October 10, 2006 By Tod Newcombe
Disgusted with its poor manufacturing quality, Motorola's executives took a long, hard look at the problem. They implemented several initiatives aimed at improving quality and customer satisfaction. At the top of the list was something called Six Sigma.
According to the American Society for Quality, there are differing opinions on Six Sigma -- whether it's a philosophy, a set of tools or a methodology -- but it's best described by the American Society for Quality as a "fact-based, data-driven philosophy of quality improvement that values defect prevention over defect detection. It drives customer satisfaction and bottom-line results by reducing variation and waste, thereby promoting a competitive advantage."
Six Sigma uses statistical and management tools to improve quality. A process -- whether it involves manufacturing or a service -- is said to have reached Six Sigma when it has a failure rate of 3.4 per 1 million, or 99.99966 percent accuracy. The industry average, according to James Lucas in his 2002 article, The Essential Six Sigma, is 6,200 defects per 1 million, otherwise known as Four Sigma. Lucas said the strength of Six Sigma is its "simple and effective management structure."
Compatible with Six Sigma is another process that also got its start in manufacturing: Lean Flow.
Famed automobile manufacturer Henry Ford is sometimes credited with devising the idea as a way to eliminate waste from the manufacturing and assembly line processes when building the Model T in the early 20th century. Ford likened his Lean Flow process -- also called Lean Manufacturing, Continuous Flow and Just-In-Time Manufacturing -- to a river that flowed continuously. Anything that disrupted the flow was a waste that had to be eliminated.
Peter Peterka, president of SixSigma.us, said Lean Flow and Six Sigma have strong commonalities and complement each other. "They share the goal to identify and eliminate sources of waste and activities that do not add value," he wrote in an article posted on his company's Web site. When the two are combined, he said, they make it easier to identify and resolve quality issues.
How It Works
Together, Lean Flow and Six Sigma have become a defined approach to quality improvement embraced by some of America's leading business firms, including Dell, General Electric (GE), Johnson & Johnson, Lockheed Martin, Motorola, Northrop Grumman and Xerox, to name a few.
Motorola's use of Six Sigma improved quality and reduced errors to such an extent that the company won the prestigious Malcolm Baldridge Award for national quality. At GE, Lean Six Sigma (LSS) also had a huge impact.
When Jack Welch, former CEO, heard about Motorola's success with LSS, he developed a quality improvement program that became known as the GE Way. His goal was quite far-reaching. "We want to change the competitive landscape by not just being better than our competitors, but by taking quality to a whole new level." In the first two years GE implemented LSS, revenue increased 11 percent and profits grew 13 percent.
All organizations that embrace LSS use a standard, five-step, data-driven approach to re-engineering an existing process for quality improvement. Newton Peters, principal at Xerox Global Services, summarizes the five steps, known as DMAIC, in a white paper about Lean Six Sigma in the public sector:
As Peters and other Six Sigma experts point out, it takes training to become a leader in LSS projects, not only to implement the DMAIC methodology, but also to learn to use the tool sets that can qualitatively and quantitatively drive process improvement.
Finally the training immerses participants in the notion that any process can be defined, measured, analyzed, improved and controlled to eliminate waste and add value. As some say, this immersion is what makes LSS a philosophy, not just a methodology.
LSS in Government
In 2001, Fort Wayne, Ind., Mayor Graham Richard took the unusual step of instituting what was probably the first Six Sigma program in local government. Richard, who had extensive experience in the business sector, transferred his knowledge of the quality improvement program into a public-sector setting. Ten city employees took Six Sigma training and began LSS projects in various city departments. It wasn't long before the results started rolling in.
The Fort Wayne Police Department reduced larcenies by 19 percent in a targeted area of the city. Meanwhile, code inspectors increased the rate of code reinspection by 23 percent while reducing the time it took to conduct a reinspection by a whopping 17 days. Most impressive was the $1.7 million the city saved using LSS in the Water Pollution Control plant.
"What I knew, that a lot of people really didn't recognize, is that parts of government are very transaction oriented," Richard said in an interview with iSixSigma Magazine. "They are very comparable, quite frankly, to a manufacturing business or to the transactions that take place in financial businesses. [Government] has a lot more in common with the business sector than people might have thought, but it hadn't been recognized that way."
As Fort Wayne's mayor pointed out, the idea of quality improvement in the public sector is not a new phenomenon. All levels of government have been practicing variations of total quality management for years. Former governor of Washington Gary Locke instituted a series of quality management programs during his administration that became a model for other state governments, and received widespread recognition for its success.
But the idea of adopting and using a rigorous and data-driven process, such as Six Sigma, is another matter. Aside from Fort Wayne, few government agencies have embraced LSS the same way GE, Motorola and other firms have done in the private sector. Still there are attempts under way.
For example, the military, having seen how LSS has worked for its key contractors, began implementing its methodology, tool sets and philosophy. Milwaukee heard about Fort Wayne's success with Six Sigma, and has begun to use LSS in its child support enforcement program, the Department of Parks and Public Infrastructure, and in IT for the city's financial system.
According to Xerox's Peters, LSS is particularly suited for reducing waste and improving quality in document and content management situations. "Control of electronic records is often assigned to the IT department, as management of electronic data files is traditionally based on transaction volume and storage requirements," he said. "Yet IT departments sometimes implement solutions with a lack of understanding of the requirements to identify and retain specific records."
With LSS, Peters argued, IT shops can establish a structured approach to document and information management, gain efficiencies and eliminate many time-, cost- and labor-intensive, paper-based processes. Some of the gains come through judicious use of technology, such as document imaging, but also through rigorous analysis of workflow. Imagine the public sector, which includes some of the world's most document-intensive organizations, reducing error rates to 3.4 per 1 million.
That's the goal of Monroe County, N.Y. Using LSS methodologies, the county Sheriff's Office identified a key problem with its records management system, conducted interviews across all of its function areas, and gathered extensive data on the entire process, measuring everything from how long it took deputies to fill out accident reports to the cost of managing the records.
The office instituted many improvements, using a combination of new technology and re-engineered workflow, and quickly began adding up the results. The cost of processing accident reports fell from $28 to $8, and time spent completing reports went from 30 minutes to 5 minutes.
Like all new methodologies and techniques, LSS has its detractors. In Quality Digest magazine, John S. Ramberg, a fellow of the American Society for Quality, wrote that one of the common criticisms is, "[LSS] has little to offer that can't be found elsewhere." Another problem, according to critics, is that LSS is more of an appraisal or corrective action system than a proactive approach to solving problems.
Others worry that organizations have elevated LSS from its purpose of modeling the best way to do something into an organizational panacea for problems ranging from leadership to process. According to Michael Tatham, CEO of the Tatham Group, LSS can help fine-tune an existing process, but it can't determine whether the process is necessary in the first place.
As government scrambles to find new ways to improve processes and customer satisfaction, the business of public service will continue to seek better ways to deliver quality. In the middle of this "lean flow" challenge lies the IT department. CIOs who take the time to find out if LSS is right for their needs and use it where necessary might become the next Jack Welch of technology.
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