lssgb lesson2 define
Post on 09-Jan-2016
24 Views
Preview:
DESCRIPTION
TRANSCRIPT
-
Copyright 2014, Simplilearn, All rights reserved.
Copyright 2014, Simplilearn, All rights reserved.
Lesson 2Define
Lean Six Sigma Green Belt
-
Copyright 2014, Simplilearn, All rights reserved.Copyright 2014, Simplilearn, All rights reserved.
Explain various components of project selection
Describe customer data collection methods
List various means of project documentation
Discuss risk analysis and management
Describe project management and planning tools
Explain the concepts used in evaluation of project performance
Describe the deliverables of Lean Six Sigma project
After completing this lesson, you will be able to:
Objectives
2
-
Copyright 2014, Simplilearn, All rights reserved.
Define
Topic 1Project Identification
-
Copyright 2014, Simplilearn, All rights reserved.
Project Selection
The five steps for selecting a project are as follows:
Identify organizational need
Identify the projects
Evaluate the projects
Select the right project
Review the project
Organization needs
projects to improve
and develop its
functional areas and
to serve and meet
customer needs.
Identify projects
that are aligned
with the
organizational need.
Evaluate the project
in the following
areas:
Net present
value
Cost benefit ratio
Internal ROR
Opportunity cost
Payback period
The project which
meets the
organizational
requirement is
selected and
initiated.
Project will be
reviewed to ensure
alignment to the
organizational
goals.
4
-
Copyright 2014, Simplilearn, All rights reserved.
A business process has five elements: Supplier, Input, Process, Output, and Customer (SIPOC).
Process Elements
Supplier:A person or organization providing resources to the process concerned
Input:Information, material, or services provided by the supplier
Process:Set of steps which transforms the inputs into output
Output:Final product or service, outcome of the process
Customer:A person, process, or organization which uses the output
5
-
Copyright 2014, Simplilearn, All rights reserved.
One or more changes in Supplier, Input, or the Process actions (SIP) will result in a change in the
process output.
If SIPs are stable, the output will be stable.
Relations between SIPs and output provide a method to define possible cause-effect relationships.
These relationships can be termed as closed-loop business systems.
SIPOutput Interaction
Supplier Input Process Output
6
-
Copyright 2014, Simplilearn, All rights reserved.
SIPOCExample
SIPOC form for a call center:
Suppliers Inputs Process Output Customer
Telecom industry
IT industry
Phone connection
Computer or
system
Head set
Server or dialer
CSR or TSR
Opening call
Customer verification
Probing customer
Resolution
Closing
Problem solution User (existing
customer)
New customer
7
-
Copyright 2014, Simplilearn, All rights reserved.
The following image represents where the process owner and stakeholders are placed in the
organizational hierarchy:
Owners and Stakeholders
Process Owner:Responsible for the performance and execution of the process.
Stakeholder: People who are affected by the organizations actions.
Stockholders Customers Suppliers Management Employees Society
8
-
Copyright 2014, Simplilearn, All rights reserved.
Customers are the most important part of any business. A customer is someone who:
decides to purchase;
pays;
consumes; and
gets affected by a particular product or service.
It is essential to identify and understand the customer requirements so the products or services can
be designed according to these requirements.
There are two types of customersinternal and external.
Identify Customer
9
-
Copyright 2014, Simplilearn, All rights reserved.
An internal customer is anyone within the business system who is affected by the product or the
service while it is being developed.
Internal Customers
Needs of an internal customer
Necessary tools, training, and specific instructions
Provision of company newsletters, projects,
storyboards, etc.
Awards and recognition
Importance of an internal customer
Activities directly impact final customer
Activities affect the next process in the system
Affects the quality of the end product
The satisfaction levels of the internal customers can be improved in various ways: increased internal communication through company newsletters, awards, recognition, constant trainings, and competitive environment.
!10
-
Copyright 2014, Simplilearn, All rights reserved.
External customers are not a part of any organization; however, they are impacted by it. They are the
source of revenue for any business system and are therefore extremely important.
There are three types of external customers:
External Customers
Affected parties
They do not purchase the product or service. However, they are impacted by it.
End users
They purchase a particular product or service for their personal use.
Intermediate customers
They purchase a particular
product or service, modify or
assemble, repack, and resell
the product or service to an
end user.
11
-
Copyright 2014, Simplilearn, All rights reserved.
Building a Business Case
A Business Case is needed to provide details to the management and team members on the
business values to be achieved by conducting a project.
Explore the improvements and opportunities while documenting a business case along with the
high level view on what business output is anticipated and by when.
A business case must capture the following:
Business outcome;
Effort needed;
Set of resources and their availability; and
Timeline.
12
-
Copyright 2014, Simplilearn, All rights reserved.
Building a Business CaseDetails
The tangible benefits from the Lean Six Sigma project needs to be articulated using following factors:
Amount of cost reduction,
Ways to reduce turnaround time,
Focus on quality by reduction in defects, and
Ways to achieve customer satisfaction.
The business case is presented to stakeholder with the following details:
Executive summary brief
Strategic linkage
13
-
Copyright 2014, Simplilearn, All rights reserved.
Financial Evaluation and Benefits Capture
Hard Savings
Actual reductions in money being spent, such as:
Reduced budgets,
Fewer employees,
Additional revenue opportunities,
Effort reduction,
Rework and scrap reduction, and
Reduction in work force.
Soft Savings
Intangible benefits such as:
Increase in customer satisfaction,
Employee morale,
Brand uplift and repeat customer.
Also includes the benefits arising from:
Less inventory and reduced testing,
Lower cycle times and improved yields,
Lower rework rates and reduced scrap.
The potential financial benefits from the Six Sigma project are captured by looking at the cost and
both hard and soft savings.
14
-
Copyright 2014, Simplilearn, All rights reserved.
Financial Evaluation and Benefits CaptureSample
The given excel sheet is used to capture monthly costs and benefits to get a full picture of the cost
involved and the benefits realized.
Criteria/Factors M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Total
Cost
Benefits
Net (Monthly)
Cumulative
This row captures all the cost that is incurred month over month.
This row captures the benefits expected to be realized.
In this row, calculate the net value (Benefits Cost for every month).
In this row, capture the monthly data and add the data to get a cumulative view of benefits up to that month.
15
-
Copyright 2014, Simplilearn, All rights reserved.
The most important aspect of any process improvement project is the customers. Following are the
positive impacts of the project on both types of customers:
Effects on internal customer Effects on external customer
High level of motivation
High level of job satisfaction
Undertake additional roles and responsibilities
Focus on delivering their responsibilities
Improved team bonding
Solution to problems
Better product
Requirements are effectively met
Improved customer service
Customer satisfaction
Positive Effects of Project on Customers
16
-
Copyright 2014, Simplilearn, All rights reserved.
Define
Topic 2Voice of the Customer
-
Copyright 2014, Simplilearn, All rights reserved.
Collecting data from customers is very essential as it helps one consider the levels at which these
customers impact the business. Customer data or feedback is collected from internal and external
customers. Collecting customer data helps:
to fill the gaps and improve the various business processes in the organization;
to define a good quality product as perceived by the customer;
to identify qualities that make the competitors product or service better; and
to identify factors that provide a competitive edge to the product or service.
Collect Customer Data
Popular and common methods are surveys conducted through questionnaires, focus groups, individual interviews with the customers, and direct feedback from customers through call center data, emails, and feedback forms.
!18
-
Copyright 2014, Simplilearn, All rights reserved.
Questionnaires can be given in the form of a survey. It is a method of deriving feedback from
individuals though structured questions, either personally or over emails, telephone, etc.
Following are the steps in the process:
Questionnaire
Scope of the surveyDefine the
survey group Pick a
methodologyDevelop a
questionnaire
Initially plan the
scope of the
survey. Make a list
of all the points
that need to be
covered.
Plan the
participants
required for the
survey.
Depending on the
time, budget, and
demography of
the participants,
decide on a survey
methodology.
Develop a brief,
professional, and
neat
questionnaire to
encourage
effective
participation.
Compilation
Scan the
questionnaires
and develop a
report.
19
-
Copyright 2014, Simplilearn, All rights reserved.
Some advantages and disadvantages of questionnaires are listed below:
Advantages
Low-cost approach
Phone response rate: 7090%
Faster results
Analysis of mail questionnaires requires few
trained resources
Disadvantages
Incomplete results and unanswered questions
leading to a lack of clarity
Mail response rate: 2030%
During phone surveys, the interviewer may
influence the interviewee
Advantages and Disadvantages of Questionnaire
20
-
Copyright 2014, Simplilearn, All rights reserved.
The popular methods of survey are the telephone survey and web survey.
Telephone Survey vs. Web Survey
Telephone Survey
This is used for general survey and when sample
size consists of generic population.
It is expensive and is conducted in limited time.
Clarification of some answers is possible.
Open-ended questions can be asked.
More respondents respond.
There might not be enough audio-video support,
so the data quality can be low.
Compilation & analysis of data consumes time.
Web Survey
This is used when survey is targeted at a specific
set of people and when the sample size is easily
accessible through the Internet.
It is low cost and respondents get enough time.
Clarifications for answers are not possible.
Open-ended questions cannot be asked.
Less respondents respond.
Audio and video support is possible, so the data
quality is better.
It simplifies the compilation & data analysis of
data collected.
21
-
Copyright 2014, Simplilearn, All rights reserved.
Focus group is generally a small group of three to twelve individuals who assemble for one or two
hours to explore specific topics and questions.
Following are the steps in the process:
Focus Group
Preparatory stage Planning stage Session Compilation
Identify scope of
focus group
Analyze the
problem that
needs to be
addressed
Finalize session
venue and time
Arrange a means
for transcription
Advertise session
details
Arrange for
refreshments
Facilitate
introductions
State the agenda
and transcription
factor involved
Record the
session
Retreat to an
observatory
Study
transcription
material
Make notes
22
-
Copyright 2014, Simplilearn, All rights reserved.
Some advantages and disadvantages of focus group are listed below:
Advantages
Group interaction generates information
Provides in-depth responses
Addresses complex questions or qualitative data
Excellent for getting critical-to-quality definitions
Disadvantages
Learning is subjective and cannot be generalized
Data collected is qualitative rather than
quantitative
Generates anecdotes and incidents experienced
by the individuals in the group
Advantages and Disadvantages of Focus Group
23
-
Copyright 2014, Simplilearn, All rights reserved.
Interview is a technique of questioning and probing an individual to gather information. It is informal
and encourages the interviewees to voice their opinion. Even though quite common for collecting
customer feedback, individual interviews can be time consuming.
Following are the steps in the process:
Interview
Introduction and greetings
Gather feedback Compilation
Start the session with
a friendly greeting.
Understand
interviewees
background,
interests, and
knowledge level.
Avoid taking notes.
Display complete
attention to what the
participant has to
say.
Gather information
at all levels.
After the session,
make a list of the
points discussed, the
ideas that cropped
up, suggestions, etc.
24
-
Copyright 2014, Simplilearn, All rights reserved.
Some advantages and disadvantages of the interview technique are listed below:
Advantages
Can tackle complex questions and cover a wide
range of information
Allows use of visual aids
Good choice when individuals dont respond
willingly and/or accurately by phone/mail
Disadvantages
Time consuming
Requires a trained and experienced interviewer
Advantages and Disadvantages of Interview
25
-
Copyright 2014, Simplilearn, All rights reserved.
The table shows the importance and urgency of different kinds of input.
Importance and Urgency of Various Inputs
Criteria / Factors WeightageTelephone
SurveyWeb
SurveyInterview
Respondents availability 12 8 8 6
Lead data 6 8 8 9
Cost involved 20 3 9 1
Time consumption (organization perspective) 5 5 10 1
Availability of time from customer (for the survey) 5 3 10 4
Response rate of the customer 15 7 5 8
Judging the quality of data 10 1 6 10
Clarification 3 7 0 10
Visualizing feature 2 0 10 10
Compiling & analyzing data 2 3 10 3
Resource requirement 10 1 10 1
Preparation time 5 7 1 9
Accessibility to customer 5 8 8 4
TOTAL 100 471 744 522
26
-
Copyright 2014, Simplilearn, All rights reserved.
There are pros and cons for gathering information from customer complaints.
Customer Complaints
Advantages
Availability of specific feedback directly from the
customer
An easy option to respond appropriately to every
customer
Disadvantages
Feedback in this method does not provide an
adequate sample size
May lead to process changes based on one or two
inputs from the customer
27
-
Copyright 2014, Simplilearn, All rights reserved.
Product complaints and expedited service requests can act as inputs to the company for improving
their process.
Product Complaint vs. Expedited Service Request
Product Complaint
This arises when customer is dissatisfied.
Product is not meeting customer specification.
Product has to be improved.
Customer needs for product are not completely
identified.
Expedited Service Request
This arises when customer is in a hurry.
Service timelines are not meeting customer
requirements. Service has to be improved.
Customer timings need to be recalculated.
28
-
Copyright 2014, Simplilearn, All rights reserved.
The table shows the importance and urgency of different kinds of input.
Importance and Urgency of Various Inputs
Factors Weightage Product complaintExpedited service
request
Identifying customer need 15 8 9
Cost involved 15 4 8
Time consumption (orgn. perspective) 2 3 9
Probing the customer 10 1 10
Availability of time from customer 10 1 10
Response rate of the customer 10 1 6
Clarification from customer 8 1 6
Retaining customer 10 1 10
Compiling & analyzing data 2 4 10
Resource requirement 8 1 2
Handling customer 10 1 10
TOTAL 100 260 817
29
-
Copyright 2014, Simplilearn, All rights reserved.
Data collection tools will be selected based on the type of data to be collected. The key elements that
make these tools effective are as follows:
Data is directly collected from the primary source, reducing the scope for miscommunication or
loss of information.
Data is highly reliable as it is collected exclusively for the stated purpose.
Data is captured after understanding the organizational purpose, making data relevant.
Data is collected instantaneously when there is a requirement, making it up-to-date and valid.
Customer requirement is accurately defined with the data.
Key Elements of Data Collection Tools
The tools help to get enough information about customer requirement through which the process for improving or creating the product or service that the customer requires can be developed.!
30
-
Copyright 2014, Simplilearn, All rights reserved.
Collected data must be reviewed to eliminate vagueness, ambiguity, and any unintended bias.
Review of Collected Data
Customer feedback sheet before review
Name:
Gender: Male/Female
Occupation: Student/Professional
Were sales executive supportive? Yes/No
Was the product delivered on assured time?
Yes/No
Please rate overall experience between
1 and 10 (1 lowest and 10 highest)
Customer feedback sheet after review
Name:
Gender: Male/Female
Occupation: Student/Professional/others (please specify)
Rate sales executives on the below areas: (10 high1 low)
o Politeness
o Ability to understand & identify problem
o Quick reply to queries
o Overall
Was the product delivered on assured time? Yes/No
Please rate overall experience between 1 and 10 (1 lowest
and 10 highest)
31
-
Copyright 2014, Simplilearn, All rights reserved.
Voice of Customer
Who is the Customer?
What the customer said (VOC)
What the customer meant
What is the need?
When is the need felt?
Where is the need felt?
Why is the need felt?
How is the situation handled now?
Household Member
AC should be silent
Sound sleep At NightIn the bedroom
To remain fresh next morning
Uses a ceiling fan that makes a lot of noise
AC should be efficient
Good cooling
At NightIn the bedroom
It gets very hot in May-June
Uses a ceiling fan that is not so effective in summer
AC should be economic
Affordability N/A N/A Limited Finance N/A
The Voice of Customer (VOC) is a technique to organize, analyze, and profile the customers
requirements.
Following is an example for customer requirements while purchasing an air conditioner:
32
-
Copyright 2014, Simplilearn, All rights reserved.
Importance of Translating Customer Requirements
Customer requirement is the data collected from customers that gives information on what they need
or want from a process.
Customer requirements are often high-level, vague, and non-specific.
Customer requirements when translated into critical process requirements that are specific and
measurable are called Critical To Quality (CTQ) factors.
A fully developed CTQ has four major elements:
output characteristic;
Y metric;
target; and
specification or tolerance limits.
33
-
Copyright 2014, Simplilearn, All rights reserved.
Critical to Quality factors are quality parameters set by the organization relating to the customers
needs. CTQ tree is a diagram-based tool that helps develop and deliver quality products and services.
Critical to Quality
Identify Critical Needs Identify Quality DriversIdentify Performance
Requirements
Identify the critical needs that
the product has to meet.
Define the product
requirements in broad terms.
Ask the customers directly or
brainstorm on their needs
with people in direct contact
with customers.
Identify the specific quality
drivers that must be in place
to meet the needs.
Identify all of the drivers that
are important to the
customers.
Understand the factors that
are important to the
customers.
Identify the minimum
performance requirements.
Satisfy the requirements for
each quality driver to provide a
quality product.
Remember the things that may
affect your ability to deliver
these.
34
-
Copyright 2014, Simplilearn, All rights reserved.
Quality Function Deployment (QFD) is a process to understand the customers needs and translate
them into a set of design and manufacturing requirements, while motivating businesses to focus on
its customers.
It helps companies to design and build more competitive products in less time and lesser costs.
It also helps you understand the following:
Quality Function Deployment
Customer requirements
Organizations strengths & weaknesses
Where the focus should
be
Areas where most of the work is to be done
35
-
Copyright 2014, Simplilearn, All rights reserved.
Phases of QFD
Quality function deployment involves four phases. The output of a phase is the input of the next
phase.
Product Planning
Product Design
Process Planning
Process Control
Technical Requirements
Key Process Operations
Establishing process control plans, maintenance plans, and training plans to control operations
Key Parts Characteristics
Customer Requirements
Input Output
InputOutput
Input
Input
Output
Output
36
-
Copyright 2014, Simplilearn, All rights reserved.
Structure of QFD
Quality function deployment or House of Quality (HOQ) comprises six steps:
37
-
Copyright 2014, Simplilearn, All rights reserved.
Step 1Customer Requirements
The first part of the HOQ matrix is Customer Requirements.
This is a documented version of the customers
requirements for a product.
Customer requirements box is known as WHATS.
Inputs are collected through direct conversation with the
customers.
List of customer inputs must be structured before it enters
HOQ.
The organization can also collect customer requirements
by brainstorming with people who work with customers
directly.38
-
Copyright 2014, Simplilearn, All rights reserved.
Customer RequirementsImportance Weightage
Customer requirements prioritization measures for each customer requirement are gathered from the
questionnaire and AHP.
High priority requirements are rated 1 and low priority requirements are rated 0.
For every requirement, calculate the sum of customers who voted it as high priority.
Calculate the percentage of these customers.
Customer RequirementsCustomers
Sum % Sum1 2 3 4 5
1 Lasts a long time 1 0 1 0 0 2 18.2%
2 Inexpensive 1 0 1 1 1 4 36.3%
3 Protects hood 0 1 1 1 0 3 27.3%
4 Doesnt rust 1 1 0 0 0 2 18.2%
Totals 11 100%
39
-
Copyright 2014, Simplilearn, All rights reserved.
Step 2Planning Matrix
The second part of the HOQ matrix is Planning Matrix.
This provides a measure of customer satisfaction with the
existing products.
It is used to rate the industry competitors on each of the
customer requirements or WHATS.
It helps the organization to get an overview of their
performance when compared with industry competitors.
5-scale rating is used.
40
-
Copyright 2014, Simplilearn, All rights reserved.
Step 3Technical Requirements
The third part of the HOQ matrix is Technical Requirements.
It is also known as Engineering Characteristics or Voice of
the Company.
This section describes products in terms of the company.
QFD team identifies all the measurable characteristics of
the product which are related to customer requirements.
It helps to identify the minimum performance
requirements that the organization must satisfy for each
WHATS.
Organizational factors that affect the ability to deliver the
desired high quality product need to be listed.41
-
Copyright 2014, Simplilearn, All rights reserved.
Step 4Inter-Relationships Matrix
The fourth part of the HOQ matrix is Inter-Relationships
Matrix.
This section forms the main body in the HOQ matrix.
This section translates customer requirements into
technical characteristics of the product.
The QFD team identifies the significance of these inter-
relationships.
The level of inter-relationship is weighted on a scale.
Each level is assigned a score that is agreed by the QFD
team.
42
-
Copyright 2014, Simplilearn, All rights reserved.
Step 5Roof
The fifth part of the HOQ matrix is Roof.
This speaks about the impact of HOWs on WHATSs.
This identifies where the technical requirements of the
product support or obstruct each other.
QFD team considers the pairing of the technical
requirements to form this matrix.
If improving one requirement leads to deterioration
trade-offs existMinus symbol is entered.
If improving one requirement leads to improvement of
the technical requirementTick or Plus symbol is
entered.43
-
Copyright 2014, Simplilearn, All rights reserved.
Step 6Targets
This summarizes the conclusions drawn from the data from
the entire matrix and team discussions.
Technical Priorities: Each inter-relationship weighting is
multiplied by overall weighting from the planning matrix.
Competitive Benchmarks: These show the relative
technical position of the existing product and identify the
target levels of performance to be achieved in a new
product.
Targets: This is a final output of HOQ matrix and is a set
of engineering target values to be met by the new
product design.44
-
Copyright 2014, Simplilearn, All rights reserved.
The output of the first HOQ matrix can be the first stage of the first QFD phase.
Post-HOQ Matrix
45
-
Copyright 2014, Simplilearn, All rights reserved.
Define
Topic 3Project Management Basics
-
Copyright 2014, Simplilearn, All rights reserved.
Problem Statement
The first step of project initiation is defining the problem
statement.
A problem statement should:
be a clear and concise description of the problem;
identify and specify the observed gap in performance
by setting the current baseline and measuring the gap
against customer needs; and
be quantifiable with metrics.
The problem statement cannot contain solutions or causes for the problem. !
Gap
Actual State
Required State
47
-
Copyright 2014, Simplilearn, All rights reserved.
A project charter is a written document that defines a teams mission, scope of operation, objectives,
time frame, and consequences for the project. It is a formal approval from the senior management to
start the project. A project charter includes:
measurable objectives to be achieved from the project;
organizational and operation boundaries of the project; and
top management support and commitment.
Project Charter
Write Review Approve
A Green Belt writes the problemstatement and project charter.
The Black Belt is responsible to get the Champions approval for the project charter.
The project charter is reviewed by a Black Belt.
48
-
Copyright 2014, Simplilearn, All rights reserved.
Some of the major sections of a project charter are as follows:
Project Charter Sections
Project name and description
Business need (problem statement)
Project managers name
Project purpose or justification, including ROI
Stakeholder requirements
Broad timelines
Major deliverables
Constraints and assumptions
Summary budget
49
-
Copyright 2014, Simplilearn, All rights reserved.
A project plan is the final approved document which is used to manage and control the various
processes within a project and ensure seamless project execution. The project manager uses the
project charter as an input to create a detailed project plan.
Some of the major sections of a project charter are as follows:
Project Plan
Project management approach and scope statement
Work breakdown structure (WBS)
Cost estimates and schedule
Performance baselines and major milestones
Key or required staff
Open or pending decisions
Key risks
50
-
Copyright 2014, Simplilearn, All rights reserved.
According to the Lean Six Sigma project plan:
The deliverables must be documented at all the phases of the project;
They are planned and documented in the define phase and are reviewed by the management;
The deliverables are then tracked and delivered by project team, within the stipulated time along
with the relevant information;
The project team reviews the project status with the management at the end of each phase; and
On the basis of the review, the feedback and guidance are provided by the leadership team.
Deliverables of a Lean Six Sigma Project
51
-
Copyright 2014, Simplilearn, All rights reserved.
Deliverables of a Lean Six Sigma ProjectDetails
The high level deliverables expected of the Lean Six Sigma project phases are as follows:
Define phaseMeasure
phaseAnalyze phase Improve phase Control phase
Form the Cross-
functional team
Document the
project charter
(along with SIPOC,
VOC, CTQs,
benefits, and
timeline)
Identify the key
measures
Collect and plot the
data
Identify the process
variation in the data
Analyze the
measurement
system
Baseline the
process sigma level
Analyze the data
and processes
Perform correlation
and causation
analysis
Quantify the
process gaps and
sources of variance
Identify the
opportunities for
improvement
The team reviews of
the data collected
occurs
Perform FMEA to
design the solution
and plan for
improvements
Standardize the
processes across
the organization.
Develop the control
charts
Implement
monitoring plans
for the project
Establish the
response plan
Transfer ownership
Close the project
52
-
Copyright 2014, Simplilearn, All rights reserved.
Pareto Chart
Pareto chart, also known as eighty-twenty rule or vital few,
trivial many, is a histogram depicting the frequency of
occurrence of events.
It plots all the causes for defects in a product or service.
Values are represented in descending order by bars.
Cumulative total is represented by the line.
80% of the effects come from 20% of the causes.
Thus, Pareto chart narrows the scope of the project, or
problem solving, by identifying the major causes affecting
quality.
80/20
53
-
Copyright 2014, Simplilearn, All rights reserved.
A hotel receives plenty of complaints from its customers and the hotel manager wishes to identify the
key areas of complaints.
Pareto ChartsExample
Cause Number Percentage Cumulative
Cleaning 35 54.69% 54.69%
Check-in 19 29.69% 84.38%
Pool timings 4 6.25% 90.63%
Minibar 3 4.69% 95.31%
Room service
2 3.13% 98.44%
Other 1 1.56% 100.00%
Total 64 100.00%
54
-
Copyright 2014, Simplilearn, All rights reserved.
Risk is an uncertain event or consequence that will probably occur during a project.
Risk impacts at least one of the four main project objectives (time, cost, quality, and scope).
Risk can be positive and enhance the success of the project as well as negative and pose a threat
to a projects success.
Terms used in risk analysis and management:
Risk probability: The likelihood that a risk will occur is called risk probability. To assess any risk is to
assess the probability and impact of the risk.
Issue: Issue is the occurrence of a risk.
Risk consequences: Risk consequences are the effects on project objectives if there is an
occurrence of a risk or issue.
Risk
55
-
Copyright 2014, Simplilearn, All rights reserved.
Risk analysis and management is crucial to the success of a project.
Risk analysis is a five-step process:
Risk Analysis and Management
Identify risk Evaluate riskPrioritize and
preventImplement
Monitor and control
Potential risks are
identified using
qualitative
techniques like
interview,
brainstorming,
and check sheets.
Identified
potential risks are
evaluated using
the quantitative
methods under 3
criteria
occurrence,
severity, and
detection.
Identified risks are
prioritized based
on their RPN
number. Counter
or prevention
measures for the
risk are
brainstormed.
The identified
counter measures
are implemented.
The whole project
will be monitored
and controlled so
that the risk and
its impact are
under control.
56
-
Copyright 2014, Simplilearn, All rights reserved.
Some elements of risk analysis are as follows:
Elements of Risk Analysis
Elements Description
Qualitative method Interviews, check lists, and brainstormingused to identify potential risks.
Quantitative method
Used to evaluate the cost, time, and probabilistic combination of individual uncertainties.
Feasibility The study of the project risk.
Potential impact Determining the impact of potential risks on a project.
RPN RPN of a failure is the product of its probability of occurrence, severity, and detectability.
Avoiding risk If the potential impact is huge, then avoiding the risk is the best option.
Mitigating risk The loss from mitigating a risk is much less than loss from temporarily avoiding the risk.
Accepting riskIf a risk cannot be avoided or mitigated, then it has to be accepted. The risk will be accepted if it doesnt greatly impact the cost, time, and product objective.
57
-
Copyright 2014, Simplilearn, All rights reserved.
Benefits of Risk Analysis
Benefits of risk analysis are as follows:
Identified risk can be mitigated, transferred, or accepted.
When risk is identified in a task, slack time is provided as a buffer. Thus identifying risks helps in
setting up actual timeline for a project.
Identifying risks helps in setting realistic expectations from the project by communicating the risk
probability and consequence to stakeholders.
Contingency plans can be developed for identified risk. The project team is then well prepared to
work on the issue, thereby reducing the impact of the risk.
58
-
Copyright 2014, Simplilearn, All rights reserved.
The potential risks of a project are assessed using the risk assessment matrix.
Risk Assessment Matrix
59
-
Copyright 2014, Simplilearn, All rights reserved.
The following roles assist the smooth execution of a Six Sigma project:
Six Sigma Team and their Responsibilities
Roles Responsibility
Executive sponsor Source or conduit for project resources, usually the recipients of the benefits the project will produce
Process owners Work with the Black Belts to improve their respective process, provide functional expertise
Champions Upper level managers that control and allocate resources to promote process improvements
Master Black Belt Consultant who offers expertise in the use of Six Sigma tools and methodologies to team leaders
Black Belts Leaders of individual Six Sigma projects, a mentor to Green Belts by educating them in Six Sigma tools
Green Belts Lead project teams working in their areas of expertise
Executive Manages and leads the team to ensure smooth working of tasks, has the power to execute decisions
Coach Trains, mentors, teaches, and guides the team when required
Facilitator Acts as a guide and helps the team to understand their common objective
Sponsor Supports the event or the project by providing all the required resources
Team member Contributes to the performance of the team and actively participates to fulfil project objectives
60
-
Copyright 2014, Simplilearn, All rights reserved.
Project Closure
Every project requires closure because without a formal closure process, project teams can fail to
recognize the end, and then the project can drag on, sometimes at great expense.
Project closure ensures the following:
Outcomes match the stated goals of the project.
Customers and stakeholders are happy with the results.
Critical knowledge is captured.
The team feels a sense of completion.
Project resources are released for new projects.
61
-
Copyright 2014, Simplilearn, All rights reserved.
Goals of Project Closure Report
The project closure report is created to accomplish the following goals:
62
-
Copyright 2014, Simplilearn, All rights reserved.
Affinity Diagram
The affinity diagram method is employed by an
individual or a team to solve unfamiliar problems
and when the consensus of the group is necessary.
Each member writes down ideas and opinions on
sticky notes. Each note can have a single idea.
All the sticky notes are pasted on a table or wall.
All the sticky papers are arranged according to
categories or thought patterns.
Each category is named with a header card
capturing the central idea of that category.
A boundary is drawn around them.
Pay is too low
Workers unkind Dont like
the people
Lighting is poor
Hours are too long
Air is Stuffy Cant live
on wage
Uncomfortable room
Work is not a challenge
Too Repetitive
Poor Compensation
Poor Work Environment
Poor Relationships
Lack of Motivation
Pay is too low
Hours are too long
Cant live on wage
Lighting is poor
Uncomfortable room
Air is Stuffy
Dont like the people
Workers unkind
Work is not a challenge
Too Repetitive
HeaderCards
Sticky paper
63
-
Copyright 2014, Simplilearn, All rights reserved.
Interrelationship Diagram
The interrelationship diagram is a technique
developed to illustrate the relationship
between ideas in more complex situations.
Each member writes down ideas and
opinions on sticky notes. Each note can
have a single idea.
All the sticky notes are pasted on a table
or wall.
A cause-effect arrangement of cards is
constructed by drawing an arrow between
the causes and the effects of the cause.
Lack of Quality Strategy
Inadequate Training Time
Lack of Knowledge of Quality Improvement
Confusion of Committees without
organization
Customer Focus
Lack of Focus
Responsibility Not clear
No StandardTQM
Method
Lack of Communication of
information
Lack of TQM Commitment by
top managers
64
-
Copyright 2014, Simplilearn, All rights reserved.
The tree diagram is a systematic approach
to outline and identify the tasks and
methods needed to solve a problem to
reach a predefined goal.
Note: The objective is noted on a card
and placed on the far left side of the
board.
Three different solutions are furnished
to achieve the goal.
Solutions to each issue are provided.
Tree Diagram
Need
Driver 1
Driver 2
Req A1
Req A2
Req B1
Req B2
Req C1
Req C2
Delighted with cappuccino
Hot but not too hot
Strong coffee flavor
Correct amount of sweetness
Espresso temperature
Steamed milk temperature
Fitness of grind of the coffee beans
Amount of ground coffee
Type of sweetener
Amount of sweetenerDriver 3
65
-
Copyright 2014, Simplilearn, All rights reserved.
Define
Topic 4Management and Planning Tools
-
Copyright 2014, Simplilearn, All rights reserved.
Matrix diagrams show the relationship between objectives and methods, results and causes, tasks
and people, etc. They:
provide information about the relationship;
help determine the strength of relationships between a grid of rows and columns;
provide importance of task and method elements of the subject; and
help in organizing a large amount of inter-process related activities.
Matrix Diagram
67
-
Copyright 2014, Simplilearn, All rights reserved.
The following are five types of matrix diagrams:
Types of Matrices
Compares three lists against one another, a combination of two L type matrices joined in the y axis in a three dimensional space
Compares three lists, each against the other in pairs, two L type matrices joined at the y axis
Compares four lists, each against two other lists, in pairs, with two sets of elements on both the x and the y axes
Compares one list against the two others, in pairs, with two sets of elements on the y-axis which are split by a set of elements on the x-axis
Compares one list against another, with one set of elements on the x-axis and another along the y-axis
L Type Matrix
T Type Matrix
X Type Matrix
Y Type Matrix
C Type Matrix
68
-
Copyright 2014, Simplilearn, All rights reserved.
Defect per unit (DPU) is the average number of defects per unit of a product.
Defect per Unit
Calculate DPU for the matrix shown below.Q
Defect per Unit (DPU) =1 20 +2 5 +3 4 +5(1)
70+20+5+4+1=
47
100= 0.47
A
Defects per unit 0 1 2 3 5
Units 70 20 5 4 1
Defect per Unit (DPU) =Total number of defects
Total number of units
69
-
Copyright 2014, Simplilearn, All rights reserved.
Throughput Yield (TPY) is the number of acceptable pieces at the end of a process divided by the
number of starting pieces, excluding scrap and rework. TPY is used to measure a single process only.
If DPU is known, TPY can be calculated using the following formula:
Throughput Yield
Throughput Yield (TPY) = eDPU
Defect per Unit DPU = loge(TPY)
70
-
Copyright 2014, Simplilearn, All rights reserved.
Rolled Throughput Yield (RTY) is the probability of the entire process producing zero defects. It is
important as a metric when a process has excessive rework.
Total Defects per Unit (TDPU) is defined for a set of processes. RTY is calculated using the following
formula when the Total Defects per Unit (TDPU) is known:
RTY is the product of each processs First Pass Yield (FPY) when the defectives are known. FPY is
the number of products which pass without any rework over total number of units.
Rolled Throughput Yield
First Pass Yield (FPY) =Total number of units Number of Defectives units
Total number of units=Total number of quality products
Total number of units
Rolled Throughput Yield RTY = FPY1 FPY2 FPY3 FPYn
Rolled Throughput Yield (RTY) = eTDPU
Total Defects per Unit (TDPU) = loge(RTY)
71
-
Copyright 2014, Simplilearn, All rights reserved.
FPY and RTYExample
A company has three processes: A, B, and C. Given below is the data.
The output from process C is sent to the customer. Calculate the FPY and RTY.
First Pass Yield for Process A =Total number of quality products
Total number of units=
85
100= 0.850
First Pass Yield for Process B =Total number of quality products
Total number of units=80
90= 0.889
First Pass Yield for Process C =Total number of quality products
Total number of units= 1
Rolled Throughput Yield (RTY) = FPY1 FPY2 FPY3
Rolled Throughput Yield RTY = 0.850 0.889 1 = 0.75
Rolled Throughput Yield RTY = 75%
Q
A
Process Input parts from the supplier Input parts that passed inspection Reworked parts
Process A 100 85 5
Process B 90 80 5
Process C 85 85 0
72
-
Copyright 2014, Simplilearn, All rights reserved.
Define
Topic 5Business Results for Projects
-
Copyright 2014, Simplilearn, All rights reserved.
Defect per Million Opportunities (DPMO), or Non-Conformities per Million Opportunities (NPMO), is a
measure of process performance. It standardizes the number of defects at the opportunity level and
allows comparison of the processes with different complexities.
Defect per Million Opportunities
Defect per Million Opportunities (DPMO) =Total number of defects
Total number of opportunities 106
Where, Total number of opportunities = Units * Number of opportunities per unit
There are 5 units with 5 defect opportunities each. The total number of defects are 8. Calculate DPMO.
Total number of opportunities = Units * Number of opportunities per unit = 5 * 5 = 25 total opportunities
Defect per Million Opportunities (DPMO) =Total number of defects
Total number of opportunities 106 =
8
25 106= 320,000
Q
A
74
-
Copyright 2014, Simplilearn, All rights reserved.
Cost of Quality (COQ) is the cost incurred by a process because it cannot consistently make a perfect
product.
The four types of COQ are as follows:
Cost of Quality
Preventive Cost
Cost incurred in preventing a failure
Example: Training and improvement programs
External Failure Cost
Cost associated with defects after a product reaches the customer
Example: Warranty, returned products, or lost reputation
Appraisal Cost
Cost incurred to test a product for quality conformance
Example: Testing, audits, and inspection
Internal Failure Cost
Cost associated with defects identified before a product reaches the customer
Example: Rework and scrap
75
-
Copyright 2014, Simplilearn, All rights reserved.
Quiz
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following is an incorrect description of QFD?1
QFD is an iterative process.
QFD is similar to project management.
QFD identifies risk areas.
QFD converts customer requirements into design specification.
77
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following is an incorrect description of QFD?1
Answer: c.
Explanation: QFD focuses on identifying the voice of the customer, whereas Project management focuses on implementation.
QFD is an iterative process.
QFD is similar to project management.
QFD identifies risk areas.
QFD converts customer requirements into design specification.
78
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
What is Rolled Throughput Yield?2
The probability of the entire process producing zero defects
A measure of process performance
The number of acceptable pieces at the end of a process
The number of products which pass without any rework
79
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
What is Rolled Throughput Yield?2
Answer: b.
Explanation: Rolled Throughput Yield is the probability of the entire process producing zero defects.
The probability of the entire process producing zero defects
A measure of process performance
The number of acceptable pieces at the end of a process
The number of products which pass without any rework
80
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Identification of external customer is important because:3
It helps identify customer requirements.
It ensures higher profit.
It eliminates futile advertisements.
It ensures a smooth product recall.
81
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Identification of external customer is important because:3
Answer: b.
Explanation: A company will be successful only if it meets the needs of the customers better than the competitors. Hence we need to identify the customers to gather their requirements.
It helps identify customer requirements.
It ensures higher profit.
It eliminates futile advertisements.
It ensures a smooth product recall.
82
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following are not stakeholders?4
Potential suppliers
Potential competitors
Contract workers
Owners or stockholders
83
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following are not stakeholders?4
Answer: c.
Explanation: The relevant stakeholders in any project are the stockholders, management, employees, suppliers, and customers.
Potential suppliers
Potential competitors
Contract workers
Owners or stockholders
84
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
What is the main difference between risk analysis and risk management?5
Risk analysis includes risk handling while risk management includes risk monitoring.
Risk analysis refers to tools and risk management deals with consent.
Risk analysis evaluates risks, while risk management is a more inclusive process.
There is minimal difference between risk analysis and risk management.
85
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
What is the main difference between risk analysis and risk management?5
Answer: d.
Explanation: Risk management is a complete process, while risk analysis is more specific and deals with evaluation of complex risks.
Risk analysis includes risk handling while risk management includes risk monitoring.
Risk analysis refers to tools and risk management deals with consent.
Risk analysis evaluates risks, while risk management is a more inclusive process.
There is minimal difference between risk analysis and risk management.
86
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which Matrix diagram illustrates relationships in three planes?6
T type
X type
C type
L type
87
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which Matrix diagram illustrates relationships in three planes?6
Answer: d.
Explanation: C type Matrix diagram illustrates relationships in three planes. L type, T type, and X type are drawn on two planes.
T type
X type
C type
L type
88
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following is not a Cost of Quality?7
Opportunity cost
Internal failure cost
External failure cost
Preventive cost
89
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following is not a Cost of Quality?7
Answer: b.
Explanation: There are four types of Cost of Quality: preventive cost, appraisal cost, internal failure cost, and external failure cost.
Opportunity cost
Internal failure cost
External failure cost
Preventive cost
90
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
The tangible benefits from the Lean Six Sigma project needs to be articulated in the following terms, except:8
Reduce Turnaround Time
Defects Reduction
Six Sigma Certification
Cost Reduction
91
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
The tangible benefits from the Lean Six Sigma project needs to be articulated in the following terms, except:8
Answer: d.
Explanation: The tangible benefits of Lean Six Sigma includes cost reduction, reducing turnaround time, and reducing defects. Six Sigma Certification is not a tangible process improvement.
Reduce Turnaround Time
Defects Reduction
Six Sigma Certification
Cost Reduction
92
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Financial evaluation of the Lean Six Sigma project will include all of the following, except:9
New customers acquired
Reduction in rework and scrap
Effort reduction
Cost Reduction and/or Avoidance
93
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Financial evaluation of the Lean Six Sigma project will include all of the following, except:9
Answer: b.
Explanation: While performing financial evaluation, the focus is on the cost reduction and/or avoidance and the benefits due to the reduction in the effort and rework and scrap. The new customers acquisition cannot be directly attributed in the financial evaluation.
New customers acquired
Reduction in rework and scrap
Effort reduction
Cost Reduction and/or Avoidance
94
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following is not a part of hard savings?10
Fewer employees
Additional revenue opportunities
Employee morale
Reduced budgets
95
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following is not a part of hard savings?10
Answer: d.
Explanation: Hard savings include reduced budgets, fewer employees, and additional revenue opportunities. Employee morale is a part of soft savings.
Fewer employees
Additional revenue opportunities
Employee morale
Reduced budgets
96
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Who are the people affected by the organizations actions?11
Process owners
Suppliers
Management
Stakeholders
97
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Who are the people affected by the organizations actions?11
Answer: a.
Explanation: Stakeholders are the people who are affected by the organizations actions.
Process owners
Suppliers
Management
Stakeholders
98
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Data collection tools will be selected on what basis?12
Products
Type of data
Suppliers
Customers
99
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Data collection tools will be selected on what basis?12
Answer: c.
Explanation: Data collection tools will be selected based on the type of data to be collected.
Products
Type of data
Suppliers
Customers
100
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
What is the first step of project initiation?13
Creating QFD structure
Translating customer requirements
Preparing project closure report
Defining the problem statement
101
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
What is the first step of project initiation?13
Answer: a.
Explanation: The first step of project initiation is defining the problem statement.
Creating QFD structure
Translating customer requirements
Preparing project closure report
Defining the problem statement
102
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following defines the number of defects observed in one unit?14
DPMO
RTY
FPY
DPU
103
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following defines the number of defects observed in one unit?14
Answer: a.
Explanation: DPU is an important business measure because it defines the number of defects observed in one unit.
DPMO
RTY
FPY
DPU
104
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following standardizes the number of defects at the opportunity level and allows comparison of the processes with different complexities?15
DPMO
RTY
FPY
DPU
105
-
Copyright 2014, Simplilearn, All rights reserved.
QUIZ
a.
b.
c.
d.
Which of the following standardizes the number of defects at the opportunity level and allows comparison of the processes with different complexities?15
Answer: b.
Explanation: DPMO standardizes the number of defects at the opportunity level and allows comparison of the processes with different complexities.
DPMO
RTY
FPY
DPU
106
-
Copyright 2014, Simplilearn, All rights reserved.Copyright 2014, Simplilearn, All rights reserved.
Project selection includes identifying organizational need, identifying the projects, and
evaluation of the projects.
SIPOC is a macro-level map drawn in the define phase.
Quality Function Deployment (QFD) is a process to ensure that the customers wants and
needs are heard and translated into technical characteristics.
A business case highlights the problem area and opportunity along with the expected
business outcomes.
Financial evaluation helps in evaluating and documenting a project from end to end,
from both cost and benefits perspective.
Summary
Here is a quick recap of what we have learned in this lesson:
107
-
Copyright 2014, Simplilearn, All rights reserved.Copyright 2014, Simplilearn, All rights reserved.
Summary (contd.)
Here is a quick recap of what we have learned in this lesson:
Risk analysis includes identification, evaluation, prioritization and prevention of risk,
implementation, and monitoring and controlling of risk.
Cost of Quality (COQ) is the cost incurred by a process because it cannot consistently
make a perfect product.
Rolled Throughput Yield (RTY) is the probability of an entire process producing zero
defects.
Defect per Million Opportunities (DPMO), or Non-Conformities per Million Opportunities
(NPMO), is a measure of process performance.
Deliverables are expected from a Lean Six Sigma project at every phase, and they help us
document the expectations and keep the project on track.
108
-
Copyright 2014, Simplilearn, All rights reserved.
Copyright 2014, Simplilearn, All rights reserved.
THANK YOU
top related