Risk Free Way to Implement Lean Six Sigma

Over half of all TQM implementations failed. In the language of Six Sigma, that's one Sigma…an pathetic track record. And if you study how most companies are implementing Six Sigma, you'll find the same old formula that ruined TQM:

1. Get top leadership to commit to widespread implementation.
2.Train internal trainers (Black Belts) to minimize the costs of training everyone
3. Internal trainers train team leaders (Green Belts)
4. Start a bunch of teams
5. Hope for the best.

Everyone points to GE as a leader in Six Sigma, but if you look more closely you'll see that Jack Welch had already created a company that managed and even embraced change. So implementing Six Sigma wasn't as hard as it might be in other organizations.

Many people I talk to in various industries say that they tried TQM and it left a bad taste in their mouths. So Six Sigma not only has to overcome resistance to change, but also the bad taste left by failed TQM implementations.

RISK FREE SIX SIGMA
So how do you implement Six Sigma in a way that's risk free? By using the proven power of diffusion (see The Diffusion of Innovations by Everett Rogers). Over 50 years of research into how changes take root and grow in corporations and cultures suggests a much safer route to successful implementation of Six Sigma or any change.

The employee body can make three choices about Six Sigma or any change: adopt, adapt, or reject. In a world of too much to do and too little time, rejection is often the first impulse. People rarely adopt methods completely, so there must be room for adaptation to fit the corporate environment. There are five factors that affect the speed and success of Six Sigma adoption:

1. Trialability-How easy is it to "test drive" the change?
2. Simplicity-How difficult is it to understand?
3. Relative benefit-What does it offer over and above what I'm already doing?
4. Compatibility-How well does it match our environment?
5. Observability-How easy is it for leaders and opinion makers to see the benefit?

You can also speed up adoption by letting the employees decide for themselves to adopt Six Sigma rather than having the CEO decide for them (although this is how we keep preaching success-get the CEO to commit to widespread change). So, to maximize your chance of success and minimize your initial investment:

1. Start small. Forget the 80/20 rule. Less than 4% of any business creates over half the waste and rework. So you don't have to involve more than 4% of your employees or spend a lot of money on widespread training to get results. Get an external Six Sigma consultant to help you find and create solutions using the tools and methods of Six Sigma. Your employees will learn through experience which is far more valuable than classroom training.
2. Set BHAGs (Big Hairy Audacious Goals). Go for 50% reduction in cycle time, defects, or costs. When you're just starting out, big reductions are often easier to get than you might think, so why not go for them? This also telegraphs the message to your teams that this ain't continuous improvement.
3. Fly under the radar. Most companies broadcast their Six Sigma initiative, and employees think: "Here comes another one." This usually stirs up the laggards and skeptics-what I call the corporate "immune system." You are much better off to make initial teams successful and let the "word of mouth" spread through informal networks, because this is the fastest way for cultures to adopt change.
4. Create initial success. In 1980, the company I worked for brought in a trial of 20 TSO terminals (to replace the punched cards IT used). They selected a small group of programmers to use the terminals. The buzz from this one group caused TSO to be immediately accepted and integrated into the workforce. Do the same thing for Six Sigma. Only start teams that can succeed. Make a small group of early adopters successful. Then another, then another.
When the pioneers (early adopters) become successful, they will tell their friends. The pioneers will convince the early settlers who will eventually convince the late settlers. No one will ever convince the laggards and skeptics; they have to convince themselves..
5. Fight the urge to widen your focus; remember the dark side of the 80/20 rule: 80% of your effort will only produce 20% of the benefit.
6. Simplify. Using simple tools like line graphs, pareto charts, and fishbone diagrams, you can easily move from 3 to 5 Sigma (30,000 parts per million to only 300) in 18-24 months. There are lots of complex tools like QFD and DOE in Six Sigma, but you won't be ready to Design For Six Sigma (DFSS) until you simplify and streamline your existing processes and lay the groundwork for it.
7. Review and refocus. Once you solve the initial 4% of your core problems, start on the next 4%, then the next. Diffusion research has shown that somewhere between 16-25% involvement will create a "critical mass" that cause the change to sweep through the culture.

Good News about Productivity and Profitability
When you focus on the 4% that creates over half the waste and rework, your initial teams get big benefits: 50% reduction in defects, waste, and rework and $250,000/project improvement in the bottom line. By the time you've worked your way through the first 16-20% of your problems, you will get 80% (the 80/20 rule) of the benefits of Six Sigma. And you'll have minimized your costs of implementation. Now you can grow skilled internal Black Belts from your initial improvement team members. And you can begin to think about DFSS to design your processes to deliver Six Sigma quality.

Six Sigma payoffs are huge, but you may want to consider using the power of diffusion to ensure that the methods and tools take root in your business and flourish. But it's up to you. You can choose the conventional wisdom which gives you only a 50-50 chance at success or choose the power of diffusion which increases your odds substantially. Haven't you waited long enough to start making breakthrough improvements in performance and profitability a permanent part of your business

Call Center Quality

In the October 27, 2003 Business Week, reporter Diane Brady found that "call centers overseas often provide better customer service than their American counterparts…Everything from customer satisfaction to error rates are vastly better."

Since frontline workers can "make or break a customer relationship," many companies are finding it easier to get fast, efficient, courteous service overseas.

India seems to be one of the best places because workers are better educated (college degree vs high school) and call center work is considered a "lucrative, successful career, not a dead end." Employee turnover in U.S. call centers is six times higher than in India.

When are we going to wake up and realize that the crashing cost of telecommunications and the rise of an educated international workforce is going to threaten all jobs? I know of at least one CIO in a $10 billion dollar company who is planning to move all IT work to a software factory in India inside of three years.

Raising our standards of performance and quality aren't just a good idea, they are a new necessity in the global village.

Barriers to Lean and Six Sigma

Sadly, the biggest barriers to Six Sigma are human and psychological, not methods or technology. Most of this resistance is about fear of one kind or another. Here's the barriers I've encountered and some ways to handle them.

1. People don't like being measured. Why? Fear! Let's face it, most companies use measurement to blame and punish people not improve processes. Is it any wonder that employees and managers resist measurement? Crafty dodgers use artful, distracting challenges to delay, derail, or ditch measurements:

• Challenge the statistics or the statistician. One doctor challenged a hospital QA manager with: "Where did you get these formulas [for control charts]? Where does the standard deviation come from?"

  Redirect: You must already know the answer, so why don't you share it with us?

  Snappy answer: "That's like asking: 'Why are there 60 minutes in an hour?' These are widely accepted statistical techniques. If you're really interested in the details, I'll get you a book to read."

• Challenge the data. I can't tell you how many times I've heard: "That's not the 'right' data." Or "That data's not accurate or valid."

  Teach them: Let's face it, no data is perfect. There's measurement error caused by measurement methods and instruments. And, because people fear being punished for poor performance, defects are systematically and routinely underreported by a factor of at least two.

  Snappy answer: "You must have better data. Show it to us."
  If they don't have better data, tell them to get over it and use what they've got. Or kick them off the team.

• Challenge the focus. "We have more important problems than this!"

  Snappy answer: "How do you know there are more important problems? Where's your data? Show it to us." If they don't have a line graph, pareto charts and cost of quality analysis to prove that their problem is more important, ask them to participate in this problem or drop out.

2. Macho Man
Most managers, directors, and VPs don't want to believe that they are wasting 10-20% of their budget. If there were such hidden stashes of $250,000 or more, shouldn't they have found it by now? After all, gut feel, common sense and trial-and-error has served them well in the past. And what does it say about them if they can't find it? (They fear looking stupid or inept. Also remember that numbers are systematically distorted to make everyone look better. Six Sigma is going to adjust the counting methods, but rarely in a positive direction.)

Reframe: It's not that what you're doing hasn't taken you a long way, it's just that gut feel and common sense stop working at around 3-4 sigma. They just won't take you any farther.

Metaphor: In the 1800s doctors believed that sickness was caused by an ill wind or bad blood. But, with the development of the microscope, Pasteur was able to "see" the invisible agents of disease. The tools of Six Sigma, like Pasteur's microscope, enable us to see the seemingly invisible root causes of waste and rework.

3. Achievers vs Problem Solvers
Businesses have employees with two opposing points of view: Achievers who want to set and achieve goals, and Problem Solvers who want to fix broken processes. Six Sigma sounds like ambrosia to the Problem Solvers and more like dog droppings to the Achievers.

Reframe: Six Sigma will free up resources to achieve more of what you want to accomplish.

4. Big Picture vs Detail
Half of your employees are "blue sky" thinkers. They love the big picture but hate the detail. Six Sigma is a rigorous, detail-oriented process. Your detail thinkers will dive in without good direction available from the big picture thinkers, and the big picture thinkers will resist taking the mission-critical issues down to an actionable level.

Reframe: Haven't you waited long enough to dig down to the root cause, or do you just want to keep watching from a distance as the business drowns in its own waste and rework?

5. Evolutionaries vs Revolutionaries
Evolutionaries want to improve the business. They make up about 65% of the workforce. Revolutionaries want to reengineer the business. They want to make a difference. Paradoxically, businesses need both styles to succeed.

Reframe: We need to create new products and improve our methods of delivering them to keep the competition at bay.

6. Hero Worship
Companies rarely let defective products escape their walls; usually by brute-force heroics of a small band of self-sacrificing perfectionists who are routinely rewarded for their heroics. Preventing problems would steal their claim to fame.

Reframe: It's not that what you're doing hasn't taken you a long way, it's just that the secret to success lies in consistency and repeatability, not random acts of heroism.

7. Fix-it Factory Fiefdoms
Most large companies have huge groups of people who do nothing but fix mistakes created elsewhere in the business. The managers and employees in these groups have based their whole careers on finding and fixing errors in the product or service. And they'll fight anything that will eliminate their jobs (fear).

Reframe: Don't you get tired of fixing the same old errors every day? You're the expert on the most common types of errors. Wouldn't you rather help fix the processes that create them? (Shift their focus from products to processes.)

8. Instincts vs Instruments
In almost every team I facilitate, I have one or two people who "know the answer." They've got a pet theory which is invariably destroyed during the root cause analysis.

Metaphor: Most barnstormers like to fly by the "seat of their pants," but combat pilots know that your instincts can get you killed. They know that when you're flying blind you have to trust your instruments, not your instincts.

Reframe: Instincts are ideal for making decisions based on insufficient data, but they are rarely sufficient when you have enough data to analyze.

9. Fear of Looking Stupid
I don't know what it is about school and grades, but most of us are afraid of looking or feeling stupid. And most people are still afraid of the math behind Six Sigma.

Reframe: We've got computers to handle the math; we just want you to understand how to use the graphs to optimize performance and profitability. And we've hired experts to show you how.

Of course there are many more human issues than these, but these are some of the most common ones I've run across. Which ones have you found?

Measuring Innovation

In the late 70s, I worked at Bell Labs developing software for the Bell System. While most software engineers still gag at the thought of measuring software development, we were tracking cycle times, defects, and costs way back then. So I never understood why anyone would think that you can't measure innovation. You just need to tweak the metrics a little bit.

In Christopher Meyer's book, Relentless Growth-How Silicon Valley Innovation Strategies Can Work in Your Business, he devotes a whole chapter to measuring innovation! Here's an abstract of his recommendations. He suggests that the five classic results measures to watch are:

1. Performance: How well does the total solution perform relative to requirements and the competition (Sounds like QFD doesn't it?)
2. Quality: defects and delay
3. Timing (i.e., speed to market): Internal development schedule (cycle time) and external market timing.
4. Financials: cost, margins, and revenue expectations.
5. Development costs: Specific project costs.

Here are some key measures of innovation used in Silicon Valley:

• Cycle time
• Percent of product/service tests passed
• Turnover (personnel changes)
• Specification or requirement changes (changes)
• Percent reuse (how much tested stuff did you borrow?)
• Percent new parts (how much stuff is untested)
• Percent unique parts (potential integration difficulties)
• Percent new vendors
• Percent staffed to plan (under/over staffed)
• Percent of time lost to other projects

Have you been putting off measuring your innovation processes? What ideas can you reuse from this list to get started now? What ideas do these give you for making immediate improvements in your innovation processes? What measures of innovation are you already using?

Can Six Sigma Kill Your Company?

t can according to Clayton Christensen, author of the Innovator's Dilemma. He found that: "management practices that allow companies to be leaders in mainstream markets are the same practices that cause them to miss the opportunities offered by 'disruptive' technologies. In other words, well-managed companies fail because they are well managed." And he offers many case studies from disk drive manufacturers and other industries that support his findings. What are the hallmarks of good management that cause companies to fail?

1. Listening to customers (Your current customers want more of the same from you. The emerging market doesn't know what it wants in the next big thing. It just wants simpler, cheaper, more convenient products and services.)
2. Seeking higher margins and larger markets, not smaller emergent ones.
3. Relying on market analysis to find new markets (Markets that don't exist can't be analyzed, they can only be explored through trial and error.)

Recently I was asked to consult with a company that had been acquired by a larger company that was obsessed with Six Sigma. The acquired company started training black belts and green belts and project teams. They required every employee to have their own Six Sigma project. Every project started asking everyone else for data in all kinds of formats and layouts and selection criteria. The company literally became paralyzed doing Six Sigma and forgot to take care of customers and continue their efforts at innovation, which they were known for. Smaller companies were eroding their market share with simpler, more convenient and cost effective tools.

As Joel Barker said in his book, Future Edge, you "manage" within paradigms and you "lead" between paradigms. Six Sigma is a great methodology and toolkit for managing and improving your product and service. Companies who do this continue to succeed as long as the underlying technology doesn't change dramatically. But when it does change, your company will most likely be incapable of recognizing and taking advantage of it.

Why? Because it means entering smaller markets with products that generate smaller margins until they become mainstream. IBM, for example, ignored minicomputers. DEC, who succeeded in minicomputers, ignored microcomputers. Apple computer started the microcomputer market, but IBM jumpstarted personal computers by creating a skunkworks to develop the first prototype. And none of these companies succeeded at developing the Palm Pilot, although Apple tried with the Newton.

Intel may be the only company that consistently rides the curve of new technology by using the strategies outlined in Christensen's book:

1. Set up a separate organization small enough to get excited by small gains with customers who want the new technology.
2. Plan for failure. Make small forays and tailor the product or service as you learn what your emerging customers want. How many companies start down one path only to discover the big market is a derivative of the original idea?
3. Don't count on breakthroughs. Many next generation technology markets emerge from re-combinations of existing technologies. Smaller disk drives use the same technology as larger disk drives. So why didn't the large-disk drive manufacturers spot the need for smaller drives in PCs, and why didn't PC-disk drive manufacturers spot the need for still smaller drives for laptops?

Is Six Sigma making you too complacent? Are you ignoring the tug of the emerging markets in your industry? Don't let Six Sigma kill your company. Balance your efforts to improve the existing business and innovate for emerging markets.

Stop the insanity. It's not either-or: improve OR innovate; it's both improve AND innovate. Otherwise, your future is in jeopardy.

Six Sigma Training

Author: Ron Muse

Quality is always a buzz word. Every company claims they are a quality organization. Can you show a single company that says that they are not a quality organization? How do we measure quality? There are many ways. Quality reflects on customer satisfaction, leading to repeat customers and resulting in more business. Reducing the errors/defects is key to quality. Six Sigma is defined as a disciplined and data-driven methodology to eliminate defects. It is important to provide Six Sigma Training to your employees. There are different type of training and certifications in the Six Sigma. Interestingly they are named - Six Sigma Black Belt, Six Sigma Green Belt, Six Sigma Yellow Belt etc. Six Sigma Training is different for different levels of employees.

As per Six Sigma, a process must not have more than 3.4 defects per million opportunities. To achieve this kind of quality, all involved shall be aware of quality, its significance and how they can contribute. Six Sigma Training exposes them to contribute to great quality.

It is important to expose Senior management to Six Sigma. Generally the Six Sigma training for Senior Management covers business and financial benefits, implementation, success stories, specific application relevant to their business etc.

There may be another level of Managers reporting to the senior management. These functional and process Managers are the people who would become champions in their areas , once they are convinced about Six Sigma. Six Sigma training for these middle management covers the Six Sigma concept, methodology and tools.

Quality Leaders who under go three to four week Six Sigma training in concepts, methodology, tools, Statistics, and analysis etc may go on to become Master Black Belts. Project leaders can become Black Belts and Employees in working level become Green Belts.

There are two Six Sigma sub-methodologies - DMAIC and DMADV where DMAIC stands for ‘define, measure, analyze, improve, control’ and DMADV - ‘define, measure, analyze, design, verify’ Six Sigma Training makes your employees aware of both these Six Sigma processes. Both, DMAIC and DMADV, processes are executed by Six Sigma Green Belts and Six Sigma Black Belts under the expert guidance of Six Sigma Master Black Belts.

While class room teaching is part of the Six Sigma Training, what makes it more effective is the case studies that are taken to analyze the line problem. If the employees bring their case study of number of failures in the production line, they collectively try to find the reason and also try to get a solution of reducing the errors to an acceptable limit. Many times, Six Sigma Training directly contributes to the productivity of the Organization. Though some people criticize Six Sigma a hype, there are many benefits for the organization, one of which is awareness of quality and how each one can contribute to his/her might for improving the quality of the organization. And, why not, particularly, so many black belts, yellow belts fighting for quality !

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Six Sigma And Lean Six Sigma - The Difference

Author: By: Gail La Grouw

It started with Six Sigma, and then came Lean Six Sigma.

So what's the difference, and how are each best applied?

Six Sigma is a quality improvement methodology developed by Motorola to systematically improve processes by eliminating defects.

Lean Six Sigma is a business improvement methodology which combines tools from both Lean Manufacturing and Six Sigma. Lean manufacturing focuses on speed and traditional Six Sigma focuses on quality.

Taking lean six sigma one more step, we can overlay it on Business Process Management.

Lean Six Sigma + BPM is the ultimate integrated methodology for achieving the best "what-why-how" balance. It helps considerably with decision making by focusing attention on the right projects and innovations at the right time, and for the right reason.

This is especially so in innovation, where success depends not only on finding the critical idea but in turning it into reality.

Like many business methodologies, what applies in one camp can be used in another, and for a completely different purpose. Rather than get hooked up into cutsey naming conventions, Coded-Vision believes more in having a clearly defined, structured approach to any project to get the best results for the client, with the minimum investment. No change process can be managed effectively without a solid framework. Rather than constrain the process, it allows for controlled flexibility, whilst maintaining a clear connection to the project goals.

And any framework is just a composition of tools, most appropriate to the job.

A builder doesn't expect to build a house without tools, and wouldn't expect to cut concrete with a wood saw. Neither would an experienced management consultant undertake a change or improvement program without a toolkit of the best tools available. And the framework is what the project hangs the fabric of change on, and measures it's progress.

Lean Six Sigma and BPM

Many Six Sigma and Lean Six Sigma tools can help streamline operational processes, reducing time to market, and bridging the innovation gap from current state to a desired future state.

The key difference between the two is that Lean Six Sigma solves problems and innovation helps to introduce and develop an opportunity.

BPM helps to facilitate the ongoing success of both programs.

Remembering The Human Element

And like any sound process or innovation, there are the three streams; People-Process-Technology.

It is easy enough to decide what you want/need to do, and easy enough to design how to do it, but encouraging people to perform to the said design is a whole different set of challenges. This is where change management skills come to the fore.

At the centre of any change management is communication. People perform based on emotionally meaningful outputs. You need to know how to reach that emotional trigger to engage their interest, and inspire their action.

BPM is very much a team effort. It may be lead from the top, but its success is driven from the bottom.

With the communication tools available today, there is no excuse for not engaging with all stakeholders at every step of the process. And that extends beyond the corporate boundaries to the customer.

BPM must address both the strategic needs of the organization, whilst maintaining intelligent growth in both its employees and its customers.

Many innovations fail, despite incredible design brilliance, because the customer is not educated sufficiently in its value and usability, and the employees do not fully understand the marketing tactics and delivery mechanism.

As customers grow, so do companies, and the value of tools such as Lean Six Sigma and BPM continue to be appreciated.

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Strategic Use Of Lean Six Sigma

Author: Carl Wright

Six sigma and lean manufacturing are utilized as improvement tools to improve the business. This improvement can take many forms, such as increased business, reduced costs, and improved cycle times or service.

Although lean six sigma projects can be utilized to improve any aspect of a business, it is important to assess the needs from an overall view. Some lean six sigma projects take many months to complete, and it is critical for the time to be utilized wisely. A team of 3-4 six sigma black belts and lean experts can consume of lot of labor and time, and it is critical to have a payback worth the effort.

Lean Six Sigma projects normally follow the DMAIC (Define-Measure-Analyze-Improve-Control) model utilized by six sigma projects. Although the Define phase is the least technical, it warrants all the time necessary to ensure the right projects are selected. For example, if a business has high scrap and costs with a product, it may appear it would be a good candidate for a project. However, it the product is declining due to other factors in the market, a project to develop or design new products might be worthy of consideration.

The Define phase must be fact based. The team should have full knowledge of the objectives and mission of the business, and be empowered to determine the correct projects. Too often, projects are selected on emotion and the power of individuals, which is detrimental to the business and the lean six sigma initiative.

One way of determining which projects to select is based on prioritization techniques. Six sigma black belts are trained to utilize the tools of 7M, prioritization matrix, and cause and effects analysis to determine which projects should have high priority.

Once the project is selected, the project must be thoroughly defined. Along with the definition, the objective should be stated and quantified. For example, the objective could be to "reduce material cost from 40% to 36% for a yearly savings of $618,000.

The measurement utilizes either six sigma or lean tools. Six sigma often utilizes statistics tools such as histograms, ANOVA (analysis of variance), flow charts, process maps, FMEA (failure mode and effects analysis. Lean tools used for measurement include value stream mapping, OEE (overall equipment effectiveness), time studies, methods and flow analysis.

During the Analyze phase, the "bottom line" is determined. In the example above, the Analyze phase might determine that 60% of the material is below 37% and two products average 73% when scrap rates are included. Six sigma tools such as hypothesis testing and brainstorming could be utilized, as well as the lean tools used in the measurement phase. When the project is more "lean" based, the measurement and analysis are often combined.

Once the problem has been determined, it is time for the Improve phase. Six sigma utilizes tools such as DOE (Design of Experiments), while lean often opts for the PDCA (Plan-Do-Check-Act) approach.

The greatest benefit of a lean six sigma approach, is the "tool kit" available during the Improve phase. The entire set of lean tools could be utilized in the improve phase, such as 5S, kaizen, SMED, OEE, value stream mapping, line balance, pull systems, and many others.

Once the solution has been implemented, control must be applied to ensure the improvement is sustained. Six sigma control charts are often utilized, as well as the lean tool of standardized operations.

When lean manufacturing and six sigma are combined, the result is a more robust set of tools. This enables the practice of solving problems using tools, rather than trying to fit a certain tool set to a problem.

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