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KNO WL EDGE-BASED SI X SIGMA FOR MAN AGEMENT

INNOVATI ON

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.
Creation of
Statistical analysis Generation of
Knowledge from
DT Data of data and data Information and
Fact information
collection refinement Inference from data

Data/information/image Development of engineering Engineering tools and


IT devices and computers for support for knowledge
Transmission and
Fact management
communication Information handing

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 & Control Measure


Capturing

Utilization Storing & Improve Analyze


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.
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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.