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Lean Six Sigma Accelerating Cost Transformation SSCX Event Slides (2010)

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Slides from latest SSCX's Event "Lean Six Sigma: Accelerating Cost Transformation". Event was attended by more than 30 companies, representing service and manufacturing. Topic discussed include Lean, Six Sigma, Lean Six Sigma, Cost Transformation, bringing the case of Toyota, Garuda, JAL, Pharmacy Manufacturer, etc.

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Lean Six Sigma Accelerating Cost Transformation SSCX Event Slides (2010)

  1. 1. Accelerating Cost Transformation Ritz Carlton, Mega Kuningan – February 3, 2010
  2. 2. Commonization of industry
  3. 3. Brighter 2010
  4. 4. 2010: Challenges and Opportunities ASEAN-China Free Trade Agreement Higher customer bargaining power – Flatten world, More supply Rising costs but limited pricing power due to globalization and intensifying competition Volatile energy prices Reduced access to liquidity and expensive financing Threat of global recession Weak investor confidence
  5. 5. The Battle
  6. 6. Case: Airlines
  7. 7. What Can or Should We Do? Translating Pressure into Competitive Advantage
  8. 8. Cost Transformation vs Future Growth Organizations tend to cut cost all over for short term without considering longer term growth Tyranny of “or” Impact: – You survive,… for now. But, to bounce back?
  9. 9. Our Perspective on COST Cost is everywhere Cost tends to increase along with business complexity Good news is you can manage the complexity Area with cost reduction opportunity is not always obvious! Cost-cutting measures will not only keep a business running efficiently in a downturn, but also position the company to take advantage of the market when it eventually snaps back.
  10. 10. Our Perspective on COST Obvious Cost You are certain Obvious eg: Defects and Errors Suspected Cost Suspect Doubtful -ed Can we eliminate it? Hidden eg: transportation, discount? Hidden Cost You do not aware Biggest portion of managing cost.
  11. 11. Approach to Cost Transformation High STRUC- TURAL PROCESS Complexity CHANGE LOW HANGING FRUIT Low Low Length of Time High
  12. 12. Myths of Six Sigma Myth #1: Runs well only in large companies Myth #2: Only for manufacturing Myth #3: You have to be a statistician to use it Myth #4: It’s a big training investment with a long payback period. Myth #5: You have to be good in Karate
  13. 13. Lean and Six Sigma Lean provides tools for quickly and significantly slashing cycle time and waste in any process Six Sigma provides tools and organizational guidelines that establish a foundation for sustained, data-based improvements in strategically important, customer-critical targets. LSS has grown beyond these problem-solving roots, it is a deployment guidelines that give companies the means to establish and maintain… strategy-to-execution links.
  14. 14. Examples of LSS Projects/Subjects PERFORMANCE MEASUREMENT CLAIM PROCESS PROCESSING COST PRODUCTIVITY CUSTOMER SATISFACTION SERVICE QUALITY OPERATION CONTROL DEFECT REDUCTION SPEED PROCESS DELIVERY PERFORMANCE ENERGY COST SERVICE LEVEL AGREEMENT EFFICIENT PROCESS HUMAN RESOURCES
  15. 15. Questions Are • Are those projects will help you increase added value to shareholders and stakeholders? • Do we have infrastructure, process, and people to identify and execute those initiatives? • Do we have the skill-set and know-how to effectively solve the issues?
  16. 16. Okay, Let’s Agree on What We Need • Strategic Alignment and Integration between process improvement, cost transformation, and strategy – Selected and prioritized portfolio of initiatives (projects) – Calibrated vision and business objectives, top down • Proven Change Infrastructure (change management, people, monitoring process) – Skilled change agents with technical know how and people skills – Power of Mass • Disciplined Execution of initiatives/projects with comprehensive skill set and methodology – Robust factual-approach methodology – Wave by wave by wave
  17. 17. Okay, Let’s Agree on What We Need • Strategic alignment and integration between process improvement, cost transformation, and strategy – Selected andCommitment prioritized portfolio of initiatives (projects) – Calibrated vision and business objectives, top down Strategy • Proven Change Infrastructure (change management, people, monitoring process) Calibrate Infrastructure – Skilled change agents with technical know Vision people skills how and – Power of Mass • Discipline Diciplined Execution of initiatives/projects – Robust factual-approach methodology Method – Wave by wave by wave
  18. 18. Okay, Let’s Agree on What We Need • Strategic alignment and integration between process improvement, cost transformation, and strategy LEAN SIX SIGMA – Selected and prioritized portfolio of initiatives (projects) – Calibrated vision and business objectives, top down • Proven Change Infrastructure (change management, people, monitoring process) – Skilled change agents with technical know how and people skills A• rose by any other of initiatives/projects as sweet! – Power of Mass Diciplined Execution name would smell But, it is not recommended to use: cost cutting – Robust factual-approach methodology – Wave by wave by wave
  19. 19. Prioritizing Projects You can download the software for free: http://www.SSCXinternational.com/projectselection.html Instruction and explanations are available on the website. Long-List of Potential CIProjects Project Queue
  20. 20. Structure of Training Programs Executive and Leadership Black Belt Green Belt Awarenesss Leadership and Change Technical Side and Execution Awareness and Understanding
  21. 21. Define Measure Analyze Improve Control Sustain!
  22. 22. DMAIC Problem Solving Roadmap Define Measure Analyze Improve Control Well defined problem is problem half-solved.
  23. 23. DMAIC Problem Solving Roadmap Define Measure Analyze Improve Control Understand issues by knowing where they stand.
  24. 24. DMAIC Problem Solving Roadmap Define Measure Analyze Improve Control Y = f(x), analyze, identify, and prioritize xs.
  25. 25. DMAIC Problem Solving Roadmap Define Measure Analyze Improve Control Execute CHANGE, ensure they are statistically significant.
  26. 26. DMAIC Problem Solving Roadmap Define Measure Analyze Improve Control Sustain improvement, never let it slip.
  27. 27. Integrating Change Management
  28. 28. More on Change Management Compelling Aligned Enduring Quick Wins Confusion, Reason Infrastructure Capability and Stories Unmotivated Clear and Aligned Enduring Quick Wins “Change is Shared Vision Infrastructure Capability and Stories not a Priority” Clear and Compelling Enduring Quick Wins Slow , Bumpy Shared Vision Reason Capability and Stories Change Clear and Compelling Aligned Quick Wins Frustration Shared Vision Reason Infrastructure and Stories Clear and Compelling Aligned Enduring Losing Shared Vision Reason Infrastructure Capability Enthusiasm Clear and Compelling Aligned Enduring Quick Wins Succesful Shared Vision Reason Infrastructure Capability and Stories CHANGE
  29. 29. Menara Rajawali 11th Floor Mega Kuningan Jakarta 12950 T +62 21 576 2727 F +62 21 576 2736 www.SSCXinternational.com

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