If you have been in management or involved with large companies for any length of time, you have probably heard the terms TQM, SPC and Six Sigma. From a high level, these terms are virtually identical, so one typical question is what are the differences between them and why should you care… In this blog, we will try to answer both questions in a concise way.
TQM = Total Quality Management. This is a high level philosophy that focus on how to continuously improve the quality of your company’s products and services. TQM addresses quality from a very broad level, focuses on people (employees, customers, suppliers, motivations, teams, etc) and the impact that people have on quality. One big concept of TQM is that everyone has a customer, whether that customer is internal or external, and that every person has a responsibility to deliver quality to that customer is a way that is continuously improving.
While TQM was a huge buzz word in the 90’s, one of the negatives of TQM is that two similar companies could implement TQM and might do so in dramatically different ways and get very different results. For many people, TQM didn’t offer enough specifics on the tactical aspects and it wasn’t quantitative enough.
Enter SPC (Statistical Process Control) which has been around since the 1920’s, but wasn’t always embraced by manufacturers. Many feel that SPC concepts were effectively used by Japanese companies, whose growth in the 80’s scared American and European companies into action in the 90’s.
SPC uses basic mathematics (mean, median, standard deviation) of a set of measurements and offers a work-flow process for operators to read a chart and identify visually if their process is “in control” or “out of control”. The amazing aspect of SPC for many people is that a process can be nominally “passing” a test, meaning that it’s measurements fall within its high and low limits, but that the process may be “out of control” and ask risk to fail in the short term. In these cases, SPC serves as an early warning sign.
The positives of SPC are that it is (1) very quantifiable, (2) can help manufacturers catch issues early, (3) relatively easy to implement in software and (4) easy to train an operator to use.
The negatives of SPC are that (1) it can be very difficult to determine the key process indicators ‘KPIs’ that you want to track, (2) its usefulness is limited to processes that fit inside a “normal curve”, or Gaussian distribution.
Enter Six Sigma, on the heels of TQM, and with a goal to add more quantifiable results and processes. Six Sigma uses many of the concepts of SPC – in fact, the name itself “sigma” is the same as “standard deviation” in statistics and six is the number of standard deviations necessary to get a process to have only 3.4 defects per million. Whereas TQM had more “fuzzy” goals and tactics, Six Sigma is incredibly specific.
A commonly used example is to compare 99% quality (or one defect per 100 tries) with Six Sigma, which is 99.999966% quality (or 3.4 defects per 1,000,000 tries). A car company that is at 3.8 Sigma (99%) would have 3 warranty claims for every car produced, whereas a 6 Sigma level (99.99966%) would have 1 warranty claim for every 980 car produced.
In Summary, the three terms are all meaningful, all relevant for today’s companies, and all interrelated in how they help companies achieve better quality.