Close Enough to Perfect In the push for quality, Six Sigma leaves no stoneunturned

Alexander Pope, the English poet and satirist, could not have foreseen nearly 300 years ago how suitable his words would be in describing the state of manufacturing on the brink of the 21st century.

Company executives say they want zero defects from their plants, but they seem to settle for mere improvement out of an acceptance that perfection is, well, inhuman.

But that thinking has no place in the concept of "six sigma," a quality initiative that employs statistical measurements to achieve 3.4 defective parts per million - the virtual elimination of errors. The challenge, however, is prodding a company to really look at its warts and get rid of them for good.

Most manufacturers in the United States operate at about three sigma, churning out 66,000 bad parts for every million produced. These companies lose up to 25% of their total revenue due to defects.

The six sigma process strives to eliminate those defects by forcing a company to quantify its quality. A database is installed to collect information about every process within a facility. Improvement can then be charted on a factual basis. "I think" and "I feel" are eliminated from conversations about plant operations.

But such cultural changes rarely come from within an organization.

Greg Brue compares it to brain surgery - a process that cannot be self-performed. Mr. Brue is senior partner and a founder of Six Sigma International Ltd. (SSI) of Akron, OH, a company that has been performing surgery on U.S. manufacturers for the past three years.

"Companies think, 'I can perform surgery on myself,' but they can't. They're too close to it," Mr. Brue says. "For a lot of companies, the issue is, 'Are we secure enough to ask an outside expert?' They have to overcome that question."

Companies considering six sigma also must accept that no process is sacred, no matter how deeply ingrained in a corporate psyche. If it generates waste, change it.

"If someone is doing rework continually for 20 years, which we find, it's no longer rework. It's a part of the process," says Mike Carnell, a partner at SSI. "We identify that as an opportunity to change."

SSI demands, for instance, a lofty 50% reduction in cycle time and pushes companies to reduce their cost of core quality from as high as 35% to 8%.

"You've got to set a stretch goal for these companies," Mr. Carnell says. "If you don't stretch them, you'll just get little pieces that won't make a difference."

The cost for SSI varies. Some companies pay a daily consulting rate of up to $3,000, while others sign long-term contracts that are based on the company size. There's even a money-back guarantee if a company does not obtain at least a 200% return on investment of training costs over two years.

Once hired, SSI begins building a database and trains "black belts" within the company (no, they don't dress like Bruce Lee) to continue training other employees.

Recently SSI merged with Marshall-Qualtec Inc., another corporate training firm, to form Six Sigma Qualtec. Marshall-Qualtec's clients include BMW and Mercedes-Benz.

The concept of six sigma was pioneered at Motorola in the 1980s and has found a home at AlliedSignal, Borg-Warner Automotive, GenCorp, Navistar International and Siebe plc.

One of its biggest supporters is Jack Welch, chairman and CEO of General Electric Co., who devoted an entire chapter of the company's 1997 annual report to its three-year-old six sigma campaign.

The concept, at the behest of Mr. Welch, has spread like wildfire across GE. Forty percent of every manager's bonus is tied to it, along with managerial promotions and the awarding of stock options.

The impact on the bottom line is huge. GE's operating margin broke the 15% barrier in 1997 after hovering around 10% for decades.

Despite the aggressive push, GE still sees room for improvement. The company estimates its current defect rate at about 3.5 sigma, or 35,000 ppm. The company's goal is to reach six sigma by 2000.

This year, GE is spending $400 million on six sigma (most of it for training) and will derive about $1.2 billion in benefits as a result. Executives say Mr. Welch's zeal hasn't turned off employees.

"They actually like six sigma because we are spending more time making jobs easier and stabilizing operations," says Wayne Hewitt, general manager of global six sigma quality for GE Plastics.

Is six sigma really a new concept for manufacturers who for years have talked about getting lean? The Japanese concept of kaizen, or continuous improvement, already has been introduced to many U.S. manufacturers.

But Mr. Hewitt says kaizen is for fixing small problems in a matter of days. Six sigma is for broader, institutional maladies.

While six sigma may appear unattainable to some, those who reach the "apex of quality" can take yet another step toward perfection - seven sigma, which equals 19 defective parts per billion.