Capturing Financial Benefits From Six Sigma


Neuscheler-Fritsch, Debbie; Norris, Robert   (2001, Debbie Neuscheler-Fritsch and Robert Norris)   PricewaterhouseCoopers LLP, Fairfax, VA

Quality Progress    Vol. 34    No. 5
QICID: 14609    May 2001    pp. 39-44

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Article Abstract

Six Sigma is a disciplined approach that helps organizations consistently meet customer requirements and drive continuous improvement through process-focused management. First and foremost, Six Sigma is about delivering value to the shareholder. What sometimes gets lost in deploying the methodology is the discipline involved in tying Six Sigma projects to clearly defined and auditable financial results. For Six Sigma organizations to effectively translate operating results into meaningful financial results, a representative from the finance team should be present at each step to ensure key assumptions have not changed. First, adopt an accountant who can help translate what the team discovers into dollars and cents. Second, document and reinforce financial guidelines early in deployment to help define what is or is not a good Six Sigma project. Third, use project reviews to align Six Sigma with the financial organization. Fourth, consistently communicate the financial benefits and recognize individuals who helped achieve them. And finally, incorporate business risk management into process improvement to evaluate the proposed process redesign and determine the costs versus the benefits of recommendations presented to management.


Continuous quality improvement (CQI),Cost of quality (COQ),Customer expectation,Upper management,Financial industry,Six Sigma,Customer requirements

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