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Deployment Average Savings

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  • #47029

    Darwin
    Participant

    I just read an article concerning deployment failure. I wanted to make two points:
    1. Author explained he/she has seen as much as $175,000 in average savings in a deployment wave. I currently find myself in a first wave deployment and average savings are at just under $1 Million. Everyones thoughts on potential concern here that this can not be sustained or actually realized or did we actually have that much opportunity??
    2. Anyones thoughts/general feelings while you were a BBIT during a company deployment; Training, learning, support, resistance to change, company culture, certification, testing, etc.

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    #156236

    Waskita
    Participant

    Agree and disagree for point#1. The best answer is actually : it depends.
    Amounts of benefits/opportunity will depend of types of industry we’re talking about. If we’re talking about hotel industry for example, many opportunity for process improvement will result in increased guests’ satisfaction (soft saving) despite some other projects that could also deliver hard saving.
    Even if we’re comparing 2 manufacturing companies which are about to start deploying 6 sigma, the opportunity lies in front will depend on the scale of the organization,product volume, cost of product, etc
    Bottom line, i’m a believer that opportunity will always be huge for any organization at deployment phase on six sigma but opportunity is not always about $$$.
    The more matured an organization in six sigma deployment, the opportunity will be even tougher coz we’re no more talking about removing tips of the iceberg.

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    #156237

    Mike Carnell
    Participant

    darwin,
    The $175,000 was a low volume manufacturing situation. May or may not have anything to do with you.
    The benefits you get are what they are and are a function of a lot of business factors i.e if you are processing say 25,000,000 credit card transactions per month and you take 0.01 per transaction out (you can do that with your eyes closed) then you are at $3,000,000 per year. Volume can make the numbers run very high. If you are in an industry that rents a piece of equipment for $500,000 per day. Volume doesn’t matter but down time does. You look for leverage in the business model. You also use those high numbers to subsidize a lower yielding project such as a safety project which if frequently difficult to create hard numbers around. If you balance the mix the business stays satisfied with the ROI and you get a more balanced portfolio of projects.
    Is there an end to this? Only if you change the way you develop processes and products. DFSS or whatever you want to call it.
    You will get lots of thoughts on how important the stats are. They are to some degree and software such as Minitab take the risk out. If that was all there was to this you don’t train BB’s and just hire statisticians. There is a long history of that not working. Read Bossidy’s book on execution – that is what it is all about.
    Just my opinion.

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