Discussion Assignment Unit 5.

University of The People

Quality Management Course
BUS 4406-01-AY2024-T3.
Instructor: Prof. Mohd Asad Siddiqui
March 2, 2024
Unit 5: Continuous Improvement.
Six Sigma Analysis- Case Study:
The Fortune Magazine article "Why You Can Safely Ignore Six Sigma" by Lee Clifford raises
several criticisms of the Six Sigma approach. While the article acknowledges that Six Sigma can
be effective in the right hands, it questions its broader impact on stock values, applicability to the
service industry, relevance to late adopters, and overall contribution to market success.
Firstly, the article suggests that the results of Six Sigma may not necessarily have a direct and
significant impact on financial statements and, consequently, on stock value. Despite success
stories like GE's cost savings of over $2 billion, the article highlights Whirlpool's case where the
stock declined despite the implementation of Six Sigma.
Secondly, the author questions whether Six Sigma is only valuable to early adopters. The
latecomer issue is raised, suggesting that the benefits of Six Sigma might diminish as more
companies adopt it, potentially leading to a situation where savings are passed on to consumers
rather than reflected in stock values.
Thirdly, the article questions the applicability of Six Sigma to the service industry, which is
inherently more challenging to measure in terms of defects. Unlike manufacturing, where defects
are tangible and easily trackable, defining errors or mistakes in service industries can be
subjective and dependent on individual interpretations by "black belts."
Lastly, the article suggests that defects may not matter if a company is producing a product that
consumers don't want to buy. The example of Motorola's failed venture into satellite-linked
mobile phones, despite its adherence to Six Sigma principles, is cited as evidence that market
demand and product appeal are crucial factors beyond defect reduction.
In conclusion, the article argues that while some companies may benefit from Six Sigma, it is not
a guaranteed path to stock market success, and its impact may vary based on industry, timing,
and the overall market demand for the product or service.
Reference:
Clifford, L. (2001, January 22). Why You Can Safely Ignore Six Sigma. Fortune Magazine.
http://money.cnn.com/magazines/fortune/fortune_archive/2001/01/22/295545/index.htm