six sigma a strategic initiative in ranhill
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YAP YUEN THYEYAP YUEN THYECHIEF EXECUTIVE OFFICERCHIEF EXECUTIVE OFFICER
RANHILL BERSEKUTU SDN BHDRANHILL BERSEKUTU SDN BHDRepresentative ofRepresentative of
RANHILL GROUP OF COMPANIESRANHILL GROUP OF COMPANIES
SIX SIGMA : A STRATEGIC INITIATIVE IN RANHILL
““CompetitionCompetition is stronger than ever, is stronger than ever, customer have morecustomer have morechoiceschoices and are demanding higher quality and better value for their invand are demanding higher quality and better value for their investments. estments. Customer Customer will walk awaywill walk away the moment they have an the moment they have an alternative.alternative.
To thrive and effectively compete in this kind of environment aTo thrive and effectively compete in this kind of environment and deliver on our nd deliver on our commitments to shareholders and customers, we need to explore necommitments to shareholders and customers, we need to explore new ways to w ways to improve our performance. improve our performance.
We need to develop a We need to develop a strategy that will widen our gapstrategy that will widen our gap within our within our company and competitors. That strategy is company and competitors. That strategy is six sigmasix sigma..““
Tan Sri Hamdan MohamadTan Sri Hamdan MohamadPresidentPresidentRanhill BerhadRanhill BerhadSix Sigma Leadership Jumpstart 2002Six Sigma Leadership Jumpstart 2002
Why Ranhill Chose Six Sigma
Ranhill in BriefRanhill in BriefAbout The Company & Nature of BusinessAbout The Company & Nature of Business
Six Sigma Deployment In RanhillSix Sigma Deployment In RanhillImplementation ApproachImplementation Approach
Challenges In Deploying Six SigmaChallenges In Deploying Six SigmaCritical ChallengesCritical Challenges
Revitalization of Ranhill Six SigmaRevitalization of Ranhill Six SigmaExecutive Black BeltExecutive Black BeltBalanced ScorecardBalanced ScorecardSix Sigma Governance InfrastructureSix Sigma Governance Infrastructure
Success StorySuccess StorySAJH ( Syarikat Air Johor Holdings)SAJH ( Syarikat Air Johor Holdings)RBSB ( Ranhill Bersekutu Sdn. Bhd)RBSB ( Ranhill Bersekutu Sdn. Bhd)
Topics of Presentation
Ranhill In Brief
Feb 2001 : Listed Main Board KLSE
Paid-up Capital :RM 597 Million
Ranhill Berhad Corporate Information
EPCMEPCM Engineering, Procurement, Construction Management
Asset Ownership
EPCEPC
AssetsAssets
Engineering, Procurement, Construction
Scope of Activities
Ranhill : Group Structure
Ranhill : Group Structure
Water, 49%
Power, 10%
Oil & Gas, 20%Infrastructure,
21%
Ranhill : Sectors InvolvedRevenue (%)
Our Global Reach
Six Sigma Deployment In
Ranhill(2002 ~ 2006)
1. Management 1. Management JumpstartJumpstart
2. Project 2. Project SelectionSelection
3. BB / GB 3. BB / GB TrainingTraining
4. Six Sigma 4. Six Sigma Project Project
ExecutionExecution
• Top Management workshop• SWOT Analysis• Brainstorm Potential Project List
• Six Sigma Officepropose short listed potential projects
• Top Management to decide which projects to be executed
• Motorola Universitycoached the project
• Co-coached by Six Sigma Office
• Project progressreporting to top management by SixSigma Office
• Top Management to select BB/ GB candidate & send for training
Implementation Approach (2002~2006)
BB : 23GB : 44
No. of Staff Trained in BB & GB ( 2002~2006)
0
5
10
15
20
25
30
35
40
45
50
2003 - BB 2003 - GB 2004 - BB 2004 - GB 2005 - BB 2005 - GB 2006 - BB 2006 - GB
MGSDERUBR POWERRECRBSBR BERHAD
97
44
7
No of GB & BBBB , 23,
GB , 44,
Challenges In Deploying Six Sigma
Resistance To Change* Understanding of Six Sigma
methodology* Linkage to the business strategy & objective * Commitment to drive the initiative* Inherent organisation inertia
Governance Infrastructure* Six Sigma Council* Establishment of Policy & Procedure
Challenges In Deploying Six Sigma
Revitalization of Ranhill Six Sigma
Six Sigma Six Sigma Governance Governance
InfrastructureInfrastructure
Executive Executive Black Belt Black Belt
Balanced Balanced Scorecard Scorecard
Revitalization of Ranhill Six Sigma
1. Six Sigma Governance Infrastructure* Establish Six Sigma Council * Establish Policy & Procedure* Enhance Six Sigma Office Roles & Responsibilities* Full Time Black Belt at Subsidiary * Establish Web-base Project Tracking System
2. Balanced Scorecard* Identify Business Strategic Objective & Initiative (As a platform for Six Sigma Project Selection)
* Linking Six Sigma Project with the Business Strategic Objective
3. Executive Black Belt* Leadership program* To equip Top Management with the knowledge of Six Sigma Methodology* Culture Change Agent
Revitalization of Ranhill Six Sigma
• Guideline for deployment; systematically
• Align the initiative to Business Strategic Plan
• Coach Six Sigma project• Identify best approach for
Six Sigma deployment• Identify training required• Reporting to Group SSO
• Set Standard• Develop training material• Conduct training• Monitor overall project
progress• Reporting to Council
• Web-base system forproject progress tracking
• System to track completed project performance for atleast 2 years
Governance InfrastructureExecutive Executive ChampionChampionPresident
Web-base Project
Tracking System
Policy &
Procedure
Group Six Sigma
OfficeFull Time BB
At Subsidiaries
Six Sigma Council
• Monitor overallSix Sigma implementation
RanhillRanhill’’s Six Sigma Councils Six Sigma Council
Roles and Responsibilities of Six Sigma Council:1.Set direction for Six Sigma initiative in Ranhill.2.Select strategically important projects linked to corporate objectives.3.Establish and maintain alignment of key metrics linking to balanced scorecard.4.Allocate resources such as human and financial to drive Six Sigma initiatives.5.Establish reward and recognition system for Six Sigma and other continuous
improvement initiatives.6.Establish project governance structure.7.Hold senior management review for strategically important projects.
Head of Council President
Advisor Motorola University
GCOOGHRGCAD DIV CEO DIV CEO
Deputy Head DIV CEO
SecretariatSix Sigma Office
Executive Black Belt
Executive Executive Black Belt Black Belt
• Leadership Program
• Top Management of the company to be certifiedas Black Belt
• To equip Top Management with the knowledge &skill of Six Sigma methodology
• Culture Change Agent & Driver For Six SigmaDeployment
Ranhill Group
Subsidiaries
CEOCOOCCOCFOSVPVPGM
STRATEGYVision, Mission, Values
Goals, Strategies
PERFORMANCE MANAGEMENTSYSTEM
(Managing Individual Performance)
•Strategy Map•Corporate Scorecard•Departmental Scorecards
•Objectives, Measures & Targets
•INITIATIVES
ENTE
RPR
ISE
RIS
K
MA
NA
GEM
ENT
Balanced ScorecardLinking Six Sigma to Group Strategic Initiatives
Balanced Scorecard
Six Sigma Projects
Success Stories(SAJH & RBSB)
Success Story : SAJH
REC SDE RUB
SAJHRWS RWT
RP RE RBSB
Ranhill Group
Management Management JumpstartJumpstart
Project Project SelectionSelection
BB / GB BB / GB TrainingTraining
Six Sigma Six Sigma Project Project
ExecutionExecutionMonthly Project Monthly Project
ReportingReporting
BSC BSC Management Management
RetreatRetreat
• Report Six Sigma Projectprogress & achievement in detail
• Next Action Plan
• Report latest progress
SAJH : Six Sigma Implementation Approach SAJH : Six Sigma Implementation Approach Since 2003Since 2003
SAJH : Project List
MINOR LEAK REPAIR CYCLE TIME
CHEMICAL COST REDUCTION
ENERGY COST SAVING
PRESSURE MANAGEMENT SYSTEM
IMPROVE BILLING CYCLE TIME & ACCURACY
ORGANIZATIONAL CLIMATE
ENHANCE ASSET MANAGEMENT SYSTEM
Six Sigma Project Impact* Average Leak Repair Cycle Time reduced from 60 hrs to 24 hrs. * Operation Cost Saving of RM 656,000 per year, due to reduction in NRW.
Observ at ion
Indi
vidu
al V
alue
252219161310741
80
70
60
50
40
30
20
_X =24.67
UCL=29.86
LCL=19.48
Apr-04 Oct-04 Apr-05
I Chart of Johor Bahru by Month1
Before Improvement : Average 60 Hours
After Improvement : Average 24 Hours
Minor Leak Repair Cycle Time
Six Sigma Project Impact
11
Chemical Cost For Sungai Lebam
120059457 10388
8575
31360 0 0 0 0 0 0
3869 4327 3784 3438 3768 3385 33233153
3266
16231378
1530 1.56
0.880.49
0.47
0.55
0.51
0.500.550.50
1.671.51
1.72
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Month
RM
-2.00
-1.50
-1.00
-0.50
0.00
0.50
1.00
1.50
2.00
Lime (RM)
Soda ASH (RM)
Cost/m3
Lime (RM) 1530 1378 1623 3266 3153 3869 4327 3784 3438 3768 3385 3323
Soda ASH (RM) 12005. 9457.0 10388. 8575.0 3136.0 0.00 0.00 0.00 0.00 0.00 0.00 0
Cost/m3 1.72 1.51 1.56 1.67 0.88 0.50 0.55 0.50 0.51 0.55 0.49 0.47
Jan Feb Mac May April June July Aug Sept Oct Nov Dec
* Chemical Cost reduced from 1.6 cent/m3 to 0.5 cent/m3.
After ImprovementPrevious
Success Story : RBSB
REC SDE RUB RP RE RBSB
Ranhill Group
PROJECT COST MONITORING
CUSTOMER FEEDBACK INDEX SURVEY
PRODUCTION OF DRAWINGS
STAFF UTILIZATION RATE
IMPROVE BOOK ORDER FOR PROJECTS OUTSIDE GROUP
IMPROVE ENGINEERING EFFICIENCY
RBSB : Project ListRBSB : Project List
Six Sigma Project Achievement85%
77%
72%
74%
76%
78%
80%
82%
84%
86%
Staff Utilization: Before Satff Utilization : After
70%
29%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Customer Feedback Index : Before Customer Feedback Index : After
ImproveImprove Staff Utilization Staff Utilization
RateRate from from 77%77% toto 85%85%ImproveImprove Customer Feedback
Index fromfrom 29%29% to to 70%70%
ReduceReduce Total Man Hour / Total Man Hour /
DrawingDrawing,, 2323 toto 2020 man hourman hour
Improve Improve PACC Reporting PACC Reporting DateDate fromfrom 1515thth toto 77thth of of the month.the month.
Man
hour
/dra
win
g
AfterBefore
35
30
25
20
15
23.02
19.97
Total Manhour/drawing Before & After
7
15
0%
200%
400%
600%
800%
1000%
1200%
1400%
1600%
PACC Report : Before PACC Report : Before
Lessons LearntLessons Learnt1. Business Strategy & Direction
- without clear business strategy / direction, Six Sigma project will be very difficult.
2. Project Selection Without Linkage to Business Objective - low financial impact- low top management support- low momentum ( project will take a long time to be closed)
3. Top Management Exposure- top management who are unexposed to Six Sigma
methodology will have difficulty in supporting Six Sigma initiative.
4. Governance Infrastructure - project with proper governance infrastructure (Six Sigma Council,
Policy & Procedure, etc) will be carried out expediently.
5. Conviction & Commitment- one of the most important factor to ensure of success of Six Sigma
initiative and it’s continuous engagement is in fact the conviction and commitment of all stakeholders.
Asian CSR Award 2005 ………Congratulations! On behalf of the Organizers, Partners and Sponsor of theAsian CSR Awards, Philippine Investment-Management (PHINMA) Inc., it is my
pleasure to inform you that Six SigmaSix Sigma--Organizational Climate ProjectOrganizational Climate Projectsubmitted by SAJ Holdings Sdn Bhdsubmitted by SAJ Holdings Sdn Bhd is deemed the most outstanding projectmost outstanding project
(winner) in the Best Workplace PracticesBest Workplace Practices category of the Asian CSR AwardsAsian CSR Awards20052005.
With 160 projects from 91 companies in 12 countries vying for the Awards infive categories, the judges had a difficult time evaluating the entries.
Your company merits our genuine congratulations.
More often than not, and as indicated in our entry rules, CEOs of thewinning companies attend the Award ceremonies to accept their
organization's award. This year's awards will be presented at the GalaDinner Ceremonies of the Asian Forum on Corporate Social Responsibility on
September 9, 2005 at the Hilton Hotel in Jakarta, Indonesia. Over 300………………
SAJH :Asian Award Winning
RBSB Award : COMPANY OF THE YEAR (2006)
BY MALAYSIA CANADA BUSINESS COUNCIL
Thank You
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