Statistics in the News: Chapter 22 Quality
Quality Revival, Part 2: Ford Embraces Six Sigma
In the 1980s, when Japanese imports threatened the U.S. auto
industry, the Ford Motor Company turned to the management
philosophy of W. Edwards Deming (Biography 22.1). The controversial
and curmudgeonly octogenarian was recruited to jump-start
Ford's quality movement and the results were stunning: After
incurring $3 billion in losses during 1979-82, Ford achieved
huge successes with its Taurus-Sable line of cars. By 1986,
Ford was the most profitable U.S. auto company.
More recently, however, Ford's hard-won quality image became
tarnished. Consider the deadly rollovers of Ford Explorers
equipped with Firestone tires. Consider costly recalls of
several older models and numerous delays in the introduction
of new models. Customer surveys reflected the impression that
Ford quality was lagging behind the competition.
In 1999, Ford's chief executive, Jacques Nasser, turned to
Six Sigma, an approach popularized by General Electric's John
F. Welch, Jr., that tolerates no more than 3.5 defects per
million operations. Using the new approach, one Ford engineer
discovered the source of vibrations in the Super Duty F-series
trucks and Excursion sport utility vehicles: a subtle alteration
in the design of parts coming from an outside supplier. The
conclusion was typical. The supplier had passed a quality
test years ago, but the required constant collaboration between
Ford and the supplier's design and manufacturing divisions
had lapsed. (Apparently, Deming's champions at Ford had retired
and new executives had introduced other priorities, such as
cutting costs at the expense of quality.)
What is the difference between the old-style Deming and the
new Six Sigma approaches?
The Deming approach was defiantly philosophical. It eschewed
explicit profit goals and held that systematic never-ending
improvements in all processes would eventually and inevitably
lead to profit. Thus, one would fix any given problem, regardless
of cost. The Six Sigma approach, on the other hand, dictates
a careful benefit-cost analysis. It is unashamedly profit-oriented.
To be approved, each project must achieve at least $250,000
in net benefits.
Source: Adapted from Andrea Gabor, "Quality Revival,
Part 2: Ford Embraces Six Sigma," The New York Times, June
13, 2001, p. C5.
Chowdury, Subir. The Power of Six Sigma: An Inspiring
Tale of How Six Sigma Is Transforming the Way We Work
(Dearborn Trade, 2001). The executive vice
president of the American Supplier Institute berates U.S.
automakers for overconfidence and the false belief that quality,
once achieved, will be automatically maintained.
Hoerl, Roger and Ronald D. Snee. Statistical Thinking:
Improving Business Performance(Duxbury Press, 2001).
A quality expert from General Electric's Corporate
Research and Development Division and a senior management
consultant for Sigma Breakthrough Technologies, Inc. team
up to discuss the strategic value of data and statistics within
the context of real problems. The authors describe the role
of statistical thinking and methods in problem solving and
process improvement, including the need for understanding,
quantifying, and reducing variation.
"The Quest for Quality," Keeping Tab (#34 of the MINITAB
newsletter, March 2001).
Features success stories from 3M, Acadia Polymers,
American Express, Lear, New York Air Brake, Toshiba, and more.
For this and other issues, visit http://www.minitab.com/resources/keepingtab.