Six Sigma at Motorola

            
 
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Case Details:

Case Code : OPER050
Case Length : 13 Pages
Period : 1988-2005
Organization : Motorola
Pub Date : 2005
Teaching Note :Not Available
Countries : US
Industry : Telecom

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"In 1981, we developed, as one of the top 10 goals of the company, the Five Year, Tenfold Improvement Program. This meant that, no matter the operation you were in or your present level of quality performance, or whether you were a service organization or a manufacturing arm, management's goal was to have you improve that level by an order of magnitude in five years. Today, we carry this forward with a program called Six Sigma…It's the next major step toward 100-percent-perfect performance, which is the only acceptable goal."1

- William J. Weisz, CEO of Motorola 1993-1997.

"In 1986 Motorola invented Six Sigma, a quality and business improvement methodology that is revolutionizing industry. Two decades and two Malcolm Baldridge Quality Awards later, Motorola is still finding new ways to reinvent itself using this technique."2

- Dan Tegel, Global Director, Digital Six Sigma Business Improvement, Motorola and Rick Kriva, Vice President, Product Management, Motorola.

Thrust on Quality

In 2002, the US based Motorola Inc. (Motorola)3 achieved the unique distinction of receiving the Malcolm Baldrige National Quality Award4 for the second time. Motorola became the only company in the world to have received this award twice, having won it earlier in 1988.

Commenting on Motorola's quality standards, the Baldrige National Quality Program had stated in 1988, "Like an Olympic athlete seeking to score better than determined world rivals, Motorola Inc. seeks sales victories in world markets for electronic components and equipment by improving the quality of its own performance. For Motorola, quality improvement leading to total customer satisfaction is the key."5

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Motorola had earned accolades and recognition from the corporate world for its 'Six Sigma' initiatives, which had its origin in the quality drive launched by the company in the early 1980s (Refer Exhibit I for a brief note on the Six Sigma concept).

In 1981, the company launched an ambitious and innovative quality drive for a ten-fold improvement in the quality of its products and services, after the company lost business to its Japanese competitors.

Motorola's Six Sigma quality target aimed at achieving not more than 3.4 defects per million products. The company aimed to achieve total customer satisfaction by providing the best quality products and services.

These efforts were rewarded with the Malcolm Baldrige Award and significant increase in company's sales.

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1]  H James Harrington, "Performance Improvement: Six Sigma's Long Term Impact," www.qualitydigest.com, June 2001.

2] Dan Tegel and Rick Kriva, "Motorola's Next Generation of Six Sigma - Six Sigma for New Product Development," www.pdma.org, July 2004.

3] Motorola is a leading global communication services provider offering wireless, broadband and automotive communications technologies and embedded electronic products. The company has six business segments - Personal Communications, Global Telecom Solutions, Commercial, Government and Industrial Solutions, Integrated Electronic Systems, Broadband Communications and other Products. Cellular products made up nearly 40 per cent of Motorola's 2004 sales, and the company was the world's third largest manufacturer of semiconductors (about 25 per cent of sales). Motorola had operations in over 40 countries and more than 50 per cent of its sales came from foreign markets. For the fiscal ending December 31, 2004, the company posted total revenues of $31,323 mn and net income of $1,532 mn.

4] The US Congress established the Malcolm Baldrige National Quality Award (MBNQA) in 1987 to recognize quality and business achievements of the companies in the US. Presented annually by the country's President, MBNQA is considered to be the highest honor for excellence in performance both nationally and internationally. These awards were given in five categories that included manufacturing, service, small business, education and health care. The criteria for judging the companies included leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management, and results.

5] "Malcolm Baldrige National Quality Award 1988 Winner Motorola Inc,"www.quality.nist.gov, 1988.

 

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