Lean, Six Sigma and Formal Process Improvement … Yesterday and Today
A confession – I’m a history geek. I read history books, watch the history channel and am fascinated by arcane entries on Wikipedia. History provides understanding. If you ever wonder why something is like it is, find its origins. Sometimes, what is commonly accepted clearly no longer merits application. And likewise, the confusing which is about to be discarded suddenly makes so much common sense that it is retained. And so I think it is worthy to pause and look back on our profession and examine our origins.
Without going back to the Stone Age, I’ll start the discussion by citing Carl Frederick Gauss (1777 – 1855) who introduced the concept of the normal curve. Aha….if you look hard enough, you realize you don’t always get the same outcome from an action. And in fact, there are patterns to the distribution. It was only a matter of time before someone asked “Why?”
Fast forward to the Roaring 1920’s, a decade marked by urbanization and strong industrial growth in the United States. Phones were offered in every home and cables had to be laid underground in growing cities. Western Electric, an engine of innovation not unlike today’s Silicon Valley based technology companies, wrestled with the Young Ma Bell’s reliability. And Walter Shewhart measured performance using the concepts of distribution of results like with a normal curve. Shewhart postulated that three sigma from the mean was where a process required correction and demonstrated that “tampering” with a process in reaction to non-conformance actually increased variation thus degrading quality. Gauss’ normal curve is tipped on its side and an SPC control chart is born.
a short Powerpoint overview of the History of Six Sigma …
It is during World War Two and Post-War Japan’s reconstruction that we see today’s modern thoughts about quality management, later to be framed more broadly as Operational Excellence, take shape. America’s still primarily agrarian economy is reshaped to supply the war in a very centralized fashion allowing for broad distribution of best practices. Then the ideas are transported to an ailing Japan in what becomes a huge laboratory for their application.
Deming rises to the top of the mountain in this period as he combines Shewhart’s Statistical Process Control with ideas about Transformational Change formed as he saw two economies repositioned. He forms his System of Profound Knowledge asserting that managers must have (i) an appreciation of a system, (ii) an understanding of variation, (iii) the theory of knowledge and (iv) knowledge of psychology or human nature. He has linked the numbers with the individuals and the organization and it is all sewn together in his book “Out of Crisis” which could serve as any OpEx leader's handbook.
It is in the ‘70’s that Motorola, a company at the very leading edge of a seemingly invincible industrial America, recognizes it has a quality problem and begins its search for improvement adopting Deming’s postulate that a focus on quality decreases cost while increasing customer satisfaction while a focus on cost leads to decreased quality and eventually increased costs and decreased customer satisfaction.
As Galvin focuses Motorola, Bill Smith comes forward with his Latent Defect Theory connecting variation to defects and waste. Eliminate the variation and you’ll increase quality, decrease costs and increase customer satisfaction. It is at Motorola that the problem solving methodology of M-A-I-C (later expanded to DMAIC) is assembled to address variation. Six Sigma, or zero defects, becomes the mantra. When Motorola is bestowed with the Baldridge Award, corporate America takes note and seeks to replicate the success.
It is from the late ‘80’s through the mid-‘90’s that elements of a deployment strategy for Six Sigma form. At Unisys, the term Black Belt is coined denoting an expert specialist in Six Sigma. At Motorola’s Six Sigma Institute, a part of Motorola’s trend setting corporate university, a knowledge transfer system is developed to broadly disseminate the practice. At ABB, the terms Champions and Green Belt are added to denote the different levels of knowledge required for different roles and populations. And at Allied Signal, the efforts pivot to improving processes with specific business goals in mind giving rise to criteria for project selection. The capstone is added at GE when Welch drives the program to new heights demonstrating what a Top Down approach can produce. And he adds the kicker of immense publicity.
Much has happened since the mid-‘90’s. Lean has been incorporated to create LSS. The ideas have spread from manufacturing to services (although one could argue services were always part of Deming’s work as well). Application has gone around the world. And the term Operational Excellence has taken shape to emphasize the business goal versus simply the project or process goal.
But wherever we are today, the elements established by Gauss, Shewhart and Deming, brought together by Motorola and popularized by modern companies lead by GE are still the same. Reading Deming today is as pertinent as fifty years ago. Putting together the numbers, individuals and the organization to improve processes, products and services to lower costs and improve customer satisfaction remain appropriate goals and the elements that developed to do so remain relevant.
Whatever criticism exists, this history should demonstrate how well founded each of the contributions were at their time and how the conditions that gave rise to them still exist today so as to validate their continued application. If we understand from where they came, we will do a better job of properly applying them today. If you would like to discuss any of this, please feel free to contact me.