Six Sigma Quality Management - Case Study Example

Introduction Constant improvement of production quality is one of determinant conditions of raise of its competitiveness on the market and growth ofproduction efficiency. Not without reason in countries with developed industry majority of firms and companies use different kinds of systems of quality management. Let us consider four stages of evolution of production quality approaches. First of them is a stage of rejection (till 20th years of the last century). According to this approach in order to provide a consumer products congruent to accepted standards, special attention should be paid to elimination of rejects. Wide spread of this concept has led to unreasonable growth of supervising personnel. Up to 40 and more percent of strength of workers involved in manufacture, that in its turn has caused irrational increase of expenses for quality management and, hence, has lowered efficiency of production. As a result in 20th the attention of managers has moved from rejection of production in the process of its yield to quality control in the process of manufacture. The most significant role of this stage was played by Mr. Shuhart, Western Electric company's employee, who suggested to apply statistical methods (known now as Shuhart control charts), which allowed to increase qualitative products yield in the process of production. However improvement of separately taken process has been often restrained by inefficiency of other fields of companies' activity. This problem has been solved owing to activity of Japan manufacturers who, having collided with a strong competition from the side of foreign products, have decided to take steps for improvement of quality at simultaneous decrease of net cost. They have invited American experts Deming and Juran, who worked the program consisted of 14 items, and based on improvement of entire company's management system, on direct participation of management in all quality issues of company, and on stimulation of personnel to qualitative labor activity. It appeared a 'Zero Defect' concept. New approaches have led to growth of quality produced goods and decrease of expenses for their manufacturing. However the qualitative product still was understood as production being congruent with norms, established by the manufacturer, instead of by consumers. In this connection the high-quality goods sometimes did not go through. From the middle of 60th of twentieth century manufacturers were focused on better satisfaction of consumers' demands. At this stage appeared the theory of reliability and system of the automated designing of works. As a result of analysis of industrial systems it was found out, that the reason of a better part of defects (about 80 %) is insufficient quality of design works. That is why before testing of samples in real conditions they began to conduct mathematical modeling of products and processes of manufacture properties. It has considerably raised efficiency of developmental works. Six Sigma Today companies use various technologies for decrease of costs, satisfaction of requirements of clients, reduction of terms of development and yield of production to the market. In order to transform consumers' demands into technical requirements to products and their manufacture, it is often conducted the functional-cost analysis (the analysis of expenses for manufacture of a product with the purpose to decrease its cost price); the analysis of opportunities of occurrence and influence of defects of a developed product on consumers; the is functional-physical analysis (the analysis of quality of technology projects, principles of product and its components working). At this stage the quantity of concepts of quality management grows. Despite of otherness of names and used tools, they have been based on the same principles. Quality can be presented in the form of a five-pointed star, in the basis of which lays documented, the formalized organizational system of quality management consisting of functions and processes. It is a ground for construction and improvement of efficient relations between suppliers and consumers, and systems of motivations and training of a company's personnel. The point is that activity of any company is a continuous process consisting of a chain of interconnected and interdependent sub-processes of closed character. It allows reducing to elements any process, which is carried out by a company within the frames of its activity, and to management quality of each element. The international Standardization Organization (ISO), having taken for a basis available national standards and documents regulating quality managements systems, and having added them with demands of consumers, has developed and has approved a series of the international standards. In these standards has been generalized and concentrated all experience of countries leading in the field of product quality management, which has been accumulated during last decades. Nowadays the new concept of quality management 'Six Sigma' rises. Motorola Company has worked it out. In January 1987 it has started the realization of brand-new strategic initiative of its management aimed to have substantial improvement of its production quality. As a result of its realization for the period from 1987 to 1997 of the company managed to lower its expenses for 13 billion dollars and to raise labor productivity many times. Let us try to define what is Six Sigma and what accomplishments it has. Pande, Neuman & Cavanagh (2001, p.4) state "the term "Six Sigma" is a reference to a particular goal of reducing defects to near zero, Sigma is the Greek letter statisticians use to represent the "standard deviation of the population". Six Sigma in corporate management is a hi-tech technique of production processes control, applied with the purpose to minimize probability of occurrence of defects in operational activity. The planned index is only 3.4 defects per million opportunities for each product. Here's a simplified one-to-six sigma conversion scale: Six Sigma conversion table 'Long Term Yield' (basically the percentage of successful outputs or operations) % Defects Per Million Opportunities (DPMO) 'Process's Sigma' 99.99966 3.4 6 99.98 233 5 99.4 6,210 4 93.3 66,807 3 69.1 308,538 2 30.9 691,462 1 The method is based on six base principles: 1. Sincere interest to the client; 2. Management on the basis of data and facts; 3. Orientation on process, management of process and improvement of process; 4. Proactive management; 5. Cooperation without borders (efficient communication); 6. Aspiration to perfection plus condescension to failures; Six Sigma has two key methodologies: DMAIC and DMADV. DMAIC (define, measure, analyze, improve, control) is used to: 1. Define purposes of the project and demands of consumers; 2. Measure process in order to define current implementation; 3. Analyze and define radical reasons of defects; 4. Improve the process, reducing defects; 5. Control of further process, ensuring that any variances are corrected before they result in defects. According to Chapman (2005) "DMADV is am alternative/substitute abbreviation to DFSS (Design For Six Sigma), and like DFSS DMADV is central to Six Sigma initiatives", which "more specifically describes a method comprising linked steps; Define, Measure, Analyze, Design, Verify, for ensuring that products and processes are designed at the outset to meet Six Sigma requirements". Kerri Simon (2000) claims that, the DMAIC methodology, instead of the DMADV methodology, should be used when "a product or process is in existence at your company but is not meeting customer specification or is not performing adequately", and on the contrary the DMADV methodology, instead of the DMAIC methodology, should be used when "a product or process is not in existence at your company and one needs to be developed, and the existing product or process exists and has been optimized (using either DMAIC or not) and still doesn't meet the level of customer specification or six sigma level" Conclusion Six Sigma is efficient and flexible system of achievement, maintenance and maximization of success in business-activity, based on: Deep understanding of consumer needs; Precise and competent use of the data given and statistic-analytical methods; Proactive management, development and reorganization of business-processes. In business press Six Sigma is often defined as "a rigorous and disciplined methodology that utilizes data and statistical analysis to measure and improve a company s operational performance, practices and systems". It is quite fair, but only in a measure. Measurements and statistic data are the key elements of improvement based on Six Sigma system, but not the only. Six Sigma can be named the large-scale program of "cultural changes", directed on leading the company to higher parameters of consumer satisfaction, profitableness and competitiveness. The spectrum of possible "successes" of Six Sigma system is very wide and the reason for that is a great number and variety of the benefits confirmed by practice, among which: Reduction of costs Increase of productivity Expansion of the market Holding the clients Reduction of duration of a production cycle Reduction of defects Change of corporate culture Development of the new goods/services and many other things. A fundamental principle of Six Sigma is that the people close to the work are often best equipped to improve it (Pande & Holpp 2001, p.42). But anyway we should understand that Six Sigma is not a nostrum. Any company should define own way of implementing it in a more efficient way taking into consideration own peculiarities and specific features of production. We may agree with the words of Tennant (2001, p. 79), who wrote, "Six Sigma alone is absolutely no guarantee of success". Bibliography: Chapman, A. (2005). Six Sigma training, history, definitions. Six Sigma glossary. (2 March 2007). URL: http://www.businessballs.com/sixsigma.htm. Pande, P.S. & Holpp, L. (2001). What is Six Sigma (7 March 2007)URL:http://books.google.com/booksvid=ISBN0071381856&id=9AjwatTXoeMC&pg=PP1&lpg=PP1&ots=Z3el2wFOwW&dq=Six+Sigma&sig=ugDGHU_N9EEQ54yXQ3REIARUJUU#PRA1-PA42,M1 Pande, P.S., Neuman, R.P. & Cavanagh R.R. (2001). The six Sigma way team fieldbook: An Implementation Guide for Process Improvement Teams. (5 March 2007) URL: http://books.google.com/booksvid=ISBN0071373144&id=ZRT8KkVJ7hMC&pg=PR21&lpg=PR21&ots=7er4T_LPOG&dq=Six+Sigma&sig=YW0Nt88xtaSGFYLCsePZm-lNPxY#PPA4,M1 Kerri,S.(2000). DMAIC Versus DMADV. (9 March2007). URL: http://www.isixsigma.com/library/content/c001211a.asp Tennant, G. (2001). Six Sigma: SPC and TQM in Manufacturing and Services. (6 March 2007) URL:http://books.google.com/booksvid=ISBN0566083744&id=O6276jidG3IC&pg=PP1&lpg=PP1&ots=nrit1mozNT&dq=Six+Sigma&sig=8JRRwj_Yoh7lX5kEfnZr1KK6EFQ#PPA79,M1 Read More