Studying Six Sigma from Historical Perspective

2017-08-09 10:18:29 viya 229

The modern attention to the use of statistical tools for the manufacture of products and processes originated prior to and during World War II, when the United States of America geared up to a massive buildup of machinery and arms to successfully conclude the war. The need to manage the myriad of complex weapon systems and their varied and distributed defense contractors led to the evolution of the system of Statistical Quality Control (SQC), a set of tools that culminated in the military standards for subcontracting, such as MIL-Std 105. The term “government inspector” became synonymous with those individuals who were trained to use the tables that controlled the amount of sampling inspection between the different suppliers of parts used by the main weapons manufacturers. The basis of the SQC process was the use of 3 sigma limits, which yields a rate of 2700 defective parts per million (PPM).

Six Sigma

Prior to that period, large U.S. companies established a quality strategy of vertical integration. In order to maintain and manage quality, companies had to control all of the resources used in the product. Thus, the Ford Motor Company in the early part of the 20th century purchased coal and iron mines for making steel for car bodies and forests in Brazil to ensure a quality supply of tires. This strategy was shelved during the rapid buildup for the war because of the use of coproducers as well as subcontractors.

The war was won and U.S. companies returned to their original strategy while the defeated countries were rebuilding their industries. In order to revive the Japanese economy, General McArthur, who was the governor general of Japan at that time, imported some of the U.S. pioneers of SQC to help train their counterparts in Japan. These efforts were largely successful in transforming Japanese industry from a low technology producer of low-quality, low-cost products such as toys to the other side of the spectrum. By the 1970s and 1980s Japanese products were renowned for their quality and durability. Consumers and companies flocked to buy Japanese electronics, cars, and computer chips, willing to pay a premium for their high quality. In recognition of this effort, Japan established the Deming prize for quality, which was later emulated in the United States, with the Baldrige award.

U.S. companies’ response to their loss of market share to Japanese companies was to investigate the Japanese companies, secrets of success. Many U.S. companies organized trips in the 1980s to Japanese companies or branches of U.S. companies in Japan. Initial findings were mostly unsuccessful. Japanese concepts such as Equality circles" or “zero defects” did not translate well into the U.S. companies’ culture. Quality circles, which were mostly ad hoc committees of engineers, workers, and their managers, were created to investigate quality problems. In many cases, they were not well organized, and after many months of meetings and discussions, resulted in frivolous solutions. It was also difficult to implement quality circles in unionized shops. The term zero defects was also ambiguous, because it was hard to define: Does the fact that a production line produces a million parts and only one is found to be defective constitute a failure to reach the zero defects goal?

The industrial and business press in the 1980s was filled with articles comparing Japanese and U.S. quality. The pressures mounted to close the quality gap. U.S. Companies slowly realized that quality improvements depended on the realization of two major elements—they have to be quantifiable and measurable, and all elements that make the company successful must be implemented: superior pricing, delivery, performance, reliability, and customer satisfaction. All of the company’s elements, not just manufacturing, have to participate in this effort, including management, marketing, design, and external (subcontractors) as well as internal suppliers (in-house manufacturing). The six sigma concept satisfies these two key requirements, which has led to its wide use in U.S. industry today.

The Motorola Company pioneered the use of six sigma. Bill Motorola Vice President and Senior Quality Assurance Manager, is widely regarded as the father of six sigma. He wrote in the Journal 〇f Machine Design issue of February 12, 1993:

For a company aiming to design products with the lowest possible number of defects, traditional three-sigma designs are completely inadequate. Accordingly in 1987, Motorola engineers were required to create all new designs with plus or minus six sigma tolerance limits, given that the sigma is that of a world-class part or process in the first place. This marked the start of Motorola’s Six Sigma process and its adoption of robust design as one capable of withstanding twice the normal variation of a process.

Early in 1987, Bob Galvin, the CEO of Motorola and head of its Operating/Policy Committee, committed the corporation to a plan that would determine quality goals of 10 times improvement by 1989, 100 times improvement by 1991, and six sigma capability by 1992. At that time, no one in the company knew how to achieve the six sigma goal, but, in their drive for quality, they committed the company to reach the six sigma defect rate of just 3.4 defective parts per million (PPM) in each step of their processes. By 1992, they met these goals for the most part. At several Motorola facilities, they even exceeded six sigma capability in some products and processes. On average, however, their manufacturing operations by 1992 were at about 5.4 sigma capability, or 40 defective PPM—somewhat short of their original goal.

The six sigma effort at Motorola has led to a reduction of in-process defects in manufacturing by 150 times from 1987 to 1992. This amounts to total savings of $2.2 billion since the beginning of the six sigma program. Richard Buetow, Motorola’s Director of Quality, commented that six sigma reduced defects by 99.7% and had saved the company $11 billion for the nine-year period from 1987 to 1996.

Today, Motorola has reached its goal of six sigma. The complexity of new technology has resulted in a continued pressure to maintain this high level of quality. As product complexity continues to increase— such as semiconductor chips with billions of devices and trillions of instructions per second—it will be essential that Motorola master the process of producing quality at a parts-per-billion level. That is quite a challenge. One part per billion is equivalent to one second in 31 years!

Therefore, Motorola expanded the six sigma program in 1992 and beyond to achieve the following:

1. Continue their efforts to achieve six sigma results, and beyond, in everything they do

2. Change metrics from parts per million to parts per billion (PPB)

3. Go forward with a goal of 10 times reduction in defects every 2 years

Many other companies have also adopted these high levels of quality as well as cost reduction, responsiveness, flexibility, and inventory turnover. One of the most notable is the General Electric Company (GE). Several GE executives commented on the six sigma program in an article by Rachel Lane, a reporter for Bloomberg news, in 1997 and in the GE annual report for the same year. James McNerney, CEO of GE Aircraft Engines said:

Foremost among our initiatives, Six Sigma Quality is driving cultural change throughout our entire operation and accelerating our business results. Six Sigma tools allow us to improve results dramatically by enhancing the value we provide to our customers. Almost one third of our employees have been trained to lead projects and spread Six Sigma tools to co-workers, resulting in more than $70 million in productivity gains in 1997.

The same year, GE Appliance Director/CEO David Cote said:” This is a leap of faith, when people see the actual results that come from this and make money, you think, 'Son of a gun, this thing really does work!”

Jeffery Immelt, CEO of GE Medical Systems said in 1997: If you want to change the way you do things, you have to have people who are in the garnet To that end, GE created a class of six sigma practitioners that take their titles from the martial arts. Extensive Training was provided to all employees. Those at the top were called Mblack belts” and “master black belts•” They work on six sigma full time and assist in training and leading six sigma projects. Regular employees who receive abridged training are called “green belts.”

TAG:   Six Sigma

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