This document discusses the deployment of Six Sigma at Bechtel, an engineering, procurement, and construction company. It describes how Six Sigma uses rigorous tools and methodologies to improve work quality, profitability, and customer satisfaction. Bechtel implemented Six Sigma to address issues like ineffective lessons learned and talent shortages. The presentation outlines Bechtel's improvement framework, provides examples of Six Sigma projects that increased productivity, and describes how Six Sigma was organized within Bechtel with champions, belts, and executive support. It emphasizes becoming self-sufficient in improvement efforts and establishing a culture focused on process data.

1. Special PresentationSpecial Presentation
Six Sigma DeploymentSix Sigma Deployment
in the EPC Businessin the EPC Business
CII Annual Conference Orlando, Florida July 29-31, 2003CII Annual Conference Orlando, Florida July 29-31, 2003

2. Six Sigma DeploymentSix Sigma Deployment
in the EPC Businessin the EPC Business
Special PresentationSpecial Presentation
CII Annual Conference Orlando, Florida July 29-31, 2003CII Annual Conference Orlando, Florida July 29-31, 2003

3. Six Sigma uses a rigorous set of tools andSix Sigma uses a rigorous set of tools and
methodologies designed with one purpose in mind —methodologies designed with one purpose in mind —
to produce a dramatic improvement in work quality,to produce a dramatic improvement in work quality,
profitability, customer and employee satisfaction, andprofitability, customer and employee satisfaction, and
leadership of business enterprises.leadership of business enterprises.
““Six Sigma is the new way of lifeSix Sigma is the new way of life
for doing business in our company.”for doing business in our company.”
Adrian ZaccariaAdrian Zaccaria
President & Chief Operating OfficerPresident & Chief Operating Officer
What is Six Sigma?What is Six Sigma?

4. Why Six Sigma?Why Six Sigma?
 Root cause analysisRoot cause analysis
 Ineffective lessons learned programIneffective lessons learned program
 Talent shortageTalent shortage
 Extensive inspection and reworkExtensive inspection and rework
 Positive feedback from GE modelPositive feedback from GE model

5. Relentless Search for Defects, Rework, and WasteRelentless Search for Defects, Rework, and Waste
Lost OpportunityLost Opportunity
Idle timeIdle time
ReworkRework
InspectionInspection
OvertimeOvertime
CostsCosts
Near-miss safety incidentsNear-miss safety incidents
Missed commitmentsMissed commitments
Long cycle timesLong cycle times
Expediting costsExpediting costs
Inaccurate reportsInaccurate reports
Frustration and poor moraleFrustration and poor morale
Redundant processesRedundant processes
Cost of working capitalCost of working capital
Excessive planningExcessive planning

6. Measuring Performance Using DataMeasuring Performance Using Data

7. Could Six Sigma Work in Bechtel?Could Six Sigma Work in Bechtel?
19851985--9292 19931993--9494 19941994--9696 19961996--9797 1997-991997-99 2000 …2000 …
MotorolaMotorola
TexasTexas
InstrumentsInstruments
ABBABB Allied SignalAllied Signal
GeneralGeneral
ElectricElectric
HoneywellHoneywell
3M3M
BombardierBombardier
DowDow
Nokia MobileNokia Mobile
PhonesPhones
USPSUSPS
AveryAvery
DennisonDennison
CraneCrane
LockheedLockheed
MartinMartin
PraxairPraxair
PolaroidPolaroid
CorporationCorporation
ShimanoShimano
SonySony
AMEXAMEX
Air ProductsAir Products
& Chemicals& Chemicals
CelaneseCelanese
CitigroupCitigroup
DuPontDuPont
FordFord
Home DepotHome Depot
Johnson ControlsJohnson Controls
ShellShell
Wal-MartWal-Mart

8. Bechtel’s Improvement FrameworkBechtel’s Improvement Framework
Six SigmaSix Sigma Performance-Performance-
Based LeadershipBased Leadership
(PBL)(PBL)

9. A Project ExampleA Project Example
Transport ProductivityTransport Productivity
PIP Team:PIP Team: Channel Tunnel Rail Link (CTRL) project, UK,Channel Tunnel Rail Link (CTRL) project, UK,
CivilCivil
Objective:Objective: Increase spoils transport productivity by 15%Increase spoils transport productivity by 15%
Results:Results: Actual increase in productivity of 100% byActual increase in productivity of 100% by
shifting focus from total quantity of earthshifting focus from total quantity of earth
moved per day to quantity moved per truck permoved per day to quantity moved per truck per
dayday
Improvements:Improvements: Installed additional haul roads;Installed additional haul roads;
Segregated other haul routes to avoid conflictSegregated other haul routes to avoid conflict
between dump trucks and other site traffic;between dump trucks and other site traffic;
Introduced new procedure of removing trucksIntroduced new procedure of removing trucks
from worksite;from worksite;
Introduced new primary metric of productivityIntroduced new primary metric of productivity
rather than percent progressrather than percent progress

10. Strategic Plan for DeploymentStrategic Plan for Deployment
Y =Y = ff (x)(x)
XX22 = Focus on a= Focus on a
pipeline of ‘A’pipeline of ‘A’
PIPs*PIPs*
XX11 = Perform as a= Perform as a
seamless teamseamless team
XX33 ==
InstitutionalizeInstitutionalize
improvementimprovement
benefitsbenefits
XX44 = Be self-= Be self-
sufficientsufficient
Y =Y =
SustainedSustained
‘A’ Results‘A’ Results
* PIP = process improvement project* PIP = process improvement project

11. Core PrinciplesCore Principles
 Customer focusedCustomer focused
 Prioritize according to targeted impactsPrioritize according to targeted impacts
 Build on knowledge and experience ofBuild on knowledge and experience of
resourcesresources

12. Critical Success Factors at BechtelCritical Success Factors at Bechtel
 Deployment managed like a projectDeployment managed like a project
 Use of Performance-Based LeadershipUse of Performance-Based Leadership
 Focus on projectsFocus on projects
 Dedicated resourcesDedicated resources
 Strong executive supportStrong executive support

13. Six Sigma RolesSix Sigma Roles
Black BeltBlack Belt
Team Member
Yellow Belt
(process owner)
StakeholderStakeholder
ChampionChampion

14. How Bechtel’s Deployment Is OrganizedHow Bechtel’s Deployment Is Organized
Master Black Belt Deployment Coordinator
Operations Manager
Deployment Champion
President of Business Line
Deployment Sponsor
Deputy COO
Executive Sponsor
Functional/
Project Managers
Champions
Functional/
Project Managers
Champions
Process Owners
Yellow Belts
Process Owners
Yellow Belts
Black BeltsBlack Belts
All Employees
Team Members
All Employees
Team Members
Other
Managers
Stakeholders
Other
Managers
Stakeholders
Yellow
Belt
Stake-
holders
Champion
Black
Belt
Team
Members

15. Rebar OptimizationRebar Optimization
PIP Team:PIP Team: Croatian Motorway Project,Croatian Motorway Project, CivilCivil
Objective:Objective: To improve the labor efficiency for installingTo improve the labor efficiency for installing
rebar at direct hire structure sites from 38 hoursrebar at direct hire structure sites from 38 hours
per tonne to 25 hours per tonneper tonne to 25 hours per tonne
Results:Results: Improved efficiency resulted in 15% reducedImproved efficiency resulted in 15% reduced
costs over an eight-month periodcosts over an eight-month period
Improvements:Improvements: More transparent reporting process;More transparent reporting process;
Structural engineers accountable for ownStructural engineers accountable for own
structures;structures;
Maintaining rebar crew consistency;Maintaining rebar crew consistency;
Prevent downtime through increased rebar stockPrevent downtime through increased rebar stock
at sites, trained super crane operators, workingat sites, trained super crane operators, working
multi-sitesmulti-sites
Another Success StoryAnother Success Story

16. Business CultureBusiness Culture
Think Process … Ask for DataThink Process … Ask for Data
 Managers focused on data – variation, not averagesManagers focused on data – variation, not averages
 Project teams focused on process – inputs andProject teams focused on process – inputs and
customerscustomers
 Functional organizations (Engineering andFunctional organizations (Engineering and
Construction) using data to validate best practices,Construction) using data to validate best practices,
asking for business casesasking for business cases

17. Relentless Focus on Self SufficiencyRelentless Focus on Self Sufficiency

18. ““The single most importantThe single most important
decision that I’ve participateddecision that I’ve participated
in, in the last 10 years…”in, in the last 10 years…”
Riley P. BechtelRiley P. Bechtel
Chairman & Chief Executive OfficerChairman & Chief Executive Officer
Leadership CommitmentLeadership Commitment

19. Six Sigma DeploymentSix Sigma Deployment
in the EPC Businessin the EPC Business
Special PresentationSpecial Presentation
CII Annual Conference Orlando, Florida July 29-31, 2003CII Annual Conference Orlando, Florida July 29-31, 2003