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Six Main Benefits of the Sigma
Breakthrough Strategy |
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Remarkable improvements in:
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Processes
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Products and services
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Investor relations
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Design methodology
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Supplier relationships
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Training and recruitment
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Six Sigma tells you1 |
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Your don't know what you don't know
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You can't do what you don't know
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You don't know until you measure
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You don't measure what you don't value
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You don't value what you don't measure
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The New Warrior Class |
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Green Belts
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Black Belts`
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Master Black Belts
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Champions
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Impact of Six Sigma Implementation at GE |
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Results achieved over
the first two years:
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Revenues have risen to $100 billion, up
11%
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Earnings have increased to $9.3 billion, up 13%
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Earnings per share have grown to $2.80, up 14%
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Operating margin has risen to a record 16.7%
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Working capital turns have risen sharply to 9.2%, up from 1997's
record of 7.4
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Main Difference Between TQM and Six
Sigma |
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Total Quality Management (TQM)
programs focus on improvement in individual operations with unrelated
processes; as a consequence, it takes many years before all operations
within a given process are improved.
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Six Sigma focuses on making
improvements in all operations within a process, producing results
more rapidly and effectively.
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The GE Leadership Effectiveness Survey
(LES)
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Strives to fulfill commitment to
Quality in total product / service offering...
More
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What Is Six Sigma?
Six Sigma is a long-term, forward-thinking initiative
designed to fundamentally change the way corporations do business. It is first and foremost "a business process that
enables companies to increase profits dramatically by streamlining
operations, improving quality, and eliminating defects or mistakes in
everything a company does.
While traditional quality programs have focused
on detecting and correcting defects, Six Sigma encompasses something
broader: It provides specific methods to re-create the process itself so
that defects are never produced in the first place."1
Case in Point
Motorola
Facing stiff competition by Japanese manufacturers, Motorola
reversed its fortunes with the Six Sigma strategy instituted by Bob Galvin.
These programs were led by corporate and then institutionalized. Motorola's
Six Sigma quality program was so radical that it forced managers to think
about the business differently. As a result, they smashed the old inspection
paradigm.
3 Strategies of Market Leaders
Faster Returns on
Investment
While Six Sigma is a long-term strategy, it is designed to
generate immediate improvements to profit margins too. Compared to
traditional quality management programs such as
TQM that project three or more years into the future, Six Sigma focuses
on achieving financial targets in twelve-month increments.
Six Sigma's
Breakthrough
Strategy1
The Six Sigma's Breakthrough Strategy is a disciplined method
of using extremely rigorous data-gathering and statistical analysis to
pinpoint sources of errors and ways of eliminating them.
Case in Point
GE
Jack Welch
was told that Six Sigma, the quality program pioneered by
Motorola, could have a profound effect on GE quality. Although skeptical at
first, the GE Chairman initiated a huge
campaign - in the GE Way, a way that
had never been done before - to infuse quality in every corner of the
company. He
made quality the job of every employee. Senior manager's bonuses were
tied to Six Sigma results. All professional level employees were informed
that they had to get Six Sigma training or they would not be considered for
a promotion – no belt, no promotion. Welch credits the Six Sigma quality
initiative with "changing the DNA of the company", meaning that it has had
a greater impact on the productivity of GE than
any other program.
25 Lessons from Jack Welch
Integrating Six Sigma with
Business
Process Management
Source: "Six Sigma and Business Process
Management",
Andrew Spanyi
Six Sigma is frequently implemented in a traditional
departmental paradigm without much reliance on
business process thinking. It is little
wonder that many thoughtful Six Sigma practitioners complain of the
difficulty in identifying the best opportunities to apply Six Sigma
techniques, and of the fact that there are frequently overlapping and
redundant Six Sigma projects.
The practice of piecemeal thinking with respect
to various improvement initiatives is a serious issue and the failure of
integrating business process thinking with Six Sigma methods, results in
firms incurring such significant opportunity costs that it is downright
tragic. It's tragic because there is a better way. Integrating Six Sigma
with business process management principles will
help you realize significant opportunities versus the traditional methods of
implementing a Six Sigma program. Just consider the few examples cited
below.
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By asking and
answering the question 'Which business process would have to be improved
by how much, by when, in order for us to
realize our strategic objectives?' your firm would have greater
clarity on where to apply Six Sigma techniques and for what results.
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By
structuring the entire improvement initiative according to
business processes there would be fewer
overlapping initiatives and more cross-departmental collaboration.
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Since process
ownership relies on managing by influence as opposed to authority,
process owners would collaboratively sponsor projects and project
progress would be monitored by a 'Steering Team' of executives thereby
reducing the frequency of project collapse which sometimes observed when
Six Sigma is deployed on a traditional basis due to tribal warfare.
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Because of
the big picture view, leadership could decide, based on the size of the
performance gap that needs to be bridged and the firm's
appetite/capability to absorb change, when to deploy DFSS (design for
six sigma) methodology – or better yet, process redesign techniques – as
opposed to the traditional DMAIC (define, measure, analyze, improve,
control).
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The
application of business process thinking
in conjunction with Six Sigma would inject greater sensitivity to the
human side of change and help address one of the pervasive criticisms of
the Six Sigma in that it is less effective in solving historically
"soft" issues.
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On the
other hand, process improvement methods would benefit from the rigor of
Six Sigma measurement techniques and its disciplined training regime.
TPS-Lean Six Sigma
TPS-Lean Six Sigma is like a ‘turbo-charged’ Lean Six Sigma program.
Lean Enterprise: 13 Tips
TPS-Lean Six Sigma is a revolutionary, holistic
concept. It actively has human capital embedded in Lean Six Sigma in a
manner that not only stimulates commitment, integrity, work-life
balance,
passion,
enjoyment at work and
employee engagement but also stimulates individual and team learning in
order to develop a motivated workforce and sustainable
performance improvement and
quality enhancement for the organization...
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