Six Sigma Comes to IT

Posted by: meikah | 29 July 2005 | 5:03 am

Reducing defect and targeting perfection are Six Sigma’s foremost goals and that definitely can improve information technology. The proofs are evident.

*The IT organization at Raytheon Aircraft saved $500,000 from a single project in 2002.
*The nine CIOs at Textron saved a total of $5 million in six months.
*One team of engineers at Fidelity Wide Processing expects to deliver $6 million to $8 million in cost reductions this year.

Six Sigma’s focus is on processes, and IT is a big user of processes. Because of this relation, VP and CIO at Raytheon Doug Debrecht said, “Six Sigma has given us a good toolset that we can use consistently and repeatedly to analyze how we have things set up and running.”

Six Sigma in IT cam measure and improve both internal processes, such as network speed and reliability, and line-of-business processes. IT has a big role in these processes, such as how well an online ordering system is working.

For example, a Six Sigma team at Raytheon was assigned to analyze why the division had “an ungodly number” of servers?350. The team found the root of the problem: each application got its own server, regardless of its size or bandwidth requirements?and then worked out the specifics to allow applications to share servers logically and securely. The result: a 40 percent consolidation in servers, with the attendant time and labor savings added back to the bottom line.

Another IT giant, Textron used the DMAIC process and the Voice of the Customer tool, among others, to tackle data-center sprawl. According to its executive vice president and chief innovation officer, Ken Bohlen, “We found we had over 80 data centers inside our company. We used Voice of the Customer to canvass our customer base and ask some very specific questions.” An example of this is finding out what critical information was stored where. By making customer needs the top priority, Textron has been able to consolidate or shut down 40 of the data centers, which were supporting legacy or underused applications. Bohlen also said that this long-term goal was to get down to five data centers.

With the testimonies of these two IT giant companies, there is indeed a niche for Six Sigma in their sytems.

Read more Targeting Perfection

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Writing at Six Sigma

Posted by: meikah | 28 July 2005 | 4:29 am

Interestingly, we see uses of Six Sigma in industries other than manufacturing and services.

During one of my researches, I found my way to Michael Marx’s article titled Six Sigma Helps Columnist Hesh Reinfeld Improve Writing? In the article, Hesh Reinfeld, a Pittsburgh-based business columnist and humorist, called on Six Sigma black belt Harry (obviously referring to Mikel Harry) to explain an alleged dwindling interest in his columns.

Some of Harry’s analyses were:

* column was read a dismal 83 percent, my columns were not as funny as in the past
* letters to the editor were few in actual number and therefore statistically insignificant.

Reinfeld wanted to blame his editor for placing his columns next to the legal notices. But Harry rejoined, “Hogwash. It is not a critical piece of data. Six Sigma requires we identify the root cause.” Afterwhich Harry assessed Reinfeld’s supply chain. Harry told Reinfeld that he no longer had enough quality raw material for his columns.

Using Six Sigma of course, Harry offered the solutions. One of the solutions was found in a two-page report.

“…to standardize the process for me. Seven paragraphs, 622 words, four quotes, 3 question marks and only one exclamation point. Each story needed to mention my wife.”

This column is a good fodder for Six Sigma practitioners out there. Read on

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Banking on Six Sigma

Posted by: meikah | 27 July 2005 | 4:20 am

When Bank of America, one of the world?s largest financial services companies, turned to Six Sigma, many were doubtful if it would work, but it did. Less than three years later, quality and Six Sigma have become an integral part of the culture at Bank of America.

The bank has embraced the Six Sigma discipline in three ways:

1. as core process performance metric.
2. as a business approach.
3. as a leadership philosophy.

Soon, BA experieinced the following changes in its sytem:

*reduced missing items from customer statements by 70%
*lowered the number of late posted customer transactions
*reduced encoding errors
*improved the efficiency of large scale printing operations
*businesses and support units began to pay off
*reduce those system hiccups that occur in hardware and software system, thereby reducing
overall defects across electronic customer channels by 88%.
*trimmed response cycle time for certain account maintenance requests from three
days to less than 10 minutes.
* reduced the cycle time from application to closing of mortgages by 15 days

Today, Bank of America handles almost 200 customer transactions per second, faster and more accurately than ever. Same day payments have improved by more than 36% and deposit processing has improved by 47%.

As a whole, Six Sigma and the other quality tools that have become part of Bank of America?s culture have created benefits of more than $2 billion.

Read more Six Sigma…at a Bank?

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Applying Six Sigma to Service Processes

Posted by: meikah | 26 July 2005 | 4:17 am

Recently, Six Sigma efforts have been focused on service processes. One reason is that these processes consume a large portion of a company?s operating margin. It is only natural then to measure, modify and improve them.

Typical problems in service processes is the selection of Qualitative and Quantitative Measures appropriate to the business and the service process being improved.

Let’s look at this example.

Quantitative measures for service processes, especially those related to time taken for completion may be very important in a fast food restaurant. However in a gourmet restaurant, the same fast service may be seen as a negative indicator since what they may want to serve is a relaxing slow dining experience rather than been seen as trying to get you out of there as fast as possible.

Another issue is the careful selection of what a defect is ? qualitative or quantitative. When talking about quantitative measures, the definition of a defect is even more context-sensitive.

Newspaper delivery in the morning is expected within a certain cutoff time. Beyond that time, it may not be useful to have morning newspapers delivered. On the other hand, postal mail that shows up in your mailbox needs to be timely as in today vs. tomorrow, but may not be tied to a specific time during the day in most cases.

To ensure a sensible Six Sigma measurement in Service Processes, here are four considerations.

1. Right level of measurement
2. Accounting for variability
3. Righ emphasis on quantitative v. qualitative measures
4. Interpretation and Management Support for Change

Read more Six Sigma In Service Process Management

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Six Sigma and Customer Satisfaction

Posted by: meikah | 25 July 2005 | 9:58 am

The biggest challenge in business today is the ever-agressive marketplaces. They can even change overnight, and thus simply focusing on customer satisfaction and loyalty does not guarantee survival.

As quality guru W. Edwards Deming put it, ?We certainly do not want to have an unhappy customer, but it will not suffice to have customers that are merely satisfied.? It is good to have loyal customers?the people who are willing to wait in line for your products and services, and to recommend them to their friends. Loyal customers trust your products and services, and see them as higher value than those of other suppliers.”

This is one of the reasons that make companies turn to Six Sigma. Six Sigma methods contribute in a large part to achieving customer satisfaction and building customer loyalty.

Through Six Sigma, companies will be able to design metrics to measure costomer loyalty. Such measures as retaining and satisfying customers are a good feedback mechanism for an organization. If certain market segments are found to be leaving the customer base, termed as defections, Six Sigma initiatives can be used to find the root cause of the defections and then develop a method of regaining their business. Six Sigma methodology encourages a company to take a proactive approach to sustaining growth.

Read more Customer Satisfaction and Loyalty is not Enough

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Achieving Six Sigma in Golf?

Posted by: meikah | 22 July 2005 | 4:18 am

Golf is one of the world’s famous sports. Who hasn’t heard about Tiger Woods, considered one of the greatest golfer’s of all time? Or Jack Nicklaus and Walter Hagen?

Golf is an outdoor game where individual players or teams play a small ball into a hole using various clubs. The object is to deposit the ball in a specified number of cups, or holes, using as few strokes as possible into each of the 9 or 18 successive holes on a course.

It is played by holes, which could mean the actual hole in the ground, or the whole area from the teeing ground (the starting point) to the putting green (the area around the actual hole in the ground. These holes are surrounded by hazards: bunkers or sand traps, and water such as lakes, ponds, or rivers. The grass of the putting green is cut very short so that a ball can roll over distances of several meters. “To putt” means to play a stroke on the green where the ball does not leave the ground. And “putt” is a golf stroke made on a putting green to cause the ball to roll into or near the hole.

“Putting” therefore is very crucial in game of golf. Your performance will greatly improve if you hit all your putts 100% of the time.

Golfers can improve their performance by working for Six Sigma. Six Sigma is a failure rate of 3.4 parts per million or 99.9997%… Applying this to golf, a Six Sigma level will mean missing one putt every 163 years!

Possible? Definitely if players work for a Six Sigma performance.



Organizing Six Sigma

Golf Scores and Six Sigma Metrics

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Six Sigma Training

Posted by: meikah | 21 July 2005 | 5:13 am

To help modify and shape your organization’s culture, you must identify who in your organization should be trained for Six Sigma.

Who should be trained?

Let’s start with senior management, also known as ‘C-Level Management’ (CEO, CIO, CFO and peers). They are the individuals who are required to incorporate Six Sigma objectives into their operational plans.

Next group are the Functional and Process Managers. They directly report to the Senior Management. They are sometimes called sponsors and champions because they defend the cause within their business organization.

Then you have your Quality Leaders, also known as Quality Managers and Master Black Belts. They maintain rolled up budgets, track business cost savings, ensure training goals are met. They help Functional and Process Managers set and lead the Six Sigma vision within their specific areas.

Next are the Project Leaders who implement the Six Sigma methodology and tools within the business. They maintain time lines and budget, determine appropriate tool use, perform analyses. They are also called Black Belts.

And then the Employees who are also called the Green Belts. As such they take Six Sigma training courses developed specifically for part-time Project Leaders.

Read more Six Sigma Training

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Investing on Six Sigma Training

Posted by: meikah | 20 July 2005 | 4:48 am

Despite the rising cost of maintaining operations, several companies still put money on Six Sigma trainings. Simply because the payback for such projects is high.

Two companies in particular took the long-and-hard decision to pursue Six Sigma Black Belt Training with SQT Training Ltd. How their initial expense turned into a wise investment is something for other companies to learn from.

The Black Belt programme involves 20 days training carried out over a 4 month period (1 week per month) with the delivery of the key outcome–a strategic company project.

The first company, an electronics manufacturer in Ireland. Its first “project” was on increasing the reliability of a non-core but nonetheless necessary, screen manufacturing process. The second “project” was to reduce the defect level of specific components on delivery time to the customer.

At the onset, the screen reject rate from the screen manufacturing process was in excess of 50%. During the deployment, it was found that the process standard deviation could be reduced by 40% resulting in a 20% unit cost reduction and an 80% lead time reduction. The resultant savings were in excess of ?125,000. For its lead-time project, the defects were reduced from 611 ppm to approximately 45 ppm. It generated annual savings in excess of ?114,000.

The second company is Molex in southwest Ireland, the world’s second-largest manufacturer of electronic, electrical and fiber optic interconnection products and systems.

The Irish plant were challenged by a 28,000 ppm internal reject level on a new product line. During the initial investigations, they found out that resistance failures made up 70% of the problem, and that the 28,000 ppm was only achieved by retesting ?failed? units (44,000 ppm from the first test).

The company addressed the problem by developing resistance standards of 0.33 ohms and 0.5 ohms. That allowed for more accurate calibration at lower resistance levels. Its Six Sigma team got all three to accurately repeat in a guage R&R study. The result was a drop to 4000 ppm, with all three testers giving comparable results. The trainee Black Belt?s diligence and perseverance resulted in an 85% reduction in reject level and savings of over ?75,000 p.a.

Read more Six Sigma Training ? Is it worth the investment?

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Doing Six Sigma Right

Posted by: meikah | 19 July 2005 | 5:02 am

To do Six Sigma the right way is to focus on training and not on improving processes.

According to Ronald D. Snee, “Six Sigma training is designed to create the skills and knowledge that managers, Champions and Black Belts and others need to implement the project-by-project approach to improvement utilized by Six Sigma. Six Sigma training pays for itself very quickly.”

When you give in-depth initial trainings to Champions (2-5 days), Black Belts (4 weeks), and Green Belts (2 weeks), they will understand their job in the deployment of Six Sigma a lot better. This gives rise to a developing infrastructure (managers, Champions, Black Belts and others) that can use the Six Sigma approach to improve processes and thereby produce bottom line results.

Putting training as priority makes training professionals identify the needed skills and assess the skills of the organization. This brings about a deep understanding of the business and its strengths, limitations, strategies, and goals.

It is therefore important that you assess every training program. Evaluation of training should include assessment of results as well as whether the participants liked and learned the material. D.L. Kirkpatrick suggested the following four levels of assessment:

Did they like it?
Did they learn it?
Did they use it?
Did they get results?

Here ?they? refers to those who participated in the training and ?it? refers to the content and use of the training.

Focus on Improvement not Training: How Six Sigma Can Do It Right

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JLG Goes Six Sigma

Posted by: meikah | 18 July 2005 | 5:28 am

More and companies are looking into Six Sigma these days. One of the recent ones is JLG Industries, the access equipment manufacturer.

Last month (June 2005), JLG restructured its organization to accommodate expansion of service operations to focus on commercial and industrial market channels as well as bring increased focus to its Six Sigma program.

The changes include the expansion of Houston, Texas-based ServicePLUS operations into the Mid-Atlantic region. Bill Lasky, JLG?s president, CEO and chairman of the board, said, ?This organizational structure will better serve the multi-faceted needs of our customers.? He also said that JLG plans to expand its ServicePLUS operations further.

JLG will also focus more on its Six Sigma program, a system for improving the quality of organizational processes, by naming John Louderback vice president of Six Sigma, Quality Processes and Training. Lasky said, ?The first year of our Six Sigma program has been very successful, and now is the opportune time to expand its impact by focusing our commitment to this strategic initiative under John?s leadership.?

Lasky furthere said that Louderback has been a champion of Six Sigma principles since JLG initiated the program, and he expects that under Louderback?s leadership, JLG?s efforts will rise to even greater levels of success.

Way to go JLG!

JLG Makes Company Changes

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