How Amazon Uses Six Sigma and You Can Too

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In some cases, the term “Six Sigma” is cryptically applied to describe a measure of quality adopted by a business organization. Truth be told, there’s a lot more to Six Sigma than simply the formless perception some may have of its principles.

Essentially, this data-driven philosophy gets its name from the six standard deviations used as guidelines to keep business defects firmly in check and within established specification limits. Year after year, Six Sigma continues to be a keystone of the business world, opening the doors for rising professionals to embrace the tenets that have already led so many to prosperity.

Meanwhile, Over at Amazon…

Many of the most successful businesses across the globe have incorporated elements of Six Sigma into their operational plans, to great effect. However, few industries are as well-suited to its principles as retail, and fewer such companies exhibit the methodology as comprehensively and impressively as Amazon.

The eCommerce giant comfortably sits atop all other online retailers, a status due in part to its widespread application of Six Sigma to all processes. Amazon is such a shining example of Six Sigma, in fact, that the company would certainly serve well as an inspiration for your own business. Here are some of the ways in which the company can help you to achieve positive results.

The Basics

Despite the fact that Six Sigma is not typically featured in Amazon’s publicity materials, the mindset has long been an integral part of its cultural identity. Dating all the way back to 1999, both  Six Sigma and related Lean Manufacturing principles have factored prominently into the company’s Operational Excellence program. For example, Amazon has adopted a number of Six Sigma concepts, including a deliberate effort to recruit the finest thought leaders from an exclusive selection top schools like MIT and Carnegie-Mellon. Since your business is only as good as the people you bring into it, you may wish to embrace the same care when bringing on new employees.

Keep it Lean

The Lean approach complements the perspective of Six Sigma, and Amazon has similarly tied its central focus on streamlining operations into its everyday practices. The company, for instance, devotes more manpower to its fulfillment and customer service centers than its engineering end to keep its level of service high. Moreover, the transportation method for a particular package is based on the promised delivery date, and each job function is thoughtfully designed to achieve maximum efficiency. Considering that this approach allows you to make the most of available resources and trim costs, it’s a smart way to guard your business against premature growth. *Speaking of costs, have you checked that your pricing is optimized against your competition lately?

Building off of Kaizen

Since the goal for your business is undoubtedly better and better results, it stands to reason that your operations should be consistently improving. At Amazon, Kaizen — the philosophy that focuses on maximizing efficiency to match or exceed customer needs — governs the way the company runs, especially in the fulfillment center. Its warehouses process more than 35 orders every second, marking a near-unprecedented service level in the retail space. Every distribution center even has a manager assigned to ensure continuous improvement as far as workflow is concerned. Even if your company doesn’t have the sky-high volume as Amazon, you might wish to be similarly attentive to elements like order processing that have a direct impact on your bottom line.

Upgrade Your Business

When it comes to integrating the framework of Six Sigma into your business, it’s really a strategic move that only you can make. Still, the demonstrable effect that this approach has had on retail businesses like Amazon creates a compelling case. After all, one of the best ways to help your business grow is to stay abreast of what your competitors are doing, and Amazon’s ongoing dominance of eCommerce definitely warrants some closer inspection. If Six Sigma can help that company evolve into the industry leader it has become, surely there are some key lessons you can apply to your own operations.

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