Hi, guys. Welcome Teoh. Episode three The Modern History of Quality and Continuous Improvement. I'm Katherine, MC Iver and today's module were actually going to review modern quality and process improvement history on. We're going to talk about the context for how it became so prominent in the US
So where we left off in Yellow Belt was we talked about Motorola and we talked about how it did the lift.
The first they developed the 1st 6 Sigma program based off of what they learned from on Dr Domain and Dr Duran, some other names that pop up on the Toyota production system. So Taichi Ono and the Toyota family and we also talked about Whoa max machine that changed the world. So the book
where Jim MoMA took the Toyota production system and
disengaged it from Toyota and created lean on distorted marketing it as something that's available for all industries. So that's where we left off. If none of this sounds familiar, you're going to want to go to the history of continuous and quality and continuous improvement
in Yellow Belt, which will give you all about the Taiji Ono Toyota family
and bring us up to date. So with that picking up where we left off, Motorola was definitely the 1st 4 runner in it. This put six Sigma on the map. So Mitt Six Sigma wasn't a thing. It wasn't a term. Motorola actually was the one that queen to that phrase.
And remember, Sigma talks about standard deviation.
So six sigma is the number of defects within six standard deviations from the mean, so pretty creative. I mean, in the statisticians world, it saved us $15 million cost savings on the manufacturing for so people got really, really excited about it. Because if you think about $15 million in the late eighties,
it's like a lot of money.
Um and then we've talked when we learned about it, like when we when we're taking away, What are the things that we know about this? So some of the areas that there was opportunities for Motorola is the 1st 1 is it seemed voluntary. So only certain departments participated. It was entirely focused on manufacturing, which is
understandable given the fact that it came from
the rebuild of Japanese manufacturing post World War Two. So remember Deming and Juran tended to be the leaders and these little people who went to Japan to help maximize their manufacturing to rebuild their economy.
Onda had minimal focus on team dynamics, so Motorola was all about decreasing variation and getting it done
with that. We're talking about the mid the mentally eighties in the United States, so we had invested quite a bit and helping Japan get their feet under them. And then we noticed that Japan was kind of surpassing us for manufacturing. We started seeing things like Sony
and Samsung and the Toyota cars in the Honda cars,
and we started seeing American manufacturing kind of lagging behind. So President Reagan recognized this and created the Malcolm Baldridge Quality Award. So the theory behind it was that we wanted to motivate American companies to increase our quality and customer satisfaction
the converse side of that was the Japanese approach to manufacturing was better, faster, cheaper. So when we talk about you get what you pay for. Hopefully you've heard this phrase. It's not really thing that much anymore, because we all have higher expectations of quality. But at the time you bought threw away cars and throwaway TV's these sorts of things
Japanese manufacturing tended to
So with that, the Malcolm Baldridge Quality Award was a very, very deep analysis of the organization of their strategy, of their quality of their customer satisfaction. It's actually a really, really super cool program. If you have a company that slightly competitive, I would look into it. I had
the luxury of being one of their examiners for a couple of years, so getting to really look at the company and how they interact with their customers. But one of the very, very important things from the Malcolm Baldridge Quality Award, other than
you get to shake the president's hand if you win it nationally, which how cool is that is if your company wins,
you must share the quality improvement methods. So if you think about back to yellow. But we talked about internal and external benchmarking.
This is what started the culture of benchmarking. I would love to say that this was a contributing factor to the open source culture that we see now where we have publicly available information and we all try to make each other better.
But I want to say that this was kind of at the beginning edges of we can all learn from each other. And let's not be as weird about corporate espionage and rather focus on the foundations and pushed the industry up is a hole. So it was. It was very controversial at the time to say,
Hey, you do something really well, tell me how you do it.
But the goal was to stimulate American manufacturing. Specifically, the quality award had subsequently spread into four areas. So you have manufacturing, health care, education, and I think just general business where you can start looking at what are the specifics within those industries?
But it was super cool that we recognize this and we implemented this at a national.
So no surprises here. The first winner of the Malcolm Baldridge Quality Award was, of course, Motorola. Because why not? That's what they did.
So that being said, now that we finally got we, we finally recognize that were now sharing information. Um, the next two companies to get on the lean six Sigma bandwagon was Unisys and Texas Instruments.
So they're the ones that when we said Malcolm Baldrige, you gotta share your information because we're all gonna get better together.
They were the first request for it, and they focus primarily on eliminating defects, so variation and defects. They really wanted to go after defects because there's a lot of costs associated with scrap on. And then Allied Signal got into the game a little bit later, about a year later, and they took what
Motorola developed to the construct,
and they instead chose to focus on operating margins and processes. So Motorola focused only on manufacturing, Allied Signal said. We can do it from more than manufacturing. Let's look at it for processes. So it became process improvement. So this is how it how innovated. So them
Allied Signal took the Six Sigma tool set and started applying it to their research into about limits to their innovation department,
technology sales and business development. So it is no longer just on the manufacturing floor, looking at things like scrap a rate. It has now evolved into all of the areas of the business. And then this is the example that everybody knows G E and Jack Welch.
He is definitely, by and large
the most prolific. As's far as his talking about lean six sigma, his use of a he became very, very competitive with it. But here's where it was different. So Motorola was manufacturing floor.
Allied Signal's started talking about it as an entire organization rather than just manufacturing.
Jack Welch and G. E talked about team dynamics and behavioral change. So now when we talk about employee engagement being part of the culture of continuous improvement, Jack Welch made this a condition of employment.
Eso if you were a manager, 40% of your bonus was tied to the success of your lean Six Sigma projects,
and you had to run projects to get promoted. So he was really very militant about his application of lean six Sigma.
So when we talk about how we got here today, we want to think about Motorola's started the trend, but they're not. They didn't create the lean Six Sigma that we recognize today. We have fast facets from Allied Signal where they started saying, Hey, this works for whole companies
and then we have quite a bit from G E, where we start talking about behavior and employee engagement and participation.
I mean, the the other thing that we discussed was the Malcolm Baldridge Award and how it contributed to benchmarking an open source information and how it was an investment in American manufacturing because we were falling behind to Japan. Post World War Two rebuild.
So our next video is going to be or what is a process refresher. So we're gonna go over those again and create that foundation for our greenbelt practice, So I will see you guys there.