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Iomega strives to universalize the system behind its success

by Robert A. Green

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In the computer hardware market, much like in quality management, the name of the game is standardization. But while quality gurus seek out standardized quality management systems to ensure common practices and quality levels for organizations in all countries, computer-industry manufacturers seek a more specific standard: the widespread use of their products.

 Nevertheless, when Iomega's Zip product line gained the kind of popularity reserved for only those solutions that become so widely used that they become industry standards, the company struggled to keep up with demand.

 "The smashing success of Zip

Iomega's Six Master Black Belts
(left to right) Chuck Anger, Klinton Washburn, Ken Bott, Bill English, Denton Bramwell and Mike Andersen

drove Iomega through a rapid growth spurt," remembers Denton Bramwell, an Iomega Senior Master Black Belt. "We had no formal 'phase gates' for product development and no companywide quality systems. All of this stressed our quality system to the limit. Our quality levels were maintained only at great financial cost and through heroic individual effort."

 To help boost production, Iomega acquired a new world-class factory in Penang, Malaysia, to help meet the incredible demand. This was just one part of the company's heavy investment in an increased manufacturing infrastructure, an expensive proposition that would be difficult to justify if demand ever topped off. And sure enough, demand did just that.

 "The good thing about the situation was that we had very responsive, hard working people, eager for better ways," Bramwell adds. "When we decided to become ISO 9000-compliant in mid-1996, we went from an overstressed system to ISO 9000 registration in six months. But early in 1997, we realized that we needed something more than ISO."

 When slightly leaner times hit, Iomega--which had enjoyed the splendid fruits of seemingly unending demand for its products--now found itself struggling to remain profitable. Costs had to be reduced. Surely there were savings to be found, but where were they? And how could they be achieved? Enter Six Sigma.

 

Iomega's Six Sigma Principles

  Don't start without strong active support from executive staff.

  Seek middle management understanding and buy-in, and recruit a strong group of champions.

  Focus on results. Six Sigma should never be viewed as just another training program.

  Never conduct training without a meaningful project tied to the needs of the business.

  Make employee development a priority.

  Teach the usage of the most practical tools.

  Realize that Six Sigma works equally well in any function within the enterprise. It's not just a manufacturing activity.

  Give Six Sigma constant care and feeding until it becomes part of the culture.
 

Booting up

 Before Roy, Utah-based Iomega Corp. had established itself as a major U.S. high-tech manufacturer, the world of personal and business computing was facing a dilemma. The software of the day was capable of creating very large files, and processor speeds and hard drive capacities were staying on pace. But these very large files were creating problems.

 In those days, moving a 50 MB file from one computer to another was a monumental challenge. Compression technologies, which encode files by using complex algorithms to reduce their size, were emerging, but they were far from bridging this gap. Then came Iomega's Zip drives and disks.

 Iomega's Zip technology allowed a diskette barely larger than a standard 3.5-inch floppy disk (whose capacity falls under the 1.5 MB mark) to hold more than 95 MB of information with greatly improved transfer rates. The product seemed unstoppable.

 Iomega signed colossal contracts with PC manufacturers to supply Zip drives to be sold in new computers. And as production numbers grew, retail prices fell, which only made Iomega's flagship product more attractive. Not only were people and businesses buying Zip technology to provide a solution, many were buying simply because others had. Zip disks had hit the pinnacle of computer hardware success; they had become an industry standard.

 

Backing up

  Following a nearly unprecedented spike in revenue and infrastructure expansion (meaning, of course, increased expense), Iomega faced its first true test since its establishment in 1980. In November of 1998, Iomega's stock was trading at as high as $10 per share. Just six months later, the price had dipped below $4 per share. Enter new President, CEO and Director Bruce R. Albertson, 25-year veteran of Six Sigma pioneer General Electric--and enter Six Sigma.

 Iomega had begun implementing Six Sigma in 1998, a year before Albertson's arrival. But with the new CEO came renewed commitment to the program, though finding a model on which to base Iomega's Six Sigma implementation would prove difficult. First, Iomega is a high-

File Sharing

The Iomega-hosted Six Sigma benchmarking event was held in May near company headquarters in Ogden, Utah. In addition to representatives from Microsoft, Gateway, Seagate, Axion and scores of other high-tech manufacturers--as well as the International Society of Six Sigma Professionals (www.isssp.org)--in attendance were subject-matter experts such as Donald J. Wheeler.

 When discussions at the event steered toward how to go about standardizing some of the elements of Six Sigma, most all in attendance agreed that such an effort needed to be undertaken. Indeed, it would be beneficial to develop some form of standardization to ensure that all present were speaking the same language when discussing Six Sigma. Likewise, it would be beneficial to know what people mean when they call themselves Six Sigma experts, or use titles such as Black Belt or Green Belt. But how would such standardization be created. And who would do the creating?

 Three models immediately emerged. One, some impartial body could publish an international standard--much like ISO 9000 or ISO 14000--to which organizations could become registered. Two, an organization could create a learning standard that would regiment the content of Six Sigma courses. And three, an organization could create certification programs for various levels of Six Sigma expertise, much the way the International Quality Federation (www.iqfnet.org) has created a Black Belt certification program.
 

volume manufacturer, having shipped more than 44 million Zip drives and 270 million Zip disks. Additionally, these products must be produced to exacting tolerances (e.g., plastic parts with a 20 mm tolerance, magnetic head assemblies with a 0.5 mm tolerance and media layer thicknesses measured at the atomic level). Moreover, the hard-bit-error rate for many of Iomega's products must be better than one part per trillion.

 So, to achieve the sizeable task of implementing an all-encompassing Six Sigma program at a billion-dollar (annual revenue) company that employs more than 3,400 people, Iomega first purchased some outside training.

 "Later, we hired a very capable Master Black Belt, who had been running AlliedSignal's Six Sigma program," clarifies Bramwell. "He and I ran Iomega's Six Sigma program together for about a year. Having our own Master Black Belts on site was a major factor in the success of our program."

 Next came Iomega's three-point implementation game plan:

  Invest in people

  Make data-based decisions

  Achieve and measure results

 

Input

 From the Brown Belt level all the way up to Black Belts, Iomega made Six Sigma a supplemental tool, not a full-time job description change. But for the Master Black Belts, focus and training are far greater.

 We have five mostly 'home grown' Master Black Belts who lead the program, and each of us has responsibility for a specific functional area (e.g., customer satisfaction; logistics and materials; IT, HR, finance and legal; manufacturing and R&D, etc.) of the company," says Bramwell. For a company of our size, this seems to be about right."

 To become an Iomega Master Black Belt, certified Black Belts must complete at least five additional Six Sigma projects, mentor at least 20 other belts through completion of their projects, complete six to nine months of Master Black Belt training and pass an eight-hour Master Black Belt exam with a score of at least 80 percent. Additionally, Master Black Belts are expected to teach Master Black Belt training classes.

 To date, Iomega boasts an impressive Six Sigma squad of more than 400 Black Belts and Green Belts, and more than 100 champions. Full-time Six Sigma staff comprises six Master Black Belts and a support staff primed to tackle any obstacle.

 

Six Sigma Standard, Beta Version

 The focus of Iomega's benchmarking event quickly shifted toward creating a draft Six Sigma standard, which contributing attendees and Iomega Six Sigma experts named Six Sigma Model. The resulting single (double-sided) page of what contributors consider Six Sigma minimum requirements and some best practices is available at www.qualitydigest.com/news/iomega. doc .

 Key to the draft standard are what contributors coined Six Sigma's "Eight Pillar Processes," what they consider to be the bare requirements for a true Six Sigma quality management system:

  Project selection and definition

  Financial review

  Training

  Leadership for project leaders

  Project leader mentoring

  Certification

  Project tracking and reporting

  Dissemination and availability

 

Output

 "Worldwide implementation of Six Sigma during the past two years has dramatically changed the quality culture of Iomega," reports Albertson. "Our Six Sigma team has successfully driven breakthroughs in quality, reliability, cost, design, cycle time and customer satisfaction, saving Iomega millions." Furthermore, Iomega credits its Six Sigma implementation with having profoundly changed the company's approach to quality by taking responsibility for delighting customers out of the hands of a few quality specialists and spreading it throughout the company.

 Incoming bad material and factory inventory are both down 80 percent. Technical support call wait time has been trimmed from an average of 80 minutes to just two minutes. In the Zip product line, scrap has been reduced by 80 percent, rework has been reduced by 74 percent, and direct labor productivity has increased by 65 percent. Supplier reject material has been reduced by 80 percent, and material-caused line interruptions have decreased 95 percent.

 In all, Iomega lays claim to more than $120 million in Six Sigma-produced savings. "The key is that everyone is looking for breakthroughs," explains Albertson. "Productivity is a way of life, and the Six Sigma methodology gives extra power to our employees."

 But even given Iomega's tremendous results realized since its Six Sigma implementation, the company is far from content. In addition to continuing to train more and more of their own personnel in the art of Six Sigma and spread the scope of the program to more and more parts of the company, Iomega Master Black Belts are beginning to reach outside the confines of their organization in an effort to build a community of trained Six Sigma practitioners, advance the program and techniques that have served Iomega so well, and learn from other companies' Six Sigma experience. To this end, Iomega Senior Black Belt Chuck Anger recently organized a Six Sigma benchmarking event that drew representatives from a number of high-tech manufacturers.

 Resulting from the event was a Six Sigma program draft standard. Does the model represent the standard that many experts and novices alike have been eagerly anticipating? No: It's a model. Nonetheless, it's a very good start. The model is both loosely written (just enough so to ensure adaptability to organizations of greatly varying sizes and types) but specific enough to be auditable as is. Nevertheless, it's still missing one thing before we can truly call it a standard; like the Zip drive, it will have to become used pervasively enough (in this case, either by certifying bodies, quality systems registrars or even just Six Sigma companies) to become (what else?) a standard. Stay tuned.

 

About the author

 Robert A. Green is Quality Digest's news editor. He can be e-mailed at contact_us .

 

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