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How Much Does Six Sigma Cost?

Aug 17, 2007
Most companies contemplating Six Sigma implementation have most of the costs worked out beforehand. This follows the assumption that taking additional work means involving more people. You either hire people on fee base or recruit them on your payroll at a cost. Well, then there is the cost of implementation above this, which can run into quite a few thousands of dollars depending upon the project on hand.

But is that the cost of Six Sigma? There are several schools of thoughts and arguments about how to arrive at the cost of Six Sigma and one of which advocates an interesting theory. This appears to be the closest of all the definitions of Six Sigma.

Cost of Six Sigma

The cost of Six Sigma is the cost of lost opportunities due to errand processes or procedures which could have been saved had the procedures or the processes been corrected at the expense of a fraction of the cost.

Cost Consideration Before Project Selection

While contemplating the deployment, one needs to think about the composition of the team as well. The composition of the team can be so organized to as to contain the cost of hiring. The big question however, is whether the project team be placed within the purview of the QA department or be kept independent. Should the task force you are considering to form be composed of consulting Black Belts with select internal employees or should you purely consider only the freshly trained internal Black Belts? Consider whether cost of training will help save the cost of consultation and time, keeping in mind the future projects.

Some Realistic Points Of View

The truth about Six Sigma certification is no one is going to certify your organization after the implementation, as there is no such certifying standard just yet. This implies that both the implementation and achievement are relative, although measurable in terms of cost saved. But there not yet one single universally accepted standard barometer to tell whether the cost saved is absolute.

Let's just accept it; it is within the reach of the best employees of an organization to pull off wonders for their employer. They can be trained in-house or they can be asked to study 'how to' books and tools by attending a seminar or two. The next best step towards saving cost of Six Sigma is piggy backing on forums and discussion groups. This is absolutely possible, considering that many small enterprises have done this with great a degree of success.

Continuous self-education, forming of the team and introduction to not just Six Sigma tools and procedures but to the tools of management and cost give a broader picture. Six Sigma is no magic wand; it takes a excellent analytical and reasoning ability with dedicated and sustained efforts towards cost reducing (i.e; when we say problem solving.)

The cost of a Black Belt could run from $100,000 or more depending on the project at hand. The number of Black Belts is not something which is entirely decided by you if you are hiring Six Sigma consultants.
About the Author
Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.
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