Transactional Six Sigma - Portal Vanzolinivanzolini.org.br/download/Palestra Gary Cone1.pdf · 1 ©...

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© Global Productivity Solutions, LLC., All Rights Reserved

Transactional Six SigmaTransactional Six Sigma


Executing Six SigmaExecuting Six Sigma

Six Sigma BasicsSix Sigma Basics

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3© Global Productivity Solutions, LLC.; All Rights Reserved

Six Sigma Management PhilosophySix Sigma Management Philosophy

¿ “Better tomorrow than today”

¿ There is a deep understanding of the customer and which processes are critical

¿ There is a good understanding of the few high level measures that define the health of the critical processes

¿ These measures are reviewed regularly at the highest levels of the organization to ensure improvements are consistently achieved

¿ The articulation of the company’s values and mission encompass these thoughts


What is Six Sigma?What is Six Sigma?

¿ Perception about Six Sigma

ÚSix Sigma only applies in traditional manufacturing

¿Reality about Six Sigma

ÚSince 1995, transactional processes account for >70% of all applications

3


The Results of Six SigmaThe Results of Six Sigma

Perf

orm

ance

LCLLCL

UCLUCL

UCLUCL

LCLLCL

66σσ AC

M

I

Time

Measure Analyze Improve Control

¿ The Six Sigma problem-solving method achieves dramatic improvement in process performance metrics


The systems that deliver value to our customers

are perfectly designed to achieve the results we get.

food for thought…..

4


To become the Best of the Best…

What are we trying to achieve?What are we trying to achieve?


VALUE-ADDINGGROWTH

VALUE-ADDINGGROWTH

STRATEGIESSTRATEGIES

OPERATIONALEXCELLENCE

OPERATIONALEXCELLENCE

Strategies to Become the Best …

Grow business volume that creates value for shareholders, customers and our people.

Reduce waste in all business processes by engaging everyone in the sustaining and improvement efforts.

To become … Top Line GrowthTop Line Growth

Bottom Line GrowthBottom Line Growth

5


What is Required to Execute Strategy?What is Required to Execute Strategy?

Strategic PlanningStrategic Planning

Project ArchitectureProject Architecture

Human ArchitectureHuman Architecture

Business AssessmentBusiness Assessment

Lean Enterprise ToolsLean Enterprise Tools

Six Sigma Tools Six Sigma Tools

Digitization ToolsDigitization Tools

Knowledge Knowledge Management Management

SystemsSystems

Integrated Integrated Business SystemsBusiness Systems

Value Stream AnalysisValue Stream Analysis

®

Policy DeploymentPolicy Deployment


¿ Determine critical inputs¿ Define mathematical model¿ Implement and validate model

Ú Establish critical input levels

The RoadmapThe Roadmap

¿ Optimize critical inputs

¿ Monitor output/ control inputs¿ Eliminate waste ¿ Update & Enforce Business System

Ú Lean Operating System

¿ Refine and Explain Project¿ Form Team

¿ Document Process¿ Establish process capability

¿ Verify Measurement Systems

Ú List all variation sources

¿ Develop evaluation plan¿ Study response variables¿ Implement obvious solutions

¿ Analyze input variables

Ú Short list of inputs6σIImprovemprove

CControlontrol

AAnalyzenalyze

START

MMeasureeasure

6


Demand Forecasting Demand Forecasting Project Case StudyProject Case Study


Business OpportunityBusiness Opportunity

¿ June ’05 – Feb ’06 3-monthFixed Forecast AccuracyÚ Results averaged < 97% & Bias 12/88Ú -3% deviation = $ 60 MM / Yr in unidentified Revenue gaps vs.

$3.0B Revenue Objective

Mexico SP3

90%

95%

100%

105%

110%

FY 03

/04 Jul 04

Ago 0

4Se

p 04Oct 0

4No

v 04Dic

04Ene

05Fe

b 05Mar 0

5Ab

r 05May

05Jun

05Jul

05Ag

o 05Se

p 05Oct 0

5No

v 05Dic

05En

e 06Fe

b 06Mar 0

6Ab

r 06May

06Jun

06Jul 06

FYTD

FY 06

/07

7


Six Sigma Road MapSix Sigma Road Map

• Science vs. Art

• Process Improvement / Reliability / Standardization: DMS

• Project Charter• Process Map• Cause & Effect Diagram (Fishbone)• Cause & Effect Matrix• Data Collection Plan• Basic Statistics

Define andMeasure Analyze Improve Control

• Process Capability • Measurement System Analysis• Failure Modes and Effects

Analysis• Mistake Proofing• Multi-Vari Studies• Correlation/Regression

• Hypothesis Tests• Process Modeling & Simulation

• Lean Process Controls• SPC• Final Report

Define the project, gather all the information known about the problem (effect), and identify all sources of

variation (causes)

Analyze the data to determine which sources of variation (causes) do not have an impact on the

process output

Identify and implement improvements to process that reduce variation and

improve the output.

Construct and implement controls that ensure improvements are

maintained

All x’s Few x’s Critical x’s Controlled x’s

Step 0: Team Setup & Leadership Concurrence

Step 1: Analyze the situation

Step 2: Restore Process

Step 3: Improve the Process

Step 4: Standardize / Reapply


Mexico SP3

90%

95%

100%

105%

110%

FY 03

/04 Jul 04Ag

o 04Se

p 04Oct 0

4No

v 04Dic

04En

e 05Fe

b 05Mar 0

5Ab

r 05May

05

Jun 0

5Ju

l 05

Ago 0

5Se

p 05Oct 0

5No

v 05Dic

05En

e 06Fe

b 06Mar 0

6Ab

r 06May

06Ju

n 06Jul

06FY

TD

FY 06

/07

Scoping the ProjectScoping the Project

3-monthFixed Forecast Accuracy

Jul ’05 – Feb ’06

< 97%

1.2

0.80.7

0.5

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Initiatives Fcst +Planning Discipline

Value EquationAssessment

Incomplete Bottom-up Fcst

Other

1.6

0.8

0.4 0.3

0.1

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

F&HC Family PBC Health Other

Identify area of focus using multi-level pareto analysis

8


Process Mapping & Defect IDProcess Mapping & Defect ID

Negotiation&

Rework(Financial Goal

Pressure)

Demand Planning & Execution Process

DAY GBU F&A MOT Market Planning CBD Team CMO MDO Leadership Team Output

Date: March 30th, 2006

Updated by: DP&E 6-Sigma Project Team

Statistical Forecast Update by Cateagory & Channel

Marketing & Product Initiative Plans

Pre-Pre Demand Meeting01 T o 10

Demand Meeting

10

T o 17

14 T o 19

21 T o 28

26 T o 02

01 T o 10

10 T o

22

Preliminary Detailed Demand Forecast

Develop CBD Demand Forecast

WM-CBD Forecast ReconciliationHFS-CBD

Forecast ReconciliationUTT-CBD

Forecast Reconciliation

WM-MP/CBD/CMOAlignment MeetingHFS-MP/CBD/CMO

Alignment MeetingUTT-MP/CBD/CMOAlignment Meeting

Pre-Demand Forecast(1 or 2)

Category Demand Forecast

Aggregate Demand Forecasts from (4) MOTs

Demand Proposal Rev 1

Unrestricted 18-month

Demand ForecastValidate Capacity

Develop & Release 1-month Sales Plan (S&OP)

SP-1, SP-3 Metric

S&OP in SourceOne

S&OP Calendar Check Point


Sales Execution by CBD Team and Customer

Pre Demand Meeting

Involve function heads to resolve differences

Demand Meeting pre- alignment w/ MP & CBD Director


Revise Demand Proposal

YES

NO

S&OP Meeting(GBU & MP)

1.1 1.2 1.3 1.42.4

1.7

1.7

1.8

1.9

1.9

1.10

1.11

1.12

1.13

1.14

CMK

2.1 2.2 2.3

3.5 3.2 3.3

3.4

3.6

3 . 6 3.7 3.8

3.8

3.93.9 3.10

3.10

3.11

4.1

4 . 14.2

4 . 2

4.4 4 . 4 4.44 . 5

4 . 5

4 . 7

4.7

4.8

4.9

4 . 9

4.10

5 . 1

5 . 2

5 . 3

5 . 4

2.3

4.10

Bottom-upTrade & Customer

Input

Statistical Forecast& Aggregation of

Events

Marketing& New Initiative

Plans

Negotiation&

Rework(Financial Goal

Pressure)








Demand Meeting

10

T o 17

14 T o 19

21 T o 28

26 T o 02

01 T o 10

10 T o

22















SP-1, SP-3 Metric

S&OP in SourceOne




Pre Demand Meeting





YES

NO


1.1 1.2 1.3 1.42.4

1.7

1.7

1.8

1.9

1.9

1.10

1.11

1.12

1.13

1.14

CMK

2.1 2.2 2.3

3.5 3.2 3.3

3.4

3.6

3 . 6 3.7 3.8

3.8

3.93.9 3.10

3.10

3.11

4.1

4 . 14.2

4 . 2

4.4 4 . 4 4.44 . 5

4 . 5

4 . 7

4.7

4.8

4.9

4 . 9

4.10

5 . 1

5 . 2

5 . 3

5 . 4

2.3

4.10


Input


Events








Demand Meeting

10

T o 17

14 T o 19

21 T o 28

26 T o 02

01 T o 10

10 T o

22















SP-1, SP-3 Metric

S&OP in SourceOne




Pre Demand Meeting





YES

NO


1.1 1.2 1.3 1.42.4

1.7

1.7

1.8

1.9

1.9

1.10

1.11

1.12

1.13

1.14

CMK

2.1 2.2 2.3

3.5 3.2 3.3

3.4

3.6

3 . 6 3.7 3.8

3.8

3.93.9 3.10

3.10

3.11

4.1

4 . 14.2

4 . 2

4.4 4 . 4 4.44 . 5

4 . 5

4 . 7

4.7

4.8

4.9

4 . 9

4.10

5 . 1

5 . 2

5 . 3

5 . 4

2.3

4.10


Input


Events

Marketing& New Initiative

Plans

Defects are :

• Concentrated at the beginning of process

• Result of incomplete / untimely data

• Process AND Culturally - Driven

Demand Forecasting Process


Prioritization MatrixDate: Apr '06

Cri

tica

l-to

-Qua

lity

Ou

tpu

ts (C

TQ

s)

SP

1

SP

3

MD

O R

eso

urc

e C

apac

ity

Fin

anci

al F

ore

cast

Priority1 9 3 3

Process Inputs Results

1 GBU/CMK Preliminary Volume forecast 1 1 1 9 402 MOT Develop Commercial Proposition 1 1 3 1 223 GBU/CMK Volume forecast 3 9 9 9 1384 LPA Success Criteria Met 3 9 9 9 1385 LPA Approval Timing 3 3 9 3 66

6MDO MP Reconfirms Volume Assumption in S&OP at LPA 1 3 3 3 46

7MOT Confirms Marketing & Trade plansCalculates final CVA 3 9 9 3 120

8 MDO CMK Validates Volume Forecast 1 3 3 3 469 CBD Teams Agree to Volume Objectives 3 9 3 3 102

Focus the Project Using a Prioritization MatrixFocus the Project Using a Prioritization Matrix

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Initiative Impact on Forecast AccuracyInitiative Impact on Forecast Accuracy

¿ Initiatives Forecast Accuracy explains over 80% of variation of 1-month-Fixed and 3-month-Fixed Forecast AccuracyÚ Bigger initiatives have a stronger correlation

Total Index

sp1

1.101.051.000.950.900.8 50.80

110

105

100

95

90

85

80

R-Sq 80. 1%

Laundry-SP1 vs. Total Initiative Indexsp1 = 25.07 + 76.47 Total In dex

Initiative Sales Plan PerformanceTotal Index

sp1

1.101.051.000.950.900.8 50.80

110

105

100

95

90

85

80

R-Sq 80. 1%

Laundry-SP1 vs. Total Initiative Indexsp1 = 25.07 + 76.47 Total In dex

Initiative Sales Plan Performance

Initiat ive Index - Sales Peformance to Forecast

SP1

La

und

ry B

rand

s

1.21.11.00.90.80.7

1.2

1.1

1.0

0.9

0.8

S 0 .040130 5

Fitted Line PlotS P1 Brand = 0.1029 + 0.9118 Init Index

10492


Investigating the InputsInvestigating the Inputs

Initiative SOS NPV VolumeProduct Delivery

LPADate

LPA<20 weeks CVA

Copy Tested

Regent Sep-06 Y Y Y 17-Jun N N NPolaris Sep-06 Y Y Y 18-Jun N N NU2 Mar-06 Y Y Y 15-Dic N Y/3.95 NCrayola II Mar-06 Y Y Y 16-Dic N N NSwan Mar-06 Y Y Y 16-Dic N N NMaya Sep-06 Y Y Y 09-Jun N N NCitron Feb-06 N Y Y 20-Sep Y N NSancy Sep-06 Y Y - 06-May N N N

87.5% 100.0% 12.5% 12.5% 0.0%

¿Initiative Planning & Forecasting Input Variables ÚTiming / CVA / Copy Qualification are key

opportunity areas

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Planning vs. ComplexityPlanning vs. Complexity

¿Marketing & Initiative PlansÚToo many executions at a timeÚDeployment to Sales takes place in less than ideal

timing

Count 30 19 11 8 7 7 2Perc ent 35.7 22.6 13.1 9.5 8.3 8.3 2.4Cum % 35.7 58.3 71.4 81.0 89.3 97.6 100.0

Co

un

t

Pe

rce

nt

Brand OtherAriel AceAl lBoldMLAceAri el

90

80

70

60

50

40

30

20

10

0

100

80

60

40

20

0

Pareto Chart of Brand

gb p dep vs sos

Fre

qu

en

cy

15129630

20

15

10

5

0

Histogram GBP dep Prior to SOS (in weeks)

Target = 12


Initiative PerformanceInitiative Performance

Initiative Name SOS Average VarianceAriel Mamushka Jul'05

Index 95.2% 8.1%APE Cumm 6.6% 2.2%

Ariel Mermaid Jan '06Index 68.4% 67.0%

APE Cumm 54.4% 8.9%Ace B2S Jul'05

Index 97.4% 9.9%APE Cumm 7.0% 2.8%

Ace Citrón Feb '06Index 111.7% 45.9%

APE Cumm 17.4% 15.6%Bold Toque de Bebé Abr '05

Index 80.0% 13.6%APE Cumm 19.0% 5.6%

Bold Maya I/Reloaded Sep '05Index 90.9% 8.9%

APE Cumm 11.1% 5.0%Maxiblanco Aug '05

Index 57.5% 26.0%APE Cumm 47.4% 8.4%

¿ Forecast Accuracy performance is explained by under-delivery of big initiativesÚ > 85% of init. Below

forecastÚ Average 1-month Fixed

FA (Index) = 91%Ú Mean APE = 20%

11


Key Focus Areas Key Focus Areas

¿ Initiatives Planning & Execution (1.0%)Ú BPM Adherence / LPA Success CriteriaÚ Deployment to SalesÚ Number of Executions

¿ Production / Marketing Forecast Synchronization (0.3%)Ú CMK Initiative ForecastingÚ Collaborative Forecasting vs. Financial Pressure

¿ Bottom-up Trade & Customer Input (0.3%)Ú Trade & Customer EventsÚ SKU Complexity / Cannibalization


Results to DateResults to Date

33--month Fixed Forecast Accuracymonth Fixed Forecast Accuracy

Ind

ivid

ual

Va

lue

May

- Jul06

A pr-Ju n0

6

Mar-M

ay- 06

Feb-A p r06

Jan-M

ar06

Dec-

F eb06

Nov

-Jan0

6

Oct-Dec

05

Sep-Nov

0 5

Aug

-Oct0

5

Jul-S

ep05

Jun-A

ug05

May

-Jul05

105

100

95

90

_X=96.96

UCL=103.28

LCL=90.65

97

Target = 100

103

Mo

vin

g R

ang

e

May

- Jul06

A pr-Ju n0

6

Mar-M

ay-06

Feb-A p r0

6

Jan-M

ar06

Dec-F eb

06

Nov-Ja

n06

Oct-Dec05

Sep-Nov

0 5

Aug-O

ct05

Jul-S

ep05

Jun-A

ug05

May

-Jul05

10.0

7.5

5.0

2.5

0.0

__MR=2.38

UCL=7.76

LCL=0

5

1

1

I-MR Chart of F&HC

12


Process ImprovementsProcess Improvements

¿ Market PlanningÚDisciplined Standard for FCR Analysis & ApprovalÚ Redesign of Demand MeetingÚOwner of statistical shipment base plus marketing &

initiative building blocks

¿ Marketing TeamsÚ Templates to deploy initiative & marketing plans to Sales –

linked to fundamentalsÚ Implement LPA Criteria Checklist - Adjustments to

Forecast or Delay

¿ Sales TeamÚ Templates to document customer events (vs. total trade

forecast)Ú Structure within sales to manage demand information flow

& calendar



Total Business Total Business –– 1month Fixed Forecast Accuracy1month Fixed Forecast Accuracy• FY 05/06 Average at 98.5 %• AMJJ ’06 Average at 100.2 %• P3 Months @ 100.3 %

0

5

10

15

20

Jul-05 Ago-05 Sep-05 Oct-05 Nov-05 Dic-05 Ene-06 Feb-06 Mar-06 Abr-06 May-06 Jun-06 Jul-06

SP

1 M

ovin

g R

ange

84

88

92

96

100

104

108

112

Jul-05 Ago-05 Sep-05 Oct-05 Nov-05 Dic-05 Ene-06 Feb-06 Mar-06 Abr-06 May-06 Jun-06 Jul-06

SP

1

FY 0

4/05

13


Mexico SP3

90%

95%

100%

105%

110%

FY 03

/04 Jul 0

4

Ago 0

4Se

p 04Oct 0

4No

v 04Dic

04En

e 05Feb

05Mar 0

5Ab

r 05May

05Jun

05Jul

05Ag

o 05Se

p 05Oct 0

5No

v 05Dic

05En

e 06Feb

06Mar 0

6Ab

r 06May

06Jun

06Jul

06AM

MJ

FY 06

/07

MJJ 99.4%

• FY 05/06 Average at 97.1 %• AMJJ ’06 Average at 98.6 %• P3 Months @ 99.4 %


Total Business Total Business –– 3month Fixed Forecast Accuracy3month Fixed Forecast Accuracy

Transactional Six Sigma - Portal Vanzolinivanzolini.org.br/download/Palestra Gary Cone1.pdf · 1 ©...

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