1

1
st
Middle East
Six Sigma Forum
Six Sigma A Strategy for Achieving
World Class Performance
7
th
to 9
th
December, Dubai
Sunil Thawani
Manager Business Process Improvement
Union National Bank, Abu Dhabi
Sthawani@unb.com
2
Purpose of Presentation Purpose of Presentation
$are concepts and application of $ix
$igma wit a case study;
Deployment of $ix $igma as a strategy
to acieve World Class Performance;
ntegration of $ix $igma wit EFQM
framework;
Lessons Learnt
3
World Class Performance World Class Performance
Wit 99 %
Quality
Wit $ix $igma
Quality
For every 300000
letters delivered
3,000 misdeliveries 1 misdelivery
For every week of TV
broadcasting per
cannel
1.68 ours of dead air 1.8 seconds of dead
air
Out of every 500,000
computer restarts
4100 crases Less tan 2 crases
Source. The Six Sigma Way by Peter Pande and Others
4
W ased on teacings of Dr. Walter $ewart,
Dr. W. E. Deming & Dr. J. Juran.
W Process Control;
W Plan Do Ceck Act;
W Common and $pecial Causes;
W mprovement can be done project by project
W $tatistical tools
W awtorne Plant Experiences
W Developed by ill $mit at Motorola in 1980s
Wat is $ix $igma ? Wat is $ix $igma ?
5
Wat s $ix $igma? Wat s $ix $igma?
W Degree of variation;
W Level of performance in terms of
defects;
W $tatistical measurement of process
capability;
W encmark for comparison;
W Process improvement metodology;
W t is a Goal;
W $trategy for cange;
W A commitment to customers to acieve
an acceptable level of performance
9 9 9 9
Sigma is a Ietter
in the Greek
AIphabet
6
$ix $igma Definitions $ix $igma Definitions
W usiness Definition
A break troug strategy to significantly
improve customer satisfaction and
sareolder value by reducing variability in
every aspect of business.
W Tecnical Definition
A statistical term signifying defects per
million opportunities.
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Sigma
Level
DeIects Per Million
Opportunities
Rate oI
Improvement
9 9 690,000
9 9 308,000 times
9 9 66,800 5 times
49 9 6,210 11 times
59 9 230 27 times
69 9 3.4 68 times
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ank of America ank of America $$ Experience $$ Experience
oals
# 1 in Customer SatisIaction
Worlds` most admired company
Worlds` largest bank
Strategy - ' Develop business process excellence
by applying voice oI the customer to identiIy and
engineer critical Iew business processes using Six
Sigma
Created Quality & Productivity Division
Source. Best Practices Report
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ank of America ank of America $$ Experience $$ Experience
Wanted results in 1 year;
Hired more than 225 MBB & BBs Irom , Motorola,
Allied Signal Ior rapid deployment
Developed 2 week reen Belt training programs
Introduced computer simulation oI processes
Trained 3767 reen Belts, certiIied 1230 - Minimum value
target per B project $ 250K
Trained 305 Black Belts, certiIied 61 - Minimum value
target per BB project $ 1 million
Trained 43 MBB,
1017 in DFSS
80 oI xecutive Team trained in B and 50 CertiIied
10
ank of America ank of America $$ Experience $$ Experience
Results oI Iirst 2 years:
Reduced ATM withdrawal losses by 29.7
Reduced counterIeit losses in nationwide cash
vaults by 54
Customer delight up 20;
Added 2.3 million customer households
1.3 million Iewer customer households
experienced problems
Stock value up 52
Y 2002 BOA named Best Bank in US & uro
money's Worlds Most Improved Bank
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#evenue
W Capital Utilization
W #eturn on Assets
W Profits
Quote Time
W Defect #ate
W Waste
W On Time Delivery
W nventory;
W Macine Utilization
$trategically: Used by Leadersip as a veicle to develop
sustainable culture of Customer, Quality, Value and Continuous
improvement.
Operationally: y Quality Managers to reduce cycle times, costs,
errors, rework, inventory, equipment downtime.
Deployment across all types of processes and industries -
worldwide
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Six Sigma & EFQM/ DQA Framework
ResuIts
Innovation and Learning
Encouraging
& enabIing peopIe
To participate in
Improvement
PersonaIIy
activeIy
InvoIved in
improvement
Recognizing
IndividuaI &
Team effort
Identifying &
designing
processes to deIiver
strategy
DeveIoping
Team skiIIs
AIigning
IndividuaI &
Organization
GoaIs
Recognizing
PeopIe
EstabIishing
Process
management
System to be
used
ImpIementing
Process
Measures
Improving
processes
to satisfy and
Generate vaIue
For customers
DeIivery,
VaIue,
reIiabiIity
Repurchase
satisfaction
Response
Time to
customers
Time to
Market
Satisfaction
InvoIvement
Recognition
Competency
Productivity
Utility
consumption
Timeliness
nventory
Process cycIe time
Process costs
Defect rates
Productivity
Cash fIow
Maintenance cost
Return on assets
Gross margins
Net profit
SaIes
Market Share
Leadership
PoIicy & Strategy
PeopIe
Processes
PeopIe
ResuIts
Society
#esults
Partnerships
Resources
Key Perf
ResuIts
Customer#esults
EnabIers
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Wo is mplementing $ix $igma Wo is mplementing $ix $igma
At least 25% of te fortune 200 claim to
ave a serious six sigma program - ichael
Hammer.
Financial - ank of America, GE Capital,
Electronics - Allied $ignal, $amsung,
$ony
Cemicals - Dupont, Dow Cemicals
Manufacturing - GE Plastics, Jonson
and Jonson, Motorola, Nokia,
Microsoft, Ford.
Airline - $ingapore, Luftansa,
ombardier
And undreds of oters in Americas,
Europe, $ub Continent.
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$ix $igma #esults $ix $igma #esults
Company AnnuaI Savings
General Electric $2.0+ billion
JP Morgan Case *$1.5 billion (*since inception in
1998)
Motorola $ 16 billion (*since inception in 1980s)
Jonson & Jonson $500 million
oneywell $600 million
$ix $igma $avings as % of revenue vary from 1 to %
For $ 30 million/yr sales $avings potential $ 360,000 to $
1.35 million.
nvestment: salary of in ouse experts, training, process
redesign.
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$ix $igma Project Metodology $ix $igma Project Metodology
ControI ControI
Define Define Measure Measure AnaIyze AnaIyze Improve Improve
EstabIish
standards to
maintain
process;
Design the
controIs,
impIement
and monitor.
EvaIuate
financiaI
impact of the
project
Identify,
evaIuate and
seIect
projects for
improvement
Set goaIs
Form teams.
CoIIect data
on size of the
seIected
probIem,
identify key
customer
requirements
,
Determine
key product
and process
characteristic

naIyze data,
estabIish and
confirm the
vitaI few
determinants
of the
performance.
VaIidate
hypothesis
Improvement
strategy
DeveIop
ideas to
remove root
causes
Design and
carry out
experiments,
Optimize the
process.
FinaI
soIutions
Project Phases
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$ix $igma $ix $igma Case $tudy Case $tudy
$ervice Organisation $ervice Organisation
ackground
M/s Alpa nc. manages out bound cargo from
a distribution centre to different stores.
Deliveries made on trucks - owned and ired.
Customers dissatisfied at delivery scedules.
Leadersip decision to deploy $ix $igma;
Team of 1 lack elt and 3 Green elts
formed
$ponsor of te project Distribution Manager
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Define Define - - Critical to Quality (CTQ) Critical to Quality (CTQ)
Focus on customers generating annual
revenue of U$D 400,000/-.
Customer
needs
mproved delivery
performance
Level 1 CTQ Timely delivery
Level 2 CTQ On time delivery to scedule
Level 3 CTQ Delivery witin +/- 1 our of
sceduled delivery time
Current process sigma level - 2.43 or 175889 DPMO
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Define Define - - Goal $tatement Goal $tatement
#educe number of delayed deliveries by
50 % by 31st December Y 2002 to
better meet customer requirement of
timely delivery defined as witin +/- 1
our of sceduled delivery.
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Define Define - - Performance $tandards Performance $tandards
Output unit A sceduled delivery of freigt
Output
caracteristic
Timely delivery
Project Y measure Process starts wen an order is received
Ends wen goods are received & signed
for at customers desk.
Process measurement Deviation from
sceduled delivery time in minutes.
$pecification limits L$L = -60 minutes
U$L= +60 minutes
Target $ceduled time or zero minutes
deviation
Defect Delivery earlier or later tan 1 our.
No. of defect
opportunities per
unit
1 opportunity for a defect per sceduled
delivery of freigt.
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Define Define - - $POC Diagram $POC Diagram
Supplier
$tores Manager
Input
$tores Order
Process $teps
(ig level)
#eceive order
Plan delivery
Dispatc Driver wit goods
Deliver goods to stores
#eceive delivery
Output
#eceived freigt wit
Documents
Customer
$tore Manager
Detailed process maps drawn
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Measure and Analyze Measure and Analyze
Driver and Distance identified as key
factors influencing delivery performance.
Driver selected for focus.
Potential root causes as to wy Driver
influenced te time:
$ize of te veicle
Type of engine
Type of tyres
Fuel capacity
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Experiments designed and conducted
using truck type and tyre size.
Findings:
Larger tyres took longer time at certain
routes were area was cramped and time
lost in maneuvering.
ig incidence of tyre failures since tigt
turns led to stress on tyres tus increasing
number of flat tyres.
Team modified planning of dispatc
process by routing smaller trucks at
more restrictive areas.
mprove mprove
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Test implementation.
Process sigma level up from 2.43 or
175889 DPMO to or 7 DPMO.
Performance still fell sort of best in class
4.32 or 2400 DPMO.
mprovement led to significant customer
satisfaction.
Process continually monitored and data on
new cycle times, tyre failure collected as
per defined metods and frequency,
analysed and monitored.
Customer satisfaction measured and
monitored.
Control Control
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ey Lessons Learnt ey Lessons Learnt
Define
Difficulty in identifying te rigt project and
defining te scope;
Difficulty in applying statistical parameters
to Voice of te Customers;
Trouble wit setting te rigt goals;
Measure
nefficient data gatering;
Lack of measures;
Lack of speed in execution;
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ey Lessons Learnt ey Lessons Learnt
AnaIyse
Callenge of identifying best practices
Overuse of statistical tools/ under use of practical
knowledge
Callenge of developing ypoteses
Improve
Callenge of developing ideas to remove root
causes
Difficulty of implementing solutions
ControI
Lack of follow up by Managers/ Process Owners
Lack of continuous Voice of te Customer
feedback
Failure to institutionalize continuous improvement.
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ey Lessons Learnt ey Lessons Learnt
Define ranked most important step but gets
te lowest resource allocation
Project scoping and its definition is critical to
its success/ failure;
Measure is considered most difficult step
and also gets te igest resources
Source: Greenwich Associates Study Y 2002
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Versatile
reaktroug improvements
Financial results focus
Process focus
$tructured & disciplined problem solving
metodology using scientific tools and tecniques
Customer centered
nvolvement of leadersip is mandatory.
Training is mandatory;
Action learning (25% class room, 75 %
application)
Creating a dedicated organisation for problem
solving (85/50 #ule).
Wat Makes $ix $igma Different? Wat Makes $ix $igma Different?
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enefits of $ix $igma enefits of $ix $igma
Generates sustained success
$ets performance goal for everyone
Enances value for customers;
Accelerates rate of improvement;
Promotes learning across boundaries;
Executes strategic cange
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Thank you
Q & A