Productivity, Lean Six Sigma Advisory Report

3648 words (15 pages) Essay in Management

23/09/19 Management Reference this

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Productivity, Lean Six Sigma Advisory Report

Contents

INTRODUCTION

Acknowledgement

Content

Six Sigma Implementation phase

Define Phase: (DMAIC)

Measuring phase:

Analyse Phase:

Improvement Phase:

Control Phase:

Result and Conclusion:

SIX SIGMA AND CHALLENGES

Abstract:

Emergence of Six Sigma

Criticism and Resistance:

Overcoming the barriers:

Resistance to Change at Nokia

Cultural effect

SIX SIGMA A SOLUTION TO NOKIA’s PROBLEM

Conclusion

References

INTRODUCTION

Following advisory report is based on three case study to understand the application of lean six sigma and challenges faced during the implementation of six sigma. The first case study is based on proposal for managing defects in aluminium die casting business. To understand journey of implementation of Lean Six Sigma and resistance faced while implementing the process, Motorola’s journey of implementation of lean six sigma is taken as example and how they overcome it. To understand how Lean Six Sigma works and how it can face resistance, a very simple but very common non-corporate example is given, Implementation of Lean Six Sigma in daily life.

To support the argument diagrams and charts are used, examples of Lean Six Sigma tools have been given to support and illustrate the argument.

Content

Quality and Productivity Improvement Using Six Sigma

Abstract:

The following research propose an innovative process for controlling the variation of defects in die casting business. Use of Six Sigma methodology and DMAIC as main tool is done to analyse the issue. Process validation is done with Taguchi DOE and ANOVA analysis ant 95% confidence showed influence of metal temperature in causing defects. With help of implementation of Six Sigma the defect level reduced from a17.22% to 4.8%. As aluminium die casting is widely used in production of automobile industry, this study provides methodology for improving the die casting business excellence.

 

INTRODUCTION:

In the 21st century of competition and continuous changes have put businesses under pressure to improve competitiveness and strive to achieve business excellence. During the past two decades, the quality progress has provided a wide collection of continuous improvement methods to improve the process of improving quality and productivity for business growth support. Six Sigma methodology is one of continuous improvement approach adapted by businesses. Six Sigma approach is moving from manufacturing industries and spreading in other industries.

Six Sigma can be defined as systematic approach as it is based on statistical tools and data to reduce the variation or reduction in defects. The Six Sigma method includes DMAIC (Define, Measure, Analyse, Improve and Control) for process improvement. This methodology strongly emphasis on gathering statistical data and root cause analysis.

This study is initiative to practice Taguchi’s experimental design methodology with Six Sigma DMAIC approach for improving quality of product and productivity of businesses by reducing defects.

The engineering group in this study initiated Six Sigma to improve the situation and achieve quality by setting following objectives:

  • Reduce the defect rate
  • Achieve customer satisfaction
  • Achieve on time delivery
  • Improve process productivity with marginal increase in cost of quality.

      Research and Background

Six Sigma traditionally was used to reduce the cost but with recent studies it has been stated that it could be used to increase profitability, drive innovation and enhance organisational learning. The successful implementation of Six Sigma requires rigorous application of tools and techniques at each stage of process. At the heart of Six Sigma approach is the application of DOE (design of experiment). DOE is methodology for systematically applying statistic to experimentation. It was originated in UK and USA during 1920s. The Taguchi method is named after Japanese scientist Taguchi, the Taguchi method of experimental design is conventional approach that enhances productivity of better-quality products and maintain low cost. It is an efficient and effective method of identify parameters which influence the process. It is modified approach to traditional process and is widely used in making improvement by developing orthogonal array and simplifying the analysis of variance.

      Relation between Quality and Productivity

Businesses focuses on improving the profits, but it should be without compromising the quality. Productivity and quality should increase as a whole, improving productivity by compromising quality may end in failure. Deming stresses on improving quality in order to achieve productivity. Improving quality and productivity simultaneously serves following benefits to a business:

  • Productivity rises
  • Quality improves
  • Cost reduction
  • Employees satisfaction

 

 

Before

Case1

Focus productivity

After

 

 

Before

Case2

Focus productivity and quality

After

Total items produced

1000

1100

1000

1000

Defective Items

100

220

100

10

Good Items

900

880

900

990

Improvement

90%

80%

90%

99%

Table1 Productivity vs productivity and quality focus to improvement

As it is illustrated in the table above increasing productivity by 10% may stress the production resources and result in 20% of defective products resulting in reduction of number of products to 80%, 10% drop as compared to the original. Whereas in case two when the focus is shifted on both quality and productivity, the defect rate can be brought down to 1%.

Improving productivity through quality can bring all desired results, better quality, improve productivity, cost reduction and sustainability.

Six Sigma Implementation phase

Company– the company in this case study is based in South India named SME, it produces aluminium components for Automobiles companies throughout the country and abroad. Two stroke engine oil pump body is taken as main component for this study, as it has the greatest number of rejection then another component. The die casting is manufactured by using pressure die casting method. Most of the products are sold within country as most of the orders are made to order. The large numbers of defects make it difficult to meet the demand of costumers and put pressure on the business. At the customer end product is further put under heat for 24 hours before use. During the process blow holes can appear particularly at flange section, which further may result in oil leakage.

That is why it is essential for compony to produce porous free component to reduce the rejections and the cost accrued due to rejection.

Define Phase: (DMAIC)

This is the initial stage of DMAIIC phase, it aims to define the scope and process of implementing Six Sigma as per customer requirement. This stage is crucial for top management in order to optimise productivity and achieve customer satisfaction. After doing root cause analysis it was concluded that die processing is causing the defects.

Measuring phase:

This is an important phase where all the data is gathered for further analysis. It is further divided in two aspects

Measuring Phase

 

Calculating current sigma level

Data collection

 

1)      Calculating defect per unit of batch (DPU)

2)      Calculating defect per opportunity(DPO)

3)      Calculating defect per million opportunity(DPMO)

4)       

It is important to calculate current sigma level while implementing six sigma within an organisation.

Current sigma will provide clear vision of the current process capability and compare it with the results achieved after implementing SIX SIGMA.

Analyse Phase:

At this stage data is analysed to map out the process for improvements. In the case above it is vital to know the core source causing the blowholes. Cause and effect study is conducted with the help of expertise of the field, parameters that can be potential reason of causing the variation are shortlisted.

Improvement Phase:

Various experiments are done to determine the best approach of improvement among the 5 selected parameters. Different experiments are run and the results from each of them is recorded for evaluation. Variations, chances of DPU and SIGMA level is calculated.

Control Phase:

Purpose of implementing SIX SIGMA is not only to improve the process but to also provide sustainability to the process. To every change the major risk is slippage, it is hard to change and sustain with it. This phase of DMAIC requires standardisation, monitoring, which is another property of SIX SIGMA. Evaluation report shows the control limit. Metal temperature and degassing were classified as major parameters causing blowholes. Further extensive training was needed for the staff involved in die casting process, as it is important for employees to be aware of changes and new set standards of the company. A fully evaluated database is provided which helped to maintain the new set standards and process too be sustainable. After conducting final confirmation test results illustrated that the defect rates gone down to 4.8%. (Muthuswamy Shanmugaraja, n.d.)

Result and Conclusion:

The study above illustrates the results that were achieved by implementing SIX SIGMA in business process to reduce the defects. Not only the defects were reduced but the quality outcome was better and rejection rates went low as well, resulting in improved productivity.

SIX SIGMA AND CHALLENGES

                                                        Face off with resistance

Abstract:

Following are two different scenarios where changes wer introduced and it was countered with resistance. How the countermeasures were laid, and suggestions are discussed as well in following report. Motorola also known as birth place of SIX SIGMA is one of the examples of resistance faced while implementing the change in the business process. The other example is based on Nokia’s failure to accept innovation and their ultimate downfall as an organisation. Six Sigma is given as suggestion for the case at the end of it.

Case1> Motorola Story:

Emergence of Six Sigma

1981 the year the threat of Japanese competency put most of the American companies under threat. After world war 2 japan build themselves on the foundation of quality, causing major upset to American company in profit. Motorola found them in a spot where they pushed themselves to find the solution to gain some competitive advantage. Motorola gathered their top most brains to lay down the new layout of business process. They were lagging and to match with their Chinese counterpart they had to make 1000% improvement in next 5 years. They gathered all the quality management practices known at that time and thus laying the foundation of Six Sigma.

Criticism and Resistance:

Many raised doubts on Motorola’s approach, saying it is a suicidal mission as it was a huge risk. They were criticised by media saying that they used shareholders money to achieve their goals.

Motorola faced internal resistance from their employees, as it was a big cultural change. With the big goal set by the management these challenges were potential threat to the success.

Overcoming the barriers:

Even though the process seemed straightforward it was not that simple. Total Quality change was a big cultural change. 

How they did it?

Answer was one person at a time, as we all known work of Deming is one of the bricks in the foundation of six sigma, his 14 principle were a big guidance to achieve the desired change.

Motorola break down the whole organisation in to small teams and each team were defined their goals, certain ways to measure their results. On job training was provided to the employees to enrich their knowledge with the changing process. The whole process of Motorola is divided into following steps:

1)      Need to change

2) Acknowledge the resistance

3) Get everyone on board

4) breakdown into small teams

 

5) Allocate the goals to each team

 

6) Provide on job training

 

7) focus on total customer satisfaction

Motorola was strongly motivated to make change happen, even with all the doubts and criticism they manage to overcome those barriers and thus implementing and introducing Six Sigma to the world. They were able to compete with their Japanese competitors and achieved total quality management. (Management study guide, n.d.)

Case 2> NOKIA’s RESISTANCE TO CHANGE

1)      Founded in 1865

2)      1982- introduction of first car phone

3)      1987- first hand held phone by Nokia

4)      1998- the year by when Nokia became largest phone manufacturer

5)      2007- a new competitor in market, Apple i-phone introduced to world

6)      2008- emergence of Google Android phones

7)      2010- a new partnership (NOKIA/ INTEL), project MeeGo.

8)      2010- first non-finnish CEO appointed (Stephen Elop)

                              Resistance to Change at Nokia

                                                          (Failure of top management)

 

Cultural effect

Being a Finnish company, Nokia had similar cultural beliefs. Uncertainties were not welcomed by Finnish culture, with company undergoing changes, no communication, no job securities put employees in an uncomfortable spot thus pushing them to protest the company. Hiring of non-Finnish CEO was not accepted as well as this was the first time in the history of company.

With the appointment of new CEO, the project MeeGo was shelved, which enraged the employees who have put their time and effort in major project, Causing major upset. Employees working on MeeGo were essentially skilled and equipped with knowledge, closure of the project resulted in loss of the knowledge acquired during the process.

Employee engagement was one of the major flaws of management at Nokia, new policies were been made and inputs from employees were not even considered. As per the employees, MeeGo would have been a valuable project if not cancelled. Rather than admitting or owning the failure of management, CEO was blaming employees for the failure in his memo. These behaviours pushed employees to go against the company and thus causing the ultimate doom of Nokia. (Yashaswini aggarwal, n.d.)

                                  SIX SIGMA A SOLUTION TO NOKIA’s PROBLEM

Following is the breakdown of suggestion how six sigma could have been solution to Nokia. DMAIC is used as the main tool to approach the case:

The main issue with Nokia was denial of the top management, not giving employees opportunity to put inputs and concerns. The first step is to realise and accept that the change is necessary.

DMAIC:

Define phase- the initial stage and crucial one, it is important to define your goals and set the scope. Getting everyone on board is vital for this step, defining your goals and making sure everyone understand what the gaol to work toward it.

Measure- Six Sigma is a Statistical process based on data and it is important to measure and gather data during ongoing process for evaluation.

Analysis- the data gathered during measuring stage is used for further analysis to map out the process to define the best process.

Improvement- this stage target on continuous improvement based on the new business process to achieve optimised and desirable results.

Control- this is most crucial stage of any change process, implementing the change is delicate process. the risk of slippage is always there. By this phase there are certain control measure defined which should be followed to sustain the process.

It would have given Nokia advantage if they would have considered to give chance to their employees to state the concerns and put input. They were too comfortable in their shell and in denial of innovation. As we have learned that innovation is the key to sustain and employee engagement is vital for the change process.

Conclusion

After researching for the material for the case studies, one can conclude that Six Sigma is a data base statistical approach for a business to improve. It being based on statistically gathered data and evaluated analysis makes it reliable. Change seems like a good idea but it is not as simple as it looks, it is a delicate process which need strict and well designed methods to implement it. In case of Motorola, the way they improved dramatically and eradicate the threat of Japanese competition is applaudable. As seen above in Case 1 where Six Sigma was purposed to a compony with the productivity issue, it proved to be helpful to improve the productivity, reduce the defects and improve total quality as well. In case of Nokia, management arrogance and denial of innovation were their ultimate downfall, thus giving world a valuable lesson about innovation.

References

  • Management study guide. (n.d.). management study guide. Retrieved 12 21, 2018, from The motorola sic sigma story: https://www.managementstudyguide.com/motorola-six-sigma-story.htm
  • Muthuswamy Shanmugaraja, N. G. (n.d.). Quality and productivity improvement using Six Sigma and Taguchi methods. Retrieved from https://www.researchgate.net/publication/264837847_Quality_and_productivity_improvement_using_Six_Sigma_and_Taguchi_methods
  • Yashaswini aggarwal. (n.d.). Slideshare. Retrieved 12 21, 2018, from in slideshare: https://www.slideshare.net/Yashaswini100/resistance-to-change-nokia-case-study

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