Proposal for ASQ 2004 Six Sigma Conference

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  • 1. Integrate or Isolate: How to Maximize the Effectiveness of an Organizations Six Sigma Resources Caryl A.R. Eiseler Kaufman Global, LLC Carmel, IN Everybody Knows It’s Got To Start At The Top Unfortunately, no one really tells us how to “do” that. Six Sigma, lean, and many other productivity tools have become the arsenal in our toolbox of business improvement. Whether you are a Master Black Belt, Black Belt, Yellow Belt, Green Belt, sensei, champion, lean master, a CEO, a team leader or a supervisor who has been equipped with these tools, the basic question still remains: “How does our organization implement this well – so it makes sense for this organization, and drives the business and cultural results we intended?” How Are We Doing So Far? Text after text has been published in the last several years presenting different Six Sigma improvement methodologies. These texts are filled with an introductory chapter, and often a brief chapter on training, hiring a consultant or roles and responsibilities, and case studies on leadership commitment. The remaining chapters are tools – lots and lots of tools. New software tools have emerged creating easier, quicker data manipulation and interpretation strategies. Program and project management software has adapted to aid in project tracking, budgeting, documentation and communication. The tools and techniques have been dusted off, made more widely accessible (and in some cases more acceptable) and more user friendly. Statistical Process Control (SPC) and the Toyota Production System (TPS) are no longer acronyms used by those “people in quality/productivity.” Or are they? A typical Six Sigma (or lean) deployment as recommended by many of the early thought leaders consists of full-time, dedicated Master Black Belts, Black Belts, Lean-Six Sigma masters, or lean masters deployed throughout the company or location (depending upon the organization size). This commitment is for no less than two years (following the completion of training) and comes with a commitment to produce $500,000 annually to the bottom line in project savings during their tenure (this varies by company to include tangible and intangible results). Unfortunately, many companies “jumped on the deployment bandwagon” before understanding how critical having the implementation structure in place first was to their success. Trained resources returned to the organizations and started 1
  • 2. working on projects without an overall framework, goals, focus or direction. Some projects were huge successes on paper and in metrics but never affected the organization’s key business objectives such as cost, quality, inventory turns, responsiveness or customer service. From the vantage point of the employee, the supervisor, the manager or the CEO, adopting Six Sigma or lean (assuming no formal sustaining structures are in place before deployment began) looked pretty familiar: those Six Sigma and lean resources spewing acronyms and using complicated tools looked a lot like those quality and productivity people – that stuff must be their job. Six Sigma, Lean-Six Sigma, and lean resources are expensive to develop and retain or recruit and retain. Many organizations do, in fact, view the purpose of these valuable resources to “fix” quality and productivity problems. This view does perpetuate the notion that quality/productivity is someone else’s job and undermines any corporate improvement culture. Is this really happening during some implementations of Six Sigma, Lean-Six Sigma, and lean? Yes! At your next professional society meeting, network chat, or alumni group social, ask the following brief questions: • After a Six Sigma/lean project, has the improvement resource ever ended up as the defacto process owner? • Are the improvement resources often asked to continue analyzing data for a group, even after their project is done? • Are the improvement resources now still responding to teams even after the major problem in the area is “fixed” and they are assigned to a different area? Six Sigma and lean are billed as change initiatives. Change can’t happen if organizations just deploy Six Sigma/lean resources out into their facilities and just hope for results to happen. The organization must provide a leadership structure for the change to be bounded by. Executive leadership must decide how projects will be selected and resources assigned. Leadership teams will work with improvement resources and teams to create focused results and educate others in the organization. The leadership teams throughout the organization must have a consistent method for providing guidance, direction, coaching, and opportunities to the rest of the organization so they too can learn the tools and techniques of business improvement. Deployment is easier than implementation any day. Let’s Try It Again: It Starts At The Top And It Is Everyone’s Job By committing to Six Sigma, lean or Lean-Six Sigma, clearly executive managers of many companies took the first step towards implementation – a commitment to doing something with the right tools and the right people at the right time for the right reason (the shareholders were demanding it). What was missing was the overall structure or approach guiding doing the right thing. 2
  • 3. One such tactical approach that has been highly effective for many organizations implementing lean, Six Sigma, and Lean-Six Sigma is called SLIM-IT®. An organization that is able to utilize this implementation model, whether as presented or customized for their organization, is left with an aggressive, inclusive culture of sustainable, continuous change. A conceptual model of SLIM-IT is presented in Figure 1 below. SLIM-IT® “Normal” ® pre -SLIM-IT Recommend structures, personnel & processes EXISTING CHANGE TEAMS CHANGE MGT. SLIM-IT® MANAGEMENT structures New Things & processes TEAM Charters Executive Prioritize Improving Steering Guide Lean Decide Fixing Things Daily Committee Direct Management System Planning Blitz Admin. Kaizen Blitzes • PVD Operations Implementation • DWGM Administration (Planning,design, • KAS employee involvement, Maintaining good changes installation, metrics, • 20 Keys ® coaching, training) • SIC Marketing/ Sales The Organization Dept. 1 Dept. 2 Dept. 3 Dept. n a b c d e f g …y z Intact Work Groups = a, b, c, etc. © 2003 Kaufman Global, LLC Executive Champion 5 Figure 1. Implementation of a change structure begins with the Executive Steering Committee (ESC). The ESC is the top-level management at a location, office or site. The ESC should include the highest-ranking union representative, if appropriate. The size of the ESC should not exceed 10-12 members if possible. The steering committee sets the criteria for how projects are to be chartered; in essence, they determine what makes a project worthy of assigning resources to it based on how that project will directly affect business goals and objectives. The role of the ESC is to prioritize, coach, direct, allocate, counsel and make critical decisions as to the directions of the key change parameters (or metrics). The ESC meets weekly to monitor change team progress (discussed in detail below), determine the need for new change teams, deal with any political roadblocks preventing the teams and key resources from achieving their goals, and to recognize team achievements and key customer issues. If an ESC member cannot attend for any reason, a representative from his/her area must attend in their place. In order for sustaining, continuous improvement structures to be successful, key communication and decision making meetings cannot be “optional.” 3
  • 4. Change teams are the second key component of the SLIM-IT® implementation model. A change team is formed by the ESC for the reason of creating a significant modification (change) in the organization meeting one or more of the following criteria: • Involves a large number of people (>10) • Involves a more than “normal” day-to-day work process • Is complex • Is cross-functional • Involves several levels (in terms of the management hierarchy) • Is technically difficult • Makes significant alterations in the way things are done • Will likely encounter significant resistance Often, the categories of changes are divided into four basic categories: 1. New things team – implementing a system new to the organization. For example, an ERP system, a RF inventory tracking system or a new performance management tool. 2. Improvement team – changes to improve an existing system. Examples would include reducing employee turnover, improving a specific product line yield or customer service rating. 3. Fixing things team – changes to correct flaws or problems. For example, backorders, variation reduction, missed customer commitments or defects getting to the customer. 4. Kaizen Blitz team – a team that plans and administers all the intensive weeklong blitz events. Many companies have more than four categories and have adapted these names to fit their organizations’ culture more closely. Each team has a champion from the ESC and a representative from the team (not a member of management) presents a brief update at the ESC meeting (10 minutes or less). These updates serve the purpose of alerting senior staff to resource needs or roadblocks or to recognize successes. There should be limited visual materials – just a low-tech update. Each team has a champion from the ESC and a process owner from the area where the “opportunity” or performance gap emanated from. So where do the Six Sigma, lean or Lean-Six Sigma resources fit into this model? Are they integrated or isolated? Let’s take a look. 4
  • 5. Maximizing Your Improvement Resources in Implementation Each time a change team is initiated, the ESC identifies a champion, a team leader and technical support resources by type – not name. The team leader is usually the process owner with the span of control over the majority of the cross function processes if appropriate, or the single process. The technical resources by type might be Six Sigma experts (Master Black Belts, Black Belts, Green Belts,) lean masters, software engineers, hardware engineers, facilities engineers, human resource professionals, employees, supervisors, electricians, legal professionals, etc. The project may be not be well defined until just a few resources are assigned to define the opportunity, but as the project becomes clearer, formal project management methodology should prevail (based on DMAIC, DFSS, S4, PDCA, etc.) The important consideration for any project definition and assignment for the ESC is to get the right resources assigned to the right project, frequently and openly coach, mentor, counsel and direct the change teams to success in support of the overall business goals and objectives. An example of how one Fortune 100 Corporation chose to structure their implementation and assignment of Six Sigma resources is shown in Figure 2. In this case, the organization was very large and had multiple sites. The structure was instituted as part of the champion training at each of the sites. The goals and objectives of the first two types of change teams (New Initiatives and Improvements) were the same for all sites. The individual site projects were somewhat different by the character of the site, but were focused on the support of those goals. The Fixing Things and Kaizen Blitz change teams focused on both site level and corporate business improvement objectives. A site level ESC met weekly to support the continuous improvement culture and teams progress at their respective site. Additionally, a representative from the site level ESC joined the corporate ESC in person for a brief update on a quarterly basis. The site level ESC’s may also participate in corporate update ESC meetings by teleconference on a monthly basis. Most importantly, these updates held to very highly formatted, low-tech and brief presentations. No more spending a week on the presentation instead of a week on the improvement project. 5
  • 6. Change Management ESC STRUCTURE New Initiat ives (ERP),Diversit y, Succession Planning Improvem ent s (Inventory Accuracy,Employee Turnover, Pricing, Inventory Turns) Fixing Things (Defects,Defect Prevention/Error Proofing, Variation Reduction) Black Belt Kaizen Blitzes Pool (Targeted Improvement, Lean Activities, Root Cause Elimination/Minimization) LDMS/policies/procedures • Primary V isua l Displays • Da ily Work G roup Me etin gs Green Belt Implementation Plans Pool • Kaizen Action Sh eets • 20 Keys • Short-Inter val Coaching SITE-LEVEL Su pervisor Su pervisor Work Work Work Work Work Group 1 Group 2 Group 3 Group 4 Group 5 Implementation K CG :CA RE :11/ 02 Figure 2. Accepted thinking suggests organizations should staff 1% productivity improvement professionals (lean/Six Sigma Black Belt level) for the total number of employees. Centrally located or distributed? Six Sigma, Lean, Lean-Six Sigma resources that are cloistered in Centers of Excellence or within vertical organizations perpetuate the idea that “quality (performance improvement) is someone else’s job.” Corporations who utilize this structure and manage these resources by a personal performance objective of x- hundred thousand dollars a year to the bottom line are wasting time, talent, and not gaining any overall improvement focus for their corporation. Non- certified/belted employees in these companies recognize problems openly when asked. However, when asked how they were going to fix or improve them, their answer was, “We’re waiting for Organization X”, or “Those guys/gals in the neat shirts should be by today to look at it”, or “I think they are sending someone down from corporate.” Distributed resources allow knowledge capital to reside throughout the organization. Black Belts and lean masters can train others (Green Belts and lean teams) and the culture begins to grow. Projects are assigned on as needed basis instead of an “I have to meet this dollar objective” commitment. Improvement resources have a primary objective of teaching and implementing in their areas and building the culture. Instead of working on one big $400,000 project, a process owner’s teams find six different $70K-$80K annual savings opportunities they can implement themselves with his help. These projects are approved by the area manager and presented to the ESC for final approval and 6
  • 7. funding. Instead of just one Six Sigma Black Belt getting excited about the tools, the structure and the methodology, six teams get involved and get things done that are in line with the organizations goals – and they learn how to use the tools, track the metrics, see the improvement, and live the benefit. And since there were six teams involved, the Black Belt asked for help, and he was assigned two Green Belts from another organization to help facilitate some of the teams, keep them on track, and help them with the tools. The Green Belts learned about a new organization, got to practice their facilitation skills, and were part of a big success. Integrated deployment of improvement resources is the optimal use of human and knowledge capital for sustained, continuous improvement initiatives. An integrated pool of knowledge allows for flexible deployment, flexible assignment, and flexible frequency of assignment (over-deployment/long-term remote deployment has been stated as one of the highest reasons for Black Belt/lean master level turnover). Most organizations are well into the training and development curve and many belts, masters, Lean-Six Sigma masters can be readily identified. It is time to pool these resources as an organizational asset, let them be champions when needed in a team setting, but let them get back to work – teaching, mentoring, coaching and installing the continuous improvement culture in their own process area. Some may still be needed on the few “big” New Things or Fixing Things change teams. Rotate people into areas they are not familiar with to minimize bias, maximize professional development and minimize politics. Develop as many key process owners as the organization can afford in using key lean and Six Sigma tools and task them to teach their organization in the implementation of work group metrics, visual tools, process control, and team problem-solving. Conclusion By utilizing a structure that drives multiple, focused business improvement projects into the organization that are well staffed, coached, mentored, and monitored, the probability of accelerated, positive results is greatly enhanced. Distributed deployment of talent, tools, technology and team bounded by this structure (and the other key components of the SLIM-IT® implementation model) creates a long-term sustainable continuous improvement culture and significant business results. Structure Lean Daily Structure Management System Mentoring Metrics Teamwork Training Tools Technology 7
  • 8. References Breyfogle, F.W., Implementing Six Sigma: Smarter Solutions Using Statistical Methods. 1998. Wiley & Sons. Kinni, Theodore, America’s Best: Industry Week’s Guide to World-Class Manufacturing Plants. 1996. Wiley & Sons. Lareau, W., Office Kaizen: Transforming Office Operations into a Strategic Competitive Advantage. 2003. ASQ Press. Lareau, W., Lean Leadership: From Chaos to Carrots to Commitment. 2000. Midland Press. Liker, Jeffrey, Becoming Lean: Inside Stories of U.S. Manufacturers.1998. Productivity Press. Pande, Peter S., Neuman, Robert P and Cavanagh, Roland R., The Six Sigma Way. 2000. McGraw Hill. Suri, Rajan, Quick Response Manufacturing: A Companywide Approach to Reducing Lead Times. 1998. Productivity Press. 8