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    Six Sigma A Strategic Initiative in Ranhill

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    Mirza Nur Hafizah
    Ranhill implemented Six Sigma as a strategic initiative to improve performance and competitiveness. They faced challenges like resistance to change and lack of governance infrastructure. To address this, they established a Six Sigma council, full-time Black Belts, and linked projects to a balanced scorecard aligned with business strategy. Success stories from subsidiaries SAJH and RBSB showed reduced costs, improved processes and metrics like staff utilization and customer feedback. Lessons highlighted the importance of clear business strategy, project selection linked to objectives, top management exposure and commitment, and strong governance. SAJH won an Asian CSR award for its organizational climate Six Sigma project.

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    Six Sigma A Strategic Initiative in Ranhill

    Uploaded by

    Mirza Nur Hafizah
    263 views35 pages
    Ranhill implemented Six Sigma as a strategic initiative to improve performance and competitiveness. They faced challenges like resistance to change and lack of governance infrastructure. To address this, they established a Six Sigma council, full-time Black Belts, and linked projects to a balanced scorecard aligned with business strategy. Success stories from subsidiaries SAJH and RBSB showed reduced costs, improved processes and metrics like staff utilization and customer feedback. Lessons highlighted the importance of clear business strategy, project selection linked to objectives, top management exposure and commitment, and strong governance. SAJH won an Asian CSR award for its organizational climate Six Sigma project.

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    Six Sigma a Strategic Initiative in Ranhill

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    Ranhill implemented Six Sigma as a strategic initiative to improve performance and competitiveness. They faced challenges like resistance to change and lack of governance infrastructure. To address this, they established a Six Sigma council, full-time Black Belts, and linked projects to a balanced scorecard aligned with business strategy. Success stories from subsidiaries SAJH and RBSB showed reduced costs, improved processes and metrics like staff utilization and customer feedback. Lessons highlighted the importance of clear business strategy, project selection linked to objectives, top management exposure and commitment, and strong governance. SAJH won an Asian CSR award for its organizational climate Six Sigma project.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    263 views35 pages

    Six Sigma A Strategic Initiative in Ranhill

    Uploaded by

    Mirza Nur Hafizah
    Ranhill implemented Six Sigma as a strategic initiative to improve performance and competitiveness. They faced challenges like resistance to change and lack of governance infrastructure. To address this, they established a Six Sigma council, full-time Black Belts, and linked projects to a balanced scorecard aligned with business strategy. Success stories from subsidiaries SAJH and RBSB showed reduced costs, improved processes and metrics like staff utilization and customer feedback. Lessons highlighted the importance of clear business strategy, project selection linked to objectives, top management exposure and commitment, and strong governance. SAJH won an Asian CSR award for its organizational climate Six Sigma project.

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    of 35

    SIX SIGMA : A STRATEGIC INITIATIVE IN RANHILL

    YAP YUEN THYE CHIEF EXECUTIVE OFFICER RANHILL BERSEKUTU SDN BHD Representative of RANHILL GROUP OF COMPANIES

    Why Ranhill Chose Six Sigma


    Competition is stronger than ever, customer have more choices and are demanding higher quality and better value for their investments. Customer will walk away the moment they have an alternative.
    To thrive and effectively compete in this kind of environment and deliver on our commitments to shareholders and customers, we need to explore new ways to improve our performance. We need to develop a strategy that will widen our gap within our company and competitors. That strategy is six sigma.

    Tan Sri Hamdan Mohamad President Ranhill Berhad Six Sigma Leadership Jumpstart 2002

    Topics of Presentation
    Ranhill in Brief
    About The Company & Nature of Business

    Six Sigma Deployment In Ranhill


    Implementation Approach

    Challenges In Deploying Six Sigma


    Critical Challenges

    Revitalization of Ranhill Six Sigma


    Executive Black Belt Balanced Scorecard Six Sigma Governance Infrastructure

    Success Story
    SAJH ( Syarikat Air Johor Holdings) RBSB ( Ranhill Bersekutu Sdn. Bhd)

    Ranhill In Brief

    Ranhill Berhad Corporate Information


    Feb 2001 : Listed Main Board KLSE Paid-up Capital : RM 597 Million

    Scope of Activities

    EPCM EPC

    Engineering, Procurement, Construction Management

    Engineering, Procurement, Construction

    Assets

    Asset Ownership

    Ranhill : Group Structure

    Ranhill : Group Structure

    Ranhill : Sectors Involved


    Revenue (%)
    Infrastructure, 21% Oil & Gas, 20%

    Power, 10% Water, 49%

    Our Global Reach

    Six Sigma Deployment In Ranhill (2002 ~ 2006)

    Implementation Approach (2002~2006)


    1. Management Jumpstart Top Management workshop SWOT Analysis Brainstorm Potential Project List

    4. Six Sigma Project Execution

    2. Project Selection

    Motorola University coached the project Co-coached by Six Sigma Office Project progress reporting to top management by Six Sigma Office

    BB : 23 GB : 44
    3. BB / GB Training

    Six Sigma Office propose short listed potential projects Top Management to decide which projects to be executed

    Top Management to select BB / GB candidate & send for training

    No. of Staff Trained in BB & GB ( 2002~2006)


    50 45 40 35 30 25 20 15 10 5 0
    2003 - BB 2003 - GB 2004 - BB 2004 - GB 2005 - BB 2005 - GB 2006 - BB 2006 - GB

    44
    BB , 23,
    No of GB & BB

    GB , 44,

    MG SDE RUB R POWER

    9 7 7

    REC RBSB R BERHAD

    Challenges In Deploying Six Sigma

    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

    Revitalization of Ranhill Six Sigma

    Revitalization of Ranhill Six Sigma


    Six Sigma Governance Infrastructure

    Executive Black Belt

    Balanced 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

    Governance Infrastructure
    Executive Champion President
    Web-base system for project progress tracking System to track completed project performance for at least 2 years

    Six Sigma Council


    Monitor overall Six Sigma implementation

    Guideline for deployment; systematically Align the initiative to Business Strategic Plan

    Web-base Project Tracking System


    Set Standard Develop training material Conduct training Monitor overall project progress Reporting to Council

    Policy & Procedure

    Group Six Sigma Office

    Full Time BB At Subsidiaries

    Coach Six Sigma project Identify best approach for Six Sigma deployment Identify training required Reporting to Group SSO

    Ranhills Six Sigma Council


    Head of Council President Deputy Head DIV CEO Secretariat Six Sigma Office Advisor Motorola University

    GCAD

    GHR

    GCOO

    DIV CEO

    DIV CEO

    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.

    Executive Black Belt


    Executive Black Belt Leadership Program
    CEO COO CCO CFO SVP VP GM Ranhill Group Subsidiaries

    Top Management of the company to be certified as Black Belt To equip Top Management with the knowledge & skill of Six Sigma methodology Culture Change Agent & Driver For Six Sigma Deployment

    Balanced Scorecard Linking Six Sigma to Group Strategic Initiatives


    STRATEGY ENTERPRISE RISK MANAGEMENT
    Vision, Mission, Values Goals, Strategies Strategy Map Corporate Scorecard Departmental Scorecards

    Balanced Scorecard
    PERFORMANCE MANAGEMENT SYSTEM
    (Managing Individual Performance)

    Objectives, Measures & Targets INITIATIVES

    Six Sigma Projects

    Success Stories (SAJH & RBSB)

    Success Story : SAJH


    Ranhill Group

    REC

    SDE

    RUB

    RP

    RE

    RBSB

    RWS

    SAJH

    RWT

    SAJH : Six Sigma Implementation Approach Since 2003


    Management Jumpstart Project Selection BB / GB Training

    BSC Management Retreat


    Report Six Sigma Project progress & achievement in detail Next Action Plan

    Monthly Project Reporting


    Report latest progress

    Six Sigma Project Execution

    SAJH : Project List


    IMPROVE BILLING CYCLE TIME & ACCURACY ORGANIZATIONAL CLIMATE CHEMICAL COST REDUCTION ENERGY COST SAVING PRESSURE MANAGEMENT SYSTEM ENHANCE ASSET MANAGEMENT SYSTEM MINOR LEAK REPAIR CYCLE TIME

    Six Sigma Project Impact


    * Average Leak Repair Cycle Time reduced from 60 * Operation Cost Saving of RM

    hrs to 24 hrs.

    656,000 per year, due to reduction in NRW.

    Minor LeakJRepair hr u by M onth1 I C ha r t of ohor B a Cycle Time


    80 70 Individual Value 60 50 40 30 20 1 4 7 10 13 16 Obs e r v a t io n 19 22 25 A pr-04 O ct-04 A pr-05

    Before Improvement : Average 60 Hours

    After Improvement : Average 24 Hours


    UC L=29.86 _ X =24.67 LC L=19.48

    Six Sigma Project Impact


    * Chemical
    Lime (RM) Soda ASH (RM) Cost/m3 16,000 14,000 12,000 10,000

    Cost reduced from 1.6 cent/m3 to 0.5 cent/m3.


    Chemical Cost For Sungai Lebam

    Previous
    1.72 1530 1.51 1.56 1623 1.67 3266 0.88 0.50 1378

    After Improvement
    0.55 0.50 0.51 0.55 0.49 0.47

    2.00 1.50 1.00 0.50 0.00 -0.50

    RM

    8,000 6,000 4,000 2,000 0


    Lime (RM) Jan 1530 Feb 1378 Mac 1623 May 3266 12005 9457 10388 8575 3869 3153 3136 April 3153 0 June 3869 0 July 4327 0.00 0.55 0 Aug 3784 0.00 0.50 0 Sept 3438 0.00 0.51 0 Oct 3768 0.00 0.55 0 Nov 3385 0.00 0.49 4327 3784 3438 3768

    3385

    3323

    -1.00 -1.50

    0 Dec 3323 0 0.47

    -2.00

    Soda ASH (RM) 12005. 9457.0 10388. 8575.0 3136.0 0.00 Cost/m3 1.72 1.51 1.56 1.67 0.88 0.50

    Month

    11

    Success Story : RBSB

    Ranhill Group

    REC

    SDE

    RUB

    RP

    RE

    RBSB

    RBSB : Project List


    PROJECT COST MONITORING CUSTOMER FEEDBACK INDEX SURVEY PRODUCTION OF DRAWINGS STAFF UTILIZATION RATE IMPROVE BOOK ORDER FOR PROJECTS OUTSIDE GROUP IMPROVE ENGINEERING EFFICIENCY

    Six Sigma Project Achievement


    86% 84% 82% 80% 78% 76% 74%

    85%

    80% 70% 60% 50%

    70%

    77%

    40% 30% 20% 10%

    29%

    72% Staff Utilization: Before Satff Utilization : After

    0% Customer Feedback Index : Before Customer Feedback Index : After

    Improve Staff Utilization Rate from 77% to 85%


    Total Manhour/drawing Before & After
    35

    Improve Customer Feedback Index from 29% to 70%


    1600% 1400% 1200%

    15

    Manhour/drawing

    30

    1000% 800%

    25

    23.02 19.97

    600% 400%

    20

    200% 0% PACC Report : Before PACC Report : Before

    15 Before After

    Reduce Total Man Hour / Drawing, 23 to 20 man hour

    Improve PACC Reporting Date from 15th to 7th of the month.

    Lessons Learnt
    1. 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 its continuous engagement is in fact the conviction and commitment of all stakeholders.

    SAJH :Asian Award Winning


    Asian CSR Award 2005
    Congratulations! On behalf of the Organizers, Partners and Sponsor of the Asian CSR Awards, Philippine Investment-Management (PHINMA) Inc., it is my pleasure to inform you that Six Sigma-Organizational Climate Project submitted by SAJ Holdings Sdn Bhd is deemed the most outstanding project (winner) in the Best Workplace Practices category of the Asian CSR Awards 2005. 2005 With 160 projects from 91 companies in 12 countries vying for the Awards in five 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 the winning companies attend the Award ceremonies to accept their organization's award. This year's awards will be presented at the Gala Dinner Ceremonies of the Asian Forum on Corporate Social Responsibility on September 9, 2005 at the Hilton Hotel in Jakarta, Indonesia. Over 300

    RBSB Award : COMPANY OF THE YEAR (2006) BY MALAYSIA CANADA BUSINESS COUNCIL

    Thank You

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