What are the Costs of Six Sigma?

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Virtual Practice Lab
Practice Test
What are the Costs of Six Sigma?

This lesson covers the costs of Six Sigma Implementation in terms of time, money, training and resources which businesses must consider when deciding whether to use Six Sigma in their business. Utilizing Six Sigma in a business has both direct and indirect costs. Direct costs include hiring, additional certifications, planning and continuing education which will expend dollars, time and resources. Indirect costs include lost opportunities such as lost customers and the inability to deliver on certain aspects of a Service Level Agreement. A Service Level Agreement is the basis of working with all third-party services.

The average training fees for Six Sigma are:

  1. Six Sigma Black Belt (CSSBB): $538
  2. Six Sigma Green Belt (CSSGB): $438
  3. Si Sigma Yellow Belt (CSSYB): $394

 

The training takes 1-2 weeks; businesses must factor in the cost of having these employees out during this period. Other costs associated with Six Sigma include additional consultation costs to teach Six Sigma skills and getting advice on how to make efforts successful. In addition, businesses will incur payroll costs for dedicated project individuals as well as indirect payroll for time expended by executives, team members and process owners involved in data gathering and metric analysis. Finally, there are improvement implementation costs such as automated tools and documentation and process procedures. Once a business decides they are going to implement Six Sigma, it is important to consider the following:

  1. Options. DMAIC or not?
  2. Identify Objectives: What do you want to achieve? Establish priorities.
  3. Stay within what is realistic: Establish the plan so it matches commitment, resources and abilities.
  4. Prepare Leaders: they must have knowledge and commitment
  5. Create a Six Sigma organization: train to understand all aspects of Si Sigma and create a piloting effort to learn what works and what does not

It is crucial to remember that the decision to implement Six Sigma is a costly, involved process and not to be taken lightly. When Six Sigma fails, it is not because of the Black Belts. It is a result of a failure in leadership. Therefore, leadership commitment is crucial.

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