|
|
3rd Annual Lean and Six Sigma for Process Excellence in IT and Software Development
Marine Memorial Club and Hotel, San Francisco, CA (Workshops: February 3, 2009. Conference: February 4 & 5, 2009.) |
   |
| 12/18/2008 |
6s in IT Program
By Alexandra Phillips, Director of IT, Fire Detection, Intrusion, Forestry, Tyco Safety Products
In today’s economic climate it is becoming increasingly important for organizations to control and contain costs across all elements of the business. Typically IT acts as a key contributor and facilitator of cost control through improved process efficiency and business simplification. While IT professionals have long relied on the staple methodologies to deliver projects, Six Sigma has provided tools to enhance these methods. Where the challenges lie are in our ability to institutionalize the program within IT so that these benefits can be realized in a sustainable and reliable manner.
How do you create Six Sigma DNA?
It isn’t enough in today’s lean workplace to provide generic program training to touch an elite class of employees and expect that this detailed and complex level of knowledge will filter its way through the organization. The real benefits of Six Sigma are achieved when the tools and processes related to already ingrained and proven methodologies are used to enhance an organizations way of doing things. The 6s in IT Program was developed to do just that; transfuse the IT organization with value-added tools and knowledge by linking specific 6s tools and techniques to troubleshooting, project management and enhancements.
How we did it
We will cover the metamorphous of the program from its simplest form to a philosophy embraced within the organizations culture including;
The Strategy
- IT’s goal is to meet or exceed customer requirements (cost, cycle time, quality), i.e. "IT deployment"
- 6s is one technique along with project management, project portfolio management and technical skills.
- How can we maximize the benefits of 6s with the lowest cost in the shortest period of time?
- 6s should not be a separate "project" for our staff. It should be ingrained in the way we work.
- The importance of mentoring.
Planning Phase
- Developing the curriculum and the importance of real life IT examples and group exercises.
- Identifying the right instructors.
- Student training pre-requisites
- The mentoring approach.
- The importance of recognition.
- Progression to Green and Black Belt certification for staff who deliver results within the program.
Deployment Phase
- Training.
- Mentoring.
- Project Identification.
- Linking business problems to performance objectives.
- Project management.
- Certification (Green and Black Belts).
The Importance of Constant Evaluation
- Student feedback from courses.
- Stats on people trained, projects completed, certified
- Post Mortem on project benefits expected vs. received.
- Lessons Learned – A cycle through Strategy and Deployment. |
| 12/12/2008 |
Making It Easier To Chose to Change - A Discussion of the Role of Managed Change™ in Six Sigma Projects
By Jeanenne LaMarsh, Founder and CEO, LaMarsh & Associates, Inc.
Making It Easier To Choose to Change
Six Sigma is a powerful tool for change. The intense commitment of many organizations today to making Six Sigma the core of their change process sends a strong message throughout the organization: change is constant. Change is how they stay competitive. Change is how they grow. Six Sigma is their way of making change happen. And Six Sigma works. Integrating Six Sigma into the DNA of the organization increases its growth potential. Six Sigma brings a disciplined and structured process to change that is shared throughout the organization.
However, Six Sigma Improvement Projects, like any changes, are not always successful. In other cases, initial success is not always sustained. Some projects are so difficult to implement and sustain that the Black Belts question whether the project was worth the effort. That result, for many companies, matches their experience with other change projects such as system implementations and the integration of newly acquired companies. It also matches the research.
Prosci, in its report on Best Practices in change management in 2000 and subsequent reports in 2002 and 2004 identified the greatest change management obstacles:
29% Management behavior not supportive of the change
23% Employees fearful and resistant to change
16% Inadequate resources
32& All other obstacles
........52% of unsuccessful changes are directly related to human behavior!
As a result of their organization's own experiences with other types of changes, Black Belts and Master Black Belts recognize that if the changes identified in the Six Sigma Improvement Projects are to be successful it is not just the process that must change. The people who use the process must choose to change and to follow the new process. So, Six Sigma is not just about change - it must also be about managing that change. Six Sigma needs a way to improve the estimate of potential return on investment and/or to reduce the cost of deployment. Reducing the degree of difficulty and the cost of deployment will substantially increase the return on investment for each project. The result will be:
1. Reduce the cost of each Six Sigma project that results from resistance
2. Increase the probability of achieving AND sustaining the projected benefits because resistance is minimized
3. Decrease the cycle time of each project because people will embrace the change more easily and more quickly.
The strength of Six Sigma is that it is a disciplined, fact-based and focused way in which to identify the improvements that need to be made and to make them. Managed Change™, developed by LaMarsh & Associates, is a disciplined, fact-based and focused way to identity the potential resistance those improvements may generate and develop an effective plan to reduce that resistance. Managed Change also contributes to the successful implementation AND sustainment of the Six Sigma project.
More and more, Six Sigma programs recognize the need to address change management. This usually happens after the Six Sigma program has been launched and the Black Belts start to experience the effect of resistance on the Six Sigma projects. Some companies, therefore, offer additional Managed Change™ support to the Black Belts to aid them in addressing the potential for resistance and ways to reduce that resistance. The problem is Managed Change™ is not a supplement to Six Sigma.
The action steps required to identify the potential for resistance, determine its projected impact on the project, and implement action steps to mitigate that resistance, must be built into the project itself. It is important to note that addressing the Managed Change™ requirements of a Six Sigma project does not require fundamental changes in the Six Sigma methodology. Instead it adds rigor to the Six Sigma Process Improvement Project by using the Six Sigma tools and methodology to an even higher standard.
Six Sigma DMAIC Model – Define, Measure, Analyze, Improve, Control
DMAIC, as a core model of Six Sigma, has imbedded in it a robust set of tools. Those tools can be enhanced and supplemented to also address the need to help people make the choice to change. Inserting a set of Managed Change™ action steps with appropriate tools and templates into DMAIC strengthens Six Sigma. Managed Change™ is a powerful asset to DMAIC to make change happen faster and to ensure that the changes are sustained.
These action steps do not, in any way, compromise or denigrate the phases of DMAIC. Everything that is currently in DMAIC remains. The added activities (using the appropriate tools) in each phase add to the robustness of Six Sigma and increase the opportunity for a successful project.
All changes have built into them the potential for the people impacted by the change, the targets of the change, to resist. Those potential sources of resistance are known and, with the right discipline and tools, can be identified and dealt with. In each phase of DMAIC there are activities that will contribute to that identification and the resulting risk mitigation strategy and action steps. The terms frequently used in Six Sigma to analyze the targets, blocker, neutral or supporter, are effective descriptions of the targets’ orientation to the change. What is underneath the terms, though? Why is someone a blocker? Neutral? A supporter? Without the additional step of determining the reason for that orientation the Project Team cannot unblock the blocker, move someone from neutral to supporter, and take maximum advantage of the supporters.
What is Managed Change™? Six Sigma is about looking at the organization from a process perspective. Managed Change™ adds another orientation: looking at the process from a people perspective. What does it look like when a structured and disciplined Managed Change™ process is imbedded in Six Sigma?
The single most important thing to remember about Managed Change™ is that it is target-centric. The Project Team is looking not just at the process but also at the people to determine what they need in order to overcome any resistance they may have. The targets of change will tell you what they need to make the change if you can see the situation from their perspective.
Where Does Resistance Come From? When people find it difficult to change it is usually for some combination of the following reasons:
1.They don’t want to change from the way they do things now
2.They don’t want to change to what the Project Team is recommending
3.They don’t want to go through the effort of getting to the new way
4.They don’t trust the leadership’s ability to get them to the new way
5.They don’t trust the Project Team’s ability to get them to the new way
6.They have been there and done that before and don’t believe it will be any more successful this time than the last time…or, if it is successful, the way it will be done is too painful
For each group of suppliers, customers or leaders affected by the change, the Project Team should carefully and systematically ask these questions and use the information to design ways to reduce any resulting resistance.
The Change Roles - In the list of resistance sources above, items four and five deal specifically with the ability and willingness of the leadership and the Project Team to play their roles.
Sponsors
The Six Sigma chartering process calls for the identification of a sponsor or champion of the project. That role is clearly defined and well laid out in most organizations using Six Sigma. In Managed Change™, the word sponsor has a much broader meaning, though, than the champion of the project. When people who have to change, the targets, look at a change facing them, one of their key questions is: Does my management, from my immediate supervisor all the way up the chain, want and support this change? If the answer is yes, that does not necessarily mean that all resistance will disappear. But if the answer is no, it means resistance will probably increase dramatically. So sponsors are pivotal to this resistance topic. Is everyone in the management cascade (not just the identified sponsor/champion on the Stakeholder Analysis) supportive of the change? Are they willing to demonstrate that support? Do they know how to demonstrate that support?
Change Agents
One of the strengths of Six Sigma is the careful training to produce skilled and knowledge Black Belts and Green Belts. In the language of Managed Change™, they are being trained to be change agents. Their ability to use the DMAIC process and make improvements in processes is vital to the organization. Their ability to be thoughtful about the targets’ change issues makes them even better as change agents. So it is logical that the change agents themselves, and how the targets perceive them, can create a willingness to change on the part of the targets or actually be a source of resistance. If the targets see that the change agents are knowledgeable about their, the targets’, issues and trust them to deal with those issues appropriately, the chance for a quick and effective change is increased. If the targets do not trust the change agents to recognize and address the targets’ issues, resistance will increase.
Targets
There is a third role in the Six Sigma Improvement Project as well. The suppliers of inputs and customers receiving outputs identified using SIPOC are targets. They are the people who will have to change. The people who work in organizations develop, over time, an orientation to change. They come to the job with a bias to welcome change or to resist it. Their experiences with previous changes on the job and how they have been implemented either confirms or challenges that bias. In too many organizations, the experience with change in the past teaches the targets that all changes are to be resisted. If this is the case in the impacted organization, at any level of the Stakeholder chart, the changes to be made will be harder because of this preset bias.
ACTION STEPS TO INTEGRATE MANAGED CHANGE(TM) INTO DMAIC
In each step of DMAIC there are action steps accompanied by tools and templates to achieve that step that must be integrated into a well-managed Six Sigma project
DEFINE
Managed Change™ Action Steps
- Prepare a Framework for Data Collection
- Determine the Willingness and Ability of Leaders and the Project Team to Play Their Roles as Sponsors and Change Agents
- Examine the Burden of Too Many Changes
Prepare a Framework for Data Collection
While identifying the opportunity, defining the customer requirements and developing the business process, the Project Team also builds a Stakeholder Analysis. The Stakeholder Analysis, with a little more effort and attention, is an excellent tool for dealing with resistance and thus, managing the change. The Stakeholder Analysis becomes a Key Role Map that identifies all management whose areas of responsibility are impacted by this change. All of these people are sponsors of this project in their areas, even though one (or a few) are identified as the Project sponsors on the team charter. What the Project Team is doing is finding the leaders (management) whose sponsorship of the proposed changes is required because the targets of the change report to them. The Project Team should also identify all targets of the change, those who will have to change as a result of the project. Knowing who the targets are, the Team can then identify for each target population what could cause them to resist and/or reject the proposed change.
At the Define phase, there is little information that solidly identifies the resistance potential of the various target groups. But it is appropriate to begin the disciplined process of filling in a simple spreadsheet that will then be used through every step of the project to find resistance.
Caution: This Expanded Stakeholder Analysis (Key Role Map) is done at this early stage in the project, when identifying the opportunity for change is very preliminary. As the change becomes more defined the target populations may grow or shrink or change, as will the sponsors. For this reason the Stakeholder Analysis/Key Role Map will be reviewed and updated through each step of DMAIC.
Expanded Stakeholder Analysis/Key Role Map
Determine the Willingness and Ability of Leaders and the Project Team to Play Their Roles as Sponsors and Change Agents. In that Stakeholder Analysis, the Team needs to determine both the ability and the willingness of the sponsor(s) to perform the sponsorship role. They need to assess sponsor capability against a predetermined job description that identifies those behaviors required of an effective sponsor if he/she is going to reduce resistance to change. Where the sponsor is lacking in ability an improvement plan is required. Where the sponsor is unwilling, the project plan needs to be reevaluated.
Again, using the Stakeholder Analysis, the Team needs to assess its own ability and willingness as the change agents to perform that role. They need to be aware of the requirements of an effective agent of change in addition to their knowledge and skill in using the Six Sigma tools and techniques. Where the change agents are lacking in ability, an improvement plan is required. Where the change agents are unwilling to take the actions required in the job description their continued membership on the Project Team needs to be reviewed.
Examine the Burden of Too Many Changes
One potential source of resistance frequently ignored by Project Teams is the burden it puts on the targets of the change because they have too many other changes to deal with. This does not necessarily mean that the Project Team should defer or cancel the Six Sigma project. It does mean they had better consider this source of resistance and build ways to deal with it into their plan. To address this potential issue the Project Teams needs to identify the other changes affecting the various target populations.
For those target groups the Project Team should ask itself the following questions:
1.Is there a way to join or append to any other change project?
2.If not, is there a sufficient reason to do this project now? If so, this must be communicated to the targets early in the project life cycle to gain their acceptance of the need for “one more change”
Managed Change™ Tools
- Key Role Map
- Sponsor and Change Agent Job Descriptions
- Sponsor and Change Agent Assessments
- Governance Charters
- Change Impact Analysis (Fish Bone Diagram)
MEASURE and ANALYZE
Managed Change™ Action Steps
- Gather a Full Set of Data Regarding the Current State
- Determine the Source and Degree of Resistance for the Various Target Populations
- Update and Review the Key Role Map
Gather a Full Set of Data Regarding the Current State
The strength of Six Sigma is its ability to assess the processes in the current state. An issue frequently voiced regarding Six Sigma is that it is not equally strong in its ability to assess the other elements of the current state: the structure, the people and the culture. Without this full rigor it is possible to miss elements of the current state that are contributing to the problem. Equally important, it is possible to miss potential sources of resistance to leaving the current state.
Example: the process is NOT broken. The written process is fine, but there is an unwritten rule in the culture - that the written process is cumbersome and awkward, and so people choose not to follow it. This belief will lead to resistance to either a resulting affirmation of the process or any improvements to it. People are satisfied with their own workarounds and unofficial modifications.
Determine the Source and Degree of Resistance for the Various Target Populations
The information resulting from these two phases will be an important element in helping people to choose to change. To the degree that the targets are dissatisfied with the current state, they will be open and willing to change.
If the Six Sigma team uses SIPOC, for example, it needs to look at each supplier and customer group as a target and ask:
- Does each target group see the need for a change?
- Is each target group unhappy with the way the process works today?
- Does each target group understand why the customer is unhappy?
- Does each group understand the consequences of not changing?
- Does each group have a sense of urgency to change?
In other words, will they accept the need to stop doing things the way they are currently doing them, or will they resist the team’s efforts to get them to change to a new way?
If the answers to any of these questions is no, there is a potential for the people in this group to resist the changes that need to be made in this Six Sigma project. Capturing that information now will help determine the potential for a successful change and dictate what needs to be done to turn a blocker into a supporter. The action steps to do that will be addressed in the Improve phase. The data is collected now and put on a spreadsheet called the InfoMatrix under the column: Resist the need to change from the way they do things now. Note that the InfoMatrix Stakeholders are the populations identified in the Expanded Stakeholder Analysis, and here, identified as targets of the proposed change.
As the Project Team moves through these two phases of DMAIC, it needs to keep reviewing the InfoMatrix and adding the additional insight and information it gains. For example, in gathering data in the Measure step, the team members may hear comments from various targets questioning the need to examine the process, or being defensive about the current state of the process. The targets may ask questions that indicate they are suspicious of the level of support (sponsorship) of their immediate bosses, or challenge the ability of the Project Team as change agents. This information should be recorded on the Managed Change™ InfoMatrix as vital data regarding the level and type of resistance that exists, or is developing.
Managed Change™ InfoMatrix
- Update and Review the Key Role Map
- As the current state becomes more clearly defined it is possible that additional targets and sponsors may surface or people may change positions and, thus, their roles.
Managed Change™ Tools
- Current State Analysis
- InfoMatrix
IMPROVE PERFORMANCE
Managed Change™ Action Steps
- Gather a Full Set of Data Regarding the Desired State Options
- Assess the Impact of Previous Attempts to change
- Update and Review the Source and Degree of Resistance for the Various Target Populations
- Update and Review the Key Role Map
- Design the Communication/Learning/Reward Plans
Gather a Full Set of Data Regarding the Desired State Options
Generating Solutions
As the Project Team develops each potential solution, it needs to expand its definition of the Improved State beyond the proposed process improvement. When the new process looks like this (the Improved State) will it require changes in the organization structure, in job descriptions, performance measurements? Will it require new software, new tools? Will it change the location of where work is performed? Will it require new skills and/or new levels of knowledge or experience by various target populations? And, equally important, will it require changes in the things targets believe and the resulting way they behave: the culture?
Fleshing out the picture of the change will give the Project Team a much better understanding of exactly what they are changing. For the solution ultimately chosen and implemented, it will also give the targets of the change a much more informed picture of what they are being asked to change to…making it easier for them to make an informed choice to change or resist.
Note that this robust and more complete picture will not necessarily reduce resistance to the solution chosen. Indeed, it may actually increase the resistance. That is the point. That resistance to changes in location, or tools, or beliefs is there, and if not surfaced now, will surface during the implementation phase, or worse yet, lie silent and sullen under a smiling surface until the Project Team goes away and the targets get to go back to the way things used to be.
Selecting A Solution
When identifying possible solutions there are multiple tools for determining which solution is the optimal one. When using the Impact/Effort Matrix, the information that has been collected about the potential for resistance should be included in the analysis. The effort axis should incorporate the analysis of the potential for resistance and the cost in dollars, time and expertise to overcome it.
When using a Criteria Based Decision Matrix include in the criteria along with things like impact on process, the expertise required to overcome the potential resistance and estimated effort to overcome it.
Assess the Impact of Previous Attempts to Change
There is one more key issue that needs to be assessed in determining where the potential for resistance exists. Before selecting a final solution, the last question on the InfoMatrix must be answered for each target population. What is the potential that each might resist based on their experience with attempts to make this change in the past (if any) and change in general?
Update and Review the Source and Degree of Resistance for the Various Target Populations
DMAIC states that now, in the Improve Phase, is the time to develop a change management approach. It is. What that means in many organizations, however, is that this is the time to start thinking about change management. That is too late. Thinking about change management must start at the beginning of a Six Sigma Project. What the Project Team has done up until this point, if it follows the actions recommended here, is apply the first steps of an effective Managed Change™: data collection. Now, to create a Managed Change™ strategy, or way to deal with that data, it is time to analyze that data and develop an action plan to address the resistance potential in both the initial pilot implementation, and the final deployment of the new process and resulting changes.
Update and Review the Key Role Map
As the current state becomes more clearly defined it is possible that additional targets and sponsors may surface or people may change positions and, thus, their roles.
Design the Communication/Learning/Reward Plans
A Change Strategy
The Project Team, using the data on the InfoMatrix, knows why the various target groups might resist the improved process. Now it is time, as part of the implementation, to design ways to reduce that resistance. A close study of the sample InfoMatrix above not only identifies the reasons for potential or actual resistance, but it also makes it very obvious what action steps would reduce that resistance. If the resistance comes from a lack of sufficient information about why the changes are necessary, what the changes will be or how they will be made, the action step is, obviously, communication. If the resistance comes from a lack of ability to perform in the way now required, the action step is learning. If the source of resistance is a lack of willingness to change despite being fully informed and trained, the action steps are built into a reward plan.
Communication Plan
The analysis of the InfoMatrix informs the Project Team which target groups needs what information about why the change needs to be made, what it will look like, and how it will be done. The result is a communication plan built on the information needs of the targets. The identification of the management cascade on the Expanded Stakeholder Analysis also gives the Project Team the map of who should do the communicating. Targets want to hear from their management cascade, not just from the change agents.
Learning Plan
The second tool, learning is usually well addressed by the Project Team. However, the InfoMatrix adds insight to the development of the plan, into how the lack of skill or knowledge or experience could potentially cause resistance, and thus, enhances the development of the training plan.
Reward Plan
The third tool for risk mitigation is the reward system. This vital component of the Managed Change™ approach is seldom used well, if at all. However, by looking at the InfoMatrix it is obvious that after providing sufficient information about the need to change, the description of the improved state, and after demonstrating the ability and willingness of the change sponsors and change agents, there still may be reluctance to change. This may be based on a bias against change, either inherent in the target population or learned by them over time. To reduce that resistance source, the Project Team needs to build a system that makes it rewarding for the individuals in each target group to choose to change and non-rewarding for each of them to choose not to change. That means the team must determine ways in which they can reinforce and reward the effort individuals make to move to, and stay in, the improved state. It also means there must be negative consequences for people who do not change. The reward system is as important as communication and learning as a Managed Change(tm) tool.
Managed Change™ Tools
- Desired State Template
- Communication/Learning/Reward Matrixes
- Supplemental Communication/Learning/Reward templates
CONTROL
Managed Change™ Action Steps
- Implement the Communication/Learning/Reward Plans
- Design the Sustainment Plan
Implement the Communication/Learning/Reward Plans
The Managed Change™ approach built in the previous phase does not end when the project is completed and the Project Team disbanded. Six Sigma recognizes that the learning plan continues into the sustainment phase of a project. The other two plans, communication and reward, need to be extended into the sustainment phase as well, based on the needs of the targets (as identified in the InfoMatrix) for continuing information about why the change was necessary, what it should now look like (control charts and the Diamond of the Improved State) and how the changed state will sustain itself over time. They also have a need for continuing reinforcement for the effort they are making to keep the Improved State as the “new” current state.
Design the Sustainment Plan
Before leaving, design the “what if” plan
- What if the process goes out of acceptable parameters? Degrades?
- What if it happens slowly over time?
- What if it happens suddenly and dramatically?
- What if acceptance up through implementation turns into resistance after the project is terminated and the process owner now has responsibility for the sustainment of the new current state?
- How will that potential be tracked and measures?
- Who is responsible for the tracking and measuring?
- Who will be responsible for taking corrective action if required?
Managed Change™ Tool
Sustainment Plan
Six Sigma and Managed Change(tm)
Managed Change(tm) is a useful and necessary component of Six Sigma. It does not replace Six Sigma. It does not run along side of it. It should be integrated into the logical and sequential phases of all Six Sigma projects. It is extra work for the Project Team to collect, analyze and address the data about resistance. Those who do it will tell you it is well worth it. Those targets that are recipients of that the extra effort will tell you the same.
Bibliography
Changing the Way We Change, by LaMarsh, Jeanenne. Addison-Wesley, Boston, 1995.
Master Change, Maximize Success, by LaMarsh, Jeanenne and Potts, Rebeca. Chronicle Books. 2004.
The New Six Sigma: a Leader’s Guide to Achieving Rapid Business Improvement and Sustainable Results. by Matt Barney and Tom McCarty. Prentice Hall. 2002. 0131013998
Making Six Sigma Last: Managing the Balance Between Cultural and Technical Change. John Wiley and Sons. 2001. 0471415480., Maning Chaning E, by George Eckes
The Six Sigma Revolution by George Eckes. John Wiley and Sons. 2001. B00005R6XR
Six Sigma: The Breakthrough Management Strategy Revolutionizing the World’s Top Corporations. Mickel Harry, Richard Schroeder. Doubleday & Co. 1999. 0385494378
The Six Sigma Way: How GE, Motorola, and Other Top Companies Are Honing Their Performance, by Peter S. Pande, Robert P. Neuman, Roland R. Cavanagh. McGraw Hill. 2000. 0071358060
What Is Six Sigma?, by Peter S. Pande, Larry Holpp, Pete Pande, Lawrence Holpp. McGraw Hill. 2001. 0071387856
The Six Sigma Way Team Fieldbook: An Implementation Guide for Process Improvement Teams, by Peter S. Pande, Robert P. Neuman, Roland R. Cavanagh. McGraw Hill. 2001. 0071373144
The Six Sigma Handbook, Revised and Expanded: The Complete Guide for Greenbelts, Blackbelts, and Managers at All Levels, by Thomas Pyzdek. McGraw Hill. 2003. 0071410155
Leading Six Sigma: A Step-by-Step Guide Based on Experience with GE and Other Six Sigma Companies, by Ronald D. Snee and Roger W. Hoerl. Financial Times Prentice Hall. 2002. 01300845573
Source: www.lamarsh.com |
| 12/12/2008 |
Fueling Business Growth with Lean Six Sigma and ACFC
By Steven H. Jones, MBA, PMP, Lean Six Sigma Master Black Belt, Siemens IT Solutions and Services, Inc.
A misconception within some companies is that the primary purpose of Lean Six Sigma is to reduce operational costs by reducing headcount. Unfortunately, this is not only untrue, it negatively impacts the ability of companies to benefit from the improvement initiative.
Obviously, creating or fostering such a notion, only builds negative morale and perceptions about the methodology. And the negative perception results in limited acceptance, support and adoption of Lean Six Sigma. This seems ironic, since one of the core tenets of Lean Six Sigma is that quality should not suffer to reduce operational steps and costs, and the fact that human interaction is essential to the quality of almost any product or service.
In reality, an effectively run enterprise-wide Lean Six Sigma program works in conjunction with those in sales or client management to sell the capacity that successful projects create. The additional capacity obviously can be devoted to delivering new products and services. Such actions manifest themselves in the redeployment of surplus workforce capacity, empowering the business to grow with little or no cost.
An Environment for Using ACFC
A successful Lean Six Sigma program allows other options for growth. One such option is the "At the Customer, For the Customer" (ACFC) program in which a company lends Six Sigma Black Belt resources to its strategic customers. ACFC originated at General Electric and has since produced successful results at other companies such as 3M, Siemens and Xerox.
Unlike traditional Six Sigma projects that focus on an organization's internal processes, ACFC projects focus primarily from inside the customer environment. Some companies such as GE and Xerox have deployed account-based Green Belts and Black Belts. These practitioners are assigned full-time to specific strategic customer accounts and focus on improving performance and increasing value at the customer by utilizing Lean and Six Sigma tools using abbreviated DMAIC/Kaizen roadmaps. The projects are limited to 45-day cycles and target existing business volume retention, additional volume growth and increased revenue with benefits reaching both the supplier and the customer. ACFC can function as an effective tool to move an organization from a delivery vendor to a business partner.
This concept has spawned a new application of Lean Six Sigma known as Lean Six Sigma for Growth. This approach utilizes existing Lean Six Sigma and Design for Six Sigma roadmaps such as DMAIC (Define, Measure, Analyze, Improve, Control), and DMEDI (Define, Measure, Explore, Develop, Implement). The Lean Six Sigma for Growth approach begins with discovering business and revenue growth opportunities. Once these opportunities are identified they are ranked to prioritize the selection of projects. The discovery process serves as a funnel to identify project opportunities and convert them into service opportunities. It is vital that the discovery step is conducted systematically as it augments the effort to identify opportunities and select appropriate projects.
ACFC for Growth Case Study
The following example presents an ACFC Lean Six Sigma project where a growth opportunity was converted into a service opportunity to deliver high initial benefits to the customer and long-term annualized revenue growth to the supplier.
The Business Problem: A vendor acquired a $1 million document management tool to better facilitate the development, tracking and storage of operational forms for a major customer. Working with the new tool, the customer's cost and cycle time results of $25,000 and 25 days were exceeding its requirement of $2,500 and two days. As a result, the customer ceased ordering from the vendor and threatened to pull out of the entire relationship. If the customer pulled out, the vendor would incur significant legal costs as well as revenue and productivity losses.
Project Initiation: The project targeted a 90 percent reduction in repetitive development time and costs. The vendor met with the customer to propose a reduction in the current production cycle to achieve two days and $2,000 in exchange for a minimum number of orders. The customer agreed to the proposal.
Project Results: One of the vendor's Lean Six Sigma Black Belts worked directly with the customer to launch the cycle time reduction project. The project team, led by the vendor Black Belt and including participation from both organizations, exceeded the 90 percent cycle time reduction objective. As a result, the customer recognized $600,000 in savings and the vendor secured more than $160,000 in revenue from the customer for new orders while avoiding $21,000 in termination costs. Peripheral benefits were gained as the vendor now has a low cost, high speed delivery system and a process to replicate with other customer accounts.
Faced with a business problem such as this, companies typically react by reducing headcount to reduce costs. Use of Lean Six Sigma within an ACFC process improvement environment provides a non-traditional approach to achieving results while enhancing the vendor-customer relationship.
Conclusion: Value in ACFC Partnership
All companies are faced with the traditional challenge of managing costs and increasing revenues. Lean Six Sigma assists in this effort while simultaneously increasing quality. The benefits of deploying Lean Six Sigma and ACFC together are numerous. Sharing Six Sigma resources across the vendor-customer relationship allows a more thorough analysis of both organizations and provides the opportunity to view business issues from a global perspective. In addition, business needs are more readily identified and solutions are implemented with a greater degree of impact. Placing the vendor Black Belt within the customer environment provides greater opportunities to enhance the vendor-customer relationship, offering the potential for additional vendor business growth. By improving or creating processes to deliver desired results, Lean Six Sigma and ACFC provide companies with solid tools for growth.
Source: http://www.isixsigma.com/library/content/c061023a.asp |
|
|
