Six Sigma Approach to Implementing a Major Program of Organizational Change – Amazon
The Issue
The retail sector is among the fastest-growing sectors across the world. Retailers are turning to technology to improve efficiency and gain a competitive advantage. Over the past decade, small and large organizations in the retail sector have been using automation and artificial intelligence for better supply chain management and customer relationship management. Artificial intelligence in the retail industry is also being used in inventory management. However, the high cost of implementing automation and artificial intelligence and the possible disruptions it may create in the organization creates a dilemma among retailers on whether to embrace it. Therefore, there is a need to enlighten organizations in the retail sector on the advantages of using artificial intelligence and automation and the impact it would have on organizational change so that they can weigh the benefits versus the disruptions it would have on the organization and determine whether they should go ahead with plans to embrace technology in operations or not.
How Automation and Artificial Intelligence Will Affect Large Scale Organizational Change
According to Mishra et al. (2019), automation and the use of artificial intelligence to replace human labor can have a substantial negative impact on work-life balance and workers’ conditions, especially when combined with zero-hours contracts that allow employers to increase the workforce during peak days and reduce it during off-peak periods to reduce operational costs. The use of scheduling systems in an organization can intensify work because it is intended to reduce downtime when workers can conventionally relax while completing the tasks assigned to them. The systems also dehumanize the employment relationship by limiting employees’ ability to contest or change schedules. Algorithmic scheduling could restrict the use of scheduling as a system of reward and discipline (Seong Park, 2020). However, the scheduling system could also help organizations by creating discipline among workers. Automation and artificial intelligence will also affect large scale organizational change by increasing the workload handled in an organization because most of the work is being done by machines, thus extending the scale of operations for profit maximization. It will also eliminate the need for customer service management employees due to the application of technologies such as Chatbot, which is an artificial intelligence technology that offers interactions between human beings and machines based on natural language. According to Doshi (2021), the organization would be in a better position to offer more efficient customer service, send notifications about its products and services, improve search, and recommend similar products that meet customer preferences because Chatbots create a new way for businesses and brands to interact with users and maintain regular communication.
Another significant impact of automation and artificial intelligence on large scale organizational change is creating dynamic pricing. According to Christ (2011), dynamic pricing changes a product’s or service’s price to reflect changes in market conditions, such as price increases due to high demand. Retailers use artificial intelligence to grow the customer segment that generates the most profit by providing personalized prices promoting their products through customer recognition, and develop its focus based on the input of the rating of profit-return rate (Bollinger & Hartmann, 2017). Retailers also use dynamic algorithms to determine how much consumers should pay for a specific product and alter prices in real-time by analyzing store prices and competitive product, location, consumer behavior, seasonal and time factors in line with the constantly changing market conditions. This affects individual prices per customer based on customer interests and other factors such as the possibility of such pricing. Retailers may additionally use discounts to increase sales by offering discounts based on customers’ needs. Retailers can use machine learning to determine customer needs.
What Amazon is Doing in this Regard
Amazon is among the retail companies that have leveraged information technology to create a competitive advantage. One of the technologies used in the company’s operations is Kiva. It includes using different types of robot arms to hold and move items in the warehouses (Laber et al., 2020). A smaller robot is used to pick products from the conveyor belts and place them on pallets, and a larger robot is used to lift the pallets and move them to different floors within the warehouse. The larger robot can carry up to 1300 kilograms, thus enabling the movement of large quantities of products within a short time. The company also has a drive unit, which is a robot that lifts shelves and autonomously carries them to a worker to pick up and store products. The most recent development in Amazon’s robots is the Xanthus robot, which is equipped with add-ons to sort and stack containers (Laber et al., 2020). Amazon has also invented an autonomous cart that continuously maps the environment in the warehouse in 3D and transfers the data to other carts. Another important technology is the SmartPc, which is used to package envelope products. The technology has significantly reduced the workforce in charge of placing products in the warehouse. Currently, the company is working on Soft Robotics technology that will improve the robots’ holding and lifting ability (Laber et al., 2020). It has tested grippers from different companies to select the most effective one.
Organizational Change Approach Selection
According to Pentland & Goh (2021), organizational change is when the business or company changes major components of the organization, such as the underlying technologies, culture, internal processes, or infrastructure used to operate. Therefore, an organizational change approach selection is the process of selecting the technique applied in the process of constantly renewing an organization’s structure, direction, and capabilities to meet the continually changing needs of internal and external customers. Morgan & Spicer (2009) argue that there are two approaches to organizational change.
One approach considers change as a project. It assumes that changes are assumed to be a one-time action with a clearly defined beginning and end and transparent and clear results. This approach is used when essential changes in the strategy used in a company are necessary and when there is a need for business model restructuring due to mergers and acquisitions. However, the approach may not be a good choice for most organizations because it includes the risk of a gap between the objectives of the project for change management and the implementation strategy objectives and the possibility that after the end of the project, the company may not be ready for more transformations and evolutionary maintenance of development (Morgan & Spicer, 2009).
The second approach assumes that the company and its employees develop the willingness and ability to change. This is done continuously without time constraints and without considering specific projects. This process focuses on the long-term development of the company and is not a solution to any specific issues but an investment in human resources development (Morgan & Spicer, 2009). The main risk in using this approach is losing connection with specific business issues when abilities develop and there are no changes.
Six Sigma is the organizational change approach selected for Amazon automation and artificial intelligence. The approach is defined as a disciplined, data-driven approach to problem-solving and improvement. It involves using specialized tools and techniques to measure and improve performance (Patel & Desai, 2018). These tools include statistical process control, design of experiments, and root cause analysis. The goal of Six Sigma is to improve the quality of products and services through the application of statistical methods and tools. The focus is on reducing variation and defects in products and services to enhance customer satisfaction.
The implementation of Six Sigma is also founded on the principle of taking an organization to a higher level of Sigma competence by applying statistical techniques and tools. It mainly applies to problems that organizations face in the production process. According to Kesterson (2017), Six Sigma also includes reported and measured financial results utilizes additional, more advanced data analysis tools, uses project management methodology and tools, and focuses on customer concerns. The implementation of Six Sigma requires technical skills and empathy so that every member involved in the organizational change understands what they stand to lose and gain.
The Program’s Goals
One of the program’s goals is to improve the quality of products and services, focusing on reducing variation and defects to enhance customer satisfaction (Paul, 2019). The application of automation and artificial intelligence will help to reduce defects and variation because machines can be programmed to yield specific, consistent results. Maintaining consistency in providing high-quality products that meet customer needs increases customer satisfaction and customer loyalty, thus improving the organization’s profitability. The second goal is to improve the company’s image and credibility by reducing or eliminating common complaints. The company’s image will be enhanced by meeting customer needs and constantly engaging customers to determine whether the products and services offered to meet their needs, thus eliminating complaints.
Next, the third goal is to increase employee productivity. Automation and artificial intelligence will improve employee productivity by giving employees more time to focus on important tasks in the organization. The fourth goal is to reduce expenses. Most organizational expenses are incurred in paying employees. Therefore, automating tasks to reduce the workforce significantly reduces expenses. For instance, most organizations automate customer relationship management tasks by using chatbots and only engage human customer relationship management agents when there are serious customer complaints or issues that require further clarification.
Measuring the Goals
The program’s goals will be measured by tracking the variations and defects in products and services before and after the program’s implementation. This includes tracking customer satisfaction levels, employee productivity, and expenses (Raval, Kant, & Shankar, 2018). In addition, employee productivity and customer satisfaction levels will be tracked to gauge the program’s effectiveness. The program’s financial impact will also be monitored to assess its overall effectiveness by calculating the Return on Investment. Customer satisfaction levels will be measured through the frequency of positive and negative feedback, the number of returning customers, and the occurrence of customer complaints. Employee productivity will be measured based on the number of employees who meet their targets. Finally, expenses will be measured based on the money used to complete activities within the organization versus the profit generated from the activities.
Program Implementation
The program will be implemented in several phases. The first phase will involve identifying the areas in which the company needs to improve. During this phase, top management and employees will collaborate with employees to determine the company’s needs. The needs will then be prioritized based on their urgency and contribution to the organization’s success. For instance, needs relating to customer satisfaction and reducing expenses will be prioritized because they directly affect the organization’s profitability. The second phase will involve selecting the appropriate tools and techniques to address these areas. The third phase will involve the actual implementation of the program, and the fourth phase will include monitoring and adjusting the program as necessary. A team of Six Sigma professionals will oversee the entire process. The criterion for selecting the team will involve determining whether team members have the technical skills required to implement Six Sigma and understand the process of implementing Six Sigma.
The Structure of the Company
The company will be structured to support the goals of the program. This structure will include creating a team of Six Sigma professionals who will oversee the program and establish guidelines and protocols for using the Six Sigma approach. A team leader will also be selected to lead the team in the implementation process and assign tasks to team members to ensure that the program is completed within the specified timeline and within the organizational specifications. The team leader will be required to report the team’s progress in completing the project and request any resources that the team may need to implement the program. Employees will be given training in Six Sigma methods to participate in problem-solving and improvement initiatives. They will be assessed at the end of the training program to ensure that they are ready to implement the program using the Six Sigma method. Accordingly, the company will provide all the resources needed to support the program.
“Buy-in” by the Employees
The employees will be given training in Six Sigma methods to understand the goals of the program and how their work contributes to its success. They will also be given a voice in implementing the program and encouraged to participate in problem-solving and improvement initiatives. The company will also need to provide incentives for employee involvement and success. Incentives will include employee benefits such as healthcare insurance and bonuses, cash rewards, and salary increases. According to Sihabudin (2019), incentives play a vital role in motivating employees to meet organizational goals and increase their commitment to the organization. In the program implementation, incentives will increase employee commitment to the project to ensure that it is successful so that they can receive rewards such as salary increases.
Role of Leadership
The leadership team will provide guidance and support to the Six Sigma professionals who oversee the program (Brun, 2011). It will also monitor employees’ activities to ensure that they are directed toward program success. Leadership will also supervise the employee motivation program to maintain their commitment to the project, guaranteeing its success. They will also need to ensure that employees are given the necessary training in Six Sigma methods and that resources are allocated to support the program. Management must also be willing to make changes to accommodate the program’s goals. Changes may include adjusting employee schedules and assigning employees additional tasks to ensure that the program’s implementation process is completed on time.
The Implications for Organizational Culture
Implementing a major organizational change program will significantly impact the company’s culture. It will alter how things are carried out in the organization by altering employee assumptions, beliefs, and interactions, which play a significant role in forming its environment. For instance, automation will reduce the workforce and limit human interaction within the organization and may create an assumption that the automation of processes dictates the organization’s productivity that employees initially completed. Employees will be given training in Six Sigma methods to understand the goals of the program and how their work contributes to its success (Stankalla, Koval & Chromjakova, 2018). They will also be encouraged to participate in problem-solving and improvement initiatives. The company will also need to provide incentives for employee involvement and success.
References
Bollinger, B. K., & Hartmann, W. R. (2017). Information vs automation and implications for dynamic pricing. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2543149
Brun, A. (2011). Critical success factors of Six Sigma implementations in Italian companies. International journal of production economics, 131(1), 158-164.
Christ, S. (2011). Dynamic pricing. Operationalizing Dynamic Pricing Models, 23-62. https://doi.org/10.1007/978-3-8349-6184-6_3
Doshi, J. (2021). Chatbot user interface for customer relationship management using NLP models. 2021 International Conference on Artificial Intelligence and Machine Vision (AIMV). https://doi.org/10.1109/aimv53313.2021.9670914
Kesterson, R. K. (2017). The intersection of organizational change management and Lean Six Sigma. The Intersection of Change Management and Lean Six Sigma, 73-76. https://doi.org/10.1201/9781315116891-12
Laber, J., Thamma, R., & Kirby, D. (2020). The Impact of Warehouse Automation in Amazon’s Success. IJISET – International Journal of Innovative Science, Engineering & Technology, 7(8).
Mishra, A., Cao, C., & George, J. (2019). IT induced employment irregularities and deskilling: Impacts on temporary worker welfare. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3524085
Morgan, G., & Spicer, A. (2009). Critical approaches to organizational change. Oxford Handbooks Online. https://doi.org/10.1093/oxfordhb/9780199595686.013.0012
Patel, M., & Desai, D. A. (2018). Critical Review and Analysis of Measuring the Success of Six Sigma Implementation in Manufacturing Sector. International Journal of Quality & Reliability Management.
Paul, S. (2019). Managing Development Programs: The Lessons of Success: The Lessons of Success. Routledge.
Pentland, B. T., & Goh, K. T. (2021). Organizational routines and organizational change. The Oxford Handbook of Organizational Change and Innovation, 338-363. https://doi.org/10.1093/oxfordhb/9780198845973.013.16
Raval, S. J., Kant, R., & Shankar, R. (2018). Lean Six Sigma Implementation: Modelling the Interaction among the Enablers. Production Planning & Control, 29(12), 1010-1029.
Seong Park, H. (2020). Real-time scheduling method for Middleware of industrial automation devices. Scheduling Problems – New Applications and Trends. https://doi.org/10.5772/intechopen.86769
Sihabudin. (2019). The importance of providing incentives and motivation in improving employee performance. International Journal of Science and Society, 1(1), 91-97. https://doi.org/10.54783/ijsoc.v1i1.116
Stankalla, R., Koval, O., & Chromjakova, F. (2018). A review of critical success factors for the successful implementation of Lean Six Sigma and Six Sigma in manufacturing small and medium sized enterprises. Quality Engineering, 30(3), 453-468.
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Question 
Overview:
The goal of your Final Paper is to describe how you would implement a major program of organizational change as if you were a senior leader of the company, using one of the following approaches:
Six Sigma Approach to Implementing
- An organization-wide initiative to improve Diversity, Equity, and Inclusion
- Where work allows, moving from a traditional “in-office” environment to remote work or a hybrid model (partly in-office, partly remote).
- Adopting CSR (Corporate Social Responsibility) as a Key organization-wide
- Increased automation in processes and the increase in the use of Artificial Intelligent
- Optimizing Digital communications (all forms of video, audio, and text-based communications) to replace or enhance traditional
- Six Sigma
- Organizational-wide, continuous Learning
- Kaizen
- Systems Thinking
Additionally, the final paper’s purpose is to draw upon as much of the course material as possible, specifically from Units 5 -7.
In this assignment, you will create a draft of your final paper.
Instructions:
The requirements for your paper are:
- Research the initiative you select and the business:
- What is at issue here?
- How will it affect large-scale organizational change?
- What is the company you selected doing in this regard?
- Answer/address these questions:
- What is meant by organizational change approach selection (i.e., DEI, CSR, Six Sigma, etc.)?
- What specific goals do you hope to achieve with this program? For example, improve Return on Investment, Market Share, reduction in errors, etc.
- How will these goals be measured?
- How will the program be implemented?
- How will the company be structured to achieve these results?
- How will “buy-in” by the employees be gained?
- What is the role of leadership/management in the implementation of your selected organizational change approach selection?
- Discuss the implications for organizational culture.
- It is important that you are as specific as possible and that you use terms and information gleaned from the text and from research! All research citations must be in APA.
- Specific, real-world examples are preferred where possible (discovered by research). For example, how did a company like Continental Airlines restructure themselves? How do these examples reflect the concepts we are studying? If you must make assumptions to supplement the material you find, and if insufficient real-world examples exist, then please identify when you have done so.