Production and Operations Management – Meaning and Important Concepts
Introduction The very essence of any business is to cater needs of customer by providing services and goods, and in process create value for customers and solve their problems. Production and operations management talks about applying business organization and management concepts in creation of goods and services. Production Production is a scientific process which involves […]
Operational Transparency
As children, we have always had to prove to our teachers or our parents that we have been working. The homework book was proof that we have spent our time productively and would often calm down angry parents and teachers. It seems like the same principles also apply in corporate life! Harvard Business Review has […]
Organizations Gain from Embracing Business Process Improvements
Business in present times is very challenging and dynamic. The nature of markets, life cycle of products and services as well as the Customers and their expectations have changed. So has competition. No business can survive this change unless and until they re-invent themselves and equip themselves to face competition. While some Organizations build their […]
Understanding Sigma Levels
What Is Sigma ? Sigma or standard deviation is a statistical measure of dispersion in data. It is a measure which uses the characteristic of past data to make judgements about how the process will perform in the future. If a given set of data has normal probability distribution then the number of defects that […]
Switching Over From Socialism to Capitalism
Socialism is a failed idea. Many nations in the world have now tried socialism. It is no surprise that all of them have failed. After the World War-2, the world was divided into two lobbies. There was the capitalist lobby led by the United States. Then, there was the socialist lobby which was led by […]
As mentioned in the earlier articles, Six Sigma helps the organization develop at various levels viz. operational, tactical and strategic. While the operational and tactical goals of cost reduction and increased customer satisfaction are well understood and appreciated, the strategic intent behind Six Sigma is not well recognized. It is the pivotal factor, however in the success or failure of any Six Sigma initiative in the organization. Here is an explanation of the same:
When Six Sigma was introduced by Motorola, it became a strategic advantage for them. Since, not many of their competitors had the efficiency of Six Sigma tools, they were leading these corporations and the marketplace. However, with the passage of time, every major corporation on the planet has developed a Six Sigma program. Efficiency is now the name of the game. Hence, from a strategic standpoint, there are now Six Sigma programs competing against other Six Sigma programs and the better ones win!
Over the course of time, there have been numerous studies that have been conducted about the efficiency of these Six Sigma programs. It has been found out that companies that follow Six Sigma projects sporadically do not stand to gain as much from it as do companies that have a well co-ordinated effort. Today’s marketplace requires using Six Sigma processes to execute the companywide strategies.
An organization that is truly dedicated to Six Sigma philosophy will find many and varied projects that can be executed. Even an already Six Sigma organization needs to be developed over time. This is because technological changes unleash better ways of doing work and the organization must continuously adapt.
Hence, the challenge lies in prioritizing between the different Six Sigma projects and executing the correct ones. Projects must be checked for strategic fit i.e. how do they help meet the long term goal of the organization in question.
Example: A company like Facebook that relies on intimate knowledge of its customers to place ads, must execute Six Sigma projects related to Customer Relationship Management (CRM) first and then if resources are left must consider alternative projects. Facebook would not want to be operationally efficient at the cost of being misdirected from its long term strategy.
It is for this reason that Six Sigma has been tied up with a process called Hoshin Kanri by the Japanese. Roughly translated into English, it means management of direction. Six Sigma efforts, therefore need to be well directed.
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The Cost of Poorly Performing Processes – Need for Six Sigma
February 12, 2025
