TPMG Lean Six Sigma - What is Six Sigma?

1. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
The Performance Management Group
LLC
Six Sigma
““Achieving Service Excellence”Achieving Service Excellence”
First Contact DiscussionFirst Contact Discussion

2. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
TPMG Six Sigma Principles
1. Passion and Accountability:
The burning desire for everyone
taking the personal responsibility
to be the absolute best!
2. Operational Excellence: The
result of continuously producing
value added work products at the
highest levels of productivity,
efficiency, and quality!
3. Customer Loyalty: Enjoying the
financial and market
consequences of being #1 in the
eyes of your customers!
PM6σ
Operational
Excellence
Customer
Loyalty
Passion &
Accountability
A Culture of Being Exceptional!
Excellence!
Slide 1

3. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
1. Six Sigma is a “quality improvement
business practice” that strives to produce
perfection in the delivery of services.
2. A “method of management” that uses
facts, information and data to make
decisions and manage business
performance.
3. A “problem solving method” that identifies
root causes to problems and determines
permanent solutions.
What is Six Sigma?
Slide 2

4. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
1. Six Sigma is NOT a budget cutting strategy:
It is not across – the – board cuts that result in
travel and hiring freezes, reductions-in-force or
project delays.
The goal is to obtain the highest levels of customer
loyalty and achieve the highest levels of
productivity in order to avoid strategies and
policies that are destructive.
2. Six Sigma is NOT a program:
It is not the new “flavor-of –the-month” packed with
slogans and signs.
The premise of Six Sigma implies that everyone will
produce something of value. The goal of Six Sigma
is to ensure that everyone produces work products
efficiently, and is driven by a responsible executive
and management team.
3. Six Sigma does NOT solely focus on people:
It is not an intense focus on working harder and
faster, nor is there an intense focus on peoples
performance against productivity standards
To improve things, everyone must make the
SYSTEM work better. Measurement and evaluation
of the processes is essential.
4. Six Sigma is NOT fire fighting:
It is not finding errors and defects and then fixing
them.
The goal of Six Sigma is to find out WHY there are
problems and eliminate the root cause of problems
and waste. Prevention not fire fighting.
5. Six Sigma is NOT just listening to the voice of the yard stick:
It is not the intention for your job success to be
solely based on the measurement of managements
yardstick “alone”.
Six Sigma wants you to pay attention to your
customer. Do what the customer wants. Your
manager helps you by providing resources,
direction, training, and support.

5. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
1. Sigma (σ) is a Greek letter that
represents variation.
The sigma value indicates how well an
operation is performing. To achieve 6σ
performance means a service operation only
produces 3.4 errors out of every million
opportunities (EPMO).
What does Six Sigma Mean?
Slide 3

6. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Six Sigma translates into bottom line
results!
• Call centers improve handling times.
• Service centers improve cycle times.
• Fewer billing errors and customer credits.
• Work quality within and across functions
become more efficient.
• Overall productivity and cost effectiveness
improves.
Why is Six Sigma Important?
Slide 8

7. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Higher
Growth
In Sales
Higher
Growth
In Income
Higher
Growth
In Stock
Price
37% 48% 44%
Quality Delivers Business Results!
Source: US Department of Commerce National Institute of Standards and
Technology.
Slide 9
Why is Six Sigma Important?

8. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
You can quantify the return on your
investment!
• GE calculated a $10 Billion Return in its first 5
years.
• Bank of America estimated $1 Billion in savings in
its 1st
year.
• Phelps Doge estimated over $40 Million in its 1st
year with limited deployment.
(Source: Caler Group, isixsigma.com)
Why Consider Six Sigma?
Slide 10

9. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Best form of management and employee training for a
company!
• Voice of the Customer.
• People Skills.
Working with and through others.
Consensus building and group decision making.
Working in teams to get results (Team Building).
• Management Skills
Measuring and managing performance.
Process design and improvement.
Problem solving at the root cause.
Work across functions to produce results.
Financial impact analysis.
Project Management.
Why Consider Six Sigma ?
Slide 7

10. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Essential Skills
Trend and Stability
Analysis
Capability Analysis
Scatter Diagram
Positive Correlation
0
50
100
150
200
250
0 10 20 30
X Axis Independent Variable
YAxisDependentVarialbe
Cause and Effect
Analysis Y = F(X)
Applications Errors 10/1 - 10/31
12 4
8 4
51
2 2 17 12 2 0
3 8 %
78 %
8 5%
9 0 %
9 4 %
10 0 %
6 3 %
0
20
40
60
80
100
120
140
Application Error Type
#ofErrors
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
%ofErrors
Pareto Analysis
Root Cause Analysis
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Benefits
Cost Reduction - Postage 57,916$ 57,916$ 57,916$ 57,916$ 57,916$
Cost Reduction - Labor 593,550.27$ 1,242,139$ 1,242,139$ 1,242,139$ 1,242,139$
Other
Total Benefits 651,466$ 1,300,054$ 1,300,054$ 1,300,054$ 1,300,054$
Costs/Expenses
Operating (Statasoft Software Maint) 7,055.00$ 7,055.00$ 7,055.00$ 7,055.00$ 7,055.00$
Telecom Cost 21,516.00$ 21,516.00$ 21,516.00$ 21,516.00$ 21,516.00$
Development IT Cost and Purchase of the Dialer 1/2 of purchase price 45,500$
Other
Total Expenses 45,500$ 28,571$ 28,571$ 28,571$ 28,571$ 28,571$
Calculations
Straight Line Depreciation (per year) 9,100 9,100 9,100 9,100 9,100
Pretax Profit 613,795 1,262,383 1,262,383 1,262,383 1,262,383
Taxes (34%) (208,690) (429,210) (429,210) (429,210) (429,210)
Profit After Taxes - 405,105 833,173 833,173 833,173 833,173
Noncash Charges
Depreciation 9,100 9,100 9,100 9,100 9,100
Residual Net Cash Flow (45,500)$ 414,205 842,273 842,273 842,273 842,273
Analysis
Annual Return (After Payback) 622,895$ Before Tax
5 Year NPV $2,608,501 After Tax
Payback Period (months) 0.8
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Cum. Benefits (after tax) $0 $429,967 $1,288,003 $2,146,039 $3,004,075 $3,862,110
Cum. Costs / Expenses (after tax) $45,500 $61,263 $77,026 $92,789 $108,551 $124,314
Cum. Resid. Net Cash Flow (after tax) (45,500)$ 368,705$ 1,210,977$ 2,053,250$ 2,895,523$ 3,737,796$
Cost Benefit Analysis

11. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
1. Customer Loyalty
• Needs
• Attitudes
• Perceptions
2. Operational Excellence
• Cycle Time Reduction
• Greater Accuracy
• Less Rework
• On Time Service
The Six Sigma Value Proposition
Slide 4
Determines customer short and
long term requirements,
expectations, and preferences to
ensure the relevance of current
product offerings and service
levels.
Operational requirements that
become the Excellence
Standards

12. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Dept.
A
Dept.
B
Dept.
C
Dept.
D
Company
Dept.
A
Dept.
B
Dept.
C
Dept.
D
The
Customer
Product /Service Delivery
Functionally Focused Process Focused
Functionally Focused Organizations:
1. “Us-versus-them” relationships which can limit communication between departments.
2. Departments too concerned with its own needs to meet the needs of external customers.
3. Unmanaged gaps between departments that often disrupt the continuity of cross-
functional work processes.
Process Focused Organizations:
1. Encourage relationships across functions.
2. Base process requirements on internal and external customer needs.
3. Promote teamwork to improve “shared” work processes.
Slide 5
Six Sigma Encourages Co-operation
Functional Focused Organizations VS Process Focused Organizations

13. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Cost decrease
because of
fewer
deficiencies,
fewer delays &
snags, fewer
errors &
credits,
less rework
and better use
of technology,
materials and
people!
Productivity
Improves!
Capture the
market with
better quality
& lower price!
Enhance
Shareholder
value!
Stay in business
and provide
more jobs!
PM6σExcellence!
Sets in Motion a “Chain Reaction!”
• Fewer Defects.
• Less Waste.
• Fewer Errors & Credits.
• Improved Cost Effectiveness.
Slide 6
Six Sigma Promotes Operational Excellence

14. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
ASA - CIG Customer Service - November 2005
0 0
208
78
46 48
26 30
11 10
2 1 3 3 1 0 0 0 0 0 0 0 0 1 0
0.0
50.0
100.0
150.0
200.0
250.0
0.5 to
29.4
58.3
to
87.2
116.1
to
145.0
173.9
to
202.8
231.7
to
260.6
289.5
to
318.4
347.3
to
376.2
405.1
to
434.0
462.9
to
491.8
520.7
to
549.6
578.5
to
607.4
636.3
to
665.2
Seconds
USL 60
Mean 64
Median 40
Mode 8
Numberof1/2hourincrements
Source: 1 Incoming Calls Management Institute Multichannel Contact Study II –
June 2005
38% > than 1 Minute
Goal: 60 seconds
CPI Direct Cost Per Claim - Close Ratio Numbers
$79.66
$89.25
$108.66
$124.17
$145.65
$149.16
$163.43
$148.86
$136.26
$172.86
$184.27
$148.90
$128.95
$157.00
$88.55
$110.58
$147.45
$113.45
$134.11
$111.07
$150.84
197.80UCL
CL 133.01
LCL 68.21
$68.21
$88.21
$108.21
$128.21
$148.21
$168.21
$188.21
$208.21
Jan-
04
Feb-
04
Mar-
04
Apr-
04
May-
04
Jun-
04
Jul-
04
Aug-
04
Sep-
04
Oct-
04
Nov-
04
Dec-
04
Jan-
05
Feb-
05
Mar-
05
Apr-
05
May-
05
Jun-
05
Jul-
05
Aug-
05
Sep-
05
M onth
Cost
Data Points
UCL
+2 Sigma
+1 Sigma
Average
-1 Sigma
-2 Sigma
LCL
ASA- CIGCustomer Service: November 2005
UCL 103.6
64.2CL
24.8LCL
10
30
50
70
90
110
130
11/1/2005
11/2/2005
11/3/2005
11/4/2005
11/5/2005
11/6/2005
11/7/2005
11/8/2005
11/9/2005
11/10/2005
11/11/2005
11/12/2005
11/13/2005
11/14/2005
11/15/2005
11/16/2005
11/17/2005
11/18/2005
11/19/2005
11/20/2005
11/21/2005
11/22/2005
11/23/2005
11/24/2005
11/25/2005
11/26/2005
11/27/2005
11/28/2005
11/29/2005
11/30/2005
Date
ASA-InSeconds
Trends
Stability
Capability
Measure, Measure, Measure
• Daily
• Weekly
• Monthly
• Etc…
Averages
Variation
Six Sigma Promotes Evaluation

15. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
TPMG’s Leveraged Management Strategy™
EIC
Dept A Dept B Dept C
Quality
&
Process Improvement
IC IC IC IC IC IC IC IC
Practitioner /Managers:
Green Belt Certification
Six Sigma Basic Training
Facilitators/Technical
Expert(s):
Black Belt Certification
Executive Champion(s)
Executive Seminar
Cross Functional Processes
IC
Associates:
Six Sigma Basic Training
How to leverage the
existing management
and organizational
structure for
breakthroughs in
process improvement
and performance
management.
Slide 11

16. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Why The Performance Management Group?
1. Most Qualified Trainers and Consultants.
2. Experts with Service
Providers.
 Telecommunications.
 Energy and Utilities.
 Financial Services.
 Insurance Services.
 Logistics.
 etc…
(References Provided)
3. Guaranteed Results!
Slide 12

17. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Certifications for each level of business!
• 6σ Black Belt Certification - Technical Experts.
• 6σ Green Belt Certification – Practitioners.
• Six Sigma Basic Training – Middle Management
• Six Sigma Champions - Executive Leadership
Slide 13

18. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
3 Levels of Service
1.Classic Public Sessions.
2.On – Site Dedicated.
3.On – Site Premium.
Slide 14

19. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
On-Site Premium Services
• Full Time Dedicated
Consultant(s).
• 6 - 12 Month Tenure
• On-Site Training &
Certification.
• Expert Project
Supervision.
• Train the Trainer
• Guaranteed Results!
Slide 15

20. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Fee Structure:
• On-Site Premium Services – Per Consultant
– $150.00 – $175.00 Per Hour (8 hour/day max)
– 15 - 18 Work Days Per Month
– Plus Cost of Materials (at cost)
• Manuals – $35.00 to $45.00.
• Software - $100.00 to $125.00

21. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Envision
Prioritiz
e
Commi
t
Improve
Achieve
TPMG
Turning the Strategy Wheel! 1) 12-18 month Quality
Vision.
2) Identify Critical
Success Factors.
3) Commit to 6σ
Projects.
4) Realize
Improvements.
5) Experience the
Vision.
Premium Services – Six Sigma Strategy
Slide 16

22. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Train Your Teams.
Define Your Overall Six Sigma Vision.
Define Departmental Missions.
Deploy Your Teams.
Focus On Core Processes.
Integrate Measurements.
Deploy DMAIC.
1
2
3
4
5
6
7
Deploying Six Sigma
Service Excellence!
Slide 17

23. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Define
Measure
AnalyzeImprove
Control
TPMG
From Root Cause to Performance Improvement!
Define
– Identify limiting factors and barriers.
Measure
– Understand the degree of impact.
Analyze
– Ascertain the Root Causes.
Improve
– Remove Root Causes.
Control
– Maintain and improve outcomes.
Slide 18

24. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
Breaking the fallacies:
1. We don’t have time for Six Sigma!
• Six Sigma makes work 54% less time consuming.
• Eliminates rework, returns, unanticipated truck roles and the time
associated.
2. It is too complicated!
• 8th
grade education.
• Software makes it simple.
3. It is too expensive!
• Six Sigma will improve a company’s bottom line by at least 25%.
4. It won’t fit into our culture!
• Six Sigma serves the profit motive!
• Six Sigma serves companies who strive for customer loyalty!
• Six Sigma serves leaders who strive for the team concept.
Slide 19

25. TPMG
P
A
R
T
N
E
R
S
I
N
E
X
C
E
L
L
E
N
C
E
Helping You
Make It Happen!
PM6σExcellence
!
TPMG
Six Sigma Service
Excellence!
?
Questions
Comments
Contact TPMG at 623.643.9837
Slide 20