No understanding of Six Sigma is complete without truly understanding where it came from - Motorola. The backdrop of the story shows how Six Sigma implementations changed the way Multi-National Corporations conducted operations worldwide.
It started in 1981. Motorola like most American companies was reeling under the threat of Japanese competition. Recovering from World War-2, the Japanese had built such a remarkable quality initiative that they were way ahead of any American company and were undercutting them on prices causing grave losses in terms of profitability and market share. Motorola was compelled into action. But the management at Motorola made an ambitious plan. They decided to give the Japanese a taste of their own medicine and beat them at their own game i.e quality.
For this reason, the management summoned the top engineers in Motorola and told them to combine all the best quality management practises known till that time and make an aggregated methodology which would be the base of Motorolaâ€™s competitive quality improvement program. Thus was developed the first Six Sigma program.
Motorola immediately took up a loft goal. They already were a respected manufacturing firm and had stringent quality measures. However, analysis had revealed that they were lagging way behind the Japanese and to be competitive they had to improve their quality goals by a 1000% in five years. Thus an ambitious goal of a 10:1 quality improvement came into picture.
Most experts thought it was suicidal for Motorola to attempt to do so, especially given the fact that Motorola was making huge investments in the quality initiative. Media criticised Motorola for using shareholder funds for goals that can be compared to fantasies. However the management did not pay heed. At the end of 5 years, almost every business unit functioning inside Motorola Inc. had achieved the 10:1 goal, boosting the morale of the workforce and silencing the critics.
However, Motorola realised that the Japanese were once again way ahead of them. This is because the Japanese had also launched a similar program. Even though their program was not as good as Motorola, they were ahead because of their previous lead. The Motorola Management became even more ambitious and launched another 1000% improvement drive. This time the goal had to be achieved in two years. The stream of criticisms started once again as to how success had shot to Motorolaâ€™s head and how the management was pursuing impossible programs. But to everyoneâ€™s surprise Motorola had triumphed once again.
Thus a third program was launched with the same 1000% or 10: 1 improvement in quality program. This time, when the program ended in 1991, Motorola failed. They reached a target of 8:1 when measured on a company wide basis even though some individual units had met the target.
When all these results were done Motorola had achieved a target of 800:1 improvement in their quality. Even the critics were full of applauses. Motorola had defeated the Japanese threat and Six Sigma became the biggest buzzword on the management scene with companies left, right and centre jumping to implement it, trying to reap the same benefits that Motorola did.
This is how Six Sigma was born!