Total Quality Management through Six Sigma - Coursework Example

Introduction Most of us would have heard of the revolutionary quality management methodology and framework, Six Sigma. For quality professionals and people in manufacturing and operations, Six Sigma is a buzzword for effective quality management and rigorous application of defect prevention and reducing wastage in the organizational processes. However, in recent years, there has been movement towards a new model of quality excellence called Six Sigma Plus. This model of quality excellence goes beyond the methodology employed by Six Sigma and is aimed at aligning people and processes not to mention the management focus towards accomplishing the goals of effective quality management. This paper discusses the Six Sigma Plus model of quality management (“the how and what” of the model) along with illustrating the differences between this model and the traditional quality frameworks of TQM (Total Quality Management). There is also a separate section on analyzing the differences between Six Sigma Plus and its predecessor in quality excellence, Six Sigma. The focus throughout the paper would be on finding the “Plus” factor that lends the chosen framework the advantage over the traditional frameworks of Six Sigma Plus and TQM. The paper also discusses the origin of Six Sigma Plus as a methodology that was pioneered by Honeywell enterprises. What is Six Sigma Plus? The preceding section gave a brief introduction to “Six Sigma Plus”. Though Six Sigma is universally known for over two decades now, it is only in the recent past that Six Sigma Plus has become popular among the quality professionals. To put it simply, Six Sigma Plus is more than Six Sigma and the “Plus” is used to denote the “synergies” that are achieved by integrating people, processes and strategy. For instance, Six Sigma aims reducing the defects in a million parts to 3.4. Likewise, Six Sigma plus uses the same metrics for defect prevention. So, one might be tempted to ask, what is it that is so different about Six Sigma Plus? The answer lies in looking at the scope of a typical Six Sigma Plus implementation as compared to a Six Sigma implementation. A Six Sigma Plus initiative aims to “integrate” the three cornerstones of an organization i.e. systems, processes and people and melding them together with the underlying business strategy. This means that unlike Six Sigma that concentrates on processes and reducing the defects, Six Sigma Plus goes beyond the statistics and instead aims at a “holistic” approach that takes into account the customer focus and customer centric strategy. Further, Six Sigma Plus is a “proactive” approach that anticipates future trends and acts in the present to capitalize on them when they become the standard. In this way, Six Sigma Plus hopes to go beyond Six Sigma in its scope. Now that we have defined what Six Sigma Plus is, it is useful to look at the areas covered in a typical Six Sigma Plus implementation. Traditionally Six Sigma implementations covered the production processes and aimed at defect reduction and defect prevention in those processes. However, Six Sigma Plus implementations typically cover all the departments including the functional areas and the product development functions as well. This ensures a comprehensive coverage of all the processes in an organization and not only the production processes. Further, Six Sigma Plus implementations are typically customer focused which means that these implementations anticipate customer trends and act decisively to integrate customer needs and expectations into the implementations. Honeywell and Six Sigma plus: A Case Study The preceding sections have introduced the concept of “Six Sigma Plus” as it is now known. This section looks at the origin of the Six Sigma methodology by studying the case of Honeywell enterprises which pioneered the same. Before launching into the specifics of Six Sigma Plus implementation at Honeywell, it is pertinent to understand the way in which the concept of Six Sigma Plus evolved from the merger of AlliedSignal enterprises with Honeywell in the year 1999. Before the merger, AlliedSignal was using the Six Sigma methodology with great success and Honeywell had its own quality initiative called HQV (Honeywell Quality Value) that was based on the Malcolm Baldridge model of quality improvement. As the company website of Honeywell puts it, “Six Sigma Plus is an overall strategy to accelerate improvements in all processes, products and services, and reduce the punitive cost of poor quality through elimination of waste and reduction of defects and variations.” Further the website states that “One of the ultimate aims documented in the Six Sigma Plus strategy is “Providing maximum value to customers” by applying a logical and structured approach to all business processes.” (Honeywell, 2010) The operative terms here are “all business processes” and “alignment with the company strategy” as envisaged by the leaders who led the Six Sigma Plus implementation at Honeywell. As can be seen from this definition, Six Sigma Plus was conceived as a methodology that would combine the best elements of the internally focused Six Sigma initiative of AlliedSignal and the Customer centric initiative of HQV. The result was a blending of defect reduction and customer focus with a combination of strategy and alignment of people and processes with the “goal” of achieving holistic growth. The aim was to improve productivity and spur growth across all areas in which the merged Honeywell enterprises was operating. Hence, Six Sigma Plus was promoted as a means of ensuring overall growth and improving productivity with a continued focus on customers and integration of the feedback loop from the customers as well as internal stakeholders being an essential part of the process. Honeywell's Six Sigma Plus incorporates new skills and tools, and broadens the application of many existing tools. For example, it has added: • A process methodology to enable the success of its E-Business value creation strategy. Each element of that strategy uses the power of the Internet and Six Sigma Plus processes to differentiate itself by creating more value for customers. • Another learning curriculum specifically geared to marketing and selling processes to enable customer value creation and growth opportunities. • The Honeywell Quality Value (HQV) assessment process, which is based on the Malcolm Baldridge Award in the US. The assessment process focuses on gaps and identifies opportunities for improvement. • New skills and techniques for Total Productive Maintenance (TPM), a productivity skill-set which enables permanent improvement in the overall effectiveness of Honeywell's assets, be they equipment for production, laboratories, buildings, business support or transportation. • Broader applications for Activity Based Cost Management to analyze customer profitability and target future costs for new product development. As can be seen from the above, the key components of the Six Sigma Plus initiative are the TPM or the Total Productive Maintenance, Measurement of business effectiveness, ABM or Activity Based Measurement which led to the adoption of Activity Based Costing, new processes for marketing and selling functions apart from extending the Six Sigma initiative to administrative functions. The implementation of Six Sigma Plus in Honeywell has led to the following results: • Increased Rolled Throughput Yield (RTY) • Reduced variations in all processes • Reduced cost of poor quality (COPQ) • Deployment of skilled resources as change agents. These results point to the fact that Six Sigma Plus implementations at Honeywell have achieved the desired effect of overall improvement in productivity and increased growth in the bottom line of the company. Difference between Six Sigma Plus and TQM As the preceding sections have shown, Six Sigma Plus is a holistic approach when compared with standard quality management approaches like TQM or Total Quality Management. The “plus” in Six Sigma is the alignment of quality initiatives with that of the business goals and this is what differentiates Six Sigma Plus from TQM. Where TQM takes a narrow approach towards defect prevention and quality control with the ultimate goal of customer satisfaction, Six Sigma Plus takes the whole notion of quality management to a new level by starting with the customer and then aligning the business strategy with that of the quality processes. The point here is that TQM is more of an internally focused measure that aims to reduce defects and hence satisfy the customer whereas Six Sigma Plus takes the customer as the starting point and works the quality processes from this perspective. The other differences between TQM and Six Sigma Plus include the “change” aspect of Six Sigma Plus where the objective of the latter is to proactively seek measures to improve quality as opposed to that of the TQM methodology which concentrates on doing the same process to the quality norms prescribed for the process. The difference here is one of continuous improvement and change with each iteration as opposed to merely reducing the incidence of defects. The operative term here is “change” and the practitioners of Six Sigma Plus tend to call themselves as “change agents” as opposed to calling themselves as “quality champions” in TQM implementations. Further, Six Sigma Plus focuses on driving change through the organization by identifying areas in the processes that can be improved and being customer focused as well as extending the process improvement to all functional areas. In short, Six Sigma Plus covers the entire organization whereas standard quality management methodologies like TQM confine themselves to quality control and quality management of the production processes. The difference here is that Six Sigma aims to identify process improvements in all functional areas and build on them proactively whereas TQM usually contends itself to preventing defects in selected processes and areas in the company. As can be seen from the case study of Honeywell, the practice of Voice of the Customer (VOC) where the feedback from the customer is sought and incorporated into the process improvement paradigm is an important difference between Six Sigma Plus and TQM. The customer feedback and the overall business strategy of the company are integrated with that of the quality processes to bring about “synergies” that are absent in traditional TQM implementations. Differences between Six Sigma Plus and Six Sigma This section focuses on the differences between Six Sigma Plus and Six Sigma. As mentioned in the previous sections, Six Sigma Plus goes “beyond” the normal implementation of Six Sigma and has the added advantage of Customer focus, Process Improvement and Productivity growth as the cornerstones of its implementation. Though, the differences between Six Sigma Plus and Six Sigma appear superficial on first glance, there are indeed significant differences in the way these methodologies are implemented. The Six Sigma is a rigorous, focused and highly effective implementation of proven quality principles and techniques. Incorporating elements from the work of many quality pioneers, Six Sigma aims for virtually error free business performance. Sigma, s, is a letter in the Greek alphabet used by statisticians to measure the variability in any process. A company’s performance is measured by the sigma level of their business processes. Traditionally companies accepted three or four sigma performance levels as the norm, despite the fact that these processes created between 6,200 and 67,000 problems per million opportunities! The Six Sigma standard of 3.4 problems per million opportunities* is a response to the increasing expectations of customers and the increased complexity of modern products and processes. (Eckes, 2007, p.56) The Six Sigma framework posits an acceptance of two defects per billion samples tested. Though this might seem impossible to attain particularly in the manufacturing sector where quality slippages are common, it is indeed the case that several companies like GE, Dow Chemical, The TATA group and banking institutions like JPMC, Citigroup and Bank of America have successfully adopted the Six Sigma framework. (Evans & Lindsay, 2008, p. 67) The adoption of Six Sigma by these companies came about as a result of a focus on quality that was both top-down and bottom-up and the combined efforts of all the stakeholders ensured that the exercise was a success. However, it needs to be mentioned that adoption of the framework is the first step in the process of attaining quality excellence as the companies need to adhere to the framework in their every day operations in order to claim that they are indeed Six Sigma compliant. (Chowdhury, 2005, p. 90) If we turn to the Six Sigma Plus builds upon the capabilities of Six Sigma and as explained in the section related to Honeywell, the Six Sigma Plus is a merging of Six Sigma and HQV. The Six Sigma Plus initiative in Honeywell focused on bringing the together the statistical approach to Quality Management (Six Sigma) of AlliedSignal with that of the HQV approach or the Honeywell Quality Value approach that was being practiced at Honeywell. The difference between these two approaches was the internal focus of Quality at AlliedSignal and the Customer centric approach at Honeywell (which was an adaptation of the Malcolm Baldridge Model that was balanced in its internal and external orientation). After the merger of AlliedSignal and Honeywell, the quality initiative that stretched across all areas including production departments and functional areas as well as being customer centric in nature was called the “Six Sigma Plus” initiative. This initiative differed from that of the TQM approaches and typical Six Sigma initiatives in its breadth and scope as well as including the customer as a point of reference. The bottom line was the integration of people, processes and systems with that of business strategy to achieve what can be called a “holistic” approach towards quality management. As many experts have put it, Six Sigma Plus takes the Six Sigma methodology and adds the aspects of leading change to strategy, coaching leaders to people development, a practical approach to theory, implementation of customer focused projects to training, enhanced tools through components (as discussed in the section related to Six Sigma Plus) and using a mix of soft skills and hard skills to make the company more competitive with regards to its competitors. Conclusion This paper has discussed the differences between Six Sigma Plus and Six Sigma as well as TQM. The emphasis in this paper has been on finding the added advantage that companies get when they embrace Six Sigma Plus as opposed to traditional methodologies like TQM. As can be seen from the preceding discussion, the alignment of people, processes and systems with that of business strategy in a holistic manner and achieving synergies in the interaction of the components is a hallmark of Six Sigma Plus implementations. Further, Six Sigma Plus seeks to drive change and focus on leadership as opposed to merely training people in the methodology. The key term here is the ability to conceive of a different mindset when it concerns quality and hence Six Sigma Plus can be thought of a philosophy of quality as opposed to implementation of statistical measures of quality. In conclusion, Six Sigma Plus is an emerging model of quality excellence that goes beyond traditional conceptions of quality and gives an entirely new meaning to the concept of quality control. It remains to be seen how many companies adopt the Six Sigma Plus methodology and how successful this addition to the existing pantheon of quality initiatives would be. References 1. Basu, R, Wright, N, 2003, Quality Beyond Six Sigma, Butterworth-Heinemann, New York. 2. Basu, R, 2004, Implementing Quality, Thomson Learning, New York. 3. Biolos, J, ‘Six Sigma Meets the Service Economy’, Harvard Management Update, Vol. 7, No. 11, November 2002. 4. Bowen, D. & Lawler, E. 1994, ‘The Empowerment of Service Workers: What, Why, How, and When’, Management Review, Spring. 5. Chowdhury, S, 2005 Design for Six Sigma, American Supplier’s Institute, Livonia: Michigan. 6. Covey, S, 2002, The Seven Habits of Highly Effective People, Bantam, New York. 7. Dahlgaard, J, Kristensen, K, Kanji, G, 2002, Fundamentals of Total Quality Management, Taylor and Francis, New York. 8. Dean, J. & Evans, J., 1994, Total Quality: Management, Organization, and Strategy, West Publishing Co, St. Paul, Minn. 9. Eckes, George, 2007, Making Six Sigma Last, Free Press, Colorado. 10. Evans, J, Lindsay, W, 2008, Management for Quality and Performance, McGraw-Hill, New York. 11. Gitlow, H & Oppenheim, A & R, Levine, D 2005, Quality Management, McGraw Hill, New York. 12. Pyzde, T, 2003, The Six Sigma Handbook, McGraw-Hill, New York. 13. Stein, E., 1994, Next Phase of Total Quality Management, Marcel Dekker, Inc. 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