TheSixSigmaRevolution-Wikispaces.docVIP

SIX SIGMA Six Sigma was started in Motorola in 1987. In 1986, Bill Smith, a senior engineer and scientist with Motorola’s Communications Division, introduced the concept of Six Sigma in response to the increasing complaints from the field sales force about warranty claims. He took his idea to the CEO, Bob Galvin, who was struck by Smith’s passion and came to recognize the approach as key to addressing quality concerns. Six Sigma became central to Motorola’s strategy of delivering products that were fit for use by customers. As a result, in 1988 Motorola became the first company to win the Malcom Baldrige National Quality Award (Barley, 2002). Other corporations that have implemented Six Sigma successfully are Allied Signal in financial area in 1994 (now named as HoneyWell), General Electric in services business in 1995 and 3 M in sales and product commercialization. Started at AlliedSignal (before the company merged with Honeywell in 1999), CEO Larry Bossidy introduced Six Sigma in 1994 as a business initiative to produce high-level results, improve work processes, expand all employees’ skills and change the corporate culture. With that, the success of Six Sigma program was evidenced by the $2 million-plus in savings and 988 growths in stock price. (American Society for Quality, Feb 2002). Jack Welch, the CEO of General Electric has chosen Six Sigma Methodology as a business building strategy since 1995. After the implementation of Six Sigma, GE demonstrated the following performance (American Society for Quality, Nov 2001): Operating margins improving from 13.6% to 18.9%; Inventory turns moving from 5.8 to 8.5; Asset efficiency (ratio of plant expenditures to depreciation) moving down toward 1.0; and Earnings per share doubling over the five years of implementing Six Sigma. Jack Welch from GE was a believer of quality in the value of quality and in the need for CEO’s personal commitment to the quality. He also believed the job of leadership i