Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved.
Six Sigma Training and
Implementation Proposal
Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Purpose
Deployment of Six Sigma as a strategy to achieve World Class Performance at (XYZ).
Scope
Example: Emerging Leader- AM to DGM Leaders- Sr. DGM and Above Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Success Factor Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Where to apply Six Sigma Lean Six Sigma Steel Power IT & ITES Hotel & Tourism Business Developm ent Quality Finance HR Admin Retail Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Step 1: GAP Analysis Its performed to understand the performance of a process when compared to what is expected or standard Its used to compare the output of a process versus the competition Its based on statistical process control & robust methods to measure and collect data Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Step 2: Staff sensitization
1 to 1 hand holding (Mentoring/ Coaching)
2 days workshop for Leaders At max 10 participants per Workshop/ Location
4 day workshop for Emerging Leaders At max 15 participants per Workshop/ Location Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Step 3: Project identification/Selection Prioritize Project based on Benefit Analysis, and ROI
Analysis & evaluation of opportunities by the Senior management for decisions, projects to be selected for implementations Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Step 4: Implementation
Stage 1- One to One handholding (Min 3-4 months; 3 resource required) Pilot Site Stage 2- One to One handholding (Min 2 month; 3 resource required) ??? Sites (Location) identified Stage 3- One to One handholding (Min 2 month; 3 resource required) ??? Remaining Sites Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Six Sigma Staff Sensitization - Approach 9 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Staff Sensitization & 1 on 1 Support Initiative(s) Roadmap 1 Year Six Sigma Improvement Initiative MS1 Opening Meeting MS3 Stage 1 Review MS2 Gap Analysis & Project Identification Jul13 Aug13 Sep13 Oct13 Nov13 Dec13 Jan14 Feb14 Mar14 Apr14 May14 Jun14 Jul14 MS5 Stage 3 Review MS4 Stage 2 Review MS1 MS2 MS5 MS3 MS4 Level 1: Initial (Heroic Efforts) Level 2: Managed (Basic Project Management) Level 3: Defined (Process Standardization) Level 4: Quantitatively Managed Level 5: Optimizing Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. SIX Sigma Implementation Benefits Greater productivity & throughput Improved quality & performance Reduced cycle times & operating costs Smoother operation & executes strategic change Generates sustained success & enhances value Accelerates improvement & promotes learning across boundaries
Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Case Study Bank of America Six Sigma Experience Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Bank of America Six Sigma Experience 14 Goals # 1 in Customer Satisfaction Worlds most admired company Worlds largest bank Strategy - Develop business process excellence by applying voice of the customer to identify and engineer critical few business processes using Six Sigma Created Quality & Productivity Division Source: Best Practices Report Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Bank of America Six Sigma Experience 15 Wanted results in 1 year; Developed 2 week Green Belt training programs Introduced computer simulation of processes Trained 3767 Green Belts, certified 1230 - Minimum value target per GB project $ 250K Trained 305 Black Belts, certified 61 - Minimum value target per BB project $ 1 million Trained 43 MBB, 1017 in DFSS 80 % of Executive Team trained in GB and 50 % Certified Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Bank of America Six Sigma Experience 16 Results of first 2 years:
Reduced ATM withdrawal losses by 29.7 % Reduced counterfeit losses in nationwide cash vaults by 54% Customer delight up 20%; Added 2.3 million customer households 1.3 million fewer customer households experienced problems Stock value up 52% Y 2002 BOA named Best Bank in US & Euro money's Worlds Most Improved Bank Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Backup Slides:
Six Sigma Concept, Philosophy & History 17 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Organizational Entities and Quality Initiative. 18 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Six Sigma is. . . 19 A performance goal, representing 3.4 defects for every million opportunities to make one.
A series of tools and methods used to improve or design products, processes, and/or services.
A statistical measure indicating the number of standard deviations within customer expectations.
A disciplined, fact-based approach to managing a business and its processes.
A means to promote greater awareness of customer needs, performance measurement, and business improvement. A scientific and practical method to achieve improvements in a company Scientific: Structured approach. Assuming quantitative data.
Practical: Emphasis on financial result. Start with the voice of the customer. Show me the data Show me the money Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. What is Six Sigma? 20 Philosophy: The philosophical perspective views all works as a processes that can be defined, measured, analysed, improved & controlled (DMAIC). Processes require inputs & produce outputs. If you control the inputs, you will control the outputs. This is generally expressed as the y= f (x) concept. The philosophy results in a culture of total aversion to defects.
Set of Tools: Six Sigma as a set of tools includes all the qualitative and quantitative techniques used by the six sigma expert to drive process improvement. A few such tools include statistical process control (SPC), Control charts, failure mode & effects analysis, process mapping etc
Methodology: This view of Six Sigma recognizes the underlying and rigorous approach known as DMAIC. DMAIC defines the steps a Six Sigma practitioner is expected to follow, starting with identifying the problem and ending with the implementation of long-lasting solutions. While DMAIC is not only Six Sigma Methodology in use, it is certainly the most widely adopted and recognized.
Metrics: In simple terms, Six Sigma quality performance means 3.4 defects per million opportunities. Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved.
Whats in a name? 21 Sigma is the Greek letter (18 th character) representing the standard deviation of a population of data.
Sigma is a measure of variation (the data spread) As defects go down... ...the Sigma capability goes up D
Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. What does variation mean? 22 Variation means that a process does not produce the same result (the Y) every time.
Some variation will exist in all processes.
Variation directly affects customer experiences. Customers do not feel averages! -10 -5 0 5 10 15 20 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Measuring Process Performance - The pizza delivery example. . .
23 Customers want their pizza delivered fast!
Guarantee = 30 minutes or less
What if we measured performance and found an average delivery time of 23.5 minutes? On-time performance is great, right? Our customers must be happy with us, right? Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. How often are we delivering on time? 24
Managing by the average doesnt tell the whole story. The average and the variation together show whats happening. s x 30 min. or less 0 10 20 30 40 50 Answer: Look at the variation! Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Delivery Cycle Time (Days) Baseline Improved? What we see 12 24 13 7 16 8 20 25 14 10 11 30 16 Mean 15.8 Std Dev 7.0 27 7 15 4 18 6 23 6 2 24 2 6 5 11.2 9.0 11.2 15.8 What customers feel Using mean-based thinking, we improve average performance by 29%, and break out the champagne. But our customer only feels the variance and cancels the next order. Customers Feel Variance, Not the Mean Insight Through Variance 25 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Reduce Variation to Improve Performance
26
Sigma level measures how often we meet (or fail to meet) the requirement(s) of our customer(s). s x 30 min. or less 0 10 20 30 40 50 How many standard deviations can you fit within customer expectations? Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. A Standard Deviation (s) is a measure of the amount of spread or dispersion about the mean (m). s s s T m LSL USL T = Process Target s = Standard Deviation m = Mean LSL = Lower Spec. Limit USL = Upper Spec. Limit This is an illustration of a three sigma process . Alternatively, it can be said that this process has a sigma level of 3. In conventional quality lingo , the CpK of this process is 1.0. CpK = Sigma Level / 3 A Three Sigma Process 27 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. s s s T m LSL USL s s s A Six sigma process has room for six standard deviation between the mean and nearest specification limit or Cpk of 2. A Six Sigma Process 28 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Managing Up the Sigma Scale 29 Sigm a % Good % Bad DPMO Short Term CPk Long term CPk 1 30.9% 69.1% 691,462 0.33 -0.17 2 69.1% 30.9% 308,538 0.67 0.17 3 93.3% 6.7% 66,807 1.00 0.5 4 99.38% 0.62% 6,210 1.33 0.83 5 99.977% 0.023% 233 1.67 1.17 6 99.9997% 0.00034% 3.4 2.0 1.5 Process Capabilities Defect per million Opportunity Rolled Throughput Yield Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Examples of the Sigma Scale
There are 964 U.S. flight cancellations per day.
The police make 7 false arrests every 4 minutes.
In MA, 5,390 newborns are dropped each year.
In one hour, 47,283 international long distance calls are accidentally disconnected.
1 U.S. flight is cancelled every 3 weeks.
There are fewer than 4 false arrests per month.
1 newborn is dropped every 4 years in MA.
It would take more than 2 years to see the same number of dropped international calls. 5,000 incorrect surgical operations per week No electricity for almost seven hours each month. 4 Sigma = 99 % Good 6 Sigma = 99.9997 % Good 1.7 incorrect surgical operations per week One hour without electricity every 34 years. 3 Sigma = 93.3 % Good 6 Sigma = 99.9997 % Good Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. 1,000,000 100,000 Restaurant Bills Order Taking Airline Baggage Handling Payroll Processing 10,000 Average Company Purchased Material Reject Rate 1,000 100 10 World Class 1 2 3 4 5 6 7 Domestic Airline Flight Fatality Rate 0.43 PPM Benchmarking Chart
31 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. s-level Defect rate (ppm) Costs of poor quality Status of the company 6 3.4 < 10% of turnover World class 5 233 10-15% of turnover 4 6210 15-20% of turnover Current standard 3 66807 20-30% of turnover 2 308537 30-40% of turnover Bankruptcy
Benefits of 6s approach w.r.t. financials 32 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Know what is Important to the Customer and to the Business Reduce Defect Levels by: 1. Reducing the Variation 2. Centering around the Target Long Term LSL USL Six Sigma Improvement Strategy 33 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Process Off Target Target Excessive Variation Target LSL USL LSL USL Center Process Target Reduce Spread Defects LSL USL Ideal State: Centred on the Customers Target with Minimal Variation The Statistical Objective of Six Sigma 34 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Target Analogy Measurement Precise, Not Accurate Statistical LSL T USL Accurate Not Precise Precise and Accurate LSL T USL Ideal State: Centred on the Customers Target with Minimal Variation The Statistical Objective of Six Sigma 35 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Defect Reduction Yield Improvement Customer Satisfaction $ Six Sigma (s) is a business-driven, multi-faceted approach to process improvement, reduced costs, and increased profits. With a fundamental principle to improve customer satisfaction by reducing defects. The Goal of Six Sigma 36 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Customer Satisfaction Organization Goal Quality Defects Delivery Cycle Time Price/Value Cost Whatever is critical to the customer must be critical to our business. Six Sigma project are then focused on the process required to satisfy the critical to customer & process. Customer Satisfaction
37 Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. The Six Sigma Evolutionary Timeline 38 1736: French mathematician Abraham de Moivre publishes an article introducing the normal curve. 1896: Italian sociologist Vilfredo Alfredo Pareto introduces the 80/20 rule and the Pareto distribution in Cours dEconomie Politique. 1924: Walter A. Shewhart introduces the control chart and the distinction of special vs. common cause variation as contributors to process problems. 1941: Alex Osborn, head of BBDO Advertising, fathers a widely-adopted set of rules for brainstorming. 1949: U. S. DOD issues Military Procedure MIL-P-1629, Procedures for Performing a Failure Mode Effects and Criticality Analysis. 1960: Kaoru Ishikawa introduces his now famous cause-and-effect diagram. 1818: Gauss uses the normal curve to explore the mathematics of error analysis for measurement, probability analysis, and hypothesis testing. 1970s: Dr. Noriaki Kano introduces his two-dimensional quality model and the three types of quality. 1986: Bill Smith, a senior engineer and scientist introduces the concept of Six Sigma at Motorola 1994: Larry Bossidy launches Six Sigma at Allied Signal. 1995: Jack Welch launches Six Sigma at GE. Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved. Thank you