six sigma of motorola, general electric and skymark
TRANSCRIPT
Universiti Tunku Abdul Rahman
Faculty of Engineering and Science
UEMT 3143 Industrial Engineering
Assignment
Mechanical Engineering
Year 4 Semester 1
Lo Chau Min 08UEB04830
Sam Wing Hong 08UEB02697
Su Wen Bin 08UEB03297
Teng Kai Wea 08UEB04416
Yeap Beng Yaw 08UEB06440
Date of Submission: 25th August 2011
1The Six Sigma of Motorola
Contents
List of Tables.............................................................................................................................2
List of Figures........................................................................................................................... 2
1.0 Total Quality Management (TQM)...............................................................................3
1.1 Principles of Total Quality Management (TQM)........................................................4
2.0 The Six Sigma of Motorola............................................................................................6
2.1 Levels of Six Sigma in Motorola.................................................................................6
3.0 The Six Sigma of General Electric (GE)..........................................................................9
3.1 General Electric’s Concepts of Six Sigma...................................................................9
4.0 How Motorola differentiates between Six Sigma and TQM.......................................11
5.0 Comparisons of Six Sigma Programmes at Motorola and General Electric (GE).........13
5.1 Similarities...............................................................................................................13
5.2 Differences...............................................................................................................13
6.0 Brief Overview of the Six Sigma Concepts for Motorola, General Electric and SkyMark……………………………………………………………………………………………………………………………….14
6.1 How Motorola, General Electric and SkyMark Implement the Six Sigma................14
6.1.1 Summary of Implementation of Six Sigma for Motorola, General Electric and SkyMark......................................................................................................................17
7.0 What Six Sigma Means in Statistical Terms................................................................18
8.0 Bibliography................................................................................................................21
2The Six Sigma of Motorola
List of Tables
TABLE 1 SIX SIGMA CONCEPTS OF GENERAL ELECTRIC (GE)..................................................................7
TABLE 2 COMPARISON OF MOTOROLA'S SIX SIGMA AND TOTAL QUALITY MANAGEMENT..........................8
TABLE 3 COMPARISON OF IMPLEMENTATION OF SIX SIGMA FOR MOTOROLA, GENERAL ELECTRIC AND
SKYMARK...........................................................................................................................13
TABLE 4 ONE TO SIX SIGMA CONVERSION TABLE..............................................................................15
List of Figures
FIGURE 1 GE'S EVOLUTION TOWARDS QUALITY...............................................................................11
FIGURE 2 GRAPH OF THE NORMAL DISTRIBUTION, WHICH UNDERLIES THE STATISTICAL ASSUMPTIONS OF THE
SIX SIGMA MODEL............................................................................................................... 15
3The Six Sigma of Motorola
1.0 Total Quality Management (TQM)
The concept of Total Quality Management (TQM) originated in the 1950s and has steadily
become more popular since the early 1980s. TQM is a management philosophy, a paradigm,
a continuous improvement approach to doing business through a new management model.
The TQM philosophy evolved from the continuous improvement philosophy with a focus on
quality as the main dimension of business. Under TQM, emphasizing the quality of the
product or service predominates. TQM expands beyond statistical process control to
embrace a wider scope of management activities of how we manage people and
organizations by focusing on the entire process, not just simple measurements.
TQM is a comprehensive management system which:
Focuses on meeting owners’/customers’ needs by providing quality services at a cost
that provides value to the owners/customers
Is driven by the quest for continuous improvement in all operations
Recognizes that everyone in the organization has owners/customers who are either
internal or external
Views an organization as an internal system with a common aim rather than as
individual departments acting to maximize their own performances
Focuses on the way tasks are accomplished rather than simply what tasks are
accomplished
Emphasizes teamwork and a high level of participation by all employees
TQM believes in:
Owner/customer satisfaction is the measure of quality
Everyone has owners/customers; everyone is an owner/customer
Quality improvement must be continuous
Analysing the processes used to create products and services is key to quality
improvement
4The Six Sigma of Motorola
Measurement, a skilled use of analytical tools, and employee involvement are critical
sources of quality improvement ideas and innovations
Sustained total quality management is not possible without active, visible,
consistent, and enabling leadership by managers at all levels
If we do not continuously improve the quality of products and services that we
provide our owners/customers, someone else will
1.1 Principles of Total Quality Management (TQM)
There are a number of principles that are embedded in TQM to improve quality.
To focus on work processes
Since the quality of products and services depends most of all on the processes by which
they are designed and produced. It is not adequate to only provide clear direction about
hoped-for-outcomes, rather the management must train and coach employees to
assess, analyse, and improve work processes.
Analysis of variability
For uncontrolled variance in processes or outcomes is the primary cause of quality
problems and must be analysed and controlled by those who perform an organization’s
front-line work. Only when the root causes of variability have been identified are
employees in a position to take appropriate steps to improve work processes. In
addition, the central problem of management is to understand better the meaning of
variation, and to extract the information contained in variation.
Management by fact
For the process of Total Quality Management calls for the use of systematically collected
data at every point in a problem-solving cycle, beginning from determining high-priority
problems, through analysing their causes, to selecting and testing solutions. This quality-
improvement program is based on collecting data, using statistics, and testing solutions
through experiment.
5The Six Sigma of Motorola
Learning and continuous improvement
For the long-term health of an enterprise depends on treating quality improvement as a
lifetime quest. Opportunities to develop better methods for carrying out work always
exist, and a commitment to continuous improvement measures that people will never
stop learning about the work they do.
6The Six Sigma of Motorola
2.0 The Six Sigma of Motorola
In 1986, Bill Smith, a senior engineer and scientist within Motorola’s Communications
Division, introduced the concept of Six Sigma in response to the increasing complaints from
the field sales force about warranty claims. It was a new method for standardizing the way
defects are counted, with Six Sigma being near perfection.
Smith crafted the original statistics and formulas that were the beginnings of
Motorola’s Six Sigma methodology. He took his ideas to CEO Bob Galvin, who was struck by
Smith’s passion and came to recognize the approach as key to addressing quality concerns.
The Six Sigma became central to Motorola’s strategy of delivering products that were fit for
use by customers.
In definition, Six Sigma means a measure of quality that strives for near perfection, a
disciplined, data-driven approach and methodology for eliminating defects in any process,
from manufacturing to transactional and from product to service. In addition, the statistical
representation of Six Sigma describes quantitatively how a process is performing, and to
achieve this, a process must not produce more than 3.4 defects per million opportunities,
where a Six Sigma defect is defined as anything outside of customer specifications. A Six
Sigma opportunity is then the total quantity of chances for a defect.
2.1 Levels of Six Sigma in Motorola
Motorola categorizes Six Sigma into three levels, which are metric, methodology and
management system:
Six Sigma as a Metric
The term "Sigma" is often used as a scale for levels of "goodness" or quality. Using this
scale, "Six Sigma" equates to 3.4 defects per one million opportunities (DPMO).
Therefore, Six Sigma started as a defect reduction effort in manufacturing and was then
applied to other business processes for the same purpose.
7The Six Sigma of Motorola
Six Sigma as a Methodology
As Six Sigma has evolved, there has been less emphasis on the literal definition of 3.4
DPMO, or counting defects in products and processes. The Six Sigma is a business
improvement methodology that focuses an organization on:
Understanding and managing customer requirements
Aligning key business processes to achieve those requirements
Utilizing rigorous data analysis to minimize variation in those processes
Driving rapid and sustainable improvement to business processes
At the heart of the methodology is the DMAIC model for process improvement. DMAIC
is commonly used by Six Sigma project teams and is an acronym for:
Defining opportunity
Measuring performance
Analysing opportunity
Improving performance
Controlling performance
Six Sigma Management System
Through experience, Motorola has learned that disciplined use of metrics and
application of the methodology is still not enough to drive desired breakthrough
improvements and results that are sustainable over time. For greatest impact, Motorola
ensures that process metrics and structured methodology are applied to improvement
opportunities that are directly linked to the organizational strategy.
Nowadays, Motorola has learnt that Six Sigma goes far beyond counting defects in a
process or product. The next generation Six Sigma is an overall high performance system
that executes business strategy. Motorola developed these following four steps for
implementing the new Six Sigma.
1) Align executives to the right business strategy for critical improvement efforts
2) Mobilize improvement teams to attack high impact projects
3) Accelerate improved business results
4) Govern efforts to ensure improvements are sustained
8The Six Sigma of Motorola
The strategic Six Sigma principles and practices help Motorola to:
formulate, integrate, and execute new and existing business strategies and
missions
deal with constantly changing and increasingly complex customer requirements
accelerate innovation, globalization, and global integration efforts
facilitate mergers and acquisitions
ensure effective implementation of e-business ventures with their associated
strategies and infrastructure
drive revenue growth and systemic, sustainable culture change
enhance and condense the corporate learning cycle, or the time it takes to
translate market intelligence and competitive data into new business practices
9The Six Sigma of Motorola
3.0 The Six Sigma of General Electric (GE)
Nowadays, the competitive environment leaves no room for error. Therefore,
General Electric wants to delight their customers and relentlessly look for new ways to
exceed customers’ expectations. Thus, General Electric practices Sig Sigma as a highly
disciplined process that helps them to focus on developing and delivering near-perfect
products and services.
The “Sigma” could be interpreted as a statistical term that measure how far a process
deviates from its perfection. The true idea of Six Sigma is to measure how many defects in a
process, then using systematic approach to eliminate them and get as close to zero defects
as possible. As a Six Sigma Quality, a process must produce no more than 3.4 defects per
million opportunities. This means General Electric is aim to be nearly flawless in executing
their key processes.
3.1 General Electric’s Concepts of Six Sigma
In General Electric, Six Sigma is derives to six key concepts as shown in Table 1:
Critical to Quality: Attributes most important to the customer
Defect: Failing to deliver what e customer wants
Process Capability: What your process can deliver
Variation: What the customer sees and feels
Stable Operations:Ensuring consistent, predictable processes to improve
what the customer sees and feels
Design for Six Sigma: Designing to meet customer needs and process capability
Table 1 Six Sigma Concepts of General Electric (GE)
Furthermore, General Electric has defined the key element of quality, customer, process and
employee. They have created these key elements in order to ease them to implement Six
Sigma in their key element to hit the target.
10The Six Sigma of Motorola
Starts with the customer, they take customers as the centre of GE’s universe because GE
thinks that the quality is defined by customers. Therefore they have to present the
performance, reliability, competitive prices, on-time delivery, services, clear and correct
transaction processing in a sense to delight their customer.
Second is the process. The standard of quality is not from the view of GE but from the
customer’s perspective. Hence, GE takes the view of quality from the outside-in, because
they believe by understanding the transaction lifecycle from the customer’s needs and
processes they could identify the area of improvement that does best for the customer.
The third key element is the leadership commitment. People create results. All employees is
essential to GE’s quality approach. GE provides opportunities and incentives for employees
to focus their talents and energies on satisfying customers. Thus, all employees are trained
in the strategy, statistical tools and techniques of Six Sigma quality. The training course
includes:
a) Quality Overview Seminars: basic Six Sigma awareness
b) Team Training: basic tool introduction to equip employees to participate on Six
Sigma teams
c) Master Black Belt, Black Belt and Green Belt Training: in-depth quality training that
includes high-level statistical tools, basic quality control tools, Change Acceleration
Process and Flow technology tools
d) Design for Six Sigma (DFSS) Training: prepares teams for the use of statistical tools
to design it right the first time
11The Six Sigma of Motorola
4.0 How Motorola differentiates between Six Sigma and TQM
The comparison between the Six Sigma concept and Total Quality Management (TQM) for
Motorola is shown in the table below:
Six Sigma of Motorola Total Quality Management (TQM)
1. Executive ownership
2. Business strategy execution system
3. Truly cross-functional
4. Focused training with verifiable return
on investment
5. Business results oriented
1. Self-directed work teams
2. Quality initiative
3. Largely within a single function
4. No mass training in statistics and quality
5. Return on investment
6. Quality oriented
Table 2 Comparison of Motorola's Six Sigma and Total Quality Management
While Six Sigma was originally created as a continuous quality improvement technique,
today it is significantly different than the total quality management (TQM) approach of the
1980s (Barney, 2002). The table above shows how Motorola contrasts its Six Sigma
approach with TQM.
Motorola’s Six Sigma is used as a process improvement program that focuses on
continuous quality improvements for achieving “world class” performance by restricting the
number of possible defects to less than 3.4 defects per million. It is developed by Motorola’s
top management team to make their businesses as successful as possible, hence it is more
business oriented than TQM which is created by quality personnel. It focuses in reducing
operational costs by focusing on defect reduction, cycle time reduction and cost savings. On
the other hand, TQM in the eye of Motorola is a broad set of philosophical guidelines which
are not able to prove that the company has accomplished their quality goals. TQM is more
quality oriented and focuses on achieving “standard” quality performance such as ISO 9000.
TQM emphasizes minimum acceptance requirement and standards, rather than striving for
ever increasing of performance.
12The Six Sigma of Motorola
In Motorola’s point of view, implementing TQM means only focusing on improving
quality but at the same time ignored other critical business issues. Quality department will
only develop targets and goals based on quality criteria and assume that what is good for
quality is good for the company. Following quality department’s target blindly will cause a
company to dump overly huge amount of resources into improving product quality only. In
contrast, Six Sigma discards the majority of the quality toolkit in TQM. It keeps a subset of
tools and techniques and focuses training on clearly defined frameworks to achieve tangible
business results. Moreover, Six Sigma integrates business goals of Motorola together with
quality issue as a whole to improve the company. Six Sigma creates top-level oversight to
assure that the interests of the entire organization are considered.
In addition, Motorola’s Six Sigma creates an infrastructure of change agents who are
not employed in the quality department. For example, Black Belts do not make careers in Six
Sigma, instead they focus on Six Sigma for two years, then continue their careers elsewhere.
Six Sigma belts are not certified unless they can demonstrate that they have effectively used
the approach to benefit customers, shareholders and employees. In contrast, Motorola sees
TQM as a permanent career path which will create quality professionals lacking skills in
other areas of the company. Motorola believes that functionally specialized organization
with clear division of labour will not succeed to improved quality beyond a certain level.
13The Six Sigma of Motorola
5.0 Comparisons of Six Sigma Programmes at Motorola and General
Electric (GE)
5.1 Similarities
There are some similarities of implementation of Six Sigma. The General Electric is implies
the same thing as in quality to satisfy the customer, the consistency process to improve, and
the reduction of defects. The main motive of Six Sigma is the same as Motorola’s Six Sigma.
The main difference is the in-depth of Six Sigma in the corporation. Motorola implies Six
Sigma almost all of the operation of its organization.
5.2 Differences
Referring to Table 1, although General Electric implements Six Sigma into their organization
operation with the six key concepts, its implementation was not as in-depth like Motorola.
As we know, Motorola is the pioneer of the Six Sigma. Motorola introduced this concept in
respond to the rising tide of complaints from field sales force about warranty claims which is
a new method for standardizing the defects are counted.
Unlike General Electric, Motorola not just implement Six Sigma into those key concepts but
pushing the Six Sigma towards more detailed of implies. For instances, Motorola categorizes
Six Sigma into three levels, which are metric, methodology and management system.
Metric stands for scale for levels of quality. Methodology is the about the approach to
improve the process to meet requirement of customer. Management System is the new Six
Sigma approach to maintain the high performance of the system which leads to the
development a set of strategies in the management system.
14The Six Sigma of Motorola
6.0 Brief Overview of the Six Sigma Concepts for Motorola, General
Electric and SkyMark
Motorola
Motorola defines Six Sigma as a measure of quality that strives for near perfection, a
disciplined, data-driven approach and methodology for eliminating defects in any process,
from manufacturing to transactional and from product to service.
General Electric
General Electric defines Six Sigma as a highly discipline process that help them focus on
developing and delivering near-perfect products and services.
SkyMark
SkyMark define Six Sigma Quality as a movement that inherits directly from TQM, or Total
Quality Management. It uses much the same toolset and the same concepts.
6.1 How Motorola, General Electric and SkyMark Implement the Six
Sigma
Generally, Motorola, General Electric and SkyMark possesses different industry field.
Hence, they have similar and different perception in terms of implementing the Six Sigma.
Motorola
Motorola categorizes Six Sigma into three stages, which are metric, methodology
and management system. Motorola implement Six Sigma as a metric to reduce defect in
manufacturing. It recommended the defects should be at 3.4 defects per one million
opportunities (DPMO).As Six Sigma has developed, Motorola thinks that Six Sigma is a
business improvement methodology that focuses an organization on:
Understanding and managing customer requirements
Aligning key business processes to achieve those requirements
Utilizing meticulous data analysis to minimize discrepancy in those processes
15The Six Sigma of Motorola
Driving rapid and sustainable improvement to business processes
In the last stage, Motorola make sure that process metrics and structured methodology are
applied to improvement opportunities that are directly linked to the organizational strategy.
General Electric (GE)
General Electric Company’s evolution towards quality began from focusing on
product qualities in the 1980s to Six Sigma quality. GE believes the significance of Six Sigma
in defining how they work and set a stage for making their customer feel Six Sigma.
Figure 1 GE's Evolution Towards Quality
GE applied the Six Sigma Strategy by firstly identify the key elements of quality. The key
elements of quality are:
1. The Customer: GE thinks that customers are the center of GE's universe, delighting
their customers is a necessity
2. The Process: GE thinks that outside-in thinking is important as understanding the
transaction lifecycle from the customer's needs and processes; they can recognize
areas where they can add improve their product.
3. The Employee: GE thinks that leadership commitment is essential as quality is the
responsibility of every employee. Every employee must be involved, motivated and
knowledgeable if need to be succeed.
16The Six Sigma of Motorola
Hence, GE developed and implemented six key concept of Six Sigma based on the three key
elements of quality as shown in Table 1.
General Electric greatly believes that customers do not judge them on averages; they feel
the variance in each transaction. Thus, Six Sigma is implemented to focus first to reducing
processes variation and then on improving the process capability.
SkyMark
SkyMark is a leading software company that assist people help their organisations to
perform better. SkyMark search for the best management tools and concepts, and
encapsulate them in user-friendly software. SkyMark’s software products are PathMaker, i
pathmaker and THESEUS.
SkyMark provides consultation by using the Six Sigma concept. SkyMark uses the
company’s most leading software (PathMaker) for problem-solvings and process
improvements. It combines elements of statistical quality control (Six Sigma Quality),
breakthrough thinking, and management science (all valuable, powerful disciplines). Hence,
it has three main advantages which are:
The software understands what the customer needs.
Providing consultations for results: The company is expert in quality management,
strategic planning, and software development. They do provide the opportunities to
the consulting company and bring back new ideas that can then feed back into the
software development cycle.
Quality-based custom development: The company will improve the software
development practices, to the point that can rapidly deliver high-quality products at
low cost. Besides, the company also delivers custom solutions to the customer to
deal with their problems.
With the help of latest software technology, SkyMark is confident that one’s company
process cycle time could be reduces by 25%-50%. It is a good tool to assist manager to make
decisions.
17The Six Sigma of Motorola
6.1.1 Summary of Implementation of Six Sigma for Motorola, General Electric and
SkyMark
The table below shows the different companies with different perceptions of Six Sigma and
the differences in implementing it:
Definition of Six Sigma Implementation
Motorola A measure of quality to eliminate
defects in any process.
Metric
Methodology
Management system
GE
A highly discipline process.
Developing and delivering near-
perfect product and services
Critical to Quality
Defect
Process Capability
Variation
Stable Operation
Design for Six Sigma
SkyMark A movement that inherits directly
from TQM
Provides Consultation & Solution by
using software:
PathMaker
ipathmaker
THESEUS.
Table 3 Comparison of Implementation of Six Sigma for Motorola, General Electric and SkyMark
18The Six Sigma of Motorola
7.0 What Six Sigma Means in Statistical Terms
Six Sigma has evolved over the last two decade and so has its definition. In statistical
terms, it is more referred to the definition of Six Sigma as a metric and emphasize on
mathematical theory of calculations.
The word “Sigma” itself is a statistical term that measures how far a given process deviates
from perfection. If it is viewed in statistical terms, “reaching Six Sigma” means that the
process or product will perform with almost no defects. The idea based on this idea is that if
defects can be measured in a process, it can be eliminated by systematically solving the
problem by digging into the root of the problem and get as close to zero defects as possible.
According to Motorola (HA International, 2009), the term “sigma” is often used as a scale of
levels of quality. Six Sigma equates to 3.4 defects per one million opportunities (DPMO).
In mathematical theory, if one has six standard deviations between the process mean and
the nearest specification limit, as shown in the graph, practically no items will fail to meet
specifications. This is based on the calculation method employed in process capability
studies. The upper and lower specification limits (USL ,LSL) are at distance of 6σ from the
mean. It is unlikely that values will be lying that far away, thus the idea of six sigma is to
have processes where the mean is at least 6σ away from the nearest specification limit.
Figure 2 Graph of the normal distribution, which underlies the statistical assumptions of the Six Sigma model
19The Six Sigma of Motorola
In actual process, standard deviations shifts by time. It is know that there is some variation
in the output of every process. Even if the process is exactly centered over the target value,
there will be times when the process produces output that is above the target value and
other times when the output is below the target value. If samples of the output are then
calculate for the average for these samples, they also will not all be exactly on the targeted
value. (Adams, 1999) According to this idea, a process that fits 6-Sigma between the process
mean and the nearest specification limit in a short-term study will in the long term only fit
4.5-Sigma. The 3.4 DPMO of a six sigma process in fact corresponds to 4.5-Sigma, namely 6-
Sigma minus the 1.5-Sigma shift which is introduced to account for long-term variation.
“It is said that many ordinary businesses actually operate at between three and two and
sigma performance. This equates to between approximately 66,800 and 308,500 defects
per million operations, (which incidentally is also generally considered to be an
unsustainable level of customer satisfaction - ie., the business is likely to be in decline, or
about to head that way).” (Chapman, 2011)
A measurement of 4-Sigma equates to approximately 6,200 DPMO, around 99.4%
perfection, while measurement of 5-Sigma equates to 223 defects per million opportunities,
equivalent to a 99.8% perfection rate, and acceptable to many business, although not good
enough for the aircraft industry. (Chapman, 2011)
Below is a simplified one-to-six sigma conversion scale:
'Long Term Yield' (basically the
percentage of successful
outputs or operations)
%
Defects Per Million
Opportunities (DPMO)'Processs Sigma'
99.99966 3.4 6
99.98 233 5
99.4 6,210 4
93.3 66,807 3
20The Six Sigma of Motorola
69.1 308,538 2
30.9 691,462 1
Table 4 One to Six Sigma Conversion Table
Initially, Motorola Six Sigma was purely a quality metric that was used to reduce defects in
the production of electronic components. It was emphasized as a defect reduction effort in
manufacturing in the early stage but was then applied to other business processes for the
same purpose. In a nut shell, to achieve Six Sigma quality a process must produce no more
than 3.4 defects per million opportunities.
21The Six Sigma of Motorola
8.0 Bibliography
Adams, C. W. (1999). Why Does Six Sigma allow a 1.5 SD shift? Retrieved August 19, 2011, from Adams Six Sigma: http://www.adamssixsigma.com/aboutus.htm
Barney, M. (2002). Motorola’s Second Generation. American Society for Quality, 13-16.
Chapman, A. (2011). Six Sigma. Retrieved August 2011, 2011, from Businessballs web site.
HA International. (2009). 6 Sigma. Retrieved August 19, 2011, from HA international LLC Web Site: http://www.ha-international.com/content/innovations/six_sigma.aspx
The Six Sigma Strategy, General Electric. (n.d.). Retrieved August 20, 2011, from General Electric: http://www.ge.com/sixsigma/sixsigstrategy.html