“Six Sigma is delivering our corporate strategy by reshaping our company, making us more effective and building the caterpillar of tomorrow”

Glen Barton, Chairman and CEO Caterpillar inc.


Six Sigma is a way of transforming your business – make no mistake about it. It can and will create dramatic increases in customer satisfaction, productivity and shareholder value.

Customers value consistent, predictable business processes that deliver world-class levels of quality. This is what Six Sigma strives to produce.

We have the ultimate goal of creating competitive advantage, through;

• Exceeding customer expectations
• Developing best-in-class processes and products
• Eliminating all defects
• Delivering on time in full – every time
• Empowering people
• Minimising product and/or service unit costs

Six Sigma will be an exciting journey and may also be the most difficult and invigorating stretch goal ever undertaken.

While other business improvement philosophies and strategies, like TQM have come and gone, Six Sigma has been around for 20 years and the number of business embracing it is increasing exponentially. It is not another ‘magic solution’ to achieve world class – but real and quantifiable (financially), tied into the company’s business strategies and substantial in its deliverables.

Since 1986, when Motorola launched Six Sigma, hundreds of companies around the world have adopted it as a way of doing business. Nowadays we are seeing an exponential growth in companies using Six Sigma in response to commercial pressure and to secure and grow new markets.

It is being used in all sectors; heavy engineering to electronics, financial services to retail, and in all processes, including the so-called transactional processes in administration. It can have enormous opportunity for benefit – as historically we seem to spend a lot of time developing products, and little developing our administration function. Six

Sigma recognises and deals with problems…..there are any problems occurring in products, services or processes – for the customer this often means failure to live up to expectation, and for the organisation – massive avoidable cost, in many cases cost that was previously seen as unavoidable!

Six Sigma is also a statistical measure of process capability…………..this allows you measure the quality of your business’ products and services. A level of 6 sigma (about 3 defects per million opportunities), represents the highest possible quality: virtually all outputs and business processes are defect-free.

Normal Distribution:

To be precise, Six Sigma strives for perfection and allows for only 3.4 defects per million opportunities for each product or service transaction. But most companies today function at only 3 to 4 sigma and lose 10-15% of their total revenue due to defects. At 4 sigma (or 99% perfect), this still means 6,210 defects per million opportunities.

So what does this mean in everyday life, if the goal is 99% quality, well there would be:

• One hour of unsafe drinking water per month
• Two unsafe plane landings per day
• 16,000 pieces of lost mail every hour
• 500 incorrect surgical operations per week

 

Motorola, are attributed as being the first company to launch Six Sigma companywide, and their success has been nothing short of amazing.

Six Sigma has its roots way back to Carl Frederick Gauss (1777-1855) who introduced the concept of the normal curve, and as a measurement standard in product variation, when Walter Shewhart in the 1920’s showed that 3 sigma from the mean is the point where a process requires correction. Many measurement standards (Cpk, Zero Defects, etc.) later came on the scene but credit for coining the term "Six Sigma" goes to Motorola in 1986.

The name Six Sigma derives from its origins in the control of variation during the manufacturing process. The intention of Motorola’s engineers was to keep variation in their products down to a level where the tolerance limits for the product were at least six standard deviations (sigma) away from the mean measure on both sides.

General Electric, one of the first and most successful companies using Six Sigma says that it can be defined as; “completely satisfying customers’ needs profitably”.

Six Sigma & e-business solutions are becoming inextricably linked as Six Sigma is becoming even more important as e-business becomes more important.

It is precisely the e-business market – one of exceptional opportunity, but exceptional competition and complexity that Six Sigma becomes not a choice but a necessity. The e-business means easier to compare prices and features and choices than ever before, and Six Sigma delivers the key differentiators in the e-business world, that of; speed, agility and quality.

In essence, it distils complex processes down to what is essential, driven by the voice of the customer, and provides hard measures of how well you perform the essential.

 

In the world of quality, the saying goes; “It takes money to save money” is also true with Six Sigma, but the returns are of a different order.

The reason why Six Sigma has, and continues to be so successful is that it makes businesses a great deal of money, while everyone benefits!

This is achieved directly, not only through its focus on reducing variation and hence cost, and ‘critical to quality’ characteristics, but also on reducing the complexity of those products, services and processes eventually delivered to the customer.

The Six Sigma approach has been used with great success in leading companies who have made vast amounts of savings from Six Sigma; the most talked about are;

• Motorola who have documented savings due to Six Sigma in excess of $16 billion
• General Electric say they save over $2.5 billion annually, and have added $1 to their earnings per share
• Ford saved $52 million in one year

Six Sigma is for everyone, and a company can save around 2% to 5% of revenue. Our experience has shown a return on investment of 3:1, even in the first year.

If Six Sigma is not giving a good return then you’re applying it the wrong way!

The benefits are quite remarkable, not only for the bottom-line and the customer, but also for the people involved who see their potential being realised, being empowered and involved in innovative teamwork satisfying both their, and the organisations goals.

Six Sigma can and will produce a culture shift within your organisation, a shift that causes every employee to think about how their actions impact the customer, the importance of controlling variation, a belief of being empowered, and a desire to communicate effectively within the business using a consistent language.

Again, all this will require a resource commitment, but the payback is enormous!

This is a simplified business case for a particular process improvement

This enables Innovation Consultancy Partnership to address the key questions;

• What effect must we achieve?
• Who will be involved?
• How will results be measured?
• When do we get the ROI?

The challenge is that most of our very best companies currently operate and produce products and services at about 3 to 4 sigma; this gives a quality level of about 95%. But in today’s hypercompetitive world this error-free level is just not good enough.

Customer/data driven Six Sigma sets aggressive improvement targets of 70% or higher and achieves them, transforming the traditional mindset, where a 5% or 10% gain looked good.

We have found that by reaching for what appears to be the impossible, we often actually do the impossible.”
- Jack Welch.

Jack Welsh is one of the greatest corporate leaders of the 20th century and during his time as CEO of GE, stock price rose from just over $4 to $133.

You can expect to significantly reduce costs and increase sales using Six Sigma by investing in and realising the potential of your people, products and processes – and all stakeholders will benefit from this culture evolution.

 

A view from the bridge

This is a six sigma effectiveness tool that not only allows a company to determine how to proceed with a six sigma program but also to asses and monitor progress. These are the main components that head up 92 individual elements that provide an invaluable checklist of those elements that need to be in place for a successful program.

 

Launching a six sigma program requires careful planning. The Six Sigma Business Assessment is an excellent tool to establish those critical attributes required for your organisation; this is given in section.

Thereafter, the wave delivery process can be launched. This process is defined in the diagram;

 

The focus historically is often on either on initiating a high volume of projects in the hope that a few will pay off ensuring that the overall program has some success. Alternatively, projects have been selected with scant regard for complexity or impact on the business.

This simple model puts project selection carefully, on the agenda so that focus is given to those vital few actions that become; “the difference that will make the difference”

Typical project criteria - summary

• Strategic Fit: Clear alignment with organisations’ goals / KPI’s / cost reduction objectives
• Savings: Minimum delivery must be £specified and may cover several parts of a Themed Project
• Complexity: Speed/ease of implementation depending on legacy & complexity but target completion in four months
• Organisational Span: Coverage across the organisation or within a specific area are options available

 

The type of people involved in a six sigma project very much depends on the kind of project being undertaken. This diagram depicts two quite different structures that may be adopted; depending on whether it is a discrete and a relatively small project, or a themed project requiring a group of black belts and their individual project teams working towards a common goal.

 

Define:

The first phase is Define. The objective is to define the project's purpose and scope and collect background information on the process and customer. In this phase project goals will be agreed based on your knowledge of your company’s strategic business goals, customer needs, and the process that needs to be improved to get you to a higher sigma level.

During the define phase, a Team Charter will be developed with an overview of the process to be improved, and information on what is critical to quality for customers

Measure:

The goal for the Measure phase is to focus the improvement effort by gathering information about the current situation. This will help to narrow the range of potential causes needed to investigate the opportunity in the next Analyse phase. An important part of the Measure phase is to establish a baseline capability level for the performance of the process.

Analyse:

Once data in the baseline performance has been stratified, then one can pinpoint where the problems originate very clearly. This helps to focus the problem statement. In this phase, therefore, one is able to identify root causes and confirm them with data.

Improve:

In this phase, one should now be ready to develop, try out, and implement solutions that address root causes. The goal is to demonstrate, with data, that the solutions solve the problem and lead to improvement. Also to make plans for full-scale implementation.

Control:

Putting a solution in place can temporarily fix a problem, but the Control phase is designed to help make sure the problem stays fixed and that the new methods can be improved over time. The goal of this phase is to evaluate the solutions and plan, maintain the gains by standardising processes, and anticipate next steps.

 

Soft sigma means addressing people’s attitudes, behaviours and motivations towards change. All the technical knowledge and skill in the world will not deliver substantial and sustainable improvement without the desire to improve, by doing work differently.

Our attitudes to change are what really need to be addressed so that changing what we do becomes acceptable and the norm. Our attitudes are influenced by how we feel (affective) based on the support and recognition we receive, as well as what we know (cognitive) about, and this does have a major impact on what we do, our behaviour.

Often this means involving many people across the organisation, not simply those that have been trained. Good communication, commitment, leadership, empathy and empowerment are vital, as is the recognition of how others may see change affecting their working lives.

The Change Challenge

Reference: Clairy Wiholm, a Six Sigma deployment manager for Ericsson.

We recognise that people are often anxious and uncomfortable about change – it is quite natural that people will prefer to stay within their comfort zones, rather than risk embarrassing or costly failure.

People have a natural fear of failure that in reality often means; false expectations appearing real!

Innovation Consultancy Partnership understands and tackles these very real concerns head-on by using a range of behaviour change tools & techniques and by;

• Involving everyone impacted on the change to become involved in the challenge.
• Encouraging people to take risks, and reassuring them that those risks are necessary and worthwhile
• Explaining that doing nothing too has its own risks
• Mentoring and working with peers who are less fearful about change
• Giving people clear objectives so that they know what is expected of them
• Recognising achievement with encouragement and reinforcement of learning
• Coaching the effective implementation of new ideas
• Developing a trusting culture that give people the opportunity and freedom succeed.

This is crucial to succeed in transforming your organisation into something significantly better, for the long term.

Six Sigma most definitely does mean learning and using statistics – and rightly so to enable fact based decision making, and identifying those vital few X’s that affect the Y.

Six Sigma also means, in our view, that; soft sigma is really the hard sigma when it comes to implementing transformational change.

 

Our approach provides a framework that is;

• Applicable to all business processes - administrative, manufacturing, sales, marketing, R&D, etc
• Flexible in that encourages top-down commitment, linked to the business strategy and sponsored by leaders
• Focused and prioritises ‘critical to quality’ essentials based on the ‘voice of the customer’
• Fact based, with data driven decisions, NOT opinions
• Geared towards projects that achieve exponential improvement targets
• Bottom-line results-oriented
• Hands-on in realising potential in developing critical skills

Our focus leads our clients towards world class benchmarked performance in the areas of, for example;

• Increasing Overall Equipment Effectiveness (OEE)
• Improving delivery reliability
• Reducing inventory
• Growing productivity
• Raising quality standards
• Reducing non value-added operations.

Our eight golden rules to ensure success are;

Commitment - get the buy-in of senior managers so that it receives the resources, awareness and focus it deserves ensuring successful outcomes
Opportunities - select projects carefully and aligned with the strategic plan, and what the business is trying to achieve as a whole – using the new knowledge and skill here will lead more readily to achieving the vision
People - carefully select the people – not necessarily the naturally technical ones, but those who could aspire to future leaders, communicate the benefits and drive improvement.
Training – to provide the right knowledge and skills to the right people, as Six Sigma must increase stakeholder value, and not simply train Black Belts per se.
Teamwork - tackle a large problem that can be broken down and addressed by a team working together, rather than many small separate problems tackled individually and independently.
Coaching - spend adequate time providing leader support and expert process/skill coaching as this is invaluable in maximising the learning experience and hence the resultant benefit.
Recognition – recognise achievement for the project team, as well as the individual
Prevention - integrate and align the Six Sigma tools & techniques into daily life, so that they are used as prevention rather than simply to react and tackle problems.

Our resource is a team of mature and experienced trainers, consultants and expert coaches who support our clients in implementing Six Sigma within their organisation.

We have worked with the tools & techniques and philosophies of Six Sigma for over 20 years. In fact we gave one of the very first presentations of Process Improvement using these tools & techniques to an audience of business leaders at the Café Royal in London in 1987.

We are able to provide the following bespoke / tailored services;

• Full implementation across the organisation, including;

o Top Team awareness & advice workshops
o People and project selection & definition workshops
o Black Belt, Green Belt and Yellow Belt training workshops
o Expert process/skill coaching
o Six Sigma business assessment
o Financial & non financial quantification
o Implementation planning


• Specific awareness, training and coaching in any of the above to support a new or previous Six Sigma initiative
• A project quality assurance guarantee with practical project monitoring and control support using tried and tested procedures, documentation and checks. We use traffic light visual criteria for this purpose, see below;

Objectives of the indicator are to:

• improve visibility of Six Sigma projects, training and savings / benefits tracking
• identify where support is needed
• provide a benchmark of operational excellence
• provide clear indicator of overall project management and control Our methodology transfers Six Sigma knowledge and skills to our clients, enabling them to create ownership, generate results and sustain success
.


In so doing we support our clients across all business sectors in achieving outstanding results that;

• Deliver stakeholder value and higher return on investment
• Translate strategic goals into results
• Create dramatic performance improvements
• Increase revenue while reducing costs
• Drive core processes and customer service excellence
• Develop an entrepreneurial culture

 

   


 
home    |    change mgt    |    lean sigma    |    clients    |    contacts
Copyright © The Innovation Consultancy Partnership Ltd.