The Six Sigma Journey
K. Semone Wagner
VP, Franchise Performance GroupMarch 4, 2005
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Today’s Discussion:
Obstacles & Challenges: The Usual Suspects
Getting Started
Year 1
To Institutionalization
Implementing Six Sigma
Operational Excellence
Overcoming Challenges in Getting Started
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1. Lack of Executive Leadership Sponsorship & Support
2. Proper Identification of Black Belt candidates
3. Ineffective Training at Black Belt ranks
4. Training without Active DMAIC Projects
5. BB Dedication not 100%
6. Misuse of Tools
7. Ability to Effectively gain the Voice of the Customer
Obstacles & Challenges: The Usual Suspects
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1. Lack of Executive Leadership Sponsorship & Support Limited general knowledge of the subject No Champion Training No Top- Down Approach
Overcoming Challenges
Gain an understanding as to their knowledge of Six Sigma…and their views Develop Communication Package for face to face sessions Develop Elevator Speech & how we use the philosophies of Six Sigma…how it
helps to prevent the ills of the past…use examples Let them know why and how it adds value…VOC, Data Collection, Metrics, etc. Let them know your expectations of them and how they can help Establish regular communication sessions Attend their staff meetings for a wider audience
Demystify Six Sigma…go ahead and give them the secret decoder ring!
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2. Proper Identification of Black Belt candidates…common mistakes “we have all these project managers…we can simply give them some training and
they’ll be our Black Belts” “John is a great business analyst, he will be our Black Belt” “Susie crunches numbers well…she’ll be a great Black Belt”
Overcoming Challenges
Not everyone is cut out to be a Black Belt…focus on process & business acumen first, then project management acumen
Leadership skills are key Depending upon your organization, the statistical component can increase or
decrease in importance If your organization is not taking a holistic deep dive into Six Sigma, it’s vitally
important to have the right people staffed in Black Belt positions …people who can significantly add value, reengineer end-to-end state processes, and who can lead and build a team to deliver results
At the end of the day, it’s all about results, results, results
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3. Ineffective Training at Black Belt ranks Reading Best Selling books = training Training without tools….no Minitab or stat package in place, no Toolkit
developed “we’ll only train 1 person at first…that way we can test this Six Sigma thing”
Overcoming Challenges
Reading books are a good source for information, but cannot replace class room education and formal training programs
Formal training allows Black Belts to establish an external network for help…since the organization is not fully Six Sigma yet, they will have few associates to draw upon for help, etc.
Train more than 1 person at a time, allow them the opportunity to have a BB “buddy” at work
Send your best
Make an investment…get the proper training required!
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Overcoming Challenges
4. Training without Active DMAIC Projects Huge hindrance, especially with statistical tools Classic & costly mistake Lack of good metrics adds to this dilemma
Prior to formal training, identify a true DMAIC project, project sponsor and overeducate the sponsor…for buy-in, support and understanding
Provide the trainee with a tool package specific to your organization and the way in which you want to communicate to clients…all tools represent a communication opportunity
Give the candidate support where needed (e.g. some Black Belts need help in team building, others need help with the Statistical component…understanding when and how to use tools is the biggest challenge)
If they do not have a “real” project to accompany them to training, DO NOT send them
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5. BB Dedication not 100%
Overcoming Challenges
...why would this happen? Side job Do this in addition to your regular, full-time job Right candidate, but, who will do their job if they are
dedicated? Work on “Nike” projects
Invest in the right training and talent, and, demand a return for your investment
You will not meet your goals if this happens BBs will not get through projects timely, thus results will be impacted Skill Set atrophy
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Overcoming Challenges
6. Misuse of Tools Gives wrong results and can potentially lead to bad decisions Quick way to kill credibility of the program
Develop your own tool kit and train staff in their use Important for BB’s to understand when and how to use tools…avoid paralysis
by statistical analysis Use tools that will be most valuable and construct in a way that’s easy for
clients to understand…less is more To the extent possible, brand your tools and your function, to help the
organization understand th Use MBBs to help you with the proper application of tools…mentor BBs
Boil it down to the key tools, and train, train, train
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Overcoming Challenges
7. Value & Importance of the Voice of the Customer Too expensive! “The business can speak for the customer, they know all the customer’s
issues” “If we talk to the customer, we’ll be letting them know we aren’t performing
well”
Make this easy…too often project teams will try to survey the world…don’t scare off the business sponsor
Customer Surveys: Get the right data, succinctly Make this easy, but do it and do it well Get to the truth Once VOC is gathered, communicate, communicate, communicate To the degree you can formalize this, the better
The VOC is the most important aspect of any DMAIC initiative
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Demystifying Six Sigma for Everyone
Speak their language…put in a framework that they can understand
Avoid Acronyms…or explain them
Avoid showing off…using terms that are not known or understood by all only seeks to build that resistance wall…people will naturally resist what they don’t understand
Sigma Levels – Just a rating scale…3 Stars vs. 4 Stars; Sri Lankan Hilton rating scale
Use examples that everyone can relate to: Bell Curve of Median house sales
Seek to make things simpler versus complex; other methodologies have failed at bringing the client into their world due to the complexities
Make the internal client part of the process
Operational Excellence
Getting Started
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Getting Started: Setting Expectations
Establish a Charter which details in specifics, your: Opportunity Statement Goals Scope Key Metrics Any assumptions that need to be known by
all
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Getting Started: Setting Expectations
Tell the Organization what you will EXPECT from the effort: Financially, for example:
• Return on Investment by End of Year 1
• ROI after 2nd Year
• By Value Lever?
• Departmental Goals
Organizationally….for example…• Enable a Process-Oriented Business Model and Culture
• Align the Organizational Efforts with Strategies
• Strengthen the Leadership Systems
• Create a Performance Measurement Dashboard that allows the organization to manage by fact
• Evolve the culture to have a more fact-based & process focus
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Getting Started: Benchmarking
Benchmarking Sources:
Internal Groups: Are there groups/business segments within your company that can help you?
External Groups: Talk to External groups What worked, what did not Companies that are new at this Companies that are mature at this
Consultancies: Can offer a wide array of services Real life scenarios and insights Generally unbiased in opinion
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Getting Started: Benchmarking Lessons Learned
Align Everything to Company
Mission, Objectives; Stay Focused Umbrella Theme vs. Six Sigma
• Six Sigma under the Process Management Umbrella
• Brand Process Management Model (Ex. “Just Right Service”, UHC “Operational Excellence”)
Tailored Course Development• Just-In-Time Training • Projects aligned with Resource
receiving training Use Only the top Performers as BBs,
which should be a feeder to Leadership Development Programs
Need Consistency in Champion Involvement; use various methods of Engagement
Need BB Dedication to Project Work –
100% dedication Use an External Consultant for
Program Installation, up to 1 – 2 yrs, then use skilled BBs to support training efforts
Ensure Process Management Model is pervasive in organization
• Establish Scorecards (Process/Functional)
• Agree Upon Most Important Business Objectives, Business Processes, Measures and Issues
Recognize limitations – not appropriate for all business problems
Need Visible Executive Sponsorship
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Getting Started: Sample Deployment Team
Training and DevelopmentOn-Line Courses?Individual Development PlnasLeadership Programs
Human CapitalRew ard & RecognitionBB positions (permanent, temp...career pathingJob Descriptions
Project TrackingWeb-Site Development
IT Solutions
CommunicationsNew slettersCampaiigns
FinanceBenefits Tracking
Deployment LeadershipProgram ManagementUpdate Calls to Champions, BBs, GBsOverall Coordination
Executive SponsorGeneral "Voice"
Operational Excellence
The First Year
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4th Qtr 20043rd Qtr 20042nd Qtr 20041st Qtr 2004
• Program Design
• Executive Approval
• Consultancy Selection
• Deployment Team Initiated
• Program Components
Role Definition
Curriculum Customization (CH, BB, GB)
Tool Development
Communication Plan
Web-Site Launched
Tracking Tool Design
• Champion Training (W1 & W2)
• Initial Project Mining
• BB & GB Candidate Selection efforts
• BB, GB Waves 1 & 2 begins
• Project Tracking Tool Launched
• Curriculum Developed
Line Manager
All Employee On-Line CBT Modules
• Financial Tracking/Web Site Launch
• Established Tollgate Process
• Monthly Champion update calls
• BB, GB Waves 1 & 2 conclude
• Line Manager Training (9, 1-day Sessions)
• On-Line CBT Modules Launched, Aug
• Champion Training Waves 3 & 4
• BB, GB Wave 3 begins
• Project Tracking Tool Report Package Refined
• Project Mining Continues for Pipeline Development
• MBB Role (Established process to provide consistent mentoring to BB, GB, & CH)
• Champion Monthly Status Reviews (Tollgate & Financial Status)
• BB, GB Wave 3 concludes
• GB Wave 4 concludes
• GB Wave 5 begins
• On-Line CBT Modules, continues
• Program Refinement Efforts:
Champions, BB results linked to Human Capital process
Establish goals for 2005
Evaluate program for additional curriculum (DMADV, Lean, etc.)
Establish Executive Metrics Scorecards
Project Mining Approach & Commitment
Project Tracking Report Package refined
Six Sigma Roundtable
Key Events Timeline
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Current State: Challenges & Actions Underway
Champion engagement is mixed and inconsistent Black Belt dedication to project work significantly lower
than expected Project progress is impacted, resulting in longer timelines Numerous projects require establishment of Baseline
data Hard savings below expectations & current estimates at
risk Lack of Defect Identification and Project Mining Activity Few Projects in Pipeline Financial/Benefit harvesting not natural for BBs…limited
Financial Support Resources to assist in Benefit Tracking mentoring, sign-off and training
Monthly reporting of key Operational Excellence metrics to drive appropriate actions
Metrics by Champion to highlight best practices
Champions to participate in project reviews during BB training
Positioning organization for better defect identification and project mining through targeted Workshop development
Project tracking tool under review for: User versatility Report package enhancement
Challenges Actions Underway
Culture Adoption
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Getting There: Moving From Launch to Benefits Realization
Define targets for 2005 by Business Area Link Program to Performance Management
System Set specific targets by functional area &
Champion… let’s be clear on what we expect Free up BBs… BB dedication needs to increase
substantially to realize desired benefits BBs to have greater access to Champions Finance Expertise to assist in establishment of
Scorecards Create Advisory Board of Business Champions
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A) Project-Based Improvement
R E S U L T S
B) Infrastructure Alignment
C) Governance for Transformation
R.I.P.?
TIME
Strategic Scorecard (especially predictive, preventive indicators)Integrated Management SystemCultural TransformationLeader Development/SuccessionEducating the Board of Directors
Marketing and DesignHuman Capital PracticesFinanceInformation System“Best Practice” exchangeSupply Chain
Project SavingsBlack Belts, Green Belts
Six Sigma – Path to Transformation
SOURCE: Juran Center for Leadership in Quality
R.I.P.?
Operational Excellence
To Institutionalization
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Expectations are Tightening
Business ProcessChange Rate
Time
Expectation of Improvement
What barely worked yesterday, will be
inefficient today, and will be totally unsatisfactory
tomorrow
What barely worked yesterday, will be
inefficient today, and will be totally unsatisfactory
tomorrow
> 15%/year
< 5%/year
SM
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The Challenge
We need to adopt and maintain a Philosophy of learning and action based on fundamental principles:
1. All work occurs in a system of interconnected processes.
2. Variation exists in all processes
3. Understanding and reducing variation are the keys to success.
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The Cost of Poor Quality (COPQ) “Iceberg”
Lost Opportunity
“Hidden Factory”
Average COPQ approximately 15% of Sales
Traditional Quality Cost
Additional Quality Cost
InspectionScrap
ReworkWarranty
ConcessionsDisposition
More SetupsExtra Machines
Expediting CostsLost Sales
Late DeliveryFloor Space
Lost Customer LoyaltyExcess InventoryLong Cycle Tines
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Motivation for change?
To accelerate our rate of quality and productivity improvement faster than our competitors
To deal with a world of rising health care costs To compete successfully with the best companies in the
world To establish standard language and approaches across
functions and across businesses To develop our next generation of leaders
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“When your business is healthy, it is difficult to behave as if you are in a crisis. That is why one of the toughest parts of managing… is to recognize the need for change and make it while you still have a chance.”
Bill Gates
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OpX: Implementation Focus
• DMAIC Skills• Sharing the Message• Establishing Functional Metrics• Building Project Pipeline• Focus on Cost Savings; Delivering on Commitments
• Mastering DMAIC Skills; Introduce DMADV• Standardizing the Message• Establishing Organizational & Strategic Metrics• Project Alignment to Strategic Objectives and across Segments• Delivering on Commitments
• Mastering DMAIC & DMADV• The Way We Do Business• Measure end-to-end Customer Processes• Self-Sufficient in Training with Internal Talent• Delivering on Commitments• Preeminent Healthcare Provider
ExecuteExecute InstitutionalizeInstitutionalizeLaunchLaunch
Approach vs. Program