A Marketer's Experience

1. Gordon McRonald
17 Feb 2016
Six Sigma
(a Marketer’s experience)

2. Gordon McRonald
• BSc Biochem (Hons), MBA (Marketing) Otago
University, Dunedin, NZ
• 30 yrs with 3M, 27 yrs in Australia
• 20 yrs as GM, 5 of the 6 Business groups
• No prior experience with process improvement
or Six Sigma
• Green Belt, Black Belt, DFSS, Champion trained
• Master Black Belt for ANZ, 2003-05
• 15 Black Belts and 1 coach
• 600 Green Belts

3. What is Six Sigma?
• Reduction of errors in a process
– Airline accident rate vs automobile
• Reduction of variation in a process
– 95% of planes leaving on time vs 75%
• Methodology and Tool kit to solve problems
which persistently were not solved

4. Belts Explained
• BB – Black Belt
– Full time job, 2 year assignment, re-enter into the
business. Month training in the US. Run 25 GB
projects
• GB – Green Belt
– Part of normal job role, all white collar, 3 days training
locally, project to complete
• MBB – Master Black Belt
– Full time, 2 year assignment, re-enter the business, 6
weeks training in US, manage/lead the 6S initiative

5. Basic Tools
• Process map – step by step of what happens now
– Inputs and outputs
– Is map
• Measurement. Standard deviation + natural variation
– Use data and stats to inform you, real trend. “Minitab”
• C&E matrix (Cause and Effect)– find the inputs (Xs)
which impact the output (Y)
– Many inputs but few have real impact on the final result
• FMEA – lets predict what can go wrong (Failure Mode)
– How likely to go wrong and how severe if it does go wrong
• Process improvement – new process map
– Should map
• Control plan – keeping the gain
– IT system change, report to show when off track

6. Process map

7. C&E Matrix

8. Failure Mode Analysis

9. Control Plan

10. 3M Six Sigma
• Always an engineering base in 3M
• Strong process improvement methods
– O2 or Optimised Operations
– Process engineering
– Operational efficiency
• External CEO from GE, brought in 6S
• 1000 BBs world wide (1 per 100 employees)
• Emphasis on leadership development

11. 3M Six Sigma
• Very rapid uptake due to exisiting mentality
• Expanded from manufacturing into all functions
– Transaction based such as Customer Service, Logistics
and Finance were easier areas
– Marketing, Sales, Technical, HR were more difficult
– Overreach into R&D was rejected
• Used to solve problems in a systematic way
– Hopper of projects, ranked, allocated, monitored
– Global common projects – DSO, IMC, pricing

12. 3M Six Sigma
• DMAIC format was the main thread
– Lean and 5S incorporated within the curriculum
• DFSS (Design For Six Sigma) introduced for new
product introduction which is the lifeblood of 3M
– Useful for the Marketing community skill
enhancement
• GB training of 3 days for all white collar personel.
Complete 1 project pa by everyone
• Common language for process improvement for
all countries and all businesses

13. DMAIC
• DEFINE the problem or issue. Usually for a
problem persistently unsolved
• MEASURE, what measurement system is there
and gather the data. Cannot improve what you
cannot measure
• ANALYSE, look at the data.
• IMPROVE the process based on findings and
experiments
• CONTROL the new process. How to keep the gain

14. Provide a set of tools
• Global goal to improve DSO (Days Sales
Outstanding) – Super Y
• Give a set of tools, training and leadership to go
about solving it
– Global BB leader, goal tree developed
– Assign local BB
– Projects written up for all to see in a global database
– Replication of successful projects
– Super Ys for DSO, inventory, pricing

15. Other concepts
• Entitlement – optimal performance of a
process
• Project champion – executive to steer the
project through obstacles and obstructions
• Replication – copy everywhere every time
• Super Y – project Y or goal that is global
• 9,3,1,0 scoring – leading to forced
differentiation in scores
• Hopper of projects – scoped and ranked

16. DFSS
• Design for Six Sigma
• Marketing on steroids
• 130 tools to assist with new product
introduction (NPI)
• Technical BB plus Business BB joint leaders
• Fabulous work but difficult to get right

17. Features
• Leadership team inculcated with Six Sigma
thinking and methodology
• Global database of all projects to copy
• Common language for all business

18. Measurement
• Cash, Cost and Growth targets by subsidiary
then division, in dollars
• Cash – inventory and receivables primarily
• Cost – manufacturing cost out, gross margin
improvement, business process in back office.
Non manuf sub relied on back office
• Growth – large for a selling sub. New product
sales (25% of sales not exist 5 years prior)

19. Process Improvements
• New product introduction (steps, checks)
• Business planning (keyed cycle whole co)
• Demand planning (specialist role within BU)
• SKU rationalisation (automated annually)
• Credit (30+ days to 2, separate full time unit)
• Pricing (separate full time unit)
• Finance end month close from 8 days to 4
• Airfreight

20. Lessons
• Process is everywhere and we use it all the time
without realising it. (Process map)
• Statistics are everywhere and we misuse all the
time (standard deviation graphs) Minitab
software for data presentation
– Variation
– Use the data not the emotion
• What can go wrong and how to minimise damage
(FMEA- failure mode, likelihood and severity)
• Keeping the improvement is important. Methods
to do this usually are missed out

21. Lessons
• Take a systems view of the business. Applies
to all functions not only manufacturing
• Use the people closest to the process to map
• Eliminate steps in a process and improve
result with less cost
• Leadership from the BB is vital
– No line authority
– No knowledge in the studied process
– Get the result from the direct team

22. Questions and Discussion

23. Remuneration
• No bonus
• In job description for all to be trained and
complete projects as part of the annual
expectations and measured at the appraisal
process
• Not meet your expectations then less pay/no
promo/ maybe dismissal

24. Stakeholder Analysis