Six Sigma Overview October 13, 2003 Don Carlson Technology & Operations Enterprise Solutions
<ul><li>What is Six Sigma? </li></ul><ul><li>Why Six Sigma? </li></ul><ul><li>Why Six Sigma at Bank of America? </li></ul>...
<ul><li>Metric </li></ul><ul><li>Benchmark </li></ul><ul><li>Vision </li></ul><ul><li>Philosophy </li></ul><ul><li>Method ...
<ul><li>Six Sigma Was Developed at Motorola in the 1980’s As a Method to Improve Process Quality.  </li></ul><ul><li>It Wa...
<ul><li>We don’t know what we don’t know. </li></ul><ul><li>If we can’t measure it, we really don’t know much about it. </...
Process Philosophy <ul><li>Know What’s Important to the Customer (CTQ) </li></ul><ul><li>Reduce Defects (DPMO) </li></ul><...
 Defects per Million opportunities Process Capability Sigma is a statistical unit of measure which Reflects process capab...
Six Sigma -- Practical Meaning 99.99966% Good (6 Sigma) <ul><li>20,000 lost articles of mail per hour </li></ul><ul><li>Un...
Dissecting Process Capability <ul><li>Premise of 6   Sources of variation can be: </li></ul><ul><ul><li>Identified </li><...
The Strategy <ul><li>Characterize </li></ul><ul><li>Optimize </li></ul><ul><li>Breakthrough </li></ul>USL T LSL USL T LSL ...
<ul><li>What is Six Sigma? </li></ul><ul><li>Why Six Sigma? </li></ul><ul><li>Why Six Sigma at Bank of America? </li></ul>...
What is Cost of Poor Quality? <ul><li>In addition to the direct costs associated with finding and fixing defects, “Cost of...
Which Business Function Needs It? As long as there is a process that produces an output, whether it is a manufactured prod...
Ken Lewis’ “Vision” Why Six Sigma? “ Six Sigma will enable Bank of America to make the breakthrough improvements in custom...
<ul><li>What is Six Sigma? </li></ul><ul><li>Why Six Sigma? </li></ul><ul><li>Why Six Sigma at Bank of America? </li></ul>...
Green Belt Project Customer Segment Root Cause 1. Too many problems (“error free banking”)   Assigned to Payment and Depos...
A Common Tollgate Approach Project Management Ownership & Commitment Change Integration  Define Measure Analyze Improve Co...
Master  Black Belt Black Belts Green Belts Team Members Quality Fundamentals/ Kaizen Now Champions Mentor, trainer, and co...
<ul><li>Leadership Commitment, Competence, & Involvement </li></ul><ul><li>Methodology & Tools </li></ul><ul><ul><li>Data ...
Six Sigma & Leadership   <ul><li>Six Sigma only works when Leadership is  </li></ul><ul><li>passionate about excellence an...
<ul><li>Bank of America Executive Officer team </li></ul><ul><li>Ken Lewis – certified Green Belt  </li></ul><ul><li>Jim H...
<ul><li>“ Sustaining the intensity of our Six Sigma work is critical for Bank of America to achieve its strategic goals.  ...
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  • Welcome associates..
  • Define Measure Analyze Improve Control DMAIC Development : Project to design a new process or re-design a fundamentally non-competitive process to satisfy customer requirements. Improvement: Reduce defects to improve the capability of a process to satisfy customer requirements. $ = Key Funding Check points A common tollgate process and methodology that works for all types of projects.
  • “ Capable People Executing Capable Processes” requires the following training investments: Management Black Belt Champions -- All managers bankwide attend two days of training Quality Fundamentals -- All associates take this five-hour course Green Belt -- 15%* of associates become Green Belt- certified in a two-week class (These associates must be sponsored by their managers) Black Belt -- 1 - 5%* of associates become Black Belt- certified in a four-week course. (Black Belts are selected from individuals who excel in Green Belt classes.) Master Black Belt -- Fewer than 1% of associates become mentors, coaches and trainers of other Black Belts * At maturity, approximately 3 years from now (2004)
  • Fantastic statement of executive commitment to Six Sigma When Amy Brinkley certified in a few weeks…the entire BAC executive officer team will be certified Green Belts Others too….Risk and Capital Committee (includes some in addition to names on slide) all working on GBs…. All of Barbara Desoer’s directs are certified or in the pipeline… Same with T&amp;O senior leadership team Here’s what Ken said about Six Sigma in a letter earlier this month….
  • Ken’s wrote this to his direct reports Message is clear…Six Sigma delivering huge benefits to BAC…. He wants to keep Six Sigma focused on organic customer growth Says Six Sigma must continue to be a priority….it’s up to leaders Leaders -- not just his direct reports… that’s means everyone in this room… Six Sigma has died at too many companies…because leaders have let it die [ use examples…Motorola &amp; others ] MBBs/BBs crucial to keeping Six Sigma alive at BAC… it’s really in your hands… Next slides demonstrate where our Six Sigma focus needs to be…
  • PowerPoint slides

    1. 1. Six Sigma Overview October 13, 2003 Don Carlson Technology & Operations Enterprise Solutions
    2. 2. <ul><li>What is Six Sigma? </li></ul><ul><li>Why Six Sigma? </li></ul><ul><li>Why Six Sigma at Bank of America? </li></ul><ul><li>Connection to Strategy. </li></ul>Agenda
    3. 3. <ul><li>Metric </li></ul><ul><li>Benchmark </li></ul><ul><li>Vision </li></ul><ul><li>Philosophy </li></ul><ul><li>Method </li></ul><ul><li>Tool </li></ul><ul><li>Symbol </li></ul><ul><li>Goal </li></ul><ul><li>Value </li></ul> The Many Facets of Six Sigma
    4. 4. <ul><li>Six Sigma Was Developed at Motorola in the 1980’s As a Method to Improve Process Quality. </li></ul><ul><li>It Was First Used to Improve Manufacturing Process Capability and Then Migrated to Business Processes Capability </li></ul><ul><li>Companies That Have Deployed Six Sigma: Bank of America, Motorola, GE, IBM, Kodak and Many More </li></ul><ul><li>The Basic Premise Is, All Processes Have Variation. Variation Is the Enemy. </li></ul>More About Six Sigma
    5. 5. <ul><li>We don’t know what we don’t know. </li></ul><ul><li>If we can’t measure it, we really don’t know much about it. </li></ul><ul><li>If we don’t know much about it, we can’t control it. </li></ul><ul><li>If we can’t control it, we are at the mercy of chance. </li></ul>What is the Six Sigma Philosophy? Focus on the Customer! Science Art Magic Six Sigma
    6. 6. Process Philosophy <ul><li>Know What’s Important to the Customer (CTQ) </li></ul><ul><li>Reduce Defects (DPMO) </li></ul><ul><li>Center Around Target (Mean) </li></ul><ul><li>Reduce Variation (Standard Deviation) </li></ul>? GE Company Proprietary November 1998 What Is Six Sigma?
    7. 7.  Defects per Million opportunities Process Capability Sigma is a statistical unit of measure which Reflects process capability. Six Sigma as a Goal 2 3 4 5 6 308,537 66,807 6,210 233 3.4 .
    8. 8. Six Sigma -- Practical Meaning 99.99966% Good (6 Sigma) <ul><li>20,000 lost articles of mail per hour </li></ul><ul><li>Unsafe drinking water for almost 15 minutes each day </li></ul><ul><li>5,000 incorrect surgical operations per week </li></ul><ul><li>Two short or long landings at most major airports each day </li></ul><ul><li>200,000 wrong drug prescriptions each year </li></ul><ul><li>No electricity for almost seven hours each month </li></ul><ul><li>Seven articles lost per hour </li></ul><ul><li>One unsafe minute every seven months </li></ul><ul><li>1.7 incorrect operations per week </li></ul><ul><li>One short or long landing every five years </li></ul><ul><li>68 wrong prescriptions per year </li></ul><ul><li>One hour without electricity every 34 years </li></ul>99% Good (3.8 Sigma)
    9. 9. Dissecting Process Capability <ul><li>Premise of 6  Sources of variation can be: </li></ul><ul><ul><li>Identified </li></ul></ul><ul><ul><li>Quantified </li></ul></ul><ul><ul><li>Eliminated or Controlled </li></ul></ul>Defects Process Capability Inadequate Design Margin Inadequate Process Capability Unstable Parts & Materials Defects Acceptable LSL USL
    10. 10. The Strategy <ul><li>Characterize </li></ul><ul><li>Optimize </li></ul><ul><li>Breakthrough </li></ul>USL T LSL USL T LSL T USL LSL USL’ LSL’ Customer Focused - Both Internally & Externally
    11. 11. <ul><li>What is Six Sigma? </li></ul><ul><li>Why Six Sigma? </li></ul><ul><li>Why Six Sigma at Bank of America? </li></ul><ul><li>Connection to Strategy. </li></ul>Agenda
    12. 12. What is Cost of Poor Quality? <ul><li>In addition to the direct costs associated with finding and fixing defects, “Cost of Poor Quality” also includes: </li></ul><ul><ul><li>The hidden cost of failing to meet customer expectations the first time </li></ul></ul><ul><ul><li>The hidden opportunity for increased efficiency </li></ul></ul><ul><ul><li>The hidden potential for higher profits </li></ul></ul><ul><ul><li>The hidden loss in market share </li></ul></ul><ul><ul><li>The hidden increase in production cycle time </li></ul></ul><ul><ul><li>The hidden labor associated with ordering replacement material </li></ul></ul><ul><ul><li>The hidden costs associated with disposing of defects </li></ul></ul><ul><li>For most companies today, the cost of poor quality is likely to be 25 % of sales. </li></ul><ul><li>In almost every company where the COPQ is unknown, the COPQ exceeds the profit margin. </li></ul>
    13. 13. Which Business Function Needs It? As long as there is a process that produces an output, whether it is a manufactured product, data, an invoice, etc…, we can apply the Six Sigma Breakthrough Strategy. For these processes to perform to a customer standard they require correct inputs!!! 6 Sigma Methods MFG. DESIGN SERVICE PURCH. MAINT. ADMIN. QA Marketing
    14. 14. Ken Lewis’ “Vision” Why Six Sigma? “ Six Sigma will enable Bank of America to make the breakthrough improvements in customer satisfaction and shareholder value that we must achieve to reach our goal of becoming one of the world’s most admired companies. That’s why I’m committed to using it as a performance management discipline throughout our company.” Ken Lewis, Chairman and Chief Executive Officer Bank of America
    15. 15. <ul><li>What is Six Sigma? </li></ul><ul><li>Why Six Sigma? </li></ul><ul><li>Why Six Sigma at Bank of America? </li></ul><ul><li>Connection to Strategy. </li></ul>Agenda
    16. 16. Green Belt Project Customer Segment Root Cause 1. Too many problems (“error free banking”) Assigned to Payment and Deposits Golden Thread Teams Deposit Golden Thread Root Cause 2.1 Complexity of Teller Processes contributes to processing errors Green Belt Project Definition Improve number of counter deposit slips presented for processing but did not post in time in _____________ (Mid-Atlantic, Kansas City, or Tampa) from ________% to ______%. Strategic Alignment - From Strategy to Action Hoshin Plan Hoshin Strategy 1.1   Provide a world-class customer/client experience through easy access and efficient, error-free service Six Sigma Change Process Customer Segment MBF Deposits Golden Thread MBF
    17. 17. A Common Tollgate Approach Project Management Ownership & Commitment Change Integration Define Measure Analyze Improve Control Improvement (Current) Development (New) <ul><li>Two approaches to reaching the Six Sigma goal: </li></ul><ul><li>- Improving existing products and processes </li></ul><ul><li>- Developing new products and processes </li></ul><ul><li>Different tools and steps, but focus and flow is the same </li></ul>DFSS $ $ GB/BB Two Approaches
    18. 18. Master Black Belt Black Belts Green Belts Team Members Quality Fundamentals/ Kaizen Now Champions Mentor, trainer, and coach of Black Belts and others in the organization. Leader of teams implementing the six sigma methodology on projects. Delivers successful focused projects using the six sigma methodology and tools. Participates on and supports the project teams, typically in the context of his or her existing responsibilities. Responsible for supporting the Deployment Strategy within Line of Business/Customer Segment or Golden Thread Deployment Champions Education
    19. 19. <ul><li>Leadership Commitment, Competence, & Involvement </li></ul><ul><li>Methodology & Tools </li></ul><ul><ul><li>Data Driven </li></ul></ul><ul><ul><li>Statistically Validated </li></ul></ul><ul><li>Best People 100% Dedicated to Defect Reduction </li></ul><ul><li>Project Focused </li></ul><ul><ul><li>Aligned to Strategic Goals (Hoshin, MBF) </li></ul></ul><ul><ul><li>High ROI Expectations </li></ul></ul>What Makes Six Sigma Different?
    20. 20. Six Sigma & Leadership <ul><li>Six Sigma only works when Leadership is </li></ul><ul><li>passionate about excellence and willing to change. </li></ul><ul><li>Fundamentals of Leadership </li></ul><ul><ul><li>Challenge the process </li></ul></ul><ul><ul><li>Inspire a shared vision </li></ul></ul><ul><ul><li>Enable others to act </li></ul></ul><ul><ul><li>Model the way </li></ul></ul><ul><ul><li>Encourage the heart </li></ul></ul><ul><li>Six Sigma is a catalyst for leaders </li></ul>
    21. 21. <ul><li>Bank of America Executive Officer team </li></ul><ul><li>Ken Lewis – certified Green Belt </li></ul><ul><li>Jim Hance – certified Green Belt </li></ul><ul><li>Amy Brinkley – certified Green Belt </li></ul><ul><li>Ed Brown – certified Green Belt </li></ul><ul><li>Rich DeMartini – certified Green Belt </li></ul><ul><li>Barbara Desoer – certified Green Belt </li></ul><ul><li>Gene Taylor – certified Green Belt </li></ul>The Bank of America executive officer team are all certified Green Belts Executive Commitment
    22. 22. <ul><li>“ Sustaining the intensity of our Six Sigma work is critical for Bank of America to achieve its strategic goals. Six Sigma has enabled us to generate more than $300MM in first-year productivity gains for the company. It has also had a significant impact upon the leadership team with our personal education and certification as Six Sigma Green Belts. As we look to the future, our leadership charge is to keep Six Sigma a top priority and use it to produce organic customer revenue growth.” </li></ul><ul><li>Ken Lewis (10/9/02) </li></ul>Results
    23. 23. Questions?
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