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The Six Sigma Journey
Launch to Execution to Institutionalization
Vince Sanchez
Senior Director, Operational Excellence
June 29, 2006
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Implementing Six Sigma
2
Today’s Discussion:
Why Six Sigma?
Getting Started
Obstacles & Challenges: The Usual Suspects
Execution to Institutionalization
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Operational Excellence
Why Six Sigma?
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Focus On The Cost Of Poor Quality
4
Average COPQ approximately 15% of Sales
Price Erosion
Profit Profit
Profit
Product or Service Price
Profit
Cost of Cost of
Poor Quality Poor Quality
(COPQ) (COPQ) 6σ COPQ
Total cost to
provide
service Theoretical Theoretical Theoretical
Costs Costs Costs
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Expectations are Tightening
5
Expectation of Improvement
> 15%/year
What barely worked
yesterday, will be
inefficient today, and
Business will be totally
Process unsatisfactory
Change tomorrow
Rate
< 5%/year
Time
SM
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Motivation for Change
6
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
To accelerate our rate of quality and productivity improvement
faster than our competitors
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7
“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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Operational Excellence
Getting Started
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Getting Started: Setting
Expectations 9
Establish a Charter which details in
specifics, your:
Opportunity Statement
Goals
Scope
Key Metrics
Any assumptions that need to be known by all
Do Six Sigma on Six Sigma! It is, after all, an improvement effort!
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Getting Started: Setting
Expectations 10
Tell the Organization what you will EXPECT from the
effort:
Financially, for example:
• ROI after 1st Year
• ROI after 2nd Year
• By value lever?
• Departmental Goals are key
Organizationally, for example:
• To enable a process-oriented business model and culture
• Alignment of the organizational efforts with strategies
• Strengthening of the leadership systems
• Creation of a performance management dashboard that will allow the
organization to manage by fact
• Evolution of the culture to have a more fact-based & process focus
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Getting Started: Benchmarking
11
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: Get the Appropriate
Team Members Involved 12
H um a n C a p ita l
Rew ar d & Rec o gnition
BB p os itio ns ( pe r ma nen t, temp
...c a r eer p athing
Job Des c r ip tio ns E xe c utive S p o nso r
Ge ner a l "V oic e"
Tra ining a nd D e ve lo p m e nt
On - Line Co ur s e s ?
Ind iv idu al Dev e lopment Plna s
Lea der s hip Pr ogr ams D e p lo ym e nt L e a d e rs hip
Pr og r am Mana gement
Up date Calls to Champio ns , BBs , GBs
IT S o lutio ns Ov e r all Coor dina tio n
Pr oje c t Tr ac kin g
W eb - Site De v elo pme nt
C o m m unic a tio ns
New s letter s
Camp aiig ns
F ina nc e
Bene f its Tr ac king
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Operational Excellence
Obstacles & Challenges: The
Usual Suspects
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Obstacles & Challenges: The Usual Suspects
14
1. Lack of Executive Leadership Sponsorship & Support
2. Improper 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. Not Obtaining the True Voice of the Customer
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Overcoming Challenges
15
1. Lack of Executive Leadership Sponsorship & Support
Limited general knowledge of the subject
No in-depth Champion training
Gain an understanding as to their knowledge of Six Sigma…and their views
Develop elevator speech for how we can 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 to engage a wider audience
Demystify Six Sigma…go ahead and give them the secret
decoder ring!
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Overcoming Challenges
16
2. Improper Identification of Black Belt Candidates
“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”
Not everyone is cut out to be a Black Belt…focus on process & business
acumen first, then project management acumen;
Leadership skills are essential! Depending upon your organization, the
statistical component may 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
The soft stuff is the hard stuff… send your best people!
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Overcoming Challenges
17
3. Ineffective Training at Black Belt Ranks
Reading best selling books = training
Training without tools….no Minitab or stat package in place
“We’ll only train one person at first…that way we can test this Six Sigma thing”
Reading books are a good source for information, but cannot replace
classroom 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
Train more than one person in an organization at a time, allow them the
opportunity to have a BB “buddy” at work
Make the investment…get the proper training required!
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Overcoming Challenges
18
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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Overcoming Challenges
19
5. BB Dedication Not 100%
Do this in addition to your regular, full-time job
Right candidate, but, who will do their job if they are dedicated?
Working on “Nike” projects
You will not meet your goals if this happens
BBs will not get through projects on time, thus results will be impacted
Skill set atrophy
Success requires investment and dedication; you will not
achieve it with a lukewarm effort
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Overcoming Challenges
20
6. Misuse of Tools
Gives wrong results and can potentially lead to bad decisions
Quick way to kill credibility of the program
Focus on deliverables, not tools!
Important for BB’s to understand when and how to use tools…avoid paralysis
by 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 them
Use MBBs to help your BBs with the proper application of tools… formalize the
coaching process
Ensure the tools used are the appropriate means to
achieving results!
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Overcoming Challenges
21
7. Not Obtaining the True 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”
Keep this focused and simple… too often project teams will try to survey the
world…don’t scare off the business sponsor
Customer Surveys: Get the right data the first time
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
VOC is the most important aspect of any DMAIC initiative
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Demystifying Six Sigma for Everyone
22
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
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
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Operational Excellence
Execution To Institutionalization
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Getting There: Beyond Execution
24
Measure financial benefits Measure financial and operational
benefits – by individual business area
Define BB goals and competencies Define goals and competencies for all
employees and link them to the
organization’s performance
management system
Require BBs to be at least 50% dedicated Create full-time BB positions
Spread BBs throughout the organization Align BBs – at least matrixed – to best
Champions within each business area
Drive project selection within each Drive project selection from value
functional area streams that span across functional
areas
Drive recruitment of BBs within each Establish standardized BB recruitment
functional area process involving Human Capital, 6σ
leadership and the functional areas.
Select projects that fit the training to be Develop a training program that fits the
delivered. projects to be delivered.
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Getting There: Project Selection
25
Voice of the Customer Business Scorecards
Prospective Guide Qualification Checklist
• Specifications and
Please rank the sp ide did y ing go
ecific Gu can ate b placing a small"x" in the follow cate ries:
ake
(To m acorre ut a
ction, p asm ll "o" in the box)
L ow
Highly regarded as knowledgeable andeffective within respective dis cipline areaor lineof work
Recognized as som eonewith High personal integrity
guarantees
Has Respect of Always adds value andis sought out tocontribute/participate onspecial task team influential s;
Associates
able
Consistently gets results… to synthesize data and translate into achiev able goals
Personally respected does not lord his or her expertise over others
Organizedapproach to m anaging m tiv
ultiple initiatives. Effec ely identifies priorities from a
business perspective
ited hile
Manages lim resources ina highly efficient and effect manner w focusing on the bigger
it
Breaks down work into process steps; develops schedules; works well within tim constraints e
Project M anagement
Skills (H Leverage)
IGH ith
Anticipates and adjusts for problems androadblocks; allows roomfor failure w a recovery plan
Interfaces effectively with c ers,
ustom suppliers, managem and shopem ent ployees to get the job
• Surveys
done
Understands and c m om unicates the role of thecustomer in definingquality and establishing
quality priorities
Confident/Tough/ Stands upunder pressure…tough… tenacious… doesn't hesitate to "pushback"
Tenacious "can "m
Positive… do"… ake it happen" attitude… ains
weathers setbacks and rem positive/focused
Catalyst for change. A ctively involved in process and organizational changeand developm ent
ChangeAgent? Potential to produce highly crediblebreakthroughsuccess stories and transfer new process
Process Focus techniques and tools to their peers and customer focus teams. C reates positive andlasting
change
Accepts responsibility for choices
Judgem ent/Maturity/ Accepts criticismas a learningexperience… behaves m aturely in all situations
• Complaints
Perspective Personal experiencehas beensufficiently broad/variedto develop a mature perspective onwork
and life
Operations orientation with engineering/tec hnical/functional experience appropriatetoprocess
Technical/Functional s
Analytical/quantitative approachtoproblemsolving…know how to obtain and use data,
IGH
Skills (H Leverage) com fortable with statistical concepts
Com fam
puter skills… iliar withmost comm applic on ations for analysis/solutionof problem s
Clear, candid and persuasivein written and oral com munications
Breaks down barriers betweenorganizations, layers, and diverse em ployeepopulations toensure
Interpersonal/
effectiveness
Com munication Skills
Can count onthesupport of a network of associates withdiverseskills and contacts to get the
(HIGH Leverage)
job done
• Customer
Promotes win-win solutions; disagrees tactfully anddoes not over-react
Able tofunction effectively as ateacher and m entor to individuals andgroups
Provides specific one-on-one and teamsupport to ensure attainment of Just Right Service
Leader/Facilitator/Coach
objectives in target areas
Effective facilitator and m entor… Inspires others toexc el
Teambuilder -- develops strong m orale and sense of belongingin teammem bers
Displays agenuineconcern and sensitivity towardothers…A ppreciates their perspective
TeamDynamics Recognizes and respects the lim itations of others; assigns reasonable numbers of tasks
Thrives in a m
best result
ultifunctional teamenvironment which leverages divers of teammem
Pleasecheck one box per category
0 =Scoreof H Leverageitem Criterion is a m
igh s.
0 =Scoreof Low Leverage item Criterionis a m umof 52
s.
inimumof 32
inim
ity bers to chief
Expectations
APPROVED _______________________ ED O
REJECT DUE T ___________________________________________________________
Manager
Expert Guide
Just Right Service
Director
_________________________________________________ Date_______________________
_________________________________________________ Date_______________________
_________________________________________________ Date_______________________ • Industry Standards
• Performance Measures vs.
standard
• ID Red & Yellow trends/gaps
Process Breakdown
Initial Project Charters
•Drill down to workable
level Project Charter
•Meaningful leverage
Title:
ProblemStatement: er pact:
Custom Im
Champion/Sponsor:
• Based on Gaps
Project Charter
D
Title:
CTQand DefectProblemStatem
efinition: ent: Milestones/TimCustom Im
eline: er pact:
Champion/Sponsor:
Scheduled Actual
• “What keeps you up at
Project Objective: Title:
Project Charter
Champion/Sponsor:
night?”
(Process, Progress Measure, D , aseline, Target, Deadline)
irection B
Definition:
CTQand DefectProblemStatement: M eline: er pact:
ilestones/TimCustom Im Scheduled Actual
Project Objective:
Project Scope/Boundaries:
• Should be the most
(Process, Progress Measure, D , aseline, Target, Deadline)
irection B
Business Case/Financial Im CTQand Defect D
pact: efinition:
ProcessStart:
ProcessStop:
InScope:
ut
O of Scope:
Milestones/Timeline: Scheduled Actual
important things to fix
in the business
Project Scope/Boundaries:
Project Objective: Team:
(Process, Progress Measure, D , aseline, Target, Deadline)
irection B
Business Case/Financial Impact:
ProcessStart:
ProcessStop:
InScope:
ut
O of Scope:
Project Scope/Boundaries:
Team:
Business Case/Financial Impact:
ProcessStart:
ProcessStop:
InScope:
ut
O of Scope:
Team:
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Implementation Focus
26
Launch Execute Institutionalize
• DMAIC Skills • Mastering DMAIC • Mastering DMAIC & DMADV;
• Sharing the Message Skills; Introduce DMADV integrating with Lean, Kaizen
• Establishing Functional • Standardizing the Message • The Way We Do Business
Metrics • Establishing Organizational • Measure end-to-end
• Building Project & Strategic Metrics Customer Processes
Pipeline • Project Alignment to • Self-Sufficient in Training
• Focus on Cost Strategic Objectives and with Internal Talent
Savings; Delivering on across Segments • Delivering on Commitments
Commitments • Delivering on Commitments • Preeminent Healthcare
Provider
Approach vs. Program
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