CLE_ZZT005_100102_SixSigma(color)_v1SixSigmaandtheOperationsTransformationInitiativeOS&EPresentationforOS&EofficedayOctober8,2002CONFIDENTIALThisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfromMcKinsey&Company.ThismaterialwasusedbyMcKinsey&Companyduringanoralpresentation;itisnotacompleterecordofthediscussion.CLE_ZZT005_100102_SixSigma(color)_v12DISCUSSIONTOPICSBackgroundbehindtheeffortPerspectivesonSixSigmaNewthinkingonoperationstransformationOpportunitiesandnextstepsCLE_ZZT005_100102_SixSigma(color)_v13CONTEXTBuildSixSigma/Operationstransformationengineserviceline:•ResurrectSixSigma•TakeSixSigmatothenextlevel•GreenfieldtransformationprogramsCurrenteffortsInitialprojectapproach2-montheffortInterview-intensive•CompanieswithSixSigmaprograms•Boutiqueconsultingfirm•InternalFirmexpertsonSixSigmaandleanOutside-infinancialanalysisWhatisSixSigma?Howhasitbeenappliedatcompanies?HowistheSixSigmaconsultinglandscapestructured?WhataretheimplicationsfortheFirm?In-goingquestionsCLE_ZZT005_100102_SixSigma(color)_v14DISCUSSIONTOPICSBackgroundbehindtheeffortPerspectivesonSixSigma•Definition•Applicationatcompanies•ConsultinglandscapeNewthinkingonoperationstransformationOpportunitiesandnextstepsCLE_ZZT005_100102_SixSigma(color)_v15THESTATISTICALORIGINSOF“SIXSIGMA”AhigherSigmameanslessvariationandasmallerprobabilityofdefectsBeforeAfterTargetCustomerspecs2,i.e.,30.85%willfalloutsidecustomerspecs6,i.e.,only0.003%willfalloutsidecustomerspecsCLE_ZZT005_100102_SixSigma(color)_v16B.Universalmetricbasedonreductionofvarianceforcriticaltoquality(CTQs)metrics•Controlcharting/statisticalprocesscontrol(SPC)•Hypothesistesting•Paretocharts•Brainstorming•Processmapping•Root-causeproblemsolving•Designofexperiment•Voiceofthecustomer•Etc.MasterBlackBelts(fulltime)•Responsibleforlastingresults•Supportprojectselection,training/coachingofblackbelts,andreportingprogressBlackBelts(fulltime)•LeadimprovementprojectsthroughDMAICcycle•Receive4weeksofup-fronttrainingGreenBelts(parttime)•Provideblackbeltswithsupporttogetprojectsdone•Receivelessintensivetraining2.Problemsolvingtoolbox3.DedicatedandcertifiedresourcesATYPICALSIXSIGMAPROGRAMCONSISTSOF3COREELEMENTS•Definetheproblem•MeasuretheproblemDefineMeasureAnalyzeImproveControl•Analyzeandidentifygap•Identifyandimple-mentsolutions•TrackandreviewprogressDMAICA.Standardized,disciplinedproblemsolvingapproach1.StructuredimprovementmethodologyCLE_ZZT005_100102_SixSigma(color)_v17SIXSIGMAHASEVOLVEDSIGNIFICANTLYINITS15-YEARHISTORYDescription•Quality-focusedprogramusingrigorousstatisticalanalysestoreducevariabilityDescription•ImprovementprogramfocusedondrivingoperationalandfinancialexcellenceDescription•Corporatetransformationprogramfocusedondevelopmentofbusinessleadersaswellasnear-termfinancialimpactDescription•ContinuousimprovementprogramdevelopedtoaddressthemajorbusinessissuesfromcostreductionstogrowthEra1:FocusedonqualityMotorola(1987)Era2:LinkedtofinancialperformanceAlliedSignal(1994)Era3:IntegratedintoperformanceimprovementagendaGeneralElectric(1996)Era4:AppliedtobroaderbusinessissuesBombardier(2002)Source:Pande,NeumanandCavanaugh,“TheSixSigmaWay:HowGE,Motorola,andOtherTopCompaniesareHoningTheirPerformance;”interviewsCLE...
