Six Sigma Financial Tracking and Reporting Measuring Project Performance and P&L Impact

by Bremer, Michael; McKibben, Brian; McCarty, Thomas

• ISBN13: 9780071458917
• ISBN10: 0071458913
• Edition: 1st
• Format: Hardcover
• Copyright: 2006-01-05
• Publisher: McGraw-Hill Education

Summary

The six sigma world requires an effective methodology to track and report cost, savings, expenses, profits, etc. on a project by project basis.This book shows Blackbelts how to apply financial reporting to their process improvement projects, be certain their savings are accurately reflected in corporate financial accounting, and prove the net worth of their projects. Financially track Six Sigma projects Prove the net worth of improvement projects Simplify the metrics used to measure project impact

Author Biography

Michael Bremer (Chicago, IL) is president of The Cumberland Group-Chicago, as well as adjunct senior consultant for Motorola University. He is a nationally-recognized speaker on process improvement, leadership, and management team effectiveness. He has over 25 years' experience, in roles including director of the information systems group for a Fortune 25 company, chief financial officer for an international association, and president of several new business start-ups.

Brian McKibben (Chicago, IL) has been a Co-Chief Executive Officer of Flow-Works, Inc., and a Vice President of the Cumberland Group, Chicago. He is a Board Member of the Association for Manufacturing Excellence and Strategic Management Association. Additionally, he is the past president of the Chicago Chapter of the Institute of Industrial Engineers.

Thomas McCarty (Shaumberg, IL) is Vice President of Consulting and Training Services at Motorola University, responsible for improving the business performance of Motorola's suppliers, partners, and customers through consulting on performance, process, and continuous improvement.

Table of Contents

Preface	ix
Acknowledgments	xi
Introduction	1	(28)
Overview	1	(1)
Numbers Paradox	2	(3)
Performance Improvement Initiatives: Were They Failures?	5	(3)
Purpose of This Book	8	(3)
Chaos and Fractals	11	(2)
People Side of Measurement/Change	13	(3)
Profound Knowledge	16	(3)
Measurement	19	(1)
Executive Summary (Cliff Notes Version of this Book)	20	(3)
A Team Sponsor's Role and Responsibilities	23	(1)
Excellent versus Average Performance	24	(3)
Summary	27	(2)
Financial Bridge P&L Model	29	(34)
Overview	29	(4)
Six Sigma Financial Tracking and Reporting	33	(13)
Savings Analytical Guidelines	46	(8)
Lean Accounting	54	(9)
Define---Defining What Is Important	63	(34)
Overview	63	(1)
Purpose of Define	64	(1)
Define Phase Organizational Level	65	(1)
Voice of the Customer	66	(11)
Voice of the Business	77	(7)
Pulling the Voices Together	84	(4)
Actions to Avoid Metric Problems	88	(2)
What Is Great versus Average?	90	(2)
Define---Team Sponsor's Role and Responsibilities	92	(2)
Technical Business Unit Case Study	94	(1)
Tollgate Questions	95	(2)
Measure---Developing and Tracking Bridge Metrics	97	(60)
Purpose	97	(1)
Introduction	97	(2)
Overview and Background	99	(9)
Company Examples	108	(2)
Pulling It Together---Measure Phase in Bridge Process	110	(4)
Measurement System Analysis	114	(5)
Measure Substeps for Routine Bridge Process Use	119	(4)
Business Metrics Roadmap---Extended Management Horizon	123	(6)
Implementing a Bridge Model---Measure Phase	129	(2)
Tools for Doing It---Measure Phase	131	(19)
What Can Go Wrong	150	(1)
Measure---Team Sponsor's Role and Responsibilities	151	(3)
Technical Business Unit Story---Measure Phase	154	(1)
Tollgate Questions	155	(2)
Analyze---Identifying the Things That Are ``Off Track''	157	(36)
Purpose	157	(1)
Introduction	157	(1)
Overview and Background	158	(4)
Pulling It Together---Analyze Phase in Bridge Process	162	(2)
Analyze Substeps in Routine Bridge Functions	164	(8)
Implementing a Bridge Model---Analyze Phase	172	(1)
Tools for Doing It---Analyze Phase	173	(12)
Specialized Tools	185	(3)
What Can Go Wrong	188	(1)
Analyze---Team Sponsor's Role and Responsibilities	188	(2)
Technical Business Unit Story---Analyze Phase	190	(1)
Tollgate Questions	191	(2)
Improve---Make It Happen, Effectively!	193	(42)
People and Processes	193	(3)
Selecting a Solution	196	(2)
Open Dialog	198	(4)
Alternate Solutions	202	(4)
Action Plans (60- to 90-day Timeframe)	206	(1)
Cost and Financial Benefits	207	(6)
People and Accountabilities	213	(11)
Communications	224	(4)
Improve---Team Sponsor's Role and Responsibilities	228	(2)
Improve Close	230	(1)
Technical Business Unit---Case Study	231	(1)
Tollgate Questions	232	(3)
Control---Sustain the Gains	235	(36)
Overview	235	(1)
Pilots and Pilot Evaluation Plan	236	(3)
Implementation and Execution	239	(2)
Implementation Rollout Plan	241	(8)
Standardization and Replication	249	(1)
Clarified Roles and Responsibilities	250	(3)
Process and Performance Control Metrics	253	(2)
Financial Assessment	255	(2)
Leadership Governance and Sustaining the Gains	257	(7)
Control---Team Sponsor's Role and Responsibilities	264	(2)
Case Study	266	(1)
Control Phase---Tollgate Questions	267	(4)
Assessment Instruments	271	(24)
Malcolm Baldrige Quality Award	271	(2)
Capability Maturity Model Integration	273	(3)
People Capability Maturity Model	276	(1)
Shingo Prize for Excellence in Manufacturing	277	(1)
Baldrige National Quality Program: Criteria for Performance Excellence	278	(17)
The Role of Leadership and Governance in Driving Financial Impact	295	(30)
Overview	295	(1)
The Six Sigma Macro Model at Apex	296	(3)
The Holistic Six Sigma Model	299	(1)
Jones Lang LaSalle's Client-Driven Six Sigma Continuous Improvement Model	299	(5)
Integrating Six Sigma Techniques	304	(6)
The Collaborative Management Model	310	(3)
Annual Planning and Strategy Development Workshop	313	(2)
Collaborative Management Process Summary	315	(4)
The Guidance Center	319	(3)
Conclusion	322	(3)
Shareholder Value and Business Profitability	325	(22)
Shareholder Value	326	(3)
Strategic Business Planning Metrics	329	(1)
The One-Page Strategic Growth Model	330	(7)
Customer Profitability	337	(3)
Supply Chain Profitability	340	(1)
Cost of Quality	341	(2)
Shareholder Value and Profitability Summary	343	(4)
Support Systems---People Side of Bridge Process	347	(24)
Purpose	347	(1)
Introduction	347	(2)
Overview and Background	349	(14)
Pulling It Together---Bridge Structure and Usage	363	(7)
Tools for Doing It	370	(1)
What Can Go Wrong	370	(1)
Tollgate Questions	370	(1)
Continuous Improvement Processes	371	(20)
Purpose	371	(1)
Introduction	371	(1)
Overview and Background	372	(6)
Pulling It Together---Bridge Structure and CI Process	378	(5)
Tools for Doing It	383	(6)
What Can Go Wrong	389	(1)
Tollgate Questions	389	(2)
Multipurpose and Next-Gen Tools	391	(44)
Value-Stream Mapping	391	(1)
Value-Stream Mapping Methods	392	(15)
MRP for Logistics and Supply Chain Management	407	(5)
Operations Planning Models	412	(3)
Optimizing Customer-Configured, Mixed-Model Manufacturing	415	(13)
Real-Time Analysis of Complex Process Variability Causes	428	(5)
In Closing---A Bridge Span: In-Process Analysis of Variation Causes	433	(2)
Bridge Process Outlines	435	(6)
Routine Bridge Functions: Day-to-Day Use of a Bridge System by Process Operators and Owners	435	(3)
Bridge Implementation Steps	438	(3)
Index	441