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Improving quality through the Law of the Market

businessmeeting26252755.jpgSix sigma is a method used to provide business with the necessary tools to increase their overall performance and customer satisfaction. This is done by statistically analyzing various forms of data and information, then using it to anticipate the needs of their customers. The overall goal of Six Sigma is to increase a company's profits by identifying and then eliminating factors that contribute to waste and customer dissatisfaction.

Lean manufacturing, on the other hand, works to eliminate waste by first identifying what causes the waste. Most times, it falls into one of the following categories:

  • Overproduction - this refers to producing more than is required, resulting in wasted products and labor

  • Excess Transportation - transportation that costs the customer money but doesn't add any value to the end product

  • Excess Inventory - more inventory than is required to complete the project

  • Excess Processing - refers to using more of the labor force than necessary

  • Waiting - idle time, either via machines or laborers

  • Correction - wasted time fixing a problem because it wasn't done correctly the first time

  • Motion - wasting time to run errands like pick up parts, etc

There are five main laws organizations follow in order to achieve lean six sigma. They are:

1. The Law of the Market
2. The Law of Flexibility
3. The law of Focus
4. The Law of Velocity
5. The Law of Complexity and Cost

In manufacturing, part of the goal of six sigma is to improve quality. Even though lean Six Sigma focuses more on improving speed than on improving quality, one of the five markets of lean six sigma, the Law of the Market, directly influences the quality of your processes.

Quality through the Law of the Market
The Law of the Market states that the customer's needs and wants define what quality is and that those needs should be the highest priority with regards to improvement. This means that even if you and your customer have differing ideas on quality, you should always err to the side of your customer. It is important the customer values your work for obvious reasons -the customer essentially provides the means to pay for the whole company, from supplies to salaries. Because the customer is supplying your company or organization with the money, their needs and wants should be the top priority.

Organizations can help improve quality by applying these fundamental principles:
In order for work to be considered value-added, it generally takes three factors. These include:

  • Necessary capacity. The employees and tools used must have the necessary capacity to perform the work and add value to it.

  • Proper information/instructions. The workers must have the proper information and instructions needed to complete the job with as little waste as possible. This includes improved communication between managers and employees and also includes knowing the customer's needs as well.

  • Sufficient materials. Employees must have the tools and materials needed to complete their jobs correctly.

Companies and organizations who follow the Law of the Market will be able to better focus on their customers and what they consider to be quality, which results in increased customer satisfaction. As companies make their customers a priority by implementing the Law of the Market, the result will be improved quality and satisfaction.

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