MGT322-Fall12

The History of Six Sigma Management System

Posted on by f1211nauriemma

 

In the 1970s, a Japanese firm bought Motorola and developed Six Sigma. Companies all across the world use this in order to improve quality, which spread to thousands of organizations in the 1990s and twentieth century.  Motorola uses Six Sigma on three levels: as a metric, as a methodology, and as a management system.  Motorola came to this idea because they were making a highly complex product that created more failures than desired.  It was not until 1981 when Bob Galvin took control of Motorola that a big change happened and he achieved quality improvement tenfold with performance.  This led to the idea of (DMAIC), which is define, measure, analyze, improve, and control.  Motorola launched this idea in all different departments using it not only for the quality of a product, but in processes, services and administration.  The idea was to have 3.4 defects per one million opportunities, but today it has evolved beyond that idea and taken less literally.

Today, people can take classes and be a certified black belt in Six Sigma.  Finding the root causes of problems is important to organization and today will either make or break a company.  Competition is fierce and not adopting a quality control system, like Six Sigma could cost a firm money.  This quote explains the importance of Six Sigma to an individual, “Based on the December 2011 ASQ salary survey, people who are certified Six Sigma Black Belts earn $102K per year, versus $85K for their non-certified counterparts, a difference of over $16,500 per year” (Pyzdek Institute).   The training for Six Sigma can be time consuming and expensive; it can cost someone ten to fifteen thousand a year and take four to twelve months to complete the training, but the payout is worth it. There are three different levels of Six Sigma Project Participants: Green belts can complete a cost-saving project of ten thousand or more, a black belt can save money to companies of up to one hundred thousand, and a master black belt can save projects more than a million dollars.  Taking part in these classes can eliminate waste and increase savings by improving processes.

Six Sigma is unlike other quality improvement methodologies because is focuses on defects rather than non-conformances.  What this means is that even if there are no problems in a system, it can always be improved for better efficiency and profitability.  The goal of an organization should be to reduce variation and standardize all products and services.  A company that uses the eight essential tools involved with Six Sigma will reduce cost, increase quality, and outperform their competitors. Constant improvement must be done in order to insure the future of a company.

What companies out there do you stay away from doing business with that should adopt Six Sigma and how can they improve quality/efficiency?

Links:
http://www.pqa.net/ProdServices/sixsigma/W06002009.html
http://www.motorola.com/web/Business/_Moto_University/_Documents/_Static_Files/What_is_SixSigma.pdf
http://www.sixsigmatraining.org/an-open-letter-to-aspiring-belts

Is “Lean Government” the Solution to Economic Problems?

Posted on by f1211kdebiase

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?

http://www.forbes.com/sites/realspin/2012/09/09/lean-government-six-sigma-why-do-politicians-ignore-it/

http://www.isixsigma.com/new-to-six-sigma/getting-started/what-six-sigma/

FIRE! Honda Recalls Almost 1.4 Million Automobiles

Posted on by f1213kpavesich

http://www.chicagotribune.com/business/la-fi-mo-auto-honda-crv-recall-20121006,0,7115867.story

 

Safety issues have been a huge problem for Honda this week. This car company recalled around 1.4 million Honda Civics, Accords, and Pilots. The most resent account being this past Saturday. 268,000 CR-V sport-utility vehicles from the year 2002-2006 where recalled due to faulty automatic window switches, the specific cause of production variation. This assignable variation was recognized by Honda due to malfunction and the potential to start a fire. The problem with these vehicles was not discovered until 6-10 years after the manufacturing of the vehicle. I find it odd that these problems were not detected earlier. Honda said that rain or liquids that may enter into the driver’s window, dripping onto the power window switch is what is causing the problem. A constant exposure over time can “cause electrical resistance in the switch, making it overheat, melt and cause a fire.”

This is just the most resent recall of Honda vehicles. They are having problems in their manufacturing across three different lines produced from 2002-2006, so their system is not stable. This is not something that I would expect from a trusted automotive manufacturer. The continuation of recalls is going to make people doubt Honda vehicles. Since the assignable variation is a problem among multiple models throughout five years it will be a hard blow for Honda to bounce back from. With the massive amounts of vehicles being recalled by this automotive company, they are not upholding the quality that their customers expect. Honda needs to reevaluate their system in order to identify the cause of these multiple problems. Was it a manufacturing problem due to faulty machinery? Will the problem persist in new model Hondas but just has not been identified yet? These are questions that I have myself as a consumer; ultimately lowering my quality perception of Honda.

An expanded March recall of Civic sedans with wiring problems in the headlight switch was also announced; along with CR-V small SUVs and Pilots that have the same problem. Some models of the Accord where also recalled in order to fix leaking power steering hoses which could cause fires. This problem won’t be addressed until early 2013 because Honda does not have enough parts to fix such a large number of vehicles. Instead, notice has been sent to Accord owners telling drivers who experience symptoms of the problems to go to the dealership for repair. The smell from seeping fluid is the most common symptom reported. Do you think this is an acceptable way for Honda to handle their manufacturing flaws? Is there a more effective way to handle the matter?

“The headphone jack is going to be on the bottom…POOOFF!!”

Posted on by f1213asiddiqui

Everyone knows that the iPhone 5 and Samsung Galaxy S3 are two of the hottest phones out right now. Based on the marketing techniques used by Samsung this year, its obvious that the 2 companies are in fierce competition.  Most of you have seen the Galaxy S3 commercial making fun of Apples iPhone 5 and its users. The title of my post is from a quote in the commercial for those of you who haven’t seen it. I find the commercial to be quite clever and humorous (link for commercial posted below). Also, the day before the iPhone 5 was launched, Samsung used aggressive advertising on billboards and newspapers stating that the bigger screen and 4G network is already here, meaning the Galaxy S3. Now, Samsung is expanding the commercial to Australia and New Zealand later this month. Samsung usually does not go to these lengths when advertising for their devices, especially directly targeting a specific product. The article explains just how severe the rivalry between the two has become, since they are intensely battling over patent infringement as well. I feel that this has got to be the biggest rivalry between any two cellular phones. Samsung actually overtook Apple last year to become the largest smart phone maker, but strong demand for the iPhone 5 might cause Apple to take that title.

 

STATS:

–       After 3 days of launching, Apple sold more than 5 million iPhones.

–       $647 million spent on advertising for iPhone in the US from its release in 2010

–       $2.8 billion spent on marketing for Samsung in the second quarter, up from 1.97 billion a year earlier

–       In the second quarter, Samsungs market share was at 34.6% compared to Apples 17.8%

 

As stated in our chapter 5 slides, the objective of the product decision is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage. I think Samsung has the competitive advantage with there advertising commercial because it strengthens and positions them better in the business environment. I feel like the commercial was a smart move on Samsungs part, and with out it, Apple would have more of a  “newer product” advantage against Samsung. Since the iPhone 5 is newer, I think it was key for Samsung to use the strategy of the direct commercial making fun of Apple.

As you can see, Samsung spends heavy on advertising to keep up with its strong rival. How big of an impact do you guys think this commercial was for Samsung?

Do you guys think it was a smart move by making fun of iPhones and its users?  Do you agree that they should expand the commercial in different regions?

Was this commercial essential for Samsung to stay competitive with Apple?

Let me know what you all think!

S3 Commercial: http://www.youtube.com/watch?v=QR8A3T6sPzU               

Article: http://blogs.wsj.com/digits/2012/10/07/new-battle-brewing-between-samsung-and-apple/

Chipotle, Paving The Way to a Healthier Tomorrow…?

Posted on by mikem301s12

When it comes to quality control Chipotle has the right idea. Talk about a company doing fast food the right way, the company

prides themselves in getting a burrito prepared and ready to eat in less than 2min with a wide variety of healthy choices. Chipotle which

once was primarily owned by McDonalds and bought back in 2006 by founder Steve Ells has gone back to there roots, providing “food

with integrity, in which you can eat the finest ingredients quickly and affordably” Ells so proudly states. But with over a 1,300 locations

how does one go about providing quality ingredients at affordable prices?

 

Chipotle quickly learning how most food is processed and produced in the U.S.

wanted to do things differently, paring up with local farmers and ranchers in order

to keep there products as fresh as possible. With more than 50% of there vegetables

and meats coming from local farms, the company was able to state that 45%

of there vegetables are organically grown, while there beef is 100% naturally rased,

there chicken is 100% antibiotic free, and believes in only the highest quality pork

as well with 100% hormon free pigs. There belief is that people deserve a better quality fast food chain and in return the customers are

loyal. Taking advice from small farmer they have also managed to give 10o% rBGH (recombinant bovine growth hormone) free cheese

and sour cream, with 30% of there dairy coming from open pasture cows which have a strictly grass fed diet. Know you might be

thinking man that a lot of facts but how did this all tie into quality control? Well Chipotle is devoted to having fresh, hormone free,

organically grown products year round and in order to do so they teamed up with Sisco and East Cost Growers and Packers to insure

that not only are there products delivered in a timely and efficient manner but also so that they can keep in touch with local farmers who

are willing to provided the restaurants with the products needed. Lastly each and every Chipotle has what the company calls a “quality

assistant manager,” who’s job it is to provided the Supply Chain team with support ensuring that the food delivered meets quality

standards. They also manage and implement all QA processes in order to monitor vendor performance, tracking and reporting, quality

inspection program, food evaluations, and stock recoveries.

So as you can see know, there is quite a lot of work put into Chipotles quality control and they dont stop there, the company is

constantly looking for better and healthier choices, in the hopes that they can compete in the market with such mexican restaurant

chains as Taco Bell, who surprising is only 3 point behind in quality score from Chipotle since there new “Cantina Bell” menu went into

effect last year. In the end do you think Chipotle is a health substitute? Are there problems in there quality control?

 

Sources: http://www.chipotle.com/en-us/chipotle_story/steves_story/steves_story.aspx

http://www.fastcasual.com/article/201681/Taco-Bell-closing-perception-gap-on-Chipotle

http://en.wikipedia.org/wiki/Chipotle_Mexican_Grill

http://newyorksmash.com/top-3-best-healthy-fast-food-restaurants-chipotle/

 

AAPL and NOK?

Posted on by johnl301s12

Came across this article last night and found it to be very interesting. The article talked about a variety of different points in why Apple should consider buying Nokia. At first I thought the article was going to be absurd reasons on why they should but after I finished reading it did make sense.

One of the first points that is talked about is how many useful patents NOK has. Because NOK has some of the best wireless patents this could be a giant asset to AAPL. Another point that is talked about is NOK map technology. As everyone is aware Apple Maps “failed” you could say. There were bugs and it was not as user friendly as Google Maps. NOK is said to have just as good map technology and this could aid AAPL because right now they have nothing essentially. The next point on NOK wireless TV technology which may help AAPL if they ever venture into the TV market. Right now they offer Apple TV but they do not physically make TVs yet, although it has been talked about. And the last big point the article makes is that MSFT an NOK work together on mobile so this could give AAPL even more of the phone market if they do acquire NOK.

Overall I think AAPL should consider this move. They need to stay ahead of the game and with everyone working on the next big thing NOK could help me dramatically just with the maps portion of AAPL. Along with the maps, NOK has a wide variety of patents that AAPL would love to get their hands on.

 

 

 

Article:

http://www.forbes.com/sites/bruceupbin/2012/10/06/nokias-one-percent-iphone-tax-why-apple-should-buy-nokia/

Increased Pressure on Foxconn Workers Creates Defects in Apple Inc. Products

Posted on by Peter McGraw-Schuchman

 

After increased pressure from management and quality control inspectors, workers at a Foxconn factory in China have reportedly gone on strike. With exceedingly high production demands due to Apple’s new product, the iPhone 5, combined with increased quality standards for finished products, the manufacturing workers are under enormous pressure.

Quality control inspectors have placed more rigid quality control standards on their workers due to pressure from Apple to have phones that leave the factory completely defect tree. This has created a great deal of stress, and with a range of error as small as  .02 millimeters it is easy to see why some workers are having a tough time. However, a few have responded to the stress by threatening or acting out with physical violence towards the inspectors. Despite what seems like a major problem, factory management ignored it for as long as they could, up until production had to be halted. Many of the quality control inspectors and some other workers, an estimated total of 3,000-4,000, have gone on strike largely due to these incidents.

With reports of multiple incidents of physical violence between front-line workers and quality control inspectors and rumors of a large scale strike, Apple appears to still be having trouble meeting demand for its latest product. On top of the working conditions manufacturers say are leading to frequent scratching and defects, it has been reported that many workers and not being allowed to leave work for holiday. Foxconn, a Taiwanese company and one of the world’s largest producers of electronics has denied most of these reports, saying that production was not halted due to incident and that no such strike has occurred. Additionally, they stated that the workers working over their holiday were paid triple their normal wage as mandated by the government.

Foxconn, a company who recently came under fire for poor working conditions and a 2,000 person brawl this September, appears to be having more problems relating to worker treatment and morale. Multiple production interruptions and even the mysterious death of a 22 year old in their employee housing have plagued the company since they have been struggling to meet the demands of one of the most highly anticipated products of the year.

Additionally, the workers have virtually no way of helping themselves to improve their conditions and control the immensity of demand placed upon them since they are forbidden from unionizing by law. Even without a union, a strike of such a large scale should get the attention of the parent company. Corporate statements denying the existence of a strike aside, 3,000 unhappy workers is a sure sign of both systemic flaws, and problems in the future.

 

 

Sources:

http://www.forbes.com/sites/adriankingsleyhughes/2012/10/06/foxconn-quality-control-workers-strike-over-iphone-5-workload-production-lines-paralyzed/

http://www.marketwatch.com/story/foxconn-confirms-male-employee-found-dead-2012-09-13

http://abcnews.go.com/Business/wireStory/foxconn-denies-report-strike-iphone-plant-17411697#.UHDwvBhX5FE

Drug Dealers Beware!

Posted on by f1213spalreddy

 

How can improved quality control and diminishing quality control both work to save lives?

 

In the world of quality assurance, it is a rare thing to talk about quality within the public sector.  The public assumes that quality exists but nothing is ever thought of in regards to the measures are needed to make sure things are done correctly.  While reading this you will find two sides of the FDA.  One side of the FDA ensures the safety of people through increased quality control measures.  The other side of the FDA is hoping to remove some quality control measures in hopes of saving lives.

 

The FDA has begun rigorous efforts to take counterfeit and harmful drugs off of the internet.  http://www.reuters.com/article/2012/10/04/us-fda-baddrugs-idUSBRE8930SN20121004

 

In a time of rising health care costs and pricey prescriptions, consumers have looked to various other sources to save money.  A great source to purchase prescription medication is online.  However, many of these online retailers are distributing “counterfeit and illegal” medicine.   The FDA has joined forces with international regulatory and law enforcement agencies in an effort to take some of these dangerous drugs off the market.    18,000 online pharmacies have been shut down in the matter of just one week starting September 25th.    This is essentially a form of quality checking within the public sector.  The FDA is hoping to make sure that the medicines available to the public have gone through the testing process.  All of these regulatory agencies are working towards a pharmaceutical industry with high standards of quality.

 

In contrast, the FDA is also working to remove some of the quality processes associated with the drug approval process.  This comes mainly from a Republican push hoping to remove regulations across the board.  These deregulations are not meant to send harmful drugs out on the market prematurely.  This measure is hoping to assist immediately ill individuals that cannot wait through the testing process.  The FDA has been doing this since the 1990’s.  Currently patients within this characterization include aids and cancer patients.  However, the FDA is hoping to include various other threatening diseases/conditions to this “accelerated approval” process.  “Of 35 medicines termed innovative by the FDA and approved during fiscal 2011, 16 have some sort of shortened review or expedited approval” (Burton 2012).  The key is that people with “life threatening” conditions are more willing to try riskier drugs.  These people do not have the luxury of time to wait through the quality assurance process.

 

The point of this shows how quality assurance is paramount in some regards and in other circumstances it serves as handcuffs for progress.  The latter tends to be rare but it does point out that too many regulations have harmful effects.  We can clearly relate this to the upcoming elections as republicans and democrats battle over the topic of increased regulations.  There are clear positives for both sides.  Too many regulations impede progress and at times create a feeling of too much governmental control.  Not enough regulations also have catastrophic results.  Going back to the initial topic, if the FDA did not thoroughly check items that came through their department, people’s lives would be in danger.   People would not be aware of the harmful side effects of the things they are ingesting.  The perfect middle ground is a difficult thing to find and seems to be an ongoing battle within our society.

 

Sources:

http://online.wsj.com/article/SB10000872396390444083304578018790623838634.html

http://www.reuters.com/article/2012/10/04/us-fda-baddrugs-idUSBRE8930SN20121004

Compensation for Recommendations

Posted on by f1213cwolf

Have you ever recommended a product you found online to a friend? I know when I was working in retail that I would often recommend products that my own store didn’t carry. I recommended products despite the fact that I wasn’t going to make the commission on that sale. But imagine if you could make commission on your recommendations? Wouldn’t it be wonderful to be compensated for endorsing that product? Well now you can.

Social media shopping sites are now paying users who post product links that will create traffic to their websites. For example, if you add a lipstick to your Pinterest board with a link, you can be compensated for every time someone clicks that link.

Beso, a retail website, now pays users that send clicks to major retails such as Target and Gap. The sites determine who gets paid by providing each user with a unique link. Whenever someone uses that “unique” link to purchase an item, a payment is deposited into the referring user’s account. This is known as affiliate marketing. Links are easily traceable whether it’s via a Facebook status or photo on Pinterest. The social media shopping sites acts as a middleman. They will collect a fee from the retailers and as well as a fee from depositing payments into the users’ online accounts. Beso pays users approximately 14 cents per click they send to retailers. Other companies like Pose only pay when a purchase is made with a referral link. The average payment made per purchase is 5% of the price.

In the past, it was common for companies to purchase favorable mentions. The idea of buying someone’s “word of mouth” has been taken to a whole new level. Anyone on Facebook, Twitter, Pinterest, and so forth have an opportunity to make money. The Federal Trade Commission is arguing that this practice is blurring the lines between a recommendation and a paid endorsement. The FTC is stating that readers must be flagged. If someone is being compensated for his or her endorsement then it should be disclosed to the public.

Facebook and Twitter policies allow their users to post referral-based links, but require their users to disclose if they are getting paid. Beso is encouraging their users to add hash tags like “#spon or #paid” which would state whether their recommendation is sponsored or paid for.  Many users don’t think their friends or family will have an issue with them being paid for their endorsement. Because of this, some users are not disclosing if they are being endorsed. They feel it’s unnecessary to mention.

Personally, I often purchase products that have been reviewed and rated highly. This poses a threat to trusting anyone’s recommendation. How do I know if this product is reviewed accurately? Is the product really that great or are the reviews falsified by a user who was looking to make extra money?

Are people less likely to believe reviews online now that people are being compensated? Do you think the lines are being blurred? Is it necessary to disclose if your recommendation is being sponsored?

http://www.nytimes.com/2012/10/03/business/media/shopping-sites-pay-contributors-who-drive-traffic-to-retailers.html?ref=business&_r=0

American Airlines: A Battle of Wavering Trust

Posted on by f1213lpalarz

Picture is of American Airlines flipped seats displayed on ABC Local 10 Miami News Station.

American Airlines has found three separate occurrences of their seats being improperly bolted to the floor during passenger flights. Two of these incidents caused emergency landings, and in one case flipped passenger’s seats’ back midflight. On an additional aircraft, passengers were told to brace for emergency landing after the landing gear jammed shorting after takeoff. As a result of this, the airline has gradually inspected 757 aircrafts. In the past week, American Airlines has taken half of their 757 Boeing fleet out of service in order to inspect the seats. It is great that half of the fleet has been examined, but what about the other uninspected planes? Are they still safe to fly on?

Some people have pointed to mechanical sabotage instigated by recent labor issues. As a result American Airlines mechanics have lost their jobs due to outsourcing, which has people wondering if mechanics have unsecured bolts on purpose. The mechanics union refutes this claim saying that mechanical issues should be pointed the new maintenance procedures.

However, the FAA did note that the first two aircrafts had undergone maintenance, in which the seats were removed and re-installed, recently before the seat incidents.  While this opens a window of possibility to the sabotage claim, it also may indicate human error. It is very possible that these incidents occurred because they were not secured properly, which reflects the management personnel on duty and inspection of mechanical work. As Deming noted, 94% of problems occur because of a faulty system, not because of the workforce. It is possible that the process structure did not allow for sufficient time to review work or added stress to the mechanics process which created the human error.

The recent incidences have caused a lack of trust in both employees and customers of American Airlines, two areas that the airline should strive to satisfy.  Employees are scrutinized for the American Airlines mishaps and may feel like their jobs are unstable while the airline deals with this rough patch. The pilots of the aircraft with the landing gear issues have even been blamed for sabotaging the plane in an effort to sway the negotiations with the pilots’ union. Customers who have been on the defective aircrafts are dissatisfied with the service being provided to them. In one case, passengers were told to brace for crash landing, thinking that their lives were in danger. A crash landing did not end up being used.

It seems as if American Airlines has various issues that they need to resolve, and resole fast if they hope to retain their customer base. While it is not definitive what caused the mechanical issues or if labor negotiations played a part, I do not feel comfortable boarding an American Airlines plane at this time. In the airlines current condition, would you take the chance of boarding one of the uninspected planes?

http://abcnews.go.com/Travel/american-airlines-blames-saddle-clamp-loose-seat-problem/story?id=17372830#.UHBEEk3R5m0

http://abcnews.go.com/Travel/american-airlines-passengers-told-brace-crash-landing-maintenance/story?id=17382130#.UHBVeE3R5m0