Lean Six Sigma Accelerating Cost Transformation SSCX Event Slides (2010)
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Transcript of Lean Six Sigma Accelerating Cost Transformation SSCX Event Slides (2010)
Accelerating Cost TransformationAccelerating Cost TransformationRitz Carlton, Mega Kuningan – February 3, 2010
Commonization of industry
Brighter 2010
2010: Challenges and Opportunities
� ASEAN-China Free Trade Agreement
� Higher customer bargaining power
– Flatten world, More supply
� Rising costs but limited pricing power due to � Rising costs but limited pricing power due to
globalization and intensifying competition
� Volatile energy prices
� Reduced access to liquidity and expensive financing
� Threat of global recession
� Weak investor confidence
The Battle
Case: Airlines
What Can or Should We Do?What Can or Should We Do?
Translating Pressure into Competitive Advantage
Cost Transformation vs Future Growth
� Organizations tend to cut cost all over for short
term without considering longer term growth
� Tyranny of “or”
� Impact:
– You survive,… for now. But, to bounce back?
Our Perspective on COST
� Cost is everywhere
� Cost tends to increase along with business
complexity
� Good news is you can manage the complexity
� Area with cost reduction opportunity is not always
obvious!
Cost-cutting measures will not only keep a business
running efficiently in a downturn, but also position
the company to take advantage of the market when it
eventually snaps back.
Our Perspective on COST
� Obvious Cost
� You are certain
� eg: Defects and Errors
� Suspected CostSuspect
Obvious
� Doubtful
� Can we eliminate it?
� eg: transportation, discount?
� Hidden Cost
� You do not aware
� Biggest portion of managing cost.
Hidden
Suspect
-ed
Approach to Cost Transformation
STRUC-
TURAL
High
PROCESS
LOW
HANGING
FRUIT
Complexity
Length of Time
Low
HighLow
PROCESS
CHANGE
Myths of Six Sigma
Myth #1: Runs well only in large companies
Myth #2: Only for manufacturing
Myth #3: You have to be a statistician to use itMyth #3: You have to be a statistician to use it
Myth #4: It’s a big training investment with a long
payback period.
Myth #5: You have to be good in Karate
Lean and Six Sigma
� Lean provides tools for quickly and significantly slashing
cycle time and waste in any process
� Six Sigma provides tools and organizational guidelines that
establish a foundation for sustained, data-based
improvements in strategically important, customer-critical improvements in strategically important, customer-critical
targets.
� LSS has grown beyond these problem-solving roots, it is a
deployment guidelines that give companies the means to
establish and maintain…
strategy-to-execution links.
Examples of LSS Projects/Subjects
CLAIM PROCESS
PRODUCTIVITY
SERVICE QUALITYCUSTOMER SATISFACTION
OPERATION CONTROL
PERFORMANCE MEASUREMENT
PROCESSING COST
SERVICE QUALITY
DELIVERY PERFORMANCE
DEFECT REDUCTION
ENERGY COST
EFFICIENT PROCESS
PROCESS SPEED
HUMAN RESOURCES
OPERATION CONTROL
SERVICE LEVEL AGREEMENT
Questions Are
• Are those projects will help you increase added value to
shareholders and stakeholders?
• Do we have infrastructure, process, and people to • Do we have infrastructure, process, and people to
identify and execute those initiatives?
• Do we have the skill-set and know-how to effectively
solve the issues?
Okay, Let’s Agree on What We Need
• Strategic Alignment and Integration between process
improvement, cost transformation, and strategy
– Selected and prioritized portfolio of initiatives (projects)
– Calibrated vision and business objectives, top down
• Proven Change Infrastructure (change management, • Proven Change Infrastructure (change management,
people, monitoring process)
– Skilled change agents with technical know how and people skills
– Power of Mass
• Disciplined Execution of initiatives/projects with
comprehensive skill set and methodology
– Robust factual-approach methodology
– Wave by wave by wave
Okay, Let’s Agree on What We Need
• Strategic alignment and integration between process
improvement, cost transformation, and strategy
– Selected and prioritized portfolio of initiatives (projects)
– Calibrated vision and business objectives, top down
• Proven Change Infrastructure (change management,
Commitment
Strategy
• Proven Change Infrastructure (change management,
people, monitoring process)
– Skilled change agents with technical know how and people skills
– Power of Mass
• Diciplined Execution of initiatives/projects
– Robust factual-approach methodology
– Wave by wave by wave
CalibrateVision
Method
Discipline
Infrastructure
Okay, Let’s Agree on What We Need
• Strategic alignment and integration between process
improvement, cost transformation, and strategy
– Selected and prioritized portfolio of initiatives (projects)
– Calibrated vision and business objectives, top down
• Proven Change Infrastructure (change management, LEAN SIX SIGMA• Proven Change Infrastructure (change management,
people, monitoring process)
– Skilled change agents with technical know how and people skills
– Power of Mass
• Diciplined Execution of initiatives/projects
– Robust factual-approach methodology
– Wave by wave by wave
LEAN SIX SIGMA
A rose by any other name would smell as sweet!But, it is not recommended to use: cost cutting
Prioritizing ProjectsYou can download the software for free:
http://www.SSCXinternational.com/projectselection.html
Instruction and explanations
are available on the website.
Project
Queue
Project
Queue
Long-List of Potential CI Projects
Black BeltBlack Belt
Executive and
Leadership
Structure of Training Programs
Green BeltGreen Belt
AwarenesssAwarenesss
Leadership and Change
Technical Side and Execution
Awareness and Understanding
Define
Measure
Analyze
Improve
Control
Sustain!
DMAIC Problem Solving Roadmap
Define Measure Analyze Improve Control
Well defined Well defined
problem is problem
half-solved.
DMAIC Problem Solving Roadmap
Define Measure Analyze Improve Control
Understand Understand
issues by knowing
where they stand.
DMAIC Problem Solving Roadmap
Define Measure Analyze Improve Control
Y = f(x), analyze, Y = f(x), analyze,
identify, and
prioritize xs.
DMAIC Problem Solving Roadmap
Define Measure Analyze Improve Control
Execute CHANGE, Execute CHANGE, ensure they are
statistically significant.
DMAIC Problem Solving Roadmap
Define Measure Analyze Improve Control
Sustain Sustain
improvement,
never let it slip.
Integrating Change ManagementIntegrating Change Management
More on Change Management
Clear and
Shared Vision
Aligned
Infrastructure
Enduring
Capability
Quick Wins
and Stories
“Change is
not a Priority”
Clear and
Shared Vision
Compelling
Reason
Enduring
Capability
Quick Wins
and Stories
Slow , Bumpy
Change
Compelling
Reason
Aligned
Infrastructure
Enduring
Capability
Quick Wins
and Stories
Confusion,
Unmotivated
Shared Vision Reason Capability and Stories Change
Clear and
Shared Vision
Compelling
Reason
Aligned
Infrastructure
Quick Wins
and StoriesFrustration
Clear and
Shared Vision
Compelling
Reason
Aligned
Infrastructure
Enduring
Capability
Losing
Enthusiasm
Clear and
Shared Vision
Compelling
Reason
Aligned
Infrastructure
Enduring
Capability
Quick Wins
and Stories
Succesful
CHANGE
Menara Rajawali 11th Floor
Mega Kuningan
Jakarta 12950
T +62 21 576 2727
F +62 21 576 2736
www.SSCXinternational.com