1st Generation of Six Sigma

Variation Any quantifiable difference between a specified measurement or standard and the deviation from such measurement or standard in the output of a process. Variation in outputs can result from many causes in the functioning and management of process. And important goal of process improvement is to reduce variation in outputs.

Six Sigma in Context
Let’s take an example, an all-too-familiar scenario. lost luggage at the airport. Many of us have experienced the frustration of watching the baggage carousel slowly revolve while waiting for luggage that never arrives. The system is far from perfect. But just how far, in sigma measurement terms? In general terms, the baggage handling capability of many airlines is performing at around the three sigma level. That means there are about 66.000 -defects* for every one million luggage transactions, which equated to an approximate 94% probability that you’ll get your luggage. Is that good enough? Certainly not for the customers whose bags are among the “defects”. The “defects* increase costs for the airlines. because employees must deal with misplaced luggage and unhappy passengers. And those “defects” can result in lost business in the future.

If the airlines moves to six sigma in luggage handling. it clearly pays off in terms of lot costs and happy passengers, who are then more likely to fly with that airline again.

As figure indicates, operating at anything less than six sigma levels means your processes have higher probabilities of delivering defects.

It may seem like three sigma is good enough. After all, if there are 66,807 defects out of a million, that means that 933.193 things went well – 93.319% perfection. But if the airline is taking comfort in those statistics, it’s losing money and losing customers. Consider this three sigma level from another perspective.

For customer, three sigma represents highly unsatisfactory performance. The airline is not meeting their most basis exception-that their luggage will be put on the same flight, to travel with them to the same destination. So the airline is likely to be losing many of those frustrated
customers.

Three sigma is also costing money. Variations- time, waste, and errors-abound in the baggage
-handling process, misrouting the baggage, reporting the problem, processing the report, searching, retrieving. and finally delivering the lost luggage. When you translate the 6% probability gap of missing luggage into monetary terms, the hard cost of handling luggage-perhaps several million dollars per year. If the baggage-routing process were improved, the margin for error would be reduced and he allocation of resource, both human and monetary, could be much more profitable used.

How many customers can your business afford to lose? How much money can your company afford to lose because of mistake? Why accept as normal to be running processes at only three sigma or four sigma when, by changing the way you manage your processes, you could get a lot closer to six sigma and all the resulting benefits.

Six Sigma uncovers the layers of process variables- in data terms- that you must understand and control to eliminate defects and wasteful costs. It’s a management approach that aims to achieve the apex of quality by measuring analyzing. improving. and controlling processes to root out defects and boost bottom – line results.

How companies define Six Sigma
It is enlightening to compare how various companies-including leading proponents of six sigma-define it for their employees and their customers.

General electric, what is Six Sigma? The Road Map to customer impact
“First, what is not. It is not a secret society. a slogan, or a cliche. Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services. Why ‘Sigma”? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many ‘defects’ you have in a process, you can systematically figure out how to eliminate them and get as close to ‘zero defects’ as possible. Six Sigma has changed the DNA at GE – it is now the way we work-in everything we do and in every product we design”.

TRW. What is Six Sigma?
“Six Sigma is a structures and disciplined, data-driven process for improving business. TRW is committed to the implementation of six Sigma focusing on how we can dramatically improve our competitiveness by increasing customer focus, enhancing employee involvement, instilling positive change into our culture and ultimately creating bottom and top line growth. At the highest level. Six Sigma is all about satisfying customer needs profitably. It is a highly disciplined methodology that helps develops and effectively deliver near perfect products and services. It will help TRW in all of our operations, engineering. and manufacturing and staff areas”

Honeywell. Six Sigma Plus
Six Sigm is one of the most potent strategies ever developed to accelerate improvements in processes, products and services, and to radically reduce manufacturing andlor administrative costs and improve quality. It achieves this by relentlessly focusing on eliminating waste and reducing defects and variations. Leading-edge companies are applying this bottom -line enhancing strategy to every function in their organization-from design and engineering to manufacturing to sales and marketing to supply management – for dramatic savings.

“Now, Honeywell has developed a new generation of six Sigma….. Six Sigma Plus is Morris Township. NI-Headquartered Honeywell’s Principle engine for driving growth and productivity across all its businesses, including aerospace, performance polymers, chemical. automation and control, transportation, and power systems, among others. In addition to manufacturing.

Honeywell applies Six Sigma Plus to all of its administrative functions.

Historical Milestones
1900 to 1920s. Scientific Management and statistics
Taylor and scientific Management
Frederick W. Taylor’s techniques, which became known as scientific management, made work tangible and measurable through analyzing manufacturing process and turning them into a set of tasks that could be standardized and made repetitive. With work fragmented into a multitude of tasks, a managerial system was then required to control work. The concept of the separation of planning departments staffed by engineers with the following responsibilities.
• Developing scientific methods for doing work
•Establishing goals for productivity
•Establishing systems of rewards for meeting the goals
•Training the personnel in how to use the methods and thereby meet the goals

Taylor’s system dealt a blow to the concept of craftsmanship in managing work or quality as a single end-to-end process. In 1911, the Principles of Scientific Management, a collection of his writing. was published. By the 1920s, Taylor’s methods were widely adopted and Taylor’s ideas have influence across the globe.

Ford Assembly Line. Henry ford adopted four principles in his goal to efficiently produce an automobile at an affordable price, interchangeable parts, continues flow, division of labor. and a reduction of wasted effort. Influenced by Taylor’s ideas and fond’s own observations of improved work flow in other industries. the assembly of the Model T. first produced in 1908. was broken down into 84 distinct steps, with each worker trained to do just one. Ford had Taylor do time-and-motion workers should use to speed at which the work should proceed and the exact motions workers should use to accomplish their tasks. In 1913, ford’s experiment and innovations came together in the first moving assembly line used for large-scale manufacturing Ford’s early methods are a foundation of Just-in-time and lean manufacturing

Walter A. Shewhart and statistical Process control. Quality engineering can trace its origins to the applications of statistical methods for control of quality in manufacturing. Much of the early work was done at bell telephone laboratories, where both Walter Shewhart and Dr.
Joseph M. Juran worked in the 1920s. In 1924, Shewhart first sketched out the control chart.
What has survived of that early work is the Shewhart control chart and what has become known as statistical Process Control. Shewhart’s work laid the foundation not only for the use is engineering methods to specify work processes, but also for the use of statistical that quantity the quality and variability of processes.

1950s. Deming, Juran, and Felgenbaum and the Japanese Quality Emergency Japanese upper management – president and general managers – assumed the leadership of the quality functions in response to the quality emergency of the 1950s. Shoddy quality had made Japanese goods uncompetitive. The post-war rebuilding of Japanese industry was seen by industry leaders as unique opportunity to radically deal with this problem. Dr. W.

Edwards Deming. Dr. Armand Felgenbaum, and Dr. Joseph M. Juran are widely credited with helping the Japanese revolutionize their quality and competitiveness after World War II, and they served as consultants to the Japanese in the ensuing decades. The three became prominent in the United States after the Japanese quality revolution struck fear into American business. Although their contributions are many and complex, what we want todo here is simply point out contributions that are important to our understanding of the origins of Six Sigma.

Dr. W. Edwards Deming. Known for introducing statistical quality control to Japan. Deming also places great importance on the responsibility of management, believing it to be responsible for 94 percent of quality problems. Deming is also associated with the plan-do-check-act” (PDCA) cycle as a universal improvement cycle (also known as the shewhart fist advocated its use).

Dr. Joseph M. Juran. Juran developed the quality trilogy- quality planning, quality control. and quality improvement. Juran associated quality with customer satisfaction and dissatisfaction, emphasized ongoing quality improvement through a succession of improvement projects, and believed upper management leadership of the quality function was critical. Juan also emphasized reducing the cost of poor quality as a key to competitiveness.

Dr. Armand Feigenbaum. Known as the originator of “total quality control* or tolal quality Feigenbaum defined total quality as an effective system to ensure production and service a the most economical level that allow customer satisfaction.

1960s to 1980s Japanese Quality Revolution
Japanese companies chose to train almost all managers in the science of quality, unlike in the West, quality responsibility and training were not confined to members of specialized quality functions. Form the 1950s onwards. Japanese companies undertook a massive training program in quality for employees and instituted annual programs of quality 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)
TPS is perhaps the premier example known in the West of these Japanese methodologies Its practices – Kanban and quality circles, for example- have been widely studied and used in the West, often without achieving the same results. In the 1970s, TPS was equated with Just-in-time production methods. Stephen Spear and H. Kent Bowen believe the reason that Us companies have rarely achieved the kind of results that Toyota has is that they confuse the tools with the system itself. According to Spear and Bowen ‘s research, four basic rules capture that tacit knowledge that underlies the Toyota production system.

1. All work shall be highly specified as to content, timing, and outcome.
2. Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses.
3. The pathway for every product and service must be simple and direct.
4. Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest level in the organization.

In this system, expert knowledge requires the addition of the knowledge of the people doing the work to improve the process; the people doing the work need the guidance and help of leader-teachers to apply the scientific method in a controlled project to achieve improvement. In the Toyota Production System and in Japanese concepts of quality in general, processes, people and behaviors are seen as inextricably lined in a culture of continuous improvement.

1980s to 1990s. The American Quality Movement
Loss of market share, especially dramatic in the automotive and electronic industries, ultimately led to a reinvention of manufacturing in North America, beginning with the rediscovery of Statistical Process Control (SPC) and the introduction of quality circles, through Just-in-time (IT) and Total Quality Management (TQM) to business process reengineering (BPR) to lean Manufacturing and Six Sigma.

Just-in-Time ands Lean Manufacturing
Lean Manufacturing represents a rebirth in the United States of the powerful methods and concepts of the Toyota Production System. JIT, like its predecessor, failed in many cases because its implementation focused on the Tools and characteristics rather than o the underlying principles of TPS. Lean and Six Sigma are used side in some organisations.

Total Quality Management (TQM)
In application, TQM generally focused on organisations results rather than on business results. Although the mantra of customer focus was chanted, the tools for integrating what the customer required were not rigorous. Also, even while having a mid-set toward improving processes, entrenched Taylorism, along with the tendency of companies to ghettoize these improvement efforts as engineering and quality disciplines, have led to overall disappointment with TQM. TQM evolved during the mis-1980s into the first generation of Six Sigma at Motorola.

Business Process Reengineering (BPR)
Michael Hammer and James Champy’s message on business process reengineering. introduction in the early 1990s ion Reengineering the corporation, was welcome to an audience disenchanted with TQM and ready to use its new IT horsepower to automate processes and in doing so to tighten processes and eliminate unnecessary and redundant steps. Executives were looking for business results, not just organizational results.

TOM. JIT. Lean and BPR see work as a set of interrelated processes, reintegrated what was decomposed by Taylorism into isolated tasks. Process performance improvement is the focus.