A Business Management: Six Sigma - Essay Example

? Six Sigma Introduction Six Sigma is a business management strategy that was developed by Motorola USA in the late 1980s. This strategy aims to improve the quality of products and outputs by determining and eliminating various causes of errors, as well as minimizing variability in the manufacturing and business processes (Schroeder & Harry, 2006). Six Sigma uses a variety of quality management procedures and groups the workforce into a special infrastructure that is based on the employee’s skills (Pande & Holpp, 2002). Every Six Sigma project follows a specific sequence of steps which has its own objectives. Today, Six Sigma is widely used in numerous organizations throughout the world specifically in business areas such as Business, Telecommunication, Aviation, Pharmaceutical, and so on. The term Six Sigma originated from manufacturing terms related to the statistical modeling of the manufacturing process. A Sigma rating describes the quality of a manufacturing process. This rating is based on the percentage of defect-free products generated. More importantly, a Six Sigma process is expected to yield 99.99966% of products without any defects, which means there is only an average of 3.4 defects for every million items created. Motorola aims to achieve these high quality outputs in all of its manufacturing processes through the implementation of Six Sigma (Pande & Holpp, 2002). The following sections shall discuss Six Sigma in greater detail, along with how Six Sigma is applied in the aviation industry. Six Sigma History In 1986, Motorola USA was criticized by its senior executive Art Sundry due to the company’s poor performance and bad output quality (Schroeder & Harry, 2006). This pushed the company to understand the correlation of improving the product quality and decreasing production costs. The belief at the time was that increasing the product quality entails higher production expenses. However, the company discovered that the generating quality products reduced costs in terms of repair and control expenses (Schroeder & Harry, 2006). In the same year, Bill Smith began formulating the methodology of the company’s new business management strategy (Perez-Wilson, 1999). Six Sigma is a registered trademark and service mark of Motorola Inc. In 2006, Motorola reported to have saved over $17 billion since it implemented Six Sigma in its manufacturing and business processes. Terminology Six Sigma is a term that originated from a the statistical model of process capability studies. The model referred to the ability of the manufacturing processes to generate outputs at high volumes within the set standards. All the Six Sigma projects are expected to produce only 3.4 defects for every million opportunities, which means a Six Sigma process has a rate of producing 99.99966% of defect-free products. A Six Sigma defect is defined as any error outside the customer specifications. Moreover, a Six Sigma opportunity is the total number of chances for a defect to occur. A Six Sigma calculator is used to compute for the process sigma (Pyzdek & Keller, 2009). Influences and Characteristics Six Sigma is mainly influenced by six decades of quality improvement methodologies, which include Zero Defects, Quality Control and Total Quality Management. The Six Sigma doctrine states that: manufacturing and business processes have variables that can be measured, analyzed, improved, and controlled; continuous effort to attain stable process results are essential to a successful business; and quality improvement may be sustained through the commitment of the whole organization, specifically the higher management. Furthermore, Six Sigma has its new and unique characteristics including: strong emphasis on passionate management leadership and support; every Six Sigma project entails a clear focus on attaining measurable and quantifiable financial results; special workforce infrastructure of “Champions,” “Master Black Belts,” “Black Belts,” “Green Belts”, and so on; and decisions are made based on factual and verifiable data, rather than assumptions (Gitlow & Levine, 2005). Application Basically, the objective of the Six Sigma methodology is to apply a strategy based on measurement which focuses on improving processes and reducing variations through the deployment of Six Sigma improvement projects. This is done through the use of two Six Sigma sub-methodologies: DMAIC (define, measure, analyze, improve, control); and DMADV (define, measure, analyze, design, verify). The DMAIC process is an improvement system which focuses on developing existing processes which fail to produce within specification. The DMADV process also is also an improvement system that is used to develop new products or processes in order to reach Six Sigma quality. Both DMAIC and DMADV processes are conducted by Black Belts and Green belts, and are supervised by Master Black Belts. Six Sigma is most applicable to large scale organizations. Industry consultants such as Thomas Pyzdek and John Kullmann stated that companies with less than 500 employees are less suitable to implement Six Sigma since standard management methodologies would yield better results. This is mainly due to the Black Belt infrastructure which Six Sigma requires. In addition, Six Sigma is more applicable to larger organizations that generate more opportunities for improvements (Dusharme, 2001). According to De Feo and Barnard (2005), there are five phase processes. Sorqvist Lars (2004) defines the five phases for implementation. Although there are other authors with different terms, the essence remains the same. Generally, there is an overall agreement on the requirements for implementing a program. The most notable phase of Six Sigma are the last two, Expansion and Integration. This basically means Expand and Sustain, which are the key to the success and effectiveness of the Six Sigma methodologies. The table below, presents the phases of Sorqvist along with De Feo and Barnard. Phase Sorqvist, L. De Feo & Barnard 1 Decide/Introduction Decide 2 Try-out Phase Prepare 3 Implementation Launch 4 Expansion Expand 5 Integration Sustain Factors for Successful Implementation Although there are various factors necessary for the success of Six Sigma, all of these factors are rooted to the workforce, specifically the individuals (George, 2003). Processes are designed and facilitated by people; thus, any changes in the processes would also require a change in the people managing these processes. Six Sigma emphasizes on the commitment of the workforce in carrying out its responsibilities. Generally, finding suitable individuals for Black Belt training is the most difficult task (Schon, 2006). Moreover, cultural and lingual differences make human management the most crucial and difficult task in an organization. Success in Other Companies The Six Sigma Academy stated that for an organization, Black Belts save $230,000 per project and can accomplish four to six projects a year. Among the first adopters of Six Sigma are General Electric and Allied Signal. Both companies achieved outstanding success. General Electric have estimated around $10 billion worth of savings during the first five years of Six Sigma implementation. By the end of 1990s, around 70% of the Fortune 500 organizations had implemented Six Sigma and have also reported success in improving product quality while reducing manufacturing expenses (De Feo & Barnard, 2005). Six Sigma in the Aviation Industry Numerous airline companies such as British Airways, Thai Airways, Southwest, Delta, and Singapore Airlines use Six Sigma in facilitating its various organizational processes. The growing number of airline players have formed a highly competitive aviation industry. This competition not only entailed the adoption of new technology, but also the introduction of new products and services. Moreover, new products and services have to be marketed faster than the competitors. A strategy is also needed in designing products and services that attract as many customers as possible while delivering their necessities. All these processes provide numerous applications for the Six Sigma methodologies (Moorman, 2011). Among the companies that have adopted the Six Sigma in its business processes is the World Aviation Group, which is a company that delivers services to the aviation industry with equal equity stake of Air Malta and Cassar Airways Services Pvt Ltd, Sydney. Additionally, Boeing, GE Aircraft Engines is another company in the aviation industry which have benefited from Six Sigma in both its manufacturing and service processes. It is reported that aviation organizations have increased customer turnover rates, lowered operational and maintenance expenses, better customer satisfaction and many more (Moorman, 2011). The Sales and Marketing department of other companies have greatly benefited from the implementation of Six Sigma. In the case of the aviation industry, this department is barely studied. This gives room for the possibility of applying the success of Six Sigma in the aviation industry. Aviation Education Aviation educational institutions have started redesigning its curriculum to provide students with a concrete background of various methodology and techniques in management strategies (George, 2002). Furthermore, the focus of these courses is to discuss the two main Six Sigma methods namely, the DMAIC and DMEDI. The DMAIC method is a product improvement system, while the DMEDI method focuses on the development of the design of products or processes. The integration of Six Sigma in Aviation Education is constantly being refined in order to produce students who are more knowledgeable of the applications and benefits of the Six Sigma methodologies. Impact of Six Sigma in Aviation Industry The Six Sigma does not necessarily add new methods, rather it organizes accepted strategies in order to arrive at a more effective methodology (Sorqvist, 2004). Additionally, Six Sigma is a proven method which increases productivity and output quality while reducing maintenance and operational expenses. In fact, the Aerospace and Defense sector of the Fortune 500 have been using Six Sigma for quite a long period of time (Marx, 2006). Moreover, most of the aviation industry's largest companies are using the Six Sigma and have recorded billions of dollars in savings. The growing number of organizations with reported Six Sigma success has moved other players to consider the implementation of Six Sigma in order to improve their company performance. Furthermore, the growing number of organizations in the aviation industry have caused the formation of a highly competitive aviation market. Such competition entails the adoption of new technology, products and services which have to be marketed through a structured manner. Organizations recognized the need to implement business and manufacturing strategies that would yield better outputs and possibly, lower operational expenses. The adoption of the Six Sigma in the aviation industry have lead to numerous benefits due to the suitability of Six Sigma to large aviation organizations (Truscott, 2003). Six Sigma emphasizes on the commitment of the workforce to achieve the company goals at high production quality and low operational expenses (Pande, Neuman, & Cavanagh, 2000). Constant improvement of the company would lead to a point in time where it would be necessary to develop better relationships with all business-related persons, as well as the work environment. Six Sigma is a framework where cooperation is established across work boundaries in the supply chain. Aviation companies have recorded benefits including: improved operations safety; faster customer turnover; reduced expenses in airline operations; significant reduction of maintenance time of GE Aircraft Engines from 83 days to 5 days; lowered repair time and expense of Aircraft Engine; better customer feedback through increased customer satisfaction; development of customer feedback capturing and analysis strategies; and increased percentage of on-time departures (Moorman, 2011). IV. Summary Six Sigma is a business management strategy that focuses on generating high quality products while lowering the production costs. Since it was formulated in 1986, thousands of companies from various industries have adopted Six Sigma in their business and manufacturing processes. Tough competition have pushed companies to adopt new technologies, products and services in order to attract more customers. Six Sigma offers numerous benefits in improving the performance of a company. Moreover, Six Sigma is highly suitable to aviation companies since most of the organizations in the aviation industry are large scale. Various aviation companies that have adopted Six Sigma have reported significant improvements in operational speed, efficiency, and have recorded billions of dollars in savings. All these benefits have promoted the popularity of Six Sigma in large scale industries. It is a smart consideration to adopt Six Sigma in the aviation industry. References De Feo, J. A., & Barnard, W. (2005). JURAN Institute's Six Sigma Breakthrough and Beyond – Quality Performance Breakthrough Methods. Boston: McGraw-Hill Publishing Company Limited. Dusharme, D. (2001). Six Sigma Survey: Breaking Through the Six Sigma Hype. Retrieved on July 19, 2001 from http://www.qualitydigest.com/nov01/html/sixsigmaarticle.html . George, M. (2002). Lean Six Sigma: Combining Six Sigma Quality With Lean Speed. Boston: McGraw-Hill. George, M.L. (2003). Lean Six Sigma for Service: How to Use Lean Speed and Six Sigma Quality to Improve Services and Transactions. Boston: McGraw-Hill Gitlow, H.S., & Levine, D.M. (2005). Six Sigma for Green Belts and Champions. New Jersey: Pearson Prentice Hall. Marx, M. (2007) ‘Six Sigma saved Fortune 500 $427 billion’, iSixSigma Magazine: USA. Moorman, R. W. (2011). Overhaul and Maintenance. Retrieved on July 19, 2001 from http://www.dugganinc.com/cms/index.php?aid=125 . Pande, P.S., & Holpp, L. (2002). What is Six Sigma?. Boston: McGraw-Hill Professional. Pande, P.S., Neuman, R.P., & Cavanagh, R.R. (2000), The Six Sigma Way: How GE, Motorola, and Other Top Companies are Honoring Their Performance. Boston: McGraw-Hill Professional. Perez-Wilson, M (1999). Six Sigma: Understanding the Concept, Implications and Challenges. Virginia: Advanced Systems Consultants. Pyzdek, T., Keller, P.A. (2009). The Six Sigma Handbook: a Complete Guide for Green Belts, Black Belts, and Managers at all Levels. Boston: McGraw-Hill Schroeder, R. A., & Harry, M. J. (2006). Six Sigma: The Breakthrough Management Strategy Revolutionizing the World’s Top Corporations. Sydney: Currency. Schon, K. (2006) ‘Implementing Six Sigma in a non-American culture’, International Journal of Six Sigma and Competitive Advantage, 2(4). Sorqvist L. (2004) Standiga forbattringar, Sweden: Studentlitteratur. Truscott, W. (2003). Six Sigma: Continual Improvement for Business: a Practical Guide. United Kingdom: Butterworth-Heinemann Read More