Total quality parameters - new ventures

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  • Sustained performance!!! Customer needs!!
  •  Notes:None
  • We are currently operating at between 3.0 – 3.5 Sigma. Given this information, how satisfied are we at operating at this level?
  • Airline fatalities are at 6.2 sigma.
  • Six Sigma is 20,000 times better than 3 sigma.
  • Key customers and key competitors……and shareholders.
  • Total quality parameters - new ventures

    1. 1. Total Quality Parameters – New Ventures Venkatesh Sarvasiddhi Head-Direct Marketing HCL Technologies
    2. 2. Hidden costs Hidden Costs <ul><li>Excessive use of material </li></ul><ul><li>High inventory </li></ul><ul><li>Inadequate resource utilization </li></ul><ul><li>Cost of redesign and re-inspection </li></ul><ul><li>Cost of resolving customer problems </li></ul><ul><li>Lost customers / Goodwill </li></ul><ul><li>Conversion efficiency of materials </li></ul>
    3. 3. BREAKTHROUGH STRATEGY Identification Characterization Optimization Institutionalization Define Measure Analyze Improve Control Standardize Identify key business issues Understand current performance levels Achieve breakthrough improvement Integrate Six Sigma in day to day functioning. Stage Phase Objective The Six Sigma roadmap- Breakthrough strategy
    4. 4. Accurate and Precision <ul><li>Accuracy & precision of a process can be best explained by using the analogy of a rifle firing at a target. </li></ul>
    5. 5. Accurate and precise +
    6. 6. What is it? creating value for our customers
    7. 7. “ Six Sigma” : What is it? “ A comprehensive and flexible system for achieving, sustaining and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data and statistical analysis, and diligent attention to managing, improving and reinventing business processes.” -- The Six Sigma Way , by Pande, Newman and Cavanaugh creating value for our customers
    8. 8. Six Sigma : What is it? <ul><li>Specifically – </li></ul><ul><li>Customer-focused, fact and data-based decision making driving out waste and defects which creates value for our customers. </li></ul>It is just NOT Supply Chain or Manufacturing creating value for our customers
    9. 9. <ul><li>A culture that rapidly drives our key activities* to be defect free 999,997 times out of 1,000,000. </li></ul><ul><li>< 3.4 defects per million opportunities. </li></ul>Six Sigma : What is it? * Valued by or critical to our customer. creating value for our customers
    10. 10. Sigma - the lower case Greek letter that denotes a statistical unit of measurement. It measures the variability or spread of the data. What is Sigma? 
    11. 11. Six Sigma Methodology <ul><li>Define - Gather facts regarding the exact question to be answered </li></ul><ul><li>Measure - Establish our baseline performance and collect meaningful data relevant to the problem </li></ul><ul><li>Analyze - All about finding the real root cause(s) and the key to solving our problem </li></ul><ul><li>Improve - Evaluate possible solutions based on their impact on performance </li></ul><ul><li>Control - Quantify the change in performance and make sure the improvement is sustained </li></ul>y = f (x 1 , x 2 , x 3 …, x n )
    12. 12. Customers First Customer Requirements Process Improvement Employee Involvement
    13. 13. Customer Retention <ul><li>Acquiring a new customer costs more than retaining an existing customer </li></ul><ul><li>It can take years to sign a new customer and only minutes to lose one </li></ul><ul><li>Standing still is not an option </li></ul><ul><li>Companies measure customer retention </li></ul>
    14. 14. What to Ask Every Customer <ul><li>“How do you measure success?” </li></ul><ul><li>“How will you measure our success?” </li></ul>Helps you learn about their business Shows the customer you understand their customers Give you a basis for process improvement
    15. 15. <ul><li>Reduce Variation </li></ul>Improvement Objectives Defects: Service unacceptable to customer
    16. 16. Cure Time Number of Samples Lower Specification Limit (LSL) Upper Specification Limit (USL)
    17. 17. Upper Specification Limit (USL) Lower Specification Limit (LSL) Lower Specification Limit (LSL) Upper Specification Limit (USL)
    18. 18. Putting Six Sigma in Perspective! <ul><li>20,000 lost articles of mail every hour. </li></ul><ul><li>Power outages seven hours each month. . </li></ul><ul><li>5,000 incorrect surgical procedures each week for a major healthcare provider. </li></ul><ul><li>Unsafe drinking water nine minutes every day. </li></ul><ul><li>Two long / short airport landings every day . </li></ul>Four Sigma quality ( 6210 DPMO) means… 99.370% right…but….. creating value for our customers
    19. 19. Putting Six Sigma in Perspective! <ul><li>Airline passenger safety ~ 8.2  </li></ul><ul><ul><li>Currently at 2.6 DPMO (incidents per million takeoffs and landings). </li></ul></ul><ul><li>Airline baggage handling ~ 3  </li></ul>Six Sigma quality ( < 3.4 DPMO). creating value for our customers
    20. 20. Impact of Six Sigma creating value for our customers
    21. 21. Sample Supply Chain Measures <ul><li>Distribution Center </li></ul><ul><li>Inventory Accuracy </li></ul><ul><li>Shipment Accuracy </li></ul><ul><li>Productivity </li></ul><ul><li>Relationship? </li></ul><ul><li>Audit Scores </li></ul><ul><li>Overtime </li></ul><ul><li>Complaints </li></ul>
    22. 22. <ul><li>1987 Motorola introduced Quality Program now known as Six Sigma (Bill Smith) </li></ul><ul><li>Allied Signal picked it up. </li></ul><ul><li>G.E. Success…. </li></ul><ul><ul><li>Capital Services </li></ul></ul><ul><ul><li>Medical Systems (CAT Scan) </li></ul></ul><ul><li>Dozens of others…... </li></ul><ul><ul><li>Learned the h ighest q uality p roducer is also the l owest c ost p roducer. </li></ul></ul><ul><ul><li>Learned customer loyalty of a Six Sigma company is ~3X that of the average company . </li></ul></ul>It all began at…..Motorola…not G.E. creating value for our customers
    23. 23. Who else is doing Six Sigma? <ul><li>Avery Dennison </li></ul><ul><li>Dow </li></ul><ul><li>DuPont </li></ul><ul><li>Foxboro </li></ul><ul><li>Sony </li></ul><ul><li>Deere & Co. (John Deere) </li></ul><ul><li>Delphi </li></ul><ul><li>Allied Signal </li></ul><ul><li>Ford </li></ul><ul><li>Johnson & Johnson </li></ul><ul><li>Caterpillar </li></ul><ul><li>Lockheed Martin </li></ul><ul><li>IBM </li></ul><ul><li>CitiGroup (Visa/MasterCard) </li></ul><ul><li>G . E . </li></ul><ul><li>J.P. Morgan </li></ul><ul><li>ServiceMaster </li></ul>creating value for our customers
    24. 24. How does Six Sigma work? Why is it different? <ul><li>Top down, executive led. </li></ul><ul><li>Customer focused (VOC). </li></ul><ul><li>Project oriented </li></ul><ul><ul><li>Led by “Black Belts”. </li></ul></ul><ul><ul><li>3-5 months long. </li></ul></ul><ul><ul><li>Ave. yearly impact $150-250K/project. </li></ul></ul><ul><ul><li>Consistent methodology. </li></ul></ul>creating value for our customers Process Controls X4, X5, X6… X1 X2 X3 Output Y Critical to Customer
    25. 25. What is the “Methodology”? <ul><li>D efine </li></ul><ul><li>M easure </li></ul><ul><li>A nalyze </li></ul><ul><li>I mprove </li></ul><ul><li>C ontrol </li></ul>D M A I C creating value for our customers
    26. 26. <ul><li>What are the “The Tools”? </li></ul><ul><li>Six Sigma is a discipline using these tools: </li></ul><ul><ul><li>Advanced analysis tools (Design of Experiment, Linear Regression, etc.) </li></ul></ul><ul><ul><li>Re-engineering </li></ul></ul><ul><ul><li>Lean manufacturing </li></ul></ul><ul><ul><li>Supply chain improvements </li></ul></ul><ul><ul><li>Design for Six Sigma (DFSS) </li></ul></ul><ul><ul><ul><li>For development of new products, new services, new processes, and new workflows. </li></ul></ul></ul>creating value for our customers
    27. 27. Who are the other “Key Players”? <ul><li>Senior Champion – Owns Six Sigma for the Business. </li></ul><ul><li>Champion – Identifies and resources project s. </li></ul><ul><li>Master B lack B elt – Serves as coach to the Black Belt and project team. </li></ul><ul><li>Black B elt – Leads the project team, full time . </li></ul><ul><li>Green B elts – Team members (part-time) from the organization sponsoring the project </li></ul><ul><li>Project Sponsors – Team leaders. </li></ul><ul><li>Process Owners – Owns the process / workflow. </li></ul><ul><li>Executive Six Sigma Steering Committee – Oversees progress, resolves issues, ensures success enterprise-wide. </li></ul>creating value for our customers
    28. 28. Your Team <ul><li>All associates must look for improvement opportunities </li></ul><ul><li>They must be rewarded for finding them !! </li></ul><ul><li>You must train them to understand how to investigate </li></ul><ul><li>Training in a classroom setting </li></ul><ul><li>is not sufficient </li></ul>
    29. 29. Summary “take aways” <ul><li>Customer focused….Driven by the Voice of the Customer. </li></ul><ul><li>Strong top management leadership, commitment, and involvement. Very Key! </li></ul><ul><li>Project orientation with measurable financial results. </li></ul><ul><li>Consistent methodology for all work. Time driven. </li></ul><ul><li>Time driven….more accountable. </li></ul><ul><li>Six Sigma - is a discipline not an “add on” or “program”. </li></ul><ul><li>- NOT a supply chain/manufacturing activity. </li></ul><ul><li>- No new tools ….new ways to apply them! </li></ul><ul><li>Goals </li></ul><ul><ul><li>Value for the Customer (i.e. no defects or waste & low cost) </li></ul></ul><ul><ul><li>Improved productivity = profitability. </li></ul></ul><ul><ul><li>Customer success and satisfaction + Profitability = Growth </li></ul></ul>creating value for our customers
    30. 30. creating value for our customers References…… <ul><li>The Six Sigma Way (ISBN 0-07-135806-4) by Pande, Neuman, and Cavanaugh </li></ul><ul><li>The Power of Six Sigma (ISBN 0-7931-4434-5) by Subir Chowdhury </li></ul><ul><li>Six Sigma (ISBN 0-385-49437-8) by Harry and Schroeder. </li></ul><ul><li>The Six Sigma Handbook (ISBN 0-07-137233-4) by Pyzdek is more technical and becoming the 'handbook' for Black Belts. </li></ul>
    31. 31. creating value for our customers References…… <ul><li>Also...you might consider: </li></ul><ul><li>www.6-sigma.com </li></ul><ul><li>www.sixsigma.co.uk </li></ul><ul><li>www.sixsigmasystems.com </li></ul><ul><li>www.isixsigma.com </li></ul>
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