Can Six Sigma Help? Wholesale electrical distributor

J

JohnH

#1
Hi,

I work for an wholesale electrical distributor that is ISO9000 Registered and has about 250 employees. We have instituted a team appproach as to how business is conducted with our customers and employees. I have recently read some very interesting things on the bennefits of Six Sigma and the Breakthrough Strategy and was wondering what peoples thoughts were as to how/if it could help a smaller company like ours? Is it to difficult, expensive, complicated? I am thinking that it gives teams a better direction in knowing how and what to improve.

John
 
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Kevin Mader

One of THE Original Covers!
Staff member
Admin
#2
Sounds like you may be reading something about or from Mikel Harry.

What have you found interesting?

Regards,

Kevin
 
J

JohnH

#3
Thanks for the reply,

You hit the nail on the head. I have been reading Mikel Harry's book. The reason that I am interested in what he has to say is because of the direction that it could add to our team process. We have three teams that are responsible for customer satisfaction, employee satisfaction, and company growth. We are 8 months into this process and have worked through quite a few growing pains caused by this big change in the way decisions were made in the company. I feel that giving these teams the direction that is talked of in this book would enhance the maturity and process of decision making. The direction that I am refering to specifically is benchmarking, the breakthrough strategy, and the statistical tool to make sure everything is working as it should. I guess what I am looking for is one process for problem solving that the teams can all use to standardize and monitor the results of the decisions made. That is all the history I can think to give at the moment.

John
 

Kevin Mader

One of THE Original Covers!
Staff member
Admin
#4
Hello John,

Changing organizational culture is a slow process. Senior Management support for change is essential. Eight months indicates that you are still in the early stages, so the growing pains you are feeling are really quite normal. Cultural changes take time often taking a few years to appreciate the effect. Granted, organizations in peril can do it quicker, but it is often because the alternative would be much worse. Still, in a world of instant gratification and returns, folks, especially senior managers, often grow restless and tensions build. Do your best to educate folks that the process will take time, measured in years, not weeks. They need to understand that point in order to appreciate it.

I am really not a proponent of Dr. Harry’s plan, nor his Breakthrough Strategy. Benchmarking is a tool and can help organizations to compare systems and borrow the good stuff. Nothing wrong with that, I suppose, but folks generally get into the role of copying (looking for an “instant pudding solution”) and ending there. More is necessary. Additionally, Dr. Harry’s plan deals primarily with visual numbers. Calculation of process capabilities requires standard tolerance ranges (standards), which are often arbitrarily established (how would one standardize employee satisfaction?). It is easy to manipulate data to achieve six sigma status. But what is the gain in doing so? Perhaps a false sense of accomplishment. In my opinion, it is better to focus on the process, run SPC to hear the Voice of the Process, and then improve the process. Six Sigma is ancillary. It is a modified statistical technique, a tool.

I would also like to point out that three separate teams working independently on three separate goals shows lack of consistency of a common AIM. All of these ‘goals’ are interdependent and need to be considered as part of the whole, not individually. This lack of consistency may also be contributing to some of the growing pains you are experiencing. There is no Harmony when teams work independently of each other. Granted, I am speculating on the fact that there isn’t Harmony in your organization, I am reading between the lines a bit and working from my own experiences.

I hope I haven’t offended you in any way. I only hope to throw out a warning that Dr. Harry’s program is incomplete and has some down sides. Still, each of us must determine for ourselves the value of a program. But often times, folks are suited to take the recent best fad program and try to plug it into their own systems with the hopes of similar positive results. I am also not saying that Dr. Harry’s program doesn’t offer some good points (much of his program is based on the studies and teachings of Shewhart and Deming). Mikel Harry has tailored a program to suit Visual Numbers Managers and Financiers in the quest for short term gains. Unfortunately for us, this is what many CEOs are looking for in this country and in Europe. He has found a niche market for his program.

Best regards,

Kevin
 
J

JohnH

#5
Kevin,

Thanks for your reply and sound advice. Your assumptions for the most part are true of our organization. I guess the quick fix will always be sought as opposed to the long term solution. The battle wages on. Thanks again.

John
 

Kevin Mader

One of THE Original Covers!
Staff member
Admin
#6
John,

Remain the catalyst for change. People look for leadership from anyone and any place. You can be that leader.

The process I would recommend works more with baseline data rather than benchmarking data. I would recommend the Plan-Do-Study-Act cycle. Use statistical methods to provide quantitative data where possible to understand the process and to gage improvement. Also understand that most of the important figures in an organization are "unknown and unknowable"(Lloyd S. Nelson). You won't be able to put a price on the cost of a lost customer, for example. Qualitatively speaking, you may be able to judge improvement. You won't be able to split hairs as you might with quantitative data, but it should be an indicator of improvement or decline within a process (ask your customer how they feel about your product/service. Were they happy?).

For an expanded explanation on Interdependency, please pay a visit to Don Winton's website and read his paper on Circular Thinking (dWizards Lair). He has Venn Diagrams that illustrate interdependency and Harmony.

Regards,

Kevin
 
D

Dave_whalen

#7
I work in a company that has had a very good response with a Six Sigma Program. In general, folks that have been successful have taken Harrys concepts and applied them to a broader scope of business management. His application of math is important but not the reason for success. At the core 6 Sigma speaks to identifying what a customer defines as a defect, determining what causes the defect and fixing it so it does not happen again. If you apply this concept to the high business level, what is important to the business, where are the defects ( low sales, high cost, low margins), what causes them , ( low yield mfg lines., high cost raws, poor market plans) and dedicate resources ( BBs, GBs and Project teams) to fix them, you get great business results.

With out the business level focus, you get some projects that bring results and some that die in progress because they are not important to the business and some that die because other things become more important.

Many on the tools taught in a 6 sigma training session are the same ones you learned in any other problem solving program, (I have been learning them since college in 1980 and they were old then)
 
A

Al Dyer

#8
I'll probably take a big hit on this but here goes:

I've been through the training, read the books and consider six sigma a new method for people (consultants/trainers etc...) to make (take) money. What will they think of next when they run out of six sigma customers?

If there is a well defined project management process (based on continuous improvement and preventive action) in place, with total management buy-in, there is no need allocate all those resources and change the direction of a company.

Let's stick to (and improve) the plan and keep it simple!

In my cynical opinion.

ASD...
 

Kevin Mader

One of THE Original Covers!
Staff member
Admin
#9
Al,

Why would you be taking a hit? Plenty of room to agree or disagree with an opinion here or to offer up another.

The recent Six Sigma rush has made Mikel Harry a very rich consultant! Others have seen his success and are quick to jump onto the bandwagon. The thought of easy money is often alluring. Others see his program as having value and in turn, offer services to spread 'the good word'. Mikel Harry is certainly a pioneer in creating this recent program (fad) by blending some very old methods with some other, very old methods. His success comes from blending two old ingredients in order to create a new flavor. But just as certain, a new flavor will eventually emerge to replace this one. Also to be certain, not all pioneers bring positive programs to light. Sometimes they are negative.

The question is whether or not Six Sigma can help. It would depend on the mindset and culture of the organization. One still in the grips of Command Control and the Western Management Philosophy would probably find that it can help, especially in the short term. An organization which is process-oriented would probably not find much use for the program. The focus of Harry's statistical program is not on the process, but in the result. This is quite apparent.

I happen to agree with your opinion and the comments you made.

Regards,

Kevin
 
R

Rick Goodson

#10
Al & Kevin,

Well spoken!

A good process improvement system, utilizing the proper statistical tools, has been proposed by many of us with some success and in some cases less success. Giving credit to Harry though, he used Juran's mantra of speaking in the language of management (money) to make himself rich.

Regards,

Rick
 
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