The Journey of Six Sigma at Motorola - Case Study Example

Six Sigma Name: Tutor: Course: Date: Six Sigma Introduction Six Sigma constitute tools, strategies, and techniques for process improvement. Motorola pioneered Six Sigma in 1981 and popularized by Jack Welch who successfully ran it across the business operations at General Electric in 1995. Many industrial sectors use it today. This study seeks to explore the journey of Six Sigma especially at Motorola. This ideology seeks to increase the process outputs quality through identification and removal of the defects causes (errors). Reducing variability in business processes manufacturing uses a method largely sets of quality management such as statistical methods (Harry, 2008). It also creates a unique infrastructure of people within the firm such as Champions, Yellow Belts, Black Belts, and Green Belts with greater expertise in the methods.  Every Six Sigma project undertaken within the organization takes on logical sequence of steps and quantified targets of value. This initiatives are geared to reducing pollution, process cycle time, costs, improving customer satisfaction and profits (Huesing, 2008). Process improvement can take any case like development of a phone, base station or a modem. Why Companies use Six Sigma In many organizations, Six Sigma is simply a determinant of quality striving to a near perfection. The concept is a data-driven and disciplined methodology and approach that eliminates defects. The methodology drives toward six standard deviations between the nearest specification limit and the mean to every process ranging from transactional, manufacturing, product and service. The Six Sigma statistical representation explores quantitative process performance (Harry, 2008). Achieving Six Sigma requires a process to limit production of defects that does not exceed 3.4 per million opportunities. A defect in Six Sigma is anything falling outside the specifications of the customer. An opportunity in Six Sigma is the total quantity of probability for a defect. A Six Sigma calculator is used to determine process sigma. The basic objective of using Six Sigma methodology is the execution of a metric-based strategy is specific to variation reduction and process improvement when Six Sigma improvement projects are used (Huesing, 2008). This is done using two Six Sigma sub-methodologies namely; DMADV and DMAIC. The DMAIC process of Six Sigma is define, measure then analyze and improve then finally control. This is a system for improvement of current processes looking for incremental improvement and appearing below specification. The DMADV process Six Sigma is essentially define measure then analyze and design then finally verify. It is also system of improvement that develops new products or processes at quality levels of Six Sigma (Leroy et al, 2006). When current process demands more than incremental improvement it may still be employed. Six Sigma Black Belts and Six Sigma Green Belts both implement Six Sigma processes and overseen by Six Sigma Master Black Belts. Black Belts can save firm an estimated $230,000 per project according to the Six Sigma Academy and completing about four to six projects each year (Harry, 2008). For instance, in the United States an average Black Belt salary is $80,000 which is a huge return on investment. One of the most successful firms executing Six Sigma, General Electric, has anticipated benefits in the range of $10 billion within the initial five years of execution. GE initially started Six Sigma in 1995 after Allied Signal and Motorola trail blazed the Six Sigma (Huesing, 2008). From then, many firms around the globe have engineered far reaching Six Sigma benefits. There are several frameworks existing for execution of Six Sigma methodology as agreed by consultants around the world. They have engendered proprietary methodologies for applying Six Sigma quality. The 20th anniversary of Six Sigma was a metrics-driven and exacting process that has largely became corporate word, seeping through functions from marketing to human resources, and industries from financial services to manufacturing (Richardson, 2007). Case study Motorola before and after using Six Sigma Motorola twenty years ago was a firm down on its luck which was vulnerable to a slight financial recession. There were many defects and customer complaints which greatly affected their balance sheet. There was need to reduce this rate of fall which could have collapsed the company. Nowadays Motorola is one of the most dominant cell phone brands around the globe.  Motorola today has a sizeable market share thanks to the Six Sigma training that drew the business into saving millions and to have quality products in the face of global consumers (Huesing, 2008). In the early era of the 21st Century, there was a great rise in sales of cell phone with Motorola currently thriving quite well. It could have collapsed long before the cell phone boom. Motorola initially invested about $25 million in training to execute Six Sigma program in 1986. A year later, the program the firm had saved more than $250 million with five-fold sales growth and profits going up nearly 20% each year (Leroy et al, 2006). Around seventy thousand of the hundred thousand employees had been involved in Six Sigma training. Motorola was able to reduce its errors by 80% in manufacturing where it was able to save about $4 billion dollars. Up to now, the collective business effort from Six Sigma is approximated at US$ 16 billion (Harry, 2008). The company credits its success to Six Sigma by a great extend especially between 1994-1998 when it was able lower cycle time, increased order processing, tightening of procurement and shipping procedures. Three Black Belts attained more than US$ 25 million in cost savings through accelerated innovation team and new product development. Motorola did source from external training consultants or outside management. Instead they developed a new way of manufacturing their products and training staff. This method saw their profits increase with such weighty effects on the company success that everyone else desired to know how they managed. Six Sigma was the secret. The process saved Motorola an estimated $17 billion twenty years later after 1986. Six Sigma is also a Motorola registered trade mark which enables it to profit each time someone sells own Six Sigma program on training. Motorola has its own University deliver the said training. The Six Sigma idea was initially a way of putting together a manufacturing program that removed defects with not doubt over its effectiveness (Huesing, 2008). Furthermore, it has expanded to being adapted to apply in other spheres beyond the sector of manufacturing. Though sounding like simple common sense, the idea hits on the principles of rigorous analysis, stability, and commitment at every levels of the process. It recognizes the value of driving principles that make huge difference to Motorola. In fact, nowadays Six Sigma process is used by two-thirds of Fortune 500 companies (Leroy et al, 2006).  The process is complicated and has become known as Lean Six Sigma and Six Sigma and has become a revolutionary ideology in the chase for business efficiency. Unknown to the early pioneers like Bill Smith and Jack Welch, Six Sigma has is perhaps more than what a firm owes in their continued existence. Motorola in 2003introduced the four cornerstones of Digital Six Sigma essentially alignment, mobilization, governance and acceleration while Lean Six Sigma focused on Customer First, Continuous Improvement and People as the most valuable resource. Similar to quality, time is a critical improvement metric (Huesing, 2008). The company invested in reducing variation and process lead time as a way of improving performance and lowering defects. Customer First required that No defects should get to the customer since the customer market dictated the price of products. Profit = Price – Cost. To Motorola, the customer became the focus since the market decided the ultimate price bared by a product or service. Profits can be increased and cost reduced since customer dictates the magnitude of production. Lesson from Motorola’s Case The adoption of Six Sigma by Motorola and later other companies shows that people, systems and materials the most valuable resources companies can have. Firms succeed when people (employees) are motivated. They have the capacity to solve problems and improve operations. People have boundless capacity for development and learning. The essence of Six Sigma is Value-addition to work which provides a tangible sense of self-worth and contribution giving rise to team success. Continuous Improvement as advised by Kaizen is essential in solving problems methodically, eliminating waste and process variations (Harry, 2008). It also indicates the constant pursuit of endless perfection since inherent dissatisfaction with status quo allows for actions changed to the better today an in the coming days. Scientific method used is an improvement in a structured experimentation by way of methodologies in a proven Lean Six Sigma. It means that everyone individual is responsible for Kaizen on daily basis (Leroy et al, 2006). The new areas for application will witness a lot of growth in quality since the scope has grown to a greater extend outside the confines of a factory. Six Sigma has expanded to the offices from the factory and warehouses. The aspect of manufacturing has seen great growth in other such as health care, government and education. Six Sigma has resulted in many people around the globe learning from each other and working collectively (Huesing, 2008). It shows that products can be developed and standardized through a training curriculum. For company success there has to be an effective leadership approach (top down), focus on the customer and strong foundation for data-based decision-making. Six Sigma can change company product focus from defect reduction to project focus which is cost reduction, customer value mainly productivity and enterprise performance which is the top line growth (Harry, 2008). Six Sigma is able to bring about customer experience, efficient flow of information, money and materials. Value can be sustained across the enterprise by looking horizontally across the enterprise for supply chain partners. The ideology is critical in knowledge management since more educated consumers needs to lay emphasis on speed and quality alongside the concept of customer’s voice (Paton, 2002). Six sigma is kit for continuous performance improvement. Motorola pioneered a case of Lean Supply Chain which has seen improvement in inventory management in Latin America through construction of a Value Stream Map beginning at the shipping dock. The team developed a current-state map that identified opportunities to rid off non-value added activities (Harry, 2008). The future-state map eliminated needless steps, hence lowering rework and simplifying physical and accounting flows. Looking forward there is great journey for Six Sigma journey since companies will take to a never-ending pursuit of perfection. Individuals and corporate are challenged to evolve in ways of deploying Six Sigma to best support their business. This approach is good considering changes to methodology after learning customers want, the data available to support the change, and the effectiveness of that change (Huesing, 2008). It shows that companies should have a deep quest for perfection by deploying Six Sigma needs in evolving businesses. It also shows that capacity for Six Sigma is limitless. Conclusion and Recommendations From the case of Motorola, it can be obtained that Six Sigma brings about inception of ideas from initiatives and committing them to action. Six Sigma is ramifying into new applications and industries and used more as a leadership tool to steer business improvement. In the coming days, all the business and companies will need Six Sigma for service and product innovation and development. Six Sigma helps to learn from the new ways (Harry, 2008). Designers are given the freedom of innovation and creativity hence closing on the steadiness of the process at hand. A cool project can meet a measurable customer demand and meet specific quality standards. Six Sigma's esoteric methodology to some companies is new and thus people need to accept it as part of the culture. Six Sigma focuses on business performance improvement and product quality. Scope can increase from product-focused quality to work flow, efficiency, yield-related opportunities and financial improvements. There is need for large scale change campaigns with intentions for communication, implementation, deployment and training. The employees, customers and suppliers need to align to this methodology if they desire to improve performance. Companies should follow suit in adoption of appropriate own approaches. Indeed, Six Sigma methodology has gained a formidable following and became broadly adopted throughout many industries. Each functional leader and business should sponsor efforts and provide for continuous governance required to eliminate barriers and attain results (Huesing, 2008). The solutions implemented should be controlled with a non-manual or systematic control mechanism to enable sustainable changes. Ultimately, the Lean concepts to the initial Six Sigma framework have identified redundancies, reduced cycle time and costs. Reference list Harry, M J 2008, The Nature of six sigma quality. Rolling Meadows, Illinois: Motorola University Press. p. 25. http://www.businessweek.com/stories/2006-12-03/six-sigma-still-pays-off-at-motorola http://www.supplychaindigital.com/procurement/motorolas-six-sigma-journey-in-pursuit-of-perfection Huesing, T 2008, Six Sigma through the years. Motorola Bulletin. New York. Leroy C R, Carl E, Cordy L R & Coryea T 2006, Champion's Practical Six Sigma Summary. Xlibris Corporation. p. 65. Paton, S M 2002, Juran: A Lifetime of Quality 22 (8). pp. 19–23 Richardson, K 2007, The 'Six Sigma' Factor for Home Depot, Wall Street Journal Online. New York. Read More