In the current economic growth, many companies are looking for ways to cut operational costs in order to stay competitive. Furthermore, the government announced that planning is underway to make Malaysia a high income country, like the developed countries in Asia, America and Europe. PSMB (Pembangunan Sumber Manusia Berhad) definitely has a vital role to play in this agenda which lies in the provision of skilled and innovative people through human capital development. For industries, what is the approach suitable to achieve this where their employees can earn higher income whilst enjoying the status of a developed nation?
One of the methodologies available is Six Sigma and it can be applied in any organisation whether in a manufacturing or service industry. It has been proven across a wide range of industries including government agencies, automotive, transportation, defense manufacturing, healthcare, logistics, education, telecommunications and construction. Six Sigma can be considered both as a business strategy and a science that has the aim of reducing operational costs. It creates significant improvements in customer satisfaction and bottom-line savings by combining statistical and business process methodologies into an integrated model of process, product and service improvement.
The main benefit of implementing Six Sigma is in the reduction of variation and subjectivity in decision-making through the creation of a system where everyone collects and analyses data in a cohesive and systematic manner. The fundamental concept of Six Sigma is to improve processes whilst improving the quality of the process outputs. By deploying Six Sigma, the improvements are defined by their impact on customer satisfaction and value. From an internal perspective, Six Sigma provides a way of improving processes so that any organisation can efficiently and predictably produce world-class products and services. Six Sigma places a clear focus on bottom-line impact in hard dollar savings. Thus the savings achieved can be in turn converted to either increase of profit margins of the company or shared amongst the employees by increasing their income.
Six Sigma has also been very successful in integrating human aspects (such as culture change and customer focus) with process aspects (such as process stability and variation reduction). Six Sigma links the tools and techniques in a sequential manner and combines with the notion that Six Sigma creates a powerful infrastructure for training key personnel in an organisation starting from the top management. For many companies, employee costs are minimal compared to other costs such as high inventory levels, payment of penalties, inefficient processes, high product or process rejects and excess wastage of raw materials or resources.
Companies should take the economic growth as a positive sign to train or re-train their workforce especially in the areas of process improvements so that they are fully-equipped for the challenges ahead in becoming a high income nation. Companies with competitive cost structures are able to compete globally. Reducing operating costs through process improvements is the only viable way in the long term to help sustain the company’s profit margins, providing higher income to its employees and contributing in the development of Malaysia to achieve its VISION 2020 and becoming a high income nation.
MBizM Sdn Bhd is a registered provider with PSMB in delivery of Change Management Programmes [http://www.mbizm.com/]