The Grey Chronicles

2008.November.18

Six Sigma: GSPI version

Six-Sigma GSPI opted to deploy Six Sigma’s DMAIC methodology: Define, Measure, Analyze, Improve and Control, a process for continued improvement. It is systematic, scientific and fact based. This closed-loop process eliminates unproductive steps, often focuses on new measurements, and applies technology for improvement.

Began in 08 March 2004, GSPI spent for the hiring of two expats, Six Sigma Black Belts, who handled the initial deployment of Six Sigma when the company was then known as Global Steelworks International, Inc. [GSII]. Furthermore, there were ten reasons why GSII chose Six Sigma (GIHL, 2004), such as:

  1. It’s measurable, & not open ended like other quality systems
  2. It is a tool, a methodology to remove defects in products & services
  3. It encompasses manufacturing & transactional processes
  4. There was a world-class consultant to guide us in the first 12 months
  5. It can give us a substantial competitive edge
  6. It is global & world leaders like GE & Citibank have it
  7. It focuses on customer
  8. It’s based on data & is solid
  9. It is a project based approach that gives us a milestone based measurement
  10. It integrates well with other quality initiatives, such as ISO

In retrospect, GSII soon found out that the world-class consultant mentioned above were the two expats. Furthermore, the use of "global and world leaders like GE and Citibank have it", is a very shallow justification that GSII could also have it. Moreover, when these presenters were asked how Six Sigma integrates well with ISO, the question was brushed aside.

Waxer (2004) found four major requirements for successfully implementing six sigma within any organisation, regardless of the size of the organisation:

  1. management team buy-in and support;
  2. education and training;
  3. resource commitment; and
  4. link to compensation.

GE spent $200 million in 1996 on Six Sigma to save $170 million. But it saved $700 million by spending $380 million in 1997 and expects to save $1.2 billion by spending $450 million this year (1998) (Jones, 1998).

In contrast, GSPI spent approximately US$2 million for the two expats for their almost three-year stint each at GSPI, plus the provision of an outmoded version of Minitab and a number of Powerpoint slides from Wipro. Initial deployment of Six-Sigma at GSPI were distributed within 2004-2005, and the first batch of Green Belt-candidates produced substantial savings, in million of pesos, for the company. Moreover, most of the Six Sigma project were of turbo-styled, meaning the Six Sigma projects bypassed most of the DMAIC methodology except for some corporate-mandated necessary steps. Published Six-Sigma projects by "global and world leaders" does not mention any turbo-styled ones.

Furthermore, from 2005 to 2008, no new references were acquired on this technology. In 2007, during the training of the second batch of Black Belt-candidates, the company again employed an Ispat Black Belt on a two-month contract.

During this time, there were definite plans for these candidates to become legitimate or certified Black Belts. Also, there were enunciated or proposed plans for at least sharing the Six Sigma project savings to the responsible Green Belt or Black Belt, as well as the Six Sigma team members. Yet, these plans remained as such&#151PLANS&#151with no clarity in sight.

Rowlands (2004) argued that the traditional six sigma approach to black belt training and deployment is not desirable in the case of SMEs. Six sigma deployment needs to be considered based on the company’s available resources and skills base. Furthermore, he suggested the use of Porter’s value chain analysis and the five forces model to analyse businesses processes prior to applying six sigma methodology. These models could be used to provide strategic alignment to the business objectives as well as identifying training needs and project selection prioritization in SMEs.

Thus, in conclusion, Six Sigma can be successful even in a small company, such as GSPI, IF AND ONLY IF, there are:

  1. Top management commitment
  2. Organisational Cultural Change
  3. Linking Six Sigma to business strategy.

Notes:

Jones, Del (1998). Firms aim for Six Sigma efficiency USA: USA Today, July 21, 1998. back to text

Global Infrastructure Holdings Ltd. (2004). Six Sigma Kickoff for Global Steel Works International Inc, GSII: March 8, 2004 back to text

Rowlands, H. (2004), “Implementation issues of six sigma in an SME”, First International Conference on Six Sigma, 16th and 17th December, Glasgow.back to text

Waxer, C. (2004), “Is six sigma just for large companies? What about small companies?” back to text

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