Knowledge-based Six Sigma For Management Innovation
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KNO WL EDGE-BASED INNOVATI ON
SI X
SIGMA
FOR
MAN AGEMENT
You ng H. Pa rk , Ph .D* Sung H. P ar k, Ph .D ** *Department of Industrial and System Eng., Kangnam University, KOREA ** Department of Statistics, Seoul National University, KOREA
1.ABSTRACT Six Sigma is a well-known management strategy in Korea. To apply six Sigma in a company effectively, information technology (IT) and data technology(DT) have to be used well in the company. Korea is very strong in IT industries such as the Internet, mobile phones, communication equipment and computer-related semi-conductors. However, Korea is rather weak in DT compared to IT. Without an efficient DT system, IT will have limitations in growth in the company. Also without an efficient IT system, DT also cannot be well visualized. Knowledge Management (KM) is very important in this knowledge-based information society. If Six sigma and KM are to be combined efficiently, they can become very powerful management strategy. The so-called knowledge-Based Six Sigma (KBSS) will be proposed in this paper.
In this paper,
major differences between DT and IT will be explained first, and then the methodologies of KBSS will be proposed. Also the relationship between DT and KBSS is commented and how KBSS can be implemented in industry is suggested.
2. SIX SIG MA, DT a nd IT Six Sigma would be defined as “new strategic paradigm of management innovation for organization, which implies statistical measurement, management strategy and quality culture”. The core goals of Six Sigma are to reduce defects, improve yield, improve customer satisfaction, reduce variation and increase shareholder value. As a result of those, Six Sigma eventually increases the company’s competitiveness. However, many executives, managers and engineers still do not understand how it can help them. Also many small- and medium companies do not think Six Sigma is very good in their own company. Why are these things happening? They know Six Sigma is good method, they learn Six Sigma tools and methodologies, but results for their
company are not so supper. We think one of the reasons of failure of Six Sigma in company is weak management of data and information in their company. We will propose knowledge-Based Six Sigma (KBSS) based on DT and IT in order to operate Six Sigma effectively in company at the followings. DT is an essential element for Six Sigma, and in general for national competitiveness. The importance of DT will rapidly expand in this knowledge-based information society. The definition of DT is a scientific methodology which deals with; ■ Measurement, collection, storage and retrieval techniques of data, ■ Statistical analysis of data, ■ Information creation from data, ■ Statistical/computational modeling from data, ■ Creation of necessary knowledge from data information, ■ Diagnosis and control of current events from statistical models, ■ Prediction of future from statistical models. Many believe that DT is a subset of IT. This is not true. Generally speaking, IT is defined as an engineering methodology which deals with; ■ Presentation and control of raw data and information created by DT, ■ Efficient data/information and image transmission and communication, ■ Manufacturing technology of electronic devices for data/information transmission and communication, ■ Engineering tools and support for knowledge management. The scope of DT can be divided into three categories: management DT, multiplication DT and execution DT. Management DT comes first, then multiplication DT, and finally execution DT provides valuation and profit generation for the organization concerned. The scopes of each DT are; ■ management DT ; acquisition, storage, retrieval and analysis of data, creation of information ■ multiplication DT ; analysis of results obtained, use of information multiplied, creation of knowledge ■ execution DT ; execution of generated knowledge, data/information transmission
The difference between DT and IT can be seen in the information flow as shown in Figure 1.
DT
IT
Fact
Fact
Data collection
Statistical analysis of data and data refinement
Data/information/image Transmission and communication
Generation of Information and Inference from data
Development of engineering devices and computers for Information handing
Creation of Knowledge from information
Engineering tools and support for knowledge management
Figure 1. Information flow of DT and IT DT is mainly concerned with data collection, statistical analysis of data and data refinement, generation of information, and creation of necessary knowledge from information. However, IT is mainly concerned with data/information/image transmission and communication, and development of engineering devices and computers for information handling. Also IT is concerned with engineering tools for knowledge management. Generally speaking, DT forms the infra-structure of IT. Without DT, IT would have limitations in growth. On the other hand, DT cannot be well visualized. IT is the vehicle for DT development
3. KNOW LEDGE- BASED SI X SIG MA We think that KM is very important in this knowledge-based information society. If Six Sigma and KM are combined, it could become a very powerful management strategy. We want to propose the so-called Knowledge Based Six Sigma (KBSS) as the combination of Six Sigma and KM. KBSS can be defined as “a company-wide management strategy whose goal is to achieve process quality innovation corresponding to 6sigma level and customer satisfaction through such activities as systematic generation, storage, and dissemination of knowledge by utilizing the information technology of the internet/intranet, data-bases and other devices. There are some differences between Six Sigma and KM. However, There also exist some areas of intersections such as data acquisition and utilization, data analysis, generation of information, and so on. KBSS is a combination of KM and Six Sigma which can be developed as a new paradigm for management strategy in this digital society of the 21st century.
The methodologies in KBSS can be explained as follows. ■ Project team The project team activities for quality and productivity improvement are perhaps the most important activities in Six Sigma. If the concept of KM is added to these activities, more useful and profitable results could be possible. Through team efforts, a team can create and capture information, share the information and utilize it in the MAIC process. Also by using the MAIC process, team can create new information and operate the CSUE process.
■ Education and training Education and training is the most fundamental infra-structure in Six Sigma. Also in KM, without proper training, creation, storage, sharing, and utilization would not be easy, and the process flow of knowledge would not be possible.
■ Process flow in KM and Six Sigma In KM, a good process flow of improvement activities is the CSUE cycle as shown in Figure 2. CSUE stands for Creating & Capturing, Strong & Sharing, Utilization and Evaluation. As explained previously, the well-known process flow of improvement activities in Six Sigma is MAIC
Evaluation Creating & Capturing
Control
Measure
Utilization
Improve
Analyze
Storing & Sharing
Flow in KM
Flow in Six Sigma
Figure 2. Process flow of improvement activities in KM and Six Sigma The CSUE and MAIC cycles can be intermixed in order to create an efficient cycle in KBSS. One way is to use the MAIC cycle in each step of CSUE, or to use the CSUE cycle in each step of the MAIC cycle. We believe that CSUE and MAIC are both complementary to each other.
■ Information and knowledge management Information on areas such as customer management, R&D, process management, quality inspection and reliability tests are essential elements in Six Sigma. In KM also, information management concerning storage, sharing and utilization of knowledge is the most important in a structure. Information management is essential in KBSS.
■ Tools Basic QC and statistical tools can be used in KBSS. Also some advanced Six Sigma tools, such as FMEA, QFD, design of experiments, and marketing surveys, can be effectively used in KBSS. We believe that if DT, KM and Six Sigma are combined in an effective way, the companies will make their management an excellent one.
4. CONCL USION In this paper, major differences between DT and IT was explained first, and then the methodologies of KBSS was proposed. Also the relationship between DT and KBSS was commented and how KBSS can be implemented in industry was suggested in order to operate Six Sigma effectively in company.
REFERENCES 1 Harry, M. J. (1998), “The Vision of Six Sigma,” 8th Volume, Tri Star Publishing. 2 Harry, M. J. (1998), “Six Sigma : A Breakthrough Strategy for Profitability,” Quality Progress 31, No.5 3. Magnusson, K., Kroslid, D. and Bergman, B (2000), “Six Sigma: The Pragmatic Approach,” Studentlitteratur, Sweden. 4. Park, sung H. (2003), “Six Sigma for Quality and Productivity Promotion,” Asian Productivity Organization. 5 Stamatis, D. H.(2004), “Six Sigma : A complete Guide to the System, Methods and Tools, Stamatis.
SI X
SIGMA
FOR
MAN AGEMENT
You ng H. Pa rk , Ph .D* Sung H. P ar k, Ph .D ** *Department of Industrial and System Eng., Kangnam University, KOREA ** Department of Statistics, Seoul National University, KOREA
1.ABSTRACT Six Sigma is a well-known management strategy in Korea. To apply six Sigma in a company effectively, information technology (IT) and data technology(DT) have to be used well in the company. Korea is very strong in IT industries such as the Internet, mobile phones, communication equipment and computer-related semi-conductors. However, Korea is rather weak in DT compared to IT. Without an efficient DT system, IT will have limitations in growth in the company. Also without an efficient IT system, DT also cannot be well visualized. Knowledge Management (KM) is very important in this knowledge-based information society. If Six sigma and KM are to be combined efficiently, they can become very powerful management strategy. The so-called knowledge-Based Six Sigma (KBSS) will be proposed in this paper.
In this paper,
major differences between DT and IT will be explained first, and then the methodologies of KBSS will be proposed. Also the relationship between DT and KBSS is commented and how KBSS can be implemented in industry is suggested.
2. SIX SIG MA, DT a nd IT Six Sigma would be defined as “new strategic paradigm of management innovation for organization, which implies statistical measurement, management strategy and quality culture”. The core goals of Six Sigma are to reduce defects, improve yield, improve customer satisfaction, reduce variation and increase shareholder value. As a result of those, Six Sigma eventually increases the company’s competitiveness. However, many executives, managers and engineers still do not understand how it can help them. Also many small- and medium companies do not think Six Sigma is very good in their own company. Why are these things happening? They know Six Sigma is good method, they learn Six Sigma tools and methodologies, but results for their
company are not so supper. We think one of the reasons of failure of Six Sigma in company is weak management of data and information in their company. We will propose knowledge-Based Six Sigma (KBSS) based on DT and IT in order to operate Six Sigma effectively in company at the followings. DT is an essential element for Six Sigma, and in general for national competitiveness. The importance of DT will rapidly expand in this knowledge-based information society. The definition of DT is a scientific methodology which deals with; ■ Measurement, collection, storage and retrieval techniques of data, ■ Statistical analysis of data, ■ Information creation from data, ■ Statistical/computational modeling from data, ■ Creation of necessary knowledge from data information, ■ Diagnosis and control of current events from statistical models, ■ Prediction of future from statistical models. Many believe that DT is a subset of IT. This is not true. Generally speaking, IT is defined as an engineering methodology which deals with; ■ Presentation and control of raw data and information created by DT, ■ Efficient data/information and image transmission and communication, ■ Manufacturing technology of electronic devices for data/information transmission and communication, ■ Engineering tools and support for knowledge management. The scope of DT can be divided into three categories: management DT, multiplication DT and execution DT. Management DT comes first, then multiplication DT, and finally execution DT provides valuation and profit generation for the organization concerned. The scopes of each DT are; ■ management DT ; acquisition, storage, retrieval and analysis of data, creation of information ■ multiplication DT ; analysis of results obtained, use of information multiplied, creation of knowledge ■ execution DT ; execution of generated knowledge, data/information transmission
The difference between DT and IT can be seen in the information flow as shown in Figure 1.
DT
IT
Fact
Fact
Data collection
Statistical analysis of data and data refinement
Data/information/image Transmission and communication
Generation of Information and Inference from data
Development of engineering devices and computers for Information handing
Creation of Knowledge from information
Engineering tools and support for knowledge management
Figure 1. Information flow of DT and IT DT is mainly concerned with data collection, statistical analysis of data and data refinement, generation of information, and creation of necessary knowledge from information. However, IT is mainly concerned with data/information/image transmission and communication, and development of engineering devices and computers for information handling. Also IT is concerned with engineering tools for knowledge management. Generally speaking, DT forms the infra-structure of IT. Without DT, IT would have limitations in growth. On the other hand, DT cannot be well visualized. IT is the vehicle for DT development
3. KNOW LEDGE- BASED SI X SIG MA We think that KM is very important in this knowledge-based information society. If Six Sigma and KM are combined, it could become a very powerful management strategy. We want to propose the so-called Knowledge Based Six Sigma (KBSS) as the combination of Six Sigma and KM. KBSS can be defined as “a company-wide management strategy whose goal is to achieve process quality innovation corresponding to 6sigma level and customer satisfaction through such activities as systematic generation, storage, and dissemination of knowledge by utilizing the information technology of the internet/intranet, data-bases and other devices. There are some differences between Six Sigma and KM. However, There also exist some areas of intersections such as data acquisition and utilization, data analysis, generation of information, and so on. KBSS is a combination of KM and Six Sigma which can be developed as a new paradigm for management strategy in this digital society of the 21st century.
The methodologies in KBSS can be explained as follows. ■ Project team The project team activities for quality and productivity improvement are perhaps the most important activities in Six Sigma. If the concept of KM is added to these activities, more useful and profitable results could be possible. Through team efforts, a team can create and capture information, share the information and utilize it in the MAIC process. Also by using the MAIC process, team can create new information and operate the CSUE process.
■ Education and training Education and training is the most fundamental infra-structure in Six Sigma. Also in KM, without proper training, creation, storage, sharing, and utilization would not be easy, and the process flow of knowledge would not be possible.
■ Process flow in KM and Six Sigma In KM, a good process flow of improvement activities is the CSUE cycle as shown in Figure 2. CSUE stands for Creating & Capturing, Strong & Sharing, Utilization and Evaluation. As explained previously, the well-known process flow of improvement activities in Six Sigma is MAIC
Evaluation Creating & Capturing
Control
Measure
Utilization
Improve
Analyze
Storing & Sharing
Flow in KM
Flow in Six Sigma
Figure 2. Process flow of improvement activities in KM and Six Sigma The CSUE and MAIC cycles can be intermixed in order to create an efficient cycle in KBSS. One way is to use the MAIC cycle in each step of CSUE, or to use the CSUE cycle in each step of the MAIC cycle. We believe that CSUE and MAIC are both complementary to each other.
■ Information and knowledge management Information on areas such as customer management, R&D, process management, quality inspection and reliability tests are essential elements in Six Sigma. In KM also, information management concerning storage, sharing and utilization of knowledge is the most important in a structure. Information management is essential in KBSS.
■ Tools Basic QC and statistical tools can be used in KBSS. Also some advanced Six Sigma tools, such as FMEA, QFD, design of experiments, and marketing surveys, can be effectively used in KBSS. We believe that if DT, KM and Six Sigma are combined in an effective way, the companies will make their management an excellent one.
4. CONCL USION In this paper, major differences between DT and IT was explained first, and then the methodologies of KBSS was proposed. Also the relationship between DT and KBSS was commented and how KBSS can be implemented in industry was suggested in order to operate Six Sigma effectively in company.
REFERENCES 1 Harry, M. J. (1998), “The Vision of Six Sigma,” 8th Volume, Tri Star Publishing. 2 Harry, M. J. (1998), “Six Sigma : A Breakthrough Strategy for Profitability,” Quality Progress 31, No.5 3. Magnusson, K., Kroslid, D. and Bergman, B (2000), “Six Sigma: The Pragmatic Approach,” Studentlitteratur, Sweden. 4. Park, sung H. (2003), “Six Sigma for Quality and Productivity Promotion,” Asian Productivity Organization. 5 Stamatis, D. H.(2004), “Six Sigma : A complete Guide to the System, Methods and Tools, Stamatis.
