Six Sigma gives immediate gains

Says NC Narayanan, founder, Six Sigma Alchemy, “Six sigma, and Lean Six Sigma
have been more well received in the Indian industry unlike ISO or CMM certifications.

The latter are more of marketing tools but Six Sigma actually adds to the bottomline.”
Changes in organisational processes are often limited if only compliance tools are used.


Mr Silverstein says investments in companies could vary between 0.1 and 0.2% of the
overall revenues. If companies were to invest in training a Six Sigma black belt, it would
cost them just Rs 4-5 lakh. The gains in efficiency are almost immediate, with returns
accruing to the company after just one quarter of implementation of Lean Six Sigma
processes.

Within nine months, companies often see returns of 4-5 times their initial investment, and
the net savings could be as much as 10-15 times the initial investment. Asian Paints
recorded savings of $4 million in a year after implementing one Six Sigma project, while
capacities in their Patancheru and Ankleshwar plants increased by 100% each, without
any capital investment while the capacity of a third plant in Kasna increased by 220%.

The returns from services are likely to be much higher, says Mr Silverstein.
Manufacturing and engineering processes are meant to drive down costs, but inherent
inefficiencies are much higher in processes in services, he feels. Also, feels Mr
Narayanan, “The defect is more easily identifiable in services than it would be in
manufacturing.” With this focus on bottomline, there is always a possibility that a lot of
companies will not invest in improving processes, as much as they would in chasing
growth.

Six Sigma practitioners concede that this could happen for a few companies, but it isn’t
the norm. Says Mr Silverstein, “In India, the airlines and telecommunication industries
are showing signs of poor service with the high growth that they’ve seen. The quality of
service will be the only differentiator in the near future.”

He feels there will be a tipping point India will encounter when the cost of labour and the
wage bill goes up and today’s small companies become large. That’s when Six Sigma
processes will gain more acceptance amongst the service companies.
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