six sigma performance workshop
TRANSCRIPT
Six Sigma: A CMA View
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Six Sigma:The Opportunity for Canadian Industry
Presentation to CMA
Wednesday, March 23, 2005Toronto, Ontario
Six Sigma:The Opportunity for Canadian Industry
Presentation to CMA
Wednesday, March 23, 2005Toronto, Ontario
Six Sigma: A CMA View
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-1%
0%
1%
2%
3%
4%
5%
91 92 93 94 95 96 97 98 99 00 01 02 03 04
United StatesCanada
Productivity Growth Rate
Source: StatsCan
Six Sigma: A CMA View
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What is Six Sigma?
“Six Sigma is a strategic program & methodologythat organizations are leveraging to transform
themselves into best-in-class businesses.
This is achieved by a dramatic increase incustomer focus, establishment of near defect-free processes, products, and services, with a
goal of maximizing shareholder value.”
Eliminate defects…Minimize variation…Eliminate defects…Minimize variation…
Six Sigma: A CMA View
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Six Sigma Is…
ToolsTools• Basic analysis tools• Advanced statistical tools• Manufacturing AND service processes
PhilosophyPhilosophy• Belief that eliminating defects in products and
processes is the best way to improve costs, cycle time, and customer satisfaction
MethodologyMethodology • Step-by-step cookbook• Rigorous project methodology
Metric and GoalMetric and Goal• 99.9997%• 3.4 Defects Per Million Opportunities (DPMO)• Near-zero defects
Six Sigma: A CMA View
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Paradigm Shift at GE
“We are going to shift the paradigm fromfixing products to fixing and developing
processes, so that they produce nothing but perfection or close to it!”
Jack Welch, CEO, General ElectricGE’s launch of the Six Sigma
Management System, 1995
Six Sigma: A CMA View
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Successful Business Need to Be…
• Customer centric
• Process focused
• Measurement based
• Fact driven
• Results oriented
Six Sigma: A CMA View
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Variation is our enemy!
Example: Engineering Change Order Approval (ECO)
The average (mean) ECO is 28 days. Customer expectation as well as related internal resource commitments are based on this average.
But, what does the real picture look like? How does this impactthe customers, support staff, account managers, and other resources in the value-stream?
28 days
Six Sigma: A CMA View
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Customers Feel The Variation!This is the reality. While the 10 day average is accurate, the customer
and the supporting systems feel the variation as depicted by the“distribution” pictured below.
How does this variation affect customer satisfaction? How does it affect resource scheduling? How does it affect costs? In reducing variation, will we also be able to reduce the average or mean?
28 days
Freq
uenc
y
44 days12 days
Six Sigma: A CMA View
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Understanding Variability andEliminating Defects
1. Identify main sources of variability2. Eliminate special (assignable) causes3. Reduce and\or control common
(inherent) causes
Result: Precise and accurate processes thaton-target, predictable results.
Result: Precise and accurate processes thaton-target, predictable results.
Six Sigma: A CMA View
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Analyzing Process Variation
“Experimenter”Y = f(X1.. Xi) Correlation RegressionAnalysis of Variance Design of Experiment…Testing hypotheses and driving results!
Y = f(X1.. Xi) Correlation RegressionAnalysis of Variance Design of Experiment…Testing hypotheses and driving results!
70’s Show
Six Sigma: A CMA View
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Sigma versus COPQ
Process Capability DPMO
How Often Cost of Quality
Sigma Level Parts Per Million Defective
Correct? % of Revenue
1 697,700 30.2% > 40%
2 308,537 69.1% 30-40%
3 66,807 93.32% 20-30%
4 6,210 99.38% 15-20%
5 233 99.977% 10-15%
6 3.4 99.9997% < 10%
Six Sigma: A CMA View
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The Pursuit of Excellence
Six Sigma: A CMA View
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Aligning Customer Satisfaction and Strategic Goals…
Voice of Customers
CorporateGoals
Quality
Outcome
Delivery
Quality of Services
Price/Value
Cost
Six Sigma applies customer-driven measures to process improvement: Customers can be clients, vendors, and employees
Six Sigma: A CMA View
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Voice of the Customer: Establish metrics that will measure and monitor performance
• How are we performing in the eyes of the customers?
• What does my customer need from my process?• What can we do better?• How would my customer like my process to
perform?• How does my customer measure my process?• Is my process changing in step with the needs of
my customer?
Six Sigma: A CMA View
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A Convergent Approach
Canada CartageSystems
Tech
nolo
gy People
Innovation
Six Sigma:Highly customer focusedProcess excellence goalsEliminate defects & variationCommon language, culture,
goals, & methodologyData-driven decisionsEfficiency: cost savings
Vision:Increased efficiencyLeverage technologyExcellence: Continuous
ImprovementProactive – not reactiveIncreased accountabilityLong-term sustainability
Commitments:Innovative methodologiesCustomer satisfactionPerformance accountabilityImprove acute care
performanceReport: KPI & MetricsMeet or exceed national avg.
for customer satisfaction
Opportunities:Better management practicesMore agile & collaborativeStronger focus on preventionImproved technologyBetter resource allocationEliminate silos – life cycle mgtImproved data: decision-making
ABCCompany
Six Sigma integration: The Common Denominator
Six Sigma: A CMA View
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How does it work?
Two approaches:
• Strategic: Total management philosophy
• Process improvement tool
Six Sigma means data-drivendecision making!
Six Sigma: A CMA View
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Total management philosophy:• Committed management team • Alignment with Strategic Objectives• Visibility at all levels• Incentive compensation• Best resources• Training, coaching• Cross-fertilization: knowledge sharing and
exchange of best practices
Six Sigma: A CMA View
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Process Improvement Tool:• Project by project approach• Low organizational visibility• No real incentive to improve• Not necessarily aligned with strategic goals• Train people & expect results• Less overall impact on organizational
performance
Six Sigma: A CMA View
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Global Community
Six SigmaCompetency
Global 500Fortune 1000Global 500
Fortune 1000
Supplier Base/Mid-Market Industries
Supplier Base/Mid-Market Industries
Six Sigma: A CMA View
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Demand for Six Sigma Skills in Canada…Magnifoam Technology Inc.,CA-ON-MississaugaMatrikon Management, Inc.,CA-AB-EdmontonMetrik Management Inc.,CA-BC-VancouverMeyers Norris Penny,CA-BC-VancouverMircom Technologies Ltd,CA-ON-VaughanNCR Corporation,CA-ON-EtobicokeNovartis Consumer Health,CA-ON-MississaugaOwens CorningPerkinElmer, Inc.,CA-ON-Shenzhen, China. CA-QC-MontrealRaytheon,CA-ON-WaterlooSonoco,CA-ON-Mississauga, OntarioSparton Electronic Mfg in London ONStepan,CA-ON-Longford MillsTeleTech Holdings, Inc.,Orillia-ONThe Stanley Works,CA-ON-BrockvilleTower Automotive,CA-ON-Toronto Tyco Safety Products,CA-ON-Toronto/GTAVelan Inc, MTL. Int. VistaPrint, Windsor, ON, Lakeshore, ONWal-Mart Canada,CA-ON-MississaugaWinpak Portion Packaging Ltd,CA-ON-Etobicoke, ONWunderman,CA-ON-Toronto/GTA
Adecco,CA-ON-Oakville, Windsor, ONAvery Dennison Fasson Canada ,CA-ON-Toronto EastBBi Enterprises Inc.,CA-ON-CambridgeC.J. Rush Industries, TorontoCactus Commerce Inc.,CA-ON-OttawaCDI Corporation,CA-ON-Northern OntarioCeridian Canada Ltd,CA-ON-Any office in CanadaCFO2Grow ,CA-QC-MontrealCollicutt Energy,CA-AB-Red Deer CompuCom,CA-ON-MississaugaCompuware Corporation, MontrealEagle Picher Canada,CA-BC-SurreyEaton Corporation,CA-ON-MississaugaFederal Signal Corporation,CA-AB-Medicine HatGaribaldi Glass Industries,CA-BC-VancouverGenesis Executive Management.HAWORTH,CA-AB-CalgaryHewitt,CA-QC-Montreal Institute for Learning,CA-ON-Toronto/GTA Inteqna ,CA-ON-MississaugaJackson Products, Inc.,CA-ON-St. Thomas.Johns Manville Corporation,CA-AB-Innisfail, AB.L3 Comm. Spar Aerospace Ltd,CA-ON-Mississauga
Maple Leaf FoodsCottNorandaCAEMagnaWescastCIBC, TD, RBC…UniversitiesCollegesCMA’s…
Source: Workopolis Canada Listings 2005
Six Sigma: A CMA View
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Lean-Sigma CoalitionLean is…“…Producing what is needed, when it is needed, in exactly the right quantities, with the minimumamount of materials, equipment, labor, & space…”
Six Sigma is…“…a dramatic increase in customer focus, establishment of near defect-free processes, products, and services, with a goal of maximizing shareholder value.”
Six Sigma + Lean
Six Sigma: A CMA View
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Statistical Thinking
1. Practical 2. StatisticalProblem Problem
4. Practical 3. StatisticalSolution Solution
Six Sigma: A CMA View
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The Hidden Factory
Inputs Operation Inspect 60% RTYMeasured
Rework
Scrap
Fail
Pass
Operator InitiatedRework
Off Target
Six Sigma: A CMA View
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What Are Champions?Pronunciation: 'cham-pE-&n Function: nounEtymology: Middle English, from Old French, from Medieval Latin campion-, campio, of West Germanic origin; akin to Old English cempa warrior; Date: 13th century1 : WARRIOR, FIGHTER2 : a militant advocate or defender <a champion of civil rights>3 : one that does battle for another's rights or honor4 : a winner of first prize or first place in competition; also : one who shows marked superiority <a champion at selling>
Source: Merriam-Webster Dictionary
“Champions are the key to success in every (Six Sigma project). For small and large companies alike, the ability to identify the right projects, select and mentor the right people, and drive (Six Sigma) to produce breakthrough results is the responsibility of the Champion.”
Source: American Supplier Institute
Six Sigma: A CMA View
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Six Sigma Champion• The Champion is a trained
manager or department head who leads the deployment of Six Sigma training and mentors trainees in their area of the company
• Develop project mandates• Approve project team selection• Provide required resources• Remove barriers or obstacles• Provide ongoing reviews and feedback• Ensure project recommendations are
implemented• Ensure project savings are realized • Sign-off and acceptance of completed
projects• Ensure project gains are sustained
over the long-term
Six Sigma: A CMA View
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Six Sigma Black Belt• A Black Belt is a fully
trained Six Sigma expert who leads improvement teams, works projects, and mentors trainees
• Effectively manage Six Sigma project(s) through to completion
• Apply Six Sigma project methodology and tools (DMAIC)
• Project team facilitation and training• Apply statistical tools & analyses• Assist Champions in project
selection & scoping• Ensure engagement of process
owners through project life cycle• Educate others on Six Sigma• Providing feedback to senior
management on project progress and results
Our SixSigma Project
Six Sigma: A CMA View
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Mission& Vision
Business Unit
Geography
Product
Service
Process
Supplier
Shareholder Value
Short-Term Long-Term
Six Sigma Deployment Strategy
Customer Focus – Needs & Expectations
Principles, Values, & Infrastructure
Business Unit
Geography
Product
Service
Process
Supplier
Shareholder Value
Strategic Alignm
ent
Mission& Vision
Business Unit
Geography
Product
Service
Process
Supplier
Shareholder Value
Short-Term Long-Term
Six Sigma Deployment Strategy
Customer Focus – Needs & Expectations
Principles, Values, & Infrastructure
Business Unit
Geography
Product
Service
Process
Supplier
Shareholder Value
Strategic Alignm
ent
To build real value for its shareholders and customers, your Six Sigma investment must be aligned with short-term and long-term strategic business goals and objectives.
This is a primary role for Six Sigma Champions.
Your mission is to ensure thatmeasurable financial benefit isrealized from Six Sigma.
Six Sigma: A CMA View
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Mission& Vision
Business Unit
Geography
Product
Service
Process
Supplier
Shareholder Value
Short-Term Long-Term
Six Sigma Deployment Strategy
Customer Focus – Needs & Expectations
Principles, Values, & Infrastructure
Business Unit
Geography
Product
Service
Process
Supplier
Shareholder Value
Strategic Alignm
ent
Mission& Vision
Business Unit
Geography
Product
Service
Process
Supplier
Shareholder Value
Short-Term Long-Term
Six Sigma Deployment Strategy
Customer Focus – Needs & Expectations
Principles, Values, & Infrastructure
Business Unit
Geography
Product
Service
Process
Supplier
Shareholder Value
Strategic Alignm
ent
Mission& Vision
Core Processes
Criticalto
Process
Quality
Cost
Cycle
Drilling down into the criticalprocesses, and identifying
the opportunities…
Six Sigma: A CMA View
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Six Sigma Project Methodology
DMAIC
DEFINE: the problem
MEASURE: gather data related to problem
ANALYZE: the data with appropriate toolsand obtain a higher level ofunderstanding & certainty
IMPROVE: cost, quality & cycle time. Reducevariation. Eliminate defects.
CONTROL: the process so improvements aresustainable & consistent.
Six Sigma: A CMA View
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Recognize Define Measure Analyze Improve Control Realize Standardize Integrate Design Verify
WhoExecutive leadership & Champion
OutputsCTS’s (customer: Quality, Delivery, Cost, Health/Safety)
Prioritization & Strategic AlignmentCore & Sub-processes (high level)
Six Sigma: A CMA View
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Recognize Define Measure Analyze Improve Control Realize Standardize Integrate Design Verify
WhoChampion
OutputsProject portfolio (Project definition & Auth. To Start)
Baseline of processes/process mapProject package (Project Definition & Project Plan)
Project benefits/financial analysis
Six Sigma: A CMA View
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WhoBlack Belt (Champion to support & mentor)Note: Champion support Project “kick-off” meeting!
OutputsDetailed process mappingMeasurement plan, hidden factory, YRTData collection, DPMO, sigma, etcIdentifying variation, histogramsDetermining which tools to use
Regular
meetings with
Black Belt!Regular
meetings with
Black Belt!
Recognize Define Measure Analyze Improve Control Realize Standardize Integrate Design Verify
Six Sigma: A CMA View
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WhoBlack Belt (Champion to support & mentor)
OutputsAnalyze approvalIsolate critical variablesRisk analysis
Regular
meetings with
Black Belt!Regular
meetings with
Black Belt!
Recognize Define Measure Analyze Improve Control Realize Standardize Integrate Design Verify
Six Sigma: A CMA View
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WhoBlack Belt (Champion to support & mentor)
OutputsIdentify and select solution(s)Value-added assessmentValidate new process capabilityPilot project
Regular
meetings with
Black Belt!Regular
meetings with
Black Belt!
Recognize Define Measure Analyze Improve Control Realize Standardize Integrate Design Verify
Six Sigma: A CMA View
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Recognize Define Measure Analyze Improve Control Realize Standardize Integrate Design Verify
WhoBlack Belt (Champion to support & mentor)
OutputsControl indicatorsSolutions, mistake-proofingCommunication, training, SOP’s, etc
Regular
meetings with
Black Belt!Regular
meetings with
Black Belt!
Six Sigma: A CMA View
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Recognize Define Measure Analyze Improve Control Realize Standardize Integrate Design Verify
WhoChampion (Black Belt support)
OutputsExecute Realize PlanNew leverage opportunityConfirm/report project benefitsProject Closure
Regular
meetings with
Black Belt!Regular
meetings with
Black Belt!
Six Sigma: A CMA View
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Recognize Define Measure Analyze Improve Control Realize Standardize Integrate Design Verify
WhoExecutive leadership,
Champion, process owners
OutputsCommon best practicesStandardized practicesMaximize benefits of projects
Six Sigma: A CMA View
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Six Sigma Outside of theManufacturing Process?
Absolutely!
Six Sigma: A CMA View
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Transactions: “Sales, CS, HR, Finance…”trans·ac·tion Pronunciation Key (trn-skshn, -zk-)
n.
The act of transacting or the fact of being transacted.
Something transacted, especially a business agreement or exchange.
Communication involving two or more people that affects all those involved; personal interaction: “a rich sense of the transaction between writer and reader” (William Zinsser).
transactions A record of business conducted at a meeting; proceedings.
trans·action·al adj. Source: The American Heritage® Dictionary of the English Language, Fourth Edition
Copyright © 2000 by Houghton Mifflin Company. Published by Houghton MifflinCompany. All rights reserved.
Our (Six Sigma) Definition: The defect-free transfer and retention ofKNOWLEDGE!
Our (Six Sigma) Definition: The defect-free transfer and retention ofKNOWLEDGE!
Six Sigma: A CMA View
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A Transactional GoalQUALITY: To transfer or impart knowledge as required across the value stream without any loss or degradation of the original information or intent. (Goal: zero defects)
DELIVERY/CYCLE TIME: To ensure that the time lapsed during transfer does not impair other value-added processes or diminish the inherent value of the knowledge being imparted. (Goal: Instantaneous)
COST: To minimize the cost of the transaction (knowledge transfer) without adversely affecting quality or delivery criteria. (Goal: zero cost)
“What customer’s want is simple: They want it NOW, they want it PERFECT, and they want it FREE!”
Robert RodinCEO, Marshall Industries
“What customer’s want is simple: They want it NOW, they want it PERFECT, and they want it FREE!”
Robert RodinCEO, Marshall Industries
Six Sigma: A CMA View
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Transactional Tools• Project Charter/Mandate (scope, constraints, etc)
• Process mapping (step and flow format)• Customer surveys; Chi Square Analysis• Benchmarking• Work order travelers, interviews, historical data• Attribute Data R & R (MSA)• Process capability and entitlement assessments• Cause & Effect (Ishikawa, fishbone)• Characteristic Selection Matrix (CSM)• Pareto Charts, Histograms (visualization)• Failure Mode & Effects Analysis (FMEA)• Quality Function Deployment (QFD)• Regression, Binary Logistic Regression• Piloting (alternative to DOE) DFSS!DFSS!
Six Sigma: A CMA View
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Open Forum – Q & A
Six Sigma: A CMA View
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For additional information about Six Sigma or Lean Sigma, or if you would like to obtain additional copies of this presentation, please contact:
E-Zsigma (Canada) Inc.One Dundas Street WestSuite 2500Toronto, OntarioCanada M5G 1Z3Ph: 416-593-8026www.e-zsigma.com