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Solving Business Problems

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Presentation on theme: "Solving Business Problems"— Presentation transcript:

1 Solving Business Problems
A structured approach with Six Sigma and Lean Anand Srinivasan Vineeti Consultants

2 General Overview Business Problems – what we faced then and now
Business problem resolution and improvement tools evolution Overview of structured techniques -TQM, Six Sigma , Lean Enterprise Strategy to Six Sigma Projects – the cascade Six Sigma DMAIC methodology Lean methods Some of the common tools used in Six Sigma and Lean Lean Six Sigma benefits so far and potential Typical Six Sigma Projects in different domains Six sigma deployment factors Conclusion

3 Business Problems – then and now
The business problems of the yesteryears were about achieving the quality targets, controlling cost ,robustness of products, developing technology The business issues today are lack of trained resources, meeting global customer expectations, rapidly changing market requirements, managing global supply chains, reduced product/ service life cycles Large organizations have leveraged quality systems, technology and automation – medium and smaller companies have been selective and big opportunities exist for these companies to scale up, while larger companies are facing renewed cost pressures The significant problems we have today, cannot be solved at the same level of thinking with which we created them Albert Einstein 

4 Evolution of Improvement techniques
The earliest initiatives for continuous improvement and raising productivity were Statistical Process Control Techniques (SPC) 1920s These were followed with more specific quality controls tools till the 1970s (Juran techniques, DOE, Robust Design, mistake proofing) Business Process Restructuring (BPR) emerged in 1980s as the management tools for reorganizing from vertical set up to Strategic Business Units Total Quality Management (TQM) based on the Deming principles and others was introduced in 1980s and was adopted widely in 1990s with International standards as reference( ISO 9000 stds) Six Sigma and Lean techniques were adapted by global organizations in the 1990s and have resulted in tremendous savings and productivity improvements for organizations till today

5 Total Quality Management
Quality cannot be inspected into each product, quality has to be built into each process ( Edward Deming ) Inspection was replaced by Process Control Systems where the reduction in variation and consistent output was achieved by focusing on the inputs Deming’s 14 principles of quality management, combined with works of Joseph Juran, Philip Crosby and others formed the basis of the transformation of the management principles to put the customers interest first and adopt a humanist approach to quality. Improve Quality Costs reduce because of less waste, mistakes, … Productivity Improves Capture market with better quality and lower price Stay in Business and provide more jobs

6 Evolution of Six Sigma methods
Six Sigma philosophy states that we need quality in everything – organizational goals, processes, people, culture – not just in inspecting parts and services Six Sigma methodology A business management strategy and methodology A statistical powerhouse to help you better produce your products Six Sigma seeks to  Improve the quality of process outputs by identifying and removing the causes of defects (errors)  Minimize variability in manufacturing and business processes. Match the outputs of the process, product or project to the customer requirements

7 Opportunities for structured improvement and growth techniques
Utilize data and facts to challenge myths and look beyond the obvious Improve end to end process understanding, rather than piecemeal approach Relating the Voice of Customers and Voice of Business to the deliverables of the organization Utilizing simple tools to document baseline and quantify improvements with simple metrics Blending Risk management and Change management techniques to ensure sustainable solutions Help to deliver solutions for the short term while developing the road map and plan for sustainable long term growth It is capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts Sir Arthur Conan Doyle

8 What is Six Sigma performance
6 Sigma is a measure of variability. It is a name given to indicate how much data falls within the customers’ requirements. The higher the process sigma, the more of the process outputs, products and services, meet customers’ requirements – or, the fewer the defects. With performance at 2 Sigma: 69.146% of products/services meet customer requirements with 308,538 defects per million opportunities With performance at 4 Sigma: 99.379% of products/services meet customer requirements … but still 6,210 defects per million opportunities With performance at 6 Sigma: % - As close to flaw-free as a business can get, with just 3.4 failures per million opportunities Examples of a world at 3 Sigma 54,000 wrong drug prescriptions per year 40,500 new-born babies per year dropped at delivery Unsafe drinking water 2 hours a month 5 crash landings per day at the busiest airports 54,000 lost pieces of mail per hour Examples of a world at 6 Sigma 1 wrong prescription in 25 years 3 new-born babies dropped in 100 year Unsafe drinking water 1 second every 16 years 1 crash landing in 10 years 35 lost pieces of mail per year

9 Six Sigma – Statistical definition
Customer requirement lays down the Lower Spec Limit (LSL) and Upper Spec Limit (USL) The process – based on the technology, quality levels, inputs , operator expertise and other factors produces results/ outputs within its lower control limit and upper control limit – resulting in its standard deviation ( lower the better) If the process Standard Deviation, sigma, is low enough that 6 x sigma is still within the Customer spec limits, then the process is defined as being at Six Sigma level of performance 6 Sigma Upper Spec Lower Control 3 Standard Deviations Target Process Center Why only 6 Sigma and not even more ? Statisticians have determined that most common processes in our daily life will need 6 Sigma or lower levels of performance

10 Six Sigma Problem solving
Six Sigma has a large and varied set of tool sets for solving various sorts of statistical or analytical problems Six Sigma methodology works on the principle of converting business issues to statistical problems so that statistical solutions can be obtained using the tools and techniques and translated back to Business solutions. Business Problem Statistical Problem that can lead to Statistical Solution Business Solution

11 Strategy Cascade Leading to Six Sigma projects
Enterprise Strategy Vision Mission SBU/ Division Strategy and Goals Strategic goals Critical Success Factors Strategic Areas of Improvement Key Processes and functions Project Portfolios Six Sigma Projects Individual and Team Goals

12 Strategy Cascade Leading to Six Sigma projects
Enterprise & Division Goals Benchmarking Data Industry Best Practices SWOT Analysis Internal Performance Data Six Sigma Projects

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