Six Sigma Is No Longer Enough - How does this 6 Sigma article affect us?

[Wes Bucey]

A Reuters news agency article today struck my eye. Many Covers have expressed ambivalent feelings about Six Sigma. I am curious whether any of you have comments related to this topic.

Originally Posted by Reuters

http://money.excite.com/ht/nw/bus/20...n12156332.html

Six Sigma Is No Longer Enough
Saturday May 15, 9:08 AM EDT
By Michael Flaherty

NEW YORK (Reuters) - Impatient investors and demanding industry analysts are pushing Corporate America's best-known efficiency program deeper into history.

The program, known as Six Sigma, still retains a loyal, if not cult-like following among executives and some of their staff, who earn black belts and green belts as they study its methods.

But in an era when a new product is old news in two fiscal quarters, critics of Six Sigma say companies need to move beyond the 20-year-old method in order to compete.

"Six Sigma does not create innovation," said Corporate strategist Jay Desai, who helped implement Six Sigma at conglomerate General Electric Co. (GE).

That's not to say Six Sigma will ever go away.

Its methods are a virtual religion at GE, where Six Sigma is said to have saved the company billions of dollars over the years.

Dow Chemical Co. (DOW), the largest U.S. maker of chemicals, swears by the program. And Heavy equipment maker Caterpillar Inc. (CAT) said it reaped $500 million through Six Sigma in 2002.

But the days of investors favoring slow and steady growth are waning. Investors want top-line growth fueled by new products.

"If Lucent applies Six Sigma, they die," Desai said, pointing to Lucent Technologies Inc. (LU), one of the world's largest makers of telecommunications equipment that has recovered after ringing up $30 billion in cumulative losses during the technology downturn.

"Six Sigma is not a solution for new products or a break-through strategy," said Desai, who now runs the Institute of Global Competitiveness, a management think-tank.

Lucent agrees.

"We've looked at Six Sigma," Lynn Mercer, Lucent's vice president of quality, told Reuters. "It would be an excellent tool set, but it's too narrow a focus and rigid to allow some of the innovation, where some of the creativity occurs."

Still, Six Sigma is in place at several of the world's top companies and has led to many profit turnarounds.

"We will continue to rely on our Six Sigma culture to ensure we are growing profitably," said Caterpillar Chairman and CEO Jim Owens in a statement. Owens added that "virtually all" company employees are involved with the program and that Caterpillar boasts 2,700 trained Six Sigma black belts.

CORPORATE CLEAN UP

The term Six Sigma originated from engineers at telecommunications maker Motorola Inc. (MOT), who in 1984 found that the average U.S. company recorded 66,800 errors per million opportunities in any process. "Three sigma" is an old statistical term referring to the point where a process needs correction.

Thus, Six Sigma was coined to mark an unprecedented efficiency standard: 3.4 errors per million opportunities.

The term ultimately took on a larger meaning. It became a data-driven methodology aimed at reducing waste, improving efficiency, and saving money. It's subscribers say the program translates into quality products, and customer satisfaction.

Joan Abraham, a manager for Six Sigma Academy said despite its critics, the program is more popular than ever.

Six Sigma Academy, a Scottsdale, Arizona training organization, has taught 10,000 people in 20 countries and 6 continents in the methods of Six Sigma, according to its Web site.

"What we've seen is an expansion to mid-size companies, small companies and even private companies," said Abraham.

Six Sigma won't go away and indeed its followers have seen positive results, said Larry Keeley, president of Doblin Inc., an innovation strategy firm.

But just implementing the program isn't enough anymore.

For example, International Business Machines Corp. (IBM) used Six Sigma to improve efficiency while its competitors gained ground with new products.

It's this focus on the bottom line that hinders Six Sigma disciples, said Michael Hammer, founder of Hammer and Co., a management education firm.

"Six Sigma will get you to parity, but not ahead of your competition," Hammer said. "It's for fixing problems, not for innovation.

[Al Dyer]

Wes,

The article doesn't surprise me, there are tools out there that we can all use. I am one of those that think of 6S as just glorified a continuous improvement process that just incorporated the tools that were already available. 6S has made many people rich by being the "wave of the future" when it is just good practice re-gurgitated.

This is not a total rejection of the process, just a view on its marketing!

Al...

[Marc]

I read that a few minutes ago at http://reuters.com/newsArticle.jhtml...toryID=5153899 and was going to paste it here as you did...

Not news to me.

[nodakbil]

I also read the article first thing this morning. As a quality manager for a company in which "Corporate" is cramming 6S down our throats, it was reassuring to see that my opinion is shared. A major part of our business is reliant on repair development, and I just haven't seen 6S as useful mechanism in this area. Don't get me wrong, I believe that the tools 6S provides can be very useful for certain aspects of the business, but these techniques are nothing new-just restated and marketed.

P.S. Got your message Wes. I'll send you an update this weekend!

[Govind]

"Six Sigma will get you to parity, but not ahead of your competition," Hammer said. "It's for fixing problems, not for innovation".

With due respect to fellow professionals, Iam sceptical about this statement. There are Six sigma projects that use TRIZ (pronounced "TREEZ", the Russian acronym for the Theory of Inventive Problem Solving).

During my recent discussion with a SS Black belt from a leading Appliance manufacturer, he mentioned that their organization use TRIZ extensively as one of the Six sigma Tool.

Dr. Elena Averboukh says,"Advanced I-TRIZ methods and tools can be used for enhancing Six Sigma methodology, both DMAIC and IMADV or DFSS, especially when Six Sigma methods and tools are by different reasons inefficient and/or insufficient".

Reference: http://www.isixsigma.com/library/content/c030908a.asp

Regards,
Govind.

[Rob Nix]

The foregoing is just further evidence that "Six Sigma" has no clear definition, and means different things to different organizations (depending on who informed them of what it is). It is like a blanket that takes the shape of whatever "tools" are shoved under it. TRIZ is an additional example of a tool that has been "adopted" by 6S.

There is one bright spot to the Reuters article, Wes, and that it may be the harbinger of 6S's ultimate demise. I wonder what will replace it?

[KMAAA]

The article takes a rather odd bent on 6S. 6S doesn't, and never has (at least in my training), made any claims with respect to enabling or fostering innovation. 6S is a solid, data-driven pathway to get you from a clearly defined objective to a completed project or product. Innovation needs to happen outside the process of commercial project execution & product/service launch(6S).

Desai & Hammer may well be writing/contributing to something controversial to create a "buzz" that ends up benefiting their "Institute of Global Competitiveness" or "Hammer and Co". The approach is certainly an age-old & well worn political tactic: (1) Identify something as evil, unfit, corrupt, misguided, a problem...etc.. (2) Get people to rally against whatever this evil is and (3) Present yourself as the solution to the problem. This gets people elected decade after decade.

It's interesting that Desai & Hammer suggest 6S isn't "it", but they offer nothing to replace it. Perhaps one has to bring them in as a consultant to be enlighten as to the next pearls of wisdom?

(Desai & Hammer aside) It surprises me how many people are willing to jump on the bandwagon to rally against 6S without the benefit of ever having been trained in the discipline as a whole. This is counter-intuitive given the nature of the many of the issues discussed on this series of boards. Whether 6S may or may not be re-hashed traditional practices is pretty much irrelavant. It promotes organized, solid, data & stats driven work toward achieving a goal and does this in places where (apparently) traditional approaches have not been adopted previously. This is a bad thing? If it is, then, by definition, so must be the re-hashed traditional practices.

If organized & clear project definition combined with a solid, data & stats driven work toward achieving a goal is now becoming passe, are we going to revert to the "Edisonian blunder-bust, fire-away & I hope we hit something we can sell" approach? At the cost of resources I can't believe this would be an attractive option. I've been in RDE for near 2 decades. The easy stuff has been invented and is either a commodity by now or obsolete. Sophisticated markets require sophisticated development...(even the mind numbing pop-culture is pumped by number crunching marketing wizards).

Problems are everywhere...what are the alternate solutions?

[Wes Bucey]

Originally Posted by Rob Nix

The foregoing is just further evidence that "Six Sigma" has no clear definition, and means different things to different organizations (depending on who informed them of what it is). It is like a blanket that takes the shape of whatever "tools" are shoved under it. TRIZ is an additional example of a tool that has been "adopted" by 6S.

There is one bright spot to the Reuters article, Wes, and that it may be the harbinger of 6S's ultimate demise. I wonder what will replace it?

As I recall, Rob (how soon they forget), you were present at the birth of my new Quality program:

Originally Posted by Wes Bucey

From Wesley Bucey
Date Oct-15-02 08:10 AM
Subject "The Placebo Effect" - Wes's New Quality Theory

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From Wes Bucey, Quality Manager:
My new theory of Quality (vis a vis "Six Sigma") is based on the following:
Any Quality System, when first imposed, will exhibit a "Placebo Effect" of improvement in the business of the organization. Unless the new system is rigorously compared against a Control system, no real value can be attributed to the new system. (The primary task will be to prevent rigorous comparison against a Control.)

Here's an excerpt from a definition of "Placebo Effect" from the Skeptic's Dictionary (http://skepdic.com/placebo.html):
However, it may be that much of the placebo effect is not a matter of mind over molecules, but of mind over behavior. A part of the behavior of a "sick" person is learned. So is part of the behavior of a person in pain. In short, there is a certain amount of role-playing by ill or hurt people. Role-playing is not the same as faking or malingering. The behavior of sick or injured persons is socially and culturally based to some extent. The placebo effect may be a measurement of changed behavior affected by a belief in the treatment. The changed behavior includes a change in attitude, in what one says about how one feels, and how one acts. It may also affect one's body chemistry.

The psychological explanation seems to be the one most commonly believed. Perhaps this is why many people are dismayed when they are told that the effective drug they are taking is a placebo. This makes them think that their problem is "all in their mind" and that there is really nothing wrong with them. Yet, there are too many studies which have found objective improvements in health from placebos to support the notion that the placebo effect is entirely psychological.

It is my "new found" belief that many organizations do benefit from the Shaman's visit (hiring a Six Sigma Master Black Belt Quality Consultant, for example), especially when the rest of the tribe also use the same Shaman.

I've been told from an early age that a Stone Age Shaman could actually have an apparently good "cure ratio" for poisonous snake bites just by dancing, praying, and applying poultices. The reason is that often the biting snake was misidentified as poisonous, OR didn't deliver enough venom to KILL, OR by some coincidence, the poultice absorbed enough of the venom to reduce the dose from fatal to something survivable.

Of course, when it didn't work, the Shaman always had someone or something else to blame for the fatality. In some cases, they blamed the victim's evil personality OR maybe the fact that a bird's shadow touched the victim during the healing ceremony.

Modern day Shamans use similar blame-deflecting excuses for their failures. The most frequent phrase we hear these days is: "The operation was a success, but the patient died."

I will be enlisting disciples for my New Quality Theory shortly. A primary criterion for acceptance will be the number of excuses for failure the disciple can bring with him or her.

I remain, with tongue firmly in cheek, -Wes Bucey