Six Sigma - Defect-free system

Six Sigma is a comprehensive and flexible system for achieving, maintaining, and maximizing success in business activities, based on:

Deep understanding of consumer needs.
clear and competent use of facts, data, and statistical and analytical methods.
proactive management, development, and reorganization of business processes.

“We consider the Six Sigma system to be the most promising technology for improving the efficiency of Indian companies both in the field of production and in the provision of services. Flexibility, scalability, and adaptability of the Six Sigma toolkit determine the possibility and reality of its implementation in difficult conditions development of Indian business”.

In the business press, Six Sigma is often defined as “a highly technical method of fine-tuning processes and goods used by economists, technologists and statisticians.” This is quite true, but only partially. Measurements and statistics are key elements for improving the system “Six Sigma”, but the matter is not limited to them.

Another definition states that Six Sigma is a target that corresponds to the level of the highest possible perfection in meeting the requirements of consumers. And this is also true. Strictly speaking “Six Sigma” is a plans indicator of operating activity obtain by the method of statistical calculations. At which per million transactions or “opportunities” account for no more than 3.4 deviations (defects). Very few companies can boast of such results.

In addition,

Six Sigma can be called a large-scale program “cultural change” aimed at leading the company to higher rates of customer satisfaction, profitability, and competitiveness.

Given the absolute commitment to this system in companies such as General Electric or Motorola, Six Sigma can rightly be called a “cultural change.”

On the other hand, in order to practice Six Sigma, it is not necessary to make a frontal attack on the corporate culture of your company. The range of possible “successes” of the Six Sigma system is very wide and the reason for this is the multiplicity and variety of benefits confirmed in practice, including:

Retrenchment
Increased Productivity
Market Expansion
Customer retention
Shortening the production cycle time
Reduction of defects
Changing corporate culture
Development of new products/services and much more.

(I) Principles of Six Sigma

Principle one. Sincere interest in the client

In the Six Sigma system, customer orientation goes to the first plan. So, for example, the client with his needs and requests is the reference point in the measurement of the level of “defect-free”. The quality of improvements is determined by the degree of customer satisfaction and contribution to the creation of added value.

Principle two. Data-driven and fact-based management

In the Six Sigma system, the concept of “fact-based management” reaches a higher, qualitatively new level. Despite the fact that in recent years special attention has been paid to issues such as measurements, information systems, knowledge management, etc., nevertheless, many business decisions are still made on the basis of subjective opinions and assumptions.

The implementation of the Six Sigma system begins with finding out which criteria play a key role in measuring the company’s performance. Then begins work with data and methods of analysis, which is structured in such a way as to provide an understanding of key variables and optimize the results.

If we formulate all of the above in a more accessible language, then the system Six Sigma helps leaders answer two basic questions that start with “Fact-based management” and evidence-based decision-making:

What data/information do I really need?.

How to use this data/information with maximum benefit?.

Principle three. Process-oriented, management and improvement

In the Six Sigma system, every action or operation is considered as a process. Whether it’s designing products and services, measuring results, improving efficiency and customer satisfaction, or even managing the company as a whole, the basic principle remains the same: “Process is the engine of success.”

To date, one of the most significant achievements in the promotion of the system Six Sigma was the fact that it was possible to convince the heads and managers of companies (and above all companies operating in the service markets) that process improvement is not a necessary evil or burdensome duty, but a way to achieve a competitive advantage through the creation of added value for customers. Of course, many have yet to be convinced of this, using the tempting amounts of potential profits.

Principle four. Proactive management

“Proactivity” means anticipation of events by actions (accordingly, the opposite phenomenon is called “reactivity”.

In practice, however, proactive management is understood as the formation of habits from those the “golden rules” of business, which, unfortunately, are too often and undeservedly ignored: set ambitious goals and often revise them. set priorities clearly. prevent problems rather than deal with their consequences. Ask a question “why do we do this”, and not declare “we do it this way.”

True proactivity is the launching pad for creativity and effective change. By relying on the use of reactive control, you will only do what to swim out of one crisis to another, while being constantly “in business” and amuse yourself with the deceptive impression that you have everything under control. In reality, these are symptoms of leaders or organizations that have lost any control over events.

The Six Sigma system includes tools and methods that allow you to replace reactive habits with a dynamic, flexible, proactive management style. Considering that in today’s conditions of fierce competition, a small mistake is punishable by large losses, proactivity – This is “the only way to stay in the air.”

Principle five. Collaboration without borders

It is the absence of internal organizational barriers that is the key to business success. The magnitude of the opportunities offered by more effective collaboration, both within the company and between companies, their suppliers, and customers, cannot be overstated. Huge sums are lost every day, and the reason for this is the lack of coherence and even outright hostility between groups that must work side by side for the benefit of the common cause – creating added value for customers.

The Six Sigma system fosters collaboration by allowing people to see their role in the organization “in perspective” and teaches them to identify and measure the interdependence between operations in all parts of the overall process.

“Cooperation without borders” does not require self-sacrifice, but you need to at least understand both the real needs of end users and the chain of transformations that accompany the passage of goods or services through the production and marketing process. In addition, it is necessary to strive to use the understanding of customers and processes for the benefit of all stakeholders.

All this allows the Six Sigma system to create an environment and management structures conducive to effective teamwork.

Principle six. Striving for perfection plus indulgence for failure

To some, such a formulation may seem contradictory. Is it possible to combine “The will to win” with tolerance for defeat? But it turns out that in fact, these two qualities complement each other perfectly. Judge for yourself. If you avoid new ideas and approaches (and everything new, as you know, is associated with a certain degree of risk), and forget to think about getting at least a little closer to the level Six Sigma.

Some people think they know a way to improve maintenance, reduce costs, take advantage of new opportunities – in other ways in other words, to approach “defect-free” – and at the same time they are afraid of making a mistake, they will never dare to test their assumption. What is the result? Stagnation, decay, death (gloomy, huh?).

However, the essence of the sixth principle is that companies that have embarked on the path “Six Sigma”, will always have to strive for perfection, approaching it, but never achieving (since the idea of customers about “perfect” is constantly changing), and at the same time condescending to individual failures, knowing how to manage them.

(II) Route Map : Six Sigma

Step 1. Identification of central processes and key consumers

Identifying your company’s central processes.
Identify the main outputs of these processes and the primary consumers they serve.
Making a large map of your central or strategic processes.

Step 2. Definition of consumer requests

Collecting customer data and developing a “Voice of the Customer” strategy – Development of quality standards and “Statements of Demand”.
Analysis and selection of priority consumer requirements, linking the strategy to the requirements.

Step 3. Measurement of current quality indicators

Planning and measuring quality in comparison with customer requirements.
Development of baseline indicators of defect-free and identification of opportunities for improvement.

Step 4. Prioritizing, analyzing, and implementing improvements.

Selection of projects for improvement and development of the “Project Justification”.

Six Sigma Business Process Improvement.

Definition: clarification of the problem, purpose and process.
Measurement: Evaluation of basic characteristics and clarification of the problem – Analysis: identifying real root problems.
Improvement: generating, selecting, and implementing solutions.

Six Sigma Business Process Design/Modernization.

Definition: Clarify the purpose, “scope” and requirements for modernization.
Measurement: establishing basic performance parameters.
Analysis: Building the Foundation for Modernization.
Improvement: design and implementation of a new process.

Step 5. Expansion and integration of the Six Sigma system.

Implementation of continuous measures to ensure sustainable improvement (“Control”).
Definition of responsibility for ownership and management of the process.
Closed-loop control and transition to the Six Sigma system.

(A) Key Processes

Step 1 A. Identification of central Processes

Concepts

The processis work. More and more organizations are beginning to understand the distinction between “function” and “process”, and the idea that business success depends on the understanding and improvement of work processes, has become a basic principle in many organizations.
The central process (core process)– a chain of tasks (usually performed by different departments or functions) to create and provide value to consumers.
Auxiliary (or serving)processes are processes that provide the necessary resources or inputs for value creation processes.
Chain Valuesare a way of representing an organization as a totality activity that are performed for the development, marketing, delivery, and service of its products.

The concept of the Value Chain is based on three Positions:

Each function contributes (or should contribute) to Achieving the main goal of the organization is to provide its market and to consumers some unique value. Any gap or weak A link in a chain (e.g., cross-functional rivalry) reduces output value.
While all functions contribute to value, some of them are play a primary role, while others play a secondary role. Primary functions are involved in the physical creation of a product (or service), its sale, delivery customer and after-sales service. Functions attributed by Porter to auxiliary, include management of personnel, finance, supply and even the functions of senior management.
Value chains are defined at the operating unit level Organization. A company-wide value chain encompassing a variety of business units, doesn’t make sense.

Definition and delineation of central processes Company

The first thing that should be taken as an axiom when proceeding to compiling a list of primary, or central, processes in its organizations are that there are no right options and wrong ones. In in some cases, such as what processes you consider to be central, will depend on the need to convey to the organization A specific message.

Key issues on central processes

Compiling your own model of central processes can require you to have a certain amount of time and effort of thought. Besides Exactly how many processes you choose to include in this category will be in largely depend on the specifics of your business, as well as on such factors, as the company’s strategy and its history.

But you should focus on the fact that the majority operating units should be between four and eight indeed. large maps of primary processes. The following questions may make it easier for you their identification.

What The main operations ensure the receipt of value – goods and services – to our consumers?
How More accurately characterize or name these processes?
What Major (one to three) critical results/outcomes Outputs of each of the processes that can be evaluated Its quality/capabilities?

Establish deliverables/end products processes and key Consumers.

The main difficulty is to There weren’t too many “Deliverables/End Products” category items, i.e., working products. If your organization is the same as Most of the rest, then every day you produce a lot of “all sorts of all sorts of things,” and some part of it really ends up in your hands Consumers. But from the point of view of the strategic, or central, process, at the moment only the result / final is important to us product.

It is not necessary that the final products central processes were delivered to external, “paying” customers. For example, the end product of the “customer acquisition” process may be an arrangement on joint business, issued in the form of an order, Distribution Agreements, Contracts, Declarations An external client usually receives some kind of confirmation of the fact of the transaction, but at the same time primary.

The product consumer of this central process will be the following: a central process, such as an order processing process, or Production.

Mapping central processes

The last step you have to take is to fold the “picture” of the process map is to establish the main types of activities for each of the central processes. (If you wish, you can in the same way draw diagrams and auxiliary processes).

SIPOC Process Model

The SIPOC scheme is one of the most useful and frequently used techniques for managing and improving processes. Her Used when you need to represent all workflows from the perspective of “C at a glance.” The name of the model is an abbreviation for the first letters of its Five elements:

Supplier – a person or group of persons providing basic information, materials, or other resources for the process.
Inputs – all that is started in the process.
Process – a sequence of steps that modify And, ideally, add value to the entry product.
Output– the final product of the process.
Customer (Customer) – the person, group of persons or process to whom the person receives final product.

Benefits of the SIPOC model

Model SIPOC can be very useful when you need to show a company in perspective of processes. The advantages of the model include: The fact that it is, among other things:
Reflects A multi-functional set of processes on a single, simple circuit.
Built on a design that is applicable to processes of all scales – even organization-wide ones.
Allows to maintain the perspective of the “general plan”, to which it is always possible Add new details. By linking all SIPOC models one by one organizations into a single whole. Where the results/final products of one process becomes the input/source material of another. You’ll get a process diagram of the entire organization.

(B) Consumer Requests

Definition of consumer requests

Collecting customer data and developing a “Voice of the Customer” strategy.
Development of quality standards and “Statements of Demand”.
Analysis and selection of priority consumer requirements, linking the strategy to the requirements.

Key results

The main results of the implementation of Step 2 should be the creation of:

“Voice of the Customer” (or VOC – Voice of the Customer) systems – that is, Strategies and systems for continuous monitoring and updating of information about consumer requests, competitors’ activities, changes in the market, etc.
Specific measurable Product Quality Standards (for each of the deliverables/final products) as defined by the customer(s).
Observable and, where possible, measurable Service Quality Standards for key customer interfaces.

Systems of Analysis of quality standards for goods and services according to their relative importance for consumers and consumer groups and their impact on the company’s strategy.

(C) Quality Management

Measuring current quality indicators

Depending on your goals, measurements can be as simple as they require a lot of effort and effort within a single program.

For example, collecting data on specific problems can be a fairly quick operation: If this data already exists, the process of collecting it can take only a few hours.

However, it can take weeks or even months of hard work to gather enough information to benchmark core business processes.

Perhaps, apart from training, the measurement is the largest “Object of investment” in any organization embarking on the implementation of the initiative Six Sigma.

The long-term development of the measurement “infrastructure” is a major step towards the creation of a coherent enterprise system Six Sigma. The benefits are enormous – the ability to track and respond to change with an efficiency that only a few organizations can claim today.

The final products of this stage include:

Data to evaluate the performance of your processes compared to consumer requirements for the result/end product and/or service.
Effective measurements, based on information about the relative strengths and weaknesses of your processes and between them, are a key source material in the project selection phase (Step 4).

Plan and measure quality against customer requirements

Selecting a measurement object

Choosing the optimal quality indicators (you simply cannot measure everything) means balancing two main elements:

(1) what is doable, and (2) what is most useful or valuable.

If you have chosen the priority requirements of consumers by this time, you have a good starting point for determining value. A good choice for the first measurements can be those areas where, in your opinion, there is a gap between quality and consumer requirements.

Drafting working wording

By working wording, we mean a clear, understandable, unambiguous description of what is to be measured or observed, so that everyone can work, i.e., make measurements according to these definitions.

Identify data sources.

In any organization, there are many potential sources of data. The most important thing you should make sure is that the data source you choose (or have access to) contains accurate data and represents the process, product, or service you intend to measure.

Development of a data collection and sample study plan

We will limit the review of this step to three main elements – questionnaire, stratification, sample study.

Data Collection Forms

Properly designed questionnaires are the workhorses of data collection. And although there are a sufficient number of standard questionnaire forms. It is advisable in each case to modify the form so that it best suits the data collection project in which you plan to use it.

Stratification

Obtaining a basic quality indicator relative to customer requirements is the key task of Step 3 on the Route Map Six Sigma. However, after a while, you’ll probably want to learn more about this data, and that’s where stratification comes in.

The word itself means levels (or “strata”) of data. We prefer another comparison – “data cutting”. Stratification helps you be curious and find out what’s really going on. However, if this data was not included in the collection during your first study, you will not be able to answer these questions.

That’s why you need to think ahead of time, as far as possible, which stratification “Factors” you may need later.

Sample study

In the field of data collection, “sampling” (more precisely, selective research) is understood as the use of individual elements of the population (group and process). Allstatistics as a scientific discipline is based on selective observation in the sense of the ability to draw conclusions about the whole on the basis of observations of the particular.

Implementation and refinement of the dimension

It’s always best if you have the opportunity to test your data collection method and make sure that forms, sampling plans, and working formulations work as you expected. If you can’t do a trial data collection, then at least pay close attention to how your plan works when you start implementing it. If you plan to involve many different people in the collection and compilation of data, it is important to conduct preliminary preparation (formal or informal).

Verification of the accuracy and value of measurements

There are many different ways to check the accuracy of your measurements – and ensure that they are accurate in the future. In manufacturing, the most common measurement performance test is known as Gage R&R… It consists of repeating the measurement many times under different conditions to check for compliance with four criteria:

How accurate are the measurements or observations?
If the same person or measuring instrument measures and observes the same object more than once, will the results be the same?
If two people or measuring instruments take measurements of the same object, will they get the same results?
Is there a decrease or shift in accuracy or repeatability over time? Although Gage R&R. Most common in continuous data measurement tests – and often using measuring tools (e.g., scales, meters, etc.), similar methods can be used to test discrete data measurements. You can develop your own way to check the accuracy of the measurement and use it before implementing the measurement in practice and for periodic monitoring if you plan to collect data over a long period of time.

Develop a defect-free baseline and identify opportunities for improvement.

Tools and techniques are important in any kind of business process measurement. At this point of the Route Map “Six Sigma” our task will only be to establish “baselines” of quality, i.e., determine how effectively processes work today in order to learn how to concentrate and measure improvements.

Yield (of a suitable product) and the content of defects

The content of the marriage. Shows the proportion or percentage of units with one or more defects. We will use them for all types of quantities.
Final output (denoted as Y). It is calculated by subtracting defective products from the Content unit. This value shows what proportion of the total number of units produced and/or delivered was defect-free. (Multiplying the final output by 100 gives you a percentage of the volume of quality products/services.)

Defect-free rates

Defects per unit.

This indicator reflects the average number of defects of all types in all sample units.

If you get a DPU of 1.0.

This indicates a high probability that there will be one defect in each unit.

Although some may have several and others none.

With a DPU of 0.25, the probability of detecting defects in the total output of units is 1 : 4.

Identify opportunities for defects.

One of the innovations of the Six Sigma measurement system was the adjustment of measurement values by complexity or number “opportunities” for defects. This allows you to “equalize forces”, i.e. compare the level of quality of complex goods and services with simpler ones.

In the Six Sigma system, the word “complex” is interpreted as “having more opportunities for a defect.” The challenge is to establish a real number of defect opportunities for each product or service. In many cases, we have to be content with common sense, however, we can distinguish three sequential actions to determine the number of possibilities:

Make a preliminary list of defects.
Determine which specific defects are critical for the consumer.
Check the proposed number of features against other standards.

(D) Perfection

Choosing a project for Six Sigma

The first important choice you have to make when starting the program Six Sigma, a choice that largely determines the amount of future costs, size and payback periods, comes down to a question “Where do I start?” Essentially, we’re going to introduce and consider two different approaches to dealing with issues related to running your program.

The first approach is based on an assessment of the criteria that affect the scope and urgency of your program, and the second is based on an analysis of your strengths and weaknesses in terms of what we call “core competencies” of the Six Sigma system.

Clarification of the task

What do you want to achieve with Six Sigma? It is clear that any company that undertakes “Six Sigma”, wants to get some “Results”, but what kind of results it needs (or achieves) depends on the company itself, and here the spread is very wide.

We’ve identified three main levels of tasks – business transformation, strategic improvement, and problem solving, depending on the scale of the impact you want to have on the organization.

Estimation of volumes

What segments of the organization can, or should you cover at the initial stage of your program “Six Sigma”? The answer will largely depend on your position in the organization. If, say, you lead an information technology team, then most likely your authority and resources allow you to launch a change program in the IT department, but not within the entire corporation.

The second point that should be taken into account when estimating the scope of a future program is related to the question of achievability. It would be highly unrealistic to assume that your organization can handle an unlimited amount of work. Once you’ve analyzed your key processes and business operations in detail, it’s easier to determine how much to focus your efforts on initially.

Definition of time frames

How long are you willing to wait for the results? In other words, under a neutral concept the “time frame” can hide anything – urgency, patience or the degree of panic. Waiting for the first results for a long time can be quite tedious and frustrating. As a matter of fact, it is the time factor that has the strongest impact on the vast majority of start-up projects “Six Sigma” – and for a very specific reason.

Selecting the “Transformation Site” on the Route Map

Possible starting points that correspond to the task of your program are indicated “Six Sigma”, the so-called “transformation sites” on the Route Map. If you wish, you can choose two “Sites” at the same time – the whole trick is to distribute resources and energy, but not to let them spread in a thin layer.

Route map: your strengths and weaknesses

There is another way to identify priority issues for the Six Sigma program. It is also based on the Route Map “Six Sigma”, but at the same time you evaluate your capabilities for each of the Steps, which, as we have already noted, make up “key components” of a successful organization of the twenty-first century. There are a number of questions, answering which, you will gradually begin to recognize your weaknesses, as well as those activities to which you can direct your efforts in the first place.

Pilot launch of the Six Sigma program

Regardless of the scale and scope of your Six Sigma launch, strategic piloting should be a must. The reality is that pitfalls and unexpected turns of the current are inevitable in all programs. However, a test run allows you to minimize the complications that arise and, most importantly, learn from it. Also, if you’re still not sure if your company will be able to benefit from Six Sigma, the run will be the best test for your overall approach.

Development of the Project Justification

The end product of the selection process is a description of the subject of the project. The significance and the overall goal or expectations of the team entrusted with this project. The rationale for the project serves as a guideline for the leader of the improvement team. Moreover, the prepared justification becomes a communication tool and even a kind of internal A “marketing” document that allows you to explain the purpose of the project to the entire organization.

But, most importantly, the rationale (sometimes referred to as the mission of the project or “Statement of Purpose”) is the starting point from which the improvement team begins the development of the Charter or other of the review document. Statement of Justification of the Project traditionally It includes the following elements:

description Question
focus of this particular project
Total the purpose or nature of the results to be achieved.
Total Description of the value of the project
Options and expectations

When preparing your statement of justification for the project, you can add some of your own points or shorten the option we propose. You can also use the format of the project description that is accepted in your company. In other words, our advice is to choose what best suits your organization.

The main task is to find a middle ground: To give the team an accurate idea of the direction in which the project should develop and what the expectations are, but not to dictate decisions and not to unnecessarily limit the range of possible options. One of the first tasks of the improvement team will be to interpret the Project Justification prepared by the company’s managers and prepare their starting document based on it.

Selection of Six Sigma Improvement Model(s)

The last question you have to decide when determining your approach to “Six Sigma” is the choice of a model of improvement. Although the immediate impact of this decision is limits to Step 4 of the Route Map Six Sigma. The choice of model will also affect how you conduct training and “promote” the Six Sigma initiative.

We have said that many companies in their improvement projects Six Sigma uses the DMAIC model – Define – Measure – Analyze – Improve – Control – or one of its variants. We use this same sequence of steps throughout our book as the preferred model.

However, if your organization is already using a different method of improving or modernizing processes and has taught it to people. The system “Six Sigma” in no way obliges you to abandon it in favor of the DMAIC model.

Many of those models that we have seen in various organizations can be a good conduit for programs Six Sigma. All of them, in one way or another, rely on the PDCA cycle. Each has its own strengths and weaknesses. If the model you practice is well known and understandable to your people. The introduction of new methods Cultivation can confuse them. Plus, you’ll have to completely retrain them.

(E) System Development

Expansion and integration of the Six Sigma system

The main actions to take when process management to ensure the efficiency of the Six Sigma system, are the following three:

Implementation of continuous measures to ensure sustainable improvement (“Control”)
Definition of responsibility for ownership and management of the process
Closed-loop control and transition to Six Sigma

Introduction Continuous measures to ensure sustainable improvement (“Control”).

Building Strong Solution Support

Work with those who manage the process.
Use a “demonstration stand” with facts and Data.
Be one of the people running the new process and using it as to their customers.
Create an atmosphere of purpose and Enthusiasm.

Documenting changes and new methods

Documentation is a necessary evil, and to its Compilation can be approached creatively. A successful organization working on the Six Sigma system will have to look for new and better ways of transformation documentation in a convenient and accessible way.

Define meaningful dimensions and charts.

After successful investments in Six Sigma projects, you will Put your victory in jeopardy by going back to the old management a guessing game. The need to speculate can be avoided if use well-selected and performed measurements that allow you to Track your process and implemented solutions.

Developing “response plans” for the process

Availability of pre-designed instructions on when and what measures should be taken is part of the practice of “offensive management” of any company using the Six Sigma system.

Definition responsibility for ownership and management of the process.

Six Sigma and the Business Process Management Vision»

Here are some elements of the “vision” of management: Processes.

Business leaders will concentrate their efforts on the effective promotion of work throughall functional subdivisions to the benefit of customers – and shareholders, ultimately.
Employees will be identified with the process into the same extent as with its functions / departments.
People at all levels will understand how their job is fits into the process and creates additional value for the client.
The client’s requirements will be known throughout Process.
Processes will be constantly measured, improvement and modernization.
More energy and resources will be spent on providing value to customers and shareholders, not bureaucratic Games.

Process Owner

Perhaps the most important step in the transition to Process management is the assignment of process owners. Not There is an official description of the owner’s job responsibilities process, however, the following responsibilities are required to perform the role Six Sigma organizations:

Maintenance of technological documentation.
Measurement/monitoring of process efficiency.
Identify challenges and opportunities.
Launching and sponsoring projects on Improve.
Coordination and communication with other processes and managers of functional units.
Maximizing process efficiency.

Control with “feedback” and the transition to the “Six Sigma” system.

Coming to process management is at the same time the end of our Six Sigma Route Map and the beginning of the real becoming a Six Sigma organization.

(III) Platform and Transformation

Selecting the “Transformation Site” on the Route Map

Possible starting points that correspond to the task of your program are indicated “Six Sigma” – the so-called “transformation sites “ on the Route Map. If you wish, you can choose two “sites “ at the same time – the whole trick is to distribute resources and energy, but not let them spread in a thin layer.

After we explain the principle of operation of the “sites”, it will be possible to present launch scenarios and clearly illustrate each category.

Business Transformation Platform

The upper “platform“ is for those who have the need, vision and patience necessary to get the program up and running Six Sigma as a full-blown change initiative.

At the initial stage, it will be easier and more useful for you from the point of view of the training effect to direct your efforts to preparing a map of only certain key processes. Do not try to identify and define all processes at once the first time.

In addition, the fact that you decide to opt for a “platform “ leading to business transformation does not mean that you are automatically denied access to the remaining two. In fact, in most situations. It is wiser to view organizational change as a multifaceted program.

Strategic Improvement Platform

The average “platform“ opens up the greatest choice for you. The scope of the strategic improvement program can be completely different: from one or two key pilot improvement projects to a whole wave of teamwork and training aimed at a key strategic weakness of the company. It can be seen both as a preparatory stage on the way to more ambitious business transformation initiatives, and as a focused improvement campaign that does not exist in a long-term context.

In addition, strategic improvement can be aimed at creating one of the key elements of the infrastructure or key competencies of the system “Six Sigma”: for example, measurements or the “voice of the customer“ system.

“Platform” for solving problems.

Given that behind almost all Six Sigma launches there is an urgent need to obtain results. Many organizations first of all choose the “platform “ leading to the solution of the problem. But while this is the fastest path to payback. It can also be the riskiest if you limit yourself solely to solving problems.

Two dangers may lie in wait for you along the way:

An error in the selection of the project. Managers do not have accurate data on processes and customers. As a result of which decisions about the selection of projects are made on the basis of assumptions and guesses. And this means that halfway through, you may find that the issue you directed your efforts to creates some inconvenience. But is by no means critical for the company or its customers. In addition, many succumb to the temptation and launch too many projects at the same time.
Limited income. The problem-solving methods that are the fourth point in our Route Map, i.e. process improvement and its design/modernization, are most effective when combined with a broad focus and a long-term perspective. It was precisely the lack of vision of larger-scale changes that distinguished many TQM programs. Which contributed to a slowdown and a halt in the program.

Route map: your strengths and weaknesses

There is another way to identify priority issues for the Six Sigma program. It is also based on the Route Map “Six Sigma”, but at the same time you evaluate your capabilities for each of the Steps. Which, as we have already noted, make up “key components” of a successful organization of the twenty-first century. We offer you a number of questions, answering which, you will gradually begin to recognize your weaknesses, as well as those activities to which you can direct your efforts in the first place:

Step 1.

How well do we understand how the organization works and what it is based on? For example, which processes play a key role?.

What key customers do they serve? How well defined are the links between the groups?.

Step 2.

How well do we really understand our customers? Customers of our competitors?.

Do we have an effective, wide-ranging Voice of Customer strategy?.

Are there mechanisms in place to track consumer and market factors so that we can regularly review and analyze this data?.

Are we focused enough on our customers’ requirements, products, and services, or are we focusing on one at the expense of the other?.

Is the information coming from customers through feedback channels translated into clear requirements and specifications?.

Step 3.

Do we accurately measure our performance against our customers’ requirements?. (Do we really know how effectively these measurements are made?). Are product and service requirements cover by the measurements?

Step 4.

Do you have critical issues or opportunities that require immediate attention?. Do we see every problem as urgent, or do we prioritize effective improvement?. What do we gain from solving these problems?. Are we allocating the necessary resources to address these problems, or are we rather resorting to temporary measures?. Is it safe to say that we have a proactive management style, and the decisions made are aimed at eliminating the real sources of problems?. Is it possible to say that we are able to design/modernise processes and readily apply this skill when existing processes are exhausted?. Do key managers participate in improvement programs, and do they support these initiatives?. Are we measuring results, and are we taking steps to ensure that these decisions are profitable?

Step 5.

Does the organization have a leader who is responsible for continuously evaluating and managing our key processes?. Have measures been taken to ensure the continuity of improvement and to achieve the target results?. Are measurements often enough and reported enough to be able to determine how well the company is performing?. Are we ready to manage the company on the principle of a closed-loop system?.

In a sense, these issues allow for a more objective and reasonable approach to setting priorities and directions for the implementation of the Six Sigma program. Such an assessment allows you to distract yourself from current issues or disturbing symptoms, i.e., from what significantly influences the choice of “site” and focus on the systemic strengths and weaknesses of your organization.

However, in real life, current problems prevail over the tasks of the system plan, and here it is important to be able to focus on the immediate needs of the company, but to do it in such a way that your first projects lay a solid foundation on which you can build the “core competencies “ of Six Sigma.

(IV) Choosing the Right Project : Six Sigma

On one occasion, we conducted an informal survey of our colleagues who had been involved in Six Sigma or other process improvement initiatives at one time or another, and we met with unexpected unanimity: absolutely everyone named project selection as the most critical part of the Six Sigma launch effort, and the most often done wrong.

The equation is actually very simple: A correctly selected and defined improvement project equals better, more rapid results.

The inverse equation is also simple: a poorly chosen and defined project equates to delays and a drop in morale.

Basics of project selection

First, let’s look at some key rules for effective project selection. This will allow us to move on to practical steps, following which. You will protect yourself from possible mistakes.

Leadership training

When it comes to managing the Six Sigma initiative, there is still a lot to learn for leaders. However, all too often it turns out that it is the basics of project selection and are “cut out” from the development programs of senior managers. This is quite understandable – identifying problems is usually not the responsibility of managers and executives of companies. But choosing the right project and formulating it well is by no means easy.

Other leadership functions are also critical. Such as vision formation, staffing and resources, and project control. And yet, if the project “Six Sigma” is not delineated accurately. It deals a direct blow to all subsequent work and its results. Therefore, we offer you at the top of your implementation plan “Six Sigma” should be attributed in large letters: TEACH SENIOR MANAGEMENT TO CHOOSE PROJECTS.

Run a moderate number of projects at the same time.

“Why not work on all projects at once?” you may ask. People and organizations can only focus on a limited number of objects at a time.

In pursuit of results, there is nothing easier than throwing balls and peas at the organization. Too large a wave of projects quickly exhausts the manager’s ability to track and direct them. Too many projects distract people’s attention and deplete their ability to implement all projects effectively.

Know how to “ration a portion” of the project.

We call this common mistake “trying to solve world hunger.” Very often, teams are assigned projects that address large, complex problems. The chances of unraveling them by the forces of a handful of people, without a colossal long-term effort, are no more than feeding all the starving.

A team can struggle for months to track and measure all sorts of tentacles of this problem, exhausting themselves with fruitless efforts and testing the patience of the leader. The ideal option is a balanced combination of two main criteria.

Make two words your magic spell: Content and feasibility.

This usually means small and very precisely focused tasks. Keep both profitability and consumer benefits in focus.

It also happened that the groups of leaders with whom we worked in the early stages of their programs “Six Sigma”, persistently interested in when their projects will be released the “finish line” leads to dizzying income. But for most companies, there’s only one way “Shortcutting” the path to the finish line means reducing costs and increasing productivity.

Opportunities for improvement and financial

The desire to save more with the help of Six Sigma is not a bad thing, but only as long as this desire is kept in balance with the understanding that short-term financial income is only part of the potential benefit. Very often, the much greater potential for the financial well-being of your organization is associated with the strengthening of competitiveness and the growth of market power – even if the first receipts have to wait longer.

And now let’s look at an example of how projects are usually selected, and expectations are formed.

Naturally, for many organizations, increasing productivity and reducing rework can bring really huge revenues. But the emphasis is solely on “Quick money” means that you are pushing those long-term benefits further and further away from your “Six Sigma”.

Which are associated with customer orientation: Satisfaction, service, value and quality of products.

The decisive intention to make the consumer the only point of focus in the project selection process is very rare and requires a certain amount of discipline. So far, we have heard of only one large industrial enterprise, relatively recently “converted” to Six Sigma. Whose leaders openly stated that the priority of their initiative is not to increase productivity, but to customer loyalty.

The best advice is an even combination of externally and internally directed opportunities for improvement in projects.

Steps to effective project selection

Choosing the right project is a process in itself. By performing the sequence of actions correctly, you can significantly improve the frequency of accurate hits. Below, we’ll look at some of the key questions and steps to help you fine-tune your project selection process. We proceed from the assumption that the decision to select projects is made by a group, usually from senior managers. But even if you choose projects for your organization yourself, the same principles apply.

Selection of sources of project goals

As in any other process, input factors play a key role in achieving effective results: “Garbage at the entrance – garbage at the exit.” If you’re deciding which focus to use for your programs Six Sigma. You are guided by very little fragmentary information, you are much more at risk of getting your hands on a mountain of inconsequential or unmanageable projects. Steps one through three on the Route Map Six Sigma is designed not only to give you a better understanding of your customers, company, and processes. But also to give you a thorough understanding of the priority areas for improvement.

If you start the route from a later stage, then you may have the following sources of project ideas:

1. External.

This includes three categories of sources: “Voice of the Customer“, “Voice of the Market” and “Comparison with Competitors”. Essentially, these sources identify opportunities to better match customer demands, respond to market trends, or counter competitors’ strategies and abilities.

Sources of information of this kind can be completely different:

From articles on business and trade to market / competitor research and “feedback” from sellers.

Here are sample questions related to these sources:

Where are we not meeting the needs of consumers well enough?
Where do we lag behind our competitors?
How will the market develop? Will we be able to respond?
What new needs are brewing in the consumer environment?

2. Internal/external.

Inputs from this category help identify the challenges your company faces in defining and/or implementing its market and consumer strategies. They should help you answer questions such as:

What barriers separate us from our strategic goals?
What should our new acquisitions look like in order for them to be cost-effective and in line with our desired market image?
What new products, services, divisions, or other potential opportunities do we hope to pursue to create more value for our shareholders and consumers?

Some of the best opportunities for improvement are identified through these questions. As they allow you to evaluate both the company itself and its positioning in relation to the outside world.

3. Internal.

Frustrations, challenges, and opportunities within your operations make up the third key source of possible projects Six Sigma. These internal sources can be conditionally called “Voice of the process” and “Voice of the employee”. As you listen to these voices, consider answering the following questions:

What long downtimes are slowing down our process?
Which areas have more defects and/or rework?
At the expense of which areas does the “cost of poor quality” increase?
What ideas or concerns were expressed by rank-and-file employees or managers?

The purpose of these questions is to take a closer look at the opinions of different people on how processes can be improved for the benefit of the company, consumers, shareholders, and employees.

Understanding the Eligibility Requirements for a Six Sigma Improvement Project.

The DMAIC model is not suitable for all occasions. There are three main requirements that a Six Sigma Improvement project must meet:

There is a gap/discrepancy between what is current and what is desired/necessary. “Where does it hurt?” – this is how we often formulate this question. If you plan to work with the DMAIC model, you must first of all have an unresolved problem or an unclaimed opportunity. When it comes to process development, the new activity (desired/necessary) is contrasted with the absence of a corresponding process at the moment.
The cause of the problem is not completely clear. Perhaps you have your own assumptions, but so far no one has been able to reliably establish the source of the pain. Or the solutions you thought were meant to relieve the pain don’t work.
The decision is not final, but there is no optimal option.

Even if you have already planned short-term measures. The potential for the project “Six Sigma” still remains – An ambulance can help you buy time for a more thorough analysis. However, if you have already run a large-scale program to eliminate “gap”. A separate, parallel project of “Six Sigma” will be at best redundant. If urgent measures are quite adequate or the decision is obvious (and justified) the DMAIC can be skipped altogether. Philosophy Six Sigma does not oblige you to permanently ban Nike’s “Just Do It” slogan from improving business processes when appropriate.

Setting criteria for project selection

The difficulty of selecting projects (as well as making many other business decisions) is to decide not only what to do, but also what not to do. As stated, you won’t be able to do everything at the same time, and some potential projects Six Sigma will probably have to be left out of your initiative. In this case, the keyword becomes “priority”. What challenges/opportunities will you tackle first?

Choosing the right project means highlighting a project that best suits your current needs, capabilities and tasks. Below you will find A “typical” list of possible criteria that can be used in the project selection process.

The criteria are grouped into three categories: The company’s results or benefits, achievability, and significance to the organization.

Results or benefits of the company

Value for external customers and requirements. How profitable is this opportunity or is this problem serious for our external customers and key audiences (shareholders, managers, distribution channel partners)?
Significance for business strategy, competitive position. How valuable will this potential project be to realize our business vision, implement our market strategy, or improve our competitive position?
Impact on “core competencies”. How is this possible project “Six Sigma” will affect the composition and capabilities of our “core competencies”?. (Perhaps the project will help strengthen one of the key competencies or “unloading” that activity that is no longer perceived as a key internal ability.)
Financial value (e.g., cost reduction, increased productivity and sales growth, increased market share). What are the likely short-term cash returns? Long term? How accurately can these indicators be predicted?. (Be careful not to overstate your projections above what is realistically achievable.)
How much time can we dedicate to solving this problem or capitalize on this opportunity?. (Note: Urgency does not equate to significance. a small problem may be urgent, and solving a huge problem may not require haste.)
Does the problem, question, or opportunity increase or decrease over time? What happens if we don’t act?
Consequence or dependence. Do we have other potential projects or opportunities that depend on the resolution of this issue? Are there other issues without which it is impossible to proceed with this problem or opportunity?

Accessibility

Required resources. How many people, time, and money might be needed for this project?
What knowledge or technical skills will be required for this project? (And will we be able to attract them from the outside?)
How difficult or difficult will it be, according to our expectations, to develop an improvement regime? Implement it?
Probability of success. As far as it is possible to judge from the data available to us, what is the probability that the project will be successful (within a reasonable time)?
Support or Buy-In. What kind of support can we expect from key groups in the organization for this project? Will we be able to convince them of the need for the project?

Implications for the organization

Learning effect. What new knowledge – about business, consumers, processes and/or system Six Sigma – can we learn from this project?
Cross-functional value. To what extent will this project contribute to the removal of barriers between groups within the organization and improve management? “a whole process.”

While this list allows you to evaluate projects quite extensively, you may have other criteria that are important to your company. When choosing a project, you should not focus on all these factors, it is better to choose from 5 to 8 such issues that are most pressing for your organization today. In addition, if possible, it is easier to adhere to those criteria by which you can give more informative answers.

Remember:

Your task is to choose the projects that best suit your financial, economic, organizational, and cultural needs and the goals of your program Six Sigma.

If you have a very large list of potential projects, you can narrow it down to the first “applicants” by establishing additional mandatory requirements. (For example, a minimum amount of potential financial benefits. benefits for external consumers) or by negotiating in the group.

For a more accurate assessment, you can introduce a point system and assign a certain number of points to all potential projects for each of the criteria. This will allow you to make a comparison and see which projects best meet your conditions for a successful choice. The “criteria matrix” can help you structure all the information and simplify the selection procedure.

Whatever criteria you follow when selecting a project, remember that there are always plenty of reasons to consider a project suitable for the DMAIC model, and just as many “contraindications” that need to be identified before the project is officially launched. But in essence, they all boil down to our two macro criteria – content and feasibility.

(V) Pilot Design for Six Sigma

Among the most common arguments against a trial run are the need to move the project forward quickly, insufficient resources, and/or loss of momentum and enthusiasm for the program. It should be argued here that a well-organized pilot launch will not only not slow down the implementation of the program. But will also allow you to achieve better results in a shorter time, as it will help to identify many shortcomings / defects in the training program, projects, teamwork, etc. If you decide to abandon the pilot run at all costs. Then you should at least set aside time to consolidate improvements in your processes. Otherwise, you risk prolonging and significantly increasing the negative impact of unforeseen problems.

Selecting the content of the pilot run

The pilot launch strategy applies to any aspect of Six Sigma, including solutions obtained during the implementation of process improvement projects and their design/modernization. Among the most typical elements Six Sigma that can be considered suitable candidates for a trial run include:

Orientation course for company executives.
Selection of the project.
Formation of a project team.
Selection of the project team leader.
Measurement methods.
Development and content of the training program (for audiences made up of directors, leaders and team members).
Logistical support and schedule of the training program.

It is quite obvious that the main object of piloting will be the results of the program Six Sigma. However, be prepared for the fact that it will take some time to measure them. By controlling at least some of the listed elements, you will be able to significantly improve your chances of a stable income from the program.

Key Questions on Strategic Piloting : Six Sigma

Strategic piloting starts with your firm decision to manage problems and review your program “Six Sigma” in terms of “continuous improvement”.

The specific features of the piloting strategy will depend on your tasks. However, you can formulate a number of questions, answering which, you will more effectively plan almost any pilot launch:

How can we test our plan or approach to make sure it works effectively?

Focus on finding opportunities to test key aspects of your program within a limited framework and with a minimum degree of risk. But be sure to make sure that the test conditions are as close to natural as possible.

What measurements/observations will be required to evaluate the effectiveness of the pilot run?

The higher the accuracy of the estimate, the better. A pilot run should be followed by a very thorough, focused analysis of everything that “worked” and what “didn’t work”. Otherwise, the whole point of this event is lost – your improvements will be based as much on guesses and assumptions as on real information extracted from piloting.

How long will it take to account for everything that comes to light during the pilot launch?

This question is always particularly difficult. Many companies, not having time to make a decision to launch the program, want everything to be ready, preferably yesterday. But if you want the pilot run to be useful, accept the fact that it will take time to analyze the results and bring the program. We strongly recommend that you set aside sufficient time in your schedule to identify, evaluate, and implement improvements to the pilot.

As a rule, depending on the subject of piloting, analysis / fine-tuning takes no more than two weeks, after which you will be able to move forward aggressively with a much greater degree of confidence in the future benefits of your program. As we have already said, piloting is an important element of improvement programs Six Sigma.

Launch of Six Sigma: results

First, we want to remind you that a number of basic questions related to the preparation of the launch of your program “Six Sigma” can be found in the Six-Sigma Launch Worksheet. Now let’s summarize and list the key points that should be remembered without fail:

Plan your route. There are many roads leading to Six Sigma, and the best one is the one that suits your organization. Stay away from advisors who claim to know exactly how to implement Six Sigma.
Define your goals. Prioritization plays an important role. Six Sigma can be used to solve key problems of your company. And they can also become an engine “cultural change”. Start at the level that best suits your needs and degree of readiness.
Take on only feasible tasks. Consider your organization’s influence, resources, and volumes when preparing your plan. Approbation of methods Six Sigma on a limited scale is also a good start.
Use a piloting strategy. In the long run, you’ll save time and effort if you test and refine key aspects of your program before you deploy it at full scale.
Evenly combine short- and long-term factors in the preparation of the program. The big disadvantage of focusing on quick results is that you run the risk of being stuck solely on short-term projects. Your focus should be on implementation “key competencies” – knowledge of consumers, measurements, proactive management, etc.

(VI) DMAIC Model & Six Sigma

Six Sigma Improvement Model

Over the years of the existence of the “movement for quality”, many different models of improvement have been proposed. And all of them, as a rule, were based on the steps identified by W. Edwards Deming, Plan – Do – Check – Act (Planning – Test – Evaluation – Action), i.e., on the so-called PDCA chain. Which describes the sequence of operations to improve processes base on accurate data.

Model PDCA

Analyze the current situation for bottlenecks and omissions. Gather data on key issues. Identify the true source of the problems and focus your efforts on it. Consider possible solutions to the problems and plan to test the most high-potential solution.
Run a test run of the solution.
Measure the results of the trial run and evaluate them against the targets. In case of complications, analyze what hinders your improvement efforts.
Based on the results of the test run with subsequent evaluation, make appropriate changes to the solution, refine it to the completed form and scale. And proceed with the implementation of an unplanned section of the process. We returned to the starting position and repeat …

DMAIC Model

DMAIC = Definition – Measurement – Analysis – Improvement – Control

Within the framework of Six Sigma. The improvement model is understood as a five-phase cycle “Definition – Measurement – Analysis – Improvement – Control”. The so-called the “DMAIC model”. Which has recently become increasingly popular with Six Sigma organizations.

Like other models, DMAIC has its origins in the PDCA cycle.

The difference is that we will use this model both for direct improvement of the process and for its design/modernization. In this regard, speaking further about “DMAIC projects”, we will mean activities using both of these strategies “defect-free” improvement.

Potential Benefits of the DMAIC Model

On the other hand, there are a number of reasons, both organizational and substantive. That may incline you in favour of switching to a new model within the program “Six Sigma” or convince you of the advantages of DMAIC over other models. If at the moment you do not have a process for solving problems.

The ability to start all over again.

If an existing model of continuous improvement is associate with a failure or discredited quality initiative, or if it is using only occasionally. The DMAIC (or any other effective model) will help you position Six Sigma as a truly new, better approach to business improvement. Fully By “breaking with the past,” you can avoid opening old wounds and reviving the hostile moods that have earned the final push for improvement. In other words, it can be a sign that the company has learned its lesson well and is embarking on a new, better path – the path Six Sigma.

Familiar tools in a new context.

By introducing a new (and better) model of improvement, you give people the opportunity not only to improve and apply familiar tools, but also to add new ones.

A consistent approach.

After all the waves of quality training that plagued companies one after another, from the 70s to the end of the 90s. There were lasting consequences, one of which was the existence of different models of improvement in the same company. But to cover the entire process with cross-functional programs “From start to finish”, a single method and a common language are needs. Therefore, the solution “pick one model and stick with it” can prove to be the important path that will lead your company to Six Sigma with its huge potential.

Priority “Consumer” and “Measurement”.

Another potential advantage of the DMAIC model is that. It focuses on these two critical elements of the Six Sigma system. For example, confirmation/clarification of consumer requests is a key step at the stage “Definition” – in the models of “older” is not represented at all.

The two paths to improvement are process improvement and process design/modernization.

We have already said that one of the breakthroughs of the Six Sigma system is that. It allows you to break out of the meaningless confrontation of TQM or Re-engineering. We have seen many examples where Six Sigma improvement teams had every right to choose whether they could “repair”, or they could “rebuild” an unfavorable process. The DMAIC model, as we will see later, can help them make the right choices and adapt the model to their approach.

Ultimately, there is no such thing as suitable/unsuitable for The Six Sigma model of improvement simply does not exist. If your company is satisfy with the five steps of the DMAIC model, great. If your people or project is better suitable to an existing model or any other, that’s also good. In any case, the system “Six Sigma” will work in your company.

(VII) Statistic Basic : Six Sigma

Usually, “sigma” means the standard deviation of a random variable from its mathematical expectation.

In practice, use a deviation from arithmetic mean.

The premise is a complete randomness of deviations. That is the absence of systematic causes leading to displacement in one direction or another. In this case, the distribution of deviations is about the average value of the process will be well approximate by normal distribution. To Keep Continue >> Read More this article