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The Six Sigma Way: How GE, Motorola, and Other Top Companies are Honing Their Performance

1 rating: 5.0
A book by Peter S. Pande et al

Six Sigma is a data-driven management system with near-perfect-performance objectives that has been employed to acclaim at leading corporations like General Electric. Its name is derived from the eye-catching statistical target of operating with no more … see full wiki

Tags: Books, Cafe Libri
Author: Peter S. Pande et al
Genre: Business & Investing
Publisher: McGraw-Hill
1 review about The Six Sigma Way: How GE, Motorola, and...

How to Achieve "Practically-Perfect Quality of Performance"

  • Mar 4, 2001
Rating:
+5
Over the years, I have worked with dozens of small-to-midsize companies, all of which were in dire need of improving one or more of the following: cost reduction, culture change, customer retention, cycle-time reduction, defect reduction, market-share growth, productivity improvement, and product-service development. You can thus understand why I was curious to know to what extent (if any) Six Sigma could be helpful to small-to-midsize companies.

By now we have become well aware of the success of Six Sigma initiatives at major international corporations such as ABB, Allied Signal/Honeywell, Black & Decker, Dow Chemical, Dupont, Federal Express, General Electric, Johnson and Johnson, Kodak, Motorola, SONY, and Toshiba. Once having read this book, I am convinced that -- with certain modifications -- Six Sigma could perhaps be even more valuable to small-to-midsize companies which, obviously, have fewer resources. What exactly is Six Sigma? The authors provide this definition: "A comprehensive and flexible system for achieving, sustaining, and maximizing business success. Six Sigma is uniquely driven by close understanding of consumer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving, and reinventing business processes."

The authors identify what they call "hidden truths" about Six Sigma:

1. You can apply Six Sigma to many different business activities and challenges -- from strategic planning to operations to customer service -- and maximize the impact of your efforts.

2. The benefits of Six Sigma will be accessible whether you lead an entire organization or a department. Moreover, you'll be able to scale your efforts, from tackling specific problems to renewing the entire business.

3. You'll be prepared to achieve breakthroughs in these untapped gold mines of opportunity -- and to broaden Six Sigma beyond the realm of the engineering community.

4. You'll gain insights into how to strike the balance between push and pull -- accommodating people and demanding performance. That balance is where real sustained improvement is found. On either side -- being "too nice" or forcing people beyond their understanding and readiness -- lie merely short-term goals or no results at all.

5. The good news is, Six Sigma is a lot more fun than root canal. Seriously, the significant financial gains from Six Sigma may be exceeded in value by the intangible benefits. In fact, the changes in attitude and enthusiasm that come from improved processes and better-informed people are often easier to observe, and more emotionally rewarding than dollar savings.

The authors organize their material as follows: Part One: An Executive Summary of Six Sigma; Part Two: Gearing Up and Adapting Six Sigma to Your Organization; Part Three: Implementing Six Sigma -- The Roadmap and Tools; and finally, The Appendices: Practical Support. According to Jack Welch, "The best Six Sigma projects begin not inside the business but outside it, focused on answering the question -- how can we make the customer more competitive? What is critical to the customer's success?...One thing we have discovered with certainty is that anything we do that makes the customer more successful inevitably results in a financial return for us."

If anything, it is even more important for small-to-midsize companies (than it is for the GEs of the world) to answer these two questions correctly and then track and compare their performance in terms of what their customers require. The well-publicized objective of Six Sigma is to achieve practically-perfect quality of performance (ie 3.4 defects for every million activities or "opportunities") and this is indeed an ambitious objective. Collins and Porras, authors of Built to Last, would probably view it as the biggest of Big Hairy Audacious Goals (BHAGs). In that book, they assert that the most successful and admired companies have the ability -- and willingness -- to simultaneously adopt two seemingly contrary objectives at the same time. Stability and renewal, Big Picture and minute detail, creativity and rational analysis -- these forces, working together,, make organizations great. This "we can do it all" approach they call the "Genius of the And."

Pande, Neuman, and Cavanagh suggest that all manner of specific benefits can result from following "the Six Sigma way." For example, Six Sigma generates sustained success, sets a performance goal for everyone, enhances value to customers, accelerates the rate of improvement, promotes learning and "cross-pollination", and executes strategic change. All organizations (regardless of their size or nature) need to avoid or escape what the authors refer to as the "Tyranny of Or." Here in a single volume is about all they need to seek "practically-perfect quality of performance." Whether or not they ultimately reach that destination, their journey en route is certain to achieve improvement which would otherwise not be possible.

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