By
Shree PhadnisAll Six Sigma proponents agree to the fact that the key to Six Sigma improvement success is the building up of an effective infrastucture. An effective infrastructure lays the foundation for the success of the organization in its implementation of Six Sigma. It is a known fact today that the success of Six Sigma lays on the projects selected and their link to the strategy of their organization. There have been enough publications on the selection of projects and the filters to be used for the prioritization of projects, however there are not enough details available on the building the key infrastructure for the deployment of Six Sigma.
When we discuss the building up of an implementation structure what we are embarking on is a project in itself, which follows the DMAIC (Define, Measure, Analyze, Improve and Control) methodology:
D: Define the Strategic Direction of the organization
M: Set Measures for the strategic objectives of the organization
A: On a continual basis collect data on the measures set and analyse using Six Sigma tools and techniques
I: Identify the opportunities for improvement and convert them to Six Sigma projects for improvement
C: Set up a management control action of continuous reviews on the improvements made on the Six Sigma Projects
The objectives of the Define and Measure phase of this project are defined as below:
- Building up a set of metrics for the organization that give definition to the organizations Vision
- Metrics that are Integrated with the Strategic direction and objectives of the organization
- Metrics that align people and work with their strategic objectives
- Metrics that serve as effective means of communication for the organization both horizontally and vertically.
- Metrics that provide insight needed for making decisions, setting direction and correcting course.
- Metrics which will serve as a continuous source for identifying gaps in the organization and plugging them with Six Sigma Projects
The problem most organizations face in the phases of Define and Measure is how to build such an organizational dashboard, which will help achieve the objectives cited above.
First Step
The first step an organization needs to embark on is conducting a self-assessment based on proven assessment models like the Malcolm Baldrige which will help the organization in understanding its "as is" state more clearly and help identify the various opportunities for improvement. The organizations could use the checklist type of approach in conjunction with interviews for identifying the gaps in Approach-Deployment-Results. Once the assessment of the organization is completed the findings need to be shared with the top management and the employees. This step is extremely crucial as this is what binds the organization together and helps create the cultural change needed aspect within the organization combined with the need for Six Sigma.
Second Step
Once the first step is conducted the organization is now clear about its current strategies for growth and customer statisfaction. Based on the assessment conducted the organization can re-evaluate all its strategies and strategic objectives. New strategic objectives can now be identified.
Third Step
Most organizations after having articulated and identified their various objectives are unable to communicate the strategies of the organization. One of the most effective methods for communicating the strategy of the organization is building a strategy map encompassing the now widely adopted Kaplan and Norton's Balanced score card spanning the four perspectives. Answering the questions related to the perspectives helps understand the strategy better and also build a good strategy map. The strategy map helps provide the vital cause and effect linkages in an organization and helps link the Business processes to the strategic destination of the organization. Before attempting to build the map it is essential for the organization to identify all its core processes and support processes as they help in completing the strategy map.
| The Four Perspectives |
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The Balanced score card perspectives help an organization to integrate and operationalise the organizations strategy.
As an example for the application for the application of the method consider a hypothetical case mentioned below. This case utilizes the frequently used Catapult in the Six Sigma black belt training and explains the concept.
XYZ is a company that is newly set up. It is in the business of delivering thrown balls to customer specifications. It has a vision of being a leading international player in the business of thrown balls by the Year 2005. It hopes to achieve this through high volumes and low cost by being the lowest cost producer. The company values its customers very strongly and believes in customer retention as its strength. In order to meet this vision the company CEO has ordered the latest state of the art machinery -- the Catapult -- for a cost of 10 Million Dollars.
The business of thrown balls is a relatively new business. In prior years, potential customers of this business had their own machinery and set-ups to meet their internal requirements. Today, where organizations are focusing on their core activities, various users of thrown balls are contemplating outsourcing this activity, making this business a very viable potentially high earning business.
XYZ has to market their product from scratch where they have to identify the markets and generate the marketing demands. International threats from Chinese products is very high. The Chinese products are known to be supplied at a very low cost making them potentially high threat to the industry. Apart from the Chinese threat there are four other Indian competitors.
The key requirements of customers are the consistency in the distance the ball is thrown from the base of the catapult. Variation from the center of the base is also critical, however, the customer might accept products offered with variation beyond specifications subject to customers approval. Delivery on time is one of the key requirements of the customer.
To service the customers properly the CEO has decided to operate through three sales and marketing outlets and two manufacturing units strategically located.
The spares of the machinery imported are not available freely in India. The organization cannot afford downtime of machines and has taken necessary steps to ensure that the machines are in the best of shape.
The management has decided that it needs to keep a control on the costs while developing business. The main raw material for the product is the balls and they are available freely in India. The marketing department has just received a hot inquiry from a potential client. This customer is one of the largest potential customers in the market.
The customer needs are that he wants balls to be delivered at 75+- 3 inch from the base of the catapult. The ball delivered to be +-2 inch from the center of the base (axial requirement). The customer needs 50 balls delivered within 10 miniutes. For balls that do not meet the requirement of +-2 axially but are in the +- 3-inch specification, the customer will buy the material at a 10% discount. Selling price of each correct ball delivered is $1000. Despite stiff competition from the Chinese on the price front, your marketing manager has been able to get this pilot order.
Raw material price for the ball is $500.
Next Page > Learning Excercise - How Will You Lead The Company? (and continuation of the roadmap)
