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Six Sigma

Six Sigma. David Wood Assignments@gmx.com. Les Roches Six Sigma assessments. List some Kaizen inspired suggestions for Market Place improvements (individual presentation) w/c 23rd February.(10%)

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Six Sigma

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  1. Six Sigma David Wood Assignments@gmx.com

  2. Les Roches Six Sigma assessments • List some Kaizen inspired suggestions for Market Place improvements (individual presentation) w/c 23rd February.(10%) • Write a Project Charter for one of your chosen Kaizen projects for the Market Place w/c 23rd March.(10%) • Group Six Sigma Projects on the Market Place. (40%) • Exam of discussion questions - 40% • Reading – What is Six Sigma and Arthur Jay

  3. What do we mean Quality?

  4. Screw Nail Rivet Glue Bolt Tread Weld Fold Knit Bond Tie Wrap Strap Box Keeping together

  5. “A journey of a thousand miles must begin with a single step.”-Lao Tzu “If you don’t know where you are going any road will get you there.” - Alice in Wonderland

  6. Managing Expectations • Change Management Customers External Stakeholders Internal Stakeholders

  7. 4 P’s that are Key Quality Elements Product People Processes Place Wood’s Theory of Quality (p*3) = P

  8. Quality Audit Tangibles Reliability Responsiveness Competence Empathy

  9. The KPIs for Quality • Customers • Tangibles • Reliability • Responsiveness • Competence • Empathy • External Stakeholders • Internal Stakeholders But nothing really works without a cultureof quality

  10. What are the rumours around? Service Excellence Customization CRM Zero defections Differentiation Quality is back

  11. Six Sigma Commitment Tools Systems Infrastructure

  12. How does quality affect profits? • Lower costs of production • Avoid costs of rework • Less dealing with customers’ complaints • Increased revenues • Increased retention • Attraction of new customers (word of mouth) • Increased usage rates Service Performance Customer Satisfaction Customer Retention Market Share Profit

  13. Marginal added value? Marginal Added Value Equalizing Differentiating Overservice Hygienic Core

  14. Drivers of Overall Satisfaction • Most companies lack a clear understanding of their customers and market drivers • Managers tend to take a scattershot approach, hoping that at least one product-service offering will succeed • Companies can not excel in all aspects -> trade-offs: • What are we good in? • What are competitors offering? • Which criteria matter most to the customers? • What determines customers’ overall satisfaction • What is critical to consumer (6 sigma)

  15. Quality in difficult ages? • There is an overwhelming pressure to excel in service, in the broad sense of the word • Quality isn’t for free • Economic situation: • Marco-economic doubts • Shrinking margins, • No double digit growth rates anymore • Cost cutting is an issue • Shouldn’t we better: • stick to basics? • mind the service dilemma?

  16. 1901 - BSI 1904 - Joseph M. Juran - Internal customer, quality trilogy 1909- Shigeo Shingo - Zero Quality Control (Poka-Yoke) 1910s 1914 - LEAN 1915 – 1989 - Kaoru Ishikawa Total Quality Management (TQM) and the fishbone diagram 1924- Genichi Taguchi – Statistical Process Control 1926 – Just in Time 1926/1946 - ISO 1950s - W. Edwards Deming 1950 - Kaizen 1950s - Total Quality Control 1962 – Quality Circles 1980s - Robert Camp - benchmarking 1980s – Six Sigma 1980 – Appreciative Inquiry 1987 – MBNQA 1988 - ServQual 1988 - EFQM 1990s - Robert S. Kaplan - Balanced scorecard 1990 - IIP 1997 – Hospitality Assured Quality Development Timeline • External Stakeholders • Internal Stakeholders • External Stakeholders • Internal Stakeholders

  17. Management by Measures • If you have no data, you’re just another person with an opinion.” • George Eckes • “Whatever you measure will change. Measure the right things.” • Dr. Gerry Faust • “What gets measured, gets done.” • W. Edwards Deming

  18. 7 Basic tools of Quality Control • Cause-and-effect diagram (also called Ishikawa or fishbone chart): Identifies many possible causes for an effect or problem and sorts ideas into useful categories. • Check sheet: A structured, prepared form for collecting and analyzing data; a generic tool that can be adapted for a wide variety of purposes. • Control charts: Graphs used to study how a process changes over time. • Histogram: The most commonly used graph for showing frequency distributions, or how often each different value in a set of data occurs. • Pareto chart: Shows on a bar graph which factors are more significant. • Scatter diagram: Graphs pairs of numerical data, one variable on each axis, to look for a relationship. • Stratification: A technique that separates data gathered from a variety of sources so that patterns can be seen (some lists replace "stratification" with "flowchart" or "run chart").

  19. Six SigmaBenchmark Survey Results By Rob Bryant, VP QA and Compliance Malcolm Baldrige NQA Sr. Examiner Six Sigma Black-Belt ISO 9001:2000 Lead Auditor

  20. Six Sigma Survey Summary • This survey was conducted electronically via the internet through Benchnet.Com to their global customers. • This report separates “Companies Using Six Sigma” from “Companies NOT Using Six Sigma” in order to compare them. • Out of 492 responses, 224 use Six Sigma (46.5%) and 266 do not use Six Sigma (53.5%). • The responses from Six Sigma users came from over 170 different companies of every size. • 22.3% of the responses from Six Sigma users were outside of the USA. • 50.7% of Six Sigma users are non-manufacturing, 43.3% measure service performance and 39.7% measure manufacturing performance. • 33% of Six Sigma users are from companies less than 1,000 and 53% are from companies under 5,000 so its not just for big companies anymore • 56% of Six Sigma users have been using Six Sigma less than two years. • Only 25% use Six Sigma as their primary Quality Management System (QMS), but 71% use it as one of their QMS’s and 84% use it to improve. • 62% use internal Black Belts to conduct the training.

  21. Six Sigma Survey Summary (Cont’ • 38% spend less than $50K on Six Sigma and 58.5% spend less than $1,000 per student. • Over 77 % of the respondents measure their cost savings and/or profit increases as result of their Six Sigma program. • Six Sigma is used more for cost savings than Profit Increases. • 66% train two to twenty students at a time. • 71% of the respondents use Six Sigma as one of their QMS’s. • The top ten Process Improvement “Tools Used” and had the “Greatest Benefit” whether Six Sigma was used or not are: • Process Mapping, Root Cause Analysis, Cause & Effect Analysis, Benchmarking, and Problem Solving. • Respondents NOT using Six Sigma use ISO, TQM, Malcolm Baldrige, Lean Thinking and internally developed QMS in that order. • Respondents NOT using Six Sigma as a program, use many Six Sigma tools through another QMS or as stand alone tools. • Respondents NOT using Six Sigma as a program, rate ISO-9001 as the #1 QMS and #1 “Greatest Benefit” Process Improvement tool.

  22. Type of Company? 50 49.3% 40 38.2% 30 % of Companies 20 12.5% 10 0 Manufacturing Company Service Company Other Company How many employees does your company have? Companies USING Six Sigma 35 32.6% 30 25 24.1% 20 20.5% % of Employees 15 10 7.6% 6.3% 5 0 More than 20,000 5001 to 10,000 Under 1,000 10,001 to 20,000 1001 to 5,000 Number of Employees Companies USING Six Sigma

  23. How long have you been using Six Sigma? 40 35 35.3% 30 25 20 % of Years Usage 21.0% 15 13.4% 10 10.3% 7.1% 0 5 3.6% 0-1 years 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years Length of Years Usage Companies USING Six Sigma (con’t)

  24. What are you measuring with Six Sigma? 55 45 35 25 60 65 50 40 30 % of Measurement 20 5.4% 23.7% 43.3% 39.7% 26.3% 62.1% 37.9% 15 10 0 5 Quality Service Performance Mnfg Performance Financial Performance All Areas Employee Performance Specific Areas Measurement of Six Sigma Companies USING Six Sigma (con’t)

  25. Do you measure your cost savings and/or profit increases resulting from your Six Sigma Program ?? 11.6% 77.7% 84.4% 80 58.0% 60 40 24.6% 20 0 YES NO Companies USING Six Sigma (con’t) Are you using Six Sigma to? How are you conducting Six Sigma Training? 100 80 • Internal Blackbelts - 62.1% • Classroom Internal - 58.0% • Internal Greenbelts - 38.4% • Consultant Based - 26.8% • Classroom External - 21.0% • Web Based - 17.9% • Self Study - 15.2% • Outsourced - 12.5% • CD Based - 8.0% 60 40 20 0 Improve Performance Measure Performance As your QMS

  26. How much are you spending on Six Sigma? Companies USING Six Sigma (con’t) What Quality Management Systems are you using? • Over $1,000,000 - 16.1% • $10,000 to $25,000 - 13.8% • Under $10,000 - 12.5% • $25,000 to $50,000 - 12.1% • $50,000 to $100,000 - 8.9% • $100,000 to $250,000 - 7.6% • None - 5.4% • $250,000 to $500, 000 - 4.9% • $500, 000 to $1,000,000 -2.2% • Six Sigma – 71.0 • 9000 Series - 59.4% • LEAN Thinking – 34.8% • TQM – 29.0% • Malcolm Baldrige – 20.5% • ANSI/Mil-Std. – 12.9% • CMM-SEI – 9.4% • ASQ/CQA – 8.9%

  27. What profit $ increases do you attribute to Six Sigma? Companies USING Six Sigma (con’t) What cost savings $ do you attribute to Six Sigma? • None - 17.0% • $1,000,000 to $10,000,000 - 12.9% • over $10,000,000 - 12.5% • $100,000 to $250,000 - 7.6% • Under $10,000 - 6.7% • $10,000 to $25,000 - 5.4% • $500, 000 to $1,000,000 - 5.4% • $25,000 to $50,000 - 4.5% • $250,000 to $500, 000 - 3.1% • $50,000 to $100,000 - 2.7% • over $10,000,000 - 18.3% • $1,000,000 to $10,000,000 - 14.7% • $500, 000 to $1,000,000 - 8.5% • $250,000 to $500, 000 - 8.0% • Under $10,000 - 6.7% • $50,000 to $100,000 - 6.3% • $100,000 to $250,000 - 5.8% • None - 5.8% • $10,000 to $25,000 - 4.0% • $25,000 to $50,000 - 3.1%

  28. How much are you spending per student on Six Sigma? 35 45 40 41.5% 30 25 20 % of Spending 15 10 4.9% 14.3% 12.1% 5.4% 6.7% 5 0 Under $50 $50 to $100 $100 to $250 Over $1,000 $250 to $500 $500 to $1,000 Amount on Six Sigma Companies USING Six Sigma (con’t) How many students do you train in Six Sigma at a time? • Ten to Twenty - 35.7% • Two to Ten - 30.4% • Twenty to Thirty - 11.2% • Thirty or more - 5.8% • One - 4.9%

  29. Which Process Improvement Tools are you using? Companies USING Six Sigma (con’t) • Process Mapping - 80.8% • Root Cause Analysis - 77.7% • Cause and Effect Analysis - 76.3% • Benchmarking - 75.0% • Control Charts - 73.7% • Performance Metrics - 67.9% • Problem Solving - 67.4% • Statistical Process Control -67.0% • Failure Mode Eval. Anal. - 67.0% • Process Capability - 64.7% • Project Management - 63.4% • Work Flow Analysis - 57.6% • Variation Measurement - 55.4% Trend Analysis - 53.6% Design of Experiments - 53.6% Process Management - 52.7% Process Re-engineering - 48.7% Customer Driven Processes - 48.7% Mistake Proofing - 47.3% Change Management - 47.3% Decision Making - 43.8% Poka-Yoke - 43.3% Management By Fact - 33.5% Work Breakdown Structure - 32.1% Set-Up Reduction - 31.7% Knowledge Management - 28.1%

  30. Which Quality Management System/Process Improvement Tools have yielded the greatest results? Companies USING Six Sigma (con’t) • Six Sigma - 53.6% • Process Mapping - 35.3% • Root Cause Analysis - 33.5% • Cause and Effect Analysis - 31.3% • LEAN Thinking/Manufacturing - 26.3% • Benchmarking - 25.0% • Problem Solving - 23.2% • 9000 Series - 21.0% • Process Capability - 20.1% • Statistical Process Control - 20.1% • Performance Metrics - 19.2% • Control Charts - 19.2% • Process Management - 18.8% • Project Management - 17.9% • Customer Driven Processes - 17.9% • Design of Experiments - 17.4% • Fault Mode Evaluation Analysis - 17.4% Mistake Proofing - 6.5% Poka-Yoke - 16.5% Process Re-engineering - 16.1% Change Management - 14.7% TQM - 10.3% Variation Measurement - 10.3% Malcolm Baldrige - 9.8% Work Flow Analysis - 9.8% Decision Making - 8.9% Trend Analysis - 8.0% Management By Fact - 6.7% Set-Up Reduction - 6.7% Knowledge Management - 5.8% Work Breakdown Structure - 3.1% CMM-SEI - 3.1% ASQ/CQA - 2.7% ANSI/Mil-Std. - 1.3%

  31. How many employees does your company have? 35 60 55 15 45 25 57.6% 50 Type of Company? 55 50 40 53.5% 40 30 25.8% 21.2% % of Employees 30 20 % of Companies 20 10 20.8% 10 0 9.1% 9.1% 0 5 3.0% Manufacturing Company Service Company Other Company More than 20,000 5001 to 10,000 Under 1,000 10,001 to 20,000 1001 to 5,000 Companies NOT Using Six Sigma Number of Employees Companies NOT Using Six Sigma

  32. What Quality Management Systems are you using? 50 45 40 35 30 % of Type of QMS 25 2.6% 3.0% 3.8% 4.9% 20 7.1% 7.5% 9.8% 47.4% 33.1% 13.5% 15 10 5 2.0% 1.1% 1.1% 0 9000 Series TQM Malcolm Baldrige LEAN Thinking Unique QMS CMM-SEI ASQ/ CQA ANSI/ Mil-Std Country Specific Award for Excellence EFQM Cont. Quality/ Process Improvement Balanced Scorecard Go Fast – GE Workout Process Types of QMS Companies NOT Using Six Sigma (con’t)

  33. Which Process Improvement Tools are you using? Companies NOT Using Six Sigma (con’t) • Benchmarking – 62.0% • Performance Measure – 53.8% • Project Management – 53.0% • Process Management – 43.2% • Process Mapping – 42.1% • Root Cause Analysis – 42.1% • Problem Solving – 41.4% • Change Management – 41.4% • Cause and Effect Anal. – 40.6% • Trend Analysis – 38.7% • Work Flow Analysis – 38.0% • Customer Driven Process 36.1% • Control Charts – 31.6% Process Re-engineering – 30.5% Knowledge Mgmt – 28.6% Decision Making – 27.8% Stat. Process Control - 21.8% Work Brkdn Structure - 21.4% Process Capability – 19.9% Fault Mode Eval. Anal. – 18.4% Management By Fact - 14.7% Design of Experiments - 10.5% Mistake Proofing – 9.4% Variation Measurement – 9.0% Poka-Yoke – 7.9% Set-Up Reduction – 6.8%

  34. Which Quality Management System/Process Improvement Tools have yielded the greatest results? Companies NOT Using Six Sigma (con’t) • ISO 9000 Series – 31.6% • Benchmarking – 27.1% • Performance Measurement – 23.3% • Process Mapping – 18.8% • Process Management – 16.9% • Root Cause Analysis – 16.5% • Project Management – 16.2% • Cause and Effect Analysis – 16.2% • Problem Solving – 15.8% • Change Management – 15.4% • TQM – 14.7% • Trend Analysis – 13.9% • Process Re-engineering – 13.5% • Customer Driven Process – 13.2% • Work Flow Analysis – 12.0% Malcolm Baldrige – 10.2% LEAN Thinking – 9.4% Process Capability – 9.0% Decision Making – 8.6% Control Charts – 7.9% Statistical Process Control – 7.5% Knowledge Management – 6.4% Management By Fact – 6.0% Work Brkdn Structure – 5.6% Fault Mode Eval. Anal. – 5.3% Mistake Proofing – 4.5% Poka-Yoke – 4.5% CMM-SEI – 3.8% Set-Up Reduction – 3.4% ANSI/Mil-Std. – 2.6%

  35. Review By Jay Arthur • 64% say Six Sigma signifiant improved profitability • 50% agreed that Six Sigma improved Customer satisfaction • 43% agree that Six Sigma improved Employee satisfaction Six Sigma is itself only performing at 2 Sigma!

  36. Quality Tools • Bar charts/Histograms • Scatter diagrams/Run Charts • Process flowcharting • Benchmarking • Pareto analysis • Statistical process control (SPC) • Check sheets • Control charts • Defining Capability • Matrix analysis • Brainstorming • Cause & effect diagrams (CEDAC) • Force field analysis • FEMA • House of Quality

  37. Quality Systems Studies. • Walter Shewhart– PDCA • W. Edwards Deming • Quality Circles • Kaizen • TQM • ISO 9000 series • ServQual • Just in Time • Malcolm Baldridge • EFQM • Balanced Scorecard • Lean • National Star schemes • Investors in People • Appreciative Inquiry

  38. American Society for Quality (ASQ) White paper titled Making the Economic Case for Quality • customer focus, • management leadership, • employee involvement, • open corporate culture, • fact-based decision-making • and partnership with suppliers

  39. What is Six Sigma? • Six sigma = 3.4 defects per million • Sigma yield = defects divided by the opportunities for a defect • Y=f(Xs) Results come from the function of Inputs • It’s a system giving focused to a way of working • “All you need to know is how to count, how to add, and how to divide – you don’t have to be a statistician.” – Alan Larson Quality Manager Motorola

  40. A place to start • A Must to accept faults as challenges There is no such thing as failure only feedback • What are the rumours around? • What is service quality? • Does service quality really matter? • Does service quality generate profit? • Is there potential for overservicing?

  41. Involvement is not enough!An English Breakfast The Chicken is Involved But the Pig is Committed

  42. Jump off Points • Description terms • Levels of commitment • Six Sigma Organisation • The Charter

  43. Six Sigma Speak • COPQ = Cost of Poor Quality • DMAIC = Define, Measure, Analyse, Improve & Control • DFSS = Design for Six Sigma • DPMO = Defects per Million Opportunities • DPO = Defects per opportunity • PDCA = Plan-Do-Check-Act • SIPOC = Suppliers, Inputs, Process, Outputs & Customer • SPC = Statistical Process Control • VOC = Voice of the Customer

  44. Sweet Fruit Design for Six Sigma Bulk of Fruit - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Low Hanging Fruit Seven Basic Tools - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Ground Fruit Logic and Intuition Six Sigma Fruit

  45. The ProjectOur Les Roches 6 Sigma Charter • Produce a “best practice” template case study of jump-off pointers for operations. • An outline Six Sigma Map to engage and involve an up-to-date managed hotel’s key functions. • Produce a starter pack of key performance indicators to further improve operations. • Keep the learning fresh after studies are completed. • Provide evidence of Les Roche’s MBA’s Programme Innovation. • A keepsake of Six Sigma MBA studies. • A future contact base for students.

  46. Six Sigma Pathway • Identify core processes and key customers • What is the customer requirement • What are the Moments of Truth/Critical to Quality CTQ • What measures of current performance • Prioritize, analyze, and implement improvements • Expand and integrate the Six Sigma system

  47. Six Sigma Pathway • Identify core processes and key customers • Define customer requirements • Measure current performance • Prioritize, analyze, and implement improvements • Expand and integrate the Six Sigma system DMAIC

  48. Typical Six Sigma Projects • Reduce variability • Reduce defects • Improve customer satisfaction • Reduce costs • Reduce cycle time • Shorten lead time • Optimize process performance • Optimize the supply chain

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