6 Overview

Greenbelt Training
1

Concept of Competitive Quality

Historically, Quality has been defined as Meeting the Specifications Fitness for Use

Today the most acceptable definition of Quality is

Meeting the Customers Requirements

Concept of Competitive Quality

Will just meeting the requirements ensure future Market share ?

NO !
3

Concept of Competitive Quality

The definition of Competitive Quality is :

Product, Process or Service Uniformity around a Target Value

The most noticeable difference in this operational definition of Quality is that it requires CONTINUOUS IMPROVEMENT

Uniformity Around A Target Value

WHY CHANGE ?
The reason is simple, to remain or become competitive and thereby increase Profitability and Market Share

The Impact of Added Inspection

If the likelihood of detecting the defect is 70% and we have 10 consecutive inspectors with this level of capability, we would expect about 6 escaping defects out of every 1,000,000 defects produced.

1,000,000 ppm

6 ppm

3.4 ppm

You can save your self by producing quality not by Inspection

Sigma - The Standard Deviation

1 Sigma - 68% 2 Sigma - 95% 3 Sigma - 99.73 %

S (X X)2 n

1
Upper Specification Limit (USL) Target Specification (T) Lower Specification Limit (LSL) Mean of the distribution (m) Standard Deviation of the distribution (s)

p(d) USL

What is Six Sigma

Before A 3 process because 3 standard deviations fit between target and spec
Target Customer Specification

1 2 3

0.27% Defects up-to 6.6 %

Target

Customer Specification

After
1 2 3 4 5 6

No Defects!

6 !

Reducing Variability Is The Key To Six Sigma

Philosophy of Six Sigma

Six Sigma focuses on :

Continuous Improvement of Processes
Defect Prevention through the use of Statistical tools as opposed to Defect Detection through inspection.
10

The Many Facets of Six Sigma

Focus and commitment to quality must be driven by top leadership Leadership must be fully engaged and accountable for success Six Sigma provides classical problem solving tools enhanced with a fundamental knowledge of statistics and variation

Leadership Process

Focus is on statistical process capability and process variation analysis Products must be designed to be manufactured within process capability Process capability must be quantified

Tools Metrics

Goal is defect free products and processes Focus is on true capability (rolled throughput yield) rather than end of line yield All decisions must be data driven

11

How Good is Six Sigma

99% Good (3.8 Sigma)
20,000 lost articles of mail per hour Unsafe drinking water for almost 15 minutes each day 5,000 incorrect surgical operations per week Two short or long landings at most major airports each day 200,000 wrong drug prescriptions each year No electricity for almost seven hours each month

99.99966% Good (6 Sigma)

Seven articles lost per hour One unsafe minute every seven months 1.7 incorrect operations per week One short or long landing every five years 68 wrong prescriptions per year One hour without electricity every 34 years

12

What does Six Sigma means to [Company Name]

Top Line Growth - satisfied customers are repeat customers

Bottom Line Growth - it costs less to do it right the first time

13

Industry Overview
The Six Sigma Define-Measure-Analyze-Improve-Control (DMAIC) model consistently yields rapid, measurable, benefits Avery Dennison Results:
Implemented 6s in March, 1998. 52 completed projects Forecast 99 savings = $18,500,000 Actual savings (through 2Q)=$5,800,000 130 projects planned or in progress Annualized savings = $35M 99 impact = $12.3M

AlliedSignal Results:
Implemented 6 in 1994 for Operations. Initial 4 months, 600 projects reduced defects by 68%. Saved $175M at bottom line in 95; $500M in 98 ! (not including overhead, inventory, indirect charges, or avoidance. Over $2B in savings realized since 1992. Fastest rate for implementing 6 yet!

GE Results:
Implemented 6 efforts in late 1995. Targets savings over $10 B during next few years by reducing its current COPQ ($7B /yr.) to less than $1B annually by: - Reducing scrap parts. - Reducing reworked parts. - Rectifying transaction mistakes.

Motorola Results:
Implemented 6 program in 1987 when it was performing at a 4 level. By 1992 it averaged a 5.21 level. Sales productivity increased from $68.9K to $110.1K per employee and savings due to US operations improvements were over $2.2 Billion.

14

Cost Opportunity
Cost of Failure (% Revenue)

40% 35% 30% 25% 20% 15% 10% 5%

If [Company Name] is a 3 Company, Cost of Failure is Estimated to be at Least 15% of Revenue

Defects per Million

3.4
Sigma

233 5

6210 4 3

66,807 2

308,537 1

691,462

15

A $4.5 Million Cost Reduction Opportunity!

Six Sigma Saving in GE

Six Sigma Cost and Benefits
2500 2000 1500
2000 Cost Benefits Net 1500 1050

1450

$ Million

1000 500
0 1996 -500
200 380 170 -30

700 320 450

550

1997

1998

1999

Mostly variable cost productivity and asset utilization

16

Up front investment and staying power Significant impact on the bottom line

How much Cost Reduction is possible

Traditional Quality Costs
(Easily Identified) Inspection Warranty Rejects
(tangible)

Scrap Rework

1.5 % COQ

Hidden Quality Costs

(Difficult to measure)

Lost sales Customer Sat Overtime

(intangible)

Long cycle times Field Modifications More Setups Expediting costs Customer Productivity Loss Engineering change orders

15 % COQ

Late delivery T&L Excess inventory Lengthy Installs

Lost Opportunity

Lost Customer Loyalty

Employee Morale, Productivity, Turnover

17

. . . Six Sigma Reveals hidden facts and capabilities

Six Sigma as a Goal

Distribution Shifted 1.5s

PPM 308,537 66,807 6,210 233 3.4

Defects Per Million Opportunities

3
4

5
6
18

Process Capability

Harvesting the Fruit of Six Sigma

Sweet Fruit
Design for Manufacturability 5 s Wall - Must Address Designs

Bulk of Fruit
Process Characterization and Optimization
----------------------------------

4 s Wall - Must Improve Internally

Low Hanging Fruit

Seven Basic Tools

----------------------------------

3 s Wall - Demand improvement

Ground Fruit
Logic and Intuition

The walls crumble faster when addressing process issues

19

Attacking the Problem

Practical Problem
Rejects for bad estimation of cost =20% average

Statistical Problem

Process characterization data set is non-normal. After normalization: ST = 5.50 LT = 2.36

DOE Results: - Technology - Labour rate - Interaction

Statistical Solution

- 52% - 24% - 19%

Practical Solution
20

Install standard measurement system for each technology Reward & recognition policy to retain experienced labours in order to increase productivity

The Focus of Six Sigma

Y
Y Dependent Output Effect Symptom Monitor

f(X)
X1 . . . Xn Independent Input-Process Cause Problem Control

21

Would you control shooter or target to get the Gold Medal at Olympics

Controlling the Output

Y
OUTPUT SIGNAL

(x)
IN-PROCESS PARAMETERS

RELATIONSHIP or EQUATION THAT EXPLAINS Y IN TERMS OF X Distance traveled Money to Spend Determined by Car speed, traveling time Income, Commitments, Credit Rating

Determined by

OUTPUT (Y) IS DETERMINED BY THE VALUES OF THE IN-PROCESS PARAMETERS (Xs)

22

Controlling the Output

Y
OUTPUT SIGNAL

(x)
IN-PROCESS PARAMETERS

RELATIONSHIP or EQUATION THAT EXPLAINS Y IN TERMS OF X Distance traveled Determined by Car speed, Car Speed traveling time Amount of wear on brakes Selection of CDs available Amount of gas in the tank Time since last service Traveling time Number of passengers Weather Car inside temperature

Understanding the 23

F (x)S

gives insight into the right

Controlling the Output

Y
OUTPUT SIGNAL,

=
Y

F
UNDERSTANDING OF

(x)
SELECT IMPORTANT

F (x)S

VERIFY UNDERSTANDING
OF

QUANTIFY WITH CORRELATION

How weve been taught to search for F

24

Controlling the Output

Y
OUTPUT SIGNAL,

=
POOR OR NO

F
UNDERSTANDING OF

(x)
BRAINSTORM

F (x)S

Y
NO CORRELATION

Thousands of (x)s to choose from....... Without an understanding of 25

F - its your opinion vs mine !

Model

Y
Capturing the measurement on a Customer unit basis

=
Understanding our output as the Customer sees it

(x)
F

Verify Correlation to find

Learning from variance in performance on Customer Y

Unlocking the process keys that control Customer impact

26

What are these opportunities..

Cost of Quality SPAN Customer Satisfaction

27

Cost of Quality
Sigma Level 2 3 4 Defects/Million Opportunities 308,000 66,800 ($12b) Cost of Quality Not Competitive 25 - 40% of Sales 15 - 25% of Sales

6210 ($7b) Industry Average 233 ($4.5b)

3.4($0.3b) World Class

5 6
28

5 - 15% of Sales <1% of Sales

SPAN
Order-to-Delivery Time vs Customer Want Date

40 Day Span
5% of orders are >15 days early to request 5% of orders are >25 days late to request

-15 days
Early

0
Customer Want Date On Time

+25 days
Late

29

Difference between Mean & variance

Average River Depth - 4ft

Focus on Average can turn your business red

30

Outside In Thinking
Delivery cycle time (days)

Insight Through Variance

What WE see

Baseline
12 24 13 7 16 8 20 25 14 10 11 30 16 Mean 15.8 Std Dev 7.0

Improved?
27 7 15 4 18 6 23 6 2 24 2 6 5 11.2 9.0

11.2 15.8 What customers feel

Using mean-based thinking, we improve average performance by 29%, and we break out the champagne ... But our customer only feels the variance and cancels the next order!

31

Customers feel variance, not the mean

The Eye of the Beholder

Customers View How did [Company Name] influence my
A C Performance?
Missing data during download

Customer Process
A B C

[Company Name] Process

How did I do against my A B Obligations?

Missing data during logical execution

[Company Name]s View

32

Where in [Company Name]

... Can Be Applied To Every Business Function
Business Development HR Operations Training

CRT

6 Sigma
Methods Finance Admin / Transport Projects Quality

IT

33

Why Now?
Customers & Competitors are adopting elements of this business improvement process:
Customers:
HP Intuit

Competitors:
Wipro Spectramind EXL Hughes

Driven by Customer Excellence at Lowest Cost

34

Table of Contents
Six Sigma Overview
What is Six Sigma Overview of Scope Linkage to Vision

Pre-Tea

Roles and Responsibilities as Leaders/ Sponsor Criteria for Project Selection Criteria for BB/GB Selection Introduction to Process

Pre-Tea Pre-Tea Post-Tea Post- Tea

35

Implementation Strategy
Train. Apply.. Review..
Every Participant arrives to training with a well defined project with measurable savings opportunities!

Integrate training with metrics performance to maximize the bottom line impact. 36

Six Sigma Program Structure

Define Measure Analyze Improve

Program Direction, Support, and Marketing

Management
Leadership Black Belt

Process Owner

Control

Change Agents and Process Leaders Green Belt Organizational Buy-in

Program is structured to build a self-sustaining critical mass of process improvement competencies.

37

Champion / Functional Leader Role

1. 2. 3. 4. 5. 6. 7. 8. 9. Lead the Six Sigma efforts overall in their BU Provide Strategic Direction for Six Sigma Project teams Track the Projects Progress, Offer rewards as appropriate Help the Black Belt / Green Belt overcome roadblocks, including seeking collaboration Help find resources for the team as Needed, Allocate resources when authorized Keep Black Belt / Green Belt focused on desired results When immovable objects block the road, Redirect Project / Team activities Serve as the Teams Champion from Top-To-Bottom of Entire Business Ensure that Project Solutions are well implemented, Gains are sustained and on-going responsibility transfers to Process Owner

38

Six Sigma Roles

Champion/Sponsor/Functional Leader
The Champion Or Sponsor Is The Person(s) Who Is Accountable For And Sanctions A Six Sigma Project. The Champion Or Sponsor Is Involved In Project Team Chartering, Reviews Progress, Helps Remove Organizational Barriers To Project Success, And Is Often The Decision-Maker For Approval Of Final Recommendations

Master Black Belt

Full-Time Positions Dedicated To Supporting Six Sigma Efforts. Expert Resources To Black Belts And Teams On The Six Sigma Tools And Techniques Coach And Assist Black Belts And Team Members. Train The Black Belts, Champions, And Employees As Needed.

Black Belt (Team Leader)

Full-time position where the Black Belt Is Accountable, Usually To The Champion, For The Project / Team Results. The Black Belt Is Responsible For The Project / Teams Progress, Provides Leadership In Planning The Project / Teams Work, Applies Six Sigma Tools And Teaches Team Members How To Apply Them, Often Leads Team Meetings, And Ensures That Decisions Are Made By The Team In A Timely Manner To Meet Its Goals

Green Belt (Team Leader)

Part-time position where the Green Belt Is Accountable, Usually To The Champion, For The Project / Team Results. The Green Belt Is Responsible For The Project / Teams Progress, Provides Leadership In Planning The Project / Teams Work, Applies Six Sigma Tools And Teaches Team Members How To Apply Them, Often Leads Team Meetings, And Ensures That Decisions Are Made By The Team In A Timely Manner To Meet Its Goals

Team Members
Team Members Are The Individuals Who Comprise The Six Sigma Project Team. Team Members Are Individually And Collectively Accountable For Specific Tasks That Will Result In The Teams Final Recommendation. When Team Members Are Responsible For A Particular Aspect Of A Project, They Often Will Make Their Own Decisions

39

BQC Roles & Responsibility

Six Sigma Steering Committee - BQC
Assures [Company Name]s Six Sigma implementation plan: Has appropriate resources allocated Has appropriate scope and is involving all required elements of the organization Is consistent with [Company Name]s culture of Exceeding customer expectation Develop a communication plan to energize the organization around the Six Sigma implementation. Remove roadblocks to facilitate implementation. Review the status of training / project implementation on a regular basis. Establish [Company Name]s business metrics and goals, assess progress towards goals, analyze strengths and weaknesses of implementation, and provide strategic direction as necessary. Verify the financial (as calculated by Finance) impact of projects implemented. Provide a forum to share best practices within the organization.
40

Table of Contents
Six Sigma Overview
What is Six Sigma Overview of Scope Linkage to Vision

Pre-Tea

Roles and Responsibilities as Leaders/ Sponsor Criteria for Project Selection Criteria for BB/GB Selection Introduction to Process

Pre-Tea Pre-Tea Post-Tea Post- Tea

41

Customer Focus

Start With The Customer

1. 2. 3. 4. Measure the same as the customer does Determine your capability as the customer sees it Understand the variance in the output signal Find the in-process keys to impact the customer

42

Customer Focus
What I Want to be

What I Am (?)

What I Am(?)

What I Am(?)

What the Customer Wants

Exceeding Customer Expectations

Competition ? Unhappy Customers Status Quo Delighted Customers

Performance Continuum

43

How Important Is This GAP?

Project Selection
Objective:

1. What exactly is the problem being addressed in measurable terms?

Need: 2. Why is the project worth doing? 3. Is the project tied to a high importance customer CTQ? 4. What are the consequences of not doing this project? 5. How would it fit with business initiatives and targets? Scope: 6. Is the scope reasonable? Can the problem be effectively broken apart into projects with reasonable scope? Expectations: 7. Is there a clear owner in the organization for the problem and for the benefits of improving? 8. What specific goals would project be trying to achieve? What would constitute stretch results?

44

Project Objectives
What exactly is the problem being addressed in measurable terms? PROBLEM The problem this project is going to solve is:
- Takes too long to submit the quotation to customer - The productivity is very poor in our company - There is too much documentation in our work

MEASURABLE In measurable terms that means:

- Improve time of submission of quotation from the time enquiry comes from customer
- Improve productivity by 15 % - Reduce the paperwork by 20%

45

Project CTQs (Critical to Quality)

Who are your customers? What do you provide your customers? What is critical to quality for your customers? What are your internal processes for providing your product or service to customers? What CTQ is this project addressing?
46

Project Need
Why is this project worth doing?

Customer

[Company Name]

What activities have higher or equal priority?

Why is it important to do now?

Customer

[Company Name]

How does it fit with the business initiatives and targets?

What are the consequences of not doing this project?

Customer 47

[Company Name]

Project Need
Write down threat and opportunity for short term and long term for the problem you are addressing in your project
Threat Short Term Opportunity

1 2
Long Term

3 4

48

Expectations
What specific goals must be met? When must they be met?

For each goal, what milestones are critical and must be met?

What would constitute stretch results?

49

Project Scoping

50

Project Scoping
Why? High level problem Level A Initial Contributor Level B

How far down should I scope my project?

Why? Why? Secondary Contributor Level C Why? Project Level Level D

??? Project Level

When you can no longer answer the Why? with confidence, you have arrived at the project level.
51

Project Scoping
Why?
AHT too high

Why?
AHT for Pavilion P.L. is too high

Why?
AHT for Team 11 is too high AHT for New Agents is too high

Level A Level B

Why?

Level C

??? Project Level

Level D Our project then becomes in measurable terms: Improving the AHT for New Batches from 30 min. to 20 min.
52

Project Scoping
What must this project accomplish? What (if anything) is out of bounds for the team?

What resources are available to the team?

What (if any) constraints must the team work under?

53

Criteria for BB / GB Selection

Business Acumen Project and Process Management Data Affinity

Result Orientation
Relationship Building and Influence Coaching and Mentoring Team Leadership Change Leadership
54

Curriculum for Green Belt

Receive 5 days training Understand the statistical tools and practice them Work on the project

Monthly presentation to the Project Sponsor / MBB

Close the project

Clear Green Belt Certification Test

55

Table of Contents
Six Sigma Overview
What is Six Sigma Overview of Scope Linkage to Vision

Pre-Tea

Roles and Responsibilities as Leaders/ Sponsor Criteria for Project Selection Criteria for BB/GB Selection Introduction to Process

Pre-Tea Pre-Tea Post-Tea Post- Tea

56

DFSS (DMADOV) vs DMAIC

DEFINE

IDENTIFY

NO

PROCESS ?

YES

MEASURE

ANALYSE

DESIGN

NO

CAPABLE ?

YES

OPTIMISE

IMPROVE

VALIDATE

CONTROL

57

DMAIC Process
Define the project (Y) & make the team & plan Measure Y & Xs Whats wrong with Xs How much and what I can improve

Control
Sustain the improvement

Define

Measure

Analyze

Improve

PLAN
58

DO

CHECK & ACT

Six Sigma Tools Used.

Project Scoping SIPOC Thought Process Mapping Quality Metrices Process Mapping C&E matrix FMEA MSA Concepts of DOE DOE Strategies & Analysis DOE Control Strategies 59

Measurement Purpose
Document Process Map

Begin To Link CTQs to Input Variables

Establish Measurement Capabilities Establish Baseline Process Capabilities

60

The Funnel Effect

Process Map C&E Matrix and FMEA Multi-Vari Studies 8 - 10 Experimentation Control Plans / SPC
Screened List Found Critical Xs Controlling Critical Xs

+30 Inputs 10-15

All Xs 1st Hit List

4-8
3-6

Optimized Process 61

Input, Output & Process Measures

Input Measures Process Measures
Measures That Are Internal To Your Process. They Include Quality And Delivery Measures Important To Your Internal Customers As Well As Waste And Cycle Time Measures. They Are Correlated To The Pertinent Output Measures.

Output Measures
Output Measures Are Measures Used To Determine How Well Customer Needs And Requirements Are Met.

The Key Quality And Delivery Requirements Placed On Your Suppliers.

62

Steps to Business Process Mapping

Develop A Picture Of The Working Process As A Team

Suppliers

Inputs Start

Process

Outputs

Customers

Requirement

64

Define the Boundaries of Business Process

START Boundary

Boundary

Input
What Must My Suppliers Provide My Process To Meet My Needs?

Process

Output
How Can I Assure That My Process Output Meets The Needs Of My Customer?

65

Process Map
[Company Name]
What You Think It Is... What It Really Is... What It Should Be... What It Could Be...

66

Industry Overview
Traditional View
Final Test

The Hidden Factory RTY is the probability that a product will pass through the entire process without rework and without any defects. It is the true yield for a product at the completion of all the individual processes.

Six sigma View

Value Stream optimization is enabled by elimination of the hidden factory. 67

Rolled Throughput Yield

Develop A Better Understanding of Your Operations

To Know Where To Begin

If this is your process, where do you put your key resources ? A B
0.90 $10 / Unit 500 un/dy

C
0.90
$ 5 / Unit 400 un/dy

D
0.583 $19 200 un

RTY
COPQ Capacity 68

0.80
$2 / Unit 700 un/dy

0.90 $2 /Unit 200 un/dy

Rolled Throughput Yield (RTY) -- A true estimate of process yield

Project Prioritization
A
0.80
$2 / Unit 700 un/dy

B
0.90
$10 / Unit 500 un/dy

C
0.90
$ 5 / Unit 400 un/dy

D
0.583 $19 200 un

RTY COPQ Capacity

0.90
$2 /Unit 200 un/dy

Project # A 69

Project # B

Project # C

Role of Statistics
Can you always measure 100% or less
What is Population what is sample? Roll of statistics in measurement (descriptive / Inference) 1. We only use experience, not data. 2. We collect data, but just look at the numbers. 3. We group the data so as to form charts and graphs. 4. We use census data with descriptive statistics. 5. We use sample data with descriptive statistics. 6. We use sample data with inferential statistics.
70

Basic Statistics
Types of data Measures of the Center of the data Mean Median Mode Measures of the Spread of Data Range Variance Standard Deviation Normal Distribution and Normal Probabilities
71

Measures of Central Tendency

Mean: Arithmetic average of a set of values Reflects the influence of all values Strongly Influenced by extreme values

x xi n
i 1

Median: Reflects the 50% rank - the center number after a set of numbers has been sorted from low to high. Does not include all values in calculation Is robust to extreme scores The mean and median will be affected by the nature of the distribution of numbers Mode - Most Common Observation Why would we use the mean instead of the median in process Improvement?

72

Different Distributions
Sketch in the Means and Medians on each Distribution.
Comparison of Distributions.
300
300

Comparison of Distributions.

Frequency

Frequency

200

200

100

Tail
0 10 20 30 40 50 60 70 80

100

Tail
60 70 80 90 100 110 120 130

C2

C3

Negative Skew

Positive Skew

Comparison of Distributions.
100

Frequency

50

0 20 30 40 50 60 70 80 90 100 110

C1

Symmetric Distribution

73

Population Parameters vs Sample Statistics

Examples of POPULATION: Entire India Average Literacy rate Examples of SAMPLE:
500 people randomly selected

= Population Standard Deviation

m = Population Mean

X ^

= Sample Mean

= Sample Standard Deviation

74

Computational Equations
Population Mean

m =

X
i 1

Population Standard Deviation

=S=

(Xi m ) 2
i=1

Sample Mean

^ m =x=
N

x
i =1

n
i --

Sample Standard Deviation 75

^ = s=

(X
i =1

X )2

n -1

Measures of Variability

Range: the distance between the extreme values of a data set. (Highest - Lowest) Variance ( ): the Average Squared Deviation of each data point from the Mean. Standard Deviation ( ): the Square Root of the Variance. The range is more sensitive to outliers than the variance.

76

Calculating Standard Deviation

X
1 2 3 4 5 6 7 8 9 10 S Mean square 2 1 3 5 4

X - X (X - X) 2
Variance

(X i X ) 2
i=1

N -1

(X
i=1

X )2

Sum

N -1
Standard Deviation

77

1.581139

Types of Data

Attribute / Discrete Data (Qualitative) Categories Yes, No Go, No go Operator 1, Operator 2, Operator 3 Pass / Fail Variable / Continuous Data (Quantitative) Decimal subdivisions are meaningful Time, Pressure, Conveyor Speed

78

Variation

While every process displays Variation, some processes display controlled variation, while other processes display uncontrolled variation (Walter Shewhart). Controlled Variation is characterized by a stable and consistent pattern of variation over time. Associated with Common Causes. Uncontrolled Variation is characterized by variation that changes over time. Associated with Special Causes.

Process A shows controlled variation. Process B shows uncontrolled variation

X- B a r C h art fo r P r o c e s s A
UCL=77.20 80

X - B a r C h a r t fo r P r o c e s s B
UCL =7 7.27 X =7 0.98 L CL =6 4 .7 0 60

Sample Mean

75

Sample Mean

70

X =70.91

70

65 0 5 10 15 20 25

LCL=64.62 50 0 5 10 15 20 25

Sa mp le Nu mbe r

S a mp le Nu mb e r

79

Special Causes

Stratification

Customer Type

Geography
Etc.

Company Process
ALL DATA
n = 2000 0 (-11, 38) 49 Sample Size , Median (Min, Max) SPAN

The most powerful potential process labels are those that are known at the beginning of the process.

80

Stratification
ALL DATA
n = 2000 0 (-11, 38) 49

Dashboard
n = 899 -2 (-9, 21) 30

Non-Dashboard
n = 1101 1 (-12, 70) 82

North
n = 261 -2 (-8, 8) 16

South
n = 297 -2 (-10, 24) 34

East
n = 103 -1 (-8, 15) 23

West
n = 238 -1 (-8, 23) 32

Commercial
n = 119 -2 (-10, 5) 15

Government
n = 74 -2 (-8, 9) 17

Industrial
n = 68 -2 (-7, 40) 47

Even with small sets of Data, the median difference appears.

Credit A
n = 71 -3 (-10, 0) 10

Credit B
n = 41 0 (-7, 6) 13

Credit C
n=7 5 (-8, 31) 39

81

Stratification
Key Learning Points:

The first thing you must do is Separate the Processes. We call this Stratification. If you dont Stratify (isolate) the processes, you will have more than one central tendency in the data set and you will never figure out what drives variance.

If you think you have found the right label to stratify the processes, make sure you double check it to see if there is another label that is influencing the way the data appears. In this case, the real process label was Credit Rating, but it appeared in the Dashboard/Non-Dashboard data. You can double check by cross-cutting the data (look at Credit Rating and Dashboard at the same time in a tabular format), or by continuing to segment to see if the central tendency indicator still moves even though we thought it was an isolated process. In this case, if you continue with Dashboard as an isolated process, you will see the median move for various segmentations (especially Credit Rating). Once you have Stratified (isolated the processes) and you have a segment that reflects several different levels of Variance, you have the first clues to find the critical xs that drive variance. When you find a critical x for one of the processes, check to see if it is also the critical x for the other processes. Often the factors that drive variance in one of the processes, also drive it in another.

82

FMEA Model
Prevention
What made failure mode to take place. Ask 5 Whys.

Detection

Detection
What manner my process was not able to obey me

Cause
Material or process input

Failure Mode (Defect)

Process Step

Effect
External customer or downstream process step.

Controls

Because of your process what all I will not be able to do

83

Measurement System Analysis

A measurement system will not willingly disclose the type of distortion, inaccuracy or imprecision it is transmitting to our data. We must actively force it to reveal its hidden effects.

CAUTION: Objects in mirror are closer than they appear

84

Measurement System Analysis

Parts (Example) Inputs Process Outputs Inputs Measurement Process Outputs Observations Measurements Data

Product Variability
(Actual variability)

Measurement Variability

Total Variability
(Observed variability)

Measurement System Variability Investigated through R&R Study

2 Actual(Part)

2 Meas.System

2 Observed (Total)

85

The Measurement System will transmit variation to our data.

Establishing the Process Capability

LSL USL Short-Term Capability

Long-Term Capability

86

Over time, a process tends to shift by approximately 1.5.

Visualizing the Causes

Within Group
Called short term (st) Our potential - the best we can be
Time 1 Time 2 Time 3 Time 4

The reported by all 6 sigma companies The trivial many

st + shift = total

Between Groups
Called shift (truly a measurement in sigma's of how far the mean has shifted) Indicates our process control The vital few

87

Analyse Purpose

To reduce the number of Process Input Variables to a manageable number To determine high risk inputs from Failure Modes and Effects analysis To determine the presence of and eliminate Noise Variables through Multi-vari Studies To plan the first improvement activities

88

Sources of Variation
A common method of analysis at this stage is the variables tree. Try thinking about your process in this manner........

Customer Service Example

Not resolved the call

Skill to Skill

Agent to Agent

Call to Call

Customer to Customer

Type of call

89

Tools Used..
Time Series Plot
15

Scatter Plot
15

HrsVar

10

HrsVar
5 10

10

0 Index

0 May Jun Jul

Date

ANOVA (Analysis of Variance)

Main Effects Plot - Means for HrsVar
13. 0 10. 5

HrsVar

8. 0

5. 5

3. 0 D at e Cu s t o m er Sal es m an

Box Plot
15
1000

Pareto Chart
Pareto Chart for : Defects
100 80 900 800 700 600 500 400 300 200 100 20 40 60

r a H sV r

10 5 0 W ater U t il
Count

0
. ev tD i gh We rB Ai bl e ub l or Co f or De n t io ma

C u s to m e r

Min in g

Pa p e r

Defect
Count Percent Cum %

431 44.2 44.2

293 30.0 74.2

1 32 1 3.5 87.7

1 20 1 2.3 1 00.0

90

Percent

Regression..
Some examples:
Y=Gas Mileage 30 (mpg)
20 10

Y=Sons Height

80 60 40

0 .5 1 1.5 2 X=Car Weight (tons) Y=Grades (of 100%) Y=Selling Price

80 60 40

60 70 80 X=Dads Height (inches)

(Thousands) 35
25 5

0 .5 1 1.5 2 X=Study Time(Hours/Night)

6 14 22 30 X=Age of Car

91

Regression..
How do you find a line that fits the data?
What we are looking for is a line which will minimize the distances from the plotted points to the line....
Deviations (distances) How much the line missed by

* * * *

Regression Line

Response Variable (Y)

* * * * * *
Input Variable (X)

Scatter Plot Points (actual data values)

92

Regression..
The R2 Statistic is defined as the sum of squares of errors divided by sum of the square of difference from average:
Y
Measured Error Measured Predicted

Y=a+bX

r 1
2

^ (yi yi )

(y y )
i 1 i

i 1 n

93

Improve
What will you do for Improve
Identify solutions. Develop change management plan. Conduct cost / benefit analysis. Create implementation plan.

94

Improve
What will you do for Control

Define and implement ongoing measurement / monitoring plan.

Document procedures.

95

Control
In the physical world, the law of entropy explains the gradual loss of order in a system. The same law applies to business processes. Unless we add energy (in the form of documentation and ongoing process controls); processes will tend to degrade overtime, losing the gains achieved by design and improvement activities. The quality plan is the structure through which we add this energy to business processes.

Target

96

Control
Three Main Control Mechanism..
Avoid Potential Problems Control Potential Problems

Risk Management SPC

Mistake Proofing 97

Project Sign-off
Answer the following questions before the project is signed off:
What can go wrong and derail improvements ? What controls are in place ? Can you show me your closure plan ? What happen when the people change ?

Are there any follow up on projects ?

Is all documentation completed ? Is the savings verified by finance ?

Is the audit plan in place ?

98

Project Sign-off
Finalize Financial Results
Calculate tangible benefits

Determine implementation costs

Calculate net financial gain Calculate the intangible benefits e.g. cost avoidance, customer retention

Tangible Benefits - Implementation Costs = Net Financial gains (Over one financial year)

Bank

99

Documentation
Complete Documentation Package
..Compile and organize a record of the key aspects of your six sigma project

Typical Elements of the Documentation Package

A description of the project Problem statement & business case A list of CTQs + Xs

Hypothesis tests
Process capability analysis Control parameters Audit Plan/ owner Financial results Operational metrics Lessons learned and best practices Project to be signed off by GB/BB, MBB, Financial controller, Process Owner, Champion.

100

Reward & Recognition

?...
101