“SIX SIGMA AT MOTOROLA”

Abstract:

The case throws light on the developments in the Six Sigma concept including
Motorola's 'New Generation Six Sigma' program and explains how the company intends to
use it for bottomline improvement and better business performance.
Motorola is the pioneer in introducing the 'Six Sigma' quality program. The company
has won the Malcolm Baldrige National Quality Award twice in 1988 and 2002. The case
discusses the circumstances that led to the evolution of Six Sigma in Motorola. It explains in
detail how Six Sigma was implemented at Motorola and the results achieved by the company
after its implementation.

Issues:

 The circumstances behind the evolution of Six Sigma program at Motorola;

 Motorola's efforts to give a new shape to the Six Sigma concept to achieve better
financial performance in the new millennium;
 The approach, methodology and process of implementation of Six Sigma by Motorola;
 The benefits reaped from Six Sigma and its contribution to the company's sustained
superior financial performance and competitive advantage.

Introduction:

Six Sigma is a quality management initiative that takes a very data-driven,

methodological approach to eliminating defects with the aim to reach six standard deviations
from the desired target of quality. Six standard deviations means 3.4 defects per million. In
Six Sigma, a defect is defined as any process output that does not meet customer
specifications, or that could lead to creating an output that does not meet customer
specifications.
Six Sigma originated as a set of practices designed to improve manufacturing
processes and eliminate defects, but its application was subsequently extended to other types
of business processes as well.

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About Motorola:

Motorola, Inc. is an American-based, multinational, telecommunications company

based in Schaumburg, Illinois. It is a manufacturer of wireless telephone handsets, and also
designs and sells wireless network infrastructure equipment such as cellular transmission base
stations and signal amplifiers.
Motorola's home and broadcast network products include set-top boxes, digital video
recorders, and network equipment used to enable video broadcasting, computer telephony,
and high-definition television. Its business and government customers consist mainly of
wireless voice and broadband systems used to build private networks and public safety
communications systems. Motorola's handset division is now focusing on smartphones using
Google's open-source Android mobile operating system.

Thrust on quality:

In 2002, the US based Motorola Inc. (Motorola) achieved the unique distinction of
receiving the Malcolm Baldrige National Quality Award for the second time. Motorola
became the only company in the world to have received this award twice, having won it
earlier in 1988.
Commenting on Motorola's quality standards, the Baldrige National Quality Program
had stated in 1988, "Like an Olympic athlete seeking to score better than determined world
rivals, Motorola Inc. seeks sales victories in world markets for electronic components and
equipment by improving the quality of its own performance. For Motorola, quality
improvement leading to total customer satisfaction is the key”.
Motorola had earned accolades and recognition from the corporate world for its 'Six
Sigma' initiatives, which had its origin in the quality drive launched by the company in the
early 1980s .
In 1981, the company launched an ambitious and innovative quality drive for a ten-
fold improvement in the quality of its products and services, after the company lost business
to its Japanese competitors.
Motorola's Six Sigma quality target aimed at achieving not more than 3.4 defects per
million products. The company aimed to achieve total customer satisfaction by providing the
best quality products and services. These efforts were rewarded with the Malcolm Baldrige
Award and significant increase in company's sales.
After Motorola's success, various other corporates across the world implemented Six
Sigma in their organizations. Motorola acquired the reputation of being the quality leader, not
just in manufacturing but in every process including customer relations.
Between 1986 and 1988 alone, Motorola received 50 quality awards. Six Sigma was
not just a quality standard at Motorola but the guiding force of Motorola's work philosophy.
Commenting on Six Sigma, Dennis Sester, Motorola's senior corporate Vice President and
Quality Director, said, "Six Sigma is not a product you can buy. It's a commitment”

The Six Sigma Initiative:

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 The term 'Six Sigma' comes from the field of Statistics. Its origin as a measurement
standard can be traced back to Carl Frederick Gauss (1777-1855) who introduced the concept
of the normal curve. Six Sigma as a measurement standard in product variation could be
traced back to the 1920s. Bill Smith, a Motorola engineer, was responsible for linking the
term with the company's quality initiatives.
The US economy was experiencing a downtrend in the 1980s. As a technology-based
company, Motorola faced several problems. Competition was intense and a few products like
semiconductor chips were being sold at half their manufacturing cost in 1981. Motorola's
financial performance was under pressure.
Most worrying of all, the company started receiving an increasing number of
complaints from its sales department about warranty claims for defective products. Despite its
reputation as market leader, Motorola started losing market share to foreign competitors that
sold products of better quality at lower prices

The Implementation:

On January 15, 1987, Galvin launched a long term quality program, called "The Six
Sigma Quality Program," with the goal of achieving no more than 3.4 defective parts per
million.
The Corporate Policy Committee of Motorola updated its quality goal to "Improve
product and service quality ten times by 1989, and at least one hundred fold by 1991." It
aimed at achieving Six Sigma quality by 1992. Galvin initiated measures to develop a culture
that focused on continuous improvement to assure total customer satisfaction. He said, "There
is only one ultimate goal: zero defects in everything we do." The new quality standard was
used in all products, processes, services and administration.

The Benefits:

The first five years of Six Sigma implementation were highly rewarding for Motorola
as sales grew dramatically and products of better quality were introduced. The company
regained its reputation of developing high quality products.

Next Generation Six Sigma:

Six Sigma was originally created as a continuous quality management and quality
improvement technique, but over a period of time, it evolved into a new way of doing
business.
In the fifteen years after its launch, Motorola transformed its initial approach of
counting defects in product manufacturing to managing variation and systematically
improving not just manufacturing but all its business processes.
Most importantly, by 2002, Motorola transformed Six Sigma from a tool for
improving product quality to an overall business improvement methodology.

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Conclusions:

 Six Sigma operates as a data-driven management system, with performance objectives

that are based on perfect attainment;
 Six Sigma generates sustained success, introduces performance goals, improves value
to customers, promotes learning and executes strategic change;
 The benefits of Six Sigma can be achieved by a whole enterprise, or even just a single
department within it;
 Like other quality initiatives, Six Sigma includes tools used to drive down defects,
improve quality and profits, and thus, morale and profitability.
 The Six Sigma quality system was developed at Motorola even though it became best
known through its use by General Electric

References:

 Pyzdek, Thomas. The Six Sigma Handbook: The Complete Guide for Greenbelts,
Blackbelts, and Managers at All Levels. New York: McGraw-Hill, 2001.
 Pande, Peter S., Robert Neuman, and Roland R. Cavanagh. The Six Sigma Way Team
Fieldbook: An Implementation Guide for Process Improvement Teams. New York:
McGraw-Hill, 2002.
 Breyfogle, Forrest W. Implementing Six Sigma: Smarter Solutions Using Statistical
Methods. New York: Wiley, 1999.

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