Six Sigma has been instrumental in Amazon's growth and success. Amazon began implementing Six Sigma principles in 1999 focused on operational excellence through continuous process improvement and efficiency. This included hiring Six Sigma Black Belts and using DMAIC methodology. As a result, Amazon saw greater inventory management, increased efficiency, and stronger process control. Statistical data shows Amazon's revenues increased dramatically after implementing Six Sigma, growing from an online bookstore to a global retail leader. Six Sigma remains deeply engrained in Amazon's culture of optimization and customer centricity.
Six Sigma has been instrumental in Amazon's growth and success. Amazon began implementing Six Sigma principles in 1999 focused on operational excellence through continuous process improvement and efficiency. This included hiring Six Sigma Black Belts and using DMAIC methodology. As a result, Amazon saw greater inventory management, increased efficiency, and stronger process control. Statistical data shows Amazon's revenues increased dramatically after implementing Six Sigma, growing from an online bookstore to a global retail leader. Six Sigma remains deeply engrained in Amazon's culture of optimization and customer centricity.
Six Sigma has been instrumental in Amazon's growth and success. Amazon began implementing Six Sigma principles in 1999 focused on operational excellence through continuous process improvement and efficiency. This included hiring Six Sigma Black Belts and using DMAIC methodology. As a result, Amazon saw greater inventory management, increased efficiency, and stronger process control. Statistical data shows Amazon's revenues increased dramatically after implementing Six Sigma, growing from an online bookstore to a global retail leader. Six Sigma remains deeply engrained in Amazon's culture of optimization and customer centricity.
Six Sigma has been instrumental in Amazon's growth and success. Amazon began implementing Six Sigma principles in 1999 focused on operational excellence through continuous process improvement and efficiency. This included hiring Six Sigma Black Belts and using DMAIC methodology. As a result, Amazon saw greater inventory management, increased efficiency, and stronger process control. Statistical data shows Amazon's revenues increased dramatically after implementing Six Sigma, growing from an online bookstore to a global retail leader. Six Sigma remains deeply engrained in Amazon's culture of optimization and customer centricity.
I. METHODOLOGY OF SIX SIGMA There are two methodologies of six sigma such as- DMAIC & DMADV:- 1. DMAIC The set of six sigma methodologies that is most applicable to the manufacturing side of a product or service, DMAIC includes these project stages:-
Define- Address the identification of specific processes to be examined.
Measure- Record data and use metrics to track effectiveness and evaluate efficiencies. Analyze- Utilize critical thinking skills to review data and clarify goals. Improve- Create changes in business processes geared toward improvement and better alignment with corporate goals. Control- Build a system of checks and adjustments for ongoing improvement in production processes.
2. DMADV The complementary set of six sigma processes that is most applicable to examining and improving the customer relations side of a company, DMADV includes these project stages:
Define- Address customer needs in relation to a product or service.
Measure- Involve the use of electronic data collection to measure customer needs, response to product, or review of services. Analyze- Utilize metrics to evaluate areas where product or service can be better aligned to customer goals and needs.
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This work is licensed under a Creative Commons Attribution 4.0 International License Priya Sharma, International Journal of Research in Management, Economics and Commerce, ISSN 2250-057X, Impact Factor: 6.384, Volume 07 Issue 08, August 2017, Page 131-135
II. CASE STUDY OF AMAZON.COM
Amazon is such a shining example of six sigma, in fact, that the company would certainly serve well as an inspiration for your own business. Six sigma is rarely mentioned by name in amazon’s annual reports and press releases, yet the methodology is entrenched in the culture of company. History of Amazon.Com When Amazon.com was first launched on July 5,1994 by Jeff Bezos, it was an online bookstore which others thought doomed to fail. Many critics thought Jeff Bezos crazy when stocked his online bookshop with one million book titles. The e-business has since expanded to sell music, electronics, videos, pharmaceuticals, pet supplies, home improvement products and groceries. Not to mention its evolution as a market place for Third party sellers, A supply chain management expert for business customers and Amazon Web Services (AWS) for networking infrastructure. Over the 2000-2010 decade, Amazon has developed a customer base of around 30 million people. Vital Status PrimeFunction: Amazon.com is American based multinational electronic commerce company. Founder: Jeff Bezos (founded in1994 in a garage in Seattle, launched online in 1995) Vision: ‘Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online’ StartUpCosts: $10,000 savings (personal equity), $44,000 bank loan, $245,000 borrowed from family. After 1996, an additional $1 million was raised from 20 or so angel investors(venturecapital)
III. SIX SIGMA APPLICATIONS IN AMAZON.COM
Ever since beginning life as an online bookstore, Amazon.com has drastically expanded its product range. They have even implemented innovative practices like same-day delivery, set to reach new heights for efficiency with automated drone delivery. But have you ever wondered how Amazon became one of the largest online retailers in the world? The answer is SIX SIGMA. Six sigma methodology is in the culture of company.Six sigma is part of the operational excellence program that began in 1999 when Jeff Wilke joined Amazon as VP of operations. He came from Allied signal and his background in six sigma made him the perfect choice to drive efficiencies in operations. “Operational excellence: To us, operational excellence implies two things: delivery continuous improvement in customer experience and driving productivity, margin, efficiency, and asset velocity across all over businesses.” 1999 Annual Report of Amazon.com How Amazon have Incorporated Six Sigma into their Work The concept of six sigma was developed as a way to cut costs in business manufacturing processes. However, its use is not exclusive to the sphere of goods manufacturing, as the online retailer and distribution company Amazon.com, one of the world’s largest online retailers has also implemented the six sigma way of business into its strategy.
Operational Excellence- Six sigma has always been firmly rooted in Amazon’s company culture. With around 2000 items ordered every sixty seconds, Amazon can’t afford to let standards slip. As far
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This work is licensed under a Creative Commons Attribution 4.0 International License Priya Sharma, International Journal of Research in Management, Economics and Commerce, ISSN 2250-057X, Impact Factor: 6.384, Volume 07 Issue 08, August 2017, Page 131-135 back as 1999, the company began a program of Operational Excellence aimed at improving company processes. Amazon defines Operational Excellence in two ways: Firstly, to deliver continuous improvement for customer experience. Secondly, to drive productivity, margin, efficiency, and asset velocity across the entire corporation. Hiring ‘BEST & BRIGHTEST’- To achieve their goal, Amazon set about hiring the best and brightest – A COMMON SIX SIGMA TACTIC. They took things one step further by training their employees as Six Sigma Black Belts. Six Sigma methods- By using six sigma methods, Amazon was able to reduce variation by actively seeking it out using DMAIC, Root Cause Analysis, and similar tools. They reduced waste by cutting spending, eliminating non-value- adding process stages, and cultivating a Kaizen-based company culture. Outcome- The outcome of six sigma was a completely different company with greater inventory management, increased efficiency, and stronger value stream control.
IV. IMPACT OF SIX SIGMA ON AMAZON.COM
Amazon is devoted to excellent customer service and experience. Before they revamped their business operations at the start of the millennium, they were indistinguishable from any other online bookstore. Using Six Sigma they have made rapid progress in becoming a global online retailer. With a culture focused on continuous improvement and greatest efficiency possible, Amazon has taken over the world. In doing so, they have emerged as a technology giant to stand alongside the likes of Apple or Microsoft. The impact of Six Sigma on Amazon.com can be seen through the statistical representation. Amazon Revenues– 1995 to 2014 Amazon.com revenues have increased manifold after implementing six sigma in1999 and that can be seen through the data given below:
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V. CONCLUSION Six Sigma being a well-known term in the industrial sector today, it helps the management in various ways such as; it is a total management commitment, philosophy of excellence, customer focus, process improvement and the rule of measurement rather than gut feel. It is about making every area of the organization able to meet better the changing needs of the customers, markets and technologies- with benefits for employees, customers and shareholders. As we all know, Six Sigma has some loopholes also, as it is time consuming, requires skilled man force and some critics also say that there is nothing new in Six Sigma. But the benefits offered by Six Sigma overshadow all loopholes and make it an adequate concept to improve the process. So, after going through the case study of amazon.com, we can say that Six Sigma is a key to upgrade the business.
