The Hindu Business Line : `Beat competition with Six Sigma'

TAKE care of customers, business will take care of itself, Dr Noshir Khory, Executive Director (Technology, Planning and Development), Motorola, US, said.

Customers will pay more for service quality and value, and they always look at innovative products at reduced price.

One way to achieve quality product is by adopting Six Sigma practice, he said here today at Connect2004, the four-day information, communication and technology event organised by the Confederation of Indian Industry.

Six Sigma is a simple and problem-solving concept, which translates into 3.4 parts per million defects.

In other words, for every million parts manufactured the defective ones should be 3.4 parts per, he said.

Six Sigma helps companies outplay their competition and provide customers something, which the other person cannot provide. It provides a distinctive competitive advantage. "This is the message I would like to give to Indian manufacturers," he said.

Heads of organisations play an important role in implementing Six Sigma, said Dr Khory, who also advises some of the Indian firms on Six Sigma.

Citing the example of Six Sigma implementation at Motorola, Dr Khory said a couple of decades ago the company was on the verge of collapse due to poor quality of products. Motorola's defective parts per million then was around 30,000 (for every million products, 30,000 were faulty). Motorola implemented Six Sigma to ensure that PPM was less than three in ten years. The company achieved this through a 68 per cent improvement every year across all groups for the next ten years. The return on investment on Six Sigma was1:10. If a company spends $1 on Six Sigma, the return is $10, he said.

In India, the Six Sigma concept is still at an early stage, and many companies are only doing statistical initiative, and do not know how to apply the concept.

The failure is due to lack of training and understanding of the concept, he said. Firms such as GE, Xerox, IBM and Tata Steel have successfully implemented Six Sigma, he said.

"This is a wake up call, and if they miss it this call, manufacturing, jobs will move to China. I would like to see India in manufacturing in the West. Manufacturing is the backbone of the country's economy, not bank or a service industry," he said.

The tool kit

Take effective (discipline) problem solving solution (find the root cause, analysis it and find permanent and corrective action).

Use Statistical method/data analysis (basic, application statistics used to control process)

Use risk analysis (solve the problems early on the development cycle - a Volkswagen study said that if it takes 1 DM (deutsche mark) to fix a problem at early design stage, it would cost 1,000 DM to correct the problem after it goes out of the field.

Use supply-based management (get the best out of suppliers by using their core competencies).

Data exchange and transfer within the company (information is key to all these).

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