Six Sigma for Everyone / Edition 1 available in Paperback
- ISBN-10:
- 0471281565
- ISBN-13:
- 9780471281566
- Pub. Date:
- 02/10/2003
- Publisher:
- Wiley
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Overview
Product Details
| ISBN-13: | 9780471281566 |
|---|---|
| Publisher: | Wiley |
| Publication date: | 02/10/2003 |
| Pages: | 144 |
| Product dimensions: | 6.00(w) x 8.80(h) x 0.60(d) |
About the Author
Read an Excerpt
Six Sigma for Everyone
By George Eckes
John Wiley & Sons
ISBN: 0-471-28156-5Chapter One
Why Has My Company Adopted Six Sigma?What Can Six Sigma Do for You?
"Six Sigma is Greek to me." -An Employee who just heard his company has started a Six Sigma initiative.
So your company has just announced they have begun a Six Sigma quality initiative. You might be an experienced worker who has been through a quality initiative in the past. In all likelihood that experience was a bad one where you felt the time and money was wasted and negatively impacted your work life. Or you might be a new employee who wants to know what the excitement is all about.
You might have heard or read about Six Sigma in the newspaper as organization after organization has begun to adopt and implement this powerful management philosophy. What we want to do in this book is take away the mysticism of Six Sigma. In this first chapter, we answer your basic questions about Six Sigma. We provide you with a user-friendly definition of Six Sigma. We give you a brief history of Six Sigma and then explain why Six Sigma is different from other quality initiatives. We discuss what Six Sigma is going to do for your company and then complete the chapter with a discussion of what Six Sigma is going to do for you.
A Beginning Definition of Six Sigma
Companies exist to be profitable. Profitable companies provide jobs and pay taxes that benefit the community, state, and country where they maketheir products or provide their services. Making a profit is based on having customers who want your product or service. Wanting your product or service is just the beginning. Every customer has requirements regarding the product or service. Think of your most recent experience where you exchanged money for some product or service. Maybe that experience was ordering lunch at a fast food restaurant. You decide to use the drive-thru and order a cheeseburger, french fries, and a large Coke.
First, you get into a line of other cars where it takes almost 10 minutes to get to the order menu. When you place your order, you can hardly hear the order person through the speaker provided. You next drive your car around the drive-thru, pay your money to a person who, without a word or a smile, hands you a bag containing your order. You drive away, sticking your hand into the bag and pulling out a fry, hoping for a crisp, hot, salted snack on the way back to work. Instead, the fries are soggy and lukewarm. As you pull into your company's parking lot, you decide to play some music and eat your cheeseburger. Rather than the cheeseburger you ordered, you pull out a regular burger. You eat it anyway because you are hungry but decide the next time you will choose another place instead.
Your lunch experience shows that your customer satisfaction is more than just the exchange of a product or service for a fee. You exchanged your money for the product offered by the fast food restaurant but you were not happy. Your unhappiness was based on the restaurant not meeting your requirements. Requirements are those characteristics about your experience that determine whether you are happy or not. In this case, you probably had requirements about the accuracy of your order, the crispness and freshness of your french fries, and the time it took for your order to be filled. You might even have had a requirement about the courtesy of the person who handled your order. In this example, the restaurant did not meet your requirements.
In our fast food example, you didn't complain when your requirements weren't met. Instead you made the decision to take your business elsewhere. Think about the customers of your business. Are they happy with your products or services? Every business exists because it has customers. Every customer has a set of requirements. If you are meeting their requirements, you are being effective. If their requirements are not being met you are being ineffective. If you are ineffective and do nothing about it, soon you will be out of business.
Effectiveness through meeting (and preferably exceeding) requirements is only half the battle. Let's return to our fast food example for a moment. Let's suppose our fast food restaurant is committed to customer satisfaction. Suppose they widely advertise that if there is any customer dissatisfaction they will immediately replace the order free of charge and even deliver a new meal to wherever you are. Replacing your order and delivering it free to you would certainly increase customer satisfaction and make the restaurant a more effective organization. However, focusing merely on customer effectiveness would eventually mean they could go out of business. Why? Because to be a profitable business, an organization must also be efficient. Efficiency relates to the amount of resources consumed in being effective. Efficiency can be measured in time, cost, labor, or value. Thus, if the fast food restaurant has to hire more people as drivers, hire more people to cook burgers for a second or third time for the same customer, and pay for the materials to make these free burgers, they quickly will recognize that the cost of being totally focused on effectiveness without efficiency will result in an unprofitable situation. Since businesses exist to make a profit, being focused on the customer without also being focused on efficiency will not be a good business decision.
Six Sigma, at its basic level, is attempting to improve both effectiveness and efficiency at the same time. Again, let's return to our fast food restaurant. We have all seen the fast food restaurant with the golden arches that publicizes "Millions served." This concept of millions served will help us understand the basic concept of Six Sigma.
A technical measure of how many unhappy customer experiences per million opportunities is the concept behind Six Sigma. For example, if on any day McDonald's served one million customers, how many of them experienced what you did during your lunch experience? If only three (yes, three) customers were unhappy with their experience, then McDonald's achieved Six Sigma on that day. This is because Six Sigma is equivalent to only 3.4 bad customer experiences for every million opportunities.
Of course, do you think only 3.4 bad customer experiences at McDonalds occurred today? If 233 bad customer experiences occurred per million McDonald's customers then McDonald's would be a Five Sigma company. If 6,210 customers had experienced soggy french fries or an inaccurate order then McDonald's would be a Four Sigma company. If 66,807 McDonald's customers opened their lunch bag and found a Big Mac when they had ordered a Quarter Pounder, McDonald's would be a Three Sigma company.
Six Sigma is a measure of customer satisfaction that is near perfection. Most companies are at the two to three sigma level of performance-that means between 308,538 and 66,807 customer dissatisfaction occurrences per million customer contacts.
Companies that have a two to three sigma level of performance experience business problems. They don't make as much money as they should for their shareholders. Shareholders get mad and begin to take their money elsewhere. Management wants to increase profitability. They fear for their jobs and want to improve the "bottom line." Often, they think too much in the short term and begin to lay off employees. In the short term, the bottom line looks improved. Of course, the emphasis here is on the short term. With less people in the organization, there is more work for those who remain.
What management forgets by "downsizing" is that if they run a business that is neither effective nor efficient, things will only get worse with less people expected to work harder. Ultimately, businesses that operate by focusing on short-term profitability will result in long-term unprofitability.
In many companies, management believes that downsizing is a way to improve profitability. Since the 1980s, there have been attempts to change that approach. During the 1980s, some management improved profitability through downsizing. For example, the early 1980s showed an interest in Japanese manufacturing techniques. Some U.S. manufacturers mimicked these techniques. The early 1980s were marked by efforts like Statistical Process Control or Just in Time Manufacturing. While well intentioned, many of these efforts were ill fated from the beginning. Management attempted to use these efforts in the same way they used downsizing. That is, they attempted to use them as cost savings measures. The workforce saw these efforts for what they were, attempts to get more work out of less workers. This was particularly the case when these quality efforts were combined with downsizing. In addition, management only attempted to implement these initiatives as programs. What this meant was that the focus was almost exclusively on the tactics of improvement at the worker level with virtually no work done by management itself. For a company to truly become effective and efficient, it was necessary for a quality initiative to have a focus on changing how executives managed their business.
Six Sigma was started in the mid-1980s. Here was a quality initiative that had a significant role for management in its implementation. Started at Motorola but popularized in the 1990s by AlliedSignal and General Electric, Six Sigma was different than previous approaches to quality improvement.
With other quality approaches, management played little if any role other than approval of bringing in external consultants to train the workforce. With Six Sigma, the work begins with management. First, executives create the Process Management system. Before work is done that affects the average worker, management has already spent several months working on identifying and measuring the processes of their organization.
A process is defined as the series of steps and activities that take inputs provided by suppliers, add value and provide outputs for their customers. Six Sigma as a management philosophy instructs management to begin identifying the 20 or 30 most important processes in their business. Next management measures the current sigma performance of each of these processes. Many, if not all, of the processes will be operating at two to three sigma performance. Some processes may even be lower than two sigma. Once management has identified their processes and personally been involved in measurement of their current performance, they then identify the lowest performing processes that have the most direct impact on the company's business objectives. Business objectives are the five to seven most important goals a company establishes each year. Sometimes they are financially stated (like profits) but there are others like customer satisfaction or employee satisfaction.
Once the processes having the worst performance with the greatest impact to the business objectives are identified, project teams are formed. That's where the individual worker comes in. They will become part of a five to seven person team that will have the responsibility of improving the performance of the worst performing processes. These teams usually exist for four to six months. They are taught a series of tools and concepts (that we will cover in later chapters) to help them use their skills to improve sigma performance to achieve greater effectiveness and efficiency.
The History of Six Sigma
Motorola is where Six Sigma began. A highly skilled, confident, and trained engineer who knew statistics, Mikel Harry began to study the variations in the various processes within Motorola. He soon began to see that too much variation in any process resulted in poor customer satisfaction and ineffectiveness in meeting the customer requirements. While the concept of variation can be expressed statistically, it doesn't have to be complicated. Again, think of your lunch buying experience. Let's go back to our fast food restaurant where you are the customer. What if over the course of going there for lunch five days in a row, you experience the following waits in the drive-thru line measured in minutes from the time you join the line until you get your order filled:
Monday (14 minutes),
Tuesday (12 minutes),
Wednesday (2 minutes),
Thursday (24 minutes), and
Friday (8 minutes).
The average wait in line for lunch this week is 12 minutes, (by the way, have you ever considered brown bagging it?). Yet, to say that you will typically wait 12 minutes in line doesn't describe the real situation. On Wednesday you waited only 2 minutes and on the very next day you waited 24 minutes. As my good friend and colleague Dave Schulenberg says, "Customers feel variation, not averages." Not having control over variation, this fast food restaurant is going to lose business, since you don't like the uncertainty of not knowing whether it is going to be a 2-minute wait or a 24-minute wait.
Mikel Harry recognized the importance of measuring variations in the various processes of Motorola. However, unlike other quality efforts that spent most time on measurement, Harry and others at Motorola acted on what processes produced the most variation. They applied a complete set of tools to reduce and control the variation in the poorly performing processes and greatly improved the effectiveness and efficiency of those processes. Not only did they improve those processes, they actively engaged their Chief Executive Officer, Bob Galvin, in their work. Soon, Galvin began to manage the variations in all of Motorola's processes and made Six Sigma the management philosophy in all he did.
In 1992, I was fortunate to hear Bob Galvin give a speech at the Juran Institute. While I was giving a speech on supplier management, I made sure to hear his keynote speech since I had spent time in the late 1980s working with several Motorola suppliers helping them begin to implement Six Sigma, albeit on a smaller scale than Motorola itself. After hearing that early November 1992 speech, I knew Six Sigma was going to be different. Never in my years of consulting had I observed an executive talking about a quality initiative. In the past, it was always other quality professionals talking about the craft of improvement, complaining accurately about the lack of management support.
If only other executives could have the passion of Bob Galvin, I thought that night. If only they could possess the type of commitment and involvement that Galvin was showing at Motorola, Six Sigma could become a true management revolution, moving management away from thinking of downsizing as their only approach to improving the bottom line.
I didn't have to wait long.
Continues...
Excerpted from Six Sigma for Everyone by George Eckes Excerpted by permission.
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Table of Contents
Chapter 1. Why Has My Company Adopted Six Sigma?: What Can Six Sigma Do for You?Chapter 2. The Strategic Component of Six Sigma.
Chapter 3. The Tactics of Six Sigma: Define, Measure, Analyze, Improve, and Control.
Chapter 4. 10 Technical Tools to Master While on a Six Sigma Team.
Chapter 5. 10 "Soft" Tools You Will Need on a Six Sigma Team.
Chapter 6. 10 Common Questions about Six Sigma.
Appendix: Process Capability and Sigma Conversion Table.
Index.