Believe it or not, 2009 is upon us. The introduction of @RISK - Palisade Corporation’s Monte Carlo simulation add-in for MS Excel - into the Six Sigma and DFSS communities has been has been incredible! Many large and small corporations have standardized on @RISK for their quality, process improvement or development projects, as well as in their Six Sigma Black Belt and DFSS training courses.
If you are interested in sharing your success stories at an upcoming event or through a white paper, by all means please do. Between the almost countless events put on by ASQ, IQPC, ISSSP, iSixSigma and Marcus Evans, there is bound to be an event near you. Please let me know about your project and how you used @RISK and if there is any way we can support you in your desire to share your story.
You can contact the event organizers directly, or contact me and I can help point you to the proper venue to present at. Also, please feel free to contact me at any time should you have any questions about Palisade Corporation, @RISK, or the advantages of simulation to save time and money in improvement and development projects, or if you would simply like a free trial.
Steve Hunt
Shunt@palisade.com
607-277-8000
I am a consumer just like everyone else, and I’m seriously concerned about the retail service industry in the United States. To our chagrin, many manufacturing and telephone customer service positions have been outsourced to places like Mexico, China, and India. Ever since this migration started we have struggled to maintain these types of industries in the US because outsourcing can produce the goods and perform the services at a much lower cost then we can. 
Last week, Palisade Corporation held its North American User Conference; it was a very successful event that brought together @RISK Users from around the world. Presentations and discussions touched on topics such as the subprime mortgage crisis, financial risk management, modeling flu, project risk management and of course, the ways to Monte Carlo simulation in Six Sigma.
It was great to see such a high level of interest in the Six Sigma related presentations and buzz they created in both the social networking opportunities as well as the feedback forms that were submitted after the conference. This shows despite the economic difficulties and the natural tendency to eliminate all unessential spending, Six Sigma and Design for Six Sigma is rightfully viewed as part of the solution.
SigmaFlow’s president Jay Holstine, presented Process Mapping for Knowledge Transfer: Doing More with Less. A very pertinent topic in today’s economic times, which will be presented live as an ISSSP Focused Session on November 25 at 2pm EST. Please join us.
Ed Biernat from Consulting with Impact led a presentation on the use of Six Sigma in Process Industries. If you are interested in viewing his presentation, Lean Six Sigma Applicatin of @RISK Part I, it can be viewed online. Part II will be live on December 12, 2008 at 1pm EST where he will dive deeply into the use of @RISK in this case study. Please join us.
A recent article, Executives Switch to Survival Mode, in the Wall Street Journal indicates that two of the top issues in crisis management can be managed with a strong Lean Six Sigma program, these were:
I learned of an upcoming free webinar through IndustryWeek that I thought I would share; it is called Lean and Six Sigma in Our Turbulent Economy and will take place Wednesday, November 12, 2008 at 2:00 p.m. I unfortunately will not be to attend but would like your feedback on the webcast if you are able to. Below is the summary.
The main limitation for any business activity when it comes to improving efficiency is time. A project typically has a definite start and end date, which means any improvement initiative has to be focused within that limited time period. This translates to working in parallel with the activities of a project as they actually happen. The second limitation is budget. Besides completing the project on time, can we do it on budget?
As defined by the Project Management Institute, "Project management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements".
The DMAIC and DFSS approaches tend to focus on controls for the improvements, process and product development, not the control of the project management process. This division between Project management and project improvement/development is fine if the project has a Project Manager, preferably a PMP, and a Black Belt, DFSS or DMAIC. But the reality is we are positioning our Black Belts as project leaders, and most times both roles are performed by the Black Belt. This approach is acceptable only if the BB is apt at both. In both DMAIC and DFSS training classes the focus is typically on the tools used to complete the project. Little (if any) time is spent on project duration or cost predication and management. Critical decisions must be made based on the probability of completing on-time and on-budget. If these probabilities are too low, the project may need to be redefined or even scraped
One excellent tool the certified PMPs use is @RISK for Project, which uses Monte Carlo simulation to show you many possible outcomes in your project – and tells you how likely they are to occur. This means that you finally have, if not perfect information, the most complete picture possible. You can determine which tasks are most important, and then manage those risks appropriately. It can help you choose the best strategy based on the available information, which is why many PMPs and large companies with in-house training programs are standardizing on Palisade Corporation’s @RISK for Project for project management.
A good article to read to learn more about Integrating Project Management into a Six Sigma System is located in iSixSIgma’s Library and was authored by Daniel Zucker
The appeal of Monte Carlo Simulation lies in its applicability under very general settings and the unlimited precision that can be achieved. In particular, Monte Carlo can be used in all situations where other techniques (Linear and non linear propagation, and Numerical Integration) can be used but can yield more precise estimates. For this reason, Monte Carlo is easily the most popular tool used in tolerance problems.
Until recently the caveat was in the amount of processing power and time it took to complete a simulation. Now @RISK from Palisade Corporation can utilize the full processing power and dual cores of today’s personal computers, so this is no longer an issue. The other issue, what was deemed as “Pseudo random number generators,” has been overcome by @RISK offering 8 tested and proven random number generators such as Mersenne Twister, RAN3I, MRG32k3a, MWC and KISS . . . to name a few. These are just a few of the reasons why @RISK is becoming the standard Monte Carlo Simulation package in DFSS Training and Six Sigma classes around the world.
Reference: Design for Tolerance of Electro-Mechanical Assemblies: An Integrated Approach by Narahari, Sudarsan, Lyons, Duffy and Sriram
Last month, I attended a free webinar, Minitab Methods to Deal with "Bad" Data, which was given by Master Black Belt Rick Haynes of Smarter Solutions, which I previously wrote about. If you didn’t attend or have a chance to read the article, or watch the archived video, I strongly suggest you do.
Since then, I have been in contact with Mr. Haynes and was very happy to hear he is proponent of using @RISK, and recommends all of his students to consider adding it as a tool to their Six Sigma tool box. Below are his thoughts:
“Lean Six Sigma methods are all about solving problems. When you start proposing improvements outside of the current wisdom, it is quite difficult to support a recommendation. The creation of a simple Y = F(x) model of an actual system, using @RISK and Excel, provides a platform that you are able to provide very accurate estimates of future performance that are very compelling to the executive leadership with little or no investment at risk. No other tools in the Lean Six Sigma tool box provide this ability like process simulation. All Black Belts and Master Black Belts can benefit from the use of simulation, particularly in transactional and service processes where experimentation and pilot testing is nearly impossible.” - Rick Haynes, Master Black Belt and Statistician, Smarter Solutions Inc.
For today, I am going to take a detour from my regular Six Sigma and Design for Six Sigma topics to discuss our world economy. I am not an expert on economics, but have to ask, How did we allow ourselves as a country get to this point? Were the experts at the helm of the economic wheel peering into a cloudy crystal ball? Did it distort their (or our) ability to make sound decisions based on data based on the analysis of our and the world’s financial positions? Isn’t this the information age? Did we ignore the information and indicators that predicated this financial train wreck? In Palisade’s DMUU (Decision Making Under Uncertainty) Blog they address this issue as well as the safeguard at least one Oil and Gas Company has put into place to avoid disasters.
As a dear friend says to me when we are in a situation that we can’t avoid and we don’t want to be in, “The train is at the station and we have our tickets.” The key now is staying calm and objectively using data to make sound financial decisions using the tools such as Monte Carlo simulation for sound quantitative risk analysis to minimize risk and to make decisions with confidence to steer us out of this situation. There is little sense buying into or wasting our time with the political rhetoric of which candidate did what or didn’t, as they bid for our votes on November 4th . . . but that is another whole topic which I will avoid.
Jim Jubak of MSN Money posted this video “Is it the end of the financial world” on Friday, October 10, 2008. For what it’s worth, his prediction should give us all hope that it isn’t the end of the financial world and that toward the end of October we could even experience a short rally. Let’s hope he isn’t using a cloudy crystal ball either.
Today, I read a very interesting article written by Tony Jacowski of Aveta Solutions, he suggests applying the principles of Six Sigma to education. This is a concept that I have never thought of, or have ever heard of anyone speak of. I think he is onto something. His suggestion is probably much less controversial than the goverment mandated No Child Left Behind Act of 2001 (NCLB).
The NCLB act, in many people’s opinion, has only forced teachers to focus on preparing for the standardized tests which are be used to evaluate the schools and students. Granted, the NCLB Act is much more comprehensive than this, but from a parent’s limited perspective and our children’s ability level compared to students in other countries, it appears to be more disruptive to learning compared to promoting true learning. The act has cost hundreds of billions of dollars since inception in 2001, which would be money well spent if all could see its success.
The concept of applying Six Sigma to education could result in, as Jacowski said, a “positive change in teaching methods and a consequential positive result is bound to happen”. By utilizing the tools of Six Sigma an environment of continuous improvement, innovation and creativity could be developed by close interaction between teachers, students and parents. Who knows, it might actually be able to reduce our school’s budgets and increase the quality of education that our students receive.
The other day I received the Synchronization newsletter produced by Xonitek Corporation. It typically has very interesting articles that are pertinent to today’s business issues. The article this month that caught my attention was written by Robert Clark, titled Is your office lean? Making every moment count.
It is an excellent summary of wastes hidden in our office environments and how to uncover and how eliminate them. The 7 wastes that Robert cites for the office environment are: Correction, Extra-processing, Underutilization, Overproducing, Inventory, Waiting, Excessive motion and Transportation.
These wastes are very similar to the wastes found on the shop floor, known as TIMWOODS (Travel, Inventory, Motion, Waiting, Overproduction, Over processing, Defects, Skills)
Robert Clark’s article is an excellent reminder that continuous improvement is a mentality not a program, and that we should look in all corners and processes of our organizations to find wastes - not just the shop floor for our Lean and Six Sigma Process improvements.
Recently, Franco Anzani of SixSigmaIn Team and Marco Manara of Casappa S.p.A. worked together on a Six Sigma tolerance analysis project where they used Palisade Corporation's @RISK 5.0. The model represents a tolerance analysis study performed to solve a potential assembly issue in a gear pump typically used in forklifts and low noise emission machines.
The model simulates the potential gap distribution in the pump and predicts the potential percentage of scraps, depending on both the nominal value and the variation (due to the machining capability) of the parameters.
@RISK 5.0 has been used to find the optimal combination of nominal design values and process variation to minimize the scrap percentage.
A combined optimization of the two responses has been performed, and an advanced 3D view of the simulated data has been added.
Download a free trial of @RISK or the Tolerance Analysis Model.
On Thursday of last week, I attended a free webinar, Minitab Methods to Deal with "Bad" Data, which was given by Master Black Belt Rick Haynes of Smarter Solutions. This is a topic that typically isn’t addressed in most Six Sigma Black Belt courses, but is extremely important for most six sigma practitioners to know and understand. Rick did an excellent job introducing and conveying the Minitab tools to deal with “bad” or missing data. As defined by Rick, “bad” data are values that are not accurate due to rounding or to data collection errors. Censored data analysis is a method developed to solve reliability issues, which he discussed using in new ways. To complete the presentation, he followed up by sending the technical paper to the attendees, which will make a good future reference.
Recently, one furniture manufacturing company who had slated 8 of their manufacturing facilities to be moved to China changed its mind and will continue producing furniture in the US. The reasons for change that were cited were the weak US Dollar and high shipping costs from China to the US. Both of these factors actually made it more cost effective to produce in the States. Decisions like this give the US a second chance to reduce operating costs and increase quality to save jobs in the US by implementing proven quality programs like Lean Six Sigma.
But will US manufacturers take this opportunity to re-enter the global scene ready to play at a higher level? Or will they choose to take the business that comes back across the ocean for now but watch it go back overseas as the situation normalizes? This is a special ‘gift’ that we are given, where we have an opportunity to win back some of the losses of prior years. I am a firm believer in the American “Can Do” spirit. I know we can do it. But will we? And how should we proceed?
I do believe these conventions are extremely important venues for idea sharing, networking, brainstorming and continuing education. It’s my impression that there are hundreds of thousands of Six Sigma practitioners, just in the Unites States alone. With this said, why are these “tradeshows” so sparsely attended? One may argue that the number of attendees has been increasing but I would think that these conferences should attract thousands of delegates and hundreds of exhibitors which isn’t the case. The organizations such as the ASQ, ISSSP and IQPC that coordinate these conventions are experts at hosting excellent events and do an excellent job, so why the low turnouts? My thoughts:
Competing technologies
As technologies around the internet grow, we are developing more tools to stay connected to the outside world without ever leaving our desks. Technologies like “web conferencing” and VOIP allow us to have meetings, and attend classes and free seminars. Couple this capability with professional networking sites like Linkedin, and one could conceivably never leave their desk and still learn the latest trends and developments in the industry, as well as network.
Frequency
It seems that other industries have far fewer focused tradeshows per year. Could it be the sheer volume of events per year that is diluting the communities will to participate? All told, I would guess that there are at least 15-20 Six Sigma events per year that range in focus from the Department of Defense Lean Six Sigma, Healthcare, Lean Enterprise, Design for Six Sigma and a host of Six Sigma Summits and award ceremonies.
Cost
The cost of attendance often exceeds $2000 per attendee, and the cost of exhibiting and speaking for 45 minutes is more than some full-time employees make per year. American businesses may be spending these dollars on their processes improvement and product development projects or perhaps they just don’t have the money and time to participate.
Recommendation
How about each organization holds a maximum of events 2 per year, perhaps one on the east coast and one on the west . Invite all the different communities and have special education and speaking tracks based on industry. This model would allow larger meetings where true idea sharing and networking can happen across industry, allowing the Automobile Six Sigma Practitioners to meet DOD and Healthcare Practitioners and share ideas and information.
During my days in Product Development, we were always looking for the Next Big thing. Now that I am submersed in the world of Six Sigma, I continuously ask myself what the next big thing will be and when will it happen? I think we can all agree that the progress in Quality during the last century has been more of an evolutionary process rather than revolutionary event. With this said, are we in the midst of the Next Big Thing with the advent of Lean Six Sigma (LSS) and Design for Lean Sigma (DFLS)? Or are these trends minor refinements on the theme? Could it be the implantation of the lessons of human capital learned from Western Electric’s Hawthorn Studies, some 80 years later, with a better workplace just around the bend? Will it be a new statistical analysis or possibly the recognition of proven techniques such as Genetic Algorithm Optimization, Monte Carlo Simulation or the use of neural networks that help to transform how we analyze data to make better decisions for the future?
No matter what the next big is, the strong will evolve with the change to capitalize on the opportunities that it opens for us.
I earned my Lean Six Sigma Black Belt Certification from Transformation Partners Company (or TPC) a full service Lean Six Sigma consultancy firm based in Fairport, NY. They have chosen Palisade's @RISK to be used exclusively for their Monte Carlo Simulation modules taught during their Black Belt, Master Black Belt, Design for Six Sigma (DFSS), and Product Development programs.
TPC will be starting a new wave of certification courses this month featuring @RISK in 4 different locations across New York and Pennsylvania. Check out TPC's website for more information on their programs and to the find links to sign up for upcoming classes.
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