The Fundamental Differences between Six Sigma and TQM
In today's world of the global economic competition, the quality of products and services is paramount in realizing the profitability and sustainability of customers. The quality management is a management of all activities and functions required in the process of determining the quality policy and its implementation. The impact of globalization and the advent of modern technology have changed the world of business and how customers conduct themselves in the market. As a result of the global challenges, organizations have been forced to develop strategies that will ensure they remain competitive in the market. Therefore, the today's challenging environment does not leave any room for error, since it will result in massive losses for the organization. Consequently, the use of Six Sigma has become part of the culture for many organizations. This essay will explore the fundamental differences between Six Sigma and the total quality management. The essay will also provide an example, where Six Sigma has been applied and successfully transformed the organization.
Total Quality Management
The concept of total quality management or TQM was coined by Edward Deming. TQM refers to a continuous effort by management in improving employees and the organization to ensure there is the customer loyalty and satisfaction. This is based on the concept that when one customer is satisfied and delighted, the company is bound to benefit from a repeat purchase, because there will be numerous referrals on the contrary; meanwhile, a disappointed customer may spread the bad news through the word of mouth, thus affecting the reputation of the organization and scare potential customers.
Turner (2007) explains that TQM is divided into four main categories or the PCDA cycle. The TQM process starts with the "planning phase", where employees are supposed to document all the questions and problems that should be addressed in the organization. This is a vital step because planning helps employees to address organizational challenges and analyze the cause of the problem. It is also essential for employees to conduct a comprehensive research and collect the relevant data to help them find viable solutions to the problems.
After the planning phase, employees enter the "doing phase" to find solutions to the documented problems. During this stage, it is vital for employees to develop formidable strategies that will help in implementing and overcoming organizational challenges. Furthermore, the effectiveness of TQM is measured during this stage in terms of the strategy development. After the "doing phase", employees enter the "checking stage", which is the actual analysis and comparison of data to check the effectiveness of the process. Finally, the TQM ends with the "acting stage", where employees document results in readiness to address other organizational problems. In essence, therefore, the TQM process undergoes four critical stages to address the issue of quality improvement.
The Fundamental Differences between Six Sigma and TQM
Although, Six Sigma is a new concept in management, it was not conceptualized to replace the quality management. This is because both TQM and Six Sigma are fundamental tools for enhancing the quality of products and services. Although there are numerous similarities in terms of the application of both concepts, systems are different in scope and focus.
The basic fundamental difference between TQM and Six Sigma lie in the area of focus and scope. According to Kass and James (2008), the main focus for Six Sigma is on a continuous improvement, because it is self-propelled. This means that when Six Sigma is well implemented in any firm, it continues to yield benefits for a long period even after the goals have been realized. Therefore, Six Sigma develops of a culture of a continuous improvement and improved performance. On the other hand, TQM focuses on individual departments of the organization and specific qualitative goals to be achieved. Therefore, as opposed to Six Sigma that focuses on a continuous improvement, TQM focuses on the customer satisfaction.
Another significant difference between TQM and Six Sigma lies in the area of its application. In most organizations, Six Sigma projects are managed by qualified experts, who have undergone a formal training with a proven track record of management. Therefore, Six Sigma aims at spreading the ownership of quality improvement to the entire organization. Furthermore, Six Sigma aims at cutting costs in order to achieve the set financial targets. Conversely, TQM is specifically run by professionals in the quality control department, who specialize on the quality improvement. Furthermore, TQM thrives on hard objectives that are difficult to measure such as the customer satisfaction and strategic excellence.
The Key Concepts of Six Sigma
According to Turner (2007), the concept of Six Sigma is not a "cliche or slogan." It is a disciplined process, through which organizations ensure that they develop and deliver quality products to consumers. The practice of Six Sigma revolves around six key concepts. First, it focuses on critical to quality, where the company produces according to the requirements of the customer to avoid overproduction and surplus. Second, the company focuses on defects by ensuring that it delivers quality products without any defects. Third, companies that apply Six Sigma focus on the process capability, which means that they only process what they can deliver.
The fourth concept of Six Sigma is a variation, where companies ensure that before they produce, the customer is given a preference to see and feel the product before it goes into the assembly line. This helps the company to make any changes or variations to suit the customer's needs and preferences. The fifth concept of Six Sigma is focusing on stable operations, where the company ensures that it maintains consistency in the production process. Finally, Six Sigma is designed to address the customer's needs and process capability (Norton & Kaplan, 2005).
The Use of Six Sigma at General Electric Company
The concept of Six Sigma was first pioneered by Motorola and then followed by General Electric, where they focused on using scientific approaches in solving production problems such as quality of products and time spent in manufacturing. When applying the principle of Six Sigma, companies identify the cause of problems in production and then implement solutions. The fundamental process elements of Six Sigma are commonly referred to as DMAICT (Define, Measure, Analyze, Improve, Control and Transfer).
General Electric Company is a leading company operating in the automotive industry. In addition, it also has interests in insurance, construction, education and real estate. In the line of production, the company applies Six Sigma and lean manufacturing, since the two concepts use similar approaches of a continuous improvement. When using Six Sigma, the company applies the key deliverables of DMAICT, where the company defines the opportunity by engaging stakeholders, identifies the root causes of production problems, measures the performance and analyzes the root causes of problems. Furthermore, the company develops implementation plans of solving problems, standardizes and controls the production process.
1. Define Opportunity: In any organization, just like General Electric, the process of Six Sigma starts with defining an opportunity. Brue (2005) contends that an opportunity should be defined in quantitative terms in order to make it measurable and meaningful. For instance, when developing a relationship with its suppliers, General Electric can say "45% of unpaid debts are 2 months past the due date." As a result, when the problem is specifically stated, it becomes easy to measure and quantify the progress and results. Furthermore, defining an opportunity may be geared towards increasing the market share or improving the customer satisfaction with the aim of achieving the goals of the business.
2. Measure Performance: The measurement of performance normally involves a difficult part of the DMAIC model, because it is exceptionally time consuming. The process of measuring the performance entails making measurements and collecting data using various techniques to define the business baseline to make further improvements (Kass & James, 2008). In General Electric, the performance is measured through the progress made in the process of implementing Six Sigma standards with the help of team leaders.
3. Analyze Opportunity: This is s a vital step in determining any disparity that may exist between the current levels of performance on the levels to be achieved and the goals set for the organization. The analysis of data should be done through the use of powerful statistical tools so as to get a clear picture of any variation in the process. Furthermore, the analysis of opportunity helps an organization, such as General Electric, to understand the magnitude of the problem and come up with viable solutions.
4. Improve Performance: In regard to improving the performance, the essence of Six Sigma is to identify possible solutions to real problems. In order to develop formidable solutions, it is vital to test the available solutions to check whether they interact with other variables. As a result, it becomes easy to choose the best solutions from among the alternatives. Therefore, various improvements need to be implemented within the system in order to ensure organizational goals are achieved. For instance, at General Electric, the improvement in performance is achieved through the creation and development of processes using the appropriate statistical tools. These are vital in the measurement of data and improvements made in case of any shortcomings.
5. Control: This is regarded as the last phase of the DMAIC process, because it helps organizations to ensure that modifications are implemented to avert any negative effect. According to Hakes (2009), the control phase helps an organization to ensure that improvements are sustained in the operating procedure and on any new processes. Furthermore, the new project components are supposed to be integrated into the existing processes, to ensure that there is a satisfaction in the service delivery. This also involves controlling the quality of data and verification of measurements according to the set goals. As a result, an effective control phase will yield positive returns in terms of the efficiency and improved performance.
General Electric Company is a company devoted to maintaining excellent standards in its operations. The company sets its quality standards with employees and clients in mind, since it believes that they are vital stakeholders of the organization. The quality standards of General Electric Company are deeply engraved in its guiding principle: "a customer focused organization that aims to meet and exceed the client's expectation".
When the company is setting its quality standards, it makes the use of an Integrated Management System (IMS), which is critical in developing objectives and targets. The IMS incorporates manuals that contain procedures of the product development to divisions and projects. In addition, the company sets its targets and standards in line with the ISO guidelines.
The use of Six Sigma has enabled General Electric Company to maintain a consistency in satisfying its customers, by producing what they require at the right time. Some of the principles of Six Sigma include a specification of the value as required by customers, identification and creation of value streams, striving for perfection and pull production.
The Assembly Engineering Manager observes: "after they implemented the process of Six Sigma, General Electric Company realized tremendous growth" (Turner, 2007). Before the introduction of Six Sigma, the company had an enormous storage rack for storing the waste material as the company produces hundred of construction materials on a daily basis. The production process was slow, since there was a lot of inventory, which took so much space. However, after the introduction of Six Sigma, one of the benefits the company realized was the elimination of waste material and too much inventory. This created a lot of space for work, and the company decided to redesign its factory layout. The Assembly Engineering Manager points out that the process of Six Sigma enabled them to align their machines in a more effective way to enhance the performance and productivity.
Another significant benefit of Six Sigma is that it enabled General Electric Company to manage its Takt time and machine time. This has enabled the company to manage the surplus production, because their production is demanded and driven by customers' orders. The company has also invested in software that automatically updates data on the machine performance. Furthermore, Turner (2007) observes "the use of Six Sigma has enabled the company to monitor its machines, thereby making it easy to identify any breakdowns".
As a result of using Six Sigma, the design departments of General Electric Company have been redesigned to enhance the performance of the entire design process. Since the introduction of Six Sigma, the design department has been extremely busy and productive. Owing to the successful implementation of the process of Six Sigma in General Electric, the company has decided to design a manual assembly line in its affiliate in the U.K.
How General Electric Company Ensures Compliance of Its Six Sigma Standards
In ensuring that the company's standards are complied with, the company regularly performs internal and external audits to monitor the quality of its products. Since the company values the customer satisfaction, it ensures that employees are adequately trained to be competitive. Furthermore, the company believes that standards can only be complied with if employees are well trained, since this will result in the quality and improved performance.
General Electric engages in a "continuous improvement" of its operations to ensure that the company's standards are complied. This involves developing and periodically reviewing its projects in the construction industry. The company has developed a quality control plan to address issues of non-conformance, workmanship and quality assurance of its projects.
In the course of its operations, General Electric is keen towards maintaining a free and secure environment through its HSE standards. In ensuring the compliance with the HSE practices, the company has developed a recognition and reward scheme that issues certificates and cash to the most cautious employees. This helps in motivating employees, thus, reducing faults and failures within the company. The company also makes the use of project consultants by conducting regular inspections on a weekly and monthly basis to make sure that the HSE system is effectively implemented. In addition, the company ensures compliance with its standards through quarterly system audits at their head office, normally conducted by ISO approved agencies, thus, making the company fully compliant with ISO certification requirements.