Six Sigma Implementation Using Information Systems

Abstract

The methodology called Six Sigma was designed by Motorola in 1985 as an efficient way to improve the quality of a complex system involving a lot of components, concepts, principles, actors, and tools. In a highly competitive business world, the approach has been gaining immense popularity as it allows companies to stay afloat even in the conditions that are more challenging than ever before (Karthi, Devadasan, Murugesh, Sreenivasa, & Sivaram, 2012, p. 240).

However, achieving Six Sigma is a rather complex process, which requires the assistance of Management Information Systems (MIS) as they provide a model allowing them to assess if the organization is ready for the transition (Nejati, Rajeiyan, Hajati, Safari, & Rashed, 2013).

The purpose of the paper at hand is to discuss the value of information systems and technologies in the development of Six Sigma methodology and to show how the combination of the two may make things easier for professionals. The essence and implications of the Six Sigma methodology for quality improvement, as well as other examples of information systems that can be used to make it possible, will also be discussed to make it clear what benefits it provides for organizations and why they should strive to achieve it.

Introduction

The Six Sigma program originated in the 1980s and has quickly gained momentum: More than 500 organizations adopted the system, including such industry giants as Motorola, General Electric, and Honeywell. Their success made Six Sigma a well-known program, allowing firms to save costs and achieve higher efficiency of performance (Swink & Jacobs, 2012, p. 437). With the course of time, the program developed into a comprehensive approach that enabled companies of all scales to boost their performance and win a competitive edge.

The major ideas underlying Six Sigma include focusing on customer needs, using metrics for performance assessment, clearly defining and dividing roles of process improvement specialists, reducing variations, implementing well-structured methodologies, and aiming at tangible results. Thus, Six Sigma can be defined as a comprehensive and highly flexible approach applicable to any kind of business and other activities and helping organizations of various types achieve success by bringing their performance to a new level (Shafer & Moeller, 2012, p. 521).

Yet, there are still doubts about whether all benefits that Six Sigma provides outnumber the expenses that are involved in its adoption. The point is that if the organization decides to introduce Six Sigma at the corporate level, it automatically accepts total organizational restructuring and huge investments in staff training and new information systems. It means that only companies that can afford such expenses have a chance to achieve Six Sigma. This and other reasons make it questionable whether the transition is actually worth it (Swink & Jacobs, 2012, p. 437).

However, information technologies may assist on the path to Six Sigma and help assess whether the company is ready for this or that type of innovation. Management Information System (MIS) is to be analyzed in the paper at hand as it unites a number of sub-systems, each performing a specific function. Establishing a fully integrated MIS is the first step to Six Sigma (Nejati et al., 2013, p. 35).

Implications of Six Sigma

The Nature of Six Sigma

With the high savings achieved by Motorola, Allied Signal, American Express, and General Motors as a result of Six Sigma introduction, the concept spread rapidly throughout industries encompassing not only giant corporations but also small- and medium-sized organizations, health care institutions, banking, and other spheres of activity. The experience of different companies has proven that the approach makes it possible to reduce costs and defects, increase productivity and customer satisfaction, win a competitive edge in the market, shorten cycle time, improve corporate culture, and achieve a higher quality of goods and services (Karthi et al., 2012, p. 242).

The major distinction of Six Sigma is that this way of problem-solving is supported by data. Moreover, it is the only exclusively customer-driven approach to quality management. Some researchers argue that Six Sigma is not unique and shares a lot of its principles and philosophies with quality management systems that existed before. Some even state that Six Sigma is a “fad” as it simply reformulates and reorganizes the old methods (Swink & Jacobs, 2012, p. 437).

However, there are at least several attributes that make the system unique. First and foremost, Six Sigma presupposes the creation of a parallel-mesostructure–a centralized office in the organization that controls staff training and defines company hierarchy. Other functions of a centralized office include: acquiring and distributing resources for various organizational purposes, assembling teams, setting project standards, supervising project implementation, and engaging top managers into all processes running in the company. This makes the implementation of business plans more transparent and keeps projects aligned with the key business strategy.

Furthermore, Six Sigma presupposes that both full- and part-time professionals are to cooperate to achieve improvement (they include lower-level employees, green belts, black belts, master black belts, and champions–each standing for different levels of training and knowledge of Six Sigma methods and techniques). This hierarchy allows establishing better coordination of working processes at all levels as all duties, and tactical tasks are distributed according to employees’ experience in Six Sigma (Swink & Jacobs, 2012, p. 438).

Six Sigma consists of five major steps:

• Define: At this stage, the problem is identified, and the customer’s needs and requirements are determined (Ganguly, 2012, p. 222).
• Measure: Under this phase, all possible root causes of the problem are reviewed to reduce the number of options and set a measuring system (Ganguly, 2012, p. 224).
• Analyze: This stage aims to establish baselines of the future project, identify its ultimate goals, and set criteria for performance assessment. Various statistical tools are used to perform analysis (Ganguly, 2012, p. 226).
• Improve: At the improvement stage, causes that were found out during the previous phase have to be validated, and potential solutions are to be tested in order to remove the existing defects (Ganguly, 2012, p. 228).
• Control: The control phase aims to sum up all the findings to run the process in such a way that eliminated flaws do not recur.

Thus, Six Sigma makes it possible for organizations to execute a more comprehensive and profound research of any problem and evaluate all alternatives in comparison. Moreover, it provides all company employees with a common working language and performance metrics that eliminate misunderstanding and ambiguity (Swink & Jacobs, 2012, p. 439).

Six Sigma: Appreciation, Criticism and Success Factors

Six Sigma approach is appreciated from the following perspectives (Karthi et al., 2012, p. 244):

• it provides quality metrics that allow achieving the highest standards whiling minimizing defects;
• Six Sigma makes it easier to use both old and new statistical tools;
• it helps save costs by avoiding rework;
• implementation of Six Sigma significantly increases customer satisfaction;
• it improves corporate culture of an organization;
• the belt system facilitates the process of training;
• Six Sigma makes it possible to achieve lean productions;
• it involves employees of all levels.

Despite the fact that Six Sigma is praised for a lot of benefits that it provides when implemented correctly, it is still subject to criticism under the following points (Karthi et al., 2012, p. 245):

• it is considered to be a repackaging of old methods with improved statistical tools and is basically the same as TQM;
• the introduction of Six Sigma requires huge investments and therefore can be achieved only by huge corporations as for others it is simply not cost effective;
• it does not provide any methods or principles that would be totally new but actually unites everything that existed before;
• the system of belts is the same old hierarchy that exists in the majority of organizations under different names;
• some companies claim that their results were much better without Six Sigma;
• the customer’s needs and requirement are very unstable, which makes exclusively customer-driven Six Sigma rather unreliable;
• belt certification is not standardized across organizations.

However, if the organization opts for Six Sigma, it has to bear in mind some ingredients that are crucial for achieving success (Karthi et al., 2012, p. 246):

• leaders and employees involvement, change of organizational culture, good project management skills, training, and communication are the initial requirements;
• proper evaluation of the process;
• responsibility of top management;
• correct selection of information systems, tools and techniques;
• prevalence of full-time black belts;
• proper choice of short- and long-term projects.

If some of the factors are missing, Six Sigma approach is likely to fail. For the purpose of increasing chances for success, companies often accompany the transition to Six Sigma by the introduction of various information systems.

MIS to Achieve Six Sigma

Similarities between MIS and Other Information Systems

Management Information System (MIS) is a way of systematizing, organizing, and presenting data used by various organizations for improving outcomes of the decision-making process. MIS is helpful in achieving Six Sigma as it allows collecting information from a great number of inner and outer sources. The only difficulty that MIS presents is that it has no clearly defined structure, which may vary considerably across organizations.

It means that the quality and type of data that it can obtain also depends upon the organization peculiarities. This information system (as it is evident from its title) is meant for managers, not for employees. It includes sourcing, deriving, and processing information in order to present it in the form suitable for further implementation (Mishra, 2013, p. 2).

From the technological point of view, MIS is just one among other information systems (involving the same computer infrastructure) that can be implemented to assist the introduction of Six Sigma. It also features the same components (input, output, computers, data, etc.) as any other system and follows the same steps of planning, design, implementation, analysis, etc., which makes its advantages and distinctions unclear. Furthermore, MIS (like all information systems) relies on the Internet and databases (Mishra, 2013, p. 2).

Differences between MIS and Other Information Systems

Unlike other information systems that are mostly designed for performing specific purposes for a particular department, MIS is capable of processing data that comes from all levels of the organization since the management must stay aware in order to ensure control and introduce corrections in due time. That is why this type of IS is the most suitable one for implementing Six Sigma as a comprehensive approach encompassing all departments and levels (Mishra, 2013, p. 5).

For example, Transaction Processing Systems (TPS) are meant to computerize all types of financial and sales transactions that are performed by the organization and have to track and automate daily operations in order to save costs and time spent on their performance. Although this system is quite successful in reducing manual work and facilitating routine operations by making them highly structured, TPS is still very narrow in its scope of application. MIS is preferable for Six Sigma because (Mishra, 2013, p. 6):

• it allows regulating not only the process of transition from one small activity to another but also to control medium term plans and long-term strategies;
• even a day-long failure of TPS (due to an emergency) is connected with production delay and is likely to bring about huge losses; on the contrary, MIS is not so much depended on computers;
• TPS has to deal with considerable volumes of information while MIS processes small fragments of data, which enables closer and more thorough analysis of each piece;
• TPS is used by employees performing a particular operation whereas MIS is designed for managers, which means that it enhances control.

As for Decision Support Systems (DSS), their primary function is to help decision making authorities choose the most suitable, non-standard, and effective option among existing solutions. DSS analyses options using data from TPS, websites, and even competitors’ reports, performs statistical calculations, and comes out with the best solutions to each particular problem. However, the system may be erratic without the human control (for instance, it may suggest to sell the product at a price that would not exceed the price of its manufacturing simply because of competitors). DSS is possible to use for achieving Six Sigma, however, unlike MIS, it does not involve improvement and control stages. Moreover, it does not feature any support software tools suitable for complicated calculations (Mishra, 2013, p. 7).

Executive Support Systems (ESS) are needed to provide required data to executives and top managers for them to take non-standard strategic decisions in difficult situations. ESS gets its input from a number of sources including TPS and transforms it into the most agreeable formats. Although this type of information system is very close to MIS, it is still narrower in scope since it excludes routine situations (Mishra, 2013, p. 7).

Office Automation System (OAS) makes use of the computers to automate the workflow (which is similar to the function of TSS). Yet, they are broader in scope of application than TSS and encompass all types of operations at all levels as any process can be automated. Sometimes, OAS is used for compilation of MIS reports but in general, since it does not involve human activities, it rarely plays a significant role in Six Sigma (Mishra, 2013, p. 8).

Advantages and Disadvantages of MIS for Six Sigma

Having analyzed all the above given information, I can come up with my own idea about MIS in general and its relevance for implementation of Six Sigma in particular. I believe that its advantages for achieving Six Sigma can be summed up as follows:

• MIS provides relevant and up-to-date information that allows managers interfere in due time;
• data loading is minimized as MIS helps single out only the key facts;
• MIS fosters decentralization due to facilitating the process of performance measuring, which makes it possible to execute control at all levels;
• department coordination is better with MIS since it creates a network of managers that cooperate across departments;
• the cost of Six Sigma is lowered due to cheap and efficient communication channels established with the help of MIS;
• all data is available at any time;
• automation combined with the human factor saves time and money;
• successful management achieved through MIS also increases job productivity of employees.

However, I can also single out some points of criticism:

• MIS requires ongoing monitoring of data, which takes a lot of time (this contradicts the idea of Six Sigma);
• hacking and other security threats cannot be completely eliminated;
• if the input is of low quality, the output will never exceed expectations;
• hardware, software, and human resources require a lot of expenses;
• upgrade of software is a non-flexible process;
• any changes in top management bring about changes in policies, which is also contrary to Six Sigma philosophy.

Contribution

Close investigation of MIS allows stating that the system contributes a lot to Six Sigma not only directly but also by serving as a starting point for many other complex systems and approaches. In order to achieve Six Sigma, I would suggest combining MIS with the following steps:

• the implementation of MIS (or any other information system) must be accompanied by a cultural change for making teams independent and self-directed; tools are insufficient as the real change must occur in mentality;
• not only MIS members but all members of the staff must receive due training to be efficient in cost saving and waste removal;
• feedback is to be ensured from employees to make MIS successful; people must be able to share their ideas;
• no changes in the approach can be optional since only obligatory transformations are perceived accordingly;
• MIS must develop mechanisms to deal with middle management and employee resistance to changes;
• metrics that are not related to Six Sigma have to be eliminated to avoid confusion;
• although the approach is common for every organization, a company still has to do its best to develop its own way of implementing it that would take into consideration its peculiarities;
• MIS requires competent leaders that are experienced in Six Sigma;
• all decisions must be supported by data collected from all accessible information systems;
• results are to be made transparent for all managers and employees;
• for successful implementation of Six Sigma, it would be reasonable to visit other companies to see what they do to achieve it.

Conclusion

In many aspects, Six Sigma focuses its solutions on information systems, which makes interrelations between it and MIS highly important. MIS participates in a number of Six Sigma operation, management, and problem-solving processes as it provides reliable reporting and performance metrics. Without its constant support, it would be impossible to control, systematize, analyze, present, transmit, and use a huge bulk of data involved in implementation of Six Sigma, which means that it could not be introduced in a meaningful way. Although there exist a lot of other information systems, their scope is much narrower.

References

Ganguly, K. (2012). Improvement process for rolling mill through the DMAIC Six Sigma approach. International Journal for Quality Research, 6(3), 221-230.

Karthi, S., Devadasan, S. R., Murugesh, R., Sreenivasa, C. G., & Sivaram, N. M. (2012). Global views on integrating Six Sigma and ISO 9001 certification. Total Quality Management & Business Excellence, 23(3-4), 237-262.

Mishra, U. (2013). Introduction to management information system. Web.

Nejati, F. K., Rajeiyan, K., Hajati, R., Safari, H. R., & Rashed, M. (2013). Relationship between Management Information Systems (MIS) and Lean Management. Singaporean Journal of Business, Economics and Management Studies, 1(10), 35-41.

Shafer, S. M., & Moeller, S. B. (2012). The effects of Six Sigma on corporate performance: An empirical investigation. Journal of Operations Management, 30(7), 521-532.

Swink, M., & Jacobs, B. W. (2012). Six Sigma adoption: Operating performance impacts and contextual drivers of success. Journal of Operations Management, 30(6), 437-453.