DOES SIX SIGMA HAVE A FUTURE THE GREAT DEBATE.ppt

SIX SIGMA

1. Making knowledge work harder
1
DOES SIX SIGMA HAVE A
FUTURE? THE GREAT DEBATE
Gerry Hahn Roger Hoerl
Former Manager Current Manager
Martha Gardner Angie Patterson
Quality Leader Senior Statistician
Applied Statistics Laboratory
GE Global Research
Schenectady, NY 12309
2004 Quality & Productivity Research Conference

2. Making knowledge work harder
2
IS, OR WAS, SIX SIGMA A FAD?
•Fad: (American Heritage Dictionary):A
fashion that is taken up with great
enthusiasm for a brief period of time; a craze
•Fad (common language):Flavor of the day.

3. Making knowledge work harder
3
TALK OUTLINE
•Prelude: How Six Sigma came to GE
•The debate: In “Point-Counterpoint” Format
▪Six Sigma Bottom Line Impact Exaggerated
▪Basic Six Sigma Concept is Flawed
▪There is Nothing New to Six Sigma
▪Six Sigma adds Bureaucracy
▪Other Faults of Six Sigma
▪Six Sigma is already Waning
•Summary
•Your turn
DISCLAIMER: VIEWS EXPRESSED NOT NECESSARILY THOSE OF THE PRESENTERS!

4. Making knowledge work harder
4
HOW 6 SIGMA CAME TO GE
•Jack Welch came to recognize cost of quality
•Talked to Larry Bossidy
•Bossidy recommended Six Sigma and Mikel
Harry
•Mikel Harry trains first waves of champions and
MBBs
•Champions and MBBs take over in each GE
business
•Process repeated with DFSS (and Maurice
Berryman)

5. Making knowledge work harder
5
•Why is GE stock valued today only about half
of what it was at height of Six Sigma fervor?
•GE claimed the following savings from Six
Sigma in its annual reports:
•1996: $170MM (for $200MM investment)
•1997: $700MM (for $380MM)
•1998: $1200 MM (for $450MM
•1999: $2000 MM (for $550MM)
•Such claims seem dubious in light of recently
exposed financial manipulations in other
companies
Point: BOTTOM LINE IMPACT EXAGGERATED

6. Making knowledge work harder
6
Counterpoint: BOTTOM LINE IMPACT
EXAGGERATED
-Nobody ever claimed Six Sigma will
impact short-term stock prices
▪Savings carefully audited by critical and
impartial accountants
P.S.GE stock value has increasedover four-
fold from start of Six Sigma (October 1995)
to today

7. Making knowledge work harder
7
Concept of 3.4 defects per million (dpm)
opportunities is flawed:
•Deming: Setting numerical goals results in
search for ways to manipulate measurement
system, rather than to improve process
•All products are not created equal: Jet
engine versus toaster
•Definition of “defect” and “opportunity”
especially manipulatable
And what’s all this nonsense about the
supposed omnipresent 1.5 sigma mean shift?
Point: BASIC SIX SIGMA CONCEPT IS FLAWED

8. Making knowledge work harder
8
•Concept of 3.4 defects per million opportunities
•Simplifies concepts
•Presents numerical goals to management
•Provides common language
•In practice, Six Sigma rests on
•Disciplined approach to addressing problems
•Data-based approach to reducing variability
and improving quality
•Focus on customer
and not on 3.4 defects per million opportunities
(or on 1.5 sigma mean shift)
Counter Point: BASIC SIX SIGMA CONCEPT
IS FLAWED

9. Making knowledge work harder
9
•Disciplined process is just plain common sense
•Six Sigma is just statistics under a different name
•There are no new statistical tools in Six Sigma
•DMAIC, DMADV, etc. are imitators of Shewhart’s
PDCA cycle and TQM
Point: THERE IS NOTHING NEW TO SIX SIGMA

10. Making knowledge work harder
10
•The goal of Six Sigma is to be effective—not
novel
•What’s wrong with common sense and a
disciplined customer-oriented approach?
•Six Sigma is much more than statistics—it
integrates the most powerful tools available
•Six Sigma isimproving quality
WHAT ISNOVEL ABOUT SIX SIGMA IS THE
DISCIPLINED INTEGRATION OF PROVEN
APPROACHES
Counter Point: THERE IS NOTHING NEW
TO SIX SIGMA

11. Making knowledge work harder
11
Counter Point: THERE IS NOTHING NEW
TO SIX SIGMA –SOME NEW ASPECTS
•Providing a “roadmap” to help
practitioners properly link and integrate
the tools into an overall approach to
scientific inquiry
•Scoping projects to be completed in 3-4
months, to provide management with
timely results
•Focus on preventing problem
reoccurrence –the Control Phase
•Providing a formal infrastructure –
dedicated roles, budgets, project

12. Making knowledge work harder
12
•The step-by-step processes of Six Sigma are
cumbersome and slow down process
•The hierarchy of champions, Master Black
Belts, etc. is undemocratic and establishes a
caste system
Point: SIX SIGMA ADDS BUREAUCRACY

13. Making knowledge work harder
13
COUNTERPOINT: SIX SIGMA ADDS
BUREAUCRACY
So what? Six Sigma works
•Even Jack Welch admitted Six Sigma
adds some unavoidable bureaucracy
•Doing it right the first time is faster in the
long run
•Formal infrastructure is important and a
success factor
•Hierarchy gives responsibility to most
qualified
•In age of specialization, we can’t all be
experts on everything
•MBB provides boot camp for aspiring
managers
•Emphasis on hierarchy is declining

14. Making knowledge work harder
14
•Emphasis on manufacturing
•Focus on addressing individual CTQ’s, instead of entire
system
•Selectivity of tools (those with which developers were
enamored)
•Emphasis on data analysis over data acquisition
Point: OTHER FAULTS OF SIX SIGMA

15. Making knowledge work harder
15
-Improve existing products
-Improve new products: DFSS (and Design for Reliability)
-Improve business processes and transactions
-Help customers directly
Counter Point: OTHER FLAWS OF SIX SIGMA
Evolution of Six Sigma for Manufactured
Products

16. Making knowledge work harder
16
Counter Point: OTHER FLAWS OF SIX
SIGMA
Asserted Flaws are being Addressed
•Greater recognition of need for “multivariate Six Sigma”
•Tools like QFD are providing systems focus
•Tools found useful in applications added, e.g.,
simulation, life data analysis, mistake proofing
•Tools training becoming applications-area focused,
e.g., mixture experiments for chemists, survey
sampling for marketeers
•Appreciation of importance of data acquisition
•Recognition not allprojects need Six Sigma,
e.g.,equipment installation, upgrading computer
network, cold fusion

17. Making knowledge work harder
17
Point: SIX SIGMA IS ALREADY
WANING
•Management continues to demand “something
new.”
•Number of newspaper and magazine articles
mentioning Six Sigma dropped off about 10% in
2003 from 1999-2002 peak
(Source:www.google.com)
•5% drop in number technical articles from peak
•Lean is replacing Six Sigma as top attention-
getter

18. Making knowledge work harder
18
Point: SIX SIGMA IS ALREADY
WANING: GE
•Precipitous drop in number of Six Sigma
mentions in GE Annual Report
▪1995: 0
▪1996: 37
▪1997: 91
▪1998: 64
▪1999: 53
▪2000: 49
▪2001: 69
▪2002: 9
▪2003: 4
•Less specific in quantifying Six Sigma
savings

19. Making knowledge work harder
19
Counter Point: SIX SIGMA IS ALREADY WANING
•Six Sigma continues to grow
▪GE is notthe world
▪Don’t believe everything you read on the Internet
•Books with 6 Sigma in Title
▪Before 2000: 10
▪2000: 9
▪2001: 25
▪2002: 35
▪2003: 41
▪2004 (to date): 25
(Source:www.isixsigma.com/books/default.asp)

20. Making knowledge work harder
20
Counter Point: SIX SIGMA IS ALREADY
WANING—More Statistics
•Members Six Sigma Forum:
▪May 2002: 10,598 (first year)
▪May 2003: 16, 506
▪May 2004: 20,587
•Six Sigma Forum Magazine
▪Ad sales: Increased from 9 to 14 pages per issue
▪Articles: Backlog increasing
•Bill Tony, Publisher ASQ Quality Press: “Customer
interest in Six Sigma continues to grow. We can’t
find enough SS titles based on customer demand—
including those not quality practitioners. We (also)
hear that SS is passé. We just aren’t seeing it.”

21. Making knowledge work harder
21
Counterpoint: SIX SIGMA IS ALREADY
WANING-Evolution
•Growth of Six Sigma beyond manufacturing
businesses
▪Financial Services
▪Health Care
•What’s next:
▪Government, education, academia, etc.
▪Globalization
▪Adaptation by smaller companies
•Integration with Lean strategies (see November
2002, Six Sigma Forum Magazine)
Challenge: Quantifying savings in move from
short-term (DMAIC) to longer term (DMADV)
applications.

22. Making knowledge work harder
22
SUMMARY
•Godfrey: “Of course, there will be something after Six
Sigma…but does this really mean we (should) wait
and not use the best tools available now?”
•Six Sigma has become a more silent partner in GE and
other companies where it flourished early
•Six Sigma is on the upswing in many new application
areas (e.g.,financial, health services) and arenas (e.g.,
globalization, small businesses)
•Six Sigma continues to evolve
▪Basic concepts are sound--will continue to provide
improvements
▪New approaches provide healthy refurbishment
▪Will be important part of whatever comes next

23. Making knowledge work harder
23
For copies of these slides contact
[email protected],or,[email protected]
Now its your turn:
•Is (or was) Six Sigma a fad?
•Do you agree with Gerry, Angie or Martha?
•What does the future behold for Six Sigma,
quality and us?
•What are your major take-aways from this
conference?
•Anything else (within reason)
•And big thanks to Blan et al

24. Making knowledge work harder
24
SOME OF OUR CONFERENCE TAKE -AWAYS
•Some key ideas
▪Processes
▪Voice of customers
▪Globalization
▪Computers, computers, computers
▪Super-saturation
▪Examine Six Sigma critically
•And a few further impressions
▪Almost all talks from computers
▪Applaud at beginning of talk
▪How times have changed: Applications paper
in Annals (Box and Hunter, 1957)
▪Listen to Yogi Berra