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Six Sigma: The Breakthrough Management Strategy Revolutionizing The World's Top Corporations

by: Mikel Harry, Richard Schroeder
en

0385494378  9780385494373  9780795327797 

 


Six Sigma, The Breakthrough Management Strategy Revolutionizing The World's Top Corporations
By Mikel Harry, Richard Schroeder


 


Product Description:

The extraordinary breakthrough management program--heralded by GE, Motorola, and AlliedSignal--that is sweeping corporate America with its unprecedented ability to achieve superior financial results.

Six Sigma is the most powerful breakthrough management tool ever devised, promising increased market share, cost reductions, and dramatic improvements in bottom-line profitability for companies of any size. The darling of Wall Street, it has become the mantra of Fortune 500 boardrooms around the world because it works.

What is Six Sigma? It is first and foremost a business process that enables companies to increase profits dramatically by streamlining operations, improving quality, and eliminating defects or mistakes in everything a company does, from filling out purchase orders to manufacturing airplane engines. While traditional quality programs have focused on detecting and correcting defects, Six Sigma encompasses something broader: It provides specific methods to re-create the process itself so that defects are never produced in the first place.

Most companies operate at a three- to four-sigma level, where the cost of defects is roughly 20 to 30 percent of revenues. By approaching Six Sigma--fewer than one defect per 3.4 million opportunities--the cost of quality drops to less than 1 percent of sales.

This is because the highest quality also results in the lowest costs. When GE reduced its costs from 20 percent to less than 10 percent, it saved a billion dollars in just two years--money that goes directly to the bottom line. This is the reason Wall Street and corporations as diverse as Sony, Ford, Nokia, Texas Instruments, Canon, Hitachi, Lockheed Martin, American Express, Toshiba, DuPont, and Polaroid have embarked on corporate-wide Six Sigma programs.

Six Sigma should be of paramount importance to every forward-thinking executive and manager determined to make their company world-class in their industry.



Amazon.com:

Mikel Harry and Richard Schroeder think they've figured out a management program that really works. While at Motorola in the 1980s, they helped pioneer Six Sigma, a process that "guides companies into making fewer mistakes in everything they do--from filling out a purchase order to manufacturing airplane engines." Since then, the two have left Motorola and have turned Six Sigma into a lucrative business that saw over $100 million in consulting contracts in 1998. And now the book.

In Six Sigma: The Breakthrough Management Strategy Revolutionizing the World's Top Corporations, Harry and Schroeder explain Six Sigma and show how it's working at companies such as General Electric, Polaroid, and Allied Signal. The authors contend that most companies today are working at a "sigma" level of between 3.5 and 4, and that with just a one-sigma shift, companies will experience "a 20 percent margin improvement, a 12 to 18 percent increase in capacity, a 12 percent reduction in the number of employees," as well as "a 10 to 30 percent capital reduction." Sigma is a quality metric that counts the number of defects per million opportunities (DPMO). For example, a sigma level of 3.5 means that a process has 22,700 DPMO; a sigma level of 4.5, 1,350 DPMO; and a perfect six sigma, 3 DPMO.

At the heart of Six Sigma is the notion that quality saves money--lots of money. Harry and Schroeder argue that for most companies "the cost of quality is roughly 25 to 40 percent of sales revenue ... at six sigma the cost of quality declines to less than one percent of sales revenue." The idea is not to create quality-assurance programs but to eliminate the need for them altogether. When a company is operating at six sigma, costs that would otherwise go to inspection, rework, warranties, and customer service drop to the bottom line. Six Sigma is a compelling concept that many companies have tied their futures to. Well written, this book is a great introduction for investors, managers, and anyone who sees Six Sigma on the horizon. --Harry C. Edwards



Summary: The Original "Real" Six Sigma
Rating: 5

In my opinion, people have lost track of what the Six Sigma methodology really is over the many years since it was first developed at Motorola. Maybe it was too hard for them to do the right way, so they tried simplifying it to suit their needs; maybe it was because they misunderstood the elements that precisely defined what Six Sigma is and implemented them incorrectly; or, as was the case with a previous employer of mine, maybe they just wanted to use the name Six Sigma, but continue using their old familiar approach towards process improvement, i.e., the name was good for business, but nothing more. Whatever the case, Six Sigma has changed a lot; in my opinion, for the worst. Take any seminar or read any new book on Six Sigma and you'll see they are focused on the tools and statistics, but only briefly examine the philosophy. Look at how many companies have tried Six Sigma only to abandon it later saying they tried it but it didn't work. Well, maybe they didn't to it right and that's why they failed.

In particular, I know very few organizations who put a high priority on measuring the process steps in the Measure phase. Most just measure the input and output metrics, but leave the process steps as a black box. Or maybe they tried to apply Six Sigma as panacea for all their process woes, rather than carefully choosing projects suitable for Six Sigma Improvement. Many companies have turned to Lean Six Sigma as their salvation; but, as any early Six Sigma professional knows, Lean Six Sigma is just Six Sigma as it was originally intended by the inventors. Isn't value-stream mapping essentially the same thing as measuring the process steps?

This book, written by two of the architects of the original Six Sigma, tells it like it really is. I have successfully implemented Six Sigma in two companies following the strategy described in Harry and Schroeder's book and our projects result in "Real," "Measurable" savings as a result of Six Sigma process improvement. The secret is in the philosophical approach to Six Sigma Process Improvement; not the tools, the statistical methods, or the name. I can't imagine how someone could go wrong if they followed this book to implement the Six Sigma methodology. The book is very well written, very easy to read, and have many, many great, and well documented, examples.



Summary: Don't Waste Your Time
Rating: 1

This is a poorly written 300 page piece of marketing fluff for the Six Sigma Academy consulting group. Either save your time by skipping the book and contacting the consultants directly or find a different book if you really want to learn about six sigma



Summary: Six Sigma and the Industrial Engineer
Rating: 2

The book gives a good general overview of the Six Sigma system. It offers little real ability to do projects UNLESS you are an industrial engineer (IE), in which case it gives you a concrete case to sell your solutions to management. Six Sigma appears to be a buzz word for PART of an indutrial engineers repitoire of skills. ...



Summary: A Six Sigma Overview
Rating: 3

Six Sigma superficially is an excellent concept and this book serves the reader well in providing a detailed description of the concept. Early chapters take the reader on a journey through various companies providing an education on the importance of benchmarking, measuring defect rates, implementation strategies, and measuring six sigma performance. When the book begins to focus on implementation and deployment in later chapters the paint strokes begin to get very broad. The ideas provided to the reader are oversimplified and basic. For example, "Companies that improve their ability to consistently meet their customer's needs will produce positive bottom-line results." Really? I believe that the 1% of managers that are unware of this concept are not reading this book. The inability of this book to lay out a detailed plan for implementation results from the fact that each business is significantly different. If after reading this book the six sigma concept is appealing one could consider employing a consultant or creating a team for implementation. In my opinion the book also applies more to businesses with easily measurable performance such as manufacturing products as opposed to service providing businesses. Although customer satisfaction can be measured it is much easier to note an increase in monthly unit production. In summary six sigma is a difficult concept to initiate without the full commitment of your management team but the individual businessman will gain some valuable managerial skills through the book's good advice.



Summary: Old wine in a new bottle
Rating: 3

As a person with exposure to Software Engineering Institute's Capability Maturity Model, I can say with conviction that the authors of this book have tried to sell the concept of Six-sigma the way corporate chieftains want to hear. i.e increase in bottom-line.

The book gives a good, superficial account of what is Six-Sigma with reference to implementations in Motorola, General Electric and Allied Signal.

While CMM is specific to software development process improvements (off-late its branching into HR aspects as well) six-sigma addressess other industries as well.

This book is a marketing tool kit for the authors' consulting practice.

I know of people who have gone through six-sigma certification process and have heard of people in GE commenting about its ineffectiveness.

Let me provide an analogy here and you will understand better.
Unless you the have the will-power to quit smoking, no amount of patch intakes will help you do that, right? Same case here...unless there's a management commitment and will-power to drive for process improvements (any model) success is hard to come by.

GE (If I recollect rightly) infact, made it mandatory to go through Six-sigma training for its employees to be promoted to a certain level higher-up.

Only such management commitment would help in process improvements (through any quality model)

I am sure many of you would be familiar with concepts and ideas of Six-Sigma. There's no doubt about it. Its plain common-sense.

In today's world, there are many industries that are head and shoulders above Six Sigma.

At the worst case, Six-sigma may be suitable for software companies whose quality practices are not something to write home about. But even then software companies have CMM. Why choose six-sigma which is more complex and expensive?

There are simpler and cost-effective techniques for smaller and medium sized companies in any industry. Such techniques evolve over a period of time with experience.

Nevertheless, this book is a good reading material that will throw lots of corporate jargons.

But please don't be misled by those jargons.