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SRINIVAS VALLURI

Six Sigma And Value Innovation( Blue Ocean Strategy)

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Offlate, I see many buisness reviews/companies are talking about " Red Ocean and Blue Ocean Strategy" 

( to give a brief note, red ocean is all about competing in existing market place, beat the competition, segment existing customer etc, and where as Blue ocean talks about creating uncontested market space, make the competition irrelevant, value innovation etc.  ex: invention of Ipod).

An organisation, which thinks in the above lines, how do you implement six sigma methodology to help in value innovation and to make the competion irrelevant? 

Please share your views.

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One way of relating Six Sigma with Blue Ocean Strategy is by working with hypotheses at different stages.

I have marked this response with Examples in Green and Hypotheses in Blue.

So if I want to use Blue Ocean Strategy (make competition irrelevant), the first question is - what are the possible options I have? If the possible options are A, B, C, and D. Some more questions I need to answer are -

  • If I have chosen one amongst them (let us say,C), how do I design a product that meets the objectives that I have visualized (DFSS). Will X product design meet the objectives? Is Y likely to meet the objectives and so on.

  • When we design, are we documenting it in a manner that shows what hypotheses have been tried during design and where we have failed? (Thomas Alva Edison could do it with individual brilliance, but we have many experimenters who are bad at firstly designing the experiments, secondly in recording them and lastly in analyzing and infering from them).

  • If X product is the best, Have I optimized my design (part of DFSS) with simulations with best estimates of values that factors can assume?

  • Do I have systems in place that shall help in realigning during the prototype development phase if I realise that the design is not really moving in a meaningful direction (Is the concept still making business sense?)

  • How do I choose among these? Which option is the best? Is there really a Voice of Customer that supports our option? One of the most hyped products which was a huge disappointment at its first launch was the IRIDUM (the satellite phone). It was very much Blue Ocean strategy (uncontested market space) but unsupported by VOC.

Even if our new design is successful, let us say one like iPod, how do we keep listening to customers and keep doing DMAIC and DMADV as relevant to keep competition at bay? Is premium pricing the best approach or is it time to get to competitive pricing (These are some more hypotheses that require VOC and forecasts)

To me the BLUE OCEAN STRATEGY is about starting with hypotheses at a high level. If we want to reduce risks we would like to use several of the Six Sigma techniques.

I am sure there are many ways of responding to Valluri's question. Ideas and comments are welcome.

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