SIX SIGMA FOR MANUFACTURING AND NON-MANUFACTURING PROCESSES

SIX SIGMA FOR MANUFACTURING  AND NON-MANUFACTURING PROCESSES.

Six Sigma is a quality improvement and business strategy that began in the 1980's at Motorola.

Emphasis is on reducing defects to less than 4 per million, reducing cycle time with aggressive goals such as 30-50% reduction per year, and reducing costs to dramatically impact the bottom line.

The statistical and problem solving tools are similar to other modern day quality improvement strategies.

However, Six Sigma stresses the application of these tools in a methodical and systematic fashion to gain knowledge that leads to breakthrough improvements with dramatic, measurable impact on the bottom line.

The secret
ingredient that really makes Six Sigma work is the infrastructure that is built within the organization.

It is this infrastructure that motivates and produces a Six Sigma culture or "thought process" throughout the entire organization.

The power of a Six Sigma approach is best described by proven return-on-investment (ROI) as shown next from Motorola, AlliedSignal, and General Electric (GE).

Motorola ROI   1987-1994   Reduced in-process defect levels by a factor of 200.   Reduced manufacturing costs by $1.4 billion.   Increased employee production on a dollar basis by 126%.   Increased stockholders share value fourfold. 

AlliedSignal ROI   1992-1996   $1.4 Billion cost reduction.   14% growth per quarter.   520% price/share growth.   Reduced new product introduction time by 16%.   24% bill/cycle reduction. 

General Electric ROI   1995-1998   Company wide savings of over $1 Billion.   Estimated annual savings to be $6.6 Billion by the year 2000.

GE has now become the standard bearer for how Six Sigma is implemented to successfully drive positive bottom line impact along with recognized "World Class" status.

Other highly respected and successful companies such as SONY are benchmarking off of GE and implementing a similar strategy.

The companies mentioned thus far are certainly well known for their engineering and manufacturing excellence. What is not as well known is their view of the importance of Six Sigma in non-manufacturing or transactional areas.

The point to be made here is that any process can be represented as a set of inputs which, when used together, generates a corresponding set of outputs. An abbreviated pharmaceutical tablet manufacturing process might appear as shown next:

Manufacturing Process Picture

Transactional organizations simply are not accustomed to looking at their processes in this manner and thus will struggle a little in developing a similar abbreviated diagnosis of a transactional process. An Input-Process-Output (IPO) diagram for a sales process is shown below:

Sales Process Picture

Thus, a process is a process, regardless of the type of organization or function. All processes have inputs and outputs.

All processes have customers and suppliers, and all processes exhibit variation. Since the purpose of Six Sigma is to gain breakthrough knowledge on how to improve processes to do things Better, Faster, and at Lower Cost, it applies to everyone.

Furthermore, since processes such as sales have historically relied less on scientific methods than engineering and manufacturing, the need for Six Sigma (i.e., a structured and systematic methodology) is even stronger here.

The method to implement Six Sigma for non-manufacturing processes is simple: the same way we implement it for engineering and manufacturing processes at Motorola, Texas Instruments, GE, Lockheed Martin, Corning, Sony, etc., with only slight modifications. These modifications are typically confined to the type and depth of statistical tools that need to be included in the training. Obviously, the slant on applications must also be directed toward the non-manufacturing processes.

A specific strategy for Six Sigma manufacturing and non-manufacturing processes would look similar to what is shown :

The executives must have a total commitment to the implementation of Six Sigma and accomplish the following:

*Establish a Six Sigma Leadership Team.

*Identify key business issues.

*Assign Masters to each key business issue.

*Assist the Masters and Leadership Team in identifying critical projects that are tied to the key business issues.

*Assist the Masters and Leadership Team in selecting Expert candidates.

*Allocate time for change agents (Experts) to make breakthrough improvements.

*Set aggressive Six Sigma goals.

*Incorporate Six Sigma performance into the reward system.

*Direct finance to validate all Six Sigma ROI.

*Evaluate the corporate culture to determine if intellectual capital is being infused into the company.

*Continuously evaluate the Six Sigma implementation and deployment process and make changes if necessary.

Comparison of Roles Picture

The overall approach to obtaining the right kind of knowledge is focused on finding the answers to the 14 questions shown next.

These questions, which are partitioned into a 4-phase strategy of Prioritize, Characterize, Optimize, and Realize, form the Six Sigma Project Master Strategy.

1. What processes are you responsible for? Who is the owner of these processes? Who are the team members? How well does the team work together? 

2. Which processes have the highest priority for improvement? How did you come to this conclusion? Where is the data that supports this conclusion? 

3. How is the process performed? 

4. What are the process performance measures? Why? How accurate and precise is the measurement system? 

5. What are the customer driven specifications for all of the performance measures? How good or bad is the current performance? Show me the data. What are the improvement goals for the process? 

6. What are all the sources of variability in the process? Show me what they are. 

7. Which sources of variability do you control? How do you control them and how is it documented?

8. Are any sources of variability supplier-dependent? If so, what are they, who's the supplier and what's being done about it?  9. What are the key variables that affect the average and variation of the measures of performance? How do you know this? Show me the data.  

10. What are the relationships between the measures of performance and the key variables? Do any key variables interact? How do you know for sure? Show me the data. 

11. What setting for the key variables will optimize the measures of performance? How do you know this? Show me the data. 

12. For the optimal setting of the key variables, what kind of variability exists in the performance measures? How do you know? Show me the data. 

13. How much improvement has the process shown in the last 6 months? How do you know this? Show me the data. 

14. How much time and/or money have your efforts saved or generated for the company? How did you document all of your efforts? Show me the data. 

Salam, Greeting.