Innovation of the latest technologies has changed the perspective of the business organizations. The production system and manufacturing department of Toyota uses an integrated technical system (Antony, 2007). This facility of Toyota is the combination of logistics manufacturers and interaction with the customers and suppliers. Presently, the world has become highly competitive and changing, which is one of the main reasons that the current quality served by the Toyota.
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According to the journal article given by Ali Uyar, understanding of quality initiative and quality improvement is significant for the business organizations. The author has researched in this article that quality initiatives are directly proportional to the financial performance of the company (Uyar, 2008). The use of these quality initiatives will result in continuous efforts to decrease the variations in process outputs. The business processes can be measured, analyzed, improved and controlled with it.
For achieving sustained quality improvement, it is required that the entire organization is committed, especially the top management (Morris, 2008). Presently, Toyota production system uses various concepts and quality initiatives such as “jidoka”, just in time, lean manufacturing, etc. Now the standard of the quality has become changed and these concepts need improvement. The quality initiatives are significant for Toyota because it increases the ability of Toyota Production System and Manufacturing Facilities.
These initiatives refer the quality programs, certification, awards, tools and methodologies, etc., to improve the quality of the organization. Studying quality initiative and quality improvement is essential for the production system of Toyota to serve high quality automobiles to the customers (Tennant, 2001).
The ability of highly capable processes to produce output within specification refers to “six-sigma”. Processes that use the six-sigma quality, produce at defect levels less than 3.4 defects per (one) million opportunities (DPMO) (Six-sigma – What is Six-sigma, 2008). The word sigma means a numerical term that evaluates how far a given process deviates from perfection. Six-Sigma technology basically focuses on systematically improving processes by eliminating defects. It uses statistical processes to manage the quality of the processes (Antony, 2007). The wide-spread applications of six-sigma are fully enjoyed by many sectors of industry and this would also assist Toyota to solve the current problem of quality and strong relationship with the customers.
Importance of Six-Sigma Quality Initiative
Six-Sigma projects carried out within an organization follow a defined sequence of steps and have quantified financial targets. In present era, the competitive environment leaves no room for error (Antony, 2004). Organizations persistently look for new ways to exceed the expectation of the customers. This is why Six-sigma Quality has turned into a part of organizational culture. The central idea behind implementation of Six Sigma is to determine how many defects are there in a process, so that they can be systematically figured out, eliminated and there are zero defects (Tennant, 2001). Toyota is one of the biggest companies in manufacturing industry. The basic objectives of Six-Sigma is to improve customer satisfaction, reduce the cycle time and reducing the defects (Pande & Holpp, 2001).
The administration team of the company applies the methodology of six-sigma with the integration of project execution methodology, which helps the company to satisfy the needs of the customer with the alignment of the various business operations (Morris, 2008). In the life cycle of software development, the model of six-sigma is also proposed by the company to convey inflexibility in the processes of effective up-stream. The implementation of this concept also helps to understand the quantitative value, productivity improvement, cost saving technique, etc. (Antony, 2004).
Six-Sigma is an instrument that has been used by various large and profitable companies to run their business better. It was actually developed to aid companies in reducing waste (Antony, 2007). Six-Sigma helps the companies from various problems. In present scenario, the concept of six-sigma has been applied in every department. For example: it has been successfully used on production, sales, marketing, design, administration and service. It is used to eradicate company defects through the use of business, statistic and engineering principles (Rene, 2007).
To work effectively and efficiently, Toyota needs to adopt the concepts of six-sigma. If the employees of the Toyota are willing to learn the concept and would apply it skillfully to their jobs, there will be a reduction of cost by 50% or more (Hunt, 2008). Six- Sigma helps to understand the need of customer’s needs better and more efficiently. It improves performance and makes internal improvements. Six-Sigma is a tool which all the business companies should learn to keep ahead the game. Because of its high success rate, many people are learning about Six- Sigma and putting it to use in their companies. Many companies hire a six-sigma master to adapt the changes (Tennant, 2001). It will take a company-wide acceptance and readiness to implement the new and exciting plan.
The study of six-sigma as a quality initiative is important because it enhances the operation as well as financial performance of the business organizations (Morris, 2008). The functional benefits of implementing Six-Sigma includes the employee satisfaction due to the improvement in work-flow, reduction in process times and steps, better usage of work space, etc. The major operational reason for choosing Six-sigma by the organization is its success in waste reduction and redundancy (What is Six-sigma? 2008).
In general, waste reduction is measured in terms of improving time, product movement and decreasing the consumption of material. The benefits of the implementation of six-sigma emerge from breaking the mindset that product processes are invariable (Rene, 2007). Benefits also emerge as a result of interconnected activities. The result of methodical approach to quality management in Six-Sigma is evidenced by reduced fluctuations in business processes. Stability triggers a series of positive chain reactions within organizations (Morris, 2008).
The cash flow of the company increases due to the creation of additional revenue. With the help of this process, although cost decreases and increases, profitability can be seen. For this, it is important that all the professionals involved in Six-sigma implementation should be given proper Six-sigma training (What is Six-sigma? 2008). Although Six-sigma training is relatively expensive, the financial benefits of supporting it sometimes outweigh the upfront costs.
Relevance of Six-sigma in Today’s World
In the beginning, the scope of six-sigma was limited towards the manufacturing environments in last decades. However, in present time, it has spread into every industry and every functional area. Six-sigma programs are spread across a growing number of functional areas like manufacturing, engineering, administration, purchasing, sales/marketing and research/development (Antony, 2007).
In today’s world, the six-sigma quality initiative concentrates on various concepts such as attributes of the products that are most important to the customers, shortcoming, failing of production system, fluctuation, capacity, etc. (Ramberg, 2000). The objective of Six-sigma is to key out and get rid of the causes of defects and errors in manufacturing and business processes, which is also one of the main objective of Toyota to improve the quality standard and relationship with customers as well as suppliers (Tennant, 2001). Six-Sigma uses a set of quality management tools like statistical methods. It helps in creating a special substructure a base of the people within the organization who are experts in these methods (Ramberg, 2000).
The Six-sigma quality initiative is highly relevant with the present business world because it is better than the total quality management process. The quality initiative of TQM only concentrates the quality level that allows the firms to attain pre-determined quality standard. On the other hand, Sig Sigma quality initiative permits the business organizations to understand the full prospective (past, present and future) of quality and its improvement (Morris, 2008).
In addition, Sig Sigma, quality initiatives also assist the business organizations to use statistical techniques and tools to improve the quality level and reduce the defects. This is data driven initiative that supports the organizations to compete with the highly changing and competitive environment (Tennant, 2001). It is relevant to the today’s world because it gives abilities to business people to keep one step ahead from its competitors in the business industry.
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In the present business environment, customer satisfaction and loyalty is also one of the main reasons to enjoy success. It helps the business leaders to manage competition as well as customer’s satisfaction level. This is a flexible technique that can be altered according to the requirements. The concept assists the Toyota to have a loyal group of customers, who will always offer a constant flow of revenues even there would be a cyclical downturn in the industry (Antony, 2007).
Best Practices to Make Six-Sigma Successful
Six-sigma is denoted buzzword of the today critical and sophisticated business world. It is a statistical tool to understand the quality level in quantitative terms. It is essential for the Toyota, and it should have expertise and professional to work on this quality initiative of Six- Sigma. Six-Sigma makes use of a great number of quality management methods (Morris, 2008). The best practices that make six-sigma successful are as followed:
Analysis of variance, Process Maps, ANOVA Gage R&R, Cause & effects diagram (fishbone or Ishikawa diagram), Chi-square test of independence and fits, control chart, correlation, cost-benefit analysis, histograms, pareto chart, regression analysis, Quality Function Deployment (QFD), root cause analysis and SIPOC analysis (Suppliers, Inputs, Process, Outputs, Customers), Value Stream Mapping, Failure Mode Effects Analysis (FMEA), etc. (The Importance of Statistical Thinking, 2010).
All these practices, tools and technologies support the business firms to lead innovation and enjoy the future potential of quality of the products and high customer satisfaction. Toyota can use any practices to resolve the current quality problem.
Implementation and Controlling Six-Sigma
Implementing Six-Sigma with global supply and manufacturing operations in an organization is not an easy task. There are two ways to implement the six-sigma in an organization (Morris, 2008). Firstly, through a separate organization that provides Six Sigma services to the main business. In this model, all Six Sigma projects run through the independent organization and making it easy to measure the impact of the changes (Morris, 2008).
Secondly, includes appointing leader. The leader of a Six Sigma project should be extremely proficient in the technical aspects of Six Sigma statistics and process. If a project requires a high degree of Six Sigma expertise, it will be led by a Black Belt, a term that possesses deep knowledge of Six Sigma methods and tools, if a project isn’t as complex, it will be led by a Green Belt.
Figure 1: Implementation of Six-Sigma (Six-Sigma Implementation)
Green Belts are used to solve the majority of process problems that arise in manufacturing and Yellow Belts are essential (Morris, 2008). They do apply some elements of the Six Sigma methodology. Yellow Belts includes staff members, administrators, operations, personnel and anyone else who might play a role.
‘Six-sigma’ requires Executive Leadership to be implemented successfully. It consists of the CEO and other chief top management team members. The Executive Leadership of the organization will be responsible for controlling and inventing a vision for the implementation of the six-sigma. The other role holders are empowered with the freedom and resources so that new ideas can be explored for breakthrough improvements (The steps to Implementing Six- Sigma, 2008).
Mistakes in the Controlling and Implementation of six-sigma are as followed:
Implementing six-sigma process successfully is a critical task for the business leaders. It needs a high level of accuracy and concentration. Lack of understanding of a manager to evaluate the company’s performance would be a biggest cause of failure. The manager should have skills to evaluate the high cost and poor quality of the firm.
The reasons for the failure of six-sigma are the use of external factors like wrong or misdirected selection of the tools, lack of application and lack of moral or psychological support from top management (Morris, 2008). Another biggest mistake is the wrong selection of approach to execute the six-sigma approach. It is important to keep in mind that for the successful implementation of Six Sigma, the organization requires a top down approach. The top-down approach of Six Sigma requires dedication and application at all the levels of the organization on a continuous basis. The statistical methodology of Six Sigma sheds light on existing flaws and their causes after thorough analysis (Hunt, 2008).
Lack of effective training and development programs for the top, middle and lower level management is also one of the main mistakes in the implementation and controlling of the six-sigma quality initiative. The executives and top management need to understand the concept of six-sigma, the steps and the requirements. In order to work for it, the management should participate actively. These employees should share some characteristics such as passion for improvement, positive attitude, etc. (The steps to Implementing Six- Sigma, 2008).
Thus, in order to execute the six-sigma process effectively, it is essential for Toyota to follow the figure one and conduct training and development programs for all the levels.
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