six sigma workshop for world bank, chennai - india

Six SigmaAcknowledgement & Citations: Graphics and Concepts are borrowed from Six Sigma CBOK, ASQ and searchable articles on the web.. Respective original authors are gratefully acknowledged.

MURALI NANDIGAMA, Ph.D. , SM.IEEE

• Engineering Analytics, Six Sigma, Quality Engineering, InfoSec, Ops, Management

1993 ….. …. 2013

Engineering Director, PayPal India Dev Center

FAIR WARNING !!

• I would be taking you through an over simplified interpretations for

– Six Sigma– Lean Six Sigma and– Continuous Process Improvements

And none of it is really the complete truth …

Imagine some thing like telling you that – PLANETS REVOLVE AROUND SUN IN ELLIPTICAL ORBITS AND EVERY YEAR EARTH COMPLETES ONE FULL ROTATION.

Don’t believe !!! Watch this video …..

Evolution of Practice

Evolution of Six Sigma

What !

• Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in any process -- from manufacturing to transactional and from product to service. • To achieve Six Sigma, a process must not produce

more than 3.4 defects per million opportunities.• A Six Sigma opportunity is then the total quantity

of chances for a defect.

How !

This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV.

• The Six Sigma DMAIC process (define, measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement.

• The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels.

• Both Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts.

Six Sigma as a Metric

1

)( 2

n

xxi�

Sigma = = Deviation

( Square root of variance )

-7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7

Axis graduated in Sigma

68.27 %

95.45 %

99.73 %

99.9937 %

99.999943 %

99.9999998 %

result: 317300 ppm outside (deviation)

45500 ppm

2700 ppm

63 ppm

0.57 ppm

0.002 ppm

between + / - 1between + / - 2between + / - 3between + / - 4between + / - 5

between + / - 6

=

3 Sigma Vs. 6 SigmaThe 3 sigma Company The 6 sigma Company• Spends 15~25% of sales dollars on cost of failure

• Spends 5% of sales dollars on cost of failure

• Relies on inspection to find defects • Relies on capable process that don’t produce defects

• Does not have a disciplined approach to gather and analyze data

• Use Measure, Analyze, Improve, Control and Measure, Analyze, Design

• Benchmarks themselves against their competition

• Benchmarks themselves against the best in the world

• Believes 99% is good enough • Believes 99% is unacceptable

• Define CTQs internally • Defines CTQs externally

3 Sigma Vs. 6 Sigma

Six Sigma is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV.

• The Six Sigma DMAIC process (define, measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement.

• The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels.

• Both Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts.

DEFINE

•Identify Project, Champion and Project Owner

•Determine Customer Requirements and CTQs

•Define Problem, Objective, Goals and Benefits

•Define Stakeholder/Resource Analysis

•Map the Process•Develop Project Plan

MEASURE

•Determine Critical Xs and Ys

•Determine Operational Definitions

•Establish Performance Standards

•Develop Data Collection and Sampling Plan

•Validate the Measurements

•Measurement Systems Analysis

•Determine Process Capability and Baseline

ANALYZE

•Benchmark the Process or Product

•Establish Causal Relationships Using Data

•Analysis of the Process Map

•Determine Root Cause(s) Using Data

IMPROVE

•Design of Experiments•Develop Solution Alternatives

•Assess Risks and Benefits of Solution Alternatives

•Validate Solution using a Pilot

•Implement Solution•Determine Solution Effectiveness using Data

CONTROL

•Statistical Process Control

•Determine Needed Controls (measurement, design, etc.)

•Implement and Validate Controls

•Develop Transfer Plan•Realize Benefits of Implementing Solution

•Close Project and Communicate Results

When To Use DMAIC• The DMAIC methodology, instead of the DMADV

methodology, should be used when a product or process is in existence at your company but is not meeting customer specification or is not performing adequately.

DEFINE

• Define the project goals and customer (internal and external) deliverables

MEASURE

• Measure and determine customer needs and specifications

ANALYZE

• Analyze the process options to meet the customer needs

DESIGN

• Design (detailed) the process to meet the customer needs

VERIFY

• Verify the design performance and ability to meet customer needs

When To Use DMADV or DFSS

• A product or process is not in existence at your company and one needs to be developed

• The existing product or process exists and has been optimized (using either DMAIC or not) and still doesn't meet the level of customer specification or six sigma level

The DMAIC Model

Define Control

Measure ImproveAnalyze

Voice of the Customer

Institutionalization

DEFINE PHASE

DEFINE

•Identify Project, Champion and Project Owner

•Determine Customer Requirements and CTQs

•Define Problem, Objective, Goals and Benefits

•Define Stakeholder/Resource Analysis

•Map the Process•Develop Project Plan

ME

ASURE•Determine Critical Xs and Ys•Determine Operational Definitions•Establish Performance Standards•Develop Data Collection and Sampling Plan•Validate the Measurements•Measurement Systems Analysis•Determine Process Capability and Baseline

ANALYZE

•Benchmark the Process or Product

•Establish Causal Relationships Using Data

•Analysis of the Process Map

•Determine Root Cause(s) Using Data

IMPROVE•Design of Experiments•Develop Solution Alternatives




CONTROL•Statistical Process Control•Determine Needed Controls (measurement, design, etc.)






19

Six Sigma Fundamentals

Voice of the Customer

Cost of Poor Quality

Process Maps

Process Metrics

Six Sigma Fundamentals - DEFINE

Selecting Projects

Elements of Waste

Wrap Up & Action Items

20

What is a Process!

Why have a process focus!– So we can understand how and why work gets done– To characterize customer & supplier relationships– To manage for maximum customer satisfaction while utilizing minimum

resources– To see the process from start to finish as it is currently being performed– Blame the process, not the people

proc•ess (pros es) ′ n. – A repetitive and systematic series of steps or activities where inputs are modified to achieve a value-added output

21

Examples of Processes

• Injection molding• Decanting solutions• Filling vial/bottles• Crushing ore• Refining oil• Turning screws• Building custom homes• Paving roads• Changing a tire

• Recruiting staff• Processing invoices• Conducting research• Opening accounts• Reconciling accounts• Filling out a timesheet• Distributing mail• Backing up files• Issuing purchase orders

We go through processes everyday. Below are some examples of those processes. Can you think of other processes within your daily environment?

22

Process Maps• The purpose of Process Maps is to:

– Identify the complexity of the process– Communicate the focus of problem solving

• Process Maps are living documents and must be changed as the process is changed– They represent what is currently happening, not what you think is happening.– They should be created by the people who are closest to the process

Step AStartInsp

ect FinishStep B Step C Step D

Process Map

23

Process Map SymbolsStandard symbols for Process Mapping (available in Microsoft Office™,

Visio™, iGrafx™ , SigmaFlow™ and other products):

A RECTANGLE indicates an activity. Statements within the rectangle should begin with a verb

A DIAMOND signifies a decision point. Only two paths emerge from a decision point: No and Yes

An ELLIPSE shows the start and end of the process

A PARALLELAGRAM shows that there are data

An ARROW shows the connection and direction of flow

1A CIRCLE WITH A LETTER OR NUMBER INSIDE symbolizes the continuation of a flowchart to another page

24

High Level Process MapOne of the deliverables from the Define Phase is a high level Process Map, which at a minimum must include:

– Start and stop points– All process steps– All decision points– Directional flow– Value categories as defined below

• Value Added:– Physically transforms the “thing” going through the process– Must be done right the first time– Meaningful from the customer’s perspective (is the customer willing to pay for

it?)• Value Enabling:

– Satisfies requirements of non-paying external stakeholders (government regulations)

• Non-Value Added– Everything else

25

Process Map ExampleA Process Map for a Call Center -

START

LOGON TO PC &APPLICATIONS

SCHEDULEDPHONE TIME?

LOGONTO PHONE

CALL orWALK-IN?

PHONE DATACAPTURE BEGINS

DETERMINE WHOIS INQUIRING

ACCESS CASE TOOL

CASE TOOLRECORD?

Y

N

A

Z

CALL

WALK-IN

DETERMINE NATUREOF CALL & CONFIRM

UNDERSTANDING

Y

N C

B

D PHONETIME

Y

N

Z

B

C

REVIEW CASETOOL HISTORY &

TAKE NOTES

PUT ON HOLD,REFER TO

REFERENCES

IMMEDIATERESPONSEAVAILABLE?

Y

N

TRANSFERAPPROPRIATE?

Y

N

TRANSFERCALL

ANSWER?Y

N

QUERY INTERNALHRSC SME(S)

ANSWER?Y

N

OFF HOLD ANDARRANGE CALL

BACK PHONE DATAENDS

PROVIDERESPONSE

PHONE&NOTE

DATA ENDS

D

ADD TORESEARCH

LIST

Z

LOGOFF PHONE, CHECKMAIL,E-MAIL,VOICE MAIL

SCHEDULEDPHONE TIME?

N

YA

E

EXAMINE NEXT NOTEOR RESEARCH ITEM

ACCESS CASE TOOL

ENTER APPROPRIATESSAN (#,9s,0s)

IF EMP DATA NOTPOPULATED, ENTER

OLDCASE

Y

N

UPDATE ENTRIESINCL OPEN DATE/TIME

CREATE A CASEINCL CASE TYPE

DATE/TIME, &NEEDED BY

AUTOROUTE

YROUTE

CASECLOSED

N

Y

N

CLOSE CASEW/

DATE/TIMEE

TAKE ACTIONor

DO RESEARCH

F

GO TOF or E

DEPENDING ONCASE F

ENEXT

26

Cross Functional Process MapWhen multiple departments or functional groups are involved in a complex process it is often useful to use cross functional Process Maps.

– Draw in either vertical or horizontal Swim Lanes and label the functional groups and draw the Process Map

Gen

eral

Ac

coun

ting

Bank

Fina

ncia

l Ac

coun

ting

Vend

orD

epar

tmen

t

Start Requesttransfer

Attach ACHform toInvoice

Produce anInvoice

Fill out ACHenrollment

form

Receivepayment End

Vendorinfo inFRS?

Input info intoweb interface

Match againstbank batch

and daily cashbatch

Accepts transactions,transfer money andprovide batch total

Review andProcess

transfer inFRS

3.0Journey Entry

21.0Bank

Reconciliation

Maintain database to balance ACHtransfers

ACH – AutomatedClearing House.

No

Yes

Sending Fund Transfers

27

Do you know your Customer!Knowing your customer is more than just a handshake. It is necessary to clearly understand their needs. In Six Sigma we call this “understanding the CTQ ’s” or critical to customer characteristics.

Voice Of the Customer Critical to Customer Characteristics

The customer’s perspective has to be foremost in the mind of the Six Sigma belt throughout the project cycle.

1. FeaturesDoes the process provide what the customers expect and need?How do you know?

2. IntegrityIs the relationship with the customer centered on trust?How do you know?

3. DeliveryDoes the process meet the customer’s time frame?How do you know?

4. ExpenseDoes the customer perceive value for cost?How do you know?

28

What is a CTQ!• Critical to Quality (CTQ ’s) are measures that we use to capture VOC properly. (also

referred to in some literature as CTC’s – Critical to Customer)• CTQ ’s can be vague and difficult to define.

• The customer may identify a requirement that is difficult to measure directly so it will be necessary to break down what is meant by the customer into identifiable and measurable terms

Product:• Performance• Features• Conformance• Timeliness• Reliability• Serviceability• Durability• Aesthetics• Reputation• Completeness

Service:• Competence• Reliability• Accuracy• Timeliness• Responsiveness• Access• Courtesy• Communication• Credibility• Security• Understanding

29

Developing CTQ’s

Step 1•Identify Customers•Listing•Segmentation•Prioritization

Step 2•Validate CTQs•Prioritize CTQs•Set Specific requirements•Confirm CTQs with customer

Step 3•Capture VOC•Review current performance•Determine Gaps that needs to be filled•Select tools that provide data on gaps•Collect data on the gaps

30

Cost of Poor Quality (COPQ)COPQ stands for Cost of Poor Quality

As a Six Sigma Belt, one of your tasks will be to estimate COPQ for your process

Through your process exploration and project definition work you will develop a refined estimate of the COPQ in your project

This project COPQ represents the financial opportunity of your team’s improvement effort (VOB)

Calculating COPQ is iterative and will change as you learn more about the process

31

The Essence of COPQ

• COPQ helps us understand the financial impact of problems created by defects.

• COPQ is a symptom, not a defect• Projects fix defects with the intent of improving symptoms.

• The concepts of traditional Quality Cost are the foundation for COPQ.• External, Internal, Prevention, Appraisal

• A significant portion of COPQ from any defect comes from effects that are difficult to quantify and must be estimated.

32

COPQ - Categories

External COPQ

Internal COPQ

• Warranty• Customer Complaint Related Travel• Customer Charge Back Costs• Etc…

Prevention

• Error Proofing Devices• Supplier Certification• Design for Six Sigma• Etc…

Detection

• Supplier Audits• Sorting Incoming Parts• Repaired Material• Etc…

• Quality Control Department• Inspection• Quarantined Inventory• Etc…

33

COPQ - IcebergRework

InspectionWarranty

Rejects

Lost sales

Late delivery

Engineering change orders

Long cycle times

Expediting costs

Excess inventory

Hidden Costs

Visible Costs

Lost Customer Loyalty

More Set-ups

Time value of money

Working Capital allocations

Excessive MaterialOrders/Planning

Recode

less obvious

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 MetricProduct Returns

0%

1%

2%

3%

4%

5%

6%

7%Au

g-99

Sep-

99

Oct

-99

Nov

-99

Dec

-99

Jan-

00

Feb-

00

Mar

-00

Apr-

00

May

-00

Jun-

00

Jul-0

0

Aug-

00

Sep-

00

Oct

-00

Nov

-00

Dec

-00

Retu

rn $

As

% S

ales

$

BaselineActualObjective

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 MetricPct of Orders Shipped within 24 hours

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

100%Au

g-99

Sep-

99

Oct

-99

Nov

-99

Dec

-99

Jan-

00

Feb-

00

Mar

-00

Apr-

00

May

-00

Jun-

00

Jul-0

0

Aug-

00

Sep-

00

Oct

-00

Nov

-00

Dec

-00

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.

DEFINE

•Identify Project, Champion and Project Owner•Determine Customer Requirements and CTQs•Define Problem, Objective, Goals and Benefits•Define Stakeholder/Resource Analysis•Map the Process•Develop Project Plan

MEASURE

•Determine Critical Xs and Ys•Determine Operational Definitions



•Validate the Measurements•Measurement Systems Analysis•Determine Process Capability and Baseline

ANALYZE

•Benchmark the Process or Product•Establish Causal Relationships Using Data•Analysis of the Process Map•Determine Root Cause(s) Using Data

IMPROVE





CONTROL

•Statistical Process Control•Determine Needed Controls (measurement, design, etc.)






Some Important Measurements

1. Select Customer Critical to Quality (CTQ) Characteristics;

2. Define Performance Standards (Numbers & Units); 3. Establish the Data Collection Plan, 4. Validate the Measurement System, 5. and Collect the Necessary Data.

Quality Function Deployment (QFD) which relates CTQs to measurable internal sub-processes or product characteristics.

Process Maps create a shared view of the process, reveals redundant or Unnecessary steps, and compares the “actual” process to the ideal one.

Fishbone Diagrams provide a structure for revealing causes of the effect.

Pareto Analysis provides a useful quantitative means of separating the vital few causes of the effect from the trivial many, but require valid historical data.

Failure Modes and Effects Analysis (FMEA) identifies ways that a sub-process or product can fail and develops plans to prevent those failures. FMEA is especially useful with high-risk projects.

Some useful tools in the MEASURE phase

Measure: 1. Select Customer Critical to Quality (CTQ) Characteristics.

FAILURE MODES AND EFFECTS ANALYSIS (FMEA)

Failure Modes and Effects Analysis (FMEA) Process is a structured approach that has the goal of linking the FAILURE MODES to an EFFECT over time for the purpose of prevention. The structure of FMEA is as follows:

Preparation FMEA Process Improvement

a. Select the team b. Develop the process map and steps c. List key process outputs to satisfy internal and external customer requirements d. Define the relationships between outputs and process variables e. Rank inputs according to importance.

Measure 1: Select Customer Critical to Quality (CTQ) Characteristics.

FAILURE MODES AND EFFECTS ANALYSIS (FMEA)

Preparation FMEA Process Improvement

a. Identify the ways in which process inputs can vary (causes) and identify associated FAILUREMODES. These are ways that critical customer requirements might not be met.

b. Assign severity, occurrence and detection ratings to each cause and calculate the RISK PRIORITY NUMBERS (RPNs). c. Determine recommended actions to reduce RPNs. d. Estimate time frames for corrective actions. e. Take actions and put controls in place. f. Recalculate all RPNs.

FAILURE MODE: How a part or process can fail to meet specifications. CAUSE: A deficiency that results in a failure mode sources of variation EFFECT: Impact on customer if the failure mode is not prevented or corrected.

RATING DEGREE OF SEVERITY LIKELIHOOD OF OCCURRENCE ABILITY TO DETECT

1 Customer will not notice the adverse effect or it is insignificant.

Likelihood of occurrence is remote.

Sure that the potential failure will be found or prevented before reaching the next customer.

2 Customer will probably experience slight annoyance. Low failure rate with supporting documentation.

Almost certain that the potential failure will be found or prevented before reaching the next customer.

3 Customer will experience annoyance due to slight degradation of performance.

Low failure rate without supporting documentation.

Low likelihood that the potential failure will reach the next customer undetected.

4 Customer dissatisfaction due to reduced performance. Occasional failures. Controls may not detect or prevent the potential failure from reaching the next customer.

5 Customer is made uncomfortable or their productivity is reduced by the continued degradation of the effect.

Relatively moderate failure rate with supporting documentation.

Moderate likelihood that the potential failure will reach the next customer.

6 Warranty repair or significant manufacturing or assembly complaint.

Moderate failure rate without supporting documentation.

Controls are unlikely to detect or prevent the potential failure from reaching the next customer.

7 High degree of customer dissatisfaction due to component failure without complete loss of function. Productivity impacted by high scrap or rework levels.

Relatively high failure rate with supporting documentation.

Poor likelihood that the potential failure will be detected or prevented before reaching the next customer.

8 Very high degree of dissatisfaction due to the loss of function without a negative impact on safety or governmental regulations.

High failure rate without supporting documentation.

Very poor likelihood that the potential failure will be detected or prevented before reaching the next customer.

9 Customer endangered due to the adverse effect on safe system performance with warning before failure or violation of governmental regulations.

Failure is almost certain based on warranty data or significant DV testing.

Current controls probably will not even detect the potential failure.

10 Customer endangered due to the adverse effect on safe system performance without warning before failure or violation of governmental regulations.

Assured of failure based on warranty data or significant DV testing

Absolute certainty that the current controls will not detect the potential failure.

FMEA Standardized Rating System1 < RPN = (Degree of Severity)*(Likelihood of Occurrence)*(Ability to Detect) < 1000

Measure: 2. Define Performance Standards: Numbers & Units

At this stage customer needs are translated into clearly defined measurable traits.

OPERATIONAL DEFINITION: This is a precise description that removes any ambiguity about a process and provides a clear way to measure that process. An operational definition is a key step towards getting a value for the CTQ that is beingmeasured.

TARGET PERFORMANCE: Where a process or product characteristic is “aimed”If there were no variation in the product / process then this is the value that would always occur.

SPECIFICATION LIMIT: The amount of variation that the customer is willing to tolerate in a process or product. This is usually shown by the “upper” and “lower” boundary which, if exceeded, will cause the customer to reject the process or product.

DEFECT DEFINITION: Any process or product characteristic that deviates outside of specification limits.

Measure: 3. Establish Data Collection Plan, Validate the Measurement System, and Collect Data.

A Good Data Collection Plan: a. Provides clearly documented strategy for collecting reliable data; b. Gives all team members a common reference; c. Helps to ensure that resources are used effectively to collect only critical data. The

cost of obtaining new data should be weighed vs. its benefit. There may be viablehistorical data available.

We refer to “actual process variation” and measure “actual output”: a. what is the measurement process used? b. describe that procedure c. what is the precision of the system? d. how was precision determined e. what does the gage supplier state about: f. Do we have results of either

* Accuracy * Precision * Resolution * Test-Retest Study? * Gage R&R Study?

Measure: 3... Establish Data Collection Plan, Validate the Measurement System, and Collect Data. Note that our measurement process may also have variation. a. Gage Variability:

Precision: Accuracy: Both:

b. Operator Variability: Differences between operators related to measurement.c. Other Variability: Many possible sources. Repeatability: Assess effects within ONE unit of your measurement system, e.g.,

the variation in the measurements of ONE device. Reproducibility: Assesses the effects across the measurement process, e.g., the variation between different operators.Resolution: The incremental aspect of the measurement device.

Measure: 3. Establish Data Collection Plan, Validate the Measurement System, & Collect Data.GAGE R&R (Repeatability & Reproducibility) STUDY: a. Operators – at least 3 recommended;b. Part – the product or process being measured. It is recommended that at least 10

representative (reflects the range of parts possible) parts per study, with eachoperator measuring the same parts.

c. Trial – each time the item is measured. There should be at least 3 trials per part,per customer.

Source of Variation % ContributionTotal Gage Repeatability & Reproducibility R1 + R2

Repeatability R1

Reproducibility R2

Part-to-Part 100% - (R1 + R2)

Total Variation 100%

DEFINE


MEASURE





ANALYZE


IMPROVE





CONTROL







Client, Enterprise & Competitive Intelligence for Product, Process & Systems InnovationDr. Rick L. Edgeman, University of Idaho

Analyze

Where are we now? Where are we going?

What can prevent us from reaching our goals?

At this stage we determine the process sigma level and regardvariation as an enemy. We must determine process capability,

that is, the ability of the process to meet customer requirements.

We require several “z-scores” to make this evaluation.

ZBENCH Zst ZLT ZLSL ZUSL

Where “BENCH” = benchmark, “st” = short term, “LT” = long term “LSL” = lower specification limit, and “USL” = upper specification limit.

Analyze

Where are we now? Where are we going? What can prevent us from reaching our goals?

ZST = best performance that can be expected from a process

ZLT = allows for drift through time (1 to 2 sigma drift is typical)

ZLSL= (X – LSL) / S then determine PLSL(d)

ZUSL= (USL – X) / S then determine PUSL(d)

P(d) = PLSL(d) + PUSL(d) then apply inverse use of the Z-table to findZBENCH (long-term)

P(d) * 1,000,000 = DPMO or PPM

0.0X

Zx.y P(d) ZBENCH


Analyze

Where are we now? Where are we going? What can prevent us from reaching our goals?

ZSHIFT = ZST – ZLT drift over time (DPMO tables assume 1.5)

ZST = (Specification Limit – Target) / ST * process sigma is determined here * indicates potential process performance if only common cause variation is present.

ZLT = (Specification Limit - ) / LT

* reveals long-term process capability * used to estimate DPMO or PPM (“parts per million” same as DPMO)

* includes special cause variation

^

^


Analyze:

An Alternative Means of Approximating the Sigma Capability for Your Process

Step Action Equations Your Calculations

1 What process do you want to consider? N/A Billing & Charging

2 How many units were put through the N/A 2,000

process?3 Of the units that went into the process, N/A

1,800how many were OK?

4 Compute process yield (step 3)/(step 2) 0.9000

5 Compute defect rate 1.0 – (step 4) 0.1000

6 Determine the number of potential N = number of 16things that could create a defect critical-to-quality

characteristics 7 Compute the defect rate per CTQ (step 5)/(step 6)

0.00625characteristic

8 Compute DPMO (step 7)*(1 million) 6,250

9 Convert DPMO to s value conversion chart About 4.0

10 Draw conclusions JUST ABOUT INDUSTRY AVERAGE

Analyze

Setting Performance Objectives

Critical to the Setting of Performance Objectives are the Concepts of‘Baseline’, ‘Process Entitlement’, ‘Benchmark’ and ‘Benchmarking’

BASELINE: This is the process performance level at the start of the Six Sigma Project.

PROCESS ENTITLEMENT: This is our best expectation for process performance(e.g., the ‘sigma level’) with the current technology – that is, without

substantial reengineering or investment. This can be estimated from Zst.

BENCHMARK: This is the current ‘best in class’ performance level.

BENCHMARKING: The process of finding the benchmark performancelevel and then matching or exceeding that performance.

Analyze

Sources of Variation

This is the search for the Vital X’s – the factors that drive the customer CTQs.

Various statistical and quality methods are useful in this effort. Among these are:

HYPOTHESIS TESTING, which can • Reveal Significant Differences in Performance Between Processes

• Validate Process Improvements• Identify Factors that Impact the Process Mean and Variation.

FISHBONE or CAUSE-AND-EFFECT DIAGRAMS

DEFINE


MEASURE





ANALYZE


IMPROVE





CONTROL







CONTROL PHASE - SIX SIGMA

• Control Phase Activities:

• Confirmation of Improvement• Confirmation you solved the practical problem• Benefit validation• Buy into the Control plan• Quality plan implementation• Procedural changes• System changes• Statistical process control implementation• “Mistake-proofing” the process• Closure documentation• Audit process

• Scoping next project


How to create a Control Plan:

1. Select Causal Variable(s). Proven vital few X(s)2. Define Control Plan - 5Ws for optimal ranges of X(s)3. Validate Control Plan - Observe Y4. Implement/Document Control Plan5. Audit Control Plan6. Monitor Performance Metrics


Control Plan Tools:

1. Basic Six Sigma control methods. - 7M Tools: Affinity diagram, tree diagram, process decision program charts, matrix diagrams, interrelationship diagrams, prioritization matrices, activity network diagram.

2. Statistical Process Control (SPC) - Used with various types of distributions - Control Charts

• Attribute based (np, p, c, u). Variable based (X-R, X)• Additional Variable based tools

-PRE-Control-Common Cause Chart (Exponentially Balanced Moving Average (EWMA))

PRODUCT MANAGEMENT

OVERALL GOAL OF SOFTWARE

KNOWLEDGE OF COMPETITORS

SUPERVISION

PRODUCT DESIGN

PRODUCT MANAGEMENT

PRODUCT DESIGN

PRODUCT MANAGEMENT

INNOVATION

OUTPUT

DIRECTORY ORGANIZATION

INTUITIVE ANSWERS

SUPPORT

METHODS TO MAKE EASIER FOR USERS

CHARACTERISTICS:

• Organizing ideas into meaningful categories

• Data Reduction. Large numbers of qual. Inputs into major dimensions or categories.

AFFINITY DIAGRAM

MATRIX DIAGRAM

Pat

ient

sch

edul

ed

Att

enda

nt a

ssig

ned

Att

enda

nt a

rriv

es

Obt

ains

equ

ipm

ent

Tra

nspo

rts

patie

nt

Pro

vide

The

rapy

Not

ifies

of

retu

rn

Att

enda

nt a

ssig

ned

Att

enda

nt a

rriv

es

Pat

ient

ret

urne

d

Arrive at scheduled time 5 5 5 5 1 5 0 0 0 0 0Arrive with proper equipment 4 2 0 0 5 0 0 0 0 0 0Dressed properly 4 0 0 0 0 0 0 0 0 0 0Delivered via correct mode 2 3 0 0 1 0 0 0 0 0 0Take back to room promptly 4 0 0 0 0 0 0 5 5 5 5

IMPORTANCE SCORE 39 25 25 27 25 0 20 20 20 20RANK 1 3 3 2 3 7 6 6 6 6

5 = high importance, 3 = average importance, 1 = low importance

HOWS

WHATS

RELATIONSHIP MATRIX

CUSTOMER IMPORTANCE MATRIX

Add f

eatu

res

Make e

xis

ting p

roduct

faste

r

Make e

xis

ting p

roduct

easie

r to

use

Leave a

s-is a

nd low

er

price

Devote

resourc

es t

o n

ew

pro

ducts

Incre

ase t

echnic

al support

budget

Out

arr

ow

s

In a

rrow

s

Tota

l arr

ow

s

Str

ength

Add features 5 0 5 45Make existing product faster 2 1 3 27Make existing product easier to use 1 2 3 21Leave as-is and lower price 0 3 3 21Devote resources to new products 1 1 2 18Increase technical support budget 0 2 2 18

(9) = Strong Influence

(3) = Some Influence

(1) = Weak/possible influence

Means row leads to column item

Means column leads to row item

COMBINATION ID/MATRIX DIAGRAM

CHARACTERISTICS:

•Uncover patterns in cause and effect relationships.

•Most detailed level in tree diagram. Impact on one another evaluated.


Control Plan Tools:

1. Basic Six Sigma control methods. - 7M Tools: Affinity diagram, tree diagram, process decision program charts, matrix diagrams, interrelationship diagrams, prioritization matrices, activity network diagram.

2. Statistical Process Control (SPC) - Used with various types of distributions - Control Charts

• Attribute based (np, p, c, u). Variable based (X-R, X)• Additional Variable based tools

-PRE-Control-Common Cause Chart (Exponentially Balanced Moving Average (EWMA))

How do we select the correct Control Chart:

Type Data

Ind. Meas. or subgroups

Normally dist. data

Interest in sudden mean changes

Graph defects of defectives

Oport. Area constant from sample to sample

X, Rm

p, np

X - RMA, EWMA or CUSUM and Rm

u

C, u

Size of the subgroup constant

p

If mean is big, X and R are effective too

Ir neither n nor p are small: X - R, X - Rm are effective

More efective to detect gradual changes in long term

Use X - R chart with modified rules

VariablesAttributes

Measurement of subgroupsIndividuals

Yes

No No

Yes

Yes

No

Yes

No

Defects Defectives

Additional Variable based tools:1. PRE-Control

• Algorithm for control based on tolerances• Assumes production process with measurable/adjustable quality

characteristic that varies.• Not equivalent to SPC. Process known to be capable of meeting

tolerance and assures that it does so.• SPC used always before PRE-Control is applied.• Process qualified by taking consecutive samples of individual

measurements, until 5 in a row fall in central zone, before 2 fall in cautionary. Action taken if 2 samples are in Cau. zone.

• Color coded

YELLOW ZONE

GREEN ZONE

YELLOW ZONE

RED ZONE RED ZONE

1/4 TOL. 1/2 TOL. 1/4 TOL.

Low

Tole

ranc

e Li

mt

Tole

ranc

e Li

mt

Hig

h

Refe

renc

e Li

ne

PRE-

Cont

rol

DIM

ENSI

ON

NO

MIN

AL

Refe

renc

e Li

ne

PRE-

Cont

rol

2. Common Causes Chart (EWMA).•Mean of automated manufacturing processes drifts because of inherent process factor. SPC consideres process static.•Drift produced by common causes.•Implement a “Common Cause Chart”.•No control limits. Action limits are placed on chart.

• Computed based on costs• Violating action limit does not result in search for special cause.

Action taken to bring process closer to target value.

•Process mean tracked by EWMA •Benefits:

• Used when process has inherent drift• Provide forecast of where next process measurement will be.• Used to develop procedures for dynamic process control

•Equation: EWMA = y^t + s (yt - y^t) s between 0 and 1Exponentially weighted moving average

EWMA chart of sand temperature

0

50

100

150

1 4 7 10 13 16 19 22 25 28

Observations

Deg

rees Sand

TemperatureEWMA

Sand Temperature EWMA Error

125 125.00 0.00123 125.00 -2.00118 123.20 -5.20116 118.52 -2.52108 116.25 -8.25112 108.83 3.17101 111.68 -10.68100 102.07 -2.0792 100.21 -8.21

102 98.22 3.78111 101.62 9.38107 110.60 -3.60112 107.30 4.70112 111.53 0.47122 111.95 10.05140 121.00 19.00125 138.00 -13.00130 126.31 3.69136 129.63 6.37130 135.36 -5.36112 130.54 -18.54115 113.85 1.15100 114.89 -14.89113 101.49 11.51111 111.85 -0.85

Tool Summary

Y'sContinuous Data Attribute Data

Continuous Data

Regression Scatter plot Logistic regression Time series plots Matrix Plot Time series plot General Linear model Fitted line C chart Multi-Vari plot Step wise Regression P chart Histogram N chart DOE NP chart Best Subsets ImR

X's X-bar R

Attribute Data

ANOVA Kruskal-Wallis Chi Square Box plots T-test Pareto Dot plots Logistic Regression MV plot Histogram DOE Homogeneity of variance General linear model

Matrix plot

Project Closure

•Improvement fully implemented and process re-baselined.•Quality Plan and control procedures institutionalized.•Owners of the process: Fully trained and running the process.•Any required documentation done.•History binder completed. Closure cover sheet signed.•Score card developed on characteristics improved and reporting method defined.

Lean PrinciplesAcknowledgement & Citations: Graphics and Concepts are borrowed from Six Sigma CBOK, ASQ and searchable articles on the web.. Respective original authors are gratefully acknowledged.

Origin of Lean: Toyota Production System

Widespread recognition of Toyota Production System (TPS) as the model production system grew rapidly with the publication in 1990 0f “The Machine that Changed the World”, the result of five years of research led by Massachusetts Institute of Technology.

The MIT research found that TPS was so much more effective and efficient than traditional mass production that it represented a completely new paradigm and coined the word lean production to indicate this radically different approach to production

Toyota Production System

Toyota Production System (TPS) developed by Toyota Motor Corporation to

provide best quality, lowest cost, and shortest lea time through elimination of

waste.

TPS is comprised of two pillars

Just-in-Time and

Jidoka

TPS is maintained and improved through iterations of standardized work, and

kaizen, following PDCA, or the scientific method

Development of TPS is credited to Taichi Ohno. Toyota’s chief of production in the

post world war-II period

Taiichi Ohno

Taiichi Ohno, the architect of Toyota Production System was born in 1912 in Manchuria, joined Toyota in 1943 as an assembly shop manager, by 1954 he was made a Director of the company, following years of intense analysis of job routines, cycle times, and experimentation with process flow.In 1960, as a general manager of the Motomochi assembly factory, Ohno introduced Kanban, the keystone of Just-In-Time. In 1970 Ohno became Executive Director of Toyota

From Mass to Lean

Ford went on to create “mass production”

at the Rouge plant in 1927-using big

machines, big batches

Toyota extended “flow production” to

cope with variety –using simple machines

and quick change tools

TPS or “Lean Production” was perfected

by 1970

Evolution of Lean

Lean Thinking

Lean Manufacturing

Lean Service

Lean Leadership

What is Lean?

Lean is an unending journey to become the most innovative, most effective, and highly efficient world class organization

Lean thinking

Focus on VALUE for the customer; specify it clearly! Identify the PROCESSES required to create the desired value Continually improve the process by improving the Competence & Leadership skills of the PEOPLE

Lean Manufacturing

“A manufacturing philosophy that shortens time between the customer order and the shipment by eliminating waste”

Lean Manufacturing

Specify value from the standpoint of the customer Identify the value stream for each product and remove Non- value added activities/wastes Make value flow towards the customer as quickly as possible Only at the pull of the customer While striving for perfection (in products and processes)

Lean Service

Solve my problem completely

Don’t waste my time

Provide exactly what I want

Provide exactly where I want it

Deliver value when I want it

Reduce the number of decisions I must make

to solve my problems

Objectives of LEAN

Improved Profitability

Improved Profitability

Enhanced Competitiveness

Lean TransformationLean Transformation

Higher Customer Satisfaction

Creating Lean Organization

Management is about thinking.

Leading is about getting other people to think

To create the lean organization is to change the way of thinking of people

Changing thinking

Changing thinking is actually one of the hardest things to do

Much of lean is counter intuitive and can be learned through experiences

So learning from examples is key- and sharing the experience is the best way to create lean organization

In due course of time you will discover that people like working in a lean process better than in the old way

What is Lean?

“A systematic approach to identifying and eliminating waste (non value added activities) through continuous improvement by flowing the product at the pull of customer in pursuit of perfection”

- Definition by the MEP Lean Network

What is Value?

• Value: a capability provided to a customer at the right time at an appropriate price, as defined in each case by the customer.

• Value is created by the producer. From customer’s point of view, this is why producer exists.

What is Waste (Muda)?

• Waste is defined as any organizational activity that absorbs resources but adds no value

• Mistakes which require rectification• Production of items no one wants so that

inventories pile up• Processing steps which are actually not

needed• Group of people in downstream activity

waiting because an upstream activity has not delivered in time

• Goods and services which does not meet the needs of customer

The Focus of Lean

• Lean focuses on elimination of waste generated in the value stream

• Lean is about expanding capacity by shortening cycle time between order and shipment

• Lean is about understanding what is important to customer

• Lean production is not about eliminating the people

Lean Thinking?

• To manage the business from the customer definition of value.

• To create perfect business processes which can deliver value with minimum wasted resources, efforts & time.

• To build a lean management system to develop, sustain, and improve these processes over time

• Be clear about customer purpose, before designing the processes and then developing the People.

In Search of Perfect Process!

• In fact we all are in search of perfect

process• But perhaps most of us have not realized

this!• The perfect process has some simple but

challenging attributes• It creates precisely the right value for

customer.• In the absence of correctly specified value,

every step in any process is muda (waste)!

The Perfect Process (in Summary)

• The right purpose (value)

• The best method (process)

• The highest sense of

accomplishment (people).

value value

Creating a Perfect Process

• Select the process you want to improve (the most critical one)

• Form a project team to make improvement• Draw a current state Value Stream Map • Develop a future state Value Stream Map. • Ask what changes in your organization will

be needed• Devise an Action Plan• Develop competence and inspire the

people• Implement the necessary changes to create

the “future state” process• Measure the performance compared with

the current state.• Plan for every process, in order of

importance

Essence of Lean Thinking

• Focus on VALUE for the customer; specify it clearly!

• Identify the PROCESSES required to create the desired value

• Continually improve the process (Move from current state to Future State)

• By means of improving Managerial Competence & Leadership skills of the PEOPLE

Leadership Styles

Dictator style

Empowerment style

Lean style

Leader as Dictator

“Do it my way”

No transfer of responsibility

Command & control

Leader as Social Worker

“Do it your way” (during 80s & 90s)

Empowerment

Set the “Goals” and let every one do as

they pleased

Loss of focus, direction, and control

Lean Leadership

“Follow me”

Leads a very different way: By setting the vision

(more why than how)

By building systems & perfect processes that cascade

responsibility

By influence: by example by being knowledgeable by getting into messy details by coaching & teaching through PDCA learning cycle through questioning

Lean Six Sigma

Acknowledgement & Citations: Graphics and Concepts are borrowed from Six Sigma CBOK, ASQ and searchable articles on the web.. Respective original authors are gratefully acknowledged.

• 98

Lean Six Sigma: What is it?

• Lean and Six Sigma are both process improvement methodologies

• Lean is about speed and efficiency• Six Sigma is about precision and accuracy – leading to

data-driven decisions• Both rooted in the 1980s (and earlier)

• Lean arose as a method to optimize auto manufacturing• Six Sigma evolved as a quality initiative to reduce variance in

the semiconductor industry

99

Why Lean and Six Sigma

• Six Sigma will eliminate defects but it will not address the question of how to optimize process flow

• Lean principles exclude the advanced statistical tools often required to achieve the process capabilities needed to be truly 'lean‘

• Each approach can result in dramatic improvement, while utilizing both methods simultaneously holds the promise of being able to address all types of process problems with the most appropriate toolkit. • For example, inventory reduction not only requires reducing batch sizes and

linking operations by using Lean, but also minimizing process variation by utilizing Six Sigma tools.

100

Lean Six Sigma Goals and Benefits

• Achieve total customer satisfaction and improved operational effectiveness and efficiency• Remove wasteful/non-value added activities• Decrease defects and cycle time, and increase first pass yields

• Improve communication and teamwork through a common set of tools and techniques

• (a disciplined, repeatable methodology)• Develop leaders in breakthrough technologies to meet

stretch goals of producing better products and services delivered faster and at lower cost

• 101

Lean Six Sigma Requires Behavioral Change

• Lean Six Sigma Challenges Us to:• Think Differently• Work Differently• Ask Questions and Challenge the Status

Quo• Make Decisions With Facts and Data• Use New Principles, Tools and

Methodologies

“Early-on, when culture and change compete, culture wins.”- Tom Quan, GlaxoSmithKline

102

To Successfully Deploy Lean Six Sigma

• Start with the customer … listen, listen, listen

• Leadership commitment and alignment … go beyond the words … change behavior

• Create momentum for change

• Develop need, vision and plan

• Communicate, communicate, communicate

• Repeatedly execute and assess

• Develop necessary skill sets to obtain the desired future state at all levels of the organization

• Involve Everyone: Leadership, Champion, Master Black Belt, Black Belt, Green Belt, Employees

103

Basic Questions

• What are the customer needs?

• Do our products or services• answer the Voice of the

Customer• at a price he is willing to pay?

• How do we know?

104

Lean Six Sigma Principles

• Specify value in the eyes of the customer

• Identify the value stream and eliminate waste / variation

• Make value flow smoothly at the pull of the customer

• Involve, align and empower employees

• Continuously improve knowledge in pursuit of perfection

105

Lean Six Sigma: A Powerful Methodology (DMAIC)

MeasureDefine ImproveAnalyze Control

what is important to the customer:

Project Selection Team Formation

Establish Goal

how well we are doing:Collect Data

Construct Process FlowValidate Measurement System

the process:Analyze Data

Identify Root Causes

the process gains:Ensure Solution is

Sustained

the process performance measures:Prioritize root causes

Innovate pilot solutionsValidate the improvement

106

The Tools and Techniques

Define Measure Analyze Improve Control

Benchmarking

FMEA

IPO Diagram

Kano’s Model

Knowledge Based Mgt

Project Charter

SIPOC Model

Quality Function Deployment

Voice of Customer

Task Appraisal / Task Summary

Value Stream Mapping

Confidence Intervals

Measurement System Analysis

Nominal Group Technique

Pairwise Ranking

Physical Process Flow

Process Capability Analysis

Process Flow Diagram

Process Observation

Time Value Map

Value Stream Mapping

Waste Analysis

Affinity Diagram

Brainstorming

Cause & Effect Diagram

e-test

F-test

Fault Tree Analysis

FMEA

Histogram

Historical Data Analysis

Pareto Chart

Reality Tree

Regression Analysis

Scatter Diagram

t-test

Thematic Content Analysis

Tukey End Count Test

5 Whys

DFSS

DOE

Kanban

Mistake Proofing

PF/CE/CNX/SOP

Standard Work

Takt Time

Theory of Constraints

Total Productive Maintenance

Visual Management

Work Cell Design

5S Workplace Organization

Control Charts

Control Plan

Reaction Plan

Run Charts

Standard Operating Procedures

Takt Time :The available production time divided by customer demand

107

Definition of a Value Stream

The VALUE STREAM is the entire set of processes or activities performed to transform the products and services into what is required by the customer.

A Primary Focus is TIME,

Product and / or Service Flow

Information Flow: Quickly In All Directions

The VALUE STREAM

Sell CustomersSuppliers Make Procure Design

108

Understanding the Value Stream

• We are often part of a value creating stream• Ultimately, the intent of the stream is to answer the end-user’s needs• Knowing who our customers are is the first step in understanding the

stream; our primary customer may not be the end-user• Knowing how the stream and our piece works or doesn’t work in

meeting customer needs is what Lean Six Sigma is about

HappyCustomer

TheirSupplier

Our Piece

TheirService

Our Supplier

OurCustomer

109

• Provides a world class business strategy• Encourages a common vision and common language shared by all• Promotes teamwork and REWARDS success• Combines aggressive goals with a method and a set of tools• Requires the application of tools throughout entire lifecycle of a

product or service• Produces knowledge for improved cycle time, reduced defects,

and lower cost

Better products and servicesdelivered faster and at lower cost

=Improved Customer Value

Summarizing the Power of Lean Six Sigma

Continuous Process Improvement

Acknowledgement & Citations: Graphics and Concepts are borrowed from Six Sigma CBOK, ASQ and searchable articles on the web.. Respective original authors are gratefully acknowledged.

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!

LaborMaterialIdeas

Information

Environment

Process

Physical products

Documents

InformationServicesDecisions

Questions to Help with SIPOCFrom 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.Identifycustomers and determinewhat you needto know

2.Collect andanalyzereactivesystem datathen fill gapswith proactiveapproaches

3.Analyze datato generatea key list of customerneeds intheir language

4.Translatethe customerlanguageinto CTQs

5.Setspecificationsfor 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






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 QuestionsFor 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






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.






THANK YOU

six sigma workshop for world bank, chennai - india

Technology

sigma company

sigma level

sigma processes

sigma dmaic process

sigma cbok

sigma opportunity

sigma dmadv process

sigma black belts