Reference no: EM133506310

Case Study: Six Sigma

The following fictional case in the food processing industry, illustrates how Six Sigma can be leveraged to make improvements to quality. As you read through the case, think about the process of implementing a Six Sigma project using the DMAIC method.

Acme Food

In late 2012, with the recent outbreaks of bacteria (listeria, salmonella, and ecoli), John Smith, V.P of Operations was evaluating the food safety processes and procedures at Acme Food. After reading a study by the Grocery Manufacturers Association (GMA), which found that the cost for a food recall was $10 million in direct costs, not including the damage to reputation or lost sales, he was motivated to review Acme's food processing and supply network. John wanted to take a proactive approach to shore up his processes, ensure conformance to quality from an operations perspective and prevent damage to the brand that his father had started.

Acme Food History

John Smith's father, Thomas started the business in the early 1920's in Toronto, Canada as a butcher, providing meats, cheeses and fresh farm preserves to the growing Torontonian population. Surviving the Great Depression and World War II eras, Thomas recognized the potential for growth with the growing population. He opened several more stores continuing to grow his brand and recognized for quality food. In 1954, with TV becoming popular he moved into the food processing business creating the TV dinner. It met with such resounding success that he continued to develop more new products in the food convenience market, growing the business. By 2012, as John begins to review their food safety protocols, Acme foods has 3 processing plants - one in the mid-west, one in Ontario and one on the east coast that process meat/fish-based frozen convenience foods along with 88 boutique retail store across Canada that sell the frozen convenience food along with fresh meats, cheese and preserves.

Leadership and Project Selection

John recognized that he needed to engage his senior leadership team across all three (3) plants and support the operators in each facility. After reviewing the data and reports, John wanted to focus on the change-over time and procedures when changing the production line from 1 frozen food dinner to a different frozen food dinner. While currently operating a 3 sigma or 99.74% defect free, John wanted a process that operated at the 6-sigma level. The brand was considered by consumers to be one of quality and strategically, John wanted to ensure that the brand equity was maintained.

After reading reports of how food can be mislabelled from suppliers, he also wanted to talk to his Procurement Manager, Jill Stephens. He wanted to understand the current procedures and quality metrics that were in place to ensure that food was purchased from reputable suppliers and ultimately received, processed and packaged to meet the needs of consumers who need food packaged and labeled according to their dietary requirements. Of concern, was the honey and olive oil that was used in 4 of their frozen dinner entrees.

DMAIC Process

Define

The leadership team in each plant and the Procurement Manager were excited about the projects. With all the media attention on recalls, they too were concerned about the external failure costs associated with poor-quality products reaching the consumer. They agreed that the costs from customer complaints and returns, replacing the product and the liability costs from legal action made this project an important strategic imperative. Especially when one considered the potential of their valued customers getting sick or dying as a result of eating one of their frozen food entrées.

Each manager went back to their plant to complete a SIPOC. Who were their Suppliers, what Inputs were received in the manufacturing process? Jill Stephens, played an active roll for this component of the SIPOC, by gathering a list of all of the suppliers and certifications.

The Process was mapped out and the Outputs were identified in terms of Customer expectations including labeling, and certifications to ensure that fair-trade and sustainable food was purchased.

Measure

The Production managers met with their individual teams to gain insights into how the production facilities were "measuring up". As a team, it was decided that they would measure the number of frozen dinners per hour, the number of in-line rejections, the change-over time between frozen dinner type and the number of quality issues discovered at the end of the line. The teams assessed listeria counts throughout the process paying attention to the change-over cleaning process between frozen dinner type processes.

Analyze

The teams from all three (3) plants got together to share their results. Jill Stephens presented first, illustrating how their suppliers comply with current Canadian regulations. For some suppliers the supply chain was transparent and appropriate certification was on file, however there was room for improvement with regard to the olive oil supplier. It was found that during the cleaning process there was a higher degree of variability in listeria counts. While the counts were between the upper and lower control limits based upon 3 sigma there was room for improvement to reduce the variation to achieve six sigma capability.

Improve

The team brainstormed possible solutions and statistically verified which potential solutions would enable them to reach six sigma capability. The ideas with the most impact were hands-free taps on wash basins and rearranging some equipment so that it was easier to clean, and condensation did not drip onto other machines or the food conveyor. From a procurement perspective, Jill Stephens wanted to engage a 3rd party testing lab, Intertek, to ensure that the olive oil was 100% extra virgin as claimed by the supplier. John Smith lent his support to the team and the ideas were implemented in all three facilities and in procurement.

Control

The team continues to manage the food processing plants to ensure they remain within 6-sigma capability. Periodic audits are performed to make sure Personal Protective Equipment (PPE) continues to be used and that Standard Operating Procedures are being followed. In procurement a monitor and control process was established with Intertek to randomly test various products to ensure adherence to quality.

Questions:

1. Think of a company or organization that is facing a problem right now. Once you have identified a problem, create a Six Sigma solution process to solve that problem. Hint; try to narrow your problem to a narrow scope. Once you have a DMAIC process in place, use your imagination on how you and your team would solve this problem.