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IS 788 [Process] Change Management

Lecture: Six Sigma Presentation and Discussion: Breaking

the Functional Mindset

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Six Sigma An extremely popular and highly regarded

continuous process improvement methodology

Directly traceable to earlier quality assurance movements and methods

‘Scientific Management’ begins with Fredrick Taylor

The term “Taylor-esque” is frequently used pejoratively to indicate rigid, detail obsessed management techniques

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Those who do not understand history . . . (class?)

Scientific management evolved into the “efficiency experts” of the 30’s and 40’s and the clipboard and stopwatch toting “industrial engineers” of the 50’s.

We owe much progress beyond this to the adoption by Japanese companies of the teachings of an American “QC guru”, Edwards Deming

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Deming’s contribution Deming was largely ignored in the US. Prior to Deming, QC = test everything

coming off the assembly line to cull out defects

Deming inverted this: Don’t remove defective products from a

flawed process. Instead . . . Engineer quality into your processes

QC became QA (quality assurance)

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The wake up call for the US

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The wake up call for the US

Toyota vs. GM: 1986 Assembly hours: Toyota @ 50% GM Defects per car: GM almost 300%

Toyota Space for auto assembly: Toyota @

50% GM Inventories: GM @ 4000% of Toyota

(2 hours vs. 2 weeks)

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Statistical Process Control SPC is a forerunner of Six Sigma Both are statistical management

techniques for improving performance

Six Sigma began at Motorola and was thrust to the forefront of management consciousness by Jack Welch of GE

Six Sigma devotees are almost fanatical about adherence to “the method”

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Three types of process change Process Management: what

Harmon (the textbook) terms developing a process architecture

Process Improvement: incrementally improve and maintain process quality

Process Redesign: more radical forms of process change, including what we’ve called redesign and BPR

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Six Sigma attributes

Works best with well understood, currently implemented techniques

Very good at process measurement and using statistical techniques to decide on corrective action

A ‘team approach’ is integral to the methodology

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How Six Sigma got its name

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The goal of Six Sigma

To reduce deviations from the mean

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Tightly scoped projects This helps insure success but may

frustrate some high level managers Short (6-months) Single activity or several tightly-

coupled activities Monitor 2-3 key process indicators Measures should be tied to higher

level processes and ultimately to strategic goals (org architecture modeling)

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Teamwork Teams are more important to Six

Sigma efforts than managers The ‘gung-ho’ team aggressiveness

and adherence to the method are part of its effectiveness.

Examinations and experience take practitioners from “green belt” to “black belt” to “master”

Teams work best with a black belt

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Six Sigma Phases

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Define Understand the process Understand what the effort is to

accomplish The two above factors improve

success 500% of many efforts Dates are important but Don’t be pushed into a premature

statement of when the team will finish

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SS definition technique: SIPOC

SF Seafood is a Running example.

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Goals are important to definition and usually involve customers

Six Sigma likes diagramsand acronyms to make the methodology concrete.

This is great for improvingexisting processes. Not asgood for new projectsinvolving vision.

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Gathering information Goals and measures frequently comes

from customers In the SFS example – good food, on

time. Surveys, one-on-one interviews and

focus groups are common techniques. Six Sigma stresses Pareto analysis;

what measures (and ultimate improvements) are most highly leveraged?

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Step 2: Measure Measure only what is important to the

customer Measure only what you can improve Don’t measure what the customer

hasn’t complained about Only three classes of measure

Inputs (raw materials) Process (cycle time, cost, etc.) Outputs (customer satisfaction)

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Process vs. Outcome

Process measures are objective – ‘hard’

Outcome measures are subjective – ‘soft’

Kano Analysis Basic requirements Satisfiers Delighters

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SF Seafood Measures not tied to customers satisfaction risk

local optimization/global suboptimization Each measure must be carefully specified and

communicated SFS: Goal – 15 min mean, never over 30 min

from order to serve – from customer interviews time from order entry to kitchen finish – PC

system Total time: not recorded by system so must be

observed Factor out food preparation time – this is a

different process!

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Analysis Three categories of activities

Add value that the customer is willing to pay for

Required for value-added activity Non-value-adding

Challenge everything Sometimes activities have “always been

done that way” and yet add no value SFS example: napkin rings See extended example bottom of page

199

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SFS Example, continued

Optimum number of tables per waiter?

Changes in customer traffic. Could busboys help? (This option

could ONLY suggest itself after extensive on-site analysis of the situation)

Always, locate Pareto

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Frequently called an Ishikawa diagram after the originator

Three stage problem analysis:

1. Brainstorm2. Narrow it down3. Design measures

and analyze to see the reality and true scope of the problem.

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SFS Analysis / Improvement Another observation only possible

after multiple on-site observations, was that tables with children were more difficult to service.

Investigate assigning each waiter a ‘fair share’ of family tables

This brought in a new actor: the mater d’ who assigned diners to tables (and thus to waiters)

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More measurement Improvement must be confirmed with

measurement! The changes, in fact, did improve the

process as expected. So, in the Control phase, drop

measurements that are expensive. Optionally, develop a response plan –

in advance – of activities to be performed if performance drops in the future.

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Six Sigma in summary Requires discipline and highly trained

(expensive) people A statistical approach, best for in-place,

well understood processes Contrast with PIP (process improvement

potential) for example A quicker, less costly technique (usually) Determine the difference between the best,

average and worst performers at a task What are they doing? Might complement Six Sigma (think of SSF)