Six sigma financial tracking and reporting

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As Six Sigma and Lean Enterprise techniques continue to evolve and become more and more engrained in the business, it is harder and harder to track the impact of savings on a project by project basis. Especially when you have more than one project concentrating on different functional areas, through the use of case studies, worked out examples, and bench marking techniques, Michael Bremer, a Senior Instructor at Motorola University, helps you to put the right infrastructure in place for project identification, project scoping, and financial reporting.

Author Notes

Michael Bremer 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 is a board member of the Association for Manufacturing Excellence--Midwest Region.

Brian McKibben is 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--Midwest Region, and is past president of the Chicago chapter of the Institute of Industrial Engineers.

Thomas McCarty is Executive Vice President and Six Sigma Practice Leader at Jones Lang LaSalle Americas, Inc., responsible for improving the business performance of suppliers, partners, and customers through consulting on performance, process, and continuous improvement.

Preface	p. ix
Acknowledgments	p. xi
Chapter 1 Introduction	p. 1
1.1 Overview	p. 1
1.2 Numbers Paradox	p. 2
1.3 Performance Improvement Initiatives: Were They Failures?	p. 5
1.4 Purpose of This Book	p. 8
1.5 Chaos and Fractals	p. 11
1.6 People Side of Measurement/Change	p. 13
1.7 Profound Knowledge	p. 16
1.8 Measurement	p. 19
1.9 Executive Summary (Cliff Notes Version of this Book)	p. 20
1.10 A Team Sponsor's Role and Responsibilities	p. 23
1.11 Excellent versus Average Performance	p. 24
1.12 Summary	p. 27
Chapter 2 Financial Bridge P&L Model	p. 29
2.1 Overview	p. 29
2.2 Six Sigma Financial Tracking and Reporting	p. 33
2.3 Savings Analytical Guidelines	p. 46
2.4 Lean Accounting	p. 54
Chapter 3 Define-Defining What Is Important	p. 63
3.1 Overview	p. 63
3.2 Purpose of Define	p. 64
3.3 Define Phase Organizational Level	p. 65
3.4 Voice of the Customer	p. 66
3.5 Voice of the Business	p. 77
3.6 Pulling the Voices Together	p. 84
3.7 Actions to Avoid Metric Problems	p. 88
3.8 What Is Great versus Average?	p. 90
3.9 Define-Team Sponsor's Role and Responsibilities	p. 92
3.10 Technical Business Unit Case Study	p. 94
3.11 Tollgate Questions	p. 95
Chapter 4 Measure-Developing and Tracking Bridge Metrics	p. 97
4.1 Purpose	p. 97
4.2 Introduction	p. 97
4.3 Overview and Background	p. 99
4.4 Company Examples	p. 108
4.5 Pulling It Together-Measure Phase in Bridge Process	p. 110
4.6 Measurement System Analysis	p. 114
4.7 Measure Substeps for Routine Bridge Process Use	p. 119
4.8 Business Metrics Roadmap-Extended Management Horizon	p. 123
4.9 Implementing a Bridge Model-Measure Phase	p. 129
4.10 Tools for Doing It-Measure Phase	p. 131
4.11 What Can Go Wrong	p. 150
4.12 Measure-Team Sponsor's Role and Responsibilities	p. 151
4.13 Technical Business Unit Story-Measure Phase	p. 154
4.14 Tollgate Questions	p. 155
Chapter 5 Analyze-Identifying the Things That Are "Off Track"	p. 157
5.1 Purpose	p. 157
5.2 Introduction	p. 157
5.3 Overview and Background	p. 158
5.4 Pulling It Together-Analyze Phase in Bridge Process	p. 162
5.5 Analyze Substeps in Routine Bridge Functions	p. 164
5.6 Implementing a Bridge Model-Analyze Phase	p. 172
5.7 Tools for Doing It-Analyze Phase	p. 173
5.8 Specialized Tools	p. 185
5.9 What Can Go Wrong	p. 188
5.10 Analyze-Team Sponsor's Role and Responsibilities	p. 188
5.11 Technical Business Unit Story-Analyze Phase	p. 190
5.12 Tollgate Questions	p. 191
Chapter 6 Improve-Make It Happen, Effectively!	p. 193
6.1 People and Processes	p. 193
6.2 Selecting a Solution	p. 196
6.3 Open Dialog	p. 198
6.4 Alternate Solutions	p. 202
6.5 Action Plans (60- to 90-day Timeframe)	p. 206
6.6 Cost and Financial Benefits	p. 207
6.7 People and Accountabilities	p. 213
6.8 Communications	p. 224
6.9 Improve-Team Sponsor's Role and Responsibilities	p. 228
6.10 Improve Close	p. 230
6.11 Technical Business Unit-Case Study	p. 231
6.12 Tollgate Questions	p. 232
Chapter 7 Control-Sustain the Gains	p. 235
7.1 Overview	p. 235
7.2 Pilots and Pilot Evaluation Plan	p. 236
7.3 Implementation and Execution	p. 239
7.4 Implementation Rollout Plan	p. 241
7.5 Standardization and Replication	p. 249
7.6 Clarified Roles and Responsibilities	p. 250
7.7 Process and Performance Control Metrics	p. 253
7.8 Financial Assessment	p. 255
7.9 Leadership Governance and Sustaining the Gains	p. 257
7.10 Control-Team Sponsor's Role and Responsibilities	p. 264
7.11 Case Study	p. 266
7.12 Control Phase-Tollgate Questions	p. 267
Chapter 8 Assessment Instruments	p. 271
8.1 Malcolm Baldrige Quality Award	p. 271
8.2 Capability Maturity Model Integration	p. 273
8.3 People Capability Maturity Model	p. 276
8.4 Shingo Prize for Excellence in Manufacturing	p. 277
8.5 Baldrige National Quality Program: Criteria for Performance Excellence	p. 278
Chapter 9 The Role of Leadership and Governance in Driving Financial Impact	p. 295
9.1 Overview	p. 295
9.2 The Six Sigma Macro Model at Apex	p. 296
9.3 The Holistic Six Sigma Model	p. 299
9.4 Jones Lang LaSalle's Client-Driven Six Sigma Continuous Improvement Model	p. 299
9.5 Integrating Six Sigma Techniques	p. 304
9.6 The Collaborative Management Model	p. 310
9.7 Annual Planning and Strategy Development Workshop	p. 313
9.8 Collaborative Management Process Summary	p. 315
9.9 The Guidance Center	p. 319
9.10 Conclusion	p. 322
Chapter 10 Shareholder Value and Business Profitability	p. 325
10.1 Shareholder Value	p. 326
10.2 Strategic Business Planning Metrics	p. 329
10.3 The One-Page Strategic Growth Model	p. 330
10.4 Customer Profitability	p. 337
10.5 Supply Chain Profitability	p. 340
10.6 Cost of Quality	p. 341
10.7 Shareholder Value and Profitability Summary	p. 343
Chapter 11 Support Systems-People Side of Bridge Process	p. 347
11.1 Purpose	p. 347
11.2 Introduction	p. 347
11.3 Overview and Background	p. 349
11.4 Pulling It Together-Bridge Structure and Usage	p. 363
11.5 Tools for Doing It	p. 370
11.6 What Can Go Wrong	p. 370
11.7 Tollgate Questions	p. 370
Chapter 12 Continuous Improvement Processes	p. 371
12.1 Purpose	p. 371
12.2 Introduction	p. 371
12.3 Overview and Background	p. 372
12.4 Pulling It Together-Bridge Structure and CI Process	p. 378
12.5 Tools for Doing It	p. 383
12.6 What Can Go Wrong	p. 389
12.7 Tollgate Questions	p. 389
Chapter 13 Multipurpose and Next-Gen Tools	p. 391
13.1 Value-Stream Mapping	p. 391
13.2 Value-Stream Mapping Methods	p. 392
13.3 MRP for Logistics and Supply Chain Management	p. 407
13.4 Operations Planning Models	p. 412
13.5 Optimizing Customer-Configured, Mixed-Model Manufacturing	p. 415
13.6 Real-Time Analysis of Complex Process Variability Causes	p. 428
13.7 In Closing-A Bridge Span: In-Process Analysis of Variation Causes	p. 433
Chapter 14 Bridge Process Outlines	p. 435
14.1 Routine Bridge Functions: Day-to-Day Use of a Bridge System by Process Operators and Owners	p. 435
14.2 Bridge Implementation Steps	p. 438
Index	p. 441

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