20 Apr Evolving beyond the Six Sigma mentality in manufacturing
by Jim Nader, Tom Lovell
If you’re in the manufacturing industry, you’re in the Six Sigma industry. Based on the idea that a near-perfect end product is always possible, Six Sigma is the methodology fueling so much of internal manufacturing processes, and for good reason. It’s estimated that Six Sigma has saved Fortune 500 companies over $400 billion since 1987.
But is Six Sigma always going to be the best approach for maintaining a strong customer base? Not necessarily. Take one look at industry disruptors like Tesla, GE, and Toyota, and we know there has to be something else at play to keep your customers your customers. As manufacturing professional and iSixSigma contributor Forrest W. Breyfogle noted, “Six Sigma sometimes is deployed for projects that provide little payoff…Six Sigma does not provide the integrated excellence at all operational and corporate levels that should be required and can be measured with bottom-line predictability.”
It’s time for manufacturers to consider how business transformation initiatives could benefit from a different approach than the old standbys: leading with customer experience in mind. Industry disruptors are not companies practicing Six Sigma in bigger, better ways—they’re the companies completely turning the equation around and providing customer value with a comprehensive experience.
We’d like to spend some time evaluating the old manufacturer mentality, why it doesn’t work for business transformation work, and what organizations can do to adopt the current, modern approach in their processes:
Before: Product excellence first
For decades, the manufacturing culture has put product excellence on the highest pedestal. It’s how companies have been dominating the market and maintaining control over large customer bases. In correspondence with that, the engineers tasked with developing these products assert their worth as a resource by making products even more perfect. Engineers aren’t just there to build something that works—they’re there to build something that won’t break. The cost of recalls, faulty parts and pieces, botched solutions, etc. present huge liability and safety concerns for the industry. All of this has fostered—rightfully so—a culture of Six Sigma discipleship.
Six Sigma requires final designs that have very little variability or chances for error. It pushes designers and engineers and, ultimately, the entire company, to not move forward on a given product until that 99.9999998% standard deviation from the mean has been attained.
Now, this mentality is great for product development. We certainly expect our products to be safe, functional, and free of error. However, this mindset isn’t ideal for business transformation projects where agile, adaptable, and fast-moving initiatives are the name of the game. Manufacturers have proven themselves to be masters at product excellence. But it’s time to pivot that drive for perfection to a more flexible methodology better suited to the initiatives driving the revolution behind digital customer experience—the new trademark sign of an industry disruptor.
Now: Leading with customer experience
When we speak with engineers and manufacturing professionals who are trying to be disruptive in their market, it’s clear there is a desire to reach their customers where they are and stay relevant. This is great. However, it’s also more often than not evident that their minds are still wired in a way that feels every stage of the business transformation process has to be done with utmost perfection. This is less than ideal, and can actually hinder business transformation efforts that are trying to bring the customer experience into the digital age as quickly as possible.
Product quality is still an expectation, to be sure. But that’s no longer a business strategy, it’s just a thing your company does. What really determines the market leaders now is how quickly they pivot to changing customer demands and how well they cater to the experience—not just serving up a high-quality product. Manufacturing decision-makers need to make sure their key stakeholders don’t just have the desire to move into new, disruptive markets but that they’re also prepared to leave old methodologies behind in favor of the speed and agility necessary for true transformation.
Take a look at the auto industry: there used to be just a handful of staple vehicle manufacturers who controlled all the customers, and their renown for quality was a seeming guarantee of their market permanence. However, we’ve now seen hundreds of new companies enter the auto business by doing what the old standbys hadn’t yet figured out: how to go fast, enter the test market, and present a minimum viable product. The engineering prowess wasn’t thrown out the window, to be sure, but it also wasn’t the leading mindset determining how quickly or slowly new products could be released. These companies knew that the customer experience, not just the physical product in their hands, was a huge value-add just begging for attention.
The barrier to entry is not as high as manufacturing stalwarts once thought. Six Sigma is great for product quality control—but the current world isn’t just looking at how many digits of perfection your physical product has. The business strategy of now is people-centric. Manufacturers that let the voice of the customer drive research, development, and agile production cycles are the manufacturers soon to dominate. Find ways to constantly present new solutions to your customers’ problems—not just offer more options to select from.
What can your organization do about it?
To truly pivot and adopt this new mindset as a company-wide culture, your manufacturing organization is going to need the business processes and IT systems in place to support the change. What kind of business experimentation do your current tech stack and operational hierarchy support? What tools would make it easier or more second-nature to test your market and try out new disruptive strategies without collapsing the business at large? It’s questions like these you’ll have to start asking yourself to become more customer experience focused.
Simplus has years of experience working hand-in-hand with manufacturers through these processes and their corresponding IT systems. We’ve helped countless companies build out agile innovation for product development, mature their sales processes, and integrate systems for partner collaboration. Ultimately, our goal with each of these clients has been to bring the data insights and processes forward that uphold transformative strategies. We realize that while the final destination and dream landing place for transformation goals may take years, the results need to start showing up as soon as possible. We focus on getting your organization started with low-hanging value-adds quickly and safely so you can start collecting and acting on customer data now.
Fostering a collaborative, experience-centered culture in your organization can bring your business closer to the customer and fill your supporting IT systems with actionable data to drive constant innovation. The journey doesn’t end with becoming an agile, digital organization. We have ongoing relationships with numerous manufacturers eager to continue building out their customer journeys in full with frictionless field service, eCommerce portals, partner communities, etc. Take a look at what we’ve done with long-time client Mitsubishi Electric HVAC here.
If not for constant agility and adapting to the customer, we’d all still be driving the Model T. So despite the years of perfect, fine-tooth methodology defining manufacturer culture, manufacturing isn’t just about best-in-class product excellence. It’s about customer wants, expectations, and demands for constant innovation to best meet their needs—the forces that have given us 200mph electric cars. Manufacturers that take the time to pivot to more agile methodologies and holistic digital transformations will find themselves ahead of the curve and being crowned the new market leaders. Learn how Simplus can help your company make a roadmap for this kind of transformation today.
Jim is Manufacturing Sales Director here at Simplus. He has been working in the Salesforce platform ecosystem for over six years and in the automotive and manufacturing advisory for over 25 years. Nader provides program guidance and manufacturing subject matter expertise, facilitates client project planning, and provides best practice insights on sales, service, and forecasting processes. Nader has global experience doing business in Japan, Korea, China, Germany, France, Italy, and England.
Tom is VP, Manufacturing CoE here at Simplus. For over 15 years, Tom has helped companies implement data and process-driven strategies to bridge the gap between business and IT. These strategies have improved patient outcomes, reduced financial risk, and improved operational efficiency in healthcare organizations while bringing to bear streamlined costs, reduced risk, and improved revenue at manufacturers. His passion is architecting and sharing practical solutions that deliver valuable results for customers.