Six Sigma

[ercarta]

I read an editorial some time back on a new management trend that was to succeed TQM (Total Quality Management). They called it Six Sigma and the name of the trend had to do the ability to reduce miscalculations to 3.4 defects per every one million opportunities. Six Sigma is supposed to be data based, that is, large conglomerates make decisions based on data & statistics rather than theory.

In any event after reading the editorial I never heard of any major corporations applying Six Sigma or converting from TQM. Today I read about Walmart and what I read I'll share...

One week before hurricane Frances Walmart made a forecast based on all the trillions of bytes of information they had on their customers in their computer network. It turns out that for hurricane Charlie Walmart sold seven times the norm on strawberry pop tarts and the top selling pre-hurricane item sold was beer.

So needless to say Walmart sent a fleet of trucks down I-95 in the way of hurricane Frances to stock up stores on these items and they sold quickly.

Walmart calls it "predictive technology", I call that a change in Walmart's management trend. "Six Sigma" I just wanted to share my epiphany... ;)

[TPN1997]

GE really was the pioneer of integrating Six Sigma into their practices. Jack Welch was a champion of the process. It worked extremely well for GE and for Jack, he now gets paid millions of dollars for his expertise in the area. As a former employee of JP Morgan Chase, they also integrated Six Sigma practices. Starwood Hotels also use the practice. So there's 3 very large corp's that use it. But I'm quite sure there are a lot more companies that use it.

TQM (a business theory) which is somewhat different than Six Sigma (a methodology) has been around for quite some time. I learned about it in my college days...

[Creature]

Motorola actually pioneered Six Sigma, but GE really institutionalized it.

As a green belt, I can tell you that the standardized approach is great, however, it can get limiting.

American Express also uses Six Sigma.

[ercarta]

Motorola actually pioneered Six Sigma, but GE really institutionalized it.

As a green belt, I can tell you that the standardized approach is great, however, it can get limiting.

American Express also uses Six Sigma.

Anything that technical can get limiting. Corporations that implement Six Sigma have to factor in human emotion and keep it technical to yield the benefits of the trend.

The training & tolerances have to cascade down from executive level management in a major way. Not easy (and very expensive) to implement however, the end product for conglomerates that make it "The Six Sigma Way" is mucho $$$$$$. ;) Ka Ching (money saved from wasted resource)! sammlung05

[TPN1997]

Thanks for clarifying. The information flowing through JPMC at the time made it seem as if GE & Jack Welch were the original user's of it.

[Creature]

Yeah, I used to work for JPMC too. And Jack Welch was Bill Harrison's personal mentor and they made a big rah-rah deal about it. We all had to got to training and I was a SME on a few projects before I went to green belt training. Then when they bought Bank One everyone found out that Jamie Dimon hates Six Sigma. One of my friends works at the corporate Six Sigma group at 270 Park and she's very worried about her job. When they prepare decks for Mr. Dimon they don't call it Six Sigma, they just talk about productivity improvements.

[ercarta]

So to become a Six Sigma green belt, one must attend the seminar and pass a standardized test. Is this correct? :confused:

It is said that in the first five years of implementing Six Sigma GE benefited over 10 billion dollars. That's some serious moolah shmoolah. ;)

[Creature]

So to become a Six Sigma green belt, one must attend the seminar and pass a standardized test. Is this correct? :confused:

It is said that in the first five years of implementing Six Sigma GE benefited over 10 billion dollars. That's some serious moolah shmoolah. ;)

Yeah, but it's far more difficult to become a black belt, and if you're really motivated, you can become a master black belt and pretty much write your own ticket at any company which uses Six Sigma or does Six Sigma consulting. But you have to really like project management and productivity/operations consulting. And after the first few products, you feel like you're always cleaning up someone else's mess.

We had some wonky numbers for our projects; if you're not careful, things can get double counted as being cost savings from multiple projects. It's difficult to isolate the benefits of one project conculsively. Apparantly, it happens to most companies that implement the methodology until they figure it out. I believe that was Mr. Dimon's objection to it, in addition to the fact that the company had to license the methodology which could be quite costly.

[ercarta]

So what are some views on TQM? Is it better than Six Sigma or is Six Sigma just TQM modified some?

[Nic]

Six Sigma just looks like an updated TQM. We've implemented it where I work and I feel like I'm just going round the houses again. The principle seems to me to be the same - focus on measurement and process improvement.