Six Sigma’s Response Plan

After going through the DMAIC cycle, your established, reliable continuous measures and controls should develop into a good documentation scheme. Aside from selecting a balanced mix of measures, you must also develop a plan that you can turn to in case problems arise in the process. This is called the Response Plan.

The rationale behind a developing a Response plan is that sooner or later something will go wrong in any process, that’s why you need to prepare for this by building process response plans. A process Response Plan includes three major elements:

First, install Action Alarms. Put “trigger points” where some action needs to be taken to correct a problem or concern.

Second, create Short-term or Emergency Fixes. Prepae some guidelines on quick fixes so they can be more effective and less likely to cause “collateral damage.”

Third, adopt Continuous Improvement Plans. Establish a process for identifying and prioritizing ongoing or serious problems so you can act on them, feed them into the DMAIC process and other higher-level actions.

In other words, it is not enough to achieve Six Sigma in your processes. Your processes must be checked and improved continuously. Make Six Sigma your organizatin’s only way of doing business.

The Six Sigma Way: How GE, Motorola, and Other Top Companies are Honing Their Performance

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Adopting Six Sigma in the US Army

During the annual meeting of the of the Association of the United States Army, Secretary of the Army Francis J. Harvey talked about improving the Army to be able to face the challenges of the 21st century.

He shared that already the Army is responding to the “Call of Duty,” the theme of this year’s meeting. The terrorist attacks of Sept. 11, 2001 had changed dramatically the security environment. As a result, higher officials in the Army saw the need to make more changes through the years.

Among the changes are the Army Modular Force Initiative for amry force transformation and the the Future Combat Systems for ground forces. Aside from this, Harvey also planned on improving the Army’s way of doing business.

Earlier this year, the Army started a comprehensive Army-wide business transformation. It centered on the re-engineering of business processes. This process, called Lean/Six Sigma, will work out and improve cycle time, leading to more efficient production. Ultimately, this initiative will make available resources that can be used to better support the warfighting side of the Army.

Harvey further said, “With unsurpassed professionalism, courage and commitment, our Soldiers have endured great hardship, lost many friends and comrades along the way, and have made lasting contributions to the peace, freedom and security. I am honored to serve as the Secretary of the Army and I look forward to 2006 to continue the tremendous progress we have made in building the Army of the future through transformation and modernization.”

SecArmy Opens AUSA with Thoughts on Future

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Six Sigma Robust Designs

I’ve featured designs for Six Sigma or DFSS in my previous posts and I will feature it again here today. This is one crucial part in the deployment. It could make or break your Six Sigma initiatives if done poorly.

According to the article Six Sigma and Robust Designs, a good robust design starts with these characteristics: the smaller-the-better, the nominal-the-best, and the larger-the-better. It is important, too, that you are able to measure each of these on a continuous scale.

A smaller-the-better response is a measured characteristic with an ideal value of zero. As the value for this type of response decreases, quality improves.
A nominal-the-best response is a measured characteristic with a specific target (nominal) value that is considered ideal.
A larger-the-better response is a measured characteristic with an ideal value of infinity. As the value for this type of response increases, quality improves

.

These robust designs however depend heavily on formulating the Voice-of-Customers (VOCs) and Critical-to-Quality (CTQ) characteristics through experiments. The following steps provide a thorough, organized framework for planning, managing, conducting, and analyzing robust design experiments.

1. Identify project and organize team
2. Develop VOC models
3. Formulate the CTQs based on VOCs
4. Control the energy transformation for each CTQ
5. Determine control and noise factors for each CTQ
6. Establish the control factor matrix

These steps need not necessarily come in this order. They can be followed in an iterative way. The team should record every step they choose to do and should be ready to redo previous steps if need be.

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The Six Sigma Design/Redesign

In Kenneth Crow’s article titled, Design for Six Sigma, he defines it as “an element of Six Sigma focused on developing products that meet customer needs with very low defect levels.”

It is therefore important to establish a Six Sigma Design or Redesign. Pande, Neuman, and Cavanagh’s book The Six Sigma Way has a good discussion on developing a Six Sigma Design/Redesign.

Below are the benefits of a Six Sigma Design.

First, you will be able to put value on your customer, resulting in significant improvements in productivity, speed, and efficiency.

Second, your redesign efforts will enable you to focus on specific segments of a business or on critical opportunities. This brings about smaller, more manageable projects.

Third, you will obtain a broader application of design/redesign projects, achieving better range of ideas and skills. Also, involving a broader range of people in your initiatives will help your business not only fix problems but also design efficient processes.

Fourth, you will be able to apply technology to your processes wisely. The Internet, database technology, customer relationship management (CRM) systems, and the increasing processing power of computers enable companies better manage their inventories, respond faster, customize products and services, among others.

Getting started with process design/redesign is not however that easy. You may need to observe in your organization the following conditions:

1. There is a major need, threat, or opportunity. You will know this when you observe changes in customer requirements, and in rules and regulations; you are facing a greater demand for flexibility; new technologies, among others.

2. Your organization is willing and ready to take on the risk involved. The signs are that you accept longer lead-time, available resources and talent, leadership support, and established risk support.

If these conditions are present, your organization may now be ready to design/redesign your charter. The basic purpose of the Project Charter in a process redesign are the same as in an improvement project, which is to set direction and define project parameters. For the Design Charter, however, the purpose should be slightly different.

The Six Sigma Way: How GE, Motorola, and Other Top Companies Are Honing their Performance

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Improving Business with Six Sigma

Have you ever tried calling a company number and have waited forever for someone to get your call? Have you waited in line for a transaction to be finished like after an eternity?

Time is gold in business and waiting time is a waste of time. If you experiences delays or long lines then you have sampled a defective service or product.

Defect of this kind is what Six Sigma aims to reduce, if not eradicate altogether.

Dr. Anirban Basu, heads “Quality+” based in Bangalore and offers consultancy on software quality standards and software engineering, said, “application of Six Sigma methodology improves efficiency and effectiveness of processes resulting in customer satisfaction.

Basu has experienced this first hand when his software development company painstakingly took the path to Six Sigma. In 2004, the company had schedule slippages in the 12 large projects. The slip varied from 5 to 60 percent, which proved costly for the company. Management therefore declared that any missed schedules beyond 20 percent was unacceptable. Project teams were instructed to improve the situation and work on it within budget.

The company then went on to hire a consultant who trained them on statistical techniques and Six Sigma methodology. The software company hoped to improve the performance of the relevant processes, meet client expectations, and eventually work on expanding its operations.

True enough, Six Sigma methodology resulted in reduction of rework, avoidance of schedule slippages and cost overruns. The team realized that when rightly implemented the methodology will prevent losses and generate substantial revenue. To start the ball rolling, the team deployed then the DMAIC.

Business Improvement With Six Sigma

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Key Metric for Six Sigma Initiatives: Customer Value

Most Six Sigma initiatives are geared toward customer satisfaction. If these projects succeed in pleasing customers then they are considered successful.

Lately however, some business organizations have realized that satisfying customers may not be the best metric of business performance or even success. They’ve found out that satisfaction has little to do with the conventional metrics of business performance , such as revenues, market share or profitability. The following are some of the reasons why they believe so:

* Satisfaction is an emotional response, not the sort of cognitive or evaluative response used by companies in most purchase situations.

* Satisfaction ignores the interaction among quality, image and price. This is essential for
understanding the nature of the buying dynamic.

* Satisfaction has little, if any, linkage to an organization’s performance.

More companies are now beginning to focus on the more actionable metric of customer value. To measure customer value, you need to establish a cognitive calculation of tradeoffs, which include thinking through and evaluating the benefits received from a product or service as against its alternative. Value is measured whether the purchase or interaction was worth the tradeoff from the customer’s perspective or not.

Because of this, customer value is considered a better fit with Six Sigma than customer satisfaction metrics for two reasons.

1. First, the metrics of customer value explicitly recognize the importance of quality to success and lead to identification of specific critical-to-quality (CTQ) characteristics.

2. Second, perceptions of price competitiveness are highly related to quality, and high levels of quality (low defects) are inversely related to cost. In other words, the more a company improves quality by reducing defects, the lower the cost of producing its product, and the more it will be able to charge for that quality, thereby increasing profit margins.

Value Matters as a Key Metric for Six Sigma Initiatives

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Not Succeeding in Six Sigma? Innovate!

I have talked about Six Sigma tools and deployment but have not dealt on some timeframe for such initiatives. Since Six Sigma requires about 20,000 times improvement to go from 3 Sigma; or 66,807 defects per million opportunities (DPMO) to 6 Sigma; or 3.4 DPMO, it needs a breakthrough performance. We therefore need to perform such improvement at a fast pace; otherwise it would take several lifetimes to achieve a Six Sigma level performance.

According to the article Innovation: the Key To a Successful Project, a breakthrough performance requires innovation.

The article went on to cite Clayton M. Christensen and Michael R. Raynor’s The Innovator’s Solution, which emphasized sustained innovation to achieve business growth. The main innovation tools include TRIZ, an acronym for the Russian theory of innovation, or brainstorming package.

Practitioners must incorporate innovation to DMAIC. To develop innovative thinking, they must challenge the obvious. To solve a problem, they need to think of different ways problems are created. Some common steps to innovative thinking include:

1. Visualizing the problem in different ways, from different angles.
2. Representing your thoughts in visuals.
3. Thinking fast and frequently.
4. Trying different combinations.
5. Investigating the opposite side.
6. Thinking beyond the known.
7. Looking for disconnects.
8. Looking for ignorance.
9. Thinking in teams and building on others’ ideas.

You must also remember that innovation often starts out with being able to generate new ideas. The article further suggests that you learn to think about the ideas behind successful products or processes. Learn from others’ success stories by understanding the premise behind the success story. The following are activities to generate new ideas:

a. Look for ideas continually.
b. Never criticize; wonder.
c. Imagine uncharted territories.
d. Roam around the world in your mind.
e. Visualize situations.
f. Handle multiple variables.
g. Prioritize a combination of variables.

All these cannot be achieved without training and communicating expectations and objectives among others.

Innovation: the Key To a Successful Project

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Telecommunicating with Six Sigma

Six Sigma started with manufacturing and showed success in that industry first. When other industries such as the financial industry adopted the strategy, many others began to understand the core benefit of Six Sigma, that is to improve customer service processes to retain wireless customers, analyze customer problem resolution.

The next Six Sigma revolution is expected to happen in telecommunications. Many reasons have been cited for this expectation.

According to reports, total spending on equipment fell by about 15% in 2001 and fell another 20% in 2002. Long-haul optical networks now operate at below half of their capacity. Until sales of core wireline equipment pick up, manufacturers in the US and Europe also face the challenge of developing new products to deliver data and voice traffic from long distance networks to broadband customers in urban areas. The mobile communications segment is also changing as exhaustively hyped mobile data services and the tide of third generation wireless technology arrive.

In the late 1990s, the slogan was: “Build it and they will come.” Following passage of the telecommunications Act of 1996, the telecom sector rode the high-tech current of an economic expansion that, in retrospect, appears to have been built on blind faith. In the five years that followed passage of the 1996 legislation, the telecom industry received $1.3 trillion from investors, and has since lost more than $1 trillion in market value.

Survival therefore for telecommunications equipment and services will largely depend on operational focus, financial discipline, and opportunistic growth. Six Sigma can help with all three.

The enormous potential of Six Sigma across the numerous functions and processes on which telecommunications companies can be viewed through the following:

1. Increasing sales force availability for customers in emerging markets
2. Reducing the sales to cash interval
3. Reducing business market collections

A successful Six Sigma in services businesses needs a relentless focus on customers and on meeting their needs as efficiently as possible. The telecommunication industry can rely on Six Sigma tools to address these issues.

Six Sigma Sharpens Services in Telecommunications

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Six Sigma’s Process Management

The Six Sigma system acts as process management or movement, which provides ways for creating, monitoring, and improving processes in an organization. A result of this process management is system alignment, where you begin to determine the Xs and the Ys in your process. The Xs are indicators of change or performance, while the Ys are the measures of the performance of the business.

The formula is Y=f(X) or Y is a function of X. This means that changes or variables in the inputs or processes of the system determine the final product.

The Y can mean a strategic goal, a customer requirement, or profits. While the X can refer to essential actions to achieve strategic goals, the quality of work done, or the key influences on customer satisfaction.

How then do you measure your Xs and Ys?

Initially, you need to understand the concept of Sigma (s). Sigma is a symbol used in statistics to represent “standard deviation” of a population. A standard deviation is an indicator or the amount of “variation” or inconsistency in any group of items or processes. Variations therefore help Management assess the real performance of the business and its processes.

In Six Sigma, these variations are also called defects. A defect therefore “is any instance or event in which the product or process fails to meet a customer requirement.” In other words, Six Sigma reduces or narrows variation, or standard deviation, to answer the demand of customer or satisfy him.

The following are some issues you need to address to satisfy your customers:

1. Establish the so-called “critical to quality characteristics,” or CTQs. This is also known as “key results” or “Ys of the process” or specification limits.

2. Design a metric to count the defects.

3. Calculate the “yield” or percentage of items without defects.

4. Determine the Sigma level using a conversion table. Sigma levels of performance are often expressed in “Defects per Million Opportunities” or DPMO.

Aside from these issues, you keep in mind the following strategies:

1.Process improvement is a strategy of developing focused solutions to eliminate the root causes of the problems of a business performance. It is also referred to as continuous improvement, incremental improvement, or Kaizen (Japanese term for continuous improvement).

2. Process design/redesign aims to build a better business. Redesigning involves replacing a process, or a piece of a process, with a new one. Six Sigma Design uses Six Sigma principles to create new goods and services patterned after customer needs.

3. Process management creating infrastructure for Six Sigma Leadership that facilitates processes. These processes are the flow of work that provides value to customers and shareholders.

As a final tip, to achieve maximum process improvement, you must create a Six Sigma improvement model. The model is a five-phase improvement cycle: Define-Measure-Analyze-Improve-Control (DMAIC). This model is grounded in the original PDCA cycle designed by W. Edwards Deming. The Plan-Do-Check-Act describes the basic logic of data-based process improvement.

The Six Sigma Way: How GE, Motorola, and Other Top Companies are Honing Their Performance – Chapter 2

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Six Sigma for Large Companies

You know by now that Six Sigma is not only for manufacturing companies nor is it for start-up companies. Six Sigma actually started with established companies that were wanting to improve their performance.

This entry will show you how large companies prepare for their Six Sigma initiatives.

First consideration is to establish a complete and well-connected infrastructure, which should include the following: Core Team, Master Black Belt, Black Belt, Green Belt, Yellow Belt, MAIC discipline, and an incentive system.

*The Core Team defines and reviews Six Sigma projects progress, and acts as the political leader, removing the barriers for the project teams.

*The Master Black Belt acts as a technical coach and provides the knowledge of quality tools for the project team. There is typically one Master Black Belt for every 1,000 employees.

*The Black Belt controls the project. There are typically 10 to 20 Black Belts per 1,000 employees.

*The Green Belt supports Black Belt. There are typically 3 to 5 Green Belts on the Project Team with the Black Belt. There are typically 300 Green Belts per 1,000 employees.

*Yellow Belts are the balance of your population. They provide information and support to the Six Sigma project teams, and are a source for future Green Belts.

*The MAIC discipline sets up a clear protocol to expedite internal communication.

*The incentive system facilitates Six Sigma projects to generate results.

After establishing a solid infrastructure, the company is now ready to deploy Six Sigma projects. To ensure a successful deployment, the company should develop a master deployment plan as a road map throughout the Six Sigma implementation cycle. DMAIC here becomes handy again.

Six Sigma Infrastructure for Large Companies

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