Configuration Control and Setting Up of Base in ERP System
ERP systems were developed based on generic need of various types of organizations, belonging to diverse business segments and further evolved through continuous adding up of new business processes. Consequently, any ERP system now offers numerous functionalities, which overwhelm most of the enterprises, during project implementation. Enterprises are needed to pickup relevant components of the […]
The Need for Person Independence in Software Project Management
The Perils of Person Dependence Imagine you are a project manager of a software project and are managing multiple resources. If by chance, one of your employees has an emergency (personal or otherwise) and has to take leave suddenly, your first priority should be to ensure that the employee gets time off and next, you […]
ERP – System-Auditing, Device, Text and Job Management
IN addition to functions covered by technical modules such as user’s management, License management, installation (as discussed in earlier papers), ERP technical module provides several other important functionalities. Some of these functionalities, as given below, will be very briefly discussed in this paper: Audit management Device management Text management Job management Audit management: Large organizations […]
How Companies are Avoiding Tariffs
The biggest ever trade war is underway. China and the United States, which are the two largest economies in the world, are at loggerheads. President Trump drew first blood when he imposed duties on steel and aluminum imported from China and many other countries. However, the Chinese government was not far behind either. China unveiled […]
Inventory Classification – ABC Classification, Advantages & Disadvantages
Inventory is a necessary evil in any organization engaged in production, sale or trading of products. Inventory is held in various forms including Raw Materials, Semi Finished Goods, Finished Goods and Spares. Every unit of inventory has an economic value and is considered an asset of the organization irrespective of where the inventory is located […]
Six Sigma Project initiatives help the organization in a wide variety of ways and at very different levels. This article describes the immediate operational benefits that an organization derives as the result of implementing a Six Sigma project.
Six-Sigma efficiency is impossible to achieve if the mode of production used by the organization is craft production. To be efficient enough to run processes that have less than 3.4 defects per million, organizations need to be systems dependant. Thus Six Sigma mind set helps transform a people driven organization into a process driven one!
Six Sigma results in massive cost savings to the organization involved. These cost savings are highlighted by the fact that after a Six Sigma project any organization has considerably less requirement for labour hours. Also the requirement of skilled labourers is also reduced. Hence, both these factors combined have an effect of drastically reducing the labour bill of the organization.
Six Sigma projects realise a large amount of their financial value from their ability to eliminate or at least reduce wastage. Since the process is critically analysed for costs and corresponding value addition, measures are taken to eliminate wastage to a large extent.
An ancillary benefit of Six Sigma projects is that it creates a system which is much more efficient than the earlier one. Hence the organization can implement systems like Just In Time Inventory practices and cut still more costs.
Organizations are plagued with defective processes which result in the manufacturing of defective products. Each defect has costs attached. The costs include material, time, overheads and loss of reputation for the firm. Implementing Six Sigma projects often pays for itself in the long run by providing the financial benefits of near zero defects to the firm that implements it.
Customers do not like unreliable products or organizations. This can be verified by the fact that many companies that have implemented Six Sigma have not only found their costs reduced but their market share increased considerably. Hence, Six Sigma is also capable of positively impacting the marketing of the firm.
All of the sources mentioned above can be seen as the revenue model of the Six Sigma project. In the financial evaluation of a project, the revenue (cost reduction) from various sources must be considered before deciding whether the project is worth the effort or not. The idea is to find scenarios that the firm will be in with the project and without it.
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The Cost of Poorly Performing Processes – Need for Six Sigma
February 12, 2025
