Week 12B Starting Six Sigma

1
Week 12B Starting Six Sigma

• Assessing readiness Starting points Getting
  leadership on board

2
Assessing Readiness

• Not all companies are candidates for six sigma
  (and may never be)!

3
Looking into the future - Questions

• Do we have a clearly developed and stated
  strategy for the future?
• Whats the outlook for financial strength and
  growth of the organization?
• Is the organization agile and able to quickly
  adapt to change?

4
Looking into the future Assessing the answers

• Answers of No to the three questions
• Not a good candidate at this time
• Need to strengthen organization first
• Answers of Yes to the three questions
• Good foundation exists for six sigma
• Mixed answers
• May need to focus on fixing the No

5
Looking at the present - Questions

• What are our current performance levels?
• Profit, return, growth, yield, k-sigma level,
  dpmo, DPU, etc.
• How well do we meet customer requirements?
• Satisfaction index, complaints, returns, warranty
  claims, etc.
• Whats our current efficiency level?
• Production efficiency, product cost, NPI time to
  market, multi-functional synchronization, etc.

6
Looking at the present - Assessing the answers

• Positive answers to these questions
• May mean that six sigma is not urgent
• Negative answers to most or all questions
• May have a number of things to fix first
• Mixed answers
• Useful in setting priorities and establishing
  focus for six sigma

7
Looking at fitness for change - Questions

• Whats the state of our systems for managing
  change?
• Performance measures, integration, etc.
• How well do we manage cross-functional processes?
• Multi-functional teams, cooperation, barriers
• What else is going on that might conflict?
• Acquisitions, NPI, new systems, economic factors

8
Looking at fitness for change - Assessing the
answers

• If systems are not in place this may be a good
  place to start
• If cross functional cooperation and integration
  are absent watch out!
• If other major activities are going on put six
  sigma on the back burner.

9
When to say No to Six Sigma

• Six Sigma is not for everybody!
• Reasons why you might decline or hold off
• You are already doing very well (better than 95
  of what can be achieved in quality
• You have too much on your plate already put Six
  Sigma in your long term plan
• You recognize that the potential return is not
  great enough to warrant the effort

10
Six Sigma Cost/Benefit Analysis

• Management is always going to ask 1) Whats the
  cost?, and 2) Whats the return?

11
Potential Benefits

• Probably need to estimate
• Use averages, samples, expert opinion
• Find any concrete benefits you can
• Recognize and communicate the uncertainty of the
  benefits data

12
The Time Element

• Results do not happen overnight
• Expect at least six to nine months before you see
  any meaningful results
• Time estimates are almost always too short
• Time affects the benefits and cost factors

13
Six Sigma Implementation Cost

• Labor (payroll)
• Full-time Six Sigma team members (Direct)
• Management, support staff, part-time team members
  (Indirect)
• Training and consulting
• Improvement implementation
• Equipment, major process changes, systems
• Other
• Occupancy, travel, etc.

14
Is a Cost/Benefit Ratio Right?

• Probably not!!
• Exceptions
• Specific, small projects
• Costs are much, much more than the benefits
• Other factors are probably more important
• Survival, competitiveness, customer satisfaction,
  long-term savings
• May require a Leap of Faith

15
Starting Points

• Objective, Scope, Timeframe

16
Objective 3 Possible Levels

• Business Transformation
• Major change in the business, such as greater
  flexibility
• Strategic Improvement
• High-level strategic areas, such as NPI
• Problem solving
• Drills down on specific areas or processes, such
  as reducing days of accounts receivable

17
Scope - Organizational Factors

• Available resources
• Other concurrent activities
• Acceptance or resistance to change in various
  areas

18
Timeframe

• Break down efforts with time estimates
• Find a meaningful and visible intended result
• Look for a reasonable quick win

19
Entries to the Roadmap

• Based on Objective Level
• Business transformation -gt Identify core
  processes and key customers
• Strategic improvement -gt Define customer
  requirements
• Problem solving -gt Prioritize, Aanalyze,
  implement improvements

20
Pilots

• As always, it is preferable to start with a pilot
  project, operation, organizational unit
• Reduces risk
• More easily managed
• Easier to measure
• Can be tweaked

21
Leadership

• Identifying and preparing Six Sigma leaders

22
Identifying Leaders

• Organizational considerations
• Function
• Level
• Proven leadership results
• Active or potential interest in Six Sigma
• Visionaries
• Motivators

23
Leader Responsibilities - 1

• Articulation of case for Six Sigma
• Actively participate in
• Planning
• Implementation
• Create vision and plan for getting buy-in
• Be an unwavering advocate

24
Leader Responsibilities - 2

• Set clear, meaningful, attainable reasonable
  objectives
• Hold everyone accountable for meeting objectives
• Insist on valid measures of results
• Communicate results throughout the organization
  frequently