A Dual Concept
For Long-Term Success
S
ix Sigma does not guarantee organizational success despite many
USE INTEGRATED examples of excellent results. Motorola, the inventor of Six Sigma,
PROFIT wrote the first success stories with millions of dollars in cost savings. But
Motorola eventually had to lay off thousands of people. In Germany, its fac-
MANAGEMENT tory in Taunusstein was closed.
Another pioneer of the Six Sigma concept, Bombardier, the Canadian aircraft
AND VISUAL manufacturer, also had problems because of decreasing markets. Bombadier
PROCESS closed seven factories in Germany, Portugal and the United Kingdom, laying off
about 6,000 employees in 2004 and so far in 2005.
MANAGEMENT. Still, Six Sigma’s value has been proven through the success of many organ-
izations in the United States and other countries. What worked in the past,
however, will not necessarily work tomorrow. Because major market changes
combined with a lack of innovation will lead to loss of market share and prof-
it for an organization, its long-term success cannot depend on Six Sigma alone.
In fact, no one management concept will work for all organizations in all cases.
In the typical Six Sigma approach, about 1% of staff become Black Belts (BBs),
while others become Green Belts or something similar. But what about the other
By Fritz W. 90 to 95%? Perhaps they get a
half- or full-day training session
Weigang, but are normally not really in-
Figure 1. Integrate Profit
Management
Institut für volved in improvement processes.
But people resources are the Clienting
most important organizational (customer + environment/competition)
Qualitätsmanagment
success factors—especially in
medium-sized companies. If you
ive
Ad
ap
ova
tiv
Profit
freedom, you cannot prevent
them from doing a good job.
This involvement of the other Processing Reliability Partnering
90 to 95% of staff can be accom- (processes) (employees)
plished through an integrated
profit management concept
that includes Visual Process Management1 and combines the advantage of the
lean Six Sigma approach with this involvement of people.
Integrated profit management (see Figure 1) combines:
• Clienting: customer orientation with concentration on the most impor-
tant bottleneck in the organization.
• Partnering: People orientation.
• Processing: Improving product and processes.
Clienting
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Purchase price
Resale value
for a new automobile Price Additional expenses
Sales talks Marketing/sales
Fuel consumption (miles per gallon)
Events promotion in the trade Reliability (costs for repair and maintenance)
Regional exhibitions Disposability
Special sales supporting activities
Date agreement
Reception (show room) Behavior of the service advisor
Friendliness of salesman/others Sales Service Receipt of the vehicle that will be repaired
Felling technology/sales conclusion process process Collection date
Selling assistance (financing/borrowing car) Result of the repair
Vehicle delivery Pick up of vehicle
Follow-up assistance Calculation understandability
Personal behavior
of the employees Follow-up assistance
© IQM, 2003.
20 I A U G U S T 2 0 0 5 I W W W . A S Q . O R G
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Chances External
customer/
External future noncustomer
influences:
Viability
assessment:
(more qualitative view) Use of the past
Market analysis: achievement
• Future requirements. (in relation to
• Benchmarking. competition).
Environmental influences: Risks • Product.
• Technology trends • Service.
(IT, substitutions). • Handling.
• Laws, regulations. • Image.
Negative thinking Strategic crisis Return deficit Substance loss
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$60 million U.S. dollars) to save jobs. After a year and The success stairs have four blocks and include five
a half, the company was bankrupt again, and public basic steps, three typical lean modules and a dual sys-
opinion prevented Schröder from bailing it out again. tem for a total of 10 steps to get to the top block.
Philip Holtzmann did not change its attitude and The five basic steps in the first block are Visual
culture but continued to do business the same as Process Management and consist of :
before. If you don’t change the attitudes and culture of 1. The five S’s developed by Toyota for production
top management and think only of short-term share- employees,2 with additional suggestions for man-
holder benefit (which frequently puts money into the agement to get rid of and prevent wrong projects
pockets of top management), you will not gain long- and activities. The latter is called “the five S’s for
term success. The same holds true for Six Sigma. management.”
Unfortunately, bankers and shareholder ratings fre-
2. Standardization, which involves much more
quently consider only the right side of the figure—the
than ISO 9000 or its sector specific derivations. It
material side—which is not as important for long-
consists of pictorial presentations of processes
term success.
with special checklists, lists for corrective actions
While layoffs often increase shareholder ratings, the
if the process is going out of control, activities in
organization will lose momentum on the left side, and
which people measure and visualize the out-
that often leads to long-term disadvantage. Through
come of processes according to the results and
short-term personnel strategies, which are only cost
productivity charts and special activities—about
oriented, you destroy your long-term organizational
six times a year—that use posters, hints for man-
social capital.
agement and supporting documents for produc-
Processing tion employees.
3. Fun during work—the best motivation—which is
Clienting and partnering are the necessary mental important for long-term success.
preparation for the integrated profit management
concept, but without the third phase—processing or 4. Process thinking, a realization of next operation
realization with clear steps—it will not work. This as customer, which can be shown by using a sup-
reveals the advantage of Six Sigma. Professional qual- ply, input, process, output, customer diagram,
ity activities should lead to avoiding tomorrow’s mis- commonly known as a SIPOC diagram.
take, not simply to measuring today’s mistakes. 5. The goals for each process with measurement
Figure 6 shows the combination of cost, time and criteria.
quality as evidenced by lean
Six Sigma. Lean is concen-
trated more on the reduc- Figure 6. Combination of Cost, Time and Quality with Lean Six Sigma
tion of cycle time and waste,
while Six Sigma focuses
more on variation. The Cost
three parts in the figure are (utilization degree/yield)
connected with a kind of
invisible rubber band. If you
stretch at one point—time,
for example—you will also
change the other parts. Customer
loyalty/profit
To show this combination
together with other concepts
and tools, I have developed Quality Time
what I call success stairs. Reduction of variation Increase of cycle time (CT) efficiency
Figure 7 is an example for a
CT
manufacturing organization ~3σ ~6σ (ideal)
that combines Six Sigma, Other time
lean and Visual Process Value added
Variation in the process extends/deteriorates (waste)
CT
Management, which will be the cycle time.
described later in this article.
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A D u a l C o n c e p t f o r L o n g - Te r m S u c c e s s
em
ive S
yst
1. F
ls
Pu
8.
a mid-sized company’s
am
Sig
Six
e n ss
9.
gem ce
usual problems after tak-
na Pro
t
M a su a l
i
.V
10
ldr and
ing such a course.
Ba QM
ige
EF
11
t
To solve other prob-
ar
St
lems for which the use
Cu
of more sophisticated sto
me
r
statistics is necessary, In loya
EFQM = European Foundation Im nova lty
pro tio
vem n
organizations may first for Quality Management.
en
t
need to use a coach and
© IQM, 2005.
then let their employ-
ees gradually become
more interested in statistics as they actually work on petition can quickly catch up. The difference between
projects. excellent organizations and others is how they handle
processes involved in day-to-day work.
Visual Process Management Typical processes include much waste, which, unfor-
tunately, is not usually noticed. Management usually
Typical business decisions for strategic and high pays attention to big projects, not to smaller mistakes.
level operational activities don’t normally result in a But these smaller mistakes are like a virus, which can
long-lasting competitive advantage because your com- spread and cause many more small problems.
Potential of changes:
Weighting + concentration of future activities
24 I A U G U S T 2 0 0 5 I W W W . A S Q . O R G
A D u a l C o n c e p t f o r L o n g - Te r m S u c c e s s
Tilt
Removal of waste
a
a
eg
eg under the surface Strategic
M
M Strategic (basic noise) projects
projects
Macro
a pro
realizati jects/ Process Management: realization of
on o innovation
innovati f • Application of five S's.
on • Pictorial presentation
Basic of process flows.
Micro
noise Visual Process Management
waste basic level
Before After
Figure 10 shows the important macro and mega Supplemental level: Many programs are started,
projects suffer from hidden waste. But management but enthusiasm frequently decreases over time, and
is astonished when the benefits of Six Sigma projects programs die slowly but surely. Use of productivity
decrease with time—the consequence of hidden charts and special benchmarking, along with incen-
waste. tive activities, can prevent this.
Reducing this waste through Visual Process The productivity charts are self-evaluations, usually
Management provides real long-term benefit. Visual
Process Management uses pictures and graphics, which
leads to easier, more enjoyable learning. The roadmap Figure 11.Build-up and Supplemental Levels
consists of three levels (see Figures 11 and 12):
1. Basic. Increase in employee productivity
2. Build-up. with Visual Process Management
3. Supplemental. Supplemental:
Basic level. The basic level consists of three stairs in • Six times per year special
which employees detect waste after training. Then activities with incentives.
they start with improvement activities according to • Special benchmarking through
the five S’s and pictorial standardization. employees/management audit.
• Productivity charts.
Build-up level: The build-up level also consists of
three stairs. At this level, the company goals are
Build up:
deployed to process goals with measurement criteria
• Employees measure, visualize and
and tolerances. After special training, employees start improve, if necessary.
to measure and visualize the output of the process. If • Training (according to modern
there is need, they then begin with improvement brain theory).
activities according to a special structure. • Goals with measuring criteria.
The employee starts doing his or her own improve-
ment work. If the work is not successful, the process
Basic:
owner will help; if it’s still not successful, a Six Sigma
• Pictorial standardization.
project will be started. • Five S’s.
I developed a special suggestion system, which when • Employees determine the waste
added to the build-up activities, gives production in their processes.
employees an opportunity to work on their own ideas.
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2. Five S’s—order,
8b. Management audits. housekeeping
(also for management).
5. Training of employees
6a. Realization with measure,
(brain compatible).
visualize/improve.
of production employees, at regular intervals. The members of top management, whose deeds should
charts are completed using weighted targets from be so loud that you can’t hear their words.
management, evaluation of actual or estimated past
data and development of neutral scores. Processes or ACKNOWLEDGMENTS
subprocesses are improved through friendly compe-
The author thanks J.M. Juran and Michael L. George for their writings and
tition with incentives. seminar presentations.
The production employees benchmark their status
against leading organizations worldwide. Managers REFERENCES AND NOTES
conduct audits twice a year—but not in their areas.
For example, the sales director might audit produc- 1. The Visual Process Management model is patented in the Munich,
Germany, patent office.
tion and vice versa.
2. The five S’s are Japanese terms, with their English translations also
Every two months, production employees are beginning with S (sort, set in order, sanitize, standardize and sustain).
assigned a special, clearly defined task, such as reduc- They are used to create a workplace suited for visual control and lean
production.
tion of cycle time. The task is explained using docu-
3. Dorian Shainin, www.asq.org/about-asq/who-we-are/bio_shainin.html.
ments and a humorous poster. Production manage-
ment also gets clear instructions.
The structured combination of integrated profit
management with Visual Process Management (see WHAT DO YOU THINK OF THIS ARTICLE? Please share
Figure 12) is a formula for increasing the productivi- your comments and thoughts with the editor by e-mailing
ty of production employees and for long-term suc-
cess. But such success depends on the behavior of godfrey@asq.org.
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