Six Sigma is a management framework that has, in the past fifteen years, evolved from a focus on process improvement using statistical tools to a highly disciplined process that helps in developing and delivering near-perfect tools and services. The Greek letter ‘Sigma’ is used as a statistical term to denote standard deviations i. e. it measures how far a given process deviates from perfection. The central theme of Six Sigma is that if the number of ‘defects’ in any process can be measured, then it is possible to systematically figure out how to eliminate these defects and get as near to ‘zero defects’ as possible.
The Six Sigma methodology therefore provides the techniques and tools to improve the capability and reduce the defects in any process. The goal of Six Sigma is to achieve perfection. It allows only 3. 4 defects per million opportunities for each product or service transaction. Robert W Galvin, the person who headed the Motorola team which first conceptualized and developed the Six Sigma methodology comments on how the concept developed” “We quickly learned if we could control variation, we could get all the parts and processes to work and get to an end result of 3. 4 defects per million opportunities, or a Six Sigma level.
Our people coined the term and it stuck. It was shorthand for people to understand that if you can control the variation, you can achieve remarkable results. ” (Bertels, 2003, pp. 1 – 2) Emergence of Six Sigma Six Sigma was developed in Motorola under the leadership of Robert W Galvin in the mid-1980s. It was however Bill Smith, a senior engineer and scientist within Motorola’s Communications Division, who is credited with inventing Six Sigma. Smith had observed that Motorola’s final product tests were not capable of predicting the high level of system failure rates that Motorola was experiencing.
The identified the cause behind this as the increasing complexity of the system and the high number of opportunities for failure. He believed that Motorola needed to acquire a higher level of internal quality. He formulated the Six Sigma Standards, and persuaded the then CEO Galvin to set Six Sigma as a quality goal. At that time, Smith’s way of viewing reliability of a whole process as the mean time to failure and of measuring quality by process variability and defect rates was entirely new. Motorola had however always been the pioneer in improving productivity and quality.
In the Eighties it was the hub of presentation of quality and productivity improvement programs by a number of renowned experts in the field such as Joseph M Juran, Dorian Shainin, Genichi Taguchi and Eliyahu Goldratt. Mikel Harry, who later became the president of the Six Sigma Academy, was drawn by the effort of these pioneers, and worked with Smith on the Six Sigma initiative. Motorola won the first Malcolm Baldrige National Quality Award in 1989 for being successful in improving quality by ten fold through the development and adoption of Six Sigma.
Motorola did not keep the Six Sigma framework to itself but shared it widely with others. As a result, General Electric’s (GE’s) Jack Welch was able to adopt Six Sigma to usher in a cultural change in GE and to achieve significant cost savings. In 1998, Business Week a $330 million savings for GE because of the adoption of Six Sigma – double the amount that had been predicted by Welch. GE’s remarkable achievement put Six Sigma in the limelight. GE’s continued success with Six Sigma has been a practical demonstration of the effectiveness of the framework, and has sustained and heightened the interest in it all along.
History and Background The Six Sigma framework has however not materialized from nothing. It integrates important developments, methodologies and lessons learnt in over a hundred years. Even as early as 1776, Adam Smith had identified the economies of scale made possible with specialization in manufacturing in his book The Wealth of Nations. The modern system of specialization of labor and the fragmentation of manufacturing work processes into simpler tasks in an effort to increase efficiency had been developed as early as in the early years of the Twentieth Century.
These principles are generally thought of as starting Fredrick W Taylor and the Scientific Theory of Management. Taylor’s Scientific Theory of Management made work tangible and measurable by analyzing manufacturing processes and turning them into a set of tasks that could be standardized and made repetitive. He made the separation of planning and execution the central theme of his approach. This was a radical shift from the concept of craftsmanship in managing work or quality as a single end-to-end process. Taylor’s Principles of Scientific Management was published in 1911.
By 1920, his methods had been widely adopted and had gained global acceptability. Influenced by Taylor’s principles, Henry Ford broke down the assembly of the Model T into 84 distinct steps, hired Taylor to do time-motion studies, and in 1913 came up with the first moving assembly line used for large-scale manufacturing. In the 1920s, statistical methods for the control of quality were first being developed at the Bell Telephone Laboratories by Walter Shewhart and Dr Joseph M Juran. Shewhart sketched out the first control chart in 1924. Statistical Process Control has evolved out of that first control chart of Shewhart’s.
Shewhart’s work laid the foundation not only for the use of engineering methods to specify work processes, but also for the use of statistical methods that quantify the quality and variability of processes. The 1950s saw the emergence of the Japanese Quality Emergency. The post Second World War Japanese upper management tackled the problem of shoddy quality head on in the rebuilding of their industries after the was. In time they assumed the leadership of the quality improvement movement.
Dr W Edwards Deming, Dr Armand Feigenbaum, and Dr. Joseph M Juran were three prominent experts in the field who helped the Japanese in revolutionizing their quality and competitiveness after the War. Dr Deming placed great importance on the on the role of the management in quality control. He believed that the management was responsible for 94 per cent of the quality problems. Dr Juran developed the quality trilogy – quality planning, quality control and quality improvement. He associated quality with customer satisfaction and dissatisfaction. Dr Feigenbaum is known as the originator of ‘total quality control’ or ‘total quality’.
Feigenbaum defined total quality as an effective system to ensure production and service at the most economical levels that allow customer satisfaction. (Quinn, 2002, pp. 7) The Japanese companies trained its managers in the science of quality and instituted a project concept of quality improvements wherein improvement breakthroughs were made project by project under the guidance of managers who selected the improvement projects and mobilized and guided project teams. The Toyota Production System (TPS) is exemplifies the Japanese quality revolution.
In TPS and in Japanese concepts of quality in general, process, people and behaviors are linked inextricably together in a culture of unabated improvement. As America began to lose its markets to the Japanese, especially in the automobile and electronic sectors, it responded with a quality movement of its own in the 1980s and 1990s. The result was the rediscovery of the Statistical Process Control (SPC) and the introduction of quality circles through Just-in-Time (JIT), Total Quality Management (TQM), Business Process Re-engineering (BPR), Lean Manufacturing and finally Six Sigma.
Six Sigma integrates many elements of the quality enhancement methodologies that went before it. “Six Sigma was a repackaging of tools and techniques already in place, and the program was rolled out because Motorola had essentially stalled in its improvement efforts. The company suffered a severe downturn in 1985-86 when Japanese manufacturers invaded the memories chip market and wiped out Motorola’s memories division. The company went into shock, and it was not until mid-1987 that things stabilized and attention began to be paid to improvement. ” (Ramias, 2005) Second Generation Six Sigma
The first generation of Six Sigma was followed by what can be called the second generation of Six Sigma led by the efforts of CEO Larry Bossidy of AlliedSignal in 1994. The first generation of Six Sigma was part of a continuous quality improvement or total quality efforts at companies and was generally led by quality professionals. The second generation Six Sigma is, on the other hand, a corporate initiative, a part of the corporate business plan and the key to achieving business objectives. The second generation has total top leadership support, and often its close involvement.
Another key difference is the total emphasis on what is known as the voice of the customer. The first generation Six Sigma involved four phases – measure, analyze, improve and control. In the GE Capital deployment of 1995 a new first phase ‘define’ was added to the four making it the DMAIC methodology now being applied in most Six Sigma implementations. In the initial Define phase, oriented around the customer, data is used to verify customer needs and requirements and to identify the Critical-to-Quality characteristics for customer satisfaction.
Six Sigma finally evolved into a comprehensive program that could drive the business instead of focusing only on quality by integrating process improvement (DMAIC) with process, product and service design or Design for Six Sigma (DFSS) and process management. Six Sigma in GE GE insists that Six Sigma has become a part of their culture because of their persistence endeavor to delight customers and relentlessly look for new ways to exceed their expectations. Six Sigma has changed the DNA of GE – it is now the way they work – in everything they do and in every product they design (GE Literature, 2004).
According to GE, the key elements of quality are Customer, Process and Employee. Customers define quality in GE. The company strives to meet customer expectations in core areas such as performance, reliability, competitive prices, on-time delivery, service, clear and correct and transaction processing. GE defines its process perspective as ‘outside-in’. They look at processes from the point of view of customers, and try to understand the transaction lifecycle from the customer’s needs and processes so that they can discover what the customer is seeing and feeling.
It is only after they do so that GE identifies areas in which they can add significant value or improvement from GE’s own perspective. All GE employees are trained n the strategy, statistical tools and techniques of Six Sigma quality. GE provides opportunities and incentives to employees so that they can focus their energies on satisfying customer expectations. Quality is made the responsibility of every employee. Every employee is involved, motivated and made knowledgeable.