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SCRC Article Library: Background: What Should the Professional Supply Chain Manager Know about Six Sigma?

Background: What Should the Professional Supply Chain Manager Know about Six Sigma?

Published on: Jan, 18, 2011

by: Zach Breitenbach, MBA ‘03 Manuela Eilert, MBA ‘03

Background

Six Sigma traces its origins to the quest to achieve higher quality at Motorola. This quest began in 1979 when executive Art Sundry proclaimed, “The real problem at Motorola is that our quality stinks!” In the coming years, Motorola studied the relationship between higher quality and lower development costs in manufacturing. They found that contrary to widely held opinions, there is a positive correlation between higher quality and lower development costs. (1)

In 1985, an engineer at Motorola’s Communication Sector, Bill Smith, authored a paper that presented the results from his study of the correlation between a product’s field life and the number of repairs on that product during the manufacturing process. He found that products that were found to be defective and repaired during production often had other defects that Motorola missed and were found by the customer during the early use of the product. In contrast, products where defects were not found and corrected rarely failed during early use by the customer. (1)

Smith’s findings sparked an internal debate at Motorola. The problem of failure in early use could be attacked in two different ways: by detecting and fixing defects or by preventing defects in the first place through improving manufacturing controls and product design. An internal study concluded that detecting and fixing defects could only get Motorola to four sigma, which is just slightly ahead of the average American company. Motorola decided to pursue the latter strategy, improving manufacturing controls and product design. This began Motorola’s quest to improve quality, while simultaneously reducing production time and costs. (1)

In 1984, Mikel Harry, a senior staff engineer in Motorola’s Government Electronics Group (GEG), authored a plan for improving product design and reducing production time and costs within the division. This plan was called the Yellow Brick Road to Six Sigma. Harry formed a team of engineers from within GEG to experiment with problem solving through statistical analysis. The methodologies developed by this team enabled the organization to show drastic improvements. GEG was able to design and produce products faster and at lower cost. With these results in mind, Harry formulated a methodology for implementing Six Sigma throughout the company. This methodology was documented in a paper titled “The Strategic Vision for Accelerating Six Sigma Within Motorola.” (1)

Six Sigma was first applied at Motorola during the development of the Bandit pager. The pager was given this name because it “borrowed” ideas from other products currently on the market. The project took approximately 18 months and cost around $10 million. The pager was designed so that it could be produced in Motorola’s Boynton Beach, Florida factory within 72 minutes of being ordered. The pagers were so reliable that product testing was eliminated because it was cheaper to just replace a pager in the event that one failed. The average life expectancy of the product was 150 years. This reduction in defects and manufacturing time resulted in high financial rewards for Motorola. Over the next four years, Six Sigma saved Motorola $2.2 billion. By 1993, many of Motorola’s manufacturing operations were operating at or near Six Sigma. (1)

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