Six sigma and Total Quality Management
Department of Industrial and Systems Engineering Chung Yuan Christian University Taiwan, R.O.C. 1. The practices and implementation of Six Sigma In the past two decades, Six Sigma methodology has been widely adopted by industries and non-profit organizations throughout the world. In this section, we demonstrate the development of Six Sigma program, and discuss the features and the five steps of the improvements 1.1 The introduction of Six Sigma Six Sigma methodology was first espoused by Motorola in the mid 1980s. (Antony & Banuelas, 2002; Wiklund & Wiklund, 2002). At that time, Motorola was facing Japanese competition in the electronics industry and needed to make drastic improvements in its levels of quality (Harry and Schroeder, 2000; Linderman et al., 2003). A Six Sigma initiative ,which is originally focused on manufacturing process and product quality (Harry & Schroeder, 2000), is also designed to change the culture in an organization through breakthrough improvement in all aspects of the business (Breyfogle III et al., 2001, p.32). The Six Sigma architects at Motorola focused on making improvements in all operations within a process—thus producing results far more rapidly and effectively (Harry & Schroeder, 2000). The successful implementation of the Six Sigma program in Motorola led to huge benefits. Motorola recorded a reduction in defects and manufacturing time, and also began to reap financial rewards. Within four years, the Six Sigma program had saved the company $2.2 billion (Harry & Schroeder, 2000). The crowning achievement was being recognized with the Malcolm Baldrige National Quality Award (Breyfegle III et al., 2001; Wiklund & Wiklund, 2002). IBM, SONY, and Allied Signal successfully followed Motorola in implementing Six Sigma. Allied Signal began its Six Sigma activities in the early 1990s, It successfully attained savings of US$2 billion during a five-year period (Klefsjö et al., 2001). Sooner, the impressive results obtained by Allied Sigma induced General Electric (GE) to undertake a thorough implementation of the Six Sigma program in 1995 (Pande et al., 2000) as a corporate initiative to improve net profits and operating margin (Hendricks and Kelbaugh, 1998). The 1999 annual report of GE showed that the implementation produced more than US$2 billion in benefit (Slater, 2001; Coronado & Antony, 2002, Raisinghani et al., 2005).
Quality Management and Six Sigma
As a result, the impressive benefits of implementing Six Sigma programs in Motorola, Allied Signal, and GE led the Six Sigma methodology being widely adopted by industries throughout the world. American Express, Ford, Honda, and Samsung have all applied the methodology (Klefsjö et al., 2001; Sandholm & Sorqvist, 2002; Yun and Chua, 2002). The Six Sigma has become the most prominent trend in quality management (Sandholm & Sorqvist, 2002; Yang, 2004) not only for manufacturing and service industries, but also for non-profit organizations and government institutes. The GE-6 program and the Motorola Six Sigma program did have some differences. Whereas Six Sigma activities in Motorola had focused on product quality and the manufacturing process, the GE-6 program extended the improvement activities to cover all key processes related to customer satisfaction. 1.2 Some key views on Six Sigma Several prominent researchers have expressed views on Six Sigma. * Hahn et al. (1999) emphasized that Six Sigma improvement is a highly disciplined and statistically based approach for removing defects from products, processes, and transactions, involving everyone in the corporation. * Harry & Schroeder (2000) emphasized that Six Sigma provides maximum value to companies—in the form of increased profits and maximum value to the consumer through high-quality products or service at the lowest possible cost. * Harry &...