March 25, 201016 yr We had this discussion at another platform recently. For everyone's benefit I am posting it here. Manish RawatManagement Operations Trainee at Avery Dennison I would like to study the penetration of the Six Sigma concept at bottom level & sustenance of the project carried out years ago Venugopal R.Manager-Quality at Moog, Controls India I would review the performance of key indicators and evaluate the effect of six sigma on improvements in KPI Mamoon Md.Abdullah AlHead of Enterprise IT Projects,BRAC Bank Ltd I would examine and assess the impact of Six Sigma in every business processes and derived improvements/benefits that ultimately contributes or complements the strategic intents/goals of the company. Vishwadeep Khatri Principal Consultant, Benchmark Six Sigma Good comments by Manish, Venugopal, and Mamoon. Sustenance of improved process performance, Impact on strategic intents (or KPIs) of the company - all seem valid and good methods. Do these seem enough for assessing maturity? Would someone like to add to these? Prasad VemuriIntelenet Global Services For me the most mature six sigma organization is where there are no more six sigma projects to be done in the organization. Now coming to the level of maturity of the process, I would say assess the Cost, performance and quality of the manufacturing process using probably metrics like OEE ( of course OEE in its true sense, not the fudged OEE that we normally see on the shop floor) and then see if we are close to 85%(You can set your own target while starting the six sigma program). At the start of the sigma program, say your OEE was 40% and now after 5 years of implementation it is 47% then your program is about 15% effective ( 7/45)% (actual improved OEE/Delta Target OEE)%. One more thing that you can measure would be the plant overall sigma level. Again integrity in the data while reporting is a must. But to some extent it will take mostly quality into account. So we can leave it to the discretion of the management to decide as to which is most important, or inline withe mission and vision of the company for profitability. V.B. ManianOutsourcing/Offshoring Professional The leads given by all so far (viz, KPIs, Performance metrics aligned with the Business mission & vision, OEE, sigma level, etc) are good indicators to keep us all (as SS professionals) on our feet. However, the driving factor of any SS project/initiative/business can be summed up in two broad terms, viz 'Business Profits' & 'Customer Satisfaction' (demonstrated by increase in customer base). The level of growth in these two over the years (since the company/business became one to operate at Six Sigma level) with continued sustenance of the same should give a fair idea on its level of maturity as a SS company/organisation. Prasad Vemuri Manian, You have a very good point, but I have a follow up question. How will you measure it? V.B. ManianOutsourcing/Offshoring Professional Hi Prasad. Six Sigma is defined as a measure of Quality that strives for perfection with benefits to both the business & its customer(s). Herein, the term measure applies to the level of performance from a (six) sigma perspective and not financial/customer base perspective. Increase in business profits & customer satisfaction (resulting in increased customer base) with continual improvement are the additional confirmed benefits of operating at six sigma level of performance, which cannot be quantified/measured in specific terms, & are variable from business to business. As mentioned in my previous post, sustained growth in these are an indicator of the level of maturity of a company/organisation operating at six sigma level of performance over a period of time. & your input OEE/Sigma level is an indicator of the measurable performance. Hope this clarifies. Vishwadeep Khatri Principal Consultant, Benchmark Six Sigma Dear Mr. Manian, My inference from your comment is that irrespective of business benefits, if a company reaches Six Sigma performance level in its important processes, it should be considered mature in the implementation journey. Am I summarizing it correctly? V.B. ManianOutsourcing/Offshoring Professional Hi VK Sir, As mentioned in my previous post, Increased business benefits & customer satisfaction alongwith continual improvement are the CORNERSTONES of a Six Sigma process by its ACCEPTED DEFINITION in business language. So, a company/business operating at Six Sigma level of performance (in its key processes) over a sustained period of time MUST be invariably accompanied by the above two (increased business benefits & customer satisfaction) all long, & NOT irrespectiveof it (per your inference), to be used as a yardstick in gauging its maturity level from a Six Sigma perspective. Vishwadeep Khatri Principal Consultant, Benchmark Six Sigma Interesting response but still little unclear to me. Are you saying that if a company tries to reach Six Sigma level of performance and achieves it (for important processes), the company is surely going to reap business benefits and have high customer satisfaction? V.B. ManianOutsourcing/Offshoring Professional Hi again VK sir The fundamental reason as to why SS is so much sought after as a professional discipline & object of business contention with its growing influence over the professional & business community at large is mainly because of the win-win situation it creates for both the business (profits) and its customer/s (satisfaction) apart from other things (increased productivity, better quality, continual improvement, etc). There may be a few one of cases where some of the expected outcomes of a supposed SS process may not be realised due to certain prevailing business &/or other conditions, but the situation can always be improved in the time to come through continued application of SS & other business efforts to fructify the same (unaccomplised objectives). Hope this answers your question. Vishwajit joshi Manager – Continuous Improvement at Integreon Managed Solutions India Pvt Ltd The key elements for assessing Six Sigma maturity in a organization can be broadly viewed at two levels viz results/effectiveness and progress on program/initiative. Some of the KPIs (aligned with Balanced Scorecard quadrants) for assessing effectiveness of Six Sigma program can be - 1. Financial KPIs - Net savings from Six Sigma projects (include all reduced costs, increased revenue, increased sales, improved margins etc) 2. Customer KPIs - CSat ratings, responsiveness, MTBF, MTTR 3. Process KPIs - COPQ, Process maturity, productivity, quality 4. Learning & Growth KPIs - Six Sigma DNA, New products/services Some of the KPIs for assessing progress on Six Sigma initiative can be - 1. Training penetration - % of organization covered under various trainings like Six Sigma overview, Yellow belt, Green belt, Black belt etc 2. Projects coverage - % of organization (in terms of functions or processes) covered under projects implementations 3. Projects selection - ad hoc or low hanging opportunities indicate low maturity of program whereas projects aligned with organization startegy, innovation, new product/service introduction etc indicate higher maturity of program 4. Six Sigma assets - processes for Six Sigma trainings, projects, certifcation etc are well defined and implemented, digitized tools are in use, reporting is real time and structured 5. Culture - strong leadership support, Six Sigma is integrated with organizational processes (strategic goals and objectives, appraisals), critical mass is covered and believes in the approach Of course there can be other additional or different KPIs for particular situations and depending on the organization's strategy and environment, but these are the generic ones which can serve as the starting point. Ashok Muthuswamy, PMP, CPIM, CSSBBGlobal Program Manager at HP, Supply Chain Strategist, Lean Sigma Black Belt I am going to respond to VK's question asking whether six sigma will ensure business benefits... The answer is yes and no. It certainly contributes when it comes to productivity and bottom line improvement. However, the long term strategy formulation and deployment is the key for sustained business benefits. Six sigma can only help facilitate the strategy formulation/deployment, but not substitute that. Let me use Motorola as an example here. While Motorola pursued lean sigma approach to optimize its operation, it failed in developing a longer term strategy and direction. One of their well known failure is the lack of being able to foresee the switch to digital cell phones and develop appropriate products. This resulted in a huge disadvantage for them despite coming up with path breaking phones such as Startalk, Pockettalk, etc., that they released in the mid 1990s. Finally, theycaught up and did release Razr, but couldn't repeat that success either. One of their issues is not coming up with products fast enough, over reliance on the existing products to do the selling, etc. Now they have been pushed to the backseat by agile players like Nokia, Samsung, etc. Motorola is even being split into two different companies now, clearly signaling the end of their domination. The bottom line is that the six sigma is a great optimization tool. It will help you streamline your operations, product design and eliminate waste throughout the value stream. However, it is not a substitute for long term vision and a farsighted corporate strategy. It can aid but not substitute the vision.
April 1, 201016 yr Dear Vishwadeep, I would like to defer on Motorola failure as I was part of Motorola for a long period. Lean Sigma never existed at Motorola before year 2000. They were already hit by Iridium failure and Asian currency Crisis. Let us not deviate from the objective of "assessing the maturity the company has achieved on Six Sigma implementation. What are the key elements that you would like to study for this?" My Personal experience on a Company that had introduced Six sigma and Six Sigma was part of the DNA a) The Customer complaints become very predictable. Based on this month Weekly Quality review, we are able to predict the customer complaints most of the time b.) The Product Margins had almost quadrupled and we had a surplus of more than 15Million USD after all expenses ( Including Tax) for an annual business of 100Million USD consistently. The COPQ was < 2 cents per unit. The COPQ was $0.57 when started. c) Core processes in the company runs like Clock work with almost negligible/Zero fire fighting. Production Stopped due to any major errors was not experienced for 1.5 years (Wrong Loading, any Major errors etc). The Goals of DPHU was revised every Quarter on Quarter. Started from 7% to 0.20%. This unit had more than 7000 types of parts and More than 56 Major Processes before converting into final product. It had 3 special processes including Soldering, gluing etc. d) The headcount was the lowest when compared to the other 15 factories world wide with similar products e) Inventory Turns were more than 50 f) Customer base had gone up from 12 clients to 259 in 2 years. This was due to projects like SLA implementation once order booked up to delivery and Service g) USD50000/- was assured on each product if any equipment fail due to the this product and was a big USP h) Have penetration of metrics in all areas including challenging areas like how to measure Training effectiveness after training g) We had 3 months Goal program and Bonus was paid on Quarterly Achievements. The goals were both Common and Dept specific. Either we win as a team or Lose as a team To Summarize on how to access.Consistently evident raise in Margin due to Improvement ProjectsCOPQ the lowest when compared to similar industry due to Six sigma implementation. The difference from the closest competitor should be significantly highClear evidence that Customer base have increased due to the six sigma projectsEvery key deliverable area is clearly measured and improved month on monthHigh CPK in Core Processes. The Trend of CPK is going high and has a strong relation to Customer SatisfactionEvidence of Applicable Sigma Projects is horizontally deployed.The environment is fearless and totally participative in case of any customer complaintBest Regards,Srinivas
April 1, 201016 yr Dear Srinivas, Please check your facts about time of Six Sigma launch in Motorola. About your reference to Six Sigma being started in Motorola not earlier than 2000, please have a look at the following news article of 1993 where Motorola was well into Six Sigma and still planning IRIDIUM. http://www.allbusiness.com/business-planning-structures/business-structures/405772-1.html Also have a look at http://en.wikipedia.org/wiki/Six_Sigma While Motorola started in 1987, it had good success in Six Sigma within ten years. Many fortune 500 companies learnt from Motorola successes in 1990's. By the year 2000, large number of companies had Six Sigma successes and they had learnt it from Motorola. Jack Welch (GE) Books hit the market on 2001 showing Six Sigma benefits at GE. However, your points on how to assess maturity are well conceptualized. Regards, Vikram
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