Lean Six Sigma Enters the Finishing Arena

As the President and Chief Executive Officer of the Juran Institute - an organization devoted to improving overall business performance by way of training and consulting services - Joseph De Feo is one of the world's most experienced consultants and executive trainers in areas such as Strategic Deployment, Six Sigma Breakthrough and Designs for World-Class Quality.

Later this month, Mr. De Feo will be giving the keynote presentation at SUR/FIN 2005. His topic will be the Lean Six Sigma Imperative, an approach to integrating the power of Six Sigma Tools and Lean Enterprise Tools designed to create the fastest rate of improvement, maximize shareholder value and increase customer delight. Products Finishing magazine was recently granted an exclusive interview with Mr. De Feo.

Products Finishing Magazine (PF): Thanks for the interview.

 

Joseph De Feo (JD): No problem.

PF: For starters, let's talk a little bit about your presentation at SUR/FIN 2005. You're scheduled to talk about Six Sigma - a popular quality improvement methodology - among other things. Here in the surface finishing industry, we've been hearing a lot about Six Sigma these days. Why has it gotten so much attention lately?

JD: In a lot of cases, a product's finish is the first thing a customer sees. It doesn't matter if they're looking at a new car or a stainless steel refrigerator. As customers become more and more educated about finishes and their functional and aesthetic importance, they're becoming increasingly demanding about quality… so much so that the tools used to meet those demands need to be revisited. The industry has always produced high-quality finishes, but the impact of peeling paint or providing the wrong color coating is more deadly today than it ever was.

PF: Quality is a bit of a subjective term, isn't it? Doesn't that make the act of defining quality an almost impossible task?

JD: Everybody has different understandings of quality. A manufacturer or service provider looking at an aggregate group of people has to come to some conclusion as to what the average person thinks about the quality of their products. We've lived according to that method for quite a while.

When you make an automobile, what does quality mean? It means a certain level of reliability, a certain level of gas mileage, a level of comfort, color... all of these things. That is translated as the voice of that group of customers, and maybe 60% of the time, you can hit the mark. However, the 40% of the people who don't buy your product are probably not finding your definition of quality in synch with theirs. So the Six Sigma approach of today is first and foremost about understanding the voice of the customer. How do they define quality for your product or service?

PF: So quality can be considered as much a function of meeting customer expectations as minimizing internal defect rates...

JD: Every bit. After defining the voice of the customer, you need to find a way to measure it the same way they do. Six Sigma - translated literally - means 3.4 defective parts per million. That's one measure of quality, meaning the absence of defect. We can always assume we want absence of defect. What we don't know is do we want absence of defect in terms of speed, mileage, reliability, etc.... What are the most important things to the customer? And what are we doing to meet those needs? Essentially, there are two aspects of quality that an organization needs to understand. The defect rate - the deficiencies or failures - and the characteristics or features that meet the customer's wants and needs.

When we talk of quality being a subjective term, it is the features side where you find the significant variations in opinion. For instance, what is a higher quality car, a Mercedes or Volkswagen?

The Seven Deadly Wastes Overproduction: making or doing more than is required or earlier than needed. Waiting: for information, materials, people, maintenance, etc. Transportation: moving people or goods around or between sites. Inventory: raw materials, work-in-progress, finished goods, papers, electronic files, etc. Poor process design: too many or too few steps, non-standardization, inspection rather than prevention. Motion: inefficient layouts at workstations or offices, poor ergonomics. Defects: errors, scrap, rework, non-conformance. Adapted from Taiichi Ohno and the Juran Institute's "The Lean Six Sigma Imperative"

PF: My guess is that most people will say the Mercedes.

JD: Right, except that while a Mercedes has more features, the Volkswagen has the higher reliability. A lot of people think about quality in terms of features, as opposed to defects.

An organization that is trying to define quality has to try to understand as much about the customer as possible and translate that understanding into a division between features and freedom from deficiency. Then, they can look at their organization and ask, "Okay, who's responsible for quality?" Marketing, sales, product development and design are all about making sure we have the right features for the operation or making sure we make it to the right spec. It's often the production personnel, the folks down in the trenches, that need to conform to the requirements and carry them through.

If I'm working in a job shop, and I get an order that says to make 1,000 widgets at one-inch thick, I'm going to do just that. I don't know what the customer wants it for, but I know they want them one-inch thick. Now, if I'm processing the widgets and I'm finding that 90% of them are good and 10% are scrap, that's bad quality because I'm throwing away 10%. So I'm going to embark upon some activity to try to get rid of that 10%. But I'm not going to change the requirement that the customer wants. I can only conform and then work towards that perfection to get rid of that waste and the defect. I can't change the features.

There are multiple definitions of quality, but one needs to separate what the customer means in terms of features and freedom from failure. Both of those impact the bottom line of a company. If your product has great features, people buy it and it generates revenue. If you have few errors/defects, it's cheaper to manufacture. Those two together make up the financial case for doing good quality work.

PF: In addition to being subjective, quality is also organic, isn't it?

JD: Absolutely. In the 1980s, when we had very high gas prices, we said a quality car was a vehicle that got good gas mileage. And up until this last year, that wasn't all that important. A quality car was an automobile that had a good sound system, anti-lock brakes and multiple airbags. Now, mileage and reliability have become very important again. Our collective definition of quality is always being reshaped by external factors. If an organization doesn't keep abreast of those forces, they'll fail to keep up with standards and lose sales as a result.

Quality isn't just organic, it's evolving. If you go back and look at defect rates 10 years ago in a particular industry, you might find that 10% was the norm. Today, one percent is the norm. And tomorrow, it will be 0.1 percent. That's what Six Sigma is about - it's a system to continuously respond to the voice of the customer the way they see it, not the way [the manufacturer] sees it.

PF: I frequently hear the phrase, "the language of management" used in discussions about Six Sigma.

JD: Dr. Joseph Juran (founder of the Juran Institute) coined that term. It means that a business professional must speak the language of management, which means the "language of money." And what he meant by that was the people at the top of an organization tend talk in the language of money - revenues, profits, return on investment, sales margins, etc. People in the middle or bottom of an organization tend to talk in the "language of things" - defect rates, late orders, attrition rates. If somebody wants to get management's attention, they can't go to management and say, "We have too many people showing up late for work." They have to go in and say, "Twenty-five percent of our product has rejects and it is costing us $22 million per year," or "Our five percent attrition rate is costing us $5 million per year." That's converting things to the language of management, and when management hears those numbers, they pay attention. If they don't hear the financial benefit - and unless a problem gets really bad - it doesn't bother them, because they're not tuned in to that. So the language of management is the language of money, like it or not. The way you make money is to have a product or service that meets your requirement. In the absence of that, meeting your requirements costs you money.

Road Map for Six Sigma Deployment Decide: In this phase, an organization decides on and commits to deploying a performance improvement initiative. The scope and goals need to be laid out and thought given as to how the initiative will integrate into other initiatives currently underway. Typically, during this phase we work with our client to develop a specific and focused deployment plan. This includes assessing current business capabilities, critical processes and gaining an understanding of the company's culture. Prepare: During this phase, an organization conducts the requisite upfront planning and establishes the appropriate infrastructure. Depending upon the scope of the improvement initiative, this includes establishing a Steering Committee or Quality Council, establishing goals and an appropriate performance management system, resource identification including selecting the appropriate individuals to lead and participate in the effort, project selection, addressing human resource issues and developing an appropriate communications strategy. Launch: During this phase, an organization conducts additional management training, conducts an initial wave of training, achieves early wins, establishes proof-of-concept, reviews lessons learned, modifies the plan as appropriate and makes an affirmative plan to continue. Expand: At this point the organization expands beyond the initial pilot wave and quickens the pace of training and deployment. It is during this phase of training that the training responsibility transitions from Juran Institute to the client organization; this results in client personnel assuming training and coaching responsibilities from the Juran team. During this period several things occur including the modification of the original deployment plan, if necessary, and the communication of initial project successes to the rest of the organization. Sustain: In this phase, an organization continues to expand the initiative and works to ensure that the previous training and performance gains are sustained. This could very well be the most difficult phase since it is easy to lose focus. Courtesy of The Juran Institute

PF: Is it possible to get too wrapped up in the "language of money?"

JD: Yes, people can also get a little enamored with the language of money. An organization's finance people drive a lot of decision-making based on financial assessments. The language of things is very important to those assessments because they need to know if they can achieve those numbers. Do they have the capability, the right machines, the right personnel, etc. Being bilingual is the key.

PF: Your presentation will focus, in large part, on a concept called Lean Six Sigma. The name implies a sort of marriage between Six Sigma and Lean Manufacturing. Is that the case?

JD: When people say Lean Six Sigma, you would think it's Lean techniques and Six Sigma techniques coming together as one, but it's more about using both methods simultaneously for the sake of reaching common goals.

Whereas Lean is concerned primarily with reducing waste and improving workflow, Six Sigma is more closely associated with reducing variability and defects. By improving quality, you can increase the speed of workflow. And by doing the things that result in maximum workflow, an organization can maximize the quality of its process.

PF: I've observed that some organizations clearly have an idea of what Lean Manufacturing and Six Sigma are, but they have a great deal of difficulty in putting the concepts to work for them. Is this something that you come across?

JD: Yes, very consistently. People understand what they want their result to be. They want to be lean. They want good quality. They don't necessarily know how to get there.

One of the things that the Juran Institute does is to provide a five-phase "road map" for improvement (see sidebar on Road map for Six-Sigma Development). The key to successfully integrating a program like Lean Six Sigma is to follow all of the steps, not just one or two of them. A lot of times, people want to launch before they prepare. Organizations will call up out of the blue and say "I want to do a black belt wave." (A Six Sigma Black Belt is a professional who can explain Six Sigma philosophies and principles, including supporting systems and tools.) It doesn't work that way. If you try to jump in at the wrong spot, you'll get the wrong result.

We guide organizations through the phases. We meet with the executives and try to understand what they're trying to do, what their options are and why they think Lean and Six Sigma are going to be good options. We answer all of their questions and provide them with an education about the process before ever getting them started.