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Save money by using Six Sigma

manwithmoney23268183.jpgThe Six Sigma method is very similar to the lean manufacturing way of thinking in that they are both promote incorporating a method of operation which will lower costs by reducing waste.Through the use of Six Sigma, everyone is a winner.The manufacturer saves money and can produce a higher quality product.The customer is happy because he receives a higher quality product on a consistent basis and often times the savings in costs are passed down from the manufacturer to the consumer.The Six Sigma method is focused mainly on reducing variation, thereby decreasing the resulting loss of resources that comes with inconsistencies.The concept of saving money by using six Sigma to eliminate waste is simple.Identifying waste in its many forms presents a challenge.In the paragraphs that follow, you will be able to read about some more specific Six Sigma ways that you can save money by using what resources you have more wisely.

The most obvious and easily quantifiable waste is material waste.When you have materials wastes you throwing money in the trash.When a product has a defect, you have the option of simply throwing away the defective product and starting the manufacturing process over or to try to repair the defect by replacing or repairing parts.Regardless of how you fix the problem, a defect costs money for materials, time, energy, etc.The extra costs that you incur because of having to find some way to account for defective products means that you make less as a business and have to ask your consumers to pay a little bit more in order to cover the costs.

Briefly introduced in the above-mentioned example of the cost of a defective product was the cost incurred because of the time wasted on the un-sellable product, the time spent disposing of the defective product and the cost of re-starting the process to hopefully create a new product free from defect.Obviously, this process takes time, especially considering that it is usually a whole batch of products that has defects rather than a single product.Usually in the time it takes to correct a problem, you could have created more acceptable quality products and increased profits.As the old saying goes, "time is money."It stands to reason that if you can save yourself time then you can also save some money.

The costs of labor are a significant portion of the total cost of the product.Many hands touch a product.From the delivery person to the assembly line worker, to the truck driver and the person stocking shelves, every one of these people is paid because the consumer is buying a product.Employees are responsible for just about every portion of the production process.Even if you have a manufacturing process that is highly computerized, overusing your machines for default corrections is still costing you money.Plus, machines wear out or need regular maintenance.A piece of equipment can never be a perfect judge of quality.When you do the job right the first time you only pay for the labor (and energy consumed by equipment) once and that is how it should be.
The cost savings of using Six Sigma are real and are definitely attainable by any company willing to develop a Six Sigma method specifically tailored to meet specific company needs and to address existing challenges.Six Sigma is not a perfect system.Many will agree that Six Sigma methods are better utilized by industries offering a product rather than a service.Determining which cost-saving choices are best is up to the business owner.

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