Case Presentation – Group1

Srinivas Bhattiprolu Falk ScherzerGeorg Wieninger

Six Sigma

Founded by Motorola in 1987

Sigma Level

Sigma Level Defects per Million Oppurtunities

(DPMO)

1 690,000

2 308,537

3 66,807

4 6,210

5 233

6 3.4

Six Sigma Methodology:DMAICThe DMAIC methodology breaks down as

follows:Define the project goals and customer (internal and external) requirements.Measure the process to determine current performance.Analyze and determine the root cause(s) of the defects.Improve the process by eliminating defect root causes.Control future process performance.

Six Sigma

Six Sigma has helped companies like: Ford Dow Chemical Kodak Xerox Polaroid Motorola General Electric

Six Sigma Academywww.6-sigma.com

Jack Finney, President & CEOWas the Chief Executive Officer of The

Acceleration Group After merger between The Acceleration Group

(TAG) and Six Sigma Academy in June 2000 .

Products and Services

Breakthrough Strategy Is separated into three different parts:

Breakthrough Design Helps with initiation and growth

Breakthrough Lean Eliminate waste

Breakthrough Six Sigma Optimize process

Company Numbers

Over 40 consultants They have saved companies over 700

million dollars with their program.The company also had trained 1, 300

black belts in their program.

Six Sigma Six Sigma is the removal of defects total

from a procedure or a design.Six Sigma can help or hurt a company if

the company is unsure about solving a problem or implementing it.

Six sigma has hurt company like IBM because they did implement the program throughout the business. This caused IBM to miss out on the profits made on personal computers.

Six Sigma

Six sigma did help Ford save $325 million last year when they started the program their goal was $250 thousand and 70% less defects.

General Electric, one of the most successful companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the first five years of implementation.

Question #1

Is Six Sigma “an enterprise-wide business strategy?” Why or why not?

Question #1 - Solution

In its early days, Six Sigma was primarily used to reduce defects in manufacturing and logistics. Today, it can be applied to all industries and functions; even research and development. This is why it could be seen as an “enterprise-wide business strategy”.

Question #1 - Solution

Critics agree that Six Sigma is useful to reduce errors in processes which are fundamentally sound but they argue that it is “ill-suited” for developing innovative products or setting overall corporate strategy.

Question #1 - Solution

An example for such a failure is IBM which used the method to improve the quality of its products and to forecast the demand. However, Six Sigma did not show IBM that it was building mainly the wrong products.

Question #2

What are the benefits and limitations of Six Sigma as a business strategy?

Question #2 - Solution

The Six Sigma mantra for approaching any process is “define, measure, analyze, improve, control”. Information technology enables many of those activities:

Define: a company could create a website where key customers define the quality aspects

Measure: one major role of information systems is to supply information about the current achievement of quality aspects (Feedback)

Question #2 - Solution

Analyze: information systems help their users to locate the sources of biases in quality

Improve: information systems also help business professionals to make better decisions; they point out opportunities how to improve business processes

Control: by evaluating the provided feedback, the information system can control if a system is moving toward the achievement of its goal and make eventually necessary adjustments

Question #3

What are the benefits and limitations of Six Sigma as a business strategy?

Question #3 - Solution

Six Sigma successfully helps to improve the business processes of firms, who are surrounded by stable market conditions, by reducing the rate of defects

Other firms, which operate in a quickly changing business environment with short lifetimes of technology, e.g. computer firms, should focus more on innovation than on optimizing their current production processes with Six Sigma.