Term Paper: Six Sigma Concept

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¶ … Six Sigma concept in relation to both a production process and a human perspective. After a section containing a literature review on the subject, a discussion on the argument and findings of the McAdam-Lafferty study shall follow, with an accent on the theoretical structure on which their research is based.

McAdam and Lafferty ascertained that mass manufacturing organizations have seen lately "a significant increase and development of Six Sigma technology and methodology." In this context, there is a lack of studies that "fundamentally critique the phenomena of Six Sigma in organizations from both people and process perspectives." The researchers ask themselves whether the current mechanistic approach to the Six Sigma concept will lead to a more "command and control" structure, significantly different than the current organic approach toward business improvement. The Six Sigma concept may be viewed as either a subset of the Total Quality Management system (which, in such a case, is a necessary precondition), or as a distinct philosophy and methodology. The aims of the study the two researchers conduct are the exploration of "the development of Six Sigma in a multilevel analysis, from both a process and people perspective," finding the challenges organizations which have implemented Six Sigma currently face and performing a multilevel case analysis of the phenomenon.

Researchers Antony and Banuelas defined Six Sigma in their study from 2001 as a business improvement strategy utilized to improve profitability, eliminate waste, reduce costs related to poor quality products and raise the efficiency of all operations, the purpose being meeting or exceeding the customers' needs and expectations. Adoption of the Six Sigma appeared as a response to the fact that reaction to market changes had to be swift and flexible, stakeholders' demands were ever higher, and competitiveness suffered due to the lack of information regarding future production processes. Traditionally profitable and stables companies such as Motorola, General Electric, Seagate, IBM and Caterpillar decided to use Six Sigma in order to avoid the problems mentioned above and to improve their overall quality, as evidenced by a 1999 study conducted by Breyfogle and Forrest.

A later analysis, also by Breyfogle and Forrest, with Meadows' participation, conducted in 2001 showed that a reason for the profitability of companies employing Sis Sigma Strategies is the maintenance of effective supporting infrastructures for the selection and execution of various projects.

As Coronado, Banuelas and Jiju, have demonstrated in 2002, causes for failure include uncommitted CEOs, renouncing the initiative before actual progress has been achieved and the inability to effectively motivate employees. Actually, according to the a representative of Deloitte, cited by Antony and Banuelas (2002), less than a tenth of the companies using Six Sigma are actually influencing their balance sheet or share price, which poses questions regarding the relation between organizations and Six Sigma strategies. Six Sigma would not be the first ever company fad, so an analysis on the connection between the allocation of resources, anticipated benefits and Six Sigma strategies and methodologies has to be completed. The 2001 study by Clifford states that there is a strong relation between success and sustained commitment toward Six Sigma.

Klefsjo, Wiklund and Edgemann have systematically researched how Six Sigma strategies are implemented and if such an implementation would bring important new contributions to an organization's efforts directed toward improving resources allocation and competitiveness.

Sanders and Hill found out in their study from 2000 that there are various degrees to which companies benefit from the Six Sigma implementation programs. More and more companies are only now beginning to realize the implications of the program, with an accent on organizational transformation and corporate strategy.

Motorola is responsible for inventing the Six Sigma concept, which developed as a result of the quality improvement initiatives at the company. The method by which management measured and compared quality improvement rates at various divisions was fundamentally changed through the introduction of a unique quality matrix, providing for the total defects per unit. The reduction of defects was then applied to all areas of activity. Wilkund and Wilkund conclude, in 2002, that the supporters of the Six Sigma concept pretend that it does not only improve profitability, but also brings a cultural change in the company, meaning that expectation of higher quality and continuous improvement by all parties are part of the benefits. Douglas and Erwin cite the case of General Electric, who has introduced the Six Sigma program nine years ago, and has claimed that an investment of $300 million in quality improvement initiatives would bring saving ranging from $400 to $500 million.

The benefits achieved as a result of an effective implementation of Six Sigma initiative include, according to McAdam and Evans (2004), cost reduction, productivity improvement, market share growth, customer retention, cycle time reduction, defect reduction, culture change, and product / service development.

Pande and Bischeno showed in their separate studies from 2000 that close understanding of consumer needs, and a disciplined approach toward the utilization of information - facts, data and statistical analysis, and increased attention to the management and constant improvement of business processes are paramount in order to achieve the goals each Six Sigma program envisages: reduction of costs, performance improvement (which results in higher net incomes) and increased consumer satisfaction.

As a conclusion, one might state, together with Ouellette and Petrovich (2002) or Tennant (2001) that Six Sigma is actually a management philosophy combined with a measure of defects and a methodology for solving problems occurred in the process of business improvement. Therefore, a connection may be made between the implementation of statistical quality methods and actual, real-life, improvements.

Reichfield and Sasser observed since as long ago as 1990 that a Six Sigma initiative, if properly implemented, gives a company a competitive edge, by creating all the advantages mentioned above. Step function improvement capabilities are achieved as a result of this revolutionary system which provides statistical, managerial and problem solving methods. One setback is that, in order for the implementation to be successful, specific training must be performed, accompanied by careful system design.

Six Sigma may be viewed, as have Harry and Schroeder (2000), as a problem-solving methodology comprising several steps: Define, Measure, Analyse, Improve and Control. The result is an incredibly low non-conformance rate.

The key to the whole Six Sigma idea is the focus and control on the Key Process Input Variables (KPIV), the purpose being the consistent production of a high quality product or service. Since there is a statistical relation between the Input Variables and Key Process Output Variables (KPOV), such a control is possible. There are four phases to the implementation of a Six Sigma program: Measure, Analysis, Improve and Control. Each process is significantly improved by using various statistical methods. There are, of course, different variables inherent to the production process and which cannot be controlled; these are identified and their importance is minimized by modifying the characteristics of the processes involved.

The general picture emerging from the literature review is that Six Sigma is generally treated in a mechanistic way, with few preoccupations regarding the people aspect of the phenomenon. However, this point-of-view is not without motives. The multi-level study conducted by McAdam and Lafferty shows that Six Sigma is closely connected with the TQM concept, which has strong mechanistic characteristics. One of the questions the researchers ask themselves at the beginning of the study finds its answer, meaning that a broad range philosophy related to Six Sigma is not yet conceivable.

In regard to the methodology employed in the development of their study, the overall research design, sampling, data gathering techniques, data analysis, methods and reliability and validity of the results, the following information should be considered: the data was gathered using a multiple level questionnaire followed by multiple level interviews, which provided both a quantitative and a qualitative approach. The unit of analysis consisted of the three levels identified in the organizations: managers, engineers and technicians. Each level had the benefit of a custom made questionnaire. An expanded Likert scale was used, which removed the possibility of obtaining a neutral response, and provided greater accuracy to the collected data. A pilot study preceded the actual data gathering and analysis, which further eliminated errors.

The Six Sigma is, according to the data presented in the study, more consistent with a mechanistic approach, which limits the role of the employees to simple robots - placed in strict hierarchies, dependent on the knowledge they possess on the machines and lacking power. This aspect is evidenced by another manifestation of this highly mechanized process: the karate-like proficiency levels.

The objective of the study was to examine the implementation and challenges of the Six Sigma concept at more than one level. The method used is the deductive one, which the authors see fit for this particular type of exploratory endeavor. Six Sigma programs were implemented in mass manufacturing organizations, a typical environment for such an initiative. However, McAdam and Lafferty express their distrust regarding a similar implementation in a service-based corporation, with regard to the results.

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