An interview with Robert Thompson of Quality Hero (formerly Qualitas, now LearnSigma): his thoughts on lean, six-sigma & quality plus all the stuff in between.
1. How long have you been a Six Sigma practitioner/Black Belt?
I started as a green belt in 2001. The training was provided as a key customer imposed six sigma principles on their supply base. They used the Juran Institute as consultants. I then applied the tools but not necessary the entire DMAIC framework until about 2005 when I completed my training with the Industrial Statistics Research Unit at Newcastle University.
2. What made you decide to go Six Sigma?
The main driver was to attain quantifiable cost savings via the reduction of internal and external failures.
3. What benefits so far are derived from it? Could you quantify them, even in terms of percentage?
I’ll use the example of one improvement project which cost $150,000. It was completed in one quarter, and we expect to realise the benefit from the improvements for 10 quarters.
Sales $ 1,000,000
Variable costs $ 540,054
Contribution margin $ 459,946
Fixed costs $ 365,000
Profit $ 94,946
To account for the improvement project, we add $150,000/10 = $15,000 to the fixed cost for the current period. The increase in profit is $94,946 – $50,000 = $44,946 or about 90% higher than when the plant produced 10% defects. Ignoring interest rates, a rough measure of the significance of the benefits of the investment:
ROI = 100 (operating advantage – amortization) / investment = 100 (44,946 – 150,000/10) / 150,000 = about 20%.
4. What is the most difficult part in the deployment/implementation?
Firstly, convincing senior management that this would work and it was not just a fad. I think that programmes such as TQM did not have a quantifiable $ link into the business and as a result tended to have an unknown benefit. Once senior management understood that financial metrics were a critical part of each project then they began to become interested.
5. What were/are the obstacles?
Belts:
> Not severing themselves from their old job, at least through training
> Treating it as an academic exercise
> Failing to recognize Control as the most difficult phase to implement effectively
> Not transferring ownership of the solution to the team as the project progresses (the solution becomes personality dependent)
> Spending to much time on the computer and not enough time in the process
Management:
> Using BBs for fire-fighting
> Business executives do not show up for report-outs (conveys a lack of priority)
> Not communicating deployment plans effectively through the organization
> Believing a single initiative can/will solve all your problems
6. How did you overcome them?
Tenacity, commitment and senior management education and backing
7. What is the level of acceptance from your people and managers?
Initially poor, now quite good � the $ benefits are being realised!
8. What is the cost of your Six Sigma deployment so far?
Around $100 000
9. Do you have consultants?
Industrial Statistics Research Unit at Newcastle University
10. What advice can you give to those who are thinking of going into Six Sigma?
Keep the faith, don’t become disheartened initially. Programs such as this take a long time to implement and get right. Each six sigma implementation has to become unique to the culture of the company � there is no off the shelf solution!
