QM-009-Design for Six Sigma 2


Published on

1 Comment
  • good material for Quality control
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

QM-009-Design for Six Sigma 2

  2. 2. IX S IGMA S D EPARTMENT OF S TATISTICS a highly structured strategy for acquiring, assessing, and applying customer, competitor, and enterprise intelligence for the purposes of product, system or enterprise innovation and design.
  3. 3. Design for Six Sigma Applications of Six Sigma that focus on the design or redesign of products and services and their enabling processes so that from the beginning customer needs and expectations are fulfilled are known as Design for Six Sigma or DFSS . The aim of DFSS is to create designs that are resource efficient, capable of exceptionally high yields, and are robust to process variations. This aim produces a recasting of DMAIC that can be characterized as: D efine- M easure- A nalyze- D esign- V erify (DMADV) or as I nvention- I nnovation- D esign- O ptimize- V erify (I 2 DOV) or as CDOV
  4. 4. Six Sigma from the GE Perspective : Six Sigma is a highly disciplined process that helps a company focus on developing and delivering near-perfect products and services. Why “sigma”? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many “defects” you have in a process, you can systematically determine how to eliminate those and approach “zero defects”. Six Sigma has changed the DNA at GE – it is the way that GE works – in everything that GE does and in every product GE designs. “ What is Six Sigma? The Roadmap to Customer Improvement ” www.ge.com/sixsigma/makingcustomers.html
  5. 5. Design for Six Sigma at GE: DFSS is changing GE. With it GE can build on all of its capabilities and take all of its product and process designs to a new level of world-class performance and quality. The essence of DFSS is predicting design quality up front and driving quality measurement and predictability improvement during the early design phases- a much more effective and less expensive way to get to Six Sigma quality than trying to fix problems further down the road. What We Do . GE Corporate Research and Development Formerly posted at: www.crd.ge.com/whatwedo/sixsigma.html
  6. 6. <ul><li>Another View of Design for Six Sigma: </li></ul><ul><li>DFSS is the change in the product design organization from a deterministic to a </li></ul><ul><li>probabilistic culture. Our people were trained to incorporate statistical </li></ul><ul><li>analysis of failure modes, both in products and processes. Then they began </li></ul><ul><li>to incorporate design changes that modify and eliminate design features </li></ul><ul><li>with a probability of failure within a predefined range of operating </li></ul><ul><li>environments and conditions. The design organization changed from a </li></ul><ul><li>“ factor-of-safety” mentality to one in which there was a quantitative assessment </li></ul><ul><li>of design risk. Four elements of design are most critical to the effort: </li></ul><ul><li>Design for producibility (design for manufacturing and assembly); </li></ul><ul><li>Design for Reliability ; </li></ul><ul><li>Design for Performance (technical requirements); and </li></ul><ul><li>Design for Maintainability . </li></ul><ul><li>“ Design for Six Sigma: 15 Lessons Learned”, Quality Progress , Vol. 35, No. 1, pp. 33-42, January 2002. </li></ul>
  7. 7. The DMAIC Model Define Control Measure Improve Analyze Voice of the Customer Institutionalization
  8. 8. D efine C ontrol I mprove A nalyze M easure S ix S igma I nnovation & the D MAIC Algorithm Define the problem and customer requirements. Measure defect rates and Document the process in its current incarnation. Analyze process data and Determine the capability of the process. Improve the process and remove defect causes. Control process performance and ensure that defects do not recur.
  9. 9. Team Charter & Project Scoping : Of similar importance & structure as in DMAIC
  10. 10. Team Charter Table of Contents   1.   EXECUTIVE SUMMARY …………………………………………………3 2.   PROJECT OBJECTIVES…………………………………………………3 3.   PROJECT SCOPE ……………………………………………………..…3 4.   BUSINESS CASE …………………………………………………………3 5.   PROJECT ORGANIZATION ……………………………………………3 6.   SCHEDULES……………………………………………………………….4 7.   COMMUNICATION PLAN ……………………………………………...4 8.   PROJECT CONTROL PROCEDURES ……………………...…………4 9.   PROJECT ASSUMPTIONS ……………………………..………………4 10. CONFLICT RESOLUTION ………………………………………………. 5
  11. 11. Project Scope <ul><li>On what process will the team focus on? </li></ul><ul><li>What are the boundaries of the process we are to improve? Start point? Stop point? </li></ul><ul><li>What resources are available to the team? </li></ul><ul><li>What (if anything) is out-of-bounds for the team? </li></ul><ul><li>Under what (if any) constraints must the team work? </li></ul><ul><li>What is the time commitment expected of team members? </li></ul><ul><li>What are the advantages to each team member for the time commitment? </li></ul>
  12. 12. SMART <ul><li>Problem & Goal Statements Should be : </li></ul><ul><li>S pecific </li></ul><ul><li>M easurable </li></ul><ul><li>A ttainable </li></ul><ul><li>R elevant </li></ul><ul><li>T ime-Bound </li></ul>
  13. 13. E ight S teps for E stablishing P roject B oundaries <ul><li>Identify the customer </li></ul><ul><ul><li>Who receives the process output? </li></ul></ul><ul><ul><ul><li>(May be an internal or external customer) </li></ul></ul></ul><ul><li>Define customer’s expectations and needs </li></ul><ul><ul><li>Ask the customer </li></ul></ul><ul><ul><li>Think like the customer </li></ul></ul><ul><ul><li>Rank or prioritize the expectations </li></ul></ul><ul><li>Clearly specify your deliverables tied to those expectations </li></ul><ul><ul><li>What are the process outputs? (Tangible and intangible deliverables) </li></ul></ul><ul><ul><li>Rank or prioritize the deliverables </li></ul></ul><ul><ul><li>Rank your confidence in meeting each deliverable </li></ul></ul><ul><li>Identify CTQ’s for those deliverables </li></ul><ul><ul><li>What are the specific, measurable attributes that are most critical in the deliverables? </li></ul></ul><ul><ul><li>Select those attributes that have the greatest impact on customer satisfaction. </li></ul></ul>
  14. 14. Eight Steps for Establishing Project Boundaries <ul><li>Map your process </li></ul><ul><ul><li>Map the process at it works today (as is). </li></ul></ul><ul><ul><li>Map the informal processes, even if there is no formal, uniform process in use. </li></ul></ul><ul><li>Determine where in the process the CTQ’s can be most seriously affected </li></ul><ul><ul><li>Use a detailed flowchart </li></ul></ul><ul><ul><li>Estimate which steps contain the most variability </li></ul></ul><ul><li>Evaluate which CTQ’s have the greatest opportunity for improvement </li></ul><ul><ul><li>Consider available resources </li></ul></ul><ul><ul><li>Compare variation in the processes with the various CTQ’s </li></ul></ul><ul><ul><li>Emphasize process steps which are under the control of the team conducting the project </li></ul></ul><ul><li>Define the project to improve the CTQ’s you have selected </li></ul><ul><ul><li>Define the defect to be attacked </li></ul></ul>
  15. 15. T he SIPOC M odel Suppliers Customers Inputs Outputs Process Steps Inform Loop
  16. 16. Six Sigma COPIS M odel C ustomers S uppliers O utputs I nputs P rocess Steps The Voice of the Customer (VOC) is aggressively sought and rigorously evaluated and used to determine needed outputs and hence the optimal process configuration needed to yield those outputs and their necessary inputs for which the best suppliers are identified and allied with. From Concept to Market: the Voice of the Customer How does Six Sigma Work?
  18. 18. Design for Six Sigma at GE: DFSS is changing GE. With it GE can build on all of its capabilities and take all of its product and process designs to a new level of world-class performance and quality. The essence of DFSS is predicting design quality up front and driving quality measurement and predictability improvement during the early design phases- a much more effective and less expensive way to get to Six Sigma quality than trying to fix problems further down the road. What We Do . GE Corporate Research and Development Formerly posted at: www.crd.ge.com/whatwedo/sixsigma.html
  19. 19. Design for Six Sigma D efine- M easure- A nalyze- D esign- V erify (DMADV) D efine customer requirements and goals for the process, product or service. M easure and match performance to customer requirements. A nalyze and assess the design for the process, product or service. D esign and implement the array of new processes required for the new process,product or service. V erify results and maintain performance.
  20. 20. <ul><ul><li>Improvement –Focuses on high priority problems in business processes. This uses the DMAIC methodology: Define, Measure, Analyze, Improve, and Control. </li></ul></ul><ul><ul><li>Design –Design For Six Sigma (DFSS) addresses new or fundamentally poor processes. The methodology is called the DMADOV model: Define, Measure, Analyze, Design, Optimize, and Verify. </li></ul></ul><ul><ul><li>Business Process Management – aids in definition and management of operations and activities in terms of core and enabling processes. The resulting process management systems provide a foundation of process definition and baseline data for all process design and improvement activities. </li></ul></ul>
  21. 21. 10 Tollgate Review 9 Review Pre-Pilot Design 8 Develop Proc. Mgt. Plans 7 Test Det. Design 6 Develop the Detailed Design 6 Tollgate Review 5 Ident. & Prior. Detailed Design Elements 5 Review Concepts 5 Tollgate Review 5 Tollgate Review 4 Test High-Level Design 4 Evaluate & Select Concepts 4 Reassess Risk 4 Identify Risks 3 Close Project 3 Develop High- Level Design 3 Generate Concepts 3 Prioritize CTQs 3 Develop Org. Change Plan 2 Implement the Design 2 Develop Design Requirements 2 Prioritize the Functions 2 Translate VOC Needs into Req. (CTQs) 2 Develop Project Plans 1 Conduct and Evaluate Pilot 1 Ident. & Prior. High-level Design Require. 1 Identify Key Functions 1 Understand VOC 1 Develop Charter Design Performance The Product Concepts Customer Requirements the Project Verify Design Analyze Measure Define
  22. 22. Project Charter Project Plan Organizational Change Plan Risk Management Plan Tollgate Review & Storyboard Presentation Market Analysis Tools : Mkt. Forecasting Tools; Customer Value Analysis; Technology Fore. & Visioning; Competitor Analysis. Process Analysis Tools : Control Charts; Pareto Charts. Project Planning Tools : Work Breakdown Structures; PERT Charts; Gantt Charts; Activity Network Diagrams. DMADV Specific Tools : Project Charter; In/Out of Scope Tool; Organizational Change Plan <ul><li>DEFINE the project </li></ul><ul><li>Develop a clear project definition. </li></ul><ul><li>Develop organizational change plans, risk management plans, and project plans. </li></ul>OUTPUTS TOOLS STEP
  23. 23. Prioritized CTQs Updated risk management plan and multistage project plan, if appropriate. Tollgate Review & Updated Storyboard Cust. Segmentation Tree Data Collection Plan Customer Research Tools: Interviews; Contextual Inquiry; Focus Groups; Surveys. VOC Table Affinity Diagrams Kano Model Perform. Benchmarking QFD Matrix CTQ Risk Matrix Multistage Plan Tollgate Review <ul><li>MEASURE Customer Req . </li></ul><ul><li>Collect VOC Data </li></ul><ul><li>Translate the VOC into design requirements - CTQs </li></ul><ul><li>Identify the most important CTQs. </li></ul><ul><li>Revise Risk Management Plan </li></ul><ul><li>If necessary, develop a multistage project plan. </li></ul>OUTPUTS TOOLS STEP
  24. 24. Selected concept for further analysis and design Tollgate Review & Updated Storyboard QFD Matrix: Creativity Tools : Brainstorming/ Brainwriting; Analogies; Assumption Busting; Morphological Box. Pugh Matrix Tollgate Review Forms <ul><li>ANALYZE Concepts: </li></ul><ul><li>Generate, evaluate, and select the concept that best meets the CTQs within budget and resource constraints. </li></ul>OUTPUTS TOOLS STEP
  25. 25. Tested and approved high-level design Tested and approved detailed design Detailed updated risk assessment Plans for conducting the pilot Completed design reviews and approvals Tollgate Review & Updated Storyboard QFD Matrix Simulation Prototyping Design Scoreboard FMEA / EMEA Planning Tools Process Management Chart Tollgate Review Forms <ul><li>DESIGN the product </li></ul><ul><li>Develop the high-level and detailed design. </li></ul><ul><li>Test the design components. </li></ul><ul><li>Prepare for pilot and full-scale deployment. </li></ul>OUTPUTS TOOLS STEP
  26. 26. Working Prototype with Documentation Plans for full implementation Control Plans to Help Process Owners Measure, Monitor, and Maintain Process Capability. Transition Ownership to Operations Completed Project Doc. Project Closure Final Tollgate Review & Updated Storyboard Planning Tools Data Analysis Tools : Control Charts; Pareto Charts. Standardization Tools : Flowcharts; Checklists; Process Management Charts. <ul><li>VERIFY Design Performance </li></ul><ul><li>Conduct the Pilot and Stress Test and Debug the Prototype. </li></ul><ul><li>Implement the Design. </li></ul><ul><li>Transition Responsibility to the Appropriate People in the Organization. </li></ul><ul><li>Close the Team. </li></ul>OUTPUTS TOOLS STEP
  27. 27. DFSS as a Growth Strategy : Lesson 1 Achieving world-class performance through any set of tools takes careful preparation and a commitment to the foundational change efforts required for world-class capability.
  28. 28. DFSS as a Growth Strategy : Lesson 2 DFSS grows into program profits in direct proportion to the size of the initial investment. The more the initial investment to eliminate (adverse) design issues, the greater the life cycle profits that will be realized.
  29. 29. DFSS as a Growth Strategy : Lesson 3 A structured compensations system that substantially rewards leadership cooperation and co-ownership for successfully implementing cross-functional DFSS projects significantly improves the bottom line. Note: the corporate example that produced the most impressive results was a firm where DFSS involvement was directly linked to management rewards. This firm REQUIRED senior management to spend 30% of its time on DFSS activity.
  30. 30. DFSS as a Growth Strategy : Lesson 4 Leaders, especially middle managers, need to be selected, prepared and trained much earlier in the process to achieve desired levels of commitment.
  31. 31. DFSS as a Growth Strategy : Lesson 5 DFSS should be regarded as a part of doing business and represent of part of reinvesting a portion of the profits into the business to produce even greater profits in the long run. If DFSS is to be the driving force, the heart and soul of a business, then adequate dollars, time and resources must be incorporated into the annual budget to ensure the company’s success. Success is rarely the result of unplanned, fortuitous accident .
  32. 32. DFSS as a Means of Serving Customers : Lesson 1 Continual customer feedback and ideas are essential to achieve a partnership with the customer. In an age where competition for customers is relentless, companies that make the customer a partner in the DFSS activity and maintain that partnering throughout the product life cycle have a customer for the product life cycle.
  33. 33. DFSS as a Means of Serving Customers : Lesson 2 A DFSS must be inclusive, and a conscious effort must be made to embed it in the fabric of the entire organization. All employees must understand how it works and why it benefits the customer, the business and themselves.
  34. 34. Product-Process Fusion Through DFSS: Lesson 1 Drive product and process compatibility across the entire value chain and product life cycle.
  35. 35. Product-Process Fusion Through DFSS: Lesson 2 The value chain of your customer includes everything incorporated into the final product. Substantial elements often come from suppliers and subcontractors. If they are not integrated into the DFSS activity, then the final product is sub-optimized.
  36. 36. Product-Process Fusion Through DFSS : Lesson 3 Six Sigma activity to reduce variability in the factory is a losing process if the new designs cause new variability. DFSS is intended to reduce the introduction of new variability and achieve process stability and uniform quality faster.
  37. 37. Product-Process Fusion Through DFSS: Lesson 4 Metrics must tell the story of the organization’s performance AND must be discussed regularly among the staff in each area.
  38. 38. Product-Process Fusion Through DFSS: Lesson 5 DFSS can have applicability in diverse industries – some that are nontraditional such as pharmaceuticals, if the design and production is integrated and balanced.
  39. 39. The DFSS Engineering Organization: Lesson 1 Design organizations are struggling with the loss of domain knowledge and lack of experience and skills among the DFSS teams themselves. This slows the movement to probabilistic design approaches as there seems to be little time to meet schedules and conduct thorough analysis using statistical tools.
  40. 40. The DFSS Engineering Organization: Lesson 2 Enlarging the responsibility of design engineering to follow the product from start to finish creates ownership that changes the approach to product design. It accelerates the incorporation of lessons learned outside the design studio.
  41. 41. The DFSS Engineering Organization: Lesson 3 The trend toward engineering efficiency in which organizations assign engineers from pools to cover assignments has made engineers a commodity at just the point in time when the loss of domain knowledge makes the need for longevity in an organization essential.
  42. 42. The People of Six Sigma
  43. 43. Six Sigma Champions <ul><li>Create the vision of Six Sigma for the company. </li></ul><ul><li>Define the path to implement Six Sigma across the organization. </li></ul><ul><li>Develop a comprehensive training plan for implementing the Breakthrough Strategy. </li></ul><ul><li>Carefully select high-impact projects. </li></ul><ul><li>Support development of “statistical thinking”. </li></ul><ul><li>Ask Black Belts many questions to ensure that they are properly focused. </li></ul><ul><li>Realize the gains by supporting Six Sigma projects through allocation of resources and removal of roadblocks. </li></ul><ul><li>Hold the ground by implementing Black Belt recommendations. </li></ul><ul><li>Make sure that project opportunities are acted upon by the organization’s leadership and the finance department. </li></ul><ul><li>Recognize people for their efforts. </li></ul>
  44. 44. Master Black Belts <ul><li>Understand the big business picture. </li></ul><ul><li>Partner with the Champions. </li></ul><ul><li>Get certified as Master Black Belts. </li></ul><ul><li>Develop and deliver training to various levels of the organization. </li></ul><ul><li>Assist in the identification of projects. </li></ul><ul><li>Coach and support Black Belts in project work. </li></ul><ul><li>Participate in project reviews to offer technical expertise. </li></ul><ul><li>Help train and certify Black Belts. </li></ul><ul><li>Take on leadership of major programs. </li></ul><ul><li>Facilitate sharing of best practices across the corporation. </li></ul>
  45. 45. Black Belts <ul><li>Act as Breakthrough Strategy experts and be Breakthrough Strategy enthusiasts. </li></ul><ul><li>Stimulate Champion thinking. </li></ul><ul><li>Identify the barriers. </li></ul><ul><li>Lead and direct teams in project execution. </li></ul><ul><li>Report progress to appropriate leadership levels. </li></ul><ul><li>Solicit help from Champions when needed. </li></ul><ul><li>Influence without direct authority. </li></ul><ul><li>Determine the most effective tools to apply. </li></ul><ul><li>Prepare a detailed project assessment during the Measurement phase. </li></ul><ul><li>Get input from knowledgeable operators, first-line supervisors, and team leaders. </li></ul><ul><li>Teach and coach Breakthrough Strategy methods and tools. </li></ul><ul><li>Manage project risk. </li></ul><ul><li>Ensure that the results are sustained. </li></ul>
  46. 46. Black Belt Activities <ul><li>MENTORS : Cultivates a network of Six Sigma individuals at the local organization or site. </li></ul><ul><li>TEACH : Provides formal training of local personnel in new strategies and tools. </li></ul><ul><li>COACH : Provides one-on-one support to local personnel. </li></ul><ul><li>TRANSFER : Passes on new strategies and tools in the form of training, workshops, case studies, and local symposia. </li></ul><ul><li>DISCOVER : Finds application opportunities for Six Sigma strategies and tools, both internal and external (e.g. suppliers and customers). </li></ul><ul><li>IDENTIFY : Highlights / surfaces business opportunities through partnerships with other organizations. </li></ul><ul><li>INFLUENCE : Sells the organization on the use of Six Sigma strategies and tools. </li></ul>
  47. 47. Green Belts <ul><li>Function as Green Belts on a part-time basis, while performing their regular duties. </li></ul><ul><li>Participate on Black Belt project teams in the context of their existing responsibilities. </li></ul><ul><li>Learn the Six Sigma methodology as it applies to a particular project. </li></ul><ul><li>Continue to learn and practice the Six Sigma methods and tools after project completion. </li></ul>
  48. 48. Corporate Six Sigma Leadership
  49. 49. Six Sigma and General Electric <ul><li>General Electric CEO, Jack Welch, describes Six Sigma as “the most important initiative GE has ever undertaken.” GE’s operating income, a critical measure of business efficiency and profitability, hovered around 10% for decades. In 1995 Welch mandated that each GE operation from credit card services to aircraft engine plants to NBC-TV work toward achieving Six Sigma. GE was averaging about 3.5  when it introduced the program. </li></ul><ul><li>With Six Sigma embedding itself deeper into GE’s processes, they achieved the previously “impossible” operating margin of 16.7% in 1998 – up from 13.6% in 1995. </li></ul><ul><li>In dollar amounts, Six Sigma delivered more than $300 million to GE’s 1997 operating income and more than $600 million in 1998. </li></ul>
  50. 50. Six Sigma and Raytheon <ul><li>Former AlliedSignal executive Daniel P. Burnham, who became Raytheon’s CEO in 1998, has made Six Sigma a cornerstone of the company’s strategic plan. </li></ul><ul><li>By pursuing Six Sigma quality levels throughout the company, Raytheon to improved its cost of doing business by more than $1 billion annually by 2001. </li></ul>
  51. 51. Six Sigma and the Service Sector Robert Galvin: Former Motorola CEO <ul><li>Failing to implement Six Sigma in commercial areas with the same force that the company implemented it in its industrial sectors cost Motorola $5 billion over a four-year period. </li></ul>
  52. 52. H ow B ig is the S ervice S ector? <ul><li>79% of the U.S. Workforce is employed by commercial businesses. </li></ul><ul><li>90% of those employed in manufacturing are actually doing service work – such as finance, marketing, sales, distribution and purchasing. </li></ul><ul><li>So: 79% + (.9)*(21%) = 98% of the U.S. Workforce is involved in “service work”. </li></ul><ul><li>MISTAKEN BELIEFS: </li></ul><ul><li>Some companies still believe that improving commercial processes is less important than improving industrial processes or that seemingly intangible commercial processes can’t be controlled. </li></ul><ul><li>BOTH ARE WRONG: </li></ul><ul><li>Customers are more likely to take their business elsewhere because of poor service than poor products. </li></ul><ul><li>Companies like GE have shown that improving internal and external commercial processes adds to the bottom line and to customer satisfaction significantly </li></ul>
  53. 53. AlliedSignal <ul><li>70,000 Employees </li></ul><ul><li>Chemicals, Fibers, Plastics, Aerospace Products, Automotive Products. </li></ul><ul><li>Larry Bossidy came from GE to become CEO in 1991 </li></ul><ul><li>Market Value = $4 billion in 1991 </li></ul><ul><li>Market Value = $29 billion by the end of 1998 </li></ul><ul><li>Market Value = $38 billion by 2000. </li></ul>
  54. 54. AlliedSignal <ul><li>TODAY’S GOALS : </li></ul><ul><li>6% productivity increase </li></ul><ul><li>Reduced Inventory </li></ul><ul><li>Full-Capacity Utilization </li></ul><ul><li>Little or no Overtime </li></ul><ul><li>Reliable Products </li></ul><ul><li>5s Manufacturing </li></ul><ul><li>5s Designs </li></ul><ul><li>Predictable Cash Flow </li></ul><ul><li>5s Suppliers </li></ul><ul><li>BY END OF 1998 : </li></ul><ul><li>Total Impact of Six Sigma Within AlliedSignal Reached $2 Billion. </li></ul><ul><li>Six Sigma Profits in Service Areas including: </li></ul><ul><ul><li>Order Processing </li></ul></ul><ul><ul><li>Shipping </li></ul></ul><ul><ul><li>Procurement </li></ul></ul><ul><ul><li>Product Innovation </li></ul></ul>
  55. 55. We can’t tell other organizations how to do Six Sigma, but we can tell them how not to do it. Allied has made mistakes along the way and, in the process, learned some tremendous lessons. <ul><li>Lesson 1 : The Organization’s Leadership Must Own Six Sigma </li></ul><ul><li>Upper management supported Six Sigma, managers below those at the top saw it as a “flavor of the month”. </li></ul><ul><li>Black Belts seen as a nuisance. </li></ul><ul><li>Black Belts were using “Six Sigma jargon” while managers were using business vocabulary. This led to confusion. </li></ul><ul><li>SOLUTION : Introduce ALL levels of management to Six Sigma. </li></ul><ul><li>Management had weeklong training sessions to understand the methods of the Breakthrough Strategy and how Black Belt training and experience could be leveraged. ALSO … how various initiatives “fit together”. </li></ul><ul><li>BEGAN TO FOCUS ON PROCESSES – NOT PEOPLE as the source of problems. Also, understanding of the Breakthrough Strategy provided a “plan of action”, rather than just a “command” to make something happen. </li></ul>
  56. 56. Six Sigma Changed the Company Culture and <ul><li>One of the flaws at Allied is that we had too much vertical mobility . Managers inch up the same smokestack, learning more and more about less and less . But companies that train promising individuals as Black Belts circumvent the vertical flow and move people around horizontally, having them serve time in as many major businesses or divisions as possible to give them a kaleidoscopic view of the organization and the benefit of being mentored by a variety of new blood. </li></ul>Linked AlliedSignal’s Goals, Vision & Activities.
  57. 57. Lesson Two: A Beginning Without an End <ul><li>Having recognized the need to train managers in the Six Sigma Breakthrough Strategy, Allied dedicated the next year to training 1,000 leaders in the organization in how Six Sigma worked, and in its potential financial impact. </li></ul><ul><li>Training sessions lasted 3.5 days and emphasized Six Sigma’s impact on: </li></ul><ul><ul><li>Profitability through improved processes; </li></ul></ul><ul><ul><li>The Crucial role of Black Belts, RATHER THAN teaching statistical processes involved in achieving Six Sigma. </li></ul></ul><ul><li>Initially trained top managers at each of Allied’s 11 Strategic Business Units and gradually worked their way down the organization to middle management, line supervisors, and so on. </li></ul><ul><li>COMPLAINTS FROM BLACK BELTS WITHIN SIX MONTHS: Management turnover and too much promotion of Black Belts into management before benefit from the training and skills could be realized. SO … training had to be ongoing. </li></ul>Allied is not in the business of measuring activity. We are in the business of measuring results. IF something doesn’t have a positive impact on customer satisfaction, our shareholders, and employees, and in the process makes a lots of money, THEN we just flat out aren’t going to do it.” RICHARD A. JOHNSON, Director of Six Sigma at AlliedSignal
  58. 58. Lesson Three: Black Belt Retention <ul><li>AlliedSignal’s goal: send Black Belts with a minimum of 18-24 months experience mastering the Breakthrough Strategy back into the organization to create Six Sigma behavior & thinking. </li></ul><ul><li>40% of Black Belts were promoted to departmental or plant managers. Others left AlliedSignal for higher-paying jobs at suppliers. Others completed only one or two projects before they were pulled back into their previous assignments with leadership not properly reviewing projects and properly acting upon financial opportunities created by Black Belts so that managers felt that Six Sigma wasn’t particularly important. </li></ul><ul><li>50% of Black Belts were absorbed back into the organization within six months. </li></ul><ul><li>NOW … BLACK BELTS must work at least 18-24 months on a series of Six Sigma projects prior to a change of roles. TIME & EXPERIENCE ARE VIEWED AS CRITICAL TO SIX SIGMA SUCCESS AND THE MATURITY OF THE BLACK BELT. </li></ul>
  59. 59. Lesson Three - Continued <ul><li>AlliedSignal’s Champions & Master Black Belts </li></ul><ul><li>3.5 Day Executive Overview followed by the traditional Four-Month Black Belt training process. </li></ul><ul><li>MASTER BLACK BELTS are selected from the best of the Black Belts. </li></ul><ul><li>Each of these trains and mentors 10 Black Belts </li></ul><ul><li>Each Black Belt trains and mentors 10 Green Belts. </li></ul><ul><li>NOW : All Salaried Employees are Expected to Undergo the 26 Hours of Training Required for Green Belt Certification by 2000. </li></ul><ul><li>CHAMPIONS 20 Master Black Belts 70 </li></ul><ul><li>Black Belts 2000+ Green Belts 18,000 </li></ul><ul><li>Total # of Employees 70,000 </li></ul>
  60. 60. Lesson Four: Supplier Capability is Critical to the Success of the Breakthrough Strategy <ul><li>The Majority of AlliedSignal’s Suppliers were operating at about three sigma. </li></ul><ul><li>This prevented the company from realizing the full benefits of Six Sigma. </li></ul><ul><li>AlliedSignal recognized that they needed to view suppliers as their partners. </li></ul><ul><li>AlliedSignal began TRAINING its suppliers and offering other technical assistance. </li></ul><ul><li>To achieve Six Sigma it is important to minimize the number of suppliers, limiting these to those that have been trained in the Breakthrough Strategy. </li></ul><ul><li>Not only does AlliedSignal provide training, BUT then follows up by dedicating ITS OWN BLACK BELTS to mentor and work with critical suppliers. AlliedSignal estimates that for every 300 Black Belts it trains, 100 are either customers or suppliers. </li></ul>W. Edwards Deming : End the Practice of Awarding Business on Price Tag Alone.
  61. 61. Lesson Five: There is No Such Thing as Operator Error <ul><li>It is PROCESSES – not PEOPLE that Fail. </li></ul><ul><li>This maps to one of Deming’s 14 Points for Management : “ DRIVE OUT FEAR ”. </li></ul><ul><li>Focus on Processes implies that people are not accused, but rather, that they are able to investigate processes and be “part of the solution.” </li></ul>
  62. 62. Lesson Six: Focus on Bottom-Line Improvement <ul><li>The number one source of failure in deploying Six Sigma is the result of Lack of Commitment FROM THE Organization’s Leadership . </li></ul><ul><li>The Finance Department must be involved so that the impact of Six Sigma Projects on the Bottom-Line is apparent. </li></ul><ul><li>Black Belts, the Finance Department, and Executive Leadership must work in tandem. </li></ul><ul><li>While Black Belts create opportunities for cost reduction and increased profitability, the company’s Leadership must make sure that Black Belts focus on the right projects and take action on the savings opportunities they generate. Finance provides closure to the effort by ensuring that the savings are returned to the organization’s bottom line. </li></ul>
  63. 63. Lesson Seven: Initiative Overload <ul><li>LARRY BOSSIDY, CEO: One of the things I have trouble with is … non-financial objectives. Often they’re just as obscure and vacuous as they sound. </li></ul><ul><li>FIVE ACTIONS TO PERPETUATE SIX SIGMA: </li></ul><ul><li>TRAINING : Allied’s employee base changes enough every nine to ten months that maintenance of Six Sigma culture requires that new employees be trained in the Breakthrough Strategy. </li></ul><ul><li>Senior management involvement. </li></ul><ul><li>Continued on-site leadership training, and alignment of goals among divisions to reinforce Breakthrough Strategy thinking and goals. </li></ul><ul><li>Requiring Black Belts to dedicate a minimum of two years to working on Six Sigma projects. </li></ul><ul><li>Supplier involvement and improvement in Six Sigma initiatives. </li></ul>Products and services should be improved ONLY to the degree that customer value is increased. Six Sigma is a program designed to generate money for the company, either through savings resulting from reduced costs, or from boosting sales by increasing customer satisfaction.
  64. 64. AlliedSignal : Hindrances to Six Sigma Success <ul><li>Working on too many improvements at the same time. </li></ul><ul><li>Not having someone accountable for the problem. </li></ul><ul><li>Not being a process-based company. </li></ul><ul><li>A lack of trained and experienced people. </li></ul><ul><li>Middle managers who fear uncertainty about future roles. </li></ul><ul><li>Lack of metrics focused on customer value-added processes. </li></ul><ul><li>Lack of integrated information and financial systems. </li></ul><ul><li>Fragmented, staff-driven approaches. </li></ul>