Define Phase - Understanding Six Sigma
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Ryan PermanaDefine Phase - Understanding Six Sigma
Uploaded by
Ryan PermanaPlace things in such a
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Certified Lean Six
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Define Phase
Understanding Six Sigma
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1
Lean Six Sigma
Black Belt Training
Define Phase
Understanding Six Sigma
Welcome to Open Source Six Sigma’s Black Belt Training Course.
This course has been designed to build your knowledge and capability to improve the
performance of processes and subsequently the performance of the business of which you are a
part. The focus of the course is process centric. Your role in process performance improvement
is to be through the use of the methodologies of Six Sigma, Lean and Process Management.
By taking this course you will have a well rounded and firm grasp of many of the tools of these
methodologies. We firmly believe this is one of the most effective classes you will ever take and it
is our commitment to assure that this is the case.
We begin in the Define Phase with “Understanding Six Sigma”.
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2
Understanding Six Sigma
Overview
The core fundamentals
of this phase are
Definitions, History, Understanding Six Sigma
Strategy, Problem
Solving and Roles and Definitions
Responsibilities.
History
We will examine the
meaning of each of Strategy
these and show you
how to apply them. Problem Solving
Roles & Responsibilities
Six Sigma Fundamentals
Selecting Projects
Elements of Waste
Wrap Up & Action Items
What is Six Sigma…as a Symbol?
Variation is our enemy. Our
σ sigma is a letter of the Greek alphabet. customers, both internal and
external, have expectations
– Mathematicians use this symbol to signify standard relative to the deliverables from
deviation, an important measure of variation. our pprocesses. Variation from
– Variation designates the distribution or spread those expectations are likely
about the average of any process. dissatisfiers to them. Much of
this course is devoted to
identifying, analyzing and
eliminating variation. So let’s
begin to understand it.
The Blue Line designates
narrow variation while the
Orange Line designated wide
The variation in a process refers to how tightly all the variation.
various outcomes are clustered around the average. No
Obviously the less variation
process will produce the EXACT same output each time.
within a process the more
predictable the p
p process is,,
assuming the mean is not moving all over the place. If you took the height of everyone in the class would
you expect a large variation or narrow variation?
What if you had a few professional basketball player in the room, would that widen or narrow the variation?
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Understanding Six Sigma
What is Six Sigma…as a Value?
Sigma is a measure of
deviation. The
mathematical calculation
for the Standard Deviation
of a population is as
shown.
Sigma can be used
interchangeably with the
statistical term Standard By definition, the Standard Deviation is the distance
Deviation.
between the mean and the point of inflection on the
Standard Deviation is the
average distance of data normal curve.
points away from the
Mean in a distribution. Point of Inflection
When measuring the
sigma value of a process
we want to obtain the
distance from the Mean to
the closest specification
limit in order to determine
how many Standard
Deviations we are from
th mean….our Sigma
the Si
Level!
The Mean being our optimal or desired level of performance.
What is Six Sigma…as a Measure?
The probability of creating a defect can be estimated and translated into a
“Sigma” level.
-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6
The higher the sigma level, the better the performance. Six Sigma refers to a process having six
Standard Deviations between the average of the process center and the closest specification limit or
service level
level.
This pictorial depicts the percentage of data which falls between Standard Deviations within a Normal
Distribution. Those data points at the outer edge of the bell curve represent the greatest variation in our
process. They are the ones causing customer dissatisfaction and we want to eliminate them.
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Understanding Six Sigma
Measure
“Sigma Level” is:
– A statistic used to describe the performance of a process relative to the
specification limits
– The number of Standard Deviations from the mean to the closest
specification limit of the process
USL
6 Sigma
5 Sigma
4 Sigma
3 Sigma
2 Sigma
1 Sigma
The likelihood of failure decreases as the number of Standard Deviations
that can be fit between the Mean and the nearest spec limit increases.
Each gray dot represents one Standard Deviation
Deviation. As you can see the Normal Distribution is
tight.
Said differently, if all the outputs of our process fall within six Standard Deviations from the
Mean, we will have satisfied our customers nearly all the time. In fact, out of one million
customer experiences, only 3.4 will have experienced a defect.
What is Six Sigma…as a Metric?
Each of these metrics serves a different purpose and may be used at different levels in the
organization to express the performance of a process in meeting the organization’s (or customer’s)
requirements. We will discuss each in detail as we go through the course.
Defects 20
Defects per unit (DPU) 18
Parts per million (PPM) 16
Defects per million opportunities (DPMO) 14
Rolled Throughput yield (RTY) 12
First Time Yield (FTY) 10
Sigma (s) 8
0 20 40 60 80 100
Above are some key metrics used in Six Sigma. We will discuss each in detail as we go through the
course.
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Understanding Six Sigma
What is Six Sigma…as a Benchmark?
This data represents the sigma level of companies
companies. As you can see less than 10% of companies
are at a 6 sigma level!
Yield PPMO COPQ Sigma
99.9997% 3.4 <10% 6 World Class Benchmarks
99.976% 233 10-15% 5 10% GAP
99.4% 6,210 15-20% 4 Industry Average
93% 66,807 20-30% 3 10% GAP
65% 308 537
308,537 30 40%
30- 2 Non Competitive
50% 500,000 >40% 1
Source: Journal for Quality and Participation, Strategy and Planning Analysis
W ha t does 2 0 - 4 0 % of Sa les represent to your O rga niza tion?
What is Six Sigma…as a Method?
The Six Sigma Methodology is made up of five stages: Define, Measure, Analyze, Improve and
Control.
Each has highly defined steps to assure a level of discipline in seeking a solution to any variation or
defect present in a process.
DM AIC provides the m ethod for a pplying the Six
Sigma philosophy in order to im prove processes.
– Define - the business opportunity
– Measure - the process current state
– Analyze - determine root cause or Y= f (x)
– Improve - eliminate waste and variation
– Control - evidence of sustained results
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Understanding Six Sigma
What is Six Sigma…as a Tool?
Six Sigma conta ins a broa d set of tools, interw oven
in a business problem-solving methodology. Six
Sigma tools a re used to scope a nd choose projects,
design new products a nd processes im prove current
processes, decrea se dow ntime a nd im prove
customer response time.
- Six Sigma has not created new tools, it has simply
organized a variety of existing tools to create flow.
Customer Value
Management Product Process Process System Functional
Responsiveness,
Cost, Quality,
= EBIT, (Enabler) , Design , Yield , Speed , Uptime , Support
Delivery
Six Sigma has not created new tools. It is the use and flow of the tools that is important. How they
are applied makes all the difference.
Six Sigma is also a business strategy that provides new knowledge and capability to employees so
they can better organize the process activity of the business, solve business problems and make
better decisions.
decisions Using Six Sigma is now a common way to solve business problems and remove
waste resulting in significant profitability improvements. In addition to improving profitability,
customer and employee satisfaction are also improved.
Six Sigma is a process measurement and management system that enables employees and
companies to take a process oriented view of the entire business. Using the various concepts
embedded in Six Sigma, key processes are identified, the outputs of these processes are
prioritized, the capability is determined, improvements are made, if necessary, and a management
structure is put in place to assure the ongoing success of the business
business.
People interested in truly learning Six Sigma should be mentored and supported by seasoned
Belts who truly understand how Six Sigma works.
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Understanding Six Sigma
What is Six Sigma…as a Goal?
To give you a better example the concept of the sigma level can be related to hanging fruit. The higher
the fruit, the more challenging it is to obtain. And, the more sophisticated the tools necessary to obtain
them.
Sw eet Fruit
Design for Six Sigma
5+ Sigma
Bulk of Fruit
Process
3 - 5 Sigma Cha ra cteriza tion
a nd O ptimiza tion
Low Ha nging Fruit
3 Sigma Ba sic Tools of
Problem Solving
Ground Fruit
1 - 2 Sigma Simplify a nd
St nda
Sta d rdize
di
What is Six Sigma…as a Philosophy?
General Electric: First, what it is not. It is not a secret society, a slogan or a cliché. Six Sigma is
a highly di i li d process that
hi hl disciplined th t helps
h l us ffocus on d developing
l i and dd
delivering
li i near-perfectf t products
d t
and services. The central idea behind Six Sigma is that if you can measure how many "defects" you
have in a process, you can systematically figure out how to eliminate them and get as close to "zero
defects" as possible. Six Sigma has changed the DNA of GE — it is now the way we work — in
everything we do and in every product we design.
Honeywell: Six Sigma refers to our overall strategy to improve growth and productivity as well as
a measurementt off quality.
lit As
A a strategy,
t t Six
Si Sigma
Si is
i a way for
f us to
t achieve
hi performance
f
breakthroughs. It applies to every function in our company, not just those on the factory floor. That
means Marketing, Finance, Product Development, Business Services, Engineering and all the other
functions in our businesses are included.
Lockheed Martin: We’ve just begun to scratch the surface with the cost-saving initiative called Six
Sigma and already we’ve generated $64 million in savings with just the first 40 projects. Six Sigma
uses data gathering and statistical analysis to pinpoint sources of error in the organization or products
and determines precise ways to reduce the error.
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Understanding Six Sigma
History of Six Sigma
Simplistically Six
Simplistically,
• 1 9 8 4 Bob Ga lvin of M otorola edicted the first objectives of
Sigma was a
Six Sigma
program that was
– 1 0 x levels of improvem ent in service a nd qua lity by 1 9 8 9
generated around
targeting a process – 1 0 0 x improvement by 1 9 9 1
Mean (average) six – Six Sigma ca pa bility by 1 9 9 2
Standard Deviations – Bill Sm ith, a n engineer from M otorola , is the person credited a s
away from the the fa ther of Six Sigm a
closest specification • 1984 T Tex a s IInstruments
t t a ndd ABB W orkk closely
l l w ith
limit. M otorola to further develop Six Sigma
• 1 9 9 4 Applica tion ex perts lea ve M otorola
By using the process
• 1 9 9 5 AlliedSigna l begins Six Sigma initia tive a s directed by
Standard Deviation
La rry Bossidy
to determine the
location of the Mean – Ca ptured the interest of W a ll Street
the results could be • 1 9 9 5 Genera l Electric, led by Ja ck W elsh, bega n the most
predicted at 3.4 w idesprea d underta k ing of Six Sigma even a ttem pted.
defects per million by • 1 9 9 7 To present Six Sigma spa ns industries w orldw ide
the use of statistics.
There is an allowance for the process Mean to shift 1.5 Standard Deviations. This number is another
academic and esoteric controversial issue not worth debating. We will get into a discussion of this
number later in the course.
The Phase Approach of Six Sigma
Six Sigma created a realistic and quantifiable goal in terms of its target of 3.4 defects per million
operations. It was also accompanied by a methodology to attain that goal.
That methodology was a problem solving strategy made up of four steps: measure, analyze,
improve and control.
When GE launched Six Sigma they improved the methodology to include the Define Phase Phase.
Control Im prove Ana ly ze M ea sure Define
M O TO RO LA GEN ERAL ELECTRIC
Today the Define Phase is an important aspect to the methodology. Motorola was a mature culture
from a process perspective and didn’t necessarily have a need for the Define Phase.
M t organizations
Most i ti today
t d DEFINITELY need
d it tto properly
l approach
h iimprovementt projects.
j t
As you will learn, properly defining a problem or an opportunity is key to putting you on the right
track to solve it or take advantage of it.
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Understanding Six Sigma
DMAIC Phases Roadmap
Cha mpion
Process
O w ner
Identify Problem Area
/
Determine Appropriate Project Focus
Define
Estimate COPQ
Charter Project
M ea sure
Assess Stability, Capability, and Measurement Systems
Identify and Prioritize All X’s
Ana lyze
Prove/ Disprove Impact X’s Have On Problem
Improve
e
Id if Prioritize,
Identify, Pi i i S
Select
l S
Solutions
l i C
Controll or Eli
Eliminate
i X’
X’s Causing
C i P Problems
bl
Implement Solutions to Control or Eliminate X’s Causing Problems
Control
Implement Control Plan to Ensure Problem Does N ot Return
Verify Financial Impact
This roadmap provides an overview of the DMAIC approach.
Define Phase Deployment
Here is a more granular Business Case
Selected
look of the Define
Phase. N otify Belts and Stakeholders
This is what you will
Create High-Level Process Map
later learn to be a Level
2 Process Map. Determine Appropriate Project Focus
(Pareto, Project Desirability)
Define & Charter Project
(Problem Statement
Statement, Objective
Objective, Primary Metric
Metric, Secondary Metric)
N Estimate COPQ
Approved
Project Recommend Project Focus
Focus
Y
Create Team
Charter Team
Ready for Measure
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Understanding Six Sigma
Define Phase Deliverables
Listed below are the type of Define Phase deliverables that will be reviewed by this course.
By the end of this course, you should understand what would be necessary to provide these
deliverables in a presentation.
Charter Benefits Analysis
Team Members (Team Meeting Attendance)
Process Map – high level
Primary Metric
Secondary Metric(s)
Lean Opportunities
Stakeholder Analysis
Project Plan
Issues and Barriers
Six Sigma Strategy
Six Sigma places the emphasis on the Process
– Using a structured, data driven approach centered on the customer Six Sigma can resolve
business problems where they are rooted, for example:
Month end reports
Capital
C it l expenditure
dit approvall
New hire recruiting
Six Sigma is a Breakthrough Strategy
– Widened the scope of the definition of quality
includes the value and the utility of
th product/service
the d t/ i to
t both
b th th
the
company and the customer.
Success of Six Sigma depends on the extent of
transformation achieved in each of these levels.
Six Sigma as a breakthrough strategy to process improvement. Many people mistakenly
assume that Six Sigma only works in manufacturing type operations. That is categorically
untrue. It applies to all aspects of either a product or service based business.
Wherever there are processes, Six Sigma can improve their performance.
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Understanding Six Sigma
Conventional Strategy
Conventional definitions of quality focused on conformance to standards.
Requirement Requirement
or or
LSL
Target USL
Bad Good Bad
Conventional strategy was to create a product or service that met certain specifications.
Assumed that if products and services were of good quality then their
performance standards were correct.
Rework was required to ensure final quality.
Efforts were overlooked and unquantified (time, money, equipment
usage, etc).
The conventional strategy was to create a product or service that met certain specifications. It was
assumed that if products and services were of good quality, then their performance standards were
correct irrespective of how they were met.
Using this strategy often required rework to ensure final quality or the rejection and trashing of some
products and the efforts to accomplish this “inspect in quality” were largely overlooked and un-
quantified.
You will see more about this issues when we investigate the Hidden Factory.
Problem Solving Strategy
The Problem Solving M ethodology focuses on:
• Understanding the relationship between independent variables
and the dependant variable.
• Identifying the vital few independent variables that effect the
dependant variable.
• Optimizing the independent variables so as to control our
dependant variable(s).
• Monitoring the optimized independent variable(s).
There a re m a ny ex a m ples to describe dependa nt a nd
independent rela tionships.
• W e describe this concept in terms of the equation:
• This equation is also commonly referred to as a transfer function
Y=f
Y f ((Xi)
This sim ply sta tes tha t Y is a function of the
X ’ s. In other w ords Y is dicta ted by the X ’ s.
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Understanding Six Sigma
Problem Solving Strategy (contd)
Y = f(x) is a key concept that you must fully understand and remember
remember. It is a fundamental principle
to the Six Sigma methodology. In its simplest form it is called “cause and effect”. In its more robust
mathematical form it is called “Y is equal to a function of X”. In the mathematical sense it is data
driven and precise, as you would expect in a Six Sigma approach. Six Sigma will always refer to an
output or the result as a Y and will always refer to an input that is associated with or creates the
output as an X.
Another way of saying this is that the output is dependent on the inputs that create it through the
blending that occurs from the activities in the process. Since the output is dependent on the inputs
we cannot directly control it, we can only monitor it.
Example
Y f (Xi)
Y=f
W hich process va ria bles (ca uses) ha ve critica l impa ct on
the output (effect)?
Crusher Yield = f ( Feed, Speed,Material
Type , Wear , Lubricant )
Tool
Time to Close = f (Balance
Trial
B l ,A
Correct
Accounts
t ,A
Sub
Accounts
t ,
Credit
M
Memos ,
Entry
Mistakes,X ) n
Applied
If we are so good at the X’s why are we constantly
testing and inspecting the Y?
Y=f(x) is a transfer function tool to determine what input variables (X’s) affect the output responses
(Y’s). The observed output is a function of the inputs. The difficulty lies in determining which X’s
are critical to describe the behavior of the Y’s.
The X’s determine how the Y performs.
In the Measure Phase we will introduce a tool to manage the long list of input variable and their
relationship to the output responses. It is the X-Y Matrix or Input-Output Matrix.
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Understanding Six Sigma
Y=f(X) Exercise
Exercise:
Consider establishing a Y = f(x) equation for a
simple everyday activity such as producing a
cup of espresso. In this case our output or Y is
espresso.
Espresso =f ( X1 , X , X , X , X )
2 3 4 n
Notes
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Understanding Six Sigma
Six Sigma Strategy
W e use a va riety of Six Sigma
tools to help sepa ra te the “ vita l (X1)
few ” va ria bles effecting our Y (X10) (X4)
from the “ trivia l ma ny.”
Some processes conta in ma ny, (X7) (X8)
ma ny va ria bles. How ever, our
Y is not effected equa lly by a ll
of them. (X3)
(X5)
By focusing on the vita l few w e
insta ntly ga in levera ge. (X9)
Archimedes
A hi d sa
Archimedes said:
id ““ Give
id: Gi me
Give me aa lever
lever
l big
bi enough
big h aand
enough nd
d
fulcrum
fulcrum on
on w
w hich
hich to
to pla
place
ce it,
it, aand
nd II sha
shallll move
move the
the
w
w orld.”
orld.”
(X6)
(X2)
As you go through the application of DMAIC you will have a goal to find the root causes to the
problem you are solving. Remember that a vital component of problem solving is cause and effect
thinking or Y=f(X). To aid you in doing so, you should create a visual model of this goal as a funnel -
a funnel that takes in a large number of the “trivial many contributors,” and narrows them to the “vital
few contributors
contributors” by the time they leave the bottom
bottom.
At the top of the funnel you are faced with all possible causes - the “vital few” mixed in with the
“trivial many.” When you work an improvement effort or project, you must start with this type of
thinking. You will use various tools and techniques to brainstorm possible causes of performance
problems and operational issues based on data from the process. In summary, you will be applying
an appropriate set of “analytical methods” and the “Y is a function of X” thinking, to transform data
into the useful knowledge needed to find the solution to the problem. It is a mathematical fact that 80
percent of a problem is related to six or fewer causes
causes, the X’s.
X’s In most cases it is between one and
three.
The goal is to find the one to three Critical X’s from the many potential causes when we start an
improvement project. In a nutshell, this is how the Six Sigma methodology works.
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Understanding Six Sigma
Breakthrough Strategy
Ba d 66-Sigm
-Sigmaa
Brea k through UCL
UCL
Brea k through
Perforrma nce
O ld Sta nda rd
LCL
LCL
UCL
UCL
N ew Sta nda rd
LCL
LCL
Good
Time Juran’s Quality Handbook by Joseph Juran
By utilizing the DMAIC problem solving methodology to identify and optimize the vital few variables we
will realize sustainable breakthrough performance as opposed to incremental improvements or, even
worse, temporary and non-sustainable improvement..
The image above shows how after applying the Six Sigma tools, variation stays within the specification
limits.
VOC, VOB, VOE
The
foundation of
Six Sigma
VO C is Customer Driven
requires
F
Focus on the
th
voices of the VO B is Profit Driven
Customer, the
Business, and
the Employee
which
VO E is Process Driven
provides:
Awareness of the needs that are critical to the quality (CTQ) of our products and
services
Identification of the gaps between “what is” and “what should be”
Identification of the process defects that contribute to the “gap”
Knowledge of which processes are “most broken”
Enlightenment as to the unacceptable costs of poor quality (COPQ)
Six Sigma puts a strong emphasis on the customer because they are the ones assessing our performance
y respond
and they p byy either continuing
g to purchase
p our products
p and services or….byy NOT!
So, while the customer is the primary concern we must keep in mind the Voice of the Business – how do we
meet the business’s needs so we stay in business? And we must keep in mind the Voice of the Employee -
how do we meet employees needs such that they remain employed by our firm and remain inspired and
productive?
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Understanding Six Sigma
Six Sigma Roles and Responsibilities
There are many roles and responsibilities for successful implementation of Six Sigma
Sigma.
MBB
Executive Leadership
Champion/Process Owner
Black Belts Master Black Belt
Black Belt
Green Belt
Green Belts Yellow Belt
Yellow Belts
Just like a winning sports team, various people who have specific positions or roles have defined
responsibilities. Six Sigma is similar - each person is trained to be able to understand and perform the
responsibilities of their role. The end result is a knowledgeable and well coordinated winning business
team.
The division of training and skill will be delivered across the organization in such a way as to provide a
specialist: it is based on an assistant structure much as you would find in the medical field between a
Doctor, 1st year Intern, Nurse, etc. The following slides discuss these roles in more detail.
In addition to the roles described herein, all other employees are expected to have essential Six Sigma
skills for process improvement and to provide assistance and support for the goals of Six Sigma and the
company.
Six Sigma has been designed to provide a structure with various skill levels and knowledge for all
members of the organization. Each group has well defined roles and responsibilities and communication
links. When all individuals are actively applying Six Sigma principles, the company operates and performs
at a higher level
level. This leads to increased profitability
profitability, and greater employee and customer satisfaction
satisfaction.
Executive Leadership
Not all Six Sigma deployments are driven from the top by executive leadership. The data is clear,
however, that those deployments that are driven by executive management are much more successful
than those that are not.
Makes decision to implement the Six Sigma initiative and develop accountability
method
Sets meaningful goals and objectives for the corporation
Sets performance expectations for the corporation
Ensures continuous improvement in the process
Eliminates barriers
The executive leadership owns the vision for the business, they provide sponsorship and set
expectations
t ti for
f the
th results
lt ffrom Si
Six Si
Sigma. They
Th enable bl th
the organization
i ti tot apply
l Six
Si Sigma
Si and
d then
th
monitor the progress against expectations.
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Understanding Six Sigma
Champion/Process Owner
Champions identify and select the most meaningful projects to work on
on, they provide guidance to the
Six Sigma Belt and open the doors for the belts to apply the process improvement technologies.
Own project selection, execution control, implementation and realization of
gains
Own Project selection
Obtain needed project resources and eliminates roadblocks
Participate
P ti i t in i allll project
j t reviews
i
Ask good questions…
One to three hours per week commitment
Champions are responsible for functional business activities and to provide business deliverables to
either internal or external customers. They are in a position to be able to recognize problem areas of
the business, define improvement projects, assign projects to appropriate individuals, review projects
and support their completion
completion. They are also responsible for a business roadmap and employee
training plan to achieve the goals and objectives of Six Sigma within their area of accountability.
Master Black Belt
MBB should be well versed with all aspects of Six Sigma, from technical applications to Project
Management. MBBs need to have the ability to influence change and motivate others.
Provide advice and counsel to Executive Staff
Provide training and support
- In class training
MBB - On site mentoring
Develop
D l sustainability
t i bilit ffor th
the b
business
i
Facilitate cultural change
A Master Black Belt is a technical expert, a “go to” person for the Six Sigma methodology. Master
Black Belts mentor Black Belts and Green Belts through their projects and support Champions. In
addition to applying Six Sigma, Master Black Belts are capable of teaching others in the practices
and tools.
Being a Master Black Belt is a full time position.
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Understanding Six Sigma
Black Belt
Bl k Belts
Black B lt are application
li ti experts
t andd workk projects
j t within
ithi th
the b
business.
i Th
They should
h ld bbe wellll
versed with The Six Sigma Technologies and have the ability to drive results.
Project team leader
Facilitates DMAIC teams in applying Six Sigma
methods to solve problems
Black Belts Works cross-functionally
Contributes to the accomplishment of organizational
goals
Provides technical support to improvement efforts
A Black Belt is a project team leader, working full time to solve problems under the direction of a
Champion, and with technical support from the Master Black Belt. Black Belts work on projects j
that are relatively complex and require significant focus to resolve. Most Black Belts conduct an
average of 4 to 6 projects a year -- projects that usually have a high financial return for the
company.
G
Green Belt
B lt
Green Belts are practitioners of Six Sigma Methodology and typically work within their
functional areas or support larger Black Belt Projects.
• Well versed in the definition & measurement of critical processes
- Creating Process Control Systems
Typically works project in existing functional area
Green Belts Involved in identifying improvement opportunities
Involved in continuous improvement efforts
- Applying basic tools and PDCA
Team members on DMAIC teams
- Supporting projects with process knowledge & data
collection
Green Belts are capable of solving problems within their local span of control. Green Belts remain in
their current positions, but apply the concepts and principles of Six Sigma to their job environment.
Green Belts usually address less complex problems than Black Belts and perform at least two projects
per year. They may also be a part of a Black Belt’s team, helping to complete the Black Belt project.
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Understanding Six Sigma
Yellow Belt
Provide support to Black Belts and Green Belts as
needed
Yellow Belts May be team members on DMAIC teams
- Supporting projects with process
knowledge and data collection
Yellow Belts participate in process management activities. They fully understand the principles of Six
Si
Sigma and
d are capablebl off characterizing
h t i i processes, solving
l i problems
bl associated
i t d with
ith th
their
i workk
responsibilities and implementing and maintaining the gains from improvements. They apply Six Sigma
concepts to their work assignments. They may also participate on Green and Black Belt projects.
The Life of a Six Sigma Belt
Training as a Six Sigma Belt can be one of the most rewarding undertakings of your career and
one of the most difficult.
You can expect to experience:
Hard work (becoming a Six Sigma Belt is not
easy)
Long hours of training
Be a change agent for your organization
Work effectively as a team leader
Prepare and present reports on progress
Receive mentoring from your Master Black Belt
Perform mentoring for your team members
ACHIEVE RESULTS!
You’re going places!
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Understanding Six Sigma
Black & Green Belt Certification
To achieve certification,, Belts must::
Complete all course work:
- Be familiar with tools and their application
- Practice using tools in theoretical situations
- Discuss how tools will apply to actual projects
Demonstrate application of learning to training project:
- Use the tools to effect a financially measurable
and significant business impact through their
projects
- Show ability to use tools beyond the training We’ll be
environment
Must complete two projects within one year from beginning of training watching!
Achieve results and make a difference
Submit a final report which documents tool understanding and
application as well as process changes and financial impact for each
project
Organizational Behaviors
All players in the Six Sigma process must be willing to step up and act according to the Six Sigma
set of behaviors.
Leadership by example: “walk the talk”
Encourage and reward individual initiative
Align incentive systems to support desired behaviors
Eliminate functional barriers
Embrace “systems” thinking
Balance standardization with flexibility
Six Sigma is a system of improvement. It develops people skills and capability for the participants. It
consists of proven set of analytical tools, project-management techniques, reporting methods and
managementt methods
th d combined
bi d tto fform a powerful
f l problem-solving
bl l i and
dbbusiness-improvement
i i t
methodology. It solves problems, resulting in increased revenue and profit, and business growth.
The strategy of Six Sigma is a data-driven, structured approach to managing processes, quantifying
problems, and removing waste by reducing variation and eliminating defects.
The tactics of Six Sigma are the use of process exploration and analysis tools to solve the equation
of Y = f(X) and to translate this into a controllable practical solution.
As a performance goal, a Six Sigma process produces less than 3.4 defects per million
opportunities. As a business goal, Six Sigma can achieve 40% or more improvement in the
profitability of a company. It is a philosophy that every process can be improved, at breakthrough
levels.
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Understanding Six Sigma
At this point, you should be able to:
Describe the objectives of Six Sigma
Describe the relationship between variation and sigma
Recognize some Six Sigma concepts
Recognize the Six Sigma implementation model
Describe the general roles and responsibilities in Six
Sigma
You have now completed Define Phase – Understanding Six Sigma.
Notes
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Lean Six Sigma
Black Belt Training
Define Phase
Six Sigma Fundamentals
Now we will continue in the Define Phase with the “Six
Six Sigma Fundamentals
Fundamentals”.
The output of the Define Phase is a well developed and articulated project. It has been correctly
stated that 50% of the success of a project is dependent on how well the effort has been defined.
There’s that Y=f(X) thinking again.
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Six Sigma Fundamentals
Overview
The core fundamentals
of this phase are Understa nding Six Sigm a
Process Maps, Voice of
the Customer, Cost of
Poor Quality and Six Sigm a Funda m enta ls
Process Metrics.
Process
Process M
Maaps
ps
We will examine the
meaning of each of V
Voice
i of
Voice off the
th
the Custom
C t
Custom er
er
these and show you
how to apply them. Cost
Cost of
of Poor
Poor Q
Qua
uality
lity
Process
Process M
Metrics
etrics
Selecting Projects
Elem ents of W a ste
W ra p Up & Action Item s
What is a Process?
W hy ha ve 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)
(pros′es) n. – A repetitive
repetitive a nd systema
system atic
tic series
of steps or
or a ctivities where
where inputs are modified to achieve
inputs are modified to
a value-added
value-added output
output
What is a Process? Many people do or conduct a process everyday but do you really think of it as a
process? Our definition of a process is a repetitive and systematic series of steps or activities where inputs
are modified to achieve a value-added output.
Usually a successful process needs to be well defined and developed.
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Six Sigma Fundamentals
Examples of Processes
We go thru processes everyday. Below are some examples of processes. Can you think
of other processes within your daily environment?
Injection molding Recruiting staff
Decanting solutions Processing invoices
Filling vial/bottles Conducting research
Crushing ore Opening accounts
Refining oil Reconciling accounts
Turning screws Filling out a timesheet
Building custom homes Distributing mail
Paving roads Backing up files
Changing a tire Issuing purchase orders
Process Maps
Process Mapping, also called
flowcharting, is a technique to • The purpose of Process Maps is to:
visualize the tasks, activities and – Identify the complexity of the process
– Communicate the focus of problem solving
steps necessary to produce a product
or a service. The preferred method for • Process Maps are living documents and must be changed as the
describing a process is to identify it process is changed
with a generic name, show the – They represent what is currently happening, not what you think is
workflow with a Process Map and happening.
– They should be created by the people who are closest to the process
d
describe
ib itits purpose with
ith an
operational description.
Process Map
Remember that a process is a
blending of inputs to produce some
desired output. The intent of each
task, activity and step is to add value,
ct
Sta rt Step A Step B Step C Step D Finish
e
sp
as perceived by the customer, to the
In
product or service we are producing.
You cannot discover if this is the case
until you have adequately mapped the process.
There are many reasons for creating a Process Map:
- It helps all process members understand their part in the process and how their process fits into the
bigger picture.
- It describes how activities are performed and how the work effort flows, it is a visual way of standing
above the process and watching how work is done. In fact, Process Maps can be easily uploaded into
model and simulation software allowing you to simulate the process and visually see how it works.
- It can be used as an aid in training new people.
- It will show you where you can take measurements that will help you to run the process better.
- It will help you understand where problems occur and what some of the causes may be.
- It leverages other analytical tools by providing a source of data and inputs into these tools.
- It identifies many important characteristics you will need as you strive to make improvements.
The individual processes are linked together to see the total effort and flow for meeting business and
customer needs. In order to improve or to correctly manage a process, you must be able to describe it
in a way that can be easily understood. Process Mapping is the most important and powerful tool you
will use to improve the effectiveness and efficiency of a process.
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Six Sigma Fundamentals
Process Map Symbols
St d d symbols
Standard b l ffor process mapping
i (available in Microsoft
Office™, Visio™, iGrafx™ , SigmaFlow™ and other products):
A RECTAN GLE indicates an A PARALLELAGRAM shows
activity. Statements within the that there are data
rectangle should begin with a
verb
A DIAM O N D signifies a decision An ELLIPSE shows the start
point. Only two paths emerge from and end of the process
a decision point: N o and Yes
An ARRO W shows the A CIRCLE W ITH A LETTER O R
1 N UM BER IN SIDE symbolizes
b li
connection and direction
the continuation of a
of flow
flowchart to another page
There may be several interpretations of some of the process mapping symbols; however, just
about everyone uses these primary symbols to document processes. As you become more
practiced you will find additional symbols useful,
useful i.e.
i e reports,
reports data storage etc
etc. For now we will start
with just these symbols.
High Level Process Map
At a minimum a high
One of the deliverables from the Define Phase is a high level process
level Process Map
map, at a minimum it must include:
must include; start
– Start and stop points
and stop points, all
process steps, all – All process steps
decision points and – All decision points
directional flow. – Directional flow
– Value categories as defined below
Also be sure to • Value Added:
include Value – Physically transforms the “ thing” going through the process
C t
Categories
i such h as – Must be done right the first time
Value Added – Meaningful from the customer’s perspective (is the customer willing to
(Customer Focus) and pay for it?)
Value Enabling • Value Enabling:
(External Stakeholder – Satisfies requirements of non-paying external stakeholders (government
regulations)
focus).
• N on-Value Added
– Everything else
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Six Sigma Fundamentals
Process Map Example
START B Z Call Center
LOGON TO PC &
REVIEW CASE LOGOFF PHONE, CHECK Process
TOOL HISTORY & MAIL,E-MAIL,VOICE MAIL
APPLICATIONS
TAKE NOTES
E
Map
C Y
SCHEDULED
N PHONE TIME?
A
SCHEDULED
PHONE TIME? Z TRANSFER Y
TRANSFER
APPROPRIATE?
CALL
D N
Y
A EXAMINE NEXT NOTE
N OR RESEARCH ITEM
LOGON
TO PHONE IMMEDIATE PROVIDE
Y RESPONSE Y RESPONSE
ACCESS CASE TOOL F
D PHONE
TIME AVAILABLE? PHONE&
N WALK-IN NOTE
CALL or DATA ENDS ENTER APPROPRIATE
WALK-IN? N SSAN (#,9s,0s)
Z CALL PUT ON HOLD,
REFER TO IF EMP DATA NOT
PHONE DATA REFERENCES POPULATED, ENTER
CAPTURE BEGINS
CREATE A CASE
Y INCL CASE TYPE
ANSWER? OLD N
DETERMINE WHO DATE/TIME, &
CASE
IS INQUIRING N NEEDED BY
Y
QUERY INTERNAL UPDATE ENTRIES
ACCESS CASE TOOL HRSC SME(S) INCL OPEN DATE/TIME AUTO Y
ROUTE
ROUTE
DETERMINE NATURE N
OF CALL & CONFIRM Y
ANSWER?
UNDERSTANDING
CASE Y CLOSE CASE
N CLOSED W/ E
DATE/TIME
CASE TOOL N OFF HOLD AND ADD TO N
RECORD? C ARRANGE CALL RESEARCH
BACK PHONE DATA LIST GO TO E
TAKE ACTION
Y ENDS F or E NEXT
or
DEPENDING ON
DO RESEARCH F
B CASE
Cross Functional Process Map
When 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
These are best
Sending Fund Tra nsfers
used in
transactional
Department
Attach ACH ACH – Automated
Request
Start form to Clearing House.
processes or transfer
Invoice
where the
process involves Fill out ACH Receive
Vendor
Produce an No
enrollment payment End
Invoice
form
several
departments
departments. Match against
Accounting
Maintain database
Financial
Vendor Yes Input info into bank batch to balance ACH
The lines drawn info in
FRS?
web interface and daily cash transfers
batch
horizontally
across the map Accepts transactions,
Bank
transfer money, and
represent provide batch total
different
Accounting
Review and
General
21.0
departments in Process
transfer in
3.0
Journey Entry
Bank
Reconciliation
p y
the company FRS
and are usually
referred to as Swim Lanes. By mapping in this manner one can see how the various
departments are interdependent in this process.
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Six Sigma Fundamentals
Process Map Exercise
Ex ercise objective: Using your favorite process
mapping tool create a process map of your project
or functional area.
1 Create
1. C t a high
hi h llevell process map, use enough
hddetail
t il
to make it useful.
• It is helpful to use rectangular post-it’s for process
steps and square ones turned to a diamond for
decision points.
2. Color code the value added (green) and non-value
added (red) steps.
3. Be prepared to discuss this with your mentor
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Six Sigma Fundamentals
Do you know your Customer?
Know ing your customer is more tha n just a ha ndsha k e. It
is necessa ry to clea rly understa nd their needs. In Six Sigma
w e ca ll this “ understa nding the CTQ ’s” or critica l to
customer cha ra cteristics.
Voice Of the Customer Critical to Customer
Characteristics
An important element of Six Sigma is understanding your customer. This is called VOC or Voice of the
Customer. By doing this allows you to find all of the necessary information that is relevant between your
product/process and customer, better known as CTQ’s (Critical to Quality). The CTQ’s are the customer
requirements for satisfaction with your product or service.
Voice of the Customer
Do you feel confident
that you know what Voice of the Customer or VOC seems obvious; after all, we all
your customer wants? know what the customer wants. Or do we??
There of four steps The customer’s perspective has to be foremost in the mind of the Six
that can help you in Sigma Belt throughout the project cycle.
understanding your 1. Features
customer. These • Does the process provide what the customers expect and need?
• How do you know?
steps
t focus
f on the
th
2. Integrity
customer’s • Is the relationship with the customer centered on trust?
perspective of • How do you know?
features, your 3. Delivery
company’s integrity, • Does the process meet the customer’s time frame?
delivery mechanisms • How do you know?
4. Expense
and perceived value • Does the customer perceive value for cost?
versus cost. • How do you know?
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Six Sigma Fundamentals
What is a Customer?
Every process has a
There are different types of customers which dictates how we interact
deliverable. The person
or entity who receives with them in the process, in order to identify customer and supplier
this deliverable is a requirements we must first define who the customers are:
customer.
Ex terna l
There are two different – Direct: those who receive the output of your services, they generally are
types of customers; the source of your revenue
External and Internal
Internal. – Indirect: those who do not receive or pay for the output of your services
People generally forget but have a vested interest in what you do (government agencies)
about the Internal
customer and they are
just as important as the Interna l
customers who are - those within your organization
buying your product. who receive the output of your
work
Value Chain
The relationship from one process to the next in an organization creates a “ value
chain” of suppliers and receivers of process outputs.
Each process has a contribution and accountability to the next to satisfy the
external customer.
External customers needs and requirements are best met when all process
owners work cooperatively in the value chain.
Careful –
each move
has many
impacts!
The disconnect from Design and Production in some organizations is a good example. If Production
is not fed the proper information from Design how can Production properly build a product?
Every activity (process) must be linked to move from raw materials to a finished product on a store
shelf.
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Six Sigma Fundamentals
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 Example: Making an
customer) Online Purchase
• CTQ ’s can be vague and difficult to define.
Reliability – Correct
– The customer may identify a requirement that is difficult to measure
amount of money is
directly so it will be necessary to break down what is meant by the
taken from account
customer into identifiable and measurable terms
Product: Service: Responsiveness –
• Performance • Competence How long to you wait
• Features • Reliability for product after the
• Conformance • Accuracy Merchant receives
• Timeliness • Timeliness there money
• Reliability • Responsiveness
• Serviceability • Access Security – is your
• Durability • Courtesy
sensitive
iti bbanking
ki
• Aesthetics • Communication
information stored in
• Reputation • Credibility
• Completeness • Security secure place
• Understanding
Developing CTQ’s
The steps in developing
CTQ’s are identifying
the customer, capturing • Identify Customers
the Voice of the Step 1 • Listing
Customer and finally • Segmentation
validating the CTQ’s. • Prioritization
• Va lida te CTQ s
Step 2 • Translate VOC to CTQ s
• Prioritize the CTQ s
• Set Specified Requirements
• C fi CTQ s with
Confirm ith customer
t
• Ca pture V O C
Step 3 • Review existing performance
• Determine gaps in what you need to know
• Select tools that provide data on gaps
• Collect data on the gaps
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Six Sigma Fundamentals
Cost of Poor Quality (COPQ)
Another important tool from • COPQ stands for Cost of Poor Quality
this phase is COPQ, Cost of
Poor Quality. COPQ • As a Six Sigma Belt, one of your tasks will be to estimate COPQ for
represents the financial your process
opportunity of your team’s
improvement efforts. Those • Through your process exploration and project definition work you will
opportunities are tied to develop a refined estimate of the COPQ in your project
either hard or soft savings
savings.
• This project COPQ represents the financial opportunity of your team’s
COPQ, is a symptom improvement effort (VOB)
measured in loss of profit
(financial quantification) that • Calculating COPQ is iterative and will change as you learn more
results from errors (defects) about the process
and other inefficiencies in our No, not that
processes. This is what we kind of cop
are seeking to eliminate! queue!
You will use the concept of COPQ to quantify the benefits of an improvement effort and also to
determine where you might want to investigate improvement opportunities.
The Essence of COPQ
There are four
• COPQ helps us understand the financial impact of problems created elements that make up
by defects. COPQ; External Costs,
Internal Costs,
Prevention Costs and
• COPQ is a sym ptom, not a defect
Appraisal Costs.
– Projects fix defects with the intent of improving symptoms. Internal Costs are
opportunities of error
• Th
The concepts off traditional
di i lQQuality
li C Cost are the
h ffoundation
d i ffor f
foundd in
i a process th
thatt
COPQ. is within your
– External, Internal, Prevention, Appraisal organization. Whereas,
External Costs are
costs associated to the
• A significant portion of COPQ from any defect comes from effects finish product
that are difficult to quantify and must be estimated. associated with the
internal and external
customer.
Prevention Costs are typically cost associated to product quality, this is viewed as an investment that
companies make to ensure product quality. The final element is Appraisal costs, these are tied to
product inspection and auditing.
This idea was of COPQ was defined by Joseph Juran and is a great point of reference to gain a
further understanding
understanding.
Over time and with Six Sigma, COPQ has migrated towards the reduction of waste. Waste is a better
term, because it includes poor quality and all other costs that are not integral to the product or service
your company provides. Waste does not add value in the eyes of customers, employees or investors.
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Six Sigma Fundamentals
COPQ - Categories
Interna l CO PQ Prevention
• Quality Control • Error Proofing Devices
Department • Supplier Certification
• Inspection • Design for Six Sigma
• Quarantined Inventory • Etc…
• Etc…
Detection
• W arranty • Supplier Audits
• Customer Complaint Related • Sorting Incoming Parts
Travel • Repaired
p Material
• Customer Charge Back Costs • Etc…
• Etc…
COPQ - Iceberg
Generally speaking W a rra nty
Inspection
Recode
COPQ can be Rew ork
classified as tangible Rejects
(easy to see) and
Visible Costs
intangible (hard to
see). Visually you can
think of COPQ as an Engineering cha nge orders Lost sa les
iceberg Most of the
iceberg.
iceberg is below the Tim e va lue of money (less obvious) La te delivery
Ex pediting costs
water where you
cannot see it. M ore Set-ups
Ex cess inventory
Similarly the tangible W ork ing Ca pita l
a lloca tions
Long cy cle tim es
quality costs are costs Ex cessive M a teria l
the organization is O rders/ Pla nning
rather conscious of,f Hidden Costs Lost Custom er Loya lty
may be measuring
already or could easily be measured. The COPQ metric is reported as a percent of sales revenue. For
example tangible costs like inspection, rework, warranty, etc can cost an organization in the range of 4
percent to 10 percent of every sales dollar it receives. If a company makes a billion dollars in revenue,
this means there are tangible wastes between 40 and 100 million dollars.
g
Even worse are the intangible Costs of Poor Quality.
y These are typically
yp y 20 to 35% of sales. If yyou
average the intangible and tangible costs together, it is not uncommon for a company to be spending
25% of their revenue on COPQ or waste.
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Six Sigma Fundamentals
COPQ and Lean
W a ste does not a dd, subtra ct or otherw ise modify the
throughput in a w a y tha t is perceived by the customer to
a dd va lue.
• In some cases, waste may be
necessary,
y, but should be
Lea n Enterprise
recognized and explored:
Seven Elements of W a ste *
– Inspection, Correction, W aiting
u Correction
in suspense
u Processing
– Decision diamonds, by
definition, are non-value added u Conveyance
• Often,, waste can provide
p u Motion
opportunities for additional defects u W aiting
to occur. u Overproduction
• W e will discuss Lean in more u Inventory
detail later this week.
Implementing Lean fundamentals can also help identify areas of COPQ. Lean will be discussed later.
COPQ and Lean
W hil
hile ha
h rdd sa vings
i a re a lw
l a y s more desira
d i ble bl
beca use they a re ea sier to qua ntify, it is a lso
necessa ry to think a bout soft sa vings.
CO PQ – Ha rd Sa vings CO PQ – Soft Sa vings
• Labor Savings • Gaining Lost Sales
• Cycle Time Improvements • Missed Opportunities
• Scrap Reductions • Customer Loyalty
• Hidden Factory Costs • Strategic Savings
• y Carrying
Inventory y g Cost • Preventing Regulatory Fines
Here are examples are COPQ’s Hard and Soft Savings.
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Six Sigma Fundamentals
COPQ Exercise
Ex ercise objective: Identify current COPQ
opportunities in your direct area.
1. Brainstorm a list of COPQ opportunities.
2. Categorize the top 3 sources of COPQ for the
four classifications:
• Internal
• Et
External l
• Prevention
• Detection
Notes
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Six Sigma Fundamentals
The Basic Six Sigma Metrics
In a ny process improvement endea vor, the ultima te
objective is to ma k e the process:
• Better: DPU, DPMO, RTY (there are others, but they derive from these
basic three)
• F ster:
Fa t C l Ti
Cycle Time
• Chea per: COPQ
IfIfyou
youmake
makethetheprocess
processbetter
betterby
byeliminating
eliminatingdefects
defectsyou
youwill
willmake
makeititfaster
faster
IfIfyou
you choose to make the process faster, you will have to eliminatedefects
choose to make the process faster, you will have to eliminate defectstoto
bebeasasfast
fastas
asyou
youcan
canbe
be
IfIfyou
you make the processbetter
make the process betteror
orfaster,
faster,you
youwill
willnecessarily
necessarilymake
makeititcheaper
cheaper
The
The metrics
metricsfor
for aallllSix
Six Sigma
Sigma projects
projectsfa
fallllinto
into one
one of
of these
these three
three
ca tegories
ca tegories
Th previous
The i slides
lid have
h been
b discussing
di i process managementt and d th
the concepts
t bbehind
hi d a process
perspective. Now we begin to discuss process improvement and the metrics used.
Some of these metrics are:
DPU: defects per unit produced.
DPMO: defects per million opportunities, assuming there is more than one
opportunity to fail in a given unit of output.
g p yyield, the p
RTY: rolled throughput probability
y that any
y unit will g
go through
g ap
process
defect-free.
Cycle Time Defined
Think of Cycle Time in terms of your product or tra nsa ction
in the eyes of the customer of the process:
– It is the time required for the product or transaction to go through the
entire process, from beginning to end
– It is not simply the “ touch time” of the value-added portion of the process
W ha t is the cycle
y time of the pprocess you
y ma pp
pped?
Is there a ny va ria tion in the cycle time? W hy?
Cycle time includes any wait or queue time for either people or products.
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Six Sigma Fundamentals
Defects Per Unit (DPU)
DPU or D Defects
f t per U Unitit
quantifies individual defects Six Sigma methods quantify individual defects and not just defectives
on a unit and not just – Defects account for all errors on a unit
defective units. A returned • A unit may have multiple defects
unit or transaction can be • An incorrect invoice may have the wrong amount due and the wrong
due date
defective and have more
– Defectives simply classifies the unit bad
than one defect.
• Doesn’t matter how many defects there are
Defect: A physical count of • The
Th invoice
i i iis wrong, causes are unknown
k
all errors on a unit, – A unit:
regardless of the disposition • Is the measure of volume of output from your area.
of the unit. • Is observable and countable. It has a discrete start and stop point.
• It is an individual measurement and not an average of
EXAMPLES: An error in a measurements.
Online transaction has
(typed wrong card number, Tw o Defects O ne Defective
internet failed). In this case
one online transaction had 2
defects (DPU=2).
A Mobile Computer that has 1 broken video screen, 2 broken keyboard keys and 1 dead battery,
has a total of 4 defects. (DPU=4)
Is a p
process that pproduces 1 DPU better or worse than a p
process that g
generates 4 DPU? If yyou
assume equal weight on the defects, obviously a process that generates 1 DPU is better; however,
cost and severity should be considered. However, the only way you can model or predict a process
is to count all the defects.
First Time Yield
Traditional metrics
when chosen
poorly can lead the
team in a direction
that is not
consistent with the
focus of the
business. Some
of the metrics we
must be
concerned about
would be FTY -
FIRST TIME
YIELD. It is very
possible to have
100% FTY and
spend tremendous
amounts in excess
repairs and
rework.
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Six Sigma Fundamentals
Rolled Throughput Yield
Instead of relying on FTY - First Time Yield, a more efficient metric to use is RTY-Rolled Throughput
Yield. RTY has a direct correlation (relationship) to Cost of Poor Quality.
In the few organizations where data is readily available, the RTY can be calculated using actual defect
data. The data provided by this calculation would be a binomial distribution since the lowest yield
possible would be zero.
As depicted here, RTY is the multiplied yield of each subsequent operation throughout a process (X1 *
X2 * X3…)
RTY Estimate
Sadly, in most companies there is • In many organizations the long term data required to
not enough data to calculate RTY calculate RTY is not available, we can however estimate
in the long term. Installing data RTY using a known DPU as long as certain conditions are
collection practices required to met.
provide such data would not be • The Poisson distribution generally holds true for the
cost effective. In those instances, random distribution of defects in a unit of product and is
it is necessary to utilize a the basis for the estimation.
prediction off RTY in the form
f off e- – The best estimate of the proportion of units containing
dpu (e to the negative dpu). no defects, or RTY is:
When using the e-dpu equation to RTY = e-dpu -dpu
calculate the probability of a
product or service moving through The mathematical constant e is the base of the natural logarithm.
e ≈ 2.71828 18284 59045 23536 02874 7135
the entire process without
a defect,, there are several things
g that must be held for consideration. While this would seem to be a
constraint, it is appropriate to note that if a process has in excess of 10% defects, there is little need to
concern yourself with the RTY.
In such extreme cases, it would be much more prudent to correct the problem at hand before worrying
about how to calculate yield.
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Six Sigma Fundamentals
Deriving RTY from DPU
The Binomial distribution is the true model for defect data
data, but the Poisson is the
convenient model for defect data. The Poisson does a good job of predicting
when the defect rates are low.
120%
Poisson
Poisson VS
VS Binomial
Binomial (r=0,n=1)
(r=0,n=1) Probability
Probability Yield
Yield Yield
Yield %
%Over
Over
120% of
ofaadefect
defect (Binomial)
(Binomial) (Poisson)
(Poisson) Estimated
Estimated
0.0
0.0 100%
100% 100%
100% 0%
0%
100%
100% Yield
Yield (Binomial)
(Binomial) 0.1
0.1 90%
90% 90%
90% 0%
0%
Yield
Yield (Poisson)
(Poisson) 0.2
0.2 80%
80% 82%
82% 2%
2%
(RTY)
80%
d (RTY)
80%
0.3
0.3 70%
70% 74%
74% 4%
4%
60% 0.4
0.4 60%
60% 67%
67% 7%
7%
60%
Yield
0.5
05
0.5 50%
50% 61%
61% 11%
11%
Yiel
40% 0.6
0.6 40%
40% 55%
55% 15%
15%
40%
0.7
0.7 30%
30% 50%
50% 20%
20%
20%
20%
0.8
0.8 20%
20% 45%
45% 25%
25%
0.9
0.9 10%
10% 41%
41% 31%
31%
0%
0% 1.0
1.0 0%
0% 37%
37% 37%
37%
0.0
0.0 0.1
0.1 0.2
0.2 0.3
0.3 0.4
0.4 0.5
0.5 0.6
0.6 0.7
0.7 0.8
0.8 0.9
0.9 1.0
1.0
Probability
Probabilityof
ofaadefect
defect
Binom ia l
n = number of units
r = number of ppredicted defects
p = probability of a defect occurrence P i
Poisson
q = 1 -p
For low defect rates (p < 0.1), the Poisson approximates the Binomial fairly well.
Our goal is to predict yield. For process improvement, the “yield” of interest is the ability of a process
to produce zero defects (r=0). Question: What happens to the Poisson equation when r=0?
D i i RTY from
Deriving f DPU - Modeling
M d li
Given a Unit
probability that Ba sic Q uestion: W hat is the likelihood of
O pportunity producing a unit with zero defects?
any opportunity is
a defect = # • For the unit shown above the following
data was gathered:
defects / (# units
– 60 defects observed
pp p
x # opps per unit):
) – 60 units processed
RTY
RTY for
o DPU
for U == 11
DPU
0.368
0.368
• W hat is the DPU? 0.364
To what value is 0.364
0.36
0.36
Yield
the P(0)
Yield
0.356
0.356
converging? 0.352
0.352
• W hat is probability that any given 0.348
0.348
Note: Ultimately, opportunity will be a defect? 10
10 100
100 1000
1000 10000
10000 100000
100000 1000000
1000000
Chances
Chances Per
Per Unit
Unit
this means that
you need the
y • W hat is the probability that any given Opportunities P(defect) P(no defect) RTY (Prob defect free unit)
ability to track all opportunity will N OT be a defect is: 10 0.1 0.9 0.34867844
100 0.01 0.99 0.366032341
the individual 1000 0.001 0.999 0.367695425
10000 0.0001 0.9999 0.367861046
defects which • The probability that all 10 opportunities 100000 0.00001 0.99999 0.367877602
on single unit will be defect-free is: 1000000 0.000001 0.999999 0.367879257
occur per unit via
If we extend the concept to an infinite number
your data of opportunities, all at a DPU of 1.0, we will
collection system. approach the value of 0.368.
Probability that an opportunity is a defect = 0.1
Probability that an opportunity is not a defect = 1 - 0.1 = 0.9
Probability that all 10 opportunities are defect-free = 0.910 = 0.34867844
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Six Sigma Fundamentals
RTY Prediction — Poisson Model
• Use the binomial to estimate the probability of a discrete event
(good/ bad) when sampling from a relatively large population,
n > 16, & p < 0.1.
• W hen r=0, we compute the probability of finding zero defects per
When r =
unit (called “ rolled throughput yield” ).
1, this
• The table to the right shows the proportion of product which will
equation have (dpu) r e – dpu
simplifies Y=
to:
– 0 defects (r=0)
(r 0) r r! p[r]
– 1 defect (r=1) W hen DPU=1
(dpu)*e-
dpu – 2 defects (r=2), etc… 0 0.3679
• W hen, on average, we have a process, with 1 defect per unit, 1 0.3679
then we say there is a 36.79% chance of finding a unit with zero 2 0.1839
defects. There is only a 1.53% chance of finding a unit with 4
defects. 3 0.0613
• W hen r=1,
r 1 this equation simplifies to: 4 0.0153
• To predict the % of units with zero defect (i.e., RTY): 5 0.0031
– count the number of defects found 6 0.0005
– count the number of units produced 7 0.0001
– compute the dpu and enter it in the dpu equation: 8 0.0000
The p
point of this slide is to demonstrate the mathematical model used to p predict the p
probability
y of an
outcome of interest. It has little practical purpose other than to acquaint the Six Sigma Belt with the math
behind the tool they are learning and let them understand that there is a logical basis for the equation.
Six Sigma Metrics – Calculating DPU
The DPU for a given operation can be calculated by dividing the number of
defects found in the operation by the number of units entering the operational
step
step.
1 0 0 pa rts built
2 defects identified a nd corrected
dpu = 0 .0 2
So RTY for this step w ould be e-.0 2 (.9 8 0 1 9 9 ) or 9 8 .0 2 %.
RTY
RTYTO =0 .9 0
TOTT= 0 .9 0
RTY 1 =0 .9 8 RTY 2 = 0 .9 8 RTY 3 =0 .9 8 RTY 4 = 0 .9 8 RTY 5 = 0 .9 8
dpu = .0 2 dpu = .0 2 dpu = .0 2 dpu = .0 2 dpu = .0 2
44
dpu
dpuTO = .1
TOTT = .1
If the process had only 5 process steps with the same yield the process
RTY would be: 0.98 * 0.98 * 0.98 * 0.98 * 0.98 = 0.903921 or 90.39%. Since our
metric of primary concern is the COPQ of this process, we can say that in less than 9% of
the time we will be spending dollars in excess of the pre-determined standard or value
added amount to which this process is entitled.
N ote: RTY’s must be multiplied a cross a process,
DPU’s a re a dded a cross a process.
When the number of steps in a process continually increase, we then continue to multiply the yield
from each step to find the overall process yield. For the sake of simplicity let’s say we are calculating
the RTY for a process with 8 steps. Each step in our process has a yield of .98. Again, there will be a
direct correlation between the RTY and the dollars spent to correct errors in our process.
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Six Sigma Fundamentals
Focusing our Effort – FTY vs. RTY
Assume we are creating two products in our organization
that use similar processes.
Product A
FTY = 80%
Product B
FTY = 80%
How do you k now w ha t to w ork on?
*None of the data used herein is associated with the products shown herein. Pictures are no more than illustration to make a point to teach the concept.
If we chose onlyy to examine the FTY in our decision making
gpprocess,, it would be difficult to determine
the process and product on which our resources should be focused.
As you have seen, there are many factors behind the final number for FTY. That’s where we need to
look for process improvements.
Focusing our Effort – FTY vs. RTY
Let’s look at the DPU of each product assuming equal opportunities and
Answer Slide margin…
questions.
Product A
Now we have a better Product B
idea of:
“What
What does a defect dpu 200 / 100 = 2 dpu
dpu 100 / 100 = 1 dpu
cost?”
“What product should N ow, can you tell which to work on?
get the focus?”
“ the product with the highest DPU?” …think again!
How much more time and/ or raw material are required?
How much extra floor space do we need?
How much extra staff or hours required to perform the rework?
How many extra shipments are we paying for from our suppliers?
How much testing have we built in to capture our defects?
*None of the data used herein is associated with the products shown herein. Pictures are no more than illustration to make a point to teach the concept.
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Six Sigma Fundamentals
At this point, you should be able to:
Describe what is meant by “Process Focus”
Generate a Process Map
Describe the importance of VOC, VOB and VOE, and CTQ’s
Explain COPQ
Describe the Basic Six Sigma metrics
Explain the difference between FTY and RTY
Explain how to calculate “Defects per Unit” (DPU)
You have now completed Define Phase – Six Sigma Fundamentals.
Notes
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Lean Six Sigma
Black Belt Training
Define Phase
Selecting Projects
Now we will continue in the Define Phase with the “Selecting
Selecting Projects
Projects”.
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Selecting Projects
Overview
The core fundamentals of Understa nding
g Six Sigma
g
this phase are Selecting
Projects, Refining and
Defining and Financial Six Sigma Funda m enta ls
Evaluation.
Selecting Projects
The output of the Define
Phase is a well developed
and
a da articulated
t cu ated p
project.
oject Itt has
as Selecting
g Projects
Selecting j
Projects
been correctly stated that
50% of the success of a Refining
Refining &
& Defining
Defining
project is dependent on how
well the effort has been
Financial
Financial Evaluation
Evaluation
defined.
Elem ents of W a ste
W ra p Up & Action Items
Approaches to Project Selection
Here are three approaches
There a re three ba sic a pproa ches to Project Selection…
for identifying projects. Do
you know what the best
approach is?
The most popular process
“ Bla ta ntly
O bvious”
for generating and selecting
Identifies projects based on individual’s projects is by holding
“ experience” and “ tribal knowledge” “brainstorming” sessions. In
of areas that m a y be creating
problems in delivering our service(s) / brainstorming sessions a
product(s)
d t( ) and d hopefully
h f ll tie
bottom-line business impact.
ti tto group off peoplel gett together,
t th
sometimes after polling
process owners for what
“ Structured Approa ch” “blatantly obvious” problems
Identifies projects based on organizational data, provides a direct plan to effect core business are occurring, and as a team
metrics that have bottom-line impact.
try to identify and refine a list
All three w a y s w ork …the Structured Approa ch is the most desira ble. of problems that MAY be
causing issues in the
organization. Furthermore in an organization that does not have an intelligent problem-solving
methodology in-place, such as Six Sigma, Lean or even TQM, what follows the project selection process
brainstorm is ANOTHER brainstorming session focused on coming up with ideas on how to SOLVE these
problems.
Although brainstorming itself can be very structured it falls far short of being a systematic means of
identifying projects that will reduce cost of poor quality throughout the organization. Why…for several
reasons One
reasons. One, it does not ensure that we are dealing with the most important high-impact
high impact problems,
problems but
rather what happens to be the recent fire fight initiatives. Two, usually brainstorming does not utilize a data
based approach, it relies on tribal knowledge, experience and what people THINK is happening. As we
know what people THINK is happening and what is ACTUALLY happening can be two very different things.
In this module we are going to learn about establishing a structured approach for Project Selection.
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Selecting Projects
Project Selection – Core Components
Business Ca se – The business case is a high level articulation of the
area of concern. This case answers two primary questions; one,
what is the business motivation for considering the project and two,
what is our general area of focus for the improvement effort.
Project
j Cha rter – The p
project
j charter is a more detailed version of
the business case. This document further focuses the improvement
effort. It can be characterized by two primary sections, one, basic
project information and simple project performance metrics.
Benefits Ana lysis – The benefits analysis is a comprehensive
financial evaluation of the pproject.
j This analysis
y is concerned with
the detail of the benefits in regard to cost & revenue impact that we
are expecting to realize as a result of the project.
With every project there must be a minimum of 3 deliverables:
Business Case
Project Charter
Benefits Analysis
Project Selection - Governance
Responsible Frequency
Pa rty Resources of Upda te
Business Champion Business Unit
N/ A
Ca se (Process Owner) Members
Champion (Process
Project
Six Sigma Belt Owner) & Ongoing
Cha rter
Master Black Belt
Benefits Capture Champion (Process
Benefits Ongoing /
Managerg or Owner)) &
Ana ly sis DM AIC
D,M,A,I,C
Unit Financial Rep Six Sigma Belt
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Selecting Projects
A Structured Approach – A Starting Point
These are some The Starting Point is defined by the Champion or Process Owner and the
examples of Business Case is the output.
Business Metrics or – These are some examples of business metrics or Key Performance Indicators
Key Performance commonly referred to as KPI’s.
Indicators. – The tree diagram is used to facilitate the process of breaking down the metric of
interest.
What metric should
you focus on…it EBIT
depends? What is Level 2
Cy cle time
the project focus?
What are your Defects Level 2
organizations Level 1
strategic goals? Cost
Level 2
Are Cost of Sales Revenue
preventing growth? Compla ints Level 2
Are ccustomer
stomer
complaints Complia nce
resulting in lost
Sa fety
earnings? Are
excess cycle times
and yield issues eroding market share? Is the fastest growing division of the business the
refurbishing department?
It depends because the motivation for organizations vary so much and all projects should be directly
aligned with the organizations objectives. Answer the question: What metrics are my department not
meeting? What is causing us pain?
A Structured Approach - Snapshot
Once a metric point
has been determined The KPI’s need to brok en dow n into a ctiona ble levels.
another important
question needs to be Business M ea sures
asked – then the next Actiona ble Level
Key Performa nce Indica tors (KPIs)
question should be
what is my metric a
function of? In other
words what are all of
the things that affect
this metric. Level 2 Level 3 Activities Processes
Level 1
We utilize the Tree Level 2 Level 4 Activities Processes
Diagram to facilitate
the process of
breaking down the metric of interest. When creating the tree diagram you will eventually run into
activities
ti iti which
hi h are made
d up off processes. This
Thi iis where
h projects
j t willill b
be ffocused db because thi
this iis
where defects, errors and waste occur.
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Selecting Projects
Business Case Components – Level 1
Prima ry Business M ea sure or Key Perform a nce
Indica tor (KPI)
Level 2 Level 3 Activities Processes
Level 1
Level 2 Level 4 Activities Processes
– Focus on one primary business measure or KPI.
– Primary business measure should bear a direct line of site with the
organizations strategic objective.
– As the Champion narrows in on the greatest opportunity for
improvement, this provides a clear focus for how the success will be
measured.
Be sure to start with higher level metrics, whether they are measured at the Corporate Level,
Division Level or Department Level, projects should track to the Metrics of interest within a given
area. Primary Business Measures or Key Performance Indicators (KPI’s) serve as indicators of the
success of a critical objective.
Business Case Components – Business Measures
Post business measures (product/service) of the primary
business measure are lower level metrics and must focus on
the end product to avoid internal optimization at expense of
total optimization.
Business Business
Activities Processes
Prima ry Business M ea sure M ea sure
M ea sure Business Business
Activities Processes
M ea sure M ea sure
Post business measures (product/service) are lower level metrics and must focus on the end
product.
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Selecting Projects
Business Case Components - Activities
Business Business
Activities Processes
Prim a ry Business M ea sure M ea sure
M ea sure Business
Business
Activities Processes
M ea sure M ea sure
Y = f (x 1 , x 2 , x 3 …x n )
1 st Call Resolution = f (Calls, Operators, Resolutions…xn )
Black Box Testing = f (Specifications, Simulation, Engineering…x n)
Business measures are a function of activities. These activities are usually created or enforced by
direct supervision of functional managers. Activities are usually made up of a series of processes or
specific processes.
B i
Business C
Case C
Components
t - Processes
P
Business Business
Activities Processes
Prim a ry Business M ea sure M ea sure
M ea sure Business
Business
Activities
ct t es Processes
ocesses
M ea sure M ea sure
Y = f (x 1 , x 2 , x 3 …x n )
Resolutions = f (N ew Customers, Existing Customers, Defective Products…xn )
Simulation = f (Design, Data, modeling…xn )
The processes represent the final stage of the matrix where multiple steps result in the delivery
of some output for the customer. These deliverables are set by the business and customer and
are captured within the Voice of the Customer, Voice of the Business or Voice of the Employee.
What makes up these process are the X’s that determine the performance of the Y which is
where the actual breakthrough projects should be focused.
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Selecting Projects
What is a Business Case?
The Business Ca se communica tes the need for the project
in terms of meeting business objectives.
The Business Case
is created to ensure
the strategic need The components are:
for your project. It – Output unit (product/ service) for external customer
is the first step in – Primary business measure of output unit for project
project
j t description
d i ti – Baseline performance of primary business measure
development.
– Gap in baseline performance of primary business measure from
business objective
Let’s get
down to
business!
Business Case Example
p
During FY 2005, the 1st Time Call Resolution
Efficiency for New Customer Hardware Setup Here is an example of an
was 89% . Business Case. This defines
the problem and provides
evidence of the problem.
This represents a gap of 8% from the industry
standard of 93% that amounts to US
$2,000,000 of annualized cost impact.
As you review this statement remember the following format of what needs to be in a Business Case:
WHAT is wrong, WHERE and WHEN is it occurring, what is the BASELINE magnitude at which it is
occurring
i and d what
h t iis it COSTING me?
?
You must take caution to avoid under-writing a Business Case. Your natural tendency is to write too
simplistically because you are already familiar with the problem. You must remember that if you are to
enlist support and resources to solve your problem, others will have to understand the context and the
significance in order to support you.
The Business Case cannot include any speculation about the cause of the problem or what actions will
be taken to solve the problem. It’s important that you don’t attempt to solve the problem or bias the
solution at this stage. The data and the Six Sigma methodology will find the true causes and solutions
to the problem.
The next step is getting project approval.
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Selecting Projects
The Business Case Template
Fill in the Bla nk s for Your Project:
During ___________________________________ , the ____________________ for
(Period of tim e for ba seline perform a nce) (Prim a ry business m ea sure)
________________________ was _________________ .
(A k ey business process) (Ba seline perform a nce)
This gap of ____________________________
(Business objective ta rget vs. ba seline)
from ___________________ represents ____________________ of cost impact.
(Business objective) (Cost im pa ct of ga p)
You need to make sure that your own Business Case captures the units of pain, the business measures,
the performance and the gaps. If this template does not seem to be clicking use your own or just free
form your Business Case ensuring that its well articulated and quantified.
Business Case Exercise
Ex ercise objective: To understand how to create a “ strong
strong”
business case.
1. Complete the business case template below to the best of your
ability.
During ________________________ , the ____________________ for
(Period of time for ba seline perform a nce) (Prima ry business mea sure)
_______________________ was ___________________ .
(A k ey business process) (Ba seline performa nce)
This gap of __________________________
(Business objective ta rget vs. ba seline)
from __________________ represents ____________ of cost impact
impact.
(Business objective) (Cost impa ct of ga p)
Using the Excel file ‘Define Templates.xls’, Business Case, perform this exercise.
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Selecting Projects
What is a Project Charter?
The Charter expands
p on the Business Case,, it clarifies the projects
p j focus and measures of
project performance and is completed by the Six Sigma Belt.
Components:
• The Problem
• Project Scope
• Project Metrics
• Primary
y & Secondary
y
• Graphical Display of Project Metrics
• Primary & Secondary
• Standard project information
• Project, Belt & Process Owner
names
• Start date & desired End date
• Division or Business Unit
• Supporting Master Black Belt
(Mentor)
• Team Members
The Project Charter is an important document – it is the initial communication of the project. The first
phases of the Six Sigma methodology are Define and Measure. These are known as
“Characterization” phases that focus primarily on understanding and measuring the problem at hand.
Th f
Therefore some off th
the information
i f ti ini the
th Project
P j t Charter,
Ch t such h as primary
i and
d secondary
d metrics,
ti can
change several times. By the time the Measure Phase is wrapping up the Project Charter should be in
its final form meaning defects and the metrics for measuring them are clear and agreed upon.
As you can see some of the information in the Project Charter is self explanatory, especially the first
section. We are going to focus on establishing the Problem Statement and determining Objective
Statement, scope and the primary and secondary metrics.
P j t Charter
Project Ch t - Definitions
D fi iti
• Problem Sta tement - Articulates the pain of the defect or error in the
process.
• O bjective Sta tement – States how much of an improvement is desired
from the project.
• Scope – Articulates the boundaries of the project.
• Prima ry M etric – The actual measure of the defect or error in the process.
• Seconda ry M etric(s) – Measures of potential consequences (+ / -) as a
result of changes in the process.
• Cha rts – Graphical displays of the Primary and Secondary Metrics over a
period of time.
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Selecting Projects
Project Charter - Problem Statement
Migrate the Business Case into a Problem Statement
Statement…
First the Business
Case will serve as the
Problem Statement, as
the Belt learns more
about the process and
the defects that are
occurring.
Project Charter – Objective & Scope
Consider the following
for constructing your
Objective & Scope:
What represents a significant
improvement?
X amount of an increase in
yield
X amount of defect reduction
Use Framing Tools to establish
p
the initial scope
A project’s main objective is to solve a
problem! The area highlighted is for
articulating how much of a reduction or
improvement will yield a significant
impact to the process and business.
This is the starting point creating your
project’s Objective Statement.
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Selecting Projects
Pareto Analysis
Assisting you in
determining what Pa reto Ana lysis:
inputs are having
the greatest • A bar graph used to arrange information in such a way that priorities for
process improvement can be established.
impact on your
process is the
Pareto Analysis
approach
approach.
• The 80-20 theory was first developed in 1906, by Italian economist,
Vilfredo Pareto, who observed an unequal distribution of wealth and power
in a relatively small proportion of the total population. Joseph M. Juran is
credited with adapting Pareto' s economic observations to business
applications.
The 80:20 Rule Examples
• 20% of the time expended produced 80% of the results
• 80% of your phone calls go to 20% of the names on your list
• 20% of the streets handle 80% of the traffic
• 80% of the meals in a restaurant come from 20% of the menu
• 20% of the paper has 80% of the news
• 80% of the news is in the first 20% of the article
Here are some
• 20% of the p
people
p cause 80% of the p
problems examples of the 80:20
Rule. Can you think of
• 20% of the features of an application are used 80% of the time any other examples?
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Selecting Projects
Pareto Chart - Tool
Multi level Pareto Charts are used in a drill down fashion to get to root cause of the tallest bar
bar.
Level 1 Scrap
200000 100
80
150000
Level 2 60 Department
Percent
Cost
100000 180000
40
160000 100
50000 140000
20
80
120000
Percent
0 100000 0
60
Cost
Scrap A B C
Count
Percent
150000
73.2
30000
14.6
25000
80000
12.2 Level 3
Cum % 73.2 87.8 100.0 40 Part
60000
100000
100
40000
20
20000 80000
80
0 0
Department J M F W Other
60000
Percent
60
Count 95000 23000 19000 17500 5000
Cost
Percent 59.6 14.4 11.9 11.0 3.1
Cum % 59.6 74.0 85.9 96.9 40000
100.0 40
20000 20
0 0
Part Z101 Z876 X492
Count 75000 15000 5000
Percent 78.9 15.8 5.3
Cum % 78.9 94.7 100.0
The Pareto Charts are often referred to as levels. For instance the first graph is called the first level,
the next the second level and so on.
Start high and drill down. Let’s look at how we interpret this and what it means.
Let’s look at the following example.
Level 2
Department
By drilling down from the first level we see 180000
that Department J makes up approximately 160000 100
140000
60% of the scrapp and p
part Z101 makes up p 120000
80
80% of Dept J’s scrap.
Percent
100000 60
Cost
80000
See how we are creating focus and 60000 40
establishing a line of sight? 40000
20
20000
0 0
You many be eager to jump into trying to fix Department
Count
J
95000
M
23000
F
19000
W
17500
Other
5000
the problem once you have identified it, BE Percent
Cum %
59.6
59.6
14.4
74.0
11.9
85.9
11.0
96.9
3.1
100.0
CAREFUL. This is what causes rework and
defects in the first place. Level 3
Part
100000
100
Follow the methodology, be patient and you 80000
will eventually be led to a solution. 80
60000
Percent
60
Cost
40000 40
20000 20
0 0
Part Z101 Z876 X492
Count 75000 15000 5000
Percent 78.9 15.8 5.3
Cum % 78.9 94.7 100.0
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Selecting Projects
Pareto Chart - Example
Open MINITABTM and select • Use the “Call
Call Center
Center.mtw
mtw”
Pareto Analysis as shown above worksheet to create a Pareto
What would you do with this Pareto?
When your Pareto shows up
like this your focus is probably Pareto Chart of FAILURE MODE
too broad. 3000 100
2500
80
A good indication of having too 2000
Percent
Count
60
broad of a focus is when your 1500
40
1000
Pareto looks flat. It’s telling
500 20
you that there is no one or two
0 0
inputs that are impacting your FAILURE MODE
ED S L S
LL VE CT NS FO
process. Multiple inputs are O UT CA LE LI O W
T
IN
L F
R D IL N KD S
having similar effects. LY PE SK CO EA CU
CT R OP R CY BR ER
E D O LI S P
RR T
PO M O
CO RA M PR
You need to reduce the scope IN PE C O IM
O T
IN
of the project to get to a more
Count 495 489 478 472 468 455
granular level. Percent 17.3 17.1 16.7 16.5 16.4 15.9
Cum % 17.3 34.4 51.2 67.7 84.1 100.0
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Selecting Projects
Pareto Chart – Example (Cont.)
Let’s look at the problem a little differently…
- Using a higher level scope for the first Pareto may help in providing focus.
- Create another Pareto as shown below.
This g
gives a better p
picture of which p
product category
g yp produces the highest
g defect count.
Pareto Chart of PRODUCT CATAGORIES
2500
100
2000
80
1500
Percent
60
Count
1000 40
500 20
0 0
PRODUCT CATAGORIES r
US ND US ND he
-B -I -B -I Ot
N
UM UM EE
N
EE
IN IN GR
A T A T GR
PL PL
Count 1238 450 362 201 106
Percent 52.5 19.1 15.4 8.5 4.5
Cum % 52.5 71.6 87.0 95.5 100.0
Now we’ve got something to work with. Notice the 80% area…. draw a line from the 80%
mark
k across to
t the
th cumulative
l ti percentt line
li (R
(Red
d Li
Line)) iin th
the graph
h as shown
h h
here.
Which cards create the highest Defect Rates?
Now you are beginning to see what needs work to improve the performance of your project.
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Selecting Projects
Pareto Chart – Example (cont.)
N ow tha t w e ha ve more of a focus a rea , drill dow n
one more level.
– This cha rt w ill only use the cla ssifica tions w ithin the first
ba r on the previous cha rt.
– Crea te a nother Pa reto w hich w ill drill dow n to the
ca tegories w ithin the Ca rd type from the previous
Pa reto.
Remember to keep focused on finding the biggest bang for the buck
buck.
N ow w ha t, w e’ve got ourselves a nother
“ Fla teto” …
Pareto
ParetoChart
Chartof
ofTRAVEL
TRAVEL
1400
1400
100
100
1200
1200
1000
1000 80
80
Percent
800
Percent
800
Count
Count
60
60
600
600
40
40
400
400
20
20
200
200
00 00
TRAVEL
TRAVEL CAR
CAR HOTEL
HOTEL AIR
AIR
Count
Count 428
428 420
420 390
390
Percent
Percent 34.6
34.6 33.9
33.9 31.5
31.5
Cum
Cum% % 34.6
34.6 68.5
68.5 100.0
100.0
Essentia lly this tells us tha t there in no clea r
direction w ithin the Pla tinum Business Accounts.
This does not mean there is NO opportunity for improvements to be had, simply means nothing
obvious is sticking out at this level.
So keep looking.
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Selecting Projects
Project Charter – Primary Metric
Moving
M i on tto ththe nextt E bli
Esta blishing
hi the
h Prim
P i a ry M etric:
i
element of the Project The primary metric is a
Charter…, Using the very important measure in
Excel file ‘Define
the Six Sigma project, this
Templates.xls’,
Project Charter,
m etric is a qua ntified
perform the following m ea sure of the defect
exercise: or prima ry issue of
the project.
Since we will be
narrowing in on the W e can only have One
defect thru the Primary metric, recall the
Measure Phase it is equation y equals f of x,
common for the well, once your defect is
primary metric to
– Quantified measure of the defect located then Y will be your
change several times
– Serves as the indicator of project success defect…your primary
while we struggle to
understand what is – Links to the KPI or Primary Business measure metric will measure it.
happening in our – Only one primary metric per project
process of interest.
The primary metric also serves as the gauge for when we can claim victory with the project.
Project Charter – Secondary Metrics
Consider a project
focused on improving Esta blishing Seconda ry M etric(s):
duration of call times
(cycle time) in a call
Secondary metrics are put in
center. If we realize a
reduction in call time place to measure potential
you would want to changes that may occur as a
know if anything else result of making changes to
was effected. our Primary Metric.
Think about it…did They will Measure ancillary
overtime increase / g in the process, both
changes
reduce, did labor positive and negative.
increase / reduce, what
happened to customer
satisfaction ratings?
These are all things
that should be – Measures positive & negative consequences as a result of changes in the
measured in order to process
accurately capture the – Can have multiple secondary metrics
true effect of the
improvement.
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Selecting Projects
Project Charter – Metric Charts
The Project Charter
template includes the Genera ting Cha rts:
graphing capabilities
shown here. It is OK Primary and Secondary
to not use this Metrics should be
template but in any continually measured and
case ensure you are frequently updated during
regularly measuring the p
projects
j lifecycle.
y
the critical metrics.
Use them as your gauge
of Project Success and
Status. This is where your
Project’s progress will be
apparent.
– Displays Primary and Secondary metrics over time
– Should be updated regularly throughout the life of the project
– One for primary metric and one for each of the secondary metrics
– Typically time series plots
Project Charter Exercise
Using the Excel
file ‘Define Ex ercise objective: To begin planning the Project Charter
Templates.xls’, deliverable.
j
Project Charter, 1 Complete the Project Charter template to the best of your
1.
perform this ability.
exercise.
2. Be prepared to present your Stakeholder Analysis to your
mentor.
Project Charter Template.xls
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Selecting Projects
What is the Financial Evaluation?
The fina ncia l eva lua tion esta blishes the va lue of the project.
The components are:
– Impact OK, let’s add it up!
• Sustainable
• One-off
– Allocations
All ti
• Cost Codes / Accounting System
– Forecast
• Cash flow
• Realization schedule
Typically a financial representative is responsible for evaluating the financial
impact of the project. The Belt works in coordination to facilitate the proper
information.
Standard financial principals should be followed at the beginning and end of the project to provide a
true measure of the improvement’s effect on the organization.
A financial representative of the firm should establish guidelines on how savings will be calculated
throughout the Six Sigma deployment.
Benefits Capture - Calculation “Template”
Whatever your
organization’s W ha tever your orga niza tion’s protocol ma y be these a spects
protocol may be should be a ccounted for w ithin a ny improvement project.
these aspects
should be There are two types of
accounted for I
Impact, One Off &
within any
M
P
A
Sustainable Impact “One-Off” Impact Sustainable
C
i
improvement t T
Cost Codes allocate the
project.
C
impact to the
O
S appropriate area in the
T Reduced Increased Implemen-
C
O
Costs Revenue
Costs
tation
Capital
“ Books”
D
E
S
Forecasts allow for
F
proper management of
O
R
E
Realization Schedule
(C h Fl
(Cash Flow)) projects and resources
C
A
S
T By Period
(i.e. Q1,Q2,Q3,Q4)
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Selecting Projects
Benefits Capture - Basic Guidelines
• Benefits should be ca lcula ted on the ba seline of k ey
business process performa nce tha t rela te to a business
mea sure or KPI(s).
• The Project M ea sure (Prima ry M etric) ha s to ha ve a
direct link betw een the process a nd it KPI(s).
• Goa ls ha ve to be defined rea listica lly to a void under
or over setting.
• Benefits should be a nnua lized.
• B
Benefits
fit should
h ld be
b m ea sured
d in
i a ccorda
d nce w ith
Genera lly Accepted Accounting Principles (GAAP).
When calculating project benefits you should follow these steps.
Benefits Capture - Categorization
Here is an example of how to categorize your project’s impact.
A
• Projects directly impact the Income Statement or Cash Flow
Statement.
B
• Projects impact the Balance Sheet (working capital).
C• Projects avoid expense or investment due to known or expected
events in the future (Cost avoidance).
D• Projects are risk management, insurance, Safety, Health,
Environment and Community related projects which prevent or
reduce severity of unpredictable events.
You don’t want to take this one home!
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Selecting Projects
Benefits Calculation Involvement & Responsibility
Project Selection D-M -A-I-C Implementa tion 6 M onth Audit
Financial Financial Financial Financial
Representative
p Representative
p p
Representative Representative
Champion Black Belt Champion Process Owner
& &
Process Owner Process Owner
It is highly recommended that you follow the involvement governance shown here.
B
Benefits
fit CCapture
t - Summary
S
• Performa nce tra ck ing for Six Sigma Projects should
use the sa me discipline tha t w ould be used for
tra ck ing a ny other high-profile projects.
• The A-B-C-D ca tegories ca n be used to illustra te the
im pa ct of your project or a “ portfolio” of projects.
• Esta blish The Governess Grid for Responsibility &
Involvement.
It’s a wrap!
Just some recommendations to consider when running your projects or program.
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Selecting Projects
Benefits Calculation Template
The Benefits Calculation Template facilitates and aligns with the aspects discussed for Project
Accounting.
The Excel file ‘Define Templates.xls’, BENEFITS CALCULATION TEMPLATE.
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Selecting Projects
At this point, you should be able to:
Understand the various approaches to project selection
Articulate the benefits of a “Structured Approach”
Refine and Define the business problem into a Project
Charter to display critical aspects of an improvement
project
Make initial financial impact estimate
You have now completed Define Phase – Selecting Projects.
Notes
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Lean Six Sigma
Black Belt Training
Define Phase
Elements of Waste
Now we will continue in the Define Phase with “Elements of Waste”.
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Elements of Waste
Overview
The core fundamentals
of this phase are the 7 Understa nding Six Sigm a
components of waste
and 5S.
Six Sigm a Funda m enta ls
We will examine the
meaning of each of
these and show you
how to apply them
them. Selecting Projects
Elem ents of W a ste
77 Com
Components
ponents of
of W
W aaste
ste
55S
S
W ra p Up & Action Item s
Definition of Lean
“ Lean Enterprise is based on the premise that anywhere
work is being done, waste is being generated.
The Lean Enterprise seeks to organize its processes to the
optimum level, through the continual focus on the
identification and elimination of waste.”
-- Ba rba ra W hea t
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Elements of Waste
Lean – History
1885 1913 1955 - 1990 1993 -
Craft Production Mass Production Toyota Production Lean Enterprise
- Machine then harden - Part inter-changeability System - "Lean" applied to all
- Fit on assembly - Moving production line - Worker as problem functions in enterprise
- Customization - Production engineering solver value stream
- Highly skilled workforce - "Workers don't like to - Worker as process - Optimization of value
- Low production rates think" owner enabled by: delivered to all
- High Cost - Unskilled labor -- Training stakeholders and
- High production rates -- Upstream quality enterprises in value chain
- Low cost -- Minimal inventory - Low cost
- Persistent quality J t i ti
-- Just-in-time - Improving productivity
problems - Eliminate waste - High quality product
- Inflexible models - Responsive to change - Greater value for
- Low cost stakeholders
- Improving productivity
- High quality product
Lean Manufacturing has been going on for a very long time, however the phrase is credited to
James Womac in 1990. A small list of accomplishments are noted in the slide above primarily
focused on higher volume manufacturing.
Lean Six Sigma
The essence of Lean is to Lea n/ Six Sigma combines the strengths of ea ch system:
concentrate effort on removing • Lea n • Six Sigma
waste while improving process – Guiding principles based – Focus on voice of the customer
flow to achieve speed and agility operating system – Data and fact based decision
at lower cost. The focus of Lean – Relentless elimination of all making
is to increase the percentage of waste – Variation
V i ti reduction
d ti tto near
value-added work performed by – Creation of process flow and perfection levels
a company. Lean recognizes demand pull – Analytical and statistical rigor
– Resource optimization
that most businesses spend a
– Simple and visual
relatively small portion of their
energies on the true delivery of
value to a customer. While all Strength: Efficiency Strength: Effectiveness
companies are busy, it is
estimated for some companies An Ex trem ely Pow erful Combina tion!
that as little as 10% of their
time is spent on value-added work, meaning as much as 90% of time is allocated to non value-added
activities, or waste.
Forms of waste include: Wasted capital (inventory), wasted material (scrap), wasted time (cycle time),
wasted human effort (inefficiency, rework) and wasted energy (energy inefficiency). Lean is a
prescriptive methodology for relatively fast improvements across a variety of processes, from
administrative to manufacturing applications. Lean enables your company to identify waste where it
exists. It also provides the tools to make improvements on the spot.
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Elements of Waste
Lean Six Sigma (cont.)
Lean focuses on what calls the Value Stream, the sequence of activities and work required to
produce a product or to provide a service. It is similar to a Linear Process Flow Map, but it
contains its own unique symbols and data. The Lean method is based on understanding how the
Value Stream is organized, how work is performed, which work is value added vs. non-value
added and what happens to products and services and information as they flow through the Value
Stream. Lean identifies and eliminates the barriers to efficient flow through simple, effective tools.
Lean removes many forms of waste so that Six Sigma can focus on eliminating variability.
Variation leads to defects
defects, which is a major source of waste
waste. Six Sigma is a method to make
processes more capable through the reduction of variation. Thus the symbiotic relationship
between the two methodologies.
Project Requirements for Lean
• Perhaps one of the most criminal employee performance issues in
today’s organizations is generated not by a desire to cheat one’s
employer but rather by a lack of regard to waste.
• In every work environment there are multiple opportunities for
reducing the non-value added activities that have (over time) become
an ingrained part of the standard operating procedure.
• These non-value added activities have become so ingrained in our
process that they are no longer recognized for what they are,
W ASTE.
• w a ste (v.) Anything other than the minimum amount of time,
material, people, space, energy, etc needed to add value to the
product or service you are providing.
• The Japanese word for waste is muda .
Get that stuff
outta here!
Employees at some level have been de-sensitized
de sensitized to waste: “That’s
That s what we
we’ve
ve always done.”
done.
Lean brings these opportunities for savings back into focus with specific approaches to finding
and eliminating waste.
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Elements of Waste
Seven Components of Waste
M uda is cla ssified into seven components:
– Overproduction
– Correction (defects)
– Inventory
– Motion
– Overprocessing
– Conveyance
– W aiting
Sometimes a dditiona l forms of muda a re a dded:
– Under use of talent
– Lack
L k off safety
f t
Being Lea n mea ns elimina ting w a ste.
Overproduction
Overproduction is producing more than the next step needs or more
than the customer buys.
– It may be the worst form of waste because it contributes to all
the others.
Examples are:
9Preparing extra reports
9Reports not acted upon or
even read
9Multiple copies in data storage
ordering materials
9Over-ordering
9Over
9Duplication of effort/reports
Waste of Overproduction relates to the excessive
accumulation of work-in-process (WIP) or finished
goods inventory.
P d i more parts
Producing t th
than necessary to
t satisfy
ti f the
th customer’s
t ’ quantity
tit demand
d d thus
th leading
l di tto
idle capital invested in inventory.
Producing parts at a rate faster than required such that a work-in-process queue is created –
again, idle capital.
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Elements of Waste
Correction
Correction or defects are as obvious as they sound
sound.
Examples are:
9Incorrect data entry
9Paying the wrong vendor
9Misspelled words in
communications
9Making bad product
9Materials or labor discarded
Eliminate erors!! during production
Waste of Correction includes the waste of handling
and fixing mistakes. This is common in both
manufacturing and transactional settings.
Correcting or repairing a defect in materials or parts adds unnecessary costs because of
additional equipment and labor expenses. An example is the labor cost of scheduling employees
to work overtime to rework defects.
Inventory
Inventory is the liability of materials that are bought, invested in and
not immediately sold or used.
Examples are:
9Transactions not processed
9Bigger “in box” than “out
box”
9Over-ordering materials
consumed in-house
9Over-ordering raw materials
– just in case
Waste of Inventory is identical to overproduction except
that it refers to the waste of acquiring raw material before
the exact moment that it is needed.
Inventory is a drain on an organization’s overhead. The greater the inventory, the higher the
overhead costs become. If quality issues arise and inventory is not minimized, defective material
i hidd
is hidden iin fifinished
i h d goods.
d
To remain flexible to customer requirements and to control product variation, we must minimize
inventory. Excess inventory masks unacceptable change-over times, excessive downtime,
operator inefficiency and a lack of organizational sense of urgency to produce product.
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Elements of Waste
Motion
M ti is
Motion i the
th unnecessary movementt off people
l and
d equipment.
i t
– This includes looking for things like documents or parts as well as
movement that is straining.
Examples are:
9Extra steps
9Extra data entry
9Having to look
for something
Waste of Motion examines how people
move to ensure that value is added.
Any movement of people or machinery that does not contribute added value to the product, i.e.
programming delay times and excessive walking distance between operations.
Overprocessing
Overprocessing is tasks, activities and materials that don’t add value.
– Can be caused by poor product or tool design as well as from not
understanding what the customer wants.
Examples are:
9Sign-offs
9Reports that contain more
information than the
customer wants or needs
9Communications, reports
9Communications reports,
emails, contracts, etc that
contain more than the
necessary points (briefer is
Waste of Over-processing relates to better)
over-processing anything that may not
be adding value in the eyes of the 9Voice mails that are too
customer. long
Processing work that has no connection to advancing the line or improving the quality of the
product. Examples include typing memos that could be had written or painting components or
fixtures internal to the equipment.
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Elements of Waste
Conveyance
Conveyance is the unnecessary movement of material and Goods.
– Steps in a process should be located close to each other so
movement is minimized.
Examples are:
9Extra steps in the
process
9Distance traveled
9Moving paper from
place to place
Waste of Conveyance is the movement of material.
Conveyance is incidental, required action that does not directly contribute value to the product.
Perhaps it must be moved however, the time and expense incurred does not produce product or
service characteristics that customers see.
It’s vital to avoid conveyance unless it is supplying items when and where they are needed (i.e.
just-in-time delivery).
Waiting
Waiting is nonproductive time due to lack of material, people, or
equipment.
– C b
Can be d
due tto slow
l or b
broken
k machines,
hi material
t i l nott arriving
i i on ti
time,
etc.
Examples are:
9Processing once each month
instead of as the work comes in
9Showing up on time for a
meeting that starts late
9Delayed work due to lack of
communication from another
internal group
Waste of Waiting is the cost of an idle resource.
Idle time between operations or events, i.e. an employee waiting for machine cycle to finish or a
machine waiting for the operator to load new parts.
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Elements of Waste
Waste Identification Exercise
Ex ercise objective: To identify waste that occurs in
your processes.
W rite an example of each type of muda below:
– Overproduction
p ___________________
– Correction ___________________
– Inventory ___________________
– Motion ___________________
– Overprocessing ___________________
– Conveyance
y ___________________
– W aiting ___________________
Notes
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Elements of Waste
5S – The Basics
5S is a process designed to organize the workplace, keep it neat and
clean, maintain standardized conditions, and instill the discipline
required to enable each individual to achieve and maintain a world
class work environment.
Seiri - Put things in order
Seiton - Proper Arrangement
Seiso – Clean
Seiketsu – Purity
Shitsuke - Commitment
The term “5S” derives from the Japanese words for five practices leading to a clean and manageable
work area. The five “S” are:
‘Seiri' means to separate needed tools, parts and instructions from unneeded materials and to
remove the latter.
'Seiton' means to neatly arrange and identify parts and tools for ease of use.
'Seiso' means to conduct a cleanup campaign.
'Seiketsu'
Seiketsu means to conduct seiri, seiton and seiso at frequent, indeed daily, intervals to maintain a
workplace in perfect condition.
'Shitsuke' means to form the habit of always following the first four S’s.
Simply put, 5S means the workplace is clean, there is a place for everything and everything is in its
place. The 5S will create a work place that is suitable for and will stimulate high quality and high
productivity work. Additionally it will make the workplace more comfortable and a place of which you
can be proud.
Developed in Japan, this method assume no effective and quality job can be done without clean and
safe environment and without behavioral rules.
The 5S approach allows you to set up a well adapted and functional work environment, ruled by
simple yet effective rules. 5S deployment is done in a logical and progressive way. The first three S’s
are workplace actions, while the last two are sustaining and progress actions.
It is recommended to start implementing 5S in a well chosen pilot workspace or pilot process and
spread to the others step by step.
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Elements of Waste
English Translation
There have been many attempts to force 5 English “S”S words to maintain the original intent of 5S
from Japanese. Listed below are typical English words used to translate:
1. Sort (Seiri)
2. Straighten or Systematically Arrange (Seiton)
3. Shine or Spic and Span (Seiso)
4. Standardize (Seiketsu)
5. Sustain or Self-Discipline (Shitsuke)
Place things in such a
way that they can be
easily reached
whenever they are
needed
Straighten
Sort Shine
5S
Identify necessary items and Visual sweep of areas,
remove unnecessary ones, use eliminate dirt, dust and
time management scrap. Make workplace
shine.
Self-Discipline
Standardize
Make 5S strong in
Work to standards,
habit. Make
maintain standards,
problems appear and
wear safety equipment.
solve them.
Regardless of which “S” words you use, the intent is clear: Organize the workplace, keep it neat and
clean, maintain standardized conditions and instill the discipline required to enable each individual to
achieve and maintain a world class work environment.
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Elements of Waste
5S Exercise
Ex ercise objective: : To identify elements of 5S in
your workplace.
W rite an example for each of the 5S’s below:
• Sortt
S ____________________
• Straighten ____________________
• Shine ____________________
• Standardize ____________________
• Self-Discipline ____________________
Notes
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Elements of Waste
At this point, you should be able to:
Describe 5S
Identify and describe the 7 Elements of Waste
Provide examples of how Lean Principles can affect your area
You have now completed Define Phase – Elements of Waste.
Notes
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Lean Six Sigma
Black Belt Training
Define Phase
Wrap Up and Action Items
Now we will conclude the Define Phase with “Wrap Up and Action Items”.
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Wrap Up and Action Items
Define Phase Overview—The Goal
The goa l of the Define Pha se is to:
• Identify a process to improve and develop a specific Six Sigma
project.
– Six Sigma Belts define critical processes
processes, sub-processes and
elaborate the decision points in those processes.
• Define is the “ contract” phase of the project. W e are determining
exactly what we intend to work on and estimating the impact to
the business.
• At the completion of define you should have a description of the
process defect that is creating waste for the business.
Define Action Items
At this point you should a ll understa nd w ha t is
necessa ry to complete these a ction items a ssocia ted
w ith Define.
Define
– Charter Benefits Analysis
– Team Members
– Process Map – high level
– Primary Metric
– Secondary Metric(s)
– Lean Opportunities
– Stakeholder Analysis
Deliver
– Project Plan
– Issues and Barriers
the
Goods!
Certified Lean Six Sigma Black Belt Book Copyright OpenSourceSixSigma.com
79
Wrap Up and Action Items
Six Sigma Behaviors
• Being tenacious, courageous
• Being rigorous, disciplined
• Making data-based
data based decisions
• Embracing change & continuous learning Walk
• Sharing best practices
the
Walk!
Ea
Each
ch ““pla
player ” in
y er” in the
the Six
Six Sigm
Sigmaa process
process must
m ust be
be
AA RO LE M O DEL
RO LE M O DEL
for
for the
the Six
Six Sigm
Sigmaa culture.
culture.
Define Phase — The Roadblocks
Look for the potential roadblocks and plan to address them before
they become problems:
– N o historical data exists to support the project.
– Team members do not have the time to collect data.
– Data presented is the best guess by functional managers.
– Data is communicated from poor systems.
– The project is scoped too broadly.
– The team creates the “ ideal
ideal” Process Map rather than the “ as
is” Process Map.
Clear the road –
I’m comin’
through!
Certified Lean Six Sigma Black Belt Book Copyright OpenSourceSixSigma.com
80
Wrap Up and Action Items
DMAIC Roadmap
Process Owner
Champion/
Identify Problem Area
Determine Appropriate Project Focus
Define
Estimate COPQ
Establish Team
Measure
Assess Stability, Capability, and Measurement Systems
Identify and Prioritize All X’s
x’s
Analyze
Prove/Disprove Impact X’
x’s
s Have On Problem
Identify, Prioritize, Select Solutions Control or Eliminate X’s
x’s Causing Problems
Improve
Implement Solutions to Control or Eliminate X’s
x’s Causing Problems
Control
Implement Control Plan to Ensure Problem Doesn
Does ’Not
t Return
Return
Verify Financial Impact
Define Phase Deployment
The importance of the Define
Phase is to begin to understand Business Case
Selected
the problem and formulate it into a
project Notice that if the
project.
N otify Belts and Stakeholders
Recommended Project Focus is
approved the next step would be
Create High-Level Process Map
team selection.
Determine Appropriate Project Focus
(Pareto, Project Desirability)
Define & Charter Project
(Problem Statement, Objective, Primary Metric, Secondary Metric)
N Estimate COPQ
Approved
Project Recommend Project Focus
Focus
Y
Create Team
Charter Team
Ready for Measure
Certified Lean Six Sigma Black Belt Book Copyright OpenSourceSixSigma.com
81
Wrap Up and Action Items
Action Items Support List
Define Questions
Step One: Project Selection, Project Definition And Stakeholder Identification
Project Charter
• What is the problem statement? Objective?
• Is the business case developed?
• What is the primary metric?
• What are the secondary metrics?
• Why did you choose these?
• What are the benefits?
• Have the benefits been quantified? It not, when will this be done?
Date:____________________________
• Who is the customer (internal/external)?
• Has the COPQ been identified?
• Has the controller’s office been involved in these calculations?
• Who are the members on your team?
• Does anyone require additional training to be fully effective on the team?
Voice of the Customer (VOC) and SIPOC defined
• Voice of the customer identified?
• Key issues with stakeholders identified?
• VOC requirements identified?
• Business Case data gathered, verified and displayed?
Step Two: Process Exploration
Processes Defined and High Level Process Map
• Are the critical processes defined and decision points identified?
• Are all the key attributes of the process defined?
• Do you have a high level process map?
• Who was as in
involved
ol ed in its de
development?
elopment?
General Questions
• Are there any issues/barriers that prevent you from completing this phase?
• Do you have adequate resources to complete the project?
• Have you completed your initial Define report out presentation?
These are some additional questions to ensure all the deliverables are achieved.
Certified Lean Six Sigma Black Belt Book Copyright OpenSourceSixSigma.com
82
Wrap Up and Action Items
At this point, you should:
Have a clear understanding of the specific action items
Have started to develop a project plan to complete the action items
Have identified ways to deal with potential roadblocks
Be ready to apply the Six Sigma method within your business
You have now completed Define Phase.
Notes
Certified Lean Six Sigma Black Belt Book Copyright OpenSourceSixSigma.com
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