The Six sigma as a concept was introduced in the 1980’s by Motorola. Primarily it is associated with the manufacturing sector though in rent times, the service industries have also started using it to enhance quality of the output. Several studies have been conducted to discuss the various frameworks for implementing the six sigma methodology in firms (Evans & Lindsay, 2008). This research will be based on the extensive study existing literature pertaining to the various implementation models of Six Sigma used worldwide. Further a critical appraisal of these models would be done using data from selected Australian manufacturing and service firms. This will result in identifying the critical success factor for the implementation of Six Sigma and also provide a framework for its implementation.
The various research questions that the research aims to address are given below:
- What are the critical success factors for successful implementation of six sigma methodology in Australian firms?
- Are there any significant differences in the critical success factors for the Australian manufacturing and services firm?
- Develop a framework to implement six sigma methodology in Australian firms based on the critical review of the current models and the requirements of the firms.
The following section contains a brief literature review of the various identified research questions.
Six Sigma may be defined as a process that focuses on eliminating defects through practices that emphasize understanding, measuring and improving processes. The statistical concept of six sigma implies that the processes are delivering 3.4 defects per million opportunities. The core belief in six sigma management is that if defects can be identified, then they can also be eliminated to approach almost zero defect level (Magnusson et. al., 2003).
Six Sigma has been described in literature as a defect-elimination method as well as variation-reduction method of business strategy. To exceed the expectations of the customers, the method seeks to eliminate sources of variation after they have been identified. It has been expressed to be 3.4 defective-parts-per-million opportunities (DPMO) and a rate of success amounting to 99.9997% (Magnusson et. al., 2003). Some success factors relating to the Six Sigma have been identified, including change in culture, training, customer and human resources linkage to Six Sigma, among others (Coronado and Antony, 2002). In this research, we seek to examine how such factors influence firms in Australia and whether they act to influence performance of the companies. Other critical success factors have also been identified (Burton and Sams, 2005), with executive engagement, communications, resources, projects, management involvement, disciplines and consequences being critical (Hayes, 2002). Differentiating these factors between the manufacturing and service firms is of necessity as far as this study is concerned, because it can be assumed that these firms are affected differently by such factors. Since there is difference between service and manufacturing firms, this research will seek to identify them and discuss them. The benefits that could be gurnard by companies using the Six Sigma as a statistical process control (SPC) including improvements in product quality have also been featured in literature. Successful implementation of six sigma methodology in Australian firms will be studied in this case. In addition, the researcher expects that those factors affecting specific firms in Australia be as special and not only those generally applying to the case of all companies.
A lot of literature exists regarding general Six Sigma theory, a focus on its overall methodology, and the Six Sigma programs’ implementation. Literature has been found as scarce, regarding benefits of applying Six Sigma in smaller firms. It has been defined as the utilization of data in analyzing business use. Literature has been provided in large amount by the American Society for Quality website regarding Six Sigma, as well as the impact it has on the industry (Adeyemi, 2003). The case of Australian firms implementing Six Sigma and the methodologies adopted is of importance to researchers and how companies, in consideration to the special factors affecting them, can adopt specific methodology for implementation. There is need to investigate the differences between the implementation methodologies adopted by manufacturing and service firms.
The actual roots of Six Sigma can be traced way back to the introduction of the normal curve by Gauss (1777-1855; cited in CBS Interactive, 2010). In 1922, a means to measure output variation was conceptualized by Shewart Walter, and named ‘three sigma’ but he noted that to measure an output beyond this limit, it was important to utilize a process intervention (CBS Interactive, 2010). Until 1980s, firms were adequately utilizing the three sigma concept, which achieved a rate of defect of 2, 600 per million, and a process yield of 99.97% (51; cited in CBS Interactive, 2010). The application of Six Sigma would be expected to vary between firms, and there is need to investigate the local and international factors affecting implementation. Tremendous success was recorded for various industries from 1960s to 1980s when there was the strengthening of the Six Sigma methodology “from statistical process control (SPC)”. Literature has sought to explore the successor application of Six Sigma concept in different organizations; IBM, Nokia, DuPont, and countries such as Asia, Europe and the United States.
Literature traces the history of Six Sigma with Motorotola Company as a development by Mikel J. Harry. Literature reveals huge impacts for implementing Six Sigma as a business strategy. Literature also locates the source of the method as the letter Sigma being used in Greek alphabet for the standard deviation. The standard deviation is utilized as a measure to indicate “how tightly all the various samples are clustered around a mean in a set of data points” (Adeyemi, 2003; 6). The method can increase efficiency and reduce costs. How Six Sigma can be measured has been theorized; including many measurement standards such as Cpk, Zero, e.t.c. Today, different methodologies of Six Sigma have been adopted by various companies. Outputs of companies are of great interest to customers, and Six Sigma concentrates to the same. How different is the traditional case with the modern case as far as methodologies adopted for these cases are concerned, is an important matter requiring investigation.
A roadmap for the Six Sigma has been illustrated by Hoerl and Snee (2003; cited in Adeyemi, 2003; 9). The roadmap offers the experiences that many companies have had with the Six Sigma. It also provides a means to deploy Six Sigma. Companies can successfully focus on an outline provided in the deployment model, which conceptualizes four main steps “launching the initiative, managing the effort, sustaining the momentum and growing” (Adeyemi, 2003; 9). Whether this applies to all companies in an equal measure and whether there is similarity of results generated, is an important question. However, Hoerl and Snee (2003; cited in Adeyemi, 2003) have also shown that “all organizations deploying Six Sigma go through each phase and yet each organization will progress through the phases differently”.
Hoerl and Snee (2003; cited in Adeyemi, 2003) have chosen the aforementioned four steps as a transition point and they note that it is a large step for a company moving from a non-Sigma to a Six Sigma. Planning of the transition aforementioned need to be done by companies so that there will be breakthrough rather than pitfall for the process. Business today has found usage of quality systems and has encountered a revolutionalized scope through the introduction of Six Sigma (Goh, 1999; cited in CBS Interactive, 2010).
Some of the things which organizations should do to apply Six Sigma have been featured in literature. Literature has also conceptualized challenges that would be faced by firms with regard to implementation and developing of the level of Six Sigma. An example of this literature is by (cited in CBS Interactive, 2010). Global markets are highly competitive, and this is a challenge to the top management (major challenge). In addition, “resource consumption is one of the incentives responsible for the current level of development of Six Sigma” (Man, 2002; cited in CBS Interactive, 2010).
Again, some of the roles of top management for Six Sigma have been pointed out by CBS Interactive (2010), including preparation for “strategy for training black belts”, ensuring that the IT resources that can track Six Sigma has been availed, preparation of a strategy “for communicating Six Sigma to the organization’s internal stakeholders: managers, employees, and others”, and development of “job descriptions and compensation programmes for Six Sigma facilitators (called black belts)” (CBS Interactive, 2010).
This depicts that some organizations could be implementing Six Sigma because it is being adopted by other companies, or the reported results gained by some companies with the process (CBS Interactive, 2010). It is necessary to identify the actual factors affecting each firm as to lead to implementing Six Sigma. We expect that companies will be geared towards achieving some benefits from the implementation. Better results may be gained by firms as a result of meeting these challenges and obstacles, as well as features, because they will lead to understanding them better (perhaps), and this will help them enhance their strategic directions and need for training, mentoring, as well as coaching (Kwak and Anbari, 2004; cited in CBS Interactive, 2010).
Six Sigma has been advocated by aerospace industries as far as applying it to achieve cost reduction. It also achieves a shorter time cycle. In addition, it has been advocated by giants in the health care and electronics industry, all for the aforementioned reasons (CBS Interactive, 2010). There is the need to analyze other industries as well since industries would be expected to face different factors and achieve different results. CBS Interactive (2010) has noted a few concerns with regard to Six Sigma, including enhancement of customer satisfaction, design and monitor of business activities carried out daily, as well as improvement of the bottom line. According to McClusky (2000; cited in CBS Interactive, 2010), a level of 99% in quality is not acceptable, and Six Sigma can be used to bridge this gap. The Six Sigma modeling aspect has not yet been explored in the literature. Modeling the implementation phase is an important aspect of Six Sigma that requires further research. In addition, modeling should include “quality performance of an organization during management transition and changeovers” (CBS Interactive, 2010).
According to Hayes (2002), the critical success factors are executive engagement, communications, resources, projects, management involvement, disciplines and consequences. Further Burton and Sams (2005) identified sixteen critical success factors for successful implementation of Six Sigma in their book. Most of the implementation models for six sigma across various organizations are based on the DMAIC approach i.e. Define, Measure, Analyze, Improve and Control or similar variants of DMAIC (Magnusson et. al., 2003).
In this stage the objectives of the project and its boundaries are defined. These should be done considering the business needs, customer needs and in depth knowledge of the existing processes.
In this stage a detailed study of the existing processes is done to develop an understanding of the potential problems and their locations.
In this stage, brain storming is done regarding the identified problem areas to reach to their root cause and understand them in totality.
In this stage, the solutions are proposed, evaluated, developed and implemented to achieve the pre-defined objectives.
After the implementation of the finalized solutions has begun, it is important to control the processes so that sustainable results are achieved.
To conduct the requisite research and to find the answers to the various research questions, we intend to reply on both primary as well as secondary data sources. While the secondary data sources would be the literature review and the various implementation framework employed by various organizations. To supplement this, primary research would be done through the means of questionnaires and personal interviews with certain executives. This would help in gaining an actual understanding of the various issues faced during six sigma implementation and how do organizations tackle them.
The secondary data collection would be done through research of various related books, online texts and academic journals. For collecting the primary data through questionnaires, a group of 200 companies (large firms) would be identified representing both the manufacturing and service sector. Care would be taken to choose industries from diverse domains to prevent any bias in the conclusion drawn. Further this questionnaire would be sent through an email and the responses would be recorded. Additionally to capture the subjectivity of the process, personal structured interview of 20- 25 firms (based on availability of executives) would be conducted to understand the implementation process in a better way.
Limitations of the Study
There are certain limitations to the study being conducted. The various managers of the organizations may be sometimes biased towards the organizations and hence the information may not be correct which may raise credibility issues regarding the conclusion drawn. Further the study is collected across selective firms which may not represent all the different domains in the manufacturing and services sector. Additionally the firms under study are primarily large firms with huge resources at hand.
Scope of further research
A detailed study may be conducted in the future to research more diverse mix of firms in the manufacturing and service sector to address the research questions outlined in the current research. Further research on the small and medium enterprises (SME’s) should also be conducted to get their perspectives on the critical success parameters and analyze any deviation, if present. Also a framework can be drawn for implementation of six sigma methodology in SME’s.
Adeyemi, Y. 2003. An analysis of six sigma at small vs. large manufacturing companies. Web.
Burton, T. and Sams, L. 2005. Six Sigma for Small and Mid-sized Organizations. Florida: J. Ross Publishing.
Coronado, B., & Antony, J. 2002. Critical success factors for the successful implementation of six sigma projects in organizations. The TQM Magazine, 14 (2).
CBS Interactive. 2010. Six Sigma: A literature review. Web.
Evans, R. and Lindsay, M. 2008. Managing for Quality and Performance Excellence, in The Management and Control of Quality. 7th ed. Cincinnati: South-Western.
Goh, N. 1999. Perspectives on statistical quality engineering, The TQM Magazine, 11 (6), pp. 461-466.
Hayes, J. 2002. Six sigma critical success factors. Web.
Kwak, H., & Anbari, T. 2004. Benefits, obstacles, and future of Six Sigma approach. Technovation, 26 (5/6), pp. 708-715.
Magnusson, K., Kroslid, D., and Bergman, B. 2003. Six Sigma. The Pragmatic Approach. 2nd ed. Lund: Studentlitteratur.
Man, J. 2002. Six Sigma and lifelong learning. Work Study, 51 (4), pp.197-201.
McClusky, R. 2000. The rise, fall and revival of Six Sigma. Measuring Business Excellence, 4 (2), pp. 6-17.