9/19/23, 12:17 AM Course Transcript

Six Sigma and Lean: Foundations and Principles

This course covers the foundations and principles of Six Sigma and Lean. You'll learn how, when used together, they can enable a system of
process control and process design that will transform your business.

This course includes the key Lean tools that are used in the typical Six Sigma project, and how they can be integrated into one business
process improvement methodology called Lean Six Sigma.

Table of Contents
1. Video: Six Sigma and Lean: Foundations and Principles (bs_apr07_a01_enus_01)
2. Video: Purpose and Goals of Six Sigma (bs_apr07_a01_enus_02)
3. Video: Key Characteristics of Six Sigma (bs_apr07_a01_enus_03)
4. Video: Evolution of Six Sigma (bs_apr07_a01_enus_04)
5. Video: Six Sigma Methodology (bs_apr07_a01_enus_05)
6. Video: Six Sigma Projects (bs_apr07_a01_enus_06)
7. Video: The Value of Six Sigma to the Organization (bs_apr07_a01_enus_07)
8. Video: Purpose and Value of Lean (bs_apr07_a01_enus_08)
9. Video: Lean Concepts and Process Steps (bs_apr07_a01_enus_09)
10. Video: Lean and the Concept of Value-added (bs_apr07_a01_enus_10)
11. Video: Lean Tools: Just-in-time (bs_apr07_a01_enus_11)
12. Video: Lean Tools: Poka-yoke (bs_apr07_a01_enus_12)
13. Video: Lean Tools: Kanban (bs_apr07_a01_enus_13)
14. Video: Lean Tools: Value Stream Mapping (bs_apr07_a01_enus_14)
15. Video: Six Sigma and Lean: Differences and Similarities (bs_apr07_a01_enus_15)
16. Video: Integrating Lean with Six Sigma (bs_apr07_a01_enus_16)
17. Video: Lean Six Sigma Deployment (bs_apr07_a01_enus_17)
18. Knowledge Check: Lean and Six Sigma Concepts and Tools
Course HTML Resources

1. Video: Six Sigma and Lean: Foundations and Principles (bs_apr07_a01_enus_01)

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9/19/23, 12:17 AM Course Transcript

In this course, you will learn the foundations and principles of Six Sigma and Lean. Along with the value that both of these quality and
productivity improvement methodologies bring to an organization. This course also includes the key Lean tools that are used in the
typical Six Sigma project. And how Lean and Six Sigma can be integrated into one methodology called Lean Six Sigma.

No Objectives

[Course title: Six Sigma and Lean: Foundations and Principles. The presenter is Ron Crabtree | CIRM, MLSSBB, SCOR-P, CSCTA.] This
course covers the foundations and principles of Six Sigma and Lean. Along with the value that both of these quality and productivity
improvement methodologies bring to an organization. This course also includes the key Lean tools that are used in the typical Six
Sigma project. And how Lean and Six Sigma can be integrated into one methodology called Lean Six Sigma.

2. Video: Purpose and Goals of Six Sigma (bs_apr07_a01_enus_02)

Learn how to recognize the purpose of Six Sigma and its potential value to organizations.

recognize the purpose of Six Sigma and its potential value to an organization

[Topic title: Purpose and Goals of Six Sigma.] What is Six Sigma? It all begins with an important metric. And that metric is Defects Per
Million Opportunities or DPMO. DPMO is a scientific measure and a way to calculate the number of potential mistakes or defects we
get when we provide a product or service. This DPMO metric sits inside the organizational system within which Six Sigma operates.
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9/19/23, 12:17 AM Course Transcript

The next part of this system is called the improvement methodology. And the phrase for that is called DMAIC, which translates as
define, measure, analyze, improve and control. This improvement methodology in addition to the metrics is part of an overall
organizational system, within which we use Six Sigma to improve business processes of all types. So why Six Sigma? Well, for one
reason, there's a definite proven track record. The Six Sigma term was popularized by General Electric and Motorola back in the
1980s and 1990s. But the reality is Six Sigma has been widely adopted by industry leaders of all kinds in all industries. The Six Sigma
basic techniques have been in practice for nearly 100 years.

Six Sigma provides a very good toolkit and methodology to accomplish a number of things. Six Sigma is not limited just to
manufacturing, which is the industry where it was born. This methodology has been successfully deployed in every kind of business.
Profit, non-profit, government, financial services and manufacturing are examples of industries that benefit from the application of Six
Sigma. There are a number of benefits to any organization from using Six Sigma and we're going to talk about that next. All industries,
whether they are for profit or not, are concerned with operating costs. All organizations must consider revenue now and in the future.
So bringing down cost and bringing cost under control is always critical. Six Sigma has been a very effective method to accomplish this
by using proven methods to reduce the cost of quality over time. Another key component is driving customer satisfaction. Six Sigma
initiatives that are being implemented the right way are focused on the voice of the customer and also focused on making changes
that reduce variation, reduce inefficiencies and improve quality in our processes. Another benefit to this is that we can improve the
net profits and the company's value over time, and that's a good thing. Organizations that are focused on making money now and in
the future need to leverage techniques like Six Sigma to ensure a long-term success and viability while never losing their focus on the
customer.

3. Video: Key Characteristics of Six Sigma (bs_apr07_a01_enus_03)

As we're able to measure and capture data about something, we can begin to chart it and evaluate its relative performance against a
goal. And using the methods for Six Sigma, we would begin to understand with the use of standard deviations how our performance
compares to that goal with respect to an upper or lower specification limit. In this video, you will learn about the characteristics of Six
Sigma.

identify key characteristics of Six Sigma

[Topic title: Key Characteristics of Six Sigma.] This topic addresses the concept of Defects Per Million Opportunities, or DPMO. As
we're able to measure and capture data about something, we can begin to chart it and evaluate its relative performance against a goal,
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or mean measurement. And using the methods for Six Sigma, we would begin to understand with the use of standard deviations, how
our performance compares to that goal with respect to an upper or lower specification limit. [The standard deviation graph is
displayed with the upper limit as 6σ and lower limit as -6σ.] Anything outside these limits will not meet the expectation for what it is
we're trying to produce and deliver to our customer. The chart includes the mean, or goal, while the increments further and further
from the mean represent increasing standard deviations. While many operations may set a level of tolerance at 3 standard deviations,
plus or minus from the mean. If our process is operating at a level of Six Sigma quality, we're setting a much higher expectation of
quality. An operation performing at a level of Six Sigma quality is 99.9997% defect free, meaning only about three defects per million
opportunities are expected. What is the difference between an operation where the deliverables are expected to fall within Three
Sigma versus an operational that operates at Six Sigma? The difference may surprise you.

Here is the difference that Six Sigma makes when an operation is able to limit defects to only 3.4 per million opportunities in its
processes. At Three Sigma this could mean losing 20,000 pieces of mail per hour. But with Six Sigma quality, only 7 pieces of mail are
lost which is a monstrous improvement. What about 5,000 incorrect surgeries per week versus just 1.7? Or outages of electricity of
almost 7 hours per month versus a very, very rare 1 hour every 34 years? How about drug prescriptions? 54,000 prescriptions that are
wrong is way too many, considering it could be a matter of life and death. Six Sigma quality suggests that this should only happen only
once every 25 years. [With three sigma, there are five short or long landings at one major airport in the US, but with six sigma, there is
one short or long landing at all US airports in ten years.] How about landing airplanes? Thankfully airlines mostly operate at Six Sigma
quality today. And as a result, we don't see a lot of airplanes crashing. However, it would happen a lot if they only operated a three
deviations or three sigma in their performance. Six Sigma is very adaptable and with a little bit of effort, any organization can work
toward this level of performance. Six Sigma quality can affect every single industry that we work in, from manufacturing to consulting,
profit to nonprofit, government to the private sector. A great application of Six Sigma quality can be evidenced in customer facing
organizations like call centers and contact centers that serve customers. But there is no upper or lower limit in terms of the size or
type of organization that can adapt and use Six Sigma successfully.

4. Video: Evolution of Six Sigma (bs_apr07_a01_enus_04)

In this video, you will learn how to sequence key developments in the evolution of Six Sigma.

sequence key developments in the evolution of Six Sigma

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[Topic title: Evolution of Six Sigma.] In this topic, we will review the Six Sigma timeline to get an understanding of the evolution of Six
Sigma over time. The important Six Sigma term standard deviation was defined in the 19th century, but if we go backward in time to
the late 1800s we have Frederick Taylor and Tayloristic thinking. Taylor's economic theory, the division of labor, gave rise to a lot of the
things that we would call Six Sigma today. In the 1920s we had folks like Henry Ford and Walter Shewhart, George Box and others
that were doing development around Six Sigma as we would recognize it today. As you move into the 1940s, there was a big push by
the US government to support military manufacturing. This is where the notion of statistical process control really came to the
forefront. These included the early teachings of statistician Walter Shewhart. And then after World War II, we had Dr. D Edwards
Deming and Dr. Joseph Juran. Their work in Japan led to the development of quality as a competitive differentiator for the Japanese.
It was during this time that the Japan Union of Scientist and Engineers was born and began to create some of the foundations for what
we later adopted as total quality management, or TQM. As we moved into the 1970s and early 80s, it was Michael Harry and others
working with Motorola, and General Electric that crafted and branded the concept of Six Sigma as a term to bundle these methods
together. This has all led to the modern day, and Six Sigma being applied in many different industries.

Now we will cover some key improvement concepts that have been developed over the years. Back in the early 1920s there was the
Plan, Do, Check, Act cycle. Then as we moved into the 1960s and 70s this led to statistical process control and the formation of the
Japan Union of Scientists and Engineers. Then the United States began adopting and embracing total quality management, or TQM in
the 1980s. In that same time frame is when quality circles developed by the Japanese began to be well understood. Moving into the
late 80s and early 90s, we had the integration of ISO9000 with total quality management and the development of the Baldrige criteria
for performance excellence. Now we will explore the Plan, Do, Check, Act, or PDCA cycle in more depth. It generally starts with a plan
of understanding. What is it that we want to change and why are we changing it? Then we take action to actually do it followed by the
all important check step. Sometimes this is actually referred to a study. But it's validating to determine if what we did actually
accomplished what we planned. If we don't pass the test in the Check step we would initiate another cycle of PDCA. So PDCA is a
cycle of continuous improvement to improve processes.

We may implement the PDCA cycle along with statistical process control, where we track data and determine if the number of defects
is acceptable or not. Continuing with the theme of total quality management, this involved in the direct response to the increasing
competitiveness of Japan in the 70s and 80s, and taking business away from the United States. This was a United States based
initiative around branding total quality, which is a precursor to what we would call Six Sigma today. During the 1990's we saw the
ISO9000 standards being developed. Quality focused organizations incorporated ISO9000 standards in order to win recognition and
credibility within their industries and with customers. The Baldridge criteria is another set of standards for performance excellence.
The criteria includes seven important elements. The elements are Leadership, Strategic Planning, Customer and Market Focus,
Measurement, Analysis and Knowledge management. Human Resource Focus, Process Management, and finally, controlling results to
create repeatability and capability within the organization. The evolution of Six Sigma as we know it today is largely credited to the
work done at Motorola and at General Electric. Michael Harry and many other very prominent quality leaders were involved with
that. Their early work led to the worldwide acceptance of Six Sigma as a practical set of methodologies, to improve results for any kind
of business.

5. Video: Six Sigma Methodology (bs_apr07_a01_enus_05)

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In this video, you'll learn about the DMAIC methodology and how that relates to the PDCA cycle. You will also discover the transfer
function and how it plays into Six Sigma.

recognize core concepts of the Six Sigma methodology

[Topic title: Six Sigma Methodology.] In this topic, we'll discuss the DMAIC methodology and how that relates to the PDCA cycle.
DMAIC is a five step process, we start with Define. This involves really understanding issue we're trying to address determining the
outcome we want to accomplish. From there, we need to measure and determine the inputs and the things we can measure and
potentially improve. Then we analyze and determine the best actions to implement the next step, which is to improve the process.
Then we move on to Control. During this step, we make sure we achieve the results. We use that information as an input to the next
iteration of the DMAIC process, and we start all over again. In contrast to DMAIC, the Plan, Do, Check, Act, or PDCA cycle is very
similar, but a bit simpler. The Plan and Do steps correlate very much with Define, Measure, and Analyze. And then the Check and the
Act correspond with Improve and Control. And making sure that we actually get the result that we're seeking. The similarity is that
both of these are intended to be cycles of continuous improvement. And neither is wrong or right, they're just different and helpful to
us in the practice of Six Sigma. Now we will discuss the Transfer function and how it plays into Six Sigma. And it starts with
understanding the meaning of the letter Y in the equation. The Y represents the output, the result, the actual process that we want to
improve, or the outcome.

The Six Sigma process takes inputs, applies a transformation, and produces outputs. In the function used here, X is the input, f is the
transformation applied and Y is the output. These are the variables that actually contribute to the success of the process. The f or the
function of X gives you the Y result. Another way of thinking about this is that the X inputs go through the f function of transformation,
generating the outputs or the Y value. Now we will talk about the transfer function and how that relates to DMAIC. For example, let's
just say we're going to call technical support to address a problem with our computer. This is the Define step of DMAIC. When we call,
a series of things are going to happen. Let's say that the Y in the transfer function represents how long it takes for you, a customer, to
get the answer to your question. Now let's identify the X factors. These are the various steps that will take place through the entire
call to resolve the technical question. These also represent the Measure step of DMAIC. Once we have all those measures, we move
on to Analyze and determine which are the critical few factors that make up most of the time. And what is the normal variation of that
range of time? Then we determine what we can do to add efficiency and to shorten the amount of time to resolve the customer's issue.

Once we've done that, we can move to the Improve phase and actually implement the counter measures and changes. From there, we
move to the Control step of DMAIC and verify that the Y in the transfer function was improved. If you remember, the Y is how long it
takes for the customer to get their answer to their question. Then we measured it with the X's. Then we moved through the analysis
and the function. We actually improved the value of Y by applying the steps of DMAIC. Since this is continuous improvement, we can
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go through the process repeatedly. This simple five-step process is very powerful if we're willing to follow the rigor of Six Sigma. There
are other improvement methodologies that we can leverage in the practice of Six Sigma. Statistical process control is one of these in
which we have upper and lower control limits. We monitor processes to determine if and when they go out of control. And we use that
to trigger root cause analysis and improvement. Statistical process control tools can actually trigger cycles of DMAIC to improve a
process. We also have variance and defect reduction tools, correlated with total quality management, or TQM. These can be very
helpful in analysis and improving processes. This is part of the Analyze-and-Improve steps of the DMAIC cycle. Another improvement
methodology is teamwork, and the notion of quality circles. This concept was developed by Toyota. And it aimed at a team based
approach to leveraging the DMAIC methodology, along with statistical tools and variance reduction tools like those that we've just
discussed.

6. Video: Six Sigma Projects (bs_apr07_a01_enus_06)

In this video, you will learn about the key concepts that a yellow belt needs to understand when implementing Six Sigma projects.

identify considerations when assessing an organization’s readiness to use Six Sigma for a project

[Topic title: Six Sigma Projects.] In this topic, we will discuss Six Sigma projects and some of the important things a yellow belt needs to
understand. First of all, the typical duration of a Six Sigma project can vary dramatically. They can be very short, just hours, or a few
days in the case of a small quality team effort to make an incremental improvement. Or it could take a year or longer to get to the end
result. That said, it's pretty typical for Six Sigma projects to run four to eight weeks to gather the data and move through all of the
stages of the DMAIC cycle. The contributions of yellow belts are very important as a critical team member working to achieve the
results. We have master black belts, or black belts, who actually sit on top of the process and manage the projects. We have green belt
level skills with heavy involvement in the analytics and information gathering, analysis, and implementation. Yellow belts are really
critical as well as team members, and those who are providing inputs and support for ongoing implementation. The purpose of various
projects varies dramatically, but generally they're going to focus on the following things. Reducing the variation of a customer's
experience. Getting things to market quicker. Eliminating errors and mistakes and finding ways to reduce cost in operating processes.

There are some important considerations as you move into implementing Six Sigma. The first and foremost is management buy-in. If
you don't have support, sponsorship, and adequate funding, it's kind of a no go for any significant project. Another thing to recognize is
that Six Sigma is not always suitable for every single problem we face. We don't want to have that one tool mentality where we treat
every problem the same way. Also, don't overshoot. Start small and then go bigger as we develop confidence and abilities in the
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organization. And don't miss the opportunities to innovate and reinvent ways to improve our performance. There are times we don't
use Six Sigma, other methodologies might be in play. They could be business process management projects, business process re-
engineering, or maybe Lean types of projects. We want to make sure we understand what's already going on before we try to
introduce Six Sigma. We don't want to bite off more than we can chew. If the scope is too big and we can't break it down into specific
outcomes, that could be a roadblock. Another thing to watch out for is when the cost to implement actually outweighs the benefits.
For example, if we spent 100 hours working on our project, but we're only going to save ten hours a year of effort, then maybe that's
not something we should be pursuing right now. Another important concept when introducing Six Sigma is the notion of conducting a
readiness assessment. You start with defining the outcome that we're seeking. We also need to define clear success factors for the
organization and the people involved. How will success be defined for them? Also, do we have reliable data? Do we have the right
participants who support success for this project? Then we have to build a solid business case for using Six Sigma. What is the value of
the improvement? What is that worth to us as an organization? Who would see that as valuable? Who might resist it that we need to
address as part of the process? And do we know what the return on investment would be for implementing these changes?

Let's take a deeper dive and assessing organizational readiness. How does the future path compare to the present situation? Are we
addressing something the business actually needs now? Are we evaluating current performance? Do we have a strong rationale for
applying Six Sigma to our business and to the particular problems that we're trying to solve? And then finally, is something else going
on that we need to recognize that could perhaps solve this problem? Is there an alternative solution? Is Six Sigma actually the right
thing to use? Only when you've asked all of these questions can you be certain that your organization is ready to implement Six Sigma
for a given problem. There are three steps that need to be followed to assess organizational readiness. Step 1 is assessing the outlook
and the future path. Ask the question, is change a critical business need now? Step 2 is evaluating current performance. Ask the
question, is there a strong strategic rationale for applying Six Sigma to our business? Step 3 is reviewing systems and capacity for the
change. Ask the question, can existing improvement systems achieve the degree of change needed to keep us successful and
competitive without using Six Sigma?

7. Video: The Value of Six Sigma to the Organization (bs_apr07_a01_enus_07)

Focusing on the voice of the customer to drive change and improvement in the organization is absolutely critical. And this is where Six
Sigma tools to analyze data can be very helpful to understand what customers care about. In this video, you will learn how to apply Six
Sigma tools to address the inputs through future strategic planning.

identify ways in which Six Sigma can benefit an organization

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[Topic title: The Value of Six Sigma to the Organization.] In this topic, we will determine what brings value to an organization applying
Six Sigma. To get started, let's first consider customer satisfaction. Focusing on the voice of the customer to drive change and
improvement in the organization is absolutely critical. And this is where Six Sigma tools to analyze data can be very helpful to
understand what customers care about. Six Sigma gives us tools to address the inputs through future strategic planning, by addressing
marketing effectiveness. How to get things right the first time, and what is it the customers are really interested in with respect to our
products and services. A fantastic tool kit in the Six Sigma bag is called Kano. Kano is a way of gathering data from customers and
beginning to understand what's important to them that really differentiates us. What are the things that we can do more of that add
more satisfaction? And what are the things that they are neutral about, or could be dissatisfiers in that product or service that we
provide? If we move on now and think about strategic planning, Six Sigma analytics can help us determine the customer satisfaction
factors and use these as key inputs to the strategic planning process. We can use Six Sigma to understand key financial drivers within
the operations of the organization, and where we need to focus our improvements.

There are very powerful tools around product and service development that can help us get to market much faster. We want to
rigorously examine features and functions that we plan for future products. And then we determine which of those are particularly
important to the customer. Then we determine how we're going to incorporate those at the correct level of quality and speed to earn
the market share that we really deserve. From an organizational culture perspective, using the rigor of Six Sigma for chartering,
developing metrics controls, and engaging quality circle teams can really drive an organization forward. Profitability is always
important, and we need to continue to reduce costs. Six Sigma is very helpful in accomplishing that. Reducing costs of quality is an
important aspect in bringing down costs as well. Because organizations could be spending as much as 20% to 75% of the cost of sales
in just assuring quality in products and services. With increased market share, we continue to work towards shorter product
development cycles, being tightly aligned to the customer's needs, and doing everything better and faster than our competitors.

8. Video: Purpose and Value of Lean (bs_apr07_a01_enus_08)

During this video, you will discover how to recognize foundational Lean concepts.

recognize foundational Lean concepts

[Topic title: Purpose and Value of Lean.] Getting introduced to the notion of Lean or Lean manufacturing in the service sector, it's all
about recognizing that it's a continuous improvement initiative. It has important elements, such as streamlining and improving
processes. Taichi Ohno is considered by many to be the father of what we call Lean today. According to Mr. Ohno, the essence of Lean
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is that we first calculate from the time that we receive an order for a product or service to the time we get paid for that fulfillment. The
objective is to make that timeframe progressively shorter and shorter. Lean is about reducing waste across the entire value stream in
terms of time and effort on the part of human beings. This results in maximized value, better efficiency, quality, and customer
satisfaction. In the manufacturing sector there are many examples of Lean. One small company producing sheet metal and wire
products moved away from a batch and queue approach to a Lean manufacturing approach. In doing so, they were able to drive down
costs by 30% the first year, and reduce lead time per customer orders by 50%. Conversely, in the service sector, a large nonprofit
financial services organization used the practice of Lean to focus on their process flows. They were able to reduce the time to respond
to customer inquiries by 50%. They reduced their backlogs for claims by 80%. And measured a 50% improvement in customer
satisfaction at the same time. There are many advantages to being lean, and it starts with improved process efficiency and flexibility
by taking out the waste and removing the impediments to a smooth flow of products and goods. After that, it's about reducing lead
time and cycle times. How long does it take for us to fulfill that customer order? Can we speed that process while simultaneously
improving the quality that we deliver to our customers? At the same time we can provide very meaningful communications with our
stakeholders.

Stakeholders include our employees, our management, our vendors and even our customers through the application of techniques
like Kaizen, or change for the better. Integrating people on teams and making improvements. We also explore opportunities to better
leverage the resources that we have and reducing the resources that we need. These are very powerful techniques. The value of Lean
to an organization has many facets, including that it creates a real purpose. And that purpose starts with the customer, as it does with
Six Sigma. There's a Japanese term called Gemba, which means going to the point of attack. In Lean, it is at the point of attack where
value is created, where we actually do the work. We allow our employees to reach their full potential by being extremely inclusive.
Lean, by the way, is a very team-based approach to continuous improvement. It leverages the technique of kaizen very much. Kaizen
involves all employees in the process of continuous improvement. Lean identifies the value added activities and separates out non-
value added activities in order to eliminate them as we go. This brings increased value to all of our stakeholders. We can drive this
improvement to our bottom line by reducing wasted effort and time that doesn't add value that our customers are willing to pay for.
Let's talk a little bit more about eliminating waste and what the value of this concept is. It involves identifying at the task level where
we spend time and money. What adds value? What doesn't add value?

And, of course, there are things that are necessary but don't add value. We progressively determine how we're going to separate the
activities and eliminate the non-value added activities immediately. In the longer term, we work on the root causes for those
necessary but non-value added activities to determine if we can do anything about those as well. We prioritize based on the voice of
our customer. It's important to recognize that this goes beyond what the customer gets in the product or service. It also includes our
internal process customers. Who's downstream in the process that depends on me to do my job right the first time? We need to
understand their voice, and meet their needs as well. By doing that we become more flexible, and we can increase the speed of what
we're doing across the entire value stream. We also can begin to use a simple technique called Pareto, or Pareto diagramming, where
we identify which 20% of the activities are associated with 80% of our opportunities or problems so that we can work to improve
those. As we address those vital few major causes, this results in speeding up the processes inversely and proportionately and thus
reducing work in process, or WIP. This in turn gives us great opportunities to minimize processes and product complexity by
rationalizing and reducing redundancy wherever we find it in our processes. In summary, the cornerstones of Lean are eliminating
waste, prioritizing the customer. Knowing that process flexibility increases speed. Understanding that 80% of problems are caused by
20% of the activities. Realizing that the speed of a process is inversely proportional to work in process, in minimizing process or
product complexity.

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9. Video: Lean Concepts and Process Steps (bs_apr07_a01_enus_09)

In this video, you will learn about the key Lean concepts and process steps. To support that, we have a four-step pyramid to represent the
concepts of Lean.

match Lean concepts to their descriptions

[Topic title: Lean Concepts and Process Steps.] In this topic, we will discuss some key Lean concepts and process steps. To support that,
we have a four-step pyramid to represent the concepts of Lean. These concepts revolve around Identifying Value, the Value Stream,
Pull, and Perfection in the execution of Lean. Let's start with Identifying Value. Identifying Value should always start with the
customer. These can include the customer we ship the product or service to or the downstream process customers. A great exercise in
identifying value is to break down a detailed invoice for your customer that shows every activity and what it costs. The customer
could review the invoice and cross off certain activities saying, you know what? I don't see this activity as adding value. This would be a
great indicator that we need to improve the process. This could include things like wasted movement, rework, or maybe extra
inspection time because we have trouble getting the process right the first time. So what is it that creates value in the process of our
product? There are many pieces to this. But if we start what is seen as valuable by our customers, and then try to determine what
brings the most value for the organization, we're off to a really good start. The next important concept in Lean is what's called the
Value Stream. A Value Stream is any x series of activities and processes that create value in an organization. We can break down the
steps and use a technique we call Value stream mapping.

We typically capture cost and quality data and the amount of time that elapses as we move along the value stream. We should be
including suppliers, the organization, both upstream and downstream, and even customers in that process. We also need to consider
identifying and eliminating waste steps in the Value Stream. With all that information, we can consider restructuring activities and
processes to improve overall performance, not only for the organization, but most importantly in the opinion of our customers. The
next important concept is the notion of Pull. Pull is the idea that instead of pushing inventory through the system by planning and
anticipating how much might be needed, we actually allow the customer to trigger a pull of inventory based on consumption. By doing
that, we can greatly reduce and eliminate wait time that's associated with traditional planning processes. Inventory is always fair. We
can use one, and then we can get one. Through the use of pull, we can drive total inventories way down. In fact, we can almost go to
zero inventory. We can minimize inventory by only having the minimal inventory necessary to create a time buffer between steps in
the process, but no more than that, to support seamless execution based on demand from the customer. Perfection, dedication to
continuous improvement is absolutely critical in the practice of Lean. All organizations would quickly agree that from a safety
perspective, the only acceptable goal for safety would be zero, zero injuries, deaths, lost time, accidents, or even near misses.

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We have to have the same attitude toward waste and defects in our processes. Zero is the only acceptable goal. While we may never
actually get there, we have to be committed to continuous improvement to drive perfection. We should create feedback loops with
our customers to get the customer voice in the elimination of waste as well. The customer will continually define for us what value
added means, and that can change over time. Now I'll take a moment to discuss the process steps for Lean. It starts with identifying
value in the organization. This is very important because it helps define the direction for the organization. We use the customer's
inputs to define what value actually means. From there, we Map the Value Stream. It makes sense to start at the end with the
customer and work backward through the process. You can create current state maps that represent the current situation and then
think about future state maps. When you compare the two, you can identify what needs to be done to create better flow. You can
remove obstacles and bottlenecks, organize people and resources better, and take steps to ensure quality of the source. Then we can
address the concept of pull. We want to establish a smooth pull through of our inventory to support the entire process. We minimize
inventories, and we manage demand so that we can have ideal logistics and execution. Then we Seek Perfection. This includes
incrementally modifying and improving our practices over time to continually eliminate wasted time and efficiently execute the entire
end-to-end process. Think about it as a never-ending cycle of continuous improvement that's driven by changes and the needs of our
customers.

10. Video: Lean and the Concept of Value-added (bs_apr07_a01_enus_10)

Discover how to classify examples of value-added activities and nonvalue-added activities and waste.

classify examples of value- and nonvalue-added activities and waste

[Topic title: Lean and the Concept of Value-added.] In this topic, we will explore the concept of value added. Value is defined by how
well a product or service actually meets our customer's requirements. An important question we can ask to determine value is, will
the customer be willing to pay for this? If the answer to that is clearly yes, then we can argue that it has value. So value added includes
activities that actually add value to the end product, and that our customer is willing to pay for. So logically, we would say that non-
value added would be any activities the customer is unwilling to pay for. So let's say we provided a detailed invoice to our customer,
and we broke down every single activity that was included in the price. If the customer was able to cross off anything and say hey, I
don't want to pay for that in my price, that would help us to identify the non-value added activities. Let's explore this in more detail.
There is a very helpful three point test. We can break down each activity in the process, perhaps using value stream mapping. For each
activity we ask three critical questions. Does it fulfill our customer's need or preference? Does it physically change something about

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the product or service? And is it done right the first time? We have to say yes to all three of these questions or this step in the process
may not add so much value.

For example, let's say you went shopping for an article of clothing, and you had a coupon with you for a discount. If you take the
clothing and the coupon to the checkout and they quickly and efficiently scan it and you receive instant savings, that's value added.
And they're actually doing it right the first time. However, if they have to stop and go find a supervisor to get approval or go research it
someplace before they can give you your discount. You probably would not see that as value added activity because of the delay and
not getting it right the first time. Let's discuss non-value add activities. Just because we mark something as non-value add, doesn't
mean we can necessarily scrap it. For example, with physical items we may repurpose it, recycle it, or sell it at a discount. Or maybe it's
something we have to do because it's necessary to operate the business, or it's a regulatory standard. We also have to support
activities such as human relations, information technology, finance, and legal could fall on this category. Or maybe our customers have
given us mandates that require additional inspections or documentation before we can provide that product or service.

There will always be some non-value add activities that we just can't change easily. The concept of Lean includes the classic seven
wastes. Let's start with overproduction. This is any effort beyond what's required to meet the customer's requirements. Building
inventory or having a bunch of people sitting around waiting for a phone call is a form of that. After that, we have extra processing,
which can include reworking a product or service. Motion would be the physical movement of people, material, and information that's
taking up time or space, but not really adding value. Waiting would be delays, both planned and unplanned, that consume time and
money, but don't really add value in the opinion of our customer. Transportation would be trucking, logistics, and shipping in excess of
the minimal requirement needed to deliver to the customer. Inventory would be excessive inventory beyond just what's needed to
support a smooth pull of production of information through the value stream. And then finally, any defects. This includes any need to
fix, repair, scrap, or otherwise correct and inspect that could be avoided by doing it right the first time.

11. Video: Lean Tools: Just-in-time (bs_apr07_a01_enus_11)

In this video, you will learn about the tool of Just-in-Time or JIT that's part of the lean tool bag. Just-in-Time is important to us because
it's a very clear and easy to execute control of inventory processes. It controls the flow of materials and products to meet the drumbeat
of customer demand.

recognize examples of the just-in-time method

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[Topic title: Lean Tools: Just-in-time.] In this topic, we will discuss the tool of Just-in-Time or JIT that's part of the lean tool bag. Just-in-
Time is important to us because it's a very clear and easy to execute control of inventory processes. It controls the flow of materials
and products to meet the drumbeat of customer demand. Also known as Takt time. We don't have the waste of waiting with a well
executed Just-in-Time system. We use one unit of inventory and we're able to get another one immediately and move on. And we can
minimize waste such as storage costs. One example in the manufacturing industry is automotive assembly plants and the practice of
sequencing. They trigger automotive interior trim like headliners, door trim, and instrument panels to be assembled nearby. And then
delivered in exactly the right order of color and combination exactly when needed. In the service sector, a great example would be hot
dogs. And a really cool process I've seen is where the order ticket is stapled to a paper bag. The paper bag moves down the counter as
you do. And each team member adds the ingredient, so that when you arrive at the end of counter, there's your bag ready to go, hot
and fresh. Just-In-Time is based on the Pull manufacturing approach. And it's driven by various kinds of signals such as Kanban, or
visual signals, or Heijunka box, or other techniques like that. The benefits of JIT involve controlling inventory. Controlling the flow of
materials and products, reducing waiting and reducing waste. JIT is based on the Pull Manufacturing approach. Production is driven
by signals and is used to create synchronized assembly lines.

The benefit of this is that it helps create synchronization between assembly lines. You can actually have visual signals to pull in
components just when needed for finished products. This in turn results in a much smoother flow in production, and reduces the
overall inventory cost to operate the business. There are many benefits and limitations associated with Just-in-Time. We can free up
working capital in the form of inventory throughout the facility. But we can also free up space. For example, a printing company was
considering expanding it's facility to accommodate pre-press operations. But after using Just-in-Time techniques, they freed up so
much space that they avoided spending $100,000 for added square footage. As a result of successful JIT, we may be able to downsize
and save on rent, heating, and cooling. We also can reduce wasted motion and efforts associated with maintaining inventory. We can
also have more working capital than what would have been allocated to the purchase and maintenance of excess inventory. Now,
there are some caveats for each of these techniques. We need to recognize that Just-in-Time is not necessarily a good fit for all
applications. The benefits of using JIT are that it frees working capital, makes space to use for other needs such as production. Allows
downsizing to a lower cost, generates less waste, and lowers inventory costs. One of the limitations of JIT is that it does not work for
all replenishment scenarios.

Additional limitations are the distance from suppliers. Potential supply shortages, a sudden spike in market demands, and delays in the
delivery of materials to name a few. For example, what if we are far from the suppliers? If we are in the United States but the supplier
is in China, they're going to need to ship the product by boat. It can be very difficult to design Just-in-Time in that kind of situation. We
have to make such significant buffers in our calculations that we're probably better off using enterprise resource planning or a
technique like that. Another potential issue is the potential supply shortages that could happen in the market. Does this product have
a volatile supply base? Is there a risk of tsunamis taking out the supply source? Are there other things that can create significant risk to
us with respect to supply chain execution? What about a sudden spike in market demands? If we design our inventory system to work
with Just-in-Time at 100 a day, but suddenly the market spikes to 1000 a day, Just-in-Time isn't going to respond very well to that
particular problem. Finally, can there be unexpected delays in the delivery of materials? This is often driven by things like the weather
or cross border movement of materials and goods through customs. Or perhaps transport issues associated with things like railroads.
Or special kinds of transportation equipment required to move the product or service that are not predictable. In summary, before
implementing JIT, it's important to examine both the benefits and the limitations based on your specific operation.

12. Video: Lean Tools: Poka-yoke (bs_apr07_a01_enus_12)

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Poka-yoke is an important aspect in the application of lean in production environments and in service environments as well. Poka-yoke
translates roughly in Japanese as mistake proofing. We also might hear it as error proofing. What we're doing with error proofing
methods and Poka-yoke is determining where human errors can occur in a process. We work to continuously eliminate these mistake
opportunities, and to make it easy for the human being to get it right the first time.

recognize examples of poka-yoke

[Topic title: Lean Tools: Poka-yoke.] Poka-yoke is an important aspect in the application of lean in production environments and in
service environments as well. Poka-yoke translates roughly in Japanese as mistake proofing. We also might hear it as error proofing.
What we're doing with error proofing methods and Poka-yoke is determining where human errors can occur in a process. We work to
continuously eliminate these mistake opportunities, and to make it easy for the human being to get it right the first time. So for
example, in an assembly area, we're going to be assembling a product with screws. If we position and stage the standard work, so if
there are exactly ten screws available for each assembly, it gives us a visual signal when we've used all ten and there's none left over.
That would be an example of error proofing in the application of an assembly operation. In the service sector, we may use color coded
forms. Or maybe the information technology system does not allow us to exit a screen until we properly fill in all the required values in
certain fields. There are many types of Poka-yoke devices. There's really no limit to these, but let's cover some of the important ones.

The first would be checklists so that we don't forget the important things that need to happen and the particular order they may need
to follow in order to ensure a quality result. Screening is also a very powerful technique, giving us the ability to force the accepting of
legitimate values or options within a given process. Simple screening devices might prevent problems with accepting agreements that
we don't want when we're accepting software licensing. Andon lighting or signaling methods are very powerful with different colors of
lights denoting different actions by the support team. And finally, control methods such as color coding or providing safety
mechanisms so that we have smooth movement of material without injuries or safety problems or damage to the product. There are
endless examples of how Poka-yoke can be utilized. In a manufacturing example we may have checklist, screening, signaling, and
control methods all in play. Additional examples may include enclosing the moving parts of a machine so no oil or chips could fly up and
loose clothing cannot get caught in the gears. Some machines are designed so that safety doors must be engaged before the tools will
move. We have computer controls and computer aided manufacturing tools that allow for fewer mistakes by the operator in terms of
programming the equipment. All of these Poka-yoke devices help to prevent or minimize human error.

13. Video: Lean Tools: Kanban (bs_apr07_a01_enus_13)

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In this video, you will learn about the concept of Kanban. You will also discover how to use a physical card or container to pull materials
into the value stream.

recognize examples of Kanban-pull

[Topic title: Lean Tools: Kanban.] In this topic, we will discuss the concept of Kanban. Kanban is Japanese term associated with the
notion of a white card, or a card that you can see and touch. But in reality, it's any form of a signal that can be used to pull materials
into the value stream. It could be anything. Colored golf balls, bins or containers, empty spaces on the floor, lights or sounds. A great
advantage of using Kanban and pull is avoiding overproduction, by only making what's needed when it's needed. Making sure we have
only enough material in the system to meet all requirements to pull things through helps us reduce inventory beyond the absolute
minimum levels. Minimizing inventory and work in progress also means better product quality, because we'll have less inventory
moving through the system that could encounter problems that need to be fixed. However, there are disadvantages as well. Whenever
we have major disruptions in delivery of materials, it can cause a Kanban system to break down. The notion of Kanban pulls works like
this. We have a customer, which could be the end customer or a downstream operation. The Kanban stream begins with the supplier
who provides the material flow to production. From production there's a product flow to the customer. When the customer requires a
product, a Kanban pull signal is sent to production from the customer. Then a Kanban pull signal is sent from production to the
supplier.

When we use the standard amount or unit of material, we create a Kanban pull. This could be a physical ticket, or a container, or a
signal that's going upstream. This authorizes the feeder operation production to produce another unit and ship it down to the
customer. When we consume the raw materials in turn, we would have a Kanban pull that goes upstream to our supplier. This process
simply repeats again and again over time to continually refill that standard unit in response to Kanban pull signals between us and our
customers or between us and our suppliers. There are many examples of how Kanban pull can work. For example, in a manufacturing
organization, I once used this technique to manage pallets. Pallets were used for shipping. And because of intermittent demand
requirements from our customers, we often ran out of returnable packaging. Because it was impossible to plan how many pallets we
would need, we simply created a standardized footprint in the parking lot. And we authorized our pallet supplier to come by every two
business days, take an inventory with a checklist, and then come back two days later to fill the empty spots.

By doing this every two days, we never had more than the footprint would allow and we had enough on hand to handle any spike in
demand from our customer. In the service sector, maybe we would be doing claims processing. And in the claims area we would have
bins from which we're pulling the claims ready to process. As the bins become empty, they could flow upstream to the mail room
where they can refill the bins with more claims to process. This in turn could trigger a pull from the mail holding area to bring in more
unopened mail to be processed to refresh the inventory of claims to be processed. There are many great opportunities in the
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application of Kanban and pull. It reduces inventory, work in process, and cycle time required to support our customers. It can also
reduce turnaround time for a given customer demand. It also reduces machine downtime because we won't run out of things we need
to keep everything productive. At the same time, we can improve visibility of quality issues. That said, there are also issues and
challenges associated with the application of Kanban and poll. We need steady flow along a fixed path. Large variations in volume or
product mix can disrupt the flow and undermine the performance of the Kanban system. It may not work so well when there are vast
differences that separate our assembly plans and our suppliers from one another. Another obstacle could be unexpected demand in
the market, which makes it very difficult for the Kanban system to respond quickly to meet that market demand.

There are many applications of the physical Kanban signals, we could use containers or physical cards. For example, I worked with our
suppliers to use standard containers for raw materials to supply my automotive supplier plant that was making parts for the auto
industry. The returnable container would have a standard amount of material, and when consumed, we would return that container
and that would trigger replenishment. The same concept can be used with a physical Kanban card as well. There are some issues with
cards, particularly when we're not co-located with our suppliers and our customers. If there are long physical distances between the
point of use and supply, we have to move the cards physically, or scan them, or somehow fax them. And if we lose cards, that can be a
real headache. A modern intervention that's working extremely well is what's called an e-Kanban system. So in an assembly plant or a
production facility, as we consume a standard amount, we could barcode scan or use an RFID scan to say we've gone empty. This signal
transmits automatically to our supplier department or outside supplier. The authorization to make and ship another unit of inventory.
The newer approach using e-Kanban system is a great adaptation that integrates technology with Kanban cards to overcome the
challenge of distance.

14. Video: Lean Tools: Value Stream Mapping (bs_apr07_a01_enus_14)

In this video, you will learn how to identify the types of information revealed by value stream mapping.

identify the types of information revealed by value stream mapping

[Topic title: Lean Tools: Value Stream Mapping.] If I were only allowed to pick one tool out of the entire Lean Six Sigma tool bag, it
would probably be value stream mapping. A value stream map depicts the flow of resources and information as it goes across the
entire value stream. It defines and shows us how value is derived and delivered from start to finish. We need to remember that waste
disrupts value flow, and waste could be of all kinds. A current state value stream map may demonstrate the effort required, the time
required, and defects and mistakes that occur in our present operation. We would also like to have a future state value stream map, to
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show the entire value stream in an ideal situation. We should recognize that value stream mapping is a technique to identify value and
waste. And it gives us clues about how we can address these for continuous improvement. Using a simple example of value stream
mapping using a popular technique, we can identify some basic information being captured. The flow of information is represented
with single skinny arrows, with some kind of production scheduling pushing things to execution. An output may be a signal to push
things through the process. We use a directional arrow to show the movement of the physical material, or the information coming
from the supplier's source.

Moving through the process and then off to some kind of transmit mechanism to our customer, who, in turn, is probably
communicating, electronically or otherwise, the requirements to us to drive our production planning and control process. So it gives
us a sense for the flow of information and material across our value stream. There are four steps in the process of analyzing the value
stream. Step 1 is defining the product family. Step 2 is creating a current state map. Step 3 is creating a future state map. And step 4 is
planning the implementation of improvements. To analyze a value stream, we have to start with first defining a particular product or
family. And generally, you shouldn't overshoot this too much or bite off more than we can chew. It's usually a good idea to pick
something very discreet. A particular piece of information we're going to process, like an insurance claim. Or a particular part we're
going to produce, like a stamping that's used in a mechanical assembly. We define this product pretty narrowly, and then follow it
through the process. You kind of staple yourself to it by becoming the thing and marching through the process.

You capture what happens to it as you create a current state map. Once you've done that, you can do the analytics and move into
analysis and identifying what could be done in the future state for a better future state and better results. The real benefit comes in
when we get to the very end of the process. And we do the analytics, comparing the current state to the future state. If we evaluate
the current state, we can identify five different steps. [They are fabrication, molding, machining, painting, and inspection.] In the future
state, we've noted a design work cell Kanban burst, and we've done a project to combine these three operations into one. [He points at
fabrication molding and machining. In the future state, we have three steps: fabrication molding and machining, painting, and
inspection.] We moved away from pushing things through the value stream, instead now pulling them through. The benefit can be
quantified in the amount of effort and the amount of time. In the current state, the value add time is about 45 minutes per unit going
through the value stream, and about 15 weeks of total lead time to get things through. In their future state, we drop that down to 31
minutes of value add time, which is about a 33% improvement in productivity. And we've reduced the time from 15 weeks to just 10
weeks of total lead time. What an improvement using value stream mapping can make.

15. Video: Six Sigma and Lean: Differences and Similarities (bs_apr07_a01_enus_15)

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Six Sigma and Lean are complementary methodologies and, in fact, they overlap a great deal. However, it's important to recognize there
are important differences between the methodologies as well. In this video, you'll learn about the focus of Six Sigma and the key tools
associated with it.

recognize differences and similarities between Six Sigma and Lean

[Topic title: Six Sigma and Lean: Differences and Similarities.] Six Sigma and Lean are complementary methodologies and, in fact, they
overlap a great deal. However, it's important to recognize there are important differences between the methodologies as well. First,
let's think about the focus. The focus of Six Sigma is around eliminating sources of variation, the number of mistakes and defects we're
making. As opposed to Lean, where we're trying to take unnecessary time out of the process and eliminate waste wherever it happens.
The methodology associated with Six Sigma suggests a very rigorous five step process. Define, measure, analyze, improve, and control,
where we're gathering the data and going through a number of different steps that are highly rigorous and very oriented around data.
With Lean, we're less focused on the data, at least the precision of it. Lean uses a four step process of identifying the end-to-end value
stream. Identifying the opportunities to improve the overall end-to-end performance, designing a solution, implementing the solution,
and taking steps to make sure that the improvement is continuous and lasting. In Six Sigma, we tend to be very focused on a point in
the value stream. The performance, say, of a single step and our ability to produce quality at that step. Lean, on the other hand,
considers the entire process and what we can do to improve the process to deliver things faster with better quality and more
efficiency at the same time.

The key tools associated with Six Sigma are narrowly focused on specific problems and very statistical in nature. We use metrics and
statistical process control tools to bring things under control and keep them controlled. [Exploratory data analysis, management and
planning tools, and SPC tools are also used.] Using a Lean line of thinking, we might use tools like theory of constraints for identifying
bottlenecks and removing them. The concept of removing muda, the Japanese word for waste, is another technique. We eliminate
waste through the use of value stream mapping, pull systems, the 5S methodology, the notion of standard work, error proofing,
creating flow, and more. [such as Kanban, poka-yoke, setup reduction, kaizen and kaizen blitz, TPM, and visual factory.] The success of
Six Sigma depends on reliable data and scientific methods. This is a bit different than Lean, which is about eliminating waste and taking
non-value added time out of the process wherever we can. On the Lean side, we're less concerned with precision in the data. Instead,
we're seeking information about what to improve and why to improve it. It's about total value stream performance and overall
customer satisfaction.

Lean focuses on removing waste, improving the overall operation of the business, and being committed to continuous, small
incremental improvements over time. In total, between both of these tool kits, there are more than 100 different defined tools that
can potentially be learned and mastered in your learning journey. Zero defects and zero waste. We may never get there, but we want
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to be continually dedicated to improving quality. While at the same time working toward a totally waste-free value stream that
delivers results that our customers want to pay for. Remember that all of this is inspired by the plan, do, check, act cycle of continuous
improvement. PDCA and other methods like it tap into systemic problem-solving tools. The Six Sigma statistical tool bag, the DMAIC
methodology. Other methodologies like the 5Ys. And additional tools like fishbone or Ishikawa diagrams and many more. Both Six
Sigma and Lean depend on teams and people being motivated to come together and work toward a common purpose. Both require
significant buy-in by the organization as well. Without that, we can't get the commitment and the support required for success. Both
methodologies, and particularly when they are leveraged together, are proven to deliver significant benefits and customer
satisfaction, employee satisfaction, overall cost reductions, and making the company a better place to be.

16. Video: Integrating Lean with Six Sigma (bs_apr07_a01_enus_16)

Think of them as pieces of the puzzle that interlock and create tremendous value for any kind of organization. In this video, you will learn
about the techniques used to integrate Lean and Six Sigma.

recognize criteria you must take into consideration before integrating Lean and Six Sigma

[Topic title: Integrating Lean with Six Sigma.] Integrating Lean and Six Sigma is the focus of this topic. Think of them as pieces of the
puzzle that interlock and create tremendous value for any kind of organization. One of the techniques I like to do when doing value
stream mapping is to take the data output from the value stream mapping, and begin to identify which relative few steps in this value
stream account for most of the effort that's being spent. At the same time, I examine the steps to see which few steps make up most of
the defects and the mistakes that we're finding across this value stream. These would be the key vital steps where the bulk of the
opportunities lie. Next, I decide which tools come into play. We can use Six Sigma to reduce the variation and reduce the number of
defects. And we can use the Lean techniques to speed things up and create stability in the process. Lean and Six Sigma overlap, and are
very powerful when working together to eliminate waste and variation, to drive value for any organization. Remember, on the Lean
side, we're going after speed, flow, eliminating waste in its various forms. [such as excess inventory and wasted time and motion.] And
in removing constraints that are preventing a smooth flow of product value. We are also working to increase flexibility and reduce
complexity. At the same time we're working on this, we will also identify opportunities to strategically and tactically apply Six Sigma
concepts. With a focus on what the customer requires, we work to reduce defects and improve our performance. We also engage in
fact-based decision-making, optimizing and controlling the infrastructure and developing teams of people that can support us as we
develop and implement our overall methodology. When working to integrate Lean and Six Sigma, there are some considerations.

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The various criteria include the time frame, the nature of the problem, capacity for culture change, and just how pervasive the
problem is. When comparing Lean and Six Sigma, it becomes evident that certain methodologies have advantages in certain
circumstances. For instance, if it's relatively inexpensive, low risk, and we can do something quickly, the Lean tool is superior.
However, what if there's a lot of risk associated with making the change? If safety is a top priority and there is a risk compromising
safety in implementing a change without thoroughly testing it, we're probably better off using Six Sigma tools. That would take a
longer time, with much more rigor in the data analysis. If we want to go after the waste and improve velocity when we have too much
inventory, Lean is the great way to go. If, however, we are making a lot of mistakes and we're putting a lot of inventory through re-work
because we can't count on reliable results, this is where Six Sigma is very powerful. What about capacity for change? If we want to
ease change into the organization, build quick wins, and drive long-term behavior, Lean is a wonderful technique. With Six Sigma, it
can take longer because we need data and a longer period of time to show the results. Finally, the pervasiveness of the problem is a
consideration as well. Is the problem isolated or is it something we can easily identify and go after as low hanging fruit with Lean
methods? However, if mistakes and defects are rampant, it will require a more intensive and data-based approach utilizing Six Sigma.

17. Video: Lean Six Sigma Deployment (bs_apr07_a01_enus_17)

During this video, you will learn how to recognize activities involved in Lean deployment.

recognize activities involved in Lean deployment

[Topic title: Lean Six Sigma Deployment.] The stages of Lean Six Sigma deployment follow the plan, do, check, act cycle. This includes
identifying an opportunity, designing a solution, implementing it, and then moving into a continuous improvement cycle. To do that
successfully means we have to equip people with the right skills and the knowledge about what we're doing and why we're doing it.
Sharing the objectives will help others to participate and support us in taking action. We need to recognize the all important customer
and how they define value using voice of the customer data collection tools. From there, we can identify existing opportunities. We
can observe or measure the current situation and identify the biggest sources of waste and variation that we can immediately address
in order to increase value for the organization and for our customers. Designing a solution very often is dependent on some level of
process or value stream mapping. There are four stages in a Lean Six Sigma deployment. Stage 1 is identify opportunity. Stage 2 is
design solution. Stage 3 is implement solution. And stage 4 is ensure continuous improvement. The steps for stage 1 are employee
training, recognizing customer defined value, and identify existing opportunities. In stage 2 of Lean Six Sigma deployment, we design
the solution.

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Let's consider an example where we're mapping out the flow of a direct mail piece. It begins with the compiling of names and data. We
then verify who we want to send our offer to based on their credit. We merge that data and we transfer it to our vendors who actually
produce the flyer document. Finally, we will send the document to the vendor who will actually print the flyers and mail them to our
customers. In this situation, the task is to develop a new mail piece in 52 days. The master schedule has five activities, each having a
varying duration. The first task is compile names, which takes 3 to 6 days. The next task is verify credit and addresses, which takes 16
days. The third task is data merge, that takes 31 days. The next task is to transfer to vendors which takes 1 day. The final task is to print
and mail vendors, which takes 10 days. The total lead time is 61.64 days. One of the important things about designing a solution is to
zero in on where we get the biggest bang for the buck and where we're likely to find our biggest improvement opportunities. So if we
evaluate the limited data with 61 days in this value stream, reducing time sounds important. And we calculate that just two of these
five steps make up 47 of those 61 days. That would be a clue that maybe we want to focus there first. So how do we identify which
improvements to address first? Well, there are some pieces to that. We want to assess the impact. We need to understand what the
low hanging fruit is that would affect people the most. We might want to prioritize those things where we can involve people in the
solution. People would have to support that and maintain it in the future.

We also like that to be highly visible. We need to generate quick wins early in the implementation of Lean and Six Sigma. We have to
be very cognizant of these issues as we move through the process. In the third stage of Lean Six Sigma deployment, we decide which
improvements to address first. We then prioritize low hanging fruit, which are improvements that involve workers and processes that
have highly visible waste. To ensure continuous improvement, it is important to create employee buy-in and ownership. There are
many things we need to do including deploying high performing teams methodologies, involving people in the process, training them
to be cooperative, and communicating to gain their support. We need to listen to and honor people in the process. We need to commit
to eliminating defects and waste in our process. And the focus is zero, zero defects and zero waste. We also need to ensure that those
processes and improvements are sustained over time. There are a number of tools that can help with this, such as error proofing or
poka-yoke, standard operating procedures, balanced scorecard, and other things like statistical process control. But we're never done.
We need to remember that Six Sigma and Lean Six Sigma together are a continuous improvement methodology. In the fourth stage of
Lean Six Sigma deployment, we ensure continuous improvement requires employee buy-in and ownership.

They need to continue to find new ways to eliminate waste, ensure that improvements are sustained, generate new ideas, and act on
ideas. We also need to remember that ideas are great, but until we act on them, until we take action, ideas have no real value to the
organization. So from a Six Sigma perspective, there are many Lean tools that we want to apply. For example, just on a general level,
we need to apply the notion of value chain and value stream, creating flow and perfection in the ability to process, to execute
flawlessly. We also don't want to overlook many different process improvement tools that we use, for example, waste elimination
techniques. The use of value stream mapping to help understand where in the value stream we can make improvements that would
have the biggest effect on the customer and on the organization. Can we put in kanban and pull systems, make things just in time,
create better flow. We're looking to leverage the tools of kanban, pull signals, and things of that nature and leverage things like poka-
yoke and error-proofing with standard visual work throughout the process. And finally, let's discuss Lean tools used by Six Sigma. The
general Lean concepts that may be used are the ideas of value chain, flow, and perfection. The process improvement tools are waste
elimination, value stream mapping, pull systems, just-in-time, cycle-time reduction, continuous flow, kanban, and poka-yoke. And the
control tools are Total Productive Maintenance, or TPM, visual factory, and visual controls.

18. Knowledge Check: Lean and Six Sigma Concepts and Tools

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This course covers the foundations and principles of Six Sigma and Lean. You'll learn how, when used together, they can enable a system
of process control and process design that will transform your business.

This course includes the key Lean tools that are used in the typical Six Sigma project, and how they can be integrated into one business
process improvement methodology called Lean Six Sigma.

recognize the purpose of Six Sigma and its potential value to an organization
identify key characteristics of Six Sigma
sequence key developments in the evolution of Six Sigma
recognize core concepts of the Six Sigma methodology
identify considerations when assessing an organization’s readiness to use Six Sigma for a project
identify ways in which Six Sigma can benefit an organization
recognize foundational Lean concepts
match Lean concepts to their descriptions
classify examples of value- and nonvalue-added activities and waste
recognize examples of the just-in-time method
recognize examples of poka-yoke
recognize examples of Kanban-pull
identify the types of information revealed by value stream mapping
recognize differences and similarities between Six Sigma and Lean
recognize criteria you must take into consideration before integrating Lean and Six Sigma
recognize activities involved in Lean deployment

Question 1: Multiple Choice

What value could Six Sigma potentially give to an organization?

Options:

1. Can result in lower operating costs

2. Greater customer loyalty

3. Company profit margins should remain steady

4. Improved employee satisfaction levels and retention rates

Answer

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1. Can result in lower operating costs

2. Greater customer loyalty

Feedback:

Option 1: This option is correct. With its focus on eliminating waste, maximizing efficiencies, and reducing the cost of
quality over time, Six Sigma initiatives result in overall operating costs being reduced.

Option 2: This option is correct. Six Sigma's focus on capturing the voice of the customer and customer satisfaction means
that it results in increased customer loyalty.

Option 3: This option is not correct. When Six Sigma is implemented properly, it should result in increased profits and
company value.

Option 4: This option is not correct. While employees may ultimately be more satisfied after a Six Sigma implementation, its
focus is more on customer satisfaction than employee satisfaction.

Question 2: Multiple Choice

Six Sigma is unique as an improvement methodology with its focus on using statistical values to measure success.

What are some characteristics of Six Sigma?

Options:

1. The Six Sigma metric equals 3.4 defects per million opportunities

2. Process performance is measured against a mean value

3. Six Sigma performance equals 99.9997% defect-free

4. Six Sigma equals 4.3 defects per million opportunities

5. Six Sigma reduces errors by increasing tolerance for variation within a process

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Answer

1. The Six Sigma metric equals 3.4 defects per million opportunities

2. Process performance is measured against a mean value

3. Six Sigma performance equals 99.9997% defect-free

Feedback:

Option 1: This option is correct. Six standard deviations from the mean means that if you tested 1,000,000 products, there
would be defects in only 3.4 of them.

Option 2: This option is correct. Six Sigma measurement tools are designed to gather process data, calculate the mean
value, and then measure all future performance against that value.

Option 3: This option is correct. If a process is operating at a level of Six Sigma quality, you would expect it to be 99.9997%
defect-free.

Option 4: This option is not correct. Six sigma performance means that there will be 3.4 DPMO.

Option 5: This option is incorrect. Error reduction is achieved by minimizing variation in the process.

Question 3: Multiple Choice

Six Sigma evolution began with the development of the PDCA cycle and SPC.

In which decade were these concepts developed?

Options:

1. 1870s

2. 1940s

3. 1960s
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4. 1920s

Answer

4. 1920s

Feedback:

Option 1: This option is incorrect. Sigma, or standard deviation, was first defined in the 1800s by Carl Friedrich Gauss, but
PDCA and SPC were developed in the 1920s.

Option 2: This option is incorrect. PDCA and SPC were actually developed twenty years earlier, in the 1920s.

Option 3: This option is incorrect. PDCA and SPC were actually developed forty years earlier, in the 1920s.

Option 4: This is the correct option. Walter Shewhart developed these concepts in the 1920s.

Question 4: Multiple Choice

Six Sigma applies the rigorous DMAIC methodology.

Which words are part of the DMAIC acronym?

Options:

1. Define

2. Measure

3. Analyze

4. Improve

5. Control

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6. Assess

7. Design

8. Monitor

Answer

1. Define

2. Measure

3. Analyze

4. Improve

5. Control

Feedback:

Option 1: This option is correct. The D in DMAIC stands for Define.

Option 2: This option is correct. The M in DMAIC stands for Measure.

Option 3: This option is correct. The A in DMAIC stands for Analyze.

Option 4: This option is correct. The I in DMAIC stands for Improve.

Option 5: This option is correct. The C in DMAIC stands for Control.

Option 6: This option is incorrect. The A in DMAIC stands for Analyze, not assess.

Option 7: This option is incorrect. The D in DMAIC stands for Define, not design.

Option 8: This option is incorrect. The M in DMAIC stands for Measure, not monitor.

Question 5: Multiple Choice

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The transfer function equation is Y=f(X).

How would you explain the transfer function?

Options:

1. Inputs go through a function of transformation and generate specific outputs

2. The number of outputs you get is a product of the number of inputs times f

3. The degree to which an input is transformed depends on the output you desire

4. Inputs are a function of the outputs they generate

Answer

1. Inputs go through a function of transformation and generate specific outputs

Feedback:

Option 1: This is the correct option. The transfer function equation means that inputs, or Xs, go through a function, or f, to
result in the outputs, or Y value, that you're looking for.

Option 2: This is an incorrect option. An accurate interpretation would be to say the output, or Y, is a direct result of the
transformation process, or f, and the inputs, or Xs, it works upon.

Option 3: This is an incorrect option. An accurate interpretation would be to say the output, Y, is a direct result of the
transformation process, f, and the inputs, or Xs, it works upon.

Option 4: This is an incorrect option. An accurate interpretation would be to say the output, or Y, is a direct result of the
transformation process, known as f, and the inputs, or Xs, it works upon.

Question 6: Multiple Choice

What type of quality improvement methodology uses the DMAIC process?

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Options:

1. Six Sigma

2. Lean

Answer

1. Six Sigma

Feedback:

Option 1: This is the correct option. Six Sigma implements the five stages of the DMAIC process: Define, Measure, Analyze,
Improve, and Control.

Option 2: This option is incorrect. Lean doesn't use DMAIC. Lean has four stages: identify opportunities, design solutions,
implement solutions, and use continuous improvement.

Question 7: Multiple Choice

You are considering Six Sigma for your organization.

Which questions should you ask to assess whether your organization is ready for Six Sigma?

Options:

1. Is it critical that the organization makes changes now, based on key business needs?

2. Is our organization strong enough to apply full-blown Six Sigma?

3. Are our current improvement approaches and change management structures working well?

4. Is our performance poor enough to provide a strong rationale for adopting Six Sigma?

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5. Will Six Sigma help our organization develop a change culture?

Answer

1. Is it critical that the organization makes changes now, based on key business needs?

2. Is our organization strong enough to apply full-blown Six Sigma?

3. Are our current improvement approaches and change management structures working well?

Feedback:

Option 1: This option is correct. You must assess the organization's level of need. Related questions would be, "Does the
organization have a clear strategic course, and if so, what is that course?" and "Do we respond effectively to
changing circumstances?"

Option 2: This option is correct. A pure Six Sigma approach achieves the best results when implemented by a high-
performing organization. Medium-performing and low-performing organizations should first implement more
basic techniques to improve performance before moving on to Six Sigma.

Option 3: This option is correct. Six Sigma is expensive. Your company should assess whether existing improvement
systems are able to achieve the degree of change needed to keep you successful and competitive.

Option 4: This option is incorrect. Low-performing organizations are generally not good candidates for Six Sigma.
Management must ensure that the performance level of the organization or department is high enough to
warrant a Six Sigma initiative.

Option 5: This option is incorrect. While Six Sigma will help your organization implement widespread change, you should
not consider it if you don't already have a culture that embraces change or if you expect widespread resistance.

Question 8: Multiple Choice

An electronic games manufacturer ramps up production in anticipation of high sales during the holidays.

What type of waste is this company in danger of producing?

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Options:

1. Extra processing

2. Transportation

3. Overproduction

Answer

3. Overproduction

Feedback:

Option 1: This option is incorrect. Extra processing wastes time and money by applying more complexity to a process than
is needed to fulfill requirements.

Option 2: This option is incorrect. Transportation waste involves moving material or products from one place to another.

Option 3: This is the correct option. Overproduction creates waste in the form of unwanted products or excess inventory
when more output is produced than is required.

Question 9: Matching

Match each Lean concept to its description.

Options:

A. Value stream

B. Pull

C. Perfection

D. Value

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Targets:

1. Customer demand is the driving force behind the creation of products or services

2. Features of the product or process that the customer expects and is willing to pay for

3. The steps or activities in a process lined up from a customer's order through to time of delivery

4. Constant improvement in processes targeting the ideal product or service as required by the customer

Answer

1: Option B

2: Option D

3: Option A

4: Option C

Feedback:

Target 1: Pull means creating output in response to actual customer demand, not anticipation of that demand.

Target 2: Value is the assessment of how well a product or service meets the customer's needs.

Target 3: The value stream is a conceptual line with each step or activity ordered in a linear stream.

Target 4: Perfection is the constant improvement of a process in order to completely meet customer requirements.

Question 10: Matching

Consider an online gift shop and match each activity to its value type. More than one activity may match to a value type.

Options:

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A. Rapid delivery

B. Answering telephones

C. Workplace safety inspection

D. Invoicing customers

E. Gift wrapping

Targets:

1. Value-added

2. Nonvalue-added

3. Required nonvalue-added

Answer

1: Option A, Option E

2: Option C

3: Option B, Option D

Feedback:

Target 1: A value-added feature is something the customer wants and is willing to pay for such as rapid delivery or gift
wrapping.

Target 2: Nonvalue-added steps like a workplace inspection don't add value to the process and aren't necessary to make the
process work, but they can be a constraint that slows the process down.

Target 3: Required nonvalue-added features add no extra value to the end product or service from the customer's
perspective. However, steps such as answering telephones and invoicing customers are necessary to make the
process work.

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Question 11: Multiple Choice

The just-in-time, or JIT, method is an effective way to control inventory and eliminate wait times.

In which examples is JIT being properly applied?

Options:

1. Crab, mussels, and lobster are delivered to a seafood restaurant fresh from the boats each morning

2. A paper-making plant stores excess lumber in a yard until it is ready for debarking and chipping

3. Paint and painting supplies are delivered to a home the afternoon before painters begin their job

4. Flooring supplies arrive at a new office building site as electricians are still running cable

Answer

1. Crab, mussels, and lobster are delivered to a seafood restaurant fresh from the boats each morning

3. Paint and painting supplies are delivered to a home the afternoon before painters begin their job

Feedback:

Option 1: This option is correct. When you have fresh seafood on your menu, you don't want your fish delivered too early or
too late.

Option 2: This option is incorrect. Any company that uses the JIT method ensures that raw materials are only delivered as
the demand in production calls for them. There should never be excess inventory that needs to be stored.

Option 3: This option is correct. The materials that the painters will need did not arrive too long before they were needed,
and not after the painters were ready to begin, but rather, just in time.

Option 4: This option is incorrect. Flooring such as carpets and tile should arrive only after the painting is finished, not while
the electrical work is still in progress.

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Question 12: Multiple Choice

Which options are examples of poka-yoke?

Options:

1. After each step in a task, a worker pushes a button to signal it is complete

2. An alarm rings and light blinks if any product on the line is defective or missing

3. Workers can check a bulletin board in the work area to view work instructions, notices, and updates

4. A gauge on an oven ensures metal is heated to the correct temperature

5. An online form has a drop-down box so that users will choose an acceptable value

Answer

1. After each step in a task, a worker pushes a button to signal it is complete

2. An alarm rings and light blinks if any product on the line is defective or missing

5. An online form has a drop-down box so that users will choose an acceptable value

Feedback:

Option 1: This option is correct. This would be a type of electronic checklist. Paper checklists would also be examples of
poka-yoke since they ensure the worker performs every step in a task.

Option 2: This option is correct. Alarms, lights, or any other signals that attract attention to defects are examples of poka-
yoke.

Option 3: This option is not correct. A bulletin board may be used in 5S, which is another Lean tool, but it is not an example
of an error-proofing device.

Option 4: This option is not correct. A temperature gauge serving this purpose is not an example of a device designed to
prevent human error.

Option 5:
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This option is correct. Drop-down boxes, acceptance dialog boxes, and error messages that appear when a
required field is empty are just three examples of poka-yoke used by software engineers. These are all screening
techniques.

Question 13: Multiple Choice

In which of these situations is Kanban-pull being employed?

Options:

1. The filling machine stops if sensors detect any of the containers has overflowed or leaked

2. Workers at the welding station wear protective clothing and helmets

3. An automated voice instructs the next person in line to advance to a free customer service agent

4. A sensor detects when a parts bin is getting too light and sends a signal for a worker to refill the bin

Answer

3. An automated voice instructs the next person in line to advance to a free customer service agent

4. A sensor detects when a parts bin is getting too light and sends a signal for a worker to refill the bin

Feedback:

Option 1: This option is incorrect. This is an example of poka-yoke, which is a device that makes a process error-proof.
Kanban is a device that pulls materials into the production stream.

Option 2: This option is incorrect. Devices designed to ensure worker safety or the security of facilities such as locks are not
examples of Kanban. Kanban is any device that pulls materials into the production stream.

Option 3: This option is correct. The automated voice pulls the next "part" into the production stream, so it is an example of
Kanban.

Option 4:
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This option is correct. The sensor is pulling raw materials into the production stream just in time for them to be
used.

Question 14: Multiple Choice

Which statements highlight the differences between Lean and Six Sigma?

Options:

1. The objective of Lean is to remove or reduce waste within a process

2. Lean is the one methodology inspired by the Plan, Do, Check, Act cycle

3. Only Six Sigma targets root cause identification and elimination

4. The objective of Six Sigma is to remove or reduce variation within a process

5. Six Sigma uses mainly statistical tools

Answer

1. The objective of Lean is to remove or reduce waste within a process

4. The objective of Six Sigma is to remove or reduce variation within a process

5. Six Sigma uses mainly statistical tools

Feedback:

Option 1: This option is correct. In Lean, the purpose is to reduce the waste. In Six Sigma, the purpose is to reduce variation
and defects.

Option 2: This option is incorrect. Both Lean and Six Sigma are inspired by the Plan, Do, Check, Act continuous
improvement cycle.

Option 3: This option is incorrect. Both Lean and Six Sigma target root cause identification and elimination.
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Option 4: This option is correct. The focus of Six Sigma is to remove variation, while Lean focuses on removing waste.

Option 5: This option is correct. Six Sigma uses statistical tools to understand where variation is coming from.

Question 15: Multiple Choice

Which activities represent the main stages of a Lean Six Sigma deployment?

Options:

1. Identify what constitutes value for your customers

2. Prioritize improvements that will be implemented

3. Use control tools to ensure improvements are sustained

4. Prepare cost estimates so that a budget can be developed for the project

5. Perform project close-out activities and archive records for future implementations

6. Use a value stream map or other tools to identify waste and where processes need improvement

Answer

1. Identify what constitutes value for your customers

2. Prioritize improvements that will be implemented

3. Use control tools to ensure improvements are sustained

6. Use a value stream map or other tools to identify waste and where processes need improvement

Feedback:

Option 1:

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This option is correct. The first step is to identify the improvement opportunity. A good place to look is any
processes or product features that customers have defined as valuable to them.

Option 2: This option is correct. This is the third step in the process, implement the solution. You always want to prioritize
your efforts and go after the low-hanging fruit first. Those are improvements that involve workers and processes
that have highly visible waste.

Option 3: This option is correct. The last step of the deployment process is to ensure improved processes don't revert back
to their former state. This requires employee buy-in and continuous improvement.

Option 4: This option is not correct. Budgeting or other project management activities are not a part of the four-step
process of deploying Lean Six Sigma.

Option 5: This option is not correct. Actually, one of the foundational principles of Lean Six Sigma is continuous
improvement. The final step of the deployment process is making sure the change effort is ongoing.

Option 6: This option is correct. This represents the second step in the process, design the solution. One of the best ways to
do that is through value stream mapping so that you can pinpoint nonvalue-added activities.

Course HTML Resources

• Glossary: Six Sigma and Lean: Foundations and Principles

An analytical tool that allows a group of people to physically organize large volumes of data, such as ideas,
affinity diagram
opinions, facts, or issues, into groups based on their natural relationships or affinities.

The most risk someone is willing to take in rejecting the H0 when it's actually true. It occurs when the Ha is
alpha risk (α risk) accepted due to an overreaction or when there's not enough statistical evidence to support the Ha but it's
accepted anyway. This situation is usually related to a Type I error.

alternative
Assumes that any differences in the observed data are due to a real effect.
hypothesis (Ha)

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Statistical methods for analyzing and interpreting data to enable inferences, generalizations, estimates,
analytical
predictions, or decisions to be made about the process producing a product or service. Also known as inferential
statistics
statistics.

Attribute A skill, quality, or characteristic that a person or system should possess in order to perform effectively.

attribute data Data that can be counted. Also known as attributes data or discrete data.

bar chart A chart utilizing a series of bars to compare characteristics of two or more items at a specific point in time.

bell curve The graphic representation of Gaussian normal probability distribution, shaped like a bell.

The risk of failing to reject the H0 when it's actually false and should be rejected. This situation is related to a
beta risk (β risk) Type II error and can be thought of as underreacting – in other words, statistical evidence exists to reject the H0
(that there is no real difference or effect) but instead it's ignored.

Bias The difference between the average measured value and a reference value.

A professional trained in Six Sigma methodologies and principles. See also Yellow Belt, Green Belt, Master Black
Black Belt
Belt, Champion, and Six Sigma.

Calibration The process of comparing a measurement device to a standard of known accuracy.

Causation Something that brings about or increases the likelihood of an effect.

Also called a fishbone or Ishikawa diagram, a graphical presentation of the potential causes of a recognized
cause-and-effect
problem. The structure of the diagram is typically presented as a main arrow (representing effect) off of which
diagram
smaller arrows (representing causes) branch in a pattern similar to a fish skeleton.

center line The line on a control chart of the long-term average or a standard value of the measure being plotted.

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A statistical concept that states that as the sample size increases, the distribution of the sample means
central limit
approaches a normal distribution. This holds true regardless of the shape of the population from which the
theorem
samples are drawn. See also normal distribution.

1. The average value of a dataset. Measures of central tendency include mean, median, and mode. 2. On a chart,
central tendency
the point about which a group of values is clustered.

An executive or manager who supports, or champions, a Six Sigma initiative within the organization, provides
leadership to the project team, and ensures the team has the organizational support required to successfully
Champion
complete the initiative. May also use organizational authority to keep a Six Sigma project moving if
organizational barriers are met. See also Six Sigma.

Checksheet Tables, forms, and worksheets used for data collection.

confidence A pair of values within which it can be determined, with a certain level of confidence, that a population parameter
interval value will fall.

Constraint The limiting element in a system that restricts production. Constraints may be physical or nonphysical.

continuous data See variable.

A run chart with the addition of statistically calculated control limits placed above and below the process average
control chart
line. See control limits and run chart.

control limits The boundaries of a process within specified confidence levels.

COQ Abbreviation for cost of quality, which is a term often used synonymously with cost of poor quality.

Correlation The measurement of the association between two variables.

correlation A statistical measure that represents the linear relationship between two variables plotted on the x and y axes of
coefficient a scatter diagram. This is often referred to as the r statistic.

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Abbreviated as CTQ. Factors important to customers in a given process. Data from Voice of Customer leads to
critical to quality
the discovery of CTQs, which can be translated into distinct and measurable requirements.

CTQ See critical to quality.

customer The process of categorizing customers in a way that focuses on who produces the most value for the product
segmentation being improved.

Interpiece variation; variation from piece to piece or unit to unit. It can also be variation from one operator to
cyclical variation
another or from machine to machine.

Dataset Any organized collection of data.

defects per million

See DPMO.
opportunities

defects per unit See DPU.

Define – Measure
– Analyze – Design See DMADV.
– Validate

Abbreviated as df, the number of independent data values that are used in estimating the value of a population
degrees of
parameter. In estimation, it is calculated as the number of independent observations minus the number of
freedom
parameters estimated.

dependent A variable that can be affected by another variable's output. Also called a response variable, the dependent
variable variable is always plotted on the vertical or y axis.

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Abbreviated as DFSS, a systematic methodology that utilizes tools, training, and measurements to enable the
Design for Six
design of products and processes that both meet customer expectations and can be produced at Six Sigma
Sigma
quality levels.

df See degrees of freedom.

DFSS See Design for Six Sigma.

discrete data See attribute data.

A description of the distribution of all the data in a dataset measured as an average deviation, such as standard
Dispersion
deviation, around some central value, such as the mean. See also standard deviation.

A core methodology for implementing DFSS that runs through the following phases: Define – Measure – Analyze
DMADV
– Design – Validate.

Acronym for the Define, Measure, Analyze, Improve, Control process, which is commonly employed when an
DMAIC
organization wishes to improve on an existing process by using Six Sigma.

Abbreviation for defects per million opportunities. The actual number of defects occurring divided by the total
DPMO
number of opportunities for a defect and multiplied by one million. Also referred to as parts per million (ppm).

Abbreviation for defects per unit. Calculated by dividing the total number of defects by the number of units or
DPU
products.

States that in a normal distribution, all values will fall within three standard deviations of the population mean.
empirical rule
Also known as the 68-95-99.7% rule.

enumerative
Statistical methods for summarizing or describing the data collected. Also known as descriptive statistics.
statistics

flow chart A graphical representation of a process that shows the sequence of events in that process.

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Abbreviation for failure modes and effects analysis, a tool that provides a structured method for analyzing
FMEA
potential failure modes and effects and how these may influence design perimeters.

Frequency The number of occurrences or observed values in a specified subgroup, sample, or population.

functional
A process map that is a visual representation of the who, what, where, and when information about a process.
deployment map

Typically full-time employees in an organization who play a vital role in Six Sigma project teams. They operate in
support or under the supervision of Black Belts and usually spend about 25-30% of their time on Six Sigma
projects. Green Belts are trained in the Six Sigma DMAIC methodology, which provides them with additional
Green Belt
knowledge and skills essential to bringing projects to success. They often lead small-scale improvement projects
and analyze and solve Six Sigma problems within their respective areas. See also Yellow Belt, Black Belt, Six
Sigma, Master Black Belt, and Champion.

header card A card used to express a general idea that connects a group of ideas in an affinity diagram.

1. The condition of a population when all units are not identical with respect to the characteristic of interest. 2.
Heterogeneity
The degree to which a characteristic or property is evenly distributed within a population.

Histogram A graphic representation of variation in a dataset.

1. The condition of a population when all units are identical with respect to the characteristic of interest. 2. The
Homogeneity
degree to which a characteristic or property varies between units in a population.

hypothesis testing Determines if any observed differences between two or more samples are due to random chance or real effect.

in-control A process where the statistical measure being evaluated is influenced only by common cause variation.

independent event An event that has no effect on the occurrence of other events.

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independent A variable that can be changed to achieve a desired output. Also known as the explanatory variable, input
variable variable, or predictor, it is always plotted on the horizontal or x axis.

An attribute whose value may vary over the course of an experiment (including simulations), across samples, or
input variable
during the operation of a system. In multi-vari analysis, the input variable is denoted as "x."

interrelationship A planning and management tool used to discover and depict the causal relationships that exist between
digraph different aspects of a complex problem.

Represent a range, or interval, within which the true value of a population parameter is likely to fall with a
interval estimates
predetermined probability on the basis of sampling statistics.

Abbreviation for just-in-time, a production and material-requirements planning methodology used in the
JIT implementation of Lean systems. The core of this methodology is that inventory is limited to only what is needed
at the time it is needed, and only in the quantity that is necessary for production.

just-in-time See JIT.

Kaizen A rapid project-based method of continuous improvement and waste elimination.

kaizen blitz A kaizen event conducted over a period of three to five days.

Kano analysis Graphically represents how customer satisfaction is impacted by a problem.

key input variable See KIV.

key output
See KOV.
variable

key performance A business performance measurement that reflects an organization's goals, measures progress toward goals, is
indicator quantifiable, and is tied to an organization's success.

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KIV Abbreviation for key input variable. Any process input that has the potential to impact process outputs.

Abbreviation for key output variable. Any process output that fulfills or leads to fulfillment of Six Sigma
KOV
deployment goals.

LCL Abbreviation for lower control limit. See control limits.

least-squares
A model used to determine the line that is closest to all the data points simultaneously.
regression model

Linearity Accuracy over different values.

A term used to explain the fact that all surveys are subject to some uncertainty about how well the sample
margin of error
represents the population.

A professional trained in Six Sigma methodologies. Master Black Belts teach individuals the Six Sigma principles
Master Black Belt
and act as mentors for lower-ranking belts. See also Yellow Belt, Green Belt, Black Belt, Champion, and Six Sigma.

The average value of all the values in a dataset. It is calculated by adding all the values in a set of data and dividing
Mean
by the number of values. See also dataset.

measurement
The difference between the measured value and the true value, represented by the accepted reference standard.
error

Median The middle value when a set of data is arranged in order from smallest to largest.

Mode The number that occurs most frequently in a set of data.

multiple linear A model used to determine the relationship between one output and multiple inputs.
regression

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A graphical technique that provides a way to view and analyze the effects of multiple sources of process variation
multi-vari analysis
at a time.

multi-vari chart A chart that graphically displays the effect that two or more input variables, "x"s, have on an output variable, "y"s.

nominal variable A variable that describes a name or category. See also variable.

normal The distribution of data is said to be normal when most of the values in the dataset are close to the mean, and the
distribution standard deviation is small. See also standard deviation.

null hypothesis
Assumes that any difference observed in data is not real and happens due to random chance.
(H0)

one-sample test Compares the mean of a sample from a population against a hypothesized, or specified, value. Also known as a
for means one-population test for means.

opportunity costs The costs associated with pursuing one opportunity over another.

ordinal variable A categorical variable for which the possible categories can be placed in a specific order. See also variable.

output variable In multi-vari analysis, the output variable is denoted as "y."

Pareto chart A chart used to evaluate the frequency of occurrence of risks. It is based on the Pareto principle.

Pareto principle A rule of thumb used in business stating that 80% of effects are generated by 20% of causes.

PDCA cycle Acronym for plan-do-check-act cycle, a four-step cycle that aims for continual process improvement.

PEST analysis A method used to analyze the risks or opportunities presented by an organization's external business

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environment, including political, economic, social, and technological factors.

plan-do-check-act
See PDCA cycle.
cycle

Statistics used when trying to find a single value to estimate a population parameter, such as the sample mean
point estimates
and sample proportion defective.

A complete set of items that share at least one common measurable characteristic and that is subject to
Population
statistical analysis.

population 1. An entire group of units that share at least one common measurable characteristic. 2. The set of all possible
parameter outcomes of a statistical determination.

Precision 1. The reproducibility of a single measurement. 2. How closely two or more measurements agree.

In statistical probability, an outcome or collection of outcomes that is a subset of the sample space. See also
probability event
sample space.

A tool used to analyze transactional processes, such as manufacturing and assembly processes, to identify failure
Process FMEA
modes and their effects caused by these processes.

A tool used to analyze processes in a project. A process map is essentially a detailed flow chart that uses symbols
process map to represent the sequence of events in the process. It shows all tasks, activities, and decisions made during the
course of a process. See also flow chart.

process model A visual representation of a process.

proportion
Number of defective units divided by total number of units.
defective

p-value The probability of getting a result as extreme as or more extreme than that observed if the null hypothesis, H0, is

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true.

quality function Abbreviated to QFD, a structured method in which customer needs and desires are translated into technical
deployment requirements and design requisites.

r The symbol for range. See range.

A graphical representation that assigns one of four levels of responsibility to individual members on a team:
RACI chart
Responsible, Accountable, Consult, or Inform. See also responsibility matrix.

Range The spectrum between the highest and lowest numbers in a set of data.

Regression The determination of a statistical relationship between factors.

relational matrix A tool to compare the importance of process outputs with the contributions of their inputs.

Repeatability The precision, or closeness, of measurements of the same units by the same measurer.

Occurs when an entire experiment with all treatments is performed more than once. It helps quantify
Replication
experimental error by resetting the experiment and doing it again.

The difference between the values obtained from the samples and the values predicted by the regression model.
Residual
Residuals are analyzed to identify errors in the model.

responsibility A matrix mapping roles to assigned tasks. Used in clarifying roles and responsibilities for an initiative. See also
matrix RACI chart.

run chart A graphic plot of some parameter of process performance.

s See standard deviation.

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A subset or subgroup with a known probability of selection collected from a complete population to represent
Sample
that population in statistical analysis. See population.

sample attribute A quality of a sample such as representativeness or variance. See attribute.

sample set The collection of outcomes in each event.

The set of all possible outcomes, both event and nonevent outcomes. In the probability formula, it is represented
sample space
by the letter "S."

sigma The standard deviation of a statistical population.

simple linear
A model used to determine the relationship between one output and one input.
regression

SIPOC diagram A high-level process map that depicts the suppliers, inputs, processes, outputs, and customers of a process.

A quality management approach that aims to reduce variation, cycle time, and waste, and to produce products or
Six Sigma
services within customer specifications.

The measure of the degree by which the sample population deviates from symmetry. In a skewed distribution, the
Skew
mean, median, and mode will not be the same value.

Represented by s, a measure of dispersion that indicates the spread of the dataset values around the mean, or
standard deviation
average.

Statistical Process
Abbreviated to SPC, a statistical methodology for analyzing and controlling the variation of a process.
Control

statistical
Ensures that the observed difference or relationship in the dataset is real and not by mere chance.
significance

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T See throughput.

Time-related variation. Data plotted over time can indicate time-related changes and help point to the root
temporal variation
causes of variation by identifying when the variation does or does not occur.

Indicates whether sample data is consistent with the population parameter, or whether it's less than or greater
test statistic than the parameter. The calculation of the test statistic is then used to interpret the test results and determine if
a null hypothesis can be rejected or not.

Throughput Represented by T, the rate of production or the rate of processing.

Tolerance The permissible range of variation in a particular measurement. See variation.

Estimates a range – an upper and lower limit of tolerance – within which a certain percentage of each individual
tolerance interval
measurement in the population should fall.

A review that takes place at the end of each DMAIC phase, allowing evaluation of the project's deliverables
tollgate review
based on the project measures.

Traceability The ability to prove that a measuring system gives measurements that are calibrated to reference standards.

A planning and management tool used to break projects, goals, and other complex items down into successively
tree diagram
more specific details.

Used to calculate a test statistic when the variance of the larger population is unknown and the sample size is less
t-test
than 30.

Type I error Most often associated with α risk. Occurs when a null hypothesis that is actually correct is rejected.

Type II error Occurs when a person fails to reject a null hypothesis that is actually incorrect. Most often associated with β risk.

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u The symbol for defects per unit.

UCL Abbreviation for upper control limit. See control limits.

unbiased When the mean of all possible sample values is equal to the corresponding population parameter, it's an unbiased
estimator estimator.

Variable A symbol used to represent an input value in a mathematical equation.

Variance The square of the standard deviation. See standard deviation.

Variation A change of condition as observed within certain limits.

Voice of the
Describes the process of capturing customer requirements.
Customer (VOC)

Xbar The mathematical symbol for average.

Typically full-time employees in an organization who play a supporting role during Six Sigma improvement
projects. They operate in support of Green Belts or Black Belts. Yellow Belts are introduced to the DMAIC
Yellow Belt
methodology that equips them with basic knowledge and tools for providing support and solving problems. See
also Green Belt, Black Belt, Six Sigma, Master Black Belt, and Champion.

A statistical calculation for estimating the standard deviation of the sampling distribution around the population
z-score
mean.

Used when the standard deviation is known or the sample is large (greater than or equal to 30). The population
z-test
must also conform to a normal distribution for this test to hold.

5S A methodology of waste elimination through workspace organization.

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© 2023 Skillsoft Ireland Limited - All rights reserved.

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