Transcript Document

Six Things Contract
Managers Need to Know
About Six Sigma
Breakout Session # 1708
Tom Reid
Chief Problem Solver
Certified Contracting Solutions, LLC
www.certifiedcontractingsolutions.com
Date: April 25, 2007
Time: 10:40 - 11:40
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What is Six Sigma?
1. A statistical measure of standard
deviation from an expected value.
2. A combination of people power and
process power.
3. Represents a statistical measure and
a management philosophy.
4. According to Jack Welch it is “the most
important initiative GE has ever
undertaken.”
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What is a “Sigma”?
• One “standard deviation”
• What is a Standard Deviation?
• The statistically expected variation in a series
Average difference between any value in a series of
values and the mean of all the values in that
series. This statistic is a measure of the variation
in a distribution of values.
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Sigma Levels
Sigma Level
(Process Capability)
Defects Per Million
Opportunities
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308,537
3
66807
4
6210
5
233
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3.4
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Where did it originate?
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•
•
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Motorola
Allied Signal
General Electric
Sony, Honda, Maytag, Raytheon, Texas
Instruments, Bombardier, Canon,
Hitachi, Lockheed Martin, Polaroid, etc.
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What Does a Contract Manager
Need to Know About Six Sigma?
1. Six s has its own acronyms and jargon
2. Six s has a strategic component
3. Six s has a tactical component
4. Six s is a statistical process
5. Six s measures quality
6. Six s is NOT “quality fodder de jure”
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Six s has its Own Acronyms and
Jargon
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•
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DMAIC
DMADV
BPM
DPMO
COPQ
CTQ
•Champion
•Black Belt
•Master Black Belt
•Green Belt
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Acronyms
• DMAIC – Define, Measure, Analyze, Improve,
Control
• DMADV - Define, Measure, Analyze, Design,
Verify (DFSS = Design for Six Sigma)
• BPM – Business Process Management
• DPMO – Defects per Million Opportunities
• COPQ – Cost of Poor Quality
• CTQ – Critical to Quality
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Definitions
• Champion – corporate level person who
“owns” the process
• Black Belt – full-time change-agent trained in
the methodology who leads the process
• Master Black Belt – Serves as trainer,
mentor, and guide throughout company
• Green Belt – Team members who
understand 6s tools and techniques; “worker
bees”
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Six s is Strategic
• There is no guarantee of success
• It involves Business Process Management
– The first step here is to clarify and communicate the
strategic business objectives of the organization
• Seeks both effectiveness and efficiency
– All key BPMs must be measured in these terms
• Involves customer input
• Lowest performing, highest impact processes
should be chosen as 6 s projects.
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What does Poor Quality Cost?
Traditional Costs
• Inspection
• Overtime
• Defects
• Idle Time
• Rework
Real but Overlooked
• Long Cycle Time
• Cost of Capital
• Redundant Processes
• Expediting Costs
• Lost Sales
• Lost Customer Loyalty
• Missed Deadlines
• Excessive Planning
• Inaccurate Reports
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Six s is Tactical
• Similar to the scientific method you learned
in elementary school
– Define the problem, measure the impact,
determine root cause, form and test
hypotheses
• It is continuous
• It seeks out best practices from anywhere
• It quantifies variances using various tools
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Technical Tools
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•
•
•
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Process maps
Histograms
Pareto charts
Process summary
Scatter diagrams
• Cause-effect
diagrams
• Affinity diagrams
• Run charts
• Control Charts
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Other Management Tools
• Stakeholder analysis chart
• Planning for influence chart
• SWOT Analysis
• Pay-off matrix (ROI)
• Agendas
• Ground rules
• Parking Lot
• Failure Modes & Effects Analysis
A 6s team is exactly that – a TEAM
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Exploiting the Potential
RECIPE FOR SUCCESSFUL TEAMS
1.
Clarity in direction and goals.
2.
Members selected based on skills and skill potential.
3.
Clearly defined jobs and responsibilities.
4.
Establish ground rules.
5.
Urgency in setting and seizing upon a few immediate
performance oriented tasks and goals.
6.
Beneficial team behaviors (friendship, concern and interest
in others).
7.
Clear communication.
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Exploiting the Potential
RECIPE FOR SUCCESSFUL TEAMS (cont.)
8. Use of a disciplined approach.
9. Awareness of the group process.
10. Balanced participation.
11. Well defined decision-making procedures.
12. Exploit power of positive feedback, recognition and
reward.
13. Challenged regularly with fresh facts and information.
14. Competent leadership.
15. Accountability.
Source: Federal Market Group
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Six s is a Statistical Process
• But math is math – add, subtract,
multiply, and divide
• Most of us learned theoretical statistics
• Six s lets you use practical statistics
• It is the Black Belt who is responsible
for the accuracy of the statistics relied
on by the team
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Six s Measures Quality
• Quality must be measured from the
customer’s perspective
• Unless you ask, you will never know
• It doesn’t help to say “The customer’s
are always complaining.”
• It does help to say, “Sixteen customers
have complained about waiting longer
than five minutes for customer service.”
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How Does the Prime Control Quality?
• In the average aerospace business 50% of
the prime dollars flow to subcontractors
• If 6s works at your company, what impact will
it have on the other half of your business
operations?
• How many of you have required that your
subs implement six sigma?
• How many of you have offered 6s training to
your subs?
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Six s is NOT “Quality Fodder de Jure”
Who Remembers:
• Quality Circles
• Process Re-engineering
• TQM
• ISO 9000
• Continuous Improvement
• Statistical Process Control
• Just in Time
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Why is Six s Different?
• Most in past were glorified pep talks
• Generally had little or no senior
management support
• No strategic element
• No widespread acceptance
• None demonstrated the success of six s
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Benefits of Six s
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Greater management involvement
Management by Fact and Data
Fosters employee creativity
Not a re-engineering job-loss objective
Has a Control element
Drives out inefficiency
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Current Trends
• Companies seeking BB or MBB talent are
ALSO now asking that these individuals have
some experience in lean enterprises, based
on the principles of the Toyota Business
System.
• MVT or Multivariable Testing attempts to
expand on the possible solutions by polling
entire organizations
• Some research has suggested that the
farther away from its manufacturing roots Six
Sigma strays, the less effective it is.
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What Does a Contract Manager
Need to Know About Six Sigma?
1. Six s has its own acronyms and jargon
2. Six s has a strategic component
3. Six s has a tactical component
4. Six s is a statistical process
5. Six s measures quality
6. Six s is NOT “quality fodder de jure”
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The Elevator Speech
Six Sigma is a problem-solving
technology that uses your human
assets, data, measurements, and
statistics to identify the vital few factors
to decrease waste and defects while
increasing customer satisfaction, profit,
and shareholder value.
Brue, Greg. Six Sigma for Managers, (McGraw-Hill: New York,
2002) p. 10.
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Bibliography
• Brue, Greg. Six Sigma for Managers. Madison,
WI: CWL Publishing Enterprises, 2002.
• Brue, Greg. Six Sigma for Small Business.
Madison, WI: CWL Publishing Enterprises, 2006.
• Chowdhury, Subir. The Power of Six Sigma.
Chicago, IL: Dearborn Trade, 2001.
• Eckes, George. Six Sigma for Everyone. Hoboken,
NJ: John, Wiley & Sons, 2003.
• Harry, Mikel. Schroeder, Richard. Six Sigma. New
York, New York: Doubleday, 2000.
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