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P 14-5: Applying Six Sigma in Manufacturing versus Administration One large company that has been...

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Accounting

P 14-5: Applying Six Sigma in Manufacturing versus Administration One large company that has been successful in applying total quality management (six sigma) princi- ples in manufacturing reports that it has had less success in applying the same techniques in improv- ing administrative functions such as order taking, distribution, and human resources. This company (which has won several quality awards and has significantly improved its product quality) used state-of-the-art six sigma methods to train all of its employees in how to apply six sigma. However, the company has not been able to achieve the same cost reductions and service quality enhancements in administrative areas as it has in the manufacturing area. Assuming that this phenomenon extends to other companies, why do you think that six sigma works better in manufacturing than in nonmanu- facturing/service areas?

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