Six Sigma Quality Engineering

1
Six Sigma Quality Engineering

• Week 3
• Chapters 4 (Define Phase)

2
Chapter 4 Outline

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

3
Six Sigma Project Team

• The team must
• Understand the organizational context for process
  improvement projects
• Know the basic elements of the team charter and
  review any questions you have about the charter
  for your own project
• Understand the basics of estimating the business
  impact of a project and be able to relate them to
  your own project
• Be able to identify key players and stakeholders
  and incorporate them into the communication plan
  for your own project

4
Six Sigma Team Charter

• A team charter is an agreement between
  management and the team about what is expected.
• The charter
• A project charter is a form that has key
  information about your project. It is used to
• Better define your project
• Define what is Critical to Quality (CTQs) to the
  Customer
• Write a business case (links project to business
  goals)
• Write a problem and goal statement
• Scope a project
• State the problem or opportunity
• Establish the project goal(s)
• Identify criteria for success
• List assumptions, risks and obstacles
• Communicate the above
• Obtain management support

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Six Sigma Project Charter Example

• Process
• Process in which opportunity exists
• Project Description
• Projects purpose and scope
• Project Scope
• Define the part of the process that will be
  investigated
• Objectives
• Define the baseline, goal target
• Business Case
• Define the improvement in business performance
  anticipated and when
• Team Members
• Who are the full time team members
• Expected Customer Benefits
• Who is the final customer?
• What benefit will they see and what are their
  most critical requirements?

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Six Sigma Project Charter Example

• Schedule
• Give the key milestones/dates
• Define completion date
• Measure completion date
• Analyze completion date
• Improve completion date
• Control completion date
• Support required
• Support needed for any special capabilities

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Project Management

• Problem Statement ? Objectives ? Measures

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

• Objectives
• Should address the problem statement
• Quantify performance improvement

• Measures
• Primary Metric(s)
• Used to measure success
• Consistent with problem statement and objectives
• Secondary Metric(s)
• Tracks potential negative consequences

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Project Management

• Project Problem Statement

• A problem is the unsatisfactory result of a job
  or process
• So what? What is the impact on the customer?
• What problem or gap are you addressing?
• What impact will closing the gap have on the
  customer?
• How will you know things are better?
• It should not include theories about solutions

Remember 5Ws H to help give more focus

• What are the symptoms? What happens when the
  problem appears?
• Where do symptoms appear? Where dont they
  appear?
• When do symptoms appear? Where dont they appear?
• Who is involved? Who isnt?

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Project Management
Project Problem Statements

• A poor problem statement
• Product returns are too high and will be reduced
  by analyzing first and second level pareto charts
• A better problem statement
• Product returns are 5 of sales resulting in a
  business unit negative profit impact of 5M and
  reduced market share of 10

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Project Management

• Project Objectives

• Should address the problem statement
• Quantify performance improvement
• Should also identify timing
• Needs to be Measurable, Actionable and Realistic
• Quality / Quantity / Time / Cost
• A poor objective
• Reduce product returns by implementing
  performance measures and objectives
• A better objective
• Reduce product returns of product line abc from
  5 to 2.5 by the year end, to reduce overall
  returns by 1 and saving 1M

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Project Management

• Measures

• Should be consistent with the problem statement
  and objectives
• Primary Metric(s) - used to measure success
• Needs to include 3 series, plotted as a function
  of time
• Baseline performance (average over past 12
  months)
• Actual performance
• Objective / target performance
• Secondary Metric(s) - drives the right behaviour
• Tracks potential negative consequences
• More than one may be required

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Structure of the Define Phase
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Define Completion Checklist

• By the end of Define, you should be able to
  describe for your Champion
• What key process is involved (including its
  Suppliers, Inputs, Outputs, and Customers)
• What about the process output is important to
  customers
• What customers currently think of the process
  and its output
• Why this project is important to your
  organization and what business goals the project
  must achieve to be considered successful
• Who the players are on the project (sponsors,
  advisors, team leader, team members)
• What limitations (budget, time, resources) have
  been placed on this project

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Six Sigma Problem Statements

• A problem statement has the form
• WHAT is wrong
• WHERE it happened
• WHEN it occurred
• TO WHAT EXTENT and
• I KNOW THAT BECAUSE
• A problem statement
• Does not include causes of the deficiency.
• Does not include likely actions or solutions.
• Is clear and concise and specific.

A good problem statement is essential to a good
start.
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What is Wrong and Where Does it Happen?

• A good problem statement will clearly define WHAT
  is wrong. Examples
• Customers are not satisfied with my product
• Yields are suffering
• Reliability is insufficient
• A good problem statement will clearly define
  WHERE the problem occurs. Examples
• Customers in the Midwest Region are not
  satisfied with my ordering service
• Equipment availability for Urgent Care is poor
• Document correctness is insufficient in Billing

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When Was This Seen?

• A good problem statement will clearly explain
  WHEN the problem occurred.
• Customers in the Midwest Region are not
  satisfied with my ordering service. Starting in
  January
• Equipment availability for Urgent Care is poor.
  Since the consolidation of services
• Document correctness is insufficient in Billing
  after the introduction of flexi-forms

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How Widespread is the Problem?

• A good problem statement will clearly explain the
  EXTENT of the problem.
• Customers in the Midwest Region are not
  satisfied with my ordering service. Starting in
  January, complaints have increased 15
• Equipment availability for Urgent Care is poor.
  Since the consolidation of services, delays
  caused by lack of availability have increased by
  40
• Document correctness is insufficient in Billing
  after the introduction of flexi-forms. Errors
  have increased 28

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What is the Standard?

• A good problem statement will clearly explain HOW
  I KNOW there is a problem. Examples
• Customers in the Midwest Region are not
  satisfied with my ordering service. Starting in
  January, complaints have increased 15 at a time
  when complaint rates from other regions have
  remained static
• Equipment availability for Urgent Care is poor.
  Since the consolidation of services, delays
  caused by lack of availability have increased by
  40 when the patient traffic has increased by
  only 5
• Document correctness is insufficient in Billing
  after the introduction of flexi-forms. Errors
  have increased by 28 when the goal of the
  project was to reduce errors by 90

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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
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Sample Primary Metric
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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 Xs
  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

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Sample Secondary Metric
23
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.

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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

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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

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When to Create a SIPOC
In the Early Stage of Any Project!

• All work can and should be considered as a
  process

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Questions to Help with SIPOC

• 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?

• From the Output/Customer End
• Why does this process exist?
• What products, services or outcomes does this
  process produce?
• How does this process end?
• Who uses the outputs or experiences the results
  from this process?
• Who provides funding or staffing for the process
  activities, and who cares about the quality of
  outcome?

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SIPOC - Process Development Example
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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)

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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

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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.

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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

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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.

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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

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Why Collect VOC Data

• Customer requirements change constantly
• Specifications tend to focus on technical data
  only

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VOC Process
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

• 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
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VOC Step 1 Identify Customers Determine What
You Need to Know
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

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

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Who Are Your Customers?

• What are the outputs of your process? Who are the
  customers of that output?
• Are there particular groups of customers whose
  needs are especially important to your
  organization and project success?

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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

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Do You Have Customer Segments?

• If your customers seem to have similar needs
  across the board, you dont 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

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Deciding the What and Why

• Revisit your charterwhat 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 youve identified to make sure your
  projects purpose stays on track?

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Sample Questions

• For all customers, you should ask questions such
  as
• 1. What is important to you about our
  process/product/service? (Ask them to rank each
  of these needs in order of importance.)
• 2. What do you think of as a defect?
• 3. How are we performing on the areas you
  consider important?
• 4. What do you like about our product/service?
• 5. What can we improve about our
  process/product/service? What can we do to make
  your job easier?
• 6. What specific recommendations would you make
  to us?

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VOC Step 2 Collect and Analyze Reactive and
Proactive Data
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

• Reactive systems
• Information comes to you whether you take action
  or not
• Proactive systems
• You need to put effort into gathering the
  information

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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

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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

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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

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VOC Step 3 Analyzing Customer Data

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

1.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
48
Questions? Comments?