GENEVA CONSTRUCTIONS AND RISK

Presented By:

Abhishek Shukla Varsha

Rajamani

Anjana Carri Akriti

Agrawal

Apoorv Soni

Contents: An Overview About Geneva Constructions GCR Time line Case Summary Understanding Concepts: Total Quality M

anagement Understanding Concepts: Six Sigma DMAIC Approach Six Sigma: Support Structure Case Questions Q1 , Q2 , Q3 Conclusion

About Geneva Construction and Risk

• The Geneva Construction and Risk Insurance was founded in 1922

• Provides insurance for building contractors and construction companies in German-speaking countries in Europe and in North America.

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The GCR timeline….

• The company had remained small and had specialized in-housing construction projectTill 1950

• Began expansion into larger construction insurance in the industrial, oil, petrochemical and power plant construction areas1950

• bought by the Wichita Mutual Group and had absorbed the group’s existing construction insurance businesses.

• Established TQM1983

• Leader amongst insurance companies that specializes in providing insurance for construction projects, especially complex, high-risk projects, where contractual and other legal issues, physical exposure and design uncertainty need ‘customized’ insurance responses

2000

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Case Summary

• Wichita Mutual had instructed all companies in its group to adopt a total quality management(TQM) initiative.

• Issued a handbook with detailed instructions of how TQM was to be implemented throughout the group- therefore, a rigid practice.

Case Summary contd.

• Although the TQM initiative had never been formally pronounced a failure, it had faded over the years without having the overall impact that once was hoped of it.

• Tyko Mattson-convinced that an improvement initiative based on Six Sigma principles will be more of a success.

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Total Quality Management (TQM)

• TQM is an integrated philosophy of management for continuously improving the quality of product and process – e.g. Kaizen

• Greater emphasis laid on the roles and responsibilities of every member of staff within an organization to influence quality- all staff are empowered and quality involves EVERYONE!!!

• Ultimate aim- to manufacture products with zero defects.

Total Quality Management

Doing things right…..

….FIRST time.

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SIX SIGMA

• Originally developed by MOTOROLA in 1986.• Six Sigma is a statistical measure of

quality, which reflects process capability.• It set the goal of achieving capability

levels of 3.4 defects per million opportunities

• Process-Centered approach that includes process design, performance measurement, continuous improvement.

Six Sigma and golf?

If you played 100 rounds of golf per year, and played at:

2 sigma - you'd miss 6 putts per round 3 sigma - you'd miss 1 putt per round 4 sigma - you'd miss 1 putt every 9 rounds 5 sigma - you'd miss 1 putt every 2.33 years 6 sigma - you'd miss 1 putt every 163 years!

The Six Sigma ApproachDMAIC

Define the problem or opportunity.

Measure the current performance and capability

Analyse to identify root causes.

Improve by implementing potential

solutions.

Control by standardising solution and monitoring

performance. Define

Measure

Analyse

Improve

Control

6

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Six Sigma Support Structure

• Champions: Business leaders who lead the implementation of Six Sigma within the business;

• Sponsors/Process Owners: Business leaders responsible for the implementation of process improvements and monitoring process performance;

• Master Black Belts: Fully trained quality leaders responsible for Six Sigma strategy, training, mentoring, deployment and results;

• Black Belts: Fully trained Six Sigma experts who lead improvement teams, work on Six Sigma projects and mentor Green belts;

• Green Belts: Fully trained individuals who apply Six Sigma skills to improvement projects;

• Team Members: (Yellow Belts) Individuals who support projects in their areas.

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Question # 1•How does the Six Sigma approach seem to differ from the TQM approach adopted by the company almost twenty years ago?

The TQM Approach

• A handbook approach where every thing is done in Copy Book Fashion

• Involves all people from all processes• People as a part of quality circle• Collaborative and cultural approach• Focus on performance improvement• A lot of time and effort involved in evaluation

The Six Sigma Approach

• Flexible system for Achieving , Sustaining and maximizing standards

• Linked between understanding customer needs , analysis of facts, data and statistics and managing , improving and implementing processes

• Process Centered Approach- Evidence based decision making , emphasis on negative effects of process variation

• Normalization of processes using DPMO principle

A Comparison• A major advantage of Six Sigma: It engages senior

management by establishing process ownership and linking process performance to strategic objectives

• In TQM approach a product meets set company standards, while in case of Six Sigma’s quality to a larger extent, is determined by the customer.

• TQM doesn’t require full time dedication in quality management processes, Six Sigma requires certified professionals.

The Verdict• Tyko sees Six Sigma as a collection of previously tried and

tested quality management techniques including TQM

Our Perspective: o We believe while TQM is process driven, Six Sigma is

highly customer driven. o Six-Sigma is a statistical and quantitative measure of

quality and involves setting statistical quality standards. TQM ,on the other hand, focuses on doing things right and involves everyone in every process.

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Question2: Do you think Tyko can avoid the Six Sigma initiative suffering the same fate as TQM?

Tyko believed three reasons contributed to failure of TQM: ‘It faded away and was just extra work” Not accepted by Middle Management Very few local offices adopted the TQM

philosophy

However, the real problem was not with TQM. It was the IMPLEMENTATION which went all wrong.

Question 2 Contd….

Question 2 Contd….

• Hence, YES, Tyko can avoid Six Sigma suffering the same fate as TQM.

• Firstly, company should not consider Six Sigma as a “Quick Fix” and “panacea” but as an approach that results in long-term systematic reduction of waste.

• Apply Six Sigma Pilot:- Use of external partner to tailor approach and

provide training- Establishing where Sigma’s performance is now - Apply it in failing processes

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Q3 Is six sigma a better approach for GCR?

Benefits Drawbacks• TQM involves upper

management and Six Sigma involves all.

• Six Sigma well tested and tried than TQM.

• Reduce process variations.• Away from monotonous.

•High investment.•Resource hungry.•Not a quick fix solution.•Over complication.•Low volume, high variety, higher visibility.•For mature and big companies.

Six Sigma compared to TQM

Conclusion

• Company should go for TQM and Six Sigma approach simultaneously

• Strategy of adopting a new approach is beneficial to the whole company

• Proper allocation of resources and time given to the approach will yield better result

• Success of a company lies on its right timing and implementation of a proper business and quality approach