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Lean Six Sigma (6 )Case Study: Amazon.com

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 All are Cordially Invited for
Guest Lecture Web Series
on

Lean Six Sigma (6 )Case Study: Amazon.com

How Amazon Have Incorporated Six Sigma into Their Work Place?

Eight Hours Session by : Dr. Mukul Burghate, FIE

Visit : https://mukulburghate.blogspot.com/ or call 9823141467

Workshop to be held at ‘NMIMS’, Navi-Mumbai

Friday 12th & 18th , Saturday 13th & 20th , March 2021
(First Session of Web series talk on ‘Operations and Supply Chain Management’ )
 INTRODUCTION TO THE TOPIC

Small businesses and multinational corporations all over the world use Lean Six Sigma to turn their failing processes around.
Companies like 3M , General Electric , Wipro , HDFC life, Maruti Suzuki , Tata Steel etc .
In fact, one of the world’s largest and most successful e-commerce companies uses Six Sigma to great effect. A household
name, we’re all familiar with their trademark smile logo. Amazon.com.
 Agenda for Presentation
INTRODUCTION AND METHODOLOGY TO SIX SIGMA

A Six Sigma process is one in which 99.99966% of all opportunities to

01 produce some feature of a part are statistically expected to be free of

defects(3.4 defective features per million opportunities or Defects per
million opportunities (DPMO)). There are two methodologies of six sigma
such as- DMAIC & DMADV

INTRODUCTION OF LEAN METHODOLOGY

02 Lean is a Japanese philosophy that was developed in the industry after World
War II. Taiichi Ohno, a Toyota engineer, was looking for ways to rebuild the
company so after visiting successful plants from other companies and spotting
improvement opportunities, he developed the Toyota Production
System (TPS)—also known as Lean manufacturing.

03 PHILOSOPHY OF LEAN SIX SIGMA

Lean Six Sigma actually combines two great philosophies: Toyota’s lean
manufacturing process philosophy and Motorola’s Six Sigma management
philosophy. Ultimately, the goal is to produce the greatest possible output
using tasks that produce the best results and happiest customers.

04 CASE STUDY OF SIX SIGMA APPLICATIONS IN AMAZON.COM

Amazon is such a shining example of six sigma, in fact, that the

company would certainly serve well as an inspiration for your
own business.
 Six sigma is a set of techniques and
Introduction to tools for process improvement. It was
Six Sigma introduced by engineer
Bill Smith while working at Motorola in
1986. That’s why, he is known as father
of Six sigma. Six sigma
projects produce major returns on
investment. Jack Welch (GE’s CEO)
made it central to his business strategy
at General Electric in 1995, He wrote in
the annual report that in just three years,
Six Sigma had saved the
company more than $2 billion.

Features
Six Sigma puts the customer first and
uses the facts and data to drive better
solutions.
Six Sigma efforts target three main
areas:
1) Improving customer satisfaction
2) Reducing process cycle time
3) Reducing defects
METHODOLOGY OF SIX SIGMA
1. DMAIC
The set of six sigma methodologies
that is most applicable to the
manufacturing side of a product or
service, DMAIC includes these
project stages:-
2. DMADV
The complementary set of six sigma
processes that is most applicable to
examining and improving the
customer relations side of a
company, DMADV includes these
project stages:
 Seven Basic Quality Tools (Quality core tools):
Within the DMAIC framework, Six Sigma can utilize several quality management tools.
Seven Basic Quality Tools (Quality core tools):
Below is the list of some quality management tools, popularly known as seven basic quality tools –
1. Cause and effect diagram or Ishikawa diagram
2. Flow Chart
3. Pareto Chart
4. Histogram
5. Check Sheet
6. Scatter Plot
7. Control Chart
These basic tools are helpful in six sigma
projects at different times.
11 Barriers to Six Sigma
 We Create
Quality Professional
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Let us Talk to be
Lean & Slim !
Let us talk Speed!
Forget the Manufactures,
Lean can be Applied
Everywhere. Lean is Simple

Lean is a Japanese philosophy that

was developed in the industry after
World War II. Taiichi Ohno, a Toyota
engineer, was looking for ways to
rebuild the company so after visiting
successful plants from other
companies and spotting improvement
opportunities, he developed
the Toyota Production System (TPS)—
also known as Lean manufacturing.
The main goal was to continuously
improve the way the company
worked, eliminating waste and
creating customer value.
8 Types of Wastes of Lean ‘TIMWOODS’(Muda)
Two Pillars of Lean Temple of TPS
The two disciplines of Lean and Six Sigma complement one another.
LEAN SIX SIGMA APPLICATIONS IN AMAZON.COM
Jeffrey Preston Bezos (Jeff Bezos)—the one and only
Amazon CEO—believed in the power of a customer-centric
company, ignoring the media’s pessimistic attitude toward
his strategies and not giving the competition a second
thought.
Having a Lean mindset, Bezos has built a strong culture in
Amazon. Its core mission is to offer the customer exactly
what they expect and need. Apart from that, the
employees are empowered to own their actions and
escalate to higher standards. Bezos believes in the power
of having hands-on senior managers that actively improve
the business by correcting problems in their root cause.
Ever since beginning life as an online bookstore,
Amazon.com has drastically expanded its product
range. They have even implemented innovative
practices like same-day delivery, set to reach new
heights for efficiency with automated drone
delivery.
But have you ever wondered how Amazon became
one of the largest online retailers in the world?
✓ The answer is LEAN SIX SIGMA.
The Amazon Way: How the Technology Company is Changing the Market
through Lean Six Sigma

How Amazon have Incorporated Six

Sigma into their Work

The concept of six sigma was developed as a

way to cut costs in business manufacturing
processes.
However, its use is not exclusive to the sphere of
goods manufacturing, as the online retailer and
distribution company Amazon.com, one of the
world’s largest online retailers has also
implemented the Lean six sigma way of
business into its strategy.
 Crazy about the Customers
Lean is all about generating value,
which means delivering something the
customer actually wants to pay for.

Professional Long-Term Thinkers

Thinking from a broader
Lean practices has became perspective is also one of Lean’s
a formal procedure at principles

Amazon. Passionate for Inventions

Lean and Amazon believe in
empowering employees to bring new
ideas as often as possible.

Hiring ‘BEST & BRIGHTEST’ Committed to Operational Excellence

To achieve their goal, Amazon set about hiring To provide real value
the best and brightest – A COMMON SIX
Committed totoOperational
the customers,Excellence
everyone in the
company must be committed—it’s a cultural matter—and
SIGMA TACTIC. They took things one step here is where Kaizen, one of Lean’s pillars, is the most
further by training their employees as Six
Online Sigma Black Belts.
effective.
Delivery Service
 A trainer of Six Sigma at Amazon once questioned Jeff Bezos – Why do I sweep? Why
Weed out the do I not instead eliminate the source of dirt?
In Lean Six Sigma, Andon is considered as the visual management system which
waste – The enables smooth operation by eliminating all or any bottleneck.
Andon cord is a Japanese word for traditional paper lantern. An Andon system is one
Andon Cord of the principle elements of ‘Jidoka’ – ‘empowering the employees’.
Andon system –
•Improves transparency at work
•Increases productivity within the given time
•Strengthen flexibility by empowering employee
•Reduce downtime to resolve issue
•Save cost by improving quality.
The Andon cord eliminates tens of thousands of defects per year.

There are different kinds of Andon card –

physical or virtual. Amazon used virtual Andon
Cord, the Lean concept, where an employees can
address to defects immediately and effectively to
his supervisor and helps the over all organization
to reduce future customer complaints.
 Advanced Supply Chain Management Practices
Amazon has always been researching, innovating and implementing bold supply chain strategies.

1 2 3 4

1. Outsourcing 2. Delivery 3. Automation Push – Pull

Inventory Options for Strategy for
Management Customer Supply Chain
Success
7 6 5

Deliver Results Drones: The Game-Changing

Supply Chain of Delivery Strategy
the Future
 IMPACT OF SIX SIGMA ON AMAZON.COM
Using Six Sigma they have made rapid progress in becoming a global online retailer. With a culture focused on continuous
improvement and greatest efficiency possible, Amazon has taken over the world. In doing so; The impact of Six Sigma on
Amazon.com can be seen through the statistical representation.
Amazon.com revenues have increased manifold after implementing six sigma in 2004 and that can be seen through
the data given below:

Country Country
Data_01 : 12,000 Data_01 : 12,000
Data_02 : 23,300 Data_02 : 23,300

Country Country
Data_01 : 12,000 Data_01 : 12,000
Data_02 : 23,300 Data_02 : 23,300
 REFERENCES
IN CONCLUSION [1] Priya Sharma, International Journal of
Research in Management, Economics and
Commerce, ISSN 2250-057X,Volume 07
Lean Six Sigma being a well-known term in the Issue 08, August 2017, Page 131-135
[2] www.sixsigmaonline.org
industrial sector today, it helps the management [3] www.intelligencenode.com
[4]
in various ways such as; it is a total management https://www.forbes.com/companies/amazon
[5] www.slideshare.net
commitment, philosophy of excellence, customer [6] Revenueandprofits.com
[7] https://en.m.wikipedia.org
focus, process improvement and the rule of [8] Six sigma paper presented by RABIA
SAGHEER, SYBMS, GNVS on
measurement rather than gut feel. www.slideshare.net
[9] Busidate: Amazon case study: part one by
It is about making every area of the organization NATASHA TERRY-ARMSTRONG (SHORE
SCHOOL)
able to meet better the changing needs of the [10] Financial reports of Amazon.com
[11] A book of Strategic management by P.S.
customers, markets and technologies- with RATHORE, (six sigma topic, page no.-148-
152).
benefits for employees, customers and
shareholders.

Scope for Further

discussion:

Mumbai
Dabbawala and
their very own
Six Sigma
 Thank you all for your Interest
and Interaction !
Questions Please?
(Pls Attempt the MCQ Test today for our
upcoming session)

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