Six Sigma Yellow Belt Training II Power point
emmct3
Week3PP.pptxSix Sigma at Amazon
Emma Trevino
Pamela Sheffield
Ashlea Rahn
Henny Phillips
Team 4
Professor : Claude Toland
OPS/571
March 1,2019
Claude Toland (CT) - You did a good job with the business selection. The Define stage was identified and executed as required. Customers were identified and you did a good job of identifying customer priorities. This was a nice selection of a project for implementing six sigma.. The CTQ’s were identified n your project. You did a good job with the DMAIC, measurement phase. You did a good job of identifying priority things to measure. Key internal processes were identified and explained. Excellent work on this project.
Customers Priorities
Convenience
Speed
Free Shipping
Variety
Amazon has become a household name for convenient online shopping. Consumers can purchase numerous items from books, clothing and home furniture with a click of a button. "As much choice or selection as the internet provides, it's just an amazing set of data to see all that concentrated in one online retailer," said Micah Roberts, a partner at research firm Public Opinion Strategies. "It really underscores the dominance in that space" (Raegan & Gralnick, 2017). Some key factors that attract consumers to Amazon over their competition are price, convenience, free shipping, and the availability of products. “A leading 64% cited price as their motivation for shopping on Amazon, with free shipping (60%) a close second. Convenience was also a major factor: a majority (52%) said they shopped on Amazon because it was easy to buy that way, and close to half (47%) said that they used Amazon because it’s a one-stop-shop where they can buy different things they need” (“Here’s Why,” 2018). Amazon has discovered and capitalized on consumer priorities, making it the number one company for online purchases.
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Business Objectives
Customer Obsessed
Efficiency
Lean Manufacturing
Amazon began in 1995 as a small online book vendor and has grown into the number one online retailer with a variety of items to choose from. Amazon claims its success comes from being customer obsessed. Jeff Bezos, Amazons founder and CEO, stated “there are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most important. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf” (Chaffey, 2018). Customer loyalty, efficiency, and expanding the business are key characteristics of Amazon’s business objectives. To ensure the company is customer obsessed and meets expectations, it instituted lean manufacturing operations. “So long as Amazon remains lean and efficient as it continues to scale, it will be able to spread fixed costs, lower its cost structure and prices, and ultimately improve customer experience and continue to grow” (Stewart, 2015). By implementing lean-inspired processes, Amazon can remain customer obsessed, innovative, and profitable.
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Customers’ Needs and Feedback
Be predictable
Be dependable
Meet every expectation
“Lowering inventory requires a high level of quality as processes need to be predictable since extra inventory is not available” (Jacobs & Chase, 2014, p. 303). Over the years, Amazon acknowledges the high level of customers’ expectation to receive deliveries and to create online orders with ease. Therefore, Amazon does not “… rely on the postal service, but instead uses independent, third-party shippers” (Farfan, 2019). Amazon has also created a platform which would provide opportunities for same day or two hour shipment of goods. By using independent contractors, Amazon has developed an approach to quickly respond to customers’ needs and feedback,
despite the time of the day or the demand from customers .
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Identify and develop the problem statement
Identify the vision
Remove barriers
Become align and committed to the vision
“To convey the need to vigorously attack problems, professionals in Six Sigma firms are given martial arts titles reflecting their skills and roles” (Jacobs & Chase, 2014, p. 306). Black belts, master black belts, and green belts are responsible for using their personal skills to identify problems within the organization and develop ways in which to correct the identified problems. One of the ways in which to track problems identified within an organization is to create a problem statement. A problem statement is used by a team of individuals skilled in identifying issues and concerns related to the organization. The team develops a process that records not only the problems identified but creates strategies that would relieve the problems and deliver an effective outcome for the business. Identifying and developing the problem statement should be performed by first understanding the vision and mission statement of the organization. “The mission and vision of Amazon.com is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online” (Farfan, 2019).
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Introduction
Amazon is a multinational company that deals mainly in e-commerce and cloud computing.
In terms of revenue its regarded as the largest e-commerce marketing place.
It is also the second largest employer in the US and the most valuable retailer.
Amazon began as a bookstore but has seen extensive expansion over the years.
The company has grown its e-commerce sector to become the largest retailer in the world online("Amazon and Google: Expertly Using Data to Get Ever Closer to Customers," 2015) .
It continues to evolve heading into the future.
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Six Sigma
Six sigma is firmly rooted in the culture of Amazon.
The company has around 2000 items order red every minute.
There is no room to allow for a slip in the standards.
Amazon has several operations that take place every second of the day given the size of the business.
It has a six sigma culture that is deeply rooted given its large volume.
There is no room for mistakes as standards need to be maintained at all times.
Excellence to Amazon means improving customer experience and driving productivity and efficiency across the entire company("Amazon and Google: Expertly Using Data to Get Ever Closer to Customers," 2015) .
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Amazon begins the process by hiring the brightest and best in the world.
It hires its senior management from Harvard, Yale, and other top institutions.
Amazon also trains their employees as six sigma black belts.
Amazon is known for going only after the best and nothing else.
This is a tactic that is common in six sigma.
In addition to hiring the best, the company ensures that they are taken through training to make them better employees.
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The company has been able to reduce variation using six sigma methods.
It utilizes DMAIC, root cause analysis among others.
These have helped to eliminate non value adding stages and cut spending.
They have also been able to established a Kaizen-based company culture.
Amazon makes use of ROOT Cause Analysis and DMAIC to make its processes more efficient.
It works towards cutting spending and removing stages that add no value("Six Sigma and Visual Six Sigma," 2016).
A kaizen based company culture has also been established.
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Conclusion
Amazon has revamped its operations since the start of the millennium.
They have used six sigma to become the leading global online retailer.
The Amazon culture is focused towards achieving efficiency and continuous improvement.
Amazon has come from being an online book retailer to a top company in the world.
They have used six sigma to become a global brand.
Six sigma has helped the company develop a culture that is geared towards continuous improvement and efficiency ("Six Sigma and Visual Six Sigma," 2016) .
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Critical to Quality Characteristics
Taylor, C. (2019) stated, “ A CTQ is a measurable characteristic of the service that you provide to your customers. It is something that must exist within the service in order for the customer to say that what you have delivered is good”. (p. 1). Quality is what the customer determines because the customer’s opinion will determine if the goods or services are factors they require. To be sure, the organization’s performances should be up to the standards of the customer, or to exceed the customer’s expectations. Moreover, if you change positions with the customer and think about what you consider to be critical to quality, you are likely to know what is expected of your customer. Consequently, feedback from the customers will ensure quality performance.
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Critical to Quality Characteristics for Amazon
Delivery
Sustainability
Responsible Sourcing
Innovation
Quality
Delivery – Amazon provides fast, free shipping to customers
Sustainability – Amazon’s sustainability is good for businesses, the planet, customers, and communities
Responsible Sourcing – Amazon adheres to ethics and ensures its suppliers do the same
Innovation – Amazon is committed to introducing new and improved products
Quality – The products from Amazon is what the customer orders.
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Metrics
Productivity – increased because of establishing new stores in other states
Gross Profit Margin – highest operating profit margin worldwide
Return on Investment – overall 892
Earned Value – performance based projects with innovative guidelines
Customer Satisfaction – ranked #1
Employee Satisfaction – reached an all time high
Actual Cost – 465 billion
Cost Variance – positive
Schedule Variance – ahead
Cost Performance – efficient
Metrics determines the growth within the company. As well, the metrics of a company shows performance measures that leads to a successful outcome for the company. With Amazon, all metrics are performing well, which tells the metrics for the company are in order.
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Internal Processes
Delivery
Innovation
Quality
Delivery – Amazon provides fast, free shipping to customers, however, products do not always reach its destination on time
Innovation – Amazon is committed to introducing new and improved products, but the drones presented by Amazon could interfere with commercial airlines
Quality – The products are what the customer orders, then again, no-name brands can be delivered to customers unbeknownst to the customer, and the quality of the product is not up to par.
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References
Amazon and Google: Expertly Using Data to Get Ever Closer to Customers. (2015). Growth Champions The Battle for Sustained Innovation Leadership, 142-160. doi:10.1002/9781119208174.ch9
Amazon. (2019). Retrieved from https://www.aboutamazon.com/sustainability
Farfan, B. (2019). Retail Industry: Managing Employees. Amazon’s Mission Statement. Retrieved from https://www.thebalancesmb.com/amazon-mission-statement-4068548
References
Chaffey, D. (2018, Aug 14). Retrieved from https://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/amazon-case-study/
Jacobs, F. R., & Chase, R. B. (2014). Operations and Supply Chain Management. Retrieved from https://phoenix.vitalsource.com/#/books/1259850137/cfi/6/30!/4/60/4@0:0
Here’s Why People Shop on Amazon – And Why They’d Shop Elsewhere Too. (2018, Feb 27). Retrieved fromhttps://www.marketingcharts.com/industries/retail-and-e-commerce-82536
Raegan, C. and Gralnick, J. (2017, Dec 19). Retrieved from https://www.cnbc.com/2017/12/19/more-than-75-percent-of-us-online-consumers-shop-on-amazon-most-of-the-time.html
References
Stewart, D. (2015, Dec 7). Retrieved from https://rctom.hbs.org/submission/the-lean-mean-amazon-machine/
Six Sigma and Visual Six Sigma. (2016). Visual Six Sigma, Second Edition, 7-26. doi:10.1002/9781118925348.ch2
Taylor, C. (2019). Critical To Quality Characteristics. Retrieved from https://service.asu.edu/blog/critical-quality-characteristics
