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Introduction: Six Sigma

Six Sigma is a proven business strategy (structured according to the DMAIC phases) to

measure, analyze and improve the performance in terms of operational excellence.

The methodology, thanks to a wide range of qualitative and quantitative tools, aims to optimize

the manufacturing and transactional processes through reduction of their variability.

The 5 stages in the DMAIC approach are:

DEFINE: Select the appropriate response (the Ys, performance metrics) to be improved

MEASURE: Data must be gathered to measure the response variable Y and possible causes X

ANALYZE: Identify the root causes of defects, defectives or significant measurement deviations whether in or out of specifications. (The Xs, independent variables)

IMPROVE: Reduce variability or eliminate the causes

CONTROL With the desired improvement in place, monitor the process to sustain the improvement

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)X,...,X,X,X ( f=Y k321

Our Outputs (Ys) are determined by our Inputs (Xs). If we know

enough about our Xs we can accurately predict Y without having to

measure it.

Specifically, it is very important to find the following relationship, called

transfer function:

By knowing and controlling the Xs, we can set Y in right place, and

reduce the variability in Y, which decrease the number of defects, cycle

time, etc. We can also eliminate or reduce inspection, test, and rework.

Specifically:

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Example: Surgery Service Process

Patients

Arrival

Pre

Operative

Care

OR Suites

Post

Operative

Care

Out Sourcing Discharge

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Most Often Used Metrics First Case

Rate of first case start on time---percent

First case delay in minutes

Cancellation rate

# of cases completed (Output)

Utilization General (Raw) Utilization

Block (Service) Utilization

Turn Around Time Set up time

Clean-up time

Commonly Used Performance Metrics

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OR (Raw) Utilization

OR (Operating Room) General (Raw) Utilization:

OR07 1st

case

OR-06 1st

case

OR-05 1st

case

OR-04 1st

case

OR-03 1st

case

OR-02 1st

case

OR-01 1st

case

8:00 AM 4:00 PMOperating Room Open Time

Resource hours=total number of hours scheduled to be available for

performance of procedures. (i.e. the sum of open time)

Evening/weekend/holiday hours (EWHH)=hours of case time performed

outside resource hours.

hoursresource

hoursholidayweekendeveningcleansetupORinpatient

_

_//

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Xs vs Ys

Surgery Operation

Facility Utilization

Surgeon Time Utilization

Errors

First Case

Delays

Productivity?

Set up Time Clean Up time

Cancellation

Rate

% First Cases

Start on Time

# of Cases?

Block Utilization

Scheduling

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Business systems and processes

Business system: a business system is defined as a series of actions, activities, elements,

components, departments or processes that work together for a definite purpose. System

effectiveness is a measure of the degree to which a system can be expressed to achieve a set

Of specific (mission) requirements, that may be expressed as a function of performance

(availability, dependability and capability). Subsystems are major divisions of a system that

are still large enough to consist of more than one process.

Process: a combination of inputs, actions and outputs".

"a series of activities that takes an input, adds value to it and produces an output for a customer

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Inputs

Data

Options and ideas

Orders

Specifications

Money

Customer needs

Suppliers

Process 1

Process 2

Process N

Outputs

Products

Services

Remedies

Designs

Root Causes

Training

Others, Etc.

End

Customer

Feedback

A business system

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SIPOC Diagram

(Supplier-Input-Process-Output-Customer) diagram:

Process (X)

Output (Y)

Input Cus-tomer

Sup-plier

1. Supplier: The person or group that provides key information, materials, and/or other

resources to the process

2. Input: The thing provided

3. Process: The set of steps that transforms and ideally, add value to the input

4. Output: The final product of the process

5. Customer: The person, group, or process that received the output

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Example: An academic teaching program of an university department

Suppliers: Book publishers and bookstores, university administrators and facility support people,

lab equipment suppliers, acredation board, tuition payers and so on.

Inputs: Books, classrooms and facilities, labs and facilities, academic program standard, tuition.

Process: The academic program, which includes Curriculum system, degree program setup, courses,

professors, counselors and so on. The process transform inputs to a system of courses, academic

standards (quality control system) and academic records, under this system, incoming students are

processed into graduating students in many steps (course- work)

Output: Graduating students with degrees

Customers: Employers of future students, students themselves.

Key requirements for output: Excellent combination of knowledge for future career, high and

consistent learning qualities, and so on.

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Six Sigma Roles

Black Belt Most effective in full time process improvement position

Studied and demonstrated in 6 Sigma body of knowledge and implementation abilities (through projects)

Could be a team leader responsible for measuring, analyzing, improving and controlling key processes that

influence customer satisfaction and/or productivity growth

Could be a internal consultants, working with a number of teams at once.

Could be a instructor

Could be a mentor for green belts and black belts candidates

Master Black Belts

Typically a full time process improvement positions

Needs both quantitative skills and the ability to teach and mentor

Promoted from black belt who has excellent records on projects

MBB are teachers who mentors black belts and review their projects

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Green belts

Usually not in full time process improvement positions

May be black belt in training, having less experience

Must demonstrate proficiency with core statistical tools by using them in projects

May remain green belts for a few years

Operate under the supervision and guidance of a black belt or master black belt.

Executive Sponsors

Executive sponsorship is a key element in effective 6 Sigma program

Executive leadership sets the direction and priorities for the organization

Executive team is comprised of leaders that communicate, lead and direct the companys overall objectives

towards successful 6 Sigma deployment

Executives typically receive training that include six sigma program overview, deployment strategies and

tools/methods of 6 sigma

Champions

They are typically upper level managers that control and allocate resources to promote process improvements

They are trained in core concepts of 6 Sigma and deployment strategies

They lead the implementation of 6 Sigma program.

They work with black belts to ensure that senior management is aware of the status of 6 sigma deployment

They ensure that resources are available for training and project completion

They are involved in all project reviews

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Process Owners

Key processes should have a process owner

A process owner coordinates process improvement activities and monitors progress on a regular basis

Process owners work with black belts to improve the processes for which they are responsible

Process owners should have basic training in core statistical tools

In some organizations, process owners may be Six Sigma Champions

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Training

Senior Management Sponsorship training

Master Black Belt Candidates Master Black Belt Training

Management Executive training

Black Belt Candidates Black Belt Training

Supervisors Overview training

Green Belt Candidate Black Belt Training

Everyone Six Sigma Orientation Training

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Typical Six Sigma Training (Black Belt)

Week one

Six Sigma overview and DMAIC roadmap

Process mapping

Quality function deployment

Failure Mode and Effects Analysis

Organization Effectiveness

Minitab Usage

Process Capability

Measurement System Analysis

Week Two

Statistical thinking

Hypothesis Testing and confidence intervals

Correlation

Multi-vari Analysis

Regression

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Week three

ANOVA

Design of experiments

Factorials

Fractional factorials

Balanced block designs

Response surface designs

Multiple regression

Facilitation tools

Week four

Control Charts

Control Plans

Mistake Proofing

Team Development

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Functions in Six Sigma Organization

Functions

Structures Options (Who is

performing the function)

Executive Direction Six Sigma Steering Committee

Quality Council

Executive Steering Council

Six Sigma management Six Sigma Manager

Six Sigma Director

Master Black Belt

Process owner Champion

Sponsor

Sponsor Process Owner

Champion

Coach Master Black Belt

Black Belt

Team Leader Trained Supervisor/Facilitator

Black Belt

Green Belt

Team Member Associate with Team Training

Associate with Process Knowledge

Green Belt

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Quality History Influencing Six Sigma

Guru Contribution

Phillip B. Crosby Senior management involvement

4 absolutes of quality management

Quality cost management

W. Edwards Deming Plan-do-study-act

Top management involvement

Concentration on system improvement

Constancy of purpose

Armand V. Feigenbaum Total quality control/management

Top management involvement

Kaoru Ishikawa Cause and effect diagram

Company wide quality control

Next operation as customer

Joseph M. Juran Top management involvement

Quality trilogy

Quality cost measurement

Pareto analysis

Walter A Shewhart Assignable cause vs chance cause

Control charts

Plan-do-check-act

Use of statistics for improvement

Genichi Taguchi Loss function

Signal to noise ratio

Experimental design methods

Concept of design robustness

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Philip Crosby (1928-2001)

Four absolutes of quality management

1. Quality means conformance to requirements (requirements are what customer say they are)

2. Quality comes from prevention (not inspection or sorting)

3. The quality performance standard is zero defects.

4. Quality measurement is the price of nonconformance (sort of quality loss function)

14 step approach to quality improvement:

1. Management Commitment

2. Quality Improvement Team

3. Measurement

4. Cost of Quality

5. Quality Awareness

6. Corrective Action

7. Zero Defect Planning

8. Employee Education

9. Zero Defect Day

10. Goal Setting

11. Error Cause Removal

12. Recognition

13. Quality Councils

14. Do it All Over Again

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Dr. W. Edward Deming (1900-1993)

14 points for managing the improvement of quality, productivity, and competitive position: 1. create constancy of purpose for improving products and services,

2. adopt the new philosophy,

3. cease dependence on inspection to achieve quality,

4. end the practice of awarding business on price alone; instead, minimize total cost by working with a single supplier,

5. improve constantly and forever every process for planning, production and service,

6. institute training on the job,

7. adopt and institute leadership,

8. drive out fear,

9. break down barriers between staff areas,

10. eliminate slogans, exhortations and targets for the workforce,

11. eliminate numerical quotas for the workforce and numerical goals for management,

12. remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit system,

13. institute a vigorous program of education and self-improvement for everyone and

14. put everybody in the company to work to accomplish the transformation

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Seven Deadly Diseases that management Must cure

1. lack of constancy of purpose to plan a marketable product and service to keep the company in business

and provide jobs

2. Emphasis on short term profit

3. Personal evaluation appraisal

4. Mobility of management: job hopping

5. Use of visible figures for management

6. Excessive medical costs

7. Excessive costs of warranty, fueled by lawyers that work on contingency fees

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Dr. Kaoru Ishikawa (1915-1989)

11 points:

Quality begins with education and ends with education.

The first step in quality is to know the requirements of the customer.

The ideal state of quality control is when quality inspection is no longer necessary.

Remove the root cause, not symptoms.

Quality control is the responsibility of all workers and all divisions.

Do not confuse means with objectives.

Put quality first and set your sights on long-term objectives.

Marketing is the entrance and exit of quality.

Top management must not show anger when facts are presented to subordinates.

Ninety-five percent of the problem in a company can be solved by seven tools of

quality.

Data without dispersion information are false data.

Seven tools of quality:

Tools that help organizations understand their processes

to improve them. The tools are:

1. the cause and effect diagram,

2. check sheet, 3. control chart, 4. flowchart, 5. histogram, 6. Pareto chart , 7. scatter diagram

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Dr. Joseph Juran (1904-)

Juran Trilogy

Quality planning

Quality control

Quality improvement

Jurans basics for success

Top management must commit the time and resource for success

Specific quality improvement goals must be in the business plan and include:

The means to measure quality results against goals

A review of results against goals

A reward for superior quality performance

The responsibility for improvement must be assigned to individuals

People must be trained for quality management and improvement

The workforce must be empowered to participate in the improvement process

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Dr. Genichi Taguchi

1. Evaluation of Quality : Quality Loss Function

2. Quality Through Design

System Design

Parameter Design

Tolerance Design

By using Quality Function Deployment (QFD), S/N ratio, Design of Experiment

3. Online Quality Control

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Lean Pioneers

Lean Pioneer Contribution

Frederick W. Taylor Divided work into component parts

Efficiency Expert

Applied scientific method to maximize output

Henry Ford Father of Mass Production

Advocated Waste Reduction

Founded Ford Motor Company

Brought affordable transportation to masses

Kiichiro Toyoda Promoted mistake proofing concepts

Eiji Toyoda Developed an automotive research lab

Taichi Ohno Created the Toyota production system (TPS)

Integrated TPS into the supply chain

Had the vision and focus to eliminate waste

Shigeo Shingo Developed the SMED system

Assisted in the development of other TPS elements

James Womack

Daniel Jones

Well-known promoters of lean methods

Influential English book

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Frederick W Taylor (1856-1915)

Father of Industrial Engineering, Author of The principles of Scientific Management

Time and Motion Study

Stop Watch to Measure Task Speed.

Key Taylor Concepts:

Understand each element of the task

Select, train and develop the worker

Have a division of work between management and worker

Cooperate with the worker to follow the procedures

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Henry Ford (1863-1947)

Key Henry Techniques:

Standardized, interchangeable parts

Interchangeability of workers

Simpler task at each work station

Moving Assembly Line

1896: Built his first automobile

1903: Founded Ford Motor Company

1913: Started the first moving assembly line in Highland Park Plant

1918: Constructed the world largest industrial complex (Rouge Plant)

1919: One of every three cars purchased is a Model T

1927: The 15 million Model T was produced

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Taiichi Ohno (1912-1990)

Father of Toyota Production System,

Key Ohnos Techniques:

Pull system (Supermarket) Muda (7 wastes)

Quick die change (from days to minutes and seconds)

Flexible job assignments

Removing non-value added work

Kanban methods

U-shaped cells

One-Piece flow

Production leveling

Some Interesting facts on early 1950s:

1937-1950: Toyota total production of vehicles: 2685

Ford Rouge Plant: more than 8000/day

9 Japanese workers productivity = 1 American worker

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Shigeo Shingo (1909 - 1990)

Key Books:

Revolution in Manufacturing: The SMED System

Zero Quality Control: Source Inspection and Poka-Yoke System

Non-stock Production

The Toyota Production System from an Industrial Engineering Viewpoint

James Womack and Daniel Jones

Key Books:

The Machine that changed the world

Lean Thinking

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Introduction: Lean methodology

Lean methodology aims to relentlessly identify and eliminate waste in order to maximize speed

and flexibility of business processes in order to deliver what is needed, when needed and the

quantity needed by the Customer.

Terms like "Lean Manufacturing" or "Lean Production" are deliberately not used, as the Lean

method can be widely used in a variety of processes such as production processes and

transactional processes, for example:

Lean Production or Manufacturing for production processes

Lean Office for service/support processes

Lean Design inside the Research & Development process

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Introduction to Waste

What is the meaning of "waste"?

It is the use of resources (time, material, labor, etc.). for doing something that customers are

not willing to pay for, and so it does not add value to the product or service provided.

Eliminating waste improves the value of products and services.

The Lean philosophy highlights 8 macro-categories of waste:

Over-production

Transportation

Defects

Inventory

Waiting

Over-processing

Motion

Underutilized people

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The 8 Wastes Waste

Category Description Root Causes Goals

Overproduction Overproduction happens when a process

produces more products/services than

necessary

Batch Production Production on forecast

Produce just the necessary, in the

right time at the right quality

Defects

Production of defective parts/services that

cant be sold to the Customer. Defects can be scraps or reworks, which add tremendous

costs to organizations

Lack of standardization Lack of training Lack of error proofing system Poor quality of supply Obsolete process

Produce right first time

Stop the process when the defect

occurs, solve the problem in order to

remove it definitively

Transportation Unnecessary transport of materials Batch Production Inefficient layout Long set-up time

Minimize the movement by arranging

processes in close proximity to each

other.

Inventory Too many finished goods in inventory, WIP

inventory, raw material inventory

Batch Production

Long set-up time

Bottleneck

Lack of continuous flow

Push organization

The inventory must be dimensioned

based on the real actual usage and

on the supplier delivery time.

Waiting Customer waiting, waiting for materials,

waiting for employees

Bottleneck

Lack of continuous flow Lack of standardization Unbalanced workload

Maximise "value adding" time to

reduce waiting and to arrange

processes in a continuous flow

approach

Overprocessing Unnecessary processes or operations

Non Value Added activity Lack of investigation of

Customer needs

Activity by tradition

Optimize Value Added activities to

remove all the unnecessary steps

Motion Non Value Added movement of people and

machines

Inefficient layout and process flow

Lack of standardization

Remove unnecessary motion and

improve disposition of material in the

workplace

Underutilized

People

Not using peoples skills, people are seen as a source of labor and are not involved in

finding solutions/opportunities to improve

processes

Lack of involvement

Old Culture

People are the most important

resource in a company: lets involve them as much as possible in

company activities

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Introduction: Lean Thinking approach

1 LEAN

PRINCIPLE

Value

Identify the value of the product/service and

process from Customers point of view

2 LEAN

PRINCIPLE

Value Stream

Map the process value stream to discover and

understand what is value for the Customer

3 LEAN

PRINCIPLE

Flow

Value added processes must be arranged in a

continuous flow without delays and interruptions,

so Lead Time is reduced (ideal situation one piece

flow)

4 LEAN

PRINCIPLE

Pull

Produce to Customer demand (the right product,

in the right time and in the right quantity)

5 LEAN

PRINCIPLE

Perfection

Move from a reactive point of view to a

proactive one, to establish a continuous

improvement process of performance (looking for

new Customer expectations and new possibilities

to eliminate waste)

Every time a Lean expert looks at a process optimization he/she must

consider the 5 Lean Thinking principles:

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The power of Lean Six Sigma LEAN PURPOSE:

Speed and flexibility through

waste identification and

elimination

LEAN SIX SIGMA APPROACH

SIX SIGMA PURPOSE:

Variability reduction

Non value added

activities

reduction/elimination

Variability reduction The final process is fast

and capable

FINISH

FINISH

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Comparison of Six Sigma and Lean

Topic Six Sigma Lean

Improvement Reduce variation Reduce Waste

Justification Six Sigma Quality (3.4 DPMO) Speed (velocity)

Main Saving Cost of Poor Quality Operating Costs

Learning Curve Long Short

Project Selection Various approaches Value Stream Mapping

Project Length 2-6 Month 1 week - 3 month

Driver Data Demand

Complexity High Moderate

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Lean

If major business problems are:

There seems to be a lot of wastes

There is a need to minimize inventories and redundancies

There is a need to improve work flows

There is a need to speed p processes

There are human mistakes

Then, Lean techniques can be used to:

Eliminate wastes

Simplify processes

Increase speed

Improve flows

Minimize inventories

Mistake proof processes

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Six Sigma

If major business problems are:

There are quality issues

There is excessive variation

There are complex problems

There are challenging root cause identifications

There are numerous technical considerations

Then, Six Sigma techniques can be used to:

Minimize variation

Apply scientific problem solving

Utilize robust project chartering

Focus on quality issues

Employ technical methodologies

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Lean and Six Sigma Tools for DMAIC

Define Measure Analyze Improve Control

Value Stream

Mapping

Prioritization

Matrices

Regression

Analysis DOE SPC

Charter-Problem

Statement MSA Studies 5 Whys Kaizen Events Visual Controls

Voice of the

Customer

Capability

Studies

Cause-Effect

Diagrams TOC Control Plans

Communication plans Video taping

Root Cause

Analysis Pull Systems TPM

CTQ Issues Time Studies ANOVA SMED Standard Work

Business Results SIPOC

Multi-Vari

Analysis 5 S

Procedures and Work

Instructions

Benchmarking Collecting Data

Hypothesis

Testing

Work Flow

Improvements Training Requirements

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Linking Projects to Organization Goals

Performance Metrics

Profitability

Productivity

Quality

Performance Dont Do

Low Concentrate on basics

Use problem solving teams

Apply cost management

Engage in customer

innovation

Empowerment

Benchmarking

Strategic Planning

Medium Set goal and monitor them

Use process simplification

Use department

improvement teams

Get middle management

involved

High Benchmark other forms

Empower employees

Communicate strategic

plans

Continuously improve

Do

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When Six Sigma should be used and when it should not be used

Pure Six Sigma approach achieves the best results if it is implemented

by high performance organizations

Medium and low performance companies should consider more basic

techniques to pick up low hanging fruit

A decision on Six Sigma might be negative if the following

conditions exist

The company already has a strong, effective performance and process

improvement effort in place

Current changes are already overwhelming the companys people and

resources

The potential gains arent sufficient to finance the investments

necessary to support Six Sigma

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Six Sigma project focus areas

Focus on project cost savings

Focus on customer satisfaction deliverables

Focus on processes

Focus on problems

Focus on a targeted locations (a good way to introduce Six Sigma)

Focus on design

Focus on supplier processes

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Risk Analysis

SWOT (Strength, Weakness, Opportunity, Threat) Analysis

Basis for strategic planning

Different SWOTs will come up with different strategies

Copy other companys success without analyzing SWOT of your

own company will likely lead to failure

Strength: Something a company is good at, e.g., engineering expertise, skilled workforce,

solid financial position etc

Weakness: Something that the firm lacks or is a condition that put it at a disadvantage, e.g.

poor cash flow, outdated technology, high overhead expenses etc

Opportunity: Something external that the firm can take advantage of, e.g., overseas connection

Threat: Something external that could harm the firm, e.g. law suits

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SWOT Analysis Ideas

Internal Strengths Internal Weaknesses

Core competencies in critical areas

Solid finances

Market leader

Proprietary technology

Cost advantage

Good marketing skills

Management excellence

World class manufacturing

Good technical and work force skills

Superior brand names

Web skills

Too many goals

Lack of strategic focus

Obsolete facilities

Outdated technology

Inexperienced management

Manufacturing problems

Weak marketing skills

Lack of growth capital

Weak cash flow

Inadequate R&D

Can not implement plans

External Opportunities External Threats

Expansion to new markets

Product line can be broadened

Transfer technical skills to new products

Low industry rivalry

Minimal regulatory requirements

New emerging technologies

Positive growth cycle

E-commerce

Global competition

Substitute products are available

Legal and regulatory requirements

Recessionary cycle

New competitors

New technology

E-commerce

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SWOT Analysis Deployment

SWOT requires management to develop an objective view of firm

However, top management tends to be consists of the same type of person, come up with

same kind of analysis and judgment and it is often not accurate or impartial

It is recommended that different kind of people, such as new employee, low ranking employee

and outsiders, be brought into the analysis process