1 st middle east six sigma forum six sigma a strategy for achieving world class performance
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1 st Middle East Six Sigma Forum Six Sigma – A Strategy for Achieving World Class Performance 7 th to 9 th December, Dubai Sunil Thawani Manager – Business Process Improvement Union National Bank, Abu Dhabi [email protected] Purpose of Presentation.

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1 st middle east six sigma forum six sigma a strategy for achieving world class performance

1st Middle East Six Sigma ForumSix Sigma – A Strategy for Achieving World Class Performance

7th to 9th December, Dubai

Sunil ThawaniManager – Business Process ImprovementUnion National Bank, Abu Dhabi

[email protected]


Purpose of presentation

Purpose of Presentation

  • Share concepts and application of Six Sigma with a case study;

  • Deployment of Six Sigma as a strategy to achieve World Class Performance;

  • Integration of Six Sigma with EFQM framework;

  • Lessons Learnt


World class performance

World Class Performance

Source: The Six Sigma Way by Peter Pande and Others


What is six sigma

What is Six Sigma ?

  • Based on teachings of Dr. Walter Shewhart, Dr. W. E. Deming & Dr. J. Juran.

    • Process Control;

    • Plan Do Check Act;

    • Common and Special Causes;

    • Improvement can be done project by project

    • Statistical tools

    • Hawthorne Plant Experiences

  • Developed by Bill Smith at Motorola in 1980s


What is six sigma1

Degree of variation;

Level of performance in terms of defects;

Statistical measurement of process capability;

Benchmark for comparison;

Process improvement methodology;

It is a Goal;

Strategy for change;

A commitment to customers to achieve an acceptable level of performance

What Is Six Sigma?

Sigma is a letter

in the Greek Alphabet


Six sigma definitions

Six Sigma Definitions

  • Business Definition

    • A break through strategy to significantly improve customer satisfaction and shareholder value by reducing variability in every aspect of business.

  • Technical Definition

    • A statistical term signifying 3.4 defects per million opportunities.


Bank of america ss experience

Bank of America – SS Experience

  • Goals

    • # 1 in Customer Satisfaction

    • Worlds’ most admired company

    • Worlds’ largest bank

  • Strategy - “ Develop business process excellence by applying voice of the customer to identify and engineer critical few business processes using Six Sigma

  • Created Quality & Productivity Division

    Source: Best Practices Report


Bank of america ss experience1

Bank of America – SS Experience

  • Wanted results in 1 year;

  • Hired more than 225 MBB & BBs from GE, Motorola, Allied Signal for rapid deployment

  • Developed 2 week Green Belt training programs

  • Introduced computer simulation of processes

  • Trained 3767 Green Belts, certified 1230 - Minimum value target per GB project – $ 250K

  • Trained 305 Black Belts, certified 61 - Minimum value target per BB project – $ 1 million

  • Trained 43 MBB,

  • 1017 in DFSS

  • 80 % of Executive Team trained in GB and 50 % Certified


Bank of america ss experience2

Bank of America – SS Experience

Results of first 2 years:

  • Reduced ATM withdrawal losses by 29.7 %

  • Reduced counterfeit losses in nationwide cash vaults by 54%

  • Customer delight up 20%;

  • Added 2.3 million customer households

  • 1.3 million fewer customer households experienced problems

  • Stock value up 52%

  • Y 2002 – BOA named Best Bank in US & Euro money's Worlds Most Improved Bank


1 st middle east six sigma forum six sigma a strategy for achieving world class performance

High Level Business Metrics

  • Revenue

  • Capital Utilization

  • Return on Assets

  • Profits

  • Quote Time

  • Defect Rate

  • Waste

  • On Time Delivery

  • Inventory;

  • Machine Utilization

Operating Level Metrics

Strategically:Used by Leadership as a vehicle to develop sustainable culture of Customer, Quality, Value and Continuous improvement.

Operationally:By Quality Managers to reduce cycle times, costs, errors, rework, inventory, equipment downtime.

Deployment across all types of processes and industries - worldwide


1 st middle east six sigma forum six sigma a strategy for achieving world class performance

Enablers

Results

Innovation and Learning

Six Sigma & EFQM/ DQA Framework

Recognizing

People

Competency

Productivity

People

Results

People

Key Perf

Results

Establishing

Process

management

System to be

used

Personally

actively

Involved in

improvement

Developing

Team skills

Aligning

Individual &

Organization

Goals

Satisfaction

Involvement

Gross margins

Net profit

Sales

Market Share

Recognition

Implementing

Process

Measures

Customer Results

Encouraging

& enabling people

To participate in

Improvement

Identifying &

designing

processes to deliver

strategy

Response

Time to

customers

Process cycle time

Process costs

Defect rates

Productivity

Delivery,

Value,

reliability

Repurchase

satisfaction

Time to

Market

Policy & Strategy

Cash flow

Maintenance cost

Return on assets

Improving

processes

to satisfy and

Generate value

For customers

Recognizing

Individual &

Team effort

Utility

consumption

Timeliness

Inventory

Society

Results

Partnerships

Resources

Leadership

Processes


Who is implementing six sigma

Who is Implementing Six Sigma

  • At least 25% of the fortune 200 claim to have a serious six sigma program - Michael Hammer.

  • Financial - Bank of America, GE Capital, Electronics - Allied Signal, Samsung, Sony

  • Chemicals - Dupont, Dow Chemicals

  • Manufacturing - GE Plastics, Johnson and Johnson, Motorola, Nokia, Microsoft, Ford.

  • Airline - Singapore, Lufthansa, Bombardier

  • And hundreds of others in Americas, Europe, Sub Continent.


Six sigma results

Six Sigma Results

Six Sigma Savings as % of revenue vary from 1.2 to 4.5 %

For $ 30 million/yr sales – Savings potential $ 360,000 to $ 1.35 million.

Investment: salary of in house experts, training, process redesign.


Six sigma project methodology

Six Sigma Project Methodology

Project Phases

Control

Define

Measure

Analyze

Improve

  • Improvement strategy

  • Develop ideas to remove root causes

  • Design and carry out experiments,

  • Optimize the process.

  • Final solutions

  • Collect data on size of the selected problem,

  • identify key customer requirements,

  • Determine key product and process characteristic.

  • Analyze data, establish and confirm the “ vital few “ determinants of the performance.

  • Validate hypothesis

  • Establish standards to maintain process;

  • Design the controls, implement and monitor.

  • Evaluate financial impact of the project

  • Identify, evaluate and select projects for improvement

  • Set goals

  • Form teams.


Six sigma case study service organisation

Six Sigma – Case Study Service Organisation

Background

  • M/s Alpha Inc. manages out bound cargo from a distribution centre to different stores.

  • Deliveries made on trucks - owned and hired.

  • Customers dissatisfied at delivery schedules.

  • Leadership decision to deploy Six Sigma;

  • Team of 1 Black Belt and 3 Green Belts formed

  • Sponsor of the project – Distribution Manager


Define critical to quality ctq

Focus on customers generating annual revenue of USD 400,000/-.

Define - Critical to Quality (CTQ)

Current process sigma level - 2.43 or 175889 DPMO


Define goal statement

Define- Goal Statement

  • Reduce number of delayed deliveries by 50 % by 31st December Y 2002 to better meet customer requirement of timely delivery defined as within +/- 1 hour of scheduled delivery.


Define performance standards

Define- Performance Standards


Define sipoc diagram

Define- SIPOC Diagram

  • Detailed process maps drawn


Measure and analyze

Measure and Analyze

  • Driver and Distance identified as key factors influencing delivery performance.

  • Driver selected for focus.

  • Potential root causes as to why Driver influenced the time:

    • Size of the vehicle

    • Type of engine

    • Type of tyres

    • Fuel capacity


Improve

Improve

  • Experiments designed and conducted using truck type and tyre size.

  • Findings:

    • Larger tyres took longer time at certain routes where area was cramped and time lost in maneuvering.

    • High incidence of tyre failures since tight turns led to stress on tyres thus increasing number of flat tyres.

  • Team modified planning of dispatch process by routing smaller trucks at more restrictive areas.


Control

Control

  • Test implementation.

  • Process sigma level up from 2.43 or 175889 DPMO to 3.94 or 7353 DPMO.

  • Performance still fell short of best in class 4.32 or 2400 DPMO.

  • Improvement led to significant customer satisfaction.

  • Process continually monitored and data on new cycle times, tyre failure collected as per defined methods and frequency, analysed and monitored.

  • Customer satisfaction measured and monitored.


Key lessons learnt

Key Lessons Learnt

  • Define

    • Difficulty in identifying the right project and defining the scope;

    • Difficulty in applying statistical parameters to Voice of the Customers;

    • Trouble with setting the right goals;

  • Measure

    • Inefficient data gathering;

    • Lack of measures;

    • Lack of speed in execution;


Key lessons learnt1

Key Lessons Learnt

  • Analyse

    • Challenge of identifying best practices

    • Overuse of statistical tools/ under use of practical knowledge

    • Challenge of developing hypotheses

  • Improve

    • Challenge of developing ideas to remove root causes

    • Difficulty of implementing solutions

  • Control

    • Lack of follow up by Managers/ Process Owners

    • Lack of continuous Voice of the Customer feedback

    • Failure to institutionalize continuous improvement.


Key lessons learnt2

Key Lessons Learnt

  • “ Define “ ranked most important step but gets the lowest resource allocation

  • Project scoping and its definition is critical to its success/ failure;

  • “Measure” is considered most difficult step and also gets the highest resources

    Source: Greenwich Associates Study Y 2002


What makes six sigma different

What Makes Six Sigma Different?

  • Versatile

  • Breakthrough improvements

  • Financial results focus

  • Process focus

  • Structured & disciplined problem solving methodology using scientific tools and techniques

  • Customer centered

  • Involvement of leadership is mandatory.

  • Training is mandatory;

  • Action learning (25% class room, 75 % application)

  • Creating a dedicated organisation for problem solving (85/50 Rule).


Benefits of six sigma

Benefits of Six Sigma

  • Generates sustained success

  • Sets performance goal for everyone

  • Enhances value for customers;

  • Accelerates rate of improvement;

  • Promotes learning across boundaries;

  • Executes strategic change


1 st middle east six sigma forum six sigma a strategy for achieving world class performance

Thank you

Q & A


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