The development and application of six sigma implementation model for HK/China manufacturing companies

Abstract

Six Sigma has been proven to be successful in many western companies; however, most of them are Fortune 500 companies, such as GE, Motorola, Ford, Bank of America and Citi Bank. There are but few case studies that discuss the experiences of implementing Six Sigma in China. In recent years, some enterprises in China have employed Six Sigma but how to implement it effectively remains a question. Different backgrounds of the enterprises will affect the approach to Six Sigma implementation. This study developed assessment and measurement models to generate a framework for Chinese enterprises planning to implement Six Sigma. The methodology incorporated a variety of qualitative and quantitative research instruments to collect the data: participant observation, interviews and survey. Five different companies were studied to formulate the models while one of the companies was used as a benchmarking company. The models developed in this study were Readiness Assessment Model (RAM) and Six Sigma Performance Model (SSPM). The first model, RAM, uses two aspects to measure the enterprise readiness for Six Sigma implementation: 1) organizational and cultural readiness (O&C) and 2) methodology & tools readiness (M&T). Organizational and cultural readiness implies the level of readiness in the areas : rewards and recognition, team work, training system, process management and data oriented approach. Technological readiness is measured in terms of quality tools and methodology. Tools were defined as hard tools (basic and advanced) and soft tools. The methodology implies quality management systems, for examples, TQM, QCC, ISO9000, 5S etc. An O&C-M&T map identifies the status of enterprise before the Six Sigma implementation. Typical enterprises in China can be classified into different categories based on the model. In this study, type I and II enterprises are classified in the O&C-M&T map, the typical examples are labor-intensive enterprises (LIEs) and technology-oriented enterprises (TOEs) respectively. The results indicated that the enterprises in China are suitable for focusing on the application of tools in basic hard and soft tools in the initial stage of implementation. It was found that the experience of using both hard and soft tools in type II is better than type I. The second model, SSPM, was formed by using the critical successful factors of Six Sigma and then used to measure the performance of Six Sigma implementation in the enterprise. Eight criteria measured the performance of Six Sigma implemented in the company. Further, there were totally 32 questions developed based on sub-criteria. The model makes it not only possible to measure the performance of Six Sigma, but it also provides a guideline for improvement during implementation. The implementation strategy will be generated for the enterprise in different stages. Two companies were used as action case studies to validate the models, representing typical type I and type II in China. After the first phase implementation, type II (Overall Performance Index, OPI=3.13) performed better than type I (OPI=2.17) while the benchmarking company was 3.72 after four years of implementation since 2001. Accordingly, the gap between type I and the benchmarking company was 71.4%, while the gap between type II and the benchmarking company was 19.2%. The result of Six Sigma implementation in type II was significant and faster. For both types of enterprises, there is evidence that implementation will be more effective if the enterprise in China starts with methodology and tools change before turning to organizational and cultural change.

Date of Award	3 Oct 2006
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	Hongyi SUN (Supervisor)