Six Sigma in Practice

This is an approach to quality improvement based on the statistical work of Joseph Juran, one of two American pioneers of quality management in Japan. Sigma is a Greek letter used in mathematics to denote standard deviation, a statistical measure of the extent to which a series of numbers or readings deviates from its mean. One Sigma indicates a wide scattering of the readings. If the mean is the required quality standard of a particular process or product, then One Sigma quality is not very good. The higher the number, the closer the readings come to total perfection. At the Six Sigma level, there are only 3.4 defects per million.
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This may sound complicated, but in practice it has proved a popular way for managers to put quality management into effect. One of its great advantages is that it eschews the idea of aiming for “zero defects”, or total perfection—a dauntingly inaccessible goal for most. It presents a system for improving quality gradually. Companies or operational groups move step-by-step up the Sigma ladder, the ultimate goal being to reach the Six Sigma state—still just short of perfection. Reasonably unsophisticated computer programs do the necessary calculations when fed with data on the goals (the specifications of the perfect product or process) and the organisation’s actual achievements.
Six Sigma sounds like some sort of secret coven. Its advocates insist that it is no such thing. But it has certain attributes of the exclusive society. Anyone in an organisation who goes on a basic training course for a Six Sigma programme (and training is essential to an understanding of what it is about) is called a Green Belt. Anyone who is given the full-time job of leading a team that is embarking on a Six Sigma exercise is given further training and is called a Black Belt. Beyond this there are a special few who are trained even more, and they are called Master Black Belts. Their role is to champion the exercise throughout the organisation and to watch over the Black Belts and ensure that they are consistently improving the quality of their team’s output.
In its annual report for the year 2000, chemicals giant DuPont reported:
Six Sigma implementation continues to gain momentum. At the end of the year, there were about 1,100 trained Black Belts and over 3,400 active projects. The potential pre-tax benefit from active projects was $700m.
Pioneered in the United States by Motorola in the 1980s (and registered by the company as its own trademark), Six Sigma became hugely popular in the 1990s after Jack Welch adopted it at General Electric. Mikel Harry and Richard Schroeder, the two men who introduced the method to Motorola, went on to set up the Six Sigma Academy, a consultancy which has worked with such companies as Allied Signal, GR and ABB.
To achieve Six Sigma quality at GE, a process must produce no more than 3.4 defects per million “opportunities”. An opportunity is defined as “a chance for non-conformance, or not meeting the required specifications”. The company says: “Six Sigma has changed the DNA of GE. It is now the way we work—in everything we do and in every product we design”.
However, Six Sigma has not been an unmitigated success for everybody. Robert Nardelli took it with him when he moved from GE to head up Home Depot. But in August 2007 the Wall Street Journal reported that he had angered employees greatly with his attempt to force it upon them. Nardelli went on to try to resuscitate General Motors

Lean Production

It aims to combine the flexibility and quality of craftsmanship with the low costs of mass production .Lean production is the name given to a group of highly efficient manufacturing techniques developed (mainly by large Japanese companies) in the 1980s and early 1990s. Lean production was seen as the third step in an historical progression, which took industry from the age of the craftsman through the methods of mass production and into an era that combined the best of both. It has been described as “the most fundamental change to occur since mass production was brought to full development by Henry Ford early in the 20th century”.The methods of lean production aim to combine the flexibility and quality of craftsmanship with the low costs of mass production. In lean-production systems a manufacturer’s employees are organised in teams. Within each team a worker is expected to be able to do all the tasks required of the team. These tasks are less narrowly specialised than those demanded of the worker in a mass-production system, and this variety enables the worker to escape from the soul-destroying repetition of the pure assembly line.With lean production, components are delivered to each team’s work station just-in-time, and every worker is encouraged to stop production when a fault is discovered. This is a critical distinction from the classic assembly-line process, where stoppages are expensive and to be avoided at all costs. Faulty products are put to one side to be dealt with later, and a large stock of spares is kept on hand so faulty components can be replaced immediately without causing hold-ups. With such a system, workers on the assembly line learn nothing and the faults persist.When a lean-production system is first introduced, stoppages generally increase while problems are ironed out. Gradually, however, there are fewer stoppages and fewer problems. In the end, a mature lean-production line stops much less frequently than a mature mass-production assembly line.Lean production gains in another way too. In typical assembly-line operations, design is farmed out to specialist outsiders or to a separate team of insiders. Gaining feedback from both the production-line workers and the component suppliers is a long and awkward process. With lean production, designers work hand-in-hand with production workers and suppliers. There is a continuous two-way interchange. Snags can be ironed out immediately and machine tools adapted on the hoof. With the assembly-line model, the communication is linear.Lean-production methods have been introduced by many companies without sacrificing economies of scale. Japanese car manufacturers have achieved unit costs of production well below those of more traditionally organised European and American manufacturers with twice their volume. These same Japanese companies have also been leaders in the speed and efficiency of new product design, a crucial skill in a world where time to market is an important competitive lever.According to Michael Cusumano, who wrote a book on the Japanese car industry, the high productivity achieved by the lean-production methods of Japan’s car manufacturers depends not as some have maintained on a peculiarity of Japanese culture or of Japanese workers, but on technology and management. He wrote:The methods challenged fundamental assumptions about mass production. These consisted of revisions in American and European equipment, production techniques, and labour and supplier policies introduced primarily in the 1950s and 1960s when total Japanese manufacturing volumes and volumes per model were extremely low by US or European standards.Criticism of the idea has centred on the feeling that it is possible to be too lean. Beyond a certain point, a sort of corporate anorexia sets in. The total absence of surplus stock or labour can become a serious liability when there is even the slightest disturbance in normal processes or procedures.