Top Ten Cost Cutters

         To achieve Six Sigma quality, a process must produce no more than 3.4 defects per million opportunities. That means for every million opportunities to please a customer, you fail less than 3.4 times. That is an incredibly high standard of quality and it is why it produces customer satisfaction. The customer feels the variance in any transaction or process that does not deliver a consistent, predictable level of quality. 
         Six sigma is a process for continued improvement. It involves a systematic methodology utilizing tools, training and measurements. The intent is enable you to design products and processes which meet customer expectations at Six Sigma quality levels. The process consists of five key steps: Define, Measure, Analyze, Improve and Control. 
        Some of the tools include the following: Defect Measurement, which accounts for the number or frequency of defects that cause lapses in product or service quality. Process Mapping, which describes things get done thus enabling participants to visualize an entire process, to identify areas of strength and weakness; to reduce cycle time and defects, and to recognize the value of individual contributions. Root Cause Analysis is the study of the original reason for nonconformance with a process, which when removed/corrected eliminates the nonconformance. A Tree Diagram graphically shows any broad goal broken into different levels of detailed actions, which encourages team members to expand their thinking when creating solutions. 
       Other tools are: A Control Chart to monitor process variance over time and to alert you to unexpected variance which may cause defects. A Pareto Diagram, which focuses on efforts or the problems that have the greatest potential for improvement by showing relative frequency and/or size in a descending bar graph. Based on the proven Pareto principle: 20% of the sources cause 80% of any problems. Statistical Process Control or the application of statistical methods to analyze data, study and monitor process capability and performance. 
        There are a number of special terms which identify the roles people play in Six Sigma: A Black Belt is a full-time Team Leader responsible for measuring, analyzing, improving and controlling key processes that influence customer satisfaction and/or productivity growth. A Master Black Belt is a full-time teacher who also reviews and mentors Black Belts. A Master Black Belt frequently is an outside consultant at the beginning of implementing a Six Sigma program. A Green Belt assists the Black Belt on a part-time basis.
       There may be several part-time executive level positions: The Executive Champion is appointed by the CEO to implement and assure resources for the Six Sigma program. The Deployment Champion makes a leadership commitment to implement the Six Sigma Program. A Project Champion clears the way for the Master Black Belt, as well as, overseeing the Black Belt in charge of a particular project. The Project Champion picks, monitors and supports the project Black Belt. 
       Six Sigma involves well defined roles and a clear structure for tasks for everyone in your business. Some employees will be dedicated full-time to the implementation of Six Sigma. Others will be fully committed to Six Sigma, but will perform their normal duties while striving to achieve Six Sigma standards and thus are considered part-time with regard to Six Sigma. 
        There are a number of terms which help an understanding of Six Sigma: Control is designed to assure a state of stability, normal variation and predictability by regulating and guiding operations and processes using quantitative data. Critical to Quality is an element of a process or practice which has a direct impact on its perceived quality. Customer Needs, Expectations are those needs, as defined by customers, which meet their basic requirements and standards. Defects are sources of customer irritation. Defects are costly to both your customer and to you. Eliminating defects provides cost benefits. A Variance is a change in a process or business practice that may alter its expected outcome. 
        Six Sigma anticipates that everything can be measured and thus sets numerical goals for quality improvement. By writing your goal down, you start to make it happen. The real goal is to make the customer happy and add to the bottom line, thus quality improvement is a means to an end, not the end in itself. From this perspective genuine quality control will always save money. There is a people side and a process side to quality improvement.
       The people side starts by asking your customers what problems need to be solved. It is important to understand problems from the customers’ perspective, not from your perception of the customers’ perspective. Thus if you perceive a burned pizza as the cheese being scorched and the customer sees a burned pizza as any black or deep brown anywhere on the pizza, you must move to the customers perspective before you can make the customer happy. 
        Once you identify what the customer sees as a problem, pick one as your project. Pick the problem which will give you the biggest bang for the buck, the one which will provide the greatest customer satisfaction, the greatest cost savings, the most room for improvement. 
       The people side continues as a Black Belt is selected and trained to implement the project. In training there are a few concepts that create better results. For example: Tell me – I forget. Show me – I remember a little more. Involve me – I understand. Typically training for a Black Belt is an extended four week process broken by return to the company to implement the skills learned. The first week he/she learns how to measure, then returns to the company to put this skill in to effect for a week or more. During the second week of training the Black Belt will learn how to analyze and return for a week or more to practice analyzing. In the third week of training the skill is Process Improvement, then return to implement. In the fourth week the skill is Control and again return to implement the project. All told the training may involve 8-12 weeks or more. 
       On the process side there are five steps: Define, Measure, Analyze, Improve and Control or DMAIC. Dumb managers always ignore cost. 
       You define what the problems are by talking to your customers. Focus on the process, not the outcome. Map the process. Recognize the links between each part of the process. You want to brush your teeth and also floss between each tooth. Focus on what you can fix. Don’t complain about what you can’t fix. Define each problem numerically. 
       As you define problems, gather your data very carefully. The data you gather will become the instruction booklet for your project. Talk to your customers and the employees who deal directly with your customers. Be sure you understand the problems from the customers’ point of view. When you write the problems down, the problems begin to be managable, clear specific items to correct. List as many problems as necessary, then pick the most troublesome problem which is likely to yield the greatest results. 
        Now measure your opportunities and the number of current errors being made. Each time there is a transaction with a customer, there is a new opportunity. Each time the customer is unsatisfied there is an error. At first you may be giving the customer a new pizza when he/she returns one with a burnt crust. Then you begin to try to catch the pizzas with burnt crusts before the customer gets the pizza. Soon the task becomes to eliminate burning the pizzas. That is where the cost savings occur and true customer satisfaction begins. 
       Measure each element of the problem to identify the critical to quality characteristics. Be careful. Take the time to get it completely right. Don’t just change the way you put the pizza in the oven. Change the oven so that you get a perfect pizza every seven minutes every time. Now your consistency is something the customer can count on and you can promote. 
      The third step is to analyze the numbers. Find out what is working well and what is working poorly compared to what is possible and what the competition is doing. If the gap is small, move on to the next problem. If the gap is great, perhaps this is the problem to dig into. 
        As you do your analysis you are trying to figure out why errors are being committed and how to fix them. If you set your experiments up right, the numbers will answer why and how. If it isn’t working, go back to the drawing board. Look for root causes. Learn statistical reasoning. 
       The fourth step is to improve your processes. Identify which critical to quality (CTQ) components are not meeting expectations. Focus on implementing changes to improve specific CTQ elements. Determine a reasonable goal using numerical standards. Once you have new ovens that automatically cook each pizza perfectly, your standard might be zero burned pizzas. 
        The last step is to control the process. This is where you implement measures to keep your variables within your new operating limits, month after month, year after year. Perhaps every six months the conveyor system on your new ovens need to be fine tuned and after three years the ovens need to be replaced. Distinguish between statistical monitoring and statistical control. Monitoring means watching the process. Control means keeping the process at you new standard. 
     In summary: Define the problem. Measure where you stand. Analyze where the problem starts. Improve with a real solution. Control the new process. A few suggestions: Measure what you care about. Put dates on everything. Assign specific jobs to everyone on your team. Put your expectations in writing and pass them out. 
       Now that you have a beginning idea about Six Sigma, you may want to learn more. 
       You can get copies of The Power of Six Sigma by Subir A Chowdhury, list $17.95 new from Albris (apx $.99 + shipping used) Clicking this link will take you to a page on their website. From there you can explore this and other books on Six Sigma. 
        You can become Six Sigma certified through Villanova University, http://www.villanovau.com/; the University of Michigan, College of Engineering, http://cpd.engin.umich.edu/index.html; Breakthrough Management Group, http://www.bmgi.com/; Six Sigma Global, http://www.sixsigmaglobal.com/; and other online, on campus or on site programs. 
        You can do a www.google.com search to find many other sources of Six Sigma training, certification, consultants and information. You can contact Chimorel and we can provide you with additional sources.