Secrets to Succeed at Six Sigma
To succeed at Six Sigma, laser-focus every team you start. This means that leadership will want to work with an improvement expert to develop the first two elements of a successful improvement story:
1. Line graph showing defects (preferably in parts per million) or delay over a period of time. This answers the questions: "Where are the defects? Where are the delays?" See a sample line graph at
http://www.qimacros.com/qiwizard/linegraph.html
2. Pareto chart(s) showing 1, 2, or 3 "big bars" that contribute 50-60%
of the problem identified in the line graph. This answers the question "Where's
the Mother Lode." See a sample pareto chart at
http://www.qimacros.com/qiwizard/pareto.html
Use the 4-50 Rule: 4% of any business creates over half of the waste and rework. Find it and fix it.
3. Write a Good Problem Statement. Use the first big bar on the pareto chart to write your problem statement. A sample problem statement is: During the first 6 months of 2002, time code errors accounted for 47% of the incorrect paychecks, which was 2 times higher than the next highest contributor and resulted in 78 employee complaints.
4. Cost of Quality Analysis showing how much this portion of the Fix-it Factory costs and what the benefits will be. These four steps should take no more than 3-5 days using existing data. Each of these charts and worksheets are available in the QI Macros for Excel Six Sigma Software at
http://www.qimacros.com/six-sigma-software.html or
http://www.qimacros.com/spc-charts.htmlTime: It rarely takes more than 2-3 days to analyze all of a company’s data and develop a master improvement story that identifies the 4% of the business causing over 50% of the waste and rework.
Download a 30 day evaluation copy of the QI Macros at
http://www.qimacros.com/free-excel-templates.html or
http://www.qimacros.com/free-excel-macros.html
Can Speed Save Lives?
According to the story in the Valentine's day edition of the Rocky Mountain
News, Swedish Medical Center has "quadrupled the treatment success rate"
for stoke patients. That's a 400% improvement.
How? Speed! "People used to lay in the hospital for days without getting
any help. Now, they get help in minutes," says Capt. Ted Hockenberry of
West Metro Fire Rescue.
1. Paramedics evaluate a patient for symptoms of a stroke on the way to the
hospital.
2. They alert the hospital which clears their CAT scans and other services
for arrival of the patient.
3. Patients go directly from the ambulance to the CAT scan for evaluation.
"Time is brain," says Dr. Donald Frei. Patients treated with clot busting
drugs within three hours of the onset of a stroke recover most rapidly.
Lesson: Eliminate delay and integrate the elements of the process, from
paramedics to rehabilitation, and you can save lives.
You don't have to be in a life-saving job to eliminate the delay and
integrate the elements of your mission-critical business processes. Just
use the essential tools of Lean Simplified to simplify, streamline and
accelerate your business to maximize results and profits. Haven't you
waited long enough to start getting your business hooked on speed?
Jay Arthur, the KnowWare Man, works with companies that want to plug the
leaks in their cash flow. Jay is the only consultant who specializes in
transactional Six Sigma for IT and Financial applications: ordering,
billing, purchasing, and payments. He is the author of Six Sigma Simplified.
mailto:knowwareman@mindspring.com
http://www.qimacros.com
2253 S. Oneida St, Ste D
Denver, CO 80224
303-756-9144 (888) 468-1537
Lost Luggage Costs $1.6 Billion
The February 22nd Rocky Mountain News reports that lost luggage costs
airlines worldwide an estimated $1.6 billion for approximately 20 million
lost bags.
While the percent of mishandled and misdirected bags is only 0.7% (4 Sigma
or 6,280 bags-per-million), it costs an estimated $87.50 per lost bag to
correct the problem (tracking and delivery).
If airlines could drive mishandled bags to 5 Sigma (233 BPM), the savings
would be over $500,000 per million bags or about $0.50/bag. Multiply this
times the billions of bags flown every year and you've got something to
counteract the rising costs of fuel.
One of the root causes: delays through baggage screening.
Solution: Lean thinking applied to baggage screening.
One of the defects: misdirected bags
Solution: Dirty 30 root cause analysis focused on misdirected bags.
Jay Arthur, the KnowWare Man, works with companies that want to plug the
leaks in their cash flow. Jay is the only consultant who specializes in
transactional Six Sigma for IT and Financial applications: ordering,
billing, purchasing, and payments. He is the author of Six Sigma Simplified.
mailto:knowwareman@mindspring.com
http://www.qimacros.com
2253 S. Oneida St, Ste D
Denver, CO 80224
303-756-9144 (888) 468-1537
The 2005 Pulse of Leadership
According to the Leadership Pulse Study from the Stephen M. Ross School of Business at U. of Michigan, when asked "What are you doing to improve your company's performance beyond cutting costs?", the top response was:
27% said they are undertaking company-wide performance improvement initiatives to refine current processes.
Haven't you waited long enough to start plugging the leaks in your cash flow?
The High Cost of Low Quality
The January 10, 2005, BusinessWeek cites Howard Pien, CEO of Chiron, the maker of flu vaccine as one of the worst managers. As "one of only two major flu vaccine providers" it was prohibited from distributing its vaccine when "British regulators suspended its license in October citing contamination problems."
Estimated hit to revenues in 2004: $300 million, reducing earnings to $78.5 million, less than half of 2003 earnings. "Now critics wonder if Pien dropped the ball on quality." I doubt if the CEO directly dropped the ball, but more than likely did it by subtle messages about quality and its value to the bottom line.
Don't let the high cost of low quality spring a leak in your cash flow. Make quality a priority
before the government or your customers do it for you.
Jay Arthur, The KnowWare Man, works with operational managers who want to plug the leaks in their cash flow. He is the author of the Small Business Guerrilla Guide to Six Sigma and Six Sigma Simplified.
2253 S Oneida St Ste 3D.
Denver, CO 80224
(303)756-9144 (888-468-1537)
(303)756-3107 (Fax)
Discover the Small Business Guerrilla Guide to Six Sigma.
http://www.qimacros.com/sixsig220.html
Learn how to use Six Sigma to improve your golf game.
http://www.qimacros.com/golf
Signup for our Email courses by sending an email to:
Six Sigma Simplified:
mailto:six-sigma-ezine@aweber.com
Employee Hiring and Motivation:
mailto:knowware@aweber.com
Top 10 Ways You Know You Need to Plug the Leaks in Your Cash Flow
10. Customers tell you to take your product, fold it five ways and put it where the moon don't shine.
9. The end of your production line has more scrap than a New Jersey dump.
8. The media casually refer to you as Mistakes-R-Us
7. Daily operations has all the earmarks of a five-alarm fire:
-
Heroics
-
People getting burned
-
Customer service is afraid to answer the phone for fear that they might get hosed
-
Dalmations get promoted because they've been to all of the fires.
6. Customer orders are filled at half the speed of escargot.
5. Your software has more bugs than a roach motel.
4. Root cause teams create whalebone diagrams.
Your two main root causes are FUBAR and SNAFU.
3. Your invoices have more inaccuracies than a butterfly ballot.
2. Gage R&R is something your measurement tools do when they're overworked.
1. You think the House of Quality is a strip joint on Bourbon Street.
Vital Few, Not The Trivial Many
Dr. Juran said it many years ago: Focus on the "vital few, not the trivial
many."
This is the essence of Pareto's Rule, but few people abide by it. Most
managers start by selecting a team of people and then sending them off to
solve a problem. Most of the time these teams fumble around trying to find
where to start and take months to find even meager gains.
The best way to solve a problem is to start from your data about the
problem, let the data narrow your focus to the vital few real problems,
then let the data dictate who should be on the team. The counts of misses,
mistakes, errors, waste and rework will always narrow your focus to
problems that can be solved. Then you can identify the vital few employees
with the most knowledge about how to solve that particular problem, but not
before.
To plug the leaks in your cash flow, focus on the vital few, not the trival
many.
Jay Arthur, The KnowWare Man
KnowWare International Inc
2253 S Oneida St, Ste 3D
Denver, CO 80224
303-756-9144
888-468-1537
www.qimacros.com
Tsunami Early Warning System
There was little warning of the tsunami that wreaked havoc in the Indian Ocean this week.
With technology doubling in power and halving in price every 18 months (Moore's Law), there's a series of technological waves hammering your business every few months.
Do you have an early warning system for your business that detect changes in sales, cash flow, defects, and delay? If not, isn't it time to create one?
Service Contracts
The December 20th BusinessWeek covers "The Warranty Windafall."
While service contracts are only 3-4% of sales, they may represent 45-100% of profits at electronics stores.
You don't need a service contract on most electronics because of the U-shaped Wiebull curve: Electronics either fail early (covered by the basic warranty) or not for 300,000 hours or more.
By the time they do fail, there will be newer models with more features available at cheaper prices.
PCs, for example double in performance and halve in price every 18 months.
What does BusinessWeek suggest getting service contracts on?
Anything that runs hot: laptops and plasma TVs.
Save money by skipping the service contract and use it to buy the next generation.
Chronic Pain reduced 38%
Studies of nursing homes have shown a 38% drop in chronic pain rates nationwide according to David Schulke, executive vice president of the American Health Quality Association. In Colorado, rates fell from 1-in-7 patients reporting pain, to 1-in-14.
It's all part of the National Nursing Home Quality Initiative.
Who said Big Hairy Audacious Goals (BHAGs) aren't achievable in clinical care?
Employees Lash Back at Six Sigma
Employees of 3M filed suit against the company charging age discrimination because the leadership targets people under 45 for Six Sigma training. See this news article for more information:
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20041221005517&newsLang=enMaybe 3M thinks it just can't afford to train workers who will retire in a decade or two before their investment in Six Sigma can pay off. Customers using the Six Sigma Simplified approach can easily achieve dramatic improvements in six months or less.
Another recent release from employees in Caterpillar sited Six Sigma as a way to dumb-size jobs, slash wages, and reward leaders and investors.
Ouch!
