"Do Teams and Six Sigma Go Together?"

Nancy Cooper and Pat Noonan

Quality Progress

June 2003, pp. 25-28

In a study of organizations that have used teams to implement Six Sigma, the participants reported that the most important lesson they have learned was to "determine who the stakeholders are for a project and ask them for their input on how to improve the process."

Other lessons learned, broken down by category, are:

Senior Management

1. Senior managers must believe in the Six Sigma philosophy and fully support it
2. Senior managers must participate in the project
3. Senior managers' day-to-day activities must show they support Six Sigma, and they must be actively involved in implementation

Communication

1. Use every means possible to communicate on an ongoing basis
2. Make sure the employees understand the purpose of the project and how it relates to their world
3. The entire organization must understand what Six Sigma is and is not
4. Communicate and advertise your work
5. Frequent communication makes employees feel part of the change or project and limits their fear of participating or losing their jobs

Teams and Team Members

1. Align the Six Sigma project to the vision, mission and values of the organization before initiating training
2. Pick the best people to lead the project
3. You need cross-functional representation when developing solutions for process improvements to make sure you are truly capturing the process and the voice of the customer
4. Choose team members who understand the process and the project
5. Teams are the key to gathering data, analyzing the results, and staying connected to the people on the front line
6. Recognize and reward major contributors
7. Invest in teaching principles and tools before a project is assigned

Metrics

1. Clearly define your defects and metrics
2. Results are more important than fancy documentation
3. Use good metrics to ensure a successful deployment and positive impact on the business objective
4. Make process management a building block of Six Sigma deployment

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"Road to Excellence"

George Taninecz

Industry Week

July 2003, pp. 12-13

Industry Week magazine has announced the 25 finalists for its 2003 "Best Plants" awards:

1. American Axle & Manufacturing de Mexico (Silao, Guanajuanta, Mexico; front and rear axles)
2. Affordable Interior Systems (Hudson, MA; office furniture systems)
3. Autoliv Steering Wheel Facility (Columbia city, IN; steering wheels, airbags)
4. Batesville Casket Co. (Manchester, TN; steel burial caskets)
5. Boston Scientific Corp. (Maple Grove, MN; interventional cardiology devices)
6. Bridgestone/Firestone (Graniteville, SC; light truck and passenger tires)
7. Collins & Aikman (Greenville, SC; automotive carpet)
8. Collins & Aikman (Guelph, Ontario, Canada; plastic automotive components & instrument panels)
9. Collins & Aikman (Port Hope, Ontario, Canada; automotive instrument panels)
10. Collins & Aikman (St. Clair, MI; automotive floors, trunk interiors)
11. Collins & Aikman (Williamston, MI; automotive headrests, armrests, other interior components)
12. Dana Corp. (Owensboro, KY; automotive frames)
13. Delphi Adrian (Adrian, MI; automotive instrument panels)
14. Delphi Packard (Cortland, OH; plastic components for electrical systems)
15. dj Orthopedics de Mexico (Tijuana, Mexico; orthopedic arm and knee braces, slings, rib belts)
16. General Cable (Altoona, PA; aftermarket automotive ignition wire sets)
17. Honeywell Engine Systems & Accessories (Tempe, AZ; aerospace controls and systems)
18. Kautex-A Textron Company (Avilla, IN; automotive fuel tanks)
19. Kautex-A Textron Company (Lavonia, GA; automotive wind shield washer systems, fuel tanks)
20. Lockheed Martin Naval Electronics & Surveillance Systems (Syracuse, NY; radar systems)
21. Maytag Cleveland Cooking Products (Cleveland, TN; gas and electric cooking products)
22. Maytag Herrin Laundry Products (Herrin, IL; washers and dryers)
23. North Star BHP Steel (Delta, OH; hot-rolled steel)
24. Northrup Grumman (Rolling Meadows, IL; electronic defense systems)
25. TRW Automotive (Fowlerville, MI; automotive slip control products)

Some of the performance data for the plants includes:

1. Median three-year change in annual sales per employee—23.4%
2. Median three-year manufacturing cost reductions—11.3%
3. Median operating equipment efficiencies—85%
4. Median three-year profitability increases—18%
5. Documented cost savings from specific improvement programs or projects—$6,500 per plant employee

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"An Examination of the Relationships Between JIT and Financial Performance"

Rosemary Fullerton, Cheryl McWatters, and Chris Fawson

Journal of Operations Management

2003, 21, pp. 383-404

The authors of this article conducted a survey study of 253 US manufacturing firms. Using 3 profitability measures (Return On Sales; Return On Assets; and Cash Flow Margin), the researchers found:

1. There was a positive relationship between firm profitability and the degree to which JIT manufacturing practices (such as reduced set-up times, Total Productive Maintenance, multi-function employees, group technology, and uniform work loads) are implemented;
2. There were increasing marginal returns to long-term JIT investment, especially for kanban and JIT purchasing practices;
3. Inventory margin (low levels of inventory is a result of JIT implementation) had an inverse effect on profitability, with lower levels of inventory associated with higher profitability.

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"The Relationship Between Total Quality Management Practices and Their Effects on Firm Performance"

Hale Kaynask

Journal of Operations Management

2003, 21, pp. 405-435

The results of a survey study of 382 business units in the United States showed:

1. Supplier quality management has a direct positive effect on both inventory management and quality performance
2. Product/service design has a direct positive effect on both inventory management and quality performance
3. Process management has a direct positive effect on both inventory management and quality performance
4. Management leadership, training, employee relations, and quality data/reporting affect operating performance through affecting supplier quality management, product/service design, and process management
5. The positive effect of TQM practices on financial and market performance is mediated through operating performance.

The author cautions that the relationship between different TQM practices is complex, and a firm cannot simply select some of the TQM practices and expect full benefits of implementation.

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"Developing Versatile Leadership"

Robert Kaplan and Robert Kaiser

MIT Sloan Management Review

Summer 2003, pp. 19-26

The authors of this article state that "we have found it helpful to define leadership skills and qualities in terms of paired approaches that may look like opposites but together constitute a balanced whole. This view leads to the notion of leadership effectiveness as the ability to draw freely from two opposing sides as appropriate for a given situation, unencumbered by prejudice against or bias for either—in other words, the ability to be versatile."

The authors identify two balances which they consider to be the most important:

1. The balance between forceful leadership and enabling leadership—"We define forceful leadership on the basis of a leader's own intellect and energy—taking charge, taking stands, having leadership presence, being decisive, setting challenging expectations for people, holding them accountable, making tough calls, asking probing questions and so on. We define enabling leadership as creating conditions for other people to be forces in their own right—empowering them, being receptive to where others stand on issues, being responsive to the needs of others, being understanding when others don't deliver, sharing the limelight and so on."
2. The balance between strategic leadership and operational leadership—"We define strategic leadership as setting long-term direction, thinking broadly about the organization, seeking ways to grow the business, aligning people with the vision and strategy and the like. We define operational leadership as focusing on short-term results, getting involved in operational detail, being grounded in the realities of implementing strategy, using processes to keep people on track and so on."

Research by the authors has sought to find a relationship between "Leadership Versatility Index" scores (ratings by co-workers on the above two balances) and leadership effectiveness (as rated by co-workers). A recent study found correlations of .60 between each of the two balances and leadership effectiveness. The authors contend that these correlations indicate that versatility in terms of these dualities may account for the majority of what it means to be an effective leader.

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"Nature vs. Nurture"

Jill Jusko

Industry Week

July 2003, pp. 40-46

The International Association of Machinists and Aerospace Workers (IAMAW) has had a keen interest in High Performance Work Organizations for over 10 years. In 1997, the union established a High Performance Work Organizations Partnership Department at its headquarters. This article discusses three plants that have entered into the partnerships.

The key components of High Performance Work Organizations Partnerships are:

1. A full partnership between the union and management
2. Shared decision-making around the vital functions that are critical to the business, its costs, and the processes used to do the work
3. Development of continuous learning and skill building
4. Continuous integration of leading-edge technology that builds on the skills, knowledge and insights of front-line workers
5. A co-determined definition of quality
6. Shared technical and financial information
7. Ongoing joint determination of the cost of the design, prototype development, production and administrative overhead encourages the use of activity-based costing
8. The union accepted as an independent source of power for the workers
9. Dedicated people from both the labor side and management side assume leadership positions in the partnership
10. A jointly developed strategic business plan

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