Six Sigma has received much attention worldwide as a management strategy that is said to have brought about huge improvements and financial gains for such big-name companies as Allied Signal, General Electric (GE) and Motorola.
If you want to give your business the chance to attain the same resounding success, Six Sigma could be the method that will steer you towards that direction.
What is Six Sigma?
So what really is it? Six Sigma is a business management tool that was developed using the most effective quality improvement techniques from the last six decades. Basing its approach on discipline, verifiable data, and statistical calculations, Six Sigma aims to identify the causes of defects and eliminate them, thereby resulting in near-perfect products that meet or exceed customer’s satisfaction.
The core concept behind the Six Sigma method is that if an organisation can quantify the number of “defects” there are in a particular process, improvement activities can be implemented to eliminate them, and get as close to a “zero defects” scenario as possible. Defect here is defined as any process output that fails to meet customer specifications.
Six Sigma is also unique from other programs in that it calls for the creation of a special infrastructure of people within the organisation (“Champions“, “Black Belts“, “Green Belts“) who are to be expert in the methods.
Six Sigma Methodologies
When implementing Six Sigma projects, two methodologies are often employed. Although each method uses five phases each, these two are distinguished from each other using 5-letter acronyms and their specific uses.
DMAIC ? is the project methodology used to improve processes and maximise productivity of current business practices. The 5 letters stand for:
D ? Define (the problem)
M ? Measure (the main factors of the existing process)
A ??Analyse?(the information gathered to deter mine the causes of defects)
I ? Improve (the current process based on the analysis)
C ? Control (all succeeding processes so as to minimise additional defects)
DMADV – is the method most suitable if your business is looking to create new products or designs. The acronym stands for:
D ? Define (product goals as the consumer market demands)
M ? Measure (and identify product capabilities and risks)
A ??Analyse?(to create the best possible design)
D ? Design (the product or process details)
V ? Verify (the design)
How does Six Sigma differ from other quality programs?
If you think that Six Sigma is just another one of those business strategies that produce more hype than actual results, think again. Six Sigma uses three key concepts that sets it apart from other business management methods.
It is strictly a data-driven approach, where assumptions and guesswork do not figure in the decision making.
It focuses on achieving quantifiable financial results ? the bottom line ($) ? as much as giving emphasis on customer satisfaction.
It requires strong management leadership, while at the same time creating a role for every individual in the organisation.
Is Six Sigma right for your business?
While many other organisations such as Sony, Nokia, American Express, Xerox, Boeing, Kodak, Sun Micro-systems and many other blue chip companies have followed suit in adopting Six Sigma, the truth is, any company — whether you have a large manufacturing corporation, or a small business specialising in customer service.
Certainly, there is a lot more to Six Sigma than what you can probably absorb in one sitting or reading.
With our wide range of business management consultancy services, we can help you understand the Six Sigma method in the context of your business. We can also help you establish your improvement goals, set up your program, and train your own team of “champions” who can lead in implementing your Six Sigma goals.
Find out more about our Quality Assurance services in the following pages:
A mobile workforce management software is key to managing an efficient field workforce.? Managing a staff of people can be tricky in any industry. Try keeping track of employees on shifting jobsites, many whom are paid hourly or temporary workers. The added pressure of ensuring the right workers get to the right sites at the right times, but they also need to track hours, parts used, vehicles and equipment assets.
In a previous post, we defined what is an operational review and why they play a key process in the continual evolution of successful businesses.?
Operational reviews allow the organization members to evaluate their performance, according to the procedures, resources properly, timescales and budgets.
In this post, we’ll take a closer look at how to implement an operational review and the steps typically undertaken to help you and your organisation to implement an operational review.
What the steps in a Operational Review Process
There are typically six steps in an operational review that range from preparatory work conducting interviews and collecting documents to the presentation of the final written report.
An audit should be customized to meet a organisatons specific needs, so standard steps can and should only serve as a guideline.? Management and internal and external auditors should adjust the process to address the company’s particular goals and objectives.
Initial Management Meeting
Understanding the problem is the first crucial step of an operational review. This is one of major areas of discussions when the audit team meets with the management, and department heads will be asked to identify any specific areas of concern. Once the problem is identified, it would be easier to come up with workable solutions.
Conduct Interviews
The next step in the evaluation is carried out with experienced teams doing interviews and keeping close observation. Each team essentially watches how employees carry out their responsibilities. This is considered a key part of the process.
When doing the interview, it is also vital that the observing team gains the employees? trust and confidence. Likewise, the staff must be assured that whatever transpires between the team and the employee will be kept confidential. Management must therefore guarantee anonymity to anyone who offers critical information, lest employees withhold vital information and render the data gathered inaccurate.
Systems Review
Employees and management practices will be reviewed by the assessing team according to the standard policies and guidelines of the company. The effectiveness of the controls in place as well as their appropriateness to the current operating conditions will also be evaluated.
Reporting
A documentation of the data gathered and the assessment of the evaluating team, will be submitted to the management after the review process. Flow charts and written narratives of departmental activities are usually part of this report. This is also where observations and recommendations of the team will be presented to the department heads concerned.
Review Results
While the operational review is being conducted, it is important to take into account the vital factors that affect the company: the people, processes, procedures, and strategies. These four factors can determine the company?s progress in the future.
Key Areas of focus in operation reviews
At a minimum an operational review should include the following key ares of assessment
Management Control
Responsibilities, authority, and the scope in which an employee has the freedom to act must be clearly defined and documented. A complete and specific job description for instance, would give the employee a clear perspective on how he acts and functions within the company.
Boundaries should be set not only to benefit the employer but more so the employee as well.
Moral and Ethical Guidelines
Moral and ethical guidelines are just as important to ensure for a smoother employer?employee relationship. Otherwise, personal issues such as work ethics, work attitude and personal values may post problems in the long run if such guidelines are not drawn properly before relationships are established.
Processes and procedures
Evaluating processes is only beneficial if the company itself updates its processes and procedural manuals regularly, or at least when needed. Such protocols may need revision and some steps may be obsolete already. Improving a company?s processes and procedures doesn’t always entail cost. In fact, improvised procedures may even be cost-effective and could make the processes more manageable.
Communication and reporting standards
Gaps in communication could result in serious lapses in internal controls, putting the company and/or its assets at risk. This is where the importance of timely and clear communication comes in. Likewise, reports must be useful, and the flow of information and how it is processed must keep pace with the company?s growth.
Information technology (IT) and security controls can also be included under the communication clause. Proper IT security policies must be in place, state-of-the-art protection techniques employed, and everything be documented, periodically updated, and continually monitored.
Strategic planning and tactics
No company can ever be complete without its strategies. It would unwise for any organization to proceed without first knowing where it stands and what direction it wants to take. Strategic planning draws such a map. It must be aligned to the mission and vision of the company, and should also coincide with the organizational goals set. Strategic planning deals with these three key questions:
What do we do now
Whom do we do it for?
How can we overcome competition
Without clear strategic direction, expectations would likely differ between ownership and management.
Contingency planning, testing and recovery
Contingency plans must be up-to-date, and are essential to the organization. If one course of action fails, the company should have plan B, C and so on. In addition, an organization should be prepared to respond to interference’s.
This includes establishing a formal process to review transactions processing during both disruption and recovery.
Presentation of Report
Based on your objectives and our findings, we will develop detailed recommendations to improve your company?s performance and productivity. Our written report will include a list of both short-term and long-term projected improvements and courses of action, to be mutually agreed upon by both parties.
To ensure the achievement of the improvements we outlined, our team will also assist in the implementation of these modifications.
The plan has three levels of recommendations: one for executives, another for management, and a third one for staff.
The executive summary concentrates on your company?s strengths, weaknesses, opportunities and threats to its entirety. It includes recommendations for any needed changes in policy or governance.
The management plan is based on employee feedback and includes areas of immediate improvement as well as identification of potential problem areas. Concerns from the bottom level management can now be forwarded to the top level management in formal writing. Better working relationships may evolve from this, thereby setting the work environment for a higher productivity ratio.
Lastly, the staff report deals with topics like charting the hierarchy of the organization, and discussing in detail specific control objectives that are critical to the company?s mission. Part of our goal is to encourage personnel to pay close attentions to such changes, if any, as these efforts are essential if they want to bring about both organizational and personal success.
If you would like to further discuss how our operational review services can benefit your company, please feel free to contact us at your convenience to schedule an initial consultation. We?ll be more than happy to assist you.
Energy management is of interest to various stakeholders; be it heads of facilities, heads of procurement, heads of environment and sustainability, financial officers, renewable energy managers and heads of energy. Some of the energy management tips that can be used to achieve considerable energy savings are:
1) Purchasing energy supplies at the lowest possible price
2) Managing energy use at peak efficiency
3) Utilising the most appropriate technology
1. Purchasing energy supplies at the lowest possible price
Purchasing energy supplies at the lowest possible price could be the starting point to great savings of energy costs. This can be achieved through switching your energy supplier. It is always advisable for companies to always take time to compare the energy tariffs to ensure they are on the best tariff and make great savings.
2. Managing energy use at peak efficiency
(a) Free help
There are some online tools that offer energy-efficiency improvements. These could come in handy in helping someone find out where to make energy-efficiency improvements.
(b) Energy monitors
An energy monitor is a gadget that estimate in real time how much energy you’re using. This can help one see where to cut back on energy consumption.
(c) Turning down thermostats
Turning down radiators especially in rooms that are rarely used/empty rooms or programming the heating to turn off when no one is there can go a long way in saving energy and energy costs.
(d) Use energy saving bulbs
Use of energy-saving light bulbs can cut down on energy usage drastically. Replacing all the light bulbs with energy-saving ones could make significant savings on energy usage and replacement costs since energy saving bulbs also have a longer life.
(e) Switching off unnecessary lights
It is also important to switch off lights that are not in use and to use the best bulb for the size of room.
(f) Sealing all heat escape routes
It is recommended that all gaps should be sealed in order to stop heat from escaping. Some of the heat escape routes are: windows, doors, chimneys and fireplaces, floorboards and skirting and loft hatches. The ways through which this can be achieved are:
? Windows- use of draught-proofing strips around the frame, brush strips work better for sash windows
? Doors – use of draught-proofing strips for gaps around the edges and brush or hinged-flap draught excluders on the bottom of doors
? Chimney and fireplace – inflatable cushions can be used to block the chimney or fit a cap over the chimney pot on fireplaces that are not used often
? Floorboards and skirting – Using a flexible silicon-based filler to fill the gaps
? Loft hatches – the use of draught-proofing strips can help to prevent hot air escaping
It is also important to consider smaller holes of air such as keyholes and letterboxes.
3. Utilising the most appropriate technology
Utilisation of technology as an energy management tool can be by way of choosing more energy efficient gadgets and by way of running technological gadgets in an energy efficient manner.
System integration in an organisation refers to a process whereby two or more separate systems are brought together for the purpose of pooling the value in the separate systems into one main system. A key component of process consolidation within any organisation is the utilisation of IT as a means to achieve this end. As such, system integration as a means to cost reduction offers organisations the opportunity to adopt and implement lean principles with the attendant benefits. The implementation of lean techniques requires an adherence to stated methods to facilitate the elimination of wastage in the production of goods and services. In summary, the lean philosophy seeks to optimise the speed of good and service production, through the elimination of waste.
While analysing some of the traditional sources of waste in organisational activities, things like overproduction, inventory, underutilised ideas, transmission of information and ideas, transportation of people and material, time wastage and over-processing stand out. The fact is that companies can eliminate a significant portion of waste through the utilisation of IT to consolidate processes within their organisation.
Adopting lean principles calls for the identification of all of the steps in the company value stream for each product family for the purpose of the eliminating the steps that do not create any value. In other words, this step calls for the elimination of redundant steps in the process flow. This is exactly what the utilisation of IT to consolidate processes offers a company. For instance, the adoption of a central cloud system across a large organisation with several facilities could increase efficiencies in that company. Such a company would drastically reduce the redundancies that used to exist in the different facilities, eliminate the instances of hardware and software purchase, maintenance and upgrade, modernise quality assurances processes and identify further opportunities for improvement.
Perhaps, from the company’s point of view, and from the perspective of lean process implementation, the most important factor is?the effect it has?on the bottom line.’reducing the number of hardware, eliminating the need for maintaining and upgrading hardware, removing the necessity for software purchase and upgrade across facilities also contributes to a significant reduction in operational costs.?This reduction in the cost of operations leads to a corresponding increase in the profit margin of the company.
Applying system integration as a means to cost reduction can also lead to the reduction in the number of people needed to operate the previous systems that have been integrated into one primary unit. Usually, companies must hire people with specialised knowledge to operate and maintain the various systems. Such employees must also receive special training and frequent ongoing education to constantly stay informed of the latest trends in process management. With the integration of the system, the number of people needed to maintain the central system will be significantly reduced, also improving the security of information and other company trade secrets.
Based on an analysis of the specific needs that exist in a particular company environment, a system integration method that is peculiar to the needs of that organisation will be worked out. Some companies may find it more cost-effective to use the services of independent cloud service providers. Others with more resources and facilities may decide to set up their own cloud service systems. Often, private cloud service system capabilities far exceed the requirements of the initiating company, meaning that they could decide to “sell” the extra “space” on their cloud network to other interested parties.
A company that fully applies the lean principles towards the integration of its systems will be able to take on additional tasks as a result of the system consolidation. This leads to an increase in performance, and more efficiency due to the seamless syncing of information in a timely and uniform manner.
Companies have to combine a top-down and a bottom-up approach towards their system integration methods. A top-down approach simply utilises the overall system structure that is already in place as a starting point, or as a foundation. The bottom-up approach seeks to design new systems for integration into the system. Other methods of system integration include the vertical, star and horizontal integration methods. In the horizontal method, a specified subsystem is used as an interface for communication between other subsystems. For the star system integration method, the subsystems are connected to the system in a manner that resembles the depiction of a star; hence, the name. Vertical integration refers to the method of the integration of subsystems based on an analysis of their functionality.
The key to successful system integration for the purpose of cost reduction is to take a manual approach towards identifying the various applicable lean principles, with respect to the system integration process. For instance, when value has been specified, it becomes easier to identify value streams. The other process of removing unnecessary or redundant steps will be easier to follow when the whole project is viewed from the whole, rather than’the part. Creating an integrated system needs some?patience?in order to work out kinks and achieve the desired perfect value that creates no waste.
