© 2001 Copyright Six Sigma Works Limited Six Sigma Works 1 Six Sigma Performance Improvement Tim Ward (44) 07855 388 751

1

© 2001 Copyright Six Sigma Works Limited

Six Sigma Works

Six Sigma Performance Improvement

Tim Ward(44) 07855 388 751www.SixSigmaWorks.co.uk

2


Six Sigma Works

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.

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.

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.

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.

SSPI

Best Is The Enemy of BetterBest Is The Enemy of Better

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Six Sigma Works

6 Sigma is a Greek Letter Used to Represent the Deviation About the Mean (Average)

6 performance is 3.4 Defects per Million ‘Opportunities for a Defect”.

Theory

6 Provides a Set of Common Measurements That Apply to ALL Processes

6 Provides a Set of Common Measurements That Apply to ALL Processes

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Six Sigma Works Theory

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

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

Whatever You Want to Do, Six Sigma Performance Improvement Will Make You Do It Better

Definition

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Six Sigma Works

• 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.

• 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.

Potted History

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Six Sigma Works

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

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

Who Has Implemented It?

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Six Sigma Works What is Six Sigma?

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

• 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 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

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Six Sigma Works

• 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 Black Belt.

• A Shareholder Value Engine.

• 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 Black Belt.

• A Shareholder Value Engine.

What is Six Sigma?

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Six Sigma Works

Value

Commitment

A Project Management Framework

A Rigorous, Statistical, Objective Tool Kit

A Common Measurement System to Manage the Whole Business.

An On-going Continuous Improvement Mentality

The Training Ground for New Business Leaders

What is Six Sigma?

A Business Management Framework

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Six Sigma Works

• 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

• 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

Why Is It Different From Other Quality Programmes?

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Six Sigma Works

1

Doomedto Fail

MarketPerformer

WorldClass

2 3 4 5 6

Market Performance

Aspirational

Proven in Application

Sigma Rating

Sigma Ratings Relate Directly to Competitive Position

Raises the Bar of Corporate Performance

Raises the Bar of Corporate Performance

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Six Sigma Works

Using Sigma As the Measure for Corporate Effectiveness Boosts Corporate Performance

Sigma DPMO “Wastage” as % ofsales

3 66,807 25-40%4 6,210 15-25%5 233 5-15%6 3.4 <1%

Capable Processes Mean Less WasteCapable Processes Mean Less Waste


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Six Sigma Works

For Each Sigma Upshift the Following Benefits can Accrue:

• 20% Margin Improvement

• 15% Productivity Improvement

• 12% Reduction in People Costs

For Each Sigma Upshift the Following Benefits can Accrue:

• 20% Margin Improvement

• 15% Productivity Improvement

• 12% Reduction in People Costs

The Numbers Show it Works.

The Numbers Show it Works.

Six Sigma; Mikel Harry, Richard Schroeder

Macro Benefits


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Six Sigma Works

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

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

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

Strengths and Pitfalls

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Six Sigma Works

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

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

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 ApplySix 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

Management and Employees Must ApplySix 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

Dedicated Resources• Six Sigma Leader - CEO Direct Report• Master Black Belts• Black Belts

It Only Takes People to Make Six Sigma WorkIt Only Takes People to Make Six Sigma Work

What You Need

Key Success Factors

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Six Sigma Works

Design for Six Sigma (DFSS) Is A Rigorous Closed Loop Improvement Process To Ensure

Customer Needs Are Met

ControlsMeasurements

Customer Needs Processes to Deliver Satisfaction

Process Requirements

ProcessDesign

Validation -Control

CustomerNeeds

You Can Always Get Better - and Getting Better is More Profitable

You Can Always Get Better - and Getting Better is More Profitable

SSPI Processes

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Six Sigma Works

Process or ProductExists?

Design ProjectImprovement

Project

Design For Six Sigma

No Yes

SSPI Processes

20% of Projects 80% of Projects

Huge Potential for Gains From Improvement Projects at OutsetHuge Potential for Gains From Improvement Projects at Outset

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Six Sigma Works

Improvement Project Phases

Define Measure Analyse Improve ControlDefineDefine

D M A I CD M A I C

SSPI Processes

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Six Sigma Works

Design Project Phases

Define Research Analyse Design Validate

D R A D VD R A D V

SSPI Processes

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Six Sigma Works

ResearcResearchh

AnalyseAnalyse

DesignDesign

ValidateValidate

MeasureMeasure

AnalyseAnalyse

ImproveImprove

ControlControl

Process or Product?

IsIncremental Improvemen

t Enough?

DefineDefine

No Yes

No Yes

Does it Exist?

Never Satisfied Means it Never Stops

Never Satisfied Means it Never Stops

SSPI Processes

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Six Sigma Works

• 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

• 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

DRADV and TTP

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Six Sigma Works

• Involvement• Project, Programme, Embed - PPE• Team• PWAP

• Involvement• Project, Programme, Embed - PPE• Team• PWAP

Six Sigma Works - How We Work

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Six Sigma Works

• 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

• 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 CoursesOther Consultants

Training CoursesOther Consultants

Without Real Understanding There Will Always Be a Reliance on External Help,

Because You Cannot Apply & Teach Something Unless You Understand It.

Without Real Understanding There Will Always Be a Reliance on External Help,

Because You Cannot Apply & Teach Something Unless You Understand It.

Involvement

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Six Sigma Works

• 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.

• 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.

PPE

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Six Sigma Works

• 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.

• 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.

Project Within A Project - PWAP

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Six Sigma Works

• 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.

• 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”“The Longer You Wait, the Longer You’ll Wait”

When Is the Right Time?

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Six Sigma Works

Three Levels of Involvement

• Full Six Sigma Performance Improvement

• Six Sigma Cell

• Six Sigma Project Management

• Full Six Sigma Performance Improvement

• Six Sigma Cell

• Six Sigma Project Management

Six Sigma Tailored to Your NeedsSix Sigma Tailored to Your Needs

Six Sigma

Documents

© 2001 Copyright Six Sigma Works Limited Six Sigma Works 1 Six Sigma Performance Improvement Tim Ward (44) 07855 388 751