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Six Sigma Savings Mambo

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Viewing 11 posts - 1 through 11 (of 11 total)
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  • #45601

    Be Real
    Participant

    It’s that time of the year when we have to fabricate savings to justify the Six Sigma’s team’s exisistence, any tips!
    Who else finds themselves in this position besides the GE folks, but then the GEers are too busy trying to justify NPS’s value.

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    #149429

    NewBee
    Participant

    The best way to get ahead is to have the project sponsor inflate the estimate of doing nothing or calulating the savings based on a forecasted, unbudgeted expense, not actual expense.
    ;-)Afterall, this isn’t a sarbanes oxley issue.

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    #149442

    On the hook
    Participant

    We need to come up with some quick vcp benefits. Do you have some suggestions?

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    #149444

    Be Real
    Participant

    You’re in luck if you helped out marketing or development (showed them how to use excel, created a chart for them, anything), on the projects that they used your data, claim their benefits as well. If they claim a 20% improvement in leads that generated $X in revenue, claim the revenue.
    Another tip from the company that brings bogus benefits to life.

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    #149450

    Be Real
    Participant

    Here’s another classic benefit.
    I’m sure you probably worked on a project that created excess capacity, some would call it Muda/waste. I know the extra capacity will be used for “growth”
    As a revenue benefit, calculate how much more revenue the company could have made if it used the excess capacity you generated. So if the stars aligned and the system was balanced and sales was selling how much revenue would that have created.

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    #149485

    Be Real
    Participant

    Here’s another classic.
    When calculating your current defect rate in define or measure, make sure you make it worse by throwing in that pesky 1.5 shift.
    When calculating your improvement, somehow forget to add in that pesky 1.5 and there you go, huge improvements.
    If anyone asks, tell them you figured out a way to control the process so it’s mean won’t shift anymore.

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    #149489

    IMA6SNUTCASE
    Participant

    I’ve just had an idea.  Tell them your processes were all over the place but you have normalized them using Box Cox, so now they are fine.  Use the transform factor to multiplied by old costs to calculate savings.

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    #149714

    Ram
    Participant

    Dear Newbereal, Nutcase et al, 
    Obviously you are committed practioners who have been around Six Sigma long enough from your insightful albeit sarcastic comments. Does Six Sigma situation in your company really this dismal and desperate?  It is not a rhetorical question but a real concern for me. Six Sigma was a turning point in my professional life and wasan antidote to corporate cynicism! It is sad to hear waht I hear from you.

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    #149719

    Six Sigma Shooter
    Member

    I humbly submit that you refresh your knowledge of Deming’s 14 points and 7 deadly diseases (pay close attention to number eight of the 14 points).  Six Sigma is a thing and can do nothing without people.  People will use or abuse the tools and the way they figure their “savings.”  In an atmosphere of fear, people do strange things to survive.  Then give some deep thought as to where the fault truly lies and why.  It all comes down to the people who manage and “lead” the business.  Then your savings dance – or “mambo” – and the reasons for it may become clearer.  Hint: it’s not the tools and methodologies.
    Next, refresh your understanding of The Goal by Eli Goldratt and the Theory of Constraints.  It addresses your capacity issue, spot on.  If you have gained capacity without growth in your sales and markets, maybe that’s where one can focus their efforts.
    When tools, methods are  used and cost reductions are figured without a thing called Profound Knowledge and in an atmoshpere of fear, you will get what you have apparently experienced with Six Sigma.  Hint: not all Six Sigma efforts are garbage, but many are.  Again, go back to the reasons why and who is respnsible.  Hint:  try using the 5 Whys and get to the root causes and stop falling prey to post-hoc fallacy syndrome.
    What you describe in your anti-six sigma postings maybe the result of management’s short term thinking, push for “instant pudding”, lack of profound knowledge of their business, and the fear they have created within their organization.
    Lastly, if you have excess capacity and you do not need to operate the machines and processes with all of their ineffieciencies and waste, you get real cost savings, not just the hoped for ones you describe.  A little deeper dive into the true savings from your scenario might prove beneficial, and enlightening.  In my opinion, your thinking is about a half an inch deep and miles wide, as my old and wise sensei would say.

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    #149725

    Be Real
    Participant

    Ram, the situation isn’t tragic. We are getting modest improvements from our six sigma projects. An interesting point is that Six Sigma was intended to be a strategic initiative with all the bells and whistles but in reality it’s just another tactical function.One of the problems is management’s lack of integrity. The benefits from the projects are being grossly exaggerated in terms of dollars. The employees especially the team members realize this, yet managers, in some twisted way, believe that pumping up benefits adds credibility to the program.It’s truly amazing to watch Sr. managers report on benefits that they helped distort. The managers reporting these outrageous numbers have destroyed their credibility, no one can believe what they say, as well as the Six Sigma program’s integrity.Unfortunately, this is common within the industry. Dominion Resources is going through this also.My situation isn’t uncommon.Happy New Year, let the real mamboing begin.

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    #149728

    Ken Feldman
    Participant

    BR, I finally agree with you.  Yes, it is common for Management to inflate the savings from LSS.  That is why I mentioned in a previous post the silliness of capturing Type 1, 2, 3 and 4 benefits.  Granted, types 2, 3 and 4 make an organization “better” but you can’t really spend them so how can they be counted towards the ROI from LSS?  Remember, metrics drive behavior.  And when a Champion is evaluated on the “savings” of their LSS teams it shouldn’t be a surprise that they seek to maximize that number.  Personally, if the Type 1 benefits don’t cover the expenses, then you really haven’t gotten the savings you need.  The other Types are great and should be viewed as added benefits.  Now it’s time to CONGA!!!!!

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