Last month we reviewed how Ford Motor Co.’s lean concepts were slowly phased out of the organization. The concepts, however, weren’t lost: Toyota realized their potential and improved upon them.
Toyota’s chief of production, Taiichi Ohno, embraced Ford’s concepts wholeheartedly. He applied them to machining operations and then to other areas of production. As a result, the Toyota Production System (TPS) was born in the 1960s and nurtured through the 1970s.
The real test of the TPS came in 1984, when Toyota and General Motors formed a joint venture called New United Manufacturing Inc. to build a car sharing designs, assembly processes, suppliers, and people. Although the venture’s performance didn’t meet expectations, the lean concept began there and spread to other U.S. and international organizations.
Meanwhile, IBM started focusing on process improvement. Since the late 1970s it had benchmarked its international internal operations and gathered best practices from Japan, Germany, and the United States. These best-practice approaches were called “process compatibility.” They focused on streamlining all support processes and used tools such as flowcharting, as-is process mapping, and value engineering.
The concept was documented and explained in my book, Excellence: The IBM Way (ASQ Quality Press, 1988). Over time, the approach evolved into two separate but similar methodologies:
• Process redesign. Focus on streamlining present processes using 11 approaches
• Process reengineering. Develop a new process by using advanced IT concepts, all of the other process enablers, and discarding old paradigms.
For the first time, massive improvements in support activities were achieved. With the publishing of my book, Business Process Improvement in 1991 (McGraw-Hill) and another in 1993 by Michael Hammer and James Champy called Re-Engineering Corporation (Collins Business, revised edition, 2003), the concept was quickly embraced around the world.
The Six Sigma approach evolved when management began developing “learning organizations.” This was a time when long-running projects were acceptable. Putting an individual through a four-month Black Belt training program was acceptable in a learning culture. Six Sigma projects that were supposed to take three months were lasting four to six months.
The total quality management (TQM) approach was another slow, continuous methodology for improvement. But by the early 1990s, management became impatient with the pace of both Six Sigma and TQM.
Managers wanted much faster improvement; they began to move away from a culture of organizational learning toward one of immediate improvement. Another methodology that was developed during the 1980s came to the fore. It focused on “picking the low-hanging fruit” during a two-day workshop. Some organizations called it “FAST” (for fast-action solution teams). Once a FAST target was defined, a FAST coordinator collected the basic data related to the project and presented it at a two-day meeting. The data was analyzed, and corrective action initiatives were defined and approved for implementation.
The results of these quick-hit approaches were outstanding. For example, Ford ran many of these projects and averaged more than $1 million in savings for two days of team meetings.
In reality, none of these approaches are new. Almost all the tools were defined and used before the end of World War II and documented in Armand V. Feigenbaum’s book, Total Quality Control (McGraw-Hill, third edition, 2008), first published during the 1950s.
A huge part of our economy is based on consulting services and teaching. Most of the tools we’re teaching and talking about are proven industrial engineering methods. The only truly revolutionary concept today is the IT performance-enhancement software packages, and these aren’t even part of the Six Sigma toolkit.
It’s too bad that Six Sigma’s basic objective has been lost along the way. It was supposed to improve customer satisfaction but has become a cost-reduction program. Black Belts are expected to save $1 million a year, not improve customer satisfaction levels by 1 percent.
Today, Six Sigma programs are directed more at chief financial officers’ goals than quality goals. Even our national quality awards have stopped focusing on quality and look instead at financial results. There’s even a movement to remove the term “quality” from the awards’ names altogether. I pray that whatever replaces Six Sigma--and it will be replaced, for it’s dying now--will measure success by how well a company’s product or service adds value for the end-customer or consumer.