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Posts Tagged ‘Six Sigma’

Reviving Six Sigma

Monday, February 6th, 2012

Mark Crawford

 There’s been some industry discussion that Six Sigma, the longtime standard of quality implementation, isn’t what it used to be—that in fact, for a growing number of companies, it is actually more of a negative than a positive.

For example, a 2007 study by QualPro revealed that 53 of 58 large companies that use Six Sigma have trailed the S&P 500 since they implemented it.

Others maintain Six Sigma is outdated and being replaced by newer methods, such as the theory of constraints and systems thinking.

However, don’t be too quick to dump Six Sigma—it’s still the same; the difference is in the way companies use it today, especially when dealing with an increasingly fast-paced and competitive global marketplace. Companies simply aren’t taking enough time and attention to implement Six Sigma properly.

A key reason Six Sigma gets disappointing results these days is the lack of leadership strategy and commitment at the top.

“Not enough leaders truly understand that Six Sigma is not an overnight savior,” comments J. Bruce Weeks, a senior business process improvement coach with Quality Engineering Consultants LLC in Charlotte, Michigan, and author of “Is Six Sigma Dead?” (http://asq.org/qic/display-item/index.html?item=32661) in the October 2011 issue of QP, the publication of the American Society of Quality (www.asq.org). “It takes time and work to achieve outstanding results.”

Weeks indicates too many leaders bought into what was called the “latest and greatest fad” in business process fixes, rolled out a Six Sigma program, trained everyone, “and now have up to 80% of their people working on projects to improve processes,” he says. “This sort of Six Sigma undertaking often takes valuable resources away from launching new products and satisfying customers—core processes required to stay in business and make money year after year.”

Another problem occurs when leaders declare victory after using Six Sigma to solve one problem or one set of problems. The organization then moves on to the next hot improvement strategy, usually lean; the Six Sigma process then stalls and the Six Sigma Black Belts are hustled off for training in something else.

Inappropriate accounting methods can also quickly tarnish Six Sigma’s reputation. Companies often use the wrong measure—cost—to determine Six Sigma results, especially early in the process.

Because they focus on cost, “activity-based costing (ABC) and resource-consumption accounting (RCA) practices do not lend themselves to determining the value of a particular activity or resource to the revenue stream or customer satisfaction,” says Weeks.

Therefore key process/production metrics such as quality, throughput, rework, time to market, and customer satisfaction must be measured and factored into the quality equation.

To maximize Six Sigma results, Weeks emphasizes the following points:

 

  • Leadership commitment. Create strategic business goals and objectives that embrace Six Sigma thinking instead of trying to add it as a separate goal or objective. All Six Sigma projects must be customer-focused, provide value, and be integrated into the larger objectives of the company.
  • Track the right metrics. Key critical-to-quality drivers—such as cost, new product introductions, and market share—must be determined based on the goals and objectives of the program. They should be monitored regularly on a near-real-time or real-time basis.
  • Implement fair accounting methods. A better financial reporting system is required to capture Six Sigma improvements early. Most financial measures are too slow and too aggregated to determine these micro-level (process) improvements.

 

“When an organization has goals and objectives with appropriate measures that can quickly and accurately reveal the results of improvement efforts, it must determine a project-selection process,” adds Weeks. All improvement projects must meet certain criteria, such as:

 

  • Have a project charter that clearly defines the scope
  • Have an assigned leader and tentative team
  • Have an expected timeline for completion
  • Have an expected ROI that meets company goals

 

The addition of lean to the Six Sigma processes to create lean Six Sigma (LSS) makes “so much sense that not doing it seems unimaginable,” says Weeks. “This combination of two methods to reduce waste first, eliminate defects, and improve the remaining necessary processes is powerful. Today’s 110% is tomorrow’s 95%. This will avoid complacency that tends to set in after a goal has been achieved, particularly if it was a difficult project.”

With changes to an organization’s way of thinking, an LSS effort can now be a part of a normative business system for the long haul. “Select key drivers that are customer-focused and have clear key success factors,” advises Weeks. “An organization will be managing to value, not cost. That way, financial reporting will be consistent and timely and global goals and objectives will be supported.”

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Little Things Mean a Lot

Monday, June 20th, 2011

Skinny jeans, 100-calorie snacks, smart cars – everyone is focused on smaller and leaner. So why not manufacturing? Research has shown that almost all activities in manufacturing fail to add value to a product. Nielsen Research reports that a minute of downtime can cost a manufacturer more than $20,000! A MINUTE! Success lies in efficiencies. It’s about being lean.

Lean principles have been with us for a while in quality and manufacturing. You’re probably familiar with Six Sigma, TQM, Kaizan, etc. Lean is about getting the right things in the right place at the right time and always looking for continuous improvement. It can apply to processes throughout the value chain.

It’s simple to see why the focus is on lean. Our current economy is unstable. Mergers and acquisitions, layoffs, increases in the cost of doing business and on resources makes a focus on doing more with less while maintaining high quality products a must. It sounds so simple, just like if you want to lose weight, eat less, right? How many go on the “crash” or “fad” diet to achieve the desired results? The focus needs to be on the big, long-term, big picture — continuous process improvement, not metrics and projects.

Re-engineering processes will allow you to get rid of all the waste and inefficiency in your systems. Lean, simple and intuitive procedures and robust process architecture can result in quick navigation, each to use and focus on problem solving, not navigating the maze. Implementing a lean program requires that you meet all applicable regulatory requirements, have an effective Quality Management System, know your products (specifications, batch records, etc.), identify and monitor your predictable processes, consider risk management, and measure the results in terms of cycle time, complaints, recalls, etc.

So what can go wrong? Way too much! First of all, over-documentation without understanding the whole system can obstruct the whole process. Adding resources without understanding whether the existing resources are being utilized correctly can also be a pitfall. If you make the system dependent on people, it won’t survive long-term. If you’re always being reactive instead of preventive and think technology will be the magic wand that solves it all, you will never achieve lean.

Enter Automation. The benefits of automation include data improvement, with automated systems and reports, and less reliance on memory and experts, and reduced human error. It also can create reproducible data and information so trends are easily evaluated. With real time data, reports can be generated when needed and knowledge can be shared more quickly. It also allows for accountability from across multiple locations.

Automation can also improve processes, by reducing process cycle time through automated workflows, and increase productivity through easier collaboration of automated notifications and discussion threads. Automation makes it possible to handle multi-tasks, create standardization and enforcement from policies not perception or interpretation, and eliminates guessing who owns what across departments.

For success, focus on the fundamentals:

• Learn to associate efficiency with effectiveness
• Foster a culture of business excellence, quality and productivity into fabric of the organization
• Empower an effective workforce with the right skills, knowledge and decision-making capabilities
• Deploy capability to measure performance and calculate the value through the “right” metrics
• Leverage technology automation to enable effectiveness, efficiency, and closed-loop processes that complement your overall investments
• Finally, understand what controls can be put in place to sustain the gain

Going lean is solving the problem, not addressing the symptoms. Match the right skill sets to do it right the first time. The benefits of lean systems are an efficient use of resources, rapid cycles, higher quality at a lower cost, greater flexibility and sustainable processes. Remember, less is more!

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Get Lean! Using Six Sigma and Lean Strategies to Improve Quality

Friday, October 15th, 2010

The goal of lean is to eliminate waste and non-value-added steps at all points in the manufacturing process. To accomplish this, lean implements continuous improvement practices and eliminating waste across the enterprise. Technology has been successful as key to achieving this end. While saving money might be an initial consideration with lean strategies, customer satisfaction is of utmost importance to any organization. By concentrating on customer satisfaction and value while eliminating waste, a company can build profits as well.

 According to the Lean Enterprise Institute (www.lean.org), there are five principles of lean techniques:

 Specify value from the standpoint of the end customer by product family.

  1. Identify all the steps in the value stream for each product family, eliminating whenever, possible those steps that do not create value.
  2. Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer.
  3. As flow is introduced, let customers pull value from the next upstream activity.
  4. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

Lean principles can help businesses reduce costs, improve product quality, streamline processes and increase customer satisfaction, says the Institute.

 Six Sigma, on the other hand, focus on defining specific processes to produce an exact level of quality that can be repeated. In order to do so, processes must be documented, monitored and analyzed. Working together, lean initiatives and Six Sigma principles can make an effective organization that eliminates waste, reduces cost and improves profitability.

 According to the Lean Enterprise Institute, to achieve a waste-free production process, organizations must be willing to supervise the flow of products and services through entire value streams that flow horizontally across technologies, assets and departments to customers.  Companies who do so can better respond to changing customer needs, with higher quality and with lower cost. Lean principles can also improve communication and accuracy of data, a definite plus for compliance.

 When you apply these lean and Six Sigma principles to an automated quality management system, you create the ideal foundation for succeeding. Technology makes it easier to view your processes, document them, and measure your success using consistent measurements. You can make more accurate predictions without a try-and-see approach. Technology enables you to be more flexible and respond to customers faster.

 Most importantly, by using an automated quality management system with your lean initiatives, you make the system create the lean environment for the organization, rather than relying on a few people who have learned lean principles. Therefore, lean initiatives continue to thrive and grow in the organization, regardless of personnel changes.

 Lean and Six Sigma aren’t limited to the factory or even the supply chain. All parts of the organization can use these principles to improve processes: train employees, manage documents, monitor suppliers, create audit trails, and meet compliance. Even administrative processes can utilize lean principles to reduce and eliminate waste.

 Going lean isn’t easy and requires an organization to gain commitment from the entire organization, set reasonable goals and monitor improvements. You need to establish common processes and extend them to a common technology platform.  The focus should be on establishing repeatable performance and profitability through customer satisfaction.

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Wake Up and Watch Out: Getting Serious About QMS

Thursday, July 15th, 2010

“If it’s not broken, don’t fix it.” Really? If you only want to maintain the status quo, you might get away with letting sleeping dogs lie. But no one really wants to get hauled off by the dog catcher during a pleasant nap. Unfortunately, it’s happening every day to manufacturers who don’t take quality management seriously.

Quality management is about continuous improvement and product safety. And each time we optimize, we strengthen our preventive measures for avoiding unwanted surprises and disruptions in our operations.

For manufacturers, those surprises don’t just lie behind Door #1, or Door #2. Those surprises can come from regulatory bodies in the way of standards like ISO, cGMP, HACCP, or Lean and Six Sigma Objectives. Equally, if not more frightening, is what lies behind the Consumer Door.

Since consumer activist agencies and public awareness at large—fueled, for example, in the case of recent toy recalls involving lead and cadmium controversies, by clear test results and common sense—tend to be a few steps ahead of legislators and regulatory bodies on public safety concerns, it is imperative manufacturers stay a few steps ahead of the game. This can be achieved with a comprehensive Quality Management System (QMS). By enabling quality management throughout the lifecycle and detecting defects early in the process, companies benefit from improved credibility, and – bonus! – reduced costs.

Sure, a QMS doesn’t ensure perfection. The laws of probability and the inevitabilities of human behavior still come into play. However, implementation of an enterprise-wide QMS (engaging the entire supply chain) does allow the flexibility to identify, contain, and adapt to foreseeable and unforeseeable issues. Proactive, responsible companies that engage a comprehensive process review program and performance tracking system as components of their overall QMS, will be prepared to ensure smooth responses to potentially devastating scenarios.

Consider the cadmium situation: In January of this year, an Associated Press (AP) investigation revealed a number of children’s trinkets and jewelry promoting a Disney’s children’s franchise and sold exclusively at the world’s largest retailer, Wal-Mart, contained significant amounts of the highly toxic heavy metal cadmium. A known carcinogen, cadmium can inhibit brain development in young children. Subsequently, the Consumer Product Safety Commission (CPSC) took only a few weeks to confirm the results of the AP investigation before issuing a recall. However, though, though the CPSC has acted quickly by issuing recalls on a handful of products known to contain cadmium, the organization has indicated it is by no means finished, and that more recalls may be coming down the pipeline.

Regulatory agencies are working continuously to protect the consumer, and consumers have long memories that continuously question the quality of the products they buy. Therefore, being a proactive manufacturer calls for continuously going above and beyond the call of duty. By establishing a QMS built on internal standards that exceed federal regulatory requirements and make sense in terms of consumer health and safety, manufacturers can keep the dog catchers at bay and save millions of dollars in the long term.

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