In the last class, we learned about Six Sigma, a methodology that is used to eliminate waste from business activities, while benefiting a company’s financial performance. Six Sigma uses the idea that all activities are processes that can be evaluated with the DMAIC process (define, measure, analyze, improve, and control). By using data analysis methods and focusing on customer knowledge and core processes, companies can reduce defects significantly, with the ideal target being 3.4 defects per million opportunities.
Private companies have been successfully using Six Sigma to improve their methods and reduce costs for years, and even service sector companies, like hospitals, are using Six Sigma to analyze their processes for areas of improvement and greatly reducing treatment times for patients. In class, we discussed Motorola’s introduction of the Six Sigma process and saw examples of how companies like Caterpillar have used Six Sigma to reduce defects and costs. Forbes.com ran an article a few months ago about the expanding types of organizations that are bettering their operations through Six Sigma, such as the Department of Defense and even Iowa’s state government. Looking at these cases, author Kellan Giuda, questions why top government is ignoring the proposition of using Six Sigma to reduce the national deficit in his article “Lean Government Six Sigma? Why Do Politicians Ignore it?”
As everyone is aware, the economic crisis in 2007 and 2008 has caused a lot of criticism on how the U.S. government functions. Because of this many advocacy groups, specifically seen when Newt Gingrich was running for candidacy, are arguing for higher-tier adoption of this system in order to reduce debt. The argument behind this movement is the $2.45 billion saved by the U.S. Military after introducing Six Sigma in 2008 and the Department of Defense’s integration of the system into their operations. Giuda believes that these cases prove that Six Sigma can be beneficial to organizations outside of the private sector, such as government agencies. He argues that this would provide an opportunity for top government officials to undertake the public debt problem head-on and that Lean Six Sigma is a viable solution for the problems the U.S. government faces.
Thousands of companies worldwide embrace Six Sigma as a tactical improvement system and seeing the various types of organizations that are implementing it shows the transferability of the system. Do you think that using Six Sigma would reduce costs in a national government? Would it be difficult to implement?
“Study Suggests Raising the Bar for Olive Oil Quality Control”
Recently UC Davis conducted a study on the effectiveness of quality control tests for the commonly used food product Olive Oil. This seems like a small detail in food regulation and not something to think twice about, however the majority of oils sold to companies in the food-service industry was below standard. Researchers found that various brands of Olive Oils were able to pass the chemical tests that are used for quality control, however failed most sensory tests- done by blind tastings- where products were described as “rancid” and “musty.” Not necessarily the type of product you want to consume. Another fault that researchers discovered, was that most products did not list where or when the product was produced. This could lead to rotten oils or bad products being sold to consumers. Because of these results, researchers at UC Davis believe that quality testing of Olive Oils should be revised to create “more accurate and less expensive tests and to develop innovative packaging that will extend olive oil freshness” (www.news.ucdavis.edu).
This article reminds me of Deming’s Red Bead Experiment which we performed last week in class. The Quality Control for the test required two “Inspectors” to count all of the red beads that were produced in each workers batch and then have a “Chief Inspector” verify these results and submit them to be recorded. While there were always some defects in the batches produced, nothing was ever done to correct the process by which the product was created. The researchers at UC Davis mentioned that about 10% of the oils tested were “adulterated” and made of other oils such as canola oil, instead of pure olive oil. While the article did not say how many of the products tested did not pass the chemical tests, I would think that there were defective products in most batches- especially in the modified oils- that did not pass the chemical tests. I wonder how many Olive Oil companies then changed their processes and how many maintained the old process, factoring in defects as an expected occurrence.
The manufacturing of Olive Oil relates well to Deming’s Experiment. These companies may not realize that their production processes are flawed and are solely relying on the feedback of basic chemical testing for quality assessment. Two of Deming’s Fourteen Points for a better organization are “Cease dependence on inspection to achieve quality” and “Constantly and forever improve the system of production and service.” It seems that based on the research done by UC Davis, most of the Olive Oil industry needs to look at Deming’s philosophies and revise their thinking on quality and the processes in production, something most companies may need to review in their operations.
Can you think of any other companies that base their quality measurements on testing that may not be relevant to the actual quality of their product?