SIX SIGMA PROCESS
Six Sigma is a methodology or strategy that is used for process improvement. It was developed by Motorola (Nigam, 2005). Six sigma is used to improve the quality of the process outputs. The philosophy of six sigma is helpful in improving customer satisfaction level and in reducing the wastages (Nigam, 2005). It is done by finding and removing the causes of defects or deviations and reducing inconsistency in production and business process by introducing corrective measures (Kanji, 1990). Empirically, employing six sigma processes are adapted to reduce errors to 3.4 errors per million chances (Nigam, 2005). Six sigma is mainly used for the purpose of quality and efficiency management in the business methods or processes (Omachonu, & Ross, 2004).
STEPS IN SIX SIGMA PROCESS
The process of Six sigma is specially designed to improve the quality and consistency of business processes in a systematic way. The organizations commonly use this process to make the business adaptable and reduce chances of error (Dale, & van Iwaarden, 2007). There are five steps involved in this process and this process is also called as DMAIC Methodology (Nigam 2005).
Define:
The project starts with defining the problem or stating the project objective that needs to be solved or accomplished. Every person involved in the project is provided with information and understanding of its role in the project. Every participant should be clear about the objective of the project. Complete understanding enables the organization on first place in deriving a desirable conclusion (Joiner, 2007).
Measure:
In the measure stage the business focuses on clarifying the things by appraising the system with which the work is done and its level of performance. This stage gives the complete understanding of the problem. Businesses collect complete information to identify the root cause of the problem in this stage (Joiner, 2007).
Analyze:
In the previous step the business has collected complete information about the problem; in this step the main causes of problem is completely identified and analyzed. Businesses basically identify the reasons of the problem to understand all the dimensions of the problem.
Improve:
In this stage the solutions for the problem are developed. Some ideas are developed to address the problem. Alternatives are designed for the problem solution and among them the best alternative is applied. In this stage, application is applied to sort out the problem in a most effective manner (Joiner, 2007).
Control:
After getting the results of the applied alternative the business needs to assess that the desirable results are achieved or not. This stage is the most important one in order to ensure the consistency in application of solution for long term benefit (Joiner, 2007).
SIX SIGMA APPLICATIONS IN SAMSUNG
Samsung Electronics Company (SEC) is a well known brand in home, mobile and office networks and core components. The company has used various techniques to enhance the processes i.e. total process management, total quality control, enterprise resource management, product data management, supply chain management and customer relationship management etc. SEC has also taken benefit from Sig Sigma technique.
Project objective:
Samsung electronics approached the Six sigma strategy to enhance the innovation, efficiency and quality of the overall business process. This strategy is used by Samsung to achieve the level of perfection in its products and processes. The competition in the electronic industry is very much intensive therefore Samsung took step of applying sig sigma to all the processes to get the competitive edge in the highly concentrated market. Samsung Electronics Company implemented six sigma, to achieve efficiency and solid framework for the supply chain in all four segments of operations. This activity is purely conducted to get the competitive edge in the global market. Six sigma in SEC was aimed to increase efficiency by reducing the cost of production with the elimination of wastage and control on deviation or variation in the production across business process with increased synchronization (Yun, & Chua, 2002).
Project outcome:
The basic purpose of the project was to achieve the enhanced level of innovation, efficiency and quality of the overall production and business processes. The desired level of outcome was achieved by Samsung. The cost of production reduced with the application of Six sigma as nearly 50 percent defect rate was reduced from 1999-2001. SEC also gained position within top ten companies offering electronics and electronic equipment manufacturing giving it the global competitive advantage (Yun, & Chua, 2002).
Samsung gained benefit from six sigma strategy in almost all the areas of business process including transactional activities, designing methods to enhance cycle time, getting better process for human resources, accounting business planning, sales, call centers and customer services. Also, the highly focused network of supply chain management with application of Six sigma increased efficiency throughout its global market. All these results were evidently reflected in the financial results with lowest debt to equity ratio and higher than average equity to net assets ratio as compared to top ten companies. The biggest advantage for Samsung was to achieve the competitive edge in the global market. Samsung is now renowned for its high quality brands and Six sigma implementation focused on the quality production therefore helped it in getting enhanced level of quality in its brands (Yun, & Chua, 2002).
Association of steps with project milestones:
Association of six sigma steps with the objectives of Samsung:
- Define:
The main concerns for the Samsung are to bring enhancements in its innovation techniques, improving the quality standards and enhancing the overall business process efficiency. Company gives the complete understanding of the project purpose to all the employees involved in bringing all the changes in the processes. The role of every employee was clearly defined to direct all in the same direction.
- Measure:
Samsung was making changes with a vision of becoming a global market leader and synchronization across the four segments of operation. The implementation of six sigma strategy was the reason of getting the competitive edge in the global market. Overall business processes were defined as well as the areas of trouble that needs adaptability were identified. Samsung measured that the efficiency in processes is best of all options to get the competitive edge.
- Analyze:
The analysis of the situation interpreted that there is strong need to enhance the business processes. It was realized by the Samsung that some specific areas really required enhancement i.e. supply chain network, quality control, product innovation, continues quality improvement and quality maintenance. Furthermore, synchronization of all areas of operations was identified as best alternative. It was complimented with immediate improvement because all these areas are required to build credible image especially in the global market. On the other hand, the process innovations and enhancements to reducing the cost of production was identified as root cause to be controlled.
- Improve:
Samsung implemented all the ideas of process innovation, efficiency and quality to get the desired level of outcome. Ideas are implemented in the overall business process to get the better results in every phase of the business. For example, to get best results cross border learning of best practices in processes was also implemented.
- Control:
Samsung had achieved all of its targets that were formulated. With specialty of Six Sigma strategy is that it doesn’t end as soon as the goals are accomplished but continues to sustain that levels in long term to get the sustainable competitive advantage, SEC arrived among leaders of industry. Samsung maintained it’s all the standards that were formulated to get the competitive edge in the global market (Yun, & Chua, 2002)
SUPPLY CHAIN SIX SIGMA PROCESS/PROJECT OF SAMSUNG:
Supply chain management was the emerging concept in 1990s and Samsung adapted this concept at a very early stage. The basic purpose of Samsung of adapting the supply chain management was process innovation to improve the global business operations. In 2004 Samsung realized that some improvement can be made in its supply chain process therefore the company directed to align the Six sigma strategy with its supply chain management strategy. The collaboration of these formed a new combined strategy that is famous as a unique strategy of Samsung ‘SCM Six sigma strategy’. Samsung implemented the combination of these two strategies to get effective control over the four dimensions of operational efficiency. The basic purpose of is the project was to integrate make effectiveness in the operational management system to get the competitive edge in the global market. The four dimensions are as follows:
- Project discipline:
The time and the cost of the project are initially focused by this strategy. Time management and accurate budget utilization is the key factors of the project success. Samsung considered both the factors initially and developed the strategy to effectively manage it in various avenues such as product innovation etc.
- Sustaining Results:
Samsung believe that the outcome or productivity of the project should be consistent therefore the second concern was the sustainable productivity or outcomes of the project. Sustainability in quality production by reduced waste and defects are adopted as the key factor to get the competitive edge in the global market by building a brand loyalty as well as sustainability in constantly innovating is core of project (Yun, & Chua, 2002).
- Well-Established HR Frame Work:
Samsung believes that the HR policies directly impacts on the company productivity. HR best suited compensation plans for employees increase the employees’ productivity that increases the company productivity. With six sigma application by 2004 SEC had 100 Masters Belts, 3000 Black Belts and 30,000 Green belts providing it seasoned human resource.
- Quantitative Strength:
Supply chain management and six sigma strategy both give the competitive advantage in cost. Samsung considered the consistent cost reduction will give a sustainable competitive advantage to the company in the long run. Furthermore, Key performance indicators based assessment adopted across as a driver to get quantitative strength (Yun, & Chua, 2002).
COMPETITIVE INTELLIGENCE:
Applying six sigma provided extensive information application of which could have helped in improving the performances of various project I conducted in past. Six sigma techniques enable businesses to understand in detail the business processes and areas of potential improvements in processes (Omachonu, & Ross, 2004).
While setting targets for sustained improvement in business, Six sigma targets can be set by developing comprehensive information about competitors. Competitive intelligence is based on the systematic monitoring of all the competitors in the industry that can create a threat for the organization. This systematic procedure monitors all the moves and activities of the competitors for crafting the strategy for the organization after analyzing the competitor’s strategy. This strategy is very important especially for the globally operating companies. Hence, tough at very initial level, application of competitive intelligence about competitor would have benefitted in gaining the leading position in the class based competition of most successful entrepreneur with most innovative idea. The leading position was lost as class mate launched similar project with slight distinction providing me disadvantage of lacking on competitive intelligence (Omachonu, & Ross, 2004).
ANALYSIS OF SCENARIO:
Six sigma also require to develop alternative solutions while adopting the best solutions for achievement of objectives, These alternative can also serve as back up strategy in case of implementation of actual planning fails. Analysis is the one of the most important step in DMAIC process.
In a similar project of class competition, if applying analysis of scenario I would have developed some strategy that could differentiate the project, the loss could have been foregone. Hence, the application of core concepts of these strategies can be conducted at any level and benefits can be reaped accordingly.
References
Dale, B. G., & van Iwaarden, J. (2007). Managing quality. Oxford: Blackwell Pub.
Joiner, T. (2007). Total Quality Management and Performance: the role of organization support and co-worker support. International Journal of Quality & Reliability Management, 24(6), 617-627.
Kanji, G. K. (1990). Total quality management: the second industrial revolution.Total Quality Management, 1(1), 3-12.
Nigam, S. (2005). Total Quality Management: An integrated approach. New Delhi: Excel Books.
Omachonu, V., & Ross, J. (2004). Principles of Total Quality. Boca Raton, Florida: CRC Press LLC.
Yun, J. Y., & Chua, R. C. (2002). Samsung uses Six Sigma to change its image. In Six Sigma Forum Magazine, 2(1), pp. 13-16.
