Background of the Problem
Pep International Inc. is a small manufacturing company based in Oregon. The company manufactures eight models of mitering band saws, a belt grinder and a number of drill press models. Besides, the company also welds band saw blades for a large number of band saw machines. Pep International Inc. is akin to a large number of businesses that fall into the trap of focusing on âwhat is to be doneâ rather than on the more critical requirements of problem solving, decision-making and commitment to coherent action. This pattern manifest itself in static presentation masquerading as strategy, extolling the status quo and lacking true insight (Tomaszewski & Houseal, 2014). In general, the risk of new ideas and investments are considered to be a net incremental addition to the basic risk level of a company, and the incremental addition to the basic risk level is considered a net negative. This often leads to the flawed assumption that the risk of doing nothing and continuing with the status quo is low and stable (Martin, 2007). It is likely that Pep International Inc. has fallen into a groove of trying to remain in status quo because it has achieved some modicum of financial and operational stability in its business model and workflow.
While any firm might, on the surface, be performing adequately on the operational and financial front, there is always scope to improve. One of the tools that could help a firm to streamline operations, improve quality and eliminate defects in every organization-wide process is Six Sigma. Six Sigma is a customer driven, quality-oriented approach to doing business. For a business unit or a manufacturing process, the Sigma capability is a metric that indicates how well the process is being performed. The higher the Sigma capability, the better it is because it measures the capability of the process to achieve defect-free work. A defect, in the context of Six Sigma, refers to anything that results in customer dissatisfaction (Murugappan & Keeni, n.d.). Using Six Sigma, a business can strategize its plan of action to drive revenue increase, cost reduction and process improvements. Six Sigma would help the firm create a vision for itself. The firm could improve process metrics by benchmarking its processes, and keep a stringent goal for itself and try to achieve it through the year. Six Sigma focuses on âhidden factoryâ activities that result in reduced quality and efficiency in a business, and helps in eliminating them. âHidden factoryâ activities are identified as those that provide no value addition to the work flow, and yet occupy time and effort. Process improvement is done through the DMAIC process, which is an acronym for Define-Measure-Analyze-Improve-Control (Six Sigma Institute, n.d.). Over the past twenty years, the use of Six Sigma methodologies has saved an estimated $427 Billion for Fortune 500 companies, according to the January/February 2007 issue of the âiSixSigmaâ Magazine (Reliable Plant, n.d.). The success of Six Sigma is not restricted to large companies. Six Sigma offers many small and medium sized companies the same benefits as larger organizations: an improved bottom line. Many critics of Six Sigma count the cost of quality as one of the barriers to adopting the methodology for small and medium sized firms. However, it has been observed that as companies graduate to Six Sigma, their cost of quality reduces and their profitability improves (Keller, n.d.). A suitable example from the manufacturing industry is Aluminum Trailer Company, which employed Six Sigma techniques to streamline material, information and part flows, established standards and communicated the same company wide to achieve breakthrough revenue savings (Novacovici, 2012).
Closely linked to the Six Sigma DMAIC approach to challenge the status quo is the Project Management Book of Knowledge (PMBOK). Invariably, many managers follow project management processes too literally, and miss the