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PNC INSIGHTS Magazine Spring/Summer 2014 Issue
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TQM and Six Sigma are buzzwords of large corporate culture, but the simple concepts at their foundations may benefit smaller businesses, too.

Common wisdom holds that only corporate giants such as GE and Motorola deploy complex process management systems and reap the benefits of trimmed costs, improved quality and increased profitability. However, experts such as Greg Brue, who worked on GE's Six Sigma program, say that by using the basic tenets of modern process management, even the smallest businesses can produce results.

That's because, at their hearts, systems such as Total Quality Management (TQM) simply aim to link administrative and production processes to the end goal of completely fulfilling customer requirements effectively and efficiently. Six Sigma, a TQM offshoot, refines this aim by focusing on improvements that maximize profitability. Both systems utilize a disciplined process known by the acronym DMAIC that companies of all sizes can adopt:

Define. Create a list of things you (or your customers) wish you could do better, such as improving production times and more effectively dealing with customers' calls. Identify which activities from the list have the greatest impact on your bottom line and then define the linear process that leads to these outcomes.

Measure. Identify the metrics you should use to assess performance improvements, such as the percentage of customer returns, the time it takes to process an order or the age of your inventory.

Analyze. This is the heart of every process management strategy: Comb through the linear processes to find the weak points in your performance.

Improve. Hone in on those weak points, applying knowledge from the people who are closest to the problems to solve the problems. Continue to measure performance, retaining changes that improve it and reexamining those that don't.

Control. Once you've developed a successful improvement, make sure it becomes part of your institutional knowledge. Document it, identify who will be responsible for monitoring results and determine how employees involved with it will be rewarded for ongoing success.

For more information, see:

  • Total Quality Management and Small Business
    (www.sbaer.uca.edu/research/asbe/1999/14.pdf)
  • Small Businesses Thinking Big
    (http://sqp.asq.org/pub/qualityprogress/past/1997/0297/qp0297struebing.pdf)
  • Six Sigma for Small Business
    (www.entrepreneur.com/downloads/assist/six_sigma_for_smallbusiness.pdf)

 


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