Inventory too hot to hold

For companies inventory management is essential as their exists economic downturns and upturns. These trends in the economy can drastically effect company cost as holding onto inventory can become expensive. Demand is often a difficult thing to get correct. We see many companies looking to sell and reduce inventory as soon as predicted demand for goods do not pan out the way they suspected. Often times the ridding of inventory is a difficult task as the liquidity to react quickly historically is not there. Inventory can be stolen, it can become obsolete and it could be sold but many companies are now starting to believe dedicating money to inventory is a high risk with a high cost. What are the alternatives as the companies need to keep up with the demand by their clients as the cost of a shortage is even greater? Through problem solving initiatives like Six Sigma companies are more fit to react to customer demands. Theses investments in a higher level of inventory management rather than in inventory can be more competitive and eventually get more bang for the buck.  Companies, in order to remain competitive, have to reevaluate where their resources are being focused and the use of technology is a resource that would be very beneficial in their future. The Ford Motor Company reportedly saved $600 million by the implementation of a Six Sigma management system. In 1999 Ford started to train their top level management then the officer group, and then the leadership group. After a year and half Ford has reportedly spent $6 million in training their several levels of management in Six Sigma. Ford rates the level of training by way of colored belts like that of a karate dojo:

Green Belt: “They receive one week of training that includes a basic understanding of how Six Sigma works and an overview of the Black Belt tools. Green Belts learn to help Black Belts do projects faster. Green Belt training allows the people who are affected by the Six Sigma projects to be able to continue to monitor and control the improvement and to do their jobs better”

Black Belt: Process full time for two year. The training includes, “define-measure-analyze-improve-control cycle” , “mapping, cause-and-effect diagrams, failure mode and effects analysis, design of experiments, and mistake proofing”

Master Black Belts- Handpicked by upper management; describes duties are.. “My core job responsibility is to help Black Belts with the tools, eliminate road blocks and support them during the various phases of their projects”

Project Champion- Work alongside master black belts and provides them with necessary resources to complete tasks.

This sort of implementation depends on the companies dedication to customer service and by senior leadership. With such a large company as Ford Motor Company making a commitment to new, nimble approaches to inventory management there can be an example for companies of all sizes that there are very good alternatives to the negatives that come with projecting demand the traditional way.

How often do you believe companies tend to under estimate the demand in the market?

Do you feel that smaller companies have the chance to save proportionally the same level of capital a company like Ford did using something like Six Sigma?

Six Sigma vs. Sports

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Yu Darvish has nearly perfected his pitch delivery by treating each pitch as a process, evident by the same release point for each pitch.

We commonly associate Six Sigma and the DMAIC approach with improving the processes of manufacturing or certain service companies, but what about more unconventional industries? Professional Sports leagues are some of the largest businesses, yet they are hardly mentioned in regards to Six Sigma. Is it possible that athletes and coaches alike can use this quality management approach to improve their performances? Tennis star Steven Falk wrote “Six Sigma Tennis” where he explains how coaches and players can reach their maximum potential.  Falk analyzes a tennis player to find areas that can be improved using DMAIC. After the improvements, the player has minimized his unforced errors; thereby reaching his highest ability. Falk focuses on individual sports like tennis, where it is easy to identify success and failure based on points won or loss. However, the mainstream sports in America like football, basketball, etc. present a harder situation to use Six Sigma.

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The Pittsburgh Penguins have created the best power play in the NHL by treating each play as a process, reaching a high level of efficiency.

Focusing on hockey as an example, new statistical measures are being introduced to the game every season like Corsi and Fenwick now measuring puck possession.  At the core of each new stat introduced is a desire to improve a team’s performance. So why can’t Six Sigma be used along with Corsi or Fenwick for improvement?  Since Six Sigma results in 3.4 defects per million operations, essentially  a forward could expect to miss only 3.4 shots for every million he shoots. A goalie could expect to save all but 3.4 of a million shots he faces. Unfortunately, these two scenarios cannot coexist—exemplifying the issue with Six Sigma in sports.

While reaching the Six Sigma level of efficiency is nearly impossible in sports, DMAIC can still be applied to improve the process. Taking the hockey power play as an example—a time when the offense should be able to capitalize on its advantage—coaches can take each play as an individual process. First, they will define the weakness in the play, perhaps the lack of shots being taken. Then, experts can measure the amount of shots during the power play, and analyze it by comparing league averages and past results. Players improve the process by increasing the amount of shots taken, and control it by maintaining that shot level throughout the season.

Sports certainly can be subject to DMAIC application, but do they need to be? The most entertaining moments in sports and the traits that make them so appealing often center on the anticipation of what will happen next. With Six Sigma and DMAIC, there is less unknown. Every golf shot should be a hole in one, and every batter should hit a home run each pitch.  Gone would be the underdog victories or crazy upsets. Would near-perfect athletes be as entertaining? Even the Sidney Crosby and Tom Brady’s of the sports world make mistakes or bad plays. Perfect athletes throughout the leagues would be too predictable.

Do you think implementing this type of process control would change sports?

Should players and coaches actually take the time to improve their processes or is it dependent on the sport?


Six Sigma, gone Bad.


“What do weight-loss plans and process-improvement programs such as Six Sigma and “lean manufacturing” have in common?” They article starts off with this quote, referring that diet plans and six sigma plans do indeed fail at one point or another. The companies that use Six Sigma normally start of with huge goals and aspirations of putting these plans into operation, but just like a failing diet these companies tend to go back to their old ways. Many companies around the world embrace this business management such as Six Sigma; however, a recent study shows “that nearly 60% of all corporate Six Sigma initiatives fail to yield the desired results.”  This is where we begin to ask ourselves if it’s actually worth investing in a plan if 60% of the companies who do it aren’t coming up with the results that they wanted. The articles diagnosis this problem into three stages, “stretching, yielding, and failing.”

So let’s start off by talking about what they call the “stretching phase.” The process can be defined similarly to a metal spring analogy. “When a metal spring is pulled initially, the material stretches to accommodate the increase in pressure.” They compare these metal spring to people in a business process. Initially people at any process in the business will bend and stretch to make things happen. I also agree with this because when you are new to a job or trying a new process you are initially willing to do whatever it takes to try and make it work. Most teams in any business are generally excited and willing to learn the new process, such as Six Sigma. Normally at this stage in the process managers will implement a “to-do” list will let employees know what is exactly expected out of them. When the employees reached all of their goals on the “to-do” list they were rewarded and the project is normally ruled a success. I believe this is where we can see one downfall. Rewarding employees can be successful, but if you keep doing it over and over and don’t increase the expectations or continue to manage you teams, I believe failure is inevitable.

The second phase the article is called the “yielding phase.” The phase can be defined as, “If a metal spring continues to be pulled, there will come a point when the material yields as it struggles to support the increase in pressure. Though still intact, the spring becomes permanently deformed, stretched out.” They compare this to management at a company switching from one project to another. When management switches to another project more times than none the team that lost the management from the Six Sigma managers slowly begins to lose site of their goals and begin to slip back into their old ways. At this point in the phase teams begin to loose sight of the end goal and being to focus to much on their individuals efforts. The teams that lost the Six Sigma management slowly began to crack under the pressure.

The third and final phase in this article is the failing stage. Using the metal example this stage is defined as, “Over time, pulling will cause the material in one area of the metal spring to narrow, creating a neck that becomes smaller and smaller until it is unable to sustain any pressure at all. At this point breaks into pieces.” When the Six Sigma management team leaves, employees at company’s becomes discouraged and eventually begin performing poorly and than fail returning into their own ways.

After reading this article, I begin to wonder if the Six Sigma program is actually worth it? What do you think?

Should a company invest money into this program, if 60% of the companies end up returning to normal ways?

How could companies prevent this program from failing?

Flying Through Quality

Boeing 787 (Google Images)

Quality is an important factor when producing goods and services. Each organization sets its own quality standards based on customers’ demands and needs. If we look at quality from the customers’ perspective we will want to have products that we can rely on when using them, otherwise if the product is defective we might want to stop using it. On the manufacturers’ perspective if the customers are unsure of quality on their products, it is their job to make the necessary adjustments to make the product attractive to the customer again.  When the situation is created by defect on fabrication it can mean big amount of money losses for the manufacturer, therefore it should work on fixing the defects as soon as these are detected in order to avoid bigger losses and not get their reputation hurt.


An example of a company restoring confidence in its product is Boeing and the battery problems that its passenger jet 787s has been facing since January and that it cost them to stop flying them. According to an article in the New York Times by Christopher Drew and Jad Mouawad, the Federal Aviation Administration approved in April the company’s plan to fix the batteries of 50 jets that where delivered at that time. The authors explain that the lithium-ion batteries problems were detected when two of them had overheated in two different jets. As soon as the problem was detected its engineers worked on finding the causes of the defective batteries and the best approach to fix it. Collection of data was necessary to support the changes and come up with a plan.  Luckily, the 800 orders that were already planned for the plane were not affected, the authors explain, since it promised a 20 percent fuel savings. After collecting data and analyzing it, the company decided to send several technicians around the world to fix the batteries and install the new system which includes better insulation and other features to prevent batteries incidents (Drew and Mouawad). The article goes on by explaining that even after this efforts by the company to fix the problem, Japanese airlines have asked for more assurance that the incidents will not be likely to happen again or at least detected by introducing monitoring systems for the batteries that would send information about the batteries conditions and replacement of them every certain time period. All this efforts are done in order to recover the customer’s confidence.

We can see in this example how a defect might represents serious consequences in the company’s reputation and generate monetary losses. This illustrates the importance of having systems that monitor the quality and processes on production and if problems are presented look for the causes and fix them as soon as possible.

Do you think Boeing’s approach to solve the problem was appropriate? Should the company provide monitoring systems that Japanese airlines demand or do you think is enough just by replacing the batteries and the insulation system implemented?



Windows Phone 8

Microsoft new windows phone 8 offers a lot of improvements from the previous windows phone 7. New much-needed tweaks and snazzy new features that rival those on the iPhone or most popular Android devices. The analysts think that Windows Phone will overtake Apple’s iPhone by 2016, gaining 19.2% of the market How can Microsoft’s catch up to the industry’s hares? With strong hardware partnerships, relentless marketing and tight ties to Microsoft’s more successful brands, including Skype and Microsoft Office. Microsoft Phones will be available on Verizon’s network for the first time. Windows biggest boost might be the new Microsoft ecosystem which could make the very similar Windows Phone 8 a more attractive item. Microsoft is building an ecosystem of gadgets that play nicely with one another.

Microsoft has gone through an improvement on their phones similar to the one of Quality Systems of Six Sigma. Microsoft has contributed to enhance the organization performance. They had to define the problem which was that their phones were not competing with the competition. They analyzed the problem, found out what was the problem and why their product was not on the same level as the competition. Microsoft measured their current process, they came up with a new goal. The company then began to implement solution that would address the problem. After doing their research and a lot of collected data Microsoft has come out with the new Windows Phone 8 which they believe has a much better chance to compete with the competition.

Do you think the Windows Phone 8 will in fact be able to compete with Apple and the Android and if it does by when do you think this could happen?

Quality And Innovation – The Rat Race!!!

The electronics world has changed rapidly in the last few years. Some companies pioneered the changes, while others were too slow to adapt to the fast changing trends and requirements. Not long ago, Japanese companies ruled the market like lions in the jungle. Companies like sharp, Sony, Panasonic and Nintendo were the biggest and unbeatable brands in the entire industry. Now, on the contrary these market kings have lost their market share drastically.

What could be the reason behind their downfall? I have noticed a similar trend in Japanese companies and in someway have the same characteristics. However, these well known companies still follow the highest quality standards and produce highest-quality hardware devices. But the market demand now is not limited to quality only. Japanese companies were slow to catch with competitors with regards to design, operating system and software technology. For instance: Sony was the market king in 1990 when it introduced ‘The Walkman’. At one time, was the ‘must have’ gadget for everyone like the apple iPods currently.  Just in a couple of years Apple managed to shake off and challenge Sony’s position in the market with their IPhones and iPods. Sony’s fell, profits shrunk and once one of the best image in the world is battered.

I believe the major downfall of Japanese brands is due to the fact that they were slow to realize the changing demands and the need to improve software rather than only focus on quality hardware.  From a technological perspective, the explanation of how that happened is straightforward and that apple always was, is very good at software and Sony never was. Sony understood music technology but they were bad at software and they didn’t do what apple did. That is making use of computers and Internet. They created ITunes which made accessing and syncing music to apple devices easily. The Walkman was a success in their era when it did not have to interact with computers.

As discussed in class, acquiring Six Sigma, ISO or other quality certification does not guarantee profits. These methodologies are used to help businesses reduce failures in quality. Talking about Sony, they also had obtained certification under ISO 9001 for all sites manufacturing electronic products yet faced backlash from competing brands. Fast pace dynamic fulfillment of consumer market should be a big factor of management department to maintain the success of a company. Big portion of company’s budget should be allocated for R&D while maintaining the quality of their current successful products.

Do you agree that Sony was too slow to adapt to the fast changing trends?

PS: I think Apple is also slowing down its innovation pace. Watch the video and share your views

Six Sigma is SO 2007.


This is an article that focuses on Six Sigma and the fact that many companies view it as an outdated certification. While there are some very credible benefits in being Six Sigma certified, there are some major costs as well. According to the article it was a way to improve quality, but the major reason it gained so much popularity was because of its ability to cut costs and increase profitability. However, there were two standout problems with Six Sigma.

First, having such a process oriented company reduced morale. Employees were being evaluated so much on process that they were not being recognized for their hard work or outstanding customer service. Their employee results were just based on numbers. The second problem was that customer sentiment dropped. As a process focused company, the bottom line is to produce as much as possible with as little defects as possible. This may be great for a manufacturing plant, but for a company that works in customer service, it is ignoring a very important factor, the customers. Often times how a customer is treated will weigh more heavily on their decision to come back than the speed of their purchase.

Furthermore, the article goes on to state process is key, but they also need to focus on things such as innovation and creativity to keep a company moving forward. A company can be an outstanding process performer but if they are behind the times with their products or customer service, then having an excellent process doesn’t mean a lot.

In fact, Home Depot, which was a company mentioned in the article, dropped from first to worst among major retailers on the American Customer Satisfaction Index in 2005. This was a company that was Six Sigma certified and had a CEO who placed a very high value and emphasis on Six Sigma. Another example, which was meant to be an example supporting Six Sigma certification, was the desire by financial institutions to be Six Sigma certified. One of the banks mentioned was Bank of America, and we all know what has been happening with them in the recent news…

In conclusion, as we learned in our class, Six Sigma is an outstanding certification to have. It shows that a company is operating at a capacity with an extremely low rate of defect. However, in my opinion, in the case of the article, it sights that there may be more to a company’s success than excellence process. I tend to go with the belief similar to one mentioned in the article, that Process management is a good thing but it must be leavened a bit with a focus on innovation and customer relationships.


With the article in mind, I have a couple of questions I’d like to open up to the class.

First, would you go out of your way to be a customer of a Six Sigma company?

Second, what is more important to you, a customer connection or Six Sigma certification?


Article Site:

Watching success spiral into failure! Why six sigma doesn’t yield long term results…

Recently in class we have been discussing various types of ways to improve processes and quality, within management operations systems, these include the Baldridge, Six Sigma, and ISO 9000 models. In class we have looked at the different ways that these models can improve quality and productivity, however the article I found talks about some of the downsides of these models, in this case, Six Sigma. The article from the Wall Street Journal specifically talks about an aerospace company that implemented Six sigma, but then what also happens after the new processes were put into place.

The comparison that was used to describe the Six Sigma process was compared to a spring, initially when the process is implemented employees stretch out to accommodate the new work processes and work load that has been implemented, this phase appropriately named the “stretching phrase” which is when data is collected on how best the process will be implemented and which departments issues are most critical to address. However the problem is that when you become so focused on the process improvement initiatives you often begin to relegate some of the normal responsibilities in each department.

The next phase described in the article is the “yielding phase” where the “spring” is still being stretched, and as described will become permanently deformed. Meaning that now management and improvement experts believe the issue has been resolved they more onto more pressing issues, the problem though is that these newly renovated departments now struggle to hold onto the gains in improvements they’ve made without any further direction from Six Sigma advisors. Without having the leadership that guided them on the initial improvements many departments begin going back to their old familiar ways resulting in a process that once again is not meeting its full potential.

The last stage described in the failure of Six Sigma is appropriately named the “failing stage” where essentially the “spring breaks apart” meaning without further direction the departments lose motivation to keep pursuing their earlier successes. A main reason for this is the success or failure of these is that the employees personal reviews have little or nothing to do with these projects so it really holds little for them to gain or lose, in turn causing no one to step forward as a leader to continue the improvements they had made early on.

With these three stages identified the articles also points out four key points that can be learned from the failure of a Six Sigma initiative. The first being that if success is to be permanent, a long term SixSigma advisor should be appointed. Second employee performance appraisals need to be tied to success or failure of initiative put into place. Third have small focused groups for initiatives so those involved knowing exactly what their goals are. Last Management should be directly involved in all aspects to know exactly what is taking place.

What else do you think should be done to improve upon these processes other than the four stated “lessons learned”? Can you think of different ways to improve the processes that were described in the article?

Yellow Belt in college?

Over the past week we talked a lot about six sigma and how it can drastically improve the way a company does its day to day tasks. One article that sparked my interest was about how a college is going to offer a “Lean Manufacturing” course in which students would have the knowledge to pass the first exam and receive the rank of a Yellow Belt. This of course is if the material sticks and the students show interest in six sigma, but I felt this class was very similar to ours and wondered how a class like this has yet to be offered by DePaul, such as a MGT398 special topics course. One quote that I wanted to touch on is “Lean is not about making people work faster or harder; people are not waste. It’s about how you make those people more effective. It’s about establishing a system so that products or information can flow through processes at the pace of customer demand,” said Merrell. This is a very important point because a lot of people such as in the article about Starbucks believe it is going to turn companies to run more like a factory.  Becoming more and more efficient is a must for companies in this economy and companies will constantly keep changing as need be.

1.Do you think you would enroll in a class where you would obtain the knowledge to get your Yellow Belt for Six Sigma?

2.Would this be of benefit to you for your current or future job?





Recruitment Firms: Yay or Nay?

In an article from the Quality Digest website, author Kyle Toppazzini claims that staffing agencies lead their clients to the deterioration of quality management. He states that these agencies only present candidates with the minimal requirements to their clients to meet their 10-20 percent margins. For example, the author discovered several organizational lean job requirements stating they are accepting any level of certification from almost any institution. Toppazzini continues to argue how recruiters can just accept any level of certification pertaining to lean Six Sigma, especially if it was from a four-hour online course. He believes that four hours of online training does not necessarily mean that the candidate possesses the required set of knowledge and skills in order to perform a job well done. By overlooking these qualifications, “recruiters lead clients down the path of poor results.”

I believe recruitment firms only solve temporary “fixes” in an organization’s staffing needs. They are not meant to help any organization to substantially improve quality and overall performance by any means. According to the author, it is best for the organization to hire a quality management professional to educate the organization of what is truly needed to proceed forward if the company wants to apply a lean Six Sigma concept. The firm will then understand what set of skills, knowledge, and experience one needs to successfully lead the firm down to quality management.

While I do agree that a four-hour online training course does not mean that one is overly qualified for a job, but it does have an edge over other candidates who do not have certificates. Like most recruitment firms, they want to present the best possible candidates so clients would continue to use their services in the future. They don’t just select any, but the ones that stand out and would best fit the position. They are just doing their job.  Reaching their margins is one goal, but keeping clients and candidates satisfied and content is another. If neither side is happy, then these recruitment firms fail at matchmaking which is the essential responsibility to their job.

“Let recruitment firms provide the service they were intended to provide.” Recruiters don’t have the infrastructure in providing management solutions. They have no idea what the organizational goals or what the mission statement is. Recruiters are only provided with job descriptions, job requirements, what the organization’s vision of an ideal candidate would look like and then recruiters proceed to source candidates to find the ones that best meet what the company is looking for. Ultimately, the clients are the ones that make the final decision as to who to bring on to their family tree. They should not have any expectations as to what else the candidates will provide aside from the skills and experience to perform the job.

What do you think of staffing agencies? Do you think staffing agencies lead clients to poor quality improvement?