Presented By:-

Nikhil Goyal

Harpreet Singh

Ezhil A.

Vikram Sharma

Abhinav Prasoon

Amit Uniyal

Introduction to the Case Study

• Case is about Six Sigma which is a management strategy which seeks to improve the quality of process outputs by identifying the errors and removing the defects.

• The case explains on how “3M” adopted this strategy as a key lever for the firm to become more competitive.

• In the following slides you would be explained on how Six Sigma was introduced at “3M” and how they used the simple approach to put “3M” on fast forward

History of “3M”

• Founded in 1902 at the Lake Superior Town of Two Harbors, Minnesota by Five Businessman.

• Due to a rapid growth in Mining and Sandpaper products, the company moved to St. Paul in 1910.

• Gave out its first dividend at 6% share in 1916.• Richard G. Drew (Lab assistant) invented masking tape which

was a major innovation for the organization.• From 1940-1980, 3M entered new ventures introducing the

Scotch-Brite cleaning pads, Thermo Fax copying processor and several new electro-mechanical products.

• The 1990’s set a new sales record of over $15 billion.

Year 2001 – Six Sigma being Introduced to 3M

• On January 1, 2001, 3M announced W. James Mc Nerney Jr. was elected as the Chairman and CEO of the firm.

• At the annual shareholders meeting, Mc Nerney announced the implementation of Six Sigma approach to process and business environment.

• Initiated a massive training program for hundreds on Sr. Executives.

• Many Managers believed that 3M was already a quality company. The question was how would Six Sigma help the firm to become more competitive.

About Six Sigma:

•Six Sigma is a business management strategy, originally developed by Bill Smith at Motorola in 1986 that today enjoys wide-spread application in many sectors of Industry.

•Six Sigma was originally developed as a set of practices designed to improve manufacturing processes and eliminate defects, but its application was subsequently extended to many other types of business processes as well.

•Six Sigma implies a defect of only 3.4 parts per million.

•Six Sigma has two key methodologies: DMAIC and DMADV or DFSS.• DMAIC is used to improve an existing business process; • DMADV is used to create new product or process designs.

• Define process improvement goals that are consistent with

customer demands and the enterprise strategy. • Measure key aspects of the current process and collect relevant

data. • Analyze the data to verify cause-and-effect relationships.

Determine what the relationships are, and attempt to ensure that all factors have been considered.

• Improve or optimize the process based upon data analysis.• Control to ensure that any deviations from target are corrected

before they result in defects.

A senior executive is chosen to act as the “Champion”. A six sigma black belt is assigned to lead a process improvement

team.

The basic DMAIC methodology consists of the following five steps:

The basic methodology of DMADV or DFSS consists of the following five steps:

• Define design goals that are consistent with customer demands and the enterprise strategy.

• Measure and identify CTQs (characteristics that are Critical To Quality), product capabilities, production process capability, and risks.

• Analyze to develop and design alternatives, create a high-level design and evaluate design capability to select the best design.

• Design details, optimize the design, and plan for design verification. This phase may require simulations.

• Verify the design, set up pilot runs, implement the production process and hand it over to the process owners

Why Six-Sigma at 3M

3M was already a quality company with many high quality products in market but still their financial performance was “flat” due to which they felt the need of adopting six sigma.

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Six-Sigma at 3M (Implementation)• The 3M approach to six sigma included two different

improvement models:1. For existing processes, the five-step DMAIC model.

2. For new product development DFSS (Design for Six Sigma) was used.

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3M Initiatives

• 3M moved from multiple quality management systems to single companywide approach : Six Sigma.

Following are the few initiatives taken by 3M:1. Six Sigma: pursuing quality improvement under one

single program. Being more responsive to customers through 3M acceleration.

2. E-Productivity: Performing commercial activities through electronic media in order to be more efficient, productive and render better serviceas support to customers.

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3M initiatives

4. Supply: Purchasing in more systematic way led to cost reduction for 3M.

3. Indirect Cost: Good management of cost is

critical for a sound business plan, especially in critical times. Due to implementation of six sigma a lot of indirect cost was reduced which led to increased efficiency.

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Approaches

3M's simple approach to Six Sigma. The Right Projects” + The Right People + The Right Roadmap and Tools + The Right Support = The Right Results

3M's simple approach to Six Sigma

Skeptics The skeptics point to the following issues in

using Six Sigma: We can't afford to improve our processes to

3.4 parts per million defects as implied by Six Sigma. Also, our customers don't need this level of quality.

Six Sigma is too complicated and involves too much statistics for our people. We need a simpler approach to process improvement.

Six Sigma doesn't work very well for service processes or transaction-based processes that have intangible outputs and are difficult, if not impossible, to measure. Six Sigma is better suited to manufacturing.

We can't afford the training costs and the appointment of full time black belts for process improvement.

Six Sigma is just the latest quality fad-- it too will pass.

CHALLENGES AT 3M

• Tracking and reporting of 6 sigma program• Costs and risks involved in implementing this strategy• Management skills required to implement it.• Functional areas to be included under six sigma• Information systems required to support 6 sigma• Human resource implications for deploying six sigma (Black

belts, master black belts, champions etc.)• Planning for their incentives

3M- Fast Forward

• Six sigma changed company’s focus into three main areas, namely : Growth, Cost savings and cash generation

• It provided single approach on improving the ways of getting things done

• Six sigma leverages all information under a unified system, which makes things easier for people working on the same.

• Data driven of six sigma approaches helped in energizing and motivating them as well.

• It bought in new dimensions of problem solving which led to maximum yield in projects.

3M and Six Sigma: New Dimensions, New Directions

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•For Shareholders: Strong, financially healthy company-a good, solid investment

•For Employees: Learning new processes, developing leadership skills

•For Customers: A more responsive, faster company with competitive product and services.

•Expected operating income to improve by $300 million to $450 million.

• Entitlement-A concept of Six Sigma :The absolute best possible outcome that can be achieved with a given process.

• It helps in setting goals for the best possible outcome.

• Helps in determining the true potential.

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Summary: Six Sigma at 3M• “Six Sigma is totally changing 3M. Many of the things that had driven

the success of our company for the past eighty years no longer apply”. W.James McNerney, Jr. CEO, 3M, 25 June 2005

• First time common approach to problem solving, new product development, and measurement across entire company.

• One global business language. One process improvement methodology.

• A proactive means of achieving excellence in all business processes.• Provides leadership development throughout all disciplines within the

organization.• A roadmap to breakthrough performance-a disciplined methodology

to drive value creation.

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Thank You......

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