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john beaudoin

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  • #182073

    john beaudoin
    Participant

    I worked for Sony for 8 years up until 3 years ago. I was one of the
    groups to be trained as a greenbelt in the first months Sony started a
    6 sigma program in the US after I’d been there about 3 years.
    Eventually, Sony got away from the Air Academy training and tried to
    call the program their own as Sony Six Sigma. Shortly before I left the
    company, they were starting to phase it out completely as the
    management team waned in its support. The result is most likely
    more waste and lay offs.

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    #182072

    john beaudoin
    Participant

    Ken MacKenzie is a phD who recently retired from the University of
    Kansas. He is the author of many publications and has studied the
    structures and Organizational models of business for most of his
    entire career. His breakthrough research has been published and has
    spawned others to validate his findings.

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    #182071

    john beaudoin
    Participant

    Actually, I punched disciphel into Google to check the spelling before
    I posted and it came up. Thanks for the correction.Dude – If you don’t check out the organizational hologram, you can’t
    comment on it!

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    #180812

    john beaudoin
    Participant

    FYI – Michelin Tires is now headed up by a former deciphel of Ken
    MacKenzie and if you compare their processes from HR on down you
    can see their company is outperforming Goodyear. There are a few
    other companies that have made good turn around starting down the
    path of the hologram

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    #180811

    john beaudoin
    Participant

    Hello All, I haven’t submitted a post in awhile, but thought I would
    take a look at what’s been going on in the world of six sigma. First
    of all, I’m now a head manager for logistics at a worldwide
    company for all of North America. I received by greenbelt and
    blackbelt prior when I worked for Sony for 8 years. I’ve also since
    received an MBA from the University of Kansas, the NCAA National
    basketball champions and also have a BS in Aerospace engineering
    from Purdue University.The question is a good one and interesting one to respond to. The
    answer is no business outside of a consulting company starts with
    6-Sigma. The responders are correct in that there are traditional
    concepts of providing a value add to potential customers and then
    tailoring business strategy to traditional strategic items as stated. However, there are companies that once established, look to how
    they can integrate 6 sigma into their business as a tool to gain
    some competitive advantages over other corporations. This was
    the case with Motorola, GE, and Sony in the early days.The challenge is real in that if there is no 6-Sigma model, a great
    deal of money and resource is required to set up training,
    development, tracking, etc and there are many consultants that are
    well off from this approach.The key focus of your company’s strategic approach in these tough
    economic times is to drive waste out of your business. If your
    company has established products and processes that don’t
    require much evolution in the near term (for example, if you
    manufacture household cleaning products for example), then you
    need to model 6-sigma style projects into your business plan
    around taking a process you do everyday and optimizing it to
    reduce waste.On the other hand, if you manufacture cell phones or provide
    services, or are a marketing based company like a Nike, your
    options and fruits your looking to bear with 6 sigma are limited.I recommend that an overall business plan should look at
    something unique and all business encompassing. There is some
    brilliant work in organizational theory around a holonomic model.
    Managers would be good to focus on creating a nimble
    organization that can quickly adapt to the market environment and
    change. 6-Sigma tools will help you optimize a process, but it is a
    lot of wasted effort to optimize a process for producing an object
    that won’t exist in the next few years for example. You want to
    focus on optimizing your development processes, etc.Reference this website: http://www.emacassessments.com

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    #116602

    john beaudoin
    Participant

    If you really want to be enlighted on improving a business organization and ultimately to have a maximally productive and maximally efficient organization in a changing environment, check out a book written by Kenneth MacKenzie on the Organizational Hologram.  He has nailed it.

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    #101114

    john beaudoin
    Participant

    Thank you, I will add this word to my spell check immediately.  Master Yoda would never forgive me.  He hates me…. He’s jealous because he knows I’m better than him…..I can’t sleep – have nightmares about my mother.   Ahhhhhhhhhh

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    #101039

    john beaudoin
    Participant

    I’m sorry but I couldn’t find a spell check for the referral of a Star Wars Jedi apprentice….
    Is it Padwon?
     

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    #101031

    john beaudoin
    Participant

    I see you have found your answer in the shift of the bell curve, which is taught in Six Sigma 101 and is the foundation of which all training is built.  Understanding this numerical value is no where near the challenges that await you paduan learner.
     

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    #97833

    john beaudoin
    Participant

    Mike,
    I posted much over the past year, but it is amazing how some of my insights have stood the test of time in this topic coming up again.
    Keep in mind that I have started this year with simply stating a theory as to why top management at many companies has trouble sustaining the gain of 6-Sigma based on actual observations, including the evolution of 6-Sigma at my company over the last 5 years.  Theories almost always stay theories until disproved, and so far, no one has offered any evidence to disprove mine, although there seems to be some agreement that the future of GE is still not entirely tested as Motorola has been.
    My tone is one of great dissappointment as I thought this would not happen to my company 2 years ago, but I think I can say that one of the key differences in implementation at my company from implementation at a GE was the pressure put on all management levels to embrace and train in 6-Sigma.  After 5 years of company involvement, we still have a large percentage of managers who have either not received any training or went through training, but never utilized the tools, got certified, or worked on any projects.  Lay-offs and reorganizations have had a detrimental impact on 6-Sigma at my company as well, and I imagine at other companies too.  When it comes down to laying off someone that physically gets product to the customer or takes an order, the guy in the office making charts and graphs looks like the first place to cut.  I don’t agree with the logic, but I’ve seen it.
    I foresee that things will change as the economy improves, as companies struggle to find a competitive advantage over close competitors, and when resources become available to pour into improvement.  With the large number of companies out there, I’m sure some can be found in all various stages of recovery and decline.  One thing is for sure, I do not think 6-Sigma will die like TQM, at least not until some incredible breakthrough in analysis is invented, but just as 6-Sigma uses many of the TQM tools, any new methods will use many 6-Sigma tools I’m sure.

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    #97749

    john beaudoin
    Participant

    I think you have missunderstood the context of my theory.  You are absolutely correct in identifying that the strength of 6-Sigma is its ability to identify “hidden” costs and improve quality and customer service to the point that a competative advantage can be obtained by a company that because of the culture needed to support such a process, be non duplicatable.
    My theory is that most top management are going to continually prioritize their initiatives, strategies, competitive responses, share holder concerns, etc.  These managers read some trade magazines, Wall Street Journal articles, and some management books touting examples of companies that have had success with 6-Sigma.  These managers then get interested and assign some people in the organization to put something together to start some initiative withing the company.  What immediately happens is that people get trained and projects start rolling in to tackle the more simple projects that can be used in training.  For the first few years, many projects average $75K/project in cost savings.  Once a few million in savings has been attained, and it gets harder to come up with new areas for savings, or people aren’t given the necessary time to work on projects, possibly due to the downsizing of the work force that has taken place over the last couple of years, management will start focussing on other issues that they don’t see six-sigma has a connection with.
    Please do not assume I am saying this should happen, or is a good thing, because I think companies make a big mistake at this point.  It is the company that realizes 6-Sigma is an important part of the culture and can be used for items well beyond cost reduction such as improving marketing efforts, analyzing survey data, revenue generation, customer satisfaction, etc. that will truely succeed and have a unique competitive advantage.
    As a trained blackbelt, a person who has completed more than 20 6-Sigma projects over the last 5 years, as an engineer, and an MBA student who has 14 years of work experience with a Japanese company and 2 of the largest companies in the U.S, I am not just throwing stuff on the wall to see what sticks.  I have seen this evolution in companies with my own experience.
    Go to Motorola’s Web Site and tell me where you find 6-Sigma mentioned.  They don’t even call what they are doing 6-Sigma anymore.  A search on their site turned up the last item with “6 Sigma” published in May 2003.  GE on the other hand is still very active in 6-Sigma.  But remember, Jack did a lot to get GE into the mindset of 6-Sigma and went to the point of almost penalizing employees that did not embrace it.  They turn over 20% of their workforce every year, and they have immediately indoctrinated any new employees into their 6-Sigma culture.  Not too many other companies are willing to do that or have the top management support to do so.  This is why GE will continue to have a competitive advantage.

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    #97715

    john beaudoin
    Participant

    Note: You are commenting on an e-mail from 2 years ago.
    GE, I’m sure has made several changes since my last response and our company has as well.  The culture change you refer to at GE has absolutely nothing to do with “Why it is called 6-Sigma” and has nothing to do with somebody saying that more than 6-Sigma is not achievable as I have discussed this issue with a GE blackbelt in person.
    What really made 6-Sigma implementation at GE be so successful was the leadership, Jack Welsh at the time, and his commitment to it.  This commitment included  executive orders such as:  No manager will be promoted unless he/she becomes a Greenbelt.  6-Sigma was instilled as a directive in all leadership and thus all activities in the business.  Now that this leadership has passed, and this has happened in my company as well, 6-Sigma is starting to fade. 
    Note: Companies that have been touting 6 Sigma for more than 5 years are not very vocal about it any more.  New training is stopping, etc.  Perhaps the tools are being used every day in some business decisions, but less formal projects are being completed and more focus is being put on supporting only key corporate objectives. 
    Where you continue to hear excitement about 6-Sigma are in the companies that are just now getting on the band-wagon for the first time.  I have a theory that after 5 years of 6-Sigma, all of the big pay-off low-hanging fruit projects are completed, and when it gets harder to find big cost reductions, management moves its attention away from 6-Sigma instead of realizing the gains it can provide in terms of customer satisfaction and new revenue generation.  Management looks continues to use the old processes with this regard.

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    #91371

    john beaudoin
    Participant

    Mike,  I might be able to help.  Our facility of about 200 people started down the six sigma trek in August 2000.  We have about 30 trained Greenbelts here 3 years later and 3 trained Blackbelts.  This 3rd year is the year that we really feel that Six Sigma thinking is starting to become part of our business.  With that said, I will try to give you a few guidlines.
    As with any large project that a project manager gets handed by management, you need to have a Meaure of Success (MOS).  Our company has finally arrived at something that makes sense, and I will share that here. 
    First, You need to target how many people in your organization you would like to see as Six Sigma Experts.  You know you will need a Champion, some trainers (Master Blackbelts), and some Greenbelts to start using the tools on projects.  Many companies might want to look at only indirect labor positions, since these people are the only hope of having any kind of time to work on projects.  Note: Dedicated Blackbelts is probably a good way to go.  Set a goal of about 50% of indirect labor trained long term, and set shorter term goals for the first year, etc.
    Next, Look at the number of projects you expect your organization to complete and implement.  Your measurement should look at the ratio of projects to trained personnel.  A good target is about 75%.  This may sound alarming as many people expect each trained person to do a project every 6 months, but the reality is initially, a lot of projects will get started and then fizzle out or you will find that someone you thought would make a good Six sigma belt may not at all enjoy the work and be overwhelmed by the training.
    Last, Look at the Key Performance Indicators for your business (KPI).  If you improve sales, lower costs, etc., then you should be able to use your calculated project savings and determine the % impact 6-Sigma had on your business.  After 3 years, we are looking at a 30% impact target.
    The other knowns you have to work with are the 4 weeks of training required by blackbelts and 2 weeks of training required by Greenbelts.  Note that training projects selected for a Greenbelt to get certified are usually simpler projects and require a lot of tool usagage to demonstrate knowledge.  These do take 6-9 months for first timers to get through.  Some companies want the complicated items worked on right away to pay for the training, and I have seen greenbelts put on such projects take 2 years to get certified working on such an endeavor.  Don’t make the mistake of expecting the giant savings on the first round of projects unless you have some serious waste that is easy to fix.
    Final Advise: Set multiple small short term goals.  For example: Train X Champions, Y Blackbelts, and Z Greenbelts first year.  Certify %Y and %Z Belts.  Complete %(X+Z projects)  We found savings to average about $75,000 per project.  2nd Year…… 3rd Year…….  Remember, this is a long term commitment.

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    #88479

    john beaudoin
    Participant

    Consultants will not get you to 3.4 defects per million opportunities unless they know your business better than you do.  Also, this 3.4 DPMO is not something that can happen in the short term.  It takes many iterations of continuous improvement in small steps to get there.  You will need trained employees in statistical approaches to solving busieness problems.  A book will not be sufficient. You will need to hire blackbelts and champions if you are starting fresh, or will need to initiate a slow process of training company management and key personnel.   One reference I know of is the Air Academy Associates in Colorado.

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    #85461

    john beaudoin
    Participant

    Paul and I are just on the same page….
    Having been in management for 10 years, having a 6-Sigma blackbelt, an aerospace engineering degree from Purdue, PMP certification training, and working half way through an MBA from the University of Kansas, allows me to make pretty good assumptions and have a general understanding of businesses and contractural relationships.  That is the difference between purely analytical and management types.  There is a lot of truth in these statements, but I am also laughing pretty good as I’m writing them.

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    #85447

    john beaudoin
    Participant

    Makes sense.  The big issue is with the contract between you and the customer, and who will have to pay for the redesign.  That will be for the legal people to decide.

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    #85442

    john beaudoin
    Participant

    Sounds like someone has done a Design of Experiments on the interactions of the 2 products and there is some statistical evidence that there is a correlation of some component of the 2 products.  Of course, there needs to be some repeatablility to see that the correlation isn’t the result of a fluke of nature for the one time a test was ran, but if it is repeatable, then there is an issue, regardless of the laws of physics.  If you are in doubt, I would suggesst puchasing a BOB and WOW for your own experimentation/root cause analysis.
    Of course, your problem has been presented so vaguely, that it is pretty hard to come up with anything that could help you.

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    #85008

    john beaudoin
    Participant

    You are doing fine with your current measurement analysis.  The tool you need to use is a binomial distribution.  This is a specific tool for discrete data.  It looks at the probability that you will have a defect, which is soley based on how many runs and how many defects did you have.  If you have 32 runs and 2 defects, the probability of a defect is 6.25%.    You may also want to look at a Poisson distribution.  Since you are studying to be a greenbelt, hopefully you have a good statistics book and some software that can help you in this area.  Most people are using Minitab to help, but I am using SPC-XL an DOE-XL from the Air Acadamy (A 6-Sigma consulting group).  SPC-XL is very economical and works with Microsoft XL software.  The real advantage of using continuous data over discrete data is that your sample sizes have to be many times larger with discrete data to get the same confidence intervals.  You may consider this for future measurement systems.

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    #84857

    john beaudoin
    Participant

    Sorry on specifics.  Sometimes efficiencies in these areas may be the only competitive advantage a company has, and they are not willing to share specifics.  You may find some actual models through one of the university business schools, case studies.  Even then, many times the actual names of companies are left out because the professor acted as a consultant.  I have layed out a road map to realizing improvements to a business in general in the procurement area.

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    #82691

    john beaudoin
    Participant

    I think your right.  The S&P has hand selected companies in it to represent the overall market.  Dell is a company that shows how well computer sales are doing, Wal-Mart may be in their to show how well Retail is Doing, General Motors for the Auto Industry, etc.

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    #82388

    john beaudoin
    Participant

    I think everyone agrees with that.  In the optimal 6-Sigma environment, if you have full management support and your company is all for projects, etc., If you have some trained employees as Greenbelts/Blackbelts/etc. and they really get tired of the project slides, don’t enjoy the statistical analysis, and would prefer to just do their regular job, What would you let them do?
    1) This person does not fit your very pro-6-Sigma culture that you have cultivated and suggest they find a company that wants nothing to do with 6-Sigma to work for.
    2) Allow them to turn in their belt and go back to producing widgets, documents, or talking to customers with or without a loss in salary since they may not be adding as much value to the company.
    3) Force them to stay focussed and tell them the more they work with it the more they will enjoy their job and discipline them when projects aren’t getting done.
    4) Other

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    #82260

    john beaudoin
    Participant

    In other words, Mike, we’re screwed….
    Fact is we have some useful belts and get projects, some major ones, completed.  To that extent we have a success in training.
    Other fact is we’ve tried various ways to motivate individuals to use the tools and the fact is it is just too hard for them, no matter how we want to handhold them.  Sending them to training was a better decision then not sending them at all, but after they learned what 6-Sigma was about, I feel some were intimidated by the tools and work that goes into the projects.  We are a transactional environment and I thing that some would rather make improvements as they did before 6-Sigma.  You can lead a horse to water, but you can’t make him drink.
    Now that we both know it is a management issue, and that the amount of influence our department has is not absolute, we either need to be shrewd negotiators to instigate management change or the alternate hypothesis, we’re at status quo, is true.

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    #82259

    john beaudoin
    Participant

    Eduardo,
    1) We have objectives to execture projects.
    2) We give $200 for completion of first project for certification, and a framed certificate.
    3) We put 6-Sigma goals on annual review and tie salary increases to it based on performance (although the weighting varies)
    4) Managers tell us they will get time and then renig.
    5) Everyone has problems to solve, but some will move forward without using the tools.
    Still not working here – Does it work at your location?

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    #82258

    john beaudoin
    Participant

    We don’t want to sack anyone.  We also offer to put all of the slides/analysis for individuals together as well, so they do not have to do this on their own.  One problem is that our department has no direct reports.  We “manage” approved 6-Sigma projects, but individuals report first to their management.  Management is the big issue, I agree, as it is their responsibility to make 6-Sigma important to their work force.  Some may have sent individuals to training just to say they have followed a mandate to train x number of employees in their area.  Some selections were very good, and others not so good.
    Decertifying individuals has disadvantages, and we have those that have been at it for a couple of years and have not yet been certified.  We do provide incentives of cash, certificates, etc., but only for the first certification project.
    Promotions aren’t a big loss at our facility, as the opportunity is very small unless individuals wish to relocate out of state.
    I think the problem lies more in the culture, how people are used to managing their business in that they resort to the old ways after receiving training.  I think some get intimidated by the statistical tools they learn, and shy away from the things they are not comfortable with.  Most of our employees are not math experts and operate in the transactional world.
    I think all of our organizations have experience this to some extent, and wondered if this problem has been successfully eliminated and how at other locations.

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    #82256

    john beaudoin
    Participant

    I agree.  I’m also studying to get my PMP (Project Management Professionals) Certification, and the tools taught in 6-Sigma cover 5% of the things Project Managers need to know.  That is one of the drawbacks of implementation problems that 6-Sigma belts experience is that they don’t get the skills to manage meetings, influence groups, measure risk in contracts, and follow work breakdown structures, Gantt charts, etc.  Not all projects require this kind of expertise, but I just wanted to make the point that management should not view all belts as project managers.

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    #82255

    john beaudoin
    Participant

    No dedicated “moneybelts”.  Actually, I’ve never heard the term used before, but I like it.  Note it is hard to have a bottleneck when you only have 2-3 projects closed each month at a facility and the Finance Manager assigned is who signs off on them.

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    #82042

    john beaudoin
    Participant

    I agree with you 100% and we’ve tried this.  The fact we have to face is that there are performance goals set on projects completed and dollars saved.  These can’t count unless Finance/Management sign off on the savings and we need this minimum documentation to meet our goals.
    What happens is that individuals implement stuff daily, some requiring significant investiment, but they don’t want to do the minimum to capture anything to have signed off.  These few individuals love to make decisions and improvements, but don’t care that any savings is verified other than hoping their departmental performance numbers improve.  This may be OK for the company as it strives for continuous improvement, but it does not verify that the savings is sustainable or that it is even real.  Feedback from these individuals is that they don’t wish to do any 6-Sigma projects, with the result that they are not operating any different from a non-6-Sigma company.
    We have others that align well, and continue to perform admirably with 6-Sigma.  My basic question is do we drag the others kicking and screaming, or is there a good way to cut the rope on these individuals and move on.  Better yet, is there a way to change their thinking?

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    #82033

    john beaudoin
    Participant

    Thanks Joe,
    We had the same goals, but found that individual managers did not always feel that the 6-Sigma emphasis was as important as some other initiatives they had their resorces focus on during the year when came time to give a performance review.
    We certify our Greenbelts with certificates upon completing their first project, when the indivuals at your company stepped out, were the certificates pulled from these individuals as well?  Is there a good way to ask some to step out?  Can you call these individuals Yellow belts and only use them when data needs to be specifically gathered, etc.  One problem we have is from a planning standpoint, because we need to forecast number of projects and dollar savings and these goals are often based on number of Greenbelts, Blackbelts, etc.

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    #81456

    john beaudoin
    Participant

    Don’t listen to Ron, he has apparently been crunching numbers in a whole somewhere for too long.The fact is people in the real world here the term 6-Sigma.  It has gained a lot of popularity with GE and is expanding to more and more companies across the country.  Some Universities are even starting to teach classes about 6-Sigma.Ron is correct in that the mathmatical/statistical definition of 6-Sigma, which includes a 1.5 Sigma shift that I won’t go into at this time is 3.4 Defects per Million opportunities.  However, you are talking to someone that says “My company is a 6-Sigma Company”, It does not and is not intended to mean that everything my company does is at 3.4 defects per million opportunities.  It simply means that somewhere down the line, someone at Motorola that believed in reducing variation in processes that came up with a methodology for achieving the goal of 6-Sigma needed something to call their program.  Boom! Let me call it “6 Sigma!”.  Thus projects directed toward process improvement can be called “6-Sigma Projects”, etc.To your point:  6-Sigma companies do 6-Sigma Projects, Successful 6-Sigma companies do incorporate 6-Sigma training (Greenbelts, Blackbelts, Master Blackbelts, Champions, and sometimes Yellowbelts) and objectives throughout the whole company, 6-Sigma projects do save companies money like GE.  6-Sigma is the name of the philosophy to use Design, Measure, Analyze, Improve, Control (DMAIC) to strive for continuous improvement in all of a company’s processes.  The objectives are the reduction of waste and the fullfillment of all customer needs.

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    #80206

    john beaudoin
    Participant

    Not so sure we disagree here….
    1) 1 error in 1E20 is ludicrous.
    2) There may be processes that stay within spec limits 100% of the time, however small. (I always get my car into the garage without hitting the sides of the garage, although others might not, or it is just a matter of time before they don’t)
    3) Opportunities can be over inflated to make up a Sigma Level and may not reflect what the customer experiences.
    4) Inspecting in quality shouldn’t count toward Sigma Level.
    You may still disagree with number 2, but I think we see eye to eye on the others.

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    #80187

    john beaudoin
    Participant

    Thanks Jim!  Your input makes a lot of sense and is a refreshing response.  Basic statistics says that the sample sizes for continuous data are a lot less than pass/fail data.  In manufacturing, continuous data of measurements within engineering specifications is very common.

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    #80136

    john beaudoin
    Participant

    I agree with you 100% from the customer perspective, but GE is the manufacturer in this case.  If GE’s manufacturing process was only 5 sigma and not 12 sigma, they would have 233 defects per million opportunities.  If they only had 1,000 opportunities per engine, they would have .233 defects in each engine produced.  As a result, almost 1 in 5 engines would have some kind of malfunction, thus giving the end-user very bad quality.  From the design and production standpoint, you may have to have a 12 sigma process to have the final unit perform at a 6 sigma level to the customer.
    If GE is not using the opportunities to get to 12 sigma, then they have had no engine failures due to production.  If you have a defect, you need the opportunities to get to 12 sigma, but if you don’t have any defects, the opportunities do not have to be nearly so high.  Have you had any luck finding a crash do specifically to a GE engine that was not caused by poor maintenance and was blamed on the manufacturer of the engine?

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    #80125

    john beaudoin
    Participant

    Why would you want to put an artificial limit of one per engine? Sigma is always calculated from total opportunities.  At 12 Sigma, You would have 1 error in 1E+20 opportunities.  I do not know how GE is defining their opportunities, but based on the numbers above it would have to be based on each part in the engine as well as some unit of time that the engine is running.
    If you look at overall opportunity of and engine failing in flight for just one aircraft with 2 engines making 10 2-hour flights a day for a year, you would have 10 x 365 x 2 opportunities for just one aircraft or 7,300 opportunities.  If you consider the number of things in each engine that could go wrong, you would have possibly 7,300,000 opportunities for that aircraft with the 1000 parts in an engine.  This changes even more if the opportunities are measured in hours of operation vs flights, etc.
    The question is now asking to hear from someone at GE that knows how they get to 12 sigma.
     

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    #80117

    john beaudoin
    Participant

    Many in-Flight defects are prevented through strict maintenence/overhaul procedures.  Since these are not always performed by GE, should we be talking about defects found immediately after production of the engine, or by defects found in-flight?  Is GE preventing errors in engine manufacture so there is little or no rework within the plant, or is quality inspected into the product at 12 sigma, which shouldn’t count?

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    #80112

    john beaudoin
    Participant

    I have created a new Post titled GE Tubine Engines – 12 Sigma?.  The post requests to get some actual numbers, if anyone is willing to share.  You will either have data or you won’t.  FYI go out on the internet and figure out how many aircraft flights there are in a year vs. how many plane crashes their are.  You will see that all of the airline industry is at about 12 Sigma when it comes to safety. (On-Time is a completely different story)

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    #80090

    john beaudoin
    Participant

    I was told the 12 sigma was for a military engine for fighter aircraft.

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    #80089

    john beaudoin
    Participant

    Are you certified in 6-Sigma?  Your answers indicate that you are a little mis-informed in applying the tools.  With the jet engine thing, even though 100’s are produced each engine has thousands of opportunities for defects.  The entire process with all of the opportunities is running at a 12 sigma level for jet engine manufacture.  We make televisions and I have data and references to show that even a TV has 1000’s of opportunities for defects and there are probably a lot more parts in a jet engine.
    As to why 6-Sigma – Someone noticed at this level you would have 1.5 defects per million.  Not many people manufacture billions of anything, so 1.5 would be a pretty good number.  Anything else would be close to zero.  In this process, Motorola’s research found that it was very unusual for a population mean to shift by more than 1.5 sigma.  If a process is designed to produce very consistent results and perform at 6-Sigma quality levels under normal conditions, the process is virtually defect free when the mean is on target.  If the process were to shift by 1.5 sigma, only 3.4 defects per million opportunities for error would exist. From Book “Customer Centered Six Sigma” by Naumann and Hoisington.  This was Motorola’s research and the 6 sigma goal was determined by them.  Period.
    I agree with you in that there may be no data to show for everyone what sigma level they need to be at as it would probably vary by company anyway.  12 sigma may make sense for surgical tools and jet engines and 5 sigma may make sense for somone repairing furnaces.  It is going to depend on the Failure Mode Effect Outcome and the number of opportunities for defects in a year.

    0
    #80071

    john beaudoin
    Participant

    Man! What side of the bed to you get up off of this morning?  For your information, Motorola was the one that determined 6-Sigma was cost effective to achieve back in the days when they produced millions of pagers.  The also achieved 6-Sigma quality in their pagers.
    I’m an aerospace engineer, what do you know about jet engines and product liability when one fails?  Think about how much the old lady that spilled coffee on herself at the McDonnald’s drive through and then imagine what several passenger family members could do if an engine failed due to a manufacturing flaw.  I also have a friend who is a Master Blackbelt at GE and can vouch for the sigma level in their aircraft engine division (Remember they are producing these in the 100’s each year, not millions).
    Next, each company can call their statistical improvement process anything they want.  The company I work for invented their own name as well and Logo (Sony Six Sigma), which now have their own trainers and training material to avoid the high costs of consultant material and trainers.  The fact is that the tools are still there and are still used by everyone.  The other fact is that if you are less than 6-Sigma, you are going to strive to get to 6-Sigma.  If you are at 6-Sigma, you may or may not strive to be better than that.  Note that your sigma level can change instantly if your customer expectations change, so no ones work is ever done with regards to meeting customer Critical to Quality factors.
    Last, I’m honestly answering a guy’s question as to why 6-Sigma was chosen.  I don’t think your response addresses the original question posed here.

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    #80050

    john beaudoin
    Participant

    You have a good problem here.  Let me try to respond with my knowledge:
    1) When a part is produced, it is either within specifications or it is not.  Using this approach, you can get a Cpk for the machine as a whole.
    2) If the machine Cpk is not satisfactory to you, you are going to have to dig deeper in the reason, and thus you are going to have to ask why a part is not in spec.  This will eventually lead to you evaluating the individual measurements anyway.
    3) You can reduce measurements by looking at random samples and selecting a confidence interval.  You may also decide that certain measurements have so little variation that you only want to check the measurements where you have the most problems.  If you can improve the machine by replacing wearable parts, etc., based on the worst offending measurement areas, the whole of the machine may improve to an acceptable level of output.

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    #80049

    john beaudoin
    Participant

    To answer your questions, it is the job of corporate leaders to stay up on business techniques that have been successful in improving other companies.  These guys go to bed at night worrying about daily swings in stock price, financial report ratios, and wondering what the competition is up to.  Because these are their worries, when they read articles in various publications and hear things from their connections, they go out and immediately start finding books and information about the techniques and processes.
    Can you define this process model for executives as gullible?  I don’t think so.  The fact is that the problem solving model compiled under the 6-Sigma umbrella does work.  Yes, the tools have been around for awhile and were used successfully by many companies under the TQM heading in the 80’s, however, 6-Sigma has built a few improvements onto the TQM package and has thus received a name change like updated software.  The fact is that the tools in 6-Sigma work for reducing variation in processes and that if the tools are not understood and not used, you can at best get to a 3-4 Sigma level after years of incremental improvements with a loss in efficiency with each change.  In the transactional world,  a lot of duplicating processses are developed to solve some problem that occurred once a couple of years ago and a lot of these processes hang on with the battle cry “This is how we have always done it”.
    If anything, 6-Sigma training and tools will help you re-evaluate what you are doing and either prove that your business can be improved with big savings or it will confirm that you are already using best practices in all of your processes.  If you look at the probability of these 2 outcomes, I will always put my money that there is waste in anyones process that can be removed.

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    #80047

    john beaudoin
    Participant

    Yes, there is something special.  If you track your performance outputs on a histogram, and place on it Customer Specification limits, your process will hopefully be in specifications most of the time, but will also have values outside the specification limits (think of a normal distibution curve with a mean value at the peak and a value on the x axis that is a specification limit.)  At one standard deviation from the mean, you will have 68.27% of the area under the curve covered.  At 2 Standard Deviations, you have 95.45% of the area under the curve, at 3 Standard Deviations, you will have 99.73% of the area and so forth until you get to 6 standard deviations, when you have 99.99985% of the area (1.5 Defects per million).  Since there is some variation in measuring, a 1.5 Sigma shift is figured in which gives you 3.4 Defects per million or 99.99966%.
    The reason this number is used is because it has been determined for most processes that this quality level is achieved most economically, and that the benefits to better than 6-Sigma may not outweight the costs to get there.  Conversely, if you are at 5-Sigma, there are still economic benefits to get to 6-Sigma.  This is a general rule as there are exceptions.  In the jet engine manufacturing business, many processes need and achieve 12 sigma, which is very closs to zero defects per million.  Economics and liabillity help to drive this type of quality.  Most companies that do not use statistical tools for process control are in the 3 sigma range.

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    #80005

    john beaudoin
    Participant

    I never disputed that.

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    #80003

    john beaudoin
    Participant

    Mike, you are right in that you either hit the 2 days or you don’t.  In the transactional world, it would be helpful to know not only that you fail to hit 2 days x% of the time in a given sample, but you want to know the confidence interval of the sample at 95-98% and the probability that you will continue to perform at 2 days or less, you can also calculate the probability that you will be 3 days and less, 4 days and less, etc.  Sometimes this information is useful when making a commitment to a customer as we have found that variation reduction to a customer is less upseting to them than telling them you will meet 2 days and you don’t (This is obviously short term as once we reduce variation, we want to shift the mean through process improvements).
    The Good/Bad by itself doesn’t tell you how much you have missed the target.  The original question posed was interested in having some kind of weighting to penalize items greater as they missed the target by a greater amount.  I was simply suggesting that probabilities might be a better approach to give management an idea of the probabilities at different failure levels.

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    #79963

    john beaudoin
    Participant

    The factor of 10 rule does not apply here.  A lot of people make the mistake and assume that since the process cannot possibly take less than 0 days to perform that there is some artificial lower spec limit of Zero.  This is absolutely not true.  There is no lower spec limit because the probability data is based on a normal distibution curve and you need to capture all of the area under the curve to the left of your upper spec limit.  If he plots this data, the curve will encompass negative values, and to capture that area, you can’t use zero or you will be lopping a portion of the curve off, which will damage your data.  You have to keep in mind that some of his data may be in the 7 day range, and so forth.  If the Standard Deviation is more than a day, and the customer only cares about 2 days (for example, the product may need to ship by a certain time each day and it is only important that the product make the shipment time whether it was done 5 hours earlier or not, it still won’t ship until the carrier makes there pick-up time)
    Note the Weible shaped data is irrelavent as you can use random sample averages to get a normal distribution. (assuming this operation is performed several times a day and not once a day). 

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    #79956

    john beaudoin
    Participant

    You may want to be a bit more specific with your question on this one as the answer may depend on whether you are working for a 6-Sigma company already, or if your company as considering starting a 6-Sigma program to be a means to achieving the Malcom Baldrige performance criteria.  If you are not 6-Sigma, there is an entire process and several books written about implementing 6-Sigma.  If you are already 6-Sigma the question is very simple…..Know the critera and use 6-Sigma tools to achieve those goals by reducing variation in your processes and increasing customer satisfaction by designing processes to meet customer expectations.
     

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    #79955

    john beaudoin
    Participant

    The data you have is perfect for a histogram.  I suggest you make a histogram with number of days to complete the process on the x-axis and number count of occurrences on the y-axis.  With a statistical package, you should be able to also calculate the Mean and Standard Deviation of days to complete.  Also with a statistical package using Cpk analysis with a 2 Day Upper Spec Limit (Note:  for this process, do not use a Lower Spec Limit as it will make your data wrong, assuming 0 days is good)  This Cpk data you get will tell you the Defects per Million opportunities, assuming your process is similar to a normal distribution.  If not, you can use another method of random sampling and looking at the means of the sample, that will force a normal distribution.  If you don’t have a software package, you can calculate a value of Z for the table in a statistics book (Note Z=Your (2 Days – Mean ) all divided by the Standard Deviation.  Looking up this value of Z will tell you the probability that your process will yield days of 2 or less, thus telling you the probability of defects.  You can use this probability to convert to defects per million.  You can use the same process to find the probability that the days will be between 2 and 3,etc. by calculating a Z value and probabillty of less than 3 days and subtracting the probability found for 2 days, etc.  This data would mean more to you than rating a defect worse the longer the days go.
    E-mail me if you don’t understand or have the software to do such an analysis.  Excel has a Z-Value formula, mean, and population standard deviation formula, which you can use to get these values.

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    #79803

    john beaudoin
    Participant

    Depending on the complexity of the projects, you will have some variation, but to be conservative, you should average 1 $75,000 project for each of the personell you mentioned.  This will give you about $1.425 million in savings after 1 year.  This is a reasonable number as we saved about $2.6 million with 1 black-belt, 3 really good green belts, and 25 greenbelts that were pretty green and needed a lot of help. (Hard and Soft savings combined).
    As to the goal, it is better to set your goal too high than too low.  It is a good motivation to work hard and put effort in the program.  The problem lies in who your Greenbelts are and who their managers may be.  You need to have management support that allows for these individuals to spend time on projects (20%).  If you don’t, you will be set up to fail.

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    #79800

    john beaudoin
    Participant

    Yes, you are correct.  It also sounds like Prince I and Prince II are very similar to the PMP methods.  Thank you for the explanation.

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    #79791

    john beaudoin
    Participant

    If you really mean $500,000 for each project, that is way off base.  Most Blackbelts are responsible for several Greenbelts and each will be responsible for 2 or more projects annually.  If the savings is roled out annually to a Blackbelt, this would make sense.  The only exeption would be if the company management has a particular project in mind that will warrant that type of savings.

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    #79790

    john beaudoin
    Participant

    I don’t know if I am speaking for the majority here, but I have never heard of Prince1 or Prince2.  You will have to explain more in this area. (I thought Prince went by a symbol now…..)
    Six Sigma closely resembles a TQM approach, which was much more popular in the early 80’s as they share a methodology for approaching problems and several statistical tools.  Both are based somewhat on Demming’s 14 points, and both are an interated method of continuous improvement.  The main difference of Six Sigma is that it ties Cost of Poor Quality and Savings $ financially with the projects and has a stronger focus on the transactional environment than TQM (Both work well for manufacturing).  Some added tools in 6-Sigma are Failure Mode Effect Analysis, Design of Experiments (DOE Modeling), Input-Output diagrams, and a Fishbone that adds the fields of Environment and Measuring System.  Both use the various control charts, flow charts, Pareto, and Histograms.
    If you look at Project Management Professionals in the United States, none of them really use a statistical methodology.  The focus here is on contracts, Gantt Charts, managing resources, time, and money.  Project Managers are handed a project to implement and meet a deadline.  6-Sigma focusses on Greenbelts trained in the tools of gathering and analyzing data to come up with the Cost of Poor quality of a process and to design their own project to make the improvement, with no budget, other than to possibly ROI some automation or improvement.  Greenbelts and Blackbelts really get no Project Management training with this regard, only statistical analysis tools and applications.

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    #79788

    john beaudoin
    Participant

    Our Blackbelt last year saved $2.6 million.  The trick is that it was not all done by him and it wasn’t all done on one project.  This is the result of all of the Greenbelts (25) working on individual projects (1-3 each during the year) being supported and guided by the Blackbelt.
    What role are your Blackbelt’s expected to fill?
    What is the sum of the Cost of Poor Quality for your facility?

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    #79555

    john beaudoin
    Participant

    A few six sigma companies cannot save the economy, as there are a lot of special causes affecting it right now.  However, Six Sigma is very important for companies to survive in the present economy.  Without it, companies will go out of business completely like CF Motorfreight, Lady Baltimore, Vanguard Airlines.  Others will go into bankruptcy like World Com, US Air, Kmart, etc.  The remaining companies are competing for a smaller supply of customers today, and the ones that are succeeding are the ones that have a strong 6-Sigma culture.

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    #79322

    john beaudoin
    Participant

    Bill,
    In correlating preventive costs to COPQ you have a few issues:  1) Are your preventive costs inspection?  If so, 100% of these costs go into your COPQ.  2) If purchasing new parts, keeping up maintenence on equipment, etc. goes into your preventative costs, then these don’t count as COPQ as these are basic needs to producing. 3) If you randomly sample for the sole purpose of maintaining control charts, you could argue that these count or don’t count as COPQ.
    Here are a few things to look at in determining COPQ:
    1) If you had no defects, what would your optimum process be and what would it cost to perform the process at the optimum?  You can compare this cost with your actual cost to get your COPQ.
    2) If you use inspectors, you could say “How many times do we inspect something only to find that the product was good?”  If the product is good, we have thus wasted our time inspecting it (This could be used for a DPMO on inspectors where every correct item with no defects is a defect for the inspector process). As your process improves, the errors for inspectors increase to the point of justifying to eliminate them, or to get them to take smaller and smaller samples.
    3) I’m not clear why you would go from COPQ to DPMO when you really need to go from DPMO to COPQ.  You can’t know COPQ without knowing DPMO first.  If someone knows otherwise, please let me know.

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    #79032

    john beaudoin
    Participant

    First, you have to get a job with a 6-Sigma company.  These companies may be encouraged in your interest in 6-Sigma, and send you to training.  The problem for you is, you need to have a job with responsibilities and process knowledge to take a project with you into 6-Sigma training and to complete the project to get certified.  As such, your first step needs to be to identify companies that are 6-Sigma companies and send your resumes to them, or find someone from this site to send a resume to.
    Second, your university or college should have had some coursework available that may or may not have had 6-Sigma listed.  I have found in going back to school for my masters that there are couses like:  “Statistical Solutions for Business”, “TQM – Demmings approach”, etc. that are really cources in how to use all of the tools for 6-Sigma.  If you haven’t already, you may want to put that coursework under your belt to use that knowledge in an job interview.
    Last, another approach is to look at project management jobs.  Most Project managers, however, need to have a PMP certification and you have to work in project management activities for 3 years and take training to pass the certification test.  (I’m currently studying for the PMP test as well) You also have the ability in school to get some project management background.
    Several large companies I know of using 6-Sigma are:
    Motorola, GE, Sony, Ford, 3M, Allied Signal, Johnson Controls, American Express, Kodak, DuPont, Johnson&Johnson, Lenox China, Toshiba, Texas Instrument, Apple, Circuit City, Black&Decker, Campbells Soup, Boeing, and Titleist.
    There are also many smaller companies moving forward with 6-Sigma.
    Good Luck!

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    #79030

    john beaudoin
    Participant

    The goal of TQM and Six Sigma are to improve quality to eliminate mass inspection.  You can’t inspect quality into your products.  With that said, in your case, if you do a project to eliminate the causes of the problem you find most at your quality station, here is what you have to work with:
    1) What do you do with the product when you find the problem?  The point here is, if you don’t have this problem anymore, you don’t have to do anything extra to the product.  If you don’t have to do anything extra, then you should have some COPQ between having to do something and not having to do something.  In addition to the inspection, does the product get reworked or scrapped, etc?
    2) Inspectors have a checklist of items to check.  If the screw loose is never a problem anymore, why would they have to check it?  (They could build a control chart and only check that problem 4 times a day (equal intervals during production).  It seems the less items they have to check or fix, the more inspections a person could do, or could go to a more random sampling as each defect in your process is worked on, which means they can work in other areas, etc.  These incremental labor savings will be soft, but as they build can turn into hard savings.

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    #78951

    john beaudoin
    Participant

    You have received a lot of good answers.  People skills is a common thread.  The role you want for blackbelts in your organization may be different from the role of BB’s in other organizations, so you will have to tailor the core competancies to the role.  Most companies expect the following criteria:
    1) Needs to have thorough knowledge of all of the Six-Sigma statistical tools.  To choose someone that can obtain this knowledge and keep it, a candidate should be good with math, algebra for understanding, and like playing with spreadsheets, data, and formulas.  Candidate should be able to work with Statistical Software such as MiniTab or some Excel add-on such as SPC-XL, or other software.
    2) Blackbelts usually are responsible for mentoring Greenbelts.  As a result, the candidate should have the ability to work with others, be encouraging, have patience, and good communication skills to pass on knowledge.
    3) Blackbelts often coordinate the larger projects that go outside the company or go between separate business units inside a company.  These large projects require some project management skills and again, more communication skills.
    4) Some of your Blackbelts may be required to advance their training level to Master Blackbelt.  Your company will get tired of spending money on high-priced consultants and you will want to train your own Greenbelts and Blackbelts.  You will want to choose individuals that would be up to this task.
    5) Presentation skills are good.  Most of these guys will be presenting data, analysis, and solutions to upper management, Finance, etc. to muster up the required support to implement changes.
    Some companies want all of their management to be blackbelted.  If these individuals understand the communication skills and project coordinating, but are not math/statistics gurus, you will be fine.  But keep in mind that these individuals will not be doing all of the analysis work, you will have to have others capable of that, whether they are greenbelts, engineering dept. types, etc.  Not every company is organized identically in this regard, so with that in mind, figure out the roles and then make a list of the things they will be expected to perform.

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    #78767

    john beaudoin
    Participant

    It sounds simple to me, let me know if I’m wrong:
    1) it seems you need equal force on both sides.  If you know you have unequal force, you must have a way to know the force on one side and the force on the other side.
    2) I’m sure the force does not have to be exactly the same to the nth degree to satisfy your needs, although they may need to be close to some degree.
    3) Use the force on the left side minus the force on the right side to calculate the difference in force.  Set a spec limit of some acceptable force difference.  Use this spec to analyze the capability of your process.

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    #78660

    john beaudoin
    Participant

    I was told the story from a blackbelt that a chemical plant that manufactured acetominifen, which should by white like Tylenol, started having product come out with a yellow color.  Chemically, it was OK, but the customer expectation is not yellow.  All shipments had to cease, thus the firefighting started.  A team was put together to analyze all of the possible things that could cause the yellow color.  Management decided to do all of them, which included replacing very expensive valves, etc.  The problem was fixed, but no knowledge was gained about the process.
    A month later, the yellow color came back.  Choices would be to go through the expensive process of replacing everything for production, or to use DMAIC.  The 2nd choice was done this time and it was discovered that the yellow color would be gone by adding an inexpensive and save chemical at a certain point in the process.
    The point is that fire-fighting can stop bleeding at an immediate cost, but there is also a long-term cost of the problems happening again.  DMAIC, which may take a little longer up-front, thus costing you in the present, will more than pay for itself in the future.
    If you need firefighting, don’t assume the fix is permanent when the fire goes out.  The point is that the fire doesn’t really go out and smolders to come back another day.

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    #78305

    john beaudoin
    Participant

    First, they looked at their transactional process by keeping a record with the documents to time them in and out as each department/person handled them.  This gave them data to know how much actual time was spent on the documents and how much Que time they took where they waited for someone to work on them.
    Next, they used an Input/Output diagram to identify all of the inputs and the output for the process.  Second, they flow charted their current process as it is.  Then they used the outputs of their Input/Output diagram, or now called SIPOC for Supplier Input Output Customer diagrams to make the objects of a Cause and Effect Diagram (Fishbone).  They made sure they used a team of individuals to make sure that they captured all of the sources of variation in the documents.  After that, they went through each step from their flow chart they created earlier and built an FMEA of all of the possible things that could go wrong, with their severity, rate of occurrence, and non-detectibility.  They used their RPN factors from a Pareto Diagram to go after specific improvements.  They also redesigned a flow chart process to try and speed up turn around time.  In some cases, the flow chart lead to changes in how the form was layed out, so make it flow smoother through the process.  Finally, new SOP’s were created and errors were tracked on a control chart to verify improvement.  Note:  They took samples to measure errors in documents and used routing to check turn-around time in advance.  You also need to define what your errors are based on customer expectations.

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    #78014

    john beaudoin
    Participant

    John, you have a great question.  You also have gotten some good answers.  Mike mentioned going after the high hanging fruit and to reach the ulitimate in 6-Sigma, Design for Manufacturing.  When you are GE and Motorola, you produce volume: so much so that 3.4 defects per million from a few thousand defects per million is still a considerable savings.  In many smaller companys, your opportunities may be measured in 100’s or 1000’s, and having one defect in that may give you a poor sigma number, but may be expected by your company.  Depending on the ramifications of your defect, it may not be worth the investment in training for 6-Sigma initially for such incident, however, do not forget the customer.
    Instead of focussing on cost reductions and manufacturing defects, focus on the factors that are critical to the customer.  Improve satisfaction levels of customers to better than 80%.  This needs to start with developing effective tools for measuring customer satisfaction levels.  Once you do this, you can grow your business, realized gains by increased sales and greater shares of customers spendable budgets, and if effective enough, you will producing to the likes of the Motorola’s and GE’s.
    Increased Revenue and customer base can be in some cases much more desirable than a decreased cost project, especially when most of the inefficiency has been eliminated.

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    #77953

    john beaudoin
    Participant

    Jamie,
    You can always count on Mike for some good advice.  Ron seems like a good technical guy as well.  In addition, I would like to throw out some ideas from over 10 years of experience in operations such as yours and a vast inventory and orderfilling background.
    First, Cycle Counting:  I have heard the same from Financial people that within a certain percent, cycle counting can come up with adjustments that make inventory wrong.  If you count small parts loose in bins, you have a good probability of making errors vs. if you count cases on pallets with the same tie on each layer, so depending on your operation, this could be valid or not.  The best cycle counting program would count the product and have a second count by a different person on every discrepancy.  If the second count agrees with the 1st count, make the adjustment.  If the second count agrees with the system, don’t make the adjustment, and if all 3 measures don’t match, do another count until you get a match (It is important not to put 2nd and 3rd counts on productivity – when there is a discrepancy, time is not as important as accuracy).  Bad inventory accuracy leads to bad buying decisions and either overstock or shorts.  It is also important to know your processes.  I found at our facility with Real-Time inventory counting (can count while picking going on) that a picker can pick units without scanning them out of a bin.  If we counted after the picker visited the bin, we would record a short and make an adjustment.  When the parts shipped, the system defaulted to remove the parts from the bin, even though the picker didn’t scan them out, now causing us to be over.  Your system may have quirks as well.
    Second, it sounds like you are manually measuring what most companies call a Fill Rate (Backorders vs. Good Orders).  It also sounds like you have been using this measure as a gauge to how well your stock situation is and purchasing department.  As most have stated, when this is done manually, you have a chance for errors and a good Warehouse Management System would provide much more accurate data as it is gathered electronically.  If this is not an option, you can still use your current method to gage an improvement compared to past history as the measurement system was just as bad last year as this year.  As Mike stated, it is best that you find something else to measure and use as a good tracking tool.  I’ll attempt to throw out a few ideas:
    1) If the pick sheets or tickets are already printed and you can’t find stock to go with them, you can keep copies of these sheets or have Inventory Control keep a short log on a spreadsheet or database as they look for product.  This information should be pretty good, and you may get a reason for the shortage as well.
    2) As customers place orders for product and the representative receiving the order is checking for availability up front, a database form could be used to key in SKU’s and quantities the customer wanted to buy that was not available, which could be used to print daily reports of Backorders or Shortages.
    Good Luck

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    #77605

    john beaudoin
    Participant

    Microsoft Access, which comes with the Office Professional Package with Excel, Word, Outlook, and PowerPoint will work great.  It can also be purchased by itself.  You will be creating your own database, data entry forms, queries, and reports, but it is not too complex of a tool to perform such operations.  Oracle is used for applications where the amount of records and fields are extremely large and where the database is shared by 100’s, if not 1000’s of users simultaneously, but if you are only tracking scrap in one facility, and only a few people will be using the database, Access will work great and for less than $200.

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    #77502

    john beaudoin
    Participant

    Some companies right now are going after CTQ’s (Critical to Quality) factors based on customer wants.  The main premise without going into a lot of detail is that by improving customer satisfaction levels, you will increase revenues due to repeat business, larger % of customers spendible income, etc.  These projects don’t always go after immediate hard or soft savings as much as what they do for satisfaction improvement.  However, there are limits on the costs of implementation vs. expected gain and benifit.

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    #77352

    john beaudoin
    Participant

    You could be wasting a lot of time as the others said…
    However, you should plot the daily numbers that are being produced now to see if they are in control.  Look for any points outside the 3 Sigma limits (Special Causes).  If you have none, you just saved time.  If there are some, you can look at them to see if there was an error in the process you mentioned that caused it.  If so, you can implement things to eliminate these.  Then, once in control, move onto something that will save you money and save your customers grief.

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    #77351

    john beaudoin
    Participant

    George, I have about 10 years of experience in this area with the 2 top discount retailers in the country and now an world know electronics parts distributor.  My first 6-Sigma project about 2 years ago was on picking accuracy (for which I went from a 4.32 to a 4.5 and saved $100K/year).  I too found that shortages and overages were the most common cause of error, and still is.  Our case is unique in that the vast majority of our lines to pick are for a quantity of 1.  One of our most common errors is to pick 1 instead of the quantity because of the sheer repetitiveness of the job and productivity requirements.  However, the system can be “dummied” up even a bit more to cut down on the quantity errors, where in fact we have a new scan gun/picking system on the way.  Many trade shows show such devices.  If you continue to remove steps where the picker has to think, you not only speed up productivity, but make less errors.  As I said, most of the quantity errors that I found were not so much from miscounting what to pick, but not seeing/using the quantity that was required, or from errors already in the stock (we have items as individuals, bags of 10, bags of 100, 1000, etc.).  An Example would be to use a pick ticketless system that requires you to look at a readout for a picking location (note: you don’t want the display to give too much info. at once or the picker has to mentally sort out the data on the screen).  Once the location is scanned, the part number displays, once the part number is scanned the quantity shows, the number for the quantity is picked, and also the quantity number is keyed into the system, forcing the user to concentrate on the quantity number.
    2nd, the next limit to accuracy is productivity.  If pickers perceive from evaluations, goals, hot topics at meetings, etc. that the Productivity is more important than the quality, then individuals will take shortcuts on quality steps to make the best productivity as possible, especially if rewards are given to those that exceed productivity standards.  Here is the delema:  Management is very unlikely to test the results of removing productivity incentives, it can still be tracked and those that are below 2-3 sigma from the mean should be evaluated, but Management likes the individuals performing at 120%+ and think that without the incentives, they could lose that.  However, it is possible that the quality improvements, which may lower productivity slightly, could give you enough benifit in saving on rework, customer satisfaction, inventory control and adjustments, phone time with customers to correct the situation, etc. to more than pay for the productivity.
    The trade-off:  At some point, the goals of productivity will conflict with the goals of quality.  There is a combination of the 2 that will be a minimum cost for your organization.  You need to identify what that is.  You can still be 6 Sigma in picking accuracy, but if the cost far outweighs the costs a a few errors, you may be doing just fine.  This will involve some FMEA.  If you pick frozen organs for transplants, 6-Sigma would be worth the costs to get it.  If you ship reels of IC chips by the 1000’s and you are shorting customers a chip or two once a week, you don’t have the same level of customer dissatisfaction.

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    #77247

    john beaudoin
    Participant

    You have a good question Brian, and not all companies will have the same answer.  Mike is generally correct, however, many resources point to the fact that you can look at opportunity costs.  Savings in Supervisor or Management time, when no head count will be lost, are defined as 6-Sigma Soft Costs.  In Mike’s example (which most Finance Managers would agree with), the assumption is made that the company is only concerned with the bottom line savings, hard savings.  You have choices of what to do with your soft savings, and one of them, as Mike suggests, is to reduce headcount, etc. to turn the soft savings into hard savings.  However, there is something else you can do with the hard savings, which leads toward a Cost Avoidance, or opportunity savings.  For example, there may be some projects you would like the supervisor to work on, but he is caught up with day-to-day opperations and the process of evaluating his/her employees.  Now that you have freed up 3 hours a week, he can now work on the project, for which the company will now get savings without having to add any additional labor or consultants.  You may also have some quality of leadership improvement if these types are averaging 60 hour work weeks and you can reduce it to 50.  This may show improvements in leadership turnover, attendance, etc. Supervisor’s etc. have limited time just like everyone else.  As a result, they prioritize the work they need to do, and stuff at the bottom of the list normaly never gets done until their Boss raises the priority of the event, and then something else moves to the bottom of the list.  Freeing up time may allow some of the things that never get done to finally be accomplished.  Even if you don’t put a dollar value for this in the project, it is worth mentioning some of the benifit you will get here.

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    #77161

    john beaudoin
    Participant

    I agree with your statement.
    Note on this software:  The Adobe Acrobat file with it comes with 99 pages of documentation one each of the functions explaining very nicely what the functions are used for, why to use them, as well as how to use them.  Note that most of us that use the software got a lot of the concepts and background during 2 weeks of Greenbelt training.  However, it is possible now that many companies are cutting a lot out of the programs and shortening them to a few days, thus the lack of background on the functions.

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    #77146

    john beaudoin
    Participant

    Norrin,
    All the answers you have seen are correct.  I just wanted to let you know that most of us are using software to perform such calculations and charts.  I think the majority out there from previous discussions prefers MiniTab, but depending on your companies resources, it may be out of reach.  Most companies with computers have the Microsoft Office package including Excel.  Excel has some formulas that will allow you such calculations, but better yet, there is software called “SPC/XL”, and it is available from sources such as the Air Academy.  It was provided to us along with our Greenbelt Training, but can be purchased very inexpensively.  It performs 80% or more of the functions that MiniTab does for 5% of the price, and will not only do your control charts, but FMEA, Sigma Levels, Paretos, all of the P Tests, CNX’s, DOE’s, etc. as well using very user friendly macros that tie into your Excel program.  This tool will greatly speed up your analysis.

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    #76154

    john beaudoin
    Participant

    Your points are well taken.  On my data, I have not seen an HR presentation yet that showed Salary as the number one reason for job satisfaction.  Salary is usually about 3rd.  Note I have been in the work force going on 13 years now in management, as well as I am taking night classes to get my MBA.  The top two are usually a positive, friendly work environment and a good relationship with immediate managers, which usually involves a teamwork environment, a good motivational fit with the company, satisfaction with rewards and recognition, and a feeling of self worth (money is a factor).  If someone offered me $20K more a year to move from Kansas City to Chicago, I probably wouldn’t do it, because family, etc. is more important to me than the extra $20K.  Even an extra $20K in the same city would not cause me to leave my company as there are fears of the unknown.  However, I am where I am today, not so much for the offer of higher pay, as for the dissatisfaction I had with the management of my previous employer, even though I loved the job I performed.  You just can’t tell as everyone is unique and has their own motivators.

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    #76150

    john beaudoin
    Participant

    John,
    You have receives some good advice to get you started on your project.  I wanted to make you aware that what you discover about yourselves may not be pretty, and you need to be prepared for the worst.  You may find that you have some very offensive supervisory or management staff causing issues.  If this is the case, someone will need to be prepared to make the big decisions of what to do with these individuals, whether it be training or something as severe as termination.  As someone else said, a lot of these reasons may not show up on your exit reviews, as some people are intimidated by management, and also know that they need your company as a reference for finding a new job, and don’t want to say anything that might endanger that.
    Some Tips: Pay attention to exit reviews, but don’t put much faith in the data.  Look for hidden meanings.  If you really want good information, do satisfaction surveys on all your existing employees.  Ask them questions covering catagories of:  Overall Job satisfaction, pride in the company name, are they over-worked, how do they feel about immediate supervisor, manager, company leadership, do they feel safe on the job, do they think there is good communication, are they satisfied with wages, benefits, rewards and recognition, etc.  This will give you good data that you can build employee action commitees with to solve real issues for the current workforce.  You can do the surveys every year to verify that improvement is being made, etc.  Just be prepared if a particular manager or supervisor gets singled out.

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    #76148

    john beaudoin
    Participant

    Pat, I’m affraid I don’t quite understand how your statement applies to looking to REDUCE turnover, other that you are all for it.  Unless you are implying that by optimizing your other processes, natural turnover is a good thing to have so that you don’t need to lay any one off as they quit on their own.

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    #76145

    john beaudoin
    Participant

    David, stick to your first statement that you have no data to back up what you think, and that based on your experience, this is your gut feeling based on your personal motivational factors.  Because you compose part of the overall population of workers, there is a good probability that there are, in fact, others like you in the work force.  However, there is a much stronger probability that there are large numbers of population that have different motivational factors than yourself.  After you have had a few college level cources in organizational behavior or human resources, I’m sure your would have a much better idea of what motivates a workforce.

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    #76124

    john beaudoin
    Participant

    Thanks for the info.  Most airlines have unionized pilots, flight attendants, and mechanics, however Delta Airlines for example does not have unionized ground crew, ticket counter employees, etc.  I thought Southwest was the same, especially when I heard their employees volunteered to work with no pay after the Sept. 11th attacks, when passenger volume dropped to all time low levels.  I assumed no union employee would be able to do such a thing.

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    #76039

    john beaudoin
    Participant

    Let me see what I can do.  I just completed an MBA course in TQM using the textbook the Demming Dimension.  I have also been a Greenbelt for a couple of years now.  Here is what I see:
    Demming: Has the 14 Points.  I won’t retype them here as anyone should be able to find them in the library or the web.  In general, Demming stressed the business philosophy should be focused on Quality, not Productivity and that Productivity would come by improving Quality as there would be less rework and no need for mass inspection.  Demming also emphasized that 95% of quality comes from management and not the individuals doing the work. (Management designs the process, is responsible for training, and also hiring of individuals and thus the output of the process is dependant on them).  Demming stressed to eliminate work standards, quotas, and other numerical goals for the workforce to drive out fear, to note that there is normal variation in the processes and it is not fair to reward individuals who happened to see good numbers due to luck of the draw in the randomness.  The idea is to eliminate internal competition between individuals and build a cooperative workforce.  Note Demming pushed for a philosophy of continuous improvement, a management environment that did not intimidate employees and actuall helped remove barriers that prevented them from doing a better job.  Demming’s background was in statistics, and thus he was a firm beliver in using statistical tools to help improve the business.  He stressed the use of control charts to determine if processes were in control and ups and downs were part of random variation.  He advocated using these charts to look at special causes, which could lead to break-through process improvements.  He also advocated DOE modeling.
    6-Sigma:  Focuses on Statistical tools for process improvement.  Management should use these tools or results from others using the tools in making business decisions.  6-Sigma doesn’t strongly advocate doing away with year-end evaluations, productivity, goals, etc. However, it is believed by the followers of TQM that by asking the 5 Whys and doing the detailed analysis that someone perfoming 6-Sigma analysis could show that there is no benefit to year-end reviews and other internally competitive reward and recognition programs.  As a result of 6-Sigma not including some of Demming’s “radical” philosophies in its program, I feel it is a much more successful program than TQM was to companies that tried it in the 80’s and abondoned it because they could not correctly implement it.  (Ford is one such example).
    Juran came out with his 10 steps, which simplified Deming’s 14 points.  Ishikawa also had some points which management should follow along the same lines.  KBM (Knowledge Based Management) and the Baldrige Criteria are also out there for quality philosophies.  The point is that if your company is ready to buy into a quality philosophy, in addition to changing how you manage your business, 6-Sigma is a tool that you can use to identify quality problems, causes, and to implement solutions for continuous improvement.

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    #75683

    john beaudoin
    Participant

    Kim, I don’t know how many items you are talking about, but if it involves hundreds of items or more, there are plenty of software packages out there that do those calculations for you, and are automated, changing as there are demand changes over time.  Logility is one such package that we use here.  There are many others that vary in a lot of different price ranges depending on the complexity that you need for your situation.  I suggest you look into what is available for you.  Many of these companies, in making their sales presentation, will even show you your return on investment.

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    #75512

    john beaudoin
    Participant

    BillyBob, do you live in the BoSox area, or are you just a fan of anyone that can beat the Yankees?  I would have guessed BillyBob was of Southern origin.  Baseball doesn’t matter much when your home team is the Royals.  It will matter even less if another Strike takes place in August as the morning media suggested today.
    To tie this back to Six Sigma, the local Brew-Ha-Ha is that we need a few hundred million to renovate some already beautiful stadiums to insure we keep our baseball team.  The sad part is everyone is under the assumption with no analysis that the new stadium will bring additional revenue.  I haven’t talked to a sole that said they would go to any additional games in a new stadium vs. the old.  One media guy indicated that the point of the new stadium was not to increase attendance beyond the 15,000 fans per game we might have now, but to increase the spend per existing fan.  If the average family going to a game now spends $150 at a game, it would be extremly unreasonable to me to expect that figure to double to $300 because of a new stadium, irregarless of the restaurants, souvenier shops, and other outlets they may add.  To me, I think they are much better off going for attendance improvements.  Revenue will grow by doubling attendance.
    Is any one out their doing any six sigma projects related to Professional Baseball?

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    #75507

    john beaudoin
    Participant

    Are you serious?  I figured he was getting bored with some of the recent ho-hum message threads.  I know I haven’t seen much worth responding to over the past week.

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    #75506

    john beaudoin
    Participant

    Kim, I have been an inventory control manager for 5 years prior to being a project engineer with Six Sigma now under my belt.  Our facility has over $50 million in inventory, and projects to reduce inventory have been the norm here.  Note that our inventory is not for manufacturing purposes.  We have never applied the tools you have mentioned to inventory reduction.  However, we have several key measurements in place:
    1) We have a cycle counting system in place that performs the following:  Cycle counts about 20,000 parts a month (We have about 130,000 different parts).  We use an A,B,C method (Stratification of Inventory based on activity).  A’s are counted 4 times a year, B’s twice, C’s once.  Every month, we know how many parts were counted, how many bins had the incorrect count, how many pieces were counted, how many pieces needed adjusting.  We also perform a random count of 200 bins each week to obtain the same information over the full range of our parts (A,B,C,and D).  A simple run chart of such data with 3 sigma control limits will tell if the process is in control and if the process is meeting the goals of the company (Your Spec Limits, which in this case the Upper limit would be 100% accuracy and the lower limit should be determined by benchmarking, past history, etc.  Right now, our lower limit, which used to be 96% bin accuracy 3 years ago is now 99% due to process improvements.  Our piece count accuracy is just over 99.5%.
    2) Another measure of inventory is normally Months-On-Hand.  In some faster JIT environments, this could be weeks-on-hand, days-on-hand, or even hours-on-hand.  As someone else suggested, this figure has the component of sales in it.  If inventory value is constant, and sales double, your time-on-hand figure will be cut in half.  Likewise, if sales drop 50%, your time-on-hand will double.  Note that most companies that purchase inventory use some type of planning software that notices patterns and trends over time so that as sales increase for parts, inventory also increases for the part and as sales decrease, P.O. quantities for the part also decrease or in some cases no P.O.’s are generated at all as a part becomes over stocked.  Tracking Time-On-Hand is a good number to use for your final project tracking run chart to show that your project both reduced time-on-hand and the process is in control.  Time on Hand is usually Total Inventory Value/Cost of Goods Sold (for some time interval, usually months).  This number tells you how much time it takes to deplete your inventory to Zero.
    3. There are several factors in a plannng system that determine how much inventory you buy.  There may be some good opportunities for DOE models on specific parts to see inventory impact.  These factors include: The person buying with their training, experience level, and familiarity with the items purchased, The lead time for the parts as well as it’s variability (Time from order to receive), Variabiltiy of demand (Can be monthly, weekly, or daily depending on order cycles), The targeted Fill-Rate Percentage (What percent of all customer demand do you want to meet – The higer this number, the higher your safety stock levels will be), Predictability of sales for new items and also last-time-buys (used in the repair parts industry to provide model repair support over the life of the unit even when the parts will no longer be in production).  Inventory Accuracy also plays a part.  If your inventory accuracy is 80%, Purchasing may need to buy additional inventories to insure that fill rate will not be impacted by unforseen stock shortages.  There may be other factors as well, but these seem to be the largest.
    4) Last, in looking at inventory accruacy, identify sources of inaccuracy like:  Receiving counting what is received correctly, orderfilling picking the correct quantities, counting proceedure perfomed correctly, scrapping counts done properly, pilferage of high value items under control, proper proceedures for handling mispicked items, lost and found items, customer reported overages and shortages, etc.
    Please follow up if you have any additional questions or concerns.
     

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    #75317

    john beaudoin
    Participant

    Fred, I think you are missing something here:
    If some one asked you what the good and bad points were for a 12V cordless Makita Drill, you might say that it is very mobile, seems to have the torque you need to put in large deck screws or even drill through some amount of concrete.  It’s pretty reliable and the battery lasts several hours under industrial use.  The bad point of the drill may be that when a battery runs out of power, there might not be much you can do with it.  No one is going to say that the bad point of the drill is that you can’t pound nails very efficiently with it, or it takes forever to cut a sheet of plywood in half.  For the same reason, you can’t say that a negative of 6-Sigma is that it doesn’t work well for a job it wasn’t designed for.
    My 2nd point is that asking the shop floor to improve your processesses are great, but that technique alone is not going to get you to 6-Sigma.  You may get to 3 or 4 sigma.  If you only make a few thousand units a year, this may be OK, but if you make millions of units, you are going to be throwing a lot of money away.  You need control charts and statistical analysis to get to 6-Sigma, PERIOD.

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    #75273

    john beaudoin
    Participant

    You mentioned all of the very positive things about 6 Sigma that you researched, and they are all correct.  You also asked if there is a downside to implementation in a company, and there is one and only one….. It is HARD TO IMPLEMENT; not that the steps to implementation are hard to comprehend, but that each step is very difficult in that it takes a great deal of effort and persuasion to accomplish.
    You can’t train a hand-full of individuals in a company and expect that these individuals on your pay-roll now qualify you as a 6-Sigma company.  You have to have, as someone else here has stated, LEADERSHIP.  The leadership in the organization must be thoroughly convinced of the merits and opportunity of 6-Sigma.  After this step, every employee of the company must be converted to a 6-Sigma way of thinking about their jobs and processes.  Along with this you need good training and mentorship.
    Note because of the expense of training, etc., a poor implementation can be a large waste of resources for an orgainization.  Once a committment is made, it is important to stay the course and make it work.

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    #75271

    john beaudoin
    Participant

    If a contact center calls me at home during dinner, than I’m all for a call center…. but seriously now,
    Saturn contacts customers after providing service to their vehicles.  In doing so, they can collect valuable customer data as to how satisfied customers were with their service.  If they were to wait only to receive a call from a customer that complained or the rare call of commendation, then they would be losing a lot of valuable feedback and hopefully prevent the loss of data from the customer that just walks away and silently refuses to do business with you again.

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    #75196

    john beaudoin
    Participant

    Your right, At least my answer is good, but I noticed Tony was the first guy to put something comprehensive and close to the mark down and thus,  I skimmed over some of his detail.

    0
    #75186

    john beaudoin
    Participant

    I’m really surprised at how many people have fallen for the trap on this one.  Tony is exactly right.  This problem was given to us during Greenbelt training some years ago. The part of the problem that throws everyone is that showing curtains, boxes, something of choice that do not contain the “Prize” is not done randomly.  If you have 100 boxes, and one prize, and you chose one box and someone shows you 98 empty boxes, will you keep yours?  Do you think you have a 50/50 chance eitherway.  The answer is you should definately switch.  The reason for this is that you only have a 1 in a 100 chance of selecting the box with the prize.  The odds of this never change.  When someone now shows you 98 empty boxes, what they effectively do is give you a 99 out of 100 chance that the other box contains the prize.

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    #75139

    john beaudoin
    Participant

    3.4 defects per million opportunities is the numerical definintion of 6 sigma, which refers to 6 standard deviations from the mean of a population and also includes a 1.5 sigma shift, which occurs over time.
    You can use it in describing either inbound quality or outbound quality.  Simple as that.

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    #75075

    john beaudoin
    Participant

    Ally, thanks for the good thought provoking post:
    I have a question; why do you suspect that the majority of companies out of a hundred could not tell you the cost of getting an order to a customer.  I have worked for 3 major companies:  Kmart, Wal-Mart, and now Sony.  Out of these 3, every one of them could tell you exactily what it costs to get orders to stores and customers.  Usually within pennies.  What evidence have you seen to make your assumption?
    I do believe in your overall point.  I have seen through feedback in this discussion room and by teachings in the MBA program I’m attending that there can be an emphasis more on reducing costs of existing goods and services over looking at customer needs.  Many 6-Sigma projects I have seen focus on dollar savings, by improving quality in internal systems.  This can be a good thing, but if your output is not meeting your customer needs, than it may be to no avail.  I think our facility is realizing that the biggest gains of 6-Sigma are to target customer satisfaction levels which will cause increased market share and profits, which will far excede any $100K cost saving projects in value to the company.
    There is a direct correlation between high customer satisfaction scores and repeat buisness, ability to gain new customers, and the ability to capture a larger percentage of customers spending money.  I believe more and more American Companies are realizing this today and are making such changes.

    0
    #75073

    john beaudoin
    Participant

    Bill, buy the book (Amazon.com was a good place for us) “Customer Centered Six Sigma: Linking Customers, Process Improvement, and Financial Results” by Naumann and Hoisington (ASQ Press).
    Part III of the book is on “Capturing the Voice of the Customer” and it contains the following chapters:
    3. Global Customer Satisfaction Surveys
    4. Transaction Surveys
    5. Customer Loyalty Analysis
    6. Complaint Management Systems
    7. Building Relationships with Key Accounts.
    Very Good Stuff!  I was recommended this book from this very discussion forum about 6 months ago and have found it to be a very valuable resource.  I showed it to our marketing guy and he bought a copy as well – and his department lives for customer surveys.
    Amazon is a good site in that you can actually view the entire table of contents of the book, and the back cover, etc. on-line.  Irregardless of where you find it, you can get a good look and overview from Amazon.  One final note, I tried buying the book from Hastings.com as it was $10 cheaper, but it was on backorder as I waited for 2 months so I canceled my order and got it from Amazon in about 3 days.

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    #75072

    john beaudoin
    Participant

    Your motivation to learn is good.  The problem with your situation is that you stated that you are “not working anywhere at present”.  This is not to say that someone may still take your money and teach the tools, however, most certification processes, which may vary from company to company, require you to actually do a real project on the job.  If you are not working, you obviously cannot perform the required project that will certify you.  Your best bet is to find a 6-Sigma company to work for that will be willing to send you to training as a condition of employment.

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    #74972

    john beaudoin
    Participant

    Mike, as the one you stated, there are a lot of good examples of using Lean Processes, Using Pull instead of Push, etc. to produce substantial reductions in inventory and clutter.  Selling Bowling Balls, Tupperware, Rubbermaid, etc. are great because no one services these items 3 years down the road.  They end up as garage sale fodder or worse, landfill.
    If you build Appliances, Automobiles, Computers, Camcorders, etc, you start moving into the durable goods realm.  There are some unwritten rules that are followed by most companies hold off government regulation.  These imply that if you build a product, you will agree to service it for at least 5 years.  For automobiles, it may even be longer.  Note, in some cases, if you don’t have repair parts, you must offer consumers pro-rated discount toward new replacement product. (Kind of like buying tires with treadware replacements). 
    It would be a huge breakthrough (Note Toyota has accomplished this for many parts), if we could fabricate parts as needed on old models.  Unfortunately, circuit boards, picture tubes, etc. require very specialized processes to produce.  Small runs of parts can be a lot more expensive than storing available parts for several years.  It can be done, but is very difficult to predict the failure of parts as designs of product change every 6 months anymore and engineering improvements of old designs and poor quality in new designs add a great deal of noise to the prediction.  Where many companies only need to forcast for a month of sales, we have some leadtimes from over seas as long as 22 weeks and also must forcast discontinued items for several years.  It doesn’t matter who owns the inventory in our situation, the problems are still the same.
    Many companies use complex and expensive (more than $1M) inventory planning/purchasing systems with complex forecasting models.  Models are based on forcasting by monthly sales, by looking at lead time and its variability, and by looking at the desired fill rate you would like for the part.  These systems still have limits based on the current processes.
    My point is that to minimize the variability and effect of demand spikes, demand drops, etc., Minimizing Lead Time is the key.  If you are ordering today what will be arriving 3 months from now (usually the case for us), a drop in demand can cause you to be severly overstocked.  A spike in demand can cause you to run out (Note: Playstation II Memory Card Shortage).  Last, Overall safety stock numbers are high.  Note in any Lean Process, the lead times are in days or even hours.  When the bowling ball factory has demand today for 1000 balls, they can make 1000 balls by tommorrow and replenish their supplies within hours of using them up.  JIT is used by retailers and automotive manufacturers.  It all boils down to getting something as fast as you need it.

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    #74934

    john beaudoin
    Participant

    Mike, keep in mind that inventories for manufacturing are a little different than finished good or spare part inventories.  I don’t think he was referring to manufacturing inventories (raw matierials), which are planned a little differently.
    The big difference is in the forecasting model.  Most good manufacturers, like the big automakers and even in electronic manufacturing, the parts arrive at the factory, in most cases on the day they are needed.  Factories get marketing input and can plan what they want to produce on a production run.  You make the product and hope that consumers will buy it based on the research your marketing people perform.  (Note this is different in small operations where the customers place orders and you build the product as you have orders).  When you buy inventory this way, you know your demand and you just have to make sure you have all of the components needed to produce the object.
    When you deal with retail finished good inventory, or even repair part inventory, the demand is never constant, the forecasting is never accurate, and the lead time minimization is the one real controlable thing you can go after.  Note in this area, your lead time is usuallin not in days, but in weeks or months.  There are a lot of other things you can do in modeling part failures up front to aid in forecasting (in the case of repair parts), better modeling a last-time-buy (When the manufacturer will no longer make the repair part, but for customer support, you need to insure you have enough to last 5 years after the model was discontinued), and also modeling the initial request for purchase.  The modeling of any of this stuff is very complex and the Pareto will show that the best way not to over purchase, respond to spikes in demand, etc. is to lower lead time.
    I worked for both Kmart and Wal-Mart Distribution and Logistics, as well as the Sony World Repair Parts center, and I can tell you that all of these companies put a great focus on Lead Time.  So much so that even stores receive Daily Replenishments from Distribution Centers as opposed to weekly or monthly shipments, which tried to minimize transportation costs.  Most Large Distribution companies, which used to have docks for Rail Car deliveries of bulk items 12 years ago have now abandoned rail and gone to truckload and even LTL shipments.  Companies allow vendors to see their inventory levels to help them smooth production demand and deliver smaller shipments more often to reduce inventories.
    Some of the changes than have been implemented in finished good inventories are now spilling over into manufacturing.  GE for example has a program to monitor inventories of plastic chemical stock at manufacturing facilities and to provide timely replenishment accordingly.  Theis helps the factory smooth production and better plan by seeing real-time demand and also helps the manufacturer by eliminating the need to worry about running out or buying too much.  Again, fast lead times and real-time visibility are involved.

    0
    #74930

    john beaudoin
    Participant

    In defense of the Air Academy, I want to say that in looking back, they probabably did not state that they invented six sigma, but in leaving the training, my perception was that they may have.  I vaguely remember them talking about some of the founders of their company and some of the authoring they have done.  They also talked about the history of Shewhart, Demming, Juran, etc. They also talked about the Motorola people as being one of the early successful implementors.  But I do not recall them giving credit of the very first 6-Sigma program to anyone else either. 
    Stan, please respond with some of your background and experience.  This will help all of us to quantify the knowledge you have to make some of the comments you have posted.
    Also, I can’t speak for other companies that the AA has consulted in regards to 6-Sigma, but I think they have done a great job with Sony Corporation of America.  If you think otherwise, please explain.

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    #74906

    john beaudoin
    Participant

    Thanks Mike, I always thought Motorola was the 1st company to implement 6-Sigma, but I thought in one of these discussions about 6 months or so ago that someone was claiming a company before Motorola was using 6-Sigma, but I never heard of the company before, so if it is true, I don’t think it was a fortune 500 company.
    My instructor from the Air Academy was pretty new to their organization when he did our training, Kevin Weiss.  He was from GE, and had been involved heavily in their program.  He was also an engineer on the nuclear propulsion unit of a submarine in the Navy before joining GE.
    The following is from the Air Academy Website:
    Air Academy Associates is a leading-edge, Six Sigma quality management consulting firm which provides innovative consulting and training services, public workshops, statistical publications, training aids, and software to a variety of clients throughout the United States and abroad. Air Academy was first established in Colorado Springs in 1990 by Stephen R. Schmidt, Mark J. Kiemele, and Ronald J. Berdine. Since its creation, the company has gone on to become a leader in Six Sigma training focusing on the areas of Knowledge Based Management, Statistical Process Control, Design of Experiments, and Advanced Statistical Tools for industry.
    12 years is a long time to be involved in 6-Sigma, even if you weren’t the first.  What is really amazing is that it has taken this long to be a term that some people may recognize (there are still a lot of individuals that I run into that haven’t heard of 6 Sigma).

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    #74874

    john beaudoin
    Participant

    Thank you,
    As to the variation cold virus, part of 6-Sigma is to design robust processes so this doesn’t happen.  For example, if you discover variation due to poor employee training, so you retrain all of your employees on the process, what you will see is a vast improvement that starts to deteriorate over time.  Training sometimes is a temporary fix.  If you can design a process that has little room for individuals to make a mistake, you will see your improvements sustained.
    Good Luck with your program implementation.

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    #74822

    john beaudoin
    Participant

    This has been our mission last year and again this year.  We can’t share our projects, but let me give you a few things to look at:
    Inventory is a function of: How often you purchase inventory, the Lead Time (time from purchase date to delivery date), the Fill Rate that you wish to achieve, and the variablility of your demand for the inventory.  Some companies use a planning system, which looks at many of these factors and calculates a Safety Stock Level.  Also by consolidating inventory to one location, you reduce inventory because variation for each location has been combined into variation at one location, and overall safety stock levels are reduces.  Scrapping Excess and Obsolete and better yet, making a final buy such that you can scrap less helps.
    Goals to reduce inventory: Reduce Lead Time, Buy more often, Smooth Demand, Keep one location for inventory.  If you have no up-to-date planning system, buy one.
    Savings is only the interest on the inventory and a percentage reduction by reduced excess+obsolete mark downs and scrap.  Unless you can reduce your warehouse size or reduce workers as a result, which almost never happens.

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    #74821

    john beaudoin
    Participant

    Bill, you have generated a lot of conversation.  This topic has come up several times in the past.  One of the main reasons it becomes an issue is because of the expense of proper training, the variation in how companies implement the program, the training itself varies among various consultants, there is no standard certification process among all companies using 6-Sigma, there are 2 types of belt sets, standard and transactional, and maybe a few other issues I failed to mention.
    Many colleges teach TQM, Statistics, etc., but do not quantify these as 6-Sigma programs.  Many Statistics classes are good at teaching theory, but not application.  In addition to 6-Sigma, there are Lean Thinking models to follow, such as the Toyota model, there are ISO programs, which frow what I heard are a joke in that they only require you to document your existing processes, etc.
    Now, here is the point… If you have knowledge of how to flow chart (I mean to do are really thorough and detailed job here), you are able to brainstorm with a group and identify all of the inputs to a process (usually in creating a CNX or Fishbone Diagram, and asking the 5 – Whys), if you can identify which imputs are considered Noise, and normal variation, which ones are constants, and which ones are controlable variables, if you can perform a DOE model (Design of Experiments, where you change variable, sometimes multiple ones at a time and measure the effects of the output), then you can reduce variation in your processes, put them into control (requires use of control chart with 3 Sigma Control limits), and you can compare your controled process to your customer specifications.  If you can identify special causes, look at their effect on the process, and possibly improve your process by making a positive special cause reoccur, then you can really make headway in improving your business.  If you can identify costs and prioritize issues by using the FMEA (Failure Mode Effect Analysis Tools) then you can focus on the most pressing issues.  If you can Pareto defect causes, you can use the 80-20 rule to remove the largest sources of defects.  If you know your measuring systems can produce replicatable measurements (MSA Gage Capability), etc. etc.
    THEN – You don’t need 6-Sigma Training.  If you can’t do some of these, or don’t know what I’m talking about, then you will benefit from 6-Sigma Training.
    Bottom Line – Someone in the discussion said that it is important to send the right personnel to training.  You must have a vested interest in improving your area and a willingness to spend 20% of your time on projects.  You must have a company where Management fosters the growth of 6-Sigma, provides the time for those to do the projects, and has a vested interest in insuring roadblocks to completing projects can be removed.  If you have this environment at your work, it is worth training the selected individuals, if your work has the deep rooted belief that this is a FAD and it will go away, then you will not get support and the training will be wasted (Not for the individuals trained as they can switch to a company that cares, but wasted in terms of the company paying for the training).
    This is My Opinion.

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    #74819

    john beaudoin
    Participant

    Mike, my experience is that most any consulting firm wants you to believe as a client that they were the creator’s of the program, or have been involved since the beginning.  The guys at the Air Academy told us in class that they invented it, that it was based on the teachings of Demming, Shewhart, and Juran and combined with their statistical prowess as a bunch of retired air force personnel that worked with optimization in the military.
    What kind of historical evidence is there to prove one persons case or another.  I’m not doubting your word, but until today, I never heard of Mot.

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    #74715

    john beaudoin
    Participant

    I read the article and remember seeing some mixed emotions about it.  I am currently taking an on-line class from PMI to study for a PMP certification test (Project Manager Professional).  I have to say that the format is not working well for me as it is too easy to move other tasks to the importance scale, and thus the internet thing gets put off.  Also, it might be cheaper than in person classes by I’ll tell you that it was still $1600 for the class, and the teacher only needs to spend a few minutes a week answering e-mail questions.  To me, this is a way for a consultant to come in with extremely low overhead (no teachers traveling, etc.) and to only save the customer 10-20% off of the regular full-blown pricing.
    Wal-Mart is very successful with on-line learning in general.  This is because every job function in the store or distribution center has an interactive training/video/computer module covering it.  They designed the entire system in-house.  For a company that is large enough to initiate its own training programs, the e-learning of 6-Sigma may have some great value.  Not only is travel for either party eliminated, but the in-house costs drop to managing a web site and for the expense of some printed material and CD’s.
    Some will argue that there are also advantages to those that have time constraints or must travel a lot, and thus the e-learning is the only way to get training.  But, if you are one of these kinds of people, you are not going to have time to work on any 6-Sigma projects anyway, and training would be a waste of resources.  (Just My Opinion based on seeing individuals sent to real training cources out-of-town and got pulled before they could finsh training or finished the training and took 2 years to get their first project completed due to time constraints.)

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    #74681

    john beaudoin
    Participant

    Obviously you have never used the Excel add-in SPC-XL software (a bunch of well written macros with user interfaces, etc.)  A lot cheaper than MiniTab and does most any 6-Sigma task just fine.  Name me anything you think MiniTab does of 6-Sigma use and I’ll bet SPC-XL does it as well.

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    #74680

    john beaudoin
    Participant

    All Mike meant was that this subject, titled “One Person (BB) vs. the Company’s Problems” is showing up as responses to the message thread of the subject “Thank You Neil, the Rest of you Amaze Me”.  It may not be the guys fault, it could be an error in the web site.  I tried changing the subject in a reply before, and it won’t post, so it must be some kind of system issue.

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    #74679

    john beaudoin
    Participant

    You are correct in being cautious about this new E-Blackbelt training.  Some company offering this has been very savy in marketing their consulting offering theis E-belt training.  The big buzz words in business right now are E-Business, E-Commerce, E-Trade, etc.  It sounds like someone determined that if they offered E-6-Sigma they are taking 2 Buzz words and combining them for double the effect.
    There may be some value in that the company offering such a service has employees with a great deal of experience in the E-Commerce area, MBA’s with majors in Information Technology, etc., and they have 6-Sigma training to boot.  However, if your company already has a lot of capable IT personnel, then any transactional kind of 6-Sigma training will be good.  The tools are generic, and your already skilled people will have all kinds of light bulbs going off on how they can apply the tools to what they do every day.  If someone is charging more for the E-6-Sigma than the regular consultants, you may or may not be getting bang for your buck.
    To be honest, I have never heard of an E-Blackbelt until today in reading your message, and I have been a subscriber to this forum for a year now, and have been involved in 6-Sigma for almost 3 years.

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    #74678

    john beaudoin
    Participant

    You are exactly right, and have also shown why sample size hangs up a lot of individuals.  There is no real simple way to determine sample size.  However, I have heard that there are software solutions to such.  Are you doing these calculations by hand (calculator) or on a spreadsheet?  Do you know of any software such as Excel addins or PDA (Palm Pilot) software, etc. that would aid in this.  We picked up a lot of documentation on ANSI standards with a slide rule type calculator and some other tables and things, but wanted something a little more solid.

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