Concept explainers
Case summary:
TG from country S is the third largest telecom company. Its service offering includes landline, cell phone, broadband and TV services. TG has 256 million customers worldwide, the majority of which are cell phone users.
T’s mobile communication subsidiary M has 16 million customers and 4000 employees. M implement Six Sigma and Lean philosophy in 2002, and up till 2011 it has completed more than 200 projects focusing on cost reduction, service level increases, process reengineering, quality assurance and productivity improvement. This resulted in cumulative savings of $245 million. Projects are now executed with focus on three key initiatives – improvement community, workshops, and inheritance stage.
Via this process, M has trained several Champions, Black Belts and Green Belts. The improvement community consists of Black and Green Belts that conduct training on quality issues and mentor other Black and Green Belts in the usage of quality tools. The improvement community also organizes workshops for new project development.
After a team completes the DMAIC stage, the quality team evaluates team performance, followed by an inheritance period of one year. A project heir is assigned – the best performing Green Belt from the team. The heir is responsible for “improve” and “control” sections of DMAIC.
To determine: Another global company that has successfully implemented Six Sigma and discuss its experiences.
Want to see the full answer?
Check out a sample textbook solutionChapter 2 Solutions
OPERATIONS AND SUPPLY CHAIN MANAGEMENT
- A production operation is making 150 units of a product by engaging five workers for 300 hours. However, 40 percent of the units appear to have various quality problems, and the company decides to sell them as seconds at a price of £50 each when a normal unit is sold for £150. To improve the situation, several initiatives are proposed, including a scheme where, for every improvement, 50 percent will be given to workers and the other 50 percent will be held by the company. This results in a significant drop in defects as now only 10 units are faulty out of an output of 130 units. 1. Compare the productivity after Bonus with the initial productivity. 2. Determine the appropriate bonus per hour for the workers under the bonus scheme if the cost per piece is £70 both before and after the scheme.arrow_forwardGE adopted Six Sigma from Motorola in 1995, Which of the following is not an advantage of using Six Sigma : Select one: A. A decrease in customer satisfaction B. Defect reduction C. Process improvement D. Product improvementarrow_forwardA toy manufacturer wants to apply Six Sigma to its manufacturing process. The product will be examined by the inspection team using a predetermined standard. A product is considered defective if it doesn't satisfy a requirement. Each item may have as few as no flaws or as many as six. One product was discovered to be faulty after the inspection crew examined roughly 1000 goods. Determine the DPMO for the process and provide feedback on its suitability for six sigma.arrow_forward
- Because of the poor quality of its cars, Hyundai watched its U.S. sales drop from 264,000 cars to 90,000 cars in just two years. Hyundai cars ranked 26th out of 35 car brands in terms of initial car quality as measured by the influential J.D. Power Initial Car Quality survey. With $6.6 million in debt, a $1 billion investment for a new manufacturing plant in Alabama, and the company’s first-ever loss, Hyundai’s new chairman, Chung Mong Koo, declared that improving quality was the only way to fix the company.The challenge for Chung was to get his managers to put quality, and not costs, first. So he sent a visible, meaningful message that poor quality would no longer be tolerated. During one plant visit, Chung demanded to see under the hood of a car on the production line. He was furious when he saw loose wires, tangled hoses, bolts painted four different colors - tremendous deviation from what the engine compartment was supposed to look like. On the spot, he instructed the plant…arrow_forwardBecause of the poor quality of its cars, Hyundai watched its U.S. sales drop from 264,000 cars to 90,000 cars in just two years. Hyundai cars ranked 26th out of 35 car brands in terms of initial car quality as measured by the influential J.D. Power Initial Car Quality survey. With $6.6 million in debt, a $1 billion investment for a new manufacturing plant in Alabama, and the company’s first-ever loss, Hyundai’s new chairman, Chung Mong Koo, declared that improving quality was the only way to fix the company.The challenge for Chung was to get his managers to put quality, and not costs, first. So he sent a visible, meaningful message that poor quality would no longer be tolerated. During one plant visit, Chung demanded to see under the hood of a car on the production line. He was furious when he saw loose wires, tangled hoses, bolts painted four different colors - tremendous deviation from what the engine compartment was supposed to look like. On the spot, he instructed the plant…arrow_forwardBecause of the poor quality of its cars, Hyundai watched its U.S. sales drop from 264,000 cars to 90,000 cars in just two years. Hyundai cars ranked 26th out of 35 car brands in terms of initial car quality as measured by the influential J.D. Power Initial Car Quality survey. With $6.6 million in debt, a $1 billion investment for a new manufacturing plant in Alabama, and the company’s first-ever loss, Hyundai’s new chairman, Chung Mong Koo, declared that improving quality was the only way to fix the company.The challenge for Chung was to get his managers to put quality, and not costs, first. So he sent a visible, meaningful message that poor quality would no longer be tolerated. During one plant visit, Chung demanded to see under the hood of a car on the production line. He was furious when he saw loose wires, tangled hoses, bolts painted four different colors - tremendous deviation from what the engine compartment was supposed to look like. On the spot, he instructed the plant…arrow_forward
- Because of the poor quality of its cars, Hyundai watched its U.S. sales drop from 264,000 cars to 90,000 cars in just two years. Hyundai cars ranked 26th out of 35 car brands in terms of initial car quality as measured by the influential J.D. Power Initial Car Quality survey. With $6.6 million in debt, a $1 billion investment for a new manufacturing plant in Alabama, and the company’s first-ever loss, Hyundai’s new chairman, Chung Mong Koo, declared that improving quality was the only way to fix the company.The challenge for Chung was to get his managers to put quality, and not costs, first. So he sent a visible, meaningful message that poor quality would no longer be tolerated. During one plant visit, Chung demanded to see under the hood of a car on the production line. He was furious when he saw loose wires, tangled hoses, bolts painted four different colors - tremendous deviation from what the engine compartment was supposed to look like. On the spot, he instructed the plant…arrow_forwardFEMA was performed for a seat belt installation process at an automobile assembly plant. Th efollowing three failures modes were identified: (1) Select wrong color seat belt(2) Seat belt bolt were not fully tightened, and (3) Trim cover clip misaligned. The six sigma team rated each of the failure modes for its severity, probability, of occurrence and probability of detection and Severity ratings are 5,9,2, respectively; probabilty of occurence was 4,2,3, respectively; and probability of detection was 3,8,4 respectively. Which of the failure modes should recieve the highest priority for process improvement?arrow_forwardIs the goal of Six Sigma realistic for services such as Blockbuster Video stores or Redbox DVD kiosks?arrow_forward
- An automobile manufacturer plans to spend one billion dollars to improve the quality of a new model. The manufacturer expects the quality improvement program to eliminate the need for recall and reduce the costs for warranty repairs. The manufacturer’s experience has been, on average, 1.5 recalls for each new model at a cost of $300 per vehicle per recall. The average cost per recall, if one is needed, is expected to increase by 10% for the new model. Costs for other warranty repairs are expected to decrease from $200 to $80 per unit. Sales of the new model were expected to be 500,000 units without the quality-improvement program. The firm believes that the proposed, well-advertised quality program expected to cost an additional $50 million will increase total sales to 650,000 units. The gross profit per unit on the new model sold is $5,000. Required: Would you recommend the proposed quality-improvement program? Please show all your computations to support your answer.arrow_forwardAn automobile manufacturer plans to spend one billion dollars to improve the quality of a new model. The manufacturer expects the quality improvement program to eliminate the need for recall and reduce the costs for warranty repairs. The manufacturer’s experience has been, on average, 1.5 recalls for each new model at a cost of $300 per vehicle per recall. The average cost per recall, if one is needed, is expected to increase by 10% for the new model. Costs for other warranty repairs are expected to decrease from $200 to $80 per unit. Sales of the new model were expected to be 500,000 units without the quality-improvement program. The firm believes that the proposed, well-advertised quality program expected to cost an additional $50 million will increase total sales to 650,000 units. The gross profit per unit on the new model sold is $5,000.arrow_forwardIf a process has 37,000 dpmo, what is its sigma capability?arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill EducationOperations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage LearningProduction and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.