Implementation of Strategic Tools in Operations Management

This study focuses on the evaluation of stages of evolution of strategic management tools such as lean and six sigma. Implementation of strategic tools in managing business operations as well as supply chain is being discussed. In addition, this study is focusing on the importance of applying strategic tools in the manufacturing industry.

OPERATIONS MANAGEMENT
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Table of Contents
Introduction...................................................................................................................3
History of Six Sigma and Lean.....................................................................................3
Implementation of strategic tools in supply chain and business operations in service
sector............................................................................................................................4
Application of strategic tools in manufacturing industry...............................................6
Conclusion....................................................................................................................8
Reference list..............................................................................................................10
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Introduction
Strategic tools are essential part of business as it helps management of companies
to manage business operations. Strategic management tools are integrating day by
day and application of these tools are helping organizations to earn maximum
revenue through their business operations. This study focuses on evaluation of
stages of evolution of strategic management tools such as lean and six sigma.
Implementation of strategic tools in managing business operations as well as supply
chain is being discussed. In addition, this study is focusing on importance of applying
strategic tools in manufacturing industry. Discussion over this topic is capable to help
in understand role of strategic tools in business in today’s business era.
History of Six Sigma and Lean
Lean strategy is not a new concept and it is derived from Toyota production system.
This concept was derived in 1940 during the period of second world war. At Toyota
Motor Company, Taichii Ohno and Shigeo Shingo began to incorporate Ford
production and other techniques into an approach called Toyota Production System
or Just In Time. Toyota adopted the strategy of producing low volume products but
offering a larger variety. On another hand, ford theory of production accommodates
only one variety of products. Hence, a customer-centric approach was taken by this
firm that has helped them to meet different needs of customers in a proper way.
Strategy of Toyota is also known as Just in Time. as discussed by Verrier et al.
(2016), this proposed model of Toyota was contradictory to that of ford. Ford has
adopted the strategy of mass production that can impact on quality of products. In
1990, many American manufacturers have adopted this strategy of Toyota. Lean
manufacturing has attracted attention of many manufacturers in different countries.
In the 1980s, employees of Motorola Inc in the USA have used six sigma theories in
order to reduce defects in their production process. This has helped them to provide
high-level quality to customers. As stated by Omogbai and Salonitis (2016), six
sigma is an essential tool includes different characters of earlier systems and is
effective to mitigate defects in production process. In 1991, allied signals have also
used this tool, which has helped them to achieve cost control and quality
improvement within six months. On another hand, Cortes et al. (2016) argued that
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six sigma is also considered as a methodology, which helps to encourage teams and
helps to increase responsibility. There are two methodologies of six sigma tool that
includes DMAIC and DMADV. DMAIC methodology reminds every person of a team
regarding their roles and responsibilities.
Figure 1: DMAIC methodology
(Source: Influenced by Cortes et al. 2016)
Implementation of strategic tools in supply chain and business operations in
service sector
Service sector has become one of the important industries in every country as it is
able to contribute to the economy of countries. As argued by Habidin et al. (2016),
this sector uses strategic management tools such as Six Sigma, lean and others in
order to manage operations and supply chain. Organizations under this service
sector are aware of beneficial aspects of implementing strategic tools and are
successfully generating revenues. For example, DHL uses lean strategies in order to
manage business operations (Annualreport2017.dpdhl.com, 2017). In the last two
years, DHL has invested its time and cost in strategic management by following the
principles of Lean. Lean process has helped this organization in managing change,
implementation of productivity management tools and in resource management. This
approach of this company is helping them to maintain continuous improvement of
business process.
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DefineMeasureAnalyzeImproveControl

Principles of Lean can be considered as an effective source of ideas that is capable
to help organizations under service industry in effective supply chain management.
Application of Lean process has helped DHL in developing market and their capacity
of performance has been increased with the passage of time in the last two years.
As contradicted by Sarhan et al. (2017), lean process has helped DHL to provide
maximum benefit to customers by managing supply chain with efficiency.
Understanding and implementation of Lean methodology have helped DHL to
maintain consistency of their business process. The president of Harrington Group
LLC has mentioned that the combination of resilient and Lean can be considered as
the new hybrid tool that helps firms in effective supply chain management.
Management of DHL is managing business operations and supply chain in more
resilient and leaner way. On contrary, Furterer (2016) have mentioned that this
approach of this company is helping them to protect their business from potential
failures. They are being able to deliver services to their customers within minimum
time period and this aspect is leading to increasing customer satisfaction.
This organization has engaged its employees in their lean project in order to gain
collaborative effort of its employees in implementation of lean. As opined by Laureani
and Antony (2018), they have used several tools of lean strategy such as process
mapping, objective statement, 7 waster analysis, flow diagram, Ishikawa diagram,
and no cost analysts in order to improve and retain good business process. Aim of
this company is to provide the best service to its customers in order to generate
maximum revenue from their business. the senior vice president of DHL have
mentioned that, for the industry to survive and continue to develop into leaner and
more resilient supply chains, global collaborative simulations must be developed and
tested - prior to establishing the correct process and approach - before execution
and delivery
They have understood that effective supply chain management can help them to
meet business objectives within minimum time period. Antony et al. (2017) have
contradicted that “Performance dialogue” refers to management of team
performance that helps team members to understand contribution of their activities in
performance of organization. This strategy has performed well in DHL by helping
them to improve their performance by near about 20%. “Gemba walk” strategy helps
this company to make their employees understand flow of performance
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(Annualreport2017.dpdhl.com, 2017). In addition application of this strategy allows
management to identify potential areas of improvement. On another hand, Fonseca
(2015) have mentioned that “deep collaboration” strategy of lean tool helps to
engage customers in 3PL set up in order to improve business performance. This firm
considers DMAIC methodology as the alternative to Lean. Management of this
company is trying to cross their limit and think out of the box
(Annualreport2017.dpdhl.com, 2017). At present, they are providing their best effort
to think about alternative strategic tools that can help them to achieve business goals
within minimum time period.
Figure 3: Lean strategies used by DHL
(Source: Annualreport2017.dpdhl.com, 2017)
Application of strategic tools in manufacturing industry
In manufacturing sector, different strategic policies and rules have been applied for
improving quality and gaining customers satisfaction. Servitization is a current trend,
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GembawalkDeepcollaborationPerformancedialogue

which refers to building of a strong revenue system through the help of high-quality
service. As said by Gutierrez-Gutierrez et al. (2016), servitization includes three
parts that include base services, advanced services, and intermediate services.
Base services include providing high-quality products and intermediate services help
to repair products and in maintenance. In addition, customer support service
includes agreements regarding consumer support. Moreover, Cassia et al. (2015)
argued that servitization helps an organization to add some services in already
existing products or service to achieve more perfect result. Some global leaders
have adopted this strategy in order to gain higher benefits, which include Rolls-
Royce, Xerox, and others. There are different benefits of servitization that includes
growth in profit level. In addition, response of a firm increases in respect to customer
needs. Hence, it can be stated that this strategy of servitization can be applied in
order to increase competitiveness of a firm.
The process of servitization can be achieved if the number of mistakes in operations
gets minimized. In current competitive business environment mistakes in operations
and supply chain process can reduce satisfaction rate of customers. This is why the
tool of six sigma has been used by many companies for doing business. As opined
by Lim et al. (2019), six sigma is a proper tool that can be used in delivering and
developing different services and products in a proper way. Meaning of six sigma is
deviation of a product and service from perfection. For example, Samsung
Electronics Co has implemented six sigma tools in total quality management, supply
chain management, and product data management. Tool of six sigma was added in
Samsung's operations and supply chain process for upgrading innovations and
improving their competitive position in the market. For optimization of six sigma,
management of Samsung decided to develops internal assets like human resource
(Asq.org, 2019). Innovations in product have helped Samsung to become a global
leader in electronics industry. Samsung has applied six sigma tools due to some
problems like variation in product quality and high-quality costs. They have
implemented six sigma strategies to process their products and developing
personnel.
Business team of Samsung has developed some methodologies of six sigma
strategies that have helped them in the process of supply chain management. The
methodology of DMADOV (define, measure, analysis, design, optimize and
verification) is not appropriate for this company (Asq.org, 2019). Hence, they have
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included ‘Enable' instead of design and optimization. This has helped Samsung to
improve its process of supply chain management. In addition, they have also
implemented the strategy of six sigma in order to improve their system. DABTL
methodology was implemented by members of Samsung in order to improve their
support system. As stated by Fonseca (2015), DABTL methodology includes
definition of problem and architecting a plan to mitigate problem. After these
processes building testing and launching are done. Samsung has also designed
some principles regarding six sigma projects in supply chain management. Global
optimum is a principle that states all ideas need to have a positive impact on the
company both locally and globally. KPI mapping is another essential principle
adopted by Samsung that has helped them to increase the credibility of six sigma
approach (Asq.org, 2019).
\
Figure 3: Methodology of DMADOV
(Source: Asq.org, 2019)
Six Sigma has played an essential role in Samsung’s success that has helped them
to become a global leader. This firm has adopted six sigma approaches that have
helped them to increase quality of products and elimination of waste products in a
proper way. Samsung has also implemented training programs regarding
implementation of six sigma strategy. Hence, productivity of workers has increased
and quality control can be done in a proper way (Asq.org, 2019).
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Conclusion
From the above discussion, it can be concluded that different strategic tools like lean
and six sigma has impacted in quality improvement process of large organizations.
These strategies can be implemented to improve operations and supply chain
management of a business. These tools have been proven beneficial for large
organizations like DHL and Samsung. Research regarding probable risks and in
business and finding of remedies can be done by these tools of quality management.
In this competitive business environment, incorporation of these tools can help to
increase success rate. Hence, competitive advantage can be gained in market,
which can help to provide long term benefit. However, organizations need to
redesign these tools according to their needs and analyzing different external and
internal factors. Thus, various objectives like quality improvement, risk assessment
can be done in a proper way.
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Reference list
Annualreport2017.dpdhl.com (2017), Lean management strategy, available at
https://annualreport2017.dpdhl.com/report/group-management-report/general-
information/objectives-and-strategies [Accessed on 22nd April 2019]
Antony, J., Snee, R., and Hoerl, R., 2017. Lean Six Sigma: yesterday, today and
tomorrow. International Journal of Quality & Reliability Management, 34(7), pp.1073-
1093.
Asq.org (2019), Six Sigma and Samsung, available at
http://asq.org/qic/display-item/index.html?item=18622 [Accessed on 22nd April 2019]
Cassia, F., Ugolini, M.M., Cobelli, N., and Gill, L., 2015. Service-based vs. goods-
based positioning of the product concept: effects on customer perceived value. The
TQM Journal, 27(2), pp.247-255.
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Fonseca, L.M., 2015. From Quality Gurus and TQM to ISO 9001: 2015: a review of
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Furterer, S.L., 2016. Lean Six Sigma in service: applications and case studies. CRC
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Gutierrez-Gutierrez, L., De Leeuw, S. and Dubbers, R., 2016. Logistics services and
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Habidin, N.F., Salleh, M.I., Md Latip, N.A., Azman, M.N.A. and Mohd Fuzi, N., 2016.
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Omogbai, O. and Salonitis, K., 2016. A lean assessment tool based on systems
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