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SixSigma

WhatItis

HowItAffectsHumanResourcesRonaldD.SneeK.W.TunnellConsultingNovember13,2001SixSigma

WhatItis

HowItWhatisSixSigma?

Measureofhowwellaprocessisperforming-SixSigmaprocessproduces3.4defectspermillionopportunities-Mostcompaniesareat3-4sigmalevelPhilosophyofreducingdefectssowecanimprovecustomersatisfactionandreducecostsBusinessStrategythatincreasesprocessperformanceresultinginenhancedcustomersatisfactionandimprovedbottomline($$).WhatisSixSigma?MeasureWhatisSixSigma?ImprovementBreakthroughSystematic,FocusedApproachRightProjects-LinkedtoBusinessGoalsRightPeople-Selected&TrainedProjectManagement-ManagementReviewsSustainingGains-IdentifyNewProjectsRightResults-Process&Financial($$)ProcessThinkingProcessVariationFacts,Figures,DataDefine,Measure,Analyze,Improve,Control8KeyTools-LinkedandSequencedStatisticalToolsMinitabCriticalFewVariablesINITIATIVE

METHODS&TOOLSWhatisSixSigma?INITIATIVE

ROLESOFLEADERSManagementTeamProjectChampionMasterBlackBeltGreenBeltBlackBeltandTeamFunctionalGroupsHR,Finance,ITEngg,QA,etc.ROLESOFLEADERSManagementPrSixSigmaImprovementStrategyPhase0:ProcessDefinitionPhaseI:ProcessMeasurementPhaseII:ProcessAnalysisPhaseIII:ProcessImprovementPhaseIV:ProcessControlSixSigmaImprovementStrateg8KeySixSigmaToolsMapsandMetricsCauseandEffectMatrixGageR&RStudyCapabilityAnalysisFailureModeandEffectsAnalysisMulti-VariAnalysisDesignofExperimentsControlPlansincludingStatisticalProcessControlAdvancedtoolsareusedasneededtospeedupimprovement8KeySixSigmaToolsMapsandSomeManufacturingBlackBeltProjectsIncreaseprocessyield $300kIncreaseprocesscapacity $400kIncreasedryerthroughput$130kReduceprocessdowntimeandscrap$320kReducecausticuseofProcessZ $2000kMaterialloss:Reducescrap&increaseyield$150kReducewetmillingoperationscosts$300kSomeManufacturingBlackBeltTopicsofNon-ManufacturingProjectsBilling

EnergyReduction

Engineering

EnvironmentalFinance&Accounting

HumanResourcesInformationTechnologyInternalAuditsInventoryReductionLegalLogistics-TransportationCustomerServiceMaintenancePlanningandSchedulingProductDesignPurchasingQCLabSafety

SalesShippingTopicsofNon-ManufacturingPrProjectsinHumanResourcesReducecycletimeonhiringprocessIncrease“hitrate”onjobapplicantsEmployeeturnoverreductionOvertimereductionReducingstaffingshortagesCycleTimeReductionforLong-TermDisabilityApplicationProcessProjectsinHumanResourcesRedLongTermDisabilityApplicationProcessLongTermDisabilityApplicatiImprovementsSupplierProcesses -Renegotiatesub-contractors’terms -Newcasemanagementreporting -Reviewofcaseturn-aroundtimeperformanceDupontProcesses -Greateruseofemailandintranet -Casetrackingandreportingdatabaseadded -UseofperformancemetricsatSBUandsites -Ongoingcommunication,trainingandeducationImprovementsSupplierProcessesBenefitsAverageCycleTimereduced50-70%Processperformancenowmeetingcustomerrequirementsofdecisionsin<45days. Hardsavingsof$192,000.-Reductioninextendedshort-termdisabilitypayments.-70%reductioninIndependentMedicalEvaluationfeespaidtoSupplier.-ReductionofongoingadministrativefeepaidtoSupplier.BenefitsAverageCycleTimeredRecognitionandRewardfor

SixSigmaRecognitionandRewardfor

SixRecognitionVehicles-CompanyTWrittenfeedbackviae-mailWrittenfeedbackviarecognitionboardVerbalfeedbackvia-Voicemail-One-on-one-ShiftmeetingsCompanytotemsGiftcertificates/luncheons/coffee/donutsAnnualrecognitionprogramQuizmoneyPerformanceevaluationCustomertripsCareerplansRecognitionVehicles-CompanyRecognitionandRewardatGeneralElectric“Aswitheveryinitiative,webackedSixSigmaupwithourrewardssystem”

JackWelch,CEO40%ofannualbonusrelatedtoSixSigmaactivitiesStockoptiongrantsforBlackBeltsGreenBeltcertificationrequiredforpromotion

“WithSixSigmapermeatingmuchofwhatwedo,itwillbeunthinkabletohire,promoteortoleratethosewhocannot,orwillnot,committothiswayofwork”

JackWelch,CEOGeneralElectricUSATODAY2/27/98RecognitionandRewardatGeneBlackBeltCompensationatCompanyZBasePay-Potentialincreaseattimeofselection-Retaincurrentsalarygrade-Commonjobcodeforfull-timeparticipants-NormalgroupperformancereviewandmeritpayIncentiveCompensation-SpecialplanforBlackBelts-Targetawardat15%ofbasepay-Performanceratingon0-150%ofscale-Measuredagainstkeyprojectobjectives-ParticipationendsatendofBlackBeltassignmentBlackBeltCompensationatComSixSigmaRecognitionProgramCompanyKSixSigmaRecognitionProgramCBlackBeltRecognitionSelection-SixSigmaPinCertification-$5,000CertificationBonus-SixSigmaDiploma/PlaqueProjectCompletionBonusAwards-$500to$5,000incashorstockoptionsavailable>GrantedbyProjectChampion>ApprovedbySixSigmaRecognitionCommitteeBlackBeltRecognitionSelectioBlackBeltRecognition(cont.)SixSigmaSpiritAwards-MadebyProjectChampion-Recognizesandrewardseffortsandachievementsduringprojectswithindividualandteamawards>theater/movietickets,dinners,t-shirts,spotcashbonuses,etc.SixSigmaSuccessPlaque-Awardedatcompletionoffirstproject>Engravedplacardforproject>PlaquedesignedtoaddmultipleprojectsascompletedBlackBeltRecognition(cont.)CompanyK-RecognitionProgram(Cont’d)GreenBeltRecognition -SimilartoBlackBeltrecognition -NocertificationbonusProjectTeamMemberRecognition -SimilartoBBandGBRecognition -NocertificationawardsAnnualSixSigmaRecognitionevent -Presentationofkeyprojects -DinnerreceptionwithseniorleadershipCompanyK-RecognitionPrograSummarySixSigma -Itisdifferent -Itworksifyoufollowtheprocess -ProducessignificantbottomlineresultsChangeisrequiredbyallpersonswhogetinvolvedwiththeinitiativeSixSigmawilllastaslongasitproducesbottomlineresults($$)

SHOWMETHEMONEY($$)SummarySixSigmaShowMeTheMoney($$)ShowMeTheMoney($$)ReferencesBlakleslee,J.A.,Jr.(1999)“ImplementingtheSixSigmaSolution”,QualityProgress,July1999,77-85.Breyfogle,ForestW.III(1999)ImplementingSixSigma–SmarterSolutionsUsingStatisticalMethods,Wiley-Interscience,JohnWileyandSons,NewYork,NY.Breyfogle,ForrestW.,Cupello,J.M.,andMeadows,B.(2001)ManagingSixSigma,JohnWileyandSons,NewYork,NY.Eckes,G.(2001)SixSigmaRevolution,JohnWileyandSons,NewYork,NYHahn,Gerald,J.,Hill,WilliamJ.,Hoerl,RogerW.,andZinkgraf,StephenA.(1999)"TheImpactofSixSigmaImprovement--AGlimpseintoTheFutureofStatistics"TheAmericanStatistician,August1999.ReferencesBlakleslee,J.A.,JReferencesHarry,MikelJ.(1998)“SixSigma:ABreakthroughStrategyforProfitability”,QualityProgress,May1998,60-64.Harry,MikelandSchreoder,Richard(2000)SixSigma–TheBreakthroyghManagementStrategyRevolutionizingtheWorld’sTopCorporations,CurrencyDoubleday,NY,NYHoerl,R.W.(1998)“SixSigmaandtheFutureoftheQualityProfession”,QualityProgress,June1998,35-42.Hoerl,R.W.andSnee,R.D.(2002)StatisticalThinking-ImprovingBusinessPerformance,DuxburyPress,PacificGrove,CAMaguire,Miles(1999)“CowboyQuality–MikelHarry’sRidingTallintheSaddleasSixSigmaMakesitsMark.”QualityProgress,October1999,27-34.Pande,P.,Neuman,R.,andCavanuagh(2000)TheSixSigmaWay,McGraw-Hill,NewYork,NY.ReferencesHarry,MikelJ.(19ReferencesPyzdek,T.(1999)TheCompleteGuidetoSixSigma,QualityPublishing,Tucson,AZPyzdek,T.(2000)TheSixSigmaHandbook,McGraw-Hill,NewYork,NYQualityEngineering(2000)Volume12,No.3.FivearticlesonSixSigma.Snee,R.D.(1999)“StatisticiansMustDevelopData-BasedManagementSystemsasWellasCreateMeasurementSystems.”InternationalStatisticalReview,67,No.2,August1999,139-144.Snee,R.D.(1999)“WhyShouldStatisticiansPayAttentiontoSixSigma?”QualityProgress,Sept.1999,100-103.Snee,R.D.(1999)“DevelopmentandUseofStatisticalThinking:ANewEra”,InternationalStatisticalReview,67.ReferencesPyzdek,T.(1999)ThReferencesSnee,R.D.(2000)“ImpactofSixSigmaonQualityEngineering”,QualityEngineering,

12,No.3,ix-xiv.Snee,R.D.(2000)“SixSigmahasImprovedBothStatisticalTrainingandProcesses”,QualityProgress,Oct.2000,68-72.SneeR.D.(2001)“DealingwiththeAchillesHeelofSixSigma-ProjectSelection”,QualityProgress,March2001,66-72.Snee,R.D.(2001)“FocusonImprovement,NotTraining”,QualityManagementForum,Spring2001,7,8,16.Snee,R.D.(2001)“MaketheViewWorththeClimb–FocusTrainingonDeliveringBetterBusinessResults”,QualityProgress,November2001,58-61.Zinkgraf,S.A.(1998)“AnOverviewofOperationalExcellenceandSixSigmaatAlliedSignal”,TransactionsoftheAmericanQuality

Congress,173-175.ReferencesSnee,R.D.(2000)“ImSixSigma

WhatItis

HowItAffectsHumanResourcesRonaldD.SneeK.W.TunnellConsultingNovember13,2001SixSigma

WhatItis

HowItWhatisSixSigma?

Measureofhowwellaprocessisperforming-SixSigmaprocessproduces3.4defectspermillionopportunities-Mostcompaniesareat3-4sigmalevelPhilosophyofreducingdefectssowecanimprovecustomersatisfactionandreducecostsBusinessStrategythatincreasesprocessperformanceresultinginenhancedcustomersatisfactionandimprovedbottomline($$).WhatisSixSigma?MeasureWhatisSixSigma?ImprovementBreakthroughSystematic,FocusedApproachRightProjects-LinkedtoBusinessGoalsRightPeople-Selected&TrainedProjectManagement-ManagementReviewsSustainingGains-IdentifyNewProjectsRightResults-Process&Financial($$)ProcessThinkingProcessVariationFacts,Figures,DataDefine,Measure,Analyze,Improve,Control8KeyTools-LinkedandSequencedStatisticalToolsMinitabCriticalFewVariablesINITIATIVE

METHODS&TOOLSWhatisSixSigma?INITIATIVE

ROLESOFLEADERSManagementTeamProjectChampionMasterBlackBeltGreenBeltBlackBeltandTeamFunctionalGroupsHR,Finance,ITEngg,QA,etc.ROLESOFLEADERSManagementPrSixSigmaImprovementStrategyPhase0:ProcessDefinitionPhaseI:ProcessMeasurementPhaseII:ProcessAnalysisPhaseIII:ProcessImprovementPhaseIV:ProcessControlSixSigmaImprovementStrateg8KeySixSigmaToolsMapsandMetricsCauseandEffectMatrixGageR&RStudyCapabilityAnalysisFailureModeandEffectsAnalysisMulti-VariAnalysisDesignofExperimentsControlPlansincludingStatisticalProcessControlAdvancedtoolsareusedasneededtospeedupimprovement8KeySixSigmaToolsMapsandSomeManufacturingBlackBeltProjectsIncreaseprocessyield $300kIncreaseprocesscapacity $400kIncreasedryerthroughput$130kReduceprocessdowntimeandscrap$320kReducecausticuseofProcessZ $2000kMaterialloss:Reducescrap&increaseyield$150kReducewetmillingoperationscosts$300kSomeManufacturingBlackBeltTopicsofNon-ManufacturingProjectsBilling

EnergyReduction

Engineering

EnvironmentalFinance&Accounting

HumanResourcesInformationTechnologyInternalAuditsInventoryReductionLegalLogistics-TransportationCustomerServiceMaintenancePlanningandSchedulingProductDesignPurchasingQCLabSafety

SalesShippingTopicsofNon-ManufacturingPrProjectsinHumanResourcesReducecycletimeonhiringprocessIncrease“hitrate”onjobapplicantsEmployeeturnoverreductionOvertimereductionReducingstaffingshortagesCycleTimeReductionforLong-TermDisabilityApplicationProcessProjectsinHumanResourcesRedLongTermDisabilityApplicationProcessLongTermDisabilityApplicatiImprovementsSupplierProcesses -Renegotiatesub-contractors’terms -Newcasemanagementreporting -Reviewofcaseturn-aroundtimeperformanceDupontProcesses -Greateruseofemailandintranet -Casetrackingandreportingdatabaseadded -UseofperformancemetricsatSBUandsites -Ongoingcommunication,trainingandeducationImprovementsSupplierProcessesBenefitsAverageCycleTimereduced50-70%Processperformancenowmeetingcustomerrequirementsofdecisionsin<45days. Hardsavingsof$192,000.-Reductioninextendedshort-termdisabilitypayments.-70%reductioninIndependentMedicalEvaluationfeespaidtoSupplier.-ReductionofongoingadministrativefeepaidtoSupplier.BenefitsAverageCycleTimeredRecognitionandRewardfor

SixSigmaRecognitionandRewardfor

SixRecognitionVehicles-CompanyTWrittenfeedbackviae-mailWrittenfeedbackviarecognitionboardVerbalfeedbackvia-Voicemail-One-on-one-ShiftmeetingsCompanytotemsGiftcertificates/luncheons/coffee/donutsAnnualrecognitionprogramQuizmoneyPerformanceevaluationCustomertripsCareerplansRecognitionVehicles-CompanyRecognitionandRewardatGeneralElectric“Aswitheveryinitiative,webackedSixSigmaupwithourrewardssystem”

JackWelch,CEO40%ofannualbonusrelatedtoSixSigmaactivitiesStockoptiongrantsforBlackBeltsGreenBeltcertificationrequiredforpromotion

“WithSixSigmapermeatingmuchofwhatwedo,itwillbeunthinkabletohire,promoteortoleratethosewhocannot,orwillnot,committothiswayofwork”

JackWelch,CEOGeneralElectricUSATODAY2/27/98RecognitionandRewardatGeneBlackBeltCompensationatCompanyZBasePay-Potentialincreaseattimeofselection-Retaincurrentsalarygrade-Commonjobcodeforfull-timeparticipants-NormalgroupperformancereviewandmeritpayIncentiveCompensation-SpecialplanforBlackBelts-Targetawardat15%ofbasepay-Performanceratingon0-150%ofscale-Measuredagainstkeyprojectobjectives-ParticipationendsatendofBlackBeltassignmentBlackBeltCompensationatComSixSigmaRecognitionProgramCompanyKSixSigmaRecognitionProgramCBlackBeltRecognitionSelection-SixSigmaPinCertification-$5,000CertificationBonus-SixSigmaDiploma/PlaqueProjectCompletionBonusAwards-$500to$5,000incashorstockoptionsavailable>GrantedbyProjectChampion>ApprovedbySixSigmaRecognitionCommitteeBlackBeltRecognitionSelectioBlackBeltRecognition(cont.)SixSigmaSpiritAwards-MadebyProjectChampion-Recognizesandrewardseffortsandachievementsduringprojectswithindividualandteamawards>theater/movietickets,dinners,t-shirts,spotcashbonuses,etc.SixSigmaSuccessPlaque-Awardedatcompletionoffirstproject>Engravedplacardforproject>PlaquedesignedtoaddmultipleprojectsascompletedBlackBeltRecognition(cont.)CompanyK-RecognitionProgram(Cont’d)GreenBeltRecognition -SimilartoBlackBeltrecognition -NocertificationbonusProjectTeamMemberRecognition -SimilartoBBandGBRecognition -NocertificationawardsAnnualSixSigmaRecognitionevent -Presentationofkeyprojects -DinnerreceptionwithseniorleadershipCompanyK-RecognitionPrograSummarySixSigma -Itisdifferent -Itworksifyoufollowtheprocess -ProducessignificantbottomlineresultsChangeisrequiredbyallpersonswhogetinvolvedwiththeinitiativeSixSigmawilllastaslongasitproducesbottomlineresults($$)

SHOWMETHEMONEY($$)SummarySixSigmaShowMeTheMoney($$)ShowMeTheMoney($$)ReferencesBlakleslee,J.A.,Jr.(1999)“ImplementingtheSixSigmaSolution”,QualityProgress,July1999,77-85.Breyfogle,ForestW.III(1999)ImplementingSixSigma–SmarterSolutionsUsingStatisticalMethods,Wiley-Interscience,JohnWileyandSons,NewYork,NY.Breyfogle,ForrestW.,Cupello,J.M.,andMeadows,B.(2001)ManagingSixSigma,JohnWileyandSons,NewYork,NY.Eckes,G.(2001)SixSigmaRevolution,JohnWileyandSons,NewYork,NYHahn,Gerald,J.,Hill,WilliamJ.,Hoerl,RogerW.,andZinkgraf,StephenA.(1999)"TheImpactofSixSigmaImprovement--AGlimpseintoTheFutureofStatistics"TheAmericanStatistician,August1999.ReferencesBlakleslee,J.A.,JReferencesHarry,MikelJ.(1998)“SixSigma:ABreakthroughStrategyforProfitability”,QualityProgress,May1998,60-64.Harry,MikelandSchreoder,Richard(2000)SixSigma–TheBreakthroyghManagementStrategyRevolutionizingtheWorld’sTopCorporations,CurrencyDoubleday,NY,NYH

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