Six Sigma Process Improvements Sustainability Research Paper

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The organization in question is American Express (NYSE: AXP), which is a credit card firm. The majority of the company's business is in issuing consumer credit cards, which are used to purchase a wide variety of goods and services. According to the company's latest annual report, it is also engaged in network services, merchant acquisition and processing, fee services, travel-related services, expense management products and stored value/prepaid products. The company operates globally, but the bulk of its revenues come from developed markets and in particular North America. The company had revenues of $32.8 billion in 2015, down from 2014 levels, and net income of $5.163 billion, also down from prior years. The company's ROE and ROA both declined in 2015 relative to the two prior years (2015 Annual Report).

Six Sigma Analysis & Recommendation

Six Sigma is a management technique that is primarily used to improve on processes, either in manufacturing or services, in order to reduce the error rate. Over time, the objective is to reduce the error rate to almost nil. As described, the "fundamental objective of Six Sigma is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects (iSixSigma.com, 2016). Initially Six Sigma projects are fairly big in nature, because there are major issues that can be identified with an organization's processes. Over time, Six Sigma projects become more incremental in nature, finding minor ways to make improvements to existing processes, until the objective of near nil error rates is achieved.

American Express has a few core competencies that distinguish it. One is marketing, because of the importance of ensuring that American Express cards are useful in as many locations as possible.

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Six Sigma can be used in marketing. Direct marketers in particular have found Six Sigma techniques helpful, because of the nature of feedback that they receive and how it allows them to easily quantify return rates. Amex does direct marketing, and therefore can apply Six Sigma techniques to this aspect of its business. The key is that Six Sigma can only be used where the outcomes are measurable, which is why direct marketing is better than other forms of marketing (Six Sigma Online, 2016). Finding new customers is an important part of the company's business.

The organization is also adept at assessing credit quality. This is a core competency for any lender, to ensure that there is adequate return, in other words to limit bad debt. Assessing credit quality is inherently quantitative in nature, and lends itself well to Six Sigma techniques. If American Express can implement Six Sigma to these two processes, it will be able to acquire more new customers, and lower the cost of acquiring each customer, and then ensure that the new customers have a higher credit quality. If the company can lower customer acquisition costs and also lower bad debt charges, it will enjoy a better bottom line.

Sustainability Analysis and Recommendation

Six Sigma is therefore the first recommendation for American Express. The second is with respect to sustainability. American Express, because it is a financial intermediary, is not one of the worst companies with respect to sustainability. But there are definitely areas where it can improve. For example, a lot of waste in terms of fossil fuel usage -- it is never sustainable to burn fossil fuels -- comes from commuting. If American….....

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