Sigma Case: Hey, Is Anybody

¶ … Sigma

Case: "Hey, Is Anybody There?"

An Example of DMAIC at American Express

American Express was encountering difficulties with certain vendors who did not clearly state they were accepting American Express cards, but stated they were accepting cards from competing issuers, such as Visa or Mastercard (Sai, 2000). The Six Sigma is a series of strategies meant to improve the quality of the business operations and outcomes and these strategies were implemented by American Express.

Since their business was already existent on the market, they implemented the DMAIC form of Six Sigma, rather than the DMADV form, especially designed for new businesses. In order increase to design quality and conformance quality, American Express had to undergo the five stages of the DMAIC Six Sigma:

Define

Measure

Analyze

Improve

Control (Six Sigma, 2000-20008)

In other words, to improve the overall quality of the product design and the conformance quality, American Express first identified the problem: passive suppressors and uncallable stores. Then, they measured the extent of the problem: 27.4% of the stores were uncallable as they were closed; this number represented 80,000 defects per million opportunities and a 2.9 sigma level (Sai, 2000). Thirdly, the team at American Express had to analyze the matter, take the necessary steps to improve the procedures (such as the change in visiting hours) and finally, implement some control over the new and old operations to ensure the long-term success of the DMAIC Six Sigma.

2. The Six Sigma do not represent a fixed set of rules or norms to be implemented but certain specifications and advice to be followed when trying to improve the characteristics and outcomes of a business operation. They are not the perfect recipe for success but general advice which must be well analyzed and more importantly, adapted to the particular needs and characteristics of the company, the type of business conducted, the nature of the identified problems or any other features.

Aside from shadowing the vendor, American Express could have implemented other continuous improvement tools to uncover their major problems. The tools they could have used to retrieve the same results could include:

Context and Needs Data Analysis: The company could have highlighted the negative results and gradually identified their source and their reasons for occurrence, in other words the problem itself. This procedure is necessary as on numerous occasions, the problem is not given by a new factor, but by an already existent one which was initially misunderstood

Identifying Y-to-x Relations: This has to be done in order to identify the forces which influence the outcome of the business operation. Instead of shadowing the vendor, the representatives of American Express could have studied their own documents, talked to store operators and clients to identify factors of influence and any additional problems

FMEA: Failure Mode and Effects Analysis: This analysis could have been conducted by American Express before starting to actually supervize the market and it would have identified the strengths and weaknesses of the implemented system with reduced efforts and lower costs (Williams, 2002-2008).

3. The Six Sigma tools are basically concepts and tools used to improve the outcomes of the business operations. Their subjectivity derives from two sources: the person applying the tools and the subjectivity of the tools. First of all, the individual is implementing the tool; therefore he is likely to be subjective in judging the tool, implementing it and analyzing the results. Secondly, the tool itself is subjective as it is centered on improving a certain shortage, disregarding other problems. In other words, a Six Sigma tool can be implemented to resolve a particular problem, but the means of resolving this problem might not generate the desired overall effect upon the company.

Six Sigma tries to replace subjectivity with objectivity and intuition with data wherever possible. While this is appropriate for some operations -- like administration, logistics, and manufacturing -- it's detrimental to exploratory research and design, which depend on subjectivity and intuition" (Riley, 2007).