Engro Six Sigma Pres PMI

8/14/2019 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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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



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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



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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



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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



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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 mass

Acquire requisite technical knowledge to lead the initiative

Participate actively through various phases of project

implementation Implement clear reward and recognition program toreinforce the desired behavior and mindset



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If you dont know where youregoing any road will take you there.


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Successful Rollout path

Vision Strategy Structure Process People

ConfusionStrategy Structure Process People

False StartsVision Structure Process People

InterferenceVision Strategy Process People

InefficienciesVision Strategy Structure People

FrustrationVision Strategy Structure Process


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Message for Each Employee

Six Sigma will help todeliver:

The Brand PromiseMeet or Exceed Customer

Expectations (CTQs) OnTime, Every Time

6 6



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JCB

Implemented system for productivity,simplicity, transferability of people.

KPIs displayed at plant floors and

each department this was their Balanced Scorecard.

Hourly target board updated bysupervisors on plant floor.

Large master plan of all improvemenprojects prominently displayed aroundorganization to track progress and

deadlines.Started improvement program withKaizen.

Project results tracked and reportedevery quarter.

FOUNDATION

COMPANY STRENGTH

STANDARDISATION(STANDARDISED WORK) VISUAL FACTORY(5S)MAINTENANCE(TPM & QCO)

JIDOKAJIT

TAKTTIME

ONEPIECEFLOW

PULLSYSTEM

STOPCALLWAIT

(ANDON)

ERRORPROOF

(POKAYOKE)

QOS(FULL WORK

SYSTEM)

KAIZEN(CONTINUOUS IMPROVEMENT)

P E O P

L E P E O P L E

P E O P L E

P E O P L E

P E O P L E

P E OP L E

SIMPLE & ROBUST SYSTEMS BUILTAROUND OUR PEOPLE


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Training Progress

Make implementation of learning part of the

appraisal Path to Project independence (Workout and 6 )

and training independence

Training includes delivery of one projectCo-deliver

Shadow deliver

Self-Sufficient


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Project Selection approach

High Impact Projects

Other Voices:of the Process,

People andStakeholders

SWOTAnalysis

Engros StrategicObjectives

Customer

CTQs:Voice of

the Customer

SituationAnalysis

Assess severity,urgency

and capability


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Simplification

Simplification = Cost ReductionSimplification = Cost Reduction


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Why Do Most Improvement Efforts Fail?

Program Failure

5. Gaps in problemsolving approach

6. Lack criticalmass of

involvement

4. Wrong scope of effort

7. Treated like aPanacea

3. Weak resultsfocus

1. Poor changestrategy

2. Lack goals andmetrics


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Challenges We Are Facing

Lack of time for

value-addedproject work

Application of learning & tools

in daily work

Lack of real-time stewarding

of projects

Projects not tiedto help achieveexisting objectives

Managing thechange sustaining buy-in

Train for deeper tools utilization. Requireanalyses for all presentations/ business decisions

Battle of Priorities massive growth. IncorporateSafety and Six Sigma into employee appraisals

Electronic Application to track and stewardprogress of all projects across company

Dept. ambassadors, reward and recognition,implement CAP. Poster child projects

Initial Dashboard introduced strategy mapfor the organization. Key focus areas

-


KISS


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John P. Kotter: 8 stage change Mgmt Process

1. Establishing a sense of urgency

- Examining the market and competitive realities

- Identifying and discussing crises, potential crises, or major

opportunities

2. Creating the Guiding Coalition

- Putting together a group with enough power to lead thechange

- Getting the group to work together like a team

3. Developing a vision and strategy

- Creating a vision to help direct the change effort

- Developing strategies for achieving that vision

First Three Stages


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Next Three Stages4. Communicating the Change Vision

- Using every vehicle possible to constantly communicate the new visionand strategies

- Having the guiding coalition role model the behavior expected of employees

5. Empowering Broad-Based Action

- Getting rid of obstacles

- Changing systems or structures that undermine the change vision- Encouraging risk taking and nontraditional ideas, activities, and

actions

6. Generating Short-Term Wins

- Planning for visible improvements in performance, or wins

- Creating those wins

- Visibly recognizing and rewarding people who made the wins possible


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Last Two Stages

7. Consolidating Gains and Producing More Change

- Using increased credibility to change all systems, structures, andpolicies that dont fit together and dont fit the transformation vision

- Hiring, promoting, and developing people who can implement thechange vision

- Reinvigorating the process with new projects, themes, and changeagents

8. Anchoring New Approaches in the Culture

- Creating better performance through customer- and productivity-orientedbehavior, more and better leadership, and more effective management

- Articulating the connections between new behaviors and organizationalsuccess

- Developing means to ensure leadership development and succession

Vision Into Action


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One organization one goalCORPORATE OBJECTIVES

DEPARTMENTAL OBJECTIVES

INDIVIDUAL OBJECTIVES

This methodology used where Six Sigma is implemented Benefit tracking and measurement is done primarily through use of

Balanced Score Card (BSC) or Strategy Maps BSC defines organizational focus and converts expected benefits

into hard numbers Recognizes important interdependencies with peers and colleagues Reflects objectives that are within your own sphere of influence


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We want to make our quality so special, sovaluable to our customers, so important to

their success that our products become their only real value choice.

Speed is one of the true competitive advantagesin todays business environment. Speed

includes the pace at which management cancompose and implement plans.



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Forging Ahead.



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