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Six Sigma is driven from the “outside-in,” that is, it begins with the customer. The emphasis is on understanding customer needs and translating them into requirements for core processes.
Six Sigma creates a culture where the customer comes first and there is an unrelenting focus on exceeding customer expectations...
As Jack Welch Stated...
“The best Six Sigma projects begin not inside the business but outside it, focused on answering the questions, How can we make the customer more competitive? What is critical to the customer’s success? One thing we have discovered with certainty is that everything we do that makes the customer more successful inevitably results in a financial return for us.”
American Quality Revolution
Before Six Sigma There Were Lessons Learned...
On June 24, 1980 NBC aired “If Japan Can, Why Can’t We”.
The show detailed how the Japanese were capturing American markets by following Dr. Deming's quality improvement advice. Dr. Deming speaks for 9 minutes on the details of why American businesses are losing market share. Minutes after Deming’s appearance on NBC the Quality Revolution in America began.
Already hailed as a national hero in Japan, Deming becomes "The Prophet of Quality" overnight.
Go back in time and watch as America awakens and unravels. Witness Dr. Deming first changing Japan and then America.
It is said to have had its start in a Motorola boardroom when Art Sundry, a sales manager for Motorola's most profitable business at the time, said-- “The real problem here at Motorola is that our QUALITY STINKS!”
Motorola had always been and was still one of the world's best manufacturers, regardless of the hard times it was facing.
CEO Bob Galvin decided to check Sundry's claims. Instead of calling on executives he visited Motorola factories, shipping docks and other operations. He went all the way through the entire process to the individual end-users. And when he got there, they told him, "Your Quality Stinks."
Motorola was ready for change! They were BLEEDING MONEY and knew that higher quality products would reduce production costs as well as increase customer satisfaction.
Bill Smith, a Quality Engineer from Motorola, is credited with being the Father of Six Sigma.
Smith worked with co-founder Dr. Mikel Harry who eventually developed the four-stage Six Sigma Process: Measure, Analyze, Improve, and Control (MAIC). The Define (D) phase was later added by GE (DMAIC).
Bill Smith wrote an internal quality report at Motorola which eventually caught the attention of CEO Bob Galvin. The report sat on Galvin's desk for two years before Smith worked up the courage to ask Galvin if he had read it.
Sadly Bill Smith passed away in the cafeteria at Motorola. He never made a dime from Six Sigma.
Listen as his wife tells the story...
The Wife Behind Six Sigma
Six Sigma Leaders
In the mid 1980's Bob Galvin of Motorola articulated the first objectives of a new Process Improvement Program.
10x levels of improvement in service and quality by 1989
100x improvement by 1991
Six Sigma capability by 1992
In 1988 Motorola won the Malcolm Baldrige National Quality Award.
Texas Instruments and ABB work closely with Motorola to further develop Six Sigma. Application experts begin leaving Motorola for "greener pastures" elsewhere.
In 1995 AlliedSignal begins its Six Sigma initiative directed by Larry Bossidy. Bossidy's success captures the interest of Wall Street.
Although Six Sigma clearly began at Motorola, it was GE’s wide scale adoption and success that truly opened the eyes of the business world.
In 1995 Jack Welch invited his friend, Allied Signal CEO Bossidy, to speak at GE’s executive council meeting. Bossidy was a highly regarded ex-GE vice chairman.
Welch was skeptical but requested a financial analysis. Their analysis showed that shifting their processes to Six Sigma capability would save GE $10 billion.
Jack Welch, begins the most widespread undertaking of Six Sigma even attempted. By October 1995 Six Sigma was company policy at GE. Dr. Mikel Harry was hired and spent the next 4 years training GE managers.
Welch insisted that no one would be promoted to a management position without at least a Green Belt. Welch stated that Six Sigma was the most ambitious undertaking the company had ever taken on...
His speeches to executive staff are legendary....
“Quality can truly change GE from one of the great companies to absolutely the greatest company in world business. When GE does something, it does it all the way! Everyone in this room must lead the quality charge. There can be no spectators on this. What took Motorola ten years, we must do in five - not through shortcuts, but in learning from others”.
The one thing that any company can do, whether in good times or bad, to yield financial benefit is to INVEST IN AND IMPROVE QUALITY. Reducing defects and non-value added activities in processes delivers immediate benefits.
Studies in industry show that the average company is three to four Sigma. Sadly, many of these companies are firmly set in their ways, complacent in the knowledge that they are at least as good as their competition.
Among the traits shared by these companies are...
Profitable and growing
Market prices declining
Have a quality assurance program
Spending 10-25% of sales dollars on repairing or reworking product before it ships
Unaware that world-class companies have similar processes that are greater than 100X more defect-free
Believe that a zero-defects goal is neither realistic nor achievable
Have 10X the number of suppliers required to run the business
5-10% of the firm's customers are dissatisfied with product, sales, or service and will not recommend that others purchase products or services
Major differences in philosophy, policies and procedures, actions, behaviors, and beliefs, between companies which are at four Sigma capability and those which are at six.
The biggest single difference is mindset!
Under-achieving companies are complacent, unaware and unable to accept the idea that they must make quantum leaps in process quality if they are to gain, and keep, their competitive advantage.
Six Sigma Benefits
The benefits of achieving Six Sigma are clear and obvious, both from the company's standpoint, and more importantly, from their customer's standpoint.
The company is able to produce its product in the most efficient means possible, resulting in an end product which is very competitively priced and of the highest possible quality. Truly, "The highest quality producer is the lowest cost producer".
If all departments in a company are operating at Six Sigma, then the products will be at the top of their market and far ahead of the competition.
But! Product quality is not an automatic guarantee of success; even a product with excellent manufacturing quality will fail in a market place that does not want it, or where it is not adequately supported.