by Dirk Dusharme

Six Sigma: Motorola's Robert Galvin came up with it and breathed life back into the company, snagging a Baldrige Award in the process. Larry Bossidy rebooted AlliedSignal with it and then sold General Electric's Jack Welch on it. GE then made Six Sigma front-page news. Next, Mikel Harry, one of the original Motorola Six Sigma gurus, packaged it, hyped it, tried to trademark it, put a cowboy hat and spurs on it, and partnered (and then unpartnered) with ASQ on it, all while making a lot of money from it.

 Notwithstanding its 15-year history and the usual hype that comes with any concept promising organizations huge bottom-line benefits, the number of companies actually using Six Sigma appears to be quite small. Moreover, the perceptions within the quality industry of Six Sigma methodology vary greatly.

 So what's the story behind the hype? Is there really some muscle in the methodology, or is Six Sigma simply, as many believe, PR-enhanced total quality management? In this, our first Six Sigma survey, we attempt to shed some light on these questions.  Quality Digest randomly selected and contacted about 4,300 of our 75,000 readers, nearly all quality professionals, and asked them to provide us with both their perceptions of Six Sigma and, if they had experience with it, the results of their experience. We also contacted about 200 readers who we know are directly involved in Six Sigma programs. We hope the survey results, combined with commentary by a few of the most respected Six Sigma consulting companies and experts, will provide an element of reality to the Six Sigma phenomenon.

Six Sigma's Impact*   Six Sigma has significantly improved my organization's profitability. Agree 71% Disagree 15% Neither 14%     Six Sigma has significantly improved job satisfaction at my organization. Agree 49% Disagree 22% Neither 29%     Six Sigma has significantly improved customer satisfaction at my organization. Agree 59% Disagree 14% Neither 27%     *Asked only of respondents whose companies have a Six Sigma program in place

Not for little guys

 Given the multitude of Six Sigma articles in the mainstream press and the number of consultants who offer Six Sigma training, one might think that everyone is jumping on board. But among our respondents, only a small number of companies have implemented a formal Six Sigma program, and the vast majority of those are units of large corporations. Of the 280 respondents included in our survey, only 73 have a Six Sigma program in place. Nearly 90 percent of those work for divisions of larger organizations, with 60 percent being part of organizations with more than 10,000 employees. This might be attributable to the methodology having started in a giant corporation, Motorola, and then migrating to other giants, such as GE, AlliedSignal and Texas

Instruments--behemoths benchmarking from each other. But Six Sigma consultants point to more practical reasons that Six Sigma has been embraced largely by big organizations.

 For one, the larger the company and bureaucracy, the more likely are the areas for improvement. "GE had a sea of waste/opportunity," points out Greg Brue, president and CEO of Six Sigma Consultants, which has worked with GE, Tenneco Automotive, AlliedSignal and others. Because Six Sigma methodology is dependent upon identifying concrete areas for improvement that directly affect the bottom line, the more numerous or glaring the problem areas, the easier it is to launch a successful Six Sigma program, he explains.

 Also--and this may be the primary factor--small companies might have a more difficult time effectively implementing Six Sigma, says Thomas Pyzdek, a Quality Digest columnist and Six Sigma consultant. "With Six Sigma, you're asking for a commitment to an infrastructure," he explains. "Black Belts [the work horses of a Six Sigma program] are rotating full-time positions. We say that Black Belts should make up about 1 percent of a company's employment; of course, the company works up to this. But, by virtue of the fact that Six Sigma requires this sort of commitment, small businesses would have a hard time doing it." Pyzdek estimates that companies with fewer than 500 employees would struggle with implementation.

 "You need the critical mass [afforded by a large company] to assign that type of full-time personnel," agrees John Kullmann, director of marketing at Six Sigma Qualtec, one of the original two firms to spin off of Motorola's Six Sigma program. And although it's not impossible for a small company to do this,

Kullmann adds that companies with fewer than 500 employees would certainly have to use a different approach. "Traditionally, a company dedicates people for the Six Sigma program," says Kullmann. "At a smaller company, those responsible for implementing Six Sigma might have to do so as an adjunct to their current duties--Six Sigma becomes just another hat they wear."

Slow adoption

 Although the Six Sigma methodology has been around for 15 years or so, almost two-thirds (62%) of our surveyed companies that have been using Six Sigma have been doing so for less than two years. This figure might not be surprising. Six Sigma, which was indeed a topic of discussion among quality professionals well before, didn't receive serious publicity until GE's Welch made headlines in 1998 with reports of his company's $350 million in Six Sigma-related savings.

 "As more and more began to see the results at GE, other companies began to adopt it," explains Kullmann. "Although GE wasn't the first firm to adopt Six Sigma, it was the most visible." Once GE reported millions of dollars (which later grew into more than $1 billion) in Six Sigma-related savings, it didn't take long for other large companies to take up the Six Sigma torch.

Is it worth the effort?

 The answer to this question, according to our respondents, is an unequivocal yes. Although the survey contained a lot of grumbling over the implementation and support of Six Sigma, the results--as reported to us--speak for themselves. Of the 48 respondents who answered the question, 38 reported process improvements and savings; the other 10 either hadn't completed projects, had programs that were floundering because they lacked management support, or didn't have figures yet. The sidebar on page 30 outlines some of these savings.

Survey Respondents' Six Sigma Results Ranked by Company Size
Results	Employees in site	Employees in organization
Waste reduction saved $120,000	75	100,000
Reduced costs by $50,000 per year	120	350
On-time delivery improved to 97%; yields improved to 97%	120	125,000
Saved $1 million	200	3,000
Saved approximately $150,000	240	4,500
Reduced scrap by 15%; reduced rework by 25%	250	5,000
Reduced downtime by 30%	300	7,000
Saved $4 million per year	300	30,000
Improved production throughout by 43%; reduced No. 1 defect in plant by 50%	400	2,500
Increased production capability 12-16%	450	6,000
Saved $780,000 per year	500
No. 1 customer complaint 99% eliminated, saving more than $1 million per year	600	93,000
Saved $20 million in two years	1,000	7,500
Saved $12 million in 2001	1,000	20,000
Increased productivity by 20%	1,000	4,000
Reduced manufacturing defects by 67%	1,100	1,500
30 Black Belt and Green Belt projects completed; saved $14,625,800	1,400	65,000
Saved $5 million in cost during first two years	1,800	10,000
Improvements ranging from a 50% to 90% decrease in defects	3,000	48,000
Increased productivity of call center analysts by 23%	3,000	350,000
Customer service incidents reduced more than 50%	4,000	330,000
More than $7 million in direct savings in six months	8,000	21,000

Is it the only way to get things done?

 Although stories of tremendous Six Sigma results point to the effectiveness of the methodology, this doesn't mean that Six Sigma methods are the best option for every problem. Despite the fact that nearly one-third (31%) of those with Six Sigma programs answered in the affirmative to the statement, "Six Sigma is always the best methodology to apply to a project," our consultants strongly disagree.

 Six Sigma is not a magic bullet, says Pyzdek, who reports having seen numerous companies trying to apply the methodology where it doesn't make sense to. "I see it being applied wall-to-wall, and that's wrong," he says. "For instance, if you have an R&D department, I would apply it to the development part but never to the research part. Six Sigma is methodical and organized. Research is sloppy, chaotic and disorganized. You would kill the creativity of research if you tried to apply Six Sigma there."

 Generally, for Six Sigma to work, there needs to be a problem statement, adds Brue. A general objective won't cut it. "If it's got defects and waste, there is nothing better than Six Sigma, even for something like cycle time," he explains. "You can turn cycle time into a defect and use Six Sigma to reduce it. One thing that we see happen a lot is that people want to, say, consolidate their plant. You don't need Six Sigma for that. That's a management decision. Just do it."

Using Six Sigma Tools   With Six Sigma, you use whatever tools are necessary to get the job done. Agree 81% Disagree 13% Neither 6%     Six Sigma tools are the same as total quality management tools. Agree 36% Disagree 57% Neither 7%     Six Sigma uses too many tools. Agree 16% Disagree 72% Neither 12%     The complexity of the Six Sigma methodology varies with the complexity of the project. Agree 84% Disagree 16% Neither 0%

I've got three words for you

 Management, management, management. For Six Sigma to work, management has to be behind it 100 percent, according to both our survey results and expert commentators.

 "The most important element is leadership's commitment to the cause--commitment with teeth," confirms Brue. "Leadership that shows up at Six Sigma meetings. Leadership that takes time out of their schedules to participate."

 For our survey, we looked at management support in a couple of different ways. First, we had a general statement, "Management fully supports our Six Sigma program," to which three-quarters (77%) of our respondents with Six Sigma programs agreed, with half (51%) replying "strongly agree."

 However, if we look at management support in terms of training, time and resources, the results show a different picture. One-third (35%) said that they could have used more training prior to starting Six Sigma, 44 percent said they weren't given enough time to complete Six Sigma projects, and nearly half (48%) indicated that they didn't have enough resources to properly implement Six Sigma projects.

 What about tying employee promotions to Six Sigma certification, as GE has and 40 percent of our responding Six Sigma companies do? Does that kind of management support show a little too much "teeth"?

 "I was there when Welch made that announcement, and people were really angry," recalls Brue. "But, these are problem-solving skills, and I think this is a good thing. You should have a minimum skill set."

 "Should it be a qualifying factor?" asks Kullmann. "Sure. It certainly shouldn't be the only factor, and I don't think GE bases promotions purely upon whether a person is Six Sigma-certified or not." In fact, GE requires Six Sigma training of only those employees who are on a management track. But such a move might be key to ensuring that Six Sigma is taken seriously at all levels, he adds.

 "GE does a lot of things I disagree with," says Pyzdek. "The company ranks employees, for instance. And for all the reasons [W. Edwards] Deming talked about, that's wrong. It's hard to argue with success, but I think a lot of what GE does is heavy-handed. On the other hand, it certainly sends a message that you are to get on board or get out. If a company intends to use Six Sigma, then their people do need to know how to use it."

Déjà vu all over again?

 In creating Six Sigma, have we simply reinvented the wheel? Most (57%) of our readers said no, Six Sigma tools are not the same as TQM tools. Our consultants, as might be expected given their line of work, agreed. This debate will probably rage on until the next best thing comes along, but, meanwhile, here is how the debate shakes out:

 In short, TQM proponents argue that--properly implemented--TQM could achieve the same results as Six Sigma. Six Sigma proponents argue that, although Six Sigma utilizes most, if not all, of TQM's tools, it has a much more narrowly defined objective: money! Six Sigma advocates claim that TQM's weakness is that the initial motivation for TQM projects is to improve quality not to make or save money. There are times when these two objectives are not mutually compatible, our consultants argue.

 "Six Sigma has a much stronger project focus," says Kullmann. "It's not quality for quality's sake. It has a return on investment. It's all hard-number-based, as opposed to 'soft' numbers. I don't think the tools are revolutionary; its application is the bigger issue."

 TQM provides a good base, asserts Brue, but there is a clear distinction between TQM and Six Sigma: tracking the money saved. "If you asked some of the TQM companies how much money they saved, they couldn't tell you. But with Six Sigma, you track it project by project," says Brue.

 Pyzdek and Brue also point out that TQM doesn't require a workforce dedicated to attacking issues.

Adding it up

 Summarizing what our survey results and our experts tell us, here is the bottom line on Six Sigma: If yours is a small company with fewer than 500 employees, or maybe even fewer than 1,000 employees, Six Sigma probably isn't for you. Although implementation might be possible, it might require more resources than a small company can spare.

 Because it relies so heavily on management support, hard dollars (GE invested more than one billion dollars in its Six Sigma infrastructure), time allotment, training and brain resources (does your in-house statistical guru have time to answer questions for your Six Sigma neophytes?), Six Sigma won't work for companies with tight pockets or in which management's attention span to quality initiatives is measured in weeks rather than months or years.

 Beware of the hype. Six Sigma doesn't solve all problems and it shouldn't be applied in all situations. But, if it's a measurable, methodical process that you are trying to improve in order to get bottom-line results, Six Sigma might be the ticket.

 Done properly, Six Sigma does generate amazing results. And the people with Six Sigma experience with whom we've spoken to gush over it. Talking to a Six Sigma believer is almost like talking to a Demingite--they're both completely sold.

 As for the "it's the same as TQM" thing, Quality Digest has been following quality initiatives for 20 years, and here's our take: Use common sense. Whatever you're doing, whatever you call it, if it's producing measurable bottom-line results and your customers are banging at your door to get at your product and not your throat, you're probably on the right track.

About the author

 Dirk Dusharme is Quality Digest's technology editor. E-mail him at ddusharme@qualitydigest.com .