Six Sigma. a way to reach Operational Excellence and get Out of the Crisis. Alessandro Brun Politecnico di Milano

Transcription

1 Six Sigma a way to reach Operational Excellence and get Out of the Crisis Alessandro Brun Politecnico di Milano Alessandro.Brun@polimi.it

2 About Myself

3 Concorde One of the 20th century's great symbols of technological achievement

4 Concorde One of the 20th century's great symbols of technological achievement perhaps the most famous passenger jetliner in history. But it was also commercially flawed. Its engines were dirty and painfully noisy. It was banned from flying supersonic over the United States because of the sonic boom.

5 Concorde Concorde was effectively blocked from entering the crucial U.S. market when airlines in this country, including TWA and Pan American, canceled orders. "Looking back at the entire program, from beginning to end, if you knew then what you know now, then Concorde would never have been built," Bannister.

6 Concorde On 25 July 2000, Air France Flight 4590 crashed in Gonesse, France, killing all 100 passengers and 9 crew members. According to the official investigation conducted by the French accident investigation bureau (BEA), the crash was caused by a titanium strip that fell from a Continental Airlines DC-10 that had taken off minutes earlier. The metal fragment punctured a tyre on Concorde s left main wheel bogie during takeoff. Prior to the accident, Concorde had been arguably the safest operational passenger airliner in the world in terms of passenger deaths-per-kilometres travelled with zero.

7 Operations and Supply Chain Excellence Today, competition is Supply Chain vs Supply Chain, no longer firm vs firm. Supply Chain Strategy should identify Critical Success factors to gain a competitive edge. EFFECTIVENESS EFFICIENCY In addressing market needs In resources utilization

8 Out of the Crisis! A product, or service, possesses quality if it helps somebody and enjoys a good and sustainable market. We have learned to live in a world of mistakes and defective products as if they were necessary to life. It is time to adopt a new philosophy in America.

9 Noteworthy approaches to solve the Efficiency-vs-effectiveness trade-off?

10 Noteworthy approaches to solve the Efficiency-vs-effectiveness trade-off? 10

11 Noteworthy approaches to solve the Efficiency-vs-effectiveness trade-off?

12 Noteworthy approaches to solve the Efficiency-vs-effectiveness trade-off?

13 Noteworthy approaches to solve the Efficiency-vs-effectiveness trade-off?

14 In search of new paradigms? Quality Cheap Prices Service In this service centre we offer While-U-Wait service High quality repairs at the best price in town! Please pick two out of three.

15 What about the market?

16 The times they are a-changing Supply Chain performances are even more critical, due to some recent trends: Customer centric approaches Variety increases (explodes!) Shorter product life-cycles Shorter delivery Lead Times Trading Up lower sostituibility (cfr. Trading Up: The New American Luxury, di M.Silverstein e N.Fiske) Low Labour Cost Countries competition Increasing regulations Growing ethical/social responsibility

17 Six Sigma WHAT IS SIX SIGMA? Six Sigma is a managerial approach aimed to create processes capable of delivering what the customer wants. It was developed by Motorola in the 80 s as a way to improve quality of manufacturing processes. A decade later, GE transformed Six Sigma into a powerful and pragmatic company-wide process improvement program, to obtain drastic improvements in both operations and business ( transactional ) processes. Basically, Six Sigma consists in: focusing characteristics of the product/service that are critical to customers (CTQ) defining adequate technical specifications for CTQs in order to achieve customer satisfaction improving capability of the processes whose output is a CTQ reducing their variability and other causes of errors or defects in order to meet technical specifications

18 Six Sigma and the quest for more capable processes 18

19 Six Sigma and the quest for more capable processes Process out-of-target Excess variability Low-variability, Centered process

20 Six Sigma quality levels an analogy Sigma Level of a process DPMO (Defects per Million Opportunities) , , ,000 Sweet Fruits Process Redesign Process Entitlement Bulk Fruits Process characterization and improvement Low-hanging Fruits Seven basic tools Ground Fruits Logic and intuition Increasing the s level of a process requires exponential improvements in terms of quality

21 Costs of Poor Quality (COPQ) - Inspection - Warranty - Scrap - Rework - Rejects Traditional Quality Costs: - Tangible - Easy to Measure - More Setups - Expediting Costs - Lost Sales - Late Delivery - Lost Customer Loyalty - Excess Inventory - Long Cycle Times - Costly Engineering Changes - Lost Opportunities - The Hidden Factory Hidden Costs: - Intangible - Difficult to Measure For most companies, COPQ can be as high as 15% of total sales SIX 21 SIGMA a way to reach Operational Excellence and get Out of the Crisis

22 Cost of Quality % Sales Costs of Poor Quality (COPQ) vs Sigma Level 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Sigma Level SIX SIGMA 22 a way to reach Operational Excellence and get Out of the Crisis

23 Six Sigma dimensions Customer Process A Process B Vendor Define Measur e Analyze Improve Control Driven by custom er needs Process Map Analysis Led by Senior Mgmt Organization Methodology Tools LSL US L Upper/Lower specification limits Regression % % 60% Enabled by quality team Process variation L K A F B C G R D Frequency Cumulative Frequency Pareto Chart 40% 20% 0%

24 Roles of Six Sigma expert Executive sponsorships They identify key business issues and assist the champions in identifying critical projects that are tied to the key business issues Champions They define the projects and keep track of the team's progress Master Black Belts They provide coaching, training and statistical expertise to Black Belts Black Belts Green Belts They are responsible for implementing the Six Sigma projects They are team members who maintain their regular jobs but are assigned to one or more teams given their know-how or background on the selected projects Quality Management SIX SIGMA Mario a way Cappetta to reach Operational Excellence and get Out of the Crisis 24

25 Project Phases D Define Focusing the process object of improving M Measure A Analyze I Improve C Control Measuring current process s performances Identifying the causes of the problem Removing the causes of the problem Verifying that the results of the project have been realized SIX SIGMA 25 a way to reach Operational Excellence and get Out of the Crisis

26 Six Sigma and Lean are two complementary approaches Lean and Six Sigma integrate each other, making Lean Six Sigma a powerful general purpose process improvement methodology to reach Operational Excellence SIX SIGMA LEAN THINKING Main focus of the methodology Goal Cultural context in which it was originated Improving process quality - create processes capable of delivering what the customer wants. Reducing variation and aligning processes to target Western (USA) Improving process quality the right process will bring to the right results Reducing variation, eliminating wastes and avoiding overburden Eastern (Japan) Type of improvements sought after Project-by-Project Day-by-Day Organization and roles Approach to improvement actions identification and implementation Tools Strongly formalised hierarchy of highly qualified improvement experts (GB, BB, MBB, ) Top-Down Abundant use of sophisticated statistical tools Informal organization everybody should contribute Bottom-Up Mainly relies on simple visual tools