Digital six sigma effort at Motorola: Cisco helps

Motorola has been known as an innovative and technology driven company. It has been among the early ones to use six sigma quality and 10X cycle-time reduction strategies among its competition. However by year 2000, it started to suffer almost generating no profit at bottom line even though having a sales of USD $27 billion. After initially unsuccessfully trying out the strategies of laying off workers and closing don factories to cut costs, it rightly laid the stress on process driven improvements. This initiative was called Digital six sigma and incorporated Web-based training tools, modelling and simulation tools, digitized process compliance and quality measurement tools. The aim was to do a USD $3 billion cost reduction within 3 years, as there was a lack of profitability.   It was a decentralized business model with a great amount of independence being given in how every unit run their business. For the success of digital six sigma stress was laid on collaborating the various activities happening in company and reducing costs by coordinated buy-ins. Global synergy teams were formed and functional areas for improvement were targeted. Various areas that were targeted were:

·         Customer service and support

·         Logistics

·         Sourcing and supply chain

·         New product introduction

An assessment was conducted to discover where each sector was in terms of self-service capabilities. Exploratory findings were found on not yet identified strengths and weaknesses and opportunities. Cisco help was brought in and Motorola teams attended sessions with them to learn about industry best practices. It was worked upon how Motorola could take advantage of networking and Web tools in areas of service and support and implement automatic contract management, software downloads and update product specifications. Web automation was also implemented for requirement gathering and remote monitoring methods.

As a result Motorola was successful in saving nearly USD $3 billion in less than years by process improvements. This method was termed as digital six sigma.

References : http://www.cisco.com/web/about/ac79/docs/success/Motorola_Final.pdf

The writer of this article, Naman Jain is a PGP student of Indian Institute of Management, Raipur . He has done his B.Tech in Computer Science & Engineering from Vellore Institute of Technology, Vellore and can be reached at namanvit @ gmail . com

Mc Donald's Fast Food Restaurant JIT

At Mc Donald’s Fast Food Restaurant, strategy of Just in time has been applied and has brought many benefits to the organization and added value to the organization. This just in time system has helped in reducing the costs by drastically cutting down on inventory levels and wastages.

Previously at Mc Donald's Fast Food Restaurant the strategy was to pre cook all the burgers and place them under the lamps to keep them hot. As long as possible they were kept and the unsold went as waste. Special orders were expensive and time taking. Later on it transitioned itself totally to Just in Time approach. For this, extensive staff had to be hired to quickly prepare the burgers and training had to be given. It looked expensive in the short term but it reduced the wastages drastically and helped Mc Donald's excel at customer satisfaction in the long terms.

                                          A lot of advantages were brought in by this JIT method:

1.      Improved Quality – The burgers are prepared freshly and hence the quality has improved.

2.      Customer service – As the burger is made only after the order is placed, making special orders is not an issue.

3.      Cost Reduction – Due to significant reduction in wastage as uncooked material has a higher shelf life.

This strategy was first attempt to bring JIT manufacturing techniques to service industry. It was the ‘Made for You’ strategy and also helped Mcdonalds in setting up demonstrative kitchen techniques which is a unique aspect and is its USP.

References : http://www.highbeam.com/doc/1G1-20486956.html

The writer of this article, Naman Jain is a PGP student of Indian Institute of Management, Raipur . He has done his B.Tech in Computer Science & Engineering from Vellore Institute of Technology, Vellore and can be reached at namanvit @ gmail . com

Lean Manufacturing at Dell

 

Dell has also used Just in Time principles to make its manufacturing process a success.  They leverage their suppliers use JIT. Dell is about quickly assembling the part which are sourced from their suppliers and delivering to customers. They force their suppliers to carry inventory and Dell stays lean on inventory. Short lead times are provided to customers and thereby shorter lead times are demanded from their suppliers. Quick assembling and quick shipping is the USP of Dell. They have been able to do successfully implement JIT because of variety of reasons. It has had a Dependable supplier base. They have been able to meet Dell’s demanding lead time requirements. Also it has a seamless system that allows Dell to transport its system requirements. The systems are very efficient as they arrive in time to help Dell fulfill its lead times. Somehow Dell has been able to fore the suppliers to carry inventory and this willingness of suppliers to carry inventory on hand allows Dell to have low costs on inventory.

Because of JIT it has been able to successfully reduce the inventory related costs.  In 1993 it followed a practice of carrying over 10 weeks of inventory. Since 2001 it carries 1 week of inventory. This saves it majority of costs now. Inventory costs are even higher in computer industry as rate of depreciation is very high. By this rate Dell used to lose roughly 10% of the value of inventory per year.  After implementing JIT it loses roughly 1%. By this calculation dell has been able to save 9% costs in inventory management.

References : www.inventorymanagementreview.org/justintime/

The writer of this article, Naman Jain, a PGP student of Indian Institute of Management, Raipur has worked in GE Healthcare Labs. He has done his B.Tech in Computer Science & Engineering from Vellore Institute of Technology, Vellore and can be reached at namanvit @ gmail . com

Virtua Health using six sigma: Taking a cue from GE electric

Virtua health is a four hospital system in New Jersey. It was created in 1998 through the merger of West Jersey Health System and Memorial Health Alliance of Burlington County. It has now become a dominant player in the New Jersey suburbs of Philadelphia, bringing together four hospitals, two ambulatory surgery centres, two long-term care facilities, a health fitness centre, and a home health company. Virtua in order to become more competitive in the market thought to change management and operating culture at fundamental level by applying six sigma procedure.

A cultural transformation program called STAR initiative was started which was aimed for creating an outstanding patient experience. The aim was to transform Virtua into a high performing organization making quick decisions,  removing bureaucratic barriers for employees and physicians in order to create an outstanding patient experience, and driven by valid measurement and accountability for results. To implement the STAR initiative Virtua tied up with GE medical systems.

Six Sigma at Virtua

The partnership between GE and Virtua began in September 2000. GE Medical Systems representatives taught Virtua the Six Sigma tools, including the key components, the Change Acceleration Process (CAP) and Workout. Workout refers to getting extraneous work out of a process through brainstorming. It helps in removing barriers between departments and generates the action steps. CAP refers to a range of management tools to drive strategic change by getting everyone speaking a same language and making all stakeholders to accept the change. Six full time “Black-Belts” have been identified and they work on any issue identified by management. They brainstorm with the key stakeholders involved and stakeholders get organizational support in this fashion as the black belts represent the entire organization. It has also helped in improving the organizational culture.

Moreover six sigma projects have been identified in fields of             

• Improve patient satisfaction in the emergency room and medical/surgical units.                    
• Improve throughput (cases/day) in two of the systems' busiest operating rooms 
• Find a way to rapidly hire the best employees       
• Improve employee retention in such critical areas as nursing   
• Improve the revenue cycle
• Improve the efficiency of home health nurses
• Reduce errors in the use of high risk meditations
• Reduce length of stay for elderly patients with congestive heart failure.
                                                                            

Several other workout projects have been successfully completed throughout the Virtua health care system. Virtua has trained 60 coaches who are experts in CAP and workout methods. So, Six sigma is helping in enabling the whole organization through these skills.

The six sigma methodology has helped Virtua clients/employees to:

·         Be generally informed about the project, process, and projected outcomes in all domains of the health care system

·         Participate in goal setting

·         Understand how to interpret quality

·         Base their directives on hard information

·         Evaluate progress and judge success

References : http://search.proquest.com/docview/204788093?accountid=274812

The writer of this article, Naman Jain, a PGP student of Indian Institute of Management, Raipur has worked in GE Healthcare Labs. He has done his B.Tech in Computer Science & Engineering from Vellore Institute of Technology, Vellore and can be reached at namanvit @ gmail . com