A Story of Business in 6 Parts

The following story told in this 6-part series is based on actual events observed over time.  The names are fictional and the company is an amalgam.

Part 1 – The Problem

MJ and BB had just arrived at work as they do every morning; BB brought donuts and MJ arrived with two cups of their favorite coffee.  They had started this habit a couple of months earlier when they were assigned to solve an important problem that the company was having.  What started as a temporary assignment became permanent because of their excellent work.

MJ’s background in physics and BB’s in engineering had prepared them well for the investigation and analysis necessary for attacking complicated questions and problems, and they relished it.   They hung a poster in the office to remind them of their mission and their background.  The poster was the one with a picture of Albert Einstein and the quote “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”  MJ and BB enjoyed working together and had jelled into a very effective team.

On this day, as they sat eating donuts, drinking coffee and reviewing the week’s agenda, a call came into the office. BB answered the phone.  It was from the CEO.  One of the company’s largest customers had just called.  This customer had been using the company’s products for years and was very loyal.  In fact, at the end of last year, the customer had committed all if its business to the company.  Then, early in the new year, disaster struck.  The company’s product was failing, causing some of the customer’s businesses to shut down in the US with the potential of spreading globally. 

BB put the phone on speaker so that MJ could hear the details first hand and ask any questions directly to the CEO. 

The CEO didn’t know a lot.  The customer was irate, threatening law suits and worse.  The CEO calmed the customer down a bit by promising that the problem would be corrected ASAP. 

Before hanging up, the CEO told BB and MJ that this was their assignment and it took priority over anything else they were doing.  He expected them to work night and day until it was fixed.  If that wasn’t enough pressure, he told them that the future of the company was in their hands and that they had 10 days to figure it out and fix it.

BB and MJ looked at each other in stunned silence.   They had solved a lot of problems together before.  But, nothing like this!  They had better get started!

Part 2 – The Situation

The company had pursued a low-cost sourcing strategy for several years.  As an incentive, the company rewarded people in the purchasing organization based on how much it lowered the cost of supplier materials year-to-year. 

This approach had worked well for the company for a number of years because the people assigned to supporting suppliers to constantly improve their quality were experienced, knowledgeable and well supported by the leadership of the purchasing organization.  But, the leadership of the purchasing organization had changed 12 months earlier.  The new leader’s reputation was built on aggressive cost reduction actions.  And so, the philosophy changed.  No longer was the company to be responsible for supporting its suppliers’ constant quality improvement.  This was now delegated to the supplier as a contractual obligation.  If the supplier failed, then a new supplier would be found to replace them.  All of the people who had been supporting the suppliers’ quality improvement were offered retirement packages, told to find other jobs in the company within six months, or let go immediately.

This change was ok for a while.  The momentum of the earlier quality efforts took some time to atrophy and wither away. This new product problem was the first to be affected by these changes.

If this was the only issue potentially affecting the problem, the solution might be “relatively” straightforward. But, it wasn’t the only issue.  This product was also affected by these realities:

• The product consisted of 11 different elements. The product would fail if any of the 11 elements were faulty.
• Eight of the elements were designed by three different company design centers. The supplier owned design control of the other three elements.
• The company received the 11 elements from 24 different suppliers.
• Fifteen of the suppliers were located in low cost countries spread around the globe.
• The product problem was not universal, affecting “only” about 30 percent of the products shipped to this one supplier. No other customer had reported the problem…yet.
• The suppliers shipped to two company locations that compiled the elements into kits and shipped them to five different assembly centers.
• The five assembly centers created the products, packaged them for distribution and sale and shipped them to sales locations around the US.

These are the circumstances that faced BB and MJ as they began to think about what to do to solve this problem.  They were trying not to feel overwhelmed, but it was hard not to.

Part 3 – The Fall

Following Einstein’s dictum, MJ and BB knew that they first needed to make sure they understood the problem. 

Their first step was to review the situation (Part 2).  When they laid the details out on the whiteboard in their office, they quickly realized they were going to need help.  They were good problem solvers and had been successful before.  BUT, they had never faced a problem with this many potential variables.  They were not sure who to recruit to their team.

Because this was a product issue, their first thought was to talk to the engineers.  This was a natural thing to do because, traditionally, if a product problem arose, it was given to the engineers to fix.  Giving the problem to the engineers sometimes produced a good result.  However, far too often, the solution was a product improvement that added cost and complexity.  Sometimes the engineering solution even directly caused another problem in the product that had to be solved. 

At other times, the engineers would push back saying that they were too busy with the next new product design to help with a current product issue.  If pushed hard enough, they would reluctantly give a junior engineer to the project whether or not they knew the product or had anything to do with it. 

BB called the lead engineer for this product.  The lead engineer understood the importance of the problem and the need to fix it.  It was agreed that the lead engineer would meet with BB and MJ at their office in one hour.  MJ put on a pot of coffee and BB went out for more donuts.

The lead engineer arrived with three other engineers who were knowledgeable about the product.  After introductions all around, they got right to it.  There was little information about what was really going wrong.  The lead engineer had a good relationship with the customer’s head of engineering so that’s who they called first.

When the customer’s head of engineering answered the phone, the stress was clearly discernable.   The problem started to appear about two weeks earlier.  At first it was a dribble, then the dribble turned into a flood.  Reports were arriving now almost every hour saying that the product was failing.  It was a crisis. 

The call lasted about 90 minutes.  The white board was now filled with drawings and math.  It was also obvious that the engineers weren’t all that interested in what BB and MJ had to contribute.  They now owned the problem and were running with it. 

One possible clue to the problem was that it seemed to only be occurring in the colder regions of the US where the customer did business.  With this new knowledge, the engineers were already making sketches and talking about how to beef up the design to make it survivable in the cold.

BB and MJ looked at what they knew so far and the large number of potential causes for their problem.  It seemed to them too early to declare the solution.  But, the engineers were clearly convinced that this was it and were running fast.  BB and MJ decided they needed help from another source who wouldn’t so quickly jump to a solution before more fully understanding the problem.

The company had begun using Six Sigma in the last year with some very interesting results.  Neither BB nor MJ had become belts but they had talked to people who were and they had decided that they would at least volunteer to be on a Six Sigma team during the year so that they could learn more.  One of BB’s friends happened to be a Master Black Belt (MBB) who had recently been part of a complicated product problem project.  MJ agreed they would call the MBB and see if Six Sigma could help.  The MBB was intrigued and agreed to meet for lunch at the company cafeteria.

Part 4 – The Plan

Over lunch MJ and BB laid out the whole story for the MBB and asked if the MBB thought Six Sigma could help.

The MBB paused to think about all that had been said about the problem.  After a few minutes the MBB said, “Yes, I think Six Sigma could really help you.  In fact, this is exactly the kind of problem Six Sigma was created to solve.  One of the main things we learn in Six Sigma is that variation is the enemy of quality.  A way to think about the truth of this statement is that processes are created to produce an output that works.  Processes are not created to produce bad outputs.  But, what happens?  The processes change in some way introducing variation.  Some of that variation doesn’t affect the output.  But, other sources of variation have a significant negative effect on the output.  The key is finding the source of the bad variation and doing something about it.”

“This,” the MBB continued “is exactly what Six Sigma is for.  Sometimes the problem is simple and easy to fix.  This kind of problem doesn’t need Six Sigma.  We call this a Just-Do-It.  More often, the problem has many possible causes.  How do we decide which of the possible causes are creating the problem?  It’s really hard without the right tools to figure out the answer.  Without Six Sigma’s sophisticated tools sometimes the answers are almost unfindable.”

MJ was intrigued but also had a concern and posed a question.  “That all sounds great, but we have to move fast.  I have heard that a Six Sigma project takes six months to complete.  We don’t have time for that!”

The MBB chuckled.  “This is a myth.  The time it takes to complete a Six Sigma project is completely dependent on how important the problem is to management.  It’s really all about resource allocation.  If the problem is really important to solve, management has to make sure that the people, money and time are available to do the work and find the improvement.”

The MBB went on, “One of the best examples I have was an incredibly complex problem that we solved in ten days.  To make a long story short, it spanned three countries, four states in the US, four global plants, and three design centers.  The problem included a large customer and a major supplier.  We confronted a problem we had never seen before and initial estimates were that it would probably cost $100M to fix it.  Because of its importance the project was properly resourced — we used the Six Sigma DMAIC road map and tools to follow the data to the source of the variation and the solution.  I have to say, it was incredible what the people did.  They all admitted afterward that without Six Sigma they were not sure they could have solved it.  By the way, the solution was a process breakdown NOT a product design problem.”

BB and MJ looked at each other with wide eyes.  Their assignment was too important to screw up.  But, listening to the MBB gave them real confidence that Six Sigma was the way to go.  They asked the MBB for help.

BB asked, “So, what do we do now?”

The MBB told them that the first step was to identify the project sponsor.  Then, the MBB, BB and MJ would work with the sponsor to create the project charter. While the charter was being written, they would identify the right belt to lead the project and begin assembling the right team of experts to work with the belt.  The MBB would act as project coach and tool expert.  It was also important to pull together any and all data that was available on the product used by this customer to begin to understand all of the variables potentially affecting the product problem. 

And, so, they got to work.

Part 5 – The Fix

The MBB led them through the DMAIC roadmap.  Using the roadmap allowed them to be efficient, reduced arguments over how the problem would be approached and helped them focus on what they were trying to accomplish.

During the Measure (M) phase of the project, the team collected data and sorted it.  They spent time understanding the process as it currently existed.  The list of possible causes was long and detailed.  The other task accomplished during the Measure phase was the elimination of possible causes.  The team used a variety of tools to guide the team of experts to eliminate less likely possible causes.  This helped reduce the possible causes to a more manageable number. 

Next, during the Analyze (A) phase they began interrogating their data to determine which of the remaining causes were most likely to be the source of the problem that the customer was experiencing.

Some key findings began to emerge.  First, as they already knew, the problem was isolated to the northern part of the US where the weather was colder.  But, other customers in cold climates were not seeing the failure.

Also, this was the only customer currently experiencing the problem.

They received failed products from the customer so that they could see for themselves what the failure was.

Next, the problem wasn’t unique to a single supplier.  The product was failing regardless of who the supplier was.  This eliminated the thought that it might have been a problem associated with the company’s low-cost country sourcing strategy.

Finally, they saw that all of the failed products came from one assembly center.  That had to be the source of their variation.  But, what was it?

The MBB told the team that a key tactic in Six Sigma was the “break suction and go see.”  He followed: “This means get out of your chair and go see the potential cause of the problem.  So, let’s go to the assembly center.” 

The assembly center was only 10 miles away.  It was a new facility with a whole new workforce.  They had been trained six months ago and had begun assembling product.  So the team jumped in a van and drove to the center.

The assembly center leader was proud of the building and its people.  They had the newest equipment, the floors were immaculate, the lights were bright and there was an obvious emphasis on personal safety.  Yet, something was going wrong. 

After a quick introduction and briefing on the processes in the center, the team began its line walk to see how the product was assembled.  They watched each station closely to make sure the proper procedures were being followed.  They were at the fifth station when the packaging expert gasped.  Everyone was asked to wait while the packaging expert went to talk to the operator.  The operator was asked to do the next operation.  As the operator started to do the work, the packaging expert stopped the action.  The operator was not following the unpackaging instruction.  So, as the part was unpackaged a small pin was bent ever so slightly.  This was the hidden cause of the failure. 

During the Improve (I) phase of the project, this operator and others were trained on the proper way to unpackage the part to make sure this eliminated the problem.  It did. 

As part of the Control ( C ) phase the control plan called for periodic sampling and regular refresher training to make sure this problem did not recur.

The customer was happy.  The problem was solved and prevented from recurring.  And, Six Sigma had proven to work on yet another complicated, high priority problem.

Part 6 – The Challenge

Though the details of this story have been fictionalized, this is a reality of Six Sigma when properly applied.  I have seen similar results over and over again on problems of similar and often greater complexity and scope.

The discipline and common language of Six Sigma can change your organization.  The question I have for you is, why don’t you want to be able to do this?

If this has piqued your interest at all, give us a call.  Let us show you how you can make Six Sigma make a difference for you and your company.