Engro Six Sigma Pres PMI

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    The Six SigmaThe Six SigmaThe Six SigmaInitiative at EngroInitiative at EngroInitiative at Engro

    Change for the BestChange for the Best

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    n

    Todays Agenda

    Overview Project Challenges Future

    Six Sigma Overview

    ChallengesFuture

    Engro Project Phases

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    Discussion Overview

    What is Six Sigma? Project Phases and project stakeholders Change management aspects of the project Managing project execution

    Maintaining buy-in and commitment for the goals othe project

    Using the VOC Voice of the Customers for sustainability of the project

    Overview Project Challenges Future

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    Who is Engro?

    Overview Projects Challenges Future

    EngroEnergyLimited

    EngroInnovative

    AutomationLimited

    Project:Largest

    single trainFertilizer plant inWorld

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    Overview Projects Challenges Future

    Why Six Sigma

    To be the premier Pakistanienterprise with a global

    reach, passionately pursuingvalue creation for all

    stakeholders

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    Development Process

    Quality Team formed: February 2005, to study quality and businesimprovement systems

    Research, case studies, overseas / local visits, crystallized andpresented to MC in June 2005

    Six Sigma recommendation made to MC - concept approved

    Permanent Business Improvement/ Six Sigma Quality Section form

    Deployment plan presented to MC and approved

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    Six Sigma is.

    Methodology driving and achieving transformational change

    Approach

    to identify and eliminate defects with a customer-centric, data-dproblem-solving method and statistical analysis

    DEFINE MEASURE ANALYZE IMPROVE CONTROL TRANSFERRECOGNIZE

    Organizational structure Champions: Functional leader, project road-block remover, stewards Black Belts: Full-time resources, Six Sigma experts and trainers Green Belts: Project leaders, part-time, 10-day training Yellow Belts: Project members, 3-day training

    Overview Projects Challenges Future

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    34

    56

    7

    668106210

    233

    3.4

    Sigma

    DPMO (DefectsPer Million

    Opportunities)

    The Definition of Sigma Is.

    ... a measure of goodness, using a universal

    measurement scale.

    The Definition of Sigma is..

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    Six Sigma in simple language. Business management process that eliminates defects from work processes

    As defects decrease, so do costs and customer satisfaction increases Six Sigma literally means 3.4 defects per every million occurrences

    The program provides a solid route to get to the control function, the hardest thing toa corporation Jack Welch Leverages the underutilized assets of the best-managed corporations the intellectu

    resources

    Benefits are quantified in $ terms, tangible and quantifiable increases in shareholder

    Other systems focus on the cost of quality. Six Sigma principle is that quality is freemore 0-defect production, the more ROI

    Methodology allows us to reduce diverse processes and practices to a commondenominator defects per unit and sigma

    Uses are as varied as the companies deploying it: sustainable culture improvement,annoying problems, staying ahead of competition etc

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    6 s Culture of Defect Removal

    DPMO: Defects Per Million OpportunitiesDefects: Anything that results in internal /external customer dissatisfaction

    6

    5

    4

    3

    Process capability at an accuracy of 99.9997%

    6,210 DPMO

    3.4 DPMO

    66,810 DPMO

    233 DPMO

    Typical Manufacturing

    Typical Transactional

    2

    Overview Projects Challenges Future

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    Six Sigma in Our Daily Lives

    Occurrences1,000,000

    100,000

    10,000

    1,000

    100

    10

    1 2 3 4 5 6 7

    Best inClass

    Prescription WritingTax Advice

    Payroll Processing

    Restaurant Bills

    Baggage Handling

    AirlineSafety Rate

    Sigma Level

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    Six Sigma Developed Over Last 20 Years

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    World-Class Companies TodayChemical Companies Quality/ Business Improvement ProgramDupont Six SigmaDow Chemicals Six SigmaEsso Imperial Oil Operational Excellence based on Six SigmaExxon Best practices replicationFMC Six Sigma

    LESCO Fertilizers Six SigmaSherwin-Williams Six SigmaEastman Chemical Six Sigma Avery-Dennison Six SigmaPilkington Glass Six SigmaOthersGE Lean Six SigmaMotorola Six SigmaRolls Royce Six Sigma

    Honeywell Lean Six SigmaWipro Six SigmaSiemens Top Plus, Six SigmaVodafone Six SigmaMonsanto Six Sigma

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    Success Abroad

    Dupont validated over $2 billion in savings from implementation ofSigma

    GE realized over $1.8 billion in savings from Six Sigma during 1991999 (initial phase) $2.7 billion of improvements in working capital in 200304 Committed to reducing cost by generating $4 billion of

    productivity/ year

    Emerson launched Total Quality in 1992 Reduced manufacturing cost by 50%, cycle time by 62%, scrap

    and rework by 50% and cost of quality by 25%

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    upont: 6 Sigma complementing StrategSavings and Benefits

    "Six Sigma continues to play a major role inachieving all of our business objectives, both productivity and growth. We are now finishingour sixth year of Six Sigma at DuPont.

    .over 25 % of our projects are aimed at growing revenue. Six Sigma has becomethe way we work at DuPont and is a key

    approach to improving execution as weenter 2005."

    "We are also continuing our progress in productivity. Last year, DuPont Six Sigma added more than $700 million in projects with hard, validated benefits for the company.

    nearly 17,000 employees have taken Six Sigma training. We currentlyhave more than 2,500 top-line growth projects.

    We are now evolving to more enterprise-wide projects and more end-

    to-end projects that build our process capability." Overview Projects Challenges Future

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    1989

    1990

    1991

    1991

    1992

    1995six sigma quality DMAIC

    making customers winners

    process improvement, CI, re-engineering

    change acceleration process, productivity, NPI, QMI

    productivity, best practices adoption, looking outside

    work-out sessions, empowerment, bureaucracy busting, actions

    2000 design for six sigma DMADV

    GE journey to Six Sigma

    Overview Projects Challenges Future

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    Six Sigma and BPRSimilarities: Some tools in common: Process mapping, value-stream mapping, mind-maps etc Both have goals of improvement and driving bottom-line resultsDifferences:

    Standard benchmarking: 2 sigma means the same in manufacturing, marketing, H BPR does not build in sustained management and leadership roles Project Definition: BPR projects often have very wide scope, world hunger Change management: Does not institutionally address resistance to change Rigor in methodology: Success rate if jump from Define to Improve Dedicated resources: Black Belts are full-time initially external, (also almost ful

    Source: Collaborative Business Engineering: A Decade of Lessonsfrom the Field. Journal of Management Information.Systems (Spring 2004)

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    Examples of Defects Low yield rate High operating costs High customer failure

    High scrap/rework costs High quality costs High inventory/WIP Incoming product quality problems Long cycle times Unpredictable quality Unpredictable product performance Inaccurate information Missing information Completeness

    Poor process capability

    Constrained capacity Measured with variable data vs.

    attribute data

    High product volume Perceived poor quality Emissions control High delinquency to customer Frequent set up requirements High maintenance costs Low machine utilization

    Effluent reduction High set up costs De-bottlenecking

    Equipment lifeOverview Projects Challenges Future

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    Deployment Plan 2005-2006

    Champions Workshop Sept 2005 Building stake with key contributors Ongoing Infrastructure development Dec 2005 Program launch Feb 2006

    Organizational awareness training Feb onwards Specialized training June onwards

    Project focus areas: Improve efficiency of processes in Manufacturing, Market

    Corporate Services

    Domain: Engro Chemical only in 2006-2007 JVs in next phase

    Overview Projects Challenges Future

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    Benefits and Success Possible Only If

    Visibly demonstrate support in speech and actions

    Put best people on teams to ensure success

    Ensure organizational critical mas