Providing quality products and services is an essential part of business. Nothing can irritate a customer more than having to return defective parts or struggling to solve problems.
However, there is much more involved in satisfying customers. A company can offer an excellent product, but if the customer is frustrated by the way phone calls are routed or bills are processed, he or she may take their business elsewhere.
In order to improve services, a variety of new business techniques have been developed. One of the most popular of these is Six Sigma, named after the definition of achieving almost perfect quality in six standard deviations from the target.
To reach Six Sigma, a company has to achieve a quality level that represents only 3.4 defects per one million transactions, which means it must become close to perfect.
The Six Sigma program was developed by Motorola in the late 1980s, which used Six Sigma to improve its manufacturing processes. Other companies, including General Electric, Ford, IBM, AlliedSignal, R.R. Donnelley and Sons and 3M, have adapted the program to all facets of business, from accounting to service. In doing so, these companies report savings of hundreds of millions of dollars while increasing customer satisfaction.
This year, Sun Chemical has taken a leadership role in Six Sigma. Wes Lucas, Sun Chemical’s president and CEO, was involved with Six Sigma while he was at AlliedSignal. Along with Dr. David Hill, Sun Chemical’s new senior vice president, business improvement and chief technology officer, Mr. Lucas is implementing the system throughout the company worldwide.
“Six Sigma is an excellent process for building a core capability at execution. It focuses the people at the front line, the ones that do create all the value, with the right tools, processes and training to continuously improve their performance,” said Dr. Hill.
“We want to transform Sun Chemical from a company that is ‘good’ to a company that is great – a company that is excellent in everything that it does. And that means we need to create a culture of continuous improvement,” said Mr. Lucas. “This will ensure that we are the highest quality producer in the industry, that creates the most value for its customers and is the most efficient. In the next couple of years, everyone at Sun Chemical will be trained in Six Sigma methods.”
The Goals Behind Six Sigma
In Six Sigma, Critical Y is the goal that is being set. From there, each project goes along the DMAIC road map (Define, Measure, Analyze, Improve and Control).
“Our Critical Y is remaining productive and competitive,” Dr. Hill said. “Our customers demand more every day, and we have to be more productive and competitive to meet their demands.
“You have to look at the gap between present performance and perfect performance,” Dr. Hill continued. “In Six Sigma, you look at where you are and what would be perfection, and you target to close half the gap every year.”
Picking the best projects and people is essential to Six Sigma.
“We say there are three rights: the right project, the right people and the right process,” Dr. Hill said. “If you don’t choose the right projects, you can be frustrated. The problem is that sometimes people pick projects that are too large, like ‘solving world hunger.’ It has to be something that can be done. It’s easy to shortcut it, but it’s very important to follow the process. We teach statistical tools, which ensures that you get to the root cause of the problem and explore the possibilities for improvement.”
One of the keys is developing controls that will maintain the changes that have been implemented.
“Fixing things only provides a Band-Aid and ignores fundamental problems,” Dr. Hill said. “Like a diet, people begin to forget. The controls you put in place ensure that you won’t fall back into old habits after succeeding.”
Adapting to Six Sigma
Sun Chemical embarked on its Six Sigma program earlier this year. The volunteers are spilt up into Green Belts, who will utilize Six Sigma in their daily work, and Black Belts, who undergo more extensive training and will focus on training future classes. Classes for Green Belts last three months; Black Belts, who will be responsible for training future volunteers, are trained for four months. Each person brings a specific project in which to apply Six Sigma methodology.
Each class works on Six Sigma for one week a month, learning about the program and its statistical tools. Then, during the next three weeks, they apply what they have learned.
“We finished our first wave of Green Belt training, with 30 new Green Belts, and we have a class of 25 Black Belts,” Dr. Hill said. “We are now working on a class of transaction Black Belts, which will allow us to improve our service. Green Belts work on three-month projects.”
Steve Wells, director of presidential quality at Sun Chemical’s North American business unit, GPI, in Northlake, IL, has been involved in Six Sigma and similar programs at Monsanto and AlliedSignal, and knows their worth to a company.
“Early on, I went to work at Monsanto and they had a very mature quality and statistics program. Within the first two years I had completed their quality process improvement training which was really an early version of Six Sigma,” Mr. Wells said. “When I went to AlliedSignal as a technical manager, I volunteered to be in their first wave of Black Belts. A short time later, I got the chance to lead a Six Sigma implementation in another business unit. I enjoy pulling the plan together and coaching Black Belts and Green Belts.”
Mr. Wells said that the response to Six Sigma among the first waves of volunteers at Sun has been excellent.
“They’re off to a good, solid start,” said Mr. Wells. “You want someone who is a problem solver, is analytical and gets tremendous satisfaction out of accomplishment. So far we have two waves of Green Belts and one wave of Black Belts at GPI. People all over Sun are excited about Six Sigma and are volunteering. The people at Sun have been really refreshing. They have a can-do attitude.”
The early volunteers say that the system does look beneficial.
Tom Lyons, a process engineer at GPI’s Frankfort, IN plant for the past six years, is part of the company’s first wave of Black Belts, and he is coaching some of the company’s new Green Belts as they go through their first projects.
“The training was very thorough,” Mr. Lyons said. “We had four one-week sessions over four months, and we had a project to work on during training to learn to utilize the tools.
“I can see, even during the early stages, Six Sigma will be a successful
program at Sun Chemical,” Mr. Lyons said. “My initial project was in heatset blending, and we were able to reduce cycle times by 40 percent.”
Heather Lewis, a program product specialist in GPI’s marketing department, has finished her Green Belt training and is working towards completing her project to attain certification. Her project is focused on the transactional side of the business.
“My project looks at the order-taking process and how to increase the throughput, while still meeting customers expectations every time,” said Ms. Lewis. “It’s a very comprehensive approach. It allows us to take a step back to better understand how each step of the process is an integral part of the outcome.”
Areas for Six Sigma
The most obvious area where Six Sigma, or any other program, can be applied is on the manufacturing end, where results can be quantified. Companies can easily determine throughput, inventory reduction and countless other aspects of the manufacturing process.
Motorola was the first to utilize Six Sigma, but the company focused solely on manufacturing.
“They did a great job of manufacturing products that did not break,” Dr. Hill said. “At AlliedSignal, we applied it to the chemical marketing industry, and we were successful in extending it past manufacturing to transactions.”
Manufacturing isn’t the only area where Six Sigma can have an impact.
“The reality is that it is much easier to measure manufacturing, such as raw material yields, equipment up-time, and returns,” Dr. Hill said. “However, it’s amazing how little time most companies spend quantifying service.
“Six Sigma can be applied to everything we do in business, from how we handle customers’ orders, through remittance and billing,” Dr. Hill said. “You have to establish basic measures, such as efficiency vs. rework, how many times we have to go back to do something right, and cycle time – how long does it take us to accept an order and get it into the system?”
“Usually manufacturing has been hit already, because it is measurable and tangible,” Mr. Wells said. “However, a lot of decisions made by administrators or support staff can have a major impact on customer satisfaction, such as billing or even how phone calls are taken. You have to scrutinize yourself. Is an invoice confusing? Are there errors in it?
“We’re looking to apply Six Sigma to everything we do to improve our customer relations and our company,” Mr. Wells said. “When you are in the define-measure phase, it can be a really shocking revelation of what you don’t know. You have to measure yourself in terms of what you can be, instead of what is.
“I think that companies that only focus on the bottom line don’t get full value,” Mr. Wells said. “A more balanced view increases value for your customer. It comes down to strategies, projects and people. If you don’t do people selection right, you have a higher failure rate.”
Dr. Hill said that Sun Chemical’s goals are ambitious, and that the early returns look promising.
“We set ambitious goals in terms of productivity, cost efficiency and customer satisfaction,” Dr. Hill said. “There are gains being made.”