Post on 30-May-2018
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The Six SigmaThe Six SigmaThe Six SigmaInitiative at EngroInitiative at EngroInitiative at Engro
Change for the BestChange for the Best
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n
Todays Agenda
Overview Project Challenges Future
Six Sigma Overview
ChallengesFuture
Engro Project Phases
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Discussion Overview
What is Six Sigma? Project Phases and project stakeholders Change management aspects of the project Managing project execution
Maintaining buy-in and commitment for the goals othe project
Using the VOC Voice of the Customers for sustainability of the project
Overview Project Challenges Future
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Who is Engro?
Overview Projects Challenges Future
EngroEnergyLimited
EngroInnovative
AutomationLimited
Project:Largest
single trainFertilizer plant inWorld
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Overview Projects Challenges Future
Why Six Sigma
To be the premier Pakistanienterprise with a global
reach, passionately pursuingvalue creation for all
stakeholders
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Development Process
Quality Team formed: February 2005, to study quality and businesimprovement systems
Research, case studies, overseas / local visits, crystallized andpresented to MC in June 2005
Six Sigma recommendation made to MC - concept approved
Permanent Business Improvement/ Six Sigma Quality Section form
Deployment plan presented to MC and approved
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Six Sigma is.
Methodology driving and achieving transformational change
Approach
to identify and eliminate defects with a customer-centric, data-dproblem-solving method and statistical analysis
DEFINE MEASURE ANALYZE IMPROVE CONTROL TRANSFERRECOGNIZE
Organizational structure Champions: Functional leader, project road-block remover, stewards Black Belts: Full-time resources, Six Sigma experts and trainers Green Belts: Project leaders, part-time, 10-day training Yellow Belts: Project members, 3-day training
Overview Projects Challenges Future
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34
56
7
668106210
233
3.4
Sigma
DPMO (DefectsPer Million
Opportunities)
The Definition of Sigma Is.
... a measure of goodness, using a universal
measurement scale.
The Definition of Sigma is..
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Six Sigma in simple language. Business management process that eliminates defects from work processes
As defects decrease, so do costs and customer satisfaction increases Six Sigma literally means 3.4 defects per every million occurrences
The program provides a solid route to get to the control function, the hardest thing toa corporation Jack Welch Leverages the underutilized assets of the best-managed corporations the intellectu
resources
Benefits are quantified in $ terms, tangible and quantifiable increases in shareholder
Other systems focus on the cost of quality. Six Sigma principle is that quality is freemore 0-defect production, the more ROI
Methodology allows us to reduce diverse processes and practices to a commondenominator defects per unit and sigma
Uses are as varied as the companies deploying it: sustainable culture improvement,annoying problems, staying ahead of competition etc
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6 s Culture of Defect Removal
DPMO: Defects Per Million OpportunitiesDefects: Anything that results in internal /external customer dissatisfaction
6
5
4
3
Process capability at an accuracy of 99.9997%
6,210 DPMO
3.4 DPMO
66,810 DPMO
233 DPMO
Typical Manufacturing
Typical Transactional
2
Overview Projects Challenges Future
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Six Sigma in Our Daily Lives
Occurrences1,000,000
100,000
10,000
1,000
100
10
1 2 3 4 5 6 7
Best inClass
Prescription WritingTax Advice
Payroll Processing
Restaurant Bills
Baggage Handling
AirlineSafety Rate
Sigma Level
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Six Sigma Developed Over Last 20 Years
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World-Class Companies TodayChemical Companies Quality/ Business Improvement ProgramDupont Six SigmaDow Chemicals Six SigmaEsso Imperial Oil Operational Excellence based on Six SigmaExxon Best practices replicationFMC Six Sigma
LESCO Fertilizers Six SigmaSherwin-Williams Six SigmaEastman Chemical Six Sigma Avery-Dennison Six SigmaPilkington Glass Six SigmaOthersGE Lean Six SigmaMotorola Six SigmaRolls Royce Six Sigma
Honeywell Lean Six SigmaWipro Six SigmaSiemens Top Plus, Six SigmaVodafone Six SigmaMonsanto Six Sigma
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Success Abroad
Dupont validated over $2 billion in savings from implementation ofSigma
GE realized over $1.8 billion in savings from Six Sigma during 1991999 (initial phase) $2.7 billion of improvements in working capital in 200304 Committed to reducing cost by generating $4 billion of
productivity/ year
Emerson launched Total Quality in 1992 Reduced manufacturing cost by 50%, cycle time by 62%, scrap
and rework by 50% and cost of quality by 25%
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upont: 6 Sigma complementing StrategSavings and Benefits
"Six Sigma continues to play a major role inachieving all of our business objectives, both productivity and growth. We are now finishingour sixth year of Six Sigma at DuPont.
.over 25 % of our projects are aimed at growing revenue. Six Sigma has becomethe way we work at DuPont and is a key
approach to improving execution as weenter 2005."
"We are also continuing our progress in productivity. Last year, DuPont Six Sigma added more than $700 million in projects with hard, validated benefits for the company.
nearly 17,000 employees have taken Six Sigma training. We currentlyhave more than 2,500 top-line growth projects.
We are now evolving to more enterprise-wide projects and more end-
to-end projects that build our process capability." Overview Projects Challenges Future
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1989
1990
1991
1991
1992
1995six sigma quality DMAIC
making customers winners
process improvement, CI, re-engineering
change acceleration process, productivity, NPI, QMI
productivity, best practices adoption, looking outside
work-out sessions, empowerment, bureaucracy busting, actions
2000 design for six sigma DMADV
GE journey to Six Sigma
Overview Projects Challenges Future
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Six Sigma and BPRSimilarities: Some tools in common: Process mapping, value-stream mapping, mind-maps etc Both have goals of improvement and driving bottom-line resultsDifferences:
Standard benchmarking: 2 sigma means the same in manufacturing, marketing, H BPR does not build in sustained management and leadership roles Project Definition: BPR projects often have very wide scope, world hunger Change management: Does not institutionally address resistance to change Rigor in methodology: Success rate if jump from Define to Improve Dedicated resources: Black Belts are full-time initially external, (also almost ful
Source: Collaborative Business Engineering: A Decade of Lessonsfrom the Field. Journal of Management Information.Systems (Spring 2004)
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Examples of Defects Low yield rate High operating costs High customer failure
High scrap/rework costs High quality costs High inventory/WIP Incoming product quality problems Long cycle times Unpredictable quality Unpredictable product performance Inaccurate information Missing information Completeness
Poor process capability
Constrained capacity Measured with variable data vs.
attribute data
High product volume Perceived poor quality Emissions control High delinquency to customer Frequent set up requirements High maintenance costs Low machine utilization
Effluent reduction High set up costs De-bottlenecking
Equipment lifeOverview Projects Challenges Future
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Deployment Plan 2005-2006
Champions Workshop Sept 2005 Building stake with key contributors Ongoing Infrastructure development Dec 2005 Program launch Feb 2006
Organizational awareness training Feb onwards Specialized training June onwards
Project focus areas: Improve efficiency of processes in Manufacturing, Market
Corporate Services
Domain: Engro Chemical only in 2006-2007 JVs in next phase
Overview Projects Challenges Future
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Benefits and Success Possible Only If
Visibly demonstrate support in speech and actions
Put best people on teams to ensure success
Ensure organizational critical mass
Acquire requisite technical knowledge to lead the initiative
Participate actively through various phases of project
implementation Implement clear reward and recognition program toreinforce the desired behavior and mindset
Overview Projects Challenges Future
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If you dont know where youregoing any road will take you there.
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Successful Rollout path
Vision Strategy Structure Process People
ConfusionStrategy Structure Process People
False StartsVision Structure Process People
InterferenceVision Strategy Process People
InefficienciesVision Strategy Structure People
FrustrationVision Strategy Structure Process
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Message for Each Employee
Six Sigma will help todeliver:
The Brand PromiseMeet or Exceed Customer
Expectations (CTQs) OnTime, Every Time
6 6
Overview Projects Challenges Future
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JCB
Implemented system for productivity,simplicity, transferability of people.
KPIs displayed at plant floors and
each department this was their Balanced Scorecard.
Hourly target board updated bysupervisors on plant floor.
Large master plan of all improvemenprojects prominently displayed aroundorganization to track progress and
deadlines.Started improvement program withKaizen.
Project results tracked and reportedevery quarter.
FOUNDATION
COMPANY STRENGTH
STANDARDISATION(STANDARDISED WORK) VISUAL FACTORY(5S)MAINTENANCE(TPM & QCO)
JIDOKAJIT
TAKTTIME
ONEPIECEFLOW
PULLSYSTEM
STOPCALLWAIT
(ANDON)
ERRORPROOF
(POKAYOKE)
QOS(FULL WORK
SYSTEM)
KAIZEN(CONTINUOUS IMPROVEMENT)
P E O P
L E P E O P L E
P E O P L E
P E O P L E
P E O P L E
P E OP L E
SIMPLE & ROBUST SYSTEMS BUILTAROUND OUR PEOPLE
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Training Progress
Make implementation of learning part of the
appraisal Path to Project independence (Workout and 6 )
and training independence
Training includes delivery of one projectCo-deliver
Shadow deliver
Self-Sufficient
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Project Selection approach
High Impact Projects
Other Voices:of the Process,
People andStakeholders
SWOTAnalysis
Engros StrategicObjectives
Customer
CTQs:Voice of
the Customer
SituationAnalysis
Assess severity,urgency
and capability
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Simplification
Simplification = Cost ReductionSimplification = Cost Reduction
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Why Do Most Improvement Efforts Fail?
Program Failure
5. Gaps in problemsolving approach
6. Lack criticalmass of
involvement
4. Wrong scope of effort
7. Treated like aPanacea
3. Weak resultsfocus
1. Poor changestrategy
2. Lack goals andmetrics
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Challenges We Are Facing
Lack of time for
value-addedproject work
Application of learning & tools
in daily work
Lack of real-time stewarding
of projects
Projects not tiedto help achieveexisting objectives
Managing thechange sustaining buy-in
Train for deeper tools utilization. Requireanalyses for all presentations/ business decisions
Battle of Priorities massive growth. IncorporateSafety and Six Sigma into employee appraisals
Electronic Application to track and stewardprogress of all projects across company
Dept. ambassadors, reward and recognition,implement CAP. Poster child projects
Initial Dashboard introduced strategy mapfor the organization. Key focus areas
-
Overview Projects Challenges Future
KISS
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John P. Kotter: 8 stage change Mgmt Process
1. Establishing a sense of urgency
- Examining the market and competitive realities
- Identifying and discussing crises, potential crises, or major
opportunities
2. Creating the Guiding Coalition
- Putting together a group with enough power to lead thechange
- Getting the group to work together like a team
3. Developing a vision and strategy
- Creating a vision to help direct the change effort
- Developing strategies for achieving that vision
First Three Stages
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Next Three Stages4. Communicating the Change Vision
- Using every vehicle possible to constantly communicate the new visionand strategies
- Having the guiding coalition role model the behavior expected of employees
5. Empowering Broad-Based Action
- Getting rid of obstacles
- Changing systems or structures that undermine the change vision- Encouraging risk taking and nontraditional ideas, activities, and
actions
6. Generating Short-Term Wins
- Planning for visible improvements in performance, or wins
- Creating those wins
- Visibly recognizing and rewarding people who made the wins possible
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Last Two Stages
7. Consolidating Gains and Producing More Change
- Using increased credibility to change all systems, structures, andpolicies that dont fit together and dont fit the transformation vision
- Hiring, promoting, and developing people who can implement thechange vision
- Reinvigorating the process with new projects, themes, and changeagents
8. Anchoring New Approaches in the Culture
- Creating better performance through customer- and productivity-orientedbehavior, more and better leadership, and more effective management
- Articulating the connections between new behaviors and organizationalsuccess
- Developing means to ensure leadership development and succession
Vision Into Action
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l
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One organization one goalCORPORATE OBJECTIVES
DEPARTMENTAL OBJECTIVES
INDIVIDUAL OBJECTIVES
This methodology used where Six Sigma is implemented Benefit tracking and measurement is done primarily through use of
Balanced Score Card (BSC) or Strategy Maps BSC defines organizational focus and converts expected benefits
into hard numbers Recognizes important interdependencies with peers and colleagues Reflects objectives that are within your own sphere of influence
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We want to make our quality so special, sovaluable to our customers, so important to
their success that our products become their only real value choice.
Speed is one of the true competitive advantagesin todays business environment. Speed
includes the pace at which management cancompose and implement plans.
Overview Projects Challenges Future
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Forging Ahead.
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Overview Projects Challenges Future