www.synergymcg.com - Developing Six Sigma Capability

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Developing Six Sigma Capability

IMPACT OF COMPETITIVE FORCES

The 21st Century has brought with it a new, more challenging global market environment with competitive forces that often threaten the very survival of long established organizations.

No matter how good you are, your competitors are striving to take your business by beating you at price, quality, customer service, efficient delivery and the speed of getting new products to the market.

For many firms this requires a step change in sustainable cost reductions and operational performance improvements:

to find 20% to 30% reduction in costs, and
achieve 30% to 40% in overall operational performance improvement,
without capital expenditure

To achieve and sustain this level of performance requires a workplace culture that continually seeks innovation and improvement.

Six Sigma holds the promise of improving productivity and reducing costs whilst introducing an improvement culture and up-skilling the organisation.

OPERATIONAL PERFORMANCE IMPROVEMENT

To maximize the benefit from any Six Sigma initiative requires a foundation of process management. This results in the development of robust processes with predictable outputs meeting targets, with less waste and reduced cost, and achieving the desired outcomes.

Process management involves several steps:

Develop a process focus across the organization – see the diagram below
Assign accountability to manage processes not just departments or divisions
Align strategic business goals with objectives for processes that can deliver the goals
Assess the risks to the business, identifying where processes may not deliver
Map individual processes, especially those that are critical in delivering goals
Measure and benchmark process performance against objectives aligned to goals
Identify poor performing processes – these are the likely candidates for Six Sigma
Determine and implement new process controls or design new processes

Michael Porter put sustainable competitive advantage on the executive agenda in the mid 1980s. When discussing the determinants of sustainable competitive advantage within an industry Porter describes operational effectiveness as:

Employing the most up-to-date equipment and information technology
eliminating waste, defects and delays
stimulating continuous organizational improvement,
to operate closer to the productivity frontier.

However, the productivity frontier is continually moving driven by new technologies and new highly productive workplace cultures.
Thus for many organizations the development of Six Sigma Capability within an organization that manages by process may be the critical success factor in achieving operational effectiveness.

WHAT IS SIX SIGMA?

Six Sigma is a means of managing processes to consistently deliver outcomes that meet customer expectations. Six Sigma was established by Motorola in the 1980’s, building on TQM principles, and holds the promise of improving productivity and reducing costs whilst up skilling the organization.

Six Sigma is essentially a statistical measure of variability and the distance from a desired target. It is usually related to the output of a process. Six sigma means excellent process performance and one sigma is very poor. Commonly, processes perform at between two and three sigma before being subject to a Six Sigma program.

Therefore to achieve six sigma is an ideal, often a long term goal, but may not be financially viable or necessary depending on the specific process, the criticality of the characteristic being measured and the customer requirements.

Six Sigma employs the “DMAIC” method; Define, Measure, Analyse, Improve and Control.

Six Sigma Improvement

Typically, Six Sigma is applied to formal projects managed by teams and run over several months, where management has determined that a certain process is performing badly. However, the DMAIC method can be equally effective if applied to daily decision making by individuals. This can spread across an organization as a Six Sigma culture of improvement.

DEVELOPING SIX SIGMA CAPABILITY – “LEARN by DOING”

Project-Based Learning
A proven method for developing Six Sigma capability is based on project–based learning, designed to transfer Six Sigma knowledge to key personnel who work on real in-house improvement projects under the guidance of a skilled consultant and mentor.

This is called “Learn by Doing.” A typical project-based Six Sigma program would involve:

A group of 8 to 16 participants
Senior management identify several strategic improvement areas
Two or three teams are formed from the participants
An improvement project is assigned to each team
Four to six full day classroom-based learning sessions held at two to three week intervals – participants learn the various Six Sigma tools and techniques
After each classroom session, the team applies the learning on the project
Coaching sessions are held between learning sessions
Teams present recommendations for each project at the conclusion of the program

Yellow, Green and Black Belts
As participants gain more skills and experience in application of the Six Sigma tools and techniques in real projects they are assessed for competence. There is no strict standardization of the required competencies but as a guide:

Yellow belt – training only on key tools with case study application
Green belt – training and practice on at least one project, as per above program
Black belt – training on all tools, practice and leadership of several projects, and experience in conduct of training

Levels of Projects
For large organizations, participants maybe progressed through three levels of Six Sigma projects which are of increasing operational, strategic and financial benefit:

Level 1 - Operational Level Projects are designed to transfer problem solving skills key people who are then capable of undertaking strategic projects.
Level 2 - Strategic Projects selected by executive management to achieve sustainable improvement in core business processes and systems identified as constraining operational performance.
Level 3 - Transformational Projects are step-changes which transform business processes into revenue streams to dramatically impact business performance.

Interactive Software available to support project-based learning
Q-Skills for Six Sigma & Lean is the largest selling interactive Quality Tools Software in the USA and was developed jointly by Michael McLean and Dr Tony Burns and used by GE Capital, Allied Signal, Ericsson, BHP, Hammersley Iron, Toyota, Tomago Aluminum, Australia Post, Shell Coal, Zurich, Nestle, CSR, James Hardie and Lucent and HP.
http://www.q-skills.com/sixsigmatraining.htm