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In the quality management world Six Sigma has become a global reference on witch organizations can rely on to ensure effectiveness and reliability. However to reach this method and knowledge a lot of steps were previously enhanced. It was the quality management waves. Those steps were always the results of an adaptation with the new organizations 'needs. Indeed when organizations were facing strategic issues and challenges new theories emerged to promote adapted solutions. Six Sigma is then the result of continuous answers to new strategical issues. The aim of this study will be to understand how the need of efficient and coherent strategy leads to Six Sigma method. It will though go through, quality circles, Business Process Engineering (BPR), Total Quality Management( TQM) and Continuous Quality Improvement(CQI) and finally to Six Sigma itself. For each of these waves the aim is to extract the strategic perspective and to understand the overall evolution. This is a way to understand how and why Strategy is linked in essence with Six Sigma and it might also be a start to think about what will be the next wave.
Before 6sigma concepts and practices were formalized, much initial work had been done over centuries on quality, from total inspection to total quality.
One of the early quality activity was inspection, to sort out acceptables products from those to be rejected. With the appearance of statistical control tools and the growth in inspection requirements, workforce was urged to prevent defects from happening, thus quality thinking started via several initiatives such as quality circles.
Several definitions can be highlighted, like meeting of minds during a quality journey to attain customer satisfaction through continuous improvement and teamwork, entailing, according to (Besterfield, 1999), a clear understanding of the role of the customer and the involvement of employees.
Or "a small group of employees doing similar or related work who meet regularly to identify, analyse, and solve product-quality and production problems and to improve general operations". (Ross & Ross, 1982)
First developped in Japan in the 1960s
Provided opportunities for employees' joint involvement in problem solving
Relatively autonomous group organized as a work unit
Led by a supervisor or senior employee
Up to 1 million QCs in Japan (Moore, 1992)
Generally 6 to 12 members from the same work area form a circle
After setting up of the team with roles such as members, leader, facilitator, the working model of a quality circle looks like the picture below. They will use tools such as Brainstorming, Pareto analysis, Cause & effect diagram.
Overcome the barriers that may exist in the structure so as to foster an open exchange of ideas
Develop a positive attitude of employees and feel of involvement in the decision process, improve teamwork and communications among workers.
Improve quality, reduce cost, improve efficiency, improve competence
Avert imperfections rather than verification & elimination
Momentum lost: after a few successes, several initiatives were abandoned. QC are not used as part of the long term planning process
Employees tend to "get their own way" over management decisions, implying uncommittment from top management.
Reluctance to change by some employees
Strong management committment
Purpose, policy, processes defined upfront (planning)
Gain sharing between various stakeholders
Quality Circles are more local and short term initiatives, oriented towards current company operations. It takes group of six to twelve people from the same workplace, involved in joint problem solving using rudimentary tools such as brainstorming, Pareto analysis, Ishikawa diagram, with approval from management.
The Business Process Reengineering
Business Process Reengineering (BPR) is defined by Hammer and Champy as "the fundamental reconsideration and radical redesign of organizational processes, in order to achieve drastic improvement of current performance in cost, service and speed".
With BPR creation of value for the customers is the main factor and information technology often plays a critical role.
The BPR consists in the fundamental rethinking and radical re-design, made to the resources of an organization. It started in the private sector as a technique to help organizations to fundamentally rethink the way they were working in order to become world-class competitors, to consistently improve customer services, and to cut operational costs. The key tool for reengineering has been the continuous development and deployment of integrated information systems and networks.
It basically consists in an approach for redesigning the way work is done to better support the organization's mission and reduce the overall costs. Reengineering starts with a high-level assessment of the strategic goals, the organization's mission, and customer needs. Very important strategic questions are asked, such as "Does our mission need to be redefined? Are our strategic goals aligned with our mission? Who are our customers?"
The business Process Reengineering model can be summarize with a five-step approach:
Step 1: Develop the business vision and process objectives
Step 2: Identify the business processes to be redesigned
Step 3: Understand and measure the existing processes
Step 4: Identify IT levers
Step 5: Design and build a prototype of the new process
Once all those steps are realized the BPR method follows with implementation and continuous improvement as it is summarize in this scheme:
Strategic perspective of BPR
BPR and strategy
Implementing BPR within a company implies a previous strong strategic thinking which starts with key questions and obviously it is hard to be generic as questions are different for each company/sector, recurrent factors are considered such as:
- is there an extremely high frequency of meetings?
- is a more constant approach of incremental improvements not possible?
- is the competition outperforming the company? and by which factors ?
- are there too many conflicts within the organization?
- is there a disproportionate use of unstructured communication?
BPR were conceived in order to improve competitiveness while redefining the existing methods of work and processes to improve efficiency. It has been a problem solving solution for many firms. O'Neil and Sohan (1997) found out that the two main catalysis for introducing BPR in Australian organizations were competitive pressure and an intense need to cut costs. Unlike TQM, BPR is not focus roughly on quality but mostly on general improvements. BPR assist the companies at an operational level, it consists in efficient use of IT to improve the daily work. The implementation of the method will happen in the short term for the targeted company, but the overall benefits are situated in the long term when the organization will enhance efficiently the new processes.
Above all the aim of the managers when they use BPR is to increase organizational efficiency. It often operates from a management vision which may or may not be in accordance with employee expectations. After having said this, good managers know that an approach that is shared with employees is far easier to implement.
BPR implementation is a team based work as it is crucial to get feedback from those whom will use the new processes. However it is highly recommended that an external consultant would lead the implementation phase. A cultural change may be necessary in order to succeed. Changing an organization's culture is a lengthy and difficult process, but it is possible with a lot of goodwill.
While comparing with its predecessor TQM, BPR is clearly different as it is concerned with frame-braking change. It attempts to implement new systems rather than fixing the old ones. Thus, for an organization that seeks dramatic changes, BPR may be the most suitable approach. It was commonly used by organizations that had extensive problems or were close to bankruptcy, but it also can be used as a way to stimulate innovation and improvement.
Critics of BPR argue that it is often used as a euphemism for "denominator reduction". BPR increases productivity by cutting costs but does not recommend anything to increase the revenues or the sales itself.
Some warn that although BPR may lead to a competitive advantage, it is destined to be short- lived. When one company lowers its costs of doing business, other companies will immediately do the same, and the competitive advantage will then be lost. The danger is to come to a point where all firms in an industry meet at a point of no difference and no profit.
Total Quality Management & Continuous Quality Improvement
Total quality management and Continuous Quality Improvement are approaches to quality management which build upon traditional methods by emphasizing the organization and systems. They are 2 ways of management which have the aim to obtain an important mobilization and implication from the all company to reach a perfect quality in reducing to maximum wastes in a constant improvement of inputs (Deming, 2002). We will define separately in this part the definition of each quality method and their strategic perspectives.
Definition of Total Quality Management and Continuous Quality Improvement
Total Quality Management (TQM)
The method total quality management is based on ISO 9004, which is a norm which is used as an explicative document to the norm ISO 9000 (Boutry).
For the quality, the term is qualified as total because in the Japanese culture, each part of a process has to participate to the realization of a final product (Boutry). Each employee is considered as a motor to accomplish the objectives. In this way it's a continued control done by each employee at each stage, done by employee high qualified. In the "Toyota model" (Toyota is one of the investigators of the TQM) (Gestion de la qualité totale) (Clément) (Murray), the culture is a pre-requirement for the employees. They have to be watchful and good communicator in order to improve their level of qualification in their specialization (Deming, 2002). Someone who knows already, how to control and to watch quality, is before his integration in the company, more qualified than someone who discovers quality and control. The company will improve the quality of its deliverables to make it more and more adapted to the market. Quality has now to be treated because of the full-competition on the market. To recruit those type of employee will permit a more frequent and continued control which will be of a better quality. An active selection to find those employees is required. The level of qualification of the employee will make them implicated in their work to develop their loyalty regarding the company (Clément).
The quality is very present in projects. Controls and auto controls of quality are done regularly and their frequency is directly linked to the quality of the project (Clément). In differentiation to the middle of the production, the tasks are linked, so the quality of each task depends directly of the quality of the precedent task. In Total quality management, the quality in a project is not just the purpose of the quality of the deliverable, but also about the documentation, studies and the team itself (entreprisemc.com). The threats and opportunities have to be the most early as possible detected and managed. Indeed the possibility of managing the issues or the risk is bigger at the beginning of a project than near the end. Because during the running of a project, the issues can be cumulated, and the project has to manage hierarchized priority to accept the non-essential and manage the essential. The quality of the project can be affected if it's not well anticipated.
Toyota was one of the first to implement the total quality management (Toyota) in the company. Since 1939, it is one of the values that make Toyota, the biggest car manufacturer in the world.
Continuous quality improvement
Continuous Quality Improvement is an approach to quality management that builds upon traditional methods by emphasizing the organization and systems. The focus is more on process rather than the individual. Both Internal and External "customers" are recognized in this method, and it promotes the needs of those we serve and improve the services we offer. The underlying philosophy is that most things can be improved. At the core of CQI is serial experimentation (the scientific method) applied to everyday work to meet the needs of those we serve and improve the services we offer. In more technical terms, CQI is defined as an analytical tools which helps in deciding and allowing to see if a certain process is working as predicted or not. Variation is a part of every process; however the key is to decide when the variation is natural and when it needs proper action.
Core Concepts of CQI
Quality is meeting and/or exceeding the expectations of the most important stakeholder, the customer.
Success is achieved through meeting and completing the needs of those the process seeks to serve.
As mentioned above, problems are identified in processes, not in the people.
It is important to find ways to reduce or do away with unintended variation, since it causes unwanted variations in the process.
Small, incremental changes can help to achieve continual improvement in the process.
Steps Involved In Using CQI
CQI is initiated with proper planning and collecting relevant data. It does not serve any purpose to statistically analyse wrong and incorrect data, since it is mandatory that the analysis is appropriate for the data that is collected. Planning, as well as constant re-evaluation of the situation to make sure the plan is on the track is the key.
The following was described by Walter Shewart while describing the PDSA cycle.
After all the data is collected, a baseline is established. The problems and all the reasons causing it are identified.
Any changes required to rectify or improve the situation has to be taken care of.
The consequences of the changes, if done, are studied in detail. The new data after the changes is collected and compared to the baseline. Control charts are used here to analyse the effects of this change. The results are then evaluated, changes are replicated or abandoned depending on the situation and if required, a different method is tried.
Considering the result is successful, changes are standardized and further improvements or the next priority problem is looked upon. If the result is still not satisfactory, other ways to change the process are identified or different caused for the problems are identified.
Control charting is another steps mentioned within CQI. The steps in this case are called discovery, analysis, prioritization, clarification and finally charting.
Strategic perspectives of Total Quality Management and Continuous Quality Improvement
Total quality management:
The strategic perspective of the total quality management in implementing this way of managing the quality was to make a "trust-relationship" between the company and its customer, based on quality. The customers are supposing to develop loyalty to Toyota if the product well finished. The car manufacturer shows, in implementing this way of management, that it understood very early that it is crucial to keep the customer and that it is easier to keep a customer than to find a new one, and this due to the competition bigger and bigger. The company has big chances to keep the customer if he is satisfied; its satisfaction is based in a big part on the quality of the car and services delivered by Toyota.
However Toyota met some problems about its quality the last years with issues on some millions of cars. The total quality management seems less well done than before, but Toyota stays the biggest manufacturer of the world.
Continuous Quality Improvement
Continuous Quality Improvement has been used strategically for improvement of program outcomes in higher education setting. The nursing department at a university in the United States has implemented CQI to improve its program outcomes with three major goals.
1. To increase pass rates
2. To improve student advisement processes
3. To increase student satisfaction.
Administrators are striving to identify ways to work smarter, since there is an ever increasing demand on nursing education while at the same time the faculty strength is decreasing. CQI in Higher Education Recent research has supported the application of CQI in continuing and higher education. CQI goes hand in hand with adult learning principles and the standards of teaching and learning in higher education, and other factors of organizational growth requiring a student-centred approach. People involved with CQI always strive to improve the quality of all educational products and services, which includes faculty, courses, and program curricula.
In education, improvement projects are almost always linked to a failure to meet goals related to institutional or other bodies (accrediting agencies) standards of performance and/or the expectations of student, who in this case serve as the customer.
For instance, the CQI process has been applied to predict students' risk for failure, to intervene where it is appropriate, and finally to evaluate the success of these strategies in improving academic performance. A cultural change is demanded for the successful implementation of CQI in the educational setting and it also requires the co-operation of students and faculty, like their agreement and willingness to participate in various assessment activities, meetings etc. Though it is understood that changes in higher education setting can hard press on the time required and can also be affected or held back by existing bureaucracy and academic freedom, the formative process of CQI helps to mitigate the expedient results which is paradoxical in nature.
Lean Six Sigma & PM
Six Sigma: The new age of transformative processes in corporate environments
The Six Sigma method is a project-driven management approach to improve the organization's products, services, and processes by continually reducing defects in the organization. It is a business strategy that focuses on improving customer requirements understanding, business systems, productivity, and financial performance. Dating back to the middle of the 1980s, applications of the six sigma methods allowed many organizations to sustain their competitive advantage by integrating their knowledge of the process with statistics, engineering, and project management (Anbari, 2002). Six Sigma is a process that is designed to seek the total elimination of defect or error in any corporate management or systems environment (Landel, 2008). It is a registered trademark of Motorola, the company that devised the first specific methodologies to develop and implement quality improvements in organizations critical processes; by rigorously measuring and identifying variations from customer specification in those processes and adjusting them, or creating entirely new processes to keep variations at an acceptable level (Landel, 2008:2).
Six Sigma is not the first quality improvement process ever devised. Many successful companies have strived to put the continuous pursuit of quality at the forefront of their businesses for centuries (Lowder, 2007). Six Sigma achieved widespread acceptance as the 'gold standard' for quality improvement because, the system focuses on the variation in the noted defects as the metric to define quality. In this way, the system provides an objective, mathematical basis for identifying the critical processes in the organization that require improvement (Lowder, 5). Six Sigma is now a popular basis for a wide range of corporate management, quality assurance, financial controls, and systems improvement training (Erasmus, 2009). Six Sigma training institutions often adopt the label 'black belts' to define the most skilled Six Sigma practitioners. Six Sigma trainers sometimes promote a cult-like devotion to Six Sigma principles; Villanova University promotes its Six Sigma certification as creating a "Master" amongst the black belts (iSixSigma, 2010: 2).
The Six Sigma name is a powerful indicator of what the system can deliver; sigma is the Greek letter s, the symbol used in the science of statistics and probabilities to denote variability and standard deviation. The number 'Six' is significant in this realm because the higher the sigma in conjunction with deviation from norm, the better the quality process, and the fewer defects (Landel, 3). In the literature, the accepted best result to be achieved from the application of Six Sigma methodology is a defect rate as low as 3.4 parts per million (ISixSigma, 4).
The process of Six Sigma was constructed to achieve the following results in any corporate environment (Gaur, 2009):
(i) Clearly define all customer and user requirements
(ii) Align all processes to meet those requirements
(iii) Use metrics to minimize process variations
(iv) To achieve rapid and permanent process improvement
Six Sigma is a methodology that places primary emphasis on strict controls. When its' principles are applied to any company process, one outcome ought to be that in future, the Six Sigma practitioners will only choose the very best projects that are plainly aligned with the overarching goals of the company (Lowder, 5). Further, the selection of the right corporate projects will trigger the further demand that the company directs appropriate levels of resources to the projects. The References attached to this paper provide further confirmation of the breadth of potential Six Sigma applications - manufacturing processes are the most common application, but general knowledge management, service-based industries, and health care facilities are also prominent examples.
Chakladar (2010) places significant emphasis on the role that can be played by Six Sigma beyond its proven success as a process and quality improvement methodology. Chakladar asserts that the system will permit greater knowledge creation across the entire organization, as employees who are exposed to various Six Sigma projects on teams have the opportunity to both share and acquire knowledge. Chakladar suggests that the multiplier of knowledge gained in this way is between five to seven times (Chakladar, 4). A key outcome of Six Sigma from a corporate knowledge perspective is that employees are transformed from departmental oriented thinkers to ones who share all knowledge intuitively.
At the heart of Six Sigma is the process known by the acronym DMAIC (Define, Measure, Analyze, Improve, & Control). Its' approach encourages procedures aimed at limiting, reducing, or in best case preventing processes going out of the tolerance range. DMAIC demands that all vital internal processes that are critical to quality are measured. These processes can be found in every aspect of every company (Landel, 2008; iSixSigma, 2010). The management is encouraged to analyze all deficiencies that occur, to provide information concerning why the deficiency arose and how it can be prevented in the future. The objective of DMAIC is to continually improve manufacturing process so that they remain within tolerance consistently. The control of all aspects of the process is crucial to attaining all corporate goals.
For smaller organizations, the process is described by the acronym DMADV (Define, Measure, Analyze, Design, Validate) is ideal. These principles are especially applicable for smaller organizations or Internet companies, where there is a continual need to quickly create and improve their processes or products. The steps undertaken to implement DMADV are as follows (Guar, 6):
·Define - To understand where the process is not meeting customer requirements
·Measure - To understand how much of customer requirements are met and determine how much needs to be adjusted to meet them 100%
·Analyze - analyze the possible alternatives to meet customer requirements
·Design - determine and establish process changes required to achieve customer requirements.
·Validate - check that implemented changes in fact lead to meet customer requirements.
As noted in the opening paragraphs of this paper, Six Sigma is not an invention that has revolutionized process management. Six Sigma shares the same basic philosophies as other well-known systems, such as TQM (Total Quality Management); TQM can be described as an encompassing methodology to develop and maintain quality producing business process that lead to excellence. The ISO 9000 and related international standards are each directed at the same result as Six Sigma - improved process quality and greater efficiencies / reduced errors and fewer wasted resources. Six Sigma though, relies on a stringent approach that relies on measurements and evaluation thereof as a base of process improvement. In our view this legitimizes it more than any other of the quality improvement methods.
Six Sigma is a process improvement methodology, which is not easily implemented. It requires Six Sigma to be embraced by company culture, Top Management dedication, as well as specific training for yellow, green and black belts. Furthermore Top Management has to be committed and back the Six Sigma initiative and implement it for the long run. This is because of the required training and the career perspective to be given to the participants of Six Sigma (specially the Black Belts). Usually Six Sigma participation goes in line with a career path to the top positions in the organization adopting this quality enhancement & assurance method. All this, makes it an encompassing commitment, which needs commitment and funding. On the other hand it appears, that Six Sigma initiatives, more than pay for the effort they represent. Self-reported returns are impressive indistinctively of the industry (Sources: Weiner, 2004; de Feo and Bar-El, 2002; Antony and Banuelas, 2002; Buss and Ivey, 2001; McClusky, 2000).
As we know, there are several ways of defining strategy. It is a concept not easy to capture.
John Boyd, an Air Force Colonel, defined strategy as "a mental tapestry of changing intentions for harmonizing and focusing our efforts as a basis for realizing some aim or purpose in an unfolding and often unforeseen world of many bewildering events and many contending interests." (Hammond, 2001)
Another writer says: "Strategy is neither a part of mind, nor is it a part of matter. It is a third entity which is independent of the two ... even though strategy cannot be defined, you know what it is". (Pirsig, 1984)
So, the best approach for us has been to identify the various dimensions that we will use to analyze the strategy of the various quality movement waves.
The strategic perspectives dimensions (De Wit & Meyer, 2004) used are the following : strategy process (how is made, analyzed, dreamt-up, formulated, implemented, changed & controlled; who is involved; when do the necessary activities take place), strategy content (what it is, for the company, for each of its constituent units, the level, scope), strategy context (in which firm is the strategy process and content embedded), organizational purpose (why does the company exist; why a strategy is needed, direction, purpose, intent, expectations).
According to this framework, our analysis covers Quality Circles, Business Process Reengineering, Total Quality Management, and Six Sigma. Our key findings are summarized in the table below.
Strategic evolution of quality movements over time
There have been several changes observed over time, on the various perspectives (local -global; short term - long term; current market- future market; functional- projectized):
In terms of content and process, the quality movement has evolved from local initiatives at the early days of Quality circles, to more comprehensive global initiatives with TQM and Six Sigma. It changed from isolated undertakings to integrative corporate systems with more tools and techniques, structure and direct involvement of senior management.
The timeframe has moved from short term (QCs) to long term (TQM), back again to short term projects but with consistent long term target, such as 3.4 DPMO (Six Sigma).
From improving existing operations by some workers after inspections at the beginning of the quality movement, we are now contemplating a Six Sigma method integrated with innovation and project management to "maintain the competitive position of the company through continual improvement of its total system" (ANBARI, 2004). It rigorously measures and identifies variations from customer specification in processes and adjusts them using "built in" quality
The quality movement has been cumulative, learning from its previous mistakes and successes, so that one can say today:
Six Sigma = TQM (or CQI) + Stronger Customer Focus +Additional Data Analysis Tools + Financial Results + Project Management (ANBARI, Six Sigma Method and Its Applications in Project Management, 2002)
Strategic Perspective Dimensions of quality movements
How are « Quality Circles » on these dimensions?
How are « BPR» on these dimensions?
How are « TQM-CQI » on these dimensions?
How are « 6Sigma » on these dimensions?
Scope / Levels / Context (where it is embedded?)
Quality circles are more « local »
TQM and CQI is more global, dedicated to the whole company
Six Sigma is local but needs to be supported by management commitment.
Corporate / Global
QC are more short term
BPR focuses on short term improvements
Not a short term approach
Process improvement projects
TQM are more long term and culture
Organizational culture target zero defect.
Direction - Purpose (Why?)
QC are more oriented towards current market of the company, current processes, etc.
The focus is most of the time on the products and manufacturing, and little on service, marketing and logistics.
Reducing/eliminating errors. Effort driven by "hunger". Delight customers to beat competitors, minimize cost and maximize profits
Innovation and introduction of new products, services, processes, and technologies. Satisfy evolving needs of customers
No (the aim is mainly to reduce costs)
Teambuilding, improve morale
Improve overall efficiency
Trust relationship with customers/suppliers
Identify variations and drive out Faults/Errors/Waste
No long term view of the company
Become a highly technical and technological skilled organization
Target is the long term view of the company, example: Toyota
Pursuit of a "Gold Standard" of quality (3,4 DPMO)
Teams of 6 to 12 from same workplace, regular meetings
Implemented globally with business units managers teams with help of an external consultant
Team of experts to support the company
DMAIC (Define, Measure, Analyse, Improve, & Control); Yellow/Green/Black /Master Black Belts
What is it?
Employees' involvement in joint problem solving.
Implementation of performing processes
TQM is to manage quality; it is the matter of everyone and applies on everything.
Rigorously measuring and identifying variations from customer specification in processes and adjusting them. Built in quality
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