Business Improvement with Six Sigma

Business Improvement with Six Sigma by Dr Anirban Basu (Express Computer, India IT weekly):

The organisation, a CMMI-level 5 company found that although the SLA (Service Level Agreement) with its US client specified that the support time for most critical (level one) complaints should not exceed 6 hours, on the average, it was taking 8 hours with variation from 2 to 14 hours. Further, its US client told them that the support time needed to be reduced to 4 hours because of strong demand from end-users for better service.

Related Posts:

• Stretching Agile to fit CMMI Level 3

Spreading the Lean Gospel

Spreading the Lean Gospel by Rebecca Reid:

Bested said lean manufacturing at the Air Fuel Modules Division was a two-fold philosophy. The first aspect was to resolve current manufacturing inefficiencies and to implement lean principles for all new programs coming in, and the second was changing the business processes involved.

The Lion of Lean

Great article - The Lion of Lean: An Interview with James Womack by Francis J. Quinn, Supply Chain Management Review:

Let's just take one example in the purchasing area. People say, "Yes, we're going to have a lean purchasing organization. And we'll start by having target pricing." You say, "Great, but how are you going to do target pricing?" "Well, we'll set the prices 5 percent below what they are now and that will be our target pricing." "Fine, guys, but you haven't done any analysis. With true target pricing, you actually have to look at every step and figure out what it costs - including what's happening out in the world right now with regard to materials. The costs are really going up, and this reality has to be factored into your pricing approach; otherwise, all you're doing is squeezing your suppliers."

As Deming said page 31 of the New Economics: "A numerical goal accomplishes nothing. Only the method is important not the goal."

Lean people are always technology skeptics. They're not Luddites, mind you, they're just technology skeptics. They spend their time on creating a process that requires as little information as possible, while the rest of us try to figure out how can we get more and more and more information.

Perhaps the most interesting example is 7-Eleven in Japan. It's probably the leanest grocery company on the planet, doing demand-driven replenishment multiple times during the day. Solectron is doing a good job of going lean in contract manufacturing. You find some examples in unexpected places, too. One of my favorites is the post office in Canada. Postage rates in the United States keep going up, and the USPS [United States Postal Service] is losing a fortune. On the other hand, Canada Post is keeping rates steady and pays hundreds of millions of dollars in profits to the Canadian government. What's the difference? Canada Post went lean.

More lean thinking articles - Womack articles.

SPC: History and Understanding

SPC: From Chaos To Wiping the Floor by Lynne Hare (who also was the 1997 Hunter Award winner)

Shewhart based control chart limits more on the economics of change than on underlying probabilities. Ever the empiricist, Shewhart seems not to have trusted probability limits alone.

Setting control limits at 3 standard deviations is a decision based on experience. Shewhart, Deming and others determined it was sensible to take resources to look for a special cause was most effective for results more than 3 standard deviations from the mean - it is not a mathematical conclusion but a empirical conclusion.

It is disappointing to see some users place specification limits on control charts. Processes don't know or even care about specifications. The presence of specification limits on control charts encourages users to adjust on the basis of them instead of the calculated limits. The resulting miscued adjustments are likely to result in increased process variation, which is the opposite of the intent.

True.

SPC grew into everything we do. It changed the way we think, work and act, and it evolved into total quality management (TQM). But there is an ebb and flow to new technologies in our society, and TQM's star faded in the presence of reengineering, which faded with the advent of Six Sigma. All the while, the basic SPC tools have been refined and augmented, and SPC serves in muted presence to underpin the newer, expanded technologies.

Another insightful statement.

Everybody Wants It, Toyota's Got It

Everybody Wants It, Toyota's Got It by Grant Robertson, Globe and Mail (Canada):

Despite riding atop the North American auto sector for the past decade, the company's manufacturing methods are an open book.

People often look for the secret new idea instead of just executing well. So much improvement is available just using ideas that have been known for decades. But instead of doing that people keep searching for new magic bullets.

Line workers spend two hours at one job, then transfer to another within their group of half a dozen people, a strategy Toyota believes helps break monotony, foster teamwork and keep the plant flexible when employees are away.

"Toyota has probably laughed behind everybody's backs for years," he says. "Everybody goes in there and looks at [the Cambridge plant] and walks out, but doesn't really understand how to do it. So because of that, I guess they still continue to let them look at it."

Solectron IndustryWeek Best Plant

Solectron Corp: IW Best Plants by John Teresko

To empower its employee strategy, Columbia (and the rest of Solectron) is dedicated to an ongoing journey of Six Sigma and lean manufacturing, says Petta. For example, several times a year it is not unusual to encounter kaizen events on the plant floor
...
before lean arrived at Columbia, WIP typically was five days. After implementation of lean, WIP has been reduced to a half-day to one day. Lean also has cut employee "touches" as measured by the number of times a unit is picked up or transferred from one station to another. On average, "touches" have been reduced from eight to four, Petta says.

Solectron has long been a company focused on management improvement: Baldrige, Six Sigma, Process Improvement, Lean etc. Their stock value sure has not done well however. Partially this is due to the very difficult contract manufacturing competitive landscape.

Using Lean and Six Sigma in Project Management

Using Lean and Six Sigma in Project Management by Derrell S. James, Quality Digest:

Our subject company used tools such as 5S to establish consistent workforce organization and improve productivity per square foot of space. They used standard work to ensure consistency of the most optimal methods and communicated these to its manufacturing divisions throughout North America. By reducing inhibitors to just-in-time manufacturing, they reduced inventories, total cycle time and internal costs.

However, the quality of that velocity is forever tied with reducing variation--thus the innate and required linkage with Six Sigma tools.

Keeping High Tech Jobs

Keeping High-Tech Valley Jobs by Ed Taylor, East Valley Tribune (Arizona) via Lean Manufacturing Blog:

The company was able to make the move in part be cause of new lean manufacturing techniques adopted in Phoenix that increased the capacity of the plant by 25 percent without additional capital spending, Hall said.

Engineers achieved that by changing the layout in the fab and reducing losses in the manufacturing process, Hall said. And employees were trained in Six Sigma quality improvement techniques, he said.

Six Sigma Pitfalls

Six-Sigma Pitfalls by Marc S. Morrison, Industry Week.

Are Differences In Implementation Creating Different Results?

In a word, yes.

While an amazingly simple idea, people seem to forget this quite often. When people say "Six Sigma is great" or "Six Sigma is a waste" often they are talking about different things. But because in both instances "Six Sigma" is used people believe that the meaning must be the same in both cases. It often isn't. While I find some Six Sigma efforts, books or consultants very useful many others (that also use the words "Six Sigma") do not offer much of value.

What exactly is meant by "Six Sigma" varies quite a bit. And execution is critical to what makes one program succeed and another fail. Well I guess once I say that I find some of what is called "Six Sigma" valuable but not all of it I should share how to know what I think it good. I am not claiming these are the only good sources, just that they are what I have familiarity with and confidence in.

From my post: Has Six Sigma been a failure?: "Many Six Sigma proponents have done great things: Gerry Hahn, Roger Hoerl, Soren Bisgaard, Bill Hill, Ron Snee and Forrest Breyfogle" are good examples. Read several good articles by Roger Hoerl. You can also see more articles, by those I mentioned, and others via the Curious Cat Management Improvement Library.

Forrest Breyfogle, Roger Hoerl and Ron Snee have some excellent six sigma books.

However, one must wonder how much of the savings would have been achieved without a Six-Sigma program.

This is often the case with any program management is pushing. Whatever program those at higher levels want to see given the credit for successes, get the credit. This is one of several forms of distorting the figures.

Life Beyond the Short Term

Life Beyond the Short Term by Simon Caulkin, The Observer.

Last week's column - 'Adrift in a parallel universe' - about the perversion of management provoked an eloquent, sometimes passionate, response.
...
In the spirit of a positive alternative, a prime text is W Edwards Deming's 14-point programme for transforming management, drawn up in the 1980s.

Once again Simon Caulkin has penned an excellent article. In this article he gives an overview of Deming's 14 points. I am glad to have found another positive source for improving management - see our directory of management improvement blogs for some additional sources I find valuable.

I have been following management improvement resources online since 1994,when I started writing a column in the ASQ Public Sector Network newsletter. At that time it was taking months between when I wrote an article and it was finally received by subscribers. Early on the resources I shared were not web sites (they were email lists, bulletin Boards and gopher sites). And details would change even before the article was published (and no Google existed to find the new location). I soon figured out I needed a way to provide updates to the details listed in my articles. And in 1994 I started maintaining the Online Quality Resource Guide at Clemson University (where I still maintain it).

There were some great resources early on (like the Deming Electronic Network, Center for Quality and Productivity Improvement) and maybe once a year a new great resource came along (like the Center for Quality Management and the Institute for Healthcare Improvement). And I think our Curious Cat Management Improvement Site is excellent, but then I am biased.

It seems to me, in the last year, we have seen an explosion of useful sites (with content that actual provides value to the visitor) and excellent online articles. I hope this trend continues.

I have also noticed an amazing focus on Toyota. It is not amazing that Toyota gets a good share of attention, as it is very well run large company. And the increasing popularity of lean thinking (which is essentially the Toyota Production System) obviously leads to more focus on Toyota. But even so, I am amazed how many of the good articles I find these days focus on Toyota or a company trying to apply Toyota's methods. The excellent Toyota Way book by Jeffrey Liker certainly is another factor.

Fixing Healthcare from the Inside

Fixing Healthcare From the Inside, Today by Steven J. Spear, Harvard Business Review (so online access disappears sometime soon).

To understand how the improvements were achieved, it is necessary to appreciate why such a gap exists between the U.S. health care system's performance and the skills and intentions of the people who work in it.

Best efforts are not the answer, as Deming said.

The changes I've described at West Penn were individually small, but taken together they led to marked improvement in the presurgical unit's performance. That's also characteristic of change at Toyota: People don't typically go in for big, dramatic cure-alls. Instead, they break big problems into smaller, tractable pieces and generate a steady rush of iterative changes that collectively deliver spectacular results.

First, as Shadyside discovered, the solutions from one situation may not apply in another. Second, the most effective changes - —at West Penn, South Side, and elsewhere - —are small ones, generated by rapid experiments. Draw too big a group into the initial deployment, and the experiments become unwieldy, requiring too many people to change too much of their work at the same time.

More good ideas: don't just copy idea, rapid experiments and pilot on a small scale (PDSA). You can't just copy what works in one place (this is one of the risks of benchmarking, if done improperly - as is often the case). The "solutions" are part of a system and therefore the effect of that "solution" in another system might not be the same. Therefore you have to be careful when looking at applying solutions. What is needed is an understanding of the system that the improvement will be made. And then the pilot tests need to be done in the appropriate way.

You also want to apply the improvements as widely as possible (to standardize). New improvements should be piloted on a small scale and then standardized and applied as widely while retaining a balance between adopting improvements widely to gain the greatest benefit and adopting "improvements" too widely - in those places where the system in which those "improvements" would be applied is not appropriate.

The Improvement Guide is an excellent book on improvement (and is written by the management consultants - Associates in Process Improvement) working on the breakthrough series with IHI. The breakthrough series with the Institute for Healthcare Improvement also has some good material on this topic.

More resources on this topic:

• Articles and paper on improving the management of health care
• Online resources for improving the management of health care

Appeal for Marketers to Apply Deming's Ideas

Ego Systems by Doug Hall, CMO (Chief Marketing Officers magazine):

Deming's methods can transform innovation success for CMOs just as they did for Toyota. For some reason, though, sales and marketing don't get it. Instead of fixing the innovation system, they change the people. And then they expect a miracle.

Some resources for marketing management improvement.

• Free, Perfect, and Now (book) by Robert Rodin explores his experience as CEO applying Deming's ideas and making radical changes to the marketing as the internet age dawned.
• Marketers Are Embracing Statistical Design of Experiments