The Book Offers Details On Amazon’s Business Philosophy The creation of those types of tools and determining where best to apply them is the focus of both Lean and Six Sigma. I’m very detail-oriented by nature, so I have the right instincts to be an acceptable operator, but I didn’t have the tools to create repeatable processes and to know where those processes made sense.” That is something I had to learn about.”īezos further explained: “Well, by “learn” I mean I literally learned a bunch of techniques, like Six Sigma and lean manufacturing and other incredibly useful approaches. It’s one of the reasons that we have been successful for customers. ![]() He told HBR, “Something we haven’t talked about, but that is super important in our culture, is the focus on defect reduction and execution. Company founder Jeff Bezos himself made it clear in a 2007 Harvard Business Review interview where he mentioned Six Sigma. One of the main selling points of the new book, called “ Working Backwards: Insights, Stories and Secrets From Inside Amazon,” is that it offers insight into a company that is often secretive about how it conducts business.īut Amazon’s use of Lean Six Sigma philosophy and tools is not a surprise. A Focus on Deficit Reduction and Execution It’s also the focus of a new book from insiders about how Amazon leaders built the company for success. The working backwards approach mirrors the teachings of Lean Six Sigma, which focuses on understanding customers’ needs and then meeting them. The company reached $386 billion in sales in 2020, a 37% increase from 2019. That philosophy has helped Amazon grow from 600 employees in 1997 to about 1.3 million. Success at Amazon has involved always keeping the customer in mind. They used the same approach when developing a new product, even going as far as writing the press release about the product’s release before they even started developing it. Amazon uses the term to describe the process of setting an objective based on a desired customer experience and then working backwards through the process to make that happen. ![]() “Working backwards” helped achieve that goal. Amazon emerged as the company that made the right moves to leverage that technology into business success. But that technology was available to a lot of companies in the 1990s. So, while my jaded side would like to dismiss the “Six Sigma” concept as a fad that’s just lasting a bit longer than others, I can’t quarrel with success.The technology behind the creation of the internet allowed Amazon to grow from an online bookseller to the go-to shopping spot for thousands of items. Sonora Quest Laboratories has achieved tremendous success since implementing Six Sigma in fact, the company’s COO is convinced that it would not be where it is today without Six Sigma. This month, our Lab Profile looks at Sonora Quest Laboratories and how Six Sigma has enabled the operation to reduce errors, improve processes, and save money (see page 34). Another important component of Six Sigma is understanding customer needs to improve and reinvent organizational processes. This measurement standard is still used, but many insist that Six Sigma is more a way of doing business than a statistical analysis. Put another way, only 3.4 defects would be allowed per million opportunities. They determined that to achieve Six Sigma, 99.99966% of what they did had to be without defects. Most agree that the term “Six Sigma” was coined in the early 1980s by one or more engineers at Motorola who wanted to measure and improve the company’s operational performance by identifying and eliminating defects in the manufacturing process. I soon learned that Six Sigma has been around for a while some say the ideas upon which the system is based date back to the 18th century. Everywhere I turned, there seemed to be discussions about the success of this quality-management system. ![]() So it was in this frame of mind that I pondered all that I was hearing about Six Sigma. I took what was useful from each system and ignored the rest. As you can imagine, by the third time this happened, I simply wondered how long the latest management “flavor of the month” would last. ![]() However, in most cases, within 2 years, the top executive would be out the door-along with his way of doing business that was no longer all the rage. And as always, I would commit to adopting this latest philosophy. Each new executive team at my former company had its own management system, complete with a cute name or clever acronym and a popular book on management that was currently flying off the shelves of bookstores everywhere. My previous job had left me somewhat jaded when it came to trendy management philosophies. When I first heard the term “Six Sigma” a week or so after joining CLP, my eyes rolled skyward and I silently wondered how long this newfangled idea would last.
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