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A research project on Future of Six Sigma and how it aligns with the innovative strategies at a company

A research project on Future of Six Sigma and how it aligns with the innovative strategies at a company

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  • Talk about the two questions put forth to us here.
  • List the recommendation briefly.
  • Talk about the one recommendation again. Refresh their memory.
  • Talk about the one recommendation again. Refresh their memory.
  • Now that we have seen few methodologies to promote innovation in the organization, let us now take a look at variation or a new form of SIX SIGMA can help us achieve it.
  • Lean-waste reduction and Six Sigma-quality improvement methodologyWhen Lean meets Six Sigma, all projects begin with a problem statement, so the Lean Six Sigma frameworkis, de facto, a problem-solving system. Adding Lean expands traditional Six Sigma defect-reduction problem statements to include thereduction of waste in both time and resources.Yet the aim of typical Lean Six Sigma deployments is modest.A steering committee or some level of management selects projects with two objectives: to improve a process and/or to provide certification for an employee.When certification is the overriding goal, the company usually selects low-hanging fruit for the initial project, and that first project is often the last project the person completes. Either way, this system is a “push” approach to project creation; people hunt for projects because they need to get certified or because members of the Lean Six Sigma steering committee want to brag about how much money they saved the company. Such a system of project selection can produce initial successes, since the projects with the mostpotential benefit to the organization are obvious to everybody without enterprise analysis.
  • In the IEE framework, in contrast, the organizational value chain is examined for improvementopportunities during the E-DMAIC analyze phase. It consolidates the Lean approach to waste reduction with the Six Sigma quality improvement methodology — and incorporates a pragmatic, no-gaming scorecard, to build targeted strategies for improving the business as a whole.These strategies then lead to the identification of improvement needs in value-chain performance metrics,so project creation is driven by a pull — rather than push — approach.The result can be either process improvement or R&D design projects that focus on developing innovative new solutions. Emphasis is given to creating financial benefits that will be felt by the entire company, not just at the individual sub-process level. Thus Integrated Enterprise Excellence (IEE), an enterprise system that provides structure for integrating innovation with analytics.
  • In IEE strategy is not a 5 step DMAIC process but a nice step process as we see in the figure
  • 1. Define: Describe a vision and a mission. The organization builds a vision and mission that willremain consistent over time, as leaders and strategies come and go. The company’s full management teammust sign on, and employees must also be on board.2. Define-Measure: Describe the value chain, including satellite-level and 30,000-foot-levelmetrics. The IEE approach tracks two types of high-level metrics as part of the company’s value chain: 30,000-foot-level (operational) metrics and satellite-level (financial) metrics. An IEE company uses satellite-level metrics to track performance in areas such as financial revenue growth and profit margins. Once it has set performance targets for its satellite-level metrics, it builds strategies for achieving those goals. Then, from those strategies, it determines goals for its 30,000-foot-level metrics in an analytic/innovation assessment of the enterprise as a whole. The 30,000-foot-level metrics can include defective rates, on-time delivery, inventory, safety, product development time, and production lead time.3. Analyze: Analyze the enterprise. Using the metrics it has selected, the company needs to identifyaction opportunities, considering both problems and improvement possibilities.The four “analyze” phases are critically important to the E-DMAIC process. These steps can lead toan innovative solution.4. Analyze: Establish goals for satellite-level metrics. Next, the company needs to set specific,measurable, actionable, relevant, and time-based (i.e., “SMART”) goals at the satellite level. The highestlevelgoals need to be realistic and consistent with the improvement opportunities identified in the thirdE-DMAIC step.
  • 5. Analyze: Create strategies. Every organization requires a certain level of innovation. Some needmuch; others need little. It’s essential to find the optimum level, and E-DMAIC provides a structuredmethod for doing so.5. Analyze: Identify high-potential improvement areas, and establish related SMART 30,000-foot-level metric goals. Goals set for the 30,000-foot-level metrics are the ultimate determinants of whatchanges in an organization.6. Improve: Identify and execute projects. Once improvement goals are set, the company shouldselect and assign well-scoped projects that are neither too large nor too small. All projects must reflect theintegration of analytics and innovation. This isn’t difficult once a company has established IEE, becausethe system’s no-nonsense approach to metric tracking and identification of improvement opportunitiesestablishes a culture focused on better use of analytics.7. Improve: Assess the project’s final impact on enterprise goals. Assess how well objectiveswere met relative to the achievement of enterprise goals. Establish a system for collecting and analyzinglessons learned.8. Control: Maintain the gain. IEE businesses track high-level value-chain metrics, then reviewthose results as part of management meetings to ensure that the performance of a particular metric thatimproved as a result of a given project does not subsequently degrade to its previous level.
  • The analyze phase of the enterprise-level DMAIC road map blends analytics with innovationas part of the corporate strategy-building process.
  • Talk about the one recommendation again. Refresh their memory.

Six Sigma   Presentation Six Sigma Presentation Presentation Transcript

  • Contemporary Organizations and the Future Six Sigma / Innovation Facet
    SalilDeshmukh
    John Gastreich
    Justin Frey
    Prem Anand Mathiyalagan
  • 2
    Agenda
    Problem statement
    Recommendations
    Innovative companies
    Links between Six Sigma and innovation
    Integrated Enterprise Excellence
    Weighted criteria matrix
  • Problem Statement
    Future
    of
    Six Sigma
    Growth
    versus
    Performance
    3
    How to find a balance between efforts to grow the business and the diligence needed to maintain high performance operations?
    Which Six Sigma approach or evolution is most appropriate for meeting future business challenges over the next decade?
  • Scope
    Within Scope
    Out of Scope
    Research next-generation Six Sigma and continuous improvement practices.
    Compare and contrast how industry front-runners apply six sigma in terms of innovation and growth.
    Identify qualitative metrics for performance assessment and for rewarding/incentivizing.
    Perform analysis of as-is RMS Six Sigma methodologies.
    Perform primary research of direct competitors to RMS.
    Provide recommendations for a roadmap to move from as-is RMS methodologies to to-be RMS methodologies.
    4
  • Research Methodology
    Primary research: interviews with SMEs
    • Dr. Pamela Slaten– Operations
    • Dr. Kenneth Smith – Innovation
    • Dr. Sudha Ram – Business Intelligence
    • Larry Dyer – Six Sigma
    • Thomas Pyzdek – Six Sigma
    Secondary research
    • Trade magazines
    • Scholarly articles
    • Books
    • Others (company websites, industry data)
    5
  • Recommendations
    Do NOT use Six Sigma for innovation activities directly
    Identify processes/methodologies used to support innovation and other activities; use Six Sigma to improve such processes
    Innovation Maturity Model
    Next generation organizational behaviors
    Instead of applying Six Sigma in silos, use it for the processes of the entire organization
    6
  • Innovative companies
    Justin
    7
  • Innovative Company Rankings
    8
  • Most Innovative Companies
    9
  • Six Sigma in Innovation
    Of the most innovative companies, only GE couples Six Sigma with Innovation
    Reasons
    Stifles creativity
    Lowers employee morale
    Only used for process improvement
    10
  • Qualities of Innovative Companies
    Attitudes
    Willingness to cannibalize assets
    Future focus
    Tolerance for risk
    Practices
    Empowerment of product champions
    Incentives for enterprise
    Internal markets
    11
  • Recommendations
    • Do not use Six Sigma for Innovation Activities directly
    Identify processes/methodologies used to support innovation and other activities; use Six Sigma to improve such processes.
    Innovation Maturity Model
    Next generation organizational behaviors
    Instead of applying Six Sigma in silos, use it for the processes of the entire organization
    12
  • Methodologies and tools
    Prem Anand
    13
  • Is there an indirect connection between Six Sigma & Innovation?
    14
  • Yes
    15
  • Indirect Benefits
    Organization are undergoing significant changes
    Emphasis on innovation
    Proposed methodology
    Use standard framework to manage innovation
    Identify processes
    Use Six Sigma to improve processes
    Hence Six Sigma can be used indirectly
    16
  • Frameworks and Models
    Innovation Network Framework
    Framework used to manage innovation within a large organization
    Innovation Maturity Model
    Model to assess the maturity level of the innovation process within an organization
    17
  • Innovation NetworkFramework
    Network with internal and external groups to generate ideas
    Identify objectives and define metrics
    Objectives and metrics
    Business objectives
    Structural objectives
    Activity metrics
    Behavioral metrics
    Innovation Network Metrics
    Customer innovation metrics
    Case Study – P&G
    18
  • Case Study
    19
  • General Innovation Management
    Choose appropriate innovation strategy
    First-mover strategy
    Fast-follower strategy
    Conservative slow-follower strategy
    Alternative innovation strategy
    Focus innovation on a business imperative
    Define an innovation process model
    Organize to accomplish innovation
    Innovation Maturity Model
    20
  • Innovation Maturity Model
    21
  • Behaviors
    Highly Collaborative Environment
    22
  • Next Generation Behaviors
    3 Factors leading to the revolution
    Web 2.0
    Net generation
    Need for uniquely qualified minds
    Characteristics of the Net-Gen
    High technology adoption
    Creativity
    Social connectivity
    Diversity
    Ideagoras
    Marketplace for ideas, innovation and uniquely-qualified minds
    Wiki Workforce (Highly collaborative)
    Collaborative Economy
    Business – Web
    More the collaboration better the results
    23
  • Boeing 787
    …Boeing executives concluded that mass collaboration was the only way to create the kind of cheaper, more fuel-efficient jetliner that airlines want…
    24
  • Sentiment Analysis
    Also known as Opinion Mining
    Determines opinion polarity on a topic
    Quantifies the qualitative (sentiment)
    First used for movie reviews
    Used heavily in marketing analysis
    Can be used to quantify opinion surveys
    Commercially available sentiment analysis software
    25
  • Recommendations
    • Don’t use Six Sigma for Innovation Activities directly; it stifles creativity.
    • Identify processes/methodologies used to support innovation and other activities; Use six sigma to improve such processes.
    Innovation Maturity Model
    Next generation organizational behaviors
    Instead of applying Six Sigma in silos, use it for the processes of the entire organization
    26
  • Integrated Enterprise Excellence
    Salil
    27
  • Integrated Enterprise Excellence
    Developed by Forrest W. Breyfogle III, the President and CEO of Smarter Solutions, Inc
    Uses the familiar Six Sigma DMAIC road map not only at the project level, but at the enterprise level as well.
    28
    IEE
    E - DMAIC
    P - DMAIC
    Enterprise Level Roadmap
    Project Level Roadmap
    Integrated Enterprise Excellence
    * DMAIC = define, measure, analyze, improve, control
  • The Need
    Where Lean Sigma Falls Short
    • Just another Problem Solving System
    • Steering committee aims at process improvement and providing certifications
    • Low hanging fruit gets selected as a goal
    • Most process improvement techniques often occur in silos
    • Benefits are not propagated to executive level
    • In a financial crisis, Lean Six Sigma programs are often downsized
    29
  • Integrated Enterprise Excellence (IEE)
    An enterprise system that provides structure for integrating innovation with analytics
    30
    Integrated Enterprise Excellence
    Six Sigma
    Balanced Score Cards
    Lean
  • How it Works
    31
  • How it Works
    Step 1: Describe a vision and a mission
    Step 2: Describe the value chain
    Step 3: Analyze the enterprise
    Step 4: Establish goals for satellite-level metrics
    32
    Define
    Measure
    Analyze
    Analyze
  • How it Works
    Step 5: Create strategies
    Step 6: Identify high-potential improvement areas
    Step 7: Identify and execute projects
    Step 8: Assess the project’s final impact on enterprise goals
    Step 9 : Maintain the gain
    33
    Analyze
    Analyze
    Improve
    Improve
    Control
  • How it Works
    34
  • Recommendations
    • Do not use Six Sigma for Innovation Activities directly
    • Identify processes/methodologies used to support innovation and other activities; Use six sigma to improve such processes
    Innovation Maturity Model
    Next generation organizational behaviors
    • Instead of applying Six Sigma in silos, use it for the processes of the entire organization
    35
  • Weighted criteria analysis
    John
    36
  • Options for Recommendations
    Passed
    Failed
    Keep Six Sigma - Continue using Six Sigma, improve the image of the Six Sigma unit, 1% of all RMS employees
    Increase Collaboration, Innovation Network Model, Crowd sourcing - Increase collaboration inside and outside the company
    Do not Integrate Six Sigma and Innovation – Keep separate
    Implement Integrated Enterprise Excellence (IEE) - Or other forward thinking Six Sigma derived methodology
    Integrate 'Bike Shop' – i.e. Skunk Works, into the mainstream activities of RMS
    Hire Consultants - Specializing in Six Sigma and technology, e.g. Thomas Pyzdek, Bain Performance Improvement
    End of Management - Pyzdek, eliminated because RMS is not facing a crisis
    Outsource Six Sigma - Only core competencies should be kept in house
    Guidance and Collaboration with other Raytheon Six Sigma Groups - RMS is not the only division of Raytheon with Six Sigma teams
    Further Six Sigma Education - Improper education is said to be one of the leading causes of 6S failures
    Race the Red Queen - Implement adaptive approach, i.e. keep your finger on the pulse of 6S to adapt quickly and take advantage of change
    37
  • Criteria Selection Process
    Raytheon’s Vision, Strategy, Goals, and Values
    Admiration
    Respectability
    Knowledge (leveraging)
    Broadening focus
    Customer focus
    International growth
    Revenue growth
    Improved cash flow
    Predictability
    Productivity
    World class employees
    Performance
    Conversations with Daniel Kuz and Dr. Jennie Campos
    Feasibility
    Cost
    Innovativeness
    Long-Term Revenue Growth
    Short-Term Revenue Growth
    Brand Image of Six Sigma / Raytheon
    Employee Satisfaction
    Values & Behaviors Next Gen Six Sigma Organization
    Speculative
    38
  • Criteria
    Feasibility
    Can this option be implemented?
    Cost
    Cost to implement; cost/benefit ratio
    Innovativeness
    Contribution to Raytheon’s innovativeness
    Long-Term Revenue Growth
    Basic need to keep investors happy
    Short-Term Revenue Growth
    Basic need to keep investors happy
    Brand Image of Six Sigma / Raytheon
    Per company Vision & 6S unit’s needs
    Employee Satisfaction
    Per company goals, mission, values & 6S unit image
    39
  • Weighted Criteria Matrix
    40
  • Recommendations
    Increase collaboration, innovation network model, crowd sourcing
    Do NOT integrate Six Sigma with innovation
    Implement Integrated Enterprise Excellence
    41
  • Next Steps
    Whatever path is decided:
    Get support from the top
    Arrange sufficient funding
    Incentivize employees to encourage change
    42
  • Questions
    43
  • Appendix
    44
  • Collaborators
    University of Arizona MIS Master’s Project Team
    Justin Frey
    Prem Mathiyalagan
    Salil Deshmukh
    John Gastreich
    MIS Faculty
    Dr. David Pingry
    RMS Reps
    Daniel Kuz
    Dr. Jennie Campos
    RMS Special Guest
    Tom Birdsall
    45
  • Example Metrics
    46
  • Other Sources
    Myths
    Myth No. 1: Innovation just happens.
    Myth No. 2: Innovation only happens in R&D.
    Myth No. 3: The best innovation comes from inside.
    Myth No. 4: The more innovative ideas we generate, the better.
    Myth No. 5: We have lots of smart people, so innovating will be no problem.
    Innovation Culture
    Establishing and benchmarking organizational culture
    Sources
    Five Myths of Innovation.pdf
    the_innovation_culture_defin_156182.pdf
    47