Process Improvement Six Sigma Institutionalization in Projects - PowerPoint - PowerPoint by dnk18345

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									Process Improvement & Six Sigma
Institutionalization in Projects/
Organisations / Companies

Srinivas Varanasi




                2/4/2010
Breaking News – ANZ Bank –                    The Australian 15th May -07



  •   ANZ will also use so-called Six Sigma management techniques to make the
      process more efficient and reduce multiple handling of documents.
  •   Business Objective The time taken to fully process a mortgage from application
      to settlement of funds in the customer's account will be cut from up to a week to
      two days.
  •   Apart from cost reduction, the new platform would enable better management of
      higher mortgage volumes, as well as deliver new products more quickly.
  •   The automation part of the project, involving greater use of imaging rather than
      paper processing to digitise the mortgage process, will absorb most of the $70
      million.
  •   Market Share ANZ's share of the mortgage market has been around 12 per cent
      over the past year.
  •   It lags Commonwealth Bank, which is streets ahead of its rivals, National Australia
      Bank, with 16.2 per cent, and Westpac.
  •   EBIT Margin erosion was worse for other banks in the March half-year, with
      Westpac, the only bank of the Big Four to grow its book in line with the banking
      system, surrendering 10 basis points
                ANZ managing director mortgages Michael Rowland

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Agenda




  •   Six Sigma Perceptions
  •   Introduction to Six Sigma
  •   Six Sigma Enabler (Projects & Other Initiatives)
  •   Six Sigma Methodologies -Satyam’s proprietary” iSTRIVE




      “TAKE CARE OF THE MEANS. THE END WILL TAKE CARE OF ITSELF.”



                                                                    3
What is Six Sigma ?                                        Ssigma
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  It is…
                                   A Statistical Measurement


     u Tells how good our process, products are.
     u Allows to draw comparisons to other similar or
       dissimilar products, services and processes.
     u Shows how far ahead or behind we are with respect
       to our competitors.



                                                                 4
What is Six Sigma ?                                     Ssigma
                                                         ix




    It is…
                                  A Business Strategy

      u Helps improving product quality and reducing
        costs.
      u Captures customer needs and translates them
        into system or product requirements.
      u Helps satisfying customer, both Internal and
        External.


                                                              5
What is Six Sigma ?                                     Ssigma
                                                         ix




    It is…
                                       A Philosophy


    u Shows how to work smarter and not only harder,
      stretching ourselves beyond capacity.
    u Teaches how to make fewer and fewer mistakes in
      everything we do at work and daily life.




                                                              6
INTRODUCTION TO SIX SIGMA
Take Care of the means. End will take care of itself.



                                                        7
Introduction to Six Sigma

                                                                        Breakthrough

  • Six Sigma is a rigorous and disciplined                             Improvements
                                                                       through Six Sigma
    methodology that uses data and                                        approach

    statistical analysis to measure and




                                              Process Maturity Level
    improve an organization’s business
    performance.
                                                                                           Continuous
                                                                                           Step by Step
                                                                                           improvement
  • Six Sigma aims not just for error free                                                                Time Scale

    service performance but elimination of
    variations in service quality.
                                                 Six Sigma is a rigorous approach which has
                                                 combined     the   techniques   of    project
                                                 management, team development & involvement,
  • Six Sigma provides measurable and            customer & process orientation, quantitative
                                                 techniques and management practices to
    sustainable breakthrough                     eliminate errors and control variation while
                                                 deploying and improving performance through
    improvements, as compared to                 processes.
    continual improvements offered by
    other quality initiatives



                                                                                                                  8
Meaning of 6 s     Six Sigma Need
                   Statistical Six Sigma
What it means to be at Six Sigma?
  3 s capability     93.32%
                                           Capability
  4 s capability     99.38%                   Vs.
                                          Process Yield

 6 s capability     99.99966%
                     Sigma Level Defective parts per million(ppm)
                                         ‘ZB’

 Sigma Level                  2                  308,537
      Vs.                      3                  66,807
 No. of Defects                 4                  6,210
                                 5                  233
                                                               9
                                  6                 3,4
Six Sigma what it can do for your organisation?       Ssigma
                                                       ix




        Six Sigma For Your Business / Organization




       Customer        Information        Robust
         Focus            Driven        Methodology

                                                        10
Six Sigma Enabler




                    11
Power of Six Sigma                                                                                   Ssigma
                                                                                                       ix




      The power of a Six Sigma approach is best described by proven
       Return-on-Investment (ROI) as shown below from Motorola,
                 AlliedSignal, and General Electric (GE)

                   Motorola ROI                                         AlliedSignal ROI

     • Reduced in-process defect levels by a factor                 • $1.4 Billion cost reduction.
                       of 200.                                       • 14% growth per quarter.
     • Reduced manufacturing costs by $1.4 billion.                 • 520% price/share growth.
      • Increased employee production on a dollar         • Reduced new product introduction time by
                    basis by 126%.                                          16%.
     • Increased stockholders share value fourfold.                  • 24% bill/cycle reduction.


                                   General Electric ROI

                           • Company wide savings of over $1 Billion.
                                  • Annual savings $6.6 Billion .


                                                                                                        12
Six Sigma Organization

                                 Executive Management


                                                Black Belt
 Organizational     Champions,
  Objectives          Steering
                    Committee
                                                              Green Belt

    Delight
    Factors
                                               Cross
                                                             Functional
                  Master Black Belt          Functional
                                                              Processes
                                             Processes
 Performance
 Management
                                                      Enterprise




                      Six Sigma Leadership Development & Communication

                                                                           13
Measurement of Benefits                           Ssigma
                                                   ix


Benefits must be:

      Direct Savings            Indirect/
                             Intangible Savings
      Team size reduction
      Overtime reduction       Cost of
      Cost reduction            avoidance
      Rework reduction         Productivity
      Warranty cost             gains
        reduction               Customer
       Direct cost               retention
        reduction               Increase in
      Cost investment           morale
      Recover previous
        costs



                                                    14
Barriers to Six Sigma Initiative                            Ssigma
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             Objectives of the initiatives not clear
             Value of the Implementation not recognized
             Perception that 6 Sigma is time consuming
             Lack of understanding 6 Sigma strategies
             Lack of understanding benefits of 6 Sigma
             Not confident during the early stages
             Lack of management support
             Expectation of instant results
             Lack of adequate coaching
             Unwillingness to invest unless results seen




                                                              15
Project Selection
                                       List of
      Sources            Lenses
                                  Potential Projects

        Strategy                   Identify gaps in
        5 years           VOB      performance to
                                  generate projects
                                         ……
                                         …...
   Business Objectives
       1 year plan        VOC     Indentify gaps in
                                   meeting critical
                                  requirements of
                                     customers

         Others
          VOE             VOP
          EHS                     Links the business
       Regulatory                  process and give
                                    perspective on
                                       projects



                                                       16
          – Other Initiatives CMM®, CMMI , PSP , TSP
Six Sigma Quality Models- vs Six Sigma                              SM     SM    SM,
                                                                                              S
                                                                                       IDEALSM , ix
                                                                                                sigma



  • Depending on current organizational, project or individual circumstances, Six Sigma
    could be an enabler to launch CMM®, CMMISM, PSPSM, or TSP.SM

  • Or, it could be a refinement toolkit/methodology within these initiatives.

  • Initiating-Diagnosing-Establishing-Acting-Leveraging (IDEALSM), show compatibility and
    consistency with Six Sigma. IDEALSM and Six Sigma share many common features, with
    IDEALSM being slightly more focused on change management and organizational issues
    and Six Sigma being more focused on tactical, operational, data-driven analysis and
    decision making.

  • Goal-Question-Metric (GQM) meshes well with the Define-Measure steps of Six Sigma.

        Six Sigma and improvement approaches such as CMM®,
        CMMISM, PSPSM/TSPSM are complementary and mutually
                             supportive.
                                                                                                  17
Six Sigma Methodologies




                          18
Six Sigma Methodologies

  DMAIC
                 DMAIC provides structure and rigor to problem solving



       D                M                 A                 I                  C
      Define          Measure         Analyze the       Improve             Control
   improvement         current         system to                         the system so
                     performance                      the system –
      goals                            determine         remove          problems don’t
                                        ways to       variation and           recur
                    Tools Used         improve it       non value
   Tools used       -MSA                              added criteria     Tools used
   -Pareto          -Box Plots       Tools Used                          -Poka Yoka
                    -Dot Plots                        Tools Used
   charts                            -Regression      -DoE               -Flagging
                    -Histograms      -Correlation     -ANOVA             -Control Charts
   -Bar Graphs
                                     -Hypothesis      -Surface
   -Pie Charts                       testing          Response
                                                      Testing




                                                                                           19
Six Sigma Methodologies                  Continued                                     Ssigma
                                                                                        ix




  DMADV




        D               M                A                D               V
   Define goals      Measure                            Design
    of Design        Critical to    Analyze the                          Verify
                    Stakeholder                          New
     Activity                         options          products,        Design
                      metrics       available to      services or   effectiveness in
                                     met goals        processes      the real world
   Tools used      Tools Used
   -QFD            -Translate                        Tools Used
                                    Tools Used       -Predictive    Tools used
   -Analytical     customer         -Regression                     -Poka Yoka
                   requirements                      Models
   Hierarchy                        -Correlation     Simulation     -Flagging
                   into Project     -Hypothesis                     -Control Charts
                   goals SMART                       Prototypes
                                    testing          Pilot runs




                  DMADV drives customer needs into product and service design




                                                                                         20
iSTRIVETM ~ Facilitating Organizational Excellence                                              Ssigma
                                                                                                     ix




     iSTRIVETM (identify -> Set -> Track -> Review -> Improve -> Validate -> Ensure) is
     a breakthrough improvement model developed from a strategic perspective for
     Business Process improvements
                                                        Key Differentiators

                                                                Proactive    Identification  of
                                                                Improvement Projects from the
                                                                Process /Business / Organization
                                                                perspective.

                                                                Linking of these Improvement
                                                                Projects to Process/Business Areas

                                                                Consolidating & Ensuring the
                                                                overall Improvement Benefits at a
                                                                Process / Business/ Organization
                                                                level

                                                                More thrust on understanding of
                                                                Financial Benefits

       iSTRIVETM ~ Satyam’s Proprietary Six Sigma Methodology
                                                                                                      21
Summary of Six Sigma                                                                    Ssigma
                                                                                         ix




  1.    Six Sigma is strategic approach that works across all processes, products and
        industries.

  2.    Six sigma is about getting at the root causes of our defects and eliminating
        them through process improvement

  3.    Reducing variability is the key to Six Sigma


   1.   Process … Everything Is Process
   2.   Correlation … Y f(x1, x2, x3)
   3.   Discipline … DMAIC/DMADV
   4.   Data … All Learning Resides In It



                           1.   The Sooner A Team Understands
                           2.   This Is How The World Works …
                           3.   The Better The Chance For Success


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Terms used in the presentation

  • ANOVA                   Analysis of Variance
  • Poka-yoke,              Mistake proofing.

      Shigeo Shingo was one of the industrial engineers at Toyota who has
      been credited with creating and formalizing Zero Quality Control
      (ZQC), an approach to quality management that relies heavily on the
      use of poka-yoke (pronounced POH-kah YOH-kay) devices.

  •   Dotplot is a visual representation of the similarities between two
      distributions.
  •   Box Plot A box plot provides an excellent visual summary of many
      important aspects of a distribution. The box stretches from the lower
      hinge (defined as the 25th percentile to the upper hinge (the 75th
      percentile) and therefore contains the middle half of the scores in the
      distribution




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                                                                   Ssigma
                                                                       ix

                                                                   Six sigma




                 6 s Quality Consciousness
  5s



            4s




            3s




       2s

                                             Destination 6 Sigma        24

QFD

								
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