What is Six Sigma?
Six Sigma uses a rigorous set of tools and
methodologies designed with one purpose in mind —
to produce a dramatic improvement in work quality, profitability, customer and employee satisfaction, and
leadership of business enterprises.
―Six Sigma is the new way of life for doing business in our company.‖
Adrian Zaccaria President & Chief Operating Officer
Why Six Sigma?
Root cause analysis Ineffective lessons learned program Talent shortage Extensive inspection and rework Positive feedback from GE model
Relentless Search for Defects, Rework, and Waste
Inspection Overtime Idle time Rework Costs
Long cycle times
Cost of working capital
Redundant processes Expediting costs
Lost Opportunity
Frustration and poor morale
Excessive planning
Measuring Performance Using Data
Could Six Sigma Work in Bechtel?
1985-92
Motorola Texas Instruments
1993-94
ABB
1994-96
1996-97
1997-99
Avery Dennison Crane
2000 …
AMEX Air Products & Chemicals Celanese Citigroup DuPont Ford Home Depot Johnson Controls Shell Wal-Mart
Allied Signal 3M General Electric Honeywell Bombardier Dow
Lockheed Nokia Mobile Martin Phones Praxair USPS Polaroid Corporation Shimano Sony
Bechtel’s Improvement Framework
Six Sigma
PerformanceBased Leadership (PBL)
A Project Example
Transport Productivity
PIP Team: Channel Tunnel Rail Link (CTRL) project, UK, Civil Increase spoils transport productivity by 15% Actual increase in productivity of 100% by shifting focus from total quantity of earth moved per day to quantity moved per truck per day Installed additional haul roads; Segregated other haul routes to avoid conflict between dump trucks and other site traffic; Introduced new procedure of removing trucks from worksite; Introduced new primary metric of productivity rather than percent progress
Objective: Results:
Improvements:
Strategic Plan for Deployment
Y = f (x)
X2 = Focus on a pipeline of ‗A‘ PIPs*
X3 = Institutionalize improvement benefits
Y= Sustained ‘A’ Results
X1 = Perform as a seamless team X4 = Be selfsufficient
* PIP = process improvement project
Core Principles
Customer focused Prioritize according to targeted impacts Build on knowledge and experience of resources
Critical Success Factors at Bechtel
Deployment managed like a project
Use of Performance-Based Leadership Focus on projects
Dedicated resources
Strong executive support
Six Sigma Roles
Team Member
Black Belt
Champion
Yellow Belt
(process owner)
Stakeholder
How Bechtel‘s Deployment Is Organized
Black Belt Team Members Champion
Yellow Belt
Deputy COO Executive Sponsor President of Business Line Deployment Sponsor Operations Manager Deployment Champion
Stakeholders
Master Black Belt
Deployment Coordinator
Functional/ Project Managers Champions
Process Owners Yellow Belts
Black Belts
All Employees Team Members
Other Managers Stakeholders
Another Success Story
Rebar Optimization
PIP Team: Objective: Croatian Motorway Project, Civil To improve the labor efficiency for installing rebar at direct hire structure sites from 38 hours per tonne to 25 hours per tonne Improved efficiency resulted in 15% reduced costs over an eight-month period More transparent reporting process; Structural engineers accountable for own structures; Maintaining rebar crew consistency; Prevent downtime through increased rebar stock at sites, trained super crane operators, working multi-sites
Results: Improvements:
Business Culture
Think Process … Ask for Data
Managers focused on data – variation, not averages
Project teams focused on process – inputs and customers
Functional organizations (Engineering and Construction) using data to validate best practices, asking for business cases
Relentless Focus on Self Sufficiency
Leadership Commitment
―The single most important decision that I‘ve participated in, in the last 10 years…‖
Riley P. Bechtel
Chairman & Chief Executive Officer