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In: Operations Management

how does walmart maintain quality internal standards,TQM, ISO9000, six sigma? Explain 3 methods and give example....

how does walmart maintain quality internal standards,TQM, ISO9000, six sigma? Explain 3 methods and give example.

please i just need 3 good point for my PowerPoint and examples.
thank you

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Expert Solution

Introduction The economic success of any organization is measured by their net profit. Organizations seek innovative approaches for continuously improving their product and service quality to survive in the global competitive market (Kumar, Antony, Madu, Montgomery, and Park, 2008). In order to yield higher levels of profitability and organizational performance, various techniques such as zero defects, quality circles, total quality management (TQM), and business process re-engineering (BPR) have been widely implemented (Jarell and Easton, 1997). These techniques have their own uniqueness in terms of the development of construct, research methodology, quality management treatment as single or multiple constructs, performance measurement in one level or multiple levels, and data analysis. These differences in techniques have led to mixed results in the correlation of quality management and the organization’s performance (Ittner and Larker, 1977; Kaynak, 2003; Molina, LlorensMontes, and Ruiz-Moreno, 2007).

  1. Six Sigma Methodology and Impacts on Organizational Performance Six Sigma is a popular management methodology that encompasses both management and technical components in a standardized framework of DefineMeasure-Analyze-Improve-Control (DMAIC) for process and product improvement (Snee, 2000). Due its successful implementation in major companies in more than two decades, the benefit of Six Sigma is very well documented (Kumar, Antony, Madu, Montgomery, and Park, 2008). The explicit objective is the key success in a Six Sigma project. Six Sigma explicitly states that it enhances the ‘sigma level’ of performance measures that reflect customer needs and requirements. This objective yields the ultimate reduction in process variation through sustained effort (Harry, 1998; Hahn, Hill, Hoerl, and Zinkgraf, 1999). Other quality improvement efforts that are similar to Six Sigma such as the quality awards, quality certification, and other quality initiatives on the stock prices have been published as well (Goh, Low, Tsui, and Xie, 2003; Przasnyski and Tai, 1999). Likewise, the response in stock price returns for Total Quality Management companies has been extensively studied (Hendrics and Singhal, 1996; Adams, McQueen, and Seawright, 1999; Jarell and Easton, 1997). Wilson (2004) addresses the quantitative benefits of the ISO 9000 and the Baldrige awards. He evaluated the financial data of organizations with ISO 9000 and found that the costs were greater than the benefits.
  2. Critical factors for Quality Implementation Bullington, Easley, and Greenwood (2002) developed a genesis-maintenance framework to understand the critical success factors in the initiation and maintenance phases of quality improvement processes. The theory of genesis-maintenance classifies the critical success factors into early success factors versus maintained success factors. There are some factors that happen to be detrimental to success. In a similar fashion, the framework used in this paper focuses on whether there are factors that contribute to the success or failure of Six Sigma in an organization. By studying organizations that have been successful and continue to be successful in their use of Six Sigma processes, the critical success factors can be identified and the proper emphasis of these factors can be determined. The critical success factors identified during research are management commitment, customer focus, quality culture, supplier relationships, and the other factors listed in Exhibit 5. Hirtz, Murray, and Riordan (2007) report a lack of literature on the importance of leadership on quality advocated by Deming and Juran for successful quality management. Further investigation by the authors on the correlation between leadership style and perceived level of quality management revealed that transformational leadership is positively related to the successful implementation of quality management in administrative/service area, and passive styles of leadership negatively impact efforts to implement quality management.

Phase 1: Identification of Six Sigma Companies

In this phase, 65 Fortune 500 companies were selected from different industrial sectors including finance, healthcare, conglomerates, technology, services, basic materials, consumer goods, and industrial goods. The Six Sigma implementation dates and the stock performance from 5 years prior to the implementation and 10 years after implementation were collected. Due to challenges in retrieving the stock performance data prior to Six Sigma implementation, the list was reduced to 43 companies

Phase 2: Economical Analysis of Six Sigma Companies

One of the methods to establish average minimum attractive rate of return (MARR) is to use the rate of return actually achieved over past particular number of years (White, Case, and Pratt 237,278-295). The financial performances of the 43 companies selected in Phase 1 were evaluated by calculating the future value using the MARR while taking into consideration the inflation rate for these time periods. An initial investment of $1,000 five years before the Six Sigma implementation and a second investment of $1,000 during the year of Six Sigma implementation were assumed


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