Toronto is the largest city in Canada, with a population of three million, which represents eight percent of the country’s population. Like many rapidly growing cities, it faces problems around increased demand on infrastructure (housing, hospitals, and transit). It shares a trait with other iconic cities, including San Francisco, Paris, Mexico City, Geneva, Prague, Amsterdam and Brussels in that it uses streetcars (Tram) as part of its urban fleet, along with buses and a metro system.
The latest addition to the Toronto streetcar fleet is a series of 204 articulated vehicles, each 29.8 meters (98 feet) long, and wheelchair accessible. The order was placed in 2009 with an expectation of delivery of the first 150 at the end of 2017. That did not happen. The manufacturer, Bombardier, cited “supply chain irregularities. Only 89 were delivered, and then 67 of these were recalled due to what Bombardier then called “welding irregularities.
These delays and errors are a cause of frustration to Toronto citizens as well as to the levels of government who purchased the vehicles, using taxpayers’ money.
The Concept of Six Sigma
I thought about this while reviewing the concept of Six Sigma, a process and philosophy that is regularly taught at business schools and within companies as something of a panacea for all manner of production and quality issues. In essence, Six Sigma is a quality measurement system developed by Motorola, who built on their experience with Total Quality Management (TQM). Six Sigma was then popularized by General Electric under Jack Welch, and became – and remains – a favored management strategy.
Six Sigma is indeed a good system for rooting out defects in a manufacturing process, especially in circumstances where products are manufactured in large numbers, and in which large amounts of data can be collected and observed to reach the goal of excellence of 99.999999% or 3.4 defects per million opportunities. But as Michael Hammer wrote, back in 2002 in the MIT Sloan Management Review, Six Sigma is not a solution for everything, and its strengths lie primarily in finetuning an existing process, rather than seeking to innovate or replace one in the context of changing markets or operating conditions.
The tie-in to the Toronto streetcar issue is that Bombardier, the manufacturer, figures prominently in Mr. Hammer’s article as an early adopter of Six Sigma, but not as a blind disciple. He wrote:
“In 1999, Bombardier undertook a formal assessment of its Six Sigma efforts and concluded that despite the success achieved, those efforts suffered from serious limitations:
- Most Six Sigma projects were narrowly focused, concentrating on low-level and small-scale activities, typically within one functional unit of the organization. When managers attempted to apply Six Sigma to larger-scale projects, the results were unsatisfactory until the scope was narrowed.
- Six Sigma was not well aligned with the strategy of the organization as a whole. Although each individual project was worthwhile, in the aggregate the projects did not contribute to larger corporate goals.
- The Six Sigma efforts had not gotten at the company’s basic assumptions or its functional organizational structure. Because breakthrough improvements in performance require just such fundamental change, Six Sigma’s impact was limited.
As Mr. Hammer points out, this in no way diminishes the Six Sigma practice. However, it must be factored into a broader scope of operational understanding, as one piece of a larger process management philosophy.
Hence, the Bombardier fiasco. A company known for building aircraft, light rail, and several other technologies is not allowed to fail on such a basic premise as welding or even on-time delivery. These are its stock in trade. Overall, Bombardier is well respected in the business community and is a significant player, especially in the commuter jet and private jet industries as well as personal sea and snow craft (Sea-Doo and Ski-Doo).
Its difficulties in project managing and fulfilling the Toronto streetcar contract shows, however, that a wider scope is required. This will only grow in severity as the marketplace continues to expand rapidly into new and fast-changing processes, such as the use of blockchain in both manufacturing and finance verticals, the use of new materials and energy sources, including 3D printing and graphene, and the extreme viability of younger, more aggressive suppliers disrupting the traditional marketplace and tendering process. Space-X and Tesla (even despite its recent Icarus moments) are proof of this.
For students of Six Sigma, they can remain fully confident of the process as an ideal way to identify quality and defect in any area in which metrics can be collected. They should consider it to be a piece on the chessboard. Innovation, quality, and productivity will require hands-on assessment by managers and workers, meaning that in addition to seeking Six Sigma black belt certification, managers should look around their organization and question how many other different “channels” should be monitored, for example, culture, innovation, testing, etc. That will draw their company closer into a total quality management space, which was the inception point of Six Sigma to begin with.
 Hammer, Michael (2002) Process Management and the Future of Six Sigma. MIT Sloan Management Review, Winter 2002, Volume 43, No. 2. Retrieved from http://sloanreview.mit.edu
 DMAIC is an acronym for the quality assurance process within Six Sigma. It stands for define, measure, analyze, improve and control.