Six Sigma

THE MOTOROLA CASE

The Electronics leader MOTOROLA-- Invented “Six Sigma” Concept, it’s existence and success is tied to this concept. In 1980s & 1990s– Motorola faced a stiff competition from Japanese competitors. When a Japanese firm took over a Motorola factory that manufactured Quasar television sets in the United States in the 1970s, they promptly set about making drastic changes in the way the factory operated. Under Japanese management, the factory was soon producing TV sets with 1/20th the number of defects they had produced under Motorola management. They did this using the same workforce, technology, and designs, making it clear that the problem was Motorola's management. Eventually, even Motorola's own executives had to admit that the quality of its products was awful.

Finally, in the mid 1980s, Motorola decided to take quality seriously. Motorola's CEO at the time, Bob Galvin, started the company on the quality path known as Six Sigma and became a business icon largely as a result of what he accomplished in quality at Motorola.

In 1987, a new approach came out of Motorola’s communication sector, headed by George Fisher, which was innovative improvement concept called SIX SIGMA. It was strongly supported by Chairman Bob Galvin.

The initial aim was:

• To track and compare performance to customer requirements

• To target practically-perfect quality

In early 1980s, target was ten times improvement in processes i.e., 10X over five years. With Six Sigma, it became– 10X over 2 years i.e., 100X over 4 years. Only two years after launching Six Sigma, Motorola was honoured with “Malcolm Baldridge National Quality Award”. Also company’s total employment rose from 71,000 in 1980 to 130,000 today.

NOTABLE ACHIEVEMENTS:

1. Five-fold growth in sales, with profits climbing nearly 20 per cent per year.

2. Cumulative savings based on Six Sigma efforts pegged at $14 billion.

3. Motorola stock price gains compounded to an annual rate of 21.3 per cent....