Six Sigma Philosophies: Carrefour Company

Six Sigma Philosophies: Carrefour Company

Importance of Lean Six Sigma Philosophy

Running a company requires proper management of the company’s environment. This comprises of the internal environment which includes aspects like the company’s working and managerial staff and infrastructure, and the external environment which is made up of factors such as government policy, supply and demand and competition from other niche-dealing companies (George, Maxey, Rowlands, & Upton, 2004). In order to successfully run a company or a service organization, one requires an array of tools and methods that form the basis of how to formulate and implement company rules and regulations. Among these many tools of governance is the Lean Six Sigma method, which dates back to Japan’s Motorola Company in the 1980s (George et al., 2004).

Lean Six Sigma can be described as a managerial concept that traditionally focuses on the elimination of company-related waste like overproduction and extra-processing, and improving the quality of company output. It can be divided into two parts, Lean and Six Sigma, each of which provides an array of tools that allow the concept to achieve its desired results (George et al., 2004). Lean Six Sigma has five phases that are aimed to identify the causes of inefficiencies with regards to processing, services, and final product sales.

The focus of this paper, then, is to subject an established local company to the ideologies set forward by the Lean Six Sigma method in order to establish its viability in improving companies all around the globe. As a case study, the Carrefour Company, a multinational corporation of French origin that specializes in retail, will be put on a dissecting table with the rules and principles of the Lean Six Sigma method forming the tools of dissection (Chuang, Donegan, Ganon, & Wei, 2011). This paper will seek to establish the importance of using these rules and principles in the improvement of an organization’s quality of service delivery.

The first presence of the Carrefour Company was established in Annecy, France, in 1960 as a shop. However, the group was created in the late years of the 1950s by Denis Defforey, Marcel Fournier, and Jacques Defforey (Chuang et al., 2011). It became the first company in Europe to open a supermarket, hypermarket, and department store under a single roof. It also opened a private label line of foodstuffs to be sold in unbranded packages for very low prices. From then on, its growth and international reach have gradually expanded. Carrefour Company now has branches in over 30 countries worldwide and under the management of Alexandre Bompard.

As a multinational company that rakes in billions annually, Carrefour Company has an excellent rapport with its client base (Chuang et al., 2011). The company’s hypermarkets and supermarkets are some of the most popular worldwide, which raises the question, is there any way the company can further enhance and improve its internal and external relations?

Well, from implementing Lean Six Sigma, it definitely can. Lean Six Sigma has an array of tools under its aforementioned facets that will no doubt prove beneficial to Carrefour Company. Under the first facet, Lean, we have Productive Maintenance, Continuous Improvement, 5s System, Set Up Time Reduction, Line Balancing, Standardizing work, Kanban, Value Stream Mapping, and Mistake Proofing (Cambra‐Fierro, & Ruiz‐Benítez, 2011). Six Sigma, on the other hand, includes categories such as Define, Recognize, Analyze, Improve, and Control.

Each of these categories is a tool that smoothens and betters the growth of a company. When used in tandem with each other, they can offer unparalleled benefits to the concerned organization. These benefits include the following:

Improved Employee Involvement

Lean Six Sigma results in increased employee involvement. This can be done through the process of allowing the employees to participate in the development improvement teams that are designed to help them better understand the process of increasing value for their internal and external relations with regards to the company  (Cambra‐Fierro et al., 2011). This involvement of the employees in the implementation of such programs will equip them with a greater understanding and appreciation for the work that not only they do, but those of their fellow employees from their department as well as other departments.

Furthermore, Lean Six Sigma results in herding employees towards a common goal and a unified cause (Cambra‐Fierro et al., 2011). There are several changes and ways offered by the methodologies of Lean Six Sigma that allow employees to rationalize and clarify messages being presented either horizontally or vertically in the strata of the organization’s hierarchy.

In order to do this, Carrefour can encourage the employees to invest time in seminars and company meetings that refine company policies and rules (Pepper & Spedding, 2010). There should be an insistence on employee involvement in team building activities that will forge better, deeper employee relations and appreciation for the workplace as well as for their fellow workmates.

Reduced Costs

Cost reduction is with regard to time, money, and labor. Organizations that incorporate Lean Six Sigma into their activities realize a massive cost reduction in the aforementioned areas of production, distribution, and sales that each form a backbone of what a business is. Less time, low monetary costs, lowered employee resources, can highly have an effect on the company. When management sits backend examines the steps that are involved in the process of production, distribution or sales, or if they understand what is in demand and what is not, they can end up eliminating pointless steps that take up time, money and labor, and end up increasing value of their company’s trade (Pepper & Spedding, 2010). This is easily realized in companies using Lean Six Sigma methodologies. These methodologies, more often than naught, result in increased customer value with a decrease in costs.

Additionally, removing ‘waste’ from the company’s manufacturing processes and activities makes the remaining procedures cheaper (Pepper & Spedding, 2010). This also translates to the costs of meeting customer expectations with regard to the product being manufactured. Furthermore, relying more on preventing defects from occurring than focusing on costly reworks and inspection circles makes it cheaper to resolve product issues at their root of occurrence.

Lean Six Sigma allows individuals to optimize and fix processes that misuse valuable resources and result in the organization getting a bad reputation for defective or lackluster goods and services (Snee, 2010). Empirically speaking, organizations always face rising costs and competition every day. Through Lean Six Sigma, there are several ways in which costs can be contained, and intellectual boons offered to widen the space between the organization and its competition.

In including the Lean Six Sigma techniques in its own rules and regulations, Carrefour Company can save up more costs that would have ended up in needless production, distribution, and sales (Snee, 2010). Manpower can also be saved and redirected elsewhere instead of focusing it on sides of the company that are not that important. A reduction in cost will also result in more high-quality goods being produced as the cost of acquiring quality raw material will emerge (George et al., 2004). Customer value will also spring up exponentially as more people experience quality goods and services in quantities that cannot be found in other similar businesses.

Improved Customer Satisfaction

The methods that make up the Lean Six Sigma philosophy involve a very strong focus on the customer’s requirements and needs and in delivering highly rated products and services to the customers (George et al., 2004). As a byproduct of this first-class treatment, there is increased customer satisfaction. The focus of the company should not only be on improving the product and service that the company offers but also the improvement of customer services like delivery of products, which usually have a strong impact on customer satisfaction (Cambra‐Fierro et al., 2011). An increase in a satisfied customer base increases the business’ market through word of mouth. This has a positive impact on sales, which increases the business’ profits.

Positive word of mouth offered by the customers will attract even more customers. This easily translates to an improvement in the revenue stream (Pepper & Spedding, 2010). Carrefour implements upgraded procedures that aim to improve the quality of not only their products but their customer relations as well. Methodologies offered by Lean Six Sigma have resulted in higher customer satisfaction (Snee, 2010). This has resulted in improved customer loyalty, as it is evident that happy customers are always loyal to places where they make their purchases. To retain these customers, Carrefour’s customer service is impeccable as its products are of the highest quality.

Helps Nurture Leadership Abilities

The Lean Six Sigma equips employees with a thorough comprehension of quantifying and measuring financial benefits (Snee, 2010). One is groomed for leadership roles throughout the training. As part of the training, individuals are taught how to increase company revenue and cut costs while still improving the business process efficiency. Several types of belts are given to participants of this training program at different levels like the black belt, which equips the holder with knowledge of becoming change agents within the organizations (Cambra‐Fierro et al., 2011). They can help in improving processes like the quality of services offered or delivered to customers or the quality of products being manufactured.

Skills offered by Lean Six Sigma, like risk assessment and financial management, are very handy in upper and middle-level management. There is a good chance of employees to climb the ranks to better-paying jobs and more specific jobs that they can be more proficient in, like senior managerial seats.

Ensuring that the workers in any organization have the required discipline and commitment found in leaders and managers will ensure the work environment is always charged with hard work that aims at quantity and quality (Cambra‐Fierro et al., 2011). Most workers in Carrefour Company are knowledgeable in their areas of expertise. This proficiency is well complemented with a staff community that moves as a united unit and is forever on alert over the quality and quantity of goods and services being offered (George et al., 2004). Workers are also instilled with the drive to strive for more advancement in the workplace.

Sustain Quality Development and Expand Business Processes

Employees with certificates that validate their training in both Lean and Six Sigma methodologies have proof that they have the knowledge required to identify characteristics pertaining to the business processes of an organization (George et al., 2004). Steps found in Lean Six Sigma like the DMAIC: Detect, Measure, Analyze, Improve and Control, can allow for positive modifications of the organization’s processes for a better, more efficient, and cost-friendly version of the same process (George et al., 2004). Employees with this knowledge can also carry out reviews of existing processes in order to assess their impact on quality performance.

Skills provided by Lean Six Sigma also allow the workers of Carrefour Company to achieve the level of quality improvement that is continuous (Chuang et al., 2011). These skills allow them to observe processes to affirm closely; there is no deviation from the company’s set mean. If, in any case, there are, then, they have the needed knowledge of what corrective measures to employ in order to return everything to normalcy (Chuang et al., 2011). This is well sought after in ensuring Carrefour Company always runs at peak performance all year round.

Increasing Company Profit

Lean Six Sigma results in an increase in an organization’s profit. Due to an increase in capacity as a result of streamlining processes down to their needed steps, which reduce the need for unnecessary labor (workload per unit), there are more goods and services provided to the customers. These goods and services are of very good quality (Pepper & Spedding, 2010). The speed of production is also increased due to streamlining processes, and there is a substantial increase in the augmentation of the product quality

Through Lean Six Sigma, there is an increase in the revenue generated by steering the organization to provide more of what is in demand but with fewer resources.

An increase in profit allows Carrefour to plow back this profit back to the businesses (Pepper & Spedding, 2010). It is this plowed back profit that forms chunks of currency used to expand the supermarkets and the hypermarkets that are found under the Carrefour umbrella.

Improving Efficiency

Through creating a standard process that is consistent, easy to grasp, operate, and build upon will ensure the company grows faster. Streamlining process results in a surplus of resources that can be allocated to other parts of production. There will be more available resources that can be used elsewhere (Pepper & Spedding, 2010). Increasing the efficiency of production and presentation of goods and services in Carrefour will bring in a large clientele. If this efficiency is consistent, then it will be even easier to sustain this customer body. This will be a helpful way of showing a continuous improvement in the quality of goods and services in the company.

Improving the Effectiveness

The effectiveness of a company goes up when it uses the methodologies of Lean Six Sigma. There are defining customer and customer requirements. Comprehending who the customer is and their purchasing preferences gives one an edge when dealing with that particular customer (Cambra‐Fierro et al., 2011). Measuring what the customer’s value also helps funnel improvement efforts to expand the customer’s service further.

Lean Six Sigma supports an employee in making effective and efficient processes. Attaining high operational quality allows the organization to deliver more high-quality products and services to a growing customer base of progressively pleased customers.

Effectiveness, just like efficiency, builds upon the idea of bettering the company’s strive towards offering the customers a premium kind of service for the then normal cost they have been paying (Cambra‐Fierro et al., 2011). Quality service is something that must be worked upon. Carrefour can do this by understanding what works and what does not work for its customers. When done right, they will grasp the key to holding their customers’ loyalty in their hands for a long time.

Helping in Developing Effective People & Teams

Lastly, Lean Six Sigma gives an infrastructure for an environment of problem-solving that is done by relying on the employees to carry out improvement efforts. The participants find pride in the different kinds of changes the process brings (Pepper & Spedding, 2010). These processes result in teams that are able to coordinate themselves and even coordinate the facets of the organization themselves. Furthermore, there is also an environment of transparency at all levels that make up the organization (Snee, 2010). Creating a culture of truth and trust is central to the proper functionality of Lean Six Sigma. Transparency and honesty promote shared understanding and respect and builds towards the organization’s very own success.

Importance of Lean Six Sigma

As discussed above, there are numerous benefits a company can derive from the use of Lean Six Sigma methodology in its governance. Carrefour is one of the largest and equally successful hypermarket chains in today’s society (Snee, 2010). For decades, it has provided its dedicated customers with an assortment of high-quality goods, products, and food brands. It also attracts a great number of customers through promotions and special offers (Snee, 2010). Carrefour has over a number of hypermarkets and supermarkets all around the world. With this massive area of operation comes the problem of supply chains that, at such scales, can be daunting.

Bearing in mind the dynamics of UAE’s economic growth, it is conceivable to accentuate the part Carrefour plays in world trade (Chuang et al., 2011). There are a number of supplying issues that, through Lean Six Sigma, Carrefour can cement its place as the world’s biggest retailing company. By implementing the DMAIC methodology, Carrefour can root out the problems facing both its IT and supply management challenges.

DMAIC, which we can break down into Define, Measurement, Analysis, Improvement, and Control, gives us the best basis to problem solve the emergent issues of IT and supply management. There are several ways to improve quality assurance. They include:

Defining Areas to be Improved

Making positive changes within the organization can prove useful. Before assessing the employees and making the required changes to better production, defining what qualities are required in the positions the company is trying to fill  (Chuang et al., 2011). This can be done through evaluation of the business, the IT and supply challenges and how they can be fixed, by specialization, for example.

Implementation of Regular Performance Checks

Performance checks keep the company on its toes. If the authority fails to create an environment of active interaction and drive, the workers will become relaxed, and this will affect productivity (Chuang et al., 2011). Included in the performance checks is feedback and suggestions from the team that can help better the situation in both IT and supply management. The employees can give their views over what they think should be fixed, removed, or augmented.

Receiving and Acting Upon Customer Feedback

Customer feedback is very important if one is to better the company. Customers are usually great sources of information (Snee, 2010). Their feedback can inform a business what works and what do not. Customer feedback can be done through surveys, interviews, and questionnaires. Gathered feedback can be put in use when making changes to better the company.

Conclusion

Conclusively, Lean Six Sigma will increase the viability and performance of any organization. The employees are transformed into individuals who can think on their feet and are expert problem solvers. They will have a keen eye that can see product defects, and they will be able to formulate solutions that will help the organization cut down on unnecessary costs while still maintaining the prod.