Six Sigma Case Study: Motorola Pioneers
Motorola was one of the founding organization of Six Sigma as we know it today. We can trace all of Six Sigma’s present-day and past successes back to Motorola’s pioneering work. Without them, we wouldn’t have the essential tools and strategies we used to detect and eliminate defects. Similarly, without their early work developing the methodology, there would be no Belt-based hierarchy, around which Six Sigma pivots. But how did they do it? What were Motorola’s early successes and is Six Sigma still as effective today? Keep reading to learn how they created and first implemented the greatest and most powerful improvement methodology in their work.
The Start of Six Sigma
Back in the seventies, Motorola invested their time primarily in manufacturing Quasar television sets. This was long before the advent of mobile phones, modern computers, the internet, and many of the technologies associated with Motorola. A Japanese company took over control of Motorola’s Quasar factory at the time and began implementing unheard of changes. They set about revamping and restructuring the way factory operations, rebuilding it from the ground up.
Soon, while under new management, Motorola’s Quasar factory began to produce TV sets with one-twentieth the number of defects than before. Simply put, there was something Japanese management brought to the factory that Motorola didn’t. The factory even maintained the same workforce, machinery, and design work. It soon became clear that Motorola management was the problem.
It was in the next decade that Motorola knuckled down and started treating quality with the seriousness it deserves. Their then CEO, Bob Galvin, redirected Motorola towards on the quality achieving Six Sigma levels of quality. It was this decision that made Motorola a top quality and profit leader in the business world. Six Sigma was the secret to their success. And it’s just as popular and effective today as it was then!
How Does Motorola Use Six Sigma Today?
For Six Sigma, quality is about helping an organization increase profit. In Six Sigma, quality is a value contributed by a productive enterprise or activity. Motorola uses Six Sigma to maintain high efficiency by eliminating waste and defect as they discover them. This may be on a production line or even in administration.
Six Sigma aims to improve quality by minimizing variation and (overlapping with Lean) reducing waste. This helped Motorola improved its products and services, producing them faster and for less. In basic terms, Six Sigma’s goals are preventing defect, reducing cycle time, and minimizing costs. Six Sigma’s effectiveness comes from its ability to identify and eliminate waste costs, i.e. those that provide no value for customers.
Unlike Motorola, companies that eschew or dismiss Six Sigma ideas tend to have extremely costly operating processes. For those operating at low sigma, the cost of (poor) quality tends to be high, often spending 25%—40% of their revenues addressing issues. Companies operating at Six Sigma, however, typically expend less than 5% to fix problems. The dollar cost of this gap is often considerably large. This has cost companies like General Electric between $8 billion and $12 billion annually. Motorola, however, has enjoyed and still enjoys the benefits of Six Sigma. As one of its leading pioneers, they have perfected it over the years. Their success is not surprising.