Servicing with Six Sigma

Through a Six Sigma approach, service companies can perform a lot better and offer excellent services than their competition. Service providers can achieve that competitive edge when they are able to turn the request-for-quotes (RFQ) process into more than a bidding war. They need to exceed the client’s expressed and hidden needs while ensuring their own ability to deliver at the desired margin.

This is where Six Sigma comes in. Using a modified tool to align with the major steps of the sales process, the DMAIC can help a company address critical selling situations.

The DMAIC sales structure will include the following steps:

Define: Identify scope and expressed critical-to-quality (CTQ) elements. A complete profile from the Define phase provides a solid structure for a truly knowledge-based quote.

Measure: Define CTQ performance for client, competition, own capability and goal. The Measure phase provides a framework for success by looking at the client requirements and the service provider’s capability to meet or exceed them.

Analyze: For each CTQ goal, develop processes, timeline and risks. At this stage, the team evaluates each CTQ and the development of the personnel, systems and structure necessary to deliver them within budget.

Improve: Present proposal in terms of capability, cost and launch plan with metrics. In the Improve phase, the service provider develops a launch timeline to implement that structure.

Control: Complete detailed launch plan with responsibilities, milestones, corrective actions and management reviews. At this stage, the team launches a partnership with the client to complete the change plan and manage changes.

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Networking with Six Sigma

Two years ago, Chuck Yoke of Network World entered into the world of Six Sigma methodology. He did so because he was searching for that thing that will provide him with the skills to attack two evolving areas of network opportunity: converged networks and reduced operational costs.

In the field of product development and process management, network convergence is a challenge. Convergence describes a networking environment where voice, video, and data transmissions are integrated within a single, unified system. This network is based on Internet Protocol (IP) standards, the same packet-based architecture that drives the World Wide Web.

A converged, intelligent IP-based network that integrates data, voice, and video provides an endless set of applications for people to become more productive and businesses more competitive - all by increasing efficiency, saving time, and reducing costs.

While most data networks boast of their availability anytime all the time, they do not actually provide the same level of service as their voice counterparts. In reality, a data network that maintains 99% availability is considered quite good. However, on a 24-hour by 365-day basis, this equates to 88 hours of downtime, which is unacceptable in a voice network. In the voice world, 99.999% availability is considered the norm.

To be successful in the corporate world, however, converged networks must learn how to meet higher service requirements at the same time learn how to be cost-effective. In other words, data network companies should be able to provide 99.999% availability with reduced infrastructure and operational costs.

Chuck further explains, “network architects and managers will need to take a step back from technology and look at the network from a holistic perspective. To keep development and operational costs to a minimum, areas of potential savings such as process efficiencies or operational synergies will need to be identified. To ensure ongoing customer satisfaction, post-implementation service levels will need to be constantly measured, analyzed, improved and controlled. Programs such as Six Sigma can provide network professionals with the disciplines, skills and tools to ensure their converged networks bring the highest level of quality with the lowest operational costs. The future of converged networking lies not in technology, but in the overall service and value it brings to the user.”

Converging with Six Sigma

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A New Six Sigma Roadmap

There is a new book (Wiley; June 2005; $84.95; Cloth; 0-471-68291-8) in the market that offers a comprehensive guide to consistent, high-quailty service for any organization. The book is aptly titled Service Design for Six Sigma: A Roadmap for Excellence.

The book presents a detailed, easy-to-master procedure. Yet it promises a highly effective data-driven method that prevents defects in any type of service process. The Design for Six Sigma or DFSS method discussed in the book provides a proactive approach that leads not only to “a whole quality business” producing high-quality products and services, but also operates at lower cost and higher efficiency throughout the entire life cycle.

Service Design for Six Sigma also discusses innovation, interface management, and Voice of Customer (VOC) process integration, as well as axiomatic design, design for X, the theory of inventive problem solving, transfer function, design scorecards, and Taguchi’s method. All these concepts and strategies will definitely equip readers with the necessary skills to apply DFSS to organizational settings.

It is a very good reference for corporate executives, quality control managers, and process engineers, or even as a complete training manual for DFSS teams. Graduate students in management, operations, and quality assurance will also benefit from this book.

Service Design for Six Sigma: A Roadmap for Excellence

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Six Sigma Leadership Programs are Six Times More Effective

A recent survery involving more than 1300 business professionals from around the world shows that companies incorporating Six Sigma into their corporate leadership programs were six times more successful than those without. In fact, because of this kind of training, 60 percent of Six Sigma professionals are promoted into leadership positions in their respective organizations. Below are some of the interesting figures.

About 85% of people who said their leadership programs were highly successful indicated that Six
Sigma was a key component of that training.
Only 15% of highly successful programs did not include Six Sigma.

About 60% of the respondents said that people in their companies who have completed a Six Sigma ‘tour of duty’ are moved into new leadership positions.
Only 14% returned to their original jobs.

Michael Cyger, CEO and publisher of iSixSigma Magazine and iSixSigma.com, further explains, “We want leaders who are enthusiastic and passionate about what they’re doing. Those are exactly the skills and qualities that make Six Sigma professionals most successful and that Six Sigma helps build future leaders.”

The complete survey will be released in the September/October issue of iSixSigma Magazine.

iSixSigma Magazine

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A Six Sigma Workout

“Change management” is the most challenging aspect of a Six Sigma deployment. What is change management?

Six Sigma is change and management has to be ready to accept that change. It will involve determining a broader ownership for Six Sigma, without reducing the rigor of the methodology. It needs to start recognizing that Six Sigma is a relatively “low engagement” strategy. It relies on an elite core of highly trained Black Belts, and to a lesser extent Green Belts, to do the heavy lifting of driving change through the organization.

Companies who are serious about deploying Six Sigma have thought up of several strategies to involve management in the impending culture change.

One solution is the Workout tools and techniques first used by GE to create an “empowered” culture. “Workout tools were largely credited as a critical accelerator of GE’s Six Sigma effort. Among Workout’s key synergy with Six Sigma is the focus on unleashing the know-how of those closest to the work. In other words, Workout typically relies for much of its power on precisely the group of employees who often receive only a cursory exposure to Six Sigma tools and concepts.”

Based on GE’s success, a number of companies and consultants built on and steadily improved the Workout concept. Among the most recent ones is the IMG Global, the world’s largest producer of phosphates and fertilizers.

By combining Six Sigma with Workout tools, IMC Global has engaged 450
employees and managers on Workout teams to accelerate solution implementation. It is able to create a high-powered continuous improvement program. High potential leaders have been trained as both Six Sigma Black Belts and Workout Team Coaches.

To date, 68 Workout Teams have delivered hard dollar savings in excess of $3.5 million. More importantly hundreds of front line managers and employees have been engaged in the Six Sigma effort and are excited about their ability to make an impact. Read more

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Six Sigma Spreading Like Wildfire

Six Sigma projects are now being deployed in the pharmaceutical industries. From September 26 to 28 this year (2005), big pharmaceutical companies will meet together in a conference. The theme is “Unlocking the Power of Lean and Six Sigma.”

Some of the topics include.

Six Sigma Tools For Root Cause Analysis In The Pharmaceutical Industry
Dr Prasad Kanneganti, Right First Time Leader / Director of Asia Pacific
PFIZER

The US FDA and other global regulatory agencies have recently announced intentions to modernise the regulations for pharmaceutical manufacturing and product quality. The industry is encouraged to adopt new technological advances and risk-based quality management principles. This move towards a science-based and data driven approach to quality management offers many opportunities for applying Six Sigma tools.

* Pharmaceutical cGMPs for 21st Century
* Risk-based approach to regulations
* Process Analytical Technology (PAT) for improving process understanding
* Adding depth to data analysis using Six Sigma tools

Successfully Implementing Lean And Six Sigma: A Pharmaceutical Industry Case Study
Steven Walton, Continuous Improvement Manager
SCHERING-PLOUGH

Can Lean and Six Sigma work hand-in-hand to improve the quality of your business and drive down costs through better waste management and problem solving methodologies? This case study will look at some of the problems encountered with the implementation of this change programme in Schering-Plough. Steve will discuss in detail:

* The barriers to change
* The importance of early wins
* Value streams and the river banks of opportunity
* The 4ps of Six Sigma implementation

Theory Into Practise: How Wyeth Pharmaceuticals Have Applied Six Sigma Tools To Resolve And Improve The Manufacturing Processes
Iris Cordero, Director of Business Process Management and Process Excellence
WYETH

This case study addresses the successes that Wyeth Pharmaceuticals has had in applying Six Sigma tools to resolve and improve processes within their organisation. Our Speaker illustrates the experience of developing a strategy to implement and deploy Six Sigma, how it can be linked to the organisation goals and objectives and the importance of management involvement. The presentation shares the most common obstacles encountered and how to orchestrate a winning scheme. Finally, emphasis is placed on assembling an effective project team to ensure project success.

Key topics include:

* Illustrating the experience of developing a strategy to implement and deploy Six Sigma within Wyeth
* Reducing variation and obtaining bottom-line benefits by addressing specific elements focusing on value-added activities
* Examining initiatives to institutionalise a systematic Six Sigma approach to truly make it part of your operations
* How Wyeth addresses situations and opportunities and effectively measures results utilising key process metrics

Pharmaceutical Manufacturing 2005

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Starting a Six Sigma Initiative

In an interview with Forrest Breyfogle, Founder, President and CEO of Smarter Solutions, Inc., he said that a good way to start a Six Sigma initiative is to get a small but committed force of the right people and give them the proper authority. “It is typically better to grow into an overall system,” he further said.

Forrest also observes that companies that have successfully implemented Six Sigma has a committed leadership, uses top talent, and has a supporting infrastructure. “The supporting infrusture involves a formal project selection process, a formal project review process, dedicated resources and financial system integration.”

When asked if a new Six Sigma initiative should be promoted by upper management, and if so, how it should be communicated. Forrest said that “advocacy selling of Six Sigma can originate at any organizational level; however, the effectiveness of such promotion increases when originated at the executive level. The creation of a burning platform ? a visible crisis ? is an effective approach to convey the importance of instituting systematic improvements to the enterprise. The necessity of change should be presented in such a way that it is not only easy to understand, but readily internalized. The presentation should show that when there is an alignment of Six Sigma work with business needs and/or operational metrics, both existence and bottom-line excellence can be achieved.” Read more

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Six Sigma Marketing

Jim Novo thought of the concept of Six Sigma marketing but never got around to working on it until he felt that the idea has leaked out into the pseudo-mainstream.

To him, Six Sigma Marketing is a “mindset,” which touches on everything from web metrics to the value of real-time analytics to customer retention to why engineers are trying their hand at
marketing.

Novo further stressed that marketers should not be looking for defects in marketing programs, rather they should be looking for defects in the resulting products of these marketing program “plants” or “lines,” i.e. the customers they create.

Q: In the few years I’ve spent working in the field of Web site analytics I’ve only met a very small handful of companies that are able to take immediate action based on data. Because of this, I’m generally less excited about “real time” data than “getting the right data in a reasonable amount of time”. But people seem to want real-time web analytics, which are of course more expensive. Is there a case to be made for real-time, and how would you go about justifying the additional expense?

A: There is a profit opportunity in virtually every business for real-time analytics, but the opportunity will probably be very different for each business. I think this idea is so important that I’m going to spend a significant amount of time not answering this question specifically, but using a “business model” to explain it. I really want people to think about the following and then relate it to their own businesses.

Engineers know about real-time, they live it. Ever seen the pictures of a NOC (Network Operations Center) for the telcos or the electric utilities? These engineers run the guts of the business in real time, they are sitting there in front of a field of screens that alert them to trouble and they react more or less instantly, or they monitor/correct the action taken by a robot. At a lesser scale, in every company there are IT people that walk around with beepers that go off at all times of the day to alert them to processes and equipment that have gone haywire. It’s real-time monitoring and alerting, it’s here and it’s being done all the time - in engineering and in IT.

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Six Sigma Marketing

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DFSS for Jaguar

Jaguar, one of the world’s leading designers and manufacturers of premium sedans and sports cars, has turned to Six Sigma for improved processes. In an interview with David Brunson, Powertrain Quality & Reliability, Jaguar Cars Limited, the company has already achieved a lot of savings and benefits.

“Engineering Design exerts 70-80% of the influence on customer satisfaction and quality. The tools and techniques used in Design For Six Sigma are very powerful and cross functional. They have the capacity, if used in the right way, to produce really superior end-results in both product and service development. We have found the methods we are using in DFSS can produce continuous improvements in the quality and reliability of our product, which in such a highly complex system as a car, is crucial.”

“Jaguar has made some substantial savings through using Robust Design methods. For instance, we predicted a very critical problem in that we would not be able to cast a particular component using the planned process and design. The analysis tools found this issue 9 months earlier than normal methods. It was a massive cost saving even though only prototypes were being ordered. Not only in the cost saved on prototype parts, but also the savings from not delaying the whole design process. It just made the whole process so much more efficient by
working in a more rigorous way. We can routinely optimise the product and process prior to manufacture, rather than relying on the achievement of quality through inspection, and finding things out too late.”

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Doing Six Sigma Methodology Through the Employee’s View

In a Six Sigma deployment, both the leaders and the employees learn from each other. By listening to the employees tell what they expected of Six Sigma, what actually occurred, and why things worked or did not work, project leaders learn valuable lessons that can be applied immediately or help in future deployments.

This is what happened in three companies. Each shows the advantage of getting the employees voice during a Six Sigma deployment.

Federated Department Stores, one of the leading department store retailers in the United States with annual sales of more than $15.6 billion, improved its cycle time. Under the names Macy’s and Bloomingdale’s, the company operates more than 450 stores in 34 states, Guam and Puerto Rico. Beth Fitzgerald is the manager in the logistics and operations group and therefore ensures that vendor merchandise is “there and paid for” in Federated’s various warehouses. The old system they used involved multiple vendors and multiple distribution centers. Looking at the process with the Six Sigma eye allowed the team to see what the root causes of certain delays, and then address them. It enables the organization to develop a systems team person. Fitzgerald’s advice to those about to embark on a Six Sigma initiative? “Stay open minded, as vulnerable as you feel. You won’t be sorry!”

Vanguard, the second-largest mutual fund firm and a leading provider of company-sponsored retirement plan services in the U.S. is able to better handle client account queries and questions over the phone. Vanguard manages more than $850 billion in U.S. mutual fund assets, including more than $245 billion in employer-sponsored retirement plans. You can just imagine the number of customer calls and queries are everybody. Obviously, handling them quickly, efficiently, and knowledgeably is very crucial to its operations. Its own Six Sigma program, Vanguard Unmatchable Excellence (VUE), allows the company to analyze calls, trace them, and find ways for problem resolution quickly.

GAI-Tronics, manufacturer of printed circuit boards for industrial communications, reduced inventory levels, cycle time and eliminated waste.The need to focus on quality improvement led the company to turn to Kaizen to introduce minor improvements. With the Kaizen events came the usual cycle of change: Kaizen plus Lean began to show decreases in defects, and noticeable increases in efficiency.

The Employee Perspective of the Six Sigma Methodology

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