Ford Six Sigma Savings: $2 Billion Since 2000

TRAVERSE CITY, MI – Ford Motor Co. has documented $2 billion in cost savings from its Six Sigma quality initiative since it was launched in 2000, a Ford executive tells an afternoon session at Monday’s Management Briefing Seminars here.

Debbe Yeager, director of Consumer Driven Six Sigma, says the $2 billion doesn’t include items such as cost avoidance but, rather, is directly related to results from Six Sigma projects.

Yeager credits the process with helping improve Ford’s customer satisfaction ratings, both internally and in independent surveys. “Our numbers for ‘things gone wrong’ are going down,” she says, “but we haven’t reached our objectives yet.”

Agreeing that it’s difficult to define exactly what Six Sigma is, Yeager says it commands its own acronym: DMAIC, which stands for “define, measure, analyze, improve and control.”

The goal of Ford’s Six Sigma effort is to identify and correct defects or shortcomings in its processes – “things gone wrong” – especially where these can add to warranty costs, customer complaints or both.

The savings to date primarily are traceable to waste reduction and process improvements integrated into Ford’s plants and product development operations, says Yeager. “Six Sigma is a statistical tool that provides data-driven decision making,” she points out.

The idea is to identify cause and effect, Yeager says.

“We found, for example, that our climate control system was good, but we had failures because each operator (on the line) was setting the controls under different circumstances. One operator left the windows open when he was setting the controls, and this affected the system.”

Ford standardized the process.

The key to applying Six Sigma lies in training folks to tackle each project – or problem. There are two levels, “green” and “black” belts. Employees can earn a “green” ranking with two weeks of training.

Yeager says members of the United Auto Workers union have latched on to the Six Sigma movement, with many line workers already qualified at both the “green” and “black” levels. The latter requires four weeks of training and two years’ experience, after which a test is administered.

Ford has trained 4,859 in black belt Six Sigma during the last four years, of which 2,200 remain in the “active” category. Nearly 62,000 have received green belts over the same period, says Yeager.