Sustaining Six Sigma September 27 th, 2006 Denver, Colorado Neeraj Katare Master Black Belt Sanjay Joshi Adaptive Manufacturing Consultant
Business Agility & Six Sigma What is Six Sigma? Why Six Sigma? Six Sigma Industry Success Stories Six Sigma Approach & Deployment Challenges xmii-based solution for Sustaining Six Sigma
A Short Story Day-1 Day-2 Day-3 Success can kill Business Agility SAP AG 2006, Title of Presentation / Speaker Name / 3
Business Agility the Need To be agile, a business needs to: Understand market dynamics Anticipate customer needs Innovate and provide breakthroughs PvA Integrate knowledge and experience Expect the unexpected "Your success in life isn't based on your ability to simply change. It is based on your ability to change faster than your competition, customers and business." Mark Sanborn SAP AG 2006, Title of Presentation / Speaker Name / 4 8
Business Agility Defined Agility is being flexible and quick to respond to changes in the business environment Marshall the best resources 4 Customer Centricity Collaboration & teamwork 3 Responsiveness to change 1 Potential & Learning ability 2 Exploit Trends Reconfigure capabilities Leverage People & Information Enable Information Infrastructure Apply Continuous Improvement Believe in 1+1 > 2 Identify and certify partners Develop abilities to work with partners Heighten Customer Convenience Deliver solutions to current and anticipated customer needs A company's agility is is the the company's competitive advantage. SAP AG 2006, Title of Presentation / Speaker Name / 5 8
Six Sigma - A vehicle to improve Business Agility Ability to sense a change Managing Change by sensing it; Gain insight into what is likely to be business and customer needs and then bringing changes proactively to processes Ability to respond to change Managing Change by responding to it; Respond to changing business and customer demands by bringing changes to processes SAP AG 2006, Title of Presentation / Speaker Name / 6 Ability to lead change Managing Change by leading it; Create a change to which to customers, markets and competition reacts 8
Business Agility & Six Sigma What is Six Sigma? Why Six Sigma? Six Sigma Industry Success Stories Six Sigma Approach & Deployment Challenges xmii-based solution for Sustaining Six Sigma
What is Six Sigma? A philosophy of working smarter so that we make fewer and fewer mistakes and eventually no mistakes at all!! Philosophy Metric A metric that demonstrates quality levels at 99.99967% performance for products and processes Variation Process Capability A practical application of statistical tools to help measure, analyze, improve, and control processes Tool Data Driven Rigor A rigor to define/improve processes that incorporate customer feedback and to ensure processes meet customer needs Customer Centricity Optimize Processes; Align with with Customer Needs SAP AG 2006, Title of Presentation / Speaker Name / 8 8
What is Six Sigma? Six Sigma is.. An improved WAY of doing our regular work A practice that ensure that our services/ products meet customer expectations profitably A rigor that views quality from the customer s perspective, Outside-In approach Process focused A continuous improvement cycle that is systematic, scientific, and fact based A statistical measure of a process s ability to meet customer requirements (CTQs) Six Sigma is NOT.. A new Quality initiative Going to change WHAT we do A completely new way of doing things A departure from existing quality processes A practice that generates increased paperwork A Quality Control process An end in itself A replacement for engineering, scientific or process knowledge Process Sigma Z ST = 6, and equates to 3.4 Defects Per Million Opportunities (DPMO) A set of tools only A measure of variation. The Greek symbol σ (sigma) gives the standard deviation SAP AG 2006, Title of Presentation / Speaker Name / 9
What is Six Sigma? The Benefits the Cultural Shift Cultural Item Traditional Approach Six Sigma Approach Problem Resolution Fix Prevent Decision Making Experience Data-Based Process Adjustment Tweaking Controlling Vendor Selection Only Lowest Cost Lowest Cost & Best Capability Design Practice Ad-hoc Requirements Based Structure Hierarchy Empowered Teams Measurement Basis Internal Benchmarking and Metrics Manpower Cost Asset What is is your current state? Are Are you you ready? SAP AG 2006, Title of Presentation / Speaker Name / 10
What is Six Sigma? Organization The Benefits Customer Process Improvement in every sphere Hard data for every business decision Alignment with customer methodology Sharper customer focus 6σ Improved products and services Cost benefit Employee A quality driven work environment The satisfaction of meeting client needs A structured thought process Self Improvement in the way of working Improved Business Results by by positively impacting customers through improved processes, products, and and services SAP AG 2006, Title of Presentation / Speaker Name / 11
What are more critical issues facing your industry? Chemicals Automotive Cost Competitiveness 89% Cost Competitiveness 78% Customer Relationships 89% Customer Relationships 76% Manage Change Market Changes 63% Supplier Relations 63% 55% Effective IT 48% Financial Institutions Communication / Electronics Customer Relationships 82% Cost Competitiveness 79% Effective IT 77% Customer Relationships 79% Cost Competitiveness 63% Effective IT 73% Manage Change 55% Manage Change 60% Source: Aberdeen Group, 2000 Six Sigma the One Stop Shop SAP AG 2006, Title of Presentation / Speaker Name / 12 8
Why Six Sigma? Leadership Achieve Customer Delight If we don t someone else will Strategic Planning and Deployment Enable Change to Last - Compliment technical strategy with cultural change Customer and Market Focus Develop processes to meet Customer needs Transition from Reactive Quality to Predictive Quality Information and Analysis Develop meaningful metric and assess process capability 6σ Human Resource Focus Stimulate Participation Six Sigma a way of life Empower workforce with a Quality Mindset Process Management Reduce Cost of Quality Strive for Continuous Improvement As the key measurement of success Eliminate Variation The root of all process evil Business Results Communicate Business Benefits In financial terms SAP AG 2006, Title of Presentation / Speaker Name / 13 Customer Centricity: a Strategic Alignment 8
Business Agility & Six Sigma What is Six Sigma? Why Six Sigma? Six Sigma Industry Success Stories Six Sigma Approach & Deployment Challenges xmii-based solution for Sustaining Six Sigma
Six Sigma Industry Success stories Six Sigma Cost And Savings By Company Year Revenue ($B) Invested ($B) Motorola SAP AG 2006, Title of Presentation / Speaker Name / 15 % Revenue Invested Savings ($B) % Revenue Savings 1986-2001 356.9(e) ND - 16 4.5 Allied Signal 1998 15.1 ND - 0.5 3.3 GE 1996 79.2 0.2 0.3 0.2 0.2 1997 90.8 0.4 0.4 1 1.1 1998 100.5 0.5 0.4 1.3 1.2 1999 111.6 0.6 0.5 2 1.8 1996-1999 382.1 1.6 0.4 4.4 1.2 Honeywell 1998 23.6 ND - 0.5 2.2 1999 23.7 ND - 0.6 2.5 2000 25.0 ND - 0.7 2.6 1998-2000 72.3 ND - 1.8 2.4 Ford 2000-2002 43.9 ND - 1 2.3 Key: $B = $ Billions, United States (e) = Estimated, Yearly Revenue 1986-1992 Could Not Be Found ND = Not Disclosed Note: Numbers Are Rounded To The Nearest Tenth Source: By Charles Waxer, www.isixsigma.com/library/content/c020729a.asp
Business Agility & Six Sigma What is Six Sigma? Why Six Sigma? Six Sigma Industry Success Stories Six Sigma Approach & Deployment Challenges xmii-based solution for Sustaining Six Sigma
Six Sigma Approach How do I identify which problems to address first? Voice Of The Customer Voice Of The Employee Voice Of The Shareholder Business Big Ys Key output metrics that are aligned with the strategic goals/objectives of the business. Big Ys provide a direct measure of business performance Process Ys Key output metrics that summarize process performance Cost Quality Delivery Project Ys Key project metric defined from the customer perspective Productivity On time delivery Cycle time Xs Any parameters that influence the Y Raw Material Availability Idle Time Revenue growth SAP AG 2006, Title of Presentation / Speaker Name / 17
Six Sigma Approach Business Problem Business Solution Control / Verify Define Continual Improvement Measure Analyze Statistical Problem Improve / Design Statistical Solution SAP AG 2006, Title of Presentation / Speaker Name / 18 8
Sustaining Six Sigma initiative Common Pitfalls & TCS Observations: Poor strategic and tactical plans, deployment misalignment with Overall Business Goals Lack of Commitment and involvement of senior executives Breakdown in infrastructure (Project Management, Data Management, training, resource and tool) Inappropriate use of the methodologies and tools Boredom with initiative, absence of reward and recognition program Change in leadership, mergers/acquisitions and macroeconomic events Know the Deployment Challenges SAP AG 2006, Title of Presentation / Speaker Name / 19
Six Sigma Deployment in Manufacturing Industry View Based on a recently conducted survey involving top manufacturing organizations: Key areas of concern include: Quality of Output Cost of Operations & Workforce productivity 54 % of the respondents stated that they planned to / continue to embrace Six Sigma as the Process Improvement methodology 94 % of the organizations do not have access to real time data resulting into biased, error prone & manual data collection process Source: Survey conducted by Industry Week & Kronos Inc. (http://www.kronos.com/about/pr_sixsigma_oct11.htm) What about you? SAP AG 2006, Title of Presentation / Speaker Name / 20
Sustaining Six Sigma initiative Shop Floor Challenges & Issues Shop floor team is not Six Sigma savvy Inadequate training to Shop floor team Non availability of simple tailored tool solution. Inadequate Support system to track and control the improved process Data management issues Data Availability Data integrity Data extraction from ERP and other interfaces Data integration from various legacy system Measurement system issues (reliability, availability, accuracy) Situation of tight tolerance loosely followed, loose tolerance tightly followed Performance Management issues Inadequate reward and recognition system Lack of alignment between performance goals and Six Sigma targets Fear to get exposed SAP AG 2006, Title of Presentation / Speaker Name / 21
Business Agility & Six Sigma What is Six Sigma? Why Six Sigma? Six Sigma Industry Success Stories Six Sigma Approach & Deployment Challenges xmii-based solution for Sustaining Six Sigma
xmii-based Six Sigma Solution Key Requirement #1 Automate data management Abstract data sources from shop floor users by providing a directory of predefined data points with meta-data Reduce data collection time by seamless integration of disparate systems Facilitate easy data access across projects/functions/departments while maintaining the data security SAP AG 2006, Title of Presentation / Speaker Name / 23
SAP AG 2006, Title of Presentation / Speaker Name / 24 User Login gives data access control and hence security.
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SAP AG 2006, Title of Presentation / Speaker Name / 26 Pre-defined data points in a directory to choose from
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xmii-based Six Sigma Solution Key Requirement #2 Reduce dependency on Six-Sigma process/statistics knowledge Make DMAIC process flow a guided procedure that leads users through specific steps throughout the project Make the Specific and Right tools needed for data analysis readily available, in the same framework as data Set predefined rules in the tool that enables decision making Provide online-help for performing task at hand Guided Procedure Define Measure Analyze Improve Control Approval Approval Approval Approval SAP AG 2006, Title of Presentation / Speaker Name / 32
SAP AG 2006, Title of Presentation / Speaker Name / 33 Appropriate tools selected and ready for use on the same framework as data
92 90 88 86 84 82 80 78 0.82 0.83 0.84 0.85 0.86 0.87 0.88 0.89 0.9 0.91 0.92 Significance of corelation calculated based on predefined rules (like p < 0.05 etc.) SAP AG 2006, Title of Presentation / Speaker Name / 34
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SAP AG 2006, Title of Presentation / Speaker Name / 38 Pre-defined workflows with appropriate approvals makes a guided procedure for DMAIC implementation
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SAP AG 2006, Title of Presentation / Speaker Name / 41 Online help on the theory and the process of DMAIC, reducing dependence on otherwise esoteric external help!
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xmii-based Six Sigma Solution Key Requirement #3 Cut down non-value adding time in Six-Sigma, where possible Cut down the time to complete Measure phase to near Nil Prevent conflicting design of experiments Provide notifications for pending tasks or approvals Provide alerts on deviation of the KPIs and their Sigma values Automate creation of routine reports on improvement projects SAP AG 2006, Title of Presentation / Speaker Name / 44
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SAP AG 2006, Title of Presentation / Speaker Name / 57 Measure Phase completed within a few steps without having to wait for data
In summary, to sustain Six Sigma on Shop Floor Speedup your measurement processes. Integrate & Automate! Have tools to Analyze ready in a single framework same as that of data Provide excellent do-it-yourself online help Use common pool of data for all users to access. Single version of truth! Use predefined finite set of rules. Remove confusion and thus enhance sustenance! Track performance of your process. Real time performance analysis! Eliminate non-value adding time needed for the steps. Increase sustenance of projects by reducing boredom! SAP AG 2006, Title of Presentation / Speaker Name / 58
Thanks!!! Speaker Contact Neeraj Katare email: neeraj.katare@tcs.com Phone: +1-248-267-0650 SAP s preferred Partner for Adaptive Manufacturing North America Contact Ashtad Engineer Domain Expertise Our Strength Global Presence email: ashtad.e@tcs.com Phone: +1-317459-8476 Global Contact Established Processes Kamal Ajitsaria email: kamal.ajitsaria@tcs.com Phone: +91-98811-26057 Solution Desk Contact email: global.adaptive@tcs.com SAP AG 2006, Title of Presentation / Speaker Name / 59