#134 – HOW SIX SIGMA CAN HELP YOU? – JOHN AYERS

AAASix Sigma is a powerful tool used to solve a problem or improve a process. The company (one of the 4 big defense companies) I worked for over 20 years lived, breathed and ate it every day. I became a six sigma specialist. For those readers not familiar with six sigma, I offer the following example to hopefully provide some insight into how it works and the benefits it offers.  

What Is The Process?

The process we used in my company comprised six steps. They are: visualize; commit; prioritize; characterize; improve; and achieve.

Problem Statement

First a couple of definitions for the purposes of this article. Internal supplier- a person working for the company on your team that is obligated to provide you with inputs. External supplier- a person working for the company on your team that you are obligated to provide input to.

Given this, the problem is that internal and external customers are not living up to their obligations resulting in schedule and cost growth as well as team performance issues.

Visualize

A vision statement that describes the desired resolution to the problem.   An example is as follows:

An electronic discrete, user friendly quantitative measurement system for internal and external customers is established and in place to measure their performance. The PMO (program management office), engineering managers, department managers, and other managers have access to an online data base for rewards, outstanding display of team work by the IPT (integrated product team) and training. Since the system has been implemented, there has been significant improvement in cost and schedule performance and team moral. Internal and external customers are providing on time, high quality inputs the first time around.

Commit

This step involves establishment of the six sigma project team. The team comprises all stakeholders as well as a six sigma expert to facilitate the meeting. In this example, the team would include: PMO representative; a engineering manager; a department manager; IPT lead; IT representative; six sigma expert; and any other person deemed to be a stakeholder. Part of the discussions involves negotiations between stakeholders to obtain the best deal for them as well as the program and company. The meeting typically takes approximately 1 week and requires all members in attendance in a conference room for the duration. At the end of the meeting, a formal contract is signed by all participants including management. The contract includes: an action plan; schedule; budget; and deliverables (new or revised processes, training, etc.).

Characterize

This step involves defining the problem in detail based on data collection and analysis. For example, process flow charts, metrics, and root cause analysis. The characterizations of the problem are shown below. You may recognize some or many of these on your program.

-Inputs from internal suppliers are not delivered on time, are incomplete, have poor quality, and have to be redone 2 or 3 times to get it right.

-Input requirements from internal customers are not clear , have an unrealistic time line , and had to be done over several times because-“I did not want that, I wanted this, do it over” approach.

-Late delivery of the interface control document impacting the subcontractors cost and schedule.

-It takes longer to complete a design, generate a statement of work (SOW) or specification and meet a milestone because- “I did not receive the mechanical or electrical input in time resulting in a longer than planned cycle time”.

-Very difficult to meet budget with poor and incomplete input from the internal supplier when program schedule and budget performance are based on good timely input.

-Poor team moral and trust –“ you can never get inputs from Bill and when you do it is poor resulting in calling his boss to get it done and making me look like a bad guy”.

-Bill gets recognition for meeting his goals but he is impacting me making me look bad. Bill is a poor internal supplier and his hurting the program but management does not notice.

There is no qualitative system in place to measure how IPT members interact with internal goals to achieve program goals. As a result, there are inefficiencies and non-added value tasks built into each program which if indentified and corrected would yield significant cost and schedule savings. Each member of an IPT is working hard to provide inputs to their customers and define their requirements to their suppliers. But since there is no objective measurement system or feedback to each member, they assume there are performance is good which in fact most likely is not the case. Each IPT member has performance goals from their functional manager they have to meet which are the basis of their yearly performance review. However, their internal supplier or customer performance goals are not defined and therefore not included in the annual performance review. As a result, internal supplier and customer performance falls through the crack.

Improve

This is the step where new processes, performance metrics, work place organization or other changes are approved by management and put in place to provide transparency and accountability for internal suppliers and customers.

The major changes are presented below:

Add internal supplier and customer performance goals (including measurement criteria) to each individual’s performance goals designed to eliminate the gap between functional and program performance requirements.

Implementation of a self assessing online procedure (similar to 360 Assessment System for those readers familiar with this tool) which is: user friendly; discrete; data collection at one point (usually HR); report card feature; and PMO and Department management accessible for their team members via email.

Added feature that facilitates use of an electronic contract between internal suppliers and customers as part of the algorithm for merit increase, recognition, and rewards.

Creation of a data base for internal suppliers and customers allowing management access as appropriate for training, recognition, and rewards purposes

Achieve

The easy part of the six sigma process is establishment and approval of the action plan, funding and contract which takes typically 1 week to generate. The hard part is the implementation of the plan which can run anywhere from 6 months to a year or longer. Implementation starts with staffing which can be difficult to get the right people off assigned programs. Culture resistance may also be an issue but can be overcome due to top management sponsorship. Monthly project reports are presented to management showing cost and schedule progress to ensure it is completed as defined within the plan. After implementation, management continues to track the project to confirm it is working effectively and defining any problems that require attention. The project is closed out after the post implementation performance verification has been accomplished.

SUMMARY

Simply speaking, the six sigma approach is to establish a hierarchy of black belts (about 20 % of the employees) to solve 80 % of the company’s problems. It is a very effective tool for problem solving or process improvement if done properly. It is top management funded and supported which greatly increases the probability of success compared to the older quality circles or TQM (total quality management) projects that were bottoms up driven , not funded and executed on the employees own time. The primary goal of the project is to reduce costs, improve efficiencies, improve team and employee morale and benefit the company’s customer base. Based on experience with my company, it works very well.

Bio:

John earned a BS in Mechanical Engineering and MS in Engineering Management from Northeastern University. He has a total of 44 years’ experience, 30 years with DOD Companies. He is a member of PMI (project Management Institute). John has managed numerous firm fixed price and cost plus large high technical development programs worth in excessive of $100M. He has extensive subcontract management experience domestically and foreign. John has held a number of positions over his career including: Director of Programs; Director of Operations; Program Manager; Project Engineer; Engineering Manager; and Design Engineer.His technical design areas of experience include: radar; mobile tactical communication systems; cryogenics; electronic packaging; material handling; antennas; x-ray technology; underwater vehicles; welding; structural analysis; and thermal analysis. He has experience in the following areas: design; manufacturing; test; integration; selloff; subcontract management; contracts; risk and opportunity management; and quality control. John is a certified six sigma specialist, certified level 2 EVM (earned value management) specialist; certified CAM (cost control manager).

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