Six Sigma Solutions and its Benefit-Cost Ratio for Quality Improvement
This is an application research presenting the
improvement of production quality using the six sigma solutions and
the analyses of benefit-cost ratio. The case of interest is the
production of tile-concrete. Such production has faced with the
problem of high nonconforming products from an inappropriate
surface coating and had low process capability based on the strength
property of tile. Surface coating and tile strength are the most critical
to quality of this product. The improvements followed five stages of
six sigma solutions. After the improvement, the production yield was
improved to 80% as target required and the defective products from
coating process was remarkably reduced from 29.40% to 4.09%. The
process capability based on the strength quality was increased from
0.87 to 1.08 as customer oriented. The improvement was able to save
the materials loss for 3.24 millions baht or 0.11 million dollars. The
benefits from the improvement were analyzed from (1) the reduction
of the numbers of non conforming tile using its factory price for
surface coating improvement and (2) the materials saved from the
increment of process capability. The benefit-cost ratio of overall
improvement was high as 7.03. It was non valuable investment in
define, measure, analyses and the initial of improve stages after that
it kept increasing. This was due to there were no benefits in define,
measure, and analyze stages of six sigma since these three stages
mainly determine the cause of problem and its effects rather than
improve the process. The benefit-cost ratio starts existing in the
improve stage and go on. Within each stage, the individual benefitcost
ratio was much higher than the accumulative one as there was an
accumulation of cost since the first stage of six sigma. The
consideration of the benefit-cost ratio during the improvement
project helps make decisions for cost saving of similar activities
during the improvement and for new project. In conclusion, the
determination of benefit-cost ratio behavior through out six sigma
implementation period provides the useful data for managing quality
improvement for the optimal effectiveness. This is the additional
outcome from the regular proceeding of six sigma.
[1] Hahn, G.J., Doganaksoy, N., Hoerl, R., W., "The Evolution of Six
Sigma," Quality Engineering, vol. 12, Issue 3, 2000, pp. 317-326.
[2] Xingxing Zu, Lawrence D. Fredendall, Thomas J. Douglas, "The
evolving theory of quality management : The role of Six Sigma,"
Journal of Operation Management, vol.26, 2008, pp. 630 - 650
[3] U. Dinesh Kumar, David Nowicki, "On the optimal selection of process
alternatives in Six Sigma implementation," Journal of Production
Economics, Vol.111, 2008, pp.456 - 467
[4] Chung-Ho Wang, Yi Hsu, "Enhancing rubber component reliability by
response model," Journal of Computer & Industrial Engineering, vol.57,
2009, pp. 806 - 812
[5] Choa-Ton Su, Chia-Jen Chou, "A systematic methodology for the
creation of six sigma project : a case study of semiconductor foundry,"
Expert System with Applications, vol. 34, 2008, pp. 2693-2703.
[6] Satya S. Chakravorty, "Six Sigma programs : An implementation
model," International Journal Production Economics, vol. 119, 2009,
pp.1-16.
[7] Young Hoon Kwak and Frank T. Anbari, "Benefits, obstacles, and future
of sic sigma approach," Technovation, vol. 26, 2006, pp. 708-715.
[8] C. Belfield, H.M. Levin, "Cost-Benefit Analysis and Cost-Effectiveness
Analysis," International Encyclopedia of Education, 2010, pp. 199-203.
[9] Brian, T. Yates, "Cost-inclusive Evaluation : A Banquet Approaches for
Including Costs, Benefits, Cost-Effectiveness and Cost-Benefit Analyses
in your Next evaluation," Evaluation and Program Planning, vol. 32,
2009, pp 52-54.
[10] David Beevis, "Ergonomics-Costs and Benefits Revisited," Applied
Ergonomics, vol. 34, 2003, pp.491-496.
[11] Smith, D., Blakeslee, J.,Knooce., Strategic Six Sigma, Plentice-Hall,
Upper Saddle River, NJ, 2002.
[12] Banuelas, R., Tennant, C., Tuersley, I., Tang, S., "Selection of Six
Sigma projects in the UK," The TQM Magazine, vol. 18, issue 5, 2006,
pp.255-262.
[13] Roger. Shoeder, "Six Sigma : Definition and Underlying Theory,"
Journal of Operations Management, vol.26, 2008, pp 536-554.
[14] Mast, J.D., Bisgaard, S., "The science in Six Sigma," Quality Progress,
vol. 40, issue 1, 2007, pp. 25-29.
[15] A.K. Sahoo, M.K. Tiwarib, A.R. Mileham, "Six Sigma based approach
to optimize radial forging operation variables", Journal of Materials
Processign Technology, vol. 202, 2008, pp. 125 - 136.
[16] Forrest W. Breyfogle III, Implementing Six Sigma Smarter Solutions
Using Statistical Methods, John Willey, 1999, ISBN 0-471-29659-7.
[17] Henry Malcom Steiner, Engineering Economics Principles, 1992, Mc
graw-Hill pp. 125-126.
[18] Evans, J.P./ Lindsay, W.M., Managing for Quality and Performance
Excellence, seventh ed., South-Western, Mason, OH, 2008.
[19] Bendell, T., "A review and comparison of Six Sigma and the lean
organizations," The TQM Magazine, vol.18, issue 5, 2006, pp.255-262.
[20] Mader, D.P., "Lean Six Sigma-s evaluation," Quality Progress, vol.41,
issue1, pp.40-48.
[21] Johnson, A.,Swisher, B., " How six sigma improves R&D," Research
Technology Management, vol. 46 issue 2, 2003, pp. 12-15.
[22] Gitlow, H.S., Levine, D.M., Six Sigma for Gressn Belts and Champions:
Foundation, DMAIC, Tools, Cases, and Certification, Prentice Hall N.J.,
2005.
[23] J. Banks, The Essence of Total Quality Management, Prentice Hall,
Eagle wood Cliff, N.J., 1992.
[24] Peter E.D. Love, Zahir Irani, "A project management quality cost
information system for construction industry," Information &
Management, vol.40, 2003, pp.649-661.
[1] Hahn, G.J., Doganaksoy, N., Hoerl, R., W., "The Evolution of Six
Sigma," Quality Engineering, vol. 12, Issue 3, 2000, pp. 317-326.
[2] Xingxing Zu, Lawrence D. Fredendall, Thomas J. Douglas, "The
evolving theory of quality management : The role of Six Sigma,"
Journal of Operation Management, vol.26, 2008, pp. 630 - 650
[3] U. Dinesh Kumar, David Nowicki, "On the optimal selection of process
alternatives in Six Sigma implementation," Journal of Production
Economics, Vol.111, 2008, pp.456 - 467
[4] Chung-Ho Wang, Yi Hsu, "Enhancing rubber component reliability by
response model," Journal of Computer & Industrial Engineering, vol.57,
2009, pp. 806 - 812
[5] Choa-Ton Su, Chia-Jen Chou, "A systematic methodology for the
creation of six sigma project : a case study of semiconductor foundry,"
Expert System with Applications, vol. 34, 2008, pp. 2693-2703.
[6] Satya S. Chakravorty, "Six Sigma programs : An implementation
model," International Journal Production Economics, vol. 119, 2009,
pp.1-16.
[7] Young Hoon Kwak and Frank T. Anbari, "Benefits, obstacles, and future
of sic sigma approach," Technovation, vol. 26, 2006, pp. 708-715.
[8] C. Belfield, H.M. Levin, "Cost-Benefit Analysis and Cost-Effectiveness
Analysis," International Encyclopedia of Education, 2010, pp. 199-203.
[9] Brian, T. Yates, "Cost-inclusive Evaluation : A Banquet Approaches for
Including Costs, Benefits, Cost-Effectiveness and Cost-Benefit Analyses
in your Next evaluation," Evaluation and Program Planning, vol. 32,
2009, pp 52-54.
[10] David Beevis, "Ergonomics-Costs and Benefits Revisited," Applied
Ergonomics, vol. 34, 2003, pp.491-496.
[11] Smith, D., Blakeslee, J.,Knooce., Strategic Six Sigma, Plentice-Hall,
Upper Saddle River, NJ, 2002.
[12] Banuelas, R., Tennant, C., Tuersley, I., Tang, S., "Selection of Six
Sigma projects in the UK," The TQM Magazine, vol. 18, issue 5, 2006,
pp.255-262.
[13] Roger. Shoeder, "Six Sigma : Definition and Underlying Theory,"
Journal of Operations Management, vol.26, 2008, pp 536-554.
[14] Mast, J.D., Bisgaard, S., "The science in Six Sigma," Quality Progress,
vol. 40, issue 1, 2007, pp. 25-29.
[15] A.K. Sahoo, M.K. Tiwarib, A.R. Mileham, "Six Sigma based approach
to optimize radial forging operation variables", Journal of Materials
Processign Technology, vol. 202, 2008, pp. 125 - 136.
[16] Forrest W. Breyfogle III, Implementing Six Sigma Smarter Solutions
Using Statistical Methods, John Willey, 1999, ISBN 0-471-29659-7.
[17] Henry Malcom Steiner, Engineering Economics Principles, 1992, Mc
graw-Hill pp. 125-126.
[18] Evans, J.P./ Lindsay, W.M., Managing for Quality and Performance
Excellence, seventh ed., South-Western, Mason, OH, 2008.
[19] Bendell, T., "A review and comparison of Six Sigma and the lean
organizations," The TQM Magazine, vol.18, issue 5, 2006, pp.255-262.
[20] Mader, D.P., "Lean Six Sigma-s evaluation," Quality Progress, vol.41,
issue1, pp.40-48.
[21] Johnson, A.,Swisher, B., " How six sigma improves R&D," Research
Technology Management, vol. 46 issue 2, 2003, pp. 12-15.
[22] Gitlow, H.S., Levine, D.M., Six Sigma for Gressn Belts and Champions:
Foundation, DMAIC, Tools, Cases, and Certification, Prentice Hall N.J.,
2005.
[23] J. Banks, The Essence of Total Quality Management, Prentice Hall,
Eagle wood Cliff, N.J., 1992.
[24] Peter E.D. Love, Zahir Irani, "A project management quality cost
information system for construction industry," Information &
Management, vol.40, 2003, pp.649-661.
@article{"International Journal of Business, Human and Social Sciences:54848", author = "S. Homrossukon and A. Anurathapunt", title = "Six Sigma Solutions and its Benefit-Cost Ratio for Quality Improvement", abstract = "This is an application research presenting the
improvement of production quality using the six sigma solutions and
the analyses of benefit-cost ratio. The case of interest is the
production of tile-concrete. Such production has faced with the
problem of high nonconforming products from an inappropriate
surface coating and had low process capability based on the strength
property of tile. Surface coating and tile strength are the most critical
to quality of this product. The improvements followed five stages of
six sigma solutions. After the improvement, the production yield was
improved to 80% as target required and the defective products from
coating process was remarkably reduced from 29.40% to 4.09%. The
process capability based on the strength quality was increased from
0.87 to 1.08 as customer oriented. The improvement was able to save
the materials loss for 3.24 millions baht or 0.11 million dollars. The
benefits from the improvement were analyzed from (1) the reduction
of the numbers of non conforming tile using its factory price for
surface coating improvement and (2) the materials saved from the
increment of process capability. The benefit-cost ratio of overall
improvement was high as 7.03. It was non valuable investment in
define, measure, analyses and the initial of improve stages after that
it kept increasing. This was due to there were no benefits in define,
measure, and analyze stages of six sigma since these three stages
mainly determine the cause of problem and its effects rather than
improve the process. The benefit-cost ratio starts existing in the
improve stage and go on. Within each stage, the individual benefitcost
ratio was much higher than the accumulative one as there was an
accumulation of cost since the first stage of six sigma. The
consideration of the benefit-cost ratio during the improvement
project helps make decisions for cost saving of similar activities
during the improvement and for new project. In conclusion, the
determination of benefit-cost ratio behavior through out six sigma
implementation period provides the useful data for managing quality
improvement for the optimal effectiveness. This is the additional
outcome from the regular proceeding of six sigma.", keywords = "Six Sigma Solutions, Process Improvement, QualityManagement, Benefit Cost Ratio", volume = "5", number = "8", pages = "990-9", }