Wednesday, March 6, 2013
Samsung and Six Sigma in 2004
Samsung has a history of strong supply chain. However, in 2004, company believed that it could improve its global business operations by using six sigma. The company was of the opinion that there were four areas within the company that six sigma aligned with supply chain operations. These were:
1. Quantitative strength
2. Project discipline
3. Sustaining results
4. HR framework
SCM and six sigma were thus combined by training the supply chain staff that could lead innovations to improve operations. In order to further improve supply chain, the SCM Business team of Samsung looked towards other companies like GE, Honeywell and DuPont that had used six sigma similarly.GE had successfully customized the six sigma approach of process innovation for product development and system design and implementation within the company. DuPont had interpreted sig sigma to develop a quality function deployment tool that transformed customer needs into products, services or processes. Honeywell developed the Six Sigma Plus method that linked lean manufacturing tools and concepts to six sigma.The team analysed these different approaches to come up with the Samsung Six Sigma methodology.
The Team’s Findings:
· Six Sigma in SCM either focuses on either process redesign or Process improvement
· The DMADOV (define, measure, analyze, design, optimize, verify) model used for designing a process using Six Sigma was not enough for Samsung SCM projects for which they had to introduce “Enable” instead of design and optimize
· System development option –The DABTL (define, architect, build, test, launch) approach was used to support system building
The approach that they came up with was the DMAEV- define, measure, analyze, enable, and verify. To this they added the “five design parameters- process, operation rule and policy, organization role and responsibility, performance measure, and system”, and also other relevant tools like value chain map techniques and value analysis methods.
Design principles to guide SCM six sigma projects were made. These include:
· Global optimum: All ideas must effect a positive change not only locally, but on the entire process. If possible, the idea should improve both upstream and downstream processes.
· Process KPI mapping: Using key performance indicators improves the credibility of the approach and monitors the process to help manage improvement goals
· Systemization: Use systems to effect positive process and behavioral changes
· Five design parameters: SCM uses the five design parameters to characterize the changes through the process.
Six Sigma has played a facilitating role in the success of Samsung moving towards a global optimum in terms of processes. However, Samsung claims that there is still room for improvement as far as supply chain is concerned. What changes can you think of that Samsung could make in managing the supply chain of any particular line of its products? Do you think that today, it has managed to bring about consistent innovation after adopting Six Sigma?