SIX SIGMA is a type of best management strategy, which is developed by MOTOROLA basically in 1981 USA.It is a problem solving strategy by which we studied about how to increase our maximization profit with in low capital.
Six Sigma a Case Study in Motorola
Six sigma:
Six sigma is defined as a method for problem solving.
It is perhaps true that the main benefits of six sigma are:
(1)The method slows people down when they solve problems, preventing them from prematurely jumping to poor recommendations that lose money; and
(2)Six sigma forces people to evaluate quantitatively and carefully their proposed recommendations. These evaluations can aid by encouraging adoption of project results and in the assignment of credit to participants.
a) ” Many of these sub-methods fall under the headings “statistical quality control” (SQC) and “design of experiments” (DOE), which, in turn, are associated with systems engineering and statistics.
b) “Experts” often complain that opportunities to use these methods are being missed.
c) Former General Electric CEO Jack Welch, e.g., wrote that six sigma is relevant in any type of organization from finance to manufacturing to healthcare.
d) When there are “routine, relatively simple, repetitive tasks,” six sigma can help improve performance, or if there are “large, complex projects,” six sigma can help them go right the first time (Welch and Welch 2005).
e) However, it is often easy to apply methods competently, i.e., with an awareness of the intentions of methods’ designers. Also, competent application generally increases the chance of achieving positive outcomes. Wisdom about how to use the methods can prevent over-use, which can occur when people apply methods that will not likely repay the associated investment.
f) In some cases, the methods are incorrectly used as a substitute for rigorous thinking with subject-matter knowledge, or without properly consulting a subject-matter expert.
g) These choices can cause the method applications to fail to return on the associated investments.
h) Several terms are defined in relation to generic systems. These definitions emphasize the diversity of the possible application areas.
Systems and Key Input Variables:
a) We define a “system” as an entity with “input variables” and “output variables.” Also, we use “factors” synonymously with input variables and denote them x1… xm.
b) All inputs must conceivably be directly controllable by some potential participant on a project team. We use responses synonymously with output variables and denote them y1… yq.
a) Assume that every system of interest is associated with at least one output variable of prime interest to you or your team in relation to the effects of input variable changes. We will call this variable a “key output variable” (KOV). Often, this will be the monetary contribution of the system to some entity’s profits. Other KOV are variables that are believed to have a reasonably strong predictive relationship with at least one other already established KOV. For example, the most important KOV could be an average of other KOVs.
b) “Key input variables” (KIVs) are directly controllable by team members, and when they are changed, these changes will likely affect at least one key output variable. We omit the word “process” because sometimes the system of interest is a product design and not a process. Therefore, the term “process” can be misleading.
Six-Sigma: (definition):
The definition of the phrase “six sigma” is somewhat obscure. People and organizations that have played key roles in encouraging others to use the phrase include the authors Harry and Schroeder (1999), Pande et al. (2000), and the American Society of Quality. These groups have clarified that “six sigma” pertains to the attainment of desirable situations in which the fraction of unacceptable products produced by a system is less than 3.4 per million opportunities (PMO).
The definition of six sigma is built on the one offered in Linderman et al. (2003, p. 195). Writing in the prestigious Journal of Operations Management, those authors emphasized the need for a common definition of six sigma and proposed a definition paraphrased below:
“Six sigma is an organized and systematic problem-solving method for strategic system improvement and new product and service development that relies on statistical methods and the scientific method to make dramatic reductions in customer defined defect rates and/or improvements in key output variables. “
The authors further described that while “the name Six Sigma suggests a goal” of less than 3.4 unacceptable units PMO, they purposely did not include this principle in the definition. This followed because six sigma “advocates establishing goals based on customer requirements.” It is likely true that sufficient consensus exists to warrant the following additional specificity about the six sigma method:
The six sigma method for completed projects includes as its phases either-Define, Measure, Analyze, Improve, or Control (DMAIC) for system improvement or Define, Measure, Analyze, Design, and Verify (DMADV) for new system development.
Note that some authors use the term Design for Six Sigma (DFSS) to refer to the application of six-sigma to design new systems and emphasize the differences compared with system improvement activities.
Further, it is also probably true that sufficient consensus exists to include in the definition of six-sigma the following two principles:
Principle 1: The six sigma method only fully commences a project after establishing adequate monetary justification.
Principle 2: Practitioners applying six-sigma can and should benefit from applying statistical methods without the aid of statistical experts.
The above definition of six-sigma is not universally accepted.
a) First, six sigmarelates to combining statistical methods and the scientific method to improve systems.
b) Second, six sigmais fairly dogmatic in relation to the words associated with a formalized method to solve problems.
c) Third, six sigmais very much about saving money and financial discipline.
d) Fourth,there is an emphasis associated with six-sigma on training people to use statistical tools that will never be experts and may not come into contact with experts.
e) Finally, six sigma focuseson the relatively narrow set of issues associated with technical methods for improving quantitative measures of identified subsystems in relatively short periods of time.
Many “softer” and philosophical issues about how to motivate people, inspire creativity, invoke the principles of design, or focus on the ideal end state of systems are not addressed.
Management Fad:
Example:What aspects of six-sigma suggest that it might not be another passing management fad?
Solution:Admittedly, six-sigma does share the characteristic of many fads in that it’s associated methods and principles do not derive from any clear, rigorous foundation or mathematical axioms.
Properties of six-sigma that suggest that it might be relevant for a long time include:
(1)The method is relatively specific and therefore easy to implement, and
(2)Six-sigma incorporates the principle of budget justification for each project. Therefore, participants appreciate its lack of ambiguity, and management appreciates the emphasis on the bottom line. Associated with six sigma is a training and certification process.
Other properties associated with six sigma training are:
1.Instruction is “case-based” such that all people being trained are directly applying what they are learning.
2.Multiple statistics, marketing, and optimization “component methods” are taught in the context of an improvement or “problem-solving” method involving five ordered “activities.” These activities are either “Define” (D), “Measure” (M), “Analyze” (A), “Improve” (I), and b“Control” (C) in that order (DMAIC) or “Define” (D), “Measure” (M), “Analyze” (A), “Design” (D), “Verify” (V) (DMADV).
3.An application process is employed in which people apply for training and/or projects based on the expected profit or return on investment from the project, and the profit is measured after the improvement system completes.
4.Training certification levels are specified as “Green Belt” (perhaps the majority of employees), “Black Belt” (project leaders and/or method experts), and “Master Black Belt” (training experts).
STATISTICS IN SIX-SIGMA
Summary Statistics: In addition to correlation matrices and residual plots, several numbers called “summary statistics” provide often critical information about the adequacy of the model form in question. This section describes four summary statistics: R2 adjusted, PRESS, R2 Prediction, and σest. Probably the most widely used summary statistic is the “R2 adjusted” that is
also written “adjusted R-squared” or R2 adj. This quantity is also sometimes called the “adjusted coefficient of multiple determinations”. To calculate the adjusted Rsquared, it is convenient to use an n × n matrix, Q, with every entry equaling 1.0. This permits calculation of the “sum of squares total” (SST) using
where k is the number of terms in the fitted model and SSE* is the sum of squares error .It is common to interpret R2 adj as the “fraction of the variation in the response data explained by the model”.
Example( R2 Adjusted Calculations) Calculate and interpret R2 adjusted?
Answer: The following derive from previous results and definitions:
Therefore, with n = 5 data points, SST = 13720 and R2 adjusted = 0.662 so that roughly 66% of the observed variation is explained by the first order model in x1.
The phrase “cross-validation” refers to efforts to evaluate prediction errors by using some of the data points only for this purpose, i.e., a set of data points only for testing.
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Advantage and Disadvantages of SIX SIGMA
Like any other manufacturing strategy, there are various advantages and disadvantages associated with the process. These advantages and disadvantages pertain to the following:
Advantages: Six Sigma has provided a proven-track record of adding value and ensuring quality to the output of a business in the form of incremental improvements to a product or service. It could potentially also be used to optimize supply chain processes and increase customer satisfaction, which is a key component pertaining to quality. The benefits of Six-Sigma go beyond simple problem-solving and consider the entire production process from the raw materials to the end product as opposed to only the end product. Six Sigma is a proactive methodology that identifies and provides recommendations for potential problems before the company incurs any form of loss.
Disadvantages: No matter the amount of advantages there will always be some disadvantages. Six Sigma inspects the business processes minute-by-minute and generates substantial amounts of empirical data, leading to time-consuming and complicated procedures. Also, because it is a quality improvement process at its root, adoption of protocols often leads to an increase in costs. It is also important to consider that when Six-Sigma is implemented into a manufacturing process, problems arise as the company focuses on Six Sigma endorsed policies only and forgets about its specific mission statement or policies.
Additional Practical Information
Additional practical oriented Concepts
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