From: Terry Peterson
Date: Thu, 11 May 2000 21:54:22 +0100
To: den.list
Subject: six sigma
Not this again, I hear the world-wide groan.
I don't intend to prolong the discussion. I just wanted to thank the many good people who responded to my original request for help. It has helped me resolve the client issue.
Below is a summary of the responses. I am not able to acknowledge all the contributions, if you see your words, please take it as a sincere compliment.
SUMMARY OF RESPONSES
First and foremost Six Sigma is a BUSINESS. The Six Sigma Academy in Scottsdale, Ariz., is run by former Motorola quality experts Mikel Harry and Richard Schroeder, who rope steers in their spare time and pose for publicity pictures in cowboy hats and boots. Their fees start at $1 million per corporate client. It's expensive to implement, so it has been a large-company trend.
Most people responded that there is not an affordable way to learn Six Sigma well without attending "THE ACCADIMY." This explains why I couldn't find any books that explain what six sigma is and how to do it; and why Harry's books and articles are heavy on promoting benefits and light on details. They aren't about to give the store away! ASQ has decided to make Six Sigma training affordable to small and midsize companies. But even though trainees from different companies are grouped together, it still costs $35,000 to $40,000 a person. Despite this, there's a waiting list.
Six sigma does indeed have an attractive message for CEO's - save millions on the bottom line. Put the resources in place, get the people trained up and they'll big savings in waste reduction and efficiency gains. About 30 companies have embraced Six Sigma including Bombardier, ABB (Asea Brown Boveri) and Allied Signal. But it's capturing widespread attention because of two heavyweight disciples: CEOs Jack Welch of GE and Bossidy of AlliedSignal. They are arguably the most influential executives in business today; they talk to each other on the phone weekly and encourage their employees to share Six Sigma discoveries between companies.
What is it? I was stuck for info. However, it turns out that two guys from my client had been trained as black belts in mid 90's, although they hadn't been able to make much use of it. So, I was able to study their material in depth, and I was able to confirm that Six Sigma uses bog standard statistics, process management and continual improvement techniques in a nicely packaged, well promoted marketing proposal. First up, it is NOT Deming based: there is no concept of SoPK; despite the heavy doses of statistics, spc and process behaviour charts are relegated to process monitoring; and a major element uses Juran's breakthrough strategy for quality improvement projects.
In his current QP articles, Harry says "In most cases, what we see is alphabet soup--a wide array of programs and initiatives that may or may not work consistently toward the same end by the same means. We see a cornucopia of well-intended and sometimes disconnected interventions struggling to coexist under one corporate umbrella<sum><sum>. In other words, while the people in charge of the processes and operations of the company are focused on the real expectations of the customer, the company's executives are focused on the real and perceived economic needs of the business. While both factions are trying to achieve their aims independently, often there are mismatches among the customers' needs, the needs of the provider and the inherent capability of the systems by which these needs are aligned, connected and improved<sum><sum>. The crux of the issue is that the business of making profits has been too large for any one specific management intervention. Although useful initiatives have been present for a long time, and although they have seemed perfect on paper, they have never functioned as an integrated whole. We have lacked a holistic focus, an approach that could align and leverage the various initiatives in a harmonious and simultaneous manner.
Dead right Mikel! However, we already have an holistic framework - it's called SopK!!
He goes on, "We at the Six Sigma Academy believe our new definition of quality can provide the organising focus the quality movement needs <sum>.. Six Sigma, focuses concurrently on all elements of the matrix, moving a company toward entitlement in all dimensions of business. Via the Breakthrough Strategy, Six Sigma brings the entire mosaic of the matrix under one umbrella. In this way it provides a complete framework for balanced and profitable corporate turnaround".
Good words but, on closer inspection, six sigma in action doesn't match this rhetoric. Nice packaging and good promotion don't add up to add up to a soundly-based philosophical framework for running an organisation. The training concentrates on advanced statistical methods that demand a relatively high degree of mathematical ability. It depends on measureables attained to keep it alive in the eyes of the top level management, to keep it interesting to the people affected by it, and to sustain the "priestly caste" of the black belt. The programme is very intensive, one black belt likened it to 'drinking through a fire hose'. Most of it is surplus to requirements.
Harry outlines the basic framework of six sigma as;
-- Highly visible top-down management commitment to the initiatives.
-- A measurement system (metrics) to track the progress that are integrated into business strategy. This weaves accountability into the initiatives and provides a tangible picture of the organisation's efforts.
-- Successful six sigma efforts are supported with a framework of process thinking.
-- Internal and external benchmarking of the organisation's products, services, and processes. This requires disciplined customer and market intelligence gathering.
-- Six sigma projects must produce real savings.
-- Stretch goals to focus people on changing the processes by which the work gets done, rather than "tweaking" the existing processes. This leads to exponential rates of improvement.
-- Educating all levels of the organisation. Without the necessary training, people cannot bring about breakthrough improvement.
-- Success stories to demonstrate how the Breakthrough Strategy is applied and the results.
-- Champions and Black Belts to promote the initiatives and provide the necessary planning, teaching, coaching and consulting at all levels of the organisation.
-- Developing a breakthrough philosophy.
-- Leaders support and reward initiatives and the improvement teams that carry them out
Again good words, but there are concerns about this in practice. Right from the start of six sigma training the 'bottom line' financial gain from projects is the key project driver. Customer focus is of secondary importance; in the real world the first question the black belts have to answer is "How much will this project save?". Short term thinking does not provide long term benefits derived from improving processes by working with a customer on what their expectations are. One of the advantages advantage claimed for six sigma is its addition of resources, the corps of highly qualified business process improvement experts (the green, black, and master black belts) who wield the tools needed to achieve the enterprise's strategic objective. Expensive to train (up to US$30,000 per belt) and deployed for the medium to long- term, these highly motivated and skilled individuals focus on corporate sponsors (for the leverage required to overcome resistance to change, obtain additional resources, and align strategic objectives), make sure that the right metrics are identified, and continually signpost progress to cement-in both corporate and front-line commitment. Six sigma programmes call for "the best people" to be trained as black belts.
However respondents cite two issues with this:
-- Quality improvement is made to seem difficult and the prerogative of the expert. This seems to miss the notion that reducing variation ought to be the job of everyone. The Japanese feel that most workers are capable of learning what is needed to ensure quality and continuous improvement at the line worker level and expect they will study and analyse the quality control process on their own initiative. I believe this to be consistent with Dr. Deming's and Shewhart's opinion as to the learning abilities of the "willing workers."
-- Most quality improvement requires consistent application of basic approaches. Most black belts when interviewed will readily admit that over 90% improvements are achieved with about 20% of the content of the training. This is very wasteful "Where six sigma programs are being effective they tend to be in companies with very directive cultures..... some 'master' black belts are reporting spending as much as 60% of their time on collecting and reporting project data. The bigger drawback, however, is that the moment the management stop driving, all improvement stops"
In my original query, I asked about the 1.5 sigma shift, or the idea that 6sigma actually equals 4.5 sigma. No one was able to cite evidence for this. It seems to be based on a concept of process drift and/or short-term vs. long-term limits. If this makes sense in your system, then it might have some value. Most respondents did not accept it. I also had difficulty with the relevance of 6 or 4.5 sigma. Matching the voice of the customer to the voice of the process is an obvious need. But, how you attach a sigma value to customer entitlement seems to me a mind-boggling concept. Deming said, "It is necessary to innovate, to predict the needs of customers, to give them more". In other words, don't just meet today's perceived needs, continually strive to improve everything, always.
One respondent reported Don Wheeler's comments on six sigma, "Although Six Sigma is obviously based on and derived from the area under a normal curve, it is used as a communications metric, and not a scientific one. It's a way to express the approximate aggregate capability of a process. Understanding it that way requires that you <sum> add a new definition for 'sigma' to your vocabulary, but once you do that, it actually becomes a <sum> useful communications vehicle. "It is unfortunate that they used the word 'sigma,' because it has such precise meanings in the statistical world (or not, depending upon whom you read)."
Does it work? From the responses, the answer is, "it depends". It probably has utility in areas that involve multi-component assembly, such as advanced electronics. This may explain why GE, Allied Signal, Motorola, et al, have got mileage from it. However, others report that some companies have realised after several years application of six sigma that their customers are not seeing the benefits and are becoming irritated by the constant publicity.
Is the cost justified? Those who make their living by training Six Sigma are not going to stand up and say that it does not provide value. My view is that some organisations may be able to achieve the short term cost savings and justify the cost of training the multi-colour belts. Long term; the jury is still out.
There remains one outstanding issue. Six sigma is essentially predicated on existing in today's Anglo-Saxon, (i.e. British/American), management model. It says, "carry on as you are, and we will show you how to further improve the bottom line". One of my favourite papers (1) suggests that the new management theories cannot be grafted piece-meal onto existing structures, it requires full-scale organisation change, In Deming terms, 'transformation'.
Myron Tribus says that most of the alphabet soup of quality initiatives; ISO-9000, MBNQA, EFQM Excellence Model, etc, can have real value, if they are implemented through a deep understanding of SoPK. The thinking process involved in this understanding means that management simply has transform the way they run the organisation. Six sigma's attempt to eschew this, means that it will inevitably be seen as yet another business fad, nonetheless profitable for those selling it.
I hope this closes the discussion.
(1) TQM's Challenge to Management Theory and Practice, Grant, Shani and Krishnan, Sloan Management Review. Winter 1994
Terry Peterson
