Six Sigma Project Cost Estimate
This is a practical guide to building a cost estimate for a six sigma project project — a forecast of the money required to complete the work, adapted to the realities of reducing defects and variation in a process.
What a Cost Estimate is
A cost estimate is a forecast of the money required to complete the work. For the full concept and how it works in general, see Cost Estimation. On a six sigma project project it plays the same role, tuned to this kind of work.
Why it matters for a Six Sigma Project project
Six Sigma Project projects live or die on reducing defects and variation in a process. A well-built cost estimate gives the team a shared, explicit reference for exactly that — reducing ambiguity, aligning stakeholders, and making problems visible early enough to act. Skipping it, or doing it generically, is how six sigma project projects drift into avoidable delay and cost.
What to include
- Labour costs
- Material/equipment costs
- Indirect costs
- Contingency
- Estimate basis and assumptions
Six Sigma Project-specific considerations
Tailor the cost estimate to the risks that most often derail six sigma project projects:
- Data availability
- Root-cause complexity
- Sustaining control
Example
On a real six sigma project project, the cost estimate would be shaped by reducing defects and variation in a process. In particular, it should explicitly account for the project’s biggest risks — data availability, root-cause complexity, sustaining control — rather than treating them as afterthoughts.