6 sigma - other success stories case 1

8/8/2019 6 Sigma - Other Success Stories Case 1

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DMAIC:

Improve existing

processes, products,services, and facilities to 6Sigma quality

DMEDI:

Create new processes,

products, services, andplants to 6 Sigma quality


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Whyhas 6 Sigma been successful at Global benchmark companies?The people and projects make the difference. Leadership commitment.

Why is encoding important? Encoding is supporting a culture where 6 Sigma methodology,discipline & tools are used by your employees to continually create, improve& manage products, processes and servicesto enable attainment of the Vision. Only by encoding making 6 Sigma the way you work - will you ensure sustainablegrowth and achieve the Vision.

How do dealers and suppliers factor into encoding 6 Sigma? No othercompany can compete with a Companys value chain if 6 Sigma is rightly deployed, and encoding 6 Sigma throughoutthe value chain makes it even stronger.

What else? Its about people... how they use the methodology to create value; its about engaging, empoweringpeople to make decisions on facts & data; its about developing leaders, giving them skills needed for the future.

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Points to Ponder about 6 Sigma


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G&L, a machine tool builder based in US. Trained 15 leaders, 1 MBB. 6 BBs completed 14projects, delivered >$5M benefits since November 2001.

Lessons learned:

It all starts at the top of the organization; leaders must embrace the process and stay committed

Jump on t he Six Sigma bandwagon; it really works!

Challenge your organization to drive transformational change.

Haldex, a manufacturer ofhydraulic components in Illinois, headquartered in Sweden. 1,DC, 10 business leaders completed leadership workshop, 57 trained GBs. Attended BBW5 times, 8 BBs generated $1.8M benefits from 15 projects focused on:

improving productivity (8) & reducing inventory (1) , 59% of the benefit

improving quality (3), reducing costs (3), 41% of the benefit since Feb 03.

Lessons learned:

The best-practice deployment approach, materials and training are excellent

The key to success is MANAGEMENT support and involvement


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Zhejang Yinglun Machinery, a manufacturer ofheat transfer equipment, began deploymentin China Y2004. Trained 5 leaders, created 8 BBs who completed 8 projects whichdelivered about $1M benefits . Plan the 2ndwave leadership workshop on Y2006, about 40

people will attend the workshop.

One project achieved $110,000 benefit through the quality improvement of an OEM oil

cooler.

Lessons learned:Lessons learned:

It all starts at the top of the organization; leaders must embrace the process and stay

committed. Jump on the Six Sigma bandwagon; it really works!

Challenge your organization to drive transformational change.


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Hagemeyer NorthAmerica, a distributor of electrical materials, safety and othermaintenance repair and operations support products began deployment 9/03.

14 business leaders completed the 6 Sigma workshops.

Black belt candidates attended five different waves of DMAIC workshops, creating12 full time black belts as of January 13, 2006.

22 projects initiated since 9/03.

8have been completed to the control phase. Realized approx $2M in level I and $250K level II benefits to date.

Identified $8M in combined level I and level II savings in total of those 22.Balance of projects not yet into Control phase.

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Hagemeyer NorthAmerica (continued) . . . Steve B., Executive VPSupply ChainManagement says:

6 Sigma is key to our long term success.

After two years we have made great progress. We have been exemptedfrom (physical) inventory by our external auditors . . .

our freig

ht costs are $1M less today t

han in 2004.

More and more, 6 Sigma is the language of our customers.

Early projects dealt with very large issues around informational databases. The hardwork the teams didhas an additional benefit as we convert one of our operatingsystems to our common platform. We are able to duplicate the processes we used inthese early projects. . . An added win!!

Our associates are beginning to think 6 Sigma Project when they encounter arecurring process problem.

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ABB, a factory automation supplier located in US reduced average aftermarketsoftware delivery time 97.1% with a 98% reduction in variation, netting $218,000 in

process cost savings and $408,000 incremental revenue through new marketpenetration( $616,000).

Wheels India, the leading manufacturer of steel wheels for passenger cars, utility

vehicles, trucks, buses, agricultural tractors and construction equipment in Indiabegan deployment 11/03. By 3/05, they completed their first 7 projects whichdelivered $298,000 level I savings. LESSONS LEARNED:

With the increasing costs of power, steel and transportation, 6 Sigma hashelped us reduce our own costs and willhelp us grow . . . 24 - 6 Sigma projectsare underway and expect to deliver $444,000 in savings . . . . thismethodology uncovered problems we never knew were there. It found solutions

for problems thathadnt surfaced yet.

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ECCO, an ESOPcompanyheadquartered in Idaho designs, manufactures andmarkets electronic safety products for commercial vehicles. Began deployment 9/03.10 leaders trained, 6 BBs (4 DMAIC, 2DMEDI) created.

One project achieved 50% reduction in parts outages & 50% reduction in pastdues from parts outages for annual savings of $132,000.

A second project eliminated false failures & cost of calibration of testing.Reduced tech support 50%, reduced production stops by 75%, and generatedannual savings of $75,000.

Machine shop of castings in Europe, 39 employees, generated 1500 additionalhours of capacity through first project on lead time reduction.

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Nanjing Automobile Forging Co. Ltd., a manufacturer of forging parts, began deploymentY2004. Trained 3 leaders, created 5 BBs who completed 5 projects which delivered about$2M benefits, 2 projects on-going, projected benefit is $20,000. 4 projects were worked incollaboration with Customers.

One project achieved $1.5M benefit through the heat treatment process improvementof the track link.

Lessons learned:Lessons learned:

The best-practice deployment approach, materials and training are excellent.

The key to success is MANAGEMENT support and involvement.


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Volex, a wiring harness supplier in UK. 938 employees, 220M in annual sales.Began deployment 6/03. First project chartered to reduce cut cable scrap. Actualfinancial benefits for the project:

Total Saving Achieved 46,148 / Year

Reduction in overhead costs (tax, electricity, heating) by closure of fourth floor - 8,327

(reducedhandling costs) reassigned personnel - 13,000

Saving achieved by reducing . . .

scrap - 10,800

inventory - 14,021

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Mechanical Devices, a family owned business located in Bloomington, IL. MDmachines casting which are shipped to Customer facilities located in the midwest &south. The MD 6 Sigma deployment journey began in Feb. 03, 1 DC, 6 leaders,1BB.

Through a series of interlocking 6 Sigma projects, MD . . .

- focused on improving quality performance (measured by- ppm reduction internally and externally) whichhad a positive impact toCustomer facilities

- improved product availability to Customers,- reduced in-bound freight costs approximately 30%- reduced inbound freight time from 3 days to 1 day,- reduced all inventories, including WIP,

- reduced manufacturing cycle time- reduced aged accounts receivables and- doubled sales . . . in a 24 month period

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WD Allen, a supply chain management firm providing sourcing/resourcing strategy analytics, order/delivery

management, content management, requirement / demand management to meet production schedules,suppler relationship management, re-packaging, kitting, and sub-assembly. Headquartered in Crystal Lake ILwith a subsidiary company in Worcester UK, total employment 17. Began deployment in June 2004. 1DC, 1Leader, and 1 Black Belt Results:

The investment in Six Sigma recovered in the first year, via initial 2 projects.

WD Allen is involved in an on-going combination of internal and customer collaborative projects withCustomers delivering >$800K level I benefits through May 06.

Lessons learned: 6 Sigma success requires the total commitment of the companys management.

A small firm, due to their size, will not uncover million dollar savings opportunities, but small companies CANchange the business culture and imbed the Six Sigma methodology at a pace measured in months rather thanyears.

6 Sigma is an excellent tool to train the next generation of senior managers.

6 Sigma is an excellent vehicle to better understand what your customers expect from supplies now and in

the future. Mike Doran, DC

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Morton Metalcraft, a sheet metal fabricatorheadquartered in the midwest withoperations there & southeast US. Totalemployment of approximately 1200, 45leaders, 10 BBs, over 100 GBs trainedsince deployment began Nov 2001 (Pilot

wave). Delivered nearly $10M level Ibenefits.

Pareto analysis of quality issues revealed20% of rejected part numbers cause 80%of problem. Created 9 GB lead projectswith positive impact on cost, delivery andquality internally & externally.

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The empowerment and training of our Green Belts haspositively impacted our corporate culture. . . Executive VPOperations

Project

number

Base

rejections

per month

Improvement

rejections /

month

Improvement

rate

PPM

Improvment

1 xxx xx - zz 89% 22%

2 xxx xx - zz 62.50% 9%

3 xxx xx - zz 100% 19.50%

4 xxx xx - zz 78.50% 13.60%

5 xxx xx - zz 33.00% 12%

6 xxx xx - zz 80% 3.80%

7 xxx xx - zz 66.60% 10%

8 xxx xx - zz 86% 14.50%

9 xxx xx - zz 17% 0%


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Presrite Corporation, a forging manufacturer located in Cleveland, Ohio. PC employ 480

people generating approximately $120M in sales per year. Began the 6 Sigma journey 7/03,1 DC, 10 Leaders in 03 & 04. 20Project Sponsor trained 7/05, 6 BB, >50 GBs, 1 MBB.18 6Sigma projects,Yellow belt training conducted 3x / year per plant. Results $1.5M / year

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Location Define Measure Analyze Improve Control TOTAL

Corporate 1 1 2

78th Street 1 3 4

Bessemer 1 2 3 6

Jefferson 1 3 2 6

4 0 0 5 9 18

6 Sigma Project Stage

6 sigma - other success stories case 1

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