SIX SIGMA AS I SAW IT

By: Dr. H. James Harrington In the early 1980’s, Motorola was having major quality problem. Business schools were using what happen to the Quasar TV product when Motorola sold the company to Matsushita as the example of poor management and quality planning. Matsushita’s Japanese management team came in and through the use of just sound industrial management techniques cut the defect rates from defects per unit to percent defective. They cut cycle times in half and were able to reduce manufacturing cost significantly.       Indirect personnel cut 40% Warranty costs dropped from $22 million a year to 3.2 million Line rejects rate dropped from 140% to less than 6% Productivity went up by over 30% Plant output increased by more than two times Rework and scrap decreased by 75%

John Young, CEO of HP just announced a ten times improvement in 10 years program for all of HP, John Young, President of HP stated “In 1979, I launched a new quality campaign by announcing what I call a “Stretch Objectives”. Why ask for a factor-of-10 times improvement number? If I’d called for an improvement of only 2 to 1, our people wouldn’t have done anything until 1988”. Bob Galvin, CEO of Motorola felt that if they continued in their downward spiral, Motorola will be out of business. As a result, William J. Weisz, COO of Motorola announced a 10 times improvement in 5 years for all of Motorola measurements. William J. Weisz put it this way “In 1981, we developed as one of the top ten goals of the company, the 5-year Tenfold Improvement Program”. This is primarily based upon using TQM principles. By 1986, Motorola had made some progress but not enough so Bill Weisz kicked- off a second round of 10 times improvement but this time the target was to complete in 2 years. In an effort to define how to measure a 10 time’s improvement, the Motorola Six sigma was born. Motorola Six sigma program had no Black, Green or Yellow Belts or any of the infrastructure or training that we associate with Six Sigma today. Motorola still have many major problems and with its 6 step Six Sigma program there was a huge opportunity for extremely high return on investment. In addition to Six Sigma, they also have an active process redesigning activities going on that was focused primarily on cycle time reduction. For the next 5 years, Motorola have no formal MAIC (Measure, Analyze, Improve and Control) training. In 1991, Motorola developed the concepts of Black, Belt and Master Black Belt training using the MAIC model. Motorola Six Sigma program consisted of the following: o Record hard savings o Focus on measurements o Statistical concepts (simple and design of experiment)

o o o o

Process mapping Process capability analysis Statistical Process Control Graphical Methods

When Mikel Harry left Motorola and forms the Six Sigma Academy, the Six Sigma concept was sold to Allied Signal and General Electric as an approach to improve financial performance not to improve quality. GE with its excellent quality background brought a number of changes to the Motorola model. They were: o o o o o They added Define to MAIC making it DMAIC They put a strong focus on the voice of the customer They added process redesign to Six Sigma They push Six Sigma into the product development area creating DFSS They extended Six Sigma to the service departments

Allied Signal also made a contribution to expanding the Six Sigma concepts by adding the following: o Project Management o Change Management o Stake Holder Analysis It wasn’t long before lean concepts were beginning to compete with Six Sigma concepts and as a result Lean Six Sigma came into existence. Lean concepts originated in Ford motors back in the early 1900’s. It consisted of: o o o o o o Zero Stock 50 inventory turns per year Anyone can stop the line Error proofing fixture Time and Motion studies Standardized Work Methods

Most of these were pushed aside when DuPont brought controlling interest of Ford and put Slone in-charge of Ford motors. In the 1950’s Toyota’s Chief of Production Tauchi Ohno read a book that introduced him to the lean concepts that Henry Ford used in the early 1990’s and he embraced the concepts wholeheartedly. He championed Henry Ford’s concepts improving on them starting with the machining operations and then expanding them into the other areas of production. As a result, Toyota Production System (TPS) was born in the 1960’s and 70’s. Although many US and European were using parts of lean (Example: error proofing is part of the toolmakers trade) like General Electric, IBM and HP, the

real test of the TPS was started in 1984 when Toyota and General Motors formed a joint venture to build a combined plant in the San Francisco bay area. This joint venture was called New United Manufacturing Inc. although the performance of this joint venture did not meet expectations, the lean concept began to be used in other US and international organization,. Lean concepts are more system oriented where the Six Sigma approach is more problems oriented. While all of this was going on, IBM started a major focus on process improvement. Since the late 1970’s they have benchmarking their international internal operations. This brought the best practices from Japan, Germany and the US together into a single international concept Best Practice approach. These programs were called Process Compatibility. In the early 1980’s, the president of IBM John Akers put out a directive that stated the support processes had to improve to the point that they were as good or better than the manufacturing process. As a result, IBM developed a methodology called “Business Process Improvement”. These approach focus on streamlining all the support processes and used tools like: o o o o o o o o o o Flowcharting all process As-is process mapping Cycle time reduction approaches Value added analysis Value engineering Customer focused results IT concepts Bureaucracy Elimination Negative Analysis Simple English

This approach divided into 2 separate but similar methodologies, business process improvement that focused on streamlining the present process using 12 approaches and process re-engineering that developed a new process by using advance IT concepts and discarding old paradigms (breaking the mode). For the first time, massive improvements in the support activities were achieved. With the publishing of a book entitled “Business Process Improvement” in 1991 and a second book “Re-Engineering Corporation” by Michael Hammer and James Champy in 1993. The concept was quickly embraced around the world. The Six Sigma approach came to the world when we’re focused on becoming learning organizations. There was a time when it was acceptable to have long running projects. There were classes developed by university professors based upon their academic value. Putting an individual into a 4 month Black Belt training program was acceptable in a learning culture. The quality circle approach that started in Japan and became popular in United States during the early 1980’s

was design to teach tools not to sell problems. The TQM approach was a long continuous approach to improvement. Six Sigma projects that are supposed to take 3 months were lasting 4 months most of the time (not 12 to 13 weeks but 16 to 18 weeks). In the early 1980’s management became impatient with the slow continuous improvement that TQM promoted. The 12 month cycle that process reengineering required. The 4 months six Sigma projects were taken and the 12 weeks that Business process Improvement project lasted. They wanted improvement much faster; they wanted to move away from a culture of organizational learning to a culture of immediate improvement. This need result in the development of another methodology in the 1980’s. It was one directed at picking the low hanging fruit in a two day workshop. It was based upon some work done in 1985 at IBM. It was picked up by Ernst and Young and introduced to GE and Ford. GE called it work-out. Ernst and Young called it express, other organization called it FAST standing for Fast Action Solution Teams. Basically, they all were the same were once a fast target have been defined, a fast action coordinator would collect the basic data related to the project and bring it to one or two day meeting where the data would be analyzed and corrective action initiatives were defined and approved for implementation by the executive management team. The results of these quick hit approaches were outstanding. For example: Ford ran many of these projects average more than a million dollars for 2 days of team meetings. That’s much better return on investment than anyone was receiving from Six Sigma programs. But of course this approach has a limited application in most organizations. In reality, none of these approaches are new. They all are re-packaging of the work done in the first half of the 20th century. Almost all of the tools were defined and used before the end of World War II and fairly well documented in Dr. Armand V. Feigenbaum’s book Total Quality control that came out in the 1950’s. It doesn’t make much difference if you call a customer requir4emnt or voice of the customer it’s all the same. You can call it error-proofing or fool-proofing, it’s the same thing. You can call it flow-charting or As-Is model, it doesn’t make a difference. A huge part of our economy is based upon consulting services and teaching. They try to make the old look new by changing its name. Most of the tools we are teaching and talking about are just all proven industrial engineering methods that are well founded based upon years of practical application. The only real revolutionary concept that they are working with today is the IT performance enhancement software packages that are not even part of the Six Sigma kit.