Six Sigma Study Reveals Gains, Missed Potential

New research from the Juran Institute indicates Six Sigma continues to provide high returns despite generally being applied in low yield ways.

"The good news is that among the companies studied, Six Sigma programs returned more than double the investment," says Brian Swayne, a Juran Institute vice president. "The average program cost $609,000 in Six Sigma projects and returned $1,300,000.

Other data include:

• Projects with a value of $5 million or more are now routine.
• Gains by companies with three years of Six Sigma experience were 13% greater than those of newer users.
• The measure stage of the DMAIC (define, measure, analyze, improve and control) process is the most difficult and costly.

Although Six Sigma focuses on listening to the voice of the customer, the study showed most projects were aimed at cost reduction instead. "This means the companies studied generally are failing to use Six Sigma to maximum advantage for revenue growth," says Swayne.

Swayne offers ways to maximize Six Sigma effectiveness, including long-term thinking, involvement of sales and marketing people, and CEO and CFO buy-in.

More details on the study, conducted with Greenwich Associates, a market research firm, can be read in an article by Swayne, "Bottom-Line Success Clouds Unrealized Potential," in the upcoming May issue of ASQ's Six Sigma Forum Magazine.
 

Latest Customer Satisfaction Measures Show Slight Decline

The overall American Customer Satisfaction Index (ACSI) declined slightly in the fourth quarter of 2002, to 72.9 on a 100-point scale from 73.1 in the third quarter.

The fourth quarter survey specifically measured satisfaction with the quality of products and services in the e-commerce, retail and finance sectors and compared those figures to measures of those sectors in 2001.

Satisfaction with e-commerce saw a significant in-crease of 6.4% to 78. Amazon.com topped every firm on the quarter's list with a score of 88, with Barnesandnoble.com right behind at 87. All companies measured in the e-commerce category--retail, auction/reverse auction and brokerages--saw improvement. Travel sites were measured for the first time and had scores in the high 70s and low 80s.

Retail satisfaction held fairly steady, with a small decline of 0.3% to 75. Kohl's, measured for the first time in the department and discount store category, topped the entire retail sector with a score of 84. Next highest was Publix in the supermarket category, at 81. Under restaurants, KFC's score went up a significant 9.5%, to 69. Home Depot saw the biggest decline in the quarter, down 5.3% to a score of 71.

The financial service sector score declined 2.8% overall to a score of 74. Among banks, Bank One's score went up the most, 6.1%, to 70. In the healthcare category, Blue Cross/Blue Shield saw the same increase and score as Bank One.

The ACSI is produced by the National Quality Research Center at the University of Michigan, the CFI Group and ASQ. Complete company scores and other information can be found at www.theacsi.org.
 

Pentagon's Resilient Structure Limited Sept. 11 Damage

Analysis by a team of structural, fire protection and forensic engineers has concluded the 60-year-old Pentagon near Washington, DC, possessed a resilient structural system that curtailed the damage done by the intentional crash of a hijacked plane into it on Sept. 11, 2001.

The report indicates that following the crash, the structural system redistributed the weight of the building and its contents among the columns left standing, limiting the collapse of floors above the point of impact.

The team concluded the Pentagon's structural performance validates steps taken, including continuity, redundancy in design and construction and spirally steel reinforced concrete columns that absorb energy from a lateral load, to reduce collapse resulting from unlikely events.
 

NQI Offers Tour of 2002 CAE Toronto Area Winners

Canada's National Quality Institute (NQI) is offering a tour of four Toronto area winners of Canada Awards for Excellence on May 21 and 22.

The tour of facilities and discussion of best practices will include Dofasco and NCR, healthy workplace trophy recipients, and AT&T and Homewood Health Centre, quality recipients.

The coach tour will begin at the NQI offices. For more information, call 800-263-9648 x227, or e-mail stoehr.adam@nqi.ca.

Third-Party EMS Registration Practices Defended

"Third-Party Auditing of Environmental Management Systems: U.S. Registration Practices for ISO 14001," a recent report by the National Academy of Public Administration (NAPA), details several recommendations to help strengthen U.S. third-party registration practices for environmental management systems (EMS).

The American National Standards Institute-Registrar Accreditation Board National Accreditation Program (ANSI-RAB NAP) has answered NAPA by pointing out changes and improvements it has already made.

"The ANSI-RAB NAP has implemented new guidance and procedures to enhance public confidence in the system," said Lane Hallenbeck, ANSI's vice president for conformity assessment. "Some of the recommendations have been addressed by changes in the requirements governing third-party ISO 14001 registration. In other instances, the ANSI-RAB NAP has implemented its own improvements."

The NAPA report calls on ANSI-RAB NAP to play a central role in the EMS registration system for the United States, exhorting the organization to "act fairly but vigorously to correct, sanction or suspend poorly performing registrars and auditors."

For initial accreditation, for reaccreditation every four years and annually, ANSI-RAB NAP auditors conduct office audits of registrars and observe registrars' auditing and registration practices at facilities seeking registration. If these audits indicate serious nonconformances that are not addressed in a timely manner, accreditation may be suspended or withdrawn, according to ANSI-RAB NAP.

The NAPA report also cites a need for more guidance in a number of areas, including auditor independence and preassessment audits, and the addition of value during registration and surveillance audits. In response, ANSI-RAB NAP notes impartiality and freedom from conflict of interest are clear requirements of ISO/IEC Guide 66:1999, and International Accreditation Forum (IAF) guidance requires an auditor be fully independent of the organization being assessed.

The NAPA report concludes surveillance audits and assessments of continual EMS improvement need more attention. ANSI-RAB NAP believes the revised IAF guidance on assessing continual improvement, surveillance and reassessment meets this need.

During its audits of registrars, the ANSI-RAB NAP has begun assessing the continuity of an auditor or audit team from audit to audit. Since the report was published, NAP has begun assigning an executive audit team leader to each registrar for the duration of the accreditation cycle.

The NAPA report can be found at http://www.napawash.org/Pubs/NIST6-2-04.htm.

Congress Restores Aid For Small Manufacturers

The U.S. Congress has restored funds for the National Institute of Standards and Technology's Manufacturing Extension Partnership (MEP) program in the 2003 budget.

The Bush administration had proposed an 88% reduction from the 2002 funding level of $106.5 million, which would have effectively eliminated the national MEP program, according to Mike Wojcicki, president of the Modernization Forum, the trade association for the MEP centers.

MEP is a network of not-for-profit centers with 400 locations in the United States and Puerto Rico providing technical assistance and business support to small manufacturers.

Wojcicki says a study by the U.S. Census Bureau found MEP clients experience productivity gains more than four times greater than those of comparable firms. Strong bottom-line effects during 2001 include new sales, new investment and retained or new jobs.
 

VISION SYSTEM DONATED: RAM Optical Instrumentation Inc., a division of Newport Corp. in Irvine, CA, has donated a vision system to Tarrant County College's (TCC) South Campus Quality Technology Program. The system, called Data Star, is a noncontact video measuring machine. TCC offers a degree program in quality technology and training in three measuring systems: vision, laser technology and coordinate measuring machine. TCC is located in the Fort Worth, TX, area.

HEALTHCARE RESOURCES: First, the Foundation for Accountability (FACCT) has launched a clearinghouse for consumer centered healthcare materials, resources and information. It includes documents, web links and tools representing systematic solutions backed by theory and research. Materials can be contributed to nbateman@facct.org. Second, the Agency for Healthcare Research and Quality has launched a clearinghouse containing current evidence based quality measures and measures sets available to evaluate and improve the quality of healthcare at www.qualitymeasures.ahrq.gov. Organizations interested in contributing quality measures should e-mail info@qualitymeasures.ahrq.gov.

SOCIAL RESPONSIBILITY STUDY: An advisory group convened by the International Organization for Standardization, known as ISO, has recommended two steps to assist in determining whether to develop standards addressing the social responsibility of organizations. These steps are to develop a report of worldwide, state of the art codes, guidelines and specifications, and to study whether the preparation of a management system guideline standard that includes self-declaration and excludes third-party conformity assessment is justified.

INTERNATIONAL TRADE GUIDE: ISO says the new ISO/IEC Guide 68, Arrangements for the Recognition and Acceptance of Conformity Assessment Results, provides procedures for establishing and maintaining cooperation among the entities that carry out conformity assessments and the accreditation bodies that verify their competence. Copies are available at sales@iso.org.