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HI6005 Management and Organisations and Global Environment
Six-Sigma is the new approach to total quality management. Six-Sigma is being used by various Companies since decades. Companies are found successful in implementing the Six Sigma in their operations. Six-Sigma was developed by Motorola and this technique gradually became the common methodology in various Companies to improve their production process. Some Companies did not found Six Sigma as a useful technique due to their failure in understanding of quantity and method of statistical tool to be implemented in the same. It has proved by many successful stories of Company that if right tool and method is implemented in the Six Sigma then success is guaranteed. Most of the Companies use DMAIC methodology in their Six Sigma strategies. Companies design their own DMAIC as per the needs and requirements of business. Many Companies have successfully reduced the wasteful and irrelevant activities in their operations through using Six Sigma.
“Six-Sigma” an operation management tool used for operational excellence. Part of operation of management
It was introduced and developed by Motorola Company as techniques for “quality program” and causes of defects in the operations of business. Many Businesses has incorporated elements of Six Sigma to great effect as an operation management tools to improve their operations and reduce the defects in the manufacturing process. Six Sigma in most of business today’s is used as quality improvement and customer satisfaction tool. Six-Sigma is not only used in the manufacturing process but it is also used in the retail industry. Amazon is one of the top e-commerce retail Company uses Six Sigma in its operations.
Amazon.com is an electronic e-commerce and cloud computing Company is the largest internet retailer based Company in total sales and market capitalization. It has successfully implemented and entrenched Six Sigma in its business process. Amazon has a Six Sigma tenet of selecting best and bright employees. This has improved the operation system of Amazon. Amazon has achieved excellence in its operations by applying Six Sigma in its management process. Six Sigma and lean manufacturing principles are the part of the Amazon management process. In their recruitment process, they only select those employees which are best and bright for the future of the Organization. In their SIX SIGMA methodology, they select the employees from the best schools such as LFM program at MIT, Carnnegie-Meelon and university of Chicago. Due to these efforts, its operations improved and there was an improvement in inventory records of the Amazon which was a success point for every Company. Jeff Bezos to improve its SIX Sigma methodology has employed half-dozen mathematics experts who can devise models for spreading the book inventories throughout the warehouses of Amazon. Wike has also developed a method to analyze the data so that it can diminish the errors in the manufacturing process. These all the efforts of Wike have to lead the Organization to achieve its goals through the use of Six Sigma. These all were reasons that gave the positive results for the Amazon Company.
In this report, we will be discussing on the successful story of Ford Motor Company. Ford motor Company is an Automaker Company manufactures, design, develops and services car and trucks. Ford Company has a team to implement the Six Sigma in its manufacturing process and successfully reduce the cost while improving its environmental impact. This report will give a study on six-sigma, its principles, and various tools. This report will also give a brief of use of Six Sigma by Ford motor Company.
An Overview on Six Sigma on the basis of different articles:-
In the words of Fox, (2015) Six Sigma is one of the most popular trends of the management since last two decades. It was popularized by Jack Welch, chief executive of General electric from 1981-2001. Six-Sigma is a management tool developed by Motorola in 1986. It aimed to improve the Quality by identifying the defects and variability in the manufacturing process. Six-Sigma is known as the standard deviation in statistics Six Sigma was developed to improve the process of manufacturing and minimizing the variability in the manufacturing process. It is introduced with special grades of training experts which were called champions, black belts, green belt and so on. Six Sigma got combined with lean manufacturing and became lean six sigma which was aim to reduce all the process which was not adding value. Although in past few years corporate implementing six-sigma not able to generate desired results. Six-Sigma found to be a silver bullet for boosting company’s performance. It was said in the article for making out the best use of the six-sigma. There was need of identifying new ideas in using Six Sigma.
As per Fursule et.al (2012), “Six-Sigma is philosophy and methodology which helps to improve the quality of process using statistical data for analyzing. This help to identify the root cause of the defects and quality problems in the operations of business. Six-sigma relies on the statistical tool and scientific tools for improving strategies and development of new product. Six-Sigma also uses the variety of quantitative metrics for continuous improvement. This all the tools help to reduce the use of political agenda for driving any solution. It also increases the process capability, reduces performance variability and also increases employee’s improvement efforts and commitment towards the continuous improvement. Six-Sigma helps to integrate business processes into a systematic review process which helps to manage the organization effectively and to convert the business strategies into the tactical task. Six Sigma program sometimes fail due to the improper guidance of implementing Six Sigma. It has been criticized that Six sigma uses the traditional technique in the new process of production. But as per quality professional and various experts, it is a positive force as it uses existing and well-known tools in the process.
In the words of Bangert, (2014) Six Sigma is fantastic continuous improvement techniques. It has value in the business process. As per Don Buckingham, vice president of operational excellence explained that there is something middle of the production process which has to be identified. Six-Sigma is designed to get that by statistical tools and measurement which will achieve the target with the increasing use of it. DMAIC is the major theme of Six Sigma which helps to find the solution. It is difficult for some of the business to understand the methodology to be used in Six Sigma. He has given the difference between the lean and Six Sigma. Lean involves extra efforts by involving many people as opposed to Six Sigma.
As per Sherman, (2014), Most Organization has combined lean and Six-sigma in their manufacturing process. The company has found to save millions using Six-Sigma. Six-Sigma aims at reducing waste and defects to make the process more consistent. Six Sigma aims at placing the customer first and their satisfaction level by improving the quality of the product. Six-Sigma is a statistical term used measure the defaults by using statistics.
Tjahjono, et.al (2010) six sigma is an extension to a Total quality management. Companies have removed the concept of total quality management and using Six Sigma for Quality improvement. Six-Sigma is applied in the processes, products, and services for reducing defects and to develop business strategy focusing on understanding the customer requirements and better financial performance. DMAIC is the most common method of implementing Six Sigma for cost reduction in the process of manufacturing. There are many changes made in DMAIC such as P-MAIC for the project, E-DMAIC for the enterprise. These differences are only of phases, not the tools.
In the words of Ray & Das (2011), Six Sigma is a strategy used for making improvement in machine process. It helps to produce products cheaper and reasonable with better services. Statistical method and DMAIC techniques are used to reduce variation and improving the delivery time. There is the use of appropriate qualitative and quantitative measures to increase the capability of the manufacturing process. Different phases of DMAIC methodology is used as per the needs and requirements of business.
According to Ganguly, (2012), six-sigma is used as a problem-solving technique for basic process improvements. It is also referred as a new process development. Two most methodology of six sigma is DMAIC and DFSS. DMAIC focuses on mainly to accumulate the raw data from the process of manufacturing while DFSS helps to develop a new product in the process of production. An aluminum Company used the Six Sigma by involving a process of defining a problem by analyzing the process, process mapping, measuring and defining the possible causes and establishing the measuring system.
Six-Sigma is a methodology used nowadays for quality improvement. Through this process, a deep analysis of the process of production is made. It is identifying the causes of defects and variability in the manufacturing process and removing them simultaneously (Pande, et.al 2014). Business is increasingly using Six Sigma in their business from the last decades. It is a set of the tool used to improve the manufacturing process. Six-Sigma is a quality program which is done to improve the organization customer’s experience, cost reduction and to build the better leaders.
Those Companies who adopt Six Sigma at early Stage:-
2. Dow Chemical
Six-Sigma is the set of management techniques used to improve the manufacturing process and business process. It is about making every area of the Organization better to meet the changing needs of customer and process improvement. It helps in reducing time in the process cycle, reducing pollution, costs, customer satisfaction increment and profits. It helps to keep things simple by detecting the defects and improving the same (Gupta, 2013). It is implemented through the use of statistics tools and methods, linear regression, empirical, fish bones diagram, quality management methods in the whole process of management, quality and customer relations.
DMADV (Six-Sigma methodologies for existing and new process)
Six-Sigma is designed in various process of Organization like marketing, advertisement, production, recruitment process. Implementation of methodology takes place through two methodologies DMAIC and the second is DMADV.
DMAIC (Six-Sigma Methodology for existing and new processes)
DMAIC is defining, measuring, analyze, improve and control towards the improvement of existing product, process or service. DMADV process methodology is done by defining, measuring, analyzing and designing and verifying the designing of new products, processes, and services. The project team of various Companies uses different SIGMA methodologies and approaches in a business process like in recruiting process DFSS is IDOV which is identifying, designing, optimizing and verifying the whole recruiting process, it is one of the popular methods which meets the Six Sigma Standards.
Use of Six-Sigma by Ford Motor Company
As per Jacobsen, (2011), Ford team has implemented Six Sigma by using DMAIC model. They developed a project which began in 2009. Their project was to improve the quality of the production process. The team was divided into 400 employees trained as black belts and another 400 trained as Green belts among the 7000 employees of the plant. The team began with identifying the key stakeholders using SIPOC process which is suppliers, inputs, process, output, and customers. The analysis was divided into three groups of internal, external and mixed customers purchasing cars and including the process owners.
Ford Company through its scorecard system provides the reporting tools to identify the areas where improvement is required.
Green: It helps to measure the areas over or on the target
Yellow: - These are the metric which is within the target but was good then the last year
Red: - The results are kept within the target.
The goal of the project was to reduce cost, improve customer satisfaction and decrease the environmental impact.
Tools used by the team are:-
1. Value shaping Mapping
3. Cause and effect diagram
4. Statistical Data
5. Trend analysis
Among the tools mentioned above the benchmarking and value stream mapping activities was found more useful. Value stream mapping used as a visual tool to make understand the team from where the material is flowing and the process of paint application. Brainstorming helps the group to generate the ideas as many. This also increases the free flow of ideas from the stakeholders.
Identification for success in Ford Motor Company using Six Sigma:-
Ford motor Company in the year 2000 initiates the using of Six-Sigma which was consumer driven. This customer-driven slogan aims to understand the customer issues first. This drive was focused on improving the quality of products to increase the customer satisfaction. Ford was regularly analyzing the scorecard metrics to identify and detect the trends in the performance in its consumer-driven Six-Sigma Strategy. In 2009, the ford Company implemented a project which focuses on improvement in quality. In implementing the Six-Sigma, the team of Six-Sigma in Ford Company found successful in reducing the cost by half million dollars which were more than the expected cost reduction mentioned in the project. The company was also found to improve the customer satisfaction and reduction in environmental impact. Ford motor Company used the philosophy and promotes the using of six-Sigma for quality improvement. They have a culture of making the product at high quality. This is the priority and slogan of the Company. Ford Company success was due to discipline, commitment and consistency in executing Six-Sigma in their process. Ford has eliminated more than 2 billion waste since 2001 in its operations as per the Ford website.
Six themes of Six-Sigma:-
Genius focus on the customer: - Companies who are launching six-sigma focuses on customers in the top of all the priorities.
Data and fact-driven management: - Six-Sigma begins with clarifying measures gauging business performance and gathers data and analyzing the key variables.
Processes are where the action is: - It positions the process as the key to success.
Pro-active management: - Proactive is active in advance of events rather than reacting to them. It is setting clear priorities, focusing on problem prevention than fire-fighting.
Boundarylesscollaboration: - In this Sigma opportunities are identified for improvement in collaboration within the Companies and vendor at huge.
The six-sigma approaches have evolved and changed from time to time, among DMAIC is a common model which is used by many project teams in analyzing the business process. There are many approaches which are developed in Six Sigma till now which have changed the Six Sigma methodologies (Rusko & Králiková, 2011). The basic DFSS has helped in launching new drug; one of the high-tech Company has explored the use of haptics which provided the gentle vibration with wearable devices. One of Pharmaceutical developers used DFSS methodology and developed the best formula for in making bitter taste in drug ingredients.
One of the most common six-sigma tools is fish born analysis. This analysis is done by designing a fish bone diagram. It enables the management to identify those defects which are causing a particular reaction. Another Six-sigma tool is FMEA which is a failure, modes, effects analysis. This analysis enables to identify those defects in the old process which can create hindrances in the new process. This analysis can be possible only with the support and response of people, product, and competition in the market. It enables the Organization to foreseen the problems, analyzing them and arranging them as per their impact level. This also helps the Organization to make preventions for problems which can have a disastrous impact on the process of management. Management prepared them through this analysis to prepare for any contingencies in future.
Critical Evaluation on Six-Sigma:-
According to Moosaa & Sajid (2010), “Companies are increasingly implementing Six-Sigma in the operations but many Companies failed to achieve the propagated results. There are Companies who succeed in implementing Six-Sigma like Ford Company and this Company is still investing its cost and employees to make changes in their Six-Sigma implementation process. They have amazingly achieved the desired results and saved millions in their operations. But some Companies failed in implementing Six-Sigma because they fail in analyzing the amount of statistics and scientific tools to be used in operations. Six-Sigma may be found to be a great and positive tool for improving the production process and increasing customer satisfaction by involving the all the manager at different levels but is not a magic to achieve the said results. It is not necessary that by appointing training experts, black belt and consultants the desired results from six-sigma will achieve Company requires to adopt the good vision and appropriate strategies and advance statistical tool to achieve the targets. At the same time, right tools and right strategies will definitely guarantee for success for the Organization.
According to Anand (2015), Six-Sigma is the management strategies used to identifies the roots and causes of problems. It also helps to identify the control measures to remove or limit the arrival of problems. Six-Sigma failures were resulted due to following improper methods of implementing its tools. Six-Sigma requires the management commitment and involvement to ensure the successful implementation. Top management support is prominent in initiating Six-Sigma in the operations of business.
Six-Sigma has many advantages if implemented properly. It helps to identify the customer needs and using various innovation techniques to exceed the customer expectations (Chakrabortty et.al (2012). It helps to optimize the process of manufacturing. It also helps to improve relationship within and outside the Organization. It identifies the variants and improves the process. It is prospective methodology as it focuses on the prevention rather on curing at the time of occurrence.
Six-Sigma has many advantages but it has many disadvantages too. In detecting the defects, on the basis of deviations standards are designed to improve the performance. This leads to spending in other areas which are less profitable to achieve the standards. Six Sigma emphasis on the rigidity of the process, and develop innovation techniques to improve the process. This innovative approach leads to deviation in the production process. In applying the standards which are framed on the basis of deviations then, a lot of barriers occurs there which needs to be resolved.
The following things are recommended to make the better use of Six-Sigma in any organization:-
1. A training program should be initiated to Implement Six-Sigma. This training will enable the managers at the top level to evaluate the Company strategic goals and make strategies as per that evaluation.
2. Six-Sigma is an ongoing process and employee should get ownership in the process to make changes. If the employee will not have ownership in implementing the Six-Sigma then, Company will fail to implement that for the long term.
3. Small Companies should critically analyze the tools and carefully select the tools for implementing Six-Sigma.
4. Precautions should be made while selecting the projects for implementation of Six-Sigma
5. A proper commitment should be made on the part of management and staff of the Organization.
6. A regular check and follow up should be made on the implementation of Six-Sigma.
7. Proper strategies should be developed in implementing the Six-Sigma.
This report discussed on the Six-Sigma as a prominent operating tool in the operations of the Company. This report explained the concept of six-sigma with the help of articles published by many authors. A critical evaluation has been made on the Six-Sigma with the help of views made by different authors. It attains lot many tools that help in improving the processing of the organization that results into increase in the accuracy level. The major functionality of six-sigma is to remove the errors from the overall process and make it error free. It helps in building trust and loyalty among the customers. To improve the functionality the tools that get implemented by the organizations may include fish bone analysis, etc. As these tools helps the management to identify and resolve the problems from the process. With the use of these tools management improve their overall functionality and help the organization to attain a competitive advantage over their competitors.
This report also contains the successful story of Ford Company in improving their production process and quality by having Six-Sigma as an important tool in the manufacturing process. An understanding on Six-Sigma has been created in the report by using various tools and philosophies. Recommendations on the report have been provided to improve the method of implementing the Six Sigma in different sector companies.
Anand. K (2015), “Critical Analysis Of The Success Factors For Implementing Six Sigma In It Industry” Journal of Business and Management, Volume 17,pp-18-24
Bangert M., (2014)“Management”, Quality Magazine
Chakrabortty R., Biswas T. & Ahmed I. (2012).“Reducing Process Variability By Using Dmaic Model: A Case Study In Bangladesh “International Journal for Quality Research, pp-127-140
Fox C., (2015)“Benchmarking, TQM, Six Sigma, CRM and other management theories analyzed” The Australian, pp-1-6
Fursule N., Bansod S. & Fursule S. (2012)“Understanding the benefits and limitations of six sigma methodology” International journal of scientific and research publications, Volume 2, Issue 1, pp-1-9
Ganguly K., (2012)“Improvement Process For Rolling Mill Through The Dmaic Six Sigma Approach” International Journal for Quality research, Vol 6, No. 3, pp- 221-231
Gupta N. (2013)“An Overview On Six Sigma: Quality Improvement Program” International Journal of Technical Research and Applications , Volume 1, Issue 1, pp-29-39
Jacobsen J., (2011)“Ford Team Uses Six Sigma to Reduce Costs While Improving Environmental Impact” ASQ, pp-1-4
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Pande, P.S., Neuman, R.P. & Cavanagh, R.R. 2014, The Six Sigma Way: How to Maximize the Impact of Your Change and Improvement Efforts, Second;2nd; edn, McGraw-Hill Education, New York
Ray S. & Das P. (2011) “Improve Machining Process Capability By Using Six-Sigma” International Journal for Quality research, Vol.5, No. 2, pp-109-122
Rusko M. & Králiková R. (2011)“Application Of Six Sigma Method To Ems Design” Research Papers Faculty Of Materials Science And Technology In Trnava, pp-39-44
Sherman P., (2014), 10 Reasons organizations not using Lean Six Sigma, Quality Magazine
Tjahjono B., Ball P., Vitanov V., Scozafave C., and Yadav A. (2010) “Six Sigma: a literature review” Research Gate