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 Process mapping
o Process capability analysis
o Statistical Process Control
o 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 They added Define to MAIC making it DMAIC

o They put a strong focus on the voice of the customer
o They added process redesign to Six Sigma
o They push Six Sigma into the product development area creating DFSS
o 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 Zero Stock
o 50 inventory turns per year
o Anyone can stop the line
o Error proofing fixture
o Time and Motion studies
o 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 Flowcharting all process

o As-is process mapping
o Cycle time reduction approaches
o Value added analysis
o Value engineering
o Customer focused results
o IT concepts
o Bureaucracy Elimination
o Negative Analysis
o 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 re-
engineering 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.