ISO 9001 Standard / ISO 9001 Standards – ISO 9000 Standard / ISO 9000 Standards Certification & Implementation

Why Deploy Six Sigma in your organization?

Here are some reasons why we should be using Six Sigma to make process improvements:

a) It is a structured approach – if we follow the process, people will not forget any important steps along the way before they implement the solution.

b) It helps quantify the benefits and thus make it easier to sell the improvements to senior managers in the company.

c) It uses facts & data and the rigor of statistical testing to arrive at the right root cause instead of fixing symptoms or putting band-aids.

d) There is a greater likelihood of the solution being sustainable if we follow the Six Sigma process.

e) Six Sigma focuses of solving the right problems using the project selection matrix.

f) It has proven itself in a large number of deployments. Frankly, there is no better tool out there to make process improvements – especially when the root cause or the solution is not known.

When a company intends to introduce Six Sigma for its new management strategy, we would like to recommend the following seven-step procedures:

 1. Top-level management commitment for Six Sigma is first and foremost. The CEO of the corporation or business unit should genuinely accept Six Sigma as the management strategy. Then organize a Six Sigma team and set up the long-term Six Sigma vision for the company.

 2. Start Six Sigma education for Champions first. Then start the education for WBs, GBs, BBs and MBBs in sequence. Every employee of the company should take the WB education first and then some of the WBs receive the GB education, and finally some of the GBs receive the BB education. However, usually MBB education is practiced in professional organizations.

 3. Choose the area in which Six Sigma will be first introduced.

 4. Deploy CTQs for all processes concerned. The most important is the company’s deployment of big CTQy from the standpoint of customer satisfaction. Appoint BBs as full-time project leaders and ask them to solve some important CTQ problems.

 5. Strengthen the infrastructure for Six Sigma, including measurement systems, statistical process control (SPC), knowledge management (KM), database management system (DBMS) and so on.

 6. Designate a Six Sigma day each month, and have the progress of Six Sigma reviewed by top-level management.

7.  Evaluate the company’s Six Sigma performance from the customers’ viewpoint, benchmark the best company in the world, and revise the Six Sigma roadmap if necessary. Go to step 1 for further improvement.

First of all, a handful or a group of several members should be appointed as a Six Sigma team to handle all kinds of Six Sigma tasks. The team is supposed to prepare proper education and the long-term Six Sigma vision for the company. We can say that this is the century of the 3Cs, which are Changing society, Customer satisfaction and Competition in quality. The Six Sigma vision should be well matched to these 3Cs. Most importantly, all employees in the company should agree to and respect this long-term vision.

Second, Six Sigma can begin from proper education for all classes of the company. The education should begin from the top managers, so called Champions. If Champions do not understand the real meaning of Six Sigma, there is no way for Six Sigma to proceed further in the company. After Champion’s education, GB BB MBB education should be completed in sequence.

 Third, we can divide Six Sigma into three parts according to its characteristics. They are R&D Six Sigma, manufacturing Six Sigma, and Six Sigma for non-manufacturing areas. The R&D Six Sigma is often called DFSS (Design for Six Sigma). It is usually not wise to introduce Six Sigma to all areas at the same time. The CEO should decide the order of introduction to these three areas. It is common to introduce Six Sigma to manufacturing processes first, and then service areas and R&D areas. However, the order really depends on the current circumstances of the company.

 Fourth, deploy CTQs for all processes concerned. These CTQs can be deployed by policy management or by management by objectives. Some important CTQs should be given to BBs to solve as project themes. In principle, the BBs who lead the project teams work as full-time workers until the projects are finished.

(1) What is lean manufacturing?

Currently there are two premier approaches to improving manufacturing operations. One is lean manufacturing (hereinafter referred to as “lean”) and the other is Six Sigma.

Lean evaluates the entire operation of a factory and restructures the manufacturing method to reduce wasteful activities like waiting, transportation, material hand-offs,inventory, and over-production. It reduces variation associated with manufacturing routings, material handling, storage, lack of communication, batch production and so forth. Six Sigma tools, on the other hand, commonly focus on specific part numbers and processes to reduce variation. The combination of the two approaches represents a formidable opponent to variation in that it includes both layout of the factory and a focus on specific part numbers and processes.

Lean and Six Sigma are promoted as different approaches and different thought processes. Yet, upon close inspection, both approaches attack the same enemy and behave like two links within a chain – that is, they are dependent on each other for success. They both battle variation, but from two different points of view. The integration of Lean and Six Sigma takes two powerful problem-solving techniques and bundles them into a powerful package. The two approaches should be viewed as complements to each other rather than as equiva

lents of or replacements for each other (Pyzdek, 2000). In practice, manufacturers that have widely adopted lean practices record performance metrics superior to those achieved by plants that have not adopted lean practices. Those practices cited as lean in a recent industrial survey (Jusko, 1999) include

• quick changeover techniques to reduce setup time;

• adoption of manufacturing cells in which equipment and workstations are arranged sequentially to facilitate small-lot, continuous-flow production;

• just-in-time (JIT) continuous-flow production techniques to reduce lot sizes, setup time, and cycle time; and,

• JIT supplier delivery in which parts and materials are delivered to the shop floor on a frequent and as-needed basis.

 (2) Differences between Lean and Six Sigma

 There are some differences between Lean and Six Sigma as noted below.

• Lean focuses on improving manufacturing operations in variation, quality and productivity. However, Six Sigma focuses not only on manufacturing operations, but also on all possible processes including R&D and service areas.

• Generally speaking, a Lean approach attacks variation differently than a Six Sigma system does (Denecke, 1998) as shown in Figure 5.4. Lean tackles the most common form of process noise by aligning the organization in such a way that it can begin working as a coherent whole instead of as separate units. Lean seeks to co-locate, in sequential order, all the processes required to produce a product. Instead of focusing on the part number, Lean focuses on product flow and on the operator. Setup time, machine maintenance and routing of processes are important measures in Lean. However, Six Sigma focuses on defective rates and costs of poor quality due to part variation and process variation based on measured data.

• The data-driven nature of Six Sigma problem-solving lends itself well to lean standardization and the physical rearrangement of the factory. Lean provides a solid foundation for Six Sigma problem-solving where the system is measured by deviation from and improvements to the standard.

• While Lean emphasizes standardization and productivity, Six Sigma can be more effective at tackling process noise and cost of poor quality.

ISO (International Organization for Standardization) 9000 series standards were first published in 1987, revised in 1994, and re-revised in 2000 by the ISO. The 2000 revision, denoted by ISO 9000:2000, has attracted broad expectations in industry.

 As of the year 2001, more than 300,000 organizations world-wide have been certified to the ISO 9000 series standards. It embodies a consistent pair of standards, ISO 9001:2000 and ISO 9004:2000, both of which have been significantly updated and modernized. The ISO 9001:2000 standard specifies requirements for a quality management system for which third-party certification is possible, whereas ISO 9004:2000 provides guide- lines for a comprehensive quality management system and performance improvement through Self-Assessment.

The origin and historical development of ISO 9000 and Six Sigma are very different. The genesis of ISO 9000 can be traced back to the standards that the British aviation industry and the U.S. Air Force developed in the 1920s to reduce the need for inspection by approving the conformance of suppliers’ product quality. These standards developed into requirements for suppliers’ quality assurance systems in a number of western countries in the 1970s. In 1987 they were amalgamated into the ISO 9000 series standards.

Independent of ISO 9000, the same year also saw the launch of Six Sigma at Motorola and the launch of Self-Assessment by means of the Malcolm Baldrige National Quality Award in USA. Both Six Sigma and Self-Assessment can be traced back to Walter A. Shewhart and his work on variation and continuous improvement in the 1920s. It was Japanese industry that pioneered a broad application of these ideas from the 1950s through to the 1970s. When variation and continuous improvement caught the attention of some of the American business leaders in the late 1980s, it took the form of the Malcolm Baldrige National Quality Award, on a national level, and of Six Sigma at Motorola.

 Some people are wondering if the ISO 9000:2000 series standards make Six Sigma superfluous. They typically refer to clause 8 of ISO 9001: “Measurement, analysis, improvement.”

It requires that companies install procedures in operations for the measurement of processes and data analysis using statistical techniques with the demonstration of continuous improvement . They also partly refer to the ISO 9004:2000 standards that embody guidelines and criteria for Self-Assessment similar to the national quality awards.

The author firmly believes that Six Sigma is needed regardless of whether a company is compliant with the ISO 9000 series. The two initiatives are not mutually exclusive and the objectives in applying them are different. A Six Sigma program is applied in organizations based on its top-line and bottom-line rationales. The primary objective for applying the ISO 9000 series standards is to demonstrate the company’s capability to consistently provide conforming products and/or services. Therefore, the ISO 9000 series standard falls well short of making Six Sigma superfluous.

The ISO 9000 series standards have from their early days been regarded and practiced by industry as a minimum set of requirements for doing business. The new ISO 9000:2000 stan

dards do not represent a significant change to this perspective. Six Sigma on the other hand, aims at world-class performance, based on a pragmatic framework for continuous improvement.

The author believes that Six Sigma is superior in such important areas as rate of improvement, bottom-line and top-line results, customer satisfaction, and top-level management commitment. However, considering the stronghold of ISO 9000 in industry, Six Sigma and ISO 9000 are likely to be applied by the same organization, but for very different purposes.

While Six Sigma is definitely succeeding in creating some impressive results and culture changes in some influential organizations, it is certainly not yet a widespread success. Total Quality Management (TQM) seems less visible in many businesses than it was in the early 1990s. However, many companies are still engaged in improvement efforts based on the principles and tools of TQM. It appears at least in Korea that Six Sigma is succeeding while TQM is losing its momentum.

One of the problems that plagued many of the early TQM initiatives was the preeminence placed on quality at the expense of all other aspects of the business. Some organizations experienced severe financial consequences in the rush to make quality “first among equals.” The disconnection between management systems designed to measure customer satisfaction and those designed to measure provider profitability often led to unwise investments in quality, which has been often practiced in TQM. Ronald Snee (1999) points out that although some people believe it is nothing new, Six Sigma is unique in its approach and deployment. He defines Six Sigma as a strategic business improvement approach that seeks to increase both customer satisfaction and an organization’s financial health. Snee goes on to claim that the following eight characteristics account for Six Sigma’s increasing bottom-line (net income or profit) success and popularity with executives.

 • Bottom-line results expected and delivered

• Senior management leadership

• A disciplined approach (DMAIC)

• Rapid (3–6 months) project completion

• Clearly defined measures of success

• Infrastructure roles for Six Sigma practitioners and leadership

• Focus on customers and processes

• A sound statistical approach to improvement

Other quality initiatives including TQM have laid claim to a subset of these characteristics, but only Six Sigma attributes its success to the simultaneous application of all eight. Six Sigma is regarded as a vigorous rebirth of quality ideals and methods, as these are applied with even greater passion and commitment than often was the case in the past. Six Sigma is revealing a potential for success that goes beyond the levels of improvement achieved through the many TQM efforts. Some of the mistakes of yesterday’s TQM efforts certainly might be repeated in a Six Sigma initiative if we are not careful.

A review of some of the major TQM pitfalls, as well as hints on how the Six Sigma system can keep them from derailing our efforts is listed below.

1. Links to the business and bottom-line success:

In TQM, quality often was a “sidebar” activity, separated from the key issues of business strategy and performance. The link to the business and bottom-line success was undermined, despite the term “total” quality, since the effort actually was limited to product and manufacturing functions. Six Sigma emphasizes reduction of costs, thereby contributing to the bottom-line, and participation of three major areas: manufacturing, R&D and service parts.

 2. Top-level management leadership:

In many TQM efforts, top-level management’s skepticism has been apparent, or their willingness to drive quality ideas has been weak. Passion for and belief in Six Sigma at the very summit of the business is unquestioned in companies like

Motorola, GE, Allied Signal (now Honeywell), LG and Samsung. In fact, top-level management involvement is the beginning of Six Sigma.

3. Clear and simple message:

The fuzziness of TQM started with the word “quality” itself. It is a familiar term with many shades of meaning. In many companies, Quality was an existing department with specific responsibilities for “quality control” or “quality assurance,” where the discipline tended to focus more on stabilizing rather than improving processes. Also TQM does not provide a clear goal at which to aim. The concept of Six Sigma is clear and simple. It is a business system for achieving and sustaining success through customer focus, process management and improvement, and the wise use of facts and data. A clear goal (3. 4 DPMO or 6s quality level) is the centerpiece of Six Sigma.

 4. Effective training:

TQM training was ineffective in the sense that the training program was not so systematic. Six Sigma divides all the employees into five groups (WB, GB, BB, MBB and Champion), and it sets very demanding standards for learning, backing them up with the necessary investment in time and money to help people meet those standards.

 5. Internal barriers:

TQM was a mostly “departmentalized” activity in many companies, and it seemed that TQM failed to break down internal barriers among departments. Six Sigma places priority on cross-functional process management, and cross-functional project teams are created, which eventually breaks down internal barriers.

 6. Project team activities:

TQM utilized many “quality circles” of blue-collar operators and workers, and not many “task force teams” of white-collar engineers even if they are needed. Six Sigma demands a lot of project teams of BBs and GBs, and the project team activities are one of the major sources of bottom-line and top-line success. 

3. Clear and simple message:

The fuzziness of TQM started with the word “quality” itself. It is a familiar term with many shades of meaning. In many companies, Quality was an existing department with specific responsibilities for “quality control” or “quality assurance,” where the discipline tended to focus more on stabilizing rather than improving processes. Also TQM does not provide a clear goal at which to aim. The concept of Six Sigma is clear and simple. It is a business system for achieving and sustaining success through customer focus, process management and improvement, and the wise use of facts and data. A clear goal (3. 4 DPMO or 6s quality level) is the centerpiece of Six Sigma.

4. Effective training:

TQM training was ineffective in the sense that the training program was not so systematic. Six Sigma divides all the employees into five groups (WB, GB, BB, MBB and Champion), and it sets very demanding standards for learning, backing them up with the necessary investment in time and money

to help people meet those standards.

5. Internal barriers:

TQM was a mostly “departmentalized” activity in many companies, and it seemed that TQM failed to break down internal barriers among departments. Six Sigma places priority on cross-functional process management, and cross-functional project teams are created, which eventually breaks down internal barriers.

6. Project team activities:

TQM utilized many “quality circles” of blue-collar operators and workers, and not many “task force teams” of white-collar engineers even if they are needed. Six Sigma demands a lot of project teams of BBs and GBs, and the project team activities are one of the major sources of bottom-line and top-line success.

Six Sigma has become very popular throughout the whole world. There are several reasons for this popularity. First, it is regarded as a fresh quality management strategy which can replace TQC, TQM and others.

Many companies, which were not quite successful in implementing previous management strategies such as TQC and TQM, are eager to introduce Six Sigma.

Development process of Six Sigma in quality management

Six Sigma is viewed as a systematic, scientific, statistical and smarter (4S) approach for management innovation which is quite suitable for use in a knowledge-based information society.

Second, Six Sigma provides efficient manpower cultivation and utilization. It employs a “belt system” in which the levels of mastery are classified as green belt, black belt, master black belt and champion. As a person in a company obtains certain 

training, he acquires a belt. Usually, a black belt is the leader of a project team and several green belts work together for the project team.

 Third, there are many success stories of Six Sigma application in well known world-class companies. As mentioned earlier, Six Sigma was pioneered by Motorola and launched as a strategic initiative in 1987. Since then, and particularly from 1995, an exponentially growing number of prestigious global firms have launched a Six Sigma program. It has been noted that many globally leading companies run Six Sigma programs (see Figure 3), and it has been well known that Motorola, GE, Allied Signal, IBM, DEC, Texas Instruments, Sony, Kodak, Nokia, and Philips Electronics among others have been quite successful in Six Sigma. In Korea, the Samsung, LG, Hyundai groups and Korea Heavy Industries & Construction Company have been quite successful with Six Sigma.

Lastly, Six Sigma provides flexibility in the new millennium of 3Cs, which are:

• Change: Changing society

• Customer: Power is shifted to customer and customer demand is high

• Competition: Competition in quality and productivity

The pace of change during the last decade has been unprecedented, and the speed of change in this new millennium is perhaps faster than ever before. Most notably, the power has shifted from producer to customer. The producer-oriented industrial society is over, and the customer-oriented information society has arrived. The customer has all the rights to order, select and buy goods and services. Especially, in e-business, the customer has all-mighty power.

 Six Sigma with its 4S(systematic, scientific, statistical and smarter) approaches provides flexibility in managing a business unit.

Sigma (s ) is a letter in the Greek alphabet that has become the statistical symbol and metric of process variation. The sigma scale of measure is perfectly correlated to such characteristics as defects-per-unit, parts-per-million defectives, and the probability of a failure. Six is the number of sigma measured in a process, when the variation around the target is such that only 3.4 outputs out of one million are defects under the assumption that the process average may drift over the long term by as much as 1.5 standard deviations.

 Six Sigma may be defined in several ways. Tomkins (1997) defines Six Sigma to be “a program aimed at the near-elimination of defects from every product, process and transaction.” Harry (1998) defines Six Sigma to be “a strategic initiative to boost profitability, increase market share and improve customer satisfaction through statistical tools that can lead to breakthrough quantum gains in quality.”

 Six Sigma was launched by Motorola in 1987. It was the result of a series of changes in the quality area starting in the late 1970s, with ambitious ten-fold improvement drives. The top-level management along with CEO Robert Galvin developed a concept called Six Sigma. After some internal pilotm implementations, Galvin, in 1987, formulated the goal of

“achieving Six-Sigma capability by 1992” in a memo to all Motorola employees (Bhote, 1989). The results in terms of reduction in process variation were on-track and cost savings totalled US$13 billion and improvement in labor productivity achieved 204% increase over the period 1987–1997 (Losianowycz, 1999). In the wake of successes at Motorola, some leading elec-

tronic companies such as IBM, DEC, and Texas Instruments launched Six Sigma initiatives in early 1990s. However, it was not until 1995 when GE and Allied Signal launched Six Sigma as strategic initiatives that a rapid dissemination took place in non-electronic industries all over the world (Hendricks and Kelbaugh, 1998). In early 1997, the Samsung and LG Groups in Korea began to introduce Six Sigma within their companies. The results were amazingly good in those companies. For instance, Samsung SDI, which is a company under the Samsung Group, reported that the cost savings by Six Sigma projects totalled US$150 million (Samsung SDI, 2000a). At the present time, the number of large companies applying Six Sigma in Korea is growing exponentially, with a strong vertical deployment into many small- and medium-size enterprises as well.

 As a result of consulting experiences with Six Sigma in Korea, it was believed that Six Sigma is a “new strategic paradigm of management innovation for company survival in this 21st century, which implies three things: statistical measurement, management strategy and quality culture.” It tells us how good our products, services and processes really are through statistical measurement of quality level. It is a new management strategy under leadership of top-level management to create quality innovation and total customer satisfaction. It is also a quality culture. It provides a means of doing things right the first time and to work smarter by using data information. It also provides an atmosphere for solving many CTQ (critical-to-quality) problems through team efforts.

 CTQ could be a critical process/product result characteristic to quality, or a critical reason to quality characteristic. The former is termed as CTQy, and the latter CTQx.

ISO (International Organization for Standardization) 9000 series standards were first published in 1987, revised in 1994, and re-revised in 2000 by the ISO. The 2000 revision, denoted by ISO 9000:2000, has attracted broad expectations in industry.

 As of the year 2001, more than 300,000 organizations world-wide have been certified to the ISO 9000 series standards. It embodies a consistent pair of standards, ISO 9001:2000 and ISO 9004:2000, both of which have been significantly updated and modernized. The ISO 9001:2000 standard specifies requirements for a quality management system for which third-party certification is possible, whereas ISO 9004:2000 provides guide- lines for a comprehensive quality management system and performance improvement through Self-Assessment.

 The origin and historical development of ISO 9000 and Six Sigma are very different. The genesis of ISO 9000 can be traced back to the standards that the British aviation industry and the U.S. Air Force developed in the 1920s to reduce the need for inspection by approving the conformance of suppliers’ product quality. These standards developed into requirements for suppliers’ quality assurance systems in a number of western countries in the 1970s. In 1987 they were amalgamated into the ISO 9000 series standards.

 Independent of ISO 9000, the same year also saw the launch of Six Sigma at Motorola and the launch of Self-Assessment by means of the Malcolm Baldrige National Quality Award in USA. Both Six Sigma and Self-Assessment can be traced back to Walter A. Shewhart and his work on variation and continuous improvement in the 1920s. It was Japanese industry that pioneered a broad application of these ideas from the 1950s through to the 1970s. When variation and continuous improvement caught the attention of some of the

American business leaders in the late 1980s, it took the form of the Malcolm Baldrige National Quality Award, on a national level, and of Six Sigma at Motorola.

Some people are wondering if the ISO 9000:2000 series standards make Six Sigma superfluous. They typically refer to clause 8 of ISO 9001: It requires that companies install procedures in operations for the measurement of processes and data analysis using statistical techniques with the demonstration of continuous improvement . They also partly refer to the ISO 9004:2000 standards that embody guidelines and criteria for Self-Assessment similar to the national quality awards.

The ISO 9000 series standards have from their early days been regarded and practiced by industry as a minimum set of requirements for doing business. The new ISO 9000:2000 stan

dards do not represent a significant change to this perspective. Six Sigma on the other hand, aims at world-class performance, based on a pragmatic framework for continuous improvement.

The author believes that Six Sigma is superior in such important areas as rate of improvement, bottom-line and top-line results, customer satisfaction, and top-level management commitment. However, considering the stronghold of ISO 9000 in industry, Six Sigma and ISO 9000 are likely to be applied by the same organization, but for very different purposes.