Business Planning With Six Sigma

DMAIC stands for Define, Measure, Analyze, Improve and Control. Here we analyze how these steps can streamline the business planning process.

Define

This is the phase that requires attention to VOC, which is 'voice of the customer'. Here you are the customer since the business plan is meant to serve you. There are other minor customers, such the government, partners and shareholders etc., and all have an interest in the business. Here you define what you wish to achieve with your business in the near and foreseeable future.

Measure

The purpose for measurement is to set the targets to be achieved. The baseline for measurements is the previous year's budget and accounts. For making a business plan, the previous year's gross margin and profit in dollar terms would serve as parameters to determine the projected targets that need to be achieved.

Analyze

This is the stage that requires you as the business owner to put in the maximum effort, as it is here that you will critically examine your business to identify areas for improvement. As overall business objectives are achieved through a variety of actions, it is necessary to break down the entire process into different activities, depending upon what exactly your business does. However, there are some activities that are common to most businesses that are helpful in understanding the process.

For example, if your objective is to achieve one million dollars in profit with a gross margin of 15 percent, all activities to support this objective will need to be mapped out. This can be easily done with the help of a fishbone diagram, which is a simple graphical tool used to create a structure that would delineate the interrelationships between the different aspects of the business. Using some other analysis techniques along with this will help you gain an in-depth understanding of the more complicated aspects of the business.

Improve

Once you have completed the analysis, it is time to initiate improvement-oriented actions. If you have decided to make improvements to sales through a marketing campaign, the improvement stage is where you determine the modalities.

The entire action plan for overall improvement would be a collection of small, individual activities but each would be tied into the fishbone diagram reflecting support to the overall objective.

This would serve as a reference document to identify the message, targets, timing and vehicle; which would actually detail the who, what, how and when -keeping you focused.

Control

This is the monitoring stage. Here you would list the activities that you would undertake to ensure that you are keeping track of progress, and taking whatever corrective action is required for putting things in order if they go off track.

This may involve some sort of periodical reporting connected to lead conversion, production, sales, cost reporting or service delivery.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solutions - Six Sigma Online (http://www.sixsigmaonline.org) offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.

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