4Aggressively Change the Way We Do Business with Sustained Improvements I&CIM Mission,EuropeAggressively Change the Way We Do Business with Sustained ImprovementsBuild critical mass thru improved yieldAchieve critical mass to achieve culture of ExcellenceReduce cycle timeIntegration of tools and people to achieve the most efficient problem solving.
5What is QualityQuality is a state in which ‘Value Entitlement’ is realized for the customer and provider in every aspect of the business relationshipIn the world of six sigma ‘entitlement’ means that companies have a rightful level of expectation to produce quality products at the highest possible profits; for customers ‘entitlement’ means that they have a rightful level of expectations to buy high-quality products at lowest possible cost.
6The Absolutes of Excellence Focus: Your CustomerPerformance Goal: Do it Right the First TimeMethod: Innovation & Continuous ImprovementControl: Customer FeedbackPeople CaringStyle: TeamworkReward: Recognition and Security
8+ How do we work Customer Requirement Quality Delivery Price Various Internal ProcessLossInternal PerformanceFTQ = 10, ,000Cost = RedSupplier = We don’t KnowDesign FTQ= 200,We lose More As We Grow MorePerformance at CustomerQualityDeliveryPriceNew LaunchesPPM= 30-4099 %Price = As per CustomerSOP On time
9Where we lose money 1.5 % of Revenue Traditional Quality Costs Inspection(Easily Identified)Scrap1.5 % of RevenueTraditional Quality CostsWarrantyReworkRejects(tangible)Hidden Quality CostsLost salesSix Sigma reveals hidden capacities and capabilitiesLost OpportunityLate deliveryEngineering change ordersLong cycle timesExpediting costsExcess inventory(intangible)(Difficult to measure)Lost Customer LoyaltyMore SetupsCustomer SatField ModificationsCustomer Productivity LossLengthy InstallsEmployee Morale, Productivity, TurnoverT&LOvertime15-20% of Revenue
10A $0.8 Billion Cost Reduction Opportunity in Europe! How much we loseIf X is a 3sCompany, Cost of Failureis Estimated to Be at Least 15% of Sales40%Cost of Failure (%Sales)35%30%25%20%15%10%5%Defects per Million3.4233621066,807308,537691,462SigmaA $0.8 Billion Cost Reduction Opportunity in Europe!38
11How do we Improve today Random Down Stream Lower Hierarchy Higher LowerUpstream Down StreamRandomDown StreamLower HierarchyUpstream Down StreamBig $Improvement in Down Stream Process & Lower in Hierarchy gets PULLED by the Upstream process & Higher in HierarchyPresentFocusHigher LowerSavings are recorded but does not HIT the Profit & Loss A/CImprovement are incremental & unsustainable in Nature & we Need BREAKTHROUGH & sustainable
13What to Change $ $ $ $ $ $ $ € $ $ $ $ $ $ $ $ $ $ $ $ We all agree there is a Need to change the way we workBut we need to Bring Speed in the changeChange the thinking from Cost to profit$$$$$$$€$$$$$$$$$Don’t look at the cost of the person watering the plants, But look at the impact of the process on the results.$$$There are many “Upstream Process” apples still waiting to get picked
14What is the changed methodology Innovation & Continuous Improvement Methodology (I&CIM) is a X’s common global philosophy of doing business by implementing a rigorous, structured & Data driven Continuous Improvement Methodology which Focus on the Customer by driving perfection in the Business processes through Understanding & Eliminating All Sources of Variation.Build critical mass thru improved yieldAchieve critical mass to achieve culture of ExcellenceReduce cycle timeIntegration of tools and people to achieve the most efficient problem solving.Business Process Variation is a termite in our growth
16Major Projects in Europe Estimated SavingsClaim Management process for Model Year & Engineering ChangesConnection Systems Capacity improvementIn-sourcing of componentsTapping UtilizationCutting Machine ProductivityCosting AccuracyTrucking efficiencyCost of Value StreamsDesign Process optimizationNC Cost in MechatronicsOver dues A/C ReceivablesEurope Wide FTQ reduction$30-50Mi.$2-3Mi.$3-4Mi.$1Mi.$1-2Mi.$4-5Mi.
17X Global Performance 2002 1.13% We are Here Achieved How does each division define success? What other metrics are needed?Warranty discussion -Delphi is being held responsible for a larger share of our GM warranty impact. NA vehicle manufacturers experienced $6 billion in warranty costs in 1999.Plan
19The Many Facets of Six Sigma Focus and commitment to quality must be driven by top leadershipLeadership must be fully engaged and accountable for successSix Sigma provides classical problem solving tools enhanced with a fundamental knowledge of statistics and variation6sLeadershipToolsProcessMetricsFocus is on statistical process capability and process variation analysisProducts must be designed to be manufactured within process capabilityProcess capability must be quantifiedGoal is defect free products and processesFocus is on process capability (rolled throughput yield) rather than end of line yieldAll decisions must be data driven
20Organisations focus on internal performance Business PerformanceCustomer DissatisfactionBoat is still there ??CustomerTargetAverageI Shot the Boat!!SupplierOrganisations focus on internal performance
21Target Customer Experience Variation of the Upstream to downstream processes creates variation to Customer output
22Reducing Variability Is The Key To Six Sigma What Is Six SigmaA 3sprocess because 3 standard deviationsfit between target and specBeforeTargetCustomer3sSpecification1s0.27% Defects2s3sTargetCustomerSpecificationAfter6s !No Defects!Six Sigma is a problem solving methodology using statistical techniques to Gather, Examine, Modify and Sustain quality improvements.Each project follows the same 4 steps, with the ultimate goal being to raise a process’s sigma level, thus reducing defects.The graph explains what a sigma is and shows why a 2 sigma process has more defects than a 6 sigma process.1s2s3s4s5s6sReducing Variability Is The Key To Six Sigma434
23No of Parts in the product Why Six SigmaQuality as a Function of Part CountFor Average Part Quality LevelProduct Quality LevelPPMsNo of Parts in the product6 sigma Increases probability of shipment of defect free products
25s = S (X – X)2 n The Standard Deviation 3s m 1s p(d) T USL 1 Sigma - 68%2 Sigma - 95%3 Sigma %1sp(d)Upper Specification Limit (USL)Target Specification (T)Lower Specification Limit (LSL)Mean of the distribution (m)Standard Deviation of the distribution (s)TUSL3s10
26Corporate Initiatives Group - Europe What Variation Means to BusinessLHHLHLHLCycle Time ReductionHigher ProductionInventory ReductionLower PriceUsing mean-based thinking, we improve average performance, and we break out the champagne ...But our customer only feels the variance and cancels the next order!Shifting of the mean require heavy capital investment and does not significantly reduce the wasteVariation is enemy, just kill it.3/31/2017Corporate Initiatives Group - Europe
27Stability Factor Stability factor can unfold hidden factories Plant Capacity = 2000 / YearA Six Sigma Best Practice For Generating Free Capacity . . .CapacityGainQ1 = Quartile 1 (25%)Q3 = Quartile 3 (75%)Q3Q1Q3Stability Factor = Q1/ Q3IMPACT• Mfg Cycle• Inventory Turns• Promises Kept• Investment Efficiency• Labor Productivity• Delivered Quality (PPM)Q1Plant Capacity = 1100 / YearWhen products and services that we sell are truely a reflection of the way we work... then learning more from our current output performance will show how we work, what we need to change and what we need to keep. Early customer Successes in the businesses shows that spending significant time upfront capturing this Outside-In customer signal is of critical importance. Many of our six sigma projects show this to be our weakest link between improvement activity and customer impact. The information locked up in this output signal can be harvested through variance analysis, as I’ll show later. This has been proven to be the most powerful approach in providing insight and significant results.SF <0.9, Control IssueSF >0.9, Technology IssueStability factor can unfold hidden factories
28Would you control shooter or target to get the Gold Medal at Sydney The Focus of Six Sigmaf (X)YX XNIndependentInput-ProcessCauseProblemControlYDependentOutputEffectSymptomMonitorWould you control shooter or target to get the Gold Medal at Sydney
29The Inspection Exercise Task: Count the number of times the 6th letterf the alphabet appears in the following text.The Necessity of Training Farm Hands for FirstClass Farms in the Fatherly Handling of Farm LiveStock is Foremost in the Eyes of Farm Owners.Since the Forefathers of the Farm Owners Trainedthe Farm Hands for First Class Farms in theFatherly Handling of Farm Live Stock, the FarmOwners Feel they should carry on with the FamilyTradition of Training Farm Hands of First ClassFarmers in the Fatherly Handling of Farm LiveStock Because they Believe it is the Basis of GoodFundamental Farm Management.
30You can save your self by producing quality not by Inspection The Impact of Added InspectionIf the likelihood of detecting the defect is 70% and we have 10 consecutive inspectors with this level of capability, we would expect about 6 escaping defects out of every 1,000,000 defects produced.1,000,000 ppm6 ppm3.4 ppmYou can save your self by producing quality not by Inspection
31Defects Per Million Opportunities Six Sigma As A GoalDistribution Shifted ± 1.5ssPPM23456308,53766,8076,2102333.4Sigma is a statistical unit of measure which reflects process capability. Six sigma means that a process results in only 3.4 defects per million opportunities.Process CapabilityDefects Per Million Opportunities
32FTQ performance of manufacturing quality Process PerformanceFTQ performance of manufacturing qualityWhat are the over dues as % of the total ReceivablesWhat is the shipping window of the suppliersWhat is the % of pending payablesWhat is the % compliance to the production planWhat is the % compliance of the project completion datePPM11
34... Can Be Applied To Every Business Function Where in X…..... Can Be Applied To Every Business FunctionSalesEngineeringPurchasingHR6 SigmaMethodsFinanceManufacturing, CS, PCLIS&S7
35Philosophy Behind Implementation We don’t know what we don’t knowWe can’t do what we don’t knowWe won’t know until we measureWe don’t measure what we don’t valueWe don’t value what we don’t measureSix Sigma is a process of asking questions that lead to tangible, quantifiable answers that ultimately produce profitable resultsBuild critical mass thru improved yieldAchieve critical mass to achieve culture of ExcellenceReduce cycle timeIntegration of tools and people to achieve the most efficient problem solving.
36Six Sigma Road Map Business Process Organisation Customer Requirements Business RequirementsIdentify Customer RequirementsIdentify Business RequirementsIdentify Broken ProcessesAllocate resources and execute six sigma projectPermanent repair the processMonitor the business performance as seen by customerBroken Process5463BusinessProcess7281OrganisationWeak Business Process Can’t Meet Customer Requirements
37Right Structure can only make it successful Six Sigma Road MapCelebrate -Reward & RecognitionKeep Clear FocusMentor, Coaching & Closure of ProjectsGrow MBBsTrain Green BeltsTrain Black BeltsTrain Green BeltsGet Master Black BeltsSupport with Organisation StructureDecide the Business StrategyRight Structure can only make it successful
38Break Through Improvement Change ProcessConvincing Self1Convincing Others2DMAIC/DFSS Process3Break Through Improvement4Build critical mass thru improved yieldAchieve critical mass to achieve culture of ExcellenceReduce cycle timeIntegration of tools and people to achieve the most efficient problem solving.Point 1 & 2 contribute 70-80% of the success
40Define clear roles of the people OrganisationSix Sigma StructureCoach/ MBBFinancial ReviewerBlack Belt / Green BeltProject Target “Y”Define clear roles of the people
41Who Are These People? Green Belt: Black Belt: 5 days of training Focused on DMAICKnowledge of PCSsPart time team memberBlack Belt:15 plus days of trainingNormally, highly knowledgeable on aparticular process.Respected by peersFull time position, managing 3-6 DMAICs and PCSs“A rising star”
42Who Are These People? (continued) Master Black Belt:Quality Professional~8 weeks of training including electivesThe mentor to the BBThe facilitator of the entire processSupports specific areas of the companyCan support 6-8 BBs, DMAICsResponsible for validating the linkages of the PCSs for his/her areaDoes not report to any process ownerSponsor:The process ownerSupports the BBs in his/her areaRemoves barriers for DMAIC teamsResponsible for the teams’ successAccountable for SS in his/her areaChampion:Responsible for multiple processesBoss to a number of SponsorsProvides the linkage to the business at the highest levelA member of Jim Spencer’s staff
43Who Are These People? (continued) The Business LeaderJim SpencerUltimately, responsible for the quality of a particular business functionThe Quality LeaderMentor of the Business Leader with regards to Six SigmaExampleProject Name: Reduce FTQDeployment Champion-Champion- Site ManagerSponsor- Plant ManagerMBB-BB-GB-
51Certification Map Black Belt Six Sigma BB TrainingProject ApplicationPass all tollgate review sessionsTechnical CertificationASix SigmaYes4 - 6 months avg.No1week training per monthImprove Tools and Application to ProjectProject Completed and Final Report Submitted and Approved by SponsorASix Sigma Black Belt and I & CIM CertificationYesNoComplete Project and Submit Final Report
52Certification Map Green Belt Six Sigma GB TrainingProject ApplicationPass all tollgate review sessionsTechnical CertificationASix SigmaYes10 weeks (1 day on / 9 days off)3 months avg.NoImprove Tools and Application to ProjectProject Completed and Final Report Submitted and Approved by SponsorASix Sigma Green Belt and I & CIM CertificationYesNoComplete Project and Submit Final Report
53DMAIC Problem Solving Methodology: An Overview DefineMeasureAnalyzeImproveControlTeamCharteringCustomerFocusProcessMappingThe Business CasePreliminary Problem StatementProject ScopeDeliverablesRolesDefinition of QualityTypes of CustomersTranslate Customer Needs Into Specific RequirementsMethods of Collecting Customer RequirementsVoice of the Customer AnalysisProcess DefinitionsConnecting the Customer to Your ProcessBusiness Process MappingMapping GuidelinesBenefits and Applications of Process Mapping
54DMAIC Problem Solving Methodology: An Overview (cont.) DefineMeasureAnalyzeImproveControlDataCollectionMeasurementVariationWhy Measure?Input/Output/ Process MeasuresEffective and Efficiency MeasuresUnderstand Variation is the EnemyCommon Cause/ Special CauseWhy, When, and Where? Guidelines of Data CollectionUnderstand Qualitative and Quantitative DataHow to Collect DataDevelop Data Collection Plan
55DMAIC Problem Solving Methodology: An Overview (cont.) DefineMeasureAnalyzeImproveControlProcessAnalysisAnd FocusRootCauseAnalysisDataAnalysisQuantifyOpportunityRead, Interpret, and Construct Visual Displays of DataProcess Data Collection (On-Going)Moments of Truth AnalysisValue-Added AnalysisFocus on Vital Few ProblemsCharter RevisionCause & Effect AnalysisVerifying Root Causes are RealFocus on Vital Few ProblemsDetermine OpportunityDisplay/Package Opportunity
56DMAIC Problem Solving Methodology: An Overview (cont.) DefineMeasureAnalyzeImproveControlGenerateSolutionsSelectSolutionsImplementationPlanningSolution Parameters (Solution Statement & Solution CriteriaList of Possible SolutionsValidated SolutionCost/Benefit AnalysisBusiness Proposal for Improvement“Should Be” Process MapPilotingProject PlanningChange Management Strategy
57DMAIC Problem Solving Methodology: An Overview (cont.) DefineMeasureAnalyzeImproveControlMonitor theProcessDocumentationInstitutionalizeStandardsControl ChartsMeasurement PlanDeveloping ProceduresProcedure Sheet TemplateSystems and StructuresProblem-Solving StructureContinuous Improvement Attitude
59Results and PlanHow does each division define success? What other metrics are needed?Warranty discussion -Delphi is being held responsible for a larger share of our GM warranty impact. NA vehicle manufacturers experienced $6 billion in warranty costs in 1999.