Overview of Six Sigma Systems projects.

Six Sigma Systems, Inc. experience:

The individuals who make up the Six Sigma Systems team have
successfully implemented six sigma and lean manufacturing programs
worldwide across many different industries and corporate cultures.
Companies such as Xerox, American Standard, Whirlpool, Special
Devices, Unisource/Georgia Pacific and Wyeth have achieved
performance improvements with the help of Six Sigma Systems. The
experience and insight we have gained enable us to rapidly and effectively introduce this
methodology into your organization so you can achieve maximum results.

Six Sigma Systems has established kanban systems and reorganized product flow at various
manufacturers. Six Sigma has developed new cell layouts, work instructions, and data
collection plan. Six Sigma Systems used experimentation and measurement system
assessment to understand defects at a manufacturer of automotive components.

• Implemented a six sigma and lean manufacturing program for Fortune 50 company.
• Generated a ROI of greater than 700% for our clients.
• Helped clients improve hundreds of business processes, for example:
o Increased yield on avionics component. Savings: $4,000,000.
o Reduced cycle time on high tech abrasive process. Savings: $2,800,000.
o Reduced inventory by 50% in entire product delivery chain while improving
service level by 20%.
o Reduced defects in paperwork process for government required paperwork.
Results: $1,500,000 increase cash flow.
o Improved cash conversation cycle time.
• Provided project leadership, technical and implementation assistance on several
mission critical projects with savings in excess of $20M+.
• Completed project assignments for smaller organizations.

A typical process improvement expert will generate $500,000 of savings in 6-9 months. A
group of 24 employees can generate $12,000,000 of savings in your organization in that time
period.

Six Sigma System, Inc. results:

The experts of Six Sigma Systems have a proven track record of success. Across many
industries and many types of projects, Six Sigma Systems team members have delivered
results such as these:

• A $2 M reduction in inventory for one product line.

• A $3.5 M savings through improved quality of critical component.
• A $11 M gain from inventory reduction, cycle time reduction and increased sales.

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Inventory management case study:

Preface:

Just like any investment in business, inventory needs to serve the purpose of maximizing
profit. However, in many cases inventory has turned into a major cash flow constraint thus
making it necessary to optimize inventory using analytical and statistical methods in an
integrated approach.

One of the biggest challenges in optimizing inventory is the fact that it is merely an output of
many inter-organizational processes. All too often organizations attempt to lower inventory
using non-analytical approaches which lower service levels.

Although counterintuitive, it in fact is possible to reduce inventory while improving service

levels simultaneously using our proven inventory management methodology.

Our inventory management methodology attacks inventory from two directions:

• Optimizing inventory levels while viewing the existing order fulfillment process as a
given constraint
• Changing the fundamental order fulfillment process across the entire system

Most clients find this two-step approach of significant value. During the first step cash can be
made available quickly and success is immediately generated. Step two is used to generate
breakthrough business results and provide a robust order fulfillment process that will be able to
perform at lower inventory levels while providing extraordinary service levels.

Case:

A major US corporation identifies a cash flow problem. Further analysis reveals that inventory
levels are high and turns are below most major competitors. In addition a technology change
and a proliferation of models amplify the issue.

The corporate goal is a reduction of inventory across the order fulfillment process in excess of
50% with no negative impact on service levels. Customer feedback reveals that a key to
customer satisfaction is on time delivery and any deviation from promised dates has a negative
impact on customer satisfaction.

Course of action:

A baseline of the existing order fulfillment process is conducted. It quickly highlights some key
leverage points in the order fulfillment process. Furthermore it becomes apparent that much of
the current inventory is present due to internally generated variation versus customer driven
order variation.

Following the baseline activity various process changes are modeled to verify their impact on
inventory levels and service levels. Real world constraints are taken into account prior to
deciding on the appropriate changes. Simulations are conducted to verify the appropriateness
of the analytical models using actual process data.
 As a result the following changes are made to accomplish the goals.

• Implementation of a Pull System for the order fulfillment

process. This pull system spans from supplier through
manufacturing, logistics to the customer. The previous order
fulfillment process was managed via an MRPII system.
• Determination of inventory levels using economic and statistical methods in an
integrated approach.
• Implementation of appropriate inventory management models to minimize cost given
various real world conditions in the supply chain (flow production, batch production, re-
manufactured parts inflow etc.).
• Revision of the planning process to support the order fulfillment process.
• Training of analysts to determine the appropriateness of forecast models.
• Reduction of internally generated variation through
o Organizational changes to reduce tampering.
o Application of statistical methods.

Management of the new process is significantly less resource intensive than the original
process. Changes in volume are easily accomplished due to the simplicity of the new order
fulfillment process. Inventory is reduced and service levels to customers are improved.

Results:

Inventory reduction post full implementation: > $20,000,000

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Production case study:

Preface:

Often we view old equipment as not worth understanding and improving for our operations,
however replacement costs can be staggering. Certainly purchasing new equipment is
necessary at times. However, frequently it is possible to produce good product with existing
equipment. Properly characterizing existing equipment using statistical methods can yield
significant improvements. We have been able to help our clients utilize existing, considered
‘out-dated’, equipment to produce high quality product efficiently. Our improvement process
follows the basic flow of:

• Define
• Measure
• Analyze
• Improve
• Control

Case:

A supplier to a major US manufacturer made the decision to stop providing critical

components. As a result several programs are at jeopardy as they require the use of this
supplied component. The supplier made the decision because the equipment was 30-40 years
old, yields had traditionally run at 60% and the margins were low. There were no other
suppliers found that would produce these critical components. The manufacturer was forced to
buy the exiting equipment and produce the components. The goal was to produce the parts,
for which there was no existing knowledge, and to improve the yield if possible. It was also a
foregone conclusion that new equipment would have to be purchased.

Course of action:

A baseline of the extrusion process was performed and a vast list of potential factors was
identified during Process Mapping. It was also determined, through Measurement System
Studies that the measurement systems were not capable of measuring the parts. The
measurement systems were improved and several screening designed experiments (DOEs)
were conducted. Results showed a few key factors to be important. Follow-up optimization
experiments were run. In addition, some of the input devices that were not working on the
equipment were repaired. The process was producing 100% yield within 3 months on existing
part numbers. The next step was to produce parts that had not been previously produced.
The first parts off of the new die met the desired specification, although slightly off target.
Based on the process knowledge gained from the previous experiments one of the critical
factors was adjusted. Within one shift the new parts were being produced to specification and
on target.

Finally the purchase order for new equipment was cancelled.

Results:

Total cost savings: $3,000,000. Time to completion: 3 - 4 months

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Administrative case study:

Preface:

Administrative or transactional processes are at time not designed to function with efficiency
since they are often viewed as secondary to the manufacturing operations of a company.
These processes however, have direct implications to the customer and business performance
and can be viewed as opportunities for significant savings.

Case:

A major US company was having difficulty with its cash conversion cycle time.

Course of action:

A baseline of the process was performed from order input through collection. The baseline
included:

• Process maps
• Spaghetti charts
• Failure modes and effects analysis (FMEA)
 • Pareto charts
• Statistical process control (SPC) on management performance metrics
• Associate surveys
• Evaluation of goal and metric alignment
• Evaluation of organizational structure

The baseline showed that due to the complexity of the process there were many process and
organizational locations where problems could and did occur. There was no short list of
solutions that would eliminate the errors negatively impacting cash conversion. Furthermore,
the feedback loops, which could have reduced the number of repeated errors were
cumbersome, which prevented learning and improving from occurring. There was a relatively
high turnover rate and the complexity of the process made training a lengthy and expensive
process.

The following changes were made to improve the cash conversion cycle time:

• Redesign the organization into customer support teams, with each required function
being represented on each team
• Mistake proof critical processes
• Co-locate the team members into autonomous groups
• Develop goals and metrics to evaluate the customer team performance and focus the
team on the overall process.
• Provide a progressive training platform for associates.

The new process allows for teams to become familiar with their unique customers’
requirements and to improve the existing process with a continuous and short feedback loop.
Metrics allow them to focus on the critical few versus the trivial many aspects of their process.