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1、McKinsey-Six Sigma& Lean030602MVA_he_ZZT_7861GE has become the poster child of the Six Sigma movement 43216810152235501987 889092949596989901 2002Cumulative Fortune 500 program launchesEstimatesEra 1 (1987) QualityEra 2 (1994) Financial performanceEra 3 (1996) Performance Improvement Umbrella Era 4
2、(2000) Strategic issuesWhy did GE adopt Six Sigma?Intense pressure on margins and no room for price increases premium on productivityMediocre quality and disappointed customersBillions of dollars lost in cost of poor qualityReenergize GEs productivity machineEngine for cultural transformationEvoluti
3、on of Six SigmaGESource: McKinsey030602MVA_he_ZZT_7862Delivery exampleSix Sigma has its roots in statistical process controlBeforeAverage delivery time: 45 minutes55 minutes(Commitment to customer)Before: 2 (i.e., 30.85% delivered outside target times)After: 6 (i.e., only 0.0003% delivered outside t
4、arget times)35 minutesSource: McKinseyCritical-to-quality metric: on-time delivery7 articles lost per hour1.7 incorrect operations per week1 short or long landing every 5 years68 wrong prescriptions per year99.99966% Good (6 Sigma)99% Good (3.8 Sigma)Other process capability examples20,000 lost arti
5、cles of mail per hour5,000 incorrect surgical operations per week2 short or long landings at most major airports each day200,000 wrong drug prescriptions each yearAfter20,000 lost articles of mail per hour5,000 incorrect surgical operations per week2 short or long landings at most major airports eac
6、h day200,000 wrong drug prescriptions each year030602MVA_he_ZZT_7863The Six Sigma program has three key elementsBrainstormingAffinity diagramsMulti-votingHypothesis testingPareto chartsFishboneProcess mappingRoot cause problem solvingMaster Black Belts(full time)Support key line executivesResponsibl
7、e for project selection, training/coaching of Black Belts and reporting progressBlack Belts(full time)Lead improvement projects through DMAIC cycleReceive 4 weeks of up-front trainingGreen belts(part time)Provide Black Belts with support to get projects doneReceive less intensive trainingStatistical
8、ly-focused problem solving toolsDedicated and certified resources3.Focuses on reduction in variation of key metrics2.Drives measurement and data-driven analysis of metrics that are critical to customers1.Creates standardized, disciplined problem solving approach used across companyAll Six Sigma impr
9、ovement efforts optimize processes by reducing variationDefine the problemMeasure the problemDefineMeasureAnalyzeImproveControl Analyze and identify the gapIdentify and implement solutionsTrack and review progressDMAICPrescriptive Problem Solving Process DMAICDesign of experimentVoice of the custome
10、rQuality function deploymentANOVAEtc.030602MVA_he_ZZT_7864Improvement infrastructure GEs Six Sigma success is based on a thoughtful understanding of the drivers of large-scale change1243Set aspirationsArchitect programImplement changeBuild momentumEffective, well-orchestrated launchTrain top leaders
11、 and set aspirationsArchitect program and begin massive communication drive Select and deploy high-potential resourcesExecute high profile projects and make teams heroesRelentlessly communicate successes and changes to comeGE used several core elements of successful transformation programsOrganizati
12、onal enablersLeadership Intense involvement of top and line leadershipProgram designRobust roadmap and processesPerformance management Goals baked into budgets at all levels Dedicated resourcesBest resources with clear career pathsTalent/skill development Multi-level training Program supportRuthless
13、 project manage-mentProblem solving Disciplined use of DMAIC and tools199619961996 - 971997Source: McKinsey030602MVA_he_ZZT_7865Six Sigma projects follow a disciplined approach to root-cause problem solving Clearly definethe problem, the goal, and the processBaseline and further refine the problem A
14、nalyze to identify the vital few root causes Select solu-tions; test on pilot; imple-ment full scale Control the process to sustain gains Define Measure Analyze Improve Control What is the problem?Goal?Customers?Process to improve?What is the ex-tent of the pro-blem? Efficiency EffectivenessWhat dat
15、a do we need to get to the root causes?Range of optionsSolutionsBest pragmatic solutions Full range of solutionsThe select fewThe optimal and pragmatic solu-tionSmall scale pilotFull scale implementationTactical level Process standardization Process through-putStrategic level Disciplined use of busi
16、ness pro-cess manage-ment by steering committeeKey elementsDeliver-ablesClarity on what is in scope and what is out of scopeIn-depth under-standing of how big the problem is and data to get to the bottom of itData driven rigorous con-clusions on the vital root causes for the problemFully imple-mente
17、d solu-tion based on lessons from pilotStable processSystem to keep it stableFully integrated into business goalsExecutives fully involved Source: McKinseyDMAIC 030602MVA_he_ZZT_7866Six Sigma has had high impact on service businesses Problem definitionReduce accounts receivables tobest-practice leve
18、ls in 24 weeks Organizational enablers and improvement infrastructureCFO sponsor with division heads present at project launchCFO and division heads attend key status reviewsBlack Belt coach and guide but led by finance managerProject tracked by Six Sigma staff and through steering committee meeting
19、sProblem solving methodologyand toolsDMAICTools used on project brain-storming, fishbone, pareto, histo-grams, scatter plots, check sheets, control charts is-is not, force field analysis, simple FMEA, poke-yokeResultsReduced AR by 90% for annual benefits exceeding USD 4 millionSample tools used Fish
20、bone defective invoice ManMeasure-mentMachine MethodMaterialEnvironmentDefective invoiceTraining Metrics No check against POPareto RecommendationsControl chartPOT&CDeli-veryOtherImprove invoice quality by following actions Mandatory check of PO against invoice 5-day training of personnel by experien
21、ced gurus with best practices One invoice per PO with itemized list of all itemsImplement segment based control system for customers. Set target goal into annual MBO to ensure accountability Set guidelines for action, red, yellow, green flags for escalating actions Observe strict $ penalties for lat
22、e payment Monitore control chart of key metrics Days(USD delin-quency days) = USD invoice x days lateUpper control limitUpper spec. limitLower spec. limitLower control limit Special causesSource: McKinseyPROJECT REDUCE DELINQUENT ACCOUNTS RECEIVABLES 030602MVA_he_ZZT_7867Green beltBlack beltExecutiv
23、e sponsor/division managerPart-time-position leading Six Sigma. Continues fulfilling current job responsibilities Trained in Six Sigma tools, provides functional/ divisional knowledge and expertiseMentored by a black belt Communicates Six Sigma methodology to others in the organizationFull-time dedi
24、cation to Six Sigma; Leads projects and shares responsibility for deliverablesApplies right Six Sigma methodology and tools to ensure quality of process Escalate issues to managementTrains and coaches team membersProposes Six Sigma improvement projects and responsible for deliverablesResolves issues
25、 Promotes Six Sigma strategy and methodologyUnderstands Six Sigma strategy, discipline and toolsSix Sigma roles Source: McKinsey030602MVA_he_ZZT_7868Although the impact from Six Sigma has been significant for GE .00.40.81.21.619969798992000Percent of salesSix Sigma net financial impact*USD mGE total
26、 revenuesUSD bn-20550760 1,490 2,0007990100112130Single performance improvement themeCustomer perspective Common languageFact based problem solvingEnhanced capabilitiesPowerful engine for cultural changeFacilitated success of other initiatives Hard dollar benefits for GESoft benefits for GESource: M
27、cKinsey030602MVA_he_ZZT_7869WeaknessesProject-centricQuick wins remove focus on strategic movesContent neutral process prescriptive Needs strong organizational element to succeed Disconnects possible between quality and savings. Six Sigma is not a panacea for all ills it has its own set of strengths
28、 and weaknesses Source: McKinseyLean can complement Six Sigma to overcome many of its major weaknesses StrengthsCommon languageCustomer focusBottom-line resultsReal line management involvementFact-based problem solving methodologyComprehensive set of toolsBuilds new generation of leadersTakes capabi
29、lity of organization to next levelStrong infrastructure helps other initiatives030602MVA_he_ZZT_78610More over, few companies are able to use Six Sigma effectively due to a small number of root causes Source: McKinseyLack of real involvement by top and line management Six Sigma is a program run by a
30、 staff organizationRewards and incentives are not aligned with Six Sigma program no breakdown and assignment of targets for line management with accountability tied to incentivesStaffing Six Sigma with deadwood instead of top talentIneffective project selection systemIneffective project management w
31、ith no drop dead dates for projectsNo effective system for best practice replicationRapid training of large numbers of people who have no projects to work onProcess measures, such as number of people trained, number of projects launched only assess progress and not resultsLack of understanding of th
32、e difficulties inherent in change managementTypical root causes for ineffective Six Sigma implementation030602MVA_he_ZZT_78611Six Sigma space and our capabilities Source: McKinseyClient needsOur capabilities Considering Six Sigma and need an objective assessment of pros and consSix Sigma is not deli
33、vering expected results and need a rapid assessment and recommendations to fix itNeed help in accelerating existing and under-performing Six Sigma initiativeNeed deep subject matter expertise and prescriptive solutions to move to the next level of performance Six Sigma Executive Awareness Training o
34、bjective view of Six Sigma for executivesSix Sigma Diagnostic 3 - 5 day Six Sigma diagnostic of Six Sigma companies Six Sigma Acceleration for comatose programs by building an effective transformation engine to complement their problem solving and tools already in placeInfusion of deep prescriptive
35、functional knowledge into companies with robust Six Sigma programs Lean Six SigmaPricingSourcingSupply chain management030602MVA_he_ZZT_78612Lean Six Sigma integration030602MVA_he_ZZT_78613Many companies wish to build on their Six Sigma programs The company has launched a company wide Six Sigma prog
36、ram in response to external pressures several years ago A sizeable investment and efforts have been put into resource infrastructure building, and training After showing early returns, the rate of improvement has begun to slow There is interest in further content addition specifically around embraci
37、ng lean manufacturing Management acceptance and commitment to continuing the Six Sigma program remains high The company would like to continue improvements by seamlessly integrating Lean into the Six Sigma program030602MVA_he_ZZT_78614Despite some common elements lean and Six Sigma have significant
38、differencesWhat is . an integrated operating system of principles, practices, tools and techniques. a structured improvement methodology using a standard approach and statistical toolsDriving principleReduce wasteSynchronize flowsManage variabilityReduce variationOperational KPIs cascaded to front l
39、ineProject metricsPerformancemanagement Lean experts Team leaders Natural teamsInfrastructure &involvement Black belts, MBBs, GBs Six Sigma project support Ad hoc teamsPrescriptive solutions One piece flow Pull System SMED Standardized workPrescriptive processes DMAIC DMADV/DFSSStatistical approache
40、s DOE Gauge R&RProblemsolvingSystematic value stream mapping Current state and future stateDriven by key issues and problems in current processesProject selectionRoot cause analysisProcess mappingBasic analytic toolsLeanSix Sigma030602MVA_he_ZZT_78615Synergies between Lean and Six SigmaSix Sigma Sho
41、rtfalls Project centric Elitist Rigid process KPI disconnect No prescriptive solutionsHowever Lean and Six Sigma can be highly complementary030602MVA_he_ZZT_78616Synergies between Lean and Six SigmaLean Positives Holistic and systems oriented Front line involvement Standard practices KPI deployed to
42、 all levels End state driven project selection Prescriptive solutionsSix Sigma Shortfalls Project centric Elitist Rigid process KPI disconnect No prescriptive solutionsHowever Lean and Six Sigma can be highly complementary030602MVA_he_ZZT_78617Lean Shortfalls Difficult to understand Difficult to sca
43、le Rigor can suffer Weak tie to bottom line Top management understanding superficialHowever Lean and Six Sigma can be highly complementarySynergies between Lean and Six SigmaLean Positives Holistic and systems oriented Front line involvement Standard practices KPI deployed to all levels End state dr
44、iven project selection Prescriptive solutionsSix Sigma Shortfalls Project centric Elitist Rigid process KPI disconnect No prescriptive solutions030602MVA_he_ZZT_78618Synergies between Lean and Six SigmaSix Sigma Shortfalls Project centric Elitist Rigid process KPI disconnect No prescriptive solution
45、sHowever Lean and Six Sigma can be highly complementarySix Sigma Positives Common language Scalable infrastructure Fact based rigor Bottom line oriented Top management relates to it easilyLean Positives Holistic and systems oriented Front line involvement Standard practices KPI deployed to all level
46、s End state driven project selection Prescriptive solutionsLean Shortfalls Difficult to understand Difficult to scale Rigor can suffer Weak tie to bottom line Top management understanding superficial030602MVA_he_ZZT_78619The typical integration approaches are too narrowDo not understand fundamental
47、differences between Lean and Six Sigma: view Lean as toolkit vs. total system approach Do not incorporate Leans systemic value stream mapping and end state view in project selection processDo not take advantage of Lean prescriptive solutions to avoid reinventing the wheelDo not ensure front line inv
48、olvement Do not provide required breadth and depth in capability building: front line, top management, practitionersDo not alter performance management system to cascade KPIs to front line030602MVA_he_ZZT_78620Also, they do not address the typical implementation issuesLean pitfallsSix Sigma pitfalls
49、Lacks visionTop managementLacks involvementResourcesInadequate critical massElite resource modelProject selectionNot driven by end stateNot connected to line managements real prioritiesPerformance managementKPIs not defined or cascadedProject metrics disconnected from CTQsMiddle management support a
50、nd ownershipWeakWeakDeploymentTool centricProject centric030602MVA_he_ZZT_78621We recommend a five building block approach to integrationAssess whether current Six Sigma program provides a robust enough platform for integrationDrive project selection from a systemic end state value stream viewDeline