Principles of

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Chapter 10

• Principles of
• Six Sigma

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Key IdeaIntroduction
Although we view quality improvement tools and
techniques from the perspective of Six Sigma, it
is important to understand that they are simply a
collection of methods that have been used
successfully in all types of quality management
and improvement initiatives, from generic TQM
efforts, to ISO 9000, and in Baldrige processes.
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Six Sigma

• A simple quality metric
• An overall strategy to quality improvement

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Six-Sigma Metrics

• Defect any mistake or error that is passed on
  to a customer
• Defects per unit (DPU) number of defects
  discovered ? number of units produced
• Defects per million opportunities (dpmo) DPU ?
  1,000,000 ? opportunities for error

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Six-Sigma Quality

• Ensuring that process variation is half the
  design tolerance (Cp 2.0) while allowing the
  mean to shift as much as 1.5 standard deviations,
  resulting in at most 3.4 dpmo.

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k-Sigma Quality Levels
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Six Sigma(Chapter 3)

• Based on a statistical measure that equates to
  3.4 or fewer errors or defects per million
  opportunities
• Pioneered by Motorola in the mid-1980s and
  popularized by the success of General Electric

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Key Idea (Chapter 3)
Six Sigma can be described as a business
improvement approach that seeks to find and
eliminate causes of defects and errors in
manufacturing and service processes by focusing
on outputs that are critical to customers and a
clear financial return for the organization.
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Key Concepts of Six Sigma (1 of 2) (Chapter 3)

• Think in terms of key business processes,
  customer requirements, and overall strategic
  objectives.
• Focus on corporate sponsors responsible for
  championing projects, support team activities,
  help to overcome resistance to change, and
  obtaining resources.
• Emphasize such quantifiable measures as defects
  per million opportunities (dpmo) that can be
  applied to all parts of an organization

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Key Concepts of Six Sigma (2 of 2) (Chapter 3)

• Ensure that appropriate metrics are identified
  early and focus on business results, thereby
  providing incentives and accountability.
• Provide extensive training followed by project
  team deployment
• Create highly qualified process improvement
  experts (green belts, black belts, and
  master black belts) who can apply improvement
  tools and lead teams.
• Set stretch objectives for improvement.

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Key Idea
Although originally developed for manufacturing
in the context of tolerance-based specifications,
the Six Sigma concept has been operationalized to
any process and has come to signify a generic
quality level of at most 3.4 defects per million
opportunities.
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Projects as Value-Creation Processes

• Projects - temporary work structures that start
  up, produce products or services, and then shut
  down.
• Project management all activities associated
  with planning, scheduling, and controlling
  projects

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Six Sigma Project Teams

• Champions senior managers who promote Six Sigma
• Master Black Belts highly trained experts
  responsible for strategy, training, mentoring,
  deployment, and results.
• Black Belts Experts who perform technical
  analyses
• Green Belts functional employees trained in
  introductory Six Sigma tools
• Team Members Employees who support specific
  projects

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Key IdeaProject Management
Successful project managers have four key skills
a bias toward task completion, technical and
administrative credibility, interpersonal and
political sensitivity, and leadership ability.
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Project Life Cycle Management (1 of 2)

• Project Quality Initiation Define directions,
  priorities, limitations, and constraints.
• Project Quality Planning Create a blueprint for
  the scope of the project and resources needed to
  accomplish it.
• Project Quality Assurance Use appropriate,
  qualified processes to meet technical project
  design specifications.

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Project Life Cycle Management (2 of 2)

• Project Quality Control Use appropriate
  communication and management tools to ensure that
  managerial performance, process improvements, and
  customer satisfaction is tracked.
• Project Quality Closure Evaluate customer
  satisfaction with project deliverables and assess
  success and failures that provide learning for
  future projects and referrals from satisfied
  customers.

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The Definition of a Project
Performance
Required performance
Target
Cost
Cumulative
Budget limit
Due Date
Time (schedule)
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Problem Solving

• Problem any deviation between what should be
  and what is that is important enough to need
  correcting
• Problem Solving the activity associated with
  changing the state of what is to what should
  be

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Quality Problem Types

1. Conformance problems
2. Unstructured performance problems
3. Efficiency problems
4. Product design problems
5. Process design problems

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Project Selection

• One of the more difficult challenges in Six Sigma
  is the selection of the most appropriate problem
  to attack.
• Two ways to generate projects
• Top-down
• Bottom-up

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Key Factors in Six Sigma Project Selection

• Financial return, as measured by costs associated
  with quality and process performance, and impacts
  on revenues and market share
• Impacts on customers and organizational
  effectiveness
• Probability of success
• Impact on employees
• Fit to strategy and competitive advantage

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Problem Solving Process

1. Redefining and analyzing the problem
2. Generating ideas
3. Evaluating and selecting ideas
4. Implementing ideas

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Key IdeaProblem Solving
A structured problem-solving process provides all
employees with a common language and a set of
tools to communicate with each other,
particularly as members of cross-functional teams.
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DMAIC Methodology

1. Define
2. Measure
3. Analyze
4. Improve
5. Control

DMAIC
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Define

• Describe the problem in operational terms
• Drill down to a specific problem statement
  (project scoping)
• Identify customers and CTQs, performance metrics,
  and cost/revenue implications

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Measure

• Key data collection questions
• What questions are we trying to answer?
• What type of data will we need to answer the
  question?
• Where can we find the data?
• Who can provide the data?
• How can we collect the data with minimum effort
  and with minimum chance of error?

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Analyze

• Focus on why defects, errors, or excessive
  variation occur
• Seek the root cause
• 5-Why technique
• Experimentation and verification

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Improve

• Idea generation
• Brainstorming
• Evaluation and selection
• Implementation planning

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Control

• Maintain improvements
• Standard operating procedures
• Training
• Checklist or reviews
• Statistical process control charts

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Tools for Six-Sigma and Quality Improvement

• Elementary statistics
• Advanced statistics
• Product design and reliability
• Measurement
• Process control
• Process improvement
• Implementation and teamwork

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Design for Six Sigma

• Focus on optimizing product and process
  performance
• Features
• A high-level architectural view of the design
• Use of CTQs with well-defined technical
  requirements
• Application of statistical modeling and
  simulation approaches
• Predicting defects, avoiding defects, and
  performance prediction using analysis methods
• Examining the full range of product performance
  using variation analysis of subsystems and
  components

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Six Sigma in Services and Small Organizations

• Six Sigma is equally applicable to services.
  However, services have some unique
  characteristics.

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Key IdeaSix Sigma in Services
All Six Sigma projects have three key
characteristics a problem to be solved, a
process in which the problem exists, and one or
more measures that quantify the gap to be closed
and can be used to monitor progress.
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Key Six Sigma Metrics in Services

• Accuracy
• Cycle time
• Cost
• Customer satisfaction

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Lean Production and Six Sigma

• The 5Ss seiri (sort), seiton (set in order),
  seiso (shine), seiketsu (standardize), and
  shitsuke (sustain).
• Visual controls
• Efficient layout and standardized work
• Pull production
• Single minute exchange of dies (SMED)
• Total productive maintenance
• Source inspection
• Continuous improvement

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Traditional Economic Model of Quality of
Conformance
Total cost
Cost due to nonconformance
Cost of quality assurance
100
optimal level of quality
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Modern Economic Model of Quality of Conformance
Total cost
Cost due to nonconformance
Cost of quality assurance
100