Transforming Industries: The Impact of Six Sigma in Leading Companies

In the dynamic landscape of today’s business world, organizations are constantly seeking innovative strategies to enhance efficiency, streamline processes, and elevate overall performance. For decades, many of the world’s largest companies have used a data-driven methodology for decision-making and process improvement: Six Sigma.

The Six Sigma method is rooted in the following assertions:

  • Reducing process variation is essential to business success.
  • Manufacturing and business processes have characteristics that can be defined, measured, analyzed, improved, and controlled.
  • Sustained quality improvement can only be achieved when an entire company, starting with the executive team, is committed to realizing it.

This article explains what a Six Sigma company is and it has reshaped industries and established new standards for operational excellence and quality assurance. As we embark on this exploration, we explore the role of Six Sigma in navigating the challenges of contemporary business environments and fostering a culture of continuous improvement.

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The Concept of Six Sigma

Six Sigma is a scientific method that claims using verifiable data and statistics to make decisions can help businesses achieve measurable profit gains. When the technique is promoted and employed by management, the discipline tangibly improves the quality of products and services, increasing customer satisfaction while reducing costs. The goal of a Six Sigma project is to create a process that is 99.99966% free of defects (or to have fewer than 3.4 errors in one million opportunities).

These projects utilize the five-step DMAIC approach to problem-solving (Define, Measure, Analyze, Improve, Control). DMAIC projects, which typically last about four months, are used to improve existing business processes. Let’s take a closer look at the five DMAIC phases:

  1. Define: The first step is identifying the problem, the improvement opportunity, the project goals, and internal and external customer requirements. Once defined, the team must create a map illustrating how they will fix the issue at hand.
  2. Measure: Once the project map is ready to go, the team collects data and quantifies the problem so they can measure performance and evaluate improvement.
  3. Analyze: Use the data to investigate and understand the variables impacting the problem to determine what is driving the defect at the center of the project.
  4. Improve: Run experiments to learn how to implement the desired improvements and eliminate the underlying cause of the defect.
  5. Control: Measure performance to ensure the newly improved process is successful. Any deviations from the previously targeted improvements should be corrected, and a quality control plan must be created to ensure the process improvements can be maintained.

The second project methodology is Define, Measure, Analyze, Design, Verify (DMADV) and is used for projects creating a new product or process or dramatically overhauling an existing one. The five phases of DMADV include:

  1. Define: Clarify the purpose of the project, including identifying goals that align with the organization’s strategy and customer requirements.
  2. Measure: Identify Critical To Quality (CTQ) characteristics and the metrics critical to stakeholder success.
  3. Analyze: Develop design alternatives and use them to test the process, product, or design. These tests allow the team to select the best components and create the best design.
  4. Design: Create high-level designs for the new process or product so the team can identify unforeseen errors and make additional modifications as necessary.
  5. Verify: Review the new implementation with stakeholders to verify it will be effective once deployed.

Profiles of Top Six Sigma Companies

Here are a few companies that have proudly completed successful Six Sigma implementations:

General Electric

A multinational conglomerate, GE has several divisions, including aerospace, power, renewable energy, additive manufacturing, and more. GE is a pioneer in adopting Six Sigma and has used it to streamline operations and foster innovation across various sectors, from healthcare to financial services.

Motorola

A leader in telecom and electronics, Motorola is also the birthplace of Six Sigma. American engineer Bill Smith developed the method in 1986 as a system for boosting the company’s profits. Ever since, Motorola has continually demonstrated the effectiveness of Six Sigma in the tech industry via quality improvement and cost reduction.

Honeywell

Known for its diversified technology, Honeywell operates in four primary areas: aerospace, building automation, performance materials and technologies, and safety and productivity solutions. The company has applied Six Sigma for process improvement, operational excellence, and product quality improvements.

How These Companies Implemented Six Sigma

While Honeywell, GE, and Motorola are now well-known for successfully using Six Sigma, adoption was not without its challenges.  For example, both Motorola and Honeywell had to tackle the complexity of implementing Six Sigma in diverse operations by customizing methodologies to suit specific department needs.

General Electric

When GE decided to utilize Six Sigma in 1995, they refused to go halfway. The company implemented it across all departments, encouraging employee certification and linking promotions to Six Sigma proficiency. Like many companies, General Electric faced initial resistance to this change. But with a top-down endorsement stemming leadership and comprehensive training programs, GE enjoyed a successful Six Sigma rollout.

Motorola

As the original adopter, it should be no surprise that Motorola focused on training and empowering employees at all levels to use Six Sigma tools. Today, it offers hybrid, online, and classroom programs taught by a Six Sigma Black Belt with real-world experience.

Honeywell

AlliedSignal Inc. and Honeywell merged their business operation in 1999, bringing two different quality management systems (QMS) together. With AlliedSignal came Six Sigma, and soon it was into Honeywell’s overall business strategy, making it a core component of its operational procedures.

Impact of Six Sigma

Today, we can look back and analyze the outcomes of implementing Six Sigma in these companies, including tangible improvements in efficiency, quality, and customer satisfaction.

General Electric

In 1997, just two years after implementing Six Sigma, General Electric boasted nearly $700 million in corporate benefits (a number that rose to over $2.5 billion just three yeats later) So, within five years, GE reported billions of dollars in savings and significant quality improvements, such as better product reliability and improved production efficiency. Better products equal improved customer relations, which turns into greater revenue.

Motorola:

When Motorola began rolling out Six Sigma, they documented key processes and aligned them to customer requirements so they could start measuring their efficiency. As a result, the company drastically reduced product defect rates by more than 80%, leading to over $16 billion in savings.

Honeywell

Since rolling its Six Sigma Plus system, Honeywell has improved on-time delivery and product reliability by reducing cycle time and being more responsive to customers. Additionally, in 2012, its focus on waste elimination and variation reduction drove $1.2 billion from productivity improvements.

Benefits of Six Sigma in Business

Our case studies show that Six Sigma can be used to improve a variety of processes. Despite the differences in how these companies leveraged Six Sigma, the advantages in business operations are the same:

  • Reduces operational costs
  • Improves quality and efficiency
  • Enhances customer satisfaction
  • Fosters a culture of continuous improvement
  • Broader Impacts
  • Increases competitiveness
  • Drives innovation
  • Improves employee morale and engagement

Conclusion

Manufacturing giants and tech innovators have provided ample evidence Six Sigma is a versatile tool for achieving operational excellence. In an era where precision and streamlined processes are paramount, this data-driven approach and emphasis on continuous improvement aligns seamlessly with the evolving demands of industries. Six Sigma will continue evolving to meet the unique challenges of emerging sectors, and as technology advances and markets shift, the method’s adaptability will ensure that businesses remain agile and resilient in the face of change.

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