Application Of Six Sigma Tools

1603 Words Nov 12th, 2016 7 Pages
Link to Strategic Imperative
This project shows a medium link to strategic imperatives. Their goal is to ultimately get casual labor costs down so they can produce enough outputs that are in demand. This can essentially affect overall profits because as revenues climb from higher demand and expenses fall given the project successfully find a way to lower casual labor costs, profits may rise. However, it is not clear how the project will impact this key metric because there are no estimates for possible labor cost savings from the project. The company wants to find out why labor costs are so high, but fails to set specific goals of what they want casual labor to cost.

Application of Six Sigma Tools
This project demonstrates a high application of Six Sigma tools. The team used a fishbone diagram for cause-and-effect analysis to understand the various factors involved in the relationship between labor and production. They used root cause analysis to identify the most significant causes for high labor costs through contract labor hiring. A process map was used to determine under what circumstances they needed extra workers that hiring casual labor was necessary and to show the amount of manpower needed to execute product order receipts. Furthermore, statistical analysis was used, specifically hypothesis testing through a two-tailed t-test, to see if there was a significant difference after improvements were implemented to determine if the changes had any impact. The project…
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