Six Sigma and the Product Development Cycle

Graham Wilson

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781136366369
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

Six sigma is an effective and important management approach particularly used by multinational companies with manufacturing bases in the Asian and Pacific rim.One of the key issues facing businesses today is how to eliminate the high cost of developing new products. This is an area where the potential of six sigma has not been widely appreciated before. Six Sigma and the Product Development Cycle brings the six sigma approach up-to-date and explains it in a way that appeals to today's management teams. It makes the concept of six sigma easy to understand and accessible with the statistics necessary for its implementation clearly explained.Six Sigma and the Product Development Cycle covers the integration of quality function deployment with Taguchi's methods of experimental design and statistical process control. These tools gather detailed insights into customer needs, optimize the products or services to meet these needs at the lowest practical cost, and ensure that this performance is maintained. It is a book about both six sigma and product and service development. Through this approach an organization can gain greater flexibility, shorter timescales, and the ability to react more quickly to changes or new demands in the marketplace. The approach is illustrated with practical examples from the nuclear industry, motor manufacturing, inland mail, 'emergency response' organizations and financial services.

1

Culture

I am going to begin with a highly personal perspective on the evolution of the six sigma movement. This is not going to be a soft sell for six sigma. If I put you off pursuing this process, then the book will have been well worth your investment in it. If I demonstrate that the process is much more complex than you had expected, then I will have grounds to add another star on my fuselage. Six sigma is a highly worthwhile goal. But it is not to be undertaken lightly: the effort involved will reap profound rewards, but the pain is too great for many organizations (or the leaders of them) to endure.

There has been a revolution taking place in business. The world of work has never before had the flavour that it has now. And it never will again.

A time in which minds were expanded, but products lagged behind

Since our minds would struggle otherwise, when we describe the history of business, we often talk in terms of decades. Some people are still at work today who worked in the 1970s. This was a decade characterized by design, innovation and industrial disputes. Ask most teenagers today when the Vietnam War ended and they will say it was in the 1950s, although actually it did so in 1975.

Innovation and design remain crucial elements in the mixture of success-making ingredients for business. Of course, the 1970s did not have a monopoly on them. (It is sometimes interesting hearing someone describing a stylish chair as so ‘70s’ when it dates back to the 1930s. Innovation blossomed in both decades.)

The search for human beauty

Each decade seems to contribute something. While the 2000s might be seen as the era of technology, there has also been a dramatic growth in demand for antiquity, craftsmanship and the artisanal skills that were heralded by William Morris in the 1880s. Experiments in open-studio working today are replicating the model of the arts and crafts community that he set up in the Cotswolds.

The first step: appreciating quality

In the 1980s, in some ways people had grown tired of innovative products, manufactured quickly, using new materials and processes. Not because they did not like colour television, low-cost microwaves and budget hi-fi, but because they did not like them breaking down all the time. This was the world of the adults who conceived six sigma.

Behind the scenes, in the defence industry, and very much a consequence of the Vietnam War and other conflicts at the time, there had been a silent revolution brewing. The defence procurement specialists had evolved a code, a series of standards that could be applied across the board to ensure that suppliers delivered items that worked and were reliable.

In 1979, the first civilian equivalent of these military standards was launched. It was called BS5750 and it eventually evolved into ISO9000. It heralded a new era for the 1980s, of quality. This was not to say that the Quaker manufacturers of the 1870s, or the engineers who produced the first Fords, had not understood quality, but in the 1980s it became the buzzword. Suddenly everything to do with management had some connection to quality. To some extent this was a natural coalescence, but it was also a bandwagon.

Depending on who they were or what they did, individual managers clutched at a particular thread. (And boy, are some still clutching!) Engineers, outside the production area, seemed to resonate with quality management systems (as the ISO9000 fraternity called them). People in production loved the tools and techniques of quality control. (Its proper name, statistical process control, was clearly not hip enough.)

When human values matter

In the background were a few people who were pointing out that one-solution answers were unlikely to work and a more holistic approach (well, they would have called it that in the 2000s) was needed. One such guru of the time, Tom Peters, espoused four characteristics of ‘excellent’ companies: customer obsession, employee empowerment, transformed leadership and innovation. The formula still works, but it is, and always will be, 1980s’ speak.

What Peters was saying very clearly (and he had a powerful style of oratory) was that excelling in business was as much about how you relate to your employees as it is about the nuts and bolts. His message, too, had its precedents. In the 1920s, Dale Carnegie and his associates penned How to Win Friends and Influence People, in which they outlined the basic principles by which people could work better together and by which managers could lead their staff. In the 1960s, especially in the USA, there had been the ‘quality of work life’ initiative that promoted engagement of the brains as well as the brawn of employees. (Had this not been sponsored by the organized labour movement it might have had more impact, and now that the nature of the relationship between unions and management is radically different, perhaps it is time for a forward-thinking union to try again.)

Understanding people at work

The first half of the twentieth century had represented an unfolding of the science of psychology. By the 1940s, a lot of attention was being paid to the interrelationships between people, especially at work. Psychologists were employed in the war machinery. Little did anyone know of the extent of this ‘research’.

In the 1910s, early experiments by one man, Taylor, had led to the ‘discovery’ of scientific management or, as it is sometimes called, ‘Taylorism’. The idea was elegant. Divide work into simple, short, repeatable units and have workers perform them for prolonged periods. In this way they become both proficient and efficient, and the overall process becomes highly economical and of the best quality. The trouble was that people did not like doing the same mindless task hundreds of times a day.

The result was riots: literally. Scientific management was outlawed by Act of Congress in the USA, and then under French law after further riots there. Despite this there are still some managers trying to implement it today.

Scientific management was a precursor to the science of organizational behaviour, but this had to go through one more desperate evolution before it would be applied appropriately. It was only in evidence at the Nuremburg war trials that the work of Wirth, especially in designing the processing plants at Belzec and other concentration camps, came to light. He had created a system, operated knowingly by human beings, with the sole purpose of killing and disposing of as many people as possible in as short a space of time as possible.

So we entered the 1950s. Psychologists knew that there must be positive applications of their work in peacetime. One man stands out above all the rest as the father of organizational development (OD): Ed Schein. Organizational development is perhaps best defined as the application of the science of organizational behaviour, but with a clear set of humanist values underlying it.

Essentially, organizational behaviour scientists were saying, ‘It is all right to intervene in the way people behave at work, provided that they are enriched by the experience and not manipulated purely for the corporate advantage’.

Many critics of the ‘change programmes’ of the 1990s pointed out that they did not generally have the enrichment of the employees among their criteria for success. They were therefore manipulative and, in the worst cases, clearly corporate bullying in disguise.

If OD was the buzzword of the 1970s, in the 1980s it was called ‘total quality management’, and in the 1990s the ‘management of change’ (not to be confused with ‘change management’, which is an IT term). Since then it has diversified, and today we hear a lot about (inner) leadership, authenticity, emotional intelligence and spirituality at work. In each case, they are essentially about creating a workplace that is enriching for employees and at the same time successful for the organization. The themes mentioned are all reflections of the need for managers to have a more grounded sense of themselves and their own values before they attempt to manipulate people at work.

Listening to customers; anticipating their needs; building a relationship

If the 1980s saw a focus on quality, what next? It really did take the likes of Tom Peters shouting at management audiences for them to realize that quality means giving customers what they want. Even then, in the 1980s, many tried to avoid this by focusing on internal customers (to the exclusion of the ones outside who parted with cash). Most quality consultants of the time will tell you that the hardest group to influence through total quality management were salespeople: sales managers and sales directors. With hindsight, many were right to be sceptical, for their organizations focused exclusively on internal issues and paid lip-service, if that, to the real world of the buying customer.

By the 1990s, it was trendy to be totally focused on customer satisfaction. Sadly, a few companies were sold the idea that quality management systems would achieve this, and were rudely awakened when they discovered that staff who had boring jobs, and who were underpaid and bullied, rarely delivered satisfaction to their customers, regardless of the bureaucracy surrounding them. An industry was born servicing these needs: workshops, books, experiential groups and even, in one case, a company selling mirrors with a half moon on them, to which you were meant to match your grimace before speaking to punters.

As we entered the new millennium what began as an obsession, something with passion, had been systematized, regulated, legislated and turned into the field of ‘customer relationship management’. In a number of cases, so important is this relationship with their customers that companies have transported their ‘customer service’ professionals (the jobs, if not the people) to the other side of the world on the basis that it is a lot cheaper there. Of course, it was only a matter of a year or so before they realized that if you ask people who are earning £1500 a year (if they are lucky) to handle loan applications for ten times that amount they might just resent it! And people who resent things can be tempted to redress the balance in their favour. Brains, it seems, are not necessarily a prerequisite for corporate strategists.

‘And what’, you might quite rightly ask, ‘has this got to do with six sigma?’ Two things immediately come to mind. First, some people will tell you that six sigma is a thing of the past. It was relevant in an emergent US economy in the 1980s, but not since and nowhere else. The answer is that it is neither time dependent nor determined by the climate (economic or otherwise); six sigma is the natural next step for a handful of organizations, for which the culture is ready.

By the early 1990s, and certainly by 1992, half a dozen companies were in active pursuit of six sigma: ABB, Motorola, TI, IBM, DEC and Kodak. As an aside, despite this broad range of companies being involved, Motorola subsequently claimed that six sigma was a trademark of theirs. They continue to make this assertion very broadly (and in all probability many of the people who make it believe it). Yet, many companies had already embarked on the process and Motorola's claim was restricted to the ‘fields of electronics and telecommunications equipment manufacturing’.

Secondly, it tells us something about the external climate in which six sigma emerged. (I will not say was ‘born’ because it most definitely was not an invention of the 1980s, but stems instead from the pioneering work of a few souls in and around the 1950s (Deming, Shewhart, Ishikawa et al.).

Since then, GE, Allied Signal, Nokia, Sony, Navistar, Whirlpool, Bombardier, GenCorp, Siebe Foxboro, Lockheed Martin, John Deere, Siemens, Compaq, Seagate, PACCAR, Toshiba, Dupont and Dow Chemical have all launched six sigma processes. More recently still, in 2000, it seems there were active six sigma processes at Air Products, Honeywell, Johnson Controls, Maytag, Praxair, Ford, Zurich Financial Services and Johnson & Johnson.

The chief executives’ embrace

The world around us moves on. Companies (usually one or two members of the management team) embrace ideas that appeal to them. Some will be a century ahead of the game. Others will be a bit behind. What was right for Motorola in the 1980s appealed to Zurich Financial Services (ZFS) in the 1990s, and may suit your company in the 2000s. Just as the approach adopted by ZFS was very different from that applied at Motorola, so the approach that you adopt will be different to either of them.

Organizational maturity

When a company embarks on six sigma and comes to a halt, it is not unusual for the problem to be that they tried to copy too closely the approach of one of the exemplars, they were not discerning enough or they were sold a mechanistic process developed by someone who only knew part of the story. Into this last category, I would especially lump the firms who will sell you ‘black-belt’ courses in problem solving. Not only are these short courses an insult to the martial arts fraternity, but they are also an insult to the intelligence of managers and staff in organizations. Fortunately, a few courses are emerging that do teach the practical application of human behavioural science and that treat their students as articulate, intelligent human beings. These are typically part-time MSc courses, lasting a year or more. (I mention these in more detail in Chapter 3.)

You will be glad to know that this book will describe a set of tools that have been used to good effect in companies in pursuit of six sigma, and show you how to integrate them, especially in the area of (new) product development. But it expects you to be discerning in your application of them, and not slavishly to follow someone else's (my) approach.

Six sigma, as you will see later, is a statistical term. The tools that I describe were all developed and shared among organizations seeking to achieve better levels of productivity, often from customer to supplier. There are some individuals, masquerading as organizations, who would seek to label this integrated approach and stick a copyright symbol on it. To my mind they are not only exceptionally immature and sadly lacking in more appropriate measures of their own self-worth, but also missing two important points: first, pursuing six sigma, or whatever you wish to call it, is not a competitive thing. It is about your own performance, if that performance gives you a competitive advantage that is a bonus. Secondly, it is out of sharing and collaboration that most innovation emerges. If you want to get ahead, get out there and share. If you want to die off through stagnation, then keep it all to yourself.

While I do not endorse national awards and similar schemes for organizations, the US national quality award, ‘the Baldrige’, has an important provision among its terms: winners are required to do what they can to promote their own experience among other organizations.

The culture of a six sigma company

Without doubt, there is no definitive culture, but there are some similarities.

The ‘best possible’ mindset

These companies do not embark on six sigma if they have a laissez-faire attitude. They know that doing anything more than once to get it right is bad economics. They know that a production line running at half spee...

Table of contents

• Front Cover
• Half Title
• Title Page
• Copyright
• Contents
• About the author
• Preface
• Acknowledgements
• 1 Culture
• 2 What is six sigma?
• 3 The transformation that is six sigma
• 4 The product development cycle
• 5 Quality function deployment
• 6 Taguchi’s techniques
• 7 Statistical process control
• Appendix 1 F-statistics (95% confidence)
• Appendix 2 F-statistics (99% confidence)
• Appendix 3 Logarithms (base 10)
• Appendix 4 Decibel values
• Appendix 5 Quality function deployment house of quality summary
• Appendix 6 Capability report form
• Appendix 7 Attribute data control chart
• Appendix 8 Variables data control chart
• Index