November 2004

Six Sigma: Is It for You?

Maybe, but this popular manufacturing philosophy is definitely not for everybody.

By Tom Dossenbach

If Six Sigma is an enigma or a mystery to you, you are not alone.

I have avoided writing on this subject because I try to present only practical approaches to tackling challenges in our industry. I have long felt that this program goes too far for most wood products companies to benefit.

Furniture Retailers vs. Manufacturers: Can't We All Just Get Along?

I never thought I would see the day when furniture industry retailers and manufacturers would be so bitterly polarized. However, I saw first-hand how divisive the industry has become when I attended the Oct. 14 "Update Briefing on the China Furniture Trade Case," hosted by the Furniture Retailers of America during the International Furnishings Market in High Point, NC.

The FRA is an organization of 75 large and small U.S. furniture retailers that formed shortly after the Oct. 31, 2003, filing of the antidumping petition against Chinese wood bedroom furniture manufacturers. FRA members include Rooms To Go, JC Penney, Havertys, Crate & Barrel and The Bombay Company, as well as smaller mom-and-pop retailers.

The overflow crowd of about 250 furniture retail and manufacturer professionals heard about the association's efforts to minimize the U.S. International Trade Commission's preliminary ruling in June that led to the imposition of duties on Chinese wood bedroom furniture.

The antidumping petition, filed by the American Furniture Manufacturers for Legal Trade (a group of about 30 U.S. manufacturers spearheaded by Vaughan-Bassett Furniture Co.), claims that a "flood" of dumped Chinese bedroom furniture imports caused economic injury to domestic manufacturers.

The FRA contends that many of the petitioners were instrumental in helping the Chinese manufacturers gain entrance to the United States, some by outsourcing their product designs and others by importing furniture.

Retailers have recognized the opportunity in the past few years to go to China and other countries and import products directly from the manufacturers, thus cutting out the "middle-man," in many cases the U.S. manufacturer.

Because the ITC imposed duties, one single-store retailer indicated that he had to pay a $23,000 tariff on one container from China last month and was facing the possibility of going out of business if it continued. This example illustrates why the FRA said it already spent $900,000 and pledged to spend more on lawyers to fight the petition.

I will not debate the merits of the positions taken by the two sides locked in the petition battle. They both make strong arguments. However, it is unfortunate that the U.S. furniture industry is spinning so far out of control.

The industry will never be the same as more and more independent retailers scramble to import from overseas, while domestic manufacturers open their own retail stores at a torrid pace to compete with their former customers. Readers need to be aware of this issue and the implications to the broader wood products industry in North America. We need to find better ways of adjusting to the issues of globalization without creating this kind of turmoil and bitterness.

- Tom Dossenbach

I think Six Sigma is too detailed and complicated a quality management and continuous improvement system for the majority of woodworking companies. There are simpler ways to address quality issues in our industry that do not require Green Belt operatives, Black Belt team leaders and master Black Belt Six Sigma managers wielding heavy statistical controls. We need to stick to the basics of Continuous Improvement and Lean Manufacturing on a more practical level.

What Is Six Sigma?

Six Sigma is a rigorous, disciplined data-driven approach to minimizing defects in any type of process - manufacturing or otherwise. The goal is to statistically define how well a process is performed and to determine what improvements can be made to eliminate defects. Through continuous improvements up and down the processing chain, Six Sigma strives to cap defects at 3.4 per million events or what we used to call Zero Defects.

Who Needs It?

I cringe every time I hear an educational institution or other group is promoting a Six Sigma seminar for our industry. I fear that the programs will only frustrate and confound those woodworkers who attend them.

The whole notion of Six Sigma emerged from Motorola in 1987 and quickly spread to other companies such as Texas Instruments, IBM, GE, Whirlpool and, more recently, DuPont, Dow, Microsoft and American Express. Six Sigma takes a broader and more detailed approach to quality assurance than previous methods and it is not geared to manufacturing alone. For example, the principles of continuous improvement for the purpose of eliminating defects in the service industry are managed better by Six Sigma than lean management. For this reason, many hospitals are adopting Six Sigma in an attempt to improve their operations.

The companies listed above are all very large, complex businesses. Six Sigma has been credited with saving Motorola from the graveyard. It is conceivable that this giant company would not have survived this long without it. However, if you look at Motorola's stock value performance over the past 15 years, you will see that Six Sigma has not solved the company's global competitive issue. In fact, the company still struggles to maintain prominence in the communications industry.

The woodworking industry is not made of companies like Motorola or GE. Wood products companies do not need to adopt Six Sigma to make them more competitive. The program is not the silver bullet that could solve all of your company's woes nor will it enable you to compete with the Chinese.

What's the Alternative?

Ever heard someone say, "Stick to the basics," or "Walk before you run?" These statements are appropriate with regard to quality assurance in our industry at this time in its evolution.

If the central theme is to improve quality through eliminating defects, then Zero Defects is a much better approach than Six Sigma for the majority of woodworking operations to pursue.

It is critical to measure quality performance and to eliminate the causes of product defects as perceived by your customers throughout the entire manufacturing process. You do not need to be a PhD or Black Belt Sigma Six manager to implement Lean Manufacturing and Continuous Improvement.

The following checklist is a snapshot of implementing Six Sigma.

* Keep your customer requirements and expectations in focus at all times.

* Set goals and objectives.

* Educate and train suppliers and employees.

* Continuously measure the performance of your suppliers and company with regard to quality.

* Identify causes of unacceptable performance and take corrective action to prevent re-occurrence.

* Take a proactive or preventive approach to managing quality.

* Get total involvement and cooperation from suppliers and employees.

* Begin a never-ending journey to perfection.

Sound familiar? You may recognize these statements as an echo of achieving quality control through continuous improvement. But our goal is to prevent ALL waste in a company and wood product companies are better served by waging war on all types of waste through Lean Manufacturing.

If you still feel you are ready to try the Six Sigma approach to quality management, then I wish you luck. But review that decision carefully and, if you remain compelled to use Six Sigma, then integrate it with your Lean Manufacturing efforts instead of considering it as an entirely new initiative.

The Lesson

A one-man shop can implement Lean Manufacturing. Heck, anyone can conduct an audit to identify activities in his operation that add no value to the company's customers. In fact, this is what you should be doing each day; stamp out waste and make your company more efficient, competitive and profitable.

In summary, my advice is to deep six Six Sigma and concentrate on the basics we have published in this column for the past few years. They are more valid today than ever.

 

                                                                                                                                                                                           

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