How Six Sigma Can Take Construction Management to the Next Level

by: Smith and Howard

March 25, 2015

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Construction management faces a distinct challenge when it comes to customer service. Few other businesses have the customer standing right in front of them while the product in question is being assembled. Yet that’s the case in construction, where many owners pay regular site visits to monitor — and sometimes micromanage — the building process.

For this reason, it can benefit contractors to pay close attention to customer service and, if necessary, think creatively for ways to avoid costly conflicts. One approach to consider is “Six Sigma” for construction management — a disciplined, data-driven methodology for improving any business process, but particularly useful in improving customer service.

What’s the purpose of Six Sigma?

Six Sigma is all about identifying and eliminating “defects.” The word “defect” doesn’t refer only to mistakes but also to any result that fails to meet customer specifications or could lead to a process likely to dissatisfy customers.

Companies that implement Six Sigma should expect to undertake continuous efforts to achieve stable and predictable process results. For contractors, these efforts could apply to every stage of a construction project — from sales to bidding to on-site operations and in-house financial management.

Like so many of today’s business-improvement models, the practice is also heavily focused on statistics. A tenet of Six Sigma is that every company’s processes have characteristics that can be measured, analyzed, improved and controlled. Accomplishing this objective, however, calls for a total organizational commitment — particularly from you, the owner and other top-level managers.

How does Six Sigma work in construction management?

Businesses that undertake a Six Sigma program generally must choose from two primary methodologies. For improving an existing business process, you’ll navigate “DMAIC,” an acronym for define, measure, analyze, implement and control. For creating a new product or process, you’ll deal with “DMADV,” an acronym for define, measure, analyze, design and verify.

Because most contractors are likely looking to improve an established approach to customer service, let’s focus on DMAIC. It will ask you to follow five stages:

1.      Define the problem you’re trying to solve. Don’t just look at it from your own perspective. You’ll need to “speak in the voice” of your customers and point to specific goals.

2.      Measure key aspects of the process. Target metrics that will enable you to measure progress toward the stated goal, by collecting relevant data.

3.      Analyze the data, looking for cause-and-effect relationships. Here, you’ll put on your investigator’s hat and look for the root of the defect you’re seeking to eliminate.

4.      Improve the current process. Six Sigma will recommend data analysis techniques for using the information gathered and reconfiguring the process in question. You can then set up tests to establish whether the improvement is real.

5.      Control the process going forward. You’ll be guided through steps to set up systems for monitoring the improved process once you’ve implemented it.

Will we find answers?

A carefully executed Six Sigma program should provide specific answers about what you can do to better serve customers. Eliminating defects means you’ll spend less time putting out fires and more time completing quality work. In turn, you’ll be able to stay within your cost estimates and thereby improve your odds of getting more referrals and repeat business.

Plus, Six Sigma’s “control” phase often allows contractors to tighten their financial management procedures. These could enable you to free up cash flow and better leverage the growth value of your existing customer relationships.

Implementing Six Sigma in construction management

Are your construction company’s sales lagging? Additionally, are you losing time and money to conflicts and miscommunications with customers? If so, Six Sigma may be a way to overhaul your customer service process, untangle the snags slowing you down, and work more efficiently and profitably.

Of course, there are no guarantees. So, before jumping in, spend some time researching the deeper details of Six Sigma to make sure it’s for you. If it is, then set a budget for how much money you’ll invest in the effort.

Construction Accounting Services

Have questions on Six Sigma in construction management or simply looking for construction accounting and advisory services? Contact Marvin Willis at 404-874-6244 and or contact us online.

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