3M’s Stock Will Recover With Deeper Implementation of Six Sigma
After news that James McNerney, 3M’s stalwart leader for the past 4 years, is moving on to Boeing the company’s stock price fell by 4%. The fall is due in part to the amazing influence McNerney’s disciplined style leadership has brought to 3M. Although criticized for his rigidity, McNerney put a tight regimen on the company through his incorporation of the Six Sigma efficiency program. Surprised by the move, executives remaining with 3M argue that the company will continue with the plan initiated by McNerney to implement further the Six Sigma efficiency program. This program is largely credited for the turnaround in the company, and as a consequence the company plans to integrate the program further, a process that will take a number of years. Kiplinger’s Reports:
CSFB analysts say that although the shares will probably be hurt in the near term, the stock should recover fine, as 3M’s business should be able to stay on track, even without McNerney.
McNerney Leaves 3M for Boeing and Brings Six Sigma With Him
James McNerney was brought over from GE four years ago to take the helm at 3M. With him he brought a disciplined management style that included a deep incorporation of the Six Sigma program. A program that played a key role in achieving the company’s best year to date with record sales of $20 billion in 2004, a full $4 billion up from 2001. The growth was achieved through high cost cuts of 10% and a strict implementation of Six Sigma. Because of this phenomenal growth Boeing coaxed McNerney to come and take over as its new CEO.
McNerney is not without his critics, however, as some former executives have argued that McNerney focused the company too much on Six Sigma and did not leave enough room for innovation and creativity. Seattle Post-Intelligencer Reports:
“He has been criticized for not wanting to listen, and I don’t think that is correct,” said Guehler, a retiree living in Florida. “He likes to have people present things to him with facts, and in a positive manner.”
Ford India Integrates Six Sigma
After experiencing remarkable success in quality and efficiency in its many other branches, Ford has decided to expand its usage of the Six Sigma program at its India hub. The company has begun working with the Automotive Component Manufacturers Association of India who began a Six Sigma black belt program in 2003 and has since issued 35 certificates in the region. Vice President of India Ford Vinay K Piparsania has stated that his company has already experienced a “sea world” of difference in the decade since they originally began integrating the process. This personal experience has contributed to the company’s drive to integrate further. Ford India argues that while a full integration of the system would take years if not decades, even minimal integrations have the power to yield quite considerable cost savings. Sify.com Reports:
Noting that the journey of Six Sigma had tremendously improved over a period of time, he said even one per cent customer loyalty would result in savings of more than a million dollars.
Tyco’s Turnaround Due to Efficiency Achieved via Six Sigma
When Edward D. Breen took over Tyco three years ago he faced a seemingly insurmountable wall of destruction to overcome left by his predecessor. Today the company has a market capitalization of $62 billion, over three times its lowest mark achieved shortly after the former head was convicted of securities fraud, conspiracy and larceny. The company’s growth has been driven in part to a major efficiency push, led of course by the implementation of Six Sigma. The efficiency program has saved the company some $600 million and has helped triple the company’s operating margins from 8.5% in 2003 to 13.2%. BusinessWeek Reports:
As Breen continues to look for more efficiencies — $600 million in cost cuts are targeted in fiscal 2006 — he’s also seeking to get rid of the worst-performing units. “He wants to sell the leaky boats before they take on too much water,” says Nicholas P. Heymann, an analyst at Prudential Equity Group.
GECIS to Expand into Romania
In what is to become their second Business Services and Technology Solutions center in Europe, GE announced recently its plans to open a center in Bucharest, Romania. The center was saluted by the Prime Minister of Romania, an indication of its importance to the local economy. Motivation for the project was driven by the highly skilled labor force, the countries forthcoming EU membership, government support for big business, and the flat tax. GE credits much of its growth, both personally and its popularity abroad to its incorporation of the Six Sigma program. Not only will the company incorporate Six Sigma methodologies in their expansion to Romania, but the company will additionally provide such services to its customers under the company Gecis.
Applying Six Sigma in Health Care
While Six Sigma has spread throughout the corporate world, it is just now making inroads into the health care industry. In hospitals, this has meant initiatives to achieve more efficient and satisfactory patient care and business organization. A more profound incorporation of the program seems to be on the horizon, however, as increasing numbers of hospital CEOs are showing interest in the program. For hospitals this would mean the need to break down actions into their component parts and examine each part for inefficiencies and errors. For many in the industry this seems to run counter to the belief that each patient should be treated individually and actions should accordingly be individual. What such an interpretation fails to understand however, is that all patients must undergo similar imputting and basic care processes. Health Facilities Management Reports:
Six Sigma does not simply focus on cutting budgets. It focuses on the processes themselves–doing them better and faster and, consequently, doing them at lower cost. Six Sigma can be applied to any activity or transaction in the health facilities management department where quality, timeliness and costs are concerns.
Book Review: Power of Ultimate Six Sigma
Implementing Six Sigma has in the past been a prohibitively costly endeavor for many small and even mid-sized companies. Recently, however, a number of literary contributions have brought forth the ability of individuals to understand and apply the Six Sigma process to their own business. In this latest release, entitled Power of Ultimate Six Sigma, the author goes beyond an overview of the Six Sigma process as outlined in books such as Six Sigma for Dummies, and begins to explain his variant on how Six Sigma should be employed, known as Ultimate Six Sigma. While the writing is at times convoluted, the author does an adequate job of explaining an approach to Six Sigma that has eluded writers for years. To assist the reader, the author provides a number of visuals including charts, checklists and graphs. That said, this type of book is better suited for individuals who already have some background or experience with Six Sigma rather than the novice who is entirely ignorant of the terms used and structure of the program. MediaGab Reports:
3. Since there is no one perfect book on the topic of Six Sigma, and since it is always a good idea to keep learning, this book is well worth the money. For those who buy this book and understand that it isn’t a “how to” book on Six Sigma will be satisfied.
Six Sigma in Supply Chain Yields $5m on Average
A recent report entitled, “The Supply Chain & the Impact of Quality Initiatives” found that the incorporation of quality initiatives achieves an average savings of $5 million. Achieving such gains relies primarily upon companies focusing on demand/supply management and planning, production planning, and scheduling. Additional considerations should also be inventory and warehouse management. While the overall conclusions of this report are by no means surprising, as the benefits of programs like Six Sigma are widely touted, some specifics on what emphases pay off when implementing these programs were. For example, the study cited that those companies who kept a better eye on the supply chain developments of competitors achieved much higher gains through the incorporation of programs like Six Sigma than those who did not. IndustryWeek Reports:
Successful companies noted that keeping track of practices of peer company leaders and other industry leaders are critical to identifying the supply chain critical improvement opportunities.
Celestica Uses Lean over Six Sigma
Celestica Inc. is still riding high off its reception of the Shingo Prize for Excellence in Manufacturing. Thri firm was the first EMS provider to have been awarded the prize in its 18-year history. This award was given based upon the companies famed manufacturing process which has helped achieve better bottom lines for a number of large companies including Toyota Motor Corp. According to executives at the firm, the success of the manufacturing process is due to the company’s incorporation of LEAN a process they felt offered them more variability than the more widely-known Six Sigma process. Executives argued that LEAN provided them with the ability to apply efficiency changes to a real world environment, something they may have felt limited in doing with other efficiency methodologies. My-ESM Reports:
“Lean is known by most manufacturing experts to be the best production system in the world at providing cost and execution results despite the variability that exists in the real-world environment,” said Stephen Delaney, chief executive officer of the Toronto-based company. “Lean is gaining momentum in our industry; it provides some differentiation for Celestica.
AIA Malaysia Grows Due to Six Sigma
American International Assurance Malaysia, also known as AIA Malaysia has increased its sales force by over 10% to almost 10,000 agents in just five months. This type of growth has allowed the firm to provide better services to its quickly growing clientele. This type of growth was due to the fact that company has recently undergone a major incorporation of Six Sigma into their business model, a process which helped the company shed much excess weight and to identify which particular areas required the most attention. The process, however, is by no means complete as the company is continuing to delve further into Six Sigma and implement changes across the next two years. thestar Online Reports:
AIA undertook a very aggressive recruitment campaign at the beginning of the year.
“To complement the enhancement of our agency network, the company has also put in place a series of training programmes to support and train these individuals into successful entrepreneurs,” Benter said.
HSBC Expands Six Sigma Usage
HSBC Malaysia, one of the countries leading lenders, plans to incorporate the use of Six Sigma in an effort to propel its consumer banking business. Unlike some companies, who have used the methodology as a public relations move to increase stock price based upon excitement about the incorporation of the process, HSBC Malaysia says that it plans a profound incorporation of the methodology into its business plan. The company began testing the compatability of Six Sigma with their business by initially applying the methodology to the processing of applications for credit cards and mortgages as well as a few initial customer accounts. They have been so pleased with the results that a larger incorporation is now on the agenda. thestar Online Reports:
HSBC has made huge investments pertaining to the adoption of methodology and has incorporated the practice into some of tis core processes before extending it to other areas,” he told StarBiz in an interview in Kuala Lumpur.
Book Explains Simply the Six Sigma Way
One of the primary difficulties inhibiting the wider adoption of Six Sigma has been its relative exlusivity to the top-tiers of the corporate world. Implementing the efficiency strategy has required that individuals undergo extensive and quite expensive training, an often prohibitive entry gate for small companies and their executives. A recent book by Craig Gygi entitled Six Sigma for Dummies cuts through that barrier, however, by offering readers a simple straightforward interpretation of the Six Sigma process. Initial sales figures have surpassed expectations indicating the strength of demand for a service able to cheaply explain the most basic benefits of the process. Salt Lake Tribune Reports:
“[Six Sigma] is going to be build right into the fabric of business,” he says.
“The changes I made wer permanent – the were sustainable,” she says. Six Sigma helps you make decisions based on data instead of gut feeling.”
Six Sigma for Health Facilities and Hospitals
Six Sigma’s abilities have long been recognized within the business community, however, the process is relatively unknown in the health care industry. According to some experts that development is just a matter of time. This is because modern health care facilities have large repitition numbers through complex actions such as intake to the simplistic action patterns of the hospital elevators. These processes, along with thousands of others can be streamlined and made immensely more efficient through Six Sigma. hospitalconnect.com Reports:
It may surprise some, but utility reliability, or uptime can also be improved by Six Sigma. A hostpital utility system (such as electricity, chilled water and steam) operating at Six Sigma reliability would be out of service less than two minutes per year.
Further examples of facilities management functions that might benefit from Six Sigma include a work order process, a call center’s operating procedure for handling hot and cold calls, and a plant operations protocol for acknowledging and responding to equipment and system alarms.
Undertaking Process Change at the Heart of Six Sigma
Six Sigma, properly employed, is about much more than measurement, says Philip Howard of Bloor Research. While this is no profound thought, many individuals conceive of the Six Sigma process as this and as a consequence fail to percieve its greatest assets. Howard argues that the only mentality appropriate for attaining the full benefits of Six Sigma implementation is that of a willingness to undertake process change. Because of many companies unwillingness to even consider process change, however, is a primary inhibitor of Six Sigma growth. it-analysis.com Reports:
But process change – how to decide what processes to change, deciding how they will change, and monitoring those changes as they are implemented, and the people that implement them, and feeding back the results – is exactly what (corporate) performance management is all about, at least in part.
Study Reveals Just 38% of Companies Use Six Sigma
A recent survey by Optimize magazine of 156 business technology executieves revealed that fewer than 40% of companies are currently employing Six Sigma. This rather surprising information is due to the fact that many executives do not believe that the nature of their business allows for incorporation of the Six Sigma efficiency program. This is due to the notoriously cited statistic that Six Sigma aims to achieve a merre 3.4 defects for every product produced. For those executives whose companies are not involved in manufacturing or who do not percieve the repetitions within their business model, there appears no advantages of the program. The reality, however, is that every company, indeed every action, if broken down reveals a level of repitition that is duplicated thousands if not millions of times throughout the normal business practice. InformationWeek Reports:
Achieving Six Sigma requires mastering several stages: defining the process in question, measuring its performance, analyzing its effectiveness, implementing improvements, and controlling improvements over the long term.
Juran Institute Gives Advice for Getting Lean with Six Sigma
According to a recent report by Joe De Feo, President of the Juran Institute, there are concrete ways ways to achieve improvements in quality and consistency through Six Sigma. Those include guidelines such as maintaining consistent leadership, maintaining regular contact with the customer throughout any mergers or acquisitions, and keeping one’s eyes open for larger macroeconomic issues which can effect the company. Contol Engineering Reports:
1. Winning: do not get stuck on early results and celebrate;
3. Keep the effort fresh so the organization doesn’t tire of it;
ESM Company Turns Fate Around with Lean and Six Sigma
The recent Shingo Priz for Excellence in Manufacturing winner, a prize named after the father of Lean Manufacturing, is Celestica Inc. of Monterrey Mexico. It is the only Electronics Supply and Manufacturing company to be awarded the prize in its 18 year history. The award was based upon the companies vast improvment in efficiency through deep incorporation of Lean and Six Sigma. The company says that its incorporation philosophy was not just a superficial understanding of the terms by management and employees, but rather it adopted more simplistic terms so that individual employees could comprehend the concepts behind the words and be able to achieve greater efficiency. My-ESM Reports:
Business results are materializing. Celestica reported lead-time reductions of 60 to 70 percent, quality yield improvements of 40 percent, a 30 to 40 percent decrease in the effort required to manufacture products, and on-time delivery rates in the high 90 percent range.
Book Review: Six Sigma For Dummies
One of the biggest inhibiting factors preventing wider Six Sigma implementation is the percieved complexity of the program. Most managers are simply clueless about the process, preventing them from seriously examining Six Sigma as an alternative for their company. Fortunately, Six Sigma for Dummies rectifies this by explaining in very straightforward, albeit at times simplistic, language the nature and benefits of Six Sigma. In addition, a number of small to mid-sized companies have been unable or unwilling to make the capital investment necessary to incorporate the Six Sigma process. This book will allow the novice to incorporate some basic Six Sigma attributes so that they can percieve for themselves the benefits of the program and ultimately incorporate it to a deeper degree. azcentral.com Reports:
“There is a huge latent demand for this,” lead author Craig Gygi said. “The industry has purposely kept the mystique of Six Sigma so it would be exclusive.”
6 Simple Rules in Efficiency Program Implementation
At a recent Quality Control conference Joe De Feo, President of the Juran Institute outlined some concrete ways in which companies can improve service quality and accuracy. The Institute, which advocates a lean Six Sigma approach to service quality proclaims that throught the incorporation of Six Sigma major savings can be achieved through waste reduction, cycle time reduction methodology, and overall increases in inventory and cost efficiency. The recommendations, although seemingly commonsensical, are often overlooked because of their simplicity by many management teams, costing companies a great deal of potential savings. Reed Business Information Reports:
1. Winning: do not get stuck on early results and celebrate;
2. Do not change leadership before the initiative takes hold;
3. Keep the effort fresh so the organization doesn’t tire of it;
4. Maintain the infrastructure to ensure the implementation happen effectively (and continue training);
5. Do not forget the customer during a merger or acquisition;
6. Observe and consider effect of macroeconomic events outside the organization.