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The Implementation of Six Sigma in Construction in China

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 The Implementation of Six Sigma in
Construction in China

Dr Abdussalam Shibani

Lecturer Coventry university

Yurui Sun

MSC Coventry University

European Journal of Research and

Reflection in Management Sciences
 Abstract

Six Sigma has gained broad recognition. To sustaining developing, most excellent enterprises

in the world have engaged or implemented Six Sigma management. Since its was introduced

to China in the 1990s, more and more Chinese enterprises have also begun to realize its

advancement. These enterprises have improved their core competitiveness because of the

trial of applying and implementing Six Sigma.

Efficiency and quality are the two key elements of Six Sigma management in manufacturing

enterprises. However, Chinese businesses usually used Six Sigma management to improve the

quality of products in manufacturing rather than studying the practical application in the

construction management.

By setting up the DMAIC in construction enterprises as well as blending the Six Sigma

calculation with the production standard, not only the advantages or disadvantages of

construction production is judged to improve the stability of products, but also the economic

return is increased by improving the quality of production. Moreover, making the

standardization and industrialization of construction becomes a possible thing.

This paper analyzes the characteristics of the process in construction and the current situation

of construction in China, point out the significance of applying Six Sigma management in

construction industry. Also, demonstrate its feasibility by listing the specific model of

operation. In accordance with the production process of a certain construction enterprise, it

analyzes and optimizes the application of Six Sigma over its chain management and design.

By, using Six Sigma common statistical analysis to conduct a mathematical deduction.

Comparing with the old model to improve the impact factor for improving the quality of

products and reducing production costs.

Finally, analyzing the economic benefits by the adoption of Six Sigma management. And,

making a subsequently corresponding control process to ensure the effectiveness of the

standardization constructions

1
 Background of Research

Typically, anyone go to the doctor because they feel sick or have health problems.
Basically, doctors will do some suitable therapies after their check with the patient.
Such as, medication, hospitalization or surgery. These treatments can cure the patient
or not. More or less, doctors often encourage people do regular checks to prevent
problems. Essentially, enterprises need regular checks, just like people, but business
leaders usually find the problems of their company until the illness has happened. the
expert of Six Sigma likes a doctor of company. They will check and determine the
illness when a company has symptoms. And, they will intervene the sick part or
process. To recommend or perform some action to improve or cure, depending on the
disease. In this progress, the tools of Six Sigma are seen as medicine. The success of
Motorola and GE makes Six Sigma became a household name in commercial world.
Today, many world-class companies have achieved the considerable economic benefit
by using Six Sigma, like American Express, DuPont, Eastman Kodak, Sony, Toshiba,
and Xerox (Gitlow 2009).

In recent years, China real estate market has developed dramatically. The construction
project quality is improved markedly because of the modernization and mechanization
of the construction engineering. After the development in nearly six decades, Chinese
construction enterprises have gained obvious advantages on talents aspect and
technology aspect. However, with the increasingly market competition and continuous
appearance of different project types, two very serious problems arose in construction
management in China. They are instruction redundancy and management confusion. A
very obvious phenomenon is that the same error was often happened in numbers of
similar projects as lots of useful experiences were not adopted in other similar

2
projects. Especially, after China joined WTO, Chinese construction companies not
only got a chance to stand on the world stage, but also well-known international
construction management companies and excellent construction enterprises got the
opportunity to enter in Chinese construction industry. At the same time, foreign and
advanced engineering technologies and management concepts collided with Chinese
management methods and traditional concept again and again. Hence, the competition
became more and more fierce in construction in China. Many of Chinese construction
enterprises started to learn and study management. They hoped to get a series of
rational and efficient management methods in order to survive and develop in the
fierce market competition.

Six Sigma management, as a way of quality improvement, was born into Motorola,
and it was blossomed by the successful using of GE, Motorola, Allied-signal, DELL
and SIMENS. Typically, GE obtained enormous economic benefit by implementing it.
Jack. Welch, who was the CEO of GE, said that Six Sigma is the most significant
development strategy of GE, which was never experienced. Actually, as early as 2003,
the Six Sigma has dominated various markets. In the manufacturing industry, 49.3%
of enterprises have used it, and this number was 38.2% in service industry, 12.5% in
other industries (Ma and He 2007)

Six Sigma is a set of techniques and tools for process improvement. Six Sigma seeks
to improve the output quality of process by identifying and removing the reason of
defects and minimizing variability in manufacturing and business processes. It uses a
set of quality management methods, mainly empirical, statistical methods, and creates
a special organization infrastructure. Each Six Sigma project carried out within an
organization follows a defined sequence of steps and has quantified value targets,
such as, reduce process duration, reduce pollution, reduce costs, increase customer
satisfaction, and increase profits. The term Six Sigma originated from terminology
associated with manufacturing. Specifically, terms associated with statistical modeling
of manufacturing processes. The maturity of a manufacturing process can be

3
described by a sigma rating indicating its yield or the percentage of defect-free
products it creates. A six sigma process is one in which 99.99966% of all
opportunities to produce some feature of a part are statistically expected to be free of
defects (3.4 defective features / million opportunities). Motorola set a goal of "six
sigma" for all of its manufacturing operations, and this goal became a by-word for the
management and engineering practices used to achieve it. This chapter will review
lots of details of Six Sigma, such as, meaning, development, organization,
methodology, etc.

2.2 The Origin of Six Sigma

In the last century between the 1970s and 1980s, Motorola lost to Japanese companies
in the competition of radio market, followed by lost Beep Pager market as well. The
reason of failure of Motorola is that the quality of similar Japanese products is more
better than that of Motorola. Then, Paul.Galvin,who was the CEO of Motorola, with
other management leaders of Motorola visited Japanese enterprises. They were
impressed by the Japanese produce progress. Coincidentally, a television production
company of Motorola was merged by a Japanese company. Japanese changed the
original production process and started to produce products. Moreover, the scrap rate
became the 1/20 of the original scrap rate with the same management person, same
technology and same design. Obviously, there is a serious problem in production
management of Motorola. In 1985, Motorola had to face bankruptcy in the fierce
market competition. The cruel fact told the leaderships, they must made some changes
to improve the production process (Taghizadegan, S. 2010). Afterwards, CEO led his
team to study Six Sigma quality management , they hoped they can fill the quality gap
between their products and Japanese products(Ibid 2010). Interestingly, the reason
why this quality management was called Six Sigma is that Mr. Galvin liked this this
name, it sounded like a brand new limousine. And, he believed this novelty can easy
attract more attention(Ibid 2010).

Shortly afterwards, in the mid-nineties, Six Sigma was adopted by GE. This

4
comprehensive quality management method evolved into a effective and synthesis
management technique which includes design, improvement and optimizing of
business process. And it can supply a serious of exploitation tools for design,
production and services. With the globalization, servicization, e-commerce and other
strategies of GE were actualized, Six Sigma became a important strategy for many
aspiring enterprises. Six Sigma gradually developed into a benchmark for identifying
the goal of enterprise strategy and product development , in which the customer is the
major subject. These is the origin of Six Sigma(Ding, L. 2009).

2.3 The Development of Six Sigma

In the last decade of the last century, after the successful experiences of Total Quality
Management (TQM) was summarized, Six Sigma became an effective and excellent
management mode which can improve the economic benefits and competitiveness of
enterprises because it abstracted the techniques and methods from TQM. GE, DELL,
HP, SONY, Toshiba and other lots of multinational companies proved Six Sigma is
effective and advanced. Hence, Six Sigma was attracted more and more attention
from Chinese administrative departments and research institutions. Meanwhile, Six
Sigma was started to promote in Chinese enterprises, and many companies have tried
to use Six Sigma management(Ding, L. 2009). As a result, the birth of Six Sigma
system, which originated from Motorola, is thought as one of the milestones in quality
management history. In household appliance industry, it is introduced by Whirlpool
Corporation, GE, LG, and DELL. In logistics industry, it is introduced by DHL. In
chemical industry, it is introduced by Dow Chemical, Dupont, Agilent, GSK. In
communication industry, it is introduced by Vodafone, Korea Tel. And, in financial
industry, it is introduced by BOA, Merrill Lynch, HSBC. Even, in armed forces of
America introduced Six Sigma system as well (Ibid 2009). Figure 2.1 clearly shows
the development of Six Sigma.

5
 In 1988, Motorola won the Baldrige In 2001, Caterpillar, which was
National Quality award. This is the the first company, enabled Six In 2007, Weichai
first time a enterprise won this award. Sigma in international scope. Power Co., Ltd.
started to using Six
Sigma.
Six Sigma concept is
GE introduced Six Sigma
created in 1984.
by Jack Welch in 1995.

The era of
1980 1990 2000
TQM.

Motorola quoted Six Sigma in 1987.

In 2004, Six Sigma
Telefonaktiebolaget LM Ericsson was spread to the
introduced Six Sigma management in world.
1994.

Figure 2.1 The development of Six Sigma.

2.4 The Meaning of Six Sigma

Six Sigma has tow different meaning. The first one is statistics perspective. Another
one is management perspective (Pyzdek, T. and Keller, P. A 2010). Because it is a
quality management which is based on data statistics and highlights perfect.

The statistics principle of Six Sigma. The management principle of Six Sigma.

1σ = 30.85%

2σ = 69.15% A goal for improve the performance.

3σ = 93.32% A method of decision-making by data and fact.
A serious of tools of systematic solving problems.
4σ = 99.38% A philosophy by focus on customer.
5σ = 99.977% A management system for obtaining competitiveness.

Six Sigma = 99.99966%

6
 Figure 2.2 Principle of Six Sigma.

2.4.1 The Statistics Meaning of Six Sigma

The meaning of “σ” is “standard deviation” in mathematical statistics. To be more

precise, it is a index, and it is used to describe the degree of dispersion for the output
of a random set of data or process. Usually, it is used as a statistics to estimate the
extent of fluctuation characteristic of products or production processes (Pyzdek, T.
and Keller, P. A 2010).

The Sigma quality level is a kind of measurement, and used for evaluating the
fluctuation characteristics of products or production processes. To paraphrase, the
average value, standard deviation of progress output will be compared with the target
value, limitation of costumer’s requirement by Sigma quality level. The higher level
of Sigma quality means the process has stronger capabilities to satisfy the customer’s
requirement. Similarly, the lower level of Sigma quality means the process cannot
fulfill the customers totally. In fact, the Six Sigma represents the quality level in Six
Sigma management method, there is only 3 or 4 faults in 1,000,000 opportunities in
Six Sigma quality level (Pyzdek, T. and Keller, P. A (2010).

Figure 2.3 Migration of the distribution of product characteristics.

7
In figure 2.3, basically, there are two connection between Sigma level and defect rate
and pass rate. One is no offset, and other one is ±1.5σoffset.

no offset ±1.5σoffset
Sigma level Defect Per Million Defect Per
Pass rate(％) Pass rate(％)
(ppm) Million (ppm)
1.0 68.27 317300 30.23 697700

2.0 95.45 45500 69.13 308700

3.0 99.73 2700 93.32 66810

4.0 99.9937 63 99.3790 6210

5.0 99.999943 0.57 99.97670 233

6.0 99.99999983 0.0018 99.999660 3.4

Figure 2.4 No offset and ±1.5σoffset.

Essentially, the shift is always happened with the times passing by in the production
processes, even using the best production process. So, Six Sigma quality generally
means the product’s defect rate is 3.4ppm. And, the +/-1.5σ shift in the central of
normal distribution is defined as that the defect of running a long term process.

The management expert Snee and Hoerl (2012) defined Six Sigma management like
that it is a business strategy for enhancing customer satisfaction and enterprise
economic growth simultaneously.

Nowadays, the quality level is three Sigma in China. That means the yield is 99.32％.
Unfortunately, this yield has satisfied lots of mangers or workers in various industries.

Rework is a normal phenomenon in those people’s mind, especially, in construction

industry. According to the national statistics in China, if in the production process the
yield is lower than 99.32%, then the following situation will much more likely
happened. For example, averagely, the supply of water, electricity or heating would be
interrupted 9 hours per year. And, 8000 ㎡ external tiles would be fallen off due to
external wall hollowing. With the improvement of life quality, the requirement of

8
product quality is improved as well. Hence, the management method, like Six Sigma,
becomes more and more important because it can control the product’s quality and
service process.

2.6 The Methodology of Six Sigma

2.6.1 The Improvement Model of Six Sigma - DMAIC

After decades development of Six Sigma, Six Sigma has evolved a high-efficiency
management methodology for solving production problems and improving economic
benefits. Its specific application method is DMAIC. Customer is the focus in DMAIC.
Moreover, continues improvement, customer’s satisfaction and business goal are
closely connected by DMAIC. Shortly, its main method is to use data to describe
products and processes. And then, improving management with quantitative analysis
and statistical thinking. The pursuit of it is to break traditional thinking. In other word,
to pursue the real change. Using new methods to solve the problem to adapt the
requirement of continuous improvement. Compare with before, process becomes
more important. Reducing risks, cost reduction, and cut down project time are
achieved by reducing errors and faults in the process. Essentially, DMAIC represents
five stage of improvement method of Six Sigma, their details are as follow
( Michalski and King 2003):

(1) D - define

Understanding the voice of customers (VOC). In this section, the key requirement is
identified. And, to identify critical-to-quality (CTQ). To be more precise, identifying
the products and processes which need to improve. This phase will decide the key
quality characteristics of next four sections. The scope of the project is defined
reasonably in this phase.

(2) M- measurement

In this phase, the major work is to Measure and evaluate the existing process. Thereby,
to set goals and performance measurement standard. Also, to measure the

9
effectiveness of the measure system.

(3) A - analysis

In this analysis phase, main method is to use statistics to analyze. After evaluating the
current performance, collecting necessary data. Then, to find the reasons of problems,
find potential problems elements which can affect performance. There are many
method which can analyze causes. But no matter use which one, it cannot use without
data statistics. Commonly, the key factors that affect the current performance is
presented after multiple analysis.

(4) I - improvement

The major task of this stage is to find out the key factors which influencing the output
of the process, and take improvement action for key elements. The most difference
between Six Sigma management and other management is the attention of process. So,
the main improvement method is process re-engineering, which first considered point
is core process, then is auxiliary processes. The success of improvement measures is
bound up with measurement phase and analysis phase. For example, if the result of
measurement is not accurate, then, obviously, the result of analysis is not right as well.
Undoubtedly, the improvement will not obtain a excellent effect. Thus, there is no
effect of improvement, the measurement and analysis needs to rework until the
positive effect of improvement is appeared.

(5) C - control

In order to firm the effect of above improvement, control phase is very important. The
failure always is not easy to avoid in innovation process. Sometimes, the old problems
are solved, but it may still has some remaining problems which is not obvious, or
creating new contradiction. Hence, the DMAIC usually likes a lift cycle, it is run
again and again to achieve the continuous improvement.

10
 Figure 2.7 DMAIC cycle.

Phase Key point Tools and techniques

Start project IPO Diagram, SIPOC Diagram, CTQ Tree,

Define
Seek project output (Y) Flow Diagram, Project Charter.

Check Sheets, Histograms, Run Charts, Scatter

Confirm benchmark
Diagrams, Cause and Effect Diagrams, Pareto
Measure Measure Y and process
Charts, Control Charts, Flow Process Charts,
input variables (X)
Process Capability Measurement.

Process Mapping, Regression Analysis, RU/CS

Analysis, SWOT Analysis, PESTEL Analysis,

Confirm essential factor The Five Whys, Interrelationship Diagram,

Analyze
Confirm Y Overall Equipment Effectiveness, TRIZ:

Innovative Problem Solving, Scatter Diagram,

Pareto Chart, Control Charts.

Affinity Diagram, Nominal Group Technique,

Eliminate essential factor SMED, Five S, Mistake Proofing, Value Stream

Improvement
Improve Y Mapping, Brainstorming, Mind Mapping, Force

Field Diagram.

Control Keep result Gantt Chart, Activity Network Diagram, Radar

11
 Update Y Chart, PDCA Cycle, Milestone Tracker

Diagram, Earned Value Management.

Figure 2.8 Phase tools table

3.1 The significance of implementation of Six Sigma in construction

management in China

The Significance of management is to achieve the purpose by the processes of

decision-making, planning, organization, guidance, implementation and control
(Sheldon 2005). The essence of management is coordination, and people is the center
of coordination. The modern construction production system can be understood as an
artificial system. Hence, how to improve the management of people, to prevent
production accident, and to improve the product quality has become the key. With the
improvement and advance of various management methods, six sigma management
methods has generally become the basic means of advanced management companies.
Moreover, with the appearance of lean production and lean management, managers
combined DMAIC process in management, consolidated the experiences of
application, and then established the practical management specification. For instance,
Shanghai Airlines co., LTD implemented Six Sigma management in its services
progress. Additionally, Zhongxing Telecommunication Equipment Corporation, which
is the first company who using Six Sigma in telecom industry, constantly promoted
Six Sigma management since 2002, and obtained remarkable achievements. Today, it
is not only a successful model of implementation Six Sigma in Chinese enterprise, but
also providing professional and practical experience of consulting services of Six
Sigma for chinese telecom operators (Yang and El-Haik 2008).

The present construction management situation of China is as follows:

[1] Lack of safety consciousness

12
[2] Weak management foundation
[3] Laws and regulations system of construction are not perfect
[4] Supervision system of quality and production safety is not complete.

The current Chinese construction situation is that the supervision and management
system of quality and safety are not perfect, and there is a large distance with foreign
advanced management mode. As well as, by the impact of market economy, the
concept of production management is relatively fickleness. For example, most of time,
the slogan, likes "duration compression, improving quality", always is a lie, it cannot
be come true.

3.2 The Present Research Performance of Six Sigma in China and

other Countries

It is generally accepted that management and quality always dominates the primary
positions in production and operation. Since industrial revolution, the human
productivity rapidly developed , and product quality and relevant service quality
continuously improved. Especially, with the rise of developing countries, the
competition became more and more intensively in the international market, all of
which created a term "management quality of world-class". This term not only meas
the top quality standard of the world, but also requires the quality management skill of
the management team is world-class. Whereas, if the quality of the product cannot
achieve the world-class standard, no matter the product or service is belong to which
country, they would be eliminated in the fierce competition in the international
market.

Because of the successful practice of Motorola and GE, Six Sigma, as a brand-new
management model, quickly attracted the attention of whole world businesses.
Meanwhile, these two magnate also obtained excellent achievement with the
influence of global economic integration (Keller and Pyzdek 2005).

After the constantly development of Six Sigma, it has transform the initial, simple,

13
and mathematical symbol into a management concept. Likewise, it can help manager
to achieve the high standard and excellent services. Moreover, Six Sigma has
gradually extended to the manufacturing and other various fields as its core value is to
pursue perfect and its entrepreneurial spirit.

Essentially, there are five simple steps in Six Sigma management progress. Firstly, to
define goals of enterprise and requirements of client. Secondly, data collection,
statistics and analysis. Thirdly, to find weaknesses of the production process. Then, to
improve and manage weaknesses. Finally, to control improvements over the
production processes. This process has the following characteristics.

(1) A broader perspective. To be more precise, all the needs of customers will be
concerned. For example, the requirement of product specification. Especially, meet
client needs during the process of providing product-related services. This client
means the subordinate of the enterprise and external customers.

(2) The management and control capabilities of the enterprise would be improved,
and the enterprise would obtain better competitiveness.

(3) For different client requirements using distinct tools and methods to
implementation in various areas (Welch and Byrne 2003).

Based on these characteristic, studies of Six Sigma began to spread cross the world. In
the 1980’s, Six Sigma was created by Motorola, and applied to improve production
and product quality. Afterwards, it gained further development in Allied signal of
America and other enterprises. Then, it became a effective way for improving the
economic benefit and executive ability of enterprise strategy. In 1996, Jack. Welch,
who is the president of GE, imported Six Sigma in GE. In addition, Six Sigma was
seen as one of the four most important development strategies for improving
economic benefit (He 2003). The performance of implementation Six Sigma was
brilliant. In 1999, the earning of GE reached $ 1.5 billion by using Six Sigma
management method. Moreover, at the early of 21st century, the figure reached $ 5
billion (Ibid 2003). Undoubtedly, the successful implementation of Six Sigma in GE

14
promoted its popularization.

5.1 The Overview of Research Methods and Methodology

A reliable research relies on applied methods and techniques for collecting relevant
and quality information (Myers, 2013). And this information is divided into two types:
primary and secondary. The primary information is collected by analyst. Its common
collecting methods are questionnaires, interview and meetings. But, this secondary
information is not collected for specific issues.

These sources include papers, articles, journal and diaries. Its characteristic is to
complete a specific examination as a method. Research strategy focus on the
researching issue in a scientific and effective way. The expert overcome and explain
the strategies by presumption, results and connecting their capability to advances of
discovery (Miller, 1983). Commonly, research methodology is divided into two types:
qualitative and quantitative.

5.2 Qualitative Methods

Basically, qualitative method is used in social sciences study, which objective is to

gain a deep understanding of human behaviors and the reason of this behavior (Bailey,
1994). Qualitative methods are subjective because explain the reasons of decision
making. Case study is developed bu providing information (Burn, 2000). On the other
side, qualitative methods are used to declare common conclusions. Generally,
interview is the most popular qualitative method (Marshall & Rossman, 2006).
Nevertheless, data collection is depended on the following approaches (Rugg, 2007)

·Participant Observation and Non-participant Observation

·Face-to-face Questionnaires, Adaptive Computerized Questionnaires, Computerized

Questionnaires, and Paper-and-pencil Questionnaires

·Reflexive Journals

·Semi-structured Interview, Unstructured Interview, and Structured Interview

15
·Analysis of documents and materials

·Field Notes

5.3 Quantitative Methods

Quantitative methods is used for data collection by organizing empirical examination

methods, and statistical and mathematical analyzing the data (Byrne, 2002). The data
is collected by precise questions from participants (Bryman, 1996). On the hand,
quantitative methods include philosophical and statistical perspective. Proof,
determination and recording are achieved before analysis because this is a big sample
collection method (Byrne, 2002).

Generally, lots of theories and definitions are common sense to support the traditional
measurement (Doyle, 2011). But the measurement mode which support the common
sciences likes probabilism. From psychometric perspectives, the data is affected by
lots of things, such as, skills, attitudes, knowledge, personalities,and education levels.
Overall, the following methods are the common method of quantitative method
(Byrne, 2002):

· Questionnaires and interviews

· Natural influenced experiments

· Observational studies

· Laboratory experiments

· Exploration of previous studies

5.4 Mixed Methods

The meaning of mix method is that using more than one method to collect data
(Creswell, 2010). Usually, advanced studies refer to use mixed method. There are
three research classes which are labeled like mixed method (Johson, et al., 2007):

(1) Quantitative side, it focus on hypothesis, subjects and context. And, collecting
16
qualitative data to support the quantitative area in deep and details.

(2) Qualitative researches needs to be supported by quantitative researches.

(3) Both qualitative and quantitative research needs to be emphasized equally, and
they are interacted.

5.5 The Adopted Research Methodology

According to the strengths and limitation of both methods, the adopted method is
mixed method. This research includes two styles: meaning and relation by gathering
information in depth and breadth. Qualitative method is used in literature review and
the quantitative method is used in data analysis.

The aim of this paper is to implement Six Sigma in construction industry in China. In
more detail, the information of Six Sigma and current situation is gathered by
qualitative method. And the economic benefit of application Six Sigma is collected by
quantitative methods. Obviously, both these two methods are used to collect data, and
this data is divided into two types: primary data and secondary data.

5.5.1 Primary Data Collection

The primary data is obtained by the author. In this paper, the main primary data is
collected by case study. The first case is Six Sigma in GE. This case focus on every
thing of Six Sigma. The second case focus on high quality control in duration by
DMAIC model. However, all of the data of these two different case will be compared
between normal construction project and Six Sigma project. And then, analysis the
changes of it.

5.5.2 Secondary Data Collection

The secondary data is the data which often appears in people’s study or work. In
literature review, most information is secondary data of this paper. By collecting these
secondary information, the significant information of Six Sigma and construction
were presented perfectly. These sources are gathered from books, journals, articles
17
and internet.

6.1 Case Study 1: Six Sigma in GE in USA

6.1.1 Background

Undoubtedly, as one of the most successful company, the success of General Electric
(GE) cannot leave their Six Sigma program, and Six Sigma still plays a key role in
their continuous success. The turnover of GE was over $125.8 billion in 2001. 310
000 people are employed by it in the world, and its market value was achieved $401
billion. Moreover, Wall Street recorded its grown speed is 10% per annum. The
product and business of GE span a wide range, such as, automobile, construction,
health care, retail, telecommunications and finance.

The systematic and statistical method of Six Sigma successful attracted the CEO of
GE, Jack Welch, in the mid-nineties. After the presentation of the CEO of Allied
Signal about Six Sigma, he made sure the power of Six Sigma.

6.1.2 Approach

In 1995, GE hired the Six Sigma Academy which is an organization established by

Six Sigma pioneers, includes ex-Motorola executives, Richard Schroeder and Michael
Harry. They pointed out that GE costed $7 to $10 billion annually for unnecessary
rework, business errors and low productivity. And, that is the cost for fulfilling the
gap between Three Sigma and Six Sigma. Therefore, Jack Welch and other senior
managers had to admire the Six Sigma program. “GE Quality 2000” became the
slogan of GE in the 1990s and beyond. Jack Welch confirmed that “ Six Sigma, ‘GE
Quality 2000’ will be the biggest, the most personally rewarding and in the end the
most profitable undertaking in our history!” Meanwhile, the driving force of Six
Sigma system were economic benefits and share price. There are four particular
reasons of implementing Six Sigma:

(1) Reduce Cost

18
(2) Improve Customer satisfaction

(3) Wall Street recognition

(4) Corporate synergies

Actually, before the successful implementation of Six Sigma of GE, Motorola has
achieved the Six Sigma level. It is the real pioneer of Six Sigma program. It improved
manufacturing quality and decreased waste of production. However, GE broke the
original process model of Motorola by implementing Six Sigma management to itself
service-oriented business. The typical structure of Six Sigma of GE is as following
figure 6.1.

CEO

CIO Division CEO

Director, Champion
Quality Team
Six Sigma

Manager,
Six Sigma

Master Black Belt

Black Belt Team Leader

Green Belt Team Members

Figure 6.1 A particular organization of Six Sigma.

19
6.1.3 Implementation

The Six Sigma program was started in 1995. 200 distinct projects supported its
development by a large training effort. In the next two years, more then 9000
successful project saved $600 million. Although the investment of training program
cost nearly $1 billion in the first 5 years, GE set a personal achievement plan to
expand their devoted Six Sigma staff.

GE identified the following key points which focus on customers and processes:

· Critical to Quality: Identify and develop the most important concept of customer.

· Defect: Any characteristic that deviates outside of specification limits or customer

requirements.

· Process capability: The output of process.

· Variation: The comparison between what customers feels and what customers
wants.

· Stable operation: Guaranteeing the process is to improve the requirement of

customers.

· Design for Six Sigma: Designing to attach the process capability and customer
needs.

6.1.4 model for roll out

20
At that time, the universal model was not appeared for conducting Six Sigma among
the company which has implemented Six Sigma. Fortunately, the Six Sigma Academy
proposed a common and effective organization model. And, GE adopted it and gained
achievement. This model is present in figure 6.2.

Phase 1 Selecting champions and master black belt in business units. The
recommendation of Six Sigma Academy is that per business has
one champion, and every 30 black belt has a master black belt.

Phase 2 Training champions and mast black belt. Developing the tentative
deployment plan.

Phase 3 The potential project is identified by champion and mast black

belt.

Phase 4 Further training of master black belt, which is focused on how to

train the subordinate staff.

Phase 5 Training black belts. And, formally starting the project.

Phase 6 Green belts is trained by black belts

Figure 6.2 The training model of GE.

6.1.4 Results

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 Figure 6.3 The payoff of Six Sigma at GE.

Figure 6.3 shows the economic benefits of GE from 1996 to 1999. This is a obvious
evidence of the dramatic benefits that are possible from a Six Sigma program. After
the successful application of Six Sigma, the next step is to retain and grow the
benefits.

The benefit has a second level, which is not directly impact on saving. The average
achievement per year includes:

· 10% - 30% capital expenditure reduction.

· 12% - 18% capacity increase.

· 12% reduction in headcount.

· 20% margin improvement.

Additionally, there are some particular instances from business units are:

· GE medical system: there were 200 successful projects in the introductory year.

· GE capital: GE spent $6 million in the first 4 years on 5% of its full time staff to
study Six Sigma on quality projects. And, 28 000 quality projects were completed
successfully.

· GE plastics: in this project, the capacity of a European poly-carbonate unit is

increased by 30% in 8 months.

Certainly, to pursue the achievement of GE maybe is difficult. The rich of GE is cash

rich, and its growth of economic benefits over $10 billion per month. However, in
current examination, there are some positive points from GE Six Sigma which can be
learned and benefited for every company to improve quality process.

(1) Leadership support: Jack Welch, undoubtedly, played a key role in their Six Sigma
program. For every enterprise which wants to improve their culture for the
requirement of Six Sigma, a positive and sustaining leadership is significant and
essential. Similarly, all senior manager needs to be cogently engaged.
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(2) Definition of Six Sigma objectives: The objective need to be world class. Basically,
world-class means efficiency, best conduction, and focused customer satisfaction.

(3) Development of initial process and tools: Every problem of GE was solved by
DMAIC method, and using the following quality tools, such as, control charts, pareto
analysis, defect measurement, process mapping, statistical process control, root cause
and decision tree diagram.

(4) Alignment of Six Sigma with career paths: In Six Sigma management
organization, the option is shared between different level. Black belts became a
essential link for staff.

(5) Six Sigma and service industry: The experience of GE Six Sigma program
illustrated that Six Sigma is not just suitable in manufacturing. GE, as a pilot, opened
the gate for other industries. For instance, in Western economies 80% domestic
production processes using Six Sigma.

6.2 Case Study 2: Six Sigma in construction project in Shenyang in

China

6.1.1 Background

This case is a larger-scale concrete pouring for a basement in construction process in

Shenyang in China. Its features is the quantity of concrete is large, the relatively
higher requirement of construction technology, and the temperature environment is
not ideal. That means the deformation of concrete is easy to happen. The size of
structural plan is relatively large, and the confinement create a high temperature. Thus,
if the method for control the temperature is not appropriate, the quality will not be
guaranteed.

6.1.2 Approach and Implementation

For solve this problem, the manager of this project conducted Six Sigma in division
component project to ensure the quality. The main method is that using DMAIC in

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each process to improve the performance.

(1) Define

Increasing the ultimate tensile strength, improving the constraint and structure design.
Then, adopting the measurement after combining the physical truth with construction
technology. Assuring the design fulfills the design requirement. Moreover, the quality
of whole project cannot be broken.

(2) Measure

According to the investigation of the quality of in site concrete, collecting data to

analyze. Using statistical and mathematical methods to calculate the frequency of
crack. Additionally, to measure lots of others aspects, such as people, machine,
material, environment, etc..

(3) Analysis

Using brainstorming to analyze factors which affect the quality of concrete. The result
is shown in figure 6.4.

Number Reason Effect level

1 The maintenance is not timely. High

2 The storage of concrete is not reasonable. Low

3 The ratio pf concrete mix is not suitable. High

4 The temperature of protection film is higher. Normal

5 Construction technology is not reasonable. High

6 Cooling method is not enough. High

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 7 The weather situation is not good. Normal

Figure 6.4 The quality analysis of concrete pouring.

The connection between inside temperature (Ti) and outside temperature (To) of
concrete is shown in figure 6.5.

Figure 6.5 The thermometer of concrete.

According the thermometer, the biggest difference temperature is 31.55℃. And the
highest temperature is reached in 3 to 5 days after pouring. Hence, the measurement
has to conduct in this period.

(4) Improvement

According collecting and analysis data, the manager pointed out following
measurement:

· For large-scale concrete pouring, the original material of concrete needs to add
some admixture. The maintenance after pouring need to be focused specifically.

· Ensure the the temperature difference between the inside and outside of concrete
cannot reach 25℃ after initial setting.

· Extending the time of form stripping to prevent the the changes of weather
condition.

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(5) Control

The aim of this section is to consolidate the improvement and gain continuous
improvement.

 Chapter 7: Conclusion and recommendation

7.2 Finding of the Research

7.2.1 The Method for Implementing Six Sigma in Construction Enterprises

The establishment of six sigma management in the enterprise is a huge and

complicated project. For implementing Six Sigma, the first step is to establish a
complete framework focused on enterprise’s goal to get the support of senior
enterprise leaders. And it also can transform management philosophy and set up the
training and measurement system.

As the enterprise’s management system, Six Sigma requires the support from effective
organizational structure, promotion and guarantee of outstanding talents. More
importantly, all these things require the support of senior leadership. Hence, the
implementation of Six Sigma in construction enterprises need to engrave “three aims
and Two understandings”. The first understanding is to let the manager of enterprise
realize the importance of early-warning mechanism. To be more precise, the
leadership needs to deeply acquaint basic situation of company, such as, business,
production, technology, quality and logistics deeply. The second understanding is
leadership needs to realize every process from surface to subsurface, that makes
undesirable differences exposed on core processes. The first aim is to complete the
establishment of six sigma program. Second one is to realize the improving design of
process. Third one is to transform the company process under the direction of
counselor. After a period of test run, counselor adjusts and improves scheme and runs
it formally.

Only the enterprise realizes the insufficient of old processes, the determination of

26
 implementing six sigma management will be strengthened and implement. Following
figure is the integrated planning of introducing and implementing six sigma
management in the enterprise.

·Measure process
·Design target
·Sampling scheme
·Calculate standard deviation
·Correct plan
·Analyze information
· Define customer requirements
·Analyze process
·SIPOC process
·Discover cause
·Test cause
·Partial test

A ·Collect data
·Chosen plan
Six Sigma
·Brainstorming ·Specific plan
I
·Select plan ·Plan standards
·Test plan
·Full operation
C

·Continuous control ·System diagnosis

·improvement ·Train senior leadership
·process management ·Organizational division
·Set up objectives

Figure 7.1 Overall plan for introducing and application of Six Sigma in construction
enterprises

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7.4 Recommendations for Further Research

Currently, construction industry in China implements authentication management, that

is to adopt project manager responsibility system widely. Therefor, the quality concept
of employees should be changed. In a word, it is a change of man. In the process of
daily production, people do not have enough understanding of construction quality
and the quality records are incapable to reflect the aim of actual producing process
objectively and truly. Accordingly, statistics analysis is less in daily producing process.
In this paper, the author combines the real case and describes the actual five stages of
application of implementing Six Sigma in the whole process of construction project
briefly. And the author introduces how to promote it deeply. By collecting and
analyzing specific data in the process of production, we can improve the productive
process and achieve good results. It may be confirm that six sigma management is a
kind of efficient management method. It is able to combine quality improvement with
enterprise and projects aims. By means of systematic, rigorous plan and practice, Six
Sigma management is able to be implemented in each sector and division component
project of the process of construction production. And it can serve the enterprise
which aspires to improve quality.

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