Survey and Research Data

Six Sigma successes in R & D

A panel discussion which involved participants with a total of some 200 years of R&D experience was hosted by the Industrial Research Institute's Process Effectiveness Network in 2001 to discuss Six Sigma in R&D. The panellists identified the most important factors for success with Six Sigma as being:

• The people at the top of the organisation must provide commitment and leadership;

• Project selection and management processes must involve rigorous project administration, commitment management, control of costs, schedules, changes, and production, as well as quality assurance and configuration management;

• The customer's value proposition must be understood very early in the process;

• Extensive measurement data must be used to prove and track performance throughout development processes.

• A common language for improvement must be learned and used;

• Adequate funding for improvement efforts must be made available and maintained. [12]

Global Product Development teams

A survey of 1156 members of the Product Development & Management Association received 109 responses and analysis identified 4 major reasons why companies used global teams, the major leadership challenges faced, and practices employed
Companies used global teams to:

• Address global markets/customers by identifying common product platforms;

• Identify and incorporate unique needs and requirements of local markets;

• Capitalise on globally distributed centres of excellence; and

• Bring together dispersed resources;

Major leadership challenges faced were:

• Interpersonal challenges which included encouraging communication between members, building trust and motivating individuals; and

• Programmatic challenges which included keeping the project on schedule and within budget, finding adequate project resources, keeping goals stable, and getting the project done rapidly.

Practices employed included:

• Having members meet face-to-face at the outset of the project to agree project goals and individual roles and responsibilities;

• Having members engage in social activities together;

• Encouraging open communication between members;

• Treating all team members equally;

• Providing adequate resources; and

• Maintaining project focus and discipline.

Target Costing dramatically reduces manufacturing costs

US Mohawk Paper Mills Incorporated used a standard-cost system but due to tough competition target costing was employed in cost-reduction efforts This lead to a strategic revitalisation of the plant. At inception, existing costs for high quality paper in US$ per ton were:

• Standard cost $ 2,900

• Selling Price $ 2,200 ($700 loss)

• Prevailing market price $1,466

Under the target cost regime substantial cost savings were achieved i.e.:

• Fibre costs were reduced by 60% by changing the recycled paper mix

• Paper machine yield rates were improved from 46 to 75%

• Dye costs were reduced by $796 per ton

• Conversion Costs fell by 20% through quality improvement work

The target-costing framework dramatically lowered manufacturing costs. The mill continued to decrease costs through kaizen efforts and the revised standard cost became $1,162 per ton. [18]