A

TECHNICAL PAPER PRESENTATION

ON

WORLD CLASS TECHNIQUES

Submitted by:
SURAAJ S.CHARANKAR.
OMKAR A.MUKADAM.
[BE MECHANICAL]
LOKMANYA TILAK COLLEGE OF ENGINEERING
2004-05

World Class Techniques

INTRODUCTION
In todays competitive environment, organizations have to compete at
all fronts. Today customer not only buys the products or services but
also likes to see the condition of the place where it is made.
Customer determines the attitude of the organization towards quality,
after seeing the methods of work and environment of the workplace.
According to a new Boston Consulting Group (BCG) study, top
management around the globe will be looking towards Innovation,
not just cost cutting and productivity gains, in 2004, to drive bottom
line growth.

During the Innovation to Cash study, 90 % of respondents stated

that the survival of organizations in the near future would hinge on
competitive advantage derived from a creative and innovative
workforce.
The challenge before todays organizations is how to unleash
employee creativity, maximize people value and build up intellectual
capital.
A point of contention is whether the value as seen by the business
organization is the same value as seen by the buying public. Are the

functions whose value (cost-to-worth) the business organization is

trying to maximize indeed reflects what the customers want? This
project is taken up in order to benchmark the best World class
techniques used in Indian companies and have hands on experience
in application of these techniques.

 LITERATURE SURVEY
The following are the world class technique adopted in industries for
their

business solutions:

1) Six Thinking Hats (STH)

Six Thinking Hats (STH) is the Edward de Bonos tool for getting
solutions for business or personal problems. According to de Bono,
most of the time when we want to explore a subject, our ego gets
attached to it resulting into arguments i.e. Adversarial Thinking
which is a poor way of exploring a subject. He instead suggests
Parallel Thinking which is a collaborative way of exploring a subject.
In Parallel Thinking both, A & B who are
exploring a subject, explore it together from one
point of view, say logical negative or logical
positive. So, there is no negative thinker or
positive thinker in a meeting.
As long as both A & B think in Parallel their
motivation keeps increasing and better exploration of the subject
happens. The moment A & B think in Adversarial, even if A has some
point that will benefit the argument of B, he will not raise it and this
will bring the exploration down.
In Six Thinking Hats method members of the team play all roles while
exploring a subject, which drastically cuts the meeting time and gives
better solutions.

About Edward deBono:

Edward de Bono is M.D., Ph.D., (philosophy,
medicine & psychology), and a Rhodes scholar. He is
worlds leading authority in the field of creative
thinking and an author of over 60 books in 35
languages. He is originator of Six Thinking Hats ,
Lateral Thinking, and Direct Attention Thinking Tools. He has worked
with IBM, Shell, Siemens, Motorola, Ericsson, CibaGeigy and
Kuwait Oil Company, to name a few
The quality of our thinking will determine the quality of our future.
- Edward de Bono
In his book titled The mechanism of Mind (1969), de Bono first
described how the nerve networks in brain behave as self- organising
system.
Thinking all at once with positive, negative, emotional, control
thoughts is like trying to draw a picture with all colour pens together.
Instead if we use one colour pen at a time, we can draw a nice
picture. de Bono suggests that similarly we should bring out one type
of thinking at a time while exploring a subject.

All at once

Each in turn
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This method has given business solutions in various areas such as

improving productivity, reducing new product development time,
negotiations, developing new designs and reducing cost.

Six Thinking Hats that is listed below:

White Hat calls for information known or needed.

Black Hat is logical negative thinking about why
something will not work, what are the difficulties,
problems.
Yellow Hat is logical positive thinking that symbolizes
brightness, optimism and the benefits, value we will get
by solving the problem.
Red Hat signifies feelings, hunches and intuition.
Green Hat focuses on Creativity: the possibilities,
alternatives and new ideas. de Bono suggests a powerful
method called the Random word entry technique, which
uses attributes of the unconnected object for generating
creative ideas for any problem.
Blue Hat is used to manage the thinking process.

 The Six Hats Framework

Separate out thinking
Ask people to switch to thinking modes
Separate ego from performance
Signal the next process
Explore subjects in parallel

Why the Hats Metaphor ?

Makes Parallel Thinking practical to use and easy to remember
There is a traditional link between thinking and hats
You can switch to thinking processes easily just as you can switch
hats easily
Hats indicate certain roles.
How Six thinking Hats method works?
In a meeting the problem is explained by the team leader (Blue Hat).
The rule of the meeting is that at a time one person will express his
thoughts and other members will speak only when their turn comes.
The round is taken either clock-wise or anti-clockwise. If some
member does not have any thought, he should say PASS.
The sequence of Hats and the duration for the rounds of each hat is
also decided in advance. The thoughts and ideas expressed during

each hat-round are noted on-line with background of the colour of the
hat to give visual indication of the type of thoughts required.
Generally, Six Thinking Hats meeting does not last more than one
hour. The subject which takes three to four hours of meeting time,
gets resolved within a hour, as there is no argument. Parallel thinking
is like Parallel working which saves a lot of time.

Some results are as listed below :

Japan McDonald Meeting time cut by 25 %.
ABB Product planning time reduced from 30 days / year to 2
days / year
Siemens Product development time cut by 30 %
Boeing - Averted strike by using Six Thinking Hats in negotiations
Textile factory in Argentina Increase in productivity by 20 %

ALPS electric group (peripherals supplier to IBM, Apple, Microsoft)

2) VALUE ENGINEERING
The origin of VE:
The credit for the origin of Value Engineering (VE) goes to Lawrence
Miles who, in the 1940s was a purchase engineer with the General
Electric Company (GEC).
It was World War II and the US manufacturing industry was running at
maximum capacity to supply the allies with arms. There were
shortages in raw materials and components like steel, copper,
bronze, nickel, bearings etc. GEC wished to expand its production of
turbo supercharger for B24 bombers from 50 to 1000 per week. Miles
was assigned the task of purchasing the materials to permit this.
Due to the competition for raw materials, products, personnel, and
other resources in a time of war. Miles developed a procedure for
procuring, designing, and using the raw material and components,
using functions as its basis.
His reasoning was, if I cannot obtain the product, I must obtain
an alternative which performs the same function. Miles found
that he could more readily obtain what he needed if he used his new
procedure, rather than specifying standard designed components.
Miles observed that many of the substitutes were providing equal or
better performance at a lower cost. He called the procedure Value
Analysis. The term Value Engineering was coined in 1960s, following
the implementation of the concept in US government organisations.

In the 1960s, Charles Bytheway developed an additional component

to the basic Method. During his work for Sperry UNIVAC, he created
a functional critical path analysis procedure that highlighted the logic
of the activity under value study. A diagramming procedure called the
"Functional Analysis System Technique" (FAST) was adopted as a
standard component of the Value Method. Before the death of Miles
in 1985, the Value Engineering process had gained world-wide
acceptance. It spawned an international organisation dedicated to its
practice, and the certification of competent practitioners (Society of
American Value Engineers International or SAVE International). In
India, the practice of VE is being propogated by INVEST(Indian Value
Engineering Society)
The objectives mainly focusses on 3 basic constraints which are as
follows:
i.

Value Achieving the highest level of function required at the

lowest expenditure of resources, based not only on initial costs
but also throughout the life-cycle of the item or process or
project for which value is sought to be maximized. Maximization
of value is not necessarily always achieved only by reducing
the cost; it can also be enhanced by improving the functions
that are desired by the customer even at relatively small
increase in cost.

ii.

Costs The monetary equivalent for every type of resource

being expanded

expected to be expanded in order to

achieved a single function or where applicable, a group of

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functions together making up a product, process or project

designed to satisfy the specific needs of the user or customer.
iii.

Worth The lowest cost to reliably accomplish a function, even

if it be in a very elementary manner not comparable in quantity,
reliability or life to the same function required in the item or
project under study.

iv.

Function Usually defined in two words, namely, a verb and a

noun, it indicates the services provided or the purpose / use
desired by the customer.

IMPLEMENTATION OF VALUE ENGINEERING VE JOB PLAN

1. Introduction and Orientation Usually accomplish by a 4 to 8
hours appreciation session for the top levels of management in a
company, this programme should cover the basic of VE by illustrative
case examples of implemented value studies and the responsibilities
of the top management in ensuring the success of a VE programme.
2. Project Section and Detailed Seminar Middle and senior
middle level management (who will actually carry out the VE team
studies subsequently) are then exposed to the full detail of the VE
methodology. They are encouraged to participate in a creative project
selection session and assisted in a selecting high potential project for
the VE studies .

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3. Information Phase The stage during which all necessary data

information connected with the selected project are collected, are
reviewed and kept ready.
4. Function Phase The next stage during which all the functions
required or performed are identified, (in the classic verb noun two
word methodology of VE) and classified. This is the most important
phase in a VE study and can take considerable time as it will be
include the assigning of a cost to each function and making
comparison of cost to worth in respect of each function.It identifies
those function which reveal the highest cost worth difference and
there by the maximum potential for the value improvement.
5. Creative phase Refers to the period during which many
systematic techniques of idea generation and stimulation are
employed in an organized yet uninbited manner, to create large
number of ideas irrespective of their or quality. Such ideation is
attempted both individually as well as collectively by the team , on
each of the high potential function selected in the previous phase
such organized creativity is another hallmark of VE-study.
6. Analytical phase In this stage the ideas generated in the
creative phase are examined for their acceptability with or without
modification, refining, combining, etc. The activity is characterized by
positive thinking on how to make each idea work rather than on
discarding the ideas. Technical feasibility is ensured for each
proposal at the end of this phase. It is during this phase that all the
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worthwhile ideas are converted into clear proposals. Also called the
judicial phase or development phase.
7. Evaluation phase The proposals evolved in the last phase are
studied from the financial angle and relative cost both initial and
recurring for the life of the project or team. A comparison and
grading on the basis of both technical aspects and financial
benefits/costs are completed in this phase.
8. Recommendation or presentation phase The team then orally
present their recommendations and findings to all the parties
concerned, especially the top management/decision making levels.
Extensive use is made use of audio-visual aids; models and graphic
presentation should be immediately followed up by a written report
seeking decisions from the management.
9. Implementation phase- Indicates the period when all efforts are
developed to the implementation of the accepted proposals, including
solving of problems faced, if any.
10.

Feedback

and

collateral

application

The

results

implementation are audited and presented to management including

benefits derived by extending the proposal to several similar products
or areas without a re-value engineering efforts.

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3) SIX SIGMA
Six Sigma is one of the latest improvement methodologies sweeping
across the business landscape and being adopted by major
corporations and institutions.
Firms are dedicating approximately 2% of their employees full time to
conduct thousands of Six Sigma project implementations per year,
resulting in hundreds of millions of dollars of actual bottom line annual
results from reduced cost and increased revenue. The remainders of
a companys employees (Green Belts) work 10-15% of their time on
Six Sigma projects. The Six Sigma method is well defined and
audited, so it is unlikely that project implementations will deviate from
the proven methodology by being supplanted by other existing
methodologies. However, there are significant opportunities to
improve project implementation by infusing elements of Value
Management (VM).
When a company makes the commitment to become a Six Sigma
Company, it typically drives implementation of Six Sigma at all levels
and in all aspects of its operations. Due to this intense commitment
and total involvement, Six Sigma becomes the way they do their
work. Before any activity is planned, these companies posit How
can we use Six Sigma for this activity? These companies do not first
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look for alternative improvement methodologies to accomplish the

activity; however, they welcome other methods and tools to help Six
Sigma become even more powerful.
What is SIX SIGMA?
Six Sigma is a quality improvement program with a goal
to reduce the number of defects to as low as 3.4 parts per million. It
relies on the use of Normal Distribution to predict defective rates.
Six Sigma is a benchmark of excellence for the product
and process quality, popularized by Motorola based on zero defect
concept introduced by Philip B. Crosby. It provides a quantitative
statistical notion of quality useful in understanding, measuring and
reducing variation.
A product is said to be on Six Sigma quality if there are no
more than 3.4 non- conformities per million opportunities at the part
and process step level.
A list of objectives of a variety of Six Sigma projects a company might
pursue.

Why Six Sigma?

1) Six Sigma quality level is the closest to zero defect. Less than 6
sigma does not yield acceptable level of quality and more than
6 sigma does not yield substantial benefits
2) Total Customer satisfaction can be achieved with reliable
product/services.
3) Reduction of cost is possible.
4) It gives higher yield.
5) Reduce variability in product quality.
6) Improved shipment delivery time.
7) Reduction in Errors.

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 THE SIX SIGMA - JOB PLAN

Basic steps involved in the application of six sigma:

DEFINE (D)
MEASURE (M)
ANALYSE (A)
IMPROVE (I)
CONTROL ( C )

The Six Sigma "job plan" consists of five phases: Define, Measure,
Analyze, Improve and Control. Typically each phase takes about
one month to execute, for a total project execution of approximately 5
months. A Six Sigma conducts all of these phases with occasional
input or assistance from a team.
At the macro level, each of these phases answers the following
questions:
Define: What is important to the customer?
Measure: What is our current performance versus what is
important to the customer?
Analyze: What causes variations from the target?

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 Improve: What improvements will place us on target with minimal

variation?
Control: What controls will keep us there?

Sigma Level

Defect Rate
(PPM)

Yield In %

6
5

3.4
233

99.99966
99.9767

World Class

4
3

6,210
66,807

99.3790
93.3193

Industry Average

2
1

308,537
690,000

69.1462
-----------

Non-Competitive

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Competitive
Level