Live Lean ! Eat Lean ! Do the Lean way! This is the mantra of the next generation.

Six Sigma is a discipline and highly quantitative approach to improving product or process quality. The original goal implied in Six Sigma definition is the reduction of defects to no more than 3.4 per million opportunities. Six Sigma has become epitome of quality performance.

Six Sigma is known as the set of techniques and tools for process improvement. It was introduced by American engineer Bill Smith while working at Motorola in 1986. 

Bill Smith is called the father of Six Sigma

bill smith

Six Sigma was born in Japan. Devastations faced by Japan after the World War II, stuck the growth of the nation. They needed to start from scratch and speed up in the Marathon of industrial revolution. In 1950, W.Edwards Deming, an American statistician, went to Japan to teach manufacturing technique.

Being a statistician Deming adopted all the mathematical and statistical methods to manage and control the manufacturing process.

He guided the managers to closely monitor the output to check whether the defects on the outputs were flaws in manufacturing process, manufacturing equipments or raw materials. This process was followed continuously to narrow down the variability in products. From CEO of the company to the manager and to the worker, he emphasized on quality control on the basis of data generated, even if it was at the cost of reduction in production target.

In 1970s, Japanese automobiles and electronic industries started to deliver over powered performance in production in terms of quality as well as reputation.

Not just the Japanese technique but also Deming became the most sought after business consultants. The statistical methods implemented by Deming were systematized into Six Sigma at Motorola.

EVOLUTION OF SIX SIGMA

The origin of concept of Six Sigma has its connection way back from 16th century. In 1798, Eli Whiteny, created the interchangeable parts also called the Uniformity System. Period 1760 – 1840 was known as the Industrial Revolution. The First Industrial Revolution was the Age of Mechanical Production.

The Second Industrial Revolution was the Age of Science and Mass Production. The Third Industrial Revolution was the Digital Revolution. By the early 20th century the Second phase of the Industrial Revolution had started to speed up some key inventions to move the world faster.

In 1913, Henry Ford introduced his automobile assembly line which effectively powered mass production.

German Mathematician, Carl Friedrich Gauss conceptualized Normal Distribution or the Bell Curve which became the center pillar of the history of Six Sigma. The standard deviation on the  normal distribution was denoted by the Greek alphabet ‘σ‘ – Sigma

In 1924, Dr. Walter Shewhart introduced the process control chart, which was a new form of data collection, display and analysis mechanism to control quality of the product. He was the first person to work out the 3 sigma defects in manufacturing.

The Japanese Origin

World War II ended in 1945. Devastation faced by Japan after the World War II, stuck the growth of the nation. They needed to start from scratch and speed up in the Marathon of industrial revolution. In 1950, W.Edwards Deming, an American statistician, went to Japan to teach manufacturing technique.

Being a statistician Deming adopted all the mathematical and statistical methods to manage and control the manufacturing process.

He guided the managers to closely monitor the output to check whether the defects on the outputs were flaws in manufacturing process, manufacturing equipments or raw materials. This process was followed continuously to narrow down the variability in products. From CEO of the company to the manager and to the worker, he emphasized on quality control on the basis of data generated, even if it was at the cost of reduction in production target.

Deming introduced the concept of Plan Do Check Act (PDCA)

In 1954, Joseph Juran visited Japan and took the initiative to implement the quality management at all layers of an organization.

In 1970s, Japanese automobiles and electronic industries started to deliver over powered performance in production in terms of quality as well as reputation.

Not just the Japanese technique but also Deming became the most sought after business consultants. The statistical methods implemented by Deming were systemized into Six Sigma at Motorola.

In late 1970s, Motorola started experimenting with problem solving through statistical analysis to create history of six sigma.

The term “Six Sigma” was coined by Bill Smith, an engineer at Motorola.

In 1987, Motorola successfully initiated the Six Sigma methods in their critical business process for performance improvement and formally augmented it as an in-house branch name.

In 1991, Motorola certified its first Black Belt Six Sigma Expert marking a step to train its staff and overall the organization to become expert in it so that it accelerate a speedy process improvement.

In 1991, Allied Signal – a large avionics company, which later on merged to come the brand Honeywell in 1999, adopted the Six Sigma methods. They made significant improvements in quality of their products and also reduced costing with a span of six months.

In 1995, General Electric’s CEO Jack Welch noticed the improvements and achievements in other corporate. He decided to adopt the Six Sigma methodology in GE. After the implementation of Six Sigma, GE claimed to achieve a remarkable cost saving in just three quarters.

Sig Sigma quickly gained a brand name not just as a statistical process rather as a defect reduction and cost saving methodology in production and manufacturing.

By mid 1990s , Six Sigma was developed as a branded corporate management methodology in many large manufacturing organization and started to get adopted other than the manufacturing industries as well.

Six Sigma became vision in many companies. Six Sigma at its first stage, in Motorola, was a defect reduction tool, at its second stage, in GE, it turned out to be the best tool for cost reduction and cost saving mechanism. Six Sigma of third generation was more about a system of value creation all around the world.

By year 2000, Six Sigma became a part of culture and established itself as the right of the industry. Many training, certification and consultancy started to establish in various organization around the word.

The American Society of Quality, ASQ, a non profitable organization, was the first to become the biggest provider of Six Sigma certification. By this time levels of certification in Six Sigma was formulated and was not just restricted to black – White belt, Yellow Belt, Green Belt, Black Belt and Master Black Belt.

Parallely a new Japanese- inspired concept of LEAN began to increase its popularity. It was a blend of process improvement and reduction of waste.

FIVE FAMOUS SUCCESS STORY

MOTOROLA : Inventors

If you look back the history of Six sigma, Six Sigma was pioneered by Motorola company in 1980.

In late 70s, Japanese companies had started to give tough competition to Americans in all electronic products. After World War II, Japanese company started to become threat for American companies. They were improvising day by day in the quality of their products.

Sales profitability, market share all were going down for American companies.

Motorola was facing heavy competition in the market for all its products. Market competition and downfall of US economy forced Motorola to sell few products like semi-conductor chips at the half rate of the production cost. All in all, the financial situation of the company was in very bad shape. At the same time they were facing lots of customer complaints regarding the quality of products.

On the other hand market began to be filled and captured by Japanese products which were of high quality and of lower costs.

This was the time when CEO of Motorola Bill Smith adopted the Japanese technique of quality improvement in their production unit. The history of Six Sigma was definitely inspiring and was of great support to the American company’s growth. This was the time when this process methodology took a westward transmission.

After adoption of Six Sigma, 1982, Motorola targeted a five year goal to improve its product quality by ten times. Most of the competitors claimed that it to be the most devastating decision taken by the company. The idea was to revamp the product design to process quality to the level that it has to meet the specification and standards of the process control.

In 1988, Motorola Corporation won the Malcolm Baldrige National Quality Award in United States. This tryst achievement was possible only because of the implementation of Six Sigma for process quality improvement. This was the outcome when Bill Smith had conceptualized only the three sigma of standard deviation.

This is when the Design of Six Sigma was created – Define , Measure, Analyze, Design, Verify

After the great achievement, Smith expounded the old concept by adding further three standard deviation. Thus happened the birth of Six Sigma. Motorola improved many fold. Total Quality was a cultural change in Motorola.

Following the company’s five year goal of total quality control, translated the company to achieve reduce production time and near to the goal of zero defect – 99.9999 % perfection.

They started to follow the four phase Six Sigma methodology  – Measure, Analyze, Improve and Control. The performance of Motorola improves to a great extent after these changes. The changes were unanimously followed through all the layers in the organization. From top management to the ground engineers were aimed to detect and reduce defects in production.

Completion between East and West was heating up. The Japanese companies continued to outperform. They were still ahead of them.

Top management at Motorola again took a pledge to improve the quality by tenfold in two years. Motorola goal for 1992 was to have 3.4 million defects per million opportunities.

Motorola revisited their statistical methods to control the productivity extensively. Deep study was done for data tools like ‘process potential index’ and ‘process capability index’. For the first in the history of quality management policies were being pulled to such high levels.

Motorola had grown along with Six Sigma. History of six sigma and the journey of six sigma go hand in hand with the history of Motorola.

Motorola realized the importance of improving process by implementing methodology. They started to document the process and methods to be forwarded to others to enhance the production. They took forward step to train other organization about Six Sigma to leverage their production and customer satisfaction.

GENERAL ELECTRICAL : Stepping up the mile stones

GE

The credit of invention of Six Sigma definitely goes to Motorola however the credit to popularizing it goes to Jack Welch, CEO of General Electric.

Jack Welch conducted a survey of GE’s employee and concluded that there was concern about quality across all department including customers. In 1995 GE adopted Six Sigma from Motorola. After doing a cost-benefit analysis, GE invested millions to train its thousands of employees and ensure the system of Six Sigma in adopted by all the departments of GE.

Jack went one step ahead and ensured that the implementation of the process dose is restricted to tool designing and manufacturing, it was implemented in departments like accounts, customer services and even hiring new recruit.

Soon a culture of training institute for Six Sigma began in the corporate world.GE took the credit of Six Sigma’s journey to the high level of Lean, Total Quality Management and ISO 9000. These all became part of engineering curriculum in the business world.

Despite of so much efforts and systems in place, GE began to see decline in the corporate world and its share price also took a downward trend. To improve the situation, Jack Welch hired the manager from Motorola how ran the Six Sigma of the company to work at GE.

Welch enrolled a condition for employees that 40% of the employee bonus will be tagged to Six Sigma certification and the stock options will only be given to managers with black belt certifications.

No promotion would be given without minimum of green belt training. Within five years, in 2001 GE reported an increased annual profit increase by 66 %. The hero of the story was Six Sigma, thus marking the history of six sigma and journey towards success.

Many reputed business schools and institutions started to prepare students or future employees and managers with Six Sigma theories. Soon Six Sigma became to be used as tool to rise up to the ladder in an organization without even understanding its practical importance.

With the changing generation, it just became a ritual and culture.

GE discontinued the Six Sigma practice almost a decade ago however it is still prevalent in the in many departments and sister concerns in GE.

The revolutionizing of corporate culture, enhanced product quality and best cost-benefit equation helped GE to experience a phantom benefit of nearly $700 million in 1997 and over $ 2.5 billion by 2000. They were also able to achieve an overwhelming customer relation and much greater revenue by increasing production efficiency and improving the production quality.

Experts say that everything has its life cycle. Now the era came were innovations and out of the box thinking was given more importance than a system driven efficiency and technical precision.

Between 1998 -2000 implemented the Six Sigma in the concept of shipment cycle time from 18 months to 8 months and reported cost savings of $1.2 billions

FORD MOTOR COMPANY: Quality they Afford

Ford

Company named after the founder Henry Ford, American based, Ford Motor Company is one of world’s most successful motor cars manufacturing company in the automobile industry. It was incorporated in 1903. The automaker has expertise in luxury car manufacturing.

Ford implemented Six Sigma in late 1999. This became a milestone in the history of Six Sigma.

The main intension behind adoptaion of Six Sigma was to enhance the quality of manufactured cars and also to meet up to the customer’s satisfaction.

Their main goal was to outstand the brand in the automobile industry and become customer-driven company. They implied DMAIC model at their assembly belt to improvise product outcome.

In around beginning of 2000 they went one step ahead and launched a system which they termed as “Customer–Driven 6-Sigma” typically aiming to address customer satisfaction. The only hindrances they faced were the skeptical thought process of employees which they could manage by being consistent with their process implementation.

As reported in 2000 – 2002, on implementation of this technique they improvised their recalls and production delays and reduced defects by 70 % and saved financials of around $1 billion.

Ford’s experience and achievement with Six Sigma has proven the fact that many large companies can reconstruct and re-engineer their basic projects to improve customer satisfaction and product quality.

STARBUCKS: Coffee with Efficiency

starbucks coffee

Starbucks has a long story of becoming a coffee chain from just a coffee shop.

First store of Starbucks was opened in 1971 in Seattle by three coffee lovers – Jerry Baldwin, Zev Siegi and Gordon Bowker. Till this time the success stories were limited to production and manufacturing industry

Changing a retail story was interesting in history of Six Sigma.

Till now the change factors were the normal terminologies like – quality, customer satisfaction, cost reduction etc.

With coffee the story was different. Every time the coffee was prepared for customer had different taste and flavor. And everyday customer experienced a different coffee. Before the implementation of Lean methodology, a coffee was brought hand roasted and was prepared at the bar with the process best suited.

Post implementation of Lean Six Sigma, the process of making the coffee at the bar was standardized with installation of new steaming and bruing machine. The entire coffee bar was rearranged.

There were lots of criticisms which they had to face in regards with the – “their cup of coffee”. It is a real big journey towards success after the Lean Six Sigma that Starbucks sustained even beyond the critic.

The key factors behind the creation of history of Six Sigma in a retail chain were that the drinks were faster and consistent. Quality of service had improved many folds. There was also scope of improvement and experiment with the taste and flavor of the coffee. They kept on increasing the list on the menu of the coffee bar as per the customer’s feedback.

Lean Six Sigma methodology has help them sustain the same taste of coffee to a customer whether ordered at Seattle or Japan or Singapore; whether at airport or beside the beach.

With Six Sigma at its place, there was no situation of line backups, no short cuts to procedure of creating the cup and no burden of any staff faltering with the made to order coffees. This helped them to rise up from customer satisfaction to customer delight level in service parameters.

Many corporate tend to see Six Sigma a solution. But it’s time to understand that it’s not THE solution. When the industrial requirement was of process improvement and customer satisfaction it has provided outstanding results in profit optimization and quality improvement.

One must utilize the Six Sigma training at its best to analyze and resolve problems from the root. The journey of Six Sigma will help you to understand the problem, analyzing and measuring of data.

Six Sigma may be criticized for its technicalities, complexities and rigidity, but on the contrary it has revolutionized leveraged the business world in terms of customer, employees and society.

Six Sigma is powerful methodology. It includes statistics and data. This makes it obvious that the outcome of the implementation of Six Sigma will vary as with the brain which reads, analyze and finds different and innovative ways to implement the same in practical life.

Only then you can wirte the history of Six Sigma and the journey towards success

Adopt to Lean and enjoy the success journey!  The taste of the pudding is in eating !

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Author

Punam Sharma is a seasoned banker with specialization in retail banking. She is an MBA with Finance as specialization. She is a certified bank trainer from National Institute of Bank Management, Pune. Punam is a budding blogger and a pen enthusiast.

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