The Six Sigma Story – Quality Actually Costs Less

The Six Sigma Story – Quality Actually Costs Less

“…our quality stinks!”

–      Motorola executive Art Sundry

We have talked a lot about the application of Six Sigma to Marketing. This is a good time to take a step back and consider the origins of Six Sigma, and how this contributes to its value as a Marketing manager’s power tool.

Six Sigma was developed at Motorola in the mid-1980s as a way to improve manufacturing quality.

At a time when most American companies believed that quality cost money, Motorola realized that done right, quality improvements would actually reduce costs.  At the time, the company was spending as much as 20 percent, or $800 million to $900 million annually, correcting errors.

An engineer, Bill Smith, had studied the correlation between the field life of a product and how often that product was repaired during manufacturing.  He concluded that a defective product that was fixed during manufacturing was almost certain to have other defects that were missed until it was in the hands of the customer.

He also concluded that when the product was manufactured error-free, it rarely failed afterward. Once the company realized that its foreign competitors were making error-free products, Motorola began its quest to improve quality in earnest.

This led to the development of Six Sigma, which focused on the use of measurements to anticipate problem areas, not just react to them.  In other words, Six Sigma would allow business leaders to be proactive rather than reactive.

Motorola’s new standard became defects per million opportunities. Previously, the standard was defects per thousand opportunities.

Proof of its value materialized when Motorola applied Six Sigma to its Bandit pager, which hit the marketplace with a life expectancy of 150 years. 

Within four years, Six Sigma saved the company $2.2 billion.  From there, Six Sigma spread like wildfire to other industries – and beyond the realm of manufacturing.

The potential to improve results and eliminate wasted effort in Marketing makes Six Sigma a must-have for decision-makers.