DFSS satisfies the voice of business by generating profits through new products, processes and services. It satisfies the voice of the customer by generating value through new products, processes and services.
Research problem
The purpose of this thesis is to assess whether the design for Six Sigma methodology will deliver the bottom line financial benefits of a new product design at MMC and improve the strategic goal of operational excellence earnings before interest and tax (EBIT) annualized improvement benefit of $1 billion for the fiscal year (FY) 2009 at BHPB. This thesis will review the current DFSS methodology and doctrine used in DFSS and how this translates into economic benefits through the execution of the Define, Measure, Analyze, Design and Verify (DMADV) model.
Background to the study
Operating Excellence
The OE function was focused on increasing shareholder value through the creation of knowledge sharing networks in the core operational processes of mine planning, mining, processing, maintenance and logistics using the Six Sigma improvement methodology to address improvement opportunities in the BHPB businesses. The program continued to build momentum, with asset sites reporting benefits of more than US$190 million from more than 650 Six Sigma projects.
Motivation for the research
A DFSS topic search was conducted using company annual reports, intranet and Internet search engines, and a literature search found no cases in which the DMADV model was used to design new products, processes or services in BHPB. To determine whether a DFSS proposal is positive, it would be worthwhile to evaluate the DFSS process on a new product design that does not currently exist and the impact it has on the company's strategic business excellence goals.
Value of the project
According to Goodyear, Six Sigma is a preferred improvement methodology that is very closely aligned with BHPB's strategic drivers 1) People; 2) Low cost operations with long reserve life and 3) Creating and sharing efficiencies as well as BHPB Value Drivers of customer-centric marketing and innovation. Using Six Sigma principles, the right projects are chosen for the right reasons and improvements are made that not only meet but exceed BHPB's customer expectations – both internal and external, enabling BHPB to perform at excellence” (Internet 4).
Problem statement
The effect that a delay in implementing a DFSS project can have on EBIT, net present value, and internal rate of return of the new product design project at MMC. To determine the impact of the DFSS process on BHPB's FY 2009 OE goals and the delay in implementing a DFSS project and its effect on NPV and IRR.
Research methodology
An analysis of the impact of using DFSS in a new product design using some of the tools will be performed and an evaluation of this methodology will be undertaken against the DMADV model. However, as one of the objectives is to make recommendations to management, a case study approach is considered appropriate, a view supported by Alloway (1977).
Limitations
Action research was used as the primary research method for the dissertation design of the Six Sigma project. All different business improvement projects at MMC were segmented into Six Sigma, DFSS, lean Sigma and the replication Six Sigma methodologies.
Assumptions
Structure of the research
Finally, the thesis will discuss conclusions and recommendations to the OE implementation team on how improvements in financial returns can be achieved through the application of DFSS and some key areas of focus for future research. The data presented in this thesis represents only an infinitesimal portion of the total amount collected for the study.
Summary
Conclusion
Introduction
Pande ef a/., (2000) and Eckes (2001a) suggest that a process or product redesign is suitable when the new process or product will help an organization achieve a strategy goal.
Sigma
Variation
Defect rate versus process Sigma
However, reaching the five or Six Sigma level will require much more effort and more advanced statistical tools. Ultimately, the return on investment for the improvement effort and the strategic importance of the process will determine whether the process should be improved and which Sigma level should be targeted.
Design for Six Sigma defined and explained
DFSS is a systematic methodology that uses tools, training and measurements to design new processes, products or services that meet customer expectations at Six Sigma quality levels (Pyzdek, 2003). According to Brue, Design for Six Sigma is a systematic methodology that uses tools, training, and measurements to enable the design of products, services, and processes that satisfy customers.
Typical models used in DFSS
DFSS helps fulfill the voice of the business by fulfilling the voice of the customer. PIDOV consists of the four steps of the IDOV method with the addition of a Plan step.
DMADV Model - Roadmap translated from the model
DFSS is an enhancement to a company's new product, process, and service development, not a replacement for it. Table 2.7.1 below shows the five steps of the DMADV model and its associated substeps using specific tools that generate specific outputs in the DFSS process.
Roots of DFSS
The marketing basics around DFSS
Misinterpretations about DFSS
The truth is that DFSS is a complex systems engineering analysis methodology that uses statistical methods. Another misconception is that DFSS only involves the core product design group and has no influence on marketing, research and manufacturing.
Antecedents to DFSS
Concurrent Engineering - Not only did efficient new product development entail significantly more rigor in the definition phase, but the Japanese also succeeded in dramatically compressing development times for new products and services. These four teams were supported by the consistent application of three specific tools to support Japanese companies' world-class product ambitions (Smith etai, in Bertels, 2003).
DMAIC versus DMADV
In the case of DMAIC, the methodology and the roadmap are one and the same (Define, Measure, Analyze, Improve, Control). DFSS uses a number of different roadmaps, the most common being the DMADV (Define, Measure, Analyze, Design and Verify) model.
The Impact of DFSS
Conclusion
Introduction
Research methodology
It is carried out in a cyclical process that aims to increase understanding of a given situation (Baskerville and Wood-Harper, 1996). This cyclical process is not a random method; it is systematic, involving a self-reflective spiral or cycle of planning, action and fact-finding through self-reflection (McNiff, 1998).
Significance of the research
Saunders et al., (2003) argue that in addition, the person conducting the research is involved in this change action and subsequently in the application of knowledge acquired elsewhere. Schein (1995) in Saunders et al., (2003) emphasizes the importance of employee involvement throughout the process, because employees are more likely to implement the changes they have helped create.
Objectives of the research
To determine the impact of the DFSS process on BHPB's FY 2009 EO objectives and the delay in implementing a DFSS project and its effect on NPV and IRR in MMC. The data comparison will be able to give an indication of the extent to which the company has achieved its strategic EO objectives, the pace of its performance and whether it would successfully achieve the objectives of FY 2009 and how DFSS can contribute to completion of FY 2009 objectives.
Research design
Each Six Sigma CSG metric compared to a world-class benchmark, - Number of Black Belts and Green Belts trained,. There is no upper or lower limit on the number of cases to be included in a study (Ghauri and Gronhaug, 2002).
Data collection
Ghauri and Gronhaug (2002) state that it is the research problem and the research objectives that influence the number and choice of cases to be studied. Ghauri and Gronhaug (2002) state that the case study method is used when we want to study a single organization and we want to identify factors that are involved in some aspects of an organization such as the financial department.
Data analysis
Conclusion
Introduction
Background to the case study
The AMB product was a cash cow for the last decade because MMC was the sole supplier of the product to international markets. Poor operation management of existing equipment, higher production yields than designed capacity and compromised scheduled maintenance were some of the other factors that contributed to the deterioration of product quality.
Define the project and the customer requirements
It was also stated that the cost of manufacturing the new AMT product would be 50% cheaper than the existing AMB product and that some of the cost savings would be passed on to customers to gain market share. Key project milestones were a new product unit in operation, tablet press design, market penetration and customer acceptance.
Measure the customer requirements
- Voice of the customer
- Collection of customer needs data
- Translation of the VOC into requirements (CTQ's)
The information was tracked by proactive systems to better understand customer needs and determine the importance customers placed on various product features. This ensured that the first generation of the new AMT product design came to market within the specified timeframe and also provided a market presence for MMC during the implementation of the later stages of the new process design.
Analyse the concepts and high level design options
Once the QFD risk review was completed, a multi-step plan was developed to keep the scope of the project contained and manageable. A design review was conducted which ensured that the effectiveness of the features of the proposed design would meet the aesthetic and performance needs of the customers.
Design the process
The results of the pilot test proved positive and a prototype of the proposed new equipment was designed. The prototype was designed to test more than five elements of the proposed new product design in more detail and to conduct customer acceptance trials with the new product.
Verify design performance
Conclusion
Introduction
Financial analysis
- One-way analysis of variance
The other financial measure used in assessing the value of the new AMT product was the internal rate of return (IRR). The statistical Ha stated that the individual means for EBIT of the different business improvement methods are not equal, i.e.
The strategic plan
The table also shows that there are differences in the number of active full-time equivalent black belts and green belts at BHPB compared to world-class benchmarks. None of the BHPB CSGs met the criteria of devoting 1% and 5% of the workforce to full-time black and green belt trainers, respectively (French, 2005).
Findings
There is variation in the current Six Sigma implementation program in all customer sector groups. The majority of the senior management in the CSGs have not been trained in the Six Sigma method.
Conclusion
Introduction
Conclusions
The DFSS business improvement methodology produced the highest VVRB yield compared to the other business improvement methodologies at MMC and BHPB respectively. DFSS will therefore have a positive effect on the BHPB FY 2009 strategic objectives in achieving the FY09 goal of $1 billion in annualized business improvement benefits.
Recommendations
- The strategic plan
- Benchmarking
- DFSS training and deployment
- External audits
- Replication
- Benefits capture system
- Change management
A DFSS audit should be conducted in all BHPB CSGs to assess and evaluate the number of DFSS projects that can increase financial measures of success for new products, processes and services. DFSS should be seen as a change management tool used for radical and breakthrough innovations to design new products, processes and services in BHPB.
Proposed implementation action plan
The best business decisions are useless if the actual implementation is flawed, hence the importance of a good rollout strategy, a plan to ensure competent implementation of the DFSS methodology in the BE strategy plan. Statistical process control and process management systems must be implemented to measure, monitor and manage the performance of the DFSS process in terms of customer specifications.
Areas for further study
Conclusion
Managing Six Sigma: A Practical Guide to Understanding, Evaluating, and Implementing the Strategy That Delivers Bottom Line Success. The Six Sigma Way: How GE, Motorola, and Other Top Companies Improve Their Performance.
