Transcript
TOPIC
SIX SIGMA Quality management.
AGENDA What is Six Sigma? Six Sigma Methodology. Why adopt Six Sigma? Different Six Sigma Belts. Why Six Sigma and not TQM?
WHAT IS SIX SIGMA ? Six Sigma is a rigorous and a systematic
methodology that utilizes information (management by facts) and statistical analysis to measure and improve a company’s operational performance ,practices and systems by identifying and preventing ‘DEFECTS’ in manufacturing and service processes .
Six Sigma scale of Defects.Sigma Defects
(per million)
Product Optima
(%)
3
4
5
6
66,807
621
233
3.4
93.32
99.379
99.9767
99.999966
Defects values in the above tables suggests that as sigma level goes up defect rate reduces which means product quality improves.
Six Sigma Methodology Six Sigma has two key methodologies.
1) DMAIC – Define , Measure ,Analyze , Improve ,Control.
2)DMADV – Define , Measure , Analyze, Design, Verify.
Why companies Implement Six Sigma? Quality Improvement.
Improved Process Flow.
Employee Skills.
Improve Market Shares.
Earnings and Profitability.
Customer Satisfaction.
Different Six Sigma Belts
Can Six Sigma Fail ? Leaders Involvement.
Clearly Defined Strategy.
No Accountability.
Resource Allocation.
Does Organization adopt or adapt.
YES
Example: Dabbawalas.
“IF THE LOCAL TRAINS ARE THE LIFELINE OF THE CITY,DABBAWALAS ARE THE FOOD LINE.”
Why Six Sigma and not TQM?
Total Quality
Management
Six Sigma
Customer Driven
Focuses on processes
Prevents defects
Improves overall efficiency
Driven internally
Focuses on outcomes
Fixes defects
Improves bottom line
Conclusion
Six Sigma means data driven decision making
TOPIC
ALTMAN Z-ScoreDeveloped by Edward Altman.
What is Altman Z –Score? A Guide to failure prediction.
Z-Score for predicting Bankruptcy /Insolvency.
Measurement of financial health of a company.
Who will use it ? Investor’s ,broker’s.
Bankers.
Anyone related with company.
Data Required. Earnings before taxes. Total assets. Net sales. Market value of equity. Total liabilities. Working capital. Retained earnings.
Five Ratios. Return On Total Assets.
(EBIT/total assets) * 3.3 Sales To Total Assets.
(Net sales /assets) * 0.999 Equity To Debt.
(Mkt value of equity/Book value of liabilities) * 0.6 Working Capital To Total Assets.
(working capital/ total assets) * 1.2 Retained Earnings To Total Assets.
(Retained earning /total assets) * 1.4
Ratio Formula Weight Factor
Weighted Ratio.
Return On Total Asset
EBIT/Assets 3.3 -4 to 8
Sales To Total Assets
Sales/Assets 0.999 = 1 -4 to 8
Equity To Debt Ratio
M.V Equity /Liabilities
0.6 -4 to 8
Working Capital To Total Assets.
Working capital /Assets
1.2 -4 to 8
R. Earnings To Assets
R Earnings / Assets
1.4 -4 to 8
Example – XYZ public co. LTD. EBIT : 1600 Total Assets : 23350 Net Sales : 4000 Market value of Equity : 3900 Total liabilities : 15000 Current Assets : 19000 Current liabilities: 9600 Retained Earnings: 2350
FORMULA Calculation Weight
Factor
EBIT/Assets 1600/23350 0.068 *3.3 0.2261
Sales /Assets 4000/23350 0.171* 0.99 0.1711
M.V of Equity/Liabilities
3900/15000 0.26*0.6 0.156
W. capital/Assets 9400/23350 0.402*1.2 0.483
Retained Earnings/Assets
2350/23350 0.1006*1.4 0.140
Z-score = 0.2261+0.1711+0.156+0.429+0.140 = 1.1762
Interpretation of Z-Score. Above 3.0 = The company is safe based on their financial figure.
Between 2.7 and 2.99 = On alert. Insolvency is possible ,but not likely in near future.
Between 1.8 and 2.7 = Good chances of the company going bankrupt within 2 years.
Below 1.80 = Probability of Financial Bankruptcy is very high.
XYZ Co Ltd - Z-Score = 1.1762.
Z Score of Indian companies Tata Motors Limited -- 3.48
Dr.Reddy’s -- 8.25
Honeywell International -- 2.25
Points To Remember A score greater than 3.0, or an increasing Altman's Z-Score is
usually a positive sign.
The higher the score, the better the company's chances of avoiding bankruptcy, but this score should be checked against other companies and industry standards.
Large economic events, like an entire industry slowdown, would render this scoring method less accurate.
The individual components of this formula should be monitored, as they are the key to understanding how the score was calculated.
TOPIC
VIRTUOUS & VICIOUS
BUSINESS CYCLE.
What Does it mean? VIRTUOUS : Excellent.
VICIOUS: Harmful.
Example of Virtuous Business Cycle.
Example Of Vicious Business Cycle
BIBLIOGRAPHY Total Quality Management Book
Motorola site
www.12manage.com
Managing Radical Change
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