Lean 6 Sigma

Time is money. This axiom never truer than during rocky financial periods when the pressure to produce swift revenue results from any investment intensifies. In boom years and recessions alike, IT is expected to facilitate business efficiencies and innovations that yield significant cost reductions and increase profits. But during a downturn, many companies tighten or freeze budgets, expecting IT to do even more with less.

This approach could be a critical error, locking IT into an existing environment that consumes as much as 80 percent of the budget in maintenance costs and reactive fire-fighting. Instead, targeted investments in new technologies and operational disciplines such as Lean 6 Sigma, which aims to achieve results in a short time frame by eliminating process inefficiency and focusing only on activities that increase the value of the final product, can deliver significantly higher returns than simple cost cutting in tough economic times. LSS principles and practices, particularly when combined with BPM technologies and modular service-oriented architectures (SOA), offer at minimum the foundation for greatly increased operational efficiency and flexibility.

Where should an organization start? First, apply lean sigma methodology to IT operations to free up technical resources.
Lean sigma concentrates on removing process waste and smoothing workflows. Waste can be found throughout IT, much of it driven by interactions with the business process management system.

McKinsey & Company research finds organizations can cut application development and maintenance costs by as much as 40 percent through Lean 6 Sigma by identifying waste in the form of unnecessary functionality, changes in requirements during development, ineffective prioritization of maintenance requests, incomplete information, bug fixing and rework, and maintenance backlogs with many partially completed requests.

Next, businesses should invest in Business Process Management techniques and use Lean 6 Sigma methodology to guide project selection and accelerate ROI. A robust Business Process Management platform includes process modeling, real-time monitoring, integration, human workflow, and business management system rules capabilities along with repositories to store key assets and support governance and reuse.

Business and IT leaders need to then walk through both the organization’s core and its key supporting processes to determine how they can apply Business Process Management methodology to improve operational efficiency. Business and IT executives should identify Key Performance Indicators(KPI) to measure end-to-end performance, with particular attention given to measures in which the process crosses organizational boundaries because that’s where breakdowns often happen.

During this evaluation it’s important for IT to look at the needs of the external customer to determine where they can implement improvements that will satisfy these requirements, looking for opportunities to incorporate continuous change into processes to both respond to events and to differentiate the business in the eyes of the customer. Business rules and policies that are controlled by business users allow the company to change and dynamically assemble its processes more easily.

[Read the rest of this entry...]

6 Sigma for Business Management—What you need to know:

Delivering and supporting IT services is not enough to make IT a driver of business value. As IT increasingly plays an integral part in the business process management, it must consider new approaches to improve service quality and business process efficiency to become more aligned and integrated with business management objectives.

But how?

IT best practices like ITIL v3 (Information Technology Infrastructure Library) introduce Continual Service Improvement for service management. And, quality methods like 6 Sigma bring a business process focus to IT. In combination, they add a quality layer to ITSM (IT Service Management).

This series of articles will focus on what 6 Sigma is, how 6 Sigma techniques bring business process focus to business organization and how 6 Sigma complements ITIL v3.
 

What is Lean 6 Sigma?

Lean 6 Sigma is a business process driven quality improvement method that enables organizations to streamline business processes by reducing the number of nonconformance that 1) impact customers and 2) increase costs. The sigma measures, represents the standard deviation, indicating the amount of variation or inconsistency in a business process. The target for quality equates to 6 standard deviations or Sigma 6 from the mean— 6 sigma —by which the variation from a business process is reduced to no more than 3.4 defects per million opportunities (DPMO).

According to Quality America, a bank operating at three sigma for instance would correspond to 270 million erroneous credit card transactions recorded per year in the United States and 54,000 checks lost each night. It is numbers like this that get the attention of C-level business executives to turn to 6 Sigma quality solutions for business process transformation.

[Read the rest of this entry...]

6 Sigma is a quality management program to achieve “6 sigma” levels of quality.

6 Sigma is a highly disciplined process that helps to focus on developing and delivering near-perfect products and services.
Why “Sigma”? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind 6 Sigma is that if you can measure how many “defects” you have in a process, you can systematically figure out how to eliminate them and get as close to “zero defects” as possible.

To achieve 6 Sigma quality, a process must produce no more than 3.4 defects (defect=failing to deliver what the customer wants) per million opportunities. An “opportunity” is defined as a chance for nonconformance, or not meeting the required specifications. 6 Sigma focuses first on reducing process variation and then on improving the process capability (process capability=what your process can deliver).

6 Sigma was pioneered at Motorola in the mid-1980s by Bob Galvin, who succeeded his father and Motorola founder, Paul Galvin, as head of the company, and by Motorola engineer Bill Smith. It has since spread to many other manufacturing companies, including Ford, GE, Honeywell, Raytheon, Seagate Technology, and Microsoft. However, it can be applied wherever the control of variation is desired. In recent years, it has begun to branch out into the service industry, and in 2000, Fort Wayne, Indiana became the first city to implement the program in a city government. Some, claiming that 6 Sigma impact has not
yet been fully realized, advocate an open source approach so that the principles of 6 Sigma might be more widely adopted.
Why 6 standard deviation?
According to the graph of the standard normal distribution, only two billionths of the normal curve falls beyond 6 standard deviations, in contrast to the value of 3.4 millionths publicized by 6 Sigma promoters. Confusingly, that value corresponds to precision within 4.5 standard deviations, reflecting a 1.5 standard deviation “shift”. Introduced by Mikey Harry around 1980, its magnitude was based on observations and personal experience, not empirical data.
It is used to account for model inaccuracies, since defects in manufacturing processes do not always correspond to the normal distribution. Instead, processes tend to “drift” with time, causing the majority of error to fall on one side of the normal distribution and as a result, a higher defect rate than 3.4 DPMO if no shift were used. With 6 Sigma methodology, however, if the process drifts by 1.5 standard deviations, the level of quality will remain within 3.4 DPMO.

However, the 1.5 sigma shift assumption is not without its critics. Donald J. Wheeler, a respected quality professional, labels it “goofy”, arguing that it is misapplied in practice and that it is probably inaccurate anyway. Often, implementers of 6 Sigma simply add 1.5 “sigmas” to their sigma calculation, transforming a 4.5 sigma process (3.4 DPMO) into a 6.0 sigma process. But this reflects a misunderstanding of the nature of the shift. If short-term data is used (data that does not reflect potential process drift), 1.5 sigmas should be subtracted from the final sigma calculation to account for the potential drift. Thus, achieving 3.4 DPMO using short term data reflects a three sigma process, not 6 sigma, when used to reflect the long-term failure rate. Alternatively, if long-term data is used to make the sigma calculations, the process drift will have already been accounted for, and no additions or subtractions to the sigma calculation are necessary.

[Read the rest of this entry...]

Quality and quality control have attracted the attention of many industrialists during the last few decades. The success of many manufacturing and servicing industries has been linked directly or indirectly to the quality of the products and services provided. A widely quoted example is the development of Japanese products during the last 20 to 30 years. It was, at one time, being branded as a nation that produced cheap and shoddy products but that image has rapidly been changed to its present highly acclaimed status of an industrialised nation noted for its high quality products. The success story lies in the manufacture of quality products and, more importantly, through strict quality control the products are manufactured
at far less cost than its competitors. 

But what is quality? And, what is quality control ?

What is Quality?

Different people may have different views on what quality is. To many, quality typically connotes the meaning of pleasant visual appearance, dimensional accuracy, good performance including long service life, good surface finish and reliability. 

The Japanese Industrial Standards defined quality as: 

A characteristic property to be the object of valuation for determining whether or not an article or service is satisfying its purpose.

Based on the above definition, quality can be summarised as:  Satisfaction of customers’ needs 
 Suitability for intended use  Performance according to specification 
 
As different categories of consumers may have different levels of satisfaction, quality in this instance could be translated to the different grade or standard of products that a manufacturer can produce. For instance, if you are talking about automobiles, it denotes the difference between a luxury car and a popular automobile. The customer group that the product was targeted at is different from the very beginning. 

The different levels of satisfaction will mean different costs to meet the specifications. Therefore, manufacturers should be concerned with the consistency in meeting these specifications. Quality in this sense means conformity to a prescribed standard or specification. In this instance, quality has to do with the difference in how well a product is made and targeted for the same purpose. Poor quality simply means a deviation from the prescribed standard or specification. As efforts to conform incur costs, a compromise should be made to achieve an optimum level of conformance.
Summarising from the above, quality is defined by the customers’ needs. Manufacturers must be able to translate the customers’ needs into a set of precise specifications and manufacture according to the prescribed standard. In addition, it is normal to expect that customers’ expectations are not always static. With technological developments, competitions and new designs, customers constantly expect improvements in quality. This means the manufacturers will have to constantly upgrade their quality levels. 
DEFINITIONS OF QUALITY

-Quality Products are those that:  Satisfy customers’ expectations 
-Meet a well defined need, use or purpose 
-Comply with applicable standards and specifications 
-Comply with statutory and other requirements of society 
-Are available at competitive prices 
-Are provided at a cost which will yield profit 

[Read the rest of this entry...]

8D Problem Solving Introduction
 
The 8d problem solving is about teams working together to resolve problems, using a structured 8D problem solving process to help focus on facts not opinion. So far, so good! Let’s get into some more detail - the 8D explained…. 

8D Problem Solving Method

8D Problem Solving Discipline 1 – Build The Team
Assemble a small team of people with the right mix of skills, experience and authority to resolve the problem and implement solutions. Ensure these people have the time and inclination to work towards the common goal. Get your people “on board” by using team building tools such as ice-breakers and team activities in 8D Problem Solving.

8D Problem Solving Discipline 2 – Describe the Problem
How can you fix it if you don’t know what’s broken? The more clearly you describe the problem, the more likely you are to resolve it. Be specific and quantify the problem where possible. Clarify what, when, where and how much e.g. what is the impact to customers? Consider using checklists from professional 8d problem solving suppliers to stimulate and open up your thinking.

8D Problem Solving Discipline 3 – Corrective action 
What “sticking plaster” can you use until you figure out what’s really causing the problem? Implement a temporary fix and monitor and measure the impact to ensure it’s not making things worse. Remember to keep going, as a sticking plaster will never cure a broken leg!

8D Problem Solving Discipline 4 – Eliminate Root Cause
There will be many suspects causing the problem, but usually only one culprit. The key is figuring out which one. This is where it can get a bit numerically challenging, as statistical tools are often used to get a deep understanding of what is going on in a process.

[Read the rest of this entry...]

How to fit 6 Sigma into Your Corporate Culture

They may wonder why this method will prove better than similar attempts that have been tried in the past.
Getting 6 Sigma embraced within your corporate culture is important, and having employees come alongside will make the job of the Belts a lot easier.

Without their support, belts can quickly become disheartened.

The scepticism that can be found with the announcement of 6 Sigma implementation is not limited to employees alone.
Top management is often wary of claims that 6 Sigma can radically increase the bottom line of a company; it is hard to believe that a company can save $200,000 per 6 sigma project.

It is even harder to comprehend the savings as the worth of these projects are calculated over a decade, and begin to run into the billions of dollars.

Often management has trouble believing that 6 Sigma is any different than other failures reduction strategy, or that it will fit in with their corporate mission. Another objection is the cost of black belts and the expertise that they bring to the implementation process.

Well, the only way to address these issues is to have a cultural makeover from the top down. It is imperative that management wholeheartedly embraces 6 Sigma and every procedure that will serve to indoctrinate its strategies within the businesses.

6 Sigma it’s a strategy that is designed and proven to work regardless of industry or corporate.

Here are some ways you can “sell” 6 Sigma to employees and management alike.

• Results will be visible as milestones. First management will notice financial gains, then employee satisfaction, and finally satisfied customers. These changes are measured by the conventionally perceptible barometer and will generally satisfy even the most cynical skeptics.
• Begin by assessing the corporate culture before deployment of 6 Sigma strategies. Understanding where everyone is coming from will help you measure results afterwards.
• Accept that with time, people will become used to the changes. It’s likely that most people will forget they were ever leery about the businesses in the first place, as things begin to go well for the corporate.

In order for the deployment to be successful in 6 Sigma, it must be embraced within the corporate culture. Using the strategies above can decrease resistance and give 6 Sigma deployment a good head start towards success.

Related articles by Zemanta

• Lean Six Sigma Consultants - Are you good at Marketing Yourself (0058299.netsolhost.com)
• Six Startup CEOs On Their Company Culture, Boiled Down to One Word (xconomy.com)
• Why Do We Measure? (WWW.BUSINESS901.COM)
• 2006 Lean & Six Sigma Talent Demand Study | Lean & Six Sigma Job and Career Trends (slideshare.net)
• Best Practices using Lean Six Sigma (business901.com)
• Management fads: A behavioral explanation (professorbainbridge.com)