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BUSINESS BASICS & BEST PRACTICES BULLETIN

Now serving over 4723 subscribers

Competitive Knowledge for Manufacturing People 
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Manufacturing in the United States surged to a 20-
year high at the start of the year as factories 
scrambled to meet demand, while consumer spending 
increased modestly during the holidays. The Institute 
of Supply Management report released last week showed 
the manufacturing index rose to 63.6 in January---the 
highest since late 1983. 

Manufacturing is in a cyclical upswing at the 
beginning of 2004 and is poised for further growth 
over the coming months,” said John Ryding, chief 
economist at Bear Sterns.

Are you and your company getting your share of the 
current market expansion? 

* Has your company increased speed, improved 
quality and boosted customer satisfaction? 

* Has your team eliminated the high cost of 
shop floor chaos and mega stress of end-
of-the-month scrambling? 

* Have you gained control of day-to-day 
activities and created a fun work place? 

If your team and company are still in pursuit of the 
above objectives, there is help on the way. Be sure 
to read this weeks bulletin, “The 8-Basics of Lean
Six Sigma.”

Have a nice day, keep the faith, and stay connected.

Bill Gaw
Business Basics, LLC
Bg@bbasicsllc.com
760-945-5596

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BUSINESS BASICS & BEST PRACTICES BULLETIN

Now serving over 4723 subscribers

Competitive Knowledge for Manufacturing People 
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THE 8-BASICS OF LEAN SIX SIGMA

Let me start by saying that Six Sigma is not an overly 
sophisticated and unrealistic method of measuring data 
variation. It is also not a continuous improvement 
methodology for only banks, insurance companies and 
widget manufacturers. 

So if that’s what it’s not, then what is it?

First, it is a statistical measure of the performance 
of a process or a product

Second, it is a goal that reaches near perfection for 
performance improvement.

Third, and most important, it is a continuous 
improvement methodology designed to achieve “top-to-
bottom” commitment to world-class performance.

SIX SIGMA AS A STATISTICAL MEASURE

Sigma stands for standard deviation. It is a 
statistical way to describe how much variation exists 
in a set of data, a group of items, or a process. If 
you deliver only about 68% of your shipments to your
customers on time, your process is at only a “2 sigma” 
level. If you deliver 93 percent of your shipments on 
time, which sounds good, you are operating at only a 
“3 sigma” level of performance. If you get 99.4 percent 
of them to your customer on time, you’re operating at 
“4 sigma.”

To be a Six Sigma on time supplier, you would have to 
have a delivery record of 99.9997 percent on time. 
That’s practically perfect! In fact, for every million 
of shipments you make, you’d end up with only three or 
four late deliveries.

That’s enough to turn almost every manufacturing team 
off. If we’re struggling to make our goal of 97% on 
time deliveries, and that’s only 3.4 sigma, there is 
no way in hell that we’re going to get anywhere near 
6-sigma … ever! 

During my early years in manufacturing, I thought that 
Six Sigma was a program for only banks, drug companies 
and doughnut factories … not for manufacturers 
producing a product; let alone make-to-order products. 
Today, things have changed and Six Sigma has become 
the continuous improvement methodology of manufacturing
winners.

SIX SIGMA AS A GOAL

The goal of Six Sigma is to help people and processes 
aim high in aspiring to deliver defect-free products 
and services. The notion of zero defects is not at work 
here; Six Sigma recognizes that there’s always some 
potential for defects, even in the best-run processes 
or best-built products. 

The goal of Six Sigma is especially ambitious when you 
consider that prior to the start of a Six Sigma effort, 
many processes in many businesses operate at 1. 2, 3 
sigma levels. This means that from 66,000 to as many 
as 700,000 mistakes per million opportunities are being 
produced! Indeed, it’s often a shock for people to see 
how poorly their processes and products perform.

When taking up the Six Sigma banner, a business is 
saying, in effect: “We’d like to get as many of our 
customer-related activities and products performing 
as close to Six Sigma as we can.” Because 3.4 defects 
per million is such a challenging goal, the more 
immediate objective may be to get from, say, 2 to 3 
sigma. But that’s not shabby either: It would mean 
reducing defects from more than 300,000 per million to 
fewer that 70,000.

Keeping customers happy is good and profitable for 
the business. A 5 percent increase in customer 
retention has been shown to increase profits more that 
25 percent. It is estimated that companies lose 15 
percent to 20 percent of revenues each year to 
ineffective, inefficient processes---although some 
might suggest that it’s even higher. Six Sigma provides 
a goal that applies to both product and service 
activities and that sets attainable, short term goals 
while striving for long-range business objectives.


SIX SIGMA AS A SYSTEM OF MANAGEMENT

A significant difference between Six Sigma and other
continuous improvement programs is the degree to 
which management plays a key role in regularly 
monitoring program results and accomplishments.

As a management system, though, Six Sigma is not owned 
by senior leaders (although their role is critical) 
or driven by middle management (Although their 
participation is key). The ideas, solutions, process 
discoveries, and improvements that arise from Six Sigma 
take place at the front lines of the organization. Six 
Sigma companies are striving to put more responsibility 
into the hands of the people who work directly with 
customers.

In short, Six Sigma is a system that combines both 
strong leadership and grassroots energy and involvement. 
In addition, the benefits of Six Sigma are not just 
financial. People at all levels of a Six Sigma company 
find that better understanding of customers, a clearer 
process, meaningful measures, and powerful improvement 
tools make their work more effective, less chaotic, 
and often more rewarding.

In my experience, I found that like most other change 
initiatives the success level was always related to 
how well a company build the foundation for its change 
initiative success. This foundation for success 
invariably had the mastering of relevant business 
basics as its core strength. Six Sigma was no different. 

It’s amazing how many companies have great visions yet 
fail to achieve their full growth and earnings 
potential. They're a lot like the Green Bay Packer's 
football team before the arrival of Vince Lombardi ... 
all the potential in the world but with little focus 
on executing the basics of their profession. 

REQUISITES FOR SIX SIGMA SUCCESS

For any Six Sigma initiative to be successful, the 
following three challenges must be conquered:

1. Companies need to identify which Six Sigma 
basics that are requisites for increasing speed, 
improving quality, and boosting profit margins?

2. Teams need to master these basics to provide a 
solid foundation for the successful implementation of 
Six Sigma? 

3. Someone needs to champion a “top-to-bottom,” company 
commitment to the flawless execution of the Six Sigma 
Basics? A commitment that will provide the launching 
pad for individual, team and company achievements 
beyond all expectations.

THE BASICS OF LEAN SIX SIGMA SUCCESS

During my career, I identified and mastered continuous 
improvement basics that provided the foundation for a 
impressive, multi-company, performance improvement and
bottom line turnaround track record. 

Using successes and failures as a learning lab, I 
methodically researched and tested six sigma ideas, 
practices, principles, techniques and systems relative 
to how they contributed to a company's growth and 
profits. 

In order to share this powerful knowledge with the 
broadest possible audience, I began to write, teach 
and counsel on the effective implementation of what I 
came to call the Basics of Lean Six Sigma. My effort 
culminated in the development and publishing of a 
unique e-Tutorial, "Lean Six Sigma." This e-Tutorial 
provides e-learning for anyone... anywhere... anytime.

CAN THIS E-TUTORIAL REALLY MAKE A DIFFERENCE?

Many historic, recurring day-to-day problems (perhaps 
the same problems that plague your operation) can be 
permanently eliminated by a tenacious implementation 
of crucial Lean Six Sigma Basics. And, my e-Tutorial 
can help you and your company identify and master them. 
These basics will help you and your company reach your 
full growth and earnings potentials. Best of all, work 
will become fun again.


This Lean Six Sigma e-Tutorial is based on real world 
experience that: 

* Raised on-time deliveries from 2.9 to 4.4 Sigma 
* Improved inventory turnover from 2.4 to 18 
* Reduced build cycle time from 25 to 3 days 
* Stabilized P.O. reschedules from 2.6 to 5.2 Sigma 
* Increased profit margins from 34% to 55% 
* Improved supplier performance from 2.3 to 3.2 Sigma 
* Reduced scrap and rework by 58% 
* Boosted machine uptime by 24% 
* Minimized day-to-day stress levels 
* Eliminated end-of-the-month scrambling 
* Transformed work environments from drudgery to fun 

How did our teams accomplish so much? Like Vince 
Lombardi, who showed his teams how to master the 
execution of the basics of football, I showed our
teams how to master the execution of Lean Six Sigma 
Basics. Now these powerful basics are available to 
you and your company.

Don't buy another book or attend another seminar until 
you have studied my "Lean Six Sigma" e-Tutorial. Here 
you will find a time-proven approach to solving your 
problems and "bullet-proofing" your solutions. 

Using your e-Tutorial, you will gain the Lean Six 
Sigma Basics knowledge and training you need to help 
your company. There is no other "Back-to-Basics" 
program out there that comes close to touching my 
proven "Back-to-Basics" methodology. If your company 
is in need of a blueprint for reinventing itself, my 
"Lean Six Sigma" e-Tutorial is what you need.

To preview twenty 1-2 hours PowerPoint® Training Presentations on CDs with expert commentary by Bill Gaw, click below:

World Class Manufacturing Training
.


  STAY CONNECTED

To stay current on bullet-proofed manufacturing solutions, subscribe to our free ezine, "The Business Basics and Best Practices Bulletin." Simply fill in the below form and click on the subscribe button. 

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[[firstname]],

If your manufacturing team is interested in either 
implementing or improving their six sigma program, my 
methodology demonstrates proven, effective techniques 
and processes that could boost its development and 
implementation efforts to a higher level than you ever 
thought possible. 

This methodology will help you and your team: 

* Create and implement a winning business strategy 
* Boost customer satisfaction results 
* Create motivational performance management 
* Generate "quick hitting" kaizen results 
* Increase speed, improve quality, and boost profits 
* Implement a "Win-Win" e-learning process 
* Move from firefighting to proactive problem solving 
* Eliminate day-to-day stress and EOM scrambling 
* Reach your full growth and earnings potential 

Whether your company is working on improving its Six 
Sigma performance or has not started, my e-tutorial 
will help optimize its structural design and establish
a foundation for optimizing your Six Sigma results. 

To check it out go to: 

http://www.six-sigma-training.org

Believe this, I will never consider your decision 
binding until you have reviewed all the material 
and put it into practice. We know that you, like 
our other customers, will be thrilled with the 
results. In fact, we are so convinced that the 
tutorial will work for you that if you aren't 
completely satisfied for any reason at any time, 
simply return it for an immediate refund. You 
simply can't lose.

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Next week: (A humor timeout) "A Good Friend Story."

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