This chapter is from the book
This chapter is from the book
This chapter is from the book
Deployment Plan Elements
The deployment plan elements shown on page 65 must be addressed whether a partial or full deployment approach is utilized. However, the elements are not all implemented at the same time. Some are critical at launch, others in the second phase of deployment (managing the effort), and others in the third phase (sustaining momentum and growing). At this point the launch elements need to be covered in detail, but the other elements can be defined at a high, strategic level. Details of these elements will be added at the appropriate time.
While seasoned planners may feel the need to define all deployment elements in detail from the very beginning, our experience is that trying to do so delays implementation, and can result in paralysis by analysis as you try to cross every "t" and dot every "i."
We will briefly describe each deployment plan element, and then go into detail on the critical launch phase items. We provide additional detail on the other elements in Chapters 5 and 6.
Strategy and Goals
Strategy and goals make up the first key element. This element is the responsibility of senior management, and sets the overall vision for Six Sigma deployment. A key element of the strategy is choosing the place where Six Sigma will start and what the rollout sequence and timing will be. Obviously, Six Sigma cannot be rolled out everywhere at once. A typical industrial rollout starts in manufacturing, and then when success is demonstrated, management initiates projects in the other areas of the business and new product development (DFSS—Design for Six Sigma).
Service businesses, such as insurance or consumer credit companies, would typically begin Six Sigma in operations. General business projects and DFSS typically begin six to eight months and one year after manufacturing, respectively.
There are two reasons for starting in manufacturing (operations in service companies)—both related to the fact that manufacturing tends to have the best measurement systems. First, it is much easier to achieve quick hits if you begin with a good measurement system, rather than having to take time to create one. Second, the existence of good measurements usually means that everyone is aware of the huge potential savings available in manufacturing, and anxious to go after them.
Conversely, many people will need to be convinced that huge savings are available in the finance department. Starting Six Sigma in manufacturing/operations sets the initiative up for success. Success in manufacturing/operations builds confidence that Six Sigma will work, as well as producing bottom line results that help "pay as you go," thereby enabling deployment throughout the organization.
Another decision is when to start Green Belt training—typically initiated eight to ten months after Black Belt training starts. Black Belts, dedicated to Six Sigma projects 100% of their time, are needed to get the initiative moving quickly. Some companies have a goal of training the entire professional staff as Green Belts (part time) as soon as it can be managed.
It is also important that one to two year goals for Six Sigma be developed and broadly communicated in the Executive workshop. The goals, which generally include financial targets, should be communicated for the organization as a whole and reinforced within each major part of the organization.
A goal not stated in financial terms is a clear indication that management is not serious about making Six Sigma successful. A financial goal tells the organization's members what is expected of them. For example, in the case of a $1 billion revenue company, a goal of $2 million to the bottom line from Six Sigma communicates a far different message than a goal of $10 million or $20 million. At $250,000 per project, $2 million translates into eight projects while $10 million and $20 million translate to 40 and 80 projects, respectively. Clearly, much more effort (people, time, and money) will be required to complete 40-80 projects than to complete eight. The financial goals will be revised over the course of several years of deployment.
Process Performance Measures
Process performance measures define what's important for success and are used to select projects. A pitfall to be avoided is selecting each project independently. This is analogous to spending five minutes starting to clean 10 different rooms in a house, versus spending 50 minutes to completely clean one room. In the first case, it is difficult to see what impact the effort has had; in the second case there is a visible, tangible success that will now be ready to be leveraged elsewhere. It is preferable to launch Six Sigma by focusing on a few strategic areas, rather than 10 or 20. The process performance measures determined by senior leadership help everyone focus the initial projects strategically.
One model for key measures is quality, delivery, and cost (QDC). This model provides three strategic focus areas for the initial projects. Capacity is added when additional capacity is needed for the market or to run a more efficient operation (e.g., moving from a six- to seven-day operation to a five-day operation).
If all the projects affect one of these three areas, you will have significant tangible results when they are completed. Quality obviously relates to customer satisfaction, and an emphasis on it will almost always have the fringe benefit of saving money because you will reduce the costs of rejecting or reworking defective finished products, dealing with customer returns, shouldering warranty costs, and so on. The only exception is likely to be the case where delivering the desired quality level requires significant upgrade to equipment or materials. Surprisingly, this is rarely the case. See the discussion of process entitlement later in this chapter.
Delivery relates to the procurement, inventory, and logistics systems. Again, improvement here almost always enhances customer satisfaction, while reducing internal costs (excess inventory, loss of sales due to out-of-stock conditions, return of damaged or spoiled product, etc.) Reducing cost means reducing internal sources of waste or rework, regardless of whether this effort directly affects the customer. Improving the internal processes almost always results in better products and services, which ultimately benefits the customer.
In the case of service or transactional processes, the key process metrics are usually some form of accuracy or cycle time measures. Accuracy includes defects in information such as account numbers or financial figures, and directly relates to both customer satisfaction and rework costs. Cycle time of business processes is a productivity measure, so it also relates directly to costs and, of course, to customer satisfaction (e.g., time to approve mortgage loan applications). Inter-estingly, in the vast majority of cases, attempts to define customer satisfaction or internal cost metrics result in some measure of accuracy or cycle time.
Project Selection Criteria
The process metrics are also used to develop a set of more specific criteria to select projects. The project selection criteria used by one company are summarized in the following list—
Areas to improve
Waste reduction
Capacity improvement
Downtime reduction
Resource consumption (labor and raw materials)
Effect on Customer Satisfaction
On-time delivery in full
Defect levels
Effect on the bottom-line
>$250k per project
Doable in 4-6 months
Benefit realized in < 1 year
These criteria define areas that are important to improve and will produce significant bottom-line results. Note that the areas to improve are those that directly affect the customer satisfaction measurements. Project selection criteria also communicate what types of improvements are important to the organization. By communicating these criteria you alert the organization as to what your objectives are and the kinds of projects on which you want to focus. This increases the probability that large numbers of people in the organization will be involved in identifying opportunities for improvement. As noted, you will want to select projects strategically, rather than haphazardly.
Project Identification and Prioritization System
These project selection criteria are used in the Champion workshop to develop a set of initial candidate projects. The projects are put in the project hopper and prioritized for assignment to a Black Belt or Green Belt. Project selection will be discussed in greater detail later in this chapter. In later deployment phases organizations develop an ongoing system to identify potential projects, rank them, and place them in the project hopper, so that there is a continuously refreshed list of good projects.
Deployment Processes for Leaders
Lists of the Champions, Black Belts, MBBs, and Green Belts are also part of the deployment plan. In later deployment phases these lists will be expanded to become a system for selection, deployment, and advancement for each of these roles. The list of initial Champions will be developed at the Executive workshop. At the Champion workshop, the Champions will develop the list of initial projects, and based on this, develop a list of candidate Black Belts to lead these projects.
In Chapter 1 you learned that Six Sigma is about improvement—not training. It is strongly recommended that the projects be selected first and then the Black Belts for these projects. The Champions should be selected at the Executive workshop based on the areas targeted for improvement. Selecting the Champions and Black Belts before identifying specific projects increases the risk that important projects will be overlooked. This critical issue is discussed in-depth later in the chapter.
Roles of Management and Others
While there are generic job descriptions for Six Sigma titles, such as Champion, MBB, Black Belt, Green Belt, and so on, there is considerable variation in the actual role that these people play in different organizations.
Organizations should take the time to consider the specific roles that each of these will play in their deployment. Within reasonable boundaries, management can tailor the roles to a specific organization. The roles of the leadership team, Champions, MBBs, Black Belts, and functional groups should be defined in the Executive workshop and communicated to the organization. Discussion of guidelines for each of these roles is located later in this chapter.
Curricula and Training System
An overall training system for each of the Six Sigma roles is a key element of the deployment plan. At launch, a training schedule is needed only for the initial wave of Black Belts. As more and more people in various roles are involved in Six Sigma, new employees are hired, and the need is found for advanced training in certain areas (DFSS in engineering), a functioning training system with diverse curricula will need to be developed. A wave of mass training does not make a training system; mass training is an event that usually has no lasting impact. What is needed is a well thought out system that identifies all the training needs of all the roles, and puts together a sustained, ongoing system to continuously satisfy these needs in the most efficient way possible. This will be a tremendous amount of work, but fortunately the complete training system is not needed at the launch of Six Sigma.
Project and Six Sigma Initiative Review Schedule
A project review schedule is key for the deployment plan. Experience has shown that an effective schedule involves short (30-minute) weekly reviews by the Champion, and monthly reviews with the Plant Manager, functional leader, or SBU leader, as appropriate. These will be needed soon after the kick-off of the initial projects, and will be discussed in more detail in Chapter 5.
A review of the Six Sigma deployment should be done quarterly by the corporate or SBU leader as appropriate. All the elements of the deployment plan, and the associated goals, are appropriate agenda items for the quarterly reviews. This review is focused on how well the overall initiative is going; it does not focus on a review of individual projects. This review is critical to sustaining momentum of the Six Sigma effort long term, and is discussed in more detail in Chapter 6.
Project Reporting and Tracking System
This system documents the results of the projects, and provides valuable managerial information. Development of a formal system is not required in initial deployment, and is typically emphasized later in the deployment process, such as in the managing the effort phase discussed in Chapter 5. The project reporting and tracking system will keep a record of all the Six Sigma projects, providing a corporate memory of what has been accomplished to date. The system will generate managerial reports at several levels to keep management informed of progress.
This includes financial results from the tracking system, as well as non-financial information, such as number of projects completed or in progress, time to completion of projects, status reports, and so on. The tracking part of this system is intended to document the financial benefits of closed projects. Obviously, this system needs to be designed with rigor so that the claimed financial benefits are accurate and credible. For small organizations, or to get started, a simple Excel™ spreadsheet will do the trick. Dedicated computer systems are eventually needed for larger organizations. More details on this system are given in Chapter 5.
Audit System for Previously Closed Projects
When your organization gets to the sustaining momentum and growing phase (Chapter 6) there will be a large number of completed projects, many of which will claim perpetual benefits; that is, benefits that will recur year after year. For example, if waste levels drop from 10 percent to 5 percent, and this improvement is maintained, cost savings from lower waste will be reaped every year. Unfortunately, in many improvement efforts these lower costs begin to creep up over time, much like weight lost on a diet. To some degree this is to be expected, since it is human nature to revert to old habits once the additional resources and focus brought by Six Sigma move on to other priorities.
Of course, you will need to preempt the natural digression back to old ways and rework levels if your efforts are to have lasting impact. Six Sigma has the advantage of a formal step in the DMAIC process, the control phase, which is specifically targeted to implement controls that prevent backsliding to the previous performance. As a second layer of protection, an audit system for previously closed projects needs to be implemented. This is not primarily a financial audit system to ensure that claimed benefits are real—financial controls need to be implemented from the very beginning. Rather, this audit system is intended to audit the control plan of previously closed projects and ensure that it is working. In other words, the audit system will check to make sure the benefits of this project are still being received. If not, action will be initiated to revisit the project, regain the benefits, and institute an effective control plan. This system is discussed at greater length in Chapter 6.
Reward and Recognition Plan
HR needs to develop a reward and recognition plan to ensure that the organization is able to obtain (and eventually promote) the best possible candidates for Six Sigma roles. We believe in the power of "intrinsic motivation" (the idea that people do something because they really want to do it), rather than solely relying on "extrinsic motivation" (people do something because they are coerced or "bribed" to do it). Therefore, those that have a fire in the belly for improvement will likely perform better in Six Sigma roles than those solely looking for money or promotion.
However, it must be recognized that a total lack of extrinsic rewards for involvement in Six Sigma is essentially a disincentive, therefore, consider rewarding these roles in such a way that top performers will be drawn to Six Sigma. This plan, which will be discussed in greater detail in Chapter 5, should be reviewed and revised as needed over time to ensure that the Champions, Black Belts, MBBs, Green Belts, and team members are properly recognized for their contributions. Most successful Six Sigma companies have revised their reward and recognition systems to more effectively support the Six Sigma initiative. A balance of both intrinsic and extrinsic motivation is encouraged.
Communication Plan
A communication plan has to be developed to support the Six Sigma initiative. This will be a very important part of the deployment plan because it will significantly affect the impression that rank and file employees have of Six Sigma.
Communication about Six Sigma typically utilizes existing media, but sometimes new media have to be developed. It is important to use a variety of media because people take in information and learn in different ways. There is variation in people as well as in processes. Some prefer personal contacts, either one-on-one or in groups. Others prefer to read newsletters or memos, while still others respond well to videos, webcasts, or emails. Leadership needs to carefully communicate why they chose to deploy Six Sigma, what they hope to get out of it, and where it will take the organization. One example of such a communication plan was the video that Jack Welch made (see Chapter 2), and which each exempt employee at GE was expected to watch. This was followed up with frequent emails to all employees with updates on progress of the initiative.
In some cases, such as GE and AlliedSignal, the CEO will make a bold statement about Six Sigma at the very beginning. However, we have also worked with organizations that did not feel comfortable making such bold statements. There is often a concern that if too big a deal is made of Six Sigma at the very beginning, unrealistic expectations will be set. Every employee might expect to begin Six Sigma training the next week. Customers may expect better products and services immediately. Confidence in the initiative may fade if people's unrealistic expectations are not fully met. Therefore, many organizations choose to begin the initiative in a fairly low-key manner, without hoopla.
Once actual projects are begun, and results are starting to flow in, the initiative will be more formally and broadly communicated. Leadership will be able to point to tangible savings that have already been accomplished, and can communicate the sequenced rollout of projects and training. The decision of when to begin implementing the communication plan needs to be made at the Executive workshop. The communication plan is discussed more fully in Chapter 5.
Experience and surveys have shown that every item on this list is important. Moreover all are needed for success; none are optional. Not paying attention to any of these items can seriously limit the effectiveness of the Six Sigma initiative. As previously noted, however, not all items need to be developed to the same degree of detail in the launch phase. The items that comprise the implementation process are the most critical initially.