Benefits and Costs
Total quality management approaches are steadily evolving according to challenges and differentiated according to the company’s objectives. They improve product quality by optimizing specific business processes and reducing the number of defects. Six Sigma is a differentiated approach used in this case study at 3M. 3M is a large manufacturer of various products in the field of industry and chemistry. This paper provides an assessment of the implementation of this approach and the Lean production method, different views on this approach, its results, and differences from the classical methods of total quality management.
The transformation of 3M was necessary primarily because the organization’s financial performance was relatively smooth, and its improvement required corresponding changes. To do this, management began to implement the Lean Six Sigma program’s main aspects to improve the quality of 3M’s activities. Already existing business processes and new activities were described using different models. In fact, the benefits of implementing this model at first were reflected only positively in the annual reports of 3M. The company achieved faster approaches in the supply chain, commerce, which indirectly reduced costs, increased sales, and affected financial performance. Implementing this program also required certain costs, transforming specific processes in the company. The goal was to improve product quality, minimize defects, and, consequently, the consequences in the form of increased sales, comfortable working conditions, and improved company reputation.
For example, a team was assembled, and leadership led by a Black Belt was allocated to develop and optimize processes. The transformation of normal processes now requires more attention when creating a new product, approving documents, and much more, which indirectly requires the cost of creating the conditions for transformation. The approach showed a good start, and Ms. O’Connell even mentioned that Six Sigma would change the company’s DNA. Based on the activity implementations, the company’s sales increased significantly, as a result of which the transition to the Lean Six Sigma program was announced (Schroeder, 2020). This approach turned out to be more differential concerning processes. Tracking its application consisted of comparing relative financial indicators and statistical data on the quality of products.
Functional Areas
The Six Sigma approach involves the complete adaptation of every department within the organization to the new process standards. Project management assigned to create a new product or promote an existing one must, in some cases, can use complex statistical tools. They include methods to create flowcharts that clearly describe the process and look for opportunities in this process to reduce costs and increase revenue for the company. After several calculations, the marketing department should work accordingly, and the risks in financing advertising campaigns should be significantly reduced. Senior managers define the tasks, timelines, and budget; middle managers adapt the input data to achieve the best result.
The lean manufacturing approach contributes to the visualization of processes for the company’s manufacturing sector. In this case, it is essential to establish quick and flexible communication between managers to quickly respond to market changes, external and even internal factors of the company. A deep understanding of context, regardless of 3M’s functional area, depends on similar communication across industries while at the same time correctly understanding customer requirements. Customers and the market form the main challenges of the company, for which the Six Sigma and Lean approach provides a toolkit for adapting and optimizing processes within the company (Tampubolon & Purba, 2021). Value stream mapping, visual control allows for creating the best conditions for working with the process, understanding the department’s primary functions, and opportunities for their improvement.
The initiative for change, however, comes from senior management. Applying Six Sigma approaches at the local level within one department may not bring the expected results due to the lack of appropriate alignment between sectors. Top management initiates transitions, identifies opportunities and resources for these transitions, giving almost ready-made instructions for middle managers to implement these changes (Trehan et al., 2019). The Six Sigma and Lean approaches are complex enough to implement on their own and, therefore, suitable for larger companies with a large enough turnover to allocate funds for transformation. The initiative of the middle managers is mostly in control of changes and suggesting new aspects of optimization based on seeing the big picture on the spot, in contrast to the top management, which has a large number of such departments under its control.
Skeptics Opinions
Despite the generally positive aspects described in applying this approach within 3M, both opponents of Six Sigma and companies prefer more straightforward methods. Six Sigma makes exceptionally high demands on quality, which are not always economically justified. Not every company can afford the desire to produce the highest quality products. Marriage in production may be the norm, and its elimination may require the replacement of expensive equipment, the involvement of more highly qualified specialists, and other pretty resource-intensive activities (Stankalla et al., 2018). The same activity introduces additional visual or statistical tools for the control, evaluation, and creation processes. Six Sigma is an approach that almost certainly improves specific processes in a company, but the costs are incredibly high in small organizations.
In addition to the high cost of implementation, Six Sigma requires several experts to create conditions for optimizing processes according to the approach. Such experts are far from always available on the labor market and, at the same time, are pretty expensive (Ali et al., 2020). In addition, the introduction of complex tools of statistical calculations and data processing into the usual processes of employees requires appropriate competencies on the part of employees and managers. The assessment of such implementations is very vague if the activity is not reflected in the positive dynamics of financial indicators. As a result, Six Sigma companies may not lead to better working conditions, process optimization, or positive dynamics in financial performance. 3M is a large company with a long history and complex, differentiated processes, within which the organization of activities using Six Sigma has produced relevant results.
Finally, in the service industry, where the quality indicators of the finished product, namely services, are often subjective and cannot permanently be transformed into quantitative indicators, Six Sigma will also be ineffective. Skeptics argue that this approach pursues excessive quality and is a trend that may soon pass. In fact, Lean Six Sigma is a relatively narrow, specific, and resource-intensive approach that gives an advantage in the long run and companies with great opportunities.
Innovation Impact
The 3M case showed that the approach needs to be balanced to succeed both in operations and in unleashing employees’ creativity and focusing on innovation. Balancing requires even more resources, as it implies the creation of differentiated departments for different aspects of balancing: an innovative culture requires different approaches to process optimization than classical improvement. Innovation is an aspect of sustainable business development, allowing for the horizontal expansion of a company’s capabilities. 3M, before implementing this approach, experienced stagnation, reflected in financial performance. Two different CEOs with different approaches have shown that the focus of Six Sigma can be shifted and adjusted accordingly at the senior management level, the main direction of the company’s development. Accordingly, Six Sigma and Lean Manufacturing are sufficient to support and develop a company’s innovative culture if the direction of optimization is chosen correctly.
In addition, the very basis of the Six Sigma approach is aimed at reducing defects and, as a result, mitigating risks. An innovative approach is always associated with more risks than improving existing processes, their optimization without diversification. The implementation of this approach, like that of Lean manufacturing, switches to mechanisms for creating, supporting, evaluating, and controlling products within the project management or development department. The defectiveness of potential products is statistically reduced, but also the process of its design and further implementation. However, this approach still requires a relatively wide range of capabilities and resources from the company due to its complexity.
Differences with TQM
TQM’s are more general in quality standardization in manufacturing, while Six Sigma offers more targeted solutions. The conceptual difference is that Six Sigma focuses on minimizing defects while TQM focuses on improving existing procedures. Although technically, both approaches result in optimization and improvement of the company’s operations, Six Sigma is a more complex process to implement and evaluate, yet often leads to practical results. However, one should consider the position of skeptics that Six Sigma is not a universal approach for any company and requires careful preparation before direct application. The study of this case showed that the complexity of the implementation of differentiated approaches should be scaled according to the size and capabilities of the company since, regardless of the chosen approach, any changes require related costs. Processes can be improved in various ways and most often require the involvement of experts. In the 3M case, this approach proved to be the best under different managers, which indicates its effectiveness within a large company.
References
Ali, S. M., Hossen, M. A., Mahtab, Z., Kabir, G., & Paul, S. K. (2020). Barriers to lean six sigma implementation in the supply chain: An ISM model. Computers & Industrial Engineering, 149, 106843. Web.
Schroeder, R. G. (2020). Operations management in the supply chain: Decisions and cases. McGraw-Hill US Higher Ed USE. Web.
Stankalla, R., Koval, O., & Chromjakova, F. (2018). A review of critical success factors for the successful implementation of Lean Six Sigma and Six Sigma in manufacturing small and medium sized enterprises. Quality Engineering, 30(3), 453-468. Web.
Tampubolon, S., & Purba, H. H. (2021). Lean six sigma implementation, a systematic literature review. International Journal of Production Management and Engineering, 9(2), 125-139. Web.
Trehan, R., Gupta, A., & Handa, M. (2019). Implementation of Lean Six Sigma framework in a large scale industry: A case study. International Journal of Six Sigma and Competitive Advantage, 11(1), 23-41. Web.