Lean Six Sigma – a breakthrough methodology for business transformation in Jewellery Industry

Introduction:

Lean Six Sigma is a hybrid methodology combining Lean and Six Sigma to enable a customer

focused and data driven approach towards process improvement by reducing waste. The improvement

methodology enables to reduce product or service failure rates to a negligible level (roughly 3.4 failures

per million opportunities). Lean Six Sigma encompasses all aspects of a business, including

management, service delivery, design, production and customer satisfaction. Lean Six Sigma companies

typically spend less than 5 percent of their revenues addressing and repairing quality problems.

The 3 commandments of this philosophy are: -

The Customer is the King

In God we trust, all others bring data

Variation is the enemy of all processes

Manufacturing, automobile, aviation, medical transcription, software, ITES, banks and even other

financial institutions are following this methodology.

The question then is why not Jewellery industry?

The jewellery industry can also adopt and benefit from Lean Techniques as it aims to eliminate

waste and improve flow of work. We have to understand “waste” in the context of the jewellery

manufacturing process.

What is waste - Waste can arise at the following stages:

1. During design stage – Work that can be proactively avoided can be decided at this stage so that wasteful practices are not built into work practices.

2. During planning stage – Planning and scheduling can be done in a manner that prevents loss of time, less inventories and so on.

3. During operations stage – This is reactive as compared to the earlier actions and is to be addressed after the process is in place.

Lean considers the following 7 types of wastes as relevant to the operational stage:

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1. Transportation – Moving products that are not actually required to perform the processing

2. Inventory – All components, work in process and finished products not under process

3. Motion – People or equipment moving or walking more than is required to perform the processing

4. Waiting – for the next production step

5. Overproduction – production ahead of demand

6. Over processing – due to poor tool or product design

7. Defects – effort involved in inspecting and fixing defects – cost of quality

Lean philosophy:

1. Design a simple manufacturing system

2. Recognise that there is always room for improvement

3. Continually improve the manufacturing system design / processes

S No Waste Description Effect of waste

1 Rework Most jewellery pieces are subjected to rework and the rework percentage is generally very high depending upon the manufacturing technique used and the design complexity

- Limits competitiveness in establishing selling price because these costs are ultimately borne by the buyer

- Prevents on-time deliveries which cause additional costs in terms of overtime, premium freight and other administrative costs

- Represents quality problems which may reach customers even if 100% inspection methods are in place. It is a statistical fact that 100% inspection is only 85% effective.

2 Total Rejection Pieces which have become non-conforming to customer requirements and having to undergo a non-value added melting process for recovery of precious metal is a waste.

- Costs of rejection have to be absorbed by good pieces and in turn by the customer

- Contributes to approximately 3% -5% of total production waste

3 Extra Pieces Produced to compensate for Total Rejection

These represent additional waste to compensate original waste.

4 Process Bottlenecks

Work in process builds up due to imbalance in capacities

- Idle manpower- Idle machinery

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- High levels of work in process5 Machine

DowntimeMay happen due to inadequate maintenance systems

- Reduces manufacturing capacity- When critical equipment breakdown,

the consequences could be serious6 Inventories Unnecessarily over producing

items- Inventories held up in all stages from

gold central to finished goods storage is considered a waste.

- Carrying costs of inventories could add upto 25% - 30% per year

Benefits of Lean Six Sigma:

Reduction in waste Improvement in productivity and quality Introduction of innovative practices for improving competitiveness Induce good management practices Increase in output Reduction in customer complaints Better adherence to delivery schedules Reduction in stage wise rejections Lesser inventory requirements Optimum utilisation of resources like space, manpower, materials, equipment, energy,

consumables etc. Orderly work place Culture of continual improvement

What’s in it for Jewellery business owner ?

Reduce cost of operations by 30% (YoY) while scaling up to be world –class

Improve sales revenue by 25% (YoY) with less investment

Become one of the pioneers in jewellery industry to achieve Process Excellence

STRETCH 30 – “Strategic Re-engineering To Reach Competitive Horizon”

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Minimum 30% improvement, irrespective of current level of process maturity

• Metrics driven organisation

• Roadmap assessment

• Cost of Quality modeling

• Kaizen for Quick hits and rapid changes to standardization

• Analytics for opportunity assessment

• Lean operations

• Six Sigma tools for enhanced effectiveness

• BPR strategic tools / IT – assisted re-engineering for transformation

• Significant reduction in Cost per FTE and Cost per transaction

• Reduced customer complaints and improved NPS

• Six sigma level of defects / errors in Operations

• Improved Turn Around Times

• Enhanced productivity

• Transformational gains on all key metrics

• World – class organisation

Principal Coach

A Transformational Leader with over two decades of experience in the field of Project management and Operations Management with a specialization in Quality across Manufacturing, Information Technology and Services. He has rich experience training & consulting various world class companies and thousands of students, professionals and leaders through many public programs.

Earlier, he was leading the strategic agenda of Innovation and Digitisation as Head of Business Excellence and Group Change Delivery across fifty plus countries for Standard Chartered Scope International. He was driving the “Leadership Series Sponsor” program for Standard Chartered group

Name: Kalyan KrishnamoorthyEducation: BE, PGDM, CSSMBB, CQP, MCQI, FCSIA, PMPExperience: 20 years plusSkills: Lean, Six Sigma, TQM, JIT, Statistics, Analytics, Customer Service,

ISO and Project / Program ManagementStrengths: Focus, Includer, Strategic, Learner and Analytical –Top 5

strengths from the Strengths Finder of Gallup Organization

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mentoring fifty plus leaders across the globe, supporting the organisation’s strategy of “massively multiply leadership capability”. In his earlier assignments as Quality Leader in various multi-national corporations, he has deployed strategic change management programs such as Lean, Six Sigma and Innovation for business transformation with a focus on analytics and customer-centricity.

He is a certified Six Sigma Master Black Belt (CSSMBB) from Indian Statistical Institute, Lean Master / Reengineering Customer Care Engineer from Renault Institute of Quality Management and Cegos, UK, certified Chartered Quality Professional (CQP) and a Member of the Chartered Quality Institute (MCQI), UK. Fellow (FCSIA) Member of the Customer Service Institute of America, certified Project Management Professional (PMP) from Project Management Institute, US and a certified Assessor of Business Excellence from the Confederation of Indian Industry–Institute of Quality. He is an empanelled Lean Manufacturing Consultant by the Quality Council of India – National Accreditation Board for Education & Training. He is also an Uplifting Customer Service Champion and “Writing back” Specialist from Up your Service! College, Singapore.

Speaker at the various international forums including the American Society for Quality, 5th Annual Middle-east Business Excellence Summit in Dubai, 2nd Gulf Quality conference in Doha, Qatar and the Madras Chapter of Indian Institution of Industrial Engineering. Reviewer of papers for National Project Management Conference, India. Member of the panel judges for various conferences / competitions such as International Quality Conference by National Institution for Quality and Reliability and QIMPRO convention.

He is also a PhD Research scholar from Amrita School of Business with four international publications and his research interests include Process Excellence, Service Excellence and Experimental Psychology.

Key expertise

Transformational Leadership Lean Six Sigma Customer Service Analytics & Business Intelligence Program & Project Management Cost Optimization / Productivity

Improvements Innovation & Digitisation

Benchmarking Problem Solving EPS/ 8 D, TRIZ, TOC BPMS – Business Process

Management Systems Performance Management / Metrics

& Measurement Risk Management

Clients served

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Major Achievements

Mentored more than 100 hi-impact projects with over 25 million USD hard saves and significant improvement in Total Customer Experience / Net Promoter Score across world class companies in UK, UAE & India.

Trained more than 1500 Professionals with over 5000 hours of training in Project management, Lean and Six Sigma across world class companies in India, UAE and UK.

Pioneered the implementation of Lean Management Practices (including twenty plus Best practices from manufacturing) in the Banking and Financial services.

First to introduce the concept of “Service Guarantee” for all key banking products across markets with robust processes using “Lean Pods”.

Led the strategic agenda of Innovation and Digitisation for Standard Chartered Scope International across fifty plus countries.

Lean six Sigma efficiency improvement projects including maximization of Straight-through processing through Innovation & Digitisation leading to cost save of more than USD 25 million.

Lean Six Sigma projects on customer to customer TAT reduction of more than 50% on key products such as cards, personal loans and savings account leading to an increase in Net Promoter Score from 30 to 45.

Seat Utilisation improvement from 110% to 150% across locations through implementation of agile work place solutions.

Pioneered the introduction of Work Measurement (Industrial engineering practices like MOST – Maynard Operation Sequence Technique) and Hyper-specialisation in the IT / ITES industry for Productivity / cost optimisation.

Use of latest trends in technology including Artificial Intelligence (virtual assistants) to eliminate manual intervention in operations.

Winner of the Icons CEO award of the Global Shared Services Centre consecutively for 2 years (2012 and 2013).

Introduction of an innovative concept of “Customer Consultant Award” for complaining customers.

Service Excellence enabled through implementation of CRM solution across the bank.

Six Sigma Black Belt project of TAT reduction of control panels from 8 weeks to 3 weeks.

Successfully led “Cash for Growth” and improved the net cash flow position by more than 30%.

Successful implementation of Quality Control Process Control (QCPC) for the manufacture of Inverter/ Converter boxes for Delhi Metro Rail project by DMRC with technology transfer from Mitsubishi Electric Corporation, Japan.

Deployed “Quality Focus” program including Process Excellence, Sourcing Excellence, Design Excellence, Project Excellence and Autonomous Teams across the units in 35 plus countries.

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