BA 431 week 3 discussion Six Sigma

Six Sigma

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Six Sigma

Six Sigma is a method used by organizations to improve their business processes hence making them more effective and bringing about an increase in the profits. It also leads to a decrease in defects in the produce and brings about employee motivation at large. There are several advantages of six sigma, which include the following. To begin with, it leads to increase of profits. This procedure makes use of collected data and statistics to come up with deficiencies and gaps within the organization. It then makes use of this to eliminate and correct the deficiencies in order to improve productivity within the organization .

Next, it decreases costs incurred by the organization. It allows reassessment of systems and therefore leads to the detection of waste material and use of obsolete materials. It can also lead to the detection of purchase or use of unnecessary materials, which then lead to a reduction of the costs especially used in the production. When going through the system, it allows for the detection of any problems within the system process. These are then solved and ultimately bring about reduction of costs .

Thirdly, it improves the efficiency of an organization. Through the above-mentioned strategies, it leads to elimination of wastes and increase in the profits. These ultimately lead to increased efficiency of the organization with customer and client satisfaction at large. Finally, six sigma leads to employee motivation. This is achieved by enhancing active participation of the employees in the improvement process. This makes them feel trusted enough to make key decisions and therefore improving their morale and total productivity.

Cigna Corp is a 28,000-employee provider mainly concerned with employee healthcare and insurance benefits. Six Sigma brought a very big difference in Cigna both in terms of increase in profits and reduction of waste. An ex- Motorola employee who had experienced the use of the system in the previous company brought it in. In the first year alone, Cigna had achieved a 49% decrease in total inpatient care costs. There was a subsequent 53% decrease in the total readmissions of patients and a total saving of $3000 per patient. This improved both the outcome of the patients’ healthcare and decreased wastes in the organization leading to maximization of profits.