Lec 2 Quality s

7/27/2019 Lec 2 Quality s

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SIX SIGMA COMPANIES


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DEFINITION OF SIX SIGMA

Six Sigma is a data driven philosophy andprocess resulting in dramatic improvementin products/service quality and customersatisfaction. Six Sigma is the team approach to defining,measuring, analyzing, improving andcontrolling processes. Six Sigma is a set of tools aimed at reducingvariability in the inputs and in the process toincrease predictability of outputs.


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Six Sigma as a metric Sigma as a way to measure quality - a standard that

reflects the degree of control over any process to meet

the standard of performance established for that process

Sigma as a yardstickallows to compare very different

business processes in terms of the capability of theprocess to stay within the quality limits established for

that process

Sigma measures defects per million opportunities

(DPMO)


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4.6 s99.90000% Good Product or Service 6.0 s99.99966% Good4,000 Wrong medical prescriptions

each year13

3, 000 Newborns being dropped by

doctors/nurses per year

10

400 1Lost letters per hour

2 per daymajor airports

2 per yearShort or long landings at


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Reduce Variation and Center Process

Outputs are off specs which require inspection and added cost

Within Specs and Centered, Which doesnt need Inspection resulting tosavings



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The Villain

Cost of Poorly Performing Processes

s level DPMO CP3

2 308,537 Not Applicable3 66,807 25%-40% of sales

4 6,210 15%-25% of sales

5 233 5%-15% of sales

6 3.4 < 1% of sales

Each sigma shift provides a 10% net income improvement

Cost of Poorly PerformingProcesses (CP3)

Sigma (s) is a measure of perfection relating to

process performance capability the bigger

the better.

A process operating at a Six Sigma level

produces only 3.4 defects per millionopportunities (DPMO) for a defect. Without

dedication of significant and appropriate

attention to a process, most processes in leading

U.S. companies operate at a level between 3 and

4 sigma.

IMPORTANCE OF SIX SIGMA


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and the Hero

We dont know what we dont know.

We cant do what we dont know.

We wont know until we measure.

We dont measure what we dont value.

We dont value what we dont measure.

Typical Results: companies that properlyimplement Six Sigma have seen profit marginsgrow 20% year after year for each sigma shift(up to about 4.8s to 5.0s. Since mostcompanies start at about 3s, virtually eachemployee trained in Six Sigma will return on

average $230,000 per project to the bottomline until the company reaches 4.7s. After that,the cost savings are not as dramatic.

However, improved profit margins allowcompanies to create products & services withadded features and functions that result ingreater market share.

What Does Six Sigma Tell Us?


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PROCESS MODEL

PROCESS

for the creation of aproduct or service

INPUTS

X1

X2

X3

etc..

PERFORMANCE

MEASURES

Y1

Y2

etc..


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PROCESS METHODOLOGY

DDefine

MMeasure

AAnalyze

I

Improve

CControl

Identify and state the practical problemBased on customer input, select the appropriate response (theYs) to be improved and ensure that they are quantifiable andcan be accurately measuredAnalyze the preliminary data to document performance ofbaseline process capability. Begin identifying root causes ofdefects (the Xs or independent variables)Determine how to intervene in the process to significantlyreduce the defect levels. Several rounds of improvement maybe required.Set up control systems to prevent recurrence of a problem


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SCOPING TOOLS

1. Critical to Satisfaction Tree(CTS)

2. Kano Model

3. Quality Function

Deployment (QFD)4. SIPOC Diagram

5. Pareto Chart

6. Process Map

7. Fish Bone Diagram

8. Fruits of Six Sigma9. Cause-and-Effect Matrix

10.Value Stream Map

11.Check Sheets

12.Activity Network Diagram


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MEASURE / ANALYZE TOOLS

Correlation and Simple Regression

Attribute Agreement Analysis

Gage Repeatability and Reproducibility(GR&R)

Design on Experiments

Analysis of Variance (Anova) Multiple Regression Analysis

Others


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HYPOTHESIS TEST

Null Hypothesis = Ho: No Significant Change: For Tests Of Process Mean: H0: m = m0 For Tests Of Process Variance: H0: s2 = s20

Alternate Hypothesis = Ha: Has Significant Change:


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IMPROVE PHASE


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CONTROL CHART SELECTIONPROCESSVariable Data Discrete or Attribute

Data

Characteristic

Selected

Variable

Data?

Homogeneous or

NOT able to

subgroup data?

Proportions Counts

Individuals

Chart (I-MR)

Subgroup

size > 9

Ability to calculate s

for each subgroup

Average Chart

(Xbar-R)

Average Chart

(Xbar-s)

No

Yes

No

Yes

Yes

No

Constant

sample size

np or p Chart

p Chart

No

Yes

No

Yes

Constant

sample size

c or u Chart

Yes

u ChartNo

Yes No


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TEAMING LEARNING AGILITY MARKET FORESIGHT

DMAIC ProcessDefine

Measure

Analyze

Process

Capability

OK?

Modify

design?

Improve

Process

CapabilityOK?

Control

Redesign

YES

NO

YES

YES

NO

NO


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Outline

Purpose of the Define Phase Deliverables of the Define Phase

Key Steps in the Define Phase

The Project Charter

Tools for the Define Phase

Deliverables from the Class

Groupwork (Project Charter and CTC Tree of a

Fictitious Company)

Groupwork (Project Charter and CTC Tree of

chosen company)


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To have the team and its sponsor

reach agreement on the

scope, goals, performancetargets, financial targets,

and management of theproject.1

1 modified from the main text.

The Purpose of the DEFINE Phase


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The Purpose of the DEFINE Phase AGREEMENT

A contract / charter.

SCOPE

Product or Process to be improved.

Client segments / Stakeholders to be affected.

GOALS

Gap between requirements and process

outputs, and the desired future state.

PERFORMANCE TARGETS

Key metrics and their corresponding baseline

and targets (may be completed in the Measure

Phase depending on the availability of initial

data).


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FINANCIAL TARGETS Preliminary estimates of monetary benefits of

the project.; preferably computed directly

from the improvement in the performance

targets. PROJECT MANAGEMENT

Project Member Roles

Schedule and Milestones

Communication Plan Budget and Other Resources

The Purpose of the DEFINE Phase


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Deliverables of DEFINE PhasePURPOSE DELIVERABLES

Agreement Project Charter

ScopeSIPOC

Client Types / Segments

GoalsProblem Statement;

Project Goals

Performance Targets CTC Tree, Project Objectives

Financial Targets Business Impact approved by aRepresentative of Accounting

Project Management

Gantt Charts (Milestones)

Team Members

Communication Plan

Budget


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Key Steps of the DEFINE Phase REVIEW DRAFT PROJECT CHARTER

Champion drafts an initial charter.

Preliminary team negotiates the scope, timing

and schedule, resources needed, and members.

Deliverables: Initial Statement of the Problem,Initial Team Composition, and Preliminary

Schedule.

VALIDATE PROBLEM STATEMENT AND GOALS

Validate existence of the problem. Define who the clients are.

Deliverables: Statement of the Problem. Project

Goals. Client Types / Segments.


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CAPTURE VOICE OF THE CUSTOMER (optional) Conduct necessary tools to identify customer

needs and priorities.

Deliverables: Kano Analysis, CTC Tree, CTC

specifications. CAPTURE VOICE OF THE PROCESS (optional)

Determine Baseline data for the CTCs

Establish targets.

(may be done in the measure phase).

Deliverables: Baseline data and Target Data.

Key Steps of the DEFINE Phase


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VALIDATE FINANCIAL BENEFITS Estimate cost savings and/or increase in

revenue assuming targets are met.

Deliverables: Business Impact.

CREATE PROCESS MAP Develop high-level process maps that provides

the scope the processes being improved.

Deliverables: SIPOC.



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FINALIZE PROJECT PLANS Identify stakeholders (sponsors, customers,

managers, process owners, project facilitators)

and team members.

Develop schedule, budget, milestones,communication plans

Deliverables: Gantt Charts (Milestones),

Communication Plans, Budget, Final Team

Members. Complete Project Charter signed byappropriate executives.

Note that the charter may be updated throughout

the project duration (subject to approval).



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DEFINE M A I CThe Project Charter or Team Charter

The Customer

The Voice of the Customer (VOC) Critical to Quality

Supplier-Input-Process-Output-Customer (SIPOC)


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A project charter or team charter is a team contract that

summarizes the goal of the team and the resources (people,

time) that will be deployed for the project.

It is a living document. It is updated as more pieces of

information are known as the project progresses.

Project Title

What is the specific defect?

What is the improvement goal?

Example: Square Nano Qual i ty Project Team of L it te l fus e

Project Title: Reduction of Loose Caps in

Square Nano Fuses


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Problem Statement

What is the problem (name of the process/product/line, period covered,

metrics)?

What is the effect of the problem (quality, cost, delivery)?

Example of a Bad Opportunity/Problem Statement

The Package Delivery process needs to be improved. ABC Company has

received numerous customer complaints. ABC employees also confirm there is a

problem, Improving the process will increase the Customer Satisfaction scores.

Example of a Good Opportunity/Problem Statement

The ABC Company shipped P8.2 million of products in April, many of which

were late (what). Data collected from customers for the last 5 months (when)indicates that an average of 44% of southern customers (where) experienced

problems but only 8% of others customers experienced problems. During the

month of April, ABC had 40 late shipments (extent) to the southern customers

worth P1, 520, 000.


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Business Case

A clear and common understanding of why we should do the project,

and what it will cost us

Why is this project prioritized over other possible projects?

Quality /Delivery/Financial Benefits

What is the expected savings for this project?

For what period will the savings be realized (annual, monthly)?

Goal Statement What is the defect that needs to be reduced?

What is the baseline and the objective?

What is the expected date the target will be achieved?

30% - 70% break through improvement


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Stakeholders Who or which specific function will be directly affected by the project

(management, suppliers, customers)?

Team Members and Project Champion

Who will be able to contribute to the project?

Who will remove roadblocks and allocate resources?

Scope and Limitations

What process will the project focus on?

What processes will be excluded from the project?


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Team Members and Project Champion

Senior Execut iv e-- provides the impetus, direction and alignment

necessary for 6sigmas ultimate success

Champion- takes a very active sponsorship and leadership role in

conducting and implementing 6sigma projects. He/She should have

enough influence to remove obstacles or provide resources withouthaving to go higher in the organization

Process Owner manager of the process. Has the responsibility for

the process ad has the authority to change the process on his or her

signature

Master Black Belt- keeper of the 6sigma process and advisor to

senior executives or business unit managers Black b elt a full-time change agent and improvement leader who may

not be an expert in the process under study

Green belt works on the project part time


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DEFINE M A I CBusiness Case

Our current delivery time average is 72 hours for Product X.Customers are requiring delivery in 48 hours. Our competitorsare meeting the 48-hour requirement. As a result, we arelosing 1.5% of our customer base per month for the last 10months ($75,000/month), new sales are down10% for the same 10 months ($60,000/month). By decreasingour delivery time we anticipate the loss of the currentcustomer base to drop below 0.3% (savings=$60,000/month)and new sales will increase 18% above their original base($108,000).

Opportunity StatementWe currently have an average deliver orders cycle of 72

hours. Our customers require it within 48 hours. Ourprocess is currently operating at a 2.1 sigma level.

Goal Statement Reduce cycle time from call by customer to receipt by

customer to 48 hours by fourth quarter. Reduce number of defects 10 fold; from 20,000 to 2,000

by the end of the year. Increase process sigma to 3.5.

Project Scope Order Processing Core Process

Start: Call entered into system Stop: Product in customers hands

Involve all Department Core process related Enabling process related

Project Plan Team SelectionTime

Activitywk 1 wk 2 wk 3 wk 4 wk 5

Form Team

Finalize Charter

Gather Data

Analyze Data

Select Solution

Meet Management

Develop Plan to Implement

Closure & Recognition

Albert SponsorBarry Master Black BeltCarrie Black BeltDenise Dispatch SupervisorEric Senior DispatcherFrank Administrative ManagerGwen Truck Loader

Hillary Truck Loader

Project Charter: Customer Delivery Cycle Time Improvement


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Another way to evaluate a Charters completeness is through an

evaluation methodology called SMART

This acronym is a checklist to ensure that the charter is effective and

thorough

Does it address a real business problem?Specific

Are we able to measure the problem, establisha baseline and set targets for improvement?Measurable

Does it relate to a business objective?Attainable

Is the goal achievable? Is the projectcompletely realistic?Relevant

Have we set a date for completion?Time bounded


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DEFINE M A I CProject Charter

Source: www.wcqc.asq.org/2009/team-competition/index.html


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The Project Charter


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The Project Charter

(Image Source: Keller, 2011)


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Tools for the DEFINE Phase

GANTT CHART Shows the schedule of each of the project

phase/activity.

(Image Source:

www.advsofteng.com)


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PERT-CPM Emphasizes critical activities that may increase

project duration if not properly followed.

Visually presents prerequisite activities of a

task. Provides slack times for other non-critical

activities.

(Image Source:


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SIPOC A high-level process map that captures

information critical to the project

Helps a team and its sponsors agree on project

boundaries and scope Helps verify that process inputs match outputs

of upstream process and the

inputs/expectations of downstream processes.


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SIPOC Diagram -- a tool used by a process improvement team to identify allrelevant elements of a process improvement project before work begins

DEFINE M A I C

S I P O CSuppliers

The provider of

inputs to yourprocess

Inputs

Materials,

resources ordata required to

execute your

process

Process

A structured set of

activities thattransform a set of

inputs into specified

outputs, providing

value to customers

and stakeholders

Outputs

The products of

services thatresult from the

process

Customers

The recipients of

the processoutput


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DEFINE M A I C

SIPOC (Image Source: www asq org)


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SIPOC (Image Source: www.asq.org)


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DEFINE M A I C

Source: www.wcqc.asq.org/2009/team-competition/index.html


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DEFINE M A I CThe Customer

The Customer is a recipient of a product or service

A customer may be internal or external

An internal customer is in the next process of department within the

same company

An external customer of end customer is the final recipient of the

finished product or service


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DEFINE M A I CVoice of the Customer (VOC) Critical to Quality (CTQ)

Voice of the Customer (VOC) actual needs as expressed by the

customer

Critical to Quality Characteristics product or service specification

quantified and translated from the VOC

Operational Definition (OD) allows only one interpretation of the VOC

Illustration:

VOC Safety

Delivery

Quality

Cost

CTQ

Cycle time

yield

OD

Time study

ppm, Cpk


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Customer Requirements

Functional Measures

Parts Characteristic

Manufacturing Process

Production Requirements

QFD Approach


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CRITICAL-TO-CUSTOMER (CTC) or CRITICAL-TO-SATISFACTION (CTS) TREE

Can help convert vague needs and wants of the

customers into precise functional requirements.

Specific Types of CTC/CTS.

CTQ critical-to-quality

CTD critical-to-delivery

CTC critical-to-cost

Special Types of CTC

Trees

CTX Product Tree

CTY Process Tree

Voice of the Customer The Why(After Clarification)

CTC Requirement

I hate dealing with your

company.

Products are not

delivered on time.

10 day lead time

(+/- 1 day)


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CTC TREE (Image Source: www operations-excellence blogspot com)


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CTC TREE (Image Source: www.operations excellence.blogspot.com)

CTC TREE (Image Source: www tebyan net)


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CTC TREE (Image Source: www.tebyan.net)


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Critical-to-Quality(CTQ)Tree-- convertcustomer needs/wants to

measurable requirements for

the business to implement.

DEFINE M A I C


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Critical-to-Quality (CTQ)Tree

DEFINE M A I CExample:

Ben-Hurs Pizza wishes to add home delivery to their services in order to

expand their business. They have surveyed current and potential

customers to determine what would make them order Ben-Hur pizza

instead of a competitors or instead of a different kind of food.

Summarized VOC data told them that when customers order-in pizza,they want hot pizza, now, with my choice of toppings and crusts, at a

reasonable cost.


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Critical-to-Quality (CTQ)Tree

DEFINE M A I CCTQ Tree for VOC NOW


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