Symptoms of an Overheating Economy
The IMF recently asked the Philippines to take measures to rein in its overheating economy. This is not the first time the IMF has made such a statement. In fact, IMF commonly asks countries to take measures to prevent “overheating.” However, the problem is that there is no standard definition which defines the phenomenon of […]
The Great Indian NBFC Crisis
The Non-Banking Financial Companies (NBFCs) are quasi-banking institutions in India. They are allowed to make loans just like banks do. However, they are not allowed to take deposits from people in order to make these loans. Hence, these Non-Banking Financial Companies (NBFCs) borrow money from the bond market in order to make loans. Traditionally retail […]
What is TRIZ Matrix and How to Use it ?
TRIZ Matrix is a technique developed by Russian scientists to formalise the process of innovations. TRIZ is a Russian Acronym for Theory of Inventive Problem Solving. The English acronym is TIPS and is often used to refer to the same analysis. The TRIZ is a powerful tool that helps brings the insight of years of […]
The Economic Effect of the American Deep Freeze
In the beginning of 2019, America has been hit by a weather phenomenon known as the Polar Vortex. This phenomenon has brought chilly winds and freezing temperatures to the United States. In many parts of the country like Chicago, the temperatures have hit historic lows and were close to -50 degrees! The daily life of […]
Are Women Leaders Better Than Their Male Counterparts? Lessons from the Pandemic
How Women Leaders Were More Effective Than Their Strongmen Counterparts The Covid 19 Pandemic has taught several lessons. Right from the crisis of neoliberalism to the way in which the leaders of the countries and the businesses provided leadership, the pandemic has made us realize some bitter truths about our leaders. For instance, all the […]
A production defect in a company like GE (General Electric) might result in that specific product or the part being removed from the assembly line and not sent out as finished product.
However, in the service sector, a process error might prove to be costly as in the case of the JPMC or Citigroup (banking or financial services company that have adopted Six Sigma) where the “leverage” for each transaction is more and hence an error in a process can be magnified several times.
A literature review of the differences between adopting Six Sigma for manufacturing and services yields the finding that there are four things to consider before service organizations adopt Six Sigma as a way of life in their organizations.
However, in the banking sector, there are some processes that are highly complex and do not lend themselves to standardization in the same way that a process in the manufacturing sector does. Hence, the challenge for the service sector is to consider which process can be mass-customized meaning that the process is the same for all customers and in all conditions and then apply the quality frameworks to achieve process excellence.
An example of a mass customized process in the banking industry or for that matter any service sector company would be the payroll and the credit card accounting processes that lend themselves to standardization. Similarly, in a fast food chain, the processes lend themselves to a high degree of standardization and hence these can selected for application of the quality frameworks.
However, in service companies, defining a defect is a challenge as the conflict between quality as demanded by the customer and the quality of the service as offered by the service provider are two different things. Owing to the perceptual nature of arriving at an understanding of what a defect is, it is often helpful to define the defects in terms of customers lost, customer satisfaction ratings and service turnaround times.
What these three parameters mean is that the concept of quality in the service sector is often dictated by the customer. Hence, efforts must be made to understand the customer point of view by using skilled researchers and service representatives to implement a “feedback loop” that feeds into the system prevalent in the service industry and self corrects (in the ideal case) or is prodded to do so.
The leadership and management practices that have been found to have contributed to the successful implementation of the quality frameworks would be analyzed in this section. As the case study pertaining to the Dow Chemical implementation of Six Sigma framework shows, there needs to be sustained focus on the goals and objectives that have been set for the Six Sigma implementation.
The analysis of the Case Study of Dow Chemical shows how the leadership implemented a “Staircase of Change Leadership” model that has the ten attributes progressing from each step starting with the enunciation of “vision” and culminating in the success step of the staircase that represents the pinnacle of achievement for Dow.
The Dow Staircase of Change Leadership consists of the following steps: Vision, Values, Attitude, Language, Behaviours, Best Practices, Articulated Strategy, Implementation, Culture Change and Success. The emphasis at each step of the model is to have a coherent strategy to implement Six Sigma and ensure that it is driven from the top as well as embraced by the bottom.
In short a combination of top driven and bottom-up strategies that enunciate a clear vision to be the leader in achieving Six Sigma compliance is the focus of the model as followed by Dow Chemicals.
The key points about this model are the emphasis on “terminology” that is unique to the framework and its implementation (the language step), the necessary “behaviours” that are needed to be followed by each employee and which were communicated as part of “road shows” and the adoption of best practices from across the industry and customizing them to the specific case of Dow Chemicals.
The other case study that is being analyzed for Leadership practices is the one that has been followed by the Doosan Company in South Korea. Under the six-sigma framework adopted by Doosan, there are five elements in the model that are aligned with each other in pursuit of the objective of quality excellence.
The five elements that Doosan incorporates in its model are
An analysis of the elements reveals the fact that each of them cannot function without the cooperation and collaboration of the other and a coordinated and synchronous approach towards pursuing the Six Sigma framework is what gives Doosan the edge over its competitors.
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The PDSA (Plan-Do-Study-Act) Technique for Quality Improvement
February 12, 2025
