Utilizing Six Sigma tools like DMAIC saved RFR $928,000 in retained sales as well as $10,000 in cost savings and $9,000 in workplace training.

RFR Metal Fabrication Was Having Growing Pains

RFR Metal Fabrication began as Advanced Fabrication Technology in 1987, switching names to RFR in 1999. Throughout its history, the organization has focused on the contract manufacturing of precision metal fabrication and assemblies. The company primarily serves the computer, telecommunications, and electronics industries with a commitment to quality as well as customer loyalty.

A few years ago, RFR’s policy of providing the utmost level of quality for its customers felt like it was being compromised due to aspects of the organization getting out of control during a growth period. Beverly Williams, the quality coordinator at RFR, was noticing that multiple aspects of its business were not hitting the mark. These included shipping, on-time deliveries, and overall quality. She knew that RFR was going to lose at least a couple of its major customers if these issues were not addressed soon. Randall Williams, the CEO of RFR, was acutely aware of how much business in their industry was going offshore to larger organizations and lower labor markets. He realized that it was mandatory that RFR focus on continuous improvement. He knew that businesses that did not adhere to this philosophy not only did not grow but faded away entirely. Both Beverly and Randall realized that it was going to take some outside help to get RFR to where it needed to be in order for the organization to have a future.

Further incentive to change came directly from RFR’s customer base. One of the organization’s largest customers brought a program to the CEO that identified RFR as one of its worst suppliers, which led to an audit and a mandate to get its quality under control.

Customers had also started to complain about not being able to meet their own production goals. This was due to a high rate of return on RFR orders that were due to error, careless packaging, or damage in transit.

Beverly felt like she was shooting in the dark, trying to find a solid and affordable source of education that could provide RFR with the tools that it needed. The owner had had some prior success with Six Sigma and suggested going in that direction. RFR decided to enroll a couple of key members of its team in a Lean Six Sigma course at North Carolina State University.

RFR elected to send Ms. Williams (the quality coordinator) as well as someone who was newer to the organization but had shown that they had the skill sets to comprehend the training. During the course, Williams noticed that those there to learn about Six Sigma ran the gamut from people that had long careers dealing with quality to individuals that were completely new to it. Regardless of the experience level, the information rang true and was clear enough so that everyone who took the course came away with a firm understanding of the Six Sigma methodology as well as its tools and how to apply them. Some areas covered were isolating issues, forming groups, using statistical data to center focus, and addressing the root causes of the issues.

They were shown a process that is a cornerstone of the Six Sigma method and covers all of these areas.

They Decided To Try the DMAIC Six Sigma Process

When there is a need to address these issues, the key process in the Six Sigma methodology to utilize is DMAIC. DMAIC is a five-phase data-driven improvement process that incorporates a variety of tools at each phase. These phases are Define, Measure, Analyze, Improve, and Control.

The two came away from the course able to define what the issues were, measure their baseline performance through a collection of data, analyze the data to find root causes, make effective improvements with efficiency, and control the progress made so that there is no backpedaling on the improvements.

To make sure that all employees were onboard and felt invested in the process, the organization put up posters and quality alerts. It was important to make sure that everyone at the company could see the progress being made and was always aware of how much of a reduction in defective parts per million was happening due to the team’s collective effort. The entire team was also privy to how much of an increase in customer satisfaction was happening due to the improvements that were being made. This served to keep the employees excited and maintain their dedication and focus on the process.

The Outcome Was Stunning

Within six months, the improvements RFR made by embracing the Six Sigma methodology led to the company’s parts-per-million defect rate dropping to 600 from 20,000. The shipping department reported a stunning 97% on-time delivery rate, an increase of 47%. Customers could not help but notice the turnaround, and RFR’s previously most dissatisfied client voiced an approval rating of 97%, a 57% increase.

In monetary terms, RFR saw an impact of $950,000 from the improvements it made. This includes $928,000 from sales that were retained, $10,000 in cost savings, and $9,000 in workplace training.

Not only did the changes that RFR made stabilize the company, but they also helped with its exponential growth. RFR managed to increase its customers, expand its profitability, and see a clear jump in its orders.

3 Best Practices When Implementing the Six Sigma Method at Your Company

RFR had some key takeaways from its experience incorporating the Six Sigma method into the way it does business:

1. Make everyone involved in the changes feel invested

The first thing that the two representatives from RFR did upon returning from their Six Sigma course was to share what they learned with others in the company. Getting everyone in an organization to understand the benefits of embracing the Six Sigma methodology is imperative to ensuring its success. By having everyone onboard, you can be assured that each member of your team is doing their part to make sure that the changes needed are actually happening. It is also important to make sure that the team members at all levels are recognized for their importance to the project’s success and are rightfully praised for their dedication to the cause.

RFR put posters around the workplace and quality alerts so that the progress that was being made was not an abstraction. The improvements were clear to everyone at the company, and being able to see the outcome in real time kept the team excited and motivated.

2. Listen to your customers

RFR could see that change was likely needed, but it took one of its major customers to show the clear likelihood of taking its business elsewhere for the organization to jump into action.

Without our customers, our businesses would not exist. Therefore, it is imperative that we always listen to what they need and that we strive to meet those needs while delivering on them with the highest possible quality.

By listening to its customers, RFR was able to know the direction it needed to go in order to keep them. The needs of their customers helped provide a compass for knowing the areas in which improvements had to happen.

3. Continue to improve

In embracing the Six Sigma method, RFR knew going in that the improvements that were going to be made were not going to be a one-time fix. Control measures would have to be put in place to make sure that the gains made were not lost over time. The team understood that all businesses need to have a handle on their quality and efficiency in order to continue to exist. Not only that, they would need to continue to improve in order to remain competitive, maintain customer loyalty, and weather changes in the industry.

Improving Your Business With Six Sigma

Many believe that the Six Sigma method is only relevant to large corporations. RFR is an organization of fewer than 100 employees that has shown staggering success from its utilization of Six Sigma. Their example shows that medium-sized companies can also reap massive benefits from adopting its tools. Frankly, any organization, whether small, medium, or large, can improve its processes with this method. A good litmus test for seeing the proof of what Six Sigma can do for your organization is to start with a small pilot project. Get everyone on your team’s support, and make sure that the scope and the results of the project are clear and measurable. Even if the project is so small that the impact is minute, a successful outcome could lead to further Six Sigma projects. Enough small Six Sigma projects can have a major impact on an organization. Your business could have the same level of improvement shown by RFR.