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Q 432. In Statistical Process Control what is the advantage of using a Cumulative Sum (CUSUM) chart over a more traditional Individual or X-bar chart? Highlight the advantage using the same data. Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday. All questions so far can be seen here - https://www.benchmarksixsigma.com/forum/lean-six-sigma-business-excellence-questions/ Please visit the forum home page at https://www.benchmarksixsigma.com/forum/ to respond to the latest question open till the next Tuesday/ Friday evening 5 PM as per Indian Standard Time. Questions launched on Tuesdays are open till Friday and questions launched on Friday are open till Tuesday. When you respond to this question, your answer will not be visible till it is reviewed. Only non-plagiarised (plagiarism below 5-10%) responses will be approved. If you have doubts about plagiarism, please check your answer with a plagiarism checker tool like https://smallseotools.com/plagiarism-checker/ before submitting. The best answer is always shown at the top among responses and the author finds honorable mention in our Business Excellence dictionary at https://www.benchmarksixsigma.com/forum/business-excellence-dictionary-glossary/ along with the related term

Q 431. Organizations like Amazon, Airbnb, Uber etc. are prime examples of Platform Economy. With platform based services, they have been able to remove a lot of non-value adding steps from the value chain, still some of them find it difficult to make profits. What is Platform Economy? What are the key drivers for such organizations and how can they leverage Lean Six Sigma to make them profitable? Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday. All questions so far can be seen here - https://www.benchmarksixsigma.com/forum/lean-six-sigma-business-excellence-questions/ Please visit the forum home page at https://www.benchmarksixsigma.com/forum/ to respond to the latest question open till the next Tuesday/ Friday evening 5 PM as per Indian Standard Time. Questions launched on Tuesdays are open till Friday and questions launched on Friday are open till Tuesday. When you respond to this question, your answer will not be visible till it is reviewed. Only non-plagiarised (plagiarism below 5-10%) responses will be approved. If you have doubts about plagiarism, please check your answer with a plagiarism checker tool like https://smallseotools.com/plagiarism-checker/ before submitting. The best answer is always shown at the top among responses and the author finds honorable mention in our Business Excellence dictionary at https://www.benchmarksixsigma.com/forum/business-excellence-dictionary-glossary/ along with the related term

Platform economy is essentially an economy triggered through digital platforms where sellers and buyers can interact and conduct business, provide feedbacks and track delivery and returns The key drivers of platform economy are the following 1. Ensuring supply to manage the demand 2. Seller + Customer satisfaction 3. Global policies and regulations 4. Connectivity 5. Service 6. Pricing 7. Trust and goodwill 8. Positive impact on society and environment Application of Lean Six Sigma in improving profit for platform economy 1. Instill a continuous improvement mindset focused on driving process improvement while minimizing wastage / inefficiencies 2. Use data / simulation techniques to forecast, identify possible future trends and causes 3. Use techniques to confirm various hypothesis and uncertainties. Enable data based decision making 4. Use FMEA to reduce risk and build robust controls 5. Map the value stream and identify areas of improvement to better integrate platform with products, services, buyers and sellers

Economic and social activity facilitated by platforms is broadly defined as Platform Economy. It includes frameworks that facilitate sales, logistics, technology, social activities, etc. These transaction platforms are also called digital matchmakers. Major examples of the platform economy are eBay, Amazon, Facebook, Ola, Udemy, Coursera, etc. The innovation platform offers the technological framework on which other developers can build solutions. Some examples of this are the Microsoft and Ethereum platforms. Alex Moazed explains in his book Modern Monopolies that “platforms don’t own the means of production; they create the means of connection.” (Moazed, Alex (2016). Modern Monopolies. Macmillan. p. 30.) The Platform economy was formalized in the year 2000 with many large organizations adopting the technology and disrupting the traditional business models. Firms like Nokia, Blackberry lost out against firms such as Netflix, Amazon, taking leverage of the platform technology. As of today, private, government, and non-government organizations are increasing their presence on the platform economy. Categories of Platforms. Platforms can be categorized into either investment, transactional, innovation, or integrated. Transactional platforms facilitate different types of online buying and selling. Innovation platforms provide the technological framework on which other developers can create an ecosystem around the platform, Integrated platforms combine both the transactional and innovation aspects into the platform, and investment platforms invest in multiple platform businesses. Key Drivers and Emerging Key Drivers The key drivers and emerging key drivers of the platform economy are the network, the ecosystem built around the network, database management systems, machine learning, artificial intelligence, the cloud, the blockchain, decentralized finance, decentralized autonomous organizations, non-fungible tokens, web3, etc. Use of Lean Six Sigma Methodology in Platform Economy & Key Drivers The Platform Economy ties up the entire chain of an eco-system into a single framework. Master Black Belts have knowledge and experience across various domains in both the manufacturing and service industry across the entire spectrum of the chain. Projects that help in increasing productivity, efficiencies, reducing overall cost, creation of new markets, or even reducing the inefficiencies in the existing markets have all been accomplished by Black Belts. Some of the key drivers and the role played by Master Black Belts are explained below. Optimizing the Network Effect. The success of a platform depends on the Network Effect. A platform becomes powerful based on the network it is able to bring together. Six Sigma methodology can be used to study the network and create an optimal balance between various components of the network. For example, in a buyer/seller network, there has to be a supply and demand balance. This balance is dynamic and Six Sigma methodology through statistical analysis can be used to maintain the balance of the network so as to be able to monetize it in a profitable manner. Creating the Ecosystem. The platform economy works around an ecosystem that is not the platform. This ecosystem consists of various developers, who create applications for the ecosystem. These applications could be around any part of the end-to-end supply chain. Lean Six Sigma methodologies can be used in identifying the elements of the ecosystem and creating relevant applications that maximize the platform economy. Blockchain Technology, NFTs, DeFi, DAOs, etc. The Platform Economy being a centralized technology enables only big players to take advantage of the network, however, the open-source decentralized blockchain technology that enables smart contract functionality and built-in trust has enabled small players, innovators, and entrepreneurs to get on to the platform economy. Take, for example, the Ethereum platform that can attach tangible assets such as property, stocks, art, music, etc to the blockchain. Ethereum is an open-source, decentralized, blockchain technology with built-in trusted smart contracts. Any developer can deploy permanent immutable and decentralized applications. Users can use this technology and enable Decentralized Finance (DeFi), Decentralized Autonomous Organizations (DAOs), Non-fungible Tokens (NFTs), etc. Master Black Belts with their vast experience of working on various projects are uniquely placed to take advantage of the opportunities that are emerging with the decentralized platforms. References https://en.wikipedia.org/wiki/Platform_economy https://en.wikipedia.org/wiki/Ethereum