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Special Presentation

Six Sigma Deployment in the EPC Business

CII Annual Conference

Orlando, Florida

July 29-31, 2003

Special Presentation

Six Sigma Deployment in the EPC Business

CII Annual Conference

Orlando, Florida

July 29-31, 2003

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

Near-miss safety incidents
Missed commitments Inaccurate reports

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

Special Presentation

Six Sigma Deployment in the EPC Business

CII Annual Conference

Orlando, Florida

July 29-31, 2003

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