IS 788 [Process] Change Management

IS 788[Process] Change Management • Lecture: Six Sigma • Presentation and Discussion: Breaking the Functional Mindset IS 788 7.2

Six Sigma • An extremely popular and highly regarded continuous process improvement methodology • Directly traceable to earlier quality assurance movements and methods • ‘Scientific Management’ begins with Fredrick Taylor • The term “Taylor-esque” is frequently used pejoratively to indicate rigid, detail obsessed management techniques IS 788 7.2

Those who do not understand history . . . (class?) • Scientific management evolved into the “efficiency experts” of the 30’s and 40’s and the clipboard and stopwatch toting “industrial engineers” of the 50’s. • We owe much progress beyond this to the adoption by Japanese companies of the teachings of an American “QC guru”, Edwards Deming IS 788 7.2

Deming’s contribution • Deming was largely ignored in the US. • Prior to Deming, QC = test everything coming off the assembly line to cull out defects • Deming inverted this: • Don’t remove defective products from a flawed process. Instead . . . • Engineer quality into your processes • QC became QA (quality assurance) IS 788 7.2

The wake up call for the US IS 788 7.2

The wake up call for the US • Toyota vs. GM: 1986 • Assembly hours: Toyota @ 50% GM • Defects per car: GM almost 300% Toyota • Space for auto assembly: Toyota @ 50% GM • Inventories: GM @ 4000% of Toyota (2 hours vs. 2 weeks) IS 788 7.2

Statistical Process Control • SPC is a forerunner of Six Sigma • Both are statistical management techniques for improving performance • Six Sigma began at Motorola and was thrust to the forefront of management consciousness by Jack Welch of GE • Six Sigma devotees are almost fanatical about adherence to “the method” IS 788 7.2

Three types of process change • Process Management: what Harmon (the textbook) terms developing a process architecture • Process Improvement:incrementally improve and maintain process quality • Process Redesign: more radical forms of process change, including what we’ve called redesign and BPR IS 788 7.2

Six Sigma attributes • Works best with well understood, currently implemented techniques • Very good at process measurement and using statistical techniques to decide on corrective action • A ‘team approach’ is integral to the methodology IS 788 7.2

How Six Sigma got its name IS 788 7.2

The goal of Six Sigma • To reduce deviations from the mean IS 788 7.2

Tightly scoped projects • This helps insure success but may frustrate some high level managers • Short (6-months) • Single activity or several tightly-coupled activities • Monitor 2-3 key process indicators • Measures should be tied to higher level processes and ultimately to strategic goals (org architecture modeling) IS 788 7.2

Teamwork • Teams are more important to Six Sigma efforts than managers • The ‘gung-ho’ team aggressiveness and adherence to the method are part of its effectiveness. • Examinations and experience take practitioners from “green belt” to “black belt” to “master” • Teams work best with a black belt IS 788 7.2

Six Sigma Phases IS 788 7.2

Define • Understand the process • Understand what the effort is to accomplish • The two above factors improve success 500% of many efforts • Dates are important but • Don’t be pushed into a premature statement of when the team will finish IS 788 7.2

SS definition technique: SIPOC SF Seafood is a Running example. IS 788 7.2

Goals are important to definition and usually involve customers Six Sigma likes diagrams and acronyms to make the methodology concrete. This is great for improving existing processes. Not as good for new projects involving vision. IS 788 7.2

Gathering information • Goals and measures frequently comes from customers • In the SFS example – good food, on time. • Surveys, one-on-one interviews and focus groups are common techniques. • Six Sigma stresses Pareto analysis; what measures (and ultimate improvements) are most highly leveraged? IS 788 7.2

Step 2: Measure • Measure only what is important to the customer • Measure only what you can improve • Don’t measure what the customer hasn’t complained about • Only three classes of measure • Inputs (raw materials) • Process (cycle time, cost, etc.) • Outputs (customer satisfaction) IS 788 7.2

Process vs. Outcome • Process measures are objective – ‘hard’ • Outcome measures are subjective – ‘soft’ • Kano Analysis • Basic requirements • Satisfiers • Delighters IS 788 7.2

SF Seafood • Measures not tied to customers satisfaction risk local optimization/global suboptimization • Each measure must be carefully specified and communicated • SFS: Goal – 15 min mean, never over 30 min from order to serve – from customer interviews • time from order entry to kitchen finish – PC system • Total time: not recorded by system so must be observed • Factor out food preparation time – this is a different process! IS 788 7.2

Analysis • Three categories of activities • Add value that the customer is willing to pay for • Required for value-added activity • Non-value-adding • Challenge everything • Sometimes activities have “always been done that way” and yet add no value • SFS example: napkin rings • See extended example bottom of page 199 IS 788 7.2

SFS Example, continued • Optimum number of tables per waiter? • Changes in customer traffic. • Could busboys help? (This option could ONLY suggest itself after extensive on-site analysis of the situation) • Always, locate Pareto IS 788 7.2

Frequently called an Ishikawa diagram after the originator • Three stage problem • analysis: • Brainstorm • Narrow it down • Design measures • and analyze to see • the reality and true • scope of the problem. IS 788 7.2

SFS Analysis / Improvement • Another observation only possible after multiple on-site observations, was that tables with children were more difficult to service. • Investigate assigning each waiter a ‘fair share’ of family tables • This brought in a new actor: the mater d’ who assigned diners to tables (and thus to waiters) IS 788 7.2

More measurement • Improvement must be confirmed with measurement! • The changes, in fact, did improve the process as expected. • So, in the Control phase, drop measurements that are expensive. • Optionally, develop a response plan – in advance – of activities to be performed if performance drops in the future. IS 788 7.2

Six Sigma in summary • Requires discipline and highly trained (expensive) people • A statistical approach, best for in-place, well understood processes • Contrast with PIP (process improvement potential) for example • A quicker, less costly technique (usually) • Determine the difference between the best, average and worst performers at a task • What are they doing? • Might complement Six Sigma (think of SSF) IS 788 7.2

IS 788 [Process] Change Management