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Weave Six Sigma Into

The Fabric of an Organization
by Ronald D. Snee

he stories of sweeping success are plentiful. Enormous corporations led by visionary CEOs consolidated all their organizations’ activities, improvement initiatives and operations under the umbrella of Six Sigma and made their companies exemplars of excellence. Just look at General Electric (GE), Motorola, Allied Signal, 3M, Home Depot, J.P. Morgan Chase & Co., Johnson & Johnson and Quest Diagnostics. No matter what else might change in these companies, their unwavering principle of quality put into practice through Six Sigma remains. That basic principle helped their CEOs create organizations that focus on continuous improvement and continuously obtain significant financial benefits.

Although many organizations desire the bottom-line benefits of Six Sigma, the success stories make it appear out of reach. Some organizations may lack the budget for an enterprisewide Six Sigma initiative. They may be leery of vast transformation projects, having been oversold on them in the ’90s. They may have few leaders with firsthand Six Sigma experience and, therefore, little confidence Six Sigma would work at their organization.

Meanwhile, the pressure to provide flawless execution is increasing.1 From financial services to telecommunications, excelling in customer service has become one of the few differentiators for commodities. For example, giant merchandisers such as Wal-Mart and Target continue to pressure suppliers to improve their performance.

Excellence in manufacturing has also taken on more importance than ever, especially in the pharmaceutical industry. A number of blockbuster drugs are coming off patent, and there’s little in the pipeline to replace them. Though pharmaceutical R&D is geared to produce blockbusters, it hasn’t been able to do that lately, thereby resulting in increased costs. That’s why the industry’s clinical research processes must be improved dramatically.

In this high pressure environment, a nagging thought persists. Isn’t it foolish to forgo a proven methodology designed to produce business and financial success through flawless execution? Is there a middle ground between small-scale pilots and large-scale transformation? Could Six Sigma be practiced on a scale extensive enough to make a real difference to the business, yet intensive enough to keep the effort focused and manageable within budgetary, personnel and time constraints?

A Framework for New and Existing Six Sigma Programs

For companies that resist sweeping transformation but fear being left behind, a middle ground does exist. Such companies can choose several substantial areas of the enterprise and institute Six Sigma there. The key is to weave it thoroughly into the fabric of daily work in these areas.

Too often, companies employ Six Sigma to design or improve processes but fail to continue to operate the processes using its principles. Weaving Six Sigma into the fabric of daily work brings the ideal of flawless execution closer to reality and provides the substantial financial benefits necessary to make the effort worthwhile.

The middle ground of Six Sigma encompasses three steps of increasing magnitude:

1. Select two or three areas in which to initiate Six Sigma.

2. Spread it to adjacent areas as you gain experience with Six Sigma in each of the initial areas.

3. Integrate improvement efforts, including capital projects, into an overall organizational improvement system.

Because the first phase encompasses several functions or areas, as opposed to a restricted pilot project, it will rapidly produce large benefits to help fuel its spread to adjacent areas. The widely dispersed experience gained in the first phase will enable more rapid propagation of Six Sigma to other areas.

Once Six Sigma has been successfully spread and its techniques are widely understood, it eventually reaches a kind of critical mass—the point at which it envelops all the appropriate parts of the enterprise and becomes the catalyst for integrating all improvement efforts, including capital project planning, in an overall improvement system.2

This approach also provides a way for companies that have already instituted Six Sigma to measure how thoroughly they have integrated quality into daily work. Companies that have embarked on ambitious Six Sigma programs often stop short of weaving it fully into the fabric of the organization. Like beginning practitioners, they may use Six Sigma to design new processes or improve existing processes but fail to use its techniques to operate the processes on a daily basis. Because these companies often turn to Six Sigma, they believe they are getting the greatest possible benefits from it when, in fact, they use it intermittently.

Companies that measure themselves against the three-step framework not only get a clearer view of their use of Six Sigma, they also learn how to reinvigorate their efforts should they find they fall short. The goal, after all, should be not only to implement Six Sigma as needed, but to maintain and sustain its techniques to lay the groundwork for continuous improvement and the achievement of competitive and financial benefits.

Initiating Six Sigma
In Selected Areas

Selecting several areas in which to begin Six Sigma simultaneously goes beyond choosing a limited, single pilot project but is still manageable in terms of budget and resources. It is advisable to choose disparate areas in which to initiate Six Sigma projects. For example, you might choose an operational process, a customer related process and a business or managerial process, each in a different department. As Motorola and GE proved early on, Six Sigma works well with all types of processes.

Initially confining Six Sigma projects to a single area quarantines it in one department or function and eventually kills it. By instituting Six Sigma projects in different areas, leaders send a signal to the entire organization that they are serious about it—it’s not just for those in manufacturing or quality assurance. Having projects in different areas also prepares the way for the widespread, rapid propagation of Six Sigma. While most change programs claim to proceed with all deliberate speed, the emphasis often falls heavily on “deliberate” and doesn’t account for speed.

A pharmaceutical company, for example, might choose the following areas in which to initiate Six Sigma:

1. Deviation reduction in manufacturing.

2. Clinical research.

3. Logistics.

By choosing these disparate and significant but manageable areas, the company can grow the use of Six Sigma, organically producing and multiplying operational and financial benefits while staying within budgetary constraints.

To weave Six Sigma throughout the organization, the company must first weave it thoroughly into each individual area. The pharmaceutical company wishing to reduce variations in manufacturing must use Six Sigma not only to design a new process or improve an old one but also to run the process on a daily basis.

Identifying, investigating, adjudicating and correcting manufacturing deviations cost pharmaceutical companies millions of dollars each year in reduced capacity and increased labor, inventory and good manufacturing practices compliance problems. Unfortunately, many organizations, even some that employ Six Sigma, simply correct individual deviations. But deviations are not always isolated events; they are often the result of poorly functioning processes and systems.

To reduce deviations and prevent them from recurring, the pharmaceutical company would need to fix the deviations and analyze them collectively using Six Sigma techniques to identify root causes, initiate improvement projects and make the appropriate process and system changes. The company would also continue to control the process on a daily basis using Six Sigma.

The principles are the same in the company’s clinical research and logistics areas. Failure to identify root causes, improve the system or control the ongoing operation of the processes will result in a limited deployment of Six Sigma and processes that will likely deteriorate over time.

Spreading Six Sigma

The way in which Six Sigma spreads both within and across functions is not random. It proceeds according to a rigorous business logic generated by Six Sigma itself. As you undertake improvement projects and attempt to get at the root causes of problems, you will uncover additional opportunities for improvement. The root causes of a particular problem may turn out to be multiple, they may lie upstream from the point at which the problem manifests itself, or they may intersect with other problems. As a result, numerous improvement opportunities appear.

Using Six Sigma techniques, you can prioritize the new opportunities according to the potential business and financial benefits of each and attack the most rewarding projects first. These projects will uncover more opportunities and help spread Six Sigma and its benefits systematically and advantageously within and across functions.

For example, when implementing Six Sigma in clinical research, the pharmaceutical company may find its improvement of cycle times uncovers opportunities in process simplification, the use of labor resources or the rework of waste. Similarly, when implementing Six Sigma in logistics, the company may initially focus on delivery time but soon find improvement opportunities in warehouse management and inventory.

As Six Sigma spreads to adjacent areas, the choice of disparate initial areas begins to pay off as the improvement projects begin to grow toward each other and knit together. As a result, Six Sigma spreads more evenly and uniformly than in a pilot model that mechanically and ploddingly transfers itself from one function to the next. Instead of trying to manage two distinct organizations—one that employs Six Sigma and one that doesn’t—you are managing an organism whose parts are coming together in a way that maximizes the financial benefits.

Creating an Overall Improvement System

Improvement and growth occur project by project. The projects originate from several different sources and differ in scale and scope. As Six Sigma deployment spreads throughout the organization, other improvement activities will begin to compete for resources and management attention. The organization now has a portfolio of improvement projects that should be linked to strategic priorities and managed as a common system. The portfolio includes:

• Projects with a known solution, such as capital projects.

• Six Sigma projects, where the problem has no known solution.

• Other improvement initiatives, such as ISO 9000 or the Baldrige criteria.

The overall improvement system should blend these three types of initiatives and include projects related to diverse areas, such as productivity improvement, revenue growth and organizational learning and growth. Managing all improvement projects as a single system aids the budgeting process and focuses the organization on what needs to be done and when, given the available resources. Through continual portfolio review, assessment and evaluation, you can coordinate improvement efforts and ensure the organization stays focused on improvement and control so improved performance does not deteriorate.

Clearly, Six Sigma projects cannot address all an organization’s improvement needs. For example, capital spending projects with known solutions do not require Six Sigma improvement techniques.

Six Sigma tools can, however, be employed in the decision making and implementation processes for capital projects and often uncover opportunities to reduce their number and free up working capital.

The widespread deployment and use of Six Sigma on a daily basis supply a consistent stream of more accurate data on which to base such critical decisions. In addition, because other quality initiatives such as ISO 9000 are, like Six Sigma, process focused, data based and management led, they are easily integrated into the overall improvement system, and experience with any of them usually enables more rapid and effective implementation of the others.

Recognizing Success

How will you know you have succeeded? When Six Sigma has become the way your company works. The recognition won’t come from a metric or a deadline. Rather, you will know it when you see its elements being used on a daily basis. Some of those elements include:

• Working to find better ways of doing things.

• Finding ways to improve the bottom line.

• Thinking of everything you do as a process.

• Recognizing the ubiquity of variation and its effects on work.

• Working to reduce variation.

• Using data to guide decisions.

• Maintaining a joint focus on improvement and control of processes.

Companies new to Six Sigma and those already steeped in it have the same goal: to create an environment where Six Sigma is so thoroughly woven into the organization’s fabric, a formal Six Sigma initiative is no longer necessary. By adopting a phased, gradually accelerating approach, you can arrive at that point manageably and substantially, cautiously and ambitiously, intensively and extensively—moving with all deliberate speed toward emulating the success stories that once seemed so daunting.

REFERENCES

1. Larry Bossidy and Ram Charan, Execution: The Discipline of Getting Things Done, Crown Business, 2002.

2. Ronald D. Snee and Roger W. Hoerl, Leading Six Sigma—A Step-by-Step Guide Based on Experience with GE and Other Six Sigma Companies, FT Prentice Hall, 2003, pp. 161-190.


RONALD D. SNEE is principal, process and organizational excellence, at Tunnell Consulting in King of Prussia, PA. He earned a doctorate in applied and mathematical statistics from Rutgers University in New Brunswick, NJ. Snee is a Shewhart Medalist and an ASQ Fellow.

 

Copyright 2004, Ronald D. Snee

Create an environment where a formal Six Sigma initiative is no longer necessary.

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