What is Six Sigma?

842 views

Published on

TPMG Lean Six Sigma - What is Six Sigma?

Published in: Business, Education
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
842
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

What is Six Sigma?

  1. 1. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! The Performance Management Group LLC Six Sigma    ““Achieving Service Excellence”Achieving Service Excellence” First Contact DiscussionFirst Contact Discussion
  2. 2. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! TPMG Six Sigma Principles 1. Passion and Accountability: The burning desire for everyone taking the personal responsibility to be the absolute best! 2. Operational Excellence: The result of continuously producing value added work products at the highest levels of productivity, efficiency, and quality! 3. Customer Loyalty: Enjoying the financial and market consequences of being #1 in the eyes of your customers! PM6σ Operational Excellence Customer Loyalty Passion & Accountability A Culture of Being Exceptional! Excellence! Slide 1
  3. 3. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! 1. Six Sigma is a “quality improvement business practice” that strives to produce perfection in the delivery of services. 2. A “method of management” that uses facts, information and data to make decisions and manage business performance. 3. A “problem solving method” that identifies root causes to problems and determines permanent solutions. What is Six Sigma? Slide 2
  4. 4. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! 1. Six Sigma is NOT a budget cutting strategy: It is not across – the – board cuts that result in travel and hiring freezes, reductions-in-force or project delays. The goal is to obtain the highest levels of customer loyalty and achieve the highest levels of productivity in order to avoid strategies and policies that are destructive. 2. Six Sigma is NOT a program: It is not the new “flavor-of –the-month” packed with slogans and signs. The premise of Six Sigma implies that everyone will produce something of value. The goal of Six Sigma is to ensure that everyone produces work products efficiently, and is driven by a responsible executive and management team. 3. Six Sigma does NOT solely focus on people: It is not an intense focus on working harder and faster, nor is there an intense focus on peoples performance against productivity standards To improve things, everyone must make the SYSTEM work better. Measurement and evaluation of the processes is essential. 4. Six Sigma is NOT fire fighting: It is not finding errors and defects and then fixing them. The goal of Six Sigma is to find out WHY there are problems and eliminate the root cause of problems and waste. Prevention not fire fighting. 5. Six Sigma is NOT just listening to the voice of the yard stick: It is not the intention for your job success to be solely based on the measurement of managements yardstick “alone”. Six Sigma wants you to pay attention to your customer. Do what the customer wants. Your manager helps you by providing resources, direction, training, and support.
  5. 5. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! 1. Sigma (σ) is a Greek letter that represents variation. The sigma value indicates how well an operation is performing. To achieve 6σ performance means a service operation only produces 3.4 errors out of every million opportunities (EPMO). What does Six Sigma Mean? Slide 3
  6. 6. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Six Sigma translates into bottom line results! • Call centers improve handling times. • Service centers improve cycle times. • Fewer billing errors and customer credits. • Work quality within and across functions become more efficient. • Overall productivity and cost effectiveness improves. Why is Six Sigma Important? Slide 8
  7. 7. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Higher Growth In Sales Higher Growth In Income Higher Growth In Stock Price 37% 48% 44% Quality Delivers Business Results! Source: US Department of Commerce National Institute of Standards and Technology. Slide 9 Why is Six Sigma Important?
  8. 8. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! You can quantify the return on your investment! • GE calculated a $10 Billion Return in its first 5 years. • Bank of America estimated $1 Billion in savings in its 1st year. • Phelps Doge estimated over $40 Million in its 1st year with limited deployment. (Source: Caler Group, isixsigma.com) Why Consider Six Sigma? Slide 10
  9. 9. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Best form of management and employee training for a company! • Voice of the Customer. • People Skills. Working with and through others. Consensus building and group decision making. Working in teams to get results (Team Building). • Management Skills Measuring and managing performance. Process design and improvement. Problem solving at the root cause. Work across functions to produce results. Financial impact analysis. Project Management. Why Consider Six Sigma ? Slide 7
  10. 10. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Essential Skills Trend and Stability Analysis Capability Analysis Scatter Diagram Positive Correlation 0 50 100 150 200 250 0 10 20 30 X Axis Independent Variable YAxisDependentVarialbe Cause and Effect Analysis Y = F(X) Applications Errors 10/1 - 10/31 12 4 8 4 51 2 2 17 12 2 0 3 8 % 78 % 8 5% 9 0 % 9 4 % 10 0 % 6 3 % 0 20 40 60 80 100 120 140 Application Error Type #ofErrors 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% %ofErrors Pareto Analysis Root Cause Analysis Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Benefits Cost Reduction - Postage 57,916$ 57,916$ 57,916$ 57,916$ 57,916$ Cost Reduction - Labor 593,550.27$ 1,242,139$ 1,242,139$ 1,242,139$ 1,242,139$ Other Total Benefits 651,466$ 1,300,054$ 1,300,054$ 1,300,054$ 1,300,054$ Costs/Expenses Operating (Statasoft Software Maint) 7,055.00$ 7,055.00$ 7,055.00$ 7,055.00$ 7,055.00$ Telecom Cost 21,516.00$ 21,516.00$ 21,516.00$ 21,516.00$ 21,516.00$ Development IT Cost and Purchase of the Dialer 1/2 of purchase price 45,500$ Other Total Expenses 45,500$ 28,571$ 28,571$ 28,571$ 28,571$ 28,571$ Calculations Straight Line Depreciation (per year) 9,100 9,100 9,100 9,100 9,100 Pretax Profit 613,795 1,262,383 1,262,383 1,262,383 1,262,383 Taxes (34%) (208,690) (429,210) (429,210) (429,210) (429,210) Profit After Taxes - 405,105 833,173 833,173 833,173 833,173 Noncash Charges Depreciation 9,100 9,100 9,100 9,100 9,100 Residual Net Cash Flow (45,500)$ 414,205 842,273 842,273 842,273 842,273 Analysis Annual Return (After Payback) 622,895$ Before Tax 5 Year NPV $2,608,501 After Tax Payback Period (months) 0.8 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Cum. Benefits (after tax) $0 $429,967 $1,288,003 $2,146,039 $3,004,075 $3,862,110 Cum. Costs / Expenses (after tax) $45,500 $61,263 $77,026 $92,789 $108,551 $124,314 Cum. Resid. Net Cash Flow (after tax) (45,500)$ 368,705$ 1,210,977$ 2,053,250$ 2,895,523$ 3,737,796$ Cost Benefit Analysis
  11. 11. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! 1. Customer Loyalty • Needs • Attitudes • Perceptions 2. Operational Excellence • Cycle Time Reduction • Greater Accuracy • Less Rework • On Time Service The Six Sigma Value Proposition Slide 4 Determines customer short and long term requirements, expectations, and preferences to ensure the relevance of current product offerings and service levels. Operational requirements that become the Excellence Standards
  12. 12. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Dept. A Dept. B Dept. C Dept. D Company Dept. A Dept. B Dept. C Dept. D The Customer Product /Service Delivery Functionally Focused Process Focused Functionally Focused Organizations: 1. “Us-versus-them” relationships which can limit communication between departments. 2. Departments too concerned with its own needs to meet the needs of external customers. 3. Unmanaged gaps between departments that often disrupt the continuity of cross- functional work processes. Process Focused Organizations: 1. Encourage relationships across functions. 2. Base process requirements on internal and external customer needs. 3. Promote teamwork to improve “shared” work processes. Slide 5 Six Sigma Encourages Co-operation Functional Focused Organizations VS Process Focused Organizations
  13. 13. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Cost decrease because of fewer deficiencies, fewer delays & snags, fewer errors & credits, less rework and better use of technology, materials and people! Productivity Improves! Capture the market with better quality & lower price! Enhance Shareholder value! Stay in business and provide more jobs! PM6σExcellence! Sets in Motion a “Chain Reaction!” • Fewer Defects. • Less Waste. • Fewer Errors & Credits. • Improved Cost Effectiveness. Slide 6 Six Sigma Promotes Operational Excellence
  14. 14. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! ASA - CIG Customer Service - November 2005 0 0 208 78 46 48 26 30 11 10 2 1 3 3 1 0 0 0 0 0 0 0 0 1 0 0.0 50.0 100.0 150.0 200.0 250.0 0.5 to 29.4 58.3 to 87.2 116.1 to 145.0 173.9 to 202.8 231.7 to 260.6 289.5 to 318.4 347.3 to 376.2 405.1 to 434.0 462.9 to 491.8 520.7 to 549.6 578.5 to 607.4 636.3 to 665.2 Seconds USL 60 Mean 64 Median 40 Mode 8 Numberof1/2hourincrements Source: 1 Incoming Calls Management Institute Multichannel Contact Study II – June 2005 38% > than 1 Minute Goal: 60 seconds CPI Direct Cost Per Claim - Close Ratio Numbers $79.66 $89.25 $108.66 $124.17 $145.65 $149.16 $163.43 $148.86 $136.26 $172.86 $184.27 $148.90 $128.95 $157.00 $88.55 $110.58 $147.45 $113.45 $134.11 $111.07 $150.84 197.80UCL CL 133.01 LCL 68.21 $68.21 $88.21 $108.21 $128.21 $148.21 $168.21 $188.21 $208.21 Jan- 04 Feb- 04 Mar- 04 Apr- 04 May- 04 Jun- 04 Jul- 04 Aug- 04 Sep- 04 Oct- 04 Nov- 04 Dec- 04 Jan- 05 Feb- 05 Mar- 05 Apr- 05 May- 05 Jun- 05 Jul- 05 Aug- 05 Sep- 05 M onth Cost Data Points UCL +2 Sigma +1 Sigma Average -1 Sigma -2 Sigma LCL ASA- CIGCustomer Service: November 2005 UCL 103.6 64.2CL 24.8LCL 10 30 50 70 90 110 130 11/1/2005 11/2/2005 11/3/2005 11/4/2005 11/5/2005 11/6/2005 11/7/2005 11/8/2005 11/9/2005 11/10/2005 11/11/2005 11/12/2005 11/13/2005 11/14/2005 11/15/2005 11/16/2005 11/17/2005 11/18/2005 11/19/2005 11/20/2005 11/21/2005 11/22/2005 11/23/2005 11/24/2005 11/25/2005 11/26/2005 11/27/2005 11/28/2005 11/29/2005 11/30/2005 Date ASA-InSeconds Trends Stability Capability Measure, Measure, Measure • Daily • Weekly • Monthly • Etc… Averages Variation Six Sigma Promotes Evaluation
  15. 15. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! TPMG’s Leveraged Management Strategy™ EIC Dept A Dept B Dept C Quality & Process Improvement IC IC IC IC IC IC IC IC Practitioner /Managers: Green Belt Certification Six Sigma Basic Training Facilitators/Technical Expert(s): Black Belt Certification Executive Champion(s) Executive Seminar Cross Functional Processes IC Associates: Six Sigma Basic Training How to leverage the existing management and organizational structure for breakthroughs in process improvement and performance management. Slide 11
  16. 16. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Why The Performance Management Group? 1. Most Qualified Trainers and Consultants. 2. Experts with Service Providers.  Telecommunications.  Energy and Utilities.  Financial Services.  Insurance Services.  Logistics.  etc… (References Provided) 3. Guaranteed Results! Slide 12
  17. 17. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Certifications for each level of business! • 6σ Black Belt Certification - Technical Experts. • 6σ Green Belt Certification – Practitioners. • Six Sigma Basic Training – Middle Management • Six Sigma Champions - Executive Leadership Slide 13
  18. 18. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! 3 Levels of Service 1.Classic Public Sessions. 2.On – Site Dedicated. 3.On – Site Premium. Slide 14
  19. 19. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! On-Site Premium Services • Full Time Dedicated Consultant(s). • 6 - 12 Month Tenure • On-Site Training & Certification. • Expert Project Supervision. • Train the Trainer • Guaranteed Results! Slide 15
  20. 20. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Fee Structure: • On-Site Premium Services – Per Consultant – $150.00 – $175.00 Per Hour (8 hour/day max) – 15 - 18 Work Days Per Month – Plus Cost of Materials (at cost) • Manuals – $35.00 to $45.00. • Software - $100.00 to $125.00
  21. 21. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Envision Prioritiz e Commi t Improve Achieve TPMG Turning the Strategy Wheel! 1) 12-18 month Quality Vision. 2) Identify Critical Success Factors. 3) Commit to 6σ Projects. 4) Realize Improvements. 5) Experience the Vision. Premium Services – Six Sigma Strategy Slide 16
  22. 22. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Train Your Teams. Define Your Overall Six Sigma Vision. Define Departmental Missions. Deploy Your Teams. Focus On Core Processes. Integrate Measurements. Deploy DMAIC. 1 2 3 4 5 6 7 Deploying Six Sigma Service Excellence! Slide 17
  23. 23. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Define Measure AnalyzeImprove Control TPMG From Root Cause to Performance Improvement! Define – Identify limiting factors and barriers. Measure – Understand the degree of impact. Analyze – Ascertain the Root Causes. Improve – Remove Root Causes. Control – Maintain and improve outcomes. Slide 18
  24. 24. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! Breaking the fallacies: 1. We don’t have time for Six Sigma! • Six Sigma makes work 54% less time consuming. • Eliminates rework, returns, unanticipated truck roles and the time associated. 2. It is too complicated! • 8th grade education. • Software makes it simple. 3. It is too expensive! • Six Sigma will improve a company’s bottom line by at least 25%. 4. It won’t fit into our culture! • Six Sigma serves the profit motive! • Six Sigma serves companies who strive for customer loyalty! • Six Sigma serves leaders who strive for the team concept. Slide 19
  25. 25. TPMG P A R T N E R S I N E X C E L L E N C E Helping You Make It Happen! PM6σExcellence ! TPMG Six Sigma Service Excellence! ? Questions Comments Contact TPMG at 623.643.9837 Slide 20

×