6. Further Issues for Implementation of Six Sigma
6.2 IT, DT and Six Sigma
(1) Emergence of DT
It is well known that the modern technology for the 21st century is regarded as based on the following 6Ts. They are:
IT : Information Technology BT : Bio-Technology
NT : Nano-Technology
ET : Environment Technology ST : Space Technology
CT : Culture Technology
We believe that one more T should be added to these 6Ts, which is DT, data technology.
Definition of DT (data technology): DT is a scientific methodology which deals with
• Measurement, collection, storage and retrieval tech- niques of data;
• Statistical analysis of data and data refinement
• Generation of information and inference from data
• Statistical/computational modeling from data
• Creation of necessary knowledge from data informa- tion
• Diagnosis and control of current events from statistical models and,
• Prediction of unforseen events from statistical models for the future.
DT is an essential element for Six Sigma, and in general for national competitiveness. The importance of DT will rapidly expand in this knowledge-based information society.
(2) Difference between IT and DT
Many believe that DT is a subset of IT. This argument may be true if IT is interpreted in a wide sense. Generally speaking, however, IT is defined in a narrow sense as follows.
Definition of IT (information technology): IT is an engi- neering methodology which deals with
• Presentation and control of raw data and information created by DT;
• Efficient data/information and image transmission and communication;
• Manufacturing technology of electronic devices for data/information transmission and communication;
• Production technology of computer-related machines and software; and,
• Engineering tools and support for knowledge manage- ment.
Korea is very strong in IT industries such as the Internet, e- business, mobile phones, communication equipment and com- puter-related semiconductors.
The difference between DT and IT can be seen in the infor- mation flow as shown in Figure 6.1.
Figure 6.1. Information flow of DT and IT
DT is mainly concerned with data collection, statistical analy- sis of data, generation of information, and creation of neces- sary knowledge from information. However, IT is mainly con- cerned with data/information/image transmission and commu- nication, and development of engineering devices and comput- ers for information handling. Also IT is concerned with engi- neering tools for knowledge management. Generally speaking, DT forms the infrastructure of IT. Without DT, IT would have limitations in growth. DT is software-oriented, but IT is hard- ware-oriented and systems-oriented. Without IT, DT cannot be well visualized. IT is the vehicle for DT development.
Table 6.1 shows the differences between DT and IT in terms of characteristics, major products, major study fields and advanced levels in Korea.
Table 6.1. Comparison of DT and IT
Contents DT IT
Major characteristics
Major products
Major study fields
Advanced
level of Korea Low High
Software-oriented, scientific approach for data analysis, statistical modeling for future prediction
Software such as DBMS, CRM, SPC, ERP, Statistics, Data-mining, Simulation, and Cryptography
Mathematics, Statistics, Information Science, Computer Science, Management Science
Hardware & systems-oriented engineering approach for transmission &
communication of data/information/image
Communication systems and auxiliary software, Computers, Semiconductors, Electronic devices, Measuring and Control devices
Computer engineering, Electronic/
communication engineering, Control &
Systems engineering
Fact Data
collection DT
Statistical analysis of data and data
refinement
Generation of information and inference from data
Creation of knowledge from
information
IT Fact
Data/information/image transmission and
communication
Development of engineering devices and computers for
information handling
Engineering tools and support for
knowledge
(3) Knowledge triangle
It is said that the 21st century is the knowledge-based infor- mation society. We can think about the knowledge triangle as shown in Figure 6.2 in which DT and IT play important roles.
Figure 6.2. The knowledge triangle
In each step, the following activities are usually implemented.
Table 6.2. Major activities in each step of knowledge triangle Step
1
2
3
4
Major Activities
Measurement, Data refinement, Sampling design, Design of experiments, Meta-data management, Gauge R&R test
Data analysis and modeling, Data-mining, Data redefinement for application, Diagnosis and control, Prediction modeling
Output summary, Valuation, Remodeling, Information clustering
Knowledge generation from Information clustering Information
Data Knowledge
Fact
2. DT
1. DT
4. God’s Kingdom
3. DT & IT
Wisdom
(4) Scope of DT
The scope of DT can be divided into three categories: man- agement, multiplication and execution. Management DT comes first, and then multiplication DT, and finally execution DT pro- vides valuation and profit generation for the organization con- cerned. The scope can be shown sequentially as in Figure 6.3.
Figure 6.3. Scope of DT
(5) Loss due to insufficient DT
A weak DT can result in big loss to a company, to a soci- ety and to a nation. Some examples of national loss due to insufficient DT are as follows.
Economic crisis in 1997:
Korea faced an economic crisis in 1997, and the Interna- tional Monetary Fund helped Korea at that time. The major reason was that important economic data, so-called Foreign Exchange Stock (FES) had not been well taken care of. Had the collection of FES, trend analysis of FES, and prediction of FES been well performed by good DT, there would not have been an economic crisis.
Management DT
Multiplication DT
Execution DT
Valuation &
Profit Generation
Acquisition, Storage, Retrieval Basic analysis of data Creation of information
Minute analysis, Re-explanation of results obtained, Information is multiplied and regenerated by using DT, Data-mining plays large roles, Knowledge is created.
Execution of generated knowledge, Data/information transmission, Higher value & bigger profit.
Inherent political dispute in politics:
Politics is perhaps the most underdeveloped area in Asia including Korea. Non-productive political disputes hamper development of all other areas such as industry, education, culture and so on. If people’s opinion surveys are properly conducted by DT, and political parties just follow the opinion of the majority of people, politics can become more mature, and can assist all the other areas to become more developed.
Big quality cost:
The quality costs of most companies in Asia including Korea make up about 20% of the total sales value. The quality costs consist of P-cost for prevention, A-cost for appraisal and F-cost for failure. The ratios of these costs are roughly 1%, 3%, and 16% for P-cost, A-cost, and F-cost, respectively. If DT is well utilized for the data analysis of quality cost, the quality cost can be reduced to about 10% of total sales value. Perhaps the opti- mal ratios of these costs would be 3%, 2%, and 5% for P-cost, A-cost, and F-cost, respectively. Actually, Six Sigma project teams are very much aimed at reducing quality costs.