Does <strong>Six</strong> <strong>Sigma</strong> Applyto NonmanufacturingEnterprises?Tools for Retaining Market Sharein the 21st Century28 | Technology Century | OCTOBER–NOVEMBER 2006
BY Maria Staablmost everyone in the industrial world has heardof <strong>Six</strong> <strong>Sigma</strong> methodologies to design new andimprove existing manufacturing processes. Butwhat about nonmanufacturing businesses? Canthe business, or transactional, world also reapbenefits from <strong>Six</strong> <strong>Sigma</strong> process improvementstrategies? According to quality control professionals,the answer is “Yes!”Every process that produces a deliverable to a customer canbenefit from <strong>Six</strong> <strong>Sigma</strong> because there are no “perfect” processesin our world. Every process has room to increase in effectiveness,efficiency and flexibility—improvements that, in turn,ensure satisfied customers, more company profit, and theability to compete successfully in our fast-pacedtwenty-first century economy.Is <strong>Six</strong> <strong>Sigma</strong> Worthwhile?Ford Land, a wholly owned subsidiary of Ford Motor Companyin Dearborn, Michigan, provides services, worldwide, in:real estate management; construction project managment;operations and maintenance research facilities; and dealershipsupport. At Ford Land where the author practices applicationof <strong>Six</strong> <strong>Sigma</strong>, the question was raised whether our effortsin applying <strong>Six</strong> <strong>Sigma</strong> methodologies during the last fiveyears (2000 to 2005) were worthwhile. After a brief analysis,we discovered that Ford Land realized a 570% return on its<strong>Six</strong> <strong>Sigma</strong> investment in the form of hard dollars, or actualLeft: According to Maria Staab, shown here with the popular FordMustang GT, “It takes more than manufacturing to produce a great car.”At Ford Land, Black Belts use <strong>Six</strong> <strong>Sigma</strong> methods to provide processimprovement support to nonmanufacturing process owners associatedwith design and testing facilities. Photo courtesy of Peggy Finger-Greuther, SystemsAnalyst, Ford Land Asset Management Group.bottom-line savings. In addition, an equal return was realizedin the form of soft dollars, or noncaptured (nonfinancial)efficiency savings. Therefore, the answer to “Is <strong>Six</strong> <strong>Sigma</strong> worthit?” is “Definitely, yes!” Presently, there are eight <strong>Six</strong> <strong>Sigma</strong>certified Black Belts at Ford Land, real leaders at Ford MotorCo., who are ready to tackle the difficult challenges ahead ofthe company.Effectiveness, Efficiency and FlexibilityAre Customers Satisfied?All human work involves steps that can be mapped as a process,and the performance of all processes can be assessed in threecategories: effectiveness, efficiency and flexibility. Effectivenessmeasures customer satisfaction with our products, ordeliverables. If the process delivers what was promised to thecustomer, we say that process is effective. We can measure thedegree of effectiveness in the form of a sigma level, with a scoreof six being the best. Effectiveness is essential, since the lackof effectiveness will result in lost customers and eventualbusiness failure.For any process, we first evaluate its effectiveness insatisfying the customer to determine the process sigma level. Ifthe sigma level is unacceptably low, interim containment mustbe put in place to focus on retention of existing customers andto prevent further erosion of market share. Once we havea sufficient level of confidence that our process delivers anacceptable product or service to our customer, then we canproceed with assessing the efficiency level of our process,the second-most important aspect of process performance.Frequently, processes are very effective, but they are notefficient, which cuts into the bottom line. If a company isunable to make profit at the bottom line, the business willeventually collapse.www.esd.org | The Engineering Society of Detroit | 29
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