September 12, 2018
Steve Wise recounts Six Sigma’s history and explains its influence on business innovation.
For over three decades, manufacturers across industries have used Six Sigma, a statistical method for making better products while lowering costs and eliminating waste. The advent of Six Sigma was a game-changer, not just for the manufacturing sector, but also for all corners and levels of business across the globe. Six Sigma demands quality and attention as it inspires efficiency, innovation, and yes…profit. In a very real way, I submit that Six Sigma has changed the world for the better.
Quick Recap: What is Six Sigma Process Control?
To recap from Part 1 in our series: Six Sigma is a data-driven approach to eliminating defects in a process with the goal of six standard deviations between the mean/average of a collected quality data set and the nearest specification limit. One of the main strategies for implementing Six Sigma is the DMAIC approach. It is an acronym that describes five phases for driving process improvement: define, measure, analyze, improve, and control.
Manufacturing Missing Mojo
Six Sigma process control has become such a vital and ingrained part of the manufacturing ethos that it is difficult to imagine a time before Six Sigma. Yet it was a mere generation ago, in the mid-1980s, when manufacturing was one of a number of key U.S. industries struggling to overcome a severe global economic recession. The recession was salt in the wound caused by the oil embargo and stagflation of the 1970s, as well as the loss of America’s post-World War II undisputed market dominance to higher quality foreign competition.
Seeking to regain some of America’s lost manufacturing mojo, Motorola began experimenting in the late 1970s with problem solving and quality improvement through statistical analysis. In 1987, Motorola CEO Bob Galvin and engineer Bill Smith formally rolled out “The Six Sigma Quality Program.”
Motorola consultant Dr. Mikel Henry also played a crucial role in formulating the aforementioned DMAIC approach. Meanwhile, the cornerstone concept of statistical quality control can be traced back to the work of Walter Shewhart—the widely acknowledged “father of Statistical Process Control (SPC)”—and Shewhart’s protégé, Edward Deming, early in the 20th
A New Methodology and Cultural Change
Motorola’s Six Sigma process control program not only developed a new manufacturing standard, but it also created a methodology and necessary cultural change that resulted in less waste, increased savings, and customer satisfaction. From 1986 to 2004, Motorola realized $17 billion in Six Sigma-inspired savings.
Motorola’s Six Sigma success did not go unnoticed. In 1988, Motorola was the first recipient of the Malcolm Baldrige Quality Award. Established by Congress in 1987, the Baldrige Award was created to recognize performance excellence in U.S. companies. This inspired other companies to take a closer look at Six Sigma methodology.
In the early 1990s, Larry Bossidy, CEO of AlliedSignal (now Honeywell) was an early adopter of the methodology. He has credited Six Sigma with effectively turning around the company. In 1995, Bossidy introduced the Six Sigma concept to Jack Welch, CEO of General Electric (GE).
Six Sigma’s Evangelist: General Electric
Welch embraced Six Sigma with an evangelical zeal when GE launched its own program in early 1996. The Six Sigma methodology quickly became a requirement throughout the company at all levels. Welch made Six Sigma a principal part of GE’s corporate brand and an essential part of his personal identity.
At the end of 1998, GE boasted a 98-percent reduction in invoiced defects and disputes, and recorded $750 million in savings. GE’s loud-and-proud implementation of Six Sigma inspired companies in a number of sectors to adopt the methodology, even as GE fostered the evolution of the Six Sigma approach.
I don’t think it’s an exaggeration to suggest that the emergence of Six Sigma has had a profound and lasting impact on business in America and across the globe. Six Sigma revived American manufacturing’s relationship with efficiency and quality while it informed a host of improvement processes. This includes Benchmarking, Balanced Scorecard, Lean Management, and Lean Six Sigma.
When historians look back on Six Sigma and assess its importance to business innovation, I think the methodology will rank alongside Edison Electric’s production of the incandescent light bulb and Ford Motor Company’s moving assembly line among the catalogue of game-changing innovations.
Now that we have re-counted its history, stay tuned for the next installment in our blog series when we examine Six Sigma’s implementation across the enterprise.
Read other blogs in the Six Sigma series: