Download - Six Sigma in Business Functions
Six Sigma in Business Functions
Presentation by
Benchmark Six Sigma
Remember: Does Six Sigma apply to you?
When there is an Output . . .
there is a Process
When there is a Process . . .
there is Performance
Variation
When there is Performance Variation . . . there is a Six
Sigma Opportunity
Six Sigma can be applied to
ALL functions, disciplines
and business processes
Further, Six Sigma Equation is:
• Y• Dependent• Output• Effect• Symptom• Monitor• Response
• X1 . . . XN• Independent• Input-Process• Cause• Problem• Control• Factor
f (X)Y=
This equation is valid across any business process or even any general process. This is the inherent strength of Six Sigma which makes its applicability feasible across any business domain
Given the Universal applicability of Y=f(X)
• Six Sigma Is applicable across all business functions like:
• Finance• Purchasing & Inventory• HR• Sales & Marketing• IT
Six Sigma Applicability
Six Sigma Application: FinanceBusiness
Function’s Objectives
Possible Issues Examples of Six Sigma Applicability
Business Planning & Budgeting
a. Incomplete, Inaccurate information
b. Long time for approvals
a. Ensuring completeness and accuracy of financial data.
b. Minimizing variation from budget.c. Reducing cycle time of approvals
Invoicing and Revenue Assurance
a. Errors in Invoices b. Late Invoices c. Payment defaults d. Delayed revenue realization
a. Reducing Invoicing errors b. Ensuring Timely Invoicing c. Reducing payment defaults d. Reduce cost of Invoicing
Collections and Receivables Management
a. High cost of collection b. Long time to collect money c. High Bed Debts d. Customer churn
a. Reducing cost of collection b. Reducing time to collect money c. Reducing customer defaults and bed debts.
Financial Reporting & Analysis
a. Delayed reporting b. Inaccurate reporting c. Reports not easily available
a. Ensuring ease of generating financial reports for analysis with reference to time., accuracy and availability
Six Sigma Application: Manufacturing OperationsBusiness
Function’s Objectives
Possible Issues Examples of Six Sigma Applicability
Manufacturing defect free products
a. Defective productsb. Waste of overproduction
or underproduction.c. Poor First pass yield
a. Reducing manufacturing defects at each stage.
b. Improving first time yield and efficiency of each step in the manufacturing process
c. Reducing waste by optimizing & managing production
Timely Manufacturing a. Delays in Manufacturingb. Machine failures leading
to delaysc. High changeover time
a. Reducing time to Manufactureb. Reducing machine downtime c. Reducing the machine changeover
time
Optimizing Operator Time
a. Suboptimal utilization of operators
b. Lot of WIP at each stagec. Waiting times at each
stage
a. Improving Operator utilization to enhance productivity
b. Reducing WIP (work in progress)c. Reducing waiting times at each
stage.
Six Sigma Application: Customer Care OperationsBusiness
Function’s Objectives
Possible Issues Examples of Six Sigma Applicability
Effective and Optimal Customer Call Handling
a. Difficulty faced by customers in accessing the organization
b. Agents providing incomplete/insufficient information to customers
c. A large number of unwanted calls
d. Delays in handing callse. Calls getting Abandoned
a. Improving accessibilityb. Improving the Quality of
Information.c. Reducing the unwanted callsd. Reducing customer waiting timese. Improving Agents Productivityf. Reducing call handling timeg. Reducing abandoned calls
Customer Call Analysis and Resolution
a. Large number of customer complaints
b. Delays in Issue Resolution
c. Queries not resolved to Customer satisfaction
a. Reducing the number of customer complaints
b. Achieving resolution as per SLAc. Improving Quality of query
resolution
Six Sigma Application: Purchasing
Business Function’s Objectives
Possible Issues Examples of Six Sigma Applicability
Procurement of Material required for Business
Time to release Purchase orders
High material rejection High Lead time of materialsHigh Vendor turnoverHigh material rejection
Reducing time to generate purchase orderReducing Lead time of ProcurementReducing the number of material rejectionsMinimizing Purchase order
Stores and Inventory Management
High InventoryDifference between physical stock and system stock.
Reduce Inventory levelsMatching System stock with physical stock by first finding the root causes of gaps.
Six Sigma Application: Sales
Business Function’s Objectives
Possible Issues Examples of Six Sigma Applicability
Product Development High time to develop productHigh time to Launch productInefficient and ineffective
customer requirements gathering process
Reducing cycle time to develop productImproving the customer requirement
gathering process.Improving the feedback mechanisms for
product development right from concept to launch
Customer Acquisition Low leads conversionHigh sales & distribution costsLow sales productivityLow market shareDecreasing rate of growth in market share vis a vis competition
Improving the leads conversion processReducing sales & distribution costsImproving sales productivityImproving market share by analyzing 7 understanding root causes of low market share .
Six Sigma Application: Marketing
Business Function’s Objectives
Possible Issues Examples of Six Sigma Applicability
Potential Market Identification
Certain hot segments missed or ignored
Market already maturedMarket too naïveMarket tapped more effectively
by competitors.
Improving the overall process of Potential Market identification
Improving the customer voice capturing and customer voice analysis process
Market Survey & Forecasting
Long time taken for survey and forecastsGap between actual and forecasted salesGap between actual and forecasted revenuesLot of rework in Market Forecasting Survey
Reduce the cycle time for making survey forecastsReduce gap between actual and forecasted sales and revenuesWorking towards First Time Right (FTR) for market forecasting survey
Six Sigma Application: HRBusiness
Function’s Objectives
Possible Issues Examples of Six Sigma Applicability
Recruitment Long time to recruit could result in losing talent
Challenges in onboardingHigh cost of recruitment
Reducing the overall time to recruitImproving the overall Induction & On
boarding processReducing the cost of recruitment
Employee Development
Ineffective / Inadequate trainingEmployee AbsenteeismLow employee morale
Improving efficiency & effectiveness of training Improving employee satisfactionRationalizing training programs
Compensation & Benefits
Errors in Incentive compensationEmployee dissatisfaction
Six Sigma Application: IT
Business Function’s Objectives
Possible Issues Examples of Six Sigma Applicability
Business Application Management
High Application development cycle time
Cumbersome change request process
High downtimeErrors in application devpment.
Reducing application development cycle time.
Reducing change request cycle timeReducing the downtimeReducing the errors in application
development
Business Application Availability
Application not easily accessibleProblems in application performance
Improving application performanceImproving application uptimeImproving application accessibility
Six Sigma Application: IT
Business Function’s Objectives
Possible Issues Examples of Six Sigma Applicability
Business Application Management
High Application development cycle time
Cumbersome change request process
High downtimeErrors in application devpment.
Reducing application development cycle time.
Reducing change request cycle timeReducing the downtimeReducing the errors in application
development
Business Application Availability
Application not easily accessibleProblems in application performance
Improving application performanceImproving application uptimeImproving application accessibility
Following Inherent strengths of Six Sigma Methodology ensure success across any Business functions:
Six Sigma Success Factors: Methodology
• Each Project has a strong tie to business deliverables– This enhances customer satisfaction and loyalty– Gives the Project a Strategic importance– Ensures impact on profit (hard and soft benefits)
• All results link to a key metric, which ensures– Goals can be quantified and measured
• It is ensured that project selected is feasible, which ensures– Team can commit time to project– Potential solutions are relatively low cost
Clear roles defined for People working on a Six Sigma Project also ensures success across functions:
Six Sigma Success Factors: People
Executive sponsorship
• Clear link between project and critical business goal
• Executive is visible and supportive of team efforts
• Executive breaks down barriers to improvement
Dedicated project manager
• Black Belt for large or difficult projects, or projects that
require statistical analysis
• Green Belt for a smaller project within her/his team
Six Sigma Trained Student’s Advantage
• Gains knowledge about the Business Functions from the course books– This means learning about HR, IT, Finance, Sales &Marketing,
Operations from text books and discussions– Also learning Statistics & Quantitative methods as part of course
• After undergoing Six Sigma training:– Understands the interlinkage between various subjects studied in
MBA with reference to actual industrial environment.– Practically understand how their learnings in Project Management,
Quantitative Methods, Finance, Human Resource Management, Operations and Organizational Behavior are applied to address real business issues
– Can take up Summer Internship Project as a Six Sigma Project