Six Sigma: Breaking the Quality Hype

SIX SIGMA: BREAKING THROUGH THE QUALITY HYPE

PARTIAL FULMILLMENT

OF THE REQUIREMENTS FOR

OPERATIONS AND PROJECT MANAGEMENT BUSN 6110

Title:Six Sigma: Breaking through the Quality Hyp

Degree: Master of Business Administration

Motorola's Robert Galvin came up with it and breathed life back into the company, snagging a Baldrige Award in the process. Larry Bossidy rebooted AlliedSignal with it and then sold General Electric's Jack Welch on it. GE then made Six Sigma front-page news. Notwithstanding its 15-year history and the usual hype that comes with any concept promising organizations huge bottom-line benefits, the number of companies actually using Six Sigma appears to be quite small. Moreover, the perceptions within the quality industry of Six Sigma methodology vary greatly. So what's the story behind the hype? Is there really some muscle in the methodology, or is Six Sigma simply, as many believe, PR-enhanced total quality management?

TABLE OF CONTENTS

Page

ABSTRACT ii

Chapter

I INTRODUCTION 1

II TOOLS AND TECHNIQUES 3

III BENEFITS MULTIPLY 8

IV SUMMARY 10

REFERENCES 11

AUTOBIOGRAPHY 12

CHAPTER I

INTRODUCTION

The year is 1976. The USA was celebrating its 200th birthday. According to the Juran Institute, there was an emerging interest in this country for training in quality matters. Manufacturing companies were eager to implement quality improvement within their organizations. They were motivated by a very real competitive threat from overseas. Japanese industries had swallowed up a number of our companies and were threatening others. It turned out that quality was dramatically changing the way many organizations were conducting business. There was a new buzzword being used by managers: "Total Quality Management", or "TQM" (Blackiston, 1996, p. 1).

What emerged as some of the key motivators...the drivers? The Juran Institute believes at first sheer terror motivated many American businesses. These companies realized that quality was a matter of life and death. Indeed, many American manufacturers of consumer electronics died before they could react (Blackiston, 1996, p. 1).

The Juran Institute states:

…another important motivator for quality initiatives was the concept of "the costs of poor quality". This relates to all of those costs that would disappear in an organization, if everything were done correctly right from the start. We saw early on that most companies were simply throwing away about 25% of their sales revenues on scrap, repairs, warranties and other costs of quality (Blackiston, 1996, p. 1).

As the years went by, the reasons for implementing TQM piled up; however, the Juran Institute figured that 80% of the companies that tackled TQM in the 1980s failed (Blackiston, 1996, p.1). Although quality improved, TQM seemed to be mired in “find and fix” the problem and not worry about the cost.