© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, One Quality Place Edison, New Jersey One Quality Place Edison, New Jersey Beyond Six Sigma (Fusion Management TM ) Presented by Dr. Stanley A. Marash, P.E.  

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Programmes du Jour u 5 S’s u Art of Japanese Management u Breakthrough Management u Breakthrough Strategy u Business Excellence Awards u Business Partnerships u Business Process Improvement u Companywide Quality Control u Competitive Advantage u Concurrent Engineering u 5 S’s u Art of Japanese Management u Breakthrough Management u Breakthrough Strategy u Business Excellence Awards u Business Partnerships u Business Process Improvement u Companywide Quality Control u Competitive Advantage u Concurrent Engineering u Continuous Quality Improvement u Cost Reduction u Design of Experiments u Downsizing u Eliminate Variation/Consistency of Purpose u Evolutionary Operations u Fifth Discipline of Learning Organization u Holistic Management

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Programmes du Jour u JIDOKA u Just-In-Time u Kaizen u Lean Business System u Lean Enterprise u Lean Manufacturing u Loss Function u Management by Motivation u Management by Objectives u Management by Walking Around u JIDOKA u Just-In-Time u Kaizen u Lean Business System u Lean Enterprise u Lean Manufacturing u Loss Function u Management by Motivation u Management by Objectives u Management by Walking Around u Management System u Managerial Breakthrough u One-Minute Management u Operations Research u Outsourcing u Poka Yoke u Principle Centered Leadership u Process Management u Profit Improvement u Program Management

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Programmes du Jour u Quality Circles u Quality Function Deployment u Quality is Free u Reengineering u Reinventing Government u Right Sizing u Short-Interval Scheduling u Single Minute Exchange of Die (SMED) u Statistical Process Control u Quality Circles u Quality Function Deployment u Quality is Free u Reengineering u Reinventing Government u Right Sizing u Short-Interval Scheduling u Single Minute Exchange of Die (SMED) u Statistical Process Control u Statistical Thinking u Strategic Planning u Supplier Chain u Teambuilding u Theory Z u Time and Motion Study u Toyota Production System u Total Productivity Management u Total Quality Control u Total Quality Management

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Programmes du Jour u Value Analysis u Value Engineering u Vendor (Supplier) Partnership u Voice of the Customer u Work Simplification u World Class Manufacturing u Zapp u Zero Defects u Value Analysis u Value Engineering u Vendor (Supplier) Partnership u Voice of the Customer u Work Simplification u World Class Manufacturing u Zapp u Zero Defects

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, What is Fusion Management TM ?  The melting down (fusing) of the best ingredients of current and past concepts, methods, tools and philosophies into a powerhouse for business results.

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Fusion Management TM Performance Excellence Six Sigma Lean/TQM Management Systems Strategic Level Tactical Level Operational Level Systems Level

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Fusion Management TM Performance Excellence Six Sigma Management System Management System 1. Leadership Executive leadership Management responsibility 2. Strategic planning Integrated strategic planning Strategic quality plan 3.Customer&market focus Voice of the customer Customer focus 4. Information&analysis Champions/MBB/BB/GB Analysis of data 5. Human resource focus Breakthrough process Resource management 6. Process management Management Process approval 7. Business results Business results Quality results

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Six Sigma Executive Leadership Integrated Strategic Plan 10x Methodology Enterprise Wide Deployment Enterprise Process Management Voice of the Customer Business Results

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, What Is Six Sigma? A management philosophy that uses customer-focused measurement and aggressive goal-setting to drive breakthrough performance in demonstrated, validated business results A management philosophy that uses customer-focused measurement and aggressive goal-setting to drive breakthrough performance in demonstrated, validated business results

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, A Brief History  Started by Robert Galvin—Motorola (1987)  Followed by Larry Bossidy—AlliedSignal (now Honeywell) (1991)  Encouraged Jack Welch—General Electric (1995)  Who encouraged Ken Chenault—American Express (1998) and George Fisher—Kodak (1999)  Followed by many others  Reintroduced by Bossidy at Honeywell (2001)  Started by Robert Galvin—Motorola (1987)  Followed by Larry Bossidy—AlliedSignal (now Honeywell) (1991)  Encouraged Jack Welch—General Electric (1995)  Who encouraged Ken Chenault—American Express (1998) and George Fisher—Kodak (1999)  Followed by many others  Reintroduced by Bossidy at Honeywell (2001)

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Fusion Management TM What’s New and Different?  Enterprise CEOs driving Six Sigma and performance excellence  10x (order of magnitude) improvements  Integrated strategic plan*  Key measures relative to business plan  Balanced customer requirements/business results  Process focused  Six steps to Six Sigma (SEP)*  Full-time black belts  Coaches, mentors, and champions  Methods, tool, and sequence to meet business plan  Enterprise CEOs driving Six Sigma and performance excellence  10x (order of magnitude) improvements  Integrated strategic plan*  Key measures relative to business plan  Balanced customer requirements/business results  Process focused  Six steps to Six Sigma (SEP)*  Full-time black belts  Coaches, mentors, and champions  Methods, tool, and sequence to meet business plan

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Integrated Strategic Plan Unique Activity

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, The Planning Process Transfer to Operations Do It Again Identify Customers Discover Customer Needs Translate into Qualities Establish a Measurement Develop Product Optimize Product Design Develop Process Optimize Capability

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, # of parts(% overall yield) or steps ± 3 ± 4 ± 5 ± – ,000– ,000–– ,000–– ,000–– – # of parts(% overall yield) or steps ± 3 ± 4 ± 5 ± – ,000– ,000–– ,000–– ,000–– – Overall Process Yield vs. Sigma

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Improvement Steps D D P P M M O O S S i i g g m m a a I I m m p p r r o o v v e e m m e e n n t t ,, — — ,, X X X X X X X X

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Business Process Improvement Cycle CRISIS Lessons learned applied to future systems Real cost $1 Non-value added cost $2 $3 Design & System Evolution Design & System Evolution Product & System Verification Product & System Verification System & Product Improvement System & Product Improvement System fully implemented The effort before the system is put in place to prevent failures by proper system design The effort after the system is put in place to detect deviations from the norm and return the process to that norm The effort to reduce the norm (chronic problems) to lower and lower levels until it finally reaches zero Managerial Breakthrough Managerial Breakthrough The effort to get out of the box. Achieving dramatic improvements in critical measures of performance

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, What “Six Sigma” Means  As the process capability improves, defects become less and less likely -3  +3  Cp =  +4  Cp =  +5  Cp =  +6  Cp = 2.00 Cp =  +2   USL LSL

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Achieving Robustness  At 6 , even process upsets do not produce defects 308,540 ppm ppm 6210 ppm 233 ppm3.4 ppm +2  Cp =  Cp =  Cp =  Cp =  Cp = 2.00  USL LSL

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Interpreting Your Sigma Level  Less than 3-Sigma: Process is not meeting the customer requirements  3-Sigma: Process barely meets requirements; no latitude for upsets  4-Sigma: Typical corporate performance  5-Sigma: Excellent performance  6-Sigma: Robust to nearly all upsets  Less than 3-Sigma: Process is not meeting the customer requirements  3-Sigma: Process barely meets requirements; no latitude for upsets  4-Sigma: Typical corporate performance  5-Sigma: Excellent performance  6-Sigma: Robust to nearly all upsets

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Six Steps to Six Sigma Fusion Define As-Is Condition (Start-up) Launch Leadership Councils Integrated Strategic Planning Train Mentors, Coaches, Champions, Green & Black Belts, and Master Black Belts Deploy Master Plan Cascade Business Results(Ongoing Process)

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Executive Interviews Executive Interviews Baseline Evaluation Management Orientation Six Sigma Planning (Short-Term Plan) Six Sigma Planning (Short-Term Plan) Define Macroflow Process Business Process Mapping Selection of Pilot Projects Project Implementation Measure Business Results Additional Project Selection Measure Business Results Select and Train Master BB Candidates Responsibility Matrix Launch Leadership Councils Integrated Strategic Planning OngoingProcess Create and Deploy Master Plan Cascading Interlinked Leadership Councils Define Measures of Success Select and Train Black Belt Champion Training Senior Executive Process TM (SEP TM ) QMS PerformanceExcellence Six Sigma LeanEnterprise

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, ExecutiveInterviews Baseline Evaluation Management Orientation Six Sigma Planning (Short-Term Plan) Define Macroflow Process Responsibility Matrix Business Process Mapping Step 1

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Step 2 Selection of Pilot Projects LeanEnterpriseManagementSystems Six Sigma PerformanceExcellence Champion Training Launch Leadership Councils

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Step 3 Integrated Planning Define Measures of Success

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Step 4 ChampionTraining Selection of Pilot Projects Project Implementation Select and Train Black Belts Measure Business Results

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Step 5 Create and Deploy Master Plan Cascading Interlinked Leadership Councils

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Step 6 OngoingProcess Additional Project Selection Select and Train Master BB Candidates Create and Deploy Master Plan Cascading Interlinked Leadership Councils Measure Business Results

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Integrated Leadership Councils Senior Executive Team Plant Leadership Council Division Leadership Council Group Leadership Council CEO EVP Group 2 EVP Group 1 CFO EVP Engineer EVP Quality EVP Operations Division 2 Division n Facility 2 OperationsEngineeringQualityEtc. Division 1 Facility 1 Facility n

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Topics Covered: Six Sigma overview Six Sigma overview Understanding variation Understanding variation Teamwork for success Teamwork for success How variables behave How variables behave How attributes behave How attributes behave Benchmarking Benchmarking Identifying the problem Identifying the problem Process mapping Process mapping Measurement system analysis Measurement system analysis Cost of Quality Cost of Quality Data collection and sampling Data collection and sampling Minitab statistical software Minitab statistical software Quality Function Deployment Quality Function Deployment Project management Project management Project selection Project selection Topics Covered: Six Sigma overview Six Sigma overview Understanding variation Understanding variation Teamwork for success Teamwork for success How variables behave How variables behave How attributes behave How attributes behave Benchmarking Benchmarking Identifying the problem Identifying the problem Process mapping Process mapping Measurement system analysis Measurement system analysis Cost of Quality Cost of Quality Data collection and sampling Data collection and sampling Minitab statistical software Minitab statistical software Quality Function Deployment Quality Function Deployment Project management Project management Project selection Project selection Start project over next 3 weeks At the completion of this week of training, you will be able to: Explain the overall philosophy and methodology of Six Sigma Explain the overall philosophy and methodology of Six Sigma Select an appropriate project Select an appropriate project Identify critical qualities Identify critical qualities Deploy a data gathering system Deploy a data gathering system Start the project Start the project Week 1 Define & Measure

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Topics Covered: Project review Project review Group dynamics Group dynamics Diagnosing the cause Diagnosing the cause Performance studies Performance studies Process capability Process capability Analysis of Means Analysis of Means At the completion of this week of training, you will be able to: Select probable causes Select probable causes Perform in-depth analyses Perform in-depth analyses Explain key project success factors Explain key project success factors Facilitate team building Facilitate team building Topics Covered: Project review Project review Group dynamics Group dynamics Diagnosing the cause Diagnosing the cause Performance studies Performance studies Process capability Process capability Analysis of Means Analysis of Means At the completion of this week of training, you will be able to: Select probable causes Select probable causes Perform in-depth analyses Perform in-depth analyses Explain key project success factors Explain key project success factors Facilitate team building Facilitate team building Continue project next 3 weeks Week 2 Analyze

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Topics Covered: Project review Project review Conflict management Conflict management Cycle time reduction Cycle time reduction Hypothesis testing Hypothesis testing Design of experiments Design of experiments At the completion of this week of training, you will be able to: Demonstrate and improve process characteristics Demonstrate and improve process characteristics Reduce non-value-added activities Reduce non-value-added activities Reduce process cycle time Reduce process cycle time Design and analyze experiments Design and analyze experiments Manage team conflict Manage team conflict Topics Covered: Project review Project review Conflict management Conflict management Cycle time reduction Cycle time reduction Hypothesis testing Hypothesis testing Design of experiments Design of experiments At the completion of this week of training, you will be able to: Demonstrate and improve process characteristics Demonstrate and improve process characteristics Reduce non-value-added activities Reduce non-value-added activities Reduce process cycle time Reduce process cycle time Design and analyze experiments Design and analyze experiments Manage team conflict Manage team conflict Week 3 Improve Continue project next 3 weeks

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Topics Covered: Project report Project report Choosing remedies to correct the cause Choosing remedies to correct the cause Failure mode and effects analysis Failure mode and effects analysis Verifying the remedies Verifying the remedies Implementing the remedies Implementing the remedies Monitoring/holding gains Monitoring/holding gains Managing change Managing change Reducing barriers to change Reducing barriers to change Project management Project management Final exam Final exam At the completion of this week of training, you will be able to: Implement solutions Implement solutions Monitor and control improvements Monitor and control improvements Facilitate overcoming barriers to change Facilitate overcoming barriers to change Topics Covered: Project report Project report Choosing remedies to correct the cause Choosing remedies to correct the cause Failure mode and effects analysis Failure mode and effects analysis Verifying the remedies Verifying the remedies Implementing the remedies Implementing the remedies Monitoring/holding gains Monitoring/holding gains Managing change Managing change Reducing barriers to change Reducing barriers to change Project management Project management Final exam Final exam At the completion of this week of training, you will be able to: Implement solutions Implement solutions Monitor and control improvements Monitor and control improvements Facilitate overcoming barriers to change Facilitate overcoming barriers to change Week 4 Control Continue project next 3 weeks

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Fusion Management TM Milestone Chart Week(s)Event 1 Five day start-up 4 Macroflowchart/responsibility matrix 5-15 Business process map 7-16 Champion training/leadership council 9-35 Integrated strategic planning 11 Select black belt candidates 11 Select pilot projects 12 Awareness training

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Fusion Management TM Milestone Chart Week(s)Event Black belt training project-Wave Monthly leadership meetings 16 Green belt training-Wave 1 24 Green belt training-Wave Project clean-up 35 Leadership council project presentations Graduation celebration 35 Identify master black belt candidates 36Site license

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Fusion Management TM Milestone Chart Week(s)Event 37 Master black belt workshop Black belt training and project-Wave 2 39 Green belt training-Wave 3 54 Master black belt workshop 55 Green belt training-Wave Project clean-up 60 Leadership council project presentation Graduation celebration Technology/knowledge transfer

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27,  Where do we go from here?

© 2001 STAT-A-MATRIX, All Rights Reserved Brazil Presentation November 27, Thank You For Your Time STAT-A-MATRIX Thank You For Your Time STAT-A-MATRIX