The Finance and Six Sigma Quality Connection Research Paper

The Finance and Six Sigma Quality Connection - Research Paper Example According to the study conducted while operations management was being carefully studied to play the efficient, enabling function to other business functions, the field had been enabled by several highly-interrelated business functions. Pursuant to any operational implementation, cost analyses, which are tasked to the financial department, are used to assess the implementations’ â€Å"financial spin-offs†. Operation management’s Six Sigma Quality was not exempted from these analyses. Businesses planning to employ or implement the Six Sigma Quality have to set an acceptable cost reduction ratio, estimate the incurring implementation costs and resultant cost-savings, and reconcile these figures to postulate or invalidate the operational implementation. Collectively, the organization does not just want to see the improvement in operational efficiency, quality, or quantity; it also wants to make sure that Six Sigma Quality’s implementation is cost-wise and a s ignificant cost-saver. The recent craze in adopting the Six Sigma Quality on other business functions, such as financial management, is rapidly progressing. For instance, Ansari et al.’s â€Å"Application of Six-Sigma in Finance: A Case Study† explored the nature of the applicability of Six Sigma Quality to the five core processes of defining, measuring, analyzing, improving, and controlling. In the financial process of department-based financial reporting, the define phase implicates the necessity and importance of a ‘standardized process’ that is cleared of ‘non-value added steps.... cost and financial planning for all business divisions,† and â€Å"identifying all non–value added and confusing steps to reduce reporting cycle time and cost† (5-6). In other words, in the financial process of department-based financial reporting, the define phase implicates the necessity and importance of a ‘standardized process’ that is cleared of ‘non-value added steps.’ Measure. In this phase, it is crucial that a clear documenting and consistent monitoring covers the department-based financial reporting process to avert from providing â€Å"opportunities for non–value added activities such as errors, excess movement, additional IT training and maintenance costs, inconsistent data, and waiting time† from decrementing the process value (Ansari et al. 6). Thus, the documentation and monitoring of the financial process safeguards the whole process through providing substantial data or figures to measure progress and conduc t the next analysis phase. Analysis. This phase should be able to pinpoint the probable operational inefficiencies in the financial process. These inefficiencies may include but are not limited to the â€Å"lack of complete firm cost and financial plans,† as well as the existing, â€Å"multiple sources of data and databases† (Ansari et al. 7). Overall, this phase should be sufficient in enlightening the finance department the nature of the inefficiencies involved, the inherent levels of impact, the sector most affected by the impact, as well as specific process-parts for improvement. As soon as these things are shed light and well-understood, the phase makes room for the next phase, the improvement phase. Improve. This phase is relatively a two-fold phase; while it looks at the direct or actual improvements conceived out of the previous