In a new study on Six Sigma the savings to cost ratio ranged from 2.6 : 1 through to 2 : 1. As for cost savings as a percentage of revenues, the average was 1.7%. This study showed clearly the impact of Six Sigma and its ROI.
As a rule of thumb a company with $100 million in sales could expect $1.5 million of direct savings per year of implementation.
(Costs and Savings of Six Sigma Programs: An Empirical Study, Quality Management Journal, October, 2012)
About the Author
Denis Leonard
Denis Leonard has a degree in construction engineering, and an M.B.A. and a Ph.D. in quality management. He is a Fellow of the American Society for Quality and has been an Examiner for the Baldrige National Quality Award Board of Examiners, a Judge on the International Team Excellence Competition, and a Lead Judge on the National Housing Quality Award. He has experience as a quality manager in the home building industry as well as construction engineer, site manager, and in training, auditing, and consulting with expertise in strategic and operational quality improvement initiatives. His work has achieved national quality, environmental, and safety management awards for clients.