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Six sigma

initiatives in
GCR Insurance
Case for Operation Management

Aditya Ardiani
Bambang Simaremare
Ferdinand Cahyadi
Johannes Wongkar
Ridho Trimanto

Founded in 1922.
Insurance for building
contractors and construction
In 1950 start to grow bigger
In 2000 was bought by
Wichita Mutual Group


37 local offices

890 agents

Previous improvement
Adopt TQM
Run by quality committee, 8 people
representative of each department.
Organize training in quality techniques.
Company allocates small improvement budget
for each department.
Improvement plans still required annually, but
the committee has stopped meeting few years
Annual award meeting has become a general
communication meeting between staffs and

Six Sigma initiatives

Early 2005 Tyko Mattson attended
conference about Operational
Excellence in Financial Services.
September 2005 submitted a report
What is six sigma and how might it
be applied in GCR ?
Late 2005, Tykos report has been
approved by the main-boards of
GCR and Wichita Mutual.

What is TQM and Six


Total Quality Management (TQM)
is an incorporative philosophy
orviewpoint of management for
continuously improving the quality of
products and processes at every level.
Its popularity reached its peak in the
late 1980s and early1990s

Six Sigma
Six Sigma is a management
technique used to execute quality into
itsproducts and processes. It was first
implemented by Motorola a U.S.
company in the year 1986

Define, Measure, Analyze, Design
and Verify often called DMADV is
used for creation of the products and
process designs
Define, Measure, Analyze, Improve
and Control often called DMAIC is
utilized to improve processes

Question 1:
How does the Six Sigma seem to
differ from the TQM approach
adopted by the company almost
20 years ago?

1. It was always seen as
something extra and taking
time away from doing normal
2. Can't impose the structure
of an improvement initiative
from the top.
3. Everything had to be done
according to the handbook.
The cost of quality was
measured for different
department according to
handbook too.
4. Only a very few of the local
office in the world ever
adopted TQM philosophy

Six Sigma
1. Can reduce process variation,
which will have a significant
impact on operational risk
2. Engages senior management
actively by establishing
process ownership and linkage
to strategic objectives
3. It forces a rigorous approach to
driving out variance in
processes by analyzing the root
cause of defect and errors and
measuring improvement.
4. Combine some of the best part
of existing improvement
methodologies, tools and

Question 2:
Is Six Sigma a better
approach for this kind of

Six Sigma is suitable for:

Companies who are mature in process management
Customer focused
Six sigma offers more flexibility as compared to TQM, which
requires all process to conform with the rigid companys
Not a quick fix solution, therefore GCR needs to invest in
education or external sources to implement this approach.
As GCR provides service as its main product, it can benefit
from the flexibility offered by Six Sigma as opposed to the
rigidity of TQM

Six Sigma can be a better approach for GCR if the

company allocates resources and time properly and
committed itself in the long run implementation

Question 3:
Do you think Tyko can avoid
the Sic Sigma initiative
suffering the same fate as the
TQM initiative?

Performance Improvement
Apart from operation strategy matrix
(Quality, Speed, Cost, Dependability,
Flexibility). Performance improvement is
the ultimate objective of operations and
process management.
o Competitive pressure increase
o The nature of world trade is changing
o New technology
o Scope of operation widened

Managing Improvement
Total Quality
Management (TQM)

It is an approach that puts the quality

(quality development, maintenance,
improvement) at the heart of
everything that is done by an operation


The idea that inventories had a

negative effect and that throughput
time was more important than capacity

Six Sigma

A discipline methodology of defining,

measuring, analyzing, improving and
controlling the quality in every
companys products, processes and
transaction with ultimate goal of
eliminating defects

Business Process

Radical approach to improvement.

Redesign operation along customer


Six Sigma

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