Six Sigma Performance Improvement

1. Six Sigma Performance Improvement Tim Ward (44) 07855 388 751 www.SixSigmaWorks.co.uk

2. SSPI Six Sigma Performance Improvement (SSPI) At its most comprehensive level SSPI is a management framework to deliver superior profitability and competitive advantage. It does this through significant improvements in Costs, Productivity and by increasing Customer Satisfaction. This leads to a sustainable, measurable and more profitable market position. At its simplest level SSPI is a project methodology and toolkit to design and improve products and processes so that they continuously meet customer needs. Customers Feel Variation—They remember when something did not happen right • SSPI focuses on Variation in All Key Processes. This results in processes that meet Customers’ Needs. Strategy alone does not create Value - Execution of Business Processes must also be Excellent • SSPI focuses on Process Performance throughout the business to deliver maximum Value. Businesses are Multi-Functional - One Function’s Metrics are different from another’s • SSPI measures Key Processes giving the Business a common Measurement Standard across all Functions—The Sigma Rating. Best Is The Enemy of Better

3. Theory  6 Sigma is a Greek Letter Used to Represent the Deviation About the Mean (Average) 6s performance is 3.4 Defects per Million ‘Opportunities for a Defect”. 6s Provides a Set of Common Measurements That Apply to ALL Processes

4. Theory Definition Six Sigma Performance Improvement Is a Proven Methodology to Deliver World Class Performance Through Process Capability: • Making the Customer (Internal as well as External) the Focus of Everything the Company Does • Using Rigorous Project Management Tools • Through Developing People to their Full Potential • Involving Everyone and Every Function in the Business in a Common Measurement Framework To Deliver Continuous Improvement Whatever You Want to Do, Six Sigma Performance Improvement Will Make You Do It Better

5. Potted History 1984 Motorola - Innovative Quality methodologies introduced into production departments 1993 ABB - Link Six Sigma Quality to bottom line performance, developing Six Sigma Performance Improvement 1995 GE introduce Six Sigma - $500m invested in first year, pay back one year. 2000 “Six Sigma is the most important initiative GE has ever undertaken”. 2001 Six Sigma adopted widely amongst Fortune 500 companies.

6. Who Has Implemented It? DuPont "Six Sigma implementation continues to gain momentum. At the end of the year 2000, there were about 1,100 trained Black Belts and over 3,400 active projects. The potential pre-tax benefit from active projects was $700 million." - DuPont Fourth Quarter and Full Year 2000 Earnings Report Ford "In the past year we launched Consumer Driven 6-Sigma, a scientific, data-driven process to uncover the root cause of customer concerns and drive out defects. We now have more than 1,800 full-time, trained problem-solvers called Black Belts leading customer satisfaction team projects. The 215 projects they completed last year have already saved us $52 million, and will save us more than $200 million in the next two years. More importantly, these projects made a real difference to our customers by eliminating high priority concerns and increasing satisfaction." - Ford 2000 Annual Report General Electric "The Six Sigma initiative is in its fifth year — its fifth trip through the operating system. From a standing start in 1996, with no financial benefit to the Company, it has flourished to the point where it produced more than $2 billion in benefits in 1999, with much more to come this decade." - GE 1999 Annual Report Honeywell "We achieved $600 million in Six Sigma cost savings in 1999, but cost savings are only one part of the story. Delighting customers and accelerating growth completes the picture. When we are more efficient and improve work flow throughout every function in the company, we provide tremendous added value to our customers–through higher quality solutions that are more competitively priced, delivered on time and invoiced correctly. That makes us a more desirable business partner." - Honeywell 1999 Annual Report

7. What It Is A Business Programme Focused on Profits. An Enabler of Strategy. Optimised Production Processes, Delivering High Yields With Little or No Scrap or Defects, Assuring Customer’s Needs Are Met A System for Improving All Processes Across The Whole Organisation. A Common Measurement System That Compares The Performance of All Processes Across the Whole Organisation A Challenge for All Employees to Deliver Six Sigma Performance Externally Focused What It Is Not A Programme Focused on Quality. A Strategy. A Programme Assuring Quality Through 100-percent Final Inspection, With Production Processes Still Running at Low Yields With High Scrap Ratios and Defects Just a Production Improvement Tool Kit. Mystical. Exclusively the Preserve of a Few Technicians. Internally Focused What is Six Sigma?

8. What is Six Sigma? • A Project Management Framework. • DFSS, DMAIC, DRADV, TTP • A Rigorous, Statistical, Objective Tool Kit. • SPC, Pareto, Normal Distribution, Etc. • A Common Measurement System to Manage the Whole Business. • Sigma Rating. • An On-going Continuous Improvement Mentality. • Begins As a Project, Ends up As the Way Everyone Works. • The Training Ground for New Business Leaders. • Restricted Promotional Prospects Within GE If Not Certified BlackBelt. • A Shareholder Value Engine.

9. What is Six Sigma? Value A Business Management Framework The Training Ground for New Business Leaders An On-going Continuous Improvement Mentality A Common Measurement System to Manage the Whole Business. A Rigorous, Statistical, Objective Tool Kit A Project Management Framework Commitment

10. Why Is It Different From Other Quality Programmes? • Close Fit With Business Strategy - Not Just a Production Programme • Dedicated Resources - Not Part Time Practitioners • Focused on Customers - Not Internal “Navel Gazing” • Focused on Processes - Not a “Feel Good” Customer Service “Smile” Program • Success Is Increased Profits - Not Just Improved Quality

11. Proven in Application Sigma Ratings Relate Directly to Competitive Position 1s 2s 3s 4s 5s 6s Sigma Rating Doomed to Fail Market Performer World Class Aspirational Market Performance Raises the Bar of Corporate Performance

12. Sigma DPMO “Wastage” as % of sales s 66,807 25-40% 3 s 6,210 15-25% 4 s 233 5-15% 5 s 3.4 <1% 6 Proven in Application Using Sigma As the Measure for Corporate Effectiveness Boosts Corporate Performance Capable Processes Mean Less Waste

13. Proven in Application Macro Benefits For Each Sigma Upshift the Following Benefits can Accrue: • 20% Margin Improvement • 15% Productivity Improvement • 12% Reduction in People Costs Six Sigma; Mikel Harry, Richard Schroeder The Numbers Show it Works.

14. Strengths and Pitfalls Strengths • Significant Performance Improvement in Key Processes • Elimination Of Costs Of Rework and Lost Time • Workers Focused on Delivering Customer Satisfaction • Culture of Continuous Improvement • Common Performance Measures Across Business • Rigour To Maintain Improvement Gains • Better Sharing of Strategic Priorities • Develop Team Players • Deal With Problems Before They Become Serious - Loss Savings Pitfalls • Lack of Top Management Commitment and Leadership • Inadequate Resources to Embed Six Sigma in Business • Insufficient Investment in Training All Workers • Not Understanding That Six Sigma is A Journey Not An Event • No Real Desire to Be World Class • Lulled Into False Sense of Security - Take Eye Off Strategy Ball • Too Much Dogmatic Adherence to Six Sigma - Projects For Projects Sake

15. What You Need Key Success Factors CEO/ Business Leader • Define, Articulate and Evangelise Six Sigma Vision • Employee Remuneration and Career Prospects Linked to Six Sigma • Count ££ Related to Six Sigma Results Senior Management Must Drive Six Sigma • Demonstrate Commitment • Appoint High Potential People as Six Sigma Leaders • Participate in Six Sigma Projects • Reward and Celebrate Six Sigma Successes • Promote through Six Sigma Management and Employees Must Apply Six Sigma • All Projects become Six Sigma Projects • All Employees Empowered to Identify and Solve Their Own Problems • All employees trained in Six Sigma • Obligation to run projects following training Dedicated Resources • Six Sigma Leader - CEO Direct Report • Master Black Belts • Black Belts It Only Takes People to Make Six Sigma Work

16. SSPI Processes Design for Six Sigma (DFSS) Is A Rigorous Closed Loop Improvement Process To Ensure Customer Needs Are Met Processes to Deliver Satisfaction Customer Needs Process Requirements Customer Needs Process Design Measurements Controls Validation - Control You Can Always Get Better - and Getting Better is More Profitable

17. SSPI Processes Design For Six Sigma Process or Product Exists? No Yes Design Project Improvement Project 20% of Projects 80% of Projects Huge Potential for Gains From Improvement Projects at Outset

18. SSPI Processes Improvement Project Phases Define Define Define Measure Analyse Improve Control D M A I C

19. SSPI Processes Design Project Phases Define Research Analyse Design Validate D R A D V

20. Define SSPI Processes No Process or Product? Yes Does it Exist? Research Measure Analyse Analyse IsIncremental Improvement Enough? No Yes Design Validate Improve Never Satisfied Means it Never Stops Control

21. DRADV and TTP • DRADV • A Recognition That to Design Something New, You Need a Different Process. • TTP • How to Manage Change • How to Manage Teams • How to Get the Best Out of People • How to Cement Change

22. Six Sigma Works - How We Work • Involvement • Project, Programme, Embed - PPE • Team • PWAP

23. Involvement • Tell Me and I Will Forget • Show Me and I Will Remember • Involve Me and I Will Understand • Involvement in Writing the Be-spoke Intellectual Property • Involvement in the PWAP Training Courses Other Consultants Without Real Understanding There Will Always Be a Reliance on External Help, Because You Cannot Apply & Teach Something Unless You Understand It.

24. PPE • Project • Teaching the Founder Black Belts • Writing the Training Materials in Your Language • Training the Trainers • Programme • Spreading the Word. • Implementing the Roll Out Plan • Embed • Supporting the Six Sigma Leader. • Acting As Master Black Belts. • Accrediting the Graduates of the Training.

25. Project Within A Project - PWAP • Identified With Management in Advance of the Project Phase. • The Learning Opportunity for the Founder Black Belts. • The Application of the Knowledge. • The Testing of the Understanding. • With a Real Business Benefit.

26. When Is the Right Time? • Businesses Have Always Got Lots on. • No-one Ever Has Enough Good People. • The Pace of Change Is Ever Increasing. • Doesn’t Change What You Do, or Plan to Do, Only Makes You Do It Better • The Best People Are Always on Projects Anyway. • Six Sigma Gives Management the Confidence That the Work Will Be Delivered Successfully. “The Longer You Wait, the Longer You’ll Wait”

27. Six Sigma Three Levels of Involvement Full Six Sigma Performance Improvement Six Sigma Cell Six Sigma Project Management Six Sigma Tailored to Your Needs