An environmental policy is a statement of the organization’s overall aims and principles ofaction with respect to the environment, including compliance with all relevant stakeholders. As such, it should be written clearly and concisely to enable a
regulatory requirements. It is a key tool in communicating the environmental priorities of your organization to employees at all levels, as well as to external layperson to understand it, and should be made publicly available. It is up to the organization to decide on environmental priorities based on an initial environmental review, but these choices should be justified in the policy. To be truly effective the policy should regularly be reviewed and revised and incorporated into the organization’s overall corporate policy. The policy statement should set in writing a few achievable quantifiable priorities related to the environmental management system and the significant environmental effects found at the work-site. Furthermore, EMAS requires that the most signifcant environmental effects be mitigated within three years. Some form of improvement must also be accomplished from year-to-year by the organization and must be shown in the annual reports.
Although the formulation of policies and clear priorities is the most important step of
environmental management, this step is often neglected. Many top managers feel pressure to do something for the environment and thus embark on some form of ?Environmental activism?E often containing many isolated activities but no clear direction. For an organization to be a credible and efficient environmental performer and to reap the benefits of being an environmental leader in its markets, the rationale for investing in environmental management must be very clear.
To ensure an organization’s commitment towards a formulated environmental policy, it is
essential that top management is involved in the process of formulating the policy and of setting priorities. Therefore the first step is to get the commitment from the highest level of management. Based on this commitment the organization should then conduct an initial environmental review and draft an environmental policy. This draft should be discussed and approved by the board of directors. Finally, the approved environmental policy statement must be communicated internally and made available to the public.
As the environmental policy establishes an overall sense of direction and sets the principles
of action for an organization, it requires commitment from the highest level of management. Top management should be involved in the development and adoption of an environmental policy.
Getting the commitment from the highest level should be argued on the basis of costs and the implementation of an EMS increases shareholder value it is easier for top
benefits and their impact on shareholder value. If management to commit themselves to approving an environmental policy and to implementing an environmental management system. This commitment includes three basic policy statements:
Continuous improvement in environmental performance
Compliance with environmental regulations
Maintaining public relations regarding environmental issues of the organization, its activities, products and services.
The central focus of the policy should be a commitment to continuous improvement. This
means improvement in the EMS itself and a decrease in environmental impacts caused by an organization’s activities, products and services. It is important for businesses to show improvement over time, both in environmental performance and in organizational commitment to this path.
A commitment to comply with at least local environmental regulations is a minimum
requirement for all of the environmental standards. However, multinationals operating in various environments and facing different laws in each, should think about which laws to abide by and if it is feasible to adopt the same standard worldwide. Generally, laws in newly industrializing countries are lax as compared to industrialized countries. However, given the increase in interest in environmental issues in these industrializing countries and the possible impact of the ISO 14000 series, it may be sound practice to adopt the more stringent laws in worldwide operations, where it is feasible to do so. In addition, the adoption of high standards worldwide can yield other benefits, such as an improved public image or easier technology transfer between different sites.
Companies should guard against going overboard in fulfilling environmental policies. Limits
are in fact set on how far a company has to go to reduce its environmental impacts. Reductions do not have to exceed levels which can be achieved by economically viable application of the best available technology (BAT).
Friday, October 9, 2009
Measurement and Evaluation In ISO 14001:2004
After implementing the environmental policy, management needs to measure environmental that the data can be verified by an internal or external auditor.
interventions and their impact on the environment. This is done by building up an environmental effects register (environmental inventory). All equipment used for monitoring and measuring must be accurate and calibrated on a regular basis. To check the compliance status of an organization, additional information about regulations and other requirements is needed. A so called environmental regulations register?Eis often installed and maintained for this purpose. To obtain a better picture about the financial consequences of environmental protection, the accounting system should reflect environmental costs. Therefore, information about environmentally-induced costs and earnings needs to be collected. All this information should be recorded in such a manner.er
Environmental Performance Evaluation Accesses Environment Performance against environmental targets and objectives and against applicable environmental regulations. Responsibilities and authority need to be defined to deal with non-compliance within the EMS. This includes specifying the actions to be taken to correct an undesirable ituation and to prevent future non-compliance.
The analysis of environmental and economic performance leads to eco efficiency, the key component in sustainable business management.
The analysis of environmental and economic performance leads to eco
efficiency, the key component in sustainable business management. The recording of physical environmental data, environmental regulations and environmentally-induced financial information is necessary as a basis for effective decision making. Therefore, financial, legal and ecological data systems must be built up from scratch or adapted to the requirements of the EMS standard.
interventions and their impact on the environment. This is done by building up an environmental effects register (environmental inventory). All equipment used for monitoring and measuring must be accurate and calibrated on a regular basis. To check the compliance status of an organization, additional information about regulations and other requirements is needed. A so called environmental regulations register?Eis often installed and maintained for this purpose. To obtain a better picture about the financial consequences of environmental protection, the accounting system should reflect environmental costs. Therefore, information about environmentally-induced costs and earnings needs to be collected. All this information should be recorded in such a manner.er
Environmental Performance Evaluation Accesses Environment Performance against environmental targets and objectives and against applicable environmental regulations. Responsibilities and authority need to be defined to deal with non-compliance within the EMS. This includes specifying the actions to be taken to correct an undesirable ituation and to prevent future non-compliance.
The analysis of environmental and economic performance leads to eco efficiency, the key component in sustainable business management.
The analysis of environmental and economic performance leads to eco
efficiency, the key component in sustainable business management. The recording of physical environmental data, environmental regulations and environmentally-induced financial information is necessary as a basis for effective decision making. Therefore, financial, legal and ecological data systems must be built up from scratch or adapted to the requirements of the EMS standard.
Basic QC and Six Sigma Tools
The 7 QC Tools
The Seven Quality Control tools (7QC tools) are graphical and statistical tools which are most often used in QC for continuous improvement. Since they are so widely utilized by almost every level of the company, they have been nicknamed the Magnificent Seven. They are applicable to improvements in all dimensions of the process performance triangle: variation of quality, cycle time and yield of productivity.
Each one of the 7QC tools had been used separately before 1960. However, in the early 1960s, they were gathered together by a small group of Japanese scientists lead by Kaoru Ishikawa, with the aim of providing the QC Circles with effective and easy-to-use tools. They are, in alphabetical order, cause-and-effect diagram, check sheet, control chart, histogram, Pareto chart, scatter diagram and stratification. In Six Sigma, they are extensively used in all phases of the improvement methodology – define, measure, analyze, improve and control.
(1) Cause-and-effect diagram
An effective tool as part of a problem-solving process is the cause-and-effect diagram, also known as the Ishikawa diagram (after its originator) or fishbone diagram. This technique is useful to trigger ideas and promote a balanced approach in group brainstorming sessions where individuals list the perceived sources (causes) with respect to outcomes (effect).
When constructing a cause-and-effect diagram, it is often appropriate to consider six main causes that can contribute to an outcome response (effect): so-called 5M1E (man, machine, material, method, measurement, and environment).
When preparing a cause-and-effect diagram, the first step is to agree on the specific wording of the effect and then to identify the main causes that can possibly produce the effect. The main causes can often be identified as any of 5M1E, which helps us to get started, but these are by no means exhaustive.
Using brainstorming techniques, each main cause is analyzed. The aim is to refine the list of causes in greater detail until the root causes of that particular main cause are established. The same procedure is then followed for each of the other main causes. The method is a main cause, the pressure and the temperature are the causes, and “the pressure is low” and “the temperature is too high” are the root causes.
(2) Check sheet
The check sheet is used for the specific data collection of any desired characteristics of a process or product that is to be improved. It is frequently used in the measure phase of the Six Sigma improvement methodology, DMAIC. For practical purposes, the check sheet is commonly formatted as a table. It is important that the check sheet is kept simple and that its design is aligned to the characteristics that are measured. Consideration should be given as to who should gather the data and what measurement intervals to apply. For example, Figure 4.2 shows a check sheet for defect items in an assembly process of automobile ratios.
(3) Control chart
(a) Introduction
The control chart is a very important tool in the “analyze, improve and control” phases of the Six Sigma improvement methodology. In the “analyze” phase, control charts are applied to judge if the process is predictable; in the “improve” phase, to identify evidence of special causes of variation so that they can be acted on; in the “control” phase, to verify that the performance of the process is under control.
The original concept of the control chart was proposed by Walter A. Shewhart in 1924 and the tool has been used extensively in industry since the Second World War, especially in Japan and the USA after about 1980. Control charts offer the study of variation and its source. They can give process monitoring and control, and can also give direction for improvements. They can separate special from common cause issues of a process. They can give early identification of special causes so that there can be timely resolution before many poor quality products are produced. Shewhart control charts track processes by plotting data over time in the form shown in Figure 4.3. This chart can track either variables or attribute process parameters. The types of variable charts are process mean (x), range (R), standard deviation (s), individual value (x) and moving range (Rs). The attribute types are fraction nonconforming (p), number of nonconforming items (np), number of nonconformities (c), and nonconformities per unit (u).
(4) Histogram
It is meaningful to present data in a form that visually illustrates the frequency of occurrence of values. In the analysis phase of the Six Sigma improvement methodology, histograms are commonly applied to learn about the distribution of the data within the results Ys and the causes Xs collected in the measure phase and they are also used to obtain an understanding of the potential for improvements.
(5) Pareto chart
The Pareto chart was introduced in the 1940s by Joseph M.Juran, who named it after the Italian economist and statistician Vilfredo Pareto, 1848–1923. It is applied to distinguish the “vital few from the trivial many” as Juran formulated the purpose of the Pareto chart. It is closely related to the so-called 80/20 rule – “80% of the problems stem from 20% of the causes,” or in Six Sigma terms “80% of the poor values in Y stem from 20% of the Xs.”
In the Six Sigma improvement methodology, the Pareto chart has two primary applications. One is for selecting appropriate improvement projects in the define phase. Here it offers a very objective basis for selection, based on, for example, frequency of occurrence, cost saving and improvement potential in process performance.
The other primary application is in the analyze phase for identifying the vital few causes (Xs) that will constitute the greatest improvement in Y if appropriate measures are taken.
A procedure to construct a Pareto chart is as follows:
1) Define the problem and process characteristics to use in the diagram.
2) Define the period of time for the diagram – for example, weekly, daily, or shift.
Quality improvements over time can later be made from the information determined within this step.
3) Obtain the total number of times each characteristic occurred.
4) Rank the characteristics according to the totals from
(6) Scatter diagram
The scatter plot is a useful way to discover the relationship between two factors, X and Y, i.e., the correlation. An important feature of the scatter plot is its visualization of the correlation pattern, through which the relationship can be determined. In the improve phase of the Six Sigma improvement methodology, one often searches the collected data for Xs that have a special influence on Y. Knowing the existence of such relationships, it is possible to identify input variables that
cause special variation of the result variable. It can then be determined how to set the input variables, if they are controllable, so that the process is improved. When several Xs may influence the values of Y, one scatter plot should be drawn for each combination of the Xs and Y.
(7) Stratification
Stratification is a tool used to split collected data into subgroups in order to determine if any of them contain special cause variation. Hence, data from different sources in a process can be separated and analyzed individually. Stratification is mainly used in the analyze phase to stratify data in the
search for special cause variation in the Six Sigma improvement methodology.
The most important decision in using stratification is to determine the criteria by which to stratify. Examples can be machines, material, suppliers, shifts, day and night, age groups and so on. It is common to stratify into two groups. If the number of observations is large enough, more detailed stratification is also possible.
The Seven Quality Control tools (7QC tools) are graphical and statistical tools which are most often used in QC for continuous improvement. Since they are so widely utilized by almost every level of the company, they have been nicknamed the Magnificent Seven. They are applicable to improvements in all dimensions of the process performance triangle: variation of quality, cycle time and yield of productivity.
Each one of the 7QC tools had been used separately before 1960. However, in the early 1960s, they were gathered together by a small group of Japanese scientists lead by Kaoru Ishikawa, with the aim of providing the QC Circles with effective and easy-to-use tools. They are, in alphabetical order, cause-and-effect diagram, check sheet, control chart, histogram, Pareto chart, scatter diagram and stratification. In Six Sigma, they are extensively used in all phases of the improvement methodology – define, measure, analyze, improve and control.
(1) Cause-and-effect diagram
An effective tool as part of a problem-solving process is the cause-and-effect diagram, also known as the Ishikawa diagram (after its originator) or fishbone diagram. This technique is useful to trigger ideas and promote a balanced approach in group brainstorming sessions where individuals list the perceived sources (causes) with respect to outcomes (effect).
When constructing a cause-and-effect diagram, it is often appropriate to consider six main causes that can contribute to an outcome response (effect): so-called 5M1E (man, machine, material, method, measurement, and environment).
When preparing a cause-and-effect diagram, the first step is to agree on the specific wording of the effect and then to identify the main causes that can possibly produce the effect. The main causes can often be identified as any of 5M1E, which helps us to get started, but these are by no means exhaustive.
Using brainstorming techniques, each main cause is analyzed. The aim is to refine the list of causes in greater detail until the root causes of that particular main cause are established. The same procedure is then followed for each of the other main causes. The method is a main cause, the pressure and the temperature are the causes, and “the pressure is low” and “the temperature is too high” are the root causes.
(2) Check sheet
The check sheet is used for the specific data collection of any desired characteristics of a process or product that is to be improved. It is frequently used in the measure phase of the Six Sigma improvement methodology, DMAIC. For practical purposes, the check sheet is commonly formatted as a table. It is important that the check sheet is kept simple and that its design is aligned to the characteristics that are measured. Consideration should be given as to who should gather the data and what measurement intervals to apply. For example, Figure 4.2 shows a check sheet for defect items in an assembly process of automobile ratios.
(3) Control chart
(a) Introduction
The control chart is a very important tool in the “analyze, improve and control” phases of the Six Sigma improvement methodology. In the “analyze” phase, control charts are applied to judge if the process is predictable; in the “improve” phase, to identify evidence of special causes of variation so that they can be acted on; in the “control” phase, to verify that the performance of the process is under control.
The original concept of the control chart was proposed by Walter A. Shewhart in 1924 and the tool has been used extensively in industry since the Second World War, especially in Japan and the USA after about 1980. Control charts offer the study of variation and its source. They can give process monitoring and control, and can also give direction for improvements. They can separate special from common cause issues of a process. They can give early identification of special causes so that there can be timely resolution before many poor quality products are produced. Shewhart control charts track processes by plotting data over time in the form shown in Figure 4.3. This chart can track either variables or attribute process parameters. The types of variable charts are process mean (x), range (R), standard deviation (s), individual value (x) and moving range (Rs). The attribute types are fraction nonconforming (p), number of nonconforming items (np), number of nonconformities (c), and nonconformities per unit (u).
(4) Histogram
It is meaningful to present data in a form that visually illustrates the frequency of occurrence of values. In the analysis phase of the Six Sigma improvement methodology, histograms are commonly applied to learn about the distribution of the data within the results Ys and the causes Xs collected in the measure phase and they are also used to obtain an understanding of the potential for improvements.
(5) Pareto chart
The Pareto chart was introduced in the 1940s by Joseph M.Juran, who named it after the Italian economist and statistician Vilfredo Pareto, 1848–1923. It is applied to distinguish the “vital few from the trivial many” as Juran formulated the purpose of the Pareto chart. It is closely related to the so-called 80/20 rule – “80% of the problems stem from 20% of the causes,” or in Six Sigma terms “80% of the poor values in Y stem from 20% of the Xs.”
In the Six Sigma improvement methodology, the Pareto chart has two primary applications. One is for selecting appropriate improvement projects in the define phase. Here it offers a very objective basis for selection, based on, for example, frequency of occurrence, cost saving and improvement potential in process performance.
The other primary application is in the analyze phase for identifying the vital few causes (Xs) that will constitute the greatest improvement in Y if appropriate measures are taken.
A procedure to construct a Pareto chart is as follows:
1) Define the problem and process characteristics to use in the diagram.
2) Define the period of time for the diagram – for example, weekly, daily, or shift.
Quality improvements over time can later be made from the information determined within this step.
3) Obtain the total number of times each characteristic occurred.
4) Rank the characteristics according to the totals from
(6) Scatter diagram
The scatter plot is a useful way to discover the relationship between two factors, X and Y, i.e., the correlation. An important feature of the scatter plot is its visualization of the correlation pattern, through which the relationship can be determined. In the improve phase of the Six Sigma improvement methodology, one often searches the collected data for Xs that have a special influence on Y. Knowing the existence of such relationships, it is possible to identify input variables that
cause special variation of the result variable. It can then be determined how to set the input variables, if they are controllable, so that the process is improved. When several Xs may influence the values of Y, one scatter plot should be drawn for each combination of the Xs and Y.
(7) Stratification
Stratification is a tool used to split collected data into subgroups in order to determine if any of them contain special cause variation. Hence, data from different sources in a process can be separated and analyzed individually. Stratification is mainly used in the analyze phase to stratify data in the
search for special cause variation in the Six Sigma improvement methodology.
The most important decision in using stratification is to determine the criteria by which to stratify. Examples can be machines, material, suppliers, shifts, day and night, age groups and so on. It is common to stratify into two groups. If the number of observations is large enough, more detailed stratification is also possible.
TQM and Six Sigma
While Six Sigma is definitely succeeding in creating some impressive results and culture changes in some influential organizations, it is certainly not yet a widespread success. Total Quality Management (TQM) seems less visible in many businesses than it was in the early 1990s. However, many companies are still engaged in improvement efforts based on the principles and tools of TQM. It appears at least in Korea that Six Sigma is succeeding while TQM is losing its momentum.
One of the problems that plagued many of the early TQM initiatives was the preeminence placed on quality at the expense of all other aspects of the business. Some organizations experienced severe financial consequences in the rush to make quality “first among equals.” The disconnection between management systems designed to measure customer satisfaction and those designed to measure provider profitability often led to unwise investments in quality, which has been often practiced in TQM. Ronald Snee (1999) points out that although some people believe it is nothing new, Six Sigma is unique in its approach and deployment. He defines Six Sigma as a strategic business improvement approach that seeks to increase both customer satisfaction and an organization’s financial health. Snee goes on to claim that the following eight characteristics account for Six Sigma’s increasing bottom-line (net income or profit) success and popularity with executives.
• Bottom-line results expected and delivered
• Senior management leadership
• A disciplined approach (DMAIC)
• Rapid (3–6 months) project completion
• Clearly defined measures of success
• Infrastructure roles for Six Sigma practitioners and leadership
• Focus on customers and processes
• A sound statistical approach to improvement
Other quality initiatives including TQM have laid claim to a subset of these characteristics, but only Six Sigma attributes its success to the simultaneous application of all eight. Six Sigma is regarded as a vigorous rebirth of quality ideals and methods, as these are applied with even greater passion and commitment than often was the case in the past. Six Sigma is revealing a potential for success that goes beyond the levels of improvement achieved through the many TQM efforts. Some of the mistakes of yesterday’s TQM efforts certainly might be repeated in a Six Sigma initiative if we are not careful.
A review of some of the major TQM pitfalls, as well as hints on how the Six Sigma system can keep them from derailing our efforts is listed below.
1. Links to the business and bottom-line success:
In TQM, quality often was a “sidebar” activity, separated from the key issues of business strategy and performance. The link to the business and bottom-line success was undermined, despite the term “total” quality, since the effort actually was limited to product and manufacturing functions. Six Sigma emphasizes reduction of costs, thereby contributing to the bottom-line, and participation of three major areas: manufacturing, R&D and service parts.
2. Top-level management leadership:
In many TQM efforts, top-level management’s skepticism has been apparent, or their willingness to drive quality ideas has been weak. Passion for and belief in Six Sigma at the very summit of the business is unquestioned in companies like
Motorola, GE, Allied Signal (now Honeywell), LG and Samsung. In fact, top-level management involvement is the beginning of Six Sigma.
3. Clear and simple message:
The fuzziness of TQM started with the word “quality” itself. It is a familiar term with many shades of meaning. In many companies, Quality was an existing department with specific responsibilities for “quality control” or “quality assurance,” where the discipline tended to focus more on stabilizing rather than improving processes. Also TQM does not provide a clear goal at which to aim. The concept of Six Sigma is clear and simple. It is a business system for achieving and sustaining success through customer focus, process management and improvement, and the wise use of facts and data. A clear goal (3. 4 DPMO or 6s quality level) is the centerpiece of Six Sigma.
4. Effective training:
TQM training was ineffective in the sense that the training program was not so systematic. Six Sigma divides all the employees into five groups (WB, GB, BB, MBB and Champion), and it sets very demanding standards for learning, backing them up with the necessary investment in time and money to help people meet those standards.
5. Internal barriers:
TQM was a mostly “departmentalized” activity in many companies, and it seemed that TQM failed to break down internal barriers among departments. Six Sigma places priority on cross-functional process management, and cross-functional project teams are created, which eventually breaks down internal barriers.
6. Project team activities:
TQM utilized many “quality circles” of blue-collar operators and workers, and not many “task force teams” of white-collar engineers even if they are needed. Six Sigma demands a lot of project teams of BBs and GBs, and the project team activities are one of the major sources of bottom-line and top-line success.
3. Clear and simple message:
The fuzziness of TQM started with the word “quality” itself. It is a familiar term with many shades of meaning. In many companies, Quality was an existing department with specific responsibilities for “quality control” or “quality assurance,” where the discipline tended to focus more on stabilizing rather than improving processes. Also TQM does not provide a clear goal at which to aim. The concept of Six Sigma is clear and simple. It is a business system for achieving and sustaining success through customer focus, process management and improvement, and the wise use of facts and data. A clear goal (3. 4 DPMO or 6s quality level) is the centerpiece of Six Sigma.
4. Effective training:
TQM training was ineffective in the sense that the training program was not so systematic. Six Sigma divides all the employees into five groups (WB, GB, BB, MBB and Champion), and it sets very demanding standards for learning, backing them up with the necessary investment in time and money
to help people meet those standards.
5. Internal barriers:
TQM was a mostly “departmentalized” activity in many companies, and it seemed that TQM failed to break down internal barriers among departments. Six Sigma places priority on cross-functional process management, and cross-functional project teams are created, which eventually breaks down internal barriers.
6. Project team activities:
TQM utilized many “quality circles” of blue-collar operators and workers, and not many “task force teams” of white-collar engineers even if they are needed. Six Sigma demands a lot of project teams of BBs and GBs, and the project team activities are one of the major sources of bottom-line and top-line success.
One of the problems that plagued many of the early TQM initiatives was the preeminence placed on quality at the expense of all other aspects of the business. Some organizations experienced severe financial consequences in the rush to make quality “first among equals.” The disconnection between management systems designed to measure customer satisfaction and those designed to measure provider profitability often led to unwise investments in quality, which has been often practiced in TQM. Ronald Snee (1999) points out that although some people believe it is nothing new, Six Sigma is unique in its approach and deployment. He defines Six Sigma as a strategic business improvement approach that seeks to increase both customer satisfaction and an organization’s financial health. Snee goes on to claim that the following eight characteristics account for Six Sigma’s increasing bottom-line (net income or profit) success and popularity with executives.
• Bottom-line results expected and delivered
• Senior management leadership
• A disciplined approach (DMAIC)
• Rapid (3–6 months) project completion
• Clearly defined measures of success
• Infrastructure roles for Six Sigma practitioners and leadership
• Focus on customers and processes
• A sound statistical approach to improvement
Other quality initiatives including TQM have laid claim to a subset of these characteristics, but only Six Sigma attributes its success to the simultaneous application of all eight. Six Sigma is regarded as a vigorous rebirth of quality ideals and methods, as these are applied with even greater passion and commitment than often was the case in the past. Six Sigma is revealing a potential for success that goes beyond the levels of improvement achieved through the many TQM efforts. Some of the mistakes of yesterday’s TQM efforts certainly might be repeated in a Six Sigma initiative if we are not careful.
A review of some of the major TQM pitfalls, as well as hints on how the Six Sigma system can keep them from derailing our efforts is listed below.
1. Links to the business and bottom-line success:
In TQM, quality often was a “sidebar” activity, separated from the key issues of business strategy and performance. The link to the business and bottom-line success was undermined, despite the term “total” quality, since the effort actually was limited to product and manufacturing functions. Six Sigma emphasizes reduction of costs, thereby contributing to the bottom-line, and participation of three major areas: manufacturing, R&D and service parts.
2. Top-level management leadership:
In many TQM efforts, top-level management’s skepticism has been apparent, or their willingness to drive quality ideas has been weak. Passion for and belief in Six Sigma at the very summit of the business is unquestioned in companies like
Motorola, GE, Allied Signal (now Honeywell), LG and Samsung. In fact, top-level management involvement is the beginning of Six Sigma.
3. Clear and simple message:
The fuzziness of TQM started with the word “quality” itself. It is a familiar term with many shades of meaning. In many companies, Quality was an existing department with specific responsibilities for “quality control” or “quality assurance,” where the discipline tended to focus more on stabilizing rather than improving processes. Also TQM does not provide a clear goal at which to aim. The concept of Six Sigma is clear and simple. It is a business system for achieving and sustaining success through customer focus, process management and improvement, and the wise use of facts and data. A clear goal (3. 4 DPMO or 6s quality level) is the centerpiece of Six Sigma.
4. Effective training:
TQM training was ineffective in the sense that the training program was not so systematic. Six Sigma divides all the employees into five groups (WB, GB, BB, MBB and Champion), and it sets very demanding standards for learning, backing them up with the necessary investment in time and money to help people meet those standards.
5. Internal barriers:
TQM was a mostly “departmentalized” activity in many companies, and it seemed that TQM failed to break down internal barriers among departments. Six Sigma places priority on cross-functional process management, and cross-functional project teams are created, which eventually breaks down internal barriers.
6. Project team activities:
TQM utilized many “quality circles” of blue-collar operators and workers, and not many “task force teams” of white-collar engineers even if they are needed. Six Sigma demands a lot of project teams of BBs and GBs, and the project team activities are one of the major sources of bottom-line and top-line success.
3. Clear and simple message:
The fuzziness of TQM started with the word “quality” itself. It is a familiar term with many shades of meaning. In many companies, Quality was an existing department with specific responsibilities for “quality control” or “quality assurance,” where the discipline tended to focus more on stabilizing rather than improving processes. Also TQM does not provide a clear goal at which to aim. The concept of Six Sigma is clear and simple. It is a business system for achieving and sustaining success through customer focus, process management and improvement, and the wise use of facts and data. A clear goal (3. 4 DPMO or 6s quality level) is the centerpiece of Six Sigma.
4. Effective training:
TQM training was ineffective in the sense that the training program was not so systematic. Six Sigma divides all the employees into five groups (WB, GB, BB, MBB and Champion), and it sets very demanding standards for learning, backing them up with the necessary investment in time and money
to help people meet those standards.
5. Internal barriers:
TQM was a mostly “departmentalized” activity in many companies, and it seemed that TQM failed to break down internal barriers among departments. Six Sigma places priority on cross-functional process management, and cross-functional project teams are created, which eventually breaks down internal barriers.
6. Project team activities:
TQM utilized many “quality circles” of blue-collar operators and workers, and not many “task force teams” of white-collar engineers even if they are needed. Six Sigma demands a lot of project teams of BBs and GBs, and the project team activities are one of the major sources of bottom-line and top-line success.
ISO 9000 Series and Six Sigma
ISO (International Organization for Standardization) 9000 series standards were first published in 1987, revised in 1994, and re-revised in 2000 by the ISO. The 2000 revision, denoted by ISO 9000:2000, has attracted broad expectations in industry.
As of the year 2001, more than 300,000 organizations world-wide have been certified to the ISO 9000 series standards. It embodies a consistent pair of standards, ISO 9001:2000 and ISO 9004:2000, both of which have been significantly updated and modernized. The ISO 9001:2000 standard specifies requirements for a quality management system for which third-party certification is possible, whereas ISO 9004:2000 provides guide- lines for a comprehensive quality management system and performance improvement through Self-Assessment.
The origin and historical development of ISO 9000 and Six Sigma are very different. The genesis of ISO 9000 can be traced back to the standards that the British aviation industry and the U.S. Air Force developed in the 1920s to reduce the need for inspection by approving the conformance of suppliers’ product quality. These standards developed into requirements for suppliers’ quality assurance systems in a number of western countries in the 1970s. In 1987 they were amalgamated into the ISO 9000 series standards.
Independent of ISO 9000, the same year also saw the launch of Six Sigma at Motorola and the launch of Self-Assessment by means of the Malcolm Baldrige National Quality Award in USA. Both Six Sigma and Self-Assessment can be traced back to Walter A. Shewhart and his work on variation and continuous improvement in the 1920s. It was Japanese industry that pioneered a broad application of these ideas from the 1950s through to the 1970s. When variation and continuous improvement caught the attention of some of the American business leaders in the late 1980s, it took the form of the Malcolm Baldrige National Quality Award, on a national level, and of Six Sigma at Motorola.
Some people are wondering if the ISO 9000:2000 series standards make Six Sigma superfluous. They typically refer to clause 8 of ISO 9001: “Measurement, analysis, improvement.”
It requires that companies install procedures in operations for the measurement of processes and data analysis using statistical techniques with the demonstration of continuous improvement . They also partly refer to the ISO 9004:2000 standards that embody guidelines and criteria for Self-Assessment similar to the national quality awards.
The author firmly believes that Six Sigma is needed regardless of whether a company is compliant with the ISO 9000 series. The two initiatives are not mutually exclusive and the objectives in applying them are different. A Six Sigma program is applied in organizations based on its top-line and bottom-line rationales. The primary objective for applying the ISO 9000 series standards is to demonstrate the company’s capability to consistently provide conforming products and/or services. Therefore, the ISO 9000 series standard falls well short of making Six Sigma superfluous.
The ISO 9000 series standards have from their early days been regarded and practiced by industry as a minimum set of requirements for doing business. The new ISO 9000:2000 stan
dards do not represent a significant change to this perspective. Six Sigma on the other hand, aims at world-class performance, based on a pragmatic framework for continuous improvement.
The author believes that Six Sigma is superior in such important areas as rate of improvement, bottom-line and top-line results, customer satisfaction, and top-level management commitment. However, considering the stronghold of ISO 9000 in industry, Six Sigma and ISO 9000 are likely to be applied by the same organization, but for very different purposes.
As of the year 2001, more than 300,000 organizations world-wide have been certified to the ISO 9000 series standards. It embodies a consistent pair of standards, ISO 9001:2000 and ISO 9004:2000, both of which have been significantly updated and modernized. The ISO 9001:2000 standard specifies requirements for a quality management system for which third-party certification is possible, whereas ISO 9004:2000 provides guide- lines for a comprehensive quality management system and performance improvement through Self-Assessment.
The origin and historical development of ISO 9000 and Six Sigma are very different. The genesis of ISO 9000 can be traced back to the standards that the British aviation industry and the U.S. Air Force developed in the 1920s to reduce the need for inspection by approving the conformance of suppliers’ product quality. These standards developed into requirements for suppliers’ quality assurance systems in a number of western countries in the 1970s. In 1987 they were amalgamated into the ISO 9000 series standards.
Independent of ISO 9000, the same year also saw the launch of Six Sigma at Motorola and the launch of Self-Assessment by means of the Malcolm Baldrige National Quality Award in USA. Both Six Sigma and Self-Assessment can be traced back to Walter A. Shewhart and his work on variation and continuous improvement in the 1920s. It was Japanese industry that pioneered a broad application of these ideas from the 1950s through to the 1970s. When variation and continuous improvement caught the attention of some of the American business leaders in the late 1980s, it took the form of the Malcolm Baldrige National Quality Award, on a national level, and of Six Sigma at Motorola.
Some people are wondering if the ISO 9000:2000 series standards make Six Sigma superfluous. They typically refer to clause 8 of ISO 9001: “Measurement, analysis, improvement.”
It requires that companies install procedures in operations for the measurement of processes and data analysis using statistical techniques with the demonstration of continuous improvement . They also partly refer to the ISO 9004:2000 standards that embody guidelines and criteria for Self-Assessment similar to the national quality awards.
The author firmly believes that Six Sigma is needed regardless of whether a company is compliant with the ISO 9000 series. The two initiatives are not mutually exclusive and the objectives in applying them are different. A Six Sigma program is applied in organizations based on its top-line and bottom-line rationales. The primary objective for applying the ISO 9000 series standards is to demonstrate the company’s capability to consistently provide conforming products and/or services. Therefore, the ISO 9000 series standard falls well short of making Six Sigma superfluous.
The ISO 9000 series standards have from their early days been regarded and practiced by industry as a minimum set of requirements for doing business. The new ISO 9000:2000 stan
dards do not represent a significant change to this perspective. Six Sigma on the other hand, aims at world-class performance, based on a pragmatic framework for continuous improvement.
The author believes that Six Sigma is superior in such important areas as rate of improvement, bottom-line and top-line results, customer satisfaction, and top-level management commitment. However, considering the stronghold of ISO 9000 in industry, Six Sigma and ISO 9000 are likely to be applied by the same organization, but for very different purposes.
Lean Manufacturing and Six Sigma
(1) What is lean manufacturing?
Currently there are two premier approaches to improving manufacturing operations. One is lean manufacturing (hereinafter referred to as “lean”) and the other is Six Sigma.
Lean evaluates the entire operation of a factory and restructures the manufacturing method to reduce wasteful activities like waiting, transportation, material hand-offs,inventory, and over-production. It reduces variation associated with manufacturing routings, material handling, storage, lack of communication, batch production and so forth. Six Sigma tools, on the other hand, commonly focus on specific part numbers and processes to reduce variation. The combination of the two approaches represents a formidable opponent to variation in that it includes both layout of the factory and a focus on specific part numbers and processes.
Lean and Six Sigma are promoted as different approaches and different thought processes. Yet, upon close inspection, both approaches attack the same enemy and behave like two links within a chain – that is, they are dependent on each other for success. They both battle variation, but from two different points of view. The integration of Lean and Six Sigma takes two powerful problem-solving techniques and bundles them into a powerful package. The two approaches should be viewed as complements to each other rather than as equiva
lents of or replacements for each other (Pyzdek, 2000). In practice, manufacturers that have widely adopted lean practices record performance metrics superior to those achieved by plants that have not adopted lean practices. Those practices cited as lean in a recent industrial survey (Jusko, 1999) include
• quick changeover techniques to reduce setup time;
• adoption of manufacturing cells in which equipment and workstations are arranged sequentially to facilitate small-lot, continuous-flow production;
• just-in-time (JIT) continuous-flow production techniques to reduce lot sizes, setup time, and cycle time; and,
• JIT supplier delivery in which parts and materials are delivered to the shop floor on a frequent and as-needed basis.
(2) Differences between Lean and Six Sigma
There are some differences between Lean and Six Sigma as noted below.
• Lean focuses on improving manufacturing operations in variation, quality and productivity. However, Six Sigma focuses not only on manufacturing operations, but also on all possible processes including R&D and service areas.
• Generally speaking, a Lean approach attacks variation differently than a Six Sigma system does (Denecke, 1998) as shown in Figure 5.4. Lean tackles the most common form of process noise by aligning the organization in such a way that it can begin working as a coherent whole instead of as separate units. Lean seeks to co-locate, in sequential order, all the processes required to produce a product. Instead of focusing on the part number, Lean focuses on product flow and on the operator. Setup time, machine maintenance and routing of processes are important measures in Lean. However, Six Sigma focuses on defective rates and costs of poor quality due to part variation and process variation based on measured data.
• The data-driven nature of Six Sigma problem-solving lends itself well to lean standardization and the physical rearrangement of the factory. Lean provides a solid foundation for Six Sigma problem-solving where the system is measured by deviation from and improvements to the standard.
• While Lean emphasizes standardization and productivity, Six Sigma can be more effective at tackling process noise and cost of poor quality.
Currently there are two premier approaches to improving manufacturing operations. One is lean manufacturing (hereinafter referred to as “lean”) and the other is Six Sigma.
Lean evaluates the entire operation of a factory and restructures the manufacturing method to reduce wasteful activities like waiting, transportation, material hand-offs,inventory, and over-production. It reduces variation associated with manufacturing routings, material handling, storage, lack of communication, batch production and so forth. Six Sigma tools, on the other hand, commonly focus on specific part numbers and processes to reduce variation. The combination of the two approaches represents a formidable opponent to variation in that it includes both layout of the factory and a focus on specific part numbers and processes.
Lean and Six Sigma are promoted as different approaches and different thought processes. Yet, upon close inspection, both approaches attack the same enemy and behave like two links within a chain – that is, they are dependent on each other for success. They both battle variation, but from two different points of view. The integration of Lean and Six Sigma takes two powerful problem-solving techniques and bundles them into a powerful package. The two approaches should be viewed as complements to each other rather than as equiva
lents of or replacements for each other (Pyzdek, 2000). In practice, manufacturers that have widely adopted lean practices record performance metrics superior to those achieved by plants that have not adopted lean practices. Those practices cited as lean in a recent industrial survey (Jusko, 1999) include
• quick changeover techniques to reduce setup time;
• adoption of manufacturing cells in which equipment and workstations are arranged sequentially to facilitate small-lot, continuous-flow production;
• just-in-time (JIT) continuous-flow production techniques to reduce lot sizes, setup time, and cycle time; and,
• JIT supplier delivery in which parts and materials are delivered to the shop floor on a frequent and as-needed basis.
(2) Differences between Lean and Six Sigma
There are some differences between Lean and Six Sigma as noted below.
• Lean focuses on improving manufacturing operations in variation, quality and productivity. However, Six Sigma focuses not only on manufacturing operations, but also on all possible processes including R&D and service areas.
• Generally speaking, a Lean approach attacks variation differently than a Six Sigma system does (Denecke, 1998) as shown in Figure 5.4. Lean tackles the most common form of process noise by aligning the organization in such a way that it can begin working as a coherent whole instead of as separate units. Lean seeks to co-locate, in sequential order, all the processes required to produce a product. Instead of focusing on the part number, Lean focuses on product flow and on the operator. Setup time, machine maintenance and routing of processes are important measures in Lean. However, Six Sigma focuses on defective rates and costs of poor quality due to part variation and process variation based on measured data.
• The data-driven nature of Six Sigma problem-solving lends itself well to lean standardization and the physical rearrangement of the factory. Lean provides a solid foundation for Six Sigma problem-solving where the system is measured by deviation from and improvements to the standard.
• While Lean emphasizes standardization and productivity, Six Sigma can be more effective at tackling process noise and cost of poor quality.
Seven Steps for Six Sigma Introduction
When a company intends to introduce Six Sigma for its new management strategy, we would like to recommend the following seven-step procedures:
1. Top-level management commitment for Six Sigma is first and foremost. The CEO of the corporation or business unit should genuinely accept Six Sigma as the management strategy. Then organize a Six Sigma team and set up the long-term Six Sigma vision for the company.
2. Start Six Sigma education for Champions first. Then start the education for WBs, GBs, BBs and MBBs in sequence. Every employee of the company should take the WB education first and then some of the WBs receive the GB education, and finally some of the GBs receive the BB education. However, usually MBB education is practiced in professional organizations.
3. Choose the area in which Six Sigma will be first introduced.
4. Deploy CTQs for all processes concerned. The most important is the company’s deployment of big CTQy from the standpoint of customer satisfaction. Appoint BBs as full-time project leaders and ask them to solve some important CTQ problems.
5. Strengthen the infrastructure for Six Sigma, including measurement systems, statistical process control (SPC), knowledge management (KM), database management system (DBMS) and so on.
6. Designate a Six Sigma day each month, and have the progress of Six Sigma reviewed by top-level management.
7. Evaluate the company’s Six Sigma performance from the customers’ viewpoint, benchmark the best company in the world, and revise the Six Sigma roadmap if necessary. Go to step 1 for further improvement.
First of all, a handful or a group of several members should be appointed as a Six Sigma team to handle all kinds of Six Sigma tasks. The team is supposed to prepare proper education and the long-term Six Sigma vision for the company. We can say that this is the century of the 3Cs, which are Changing society, Customer satisfaction and Competition in quality. The Six Sigma vision should be well matched to these 3Cs. Most importantly, all employees in the company should agree to and respect this long-term vision.
Second, Six Sigma can begin from proper education for all classes of the company. The education should begin from the top managers, so called Champions. If Champions do not understand the real meaning of Six Sigma, there is no way for Six Sigma to proceed further in the company. After Champion’s education, GB BB MBB education should be completed in sequence.
Third, we can divide Six Sigma into three parts according to its characteristics. They are R&D Six Sigma, manufacturing Six Sigma, and Six Sigma for non-manufacturing areas. The R&D Six Sigma is often called DFSS (Design for Six Sigma). It is usually not wise to introduce Six Sigma to all areas at the same time. The CEO should decide the order of introduction to these three areas. It is common to introduce Six Sigma to manufacturing processes first, and then service areas and R&D areas. However, the order really depends on the current circumstances of the company.
Fourth, deploy CTQs for all processes concerned. These CTQs can be deployed by policy management or by management by objectives. Some important CTQs should be given to BBs to solve as project themes. In principle, the BBs who lead the project teams work as full-time workers until the projects are finished.
1. Top-level management commitment for Six Sigma is first and foremost. The CEO of the corporation or business unit should genuinely accept Six Sigma as the management strategy. Then organize a Six Sigma team and set up the long-term Six Sigma vision for the company.
2. Start Six Sigma education for Champions first. Then start the education for WBs, GBs, BBs and MBBs in sequence. Every employee of the company should take the WB education first and then some of the WBs receive the GB education, and finally some of the GBs receive the BB education. However, usually MBB education is practiced in professional organizations.
3. Choose the area in which Six Sigma will be first introduced.
4. Deploy CTQs for all processes concerned. The most important is the company’s deployment of big CTQy from the standpoint of customer satisfaction. Appoint BBs as full-time project leaders and ask them to solve some important CTQ problems.
5. Strengthen the infrastructure for Six Sigma, including measurement systems, statistical process control (SPC), knowledge management (KM), database management system (DBMS) and so on.
6. Designate a Six Sigma day each month, and have the progress of Six Sigma reviewed by top-level management.
7. Evaluate the company’s Six Sigma performance from the customers’ viewpoint, benchmark the best company in the world, and revise the Six Sigma roadmap if necessary. Go to step 1 for further improvement.
First of all, a handful or a group of several members should be appointed as a Six Sigma team to handle all kinds of Six Sigma tasks. The team is supposed to prepare proper education and the long-term Six Sigma vision for the company. We can say that this is the century of the 3Cs, which are Changing society, Customer satisfaction and Competition in quality. The Six Sigma vision should be well matched to these 3Cs. Most importantly, all employees in the company should agree to and respect this long-term vision.
Second, Six Sigma can begin from proper education for all classes of the company. The education should begin from the top managers, so called Champions. If Champions do not understand the real meaning of Six Sigma, there is no way for Six Sigma to proceed further in the company. After Champion’s education, GB BB MBB education should be completed in sequence.
Third, we can divide Six Sigma into three parts according to its characteristics. They are R&D Six Sigma, manufacturing Six Sigma, and Six Sigma for non-manufacturing areas. The R&D Six Sigma is often called DFSS (Design for Six Sigma). It is usually not wise to introduce Six Sigma to all areas at the same time. The CEO should decide the order of introduction to these three areas. It is common to introduce Six Sigma to manufacturing processes first, and then service areas and R&D areas. However, the order really depends on the current circumstances of the company.
Fourth, deploy CTQs for all processes concerned. These CTQs can be deployed by policy management or by management by objectives. Some important CTQs should be given to BBs to solve as project themes. In principle, the BBs who lead the project teams work as full-time workers until the projects are finished.
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