SIXSIGMA

1
SIXSIGMA

• BENCHMARKING
• ISO

2
SIX SIGMA

• Six Sigma is a statistically driven quality
  management methodology that aims to reduce
  defects and variation in a business process. In
  fact, the goal of any Six Sigma initiative is to
  reduce to the number of defects to 3.4 per one
  million opportunities thereby increasing customer
  satisfaction and business profits.

3

• Six Sigma was first developed and implemented by
  Motorola in the 1980s. In 1996 GE announced it
  saved 1 Billion by using the Six Sigma
  methodology. Now a lot of industry leaders have
  adopted the Six Sigma methodology as their
  quality improvement method of choice.

4
Six-Sigma Metrics

• Defects per unit (DPU) number of defects
  discovered ? number of units produced
• Defects per million opportunities (dpmo) DPU ?
  1,000,000 ? opportunities for error

5
k-Sigma Quality Levels

• Six sigma results in at most 3.4 defects per
  million opportunities

6
Six-Sigma Implementation

• Emphasize defects per million opportunities as a
  standard metric that can be applied to all parts
  of an organization manufacturing, engineering,
  administrative, software...
• Provide extensive training followed by project
  team deployment to improve profitability.
• Focus on on corporate sponsor support to ontain
  resources, focus the teams on overall strategic
  objectives.

7
Six-Sigma Implementation

• 4. Create qualified process improvement experts
  who can apply improvement tools and lead teams
• 5. Ensure identification of appropriate metrics
  are identified early in the process and that they
  focus on business results.
• 6. Set stretch objectives for improvement

8
Six-Sigma Problem Solving Approach

1. Define
2. Measure
3. Analyze
4. Improve
5. Control

DMAIC
9
The principles include

• v     Ask the customer what problems must be
  solved.
• v     Don't manage the problem. Eliminate it.
• v     Measure the defects but more importantly
  measure the opportunities - what is possible.
• v     Analyze the numbers to find out how well or
  poorly the processes are working, compared with
  what's possible and with what the competition are
  doing.

10
BENCHMARKING

• Benchmarking is the process of determining who is
  the very best, who sets the standard, and what
  that standard is.

11

• There are numerous definitions of benchmarking,
  but essentially it involves learning, sharing
  information and adopting best practices to bring
  about step changes in performance. So, at its
  simplest, benchmarking means
• "Improving ourselves by learning from others".
  Most organisations tailor definitions of
  benchmarking to suit their own strategies and
  objectives. Two examples are given below.

12

• "Benchmarking is simply about making comparisons
  with other organizations and then learning the
  lessons that those comparisons throw up".Source
  The European Benchmarking Code of Conduct
• Benchmarking is the continuous process of
  measuring products, services and practices
  against the toughest competitors or those
  companies recognized as industry leaders (best in
  class)".Source The Xerox Corporation

13
In practice, benchmarking usually encompasses

• regularly comparing aspects of performance
  (functions or processes) with best practitioners
  
• identifying gaps in performance
• seeking fresh approaches to bring about
  improvements in performance
• following through with implementing improvements
  and
• following up by monitoring progress and reviewing
  the benefits.

14
Why use Benchmarking?

• In the Private Sector
• In the private sector, the purpose of
  benchmarking is to gain a competitive edge. A
  benchmarking approach has become embedded in
  successful commercial organizations as a means of
  seeking innovation outside the industry paradigm
  - a way of keeping at the forefront of the
  competition. Recent surveys show that
  benchmarking is the third most used management
  tool. Interest in benchmarking is continuing to
  grow across the world. Benchmarking is also being
  recognized as a valuable tool for external
  learning strategies.

15

• In the Public Sector
• Over recent years, public sector organisations
  across the world have gradually been turning to
  benchmarking their public services. In the public
  sector, benchmarking has been acknowledged as a
  powerful tool for improving and bringing about
  the sort of step changes needed to deliver modern
  public services. This is against a background in
  which the drivers for change are becoming as
  intense as the competitive pressures felt by
  industry. It has also been recognised that
  efficient and effective public services play a
  vital part in improving private sector
  competitiveness by reducing the burden on
  business and compliance costs.

16
Benefits from Benchmarking

• Successful benchmarking, in which gaps in
  performance are bridged by improvements, results
  in significant tangible benefits that are needed
  in the public sector, such as
• step changes in performance and innovation
• improving quality and productivity and
• improving performance measurement.

17
Benchmarking can also have a beneficial effect on
aspects needed to support continuous improvement,
such as

• raised awareness about performance and greater
  openness about relative strengths and weaknesses
• learning from others and greater confidence in
  developing and applying new approaches
• greater involvement and motivation of staff in
  change programmes
• increase in willingness to share solutions to
  common problems and build consensus about what is
  needed to accommodate changes
• better understanding of the big picture and
  gaining a broader perspective of the interplay of
  the factors (or enablers) that facilitate the
  implementation of good practice and
• Increasing collaboration and understanding of the
  interactions within and between organisations.

18

• better understanding of the big picture and
  gaining a broader perspective of the interplay of
  the factors (or enablers) that facilitate the
  implementation of good practice and
• Increasing collaboration and understanding of the
  interactions within and between organizations.

19
Types of Benchmarking

• Strategic Benchmarking is used where
  organizations seek to improve their overall
  performance by examining the long-term strategies
  and general approaches that have enabled
  high-performers to succeed. It involves
  considering high level aspects such as core
  competencies, developing new products and
  services changing the balance of activities and
  improving capabilities for dealing with changes
  in the background environment.

20

• Performance Benchmarking or Competitive
  Benchmarking is used where organisations consider
  their positions in relation to performance
  characteristics of key products and services.
  Benchmarking partners are drawn from the same
  sector.
• Process Benchmarking is used when the focus is on
  improving specific critical processes and
  operations. Benchmarking partners are sought from
  best practice organisations that perform similar
  work or deliver similar services.

21

•  Functional Benchmarking or Generic Benchmarking
  is used when organisations look to benchmark with
  partners drawn from different business sectors or
  areas of activity to find ways of improving
  similar functions or work processes. This sort of
  benchmarking can lead to innovation and dramatic
  improvements.

22

• Internal Benchmarking involves seeking partners
  from within the same organization, for example,
  from business units located in different areas.
  The main advantages of internal benchmarking are
  that access to sensitive data and information are
  easier standardized data is often readily
  available and, usually less time and resources
  are needed. There may be fewer barriers to
  implementation as practices may be relatively
  easy to transfer across the same organization.

23

• International Benchmarking is used where partners
  are sought from other countries because best
  practitioners are located elsewhere in the world
  and/or there are too few benchmarking partners
  within the same country to produce valid results.
  Globalization and advances in information
  technology are increasing opportunities for
  international projects.

24
ISO

• ISO (International Organization for
  Standardization) is the world's largest developer
  of standards. Although ISO's principal activity
  is the development of technical standards, ISO
  standards also have important economic and social
  repercussions. ISO standards make a positive
  difference, not just to engineers and
  manufacturers for whom they solve basic problems
  in production and distribution, but to society as
  a whole.

25

• The International Standards which ISO develops
  are very useful. They are useful to industrial
  and business organizations of all types, to
  governments and other regulatory bodies, to trade
  officials, to conformity assessment
  professionals, to suppliers and customers of
  products and services in both public and private
  sectors, and, ultimately, to people in general in
  their roles as consumers and end users.

26

• ISO standards contribute to making the
  development, manufacturing and supply of products
  and services more efficient, safer and cleaner.
  They make trade between countries easier and
  fairer. They provide governments with a technical
  base for health, safety and environmental
  legislation. They aid in transferring technology
  to developing countries. ISO standards also serve
  to safeguard consumers, and users in general, of
  products and services - as well as to make their
  lives simpler.

27
Who ISO is

• ISO is a network of the national standards
  institutes of 156 countries, on the basis of one
  member per country, with a Central Secretariat in
  Geneva, Switzerland, that coordinates the system.

28

• ISO is a non-governmental organization its
  members are not, as is the case in the United
  Nations system, delegations of national
  governments. Nevertheless, ISO occupies a special
  position between the public and private sectors.
  This is because, on the one hand, many of its
  member institutes are part of the governmental
  structure of their countries, or are mandated by
  their government. On the other hand, other
  members have their roots uniquely in the private
  sector, having been set up by national
  partnerships of industry associations.

29

What makes ISO 9000 and ISO 14000 so special

• The ISO 9000 and ISO 14000 families are among
  ISO's most widely known standards ever. ISO 9000
  has become an international reference for quality
  requirements in business to business dealings,
  and ISO 14000 looks set to achieve at least as
  much, if not more, in helping organizations to
  meet their environmental challenges.

30

• ISO 9000 is concerned with "quality management".
  This means what the organization does to enhance
  customer satisfaction by meeting customer and
  applicable regulatory requirements and
  continually to improve its performance in this
  regard. ISO 14000 is primarily concerned with
  "environmental management". This means what the
  organization does to minimize harmful effects on
  the environment caused by its activities, and
  continually to improve its environmental
  performance.

31
Some benefits it was considered that
international standards can bring
32
Hospitality

• housekeeping icons, terminology, people and
  training, security, minimum standard for the room
  product, wattage/plugs, air-conditioning/heating/w
  ater temperature, health and safety
• front office a common international
  registration form
• food and beverage food and personal hygiene,
  truth in menu, safety, core competence for
  staff, purchasing, service providers,
  environmental issues, performance and product
  evaluation

33

• Any standards will need to
• facilitate trade in services among the different
  market players hotels, travel agencies,
  transportation media, etc.
• specify the delivery of specific services to
  customers
• establish basic requirements for services to
  fulfil in order to facilitate the establishment
  of a fair level of competence.