In today's competitive environment, market segmentation is the latest buzzword and is being touted as the next big thing in corporate management, especially marketing and sales. Lean Six Sigma would have failed just like any other quality improvement methodology, but it survived the test of time because it was quick to adapt to the challenges of market segmentation.
Scope And Importance Of Market Segmentation
Market segmentation is basically a management concept that is utilized by businesses to classify potential customers into different categories based on their age, income, specific needs and other factors. The need for market segmentation was realized when businesses understood that not all their customers were satisfied with the products or services being offered. The feedback provided by customers went a long way in making businesses understand that every individual has his own specific needs and requirements; and as such, the same product or service will not be able to satisfy all customers' needs and requirements.
However, since it is quite impossible to cater to the specific needs and requirements of each and every individual, businesses decided to take the middle path, (i.e. classify potential customers into different categories), each category representing the common needs and requirements of a certain group of individuals or customers. The aim was to design and develop specific products or services for each of these categories or market segments so as to satisfy the common needs and requirements of categorized group members.
It's not surprising then, that businesses have extended their product lines; for example, automobile companies now offer everything from economy cars to luxury sedans and tour operators offer everything from low-cost weekend destinations to luxury cruises across the Atlantic.
How Lean Six Sigma Helps In Market Segmentation
Market segmentation is certainly beneficial, but the problem is that it often requires businesses to incur additional expenses on designing and developing specific products, making the same available to the target audience, and also on marketing and sales. Lean Six Sigma helps because it allows businesses to increase efficiency even at a time when many different processes are being carried out, all at the same time. By utilizing Lean Six Sigma tools and techniques such as JIT (Just In Time) and ROQ (re-order quantity), businesses can ensure that production is not effected and that costs are reduced substantially.
Increased efficiency and reduced costs compensate for the expenses that are incurred for catering to the specific needs and requirements of different market segments. This shows that without Lean Six Sigma, it would become quite difficult to derive all the potential benefits that are associated with market segmentation.
The benefits of Lean Six Sigma were being debated some time back, but its recent success with market segmentation has finally proved that when it comes to managing quality and efficiency, Lean Six Sigma is certainly the best.
Lean Six Sigma Online
Lean manufacturing combined with Six Sigma have been combined to form Lean Six Sigma. Both are basically techniques to improve business. The concept of Lean manufacturing comes from Toyota Production System while Six Sigma owes its origins to Motorola. Both concepts when combined, can transform organizations.
Elimination of waste and reduction in the time cycles are the goals of Lean while Six Sigma focuses on improving quality and reducing variability. The goal of any business is to maximize shareholder value. This can be achieved by reduction in cost, increase in quality, increase in process speed, a better return on invested capital and improved customer satisfaction. When Lean Six Sigma is applied to businesses, there are significant benefits in terms of improved lead time, reduction in costs and enhancement of quality.
The US Army has adapted the Lean Six Sigma to its growing needs to eliminate waste in time, money and material. To this end, the US Army Installation Management Command or IMCOM for short has drawn up a training program for enhancing productivity and reducing costs.
IMCOM has a training program for bringing about transformation in the US Army through Lean Six Sigma. The curriculum includes awareness and conceptual training on how the concept of Lean Six Sigma fits into the overall strategy of the US Army to make it efficient and productive. Hands-on understanding of the process is given; participants are imparted knowledge on how to identify projects and select them for the purpose of applying Lean Six Sigma. The roles and responsibilities of a Leader are highlighted. The curriculum also includes training in tools and skills necessary for effective and efficient implementation of Lean Six Sigma.
Personnel have divided into Green Belts and Black Belts. Green Belts are taught to be effective team members. They are taught the DMAIC concept of six Sigma. DMAIC is the acronym for, Measure, Analyze, Improve and Control. Black Belts are those who will use the processes and tools required to implement DMAIC methodology. Black Belts are taught through simulation, case studies, exercises and examples.
The application of Lean Six Sigma in the US Army has resulted in reduction of expenditure and improvement in productivity through contracting, manufacturing, administrative services and recruiting.
The Red river Army Depot at Texas in one such example. The US Army was able to save $30 million on the production of Humvees. The unit upped its production from 3 Humvees a week in 2004 to a whopping 32 mission ready Humvees in a day by 2006.
The Regional Readiness Command at Utah has been able to reduce the cycle time from 90 to 21 days in awards processing. Previously, the deployment preparation time for a battle-rostered unit was 30 days. On account of Lead Six Sigma this time period has been brought down to just 3 days!
LEADS, the system through which army starts the recruitment process of prospectives, has improved on account of Lead Six Sigma. The steps have been reduced from 32 to 11. This has brought down the time taken for the recruitment by 40%.
The repair cycle time at the Pine Bluff Arsenal at Arkansan reduced by 90%. The production of M-40 protective masks increased by 40%, on account of Lean Six Sigma.
There was an $11.9 million reduction of cost in Patriot air defense missile system recapitalization.
At the Corpus Christi Army Depot in Texas, the time taken to rebuild the UH-60 Blackhawk decreased from 256 days to around 70.
In the backdrop of fiscal constraints that the US Army is facing, these cost savings have come in as a morale booster. While, undoubtedly there have been a number of examples of costs savings and improvement in productivity on account of implementation of Lean Six Sigma, more profound has been the impact of the common US soldier. Despite the initial resistance, wherever it has been implemented in the US army, it has met with success.
Both Tony Jacowski & Peter Peterka are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Tony Jacowski has sinced written about articles on various topics from University, Six Sigma and Information Technology. Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online six sigma training and certification classes for lean six sigm. Tony Jacowski's top article generates over 90500 views. Bookmark Tony Jacowski to your Favourites.
Peter Peterka has sinced written about articles on various topics from Six Sigma, Leadership and Six Sigma. Peter Peterka is the President of SixSigma.us. For information on Six Sigma, . Peter Peterka's top article generates over 12100 views. Bookmark Peter Peterka to your Favourites.
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