7.1. A Brief History of Six Sigma
The foundation of Six Sigma was created at Motorola around 1979. Two engineers, Art Sundry and Bill Smith, were the pioneers. They were involved in the company's pager business at the time. And the business was having quality problems. The demand for pagers was skyrocketing, and Motorola was cranking up production to take advantage of the demand. But the pace proved to be somewhat hectic, and problems began to pop up.
Out on the factory floor, when a pager rolled off the assembly line, before it was packaged, it went to Test. If it passed there, OK. If it failed, it was rerouted to Repair. Once Repair fixed what was wrong, it went on to packaging and then shipping. When more and more pagers started finding their way to Repair, Sundry and Smith, both intrigued by this growing quality problem, began to track the lives of the troublesome pagers once they got out into the field, and they noticed an interesting fact. The pagers that failed initially in Test failed more often in the field even though these were the ones that had gotten that extra shot of quality control by going through Repair. The pagers that passed Test originally tended to operate defect-free in the field.
Sundry and Smith knew that Motorola was committed to customer satisfaction and looked around to see how the company was dealing with this. The model they saw was from the Classical School. Motorola was committed to a large in-house repair facility to fix anything it could find before it got into the field. And it also invested in many repair shops in the field, so customers wouldn't have to deal with dead pagers for long. This was the American business trend of the early 80s: Motorola was keeping its customers happy by reacting to (correcting) problems in the field. But Sundry and Smith had the following revelation. They saw (just like Philip Crosby knew) that quality through reaction is expensive. It takes a lot to support a reaction strategy. More people, more materials, more steps, more time, especially more money.
That's when they realized that the defect-free pagers were not only superior and imminently more reliable, they actually cost the company less money. The lesson was clear: improving quality reduces costs. It reduces costs by reducing activities and materials. The American business climate at the time thought pretty much the opposite: it costs too much money to build quality in; it's cheaper in the long run to deal with it in the field.
Sundry and Smithboth experienced engineersbegan to develop statistical measures so that they could empirically analyze Motorola's production process to find out why these defects were creeping in. This analytical, numerical approach was essential because the pager-making process was large. It was complex. It had lots of interrelations. It was clear in this case that "gut feeling" was not the way to make improvements. What was needed was hard data. Lots of it.
Over a period of three years, Sundry and Smith implemented measures and techniques, casually labeled Six Sigma, across Motorola, measuring, measuring, analyzing, and improving. This new approachthe new program they had worked outworked. It worked out very well. From 1985 on until today, Motorola has documented over $16 billion in savings from their Six Sigma efforts.
In 1995, Jack Welch adopted Six Sigma for General Electric. Jack Welch made Six Sigma a part of GE culture. He is largely credited with widely promoting the success of Six Sigma at GE and its potential for successful use throughout corporate America. His famous quote is that Six Sigma "changed the DNA of GE."
Jack Welch and his team are the people who shaped Six Sigma into the program we know today. GE popularized and formalized Six Sigma through such concepts as Critical to Quality, the Voice of the Customer, and the DMAIC methodology. Jack Welch has credited Six Sigma with saving GE hundreds of millions of dollars in 10 years of use. Six Sigma is so important at GE that today you can't be promoted at the company without being Six Sigma-trained and -certified.
In the last 10 years, Six Sigma has risen to the top as one of the most talked about process improvement and quality management programs available. It rivals ISO 9001 and CMMI in interest and adoption. But of the three, it is often the least understood. There are a couple of reasons for this. The first is that compared to ISO and CMMI, Six Sigma has the potential to be imminently more complex. If you move seriously into its statistical and quantitative aspects, it can be both powerful (to the informed) and powerfully daunting (to the uninformed). And then there is the question of what Six Sigma actually is. Is it GE's property? Did Motorola get a patent on it? Who is the owner of Six Sigma?