six sigma of Motorola, General Electric and SkyMark

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


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


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


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.


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.


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.


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


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


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.


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


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.


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.


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.


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


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.


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.


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


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


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


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.


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

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six sigma of Motorola, General Electric and SkyMark