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©2002JayArthur(888)468-1537™ActionPlanAProvenMethodologyForIncreasingProductivityandProfitsJayArthur-TheKnowWare®ManKnowWareInternational,Inc.@rmi.netDenver,CO80224(888)468-1537©2002JayArthur(888)468-1537lifestar@rmi.netSixSigmaActionPlan2TheImprovementJourneyInthelongrun,theonlysustainablesourceofcompetitiveadvantageisyourorganization'sabilitytolearnfasterthanitscompetition.PeterSengeWhenyoustarttoimproveyourspeed,quality,orcost,youbecomelikeSherlockHolmes.Youletthetrailofevidence(yourdata)leadyoustep-by-steptothetrueculprit–therootcause.Whenyoudo,you’llstopusingtrialanderror,orgutfeeltofixthings.Youstartusingsomecommonscience.SixSigmaSimplifiedoffersaproven,systematicmethodtocontinuouslyimproveeveryaspectofyourbusiness.SixSigmaSimplifiedbeginswithfocusingeffortformaximumbenefit,thenimprovingtheprocesses,sustainingtheimprovementandhonoringyourprogress..FISHStepActivityFocus1FocustheimprovementeffortImprove2Reducedelay,defects,andcostsSustain3StabilizeandsustaintheimprovementHonor4Recognize,reviewandrefocuseffortsSixSigmaSimplified6sLaserFocusProblemSolvingFocusImproveSustainHonorIndicatorsIndicatorsValueAnalysisReview&RefocusRecognize&RewardSPC-ProcessManagementSixSigmaSimplifiedWhatIsSixSigma?SixSigmaisaresults-oriented,project-focusedapproachtoquality.It'sawayofmeasuringandsettingtargetsforreductionsinproductorservicedefectsthatisdirectlyconnectedtocustomerrequirements.Thesereductionsinthecostofpoorqualitytrans-lateintocostsavingsandcompetitiveadvantage.Sigma,σ,repre-sentsonestandarddeviationfromtheaverageormean.Mostcontrolchartssettheirrangeat+3s,butSixSigmaextendsthreemorestandarddeviations.Atsixsigma,thereareonly3.4partspermillion(PPM)defective.InBuiltToLast,(Collins1997),theauthorsmentiontheneedforaBHAGorBigHairyAudaciousGoal.UsingSixSigmaasaguide,youcanmeasureyourcurrentperformanceindefectspermillionandsetaBHAGofreachingthenextlevelsigma.Setagoaltoreach5sigma,estimating18-24monthspersigma.SixSigmaTargetsSigma(σ)Defects/Million1690,0002308,733366,8033.5Avg30,00046,210523363.4©2002JayArthur(888)468-1537“MillionDollarMoneyBelt”ImprovementStrategy80%20%20%20%20%20%4%64%Pareto'sRule4-50Rule1.CreateaMasterImprovementStory2.TrackKeyIndicators3.DefinetheProblemGoodFastCheap4.AnalyzePartsoftheProblemSimultaneouslyLineGraphRootCauseAnalysisCountermeasures5.PreventTheProblemLessthan4%ofanybusinesscreatesover50%ofthewaste,rework,andlostprofit.Likeacrimesceneinvesti-gatorreviewingforensicevidence,youcanusedatayoualreadyhavetofindandfixtheserootcauses,andsaveatonofmoney.©2002JayArthur(888)468-1537lifestar@rmi.netSixSigmaActionPlan4CreateaMasterImprovementStoryMasterQIStoryShortTermObjectivesLongTermObjectivesTargetsMasterQIstorieslinkalloftheimprovementeffortstoensurequantumimprovements,notjustincrementalones.TheeasiestwaytodepictaMasterQIStoryiswiththetreediagram.MasterQIStoriesbeginwithavisionoftheidealworld.Thisvisionisthenlinkedtolong-termcustomerrequirements,shorttermobjec-tives,measures,andtargets.WhyIsItSoImportantToDevelopAMasterQIStory?1)Ifleadershipdoesit,theywillcommittoachievingit.2)Itlinkscustomerneedstotheimprovementefforts.Thisclearlinkage,whichisoftenmissing,helpsemployeesandleadersfocusonthecustomerandalignalloftheiractionstoachievecustomeroutcomes,notinternallygeneratedones.3)Measurementsbasedoncustomerrequirementsprovideanidealwaytoevaluateperformance.4)DetailedMasterImprovementStoriescanthenbedevelopedandlinkedtothisonebyindividualmanagers.5)Resultscanbemeasuredandmonitoredeasily.LongTermCustomerRequirementsinvariablyfallintooneofthreecategories:RequirementMeasure•BetterQuality–reliabilityanddependabilitydefects/million•FasterService–speedandontimedeliverycycletime•HigherPerceivedValue–lowercostcostShortTermObjectivestranslatethesecustomerfluffyobjectivesintomoreconcreteonesthatcanbemeasuredandimprovedtomeetthetargets(fromindicators):•BetterQuality–fewerdefectsindeliveredproducts,services•FasterService–reducedcycletimeormissedcommitments•HigherPerceivedValue–greaterbenefitsachievedbyreducingthecostofwasteandrework.TargetsaretheBHAGs(BigHairyAudacious)thatchallengeourcreativityandability.50%reductionsincycletime,defects,andcostsarebothchallengingandachievableinaoneyearperiod.Buttodosorequireshighlyfocused,notrandom,improvementwork.KeyTools©2002JayArthur(888)468-1537