Posted by: meikah | 26 September 2006 | 9:55 pm
Among the many advantages of Six Sigma deployment is its positive effect on the bottomline. Companies have claimed that their going Six Sigma has given them significant savings. Well, here’s some good news. There is now a software that can measuer financial benefits of Six Sigma deployments.
ARC Advisory reports that Hagen & Co., a provider of software for manufacturing and process improvement, has introduced True Opportunity software. A dollar-based manufacturing performance reporting system, the software will be used for Overall Equipment Effectiveness (OEE), Six Sigma, and Lean Manufacturing.
By including financial measures, True Opportunity includes calculation of the true profit potential of an organization’s manufacturing operations. Also, the solution breaks down this total extra profit opportunity by reason, allowing an organization to focus on the problems or opportunities that will realize the greatest results. True Opportunity software prioritizes each opportunity by its financial value, enabling performance improvement teams to focus on projects that will deliver the greatest profit.
Ralph Rio of ARC Advisory Group has this to say about the product:
“Putting metrics in financial terms rather than just engineering scales provides more meaningful prioritization of issues. Adoption of technology to enhance continuous improvement programs allows manufacturers to take their business to a higher level of financial performance in both their P&L and balance sheets.”
Filed under: Finance, Software/Technology
Posted by: meikah | 25 September 2006 | 11:27 pm
Customers of GE get more than the products or services they get. This is especially true with GE’s customers in China. The relationship is not the usual “we make, you buy” transaction.
GE , through its GE Learning Center, also trains their customers to succeed in their respective business. I’m guessing, only a few companies do this.
Liu Deyin, Simtone’s General Manager, for example, says that his company turns to GE Plastics not only to benefit from GE’s high-quality products, but more importantly, to be taught how to grow the business and manage his people.
Moreover, almost all the major airlines in the Greater China area are working with the GE Transportation sales team and the GE China Learning Center. Almost 300 Hainan Airlines employees have become Six Sigma Green Belts, going on to share GE best practices with their top 500 managers.
Now it can be told that with GE you establish a relationship that can best be described as “we teach, you prosper.”
Filed under: Manufacturing, Six Sigma Organizations
Posted by: meikah | 24 September 2006 | 7:42 pm
It’s interesting to know that Serigraph, Inc., the global provider of innovative printed decorating solutions, is consciously making an effort to provide its employees the best healthcare benefit there is, and that which is most cost-efficient for the company. Do you know of any other company that does that?
According to John Torinus, CEO at Serigraph, they are driven by the basic principle that is behavior change—a four-way behavior change: how employees use medical treatments, how they buy them, how they live their lives and how those with chronic conditions follow their regiments.
Because employees are made to understand the need and importance of managing their healthcare benefits, they in a way, help the company save, and at the same time, get the most benefit.
To better manage and provide such benefit to their employees, Serigraph will adopt Lean and Six Sigma, and have regular quality audits:
We will, for example, identify our diabetics through annual health risk assessments and then use problem-solving methods and incentives to get them all under control. We will need to link with our two major doctor groups to do the metrics for control, namely A1c readings, lipid levels and cholesterol. Our mutual goal will be 100% of our diabetics under control. That should head off major health catastrophes that are devastating personally and financially. Then it will be on to asthma, hypertension and the dozen other chronic diseases that cause an estimated 60% to 70% of all medical costs. We are planning a monthly reward to the HRAs of co-workers who stay in control. Read more…
Filed under: Deployment, Lean Six Sigma
Posted by: meikah | 21 September 2006 | 8:05 pm
You will know if your quality system is working when you are able to deliver products or services within the specification limits consistently. An inefficient process will generate an unacceptably high number of defects and produce them with a level of variation that hinders the ability to predict process performance.
Defects Per Million and Cost of Poor Quality at Various Sigma Levels.
Sigma Level Defects per Million Cost of Poor Quality 2 308,537 Not Applicable 3 66,807 25%-40% of sales 4 6,210 15%-25% of sales 5 233 5%-15% of sales 6 3.4 < 1% of sales
You can see how costly and wasteful it is if you have an inefficient quality system. Apparently, Six Sigma can help improve your process through its methodology called DMAIC. Metric Stream shows how.
- Define the process to be improved by mapping the process flow in details
- Capture clearly the expectations of the process sponsor
- Define project boundaries the stop and start of the process
- Develop a data collection plan for the order-to-delivery process
- Collect data from many sources (systems and audits) to determine issues and core process metrics
- Identify gaps between the current order-to-delivery metrics and goals
- Perform root cause analysis
- Identify corrective actions (CAPA) using technology and discipline
- Prioritize opportunities to improve
- Develop and deploy implementation plan
- Institutionalize the improvements through the modification of processes and structures (staffing, training, incentives)
- Implement document change control to ensure process changes are followed
- Track and ensure closure of CAPA items
- Monitor corrective action effectiveness with real-time performance data and analysis
- Require the development, documentation and implementation of an ongoing monitoring plan
- Monitor order-to-delivery metrics and perform process audits to ensure improvements are here to stay.
Filed under: Deployment, Manufacturing
Posted by: meikah | 21 September 2006 | 12:17 am
Since our global society is dependent on gasoline, every price increase affects everything. In manufacturing, perhaps, it’s the automobile industry that’s affected the most. For one, people would rather commute than drive their own cars. Another, people would tend to delay buying more cars, even though the newest models are more fuel efficient.
Read more about it on Global Business Watch.
Filed under: Events/Announcements, Manufacturing
Posted by: meikah | 19 September 2006 | 10:19 pm
We all know that English is the global language. You might be surprised that at Sanyo-Energy, the world’s largest manufacturer of rechargeable batteries, the language of their organization is Six Sigma.
Because the company has offices in different parts of the world, dessiminating information has been a problem. But as they went into Six Sigma sometime in 2002, the language problem had been solved.
“…with a multinational array of manufacturing plants and offices, Sanyo-Energy’s in-country production environment is in local language. In Europe these are Hungarian, Czech and German. After just a few months of training by Six Sigma Qualtec, Sanyo- Energy black belts were communicating much more easily across all four languages with the commonly understood ‘universal language’ of six sigma. Even during training these black belts set up internal benchmarking between plants in different language environments without any trouble.” Read more…
More than anything else, I believe what the experience of Sanyo-Energy is telling us is that language is immaterial. For as long as your whole organization is looking at the same direction and has a one heart in the project you’re undertaking, then everyone will understand easily what needs to be done. Sanyo-Energy is a sure proof of that.
Filed under: Deployment, Manufacturing, Six Sigma Organizations, Training
Posted by: meikah | 18 September 2006 | 10:36 pm
Outsourcing is the name of the game these days. As companies battle for increased bottomline and less cost, many companies are seeing the value of outsourcing and operating only with some key workforce.
HRO Today Magazine shared the dilemma faced by people in Human Resource, especially when human resource is outsourced (HRO). The new term for this is recruitment process outsourcing (RPO). The issue was about what metrics to use, how to handle gargantuan data that go with staffing or recruiting, and how much will each recruitment cost. With the onset of RPO, many consultants are vying for those companies who decide to oursource their staffing needs. The slogan is always like, “reduce your organization’s cost-per-hire” and eventually optimize your metrics. Read more…
After all the discussion about cost-per-hire and metrics madness, I like how the article ended:
In the era of HRO, if you are using an outside multi-process BPO player or an RPO firm, you should insist they approach the staffing process with the same strategic perspective, level of care, and commitment to quality you’d want internally. Make sure they have the tools to provide a quality-of-process and a quality-of-hire. Also, measure the overall staffing costs and the cost to maintain organizational headcount (SOPQ) and judge the provider on that metric. Remember, cost-per-hire does not tell you anything, and the benchmarks are flawed at best. Perhaps you should hang a sign in the staffing department that reads “It’s about the Quality, Stupid.”
I agree, quality of hires should not be compromised for the sake of cutting down on cost and increasing bottomline. I’m thinking that Six Sigma may just play a major role in here. If you also think so, read my other posts on Six Sigma, Human Resource.
*Photo credit: MorgueFile.com
Filed under: Human Resource, Outsourcing
Posted by: meikah | 17 September 2006 | 10:20 pm
We all know that Six Sigma has a life-changing effect on organizations that decide to adopt it. Because Six Sigma requires a huge change in operations and overall culture, some organizations cannot even take off.
Called the Six Sigma Maturity Model, it outlines five levels along various axes and describes the evolution of the organization along these axes as it progresses through the levels:
- Launch – This is the starting point – wherein an initial few visionaries in the organization launch Six Sigma, training is initiated and projects are begun. A top-down kind of launch will be better.
- Early Success – The initial projects are yielding results and early successes are being achieved. This is a critical “show me” stage, where it is important for the early successes to be made visible so the rest of the organization can see the real impact from Six Sigma.
- Scale and Replication – The early success has led to other parts of the organization buying in to Six Sigma and a broader launch of projects is under way.
- Institutionalization – Throughout many parts of the company, projects are yielding broad-based financial impact. There is enough financial impact from projects in each organization that meaningful comparisons can be made between organizations on average project impact, average cycle time, total impact, etc.
- Culture Transformation – Six Sigma is part of the organizational DNA, financial impact is sustained and the Six Sigma culture is pervasive – even beyond the Six Sigma practitioners and beyond the company boundaries. The culture has become data-driven, process- and metrics-oriented and focused on financial impact.
There is value in this Maturity Model because it captures the basic, real issues that companies encounter. By being aware of these levels, organizations can somehow prepare for the eventualities, and will make the key players more ready to tackle the coming changes.
*Photo credit: MorgueFile.com
Filed under: Deployment, Team Dynamics
Posted by: meikah | 14 September 2006 | 8:37 pm
Companies searching for that one quality management strategy must have tried to differentiate one from the other. The common advice from books is to choose the one that best fits the puzzle, which is your organization, and if I may quote Tom Vander Well of QAQNA: “what is best for your customer; for the organization who builds satisfaction and retains its’ customers will be profitable and stand the test of time.”
Then today, I stumbled upon Robert Thomson’s blog Qualitas where he differentiated Six Sigma, Lean, and TOC. The post is well-written and offers valuable points that I’m sure will help all quality managers out there.
Just a preview:
Six sigma uses statistics to understand variation. Lean uses visuals like process mapping, flowcharting, and value stream mapping to understand the process flow. TOC is holistic: It addresses emotions, intuition, and the thinking process of the whole person… The Theory of Constraints (TOC) takes the concepts of Lean Thinking to another level of systems thinking. You will see a lot of similarity between TOC and Lean. Both are focused on reducing waste and increasing process flow. However, TOC goes beyond Lean with its focus on throughput. Read more…
*Photo credit: MorgueFile.com
Filed under: Benefits and Savings
Posted by: meikah | 13 September 2006 | 10:45 pm
If you were among those who were glued to their TV sets to watch the US Open Finals, then you’ve noticed the times Andy Roddick changed shirts. Yes, Lacoste shirts and cap had their more than 15 minutes of fame.
Read about it on Global Business Watch.