The Ultimate Six Sigma: Beyond Quality Excellence to Total Business Excellence by Keki R. Bhote

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The Ultimate Six Sigma: Beyond Quality Excellence to Total Business Excellence
By Keki R. Bhote
The Ultimate Six Sigma

List of Illustrations xv
Foreword by Robert W. Galvin, Chairman of the Board Emeritus,
Motorola xxi
Preface: Blossoming of the Ultimate Six Sigma xxiii
Motorola’s Six Sigma xxiii
Motorola’s Six Sigma Renewal xxiv
Six Sigma Consulting Companies: Hype and Hyperbole xxv
The Need for the Ultimate Six Sigma xxv
The Ultimate Six Sigma—A Chapter by Chapter Synopsis xxvi
From Liabilities to Opportunities for Industry in the
Twenty-First Century xxxiii
Acknowledgments xxxv
Part 1: Definitions and Concepts 1
One: What Is Six Sigma? 3
Will the Real Six Sigma Please Stand Up? 3
The Statistical Six Sigma 4
The Hyped Six Sigma 6
Case Study: Heresies Extended to Business Processes:
Technical Publications 9
The Ultimate Six Sigma 12
Two: The Need, Objectives, and Benefits of the Ultimate Six Sigma 15
The Need for the Ultimate Six Sigma 15
Quality for the Sake of Quality Alone, Not for Customers
and Long-Term Profit 16
Fads, Potions, Nostrums of the Quality Movement in the
Last Fifty Years 17
Tools—Driving a Nail in the Wall Without a Hammer 20
Objectives of the Ultimate Six Sigma 24
Benefits of the Ultimate Six Sigma 25
Three: The Origin, Development, and Renewal of Motorola’s Six
Sigma 27
10:1, 100:1, 1,000:1 Quality Improvement 28
Success Factors in Motorola’s Six Sigma Drive 28
Six Sigma Renewal at Motorola 31
Four: The Hyped Six Sigma: From the Pure Six Sigma to the Sick
Sigma 34
Hyped Six Sigma Strengths: A Mixed Bag 34
Hyped Six Sigma Weaknesses: In Salient Features 37
Hyped Six Sigma Weaknesses: Area by Area 40
Five: The Scope, Structure, and Methodology of the Ultimate Six
Sigma 44
The Unfolding Tableau of the Ultimate Six Sigma 44
Genesis of the Ultimate Six Sigma 45
Scope of the Ultimate Six Sigma 46
Structure and Methodology of the Ultimate Six Sigma 46
Part 2: The Ultimate Six Sigma—Twelve Areas of Business
Six: From Mere Customer Satisfaction to Customer Loyalty 55
Corporate Myopia—Failing to Perceive the Inadequacy of
Customer Satisfaction 55
Examples of the Highest Loyalty Leading to Meteoric
Financial Success 57
Who Is a Customer? 58
Inviolate Principles of Customer Loyalty 68
Loyalty Metrics 69
Infrastructure to Capture Maximum Customer Loyalty 70
Case Study: Lexus—A Benchmark Company in the Area of
Customer Loyalty 74
Results 75
Strategy 75
Profitable Service 75
Self-Assessment /Audit on Customer Loyalty 76
Conclusion 76
Seven: From Stifling Micromanagement to Inspirational
Leadership 80
Leadership—The Fulcrum of the Ultimate Six Sigma 80
The Demise of Management, the Birth of Leadership:
Personal Philosophies and Unchanging Values 81
Principles—A Corporate Genetic Code 86
The Enlightened Role of Leadership—Unleashing the
Human Spirit 88
Case Study: Motorola—A Benchmark Company in the
Area of Leadership 91
A Final Word 94
Self-Assessment/Audit on Leadership 94
Eight: From Taylorism to Empowerment Creation in the
Organization 98
A Ten-Step Process in Constructing an Empowerment
Infrastructure 100
Eliminate Mind-Numbing Energy-Sapping Bureaucracy
Tear Down and Rebuild the Organization Infrastructure
Change Requirements for Hiring Employees 107
Train, Train, Train All Employees 108
Revamp Performance Appraisals 109
Change the Rules of Compensation 110
Design Meaningful and Egalitarian Gain Sharing 111
Redesign Promotion Criteria 113
Promote Team Synergy and Facilitate Total Involvement 114
Case Study: Chaparral Steel—A Benchmark Company in
the Area of Organization 114
Self-Assessment/Audit on Organizational Capabilities 116
Nine: From Passivity and Boredom Among Employees to
Industrial Democracy 120
From ‘‘How to’’ to ‘‘Want to’’ Motivation 121
Job Redesign—The Centerpiece 123
Injecting Fun and Excitement Into a Dull, Mind-Numbing
Assembly Line Job 125
Job Security Versus the Damocles Sword of Layoffs 126
How Ready Is Your Company for Employee
Empowerment? 128
Team Competitions—Another Gold Mine 130
On the Road to Industrial Democracy 131
The Ten Stages of Empowerment 141
Case Study: Semco—A Pinnacle of Industrial Democracy 142
Case Study: Springfield ReManufacturing Corp. (SRC)—A
Benchmark Company in the Area of Employee
Empowerment 143
Its Shaky Start 144
Open Book Management to the Rescue 144
Rearranging the Financials in Terms Meaningful to Each
Employee 144
‘‘Skip the Praise, Give Us the Raise!’’ 145
Results at SRC in Adopting Open Book Management 146
Self-Assessment/Audit on Employee Empowerment 146
Ten: From Traditional Indicators to Robust Metrics 149
Measurement Axioms 150
Measurement Principles 150
The Scoreboard 152
Leading Versus Lagging Indicators 152
Traditional (Weak) Versus Robust Indicators 153
Types of Measurement 158
Company Effectiveness Index (CEI) Versus Competition
as Measured by Customers 167
Case Study: FedEx Corp.—A Benchmark Company in the
Area of Measurement 170
Service Quality Indicator (SQI) 171
Self-Assessment/Audit on Measurement Effectiveness 171
Eleven: From Obsolete Tools of the Twentieth Century to the
Powerful Tools of the Twenty-First Century 174
Ten Powerful Tools of the Twenty-First Century 175
Design of Experiments (DOE)—Shainin/Bhote Not
Classical or Taguchi: Problem-Solving Tool Par
Excellence 176
Multiple Environment Over Stress Testing (MEOST): The
Drive for Zero Field Failures 184
Mass Customization and Quality Function Deployment:
Capturing the Voice of the Customer 188
Total Productive Maintenance (TPM): Maximizing
Equipment/Machine Productivity 193
Benchmarking: Closing the Gap Between You and the
Best-in-Class Company 195
Business Process Reengineering (BPR) and Next
Operation as Customer (NOAC) 198
Total Value Engineering: Maximizing Customer Loyalty at
Minimum Cost 198
Supply Chain Optimization and Lean Manufacturing 201
Awareness and Implementation of the Ten Powerful Tools 201
Case Study: TELCO—A Benchmark Company Deploying
Powerful Tools of the Twenty-First Century 202
Self-Assessment/Audit on Effective Deployment of
Twenty-First Century Tools 203
Twelve: From Historic Levels to Designs in Half the Time With
Half the Defects, Half the Costs, and Half the Manpower 208
Today’s Design Engineers—Not Quite Old Guard but Not
Yet Avant Garde 209
The Ultimate Six Sigma Objective in Design 211
Organization of New Product Introduction (NPI) 211
Management Guidelines 215
Designing for the ‘‘Voice of the Customer’’ 217
Case Study: The Importance of Realistic, Customer-
Derived Specifications: Edge Defects in Contact Lenses 218
Design Quality/Reliability 219
Case Study: Variable Search: The Engine Control Module 231
Pilot Run Stage 234
Cost Reduction in New Product Design 237
Cycle-Time Reduction in New Product Design 242
Case Study: Automotives in Japan—A Benchmark Industry
in the Area of Design 247
Self-Assessment/Audit on Design Robustness 247
Thirteen: From a Customer-Supplier Win-Lose Contest to a
Win-Win Partnership for the Entire Supplier Chain 252
The March to Supply Chain Management 253
The Escalating Importance of Supply Chain Management 253
The Tangible Benefits of Supply Chain Management 260
Why Supplier Partnerships Fail 261
Principles of Supply Chain Partnership 261
Types of Mutual Help 262
Criteria for Selecting Partnership Suppliers 263
Infrastructure of Supply Chain Management 266
Partnership Supplier Development 268
Supplier/Distributor Evaluation of the Company as
Partner 268
Case Study: Toyota—A Benchmark Company in the Area
of Supply Chain Management 271
Self-Assessment/Audit on Supply Chain Management 274
Fourteen: From Second-Class Citizen to Manufacturing as a
Major Contributor to Business Excellence 277
Why Has Manufacturing Been Sidelined? 278
The Key Role of Manufacturing 279
Restoring Manufacturing to a Place of Honor I: What Not
to Do 280
Restoring Manufacturing to a Place of Honor II: What
Must Be Done 281
Engine One: Quality 283
Engine Two: Cycle-Time Reductions in
Manufacturing—The War on Waste 296
Cycle-Time Management: From Theory to Action 306
Case Study: Hewlett-Packard—A Benchmark Company in
the Area of Manufacturing 307
Self-Assessment/Audit on Manufacturing Excellence 307
Fifteen: Field Operations: From an Appendage to a Maximum
Service to Downstream Stakeholders 311
The Service Paradox 312
The Dimensions of Field Service 312
Field Services: Product Highlights 313
Predelivery Services 314
Services to Downstream Supply Chain 317
Services to Users 318
Case Study: Caterpillar, Inc.—A Benchmark Company in
Field Service 325
Reliability: Better Than the Best Automobile in the World 325
Strategy to Serve Customers’ Needs 325
Caterpillar Dealerships—The Crown Jewels 326
Self-Assessment/Audit on Field Operations Excellence 327
Sixteen: From the Black Hole of Little Accountability to Service
as a Productivity Contributor 330
Storm Clouds in the Service Industry 331
Objectives/Benefits of Next Operation as Customer
(NOAC) 332
The Discovering of NOAC by Serendipity 333
Basic Principles of Next Operation as Customer 333
Typical White-Collar Services in Manufacturing Industries 335
Internal Customer-Supplier Relationship Charts 336
An Organizational Framework for NOAC 337
An NOAC Road Map—The Improvement Cycle 339
Case Study: The Departmental Annual Budgeting Process 355
Business Process Reengineering (BPR): Fad or
Breakthrough? 356
Case Study: Solectron Corp.—A Benchmark in the Area of
Service Operations 358
Self-Assessment/Audit on Service Operations
Effectiveness 359
Seventeen: From Mediocrity to World-Class Results 362
A Seesaw Battle Between Process and Results 362
The Primary and Secondary Factors That Assess the
Success of a Business 363
Considerations in Choosing Secondary Parameters for
Company Results 368
Self-Assessment/Audit of Primary Results 371
Case Study: General Electric Company—A Benchmark
Company in the Area of Results 385
Conclusion 386
Reference Notes 388
Index 395

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