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KNOWLEDGE-BASED SIX SIGMA FOR MANAGEMENTINNOVATION
Young H. Park, Ph.D*Sung H. Park, 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 acompany effectively, information technology (IT) and data technology(DT) have to beused 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 inthis knowledge-based information society. If Six sigma and KM are to be combinedefficiently, they can become very powerful management strategy. The so-calledknowledge-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 themethodologies of KBSS will be proposed. Also the relationship between DT and KBSS iscommented and how KBSS can be implemented in industry is suggested.
2.
 
SIX SIGMA, DT and IT
Six Sigma would be defined as “new strategic paradigm of management innovationfor organization, which implies statistical measurement, management strategy andquality culture”. The core goals of Six Sigma are to reduce defects, improve yield,improve customer satisfaction, reduce variation and increase shareholder value. As aresult of those, Six Sigma eventually increases the company’s competitiveness.However, many executives, managers and engineers still do not understand how itcan help them. Also many small- and medium companies do not think Six Sigma is verygood in their own company. Why are these things happening? They know Six Sigma isgood 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 incompany is weak management of data and information in their company. We willpropose knowledge-Based Six Sigma (KBSS) based on DT and IT in order to operateSix Sigma effectively in company at the followings.DT is an essential element for Six Sigma, and in general for nationalcompetitiveness. The importance of DT will rapidly expand in this knowledge-basedinformation 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 isdefined 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 andcommunication,■ 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 multiplicationDT, and finally execution DT provides valuation and profit generation for theorganization concerned. The scopes of each DT are;■ management DT ; acquisition, storage, retrieval and analysis of data, creation ofinformation■ multiplication DT ; analysis of results obtained, use of information multiplied, creationof knowledge■ execution DT ; execution of generated knowledge, data/information transmissionThe difference between DT and IT can be seen in the information flow as shown inFigure 1.
 
Figure 1. Information flow of DT and IT
DT is mainly concerned with data collection, statistical analysis of data and datarefinement, generation of information, and creation of necessary knowledge frominformation. However, IT is mainly concerned with data/information/image transmissionand communication, and development of engineering devices and computers forinformation handling. Also IT is concerned with engineering tools for knowledgemanagement. Generally speaking, DT forms the infra-structure of IT. Without DT, ITwould have limitations in growth. On the other hand, DT cannot be well visualized. IT isthe vehicle for DT development
3. KNOWLEDGE-BASED SIX SIGMA
We think that KM is very important in this knowledge-based information society. IfSix Sigma and KM are combined, it could become a very powerful managementstrategy. We want to propose the so-called Knowledge Based Six Sigma (KBSS) as thecombination of Six Sigma and KM.KBSS can be defined as “a company-wide management strategy whose goal is toachieve process quality innovation corresponding to 6sigma level and customersatisfaction through such activities as systematic generation, storage, and disseminationof knowledge by utilizing the information technology of the internet/intranet, data-basesand 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 andSix Sigma which can be developed as a new paradigm for management strategy in thisdigital society of the 21st century.
DTDatacollectionFactStatistical analysisof data and datarefinementGeneration ofInformation andInference from dataITFact
 
Data/information/imageTransmission andcommunicationDevelopment of engineeringdevices and computers forInformation handing
 
Engineering tools andsupport for knowledgemanagementCreation ofKnowledge frominformation
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