EVALUATING TOTAL QUALITY MANAGEMENT V/S SIX SIGMA

Total Quality Management (TQM) is a structured system for satisfying internal and external customers and suppliers by integrating the business environment, continuous improvement, and breakthroughs with development, improvement, and maintenance cycles while changing organizational culture.  TQM aims for quality principles to be applied broadly throughout an organization or set of business processes.  Total Quality Management (TQM) programs focus on improvement in individual operations with unrelated processes; as a consequence, it takes many years before all operations within a given process are improved.  Six Sigma focuses on making improvements in all operations within a process that produce results more rapidly and effectively. 

The Six Sigma’s Breakthrough Strategy is a disciplined method of using extremely rigorous data-gathering and statistical analysis to pinpoint sources of errors and ways of eliminating them.  Six Sigma relies on the voice of the consumer to set the standard of acceptable performance.  Six Sigma has a systematic approach to both validate data and to focus on the critical few inputs that will have the greatest potential to effect meaningful improvement.
Six Sigma focuses on reducing defects in management and clinical process; it uses statistical analysis to find the most defective part of the process, and rigorous control procedures to sustain improvement. 


While Six Sigma is a long-term strategy, it is designed to generate immediate improvements to profit margins too. Compared to traditional quality management programs such as TQM that project three or more years into the future, Six Sigma focuses on achieving financial targets in twelve-month increments. 

TQM and Six Sigma have a number of similarities including the following:
1.  A customer orientation and focus
2.  A process view of work
3.  A continuous improvement mindset
4.  A goal of improving all aspects and functions of the organizations
5.  Data based decision-making
6.  Benefits depend highly on effective implementation

A key difference between TQM and Six Sigma is that Six Sigma focuses on prioritizing and solving specific problems which are selected based on the strategic priorities of the company and the problems which are causing the most defects whereas TQM employs a more broad based application of quality measures to all of the company’s business processes.  Another difference is that TQM tends to apply quality initiatives within specific departments whereas Six Sigma is cross-functional meaning that in penetrates every department, which is involved in a particular business process that is subject to a Six Sigma project.
Another difference TQM provides less methodology in terms of the deployment process whereas Six Sigma’s DMAIC framework provides a stronger platform for deployment and execution.  For example, Six Sigma has a much stronger focus on measurement and statistics, which helps the company, define and achieve specific objectives. Six Sigma is complementary to TQM because it can help to prioritize issues within a broader TQM program and provides the DMAIC framework, which can be used to meet TQM objectives.


Conclusion
Both measurements of quality control within an organization have brought true success to companies who have applied their policies and procedures.  
The leaders and management teams of any organization will have to evaluate which quality of control tactic is the most beneficial to the growth and improvements of their business. 


The one way to analyze your business is to establish your goals and vision for your organization and set plans in place to evaluate if Six Sigma or Total Quality Management falls in the realms of what you are seeking. 


Both processes have taken the best of the best countries and companies from good to great and I personally feel that as long as you have one of these processes in place, you are setting yourself up for success.

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DISRUPTIVE INNOVATION- Technological advances through business models

Many people may consider that they are familiar with the term disruptive Innovation. Before attempting to discuss this topic, it would be prudent to first define what is innovation.

Definition of Innovation

The process of translating an idea or invention into either goods/products or services that creates value or for which customers will pay. Here customers can either be external customers or internal customers for example the ICT team can come up with an innovation which allows finance – accounts payable department process payments faster and efficiently reducing the number of people and time spent in processing.

To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers.


Definition Disruptive innovation
Disruptive innovation, a term of art coined by Clayton Christensen, who describes it as a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors

This definition is what derives The theory of disruptive innovation which if applied by an organization, will reduce/eliminate complicated, expensive products and services with simplier and affordable ones.

The Theory of Disruptive innovation demonstrates that thre are actually two different trajectories of performance improvement in every market.

Trajectory one – Sustaining Innovation
This is the trajectory of continual improvement of a product or service that is introduced by companies over time. Although these innovations can be either small and incremental or dramtic breakthroughs they tend to sustain the existing trajectory of performance improvement. Sustaining innovation results in better products that can be sold for higher profits to the best customers.

Trajectory two – Disruptive Innovation
The trajectory of disruptive innovation is made possible because innovation gets started through two types of markets that incumbents overlooks

Low-end footholds
This exists because incumbents typically try to provide their most profitable and demanding customers with ever improving products and services, and they pay less attention to less demanding customers. This opens the door to a disrupter focused(at first) on providing those low-end customers with a “good enough” product.

new-market footholds
This is where a disrupter creats a market where none existed ie they find a way to turn nonconsumers into customers.


Impact of Disruptive Innovation on Value
With disruptive innovation, upstart companies, in an effort to deliver more affordable and accessible solutions are maode to away once dominant firts with alarming regularity, often before the incumbents and their leaders realize that their days are numbered.

Disruptive Technologies And Business-Model Innovations
The starting point of a successful business model is its value proposition: a product or service that helps customers get a job done more effectively, conveniently, and affordably. The role of the managers in this process to bring together a set of resources (people, suppliers, intellectual property – IP, equipment, budget) required to deliver the value proposition. As employees and other resources repeatedly work together to generate the product, processes emerge and become ingrained in the business model. Finally, a profit formula materializes, which defines the pricing, mark-ups, gross and net profit margins, asset turns, and volumes necessary to profitably cover the costs of the resources and processes that are required to deliver the value proposition. Over time, an established business model begins to determine the types of value propositions an organization can and cannot deliver. In other words, once the pieces of a business model have coalesced to deliver a particular value proposition, the causality of events begins to work in reverse—only value propositions that fit the existing resources,processes, and profit formula of the organization can be successfully taken to market

A Typology Of Business Models
In general, business models can be categorized into three types: solution shops, value-adding process businesses, and facilitated user networks.

Solution shops
Solution shops are institutions built to diagnose and solve unstructured problems. Consulting firms, advertising agencies, research and development organizations, and many law firms employ this type of business model. These solution shops deliver value primarily through the people they employ—experts who draw upon their intuition and problem-solving skills to diagnose the cause of complicated problems and recommend solutions—and successful firms are those that can attract the best talent. Solutionshop work tends to be unique for each customer, who is often quite willing to pay very high prices in return.

Value-adding process businesses
These businesses transform inputs of resources, such as people, equipment, raw materials, energy, and capital, into outputs of greater value. The business model is built to do this in repetitive ways so that the organization’s capabilities are embedded more in its processes than in its resources. Although some value-adding process businesses may be more efficient than others, as a whole they focus their attention on process excellence that can deliver high-quality services and products consistently at a lower cost, and they are less affected than other types of businesses are by the variability that occurs when outcomes depend on people’s intuition. Often, results can be guaranteed or redone free of charge. Retailing, restaurants, automobile manufacturing, and petroleum refining are examples of this type of business model.

Facilitated user networks.
User networks are enterprises in which the same people buy and sell and deliver and receive things to and from each other. In these types of businesses, the companies that deliver value and make money are those that facilitate the effective operation of the network and its user transactions. Mutual insurance companies are usernetwork businesses—customers deposit their insurance premiums into a collective pool, and they take claims out of it. Telecommunications companies, which facilitate calls and data transfers among their customers,as well as the online auction site eBay, stock exchanges, and many activities of banks are also user-network businesses.

Conclusion
When moving towards the Disruptive Innovation in an organization, the appropriate solution is to encourage the development of disruptive business models that can assume a greater share of the workload. By coupling technological advances with appropriately matched business models, disruptive innovation can bring about affordability and accessibility to industries ranging from steel making to personal finance. It is also worth pointing out that some organizations have achieved Distruptive innovation through Lean Six Sigma. Lean Six sigma has been the key driver for performance improvement for many companies, including more than 50 percent of the Fortune 500 companies. One CEO from a Fortune 500 copmany pointed out that his company used tactical innovation within the DMAIC methodology to generate the savings needed to fund the strategic or disruptive innovation that was launched at the corporate level.

TECHNOLOGY TRANSFORMING THE INSURANCE INDUSTRY

Across the country every day, Kenyans are increasingly relying on simple technologies as tools for socio-economic transformation. These innovations have in turn stimulated acquisition of new skills, increased civic participation, and access to Insurance, education, healthcare, public safety among others.

Until recently, insurance has been slow to technological change. The insurance industry seemed to be operating in the same old way while new players worked to technologically disrupt banking and financial management, ticketing, travelling, bill payments etc. That era of stability has ended with increasing deployment of advanced sensor technologies and related services. The Insurers and reinsurers are seeking new and innovative systems to improve service delivery and efficiency within their companies.

A report by Institute on International Finance 2016 examining how technology is beginning to reshape the insurance landscape stated that Insurance is now like other major industries, grappling with the risks and opportunities of new technologies. The report further stated that one of the most exciting implications resulting from these developments is expanded insurability for low- income populations. In turn, this is accelerating competition, innovation and change in insurance.

In light of this, Resolution Insurance has adopted this new technology shift. Recently, we have implemented the SSP Pure Insurance System that is aimed at improving service delivery and simplifying product design processes. The system will drastically reduce exhausting and time consuming manual processes. Customers will benefit from an array of services such as web based application processes, digitized quotes among others.

Further, the integrated portal will support full cycle trading for Resolution Insurance brokers thereby enabling Insurance brokers benefit from single solutions claims management, e-trading across the broker community and overall policy administration.

 

In addition to simplified processes, we cannot ignore the mobile world which is a key innovation contributing to reshaping of the insurance industry today. The growing prevalence of mobile phones provides new methods for insurance firms to communicate with and provide products seamlessly at all hours to their customers, encouraging greater engagement and brand allegiance.

The Insurance market is an information based market since there is a lot of information gathering, processing and distribution and thus technology is needed to manage all this information.