REDUCTION IN CONSUMABLE COST IN MAIN ASSEMBLY

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  • 1. ASTD ICE 2007 W110 Concurrent Session Session Number: W110 Motorola and Six Sigma Presented by: P.W. Wong Master Black Belt Regional Six Sigma Fulfillment Manager Motorola University Asia Pacific D. Line: 603-7800 8049 Mobile: 6012-234 7678 p.w.wong@motorola.com Session Learning Objectives: 1. Know the evolution of Six Sigma from its beginnings to the new Six Sigma of today, from Motorola’s perspective 2. Understand how Six Sigma is implemented using the top-down driven approach to help companies achieve strategic business improvements, and be cognizant of the various Six Sigma methodologies available 3. Through a case study, learn the roadmap, critical-to-success factors and the common pitfalls to avoid for a successful company-wide Six Sigma campaign 1
  • 2. ASTD ICE 2007 W110 Concurrent Session Evolution of Six Sigma in Motorola Motorola conceived the Six Sigma metric and methodology in 1986 as a way to achieve the company’s goal of a hundred-fold improvement in quality within five years. Six Sigma provided a quality measure that could be used throughout the corporation – from manufacturing to support functions. When Motorola first launched Six Sigma at the start of 1987, we put the emphasis on defect reduction in our manufacturing processes. Twenty years later, the classic Six Sigma has evolved into what is now called Digital Six Sigma, applied with focus on strategic business issues to achieve financial benefits, providing dedicated Six Sigma resources in the businesses and leveraging new digital tools to improve training, decision making, analysis and compliance. Some of the key milestones in our Six Sigma journey are as follows: 1986 - Six Sigma concept was conceived at Motorola January 1987 - Motorola officially launched and announced Six Sigma with the goal of achieving < 3.4 defects per million opportunities by 1992 1988 - Motorola won the first Malcolm Baldrige National Quality Award, given by the U.S. Congress to recognize and inspire the pursuit of quality in American business 1991 - The Black Belt initiative was introduced by the Six Sigma Research Institute(SSRI), an alliance of Motorola, IBM, Texas Instruments, Kodak, and others 1992 - the stretch goal of 10X reduction in defects and cycle time was set 1998 - Motorola launched a formal corporate renewal initiative as the vehicle to achieve re-alignment. This corporate renewal is very much a process redesign and realignment based on customer requirements 1999 - we began operating as an organization driven by new rules of engagement and managed by the Performance Excellence business model 2
  • 3. ASTD ICE 2007 W110 Concurrent Session 2003 - Digital Six Sigma was launched to deploy Six Sigma strategically within the corporation, using a top-down driven approach to work towards achieving business improvements and financial benefits 2006 - Quality IQ initiative was launched to propagate the application of specific quality tools and Six Sigma methodologies to all levels of employees in the different functions of the corporation to re-create the Quality and Six Sigma culture. Digital Six Sigma became a part of Quality IQ and was enhanced with the implementation of the various methodologies for the key processes in Motorola. Six Sigma in Motorola Today In Motorola today, Digital Six Sigma is part of the Quality IQ initiative. Quality IQ is designed to raise the overall awareness and improve competencies needed for greater efficiencies and customer satisfaction. It includes a badge achievement process as well as our traditional belt certification, providing the opportunity to develop more employees with quality improvement techniques. Quality IQ reaches out to every corner of the company. One of its objectives is to have a pre-requisite that every employee take a Six Sigma foundation course online, so that they at least understand the language and basic concepts of Digital Six Sigma. Badge Achievement Belt Certification Learn quality improvement Prepare to lead or work on skills to apply on the job strategic business improvements White Badge Green Belt CIC2004 Digital Six Sigma Foundations Green Belt Development Track CIC2006 Motorola’s Approach to Quality Yellow Badge Black Belt 2 quality electives Black Belt Development Track (Nomination Only) Continuing Education Master Black Belt Continue to take courses every Master Black Belt Development Track year to improve your Quality IQ (Nomination Only) 3
  • 4. ASTD ICE 2007 W110 Concurrent Session The Quality IQ program offers white or yellow badges for those who successfully complete training and testing in quality development courses. This badge achievement process is for those salaried and professional employees who want to apply new quality improvement skills on the job and be recognized for their accomplishments. For those who are pursuing a higher expertise level in Six Sigma, Motorola continues to provide Green, Black and Master Black Belt certification for employees who lead or work on strategic business improvements. Managers are responsible to develop a Quality IQ training plan beyond white badge achievement for their employees. Using the employee Performance Management process, they ensure their people complete training, apply the tools on the job and improve quality and performance through measurable results. Digital Six Sigma is a revitalization of Motorola’s Six Sigma through four improvements: • Leveraging New Digital Tools to Drive Project Success • Digitizing Business Processes to Permanently Enforce Optimal Process Compliance • Tracking The Vital Few through Digital Cockpits • Permanently and Proactively Eliminating Sources of Variation that Cause Defects It is used as a leadership tool and management system focusing on strategic business improvements. It helps the company align, mobilize, accelerate and govern its business improvement efforts. Align – Using the balanced scorecard process, customer requirements are aligned to business strategy and core business processes. Then relevant, line of sight improvement targets, stretch goals and appropriate metrics are created. The goal is to provide bottom-line results, which are sustainable, measurable and aligned with our business goals. Mobilize – Using empowered teams and a focused project management methodology, employees are enabled to take action. Improvement targets are recast into customer-focused team efforts, which are organized with clear project team charters, success criteria, and rigorous reviews. Accelerate – It is essential to drive projects to timely results. Acceleration can be achieved by employing an “action learning methodology” – combining structured 4
  • 5. ASTD ICE 2007 W110 Concurrent Session learning with real-time project work and coaching to quickly bridge from learning to doing. Govern - Leadership team roles and responsibilities are assigned to focus on driving the completion of projects and developing the organizational infrastructure. Execution of strategy is driven by managing scorecard metrics. Structured review processes involve reviewing dashboards of results as well as drilling into process and project details where needed. Barriers are removed when leaders share best practices. The diagram above illustrates the strategic deployment of Six Sigma efforts to help achieve Motorola’s key business performance goals. The big “Y” represents a balanced scorecard goal. It is the important result which we are trying to accomplish and it is a function of a set of performance drivers. The objective is to identify, using variance-based measurements, those vital few performance drivers which have the most impact on the big “Y”. Six Sigma projects are then identified and scoped to work on these vital few drivers utilizing focused project management with rigorous reviews to effect an organizational change towards achieving the big “Y”. Six Sigma started out in Motorola as a methodology focusing on reducing defects in manufacturing, then broadened out to other types of processes and systems, and today has become a leadership tool that we can use to drive strategic business 5
  • 6. ASTD ICE 2007 W110 Concurrent Session improvements. Our investments in improvement do not really matter unless we can meet the requirements of the customer, and do it better than the competition. We are in a battle for business, and Six Sigma is helping us win that battle. Six Sigma methodologies in Motorola In addition to Six Sigma methodologies focused on process improvements, there is an increased emphasis today to apply Six Sigma in design and innovation spaces, as it is in these areas that huge benefits can be derived from applying Six Sigma. Using Design for Six Sigma methodologies in new product development enables us to understand what the real customer requirements are and translate them into real engineering requirements so that we can design in Six Sigma performance and introduce new products that win in the marketplace. The tables below list the various Six Sigma methodologies used for process improvements and for new product development in Motorola today. Six Sigma methodologies for process improvements DMAIC Define – Measure – Analyze – Improve - Control This analytic tool set uses a five-step process to work on variation and defect reduction in business processes. DMADDD Define – Measure – Analyze – Design – Digitize – Draw-down This analytic tool set is used to drive improvements in efficiency and speed by process re-design to remove non-value tasks and other wastes. DFSS Design for Six Sigma: Define – Measure – Analyze – Design – (DMADV) Verify This is an analytic tool set used for developing a new process to optimize its performance before it is put into operation, making this methodology proactive, as opposed to reactive like the DMAIC tool set. It is also used for re-engineering an existing process or service to achieve breakthrough improvements. 6
  • 7. ASTD ICE 2007 W110 Concurrent Session Six Sigma methodologies for product development P2D2 Product Portfolio Definition and Development: (IDEA) Identify – Define – Evaluate – Activate This methodology is used at the front-end of Motorola’s research and development process to identify and develop the right portfolio of products based on the company’s business, marketing and technology strategies TDFSS Technology Design for Six Sigma: (I2DOV) Invent/Innovate – Develop – Optimize – Verify This methodology is used at the front-end of Motorola’s product development process (after P2D2) to develop the technology platform for the identified product portfolio HDFSS Hardware Design for Six Sigma: (CDOV) Concept – Design – Optimize – Verify This methodology is focused on hardware product design leading to product commercialization. It is mapped to Motorola’s M-Gate product development process SDFSS Software Design for Six Sigma (RADI) Requirements – Architecture – Design – Implementation This methodology is used for software development in a product development environment Motorola University Asia Pacific’s role in Six Sigma Implementation For more than 20 years, Motorola University has been a driving force of change in Motorola. Motorola University’s commitment to training and consulting extends beyond internal employees to include clients from the corporate world. Motorola University in Asia Pacific consists of five institutes set up to provide specific learning solutions in the areas of Leadership, Quality & Six Sigma, Sales & Marketing, Supply Chain and Engineering. The five institutes facilitate 7
  • 8. ASTD ICE 2007 W110 Concurrent Session development of the training curriculum and competency models, and provide expertise with strategic learning solutions. In addition to deploying corporate-driven quality and Six Sigma programs to Motorolans in the Asia Pacific region, Motorola University Asia Pacific runs the external Six Sigma training and consulting services to provide the learning and performance improvement vehicle for Motorola's customers, suppliers, partners and other potential customers. This helps to build a greater Motorola ecosystem and consequently enable our business growth. Case Study of Successful Company-wide Six Sigma Implementation Following is a case study of successful Six Sigma campaign in one of Motorola University A/P’s customers. The company is in the oil & gas industry with refineries at multiple locations. As part of its global strategy to improve product quality and customer satisfaction, this company engaged Motorola University A/P’s services to launch its Six Sigma initiative. The initiative was conceived when the senior leadership team participated in an awareness program on Six Sigma. This set the ball rolling and following that, a two-day Leadership Jumpstart workshop was organized to identify the strategic business objectives, develop the organizational scorecard, set high-impact improvement targets and identify the key performance drivers for the company to excel in its business. Based on the key performance drivers, Six Sigma projects were identified and prioritized, along with their project champions. This was followed by the selection of the right Black Belt and Green Belt candidates to lead the projects. A formal organization, review mechanism, structured training, and project facilitation was then established to implement the Six Sigma campaign. 1. Road Map of Six Sigma Campaign The roadmap of the Six Sigma campaign is shown on the next page. 8
  • 9. ASTD ICE 2007 W110 Concurrent Session 5. Institutionalize Business Improvement processes - Horizontal spread to all areas 4. Project Reviews & Completion - Execute projects - Document and share success stories 3. Training & Project Work Step Step - Green Belt / Black Belt training - Project initiation & follow-up 2. Project Definition - Champion development - Green and Black Belt candidate selection - Draft project charters 1. Selection & Planning - Understand the Six Sigma Business Improvement approach / Leadership Jumpstart - Development of implementation plan - Selection of appropriate Business Improvement projects Time 2. Scope To focus the energy and concerted efforts for Six Sigma Business Improvement in defined areas where potential for Return on Investment (ROI) is the highest. Scope of the campaign covers: • Understanding the company’s products and processes • Leadership Jumpstart workshop • Six Sigma project selection • Champions training • Green Belt and Black Belt training • Project facilitation and toll gate reviews • Green Belt / Black Belt Certification • Replication and Standardization 9
  • 10. ASTD ICE 2007 W110 Concurrent Session 2.1 Understanding the company’s products and processes This was done at one of the refineries over four days to help the consultant understand the company’s products and processes in preparation for the subsequent training and project coaching sessions. 2.2 Leadership Jumpstart workshop This was a crucial event in the overall campaign. Participants included the Business Director of the organization, all plant Heads and their respective General Managers. The major objectives of this workshop was to: • Identify critical customer requirements and critical business issues • Create a shared understanding of the strategic business goals and how Six Sigma will support these goals • Commit to improvements, allocate resources, and sponsor project teams • Identify high-impact Six Sigma projects for execution • Develop the selection criteria for Green Belt and Black Belt candidates • Plan the change campaign associated with Six Sigma implementation Critical outputs of this workshop are enumerated below: • Voice of Customer (VOC) – Key Stakeholder Expectations • Market/Situation Analysis • SWOT Analysis to evaluate the Strengths, Weaknesses, Opportunities and Threats Based on the above outputs, Strategic Objectives for the next 3-5 years were formulated and prioritized as follows: • Achieve annual turnover of USD XXX billion • To become a leading brand in Asia by providing total solutions in the core area of the business • Build leadership capability in the organization • Develop application technology for Green field areas with capability and competency development • Identify strategic alliances and acquisitions 10
  • 11. ASTD ICE 2007 W110 Concurrent Session This further led to the development of key metrics in the following four areas: • Internal Business • Financial • Customer and Market • Learning & Growth Key Performance Drivers were then identified as follows: • Input cost • Plant availability • Product quality and quantity to customer • Quality of services to customer • Yield of higher-revenue items from the plant • Quality culture in the organization • Performance management system • Supplier and contractor selection and qualification process 2.3 Six Sigma Project Selection The outputs from the Leadership Jumpstart workshop became the foundation used to identify and prioritize Six Sigma projects aligned to the strategic business goals. 2.4 Champions Training Project champions were trained on their expected roles and responsibilities and to be accountable for the successful completion of their respective Six Sigma projects. Project charters were drafted and the right Green and Black Belt candidates selected to work on the projects. 2.5 Black Belt and Green Belt Training Two waves of Black Belts and seven waves of Green Belts were trained and their projects were facilitated. The projects undertaken focused on the following areas: • Productivity improvement • Yield enhancement • Improving conformance to specifications • Improving cycle time in support functions • Conserving natural resources 11
  • 12. ASTD ICE 2007 W110 Concurrent Session • Reducing waste / cost reduction • Inventory reduction • Reduction of failure rates • Employee satisfaction • Improving availability of systems and networks Six Sigma implementation follows a project-driven approach. These projects were driven by committed Champions with Black Belts/Green Belts leading the projects. A total of 70 projects were selected for execution in the focus areas shown above. Highlights of a few of these projects are described in the next section. 3. Highlights of Some Completed Six Sigma Projects No. Project Title Project Details Results Achieved 1 Product This project is based on the premise that The recovery Recovery product recovery can be varied by improvement was Improvement altering the various operating parameters achieved leading to of the processing unit. The demand and a cost advantage of cost of product in the domestic and approximately international market is very high and USD 200K on an improving product recovery is essential annualized basis. to boost the overall profitability of the plant. The project was led by a Black Belt candidate. The team reviewed all the operating parameters and the critical parameters were analyzed in detail using tools such as Comparative Methods, Correlation and Regression. Solutions were identified and implemented. Control Plans and Standard Operating Procedures (SOP) were modified and then institutionalized. 12
  • 13. ASTD ICE 2007 W110 Concurrent Session 2 Compliance The team led by a Black Belt candidate The improvements to Product reviewed the potential causes of non- led to a cost saving Specification conformities. Detailed study of the of about USD 2M blending and lab operations was on an annualized undertaken. basis. Root-causes were validated with actual data collected, using tools like Pareto analysis, Multi-vari analysis and ANOVA. Appropriate solutions were then implemented and institutionalized. 3 Intermediate This project was aimed at the reduction Annualized Stock of intermediate stock inventory by financial benefits Inventory 15,000 MT and conversion of the of USD 600K was Reduction inventory into in-spec finished products realized The team focused on the generation of slop oil. Data was stratified in different ways and root-cause validation was done using analytical tools like regression analysis. 4 Improvement This project focused on the improvement Annualized cost In Plant Data of Restoration Time, Availability, savings of USD Network Response Time and Data Transfer Rate 120K was of the plant’s information system. achieved Detailed study was done on the network management and restoration process. While availability issues could be resolved by simple qualitative process analysis, other issues were subjected to statistical analysis before the best solutions were discovered. 13
  • 14. ASTD ICE 2007 W110 Concurrent Session 4. Impediments Faced in Implementing Six Sigma The company went through the 1st phase of Six Sigma implementation fairly successfully but there were various impediments in the process. The key ones are documented below. Companies planning to adopt Six Sigma can get some insights from this experience. • Initial enthusiasm of participants led to too big a scope in some projects which was difficult to manage and complete in 6 months time. This led to revision of the project charters. • Some cross-functional projects required involvement of multiple departments but they were not strongly aligned to the business strategy. As such, these projects did not get enough support. • Lack of regular review by project champions. Speedy and successful projects require rigorous review at each toll gate. • Availability of appropriate historical data. These delayed both Measure & Analyze phases, leading to delay in project completion. • Irregular meetings of the team members. • Change of priority for GB and BB candidates during the project period. This includes transfer of candidates across plants and across functions within the same plant. • Difficulty in applying concepts learnt into practice and some of the projects failed to demonstrate real Six Sigma rigor. • Inability of candidates to convert improvements into financial terms. 14
  • 15. ASTD ICE 2007 W110 Concurrent Session 5. Key Learning Points Successful implementation of Six Sigma is dependent on: • Project selection. Direct linkage of projects to the company strategy. • Project definition. Sometimes failure to clearly define ‘pain statement’ leads to unclear direction and hence, failure of the project. • Top management engagement in the implementation. In this company, projects were governed at the highest level with Plant GMs leading the toll gate reviews at the end of each phase of the DMAIC improvement process. • Selection of the right Black Belt candidates to lead the projects. If they are not analytical or are not result-oriented, the projects will not be successful. • A critical-to-success factor is the project review by project champions. The success was better (both in terms of results and speed of project completion) for those projects where the champion has a passionate interest. • Maintaining the project champion, project leader and team members throughout the project. Transfer of key members during the project execution led to slow-down and termination of some projects. • Timely mobilization of the project team. This is to prevent potential project failure due to change of priorities and/or loss of interest if the project is not started timely. • Effective application of the Six Sigma methodology and tools in a team environment. 15