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Six Sigma for Small and Medium Sized Enterprises (SME's)


Six Sigma for SME's                     Six Sigma Deployment Plan for SME's



Six Sigma for SME's

In designing a Six Sigma framework for Small and Medium Sized Enterprises (SMEs), Process Quality Associates took into account certain positive characteristics inherent in this business sector which can speed up the structuring of an effective Six Sigma Quality Management System (QMS) more than in large businesses, such as flexible process flows, short decision-making chain, and high visibility of senior management, etc. On the other hand, there are factors that can be disadvantageous, such as lack of resources and expertise in change initiatives. To make the framework more applicable and suitable for SMEs, the identified critical factors for a Six Sigma QMS are encompassed and designed into the proposed framework (shown in Figure 11.1).


Figure 11.1: Six Sigma frame Work for SME's

Six Sigma projects should be derived from your business' strategic plan which sets an organization's goals and key performance measurements.  Based on key business goals, senior management defines the scope of each Six Sigma project and organizes the right project team.  While projects are progressing, they regularily review the projects and promptly provide political, financial, and technical support.  After the projects are completed, senior management audits the projects' results, establishes necessary systems to sustain the improvements, and continuously adjusts the business strategic plans.

More importantly, for managing a Six Sigma quality system, each critical factor should be implemented through the mapping of the Six Sigma MAIC (measure, analyze, improve, and control) discipline into its routine processes.


Measure the existing systems. Identify and describe the potential critical processes/products. Establish valid and reliable metrics to help monitor progress towards the project goals.



Analyze the system to identify ways to eliminate the gap between the current performance of the system or process and the desired goal.

Improve the process performance. Each process is modified and the outcome is measured to determine whether the revised method produces results within customer expectations.

Control the new system. Institutionalize the improved system by modifying policies, procedures, operating instructions, and other management systems.

Further, each critical factor should also be continuously improved by transforming its management into different Six Sigma projects. The following explains how to apply the Six Sigma MAIC discipline into each individual critical factor of your Six Sigma QMS.

MEASURE

1
Leadership
Management provides personal leadership and commitment for quality improvement
2
Customer Focus
Marketing/Sales and customer satisfaction information is used to target potential market segments and customers
3
Education & Training
Education system balances short-term and long-term organizational and employee needs
4
Information and Analysis
The needs for quality tools in facilitating job performance are identified
5
Process Management
Key business processes are identified, improved and monitored
6
Strategic Planning
Establish a quality steering committee to develop short-term and long-term strategic plans to ensure quality improvements
7
Supplier Management
Key performance requirements are incorporated into suppliers' process management
8
Quality Tools
The needs for quality tools in facilitating job performance are identified
9
Human Resource Development
A variety of methods are designed and used to measure employee satisfaction
10
Competitive Benchmarking
Marketing, new technology, and competitor benchmarking information is obtained

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ANALYZE

1
Leadership
Management communicates organizational policies and performance expectations to employees
2
Customer Focus
Complaints received from customers are aggregated and analyzed for use in overall organizational improvement
3
Education & Training
Management and employees are trained to obtain problem-solving skills, and equipped with quality-related knowledge
4
Information and Analysis
Analysis results of measurables are linked to work units and functional-level operations
5
Process Management
Project related training system is in place
Statistical techniques are used to reduce variance in processes
6
Strategic Planning
Strategic plans are translated into executable action plans for all business units
Measures are developed to evaluate the performance of each action plan
7
Supplier Management
Working with suppliers towards long-term partnerships
Suppliers selected on the basis of quality aspects
8
Quality Tools
Training on quality tools is provided to management and employees
9
Human Resource Development
Recruitment plan is aligned with strategic plan
10
Competitive Benchmarking
Benchmarking information is analyzed and used to identify strategic opportunities



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IMPROVE


1
Leadership
Management acts as key driver in continuous improvement
Management regularly reviews quality performance measures
2
Customer Focus
Processes are established to ensure customers’ complaints are effectively resolved
Follow up with customers on recent transactions is undertaken in order to receive prompt feedback
3
Education & Training
Knowledge/skill sharing system is established across work units
Continuous learning is provided through education & training
4
Information and Analysis
Integrated performance information is provided to management to review overall organizational performance
The accessibility and utilization of information systems are improved
5
Process Management
Systems and procedures for quality assurance are implemented
6
Strategic Planning
Allocate human and financial resources to accomplish action plans
A recognition/reward system based on quality performance is established so as to facilitate attainment of the business objectives
7
Supplier Management
Suppliers are actively involved in quality improvement activities
Supplier performance audit and evaluation are important activities to be conducted
8
Quality Tools
Quality tools are used in production and non-production related functions for improvement activities
9
Human Resource Development
Job advancement system is provided
Communication methods (such as newsletter, meetings) are implemented
Work environment is conducive to the well-being of all employees
10
Competitive Benchmarking
Benchmarking information is used to drive improvement



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CONTROL


1
Leadership
Management audits the execution of results of each action plan
2
Customer Focus
Customer satisfaction levels are measured and controlled
3
Education & Training
The performance and process of the training systems are evaluated by management
4
Information and Analysis
Information analysis results are used to monitor improvement activities
5
Process Management
Work unit performance measures are identified and used to control and evaluate the improvement process
6
Strategic Planning
Define performance measurements for tracking progress relative to action plans
7
Supplier Management
Suppliers’ quality performance levels are measured and monitored
8
Quality Tools
Quality tools are used in management processes
9
Human Resource Development
The measures for employee performance are clearly defined and have been communicated with employees

10
Competitive Benchmarking
The process for selecting benchmarking information is evaluated



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Six Sigma Deployment Plan for SME's

The deployment of Six Sigma into large organizations has been quite well developed over the past 10 years. These large corporations have the resources to launch full-scale into major change programs.

Small and Medium Sized Enterprises (SMEs) have unique constraints that limit their ability to initiate a large scale Six Sigma implementation:

  • SMEs can’t afford to have full-time Master Black Belt. For large corporations, there is typically one Master Black Belt for every 1,000 employees. For SMEs that range in size from 25 to 500 employees, that would work out to only a fraction of a Master Black Belt. It doesn't make sense to have a highly qualified Master Black Belt who would only be needed for a fraction of their time.

  • SMEs don't have large reserves of excess cash to earmark for the massive training programs employed by the large corporations in implementing their Six Sigma programs

  • SMEs don't have the personnel with the skills and expertise to step into the role of Black Belts without extensive training


To overcome these limitations, Process Quality Associates (PQA) has developed a Six Sigma Deployment Plan for SMEs. The highlights of this Deployment Plan are:

  1. PQA will act as your Black Belt for the initial projects until you have generated sufficient savings to be able to provide some of those savings for training your own Green Belts and Black Belt(s). Your Six Sigma implementation is self-funding. As it generates more and more savings, you can increase the scope and velocity of its implementation.

  2. PQA acts as your Master Black Belt. When you need guidance in any area of your Six Sigma implementation, and particularly when you need to conduct complicated design of experiments or other sophisticated statistical techniques, you call on us. The majority of improvement projects can to performed using less sophisticated statistical techniques.

  3. Your senior management team becomes directly involved in developing, implementing and monitoring the Six Sigma program.


The Six Sigma Deployment Plan for SMEs is divided into four phases:  Measure, Analyze, Improve, and  Control  Phases.  The detailed steps for each phase are described as follows:


Measure Phase:

Senior management not only initiate Six Sigma deployment, but also have to play an active role in the whole deployment cycle. Thus, the initial phase of the implementation process requires the development of an awareness of and commitment to the need for quality improvement. In this initial phase, you must develop an infrastructure to carry out the deployment, and manage the implementation process. This phase should be developed as follows:

  1. Establish leadership commitment and involvement

    1. The Six Sigma implementation must be driven from the top level. Top management must fund this effort and allocate the appropriate resources. They must express commitment toward this effort to the entire organization and should be involved throughout the implementation process.

    2. Senior management will lead the Six Sigma implementation.  They have the responsibility of developing and managing the Six Sigma implementation and to ensure the organization's readiness for the implementation.

  2. Team up with outside quality facilitators

    1. The assistance from experienced outside quality facilitators is essential to Six Sigma implementation.

    2. The Core Team has the responsibility of developing and managing the Six Sigma implementation and to assure the organization's readiness for the implementation.


  3. Provide Six Sigma deployment training

    1. Senior Management should attend an overview on Six Sigma to gain an understanding of the benefits and the general approach of Six Sigma implementation.

  4. Schedule periodic senior management reviews

    1. During the initial stages in defining, developing, and implementing the Six Sigma program, it is important that senior management schedule frequent reviews with the quality facilitator to keep yourselves informed of the activities involved in the Six Sigma implementation.


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Analyze Phase:

The main objectives of the second phase are to identify the gaps between current processes performance and the business goals, transform the gaps into improvement projects, and establish an integrated system to support the implementation.

  1. Define business goals, based on organization strategic plan.

    1. Senior management must have a clear understanding of the organization's purpose, structure, and flow, including interfaces with other organizations and primary customers.
    2. Determine and understand corporate policies and procedures that affect the Six Sigma Quality Management System (QMS). Any applicable corporate policies or procedures must be incorporated or referenced within the QMS, as appropriate.

    3. Based on the organization's strategic plan, Senior management must define the short-term and long-term business goals. Your quality facilitator may be able to help you in this regard.


  2. Identify existing processes performance

    1. Identify the overall process of the organization, showing how products or services are created and supplied to the customers.

    2. A high-level “gap analysis” is performed by the Core Team.


  3. Define Six Sigma improvement projects.

    1. Based on the “gap analysis”, define the scopes and goals of Six Sigma improvement projects.

    2. Involve your quality facilitator in determining which projects to select initially.


  4. Create performance measures for all Six Sigma projects

    1. Based on the results of “gap analysis”, define the detailed performance measures for all Six Sigma projects.

    2. Incorporate these performance measures into an organizational information system.

    3. Enhance the organizational information system in order to provide the information about individual project progress and the overall Six Sigma implementation performance.



  5. Establish an incentive/recognition system

    1. An incentive/recognition system is essential to Six Sigma implementation.

    2. Senior management is responsible to design a system to motivate employees to be involved in and dedicated to the Six Sigma implementation.


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Improve Phase:  

This phase begins the process of actually composing the improvement project teams and providing Six Sigma and project-related training to the team members. Then, while the projects progress, the management should constantly monitor the status of each project.

  1. Form the Six Sigma project teams

    1. Senior Management is responsible for composing the Six Sigma project teams.

    2. The Six Sigma project teams are responsible for the delivering of the project goals assigned to each project.

    3. For the initial project(s), the quality facilitator will act as the Black Belt, leading the project team members through the Six Sigma process. A portion of the savings generated by these initial projects will provide the funding for the future training.



  2. Plan and provide Six Sigma training to members of project teams

    1. Develop a training plan and strategy, and provide the appropriate training to all members of Six Sigma project teams.

    2. The training plan should focus on: Six Sigma overview, measure-analyze-improve-control (MAIC) discipline, and utilization of quality tools.

    3. The initial training will be for Green Belts, with the quality facilitator acting as the Black Belt for additional projects until the savings generated by these projects provides enough to fund training of your own Black Belt(s).

    4. When your own Black Belt(s) has been trained, your quality facilitator will act as your Master Black Belt only, providing support to the Black Belt(s) for the more sophisticated statistical techniques (e.g. complicated design of experiments), and additional Six Sigma training.


  3. Implement the Six Sigma projects

    1. Project teams should evaluate the existing processes and proceed with the MAIC discipline:

      1. Measure: Measure the existing systems. Identify and describe the potential critical processes/products.

      2. Analyze: Analyze the system to identify ways to eliminate the gap between the current performance of the system or process and the desired goal.

      3. Improve: The improved outcome is measured to determine whether the revised method produces results within customer expectations.

      4. Control: Control the new system and keep the original problems from recurring.


  4. Monitor and review the status of each project

    1. Keep the Core Team informed of the activities involved in implementing the Six Sigma projects.

    2. Obtain their inputs on an ongoing basis.

    3. Senior Management provides directions and support to the Six Sigma project teams.


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Control Phase:

The main objectives of the fourth phase are to assess each project’s gains in improving processes performance, determine the success level of each project, continuously adjust the business strategic plan, and re-start the implementation cycle.

  1. Audit the projects' results.

    1. After the projects are completed, the results are audited by senior management and confirmed with the projects' goals.

  2. Maintain the improved systems

    1. Institutionalize the improved system by modifying policies, procedures, operating instructions, and other management systems.

  3. Apply the incentive/recognition system

    1. Based on the project performance, the appropriate incentive and recognition will be applied to the project team members.

  4. Apply continuous improvement mechanism

    1. The organization strategic plan and related action plans will be revised according to the project performance. Then, the new Six Sigma projects are derived from the revised strategic plan.

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