Question

Choose one topic from the list below and conduct an Internet search for 3-4 peer reviewed articles. Lean Systems (lean manufacturing) Agile Systems Total Quality Management Six Sigma Statistical Process Control In a 2-3 page paper (excluding cover and reference pages), explain the following: What is the main focus of the chosen topic? Where did the concept originate from? What types of organizations are utilizing the concepts? What are the biggest benefits from firms adopting the concepts? What types of leadership behaviors are necessary to drive the concept? Would the concept work in your place of business? Why or why not? Make sure you provide at least three supporting sources.

Answer 1

Six Sigma

What is the main focus of the chosen topic?
Six Sigma (6?) is a set of techniques and tools for process improvement. It seeks to improve the quality of the output of a process by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, mainly empirical, statistical methods, and creates a special infrastructure of people within the organization who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has specific value targets, for example: reduce process cycle time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits.

Where did the concept originate from?
It was introduced by engineer Bill Smith while working at Motorola in 1986. Jack Welch made it central to his business strategy at General Electric in 1995. The term Six Sigma (capitalized because it was written that way when registered as a Motorola trademark on December 28, 1993) originated from terminology associated with statistical modeling of manufacturing processes. The maturity of a manufacturing process can be described by a sigma rating indicating its yield or the percentage of defect-free products it creates. A six sigma process is one in which 99.99966% of all opportunities to produce some feature of a part are statistically expected to be free of defects (3.4 defective features per million opportunities). Motorola set a goal of "six sigma" for all of its manufacturing.

What types of organizations are utilizing the concepts?

Manufacturing
After its first application at Motorola in the late 1980s, other internationally recognized firms currently recorded the high number of savings after applying Six Sigma. Examples of these are Johnson and Johnson, with $600 million of reported savings, Texas Instruments, which saved over $500 million as well as Telefonica de Espana, which reported $30 million euros of revenue in the first 10 months. On top of this, other organizations like Sony and Boeing achieved large percentages in waste reduction.

Engineering and construction
Although companies have considered common quality control and process improvement strategies, there’s still a need for more reasonable and effective methods as all the desired standards and client satisfaction have not always been reached. There is still a need for an essential analysis that can control the factors affecting concrete cracks and slippage between concrete and steel. After conducting a case study on Tianjin Xianyi Construction Technology Co, Ltd., it was found that construction time and construction waste were reduced by 26.2% and 67% accordingly after adopting Six Sigma. Similarly, Six Sigma implementation was studied at one of the largest engineering and construction companies in the world: Bechtel Corporation, where after an initial investment of $30 million in a Six Sigma program that included identifying and preventing rework and defects, over $200 million was saved.

Finance
Six Sigma has played an important role by improving the accuracy of allocation of cash to reduce bank charges, automatic payments, improving the accuracy of reporting, reducing documentary credits defects, reducing check collection defects, and reducing variation in collector performance. Two of the financial institutions that have reported considerable improvements in their operations are Bank of America and American Express. By 2004 Bank of America increased customer satisfaction by 10.4% and decreased customer issues by 24% by applying Six Sigma tools in their streamline operations. Similarly, American Express successfully eliminated non-received renewal credit cards and improved their overall processes by applying Six Sigma principles. This strategy is also currently being applied by other financial institutions like GE Capital Corp., JP Morgan Chase, and SunTrust Bank, with customer satisfaction being their main objective.

Supply chain
In this field, it is important to ensure that products are delivered to clients at the right time while preserving high-quality standards from the beginning to the end of the supply chain. By changing the schematic diagram for the supply chain, Six Sigma can ensure quality control on products (defect free) and guarantee delivery deadlines, which are the two major issues involved in the supply chain.

Healthcare
This is a sector that has been highly matched with this doctrine for many years because of the nature of zero tolerance for mistakes and potential for reducing medical errors involved in healthcare. The goal of Six Sigma in healthcare is broad and includes reducing the inventory of equipment that brings extra costs, altering the process of healthcare delivery in order to make more efficient and refining reimbursements. A study at the University of Texas MD Anderson Cancer Center, which recorded an increase in examinations with no additional machines of 45% and reduction in patience preparation time of 40 minutes; from 45 minutes to 5 minutes in multiple cases.

What is the biggest benefit of firms adopting the concepts?

1: Improved Customer Loyalty
Any business wants to retain its customers. Indeed, this is a significant factor in determining the success of a firm. But, of course, customer loyalty and retention only ever come as a result of high levels of customer satisfaction.

Surveys suggest the reasons given by most customers for not returning to a business are dissatisfaction with the experience and employee attitude. Often a company will not even know they have a dissatisfied customer as they will simply take their businesses elsewhere.

Implementing Six Sigma reduces the risk of your company having dissatisfied customers, for once training is complete, so few experiences should be outside of their specifications. To achieve this you may want to consider running a voice of the customer study which helps your business understand which of your products attributes are critical to the customer's perception of satisfaction.

2: Time Management
Employing a Six Sigma methodology at your business can help employees manage their time effectively, resulting in a more a efficient business and more productive employees. Users are asked to set SMART goals and then apply the data principles of Six Sigma to those goals. This is done by looking at three key areas; learning, performance and fulfillment.

For instance, under learning, a practitioner of Six Sigma might ask themselves; how often do interruptions take me away from my task and how many of these interruptions require my attention?

Similarly, underperformance, they might consider how their practices are helping them reach their professional goals. Users can then create an action plan, the result of which can be employees who are up to 30 percent more efficient and who are happier in themselves, having achieved a better work-life balance.

3: Reduced Cycle Time
Unfortunately, most projects firms embark on end up extending beyond their original deadline often because there are changes in project scope or there is a shift in management policy.

By using Six Sigma, a business can set up a team of experienced employees from all levels within the organization and from every functional department. This team is then given the task of identifying factors that could negatively affect the project leading to long cycle times.

They can then be tasked to find solutions to these potential problems. This method allows business to create shorter cycle times for projects and stick to those schedules, with many firms reporting reductions in cycle times of up to 35 percent.

4: Employee Motivation
Every business, if destined to succeed, needs its employees to act in the right way - but for employees to do so there must be sufficient motivation. Indeed, organizations who are willing to fully engage with employees have consistently demonstrated 25 – 50 per cent increases in productivity.

Sharing Six Sigma problem-solving tools and techniques will allow for employee development and help create a climate and systems for employee motivation.

5: Strategic Planning
Six Sigma can play an integral part in any strategic vision. Once your business has used a created a mission statement and carried out a SWOT analysis, then Six Sigma can help you focus on areas for improvement.

For instance, if your business strategy is based on being a cost leader in the market, then Six Sigma can be used to improve internal processes, increase yields, eliminate unnecessary complexity and gain or maintain lowest cost supplier agreements. In fact, whatever your strategy happens to be, Six Sigma can help make your company the best at what it does.

6: Supply Chain Management
As previously mentioned, the aim of Six Sigma is to have a defect rate of less than 3.4 per million, and your suppliers have a major influence on whether this target is met. One of the possible ways to reduce the risk of the defect is to use Six Sigma to drive down the number of suppliers your businesses have, as this, in turn, reduces the risk of defects.

It’s also important to understand if your supplier is planning to implement any changes. For instance, a change in machinery can have an effect like the ripples from a rock thrown into a pond. The most successful firms drive their Six Sigma improvements as far up the supply chain as possible.