Posts Tagged ‘Sustain’

Sustain: The Fifth of the 5S’s

Monday, March 29th, 2010

Sustain the gains. Here we want to hold the gains we have achieved in the first four S’s (Sort, Simplify, Sweep, and Standardize). How do you do this; by establishing a vision for management to have everyone continually apply 5S’s to what they do. This means training everyone in how to apply the 5S’s. Keep a 5S’s awareness and discipline throughout the company. Every department should be keeping metrics to trend their improvements. Many companies think they apply the 5S’s to their companies but often forget or just ignore this fifth step thinking it is not that important. But if you follow any of the Six Sigma approach to process improvement you know that sustaining the gains is just as important as any other step and is critical to the success of what you do.

Sustain does not just apply to continually applying the 5 S’s but also means sustain the gains of the improvements that the 5 S’s have created. One of the biggest things that can be done is to create a open information system for data distribution to the entire workforce of the company. Why is this important for sustaining the gains? Because without data, an empowered workforce cannot make informed decisions. We need to  provide the right data to the right people at the right time insures the quickest response to shifts in conditions.

Sustain also includes teaching others. Teaching them not only about the 5S’s and how they work but in other ways as well. Everyone of us is an expert in something we do. That knowledge should be documented and shared with others. Many companies now days are loosing senior worker through retirement and as they leave so does the knowledge they have from their years of experience working. To sustain gains made over those many year of experience that knowledge needs to be capture and shared with the new employees so that it does not take years to get to the same point in their experience.

Sustain means making it easier to do it right rather than designing effective work-arounds. Remember that even though you today have a great process or way of doing a task, but tomorrow the customer needs WILL change and so will your approach to doing that task. Just think about this from a customer perspective. Television has changed from Black & White broadcast systems to Color HDTV with cable or Digital broadcast systems. All the process manufacturing and delivering Television has dramatically changed. What was the latest thing yesterday is old today and we need to be constantly watching so we adjust our processes to meet these new customer demands, not creating work-arounds to meet their needs.

Expect everyone to comply by using positive peer pressure. Don’t focus on a lot of what-if’s for those who don’t but try to listen and address their concerns about the changes. We are all afraid of change because we do not know what or how that will impact us. We need to address that in good communications and listening skills up front. Yes there will be some that will not expect the change and maybe it is best for them that they find a job where they feel things are right for them instead of staying with something that is uncomfortable for them. We all make those decisions.

Well there you have it. The last of the 5S’s in some detail. In case you miss one, you will always find them all at my blog http://www.sixsigmatrainingconsulting.com/knowledgebase/ . As always, if you have any questions feel free to contact me.

Bersbach Consulting
Peter Bersbach
Six Sigma Master Black Belt
http://sixsigmatrainingconsulting.com
peter@bersbach.com

1.520.829.0090

6 Sigma Cost Benefit Analysis

Friday, May 22nd, 2009


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Cost Benefit Analysis Article

Someone asked me for information on Cost Benefit Analysis as to how to implement this in a software project and analyze results.

Cost benefit analysis is the same for any type of project (i.e. Mfg. Process, Service Process, or Software project).  This Analysis can be used at any point in a project and I'd recommend that you do it at the very beginning and then update it at the completion of every step of the DMAIC process. In the "Define" step of the DMAIC process almost all the numbers will be estimates but I'd have a person from finance validate your estimates. That said what do you do?

1.      This all does start in Define where you put together your project charter. In the charter you will define several things that will be associated with Costs. Things like:

  • Project Schedule - Defining each step of the DMAIC processes Start and finish date.
  • Project Team members and the time they will spend on the project.
  • Other Resources: (materials, equipment, floor space, etc.) that at this time you think you might need to complete this project.

2.      Next, from the project charter again, what are the benefits? Now in that charter you will list the benefits but you also need to list the metric that will show the benefit improvement.

  • % decrease in bugs/errors
  • Faster speed
  • New Features
  • Easier customer use

3.      Now you need to convert these to $$$. This is where your team comes in. Team members (which should include a financial person) know best how these translate to $$$. For instance (I am not a Software Expert by any means):

  • Decrease in bugs could translate into a decrease in unhappy Customer calls to Tech support. This decrease the time the company spends on answer these complains. That is $$$ spent on support personal.
  • Faster speed translates into increase performance which increases customer satisfaction. That could translate into increase sales from loyal customers telling friend about the products performance.

4.      Now we go back to the charter and what does management want as a return on their investment and how quickly.

5.      Once you have all of that you can build a excel Spread sheet to see, and track, your projects performance. In excel there are functions for the NPV & IRR listed below.

 

Years

Costs

Benefits

Net

1

($10,000.00

$00.0

($10000.00)

2

$0.00

$2000.00

$2000.00

3

$0.00

$4000.00

$4000.00

4

$0.00

$4000.00

$4000.00

5

$0.00

$4000.00

$4000.00






Return wanted=

6%



Net Present Value

(NPV)=

$1861.92



Internal Rate of

Return(IRR)=

14%


 

Now you can see in the example that our expected rate of return is 14% which is higher than what management wanted which was 6% Note the Financial person can help you do the numbers the way your companies management understands them. The hard part is working the costs and benefits out to values everyone will agree to. I'd be conservative at first. By in the end you your results will look much better.

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