EngineeringManagement

Six Sigma Quality Engineering

Week 3

Chapters 4 (Define Phase)

Chapter 4 Outline

Six Sigma Project Team Six Sigma Team Charter Project Management Structure of the Define Phase Define Metrics Problem Statement Exercise SIOPC Analysis Voice of the Customer Analysis Class Exercise

Six Sigma Project Team

The team must:

• Understand the organizational context for process improvement

projects

• Know the basic elements of the team charter and review any

questions you have about the charter for your own project

• Understand the basics of estimating the business impact of a

project and be able to relate them to your own project

• Be able to identify key players and stakeholders and incorporate

them into the communication plan for your own project

Six Sigma Team Charter

A team charter is an agreement between management and the team about what is expected.

The charter:• A project charter is a form that has key information about your

project. It is used to:• Better define your project• Define what is Critical to Quality (CTQ’s) to the Customer• Write a business case (links project to business goals)• Write a problem and goal statement• Scope a project

– State the problem or opportunity– Establish the project goal(s)– Identify criteria for success– List assumptions, risks and obstacles– Communicate the above– Obtain management support

Six Sigma Project Charter Example

Process• Process in which opportunity exists

Project Description• Project’s purpose and scope

Project Scope• Define the part of the process that will be investigated

Objectives• Define the baseline, goal & target

Business Case• Define the improvement in business performance anticipated and when

Team Members• Who are the full time team members

Expected Customer Benefits• Who is the final customer?• What benefit will they see and what are their most critical requirements?

Six Sigma Project Charter Example

Schedule• Give the key milestones/dates• Define completion date• Measure completion date• Analyze completion date• Improve completion date• Control completion date

Support required• Support needed for any special capabilities

Project Management

Problem Statement Objectives Measures

Problem Statement• Should focus the team on a process deficiency• Communicate the significance to others

Objectives• Should address the problem statement• Quantify performance improvement

Measures• Primary Metric(s)

• Used to measure success

• Consistent with problem statement and objectives

• Secondary Metric(s)• Tracks potential negative consequences

Project Management

Project Problem Statement A problem is the unsatisfactory result of a job or process

• So what? What is the impact on the ‘customer’? What problem or gap are you addressing?

• What impact will closing the gap have on the customer? How will you know things are better? It should not include theories about solutions

Remember 5W’s + H to help give more focus

What are the symptoms? What happens when the problem appears?

Where do symptoms appear? Where don’t they appear? When do symptoms appear? Where don’t they appear?

Who is involved? Who isn’t?

Project Management

A poor problem statement• Product returns are too high and will be reduced by analyzing first and second

level pareto charts

A better problem statement• Product returns are 5% of sales resulting in a business unit negative profit impact

of $5M and reduced market share of 10%

Project Problem Statements

Project Management

Project Objectives Should address the problem statement Quantify performance improvement Should also identify timing Needs to be Measurable, Actionable and Realistic

• Quality / Quantity / Time / Cost

A poor objective• Reduce product returns by implementing performance

measures and objectives

A better objective• Reduce product returns of product line abc from 5% to 2.5% by

the year end, to reduce overall returns by 1% and saving $1M

Project Management

Measures Should be consistent with the problem statement and

objectives

Primary Metric(s) - used to measure success• Needs to include 3 series, plotted as a function of time:

• Baseline performance (average over past 12 months)

• Actual performance

• Objective / target performance

Secondary Metric(s) - drives the right behaviour• Tracks potential negative consequences• More than one may be required

Project Name:Estimated

completion date

Actual completion

date

Define Customers and Requirements (CTQs) Develop Problem Statement, Goals and Benefits I dentify Champion, Process Owner and Team Define Resources Evaluate Key Organizational Support Develop Project Plan and Milestones Develop High Level Process Map

Define Defect, Opportunity, Unit and Metrics Detailed Process Map of Appropriate Areas Develop Data Collection Plan Validate the Measurement System Collect the Data Begin Developing Y=f(x) Relationship Determine Process Capability and Sigma Baseline

Met Measure Phase Criteria NoMeasure

DefineMet Define Phase Criteria

StatusDMAIC PROCESS AND PHASE GATE

No

Structure of the Define Phase

Define Completion Checklist

By the end of Define, you should be able to describe for your Champion:• What key process is involved (including its Suppliers, Inputs, Outputs, and

Customers)

• What about the process output is important to customers

• What customers currently think of the process and its output

• Why this project is important to your organization and what business goals the project must achieve to be considered successful

• Who the players are on the project (sponsors, advisors, team leader, team members)

• What limitations (budget, time, resources) have been placed on this project

Six Sigma Problem Statements

A problem statement has the form:

“WHAT is wrong

WHERE it happened

WHEN it occurred

TO WHAT EXTENT and

I KNOW THAT BECAUSE…”

A problem statement:• Does not include causes of the deficiency.• Does not include likely actions or solutions.• Is clear and concise and specific.

A good problem statement is essential to a good start.

What is Wrong and Where Does it Happen?

A good problem statement will clearly define WHAT is wrong. Examples:• “Customers are not satisfied with my product…”• “Yields are suffering…”• “Reliability is insufficient…”

A good problem statement will clearly define WHERE the problem occurs. Examples:

• “Customers in the Midwest Region are not satisfied with my ordering service…”• “Equipment availability for Urgent Care is poor…”• “Document correctness is insufficient in Billing…”

When Was This Seen?

A good problem statement will clearly explain WHEN the problem occurred.• “Customers in the Midwest Region are not satisfied with my

ordering service. Starting in January…”• “Equipment availability for Urgent Care is poor. Since the

consolidation of services…”• “Document correctness is insufficient in Billing after the

introduction of flexi-forms”

How Widespread is the Problem?

A good problem statement will clearly explain the EXTENT of the problem.

• “Customers in the Midwest Region are not satisfied with my ordering service.

Starting in January, complaints have increased 15%…”

• “Equipment availability for Urgent Care is poor. Since the consolidation of services,

delays caused by lack of availability have increased by 40%…”

• “Document correctness is insufficient in Billing after the introduction of flexi-forms.

Errors have increased 28%…”

What is the Standard?

A good problem statement will clearly explain HOW I KNOW there is a problem. Examples:• “Customers in the Midwest Region are not satisfied with my ordering

service. Starting in January, complaints have increased 15% at a time when complaint rates from other regions have remained static”

• “Equipment availability for Urgent Care is poor. Since the consolidation of services, delays caused by lack of availability have increased by 40% when the patient traffic has increased by only 5%”

• “Document correctness is insufficient in Billing after the introduction of flexi-forms. Errors have increased by 28% when the goal of the project was to reduce errors by 90%”

Primary Metric

Primary Metric (used to measure process performance)• The gage used to measure your success• It must be consistent with the problem statement. It is used to track progress

towards your goals and objectives.• It is usually reported as a time series graph of:

• Baseline data – averaged over a year, if available

• Target performance – goal or objective

• Actual (current) performance

Examples:• Rolled throughput yield (RTY) [versus FTY]• Process Sigma Level or Ppk• Defects per unit (DPU) [versus Proportion Defective]

The Primary Metric is how the success of your project will be measured

Sample Primary Metric

Product ReturnsProduct Returns

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BaselineBaseline

ActualActual

ObjectiveObjective

Secondary Metrics

Secondary Metrics:• Measurements of key input/output features, cycle time, or process resource usage

that may improve as a result of meeting objectives using the primary metric• Can be “Drivers” or “Riders” – i.e. Vital X’s impacting the project (Primary Metric) or

“Good Consequential Metrics”

Examples:• Primary Metric : Cycle Time• Secondary Metric : Reduced backorders

• Primary Metric : Defects per Unit• Secondary Metric : Available Floor Space

Sample Secondary Metric

Pct of Orders Shipped within 24 hours

90%90%91%91%92%92%93%93%94%94%95%95%96%96%97%97%98%98%99%99%

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Problem Statements – Exercise

Break out into your groups. Using the guidelines of this module, each group will rewrite these problems statements to make them better:• The complaint rate for our customer service group is too high,

probably due to all of the new people in the department.

• Food Services order errors are too high. They must be reduced.

• Reduce measurement errors by cleaning the instruments more often.

• Consumable use is increasing too fast. Reduce consumable cost.

• Long term rolled throughput yield for Accounts Payable billing this year is 83% versus a past RTY of 95%.

• Long wait time for phone service. It takes customers about 30 minutes to get an order completed.

What is a SIPOC?

• A high-level map of your process that includes:• Approximately 4-7 process steps• Inputs that feed the process• The Suppliers (sources) of those Inputs• Outputs that result from the process• The Customers (recipients) of those Outputs

• Keep it simple, and think carefully about the scope

S U P P L I ER S

C U S T O M E R S

OutputsInputs Process

Why Create a SIPOC Map?

• SIPOC helps your team to: • Define process boundaries (starting and ending points)

• Identify data collection opportunities

• Clarify who are the true customers of the process

• To avoid “scope creep.”

• To identify likely sources of performance problems

• To expose fundamental issues early in the project that could change the direction of the team

When to Create a SIPOC

• All work can and should be considered as a process

In the Early Stage of Any Project!

LaborMaterial

Ideas

Information

Environment

Process

Physical products

Documents

InformationServicesDecisions

Questions to Help with SIPOC

From the Output/Customer End:

• Why does this process exist?

• What products, services or outcomes does this process produce?

• How does this process end?

• Who uses the outputs or experiences the results from this process?

• Who provides funding or staffing for the process activities, and who cares about the quality of outcome?

From the Input/Supplier End:

• What items or information gets worked on?

• Where do the items or information come from?

• What effect do the inputs have on the process and on the outcome?

• How does this process start? From the Middle – Inside the Process:

• What major steps happen to convert inputs into outputs?

• What people or resources perform those steps?

SIPOC - Process Development Example

CUSTOMERSOUTPUTSPROCESSINPUTSSUPPLIERS

NEUTROGENA CORPORATIONGreen Belt Project- Line Trial Anytime

SIPOC

Industrial Ingineering

Maintenance

Warehouse

Package Development

Quality Assurance

Scheduling

Routing

Cost Estimate

Change Parts

Specs

B.O.M.

Protocol

LINETRIAL

EXECUTION

Create/DeliverProtocol

Deliver Supplies/Change Parts

Line Set Up/FineTune

Contact Line TrialTeam

Fill ProductDeliver Samples/Documentation

START STOP

Stability Samples

Validate Change Parts

Validate Fill Process

Validate Cost

Quality Validation

R&D

MFG

Package Dev

I.E.

QA

Suppliers Material

Labor

SIPOC Workshop

Instructions: • Prepare a SIPOC for the process of baking your cake. Use the

guidelines on the following page.

• Be prepared to share your work with the class. • 15 minutes to prepare + 2 presentations (5 minutes each)

How to Create a SIPOC Map

Name the process

Identify, name, and order the major process steps (approximately 4-7 steps)

Clarify the boundaries of the process – where it starts and where it stops

List key outputs and customers

List key inputs and suppliers

SIPOC– a Foundation for Next Steps

The list of Customers from your SIPOC are the starting point for the Voice of the Customer (step 3)

The major process steps (macro map) from your SIPOC are the overview for later detailed process mapping

The Inputs, Process Steps, and Outputs on your SIPOC generates ideas for what can and should be measured, which feeds the Data Collection Plan in the Measure phase

The SIPOC contains clues about potential root causes that drive performance.

Voice of Customer

Understand why the Voice of the Customer (VOC) is critical Know how to create a plan for gathering VOC data Know both reactive and proactive ways to gather VOC

information Know how to analyze data through the use of affinity diagrams

and Kano diagrams Be able to use a CTQ tree diagram to identify customer

requirements and set specifications for them

What Is the Voice of the Customer?

The term Voice of the Customer (VOC) is used to describe customers’ needs in a process improvement effort and their perceptions of your product or service.

Why VOC Is Critical

VOC data helps an organization and a project to:• Decide what products and services to offer• Identify critical features and specifications for those products,

process outputs and services• Decide where to focus improvement efforts• Get a baseline measure of customer satisfaction to measure

improvement against• Identify key drivers of customer satisfaction

Why Collect VOC Data

Customer requirements change constantly

Specifications tend to focus on technical data only

VOC Process

Outcomes• A list of customers and customer segments• Identification of relevant reactive and proactive sources

of data• Verbal or numerical data that identify customer needs• Defined Critical to Quality requirements (CTQ)• Specifications for each CTQ

Based on Rath & Strong

1.Identify

customers and determinewhat you need

to know

2.Collect and

analyzereactive

system datathen fill gaps

with proactiveapproaches

3.Analyze datato generatea key list

of customerneeds in

their language

4.Translate

the customerlanguageinto CTQs

5.Set

specificationsfor CTQs

VOC Step 1: Identify Customers & Determine What You Need to Know

Goal• Identify your customers• Decide what you need to know about their needs• Decide when and how you will get this information

1.Identify

customers and determinewhat you need

to know

2.Collect and

analyzereactive

system datathen fill gaps

with proactiveapproaches

3.Analyze datato generatea key list

of customerneeds in

their language

4.Translate

the customerlanguageinto CTQs

5.Set

specificationsfor CTQs

Who Are Your Customers?

What are the outputs of your process? Who are the customers of that output?

Are there particular groups of customers whose needs are especially important to your organization and project success?

S U P P L I ER S

C U S T O M E R S

OutputsInputs Process

AB-588.2

Common Customer Segments

Customer status: Former Customers, Current Customers, Customers of Competitors, Substitute Customers

Where they are in the “customer chain”• Internal user Distributor End user

Geography Industry, Division or Department Demographics

Do You Have Customer Segments?

If your customers seem to have similar needs across the board, you don’t necessarily have to divide them into segments

If you suspect that different groups will have significantly different needs, and that these differences will influence how you structure your process, product, or service, then it will be worthwhile to think in terms of segments

Deciding the What and Why

Revisit your charter—what is the purpose of your project?

How does your purpose relate to customer needs?

What do you need to know about the needs of the customers you’ve

identified to make sure your project’s purpose stays on track?

Sample Questions

For all customers, you should ask questions such as:

1. What is important to you about our process/product/service? (Ask them to rank each of these needs in order of importance.)

2. What do you think of as a defect?

3. How are we performing on the areas you consider important?

4. What do you like about our product/service?

5. What can we improve about our process/product/service? What can we do to make your job easier?

6. What specific recommendations would you make to us?

VOC Step 2: Collect and Analyze Reactive and Proactive Data

1.Identify

customers and determinewhat you need

to know

2.Collect and

analyzereactive

system datathen fill gaps

with proactiveapproaches

3.Analyze datato generatea key list

of customerneeds in

their language

4.Translate

the customerlanguageinto CTQs

5.Set

specificationsfor CTQs

Reactive systems

•Information comes to you whether you take action or not

Proactive systems

•You need to put effort into gathering the information

Typical Reactive Systems

Customer complaints (phone or written) Problem or service hot lines Technical support calls Customer service calls Claims, credits, contested payments Sales reporting Product return information Warranty claims Web page activity

• Reactive systems generally gather data on:• Current and former customer issues or problems

• Current and former customers’ unmet needs

• Current and former customers’ interest in particular products, process outputs or services

Proactive VOC Systems

Interviews Focus groups Surveys Comment cards Data gathering during sales visits or calls Direct customer observation Market research, market monitoring Benchmarking Quality scorecards

VOC Plan: Final Touches

The last step to finishing your data collection is to decide specifically how you will obtain the information, within what time frame the data gathering should take place, and how you will record the data

VOC Step 3: Analyzing Customer Data

Goal is to generate a list of key customer needs in their language. It is helpful to summarize this information in a meaningful way.

1.Identify

customers and determinewhat you need

to know

2.Collect and

analyzereactive

system datathen fill gaps

with proactiveapproaches

3.Analyze datato generatea key list

of customerneeds in

their language

4.Translate

the customerlanguageinto CTQs

5.Set

specificationsfor CTQs

Questions? Comments?