McKinseySix Sigma& Lean(ppt43)

0SixSigma&LeanMMPGlobalConferenceVienna,July23,2003(1987)QualityEra2(1994)FinancialperformanceEra3(1996)PerformanceImprovementUmbrellaEra4(2000)StrategicissuesWhydidGEadoptSixSigma?•Intensepressureonmarginsandnoroomforpriceincreases–premiumonproductivity•Mediocrequalityanddisappointedcustomers•Billionsofdollarslostincostofpoorquality•ReenergizeGE'sproductivitymachine•EngineforculturaltransformationEvolutionofSixSigmaGESource:McKinsey(Commitmenttocustomer)Before:2(i.e.,30.85%deliveredoutsidetargettimes)After:6(i.e.,only0.0003%deliveredoutsidetargettimes)35minutesSource:McKinseyCritical-to-qualitymetric:on-timedelivery•7articleslostperhour•1.7incorrectoperationsperweek•1shortorlonglandingevery5years•68wrongprescriptionsperyear99.99966%Good(6Sigma)99%Good(3.8Sigma)Otherprocesscapabilityexamples•20,000lostarticlesofmailperhour•5,000incorrectsurgicaloperationsperweek•2shortorlonglandingsatmostmajorairportseachday•200,000wrongdrugprescriptionseachyearAfter•20,000lostarticlesofmailperhour•5,000incorrectsurgicaloperationsperweek•2shortorlonglandingsatmostmajorairportseachday•200,000wrongdrugprescriptionseachyear•Brainstorming•Affinitydiagrams•Multi-voting•Hypothesistesting•Paretocharts•Fishbone•Processmapping•RootcauseproblemsolvingMasterBlackBelts(fulltime)•Supportkeylineexecutives•Responsibleforprojectselection,training/coachingofBlackBeltsandreportingprogressBlackBelts(fulltime)•LeadimprovementprojectsthroughDMAICcycle•Receive4weeksofup-fronttrainingGreenbelts(parttime)•ProvideBlackBeltswithsupporttogetprojectsdone•ReceivelessintensivetrainingStatistically-focusedproblemsolvingtoolsDedicatedandcertifiedresources3.Focusesonreductioninvariationofkeymetrics2.Drivesmeasurementanddata-drivenanalysisofmetricsthatarecriticaltocustomers1.Createsstandardized,disciplinedproblemsolvingapproachusedacrosscompanyAllSixSigmaimprovementeffortsoptimizeprocessesbyreducingvariation•Definetheproblem•MeasuretheproblemDefineMeasureAnalyzeImproveControl•Analyzeandidentifythegap•Identifyandimplementsolutions•TrackandreviewprogressDMAICPrescriptiveProblemSolvingProcess–DMAIC•Designofexperiment•Voiceofthecustomer•Qualityfunctiondeployment•ANOVA•Etc.•Traintopleadersandsetaspirations•Architectprogramandbeginmassivecommunicationdrive•Selectanddeployhigh-potentialresources•Executehighprofileprojectsandmaketeamsheroes•RelentlesslycommunicatesuccessesandchangestocomeGEusedseveralcoreelementsofsuccessfultransformationprogramsOrganizationalenablers•LeadershipIntenseinvolvementoftopandlineleadership•ProgramdesignRobustroadmapandprocesses•PerformancemanagementGoalsbakedintobudgetsatalllevels•DedicatedresourcesBestresourceswithclearcareerpaths•Talent/skilldevelopmentMulti-leveltraining•ProgramsupportRuthlessprojectmanage-ment•ProblemsolvingDisciplineduseofDMAICandtools199619961996-971997Source:McKinsey•Whatistheproblem?•Goal?•Customers?•Processtoimprove?•Whatistheex-tentofthepro-blem?–Efficiency–Effectiveness•Whatdatadoweneedtogettotherootcauses?•Rangeofoptions•Solutions•Bestpragmaticsolutions•Fullrangeofsolutions•Theselectfew•Theoptimalandpragmaticsolu-tion•Smallscalepilot•Fullscaleimplementation•Tacticallevel–Processstandardization–Processthrough-put•Strategiclevel–Disciplineduseofbusinesspro-cessmanage-mentbysteeringcommitteeKeyelementsDeliver-ables•Clarityonwhatisinscopeandwhatisoutofscope•In-depthunder-standingofhowbigtheproblemisanddatatogettothebottomofit•Datadrivenrigorouscon-clusionsonthevitalrootcausesfortheproblem•Fullyimple-mentedsolu-tionbasedonlessonsfrompilot•Stableprocess•Systemtokeepitstable•Fullyintegratedintobusinessgoals•ExecutivesfullyinvolvedSource:McKinseyDMAIC•Reduceaccountsreceivablestobest-practicelevelsin24weeksOrganizationalenablersandimprovementinfrastructure•CFOsponsorwithdivisionheadspresentatprojectlaunch•CFOanddivisionheadsattendkeystatusreviews•BlackBeltcoachandguidebutledbyfinancemanager•ProjecttrackedbySixSigmastaffandthroughsteeringcommitteemeetingsProblemsolvingmethodologyandtools•DMAIC•Toolsusedonproject–brain-storming,fishbone,pareto,histo-grams,sca