FREQUENTLY ASKED QUESTIONS ON SIX SIGMA
Operational Risk - The finance institution I work for competes with JP Morgan, which uses Six Sigma in its business. Under Basel II regulations it appears there is a chance to free up cash tied up in “Operational Risk”. How does Six Sigma help our business succeed?
Lean Six Sigma for Service - I know about Lean manufacturing from Toyota. How would you suggest I use Lean tools and Six Sigma in my Service business? I take telephone orders for Insurance.
Lean and Six Sigma were tools that were first used in businesses that had manufacturing bases. They apply to every type of business. Service businesses need them just as greatly to cut out waste and achieve high levels of customer satisfaction.
Taking customer orders over the phone is an example of a transactional process.
a. Over-processing. Recording the information received in 2 separate locations.
b. Transportation. Hand-offs from the receiver to a second person to locate the customers’ files and records.
c. Motion. The customer is asked to retrieve information not to-hand at the start of the call from bank accounts or existing insurance details during the call.
d. Inventory. Orders are assembled into a batch so that each customer must wait longer than necessary for the Underwriters to be called about their particular enquiry or application.
e. Waiting. The next step may be a call to the under-writers. This is delayed by an hour to attend a staff meeting on relocation.
f. Defect. The customer’s phone number or e-mail address has been entered wrongly with no back-up check, and the enquiry is stalled while a search is made for the number/address.
g. Over-production. The order is placed and an invoice arrives. The process is repeated by mistake by another operator, and a second invoice is sent out.
Reliable, high quality-every time processes lend themselves to reduction of inventory and using human resources where it is most needed rather than accommodating errors in a poorly designed system.
Getting Started with Designed Experiments - I have a couple of green belts in a small business of 50 employees. We have made excellent progress on improving Quality with the 7 basic tools. They are saying we must use Taguchi or DoE to find the key process variables to go to the next stage. How do we start?
Now it is time to learn to run. Use the same approach and starts with an easy win, if you are able to do so. In my experience, those green and black belts that learn on a fairly simple 2 by 2 or 3 by 3 factorial designed experiment, with a known outcome are likely to succeed in the long run.
A failed screening experiment may cost £200 to £1000, and you may still gain a great deal of information on how to run the next attempt, or about the process boundaries.
By contrast asking the Operations or Production Manager for permission to run a two-day trial of the Company’s most vital asset may not be successful until you have a proven record of successfully yielding cash as the return on these investments.
It is an experiment. It therefore has an uncertain outcome, which may be seen as “failure”.
· The process owner will receive a report of the findings.
· This will document the experimental method and results.
· These results will show whether the experiment was executed as agreed and planned, and an action plan to prevent any further errors of execution.
· The 8 factors which were identified as the most likely causes of improving or decreasing the ability of light-lock material to resist penetration by light (fresh light integrity) will be classified as “Strong, Low, Very Low”.
· The Strong factors are significant in this most important customer characteristic and demand further study.
· The Very Low factors are not important enough to concern your operations until control of the strong factors has been achieved and the process placed in a state of statistical control. That is, it is predicable, and measurable, and you know what to adjust or how to react to any unusual variation in these factors.
· Low factors will be studied in combination with the Strong factors at a later date in a further experiment. This is likely to last a working day, and we will need to adopt the same experimental conditions, with normal production suspended until the experiment has been successfully concluded.
· I estimate that control of strong factors will reduce variance in Fresh Light Integrity by 40% based on initial studies by your Green Belt Quality Technician. This translates to a reduction of 10% reworked cloth, and cost reduction of £10,000 per week.
· The experiment will cost 2 hours, and this equates to £500.
People Processes - I work in People Development. How can Six Sigma be applied to the training and education of staff?
The principles of Six Sigma can be applied to any form of work, since all work is a process.
People are more resistant than materials and equipment to change, so this presents different challenges to the change agent.
The group is 2 clerical staff on a loading bay, plus forklift truck operators moving the materials.
Success is attribute (3 or less days = OK)
and variable (lost hours due to inaccurate information entered by clerks).
Devise a data collection system for both. The second is going to be hard to make objective and free of political bias. Who is really responsible for the lost time in production?
Plot the data and begin to improve the process to reduce the time to train and the accuracy of the SAP data entry as a result.
Make sure that the customer requirements have not changed by asking for feedback. Have we got the right balance of output measures? What about the success criteria for the clerks and forklift operators as customers?
Are we working hard to improve the wrong thing?
What about non-manufacturing processes?
Do I need to be a statistician?
No. If you are a senior management champion, you should appreciate what statistical methods can do for you and how to interpret the results. We train green belts and black belts in statistical techniques as appropriate for their roles. They need to understand what techniques are available and be able to apply them, perhaps with reference to support materials and guidance from specialists. However, it would be misleading to believe that Six Sigma comprises only soft tools; we at Services Limited give full weight to hard statistical tools too.
What about computers?
Isn't Six Sigma just another passing fad?
What's in it for me personally?
A skill for life. The principles of Six Sigma apply to any process in any organization. So wherever you work, a knowledge of Six Sigma tools and methods will always help you to be effective. Additionally, being a Six Sigma practitioner is inherently challenging and never boring; it offers opportunities to be creative and since each project is different, there is minimal repetition.
Why should I use Services Ltd?
Well, apart from the fact that we are nice to deal with, we do have a proven track record of successful Six Sigma implementation and can supply references from well-known organizations on request. Our team of experts are all hugely experienced and recognized in their fields. We also promise not to blind you with unnecessary science and long words! We pride ourselves on adapting our training materials to suit your organization, and feature fun, interactive exercises in our courses rather than “Death by PowerPoint”!