Six sigma (1)


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  • Usually the CFO or an executive in Finance is directly involved in Six Sigma projects. The expectation is that a project will have at least a $175,000 financial impact. Each Black Belt has a financial impact of about $1M per year from the four to six projects per year he or she leads. Allied Signal CEO Larry Bossity reported that $1.5 Billion in estimated savings has already been achieved. GE started SS in 1995 under Jack Welch. They claimed net benefits by 1997. In 1998, they claimed $1.2 Billion in benefits and costs of $450 Million for a net benefit of $750 M. 1999 Annual Report claimed a net benefit of more than $2 Billion.
  • Six Sigma is viewed as another “flavor of the month” just like TQM, reengineering, etc. All the failed attempts at Statistical Process Control, measurement, root cause analysis, etc, are lumped into the organization’s view of SS. It’s the “been there, done that” mentality and goes to the heart of any improvement program…culture change. DFSS is gaining ground as a discipline practiced by design teams of major corporations but is is not an easy or rapid transition to make. Training – BB training usually lasts four weeks in the classroom, one week per month over four months. The rest of the time is spent working on projects while being mentored by a MBB. They learn statistical tools, data analysis, design of experiments, and quality control. Certification to a MBB usually requires successful implementation of at least 20 projects (including as a BB); BB after 2 successful projects.
  • Six sigma (1)

    1. 1.
    2. 2. DEFINITION <ul><li>3.4 m defects per million opportunities. </li></ul><ul><li>Higher level, less defects. </li></ul><ul><li>Six sigma level – 99.99966% certain. </li></ul>
    3. 3. SIX SIGMA GOAL! <ul><li>PROFITABILTY </li></ul><ul><li>BY PRODUCTS: </li></ul><ul><li>QUALITY </li></ul><ul><li>EFFICIENCY </li></ul>
    5. 5. GE Perspective <ul><li>“ A highly disciplined process that helps us focus on developing and delivering near-perfect products and services. The word Six Sigma is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many “defects” you have in a process, you can systematically figure out how to eliminate them and get as close to “zero defects” as possible. Six Sigma has changed the DNA at GE – it is the way we work – in everything we do and in every product we design.” </li></ul>
    6. 6. Few Facts… <ul><li>Motorola – 10 years; $11 Billion Savings </li></ul><ul><li>Allied Signal - $1.5 Billion estimated savings </li></ul><ul><li>General Electric – started efforts in 1995 </li></ul><ul><ul><li>1998: $1.2 Billion less $450 Million in costs… net benefits = $750 Million </li></ul></ul><ul><ul><li>1999 Annual Report: more than $2 Billion net benefits </li></ul></ul><ul><ul><li>2001: 6,000 projects completed; $3 Billion in savings </li></ul></ul>
    7. 7. u-6  u-5  u-4  u-3  u-2  u-1  s u u+1  u+2  s u+3  u+4  u+5  u+6  68.26% 95.44% 99.73% 99.993% 99.999943% 99.999998%
    8. 8. Steps In Six Sigma <ul><li>RECOGNISE </li></ul><ul><li>DEFINE </li></ul><ul><li>MEASURE </li></ul><ul><li>ANALYSE </li></ul><ul><li>IMPROVE </li></ul><ul><li>CONTROL </li></ul><ul><li>STANDARDISE </li></ul><ul><li>INTEGRATE </li></ul>
    9. 9. Business Perspective <ul><li>Recognise the true state of your business. </li></ul><ul><li>Define what plans must be in place to realise improvement of each state. </li></ul><ul><li>Measure the business systems that support the plans. </li></ul><ul><li>Analyse the gaps in the system performance benchmarks. </li></ul><ul><li>Improve systems elements to achieve performance goals. </li></ul><ul><li>Control system-level characteristics that are critical to value. </li></ul><ul><li>Standardise the systems that prove to be best-in-class. </li></ul><ul><li>Integrate best-in-class systems into strategic planning framework. </li></ul>
    10. 10. Operational Perspective <ul><li>Recognise the operational issues that links to key business systems. </li></ul><ul><li>Define Six Sigma projects to resolve operational issues. </li></ul><ul><li>Measure performance of the Six Sigma projects. </li></ul><ul><li>Analyse project performance in relation to operational goals. </li></ul><ul><li>Improve Six Sigma project management system. </li></ul><ul><li>Control inputs to project management system. </li></ul><ul><li>Standardise best-in-class management system practices. </li></ul><ul><li>Integrate standardised Six Sigma practices into policies and procedures. </li></ul>
    11. 11. The Process Level <ul><li>Recognise functional problems that links to operational issues. </li></ul><ul><li>Define the processes that contribute to the functional problems. </li></ul><ul><li>Measure the capability of each process that offers operational leverage. </li></ul><ul><li>Analyse the data to assess prevalent patterns an trends. </li></ul><ul><li>Improve the key product traits created by the processes. </li></ul><ul><li>Control the process variable that exert undue influence. </li></ul><ul><li>Standardise the methods and processes that can produce best-in-class performance. </li></ul><ul><li>Integrate standard methods and processes into design cycle. </li></ul>
    12. 12. The Six Sigma Players
    13. 13. The Six Sigma Players Customer Green Belts Black Belts Master Black Belts Champions Executive Leadership
    14. 14. A High-Level Comparison Of Roles CHAMPIONS MBB BLACK BELTS GREEN BELTS Q U A L I F I C A T I O N S Senior executives(VP or Dir,) Familiarity with basic and advanced statistical tools. Technical Degree. Mastery of basic and advanced statistical tools. Tech.Degree or Orientation. Billing administration with 5years of exp. Mastery of basic statistical tools. Technical and support background. Familiarity with basic statistical tools. T R A I N I N G One week of Training. Two one-week Training sessions. Four one-week sessions. Proj. review in 2 nd ,3 rd and4 th week . Two three-day sessions . Proj. review in 2 nd week . No. One champion per biz. Group One MBB per 30 black belts. One black per 100 employees. One Green belt per 20 employee.
    15. 15. Six Sigma Consultants In India <ul><li>A B C Business Solutions Pvt. Ltd . </li></ul><ul><li>BMG India. </li></ul><ul><li>Business Strategic Solutions. </li></ul><ul><li>DSS Systems & Software Technologies Limited. </li></ul><ul><li>Indian Institute of Quality Management – IIQM. </li></ul><ul><li>Indian Statistical Institute. </li></ul><ul><li>Institute of Quality Limited. </li></ul><ul><li>Institute of Sigma Learning Pvt. Ltd. </li></ul><ul><li>Kaul Associates. </li></ul><ul><li>KPMG India. </li></ul><ul><li>Omnex. </li></ul><ul><li>Projects India. </li></ul><ul><li>QAI India Limited. </li></ul><ul><li>Six Sigma Alchemy (P) Ltd. </li></ul><ul><li>Sigma Trainers and Consultants in Quality Improvement. </li></ul><ul><li>Six Sigma Excellence. </li></ul><ul><li>TQM International Pvt. Ltd. </li></ul>
    16. 16. CHALLENGES <ul><li>The perception of “Sick Sigma.” </li></ul><ul><li>Culture change. </li></ul><ul><li>Understanding the DFSS (Design For Six Sigma). </li></ul><ul><li>It is not a quick fix nor a recipe. </li></ul><ul><li>Takes careful preparation and a commitment to the foundational change efforts required. </li></ul>
    17. 17. DFSS Leverage In Product Design ACTUAL COST COST INFLUENCE 30% Overhead Labor Material Design 5% 5% 20% 15% 50% 70% 5%
    18. 18. Challenges <ul><li>Working on too many projects at the same time. </li></ul><ul><li>Lack of discipline and accountability. </li></ul><ul><li>Lack of Integrated information and financial systems. </li></ul><ul><li>Not being a process-based company. </li></ul>
    19. 19. Rewards <ul><li>Improved reliability and predictability of products and services. </li></ul><ul><li>Increased value to the customers and shareholders. </li></ul><ul><li>Improvements in organizational morale. </li></ul><ul><li>Increased marketplace viability. </li></ul><ul><li>Organizational recognition. </li></ul><ul><li>Significant reduction in defects. </li></ul>