Six Sigma Practical Experiences - Case Study Example

Index Index 1 Company Profile and Six Sigma 2 Reasons for Implementing Six Sigma 3 Advantages and Disadvantages of Six Sigma 4 Critical Success Factors of Six Sigma 6 Cultural Change Management for Six Sigma Reception 8 Other Approaches Employed 10 Summary 10 References 12 Six Sigma Practical Experiences: HSBC Middle East Dubai Company Profile and Six Sigma The HSBC Middle East is a banking and financial institution which is a subsidiary of the international group HSBC Ltd. The company has been operation in the region for the last 13 years since the acquisition of The British Bank by HSBC Group. The company provides customers, businesses as well as corporate clients with services pertaining to banking products and services, lending services as well as investment related services. Aside from these the company also provides protection solutions for its customers through its insurance based products in the market. Aside from the normal banking services of personal and corporate banking the company also provides a customized banking solution to its customers under the name of Amanah Islamic Banking. This is a service catering specifically to the Middle Eastern region (‘About HSBC UAE’). Six Sigma is a business process reengineering initiative employing the tools and strategically specifically proposed by Motorola in the 80s for the purpose of improvement in the business sectors. The approach makes use of elimination of problems and defects in business process, and streamlining of business units in order to make a business sector efficient therefore increasing the profitability returns (Sharma, 2003). HSBC Middle East has been employing Six Sigma across is business units to increase performance while seeking long term continuity of business process efficiency (Menon, 2012). Reasons for Implementing Six Sigma The Company sought to implement Six Sigma across its business units in order to reduce the inefficiencies while trying to achieve maximum profitability from the departments. The company also sought to further grow the reach of its services and products in the market through the implementation of Six Sigma across the company. The departments which were employed under this technique included all the business units of the organization. However especially focus was on the quality and customer service departments and those pertaining to settlement, administration, reporting and those dealing with corporate accounts (Marx, 2005). Aside from these the company has also made implementation in quality assurance department along with those pertaining to the back end processing at bank branches, the account management processes as well as those relating to investment and securities. Aside from the main reasons for the implementation of Six Sigma at the company included: 1. The need to have the products of the company in the Middle East align with global benchmark for these products and services 2. To make sure that the business processes across the business units of the company are efficient as well as robust 3. To be able to meet the demand and requirements of the customers along with the expectations that they have from HSBC Middle East 4. To ensure that a consistent and high performing culture for quality and its standard maintenance is set in the company at all levels 5. Identification of the available tools and strategies of the field depicted that Six Sigma is the program that could best meet the above highlighted needs and therefore selected by HSBC Middle East as a company wide initiative. Six Sigma approach provides that if the problems or defects are known to the business, the business can strive to become efficient and improve process performance through the removal of these defects (Mast, 2006); (Nichols, 2006). In this effect companies seek this approach to be more profitable through the removal if inefficiencies. Advantages and Disadvantages of Six Sigma The advantages of the Six Sigma methodology that were experienced by HSBC Middle East were many. Firstly the vast amount of work conducted on Six Sigma enabled the company to apply it in the organization in a restively easy manner. The ease of availability of resources and the customized approaches for the different aspects of banking and financial institutions were much helpful in this regard (Azis and Osada, 2011). Aside from this the methodology enables the company to be more customers focused while fulfilling the requirements of the business. The company which is highly customer oriented as depicted through its own organizational culture and its approach towards business experience of an alignment with the customer driven nature of Six Sigma (Kumar et al., 2008). Management of data and facts across the company were made possible in an efficient manner which was a direct result of improvement and management of the business processes of the organization. The collaboration of the methodology across the organization played an important part in the company’s use of the approach. The main disadvantage that was experienced by the company from this approach was it was a cause of significant investment to be made by the company which raised costs for the period of implementation. Moreover the in depth approach required training of staff in the technical aspect of Six Sigma and the employment of trained professionals as yellow, green and black belts that raised the costs of the company while employing significant time investment as well. However after the application of the methodology, the company was able to see improvements in the business processes which reflected in the cost reductions it made specifically in the settlements area and those pertaining to management of accounts, back end branch processing and the investment and securities sections of the business. The main advantages that relate to Six Sigma are that the methodology is customer driver and in this manner highlights the satisfaction levels of the customer while aiming to minimize the defects that might be present. The innovative perspective of Six Sigma directly focuses on value for the customers. In addition to this implementation of the methodology enables the organizations to increase their performance, and profitability while enabling reductions to be made in the costs (‘Six Sigma Expert’). The results of the Six Sigma are therefore made transferable as financial returns for the organization. The Six Sigma is also versatile and therefore can be employed in any field pertaining to the business. The approach is most suitable for companies seeking lasting sustainability of their high performance as it focuses not on the final results targeted but on making the processes in order to continuously improve them. The proactive nature of the methodology makes it attractive to apply and the training aspect is incorporated in the methodology which makes it comprehendible. Critics argue against some of the disadvantages that the Six Sigma methodology can result in. Some of these include that the methodology may be deviating focus from more urgent business process where applied on a company wide scale due to it’s in depth process assessment and improvement nature. Aside from this the approach focuses on having rigid processes in order to make them efficient, but this has the disadvantage of removing the element of innovation form them as well (Antony, 2004). Accountability for outsourced projects can be affected where improper management of these occur. The Six Sigma approach also requires a significant amount of manpower for implementation and the training of the employees in the Six Sigma approach. However this can raise the cost for the company at the implementation stage. Aside from this companies cannot simply brand themselves as Six Sigma companies without actually implementing it in all aspects. This proactive effects the reflection and image of the approach in the market while being an expense for the organization itself. Critical Success Factors of Six Sigma The implementation of the Six Sigma approach and its rollout throughout the organization depicted that for HSBC Middle East there exist some success factors which were significant in relation to the Six Sigma approach. Six Sigma was employed at HSBC Middle East with the perspective that the cultural aspects of the Six Sigma would be reinforced in the organization instead of simple implementation of the Six Sigma methodology in order to attain excellence in their processes. The company employed the common sense approach for the development and improvement of its business processes seeking ease of use for the employees as well as the customers of the organization as the main goal (‘Lean Six Sigma at the World's Local Bank’, 2011). The essence and culture of Six Sigma were incorporated at the very basic employee level as HSBC Middle East was of the approach that if Six Sigma is embraced by the employees BPR and improvements in the business processes would occur as a product of the adoption. The company focused on the satisfaction of its customers, and in this regard the company sought to keep the critical quality intact with the view point that management of CTC would automatically generate in better financial gains on operations. For this the company employed the lean filters under the Six Sigma approach specific to the processes, the culture and the structure of the HSBC Middle East along with its corporate governance. The company provides that the success of the lean Six Sigma approach and its application at HSBC Middle East has been that the company employs it with a flexible and a situation dependent perspective seeking the sustainability of the Six Sigma at the organization instead of focusing too much on its methodology. The literature provides that the key success factors for Six Sigma pertain to its ability to provide commitment to change and BPR through out the organization by demand and driving the commitment of the leadership (‘Six Sigma’). The strategy alignment of Six Sigma is another critical success factor as it depicts that Six Sigma can align the strategy of the company to its business process removing inefficiencies (De Feo and Bernard, 2005). Aside from this the Six Sigma is customer focused as well as business focused helping the organizations maintain their customer orientation while seeing process improvement at the business level (Eckes, 2002). The aspect of business process management and BPR are significantly useful and contribute towards the successful reception while driving positive results. The approach towards development of teams and team management under the Six Sigma approach is another success factor along with the fact that Six Sigma deals with statistical and measurable factors that can be quantified managed and projected making them easier to assess and manage for the organization. Cultural Change Management for Six Sigma Reception Management of the company has enunciated that culture is not stable and should be allowed to change with the passage of time in order to keep pace with the changes in the industry and the markets. Specific to this the company employs an approach whereby it seeks to be profitable while making proactive change adoption. The process employed for this is to be progressive, adaptive, creative as well as encouraging in terms of its culture (‘Lean Six Sigma at the World's Local Bank’, 2011). Specific to Six Sigma the company focused on the culture of the organization and sought to create acceptance for Six Sigma in the organization and its people. In this regard the company took on a set of initiatives to build a culture of change in the organization especially in the top management of HSBC Middle East. The reception of the Six Sigma approach was then tackled through project selection, training, management of process and project reviews. In terms of project selection, the initial years after the employment of the Six Sigma was significantly important as much difficulties were faced at this stage. The projects were selected depending on the forecasted profitability of their success (‘Lean Six Sigma at the World's Local Bank’, 2011). These were then targeted and completed in short time frames in order to assess their profitability for the company. For the purpose of these tasks, the test projects were employed as pilots specifically work the business learning perspective. Then in order to select the best application project the company made use of data mining, process mapping and justification from the customer perspective. Specific to training the company invested in a professional Six Sigma team at the organization. For this the company trained its employees to attain certification for the stages of Six Sigma approaching Yellow, Green and Black belts. The trained professionals then embarked upon the management of statistics, using bench marking and designing of experiments for the Six Sigma across the organization. Support for this in terms of training was employed through a phase based training provided to the professionals with the aim of enabling them to measure, analyze while seeking improvement in business processes and managing quality. Specific to the resources employed for the projects were assessed by the company in terms of their importance and the criticality of the projects The result of this approach was employment of DSSP, DCAM, TQSS, and DMAIC with the former two being used for the development of new processes and the latter two used for new making improvements in the current processes of the organization. Specifically for reengineering of the business process the CFPM methodology was employed. The result was that the management of the company made use of ideation tools, definition tools, those for selection and tracking and relevant reporting tools for the deployment of Six Sigma across the organization (‘Lean Six Sigma at the World's Local Bank’, 2011). . Other Approaches Employed Aside from Six Sigma and Lean Six Sigma, HSBC Middle East also makes use of in house expertise and team based approach for the transformation and business process engineering at the company for sustaining performance in the organization. These are based significantly on critical thinking and the resources of the trained professionals who often employ Six Sigma methodology to these as well. Aside from this Total Quality Management is also employed. Summary HSBC Middle East has invested significantly in the management of its projects and business processes for sustainable performance in an efficient manner. The company has immersed itself in the Six Sigma approach on all levels. The company has been able to do this by building a culture around Six Sigma and lean practices of Six Sigma. The main reason for the employment of Six Sigma in the organization was to create process efficiencies and long term sustainability in the fields of settlement, investment banking, back end branch operations and service quality management for customers. The company is a customer oriented establishment and in this regard the employment of the Six Sigma approach has been useful as the approach also highlights customer centralism while striving to create business process efficiency. There were many other advantages which supported Six Sigma, but the main disadvantage was the amount of time and investment required to use the approach. References 2004, How Six Sigma transformed HSBC’s US Futures business, HSBC Publication, available at 2011, Lean Six Sigma at the World's Local Bank, Process Excellence Network, available at 2012, Companies use powerful Six Sigma tools to cut costs in a post-recession economy, AME Info Middle East, available at About HSBC UAE, Official Website, available at Azis, Y., Osada, H., 2011, An empirical study of new value creation in financial service companies using design for Six Sigma approach, International Journal of Productivity and Quality Management, Vol. 7, Number 1, pp104-124 Antony, J., 2004, Six Sigma in the UK service organizations: results from a pilot survey, Managerial Auditing Journal, Vol. 19, Issue 8, pp1006 – 1013 De Feo, J.A., Barnard, W., 2005, JURAN Institute's Six Sigma Breakthrough and Beyond - Quality Performance Breakthrough Methods, Tata McGraw-Hill Publishing Company Limited Eckes, G., 2002, The Six Sigma Revolution: How General Electric and Others Turned Process Into Profits, John Wiley & Sons Kumar, M., Antony, J., Madu, C.N., Montgomery, D.C., Park, S.H., 2008, Common myths of Six Sigma demystified, Emerald 25 Marx, M., 2005, HSBC, iSix Sigma, available at Mast, J., 2006, Six Sigma and competitive advantage, Total Quality Management & Business Excellence, Vol. 17, Issue 4 Menon, S., 2012, Companies use powerful six sigma tools to cut costs in a post-recession economy, Blue Oceans Academy Press Release, available at Nichols, H., 2006, Six sigma for financial services: how leading companies are driving results using Lean Six Sigma & process management, Lavoisier Sharma, U., 2003, Implementing Lean principles with the Six Sigma advantage: How a battery company realized significant improvements, Journal of Organizational Excellence, Vol. 22, Issue 3, pp43–52 Six Sigma, Win Management, available at Six Sigma Expert, Advantages and Disadvantages of Six Sigma, Six Sigma, available at Yu, J., Zahee, S., 2010, Building a process model of local adaptation of practices: A study of Six Sigma implementation in Korean and US firms, Journal of International Business Studies, Vol. 41, pp475-499 Read More