The Six Sigma

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Six Sigma - A Breakthrough Strategy
Competitive Edge
Management Consultants
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Contents
400 State-of-the-art training slides on concepts of Six Sigma, implementation methodologies, tools for achieving Six Sigma and training of black belts. Self assessment utility package. Quality promotional posters.
Jointly developed by FICCI Quality Forum and Competitive Edge, Management consultants
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Index
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1. Basic concepts of Six Sigma 2. Fundamentals of the breakthrough strategy 3. Define phase 4. Measurement phase 5. Analysis phase 6. Improvement phase 7. Control phase 8. Implementation and deployment
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9. Measurement of business excellence
End slide show
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1. Basic concepts of Six Sigma

Most effective strategy Limitation of other tools What is Sigma Six Sigma and defect rate Old and new concept of quality Six Sigma and cost of quality How Six Sigma works Reasons to adopt Six Sigma
Global acceptability and success stories
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Most effective strategy
Six Sigma is the most effective breakthrough strategy ever devised. It enables companies to make substantial improvements in their bottom-line by designing and monitoring every day business activities in ways which minimizes all types of waste and non-value adding activities and maximizes customer satisfaction.
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Limitations of other tools
Many organizations have earlier tried Downsizing, Outsourcing, Activity based costing, Business process reengineering, Just in time, Kaizen & TQM for improving quality and business results. While all these tools are useful in their own ways, they often fail to make breakthrough improvements in bottom line and quality.
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Limitations of other tools
Kaizen, for example, means doing little things better and continuously reaching for better standards, work well till 3 or 4 sigma in specific processes. These small improvements may not necessarily translate into overall business improvement. This is because Kaizen only uses basic tools. For reaching 5 or 6 sigma standards, the organization will have to use sophisticated tools like Quality Function Deployment (QFD), Failure Mode and Effect Analysis (FMEA) and Design of Experiments (DOE) to achieve optimum throughput at minimum cost.
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What is Sigma
The term Sigma taken from the Greek alphabet, is used to designate the distribution or spread about the mean (average) of any parameter of product, process or procedure. In the context of business or manufacturing process, Sigma capability is a metric which indicates how the process is behaving. Higher the Sigma value, better the capability of the process to produce defect free work and vice versa.
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Six Sigma and error or defect rate
At present most companies, when their processes are under control, are able to achieve 3 sigma capability which represents 99.7% performance i.e 3 defects per 1000. With rapid technological advances and development of complex products, this level of quality is no longer acceptable.
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Six Sigma and error or defect rate
As manufacturing of most of the products involves large number of processes and if each process has a maximum quality capability of 99.7%, the quality of finished product would be considerably less. Therefore, if the companies have to compete in the global markets, they have to achieve a much higher level of quality capability.
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Levels of Sigma and defect rate

Quality level % Quality Defective PPM*
3 Sigma 4 Sigma 5 Sigma 6 Sigma
99.73 99.9937 99.999943 99.9999998
66807 6210 233 3.4
*Parts Per Million
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Old concept of quality
Past concepts of quality focused on conformance to standards. This definition assumed that as long as the company produced quality products and services, their performance standard was correct regardless of how those standards were met. Moreover, setting of standards and measurement of performance was mainly confined to the production areas and the commercial and other service functions were managed through command and control.
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New concept of quality
In Six Sigma, the concept of quality encompasses manufacturing, commercial and other service functions of an organization because all these functions directly or indirectly affect products/service quality & customer satisfaction. It also embodies a structured system of capturing all types of errors and their quantified measurement for subsequent analysis and improvement. Under the new approach, quality is a state in which Value enrichment is realized for the customer and provider in every aspect of business relationship.
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Value enrichment
The term Value enrichment for the company means that they must strive to produce highest quality products at the lowest possible costs to be competitive in the global markets. For customers, the term Value enrichment means that they have the right to purchase high quality products/services at the lowest cost.
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Knowing characteristics critical to customer
Value enrichment for the company and the customer is done by measurement based approach of Six Sigma, which enables us to find :Vast areas of business about which we do not know enough. When we do not know about a parameter or a characteristic which are important to customers, we do not value it. If we do not value a parameter or a characteristic, we do not measure it. If we do not measure, we can not improve.
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Six Sigma and cost of quality
Six Sigma has a very significant impact on the cost of quality. As the Sigma level moves up, the cost of quality comes down and vice versa. Traditionally recorded quality cost generally account for only 4 to 5 percent of sales which mainly comprise of cost of scrap, re-work and warranty.
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Hidden costs of quality
There are additional costs of quality which are hidden and do not appear in the account books of the company, as they are intangible and difficult to measure. These additional costs could be as high as 20-25% of sales and comprise of low conversion efficiency of materials, cost of resolving customer problems, inadequate resource utilization, high inventory, long cycle times, more set-up times, penalties due to late delivery and lost customer loyalty and goodwill.
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Visible and hidden costs

Scrap Rework Warranty costs Conversion efficiency of materials Inadequate resource utilization
Visible costs
Excessive use of material

Cost of redesign and re-inspection Cost of resolving customer problems Lost customers / Goodwill High inventory
Hidden Costs
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Cost of quality at various levels of Sigma

Sigma 6 5 4 Defect rate(PPM) 3.4 Cost of quality <10% Competitive level
World Class
233
6210
10-15% 15-20%
20-30%
3
2 1
66807
308537 6,90000
Industry Average
30-40%
>40%
Non Competitive
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How Six Sigma works
Six Sigma is a high performance data driven approach focused on analyzing the root causes of business problems and solving them. It ties the outputs of a business directly to market place.
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Clear focus on the bottom line
Six Sigma places a clear focus on getting the bottom line results along with the time frame. No Six Sigma project is approved until the bottom line or the success factors are clearly spelt out. Each project must be completed within a given time frame which is usually 3-6 months.
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Objectives of Six Sigma
At the strategic level, the goal of Six Sigma is to align an organization to its marketplace and deliver real improvements (in terms of rupees/dollars) to the bottom line. At the operational level, the Six Sigma goal is to move the business product or service attributes within the zone of customer specifications and to significantly shrink process variation.
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Impact of Six Sigma
The Six Sigma strategy affects five fundamental areas of business :1. Process improvement 2. Product & service improvement 3. Customer satisfaction 4. Design methodology 5. Supplier improvement
The business improvement mechanism is shown in the next slide.
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Six Sigma business improvement mechanism

Critical Customer Requirements
Suppliers
Inputs
Business Process
Process Outputs
Defects
Variation in output of processes causes defects
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Aspects of Six Sigma

Six Sigma approach integrates the human and process elements of improvement to produce breakthrough results.
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Human elements
Strong leadership
Training Customer focus Project teams Culture change
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Process elements
Analysis of variation
Disciplined approach Quantitative measures Statistical methods Process improvement
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Reasons to adopt Six Sigma
In the past, quality programs adopted by organizations focused on meeting customers needs without due consideration of visible and invisible costs. Thus, many organizations managed to produce high quality goods, but at a comparatively high cost. However, today in the fiercely competitive market, the organizations have no choice but to offer the best quality products and services at the minimum cost - which is the purpose and objective of Six Sigma.
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Reasons to adopt Six Sigma
Organizations which achieve significant quality improvement earn 8 - 10 % better prices. Organizations which achieve a superior quality position are 3 times more profitable than those with inferior levels of quality. Organizations which improve their quality, gain 4-5 % in market share each year. Each significant positive shift in process capability equates to 10 times improvement in profitability.
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Global acceptability
Six Sigma approach was initially developed in Motorola and greatly refined during its application in General Electric. This is what CEO, GE Power systems has to say about Six Sigma. Quality (Six Sigma) The Pride and Commitment is the most
pervasive and all encompassing initiative we (GE) have ever launched. Quality is the fabric by which all of us will be bound together, and how our daily activities and contributions can be measured both internally and externally by our customers when they vote with their next order. Mr. Robert.L.Nardelli
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Global acceptability
The world over, organizations seeking better ways of improving their profitability have adopted Six Sigma because of its ability in giving quick tangible results. These organizations include General Electric, Allied signal, Honda, Sony, Canon, Polaroid, Texas instruments and many more fortune 500 companies across the globe.
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Success stories - General Electric
General Electrics, Jack Welch describes Six Sigma as

the most important initiative GE has ever undertaken. GE had an operative income of 10% for decades and they were not able to improve this despite various efforts. After implementation of Six Sigma GE was able to improve its operative income from 10% in 1995 to 16.7% in 1998.
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Allied Signal
Allied Signal, which was on the verge of bankruptcy was

made profitable by CEO Larry Bossidy through Six Sigma. The company implemented Six Sigma program in 1994. The cumulative impact on the savings in the direct costs during this period was more than US$ 2 billion.
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Asea Brown Boveri
ABB, after application of Six Sigma has reduced

measurement equipment error by 83%. The company also made drastic improvements in material handling resulting in an annual estimated cost savings of US $775000.
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Challenge for the Indian companies
It is high time, that Indian companies also start implementing Six Sigma for making breakthrough improvements and to remain globally competitive.
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2. Fundamentals of the breakthrough strategy
Fundamental steps
Six sigma roadmap Strategies at various levels Business perspective of strategy Operations perspective of strategy Process perspective of strategy Players and their responsibilities Black Belt training program
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Fundamental steps
There are 6 fundamental steps involved in applying the breakthrough strategy for achieving Six Sigma. These 6 steps are :Define Measure Analyze Improve Control Standardize
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The Six Sigma roadmap- Breakthrough strategy Stage

BREAKTHROUGH STRATEGY
Phase
Define
Objective
Identify key business issues Understand current performance levels Achieve breakthrough improvement
Identification
Characterization
Measure Analyze Improve Control
Optimization
Institutionalization
Standardize
Integrate Six Sigma in day to day functioning.
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Define phase
This phase defines the project. It identifies critical customer requirements and links them to business needs. It also defines a project charter and the business processes to be undertaken for Six Sigma.
Note: This phase is extensively covered in a separate chapter Define phase.
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Measurement phase
This phase involves selecting product characteristic, mapping respective process, making necessary measurements and recording the results of the process. This is essentially a data collection phase.
Note: This phase is extensively covered in a separate chapter Measurement phase.
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Analysis phase
In this phase an action plan is created to close the gap between how things currently work and how the organization would like them to work in order to meet the goals for a particular product or service. This phase also requires organizations to estimate their short term and long term process capabilities.
Note: This phase is extensively covered in a separate chapter Analysis phase.
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Improvement phase
This phase involves improving processes/product performance characteristics for achieving desired results and goals. This phase involves application of scientific tools and techniques for making tangible improvements in profitability and customer satisfaction.
Note: This phase is extensively covered in a separate chapter Improvement phase.
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Control phase
This phase requires the process conditions to be properly documented and monitored through statistical process control methods. After a settling in period, the process capability should be reassessed. Depending upon the results of such a follow-up analysis, it may be sometimes necessary to revisit one or more of the preceding phases.
Note: This phase is extensively covered in a separate chapter Control phase.
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Standardization phase
This phase requires institutionalizing Six Sigma into day to day working of the organization. In this phase the Six Sigma gains derived by certain specific projects are applied to the other projects as well for optimum business results.
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The breakthrough strategy
Each phase is designed to ensure that : Companies apply the breakthrough strategy in a systematic way. Six Sigma projects are systematically designed and executed and The results of these projects are incorporated into running the day-today business.
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Strategy at various levels
Almost every organization can be divided into 3 basic levels :1. Business level 2. Operations level 3. Process level. It is extremely important that Six Sigma is understood and integrated at every level.
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Strategies at various levels
Executives at the business level can use Six Sigma for improving market share, increasing profitability and organizations long term viability.
Managers at operations level can use Six Sigma to improve yield and reduce the labor and material cost.
At the process level engineers can use Six Sigma to reduce defects and variation and improve process capability leading to better customer satisfaction.
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Business perspective of the breakthrough strategy
Define what plans must be in place to realize improvement of each state.

Measure the business systems that support the plans.
Analyze the gaps in system performance benchmarks.

Improve system elements to achieve performance goals. Control system-level characteristics that are critical to value.
Standardize the systems that prove to be best-in-class.
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Operations perspective of the breakthrough strategy
Define Six Sigma projects to resolve operational issues.

Measure performance of the Six Sigma projects. Analyze project performance in relation to operational goals.
Improve Six Sigma project management system.

Control inputs of project management system. Standardize best-in-class management system practices.
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Process perspective of the breakthrough strategy
Define the processes that contribute to the functional problems.
Measure the capability of each process that offers operational leverage.

Analyze the data to assess prevalent patterns and trends.
Improve the key product/service characteristics created by the key processes.

Control the process variables that exert undue influence. Standardize the methods and processes that produce best-inclass performance.
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Six Sigma players and their responsibilities
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Champions - Qualification
The CEO should be the main driver of the Six Sigma program. Under him departmental / functional heads such as vice president or director manufacturing or marketing have to take charge in implementing the program. The champions must have complete hands-on experience with sound knowledge of advanced statistical tools.
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Champions - Responsibilities
Create the vision of Six Sigma for the organization. Define the road map to implement Six Sigma across the organization. Select the right people. Develop a training plan for implementing breakthrough strategy. Carefully select high impact projects.
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Champions - Responsibilities
Support development of statistical thinking. Realize the gains by supporting Six Sigma projects through allocation of resources and removal of roadblocks. Recognize and reward people.
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Selecting the right people
The success of Six Sigma to a very large extent depends upon selection of right people. The CEO must therefore ensure that the selected experts have suitable qualification, mental attitude to challenge the status-quo and a missionary zeal to implement change. These experts are also known as black belts. The qualification, responsibilities and training program of black belts is discussed on the following slides.
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Why the name Black Belts?
The name black belts comes from the sport of Karate. Both Karate and Six Sigma depend on mental discipline and systematic, intensive training. Just as black belts in Karate depend on power, speed and decisiveness, Six Sigma black belts should also depend on the same qualities. Just as the black belts continuously reposition their bodies, Six Sigma black belts also must be able to reposition themselves as they move from one project to another.
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Characteristics of Six Sigma Black Belt
Understands the big picture of the business.

Focuses on results and understands the importance of the bottom line. Speaks the language of money, time, organizational objectives.
An expert in SPC and continuous improvement tools.

Capable of consulting, mentoring and coaching. Drives change by challenging conventional wisdom.
Anticipates and confronts problems proactively and solves them.
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Master Black Belts - Qualification
They are usually Chief Engineers or Head of departments / functional heads.They must posses a technical degree and have sound knowledge of statistical tools.
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Master Black Belts - Responsibilities
The master Black Belts should take the main responsibility of implementing Six Sigma program. They must assist the organization in identifying Six Sigma projects and also develop and train Black Belts under them.
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Master Black Belts - Responsibilities
Take on leadership of major programs. Participate in project reviews to offer technical expertise. Organize training and development programs for Six Sigma team members/black belts. Facilitate sharing of best practices across the organization. Ensure successful implementation of Six Sigma projects from start to end.
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Black Belts - Qualification
They must posses a technical degree or must have minimum 5 years of relevant experience. They must have good knowledge of statistical tools.
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Black Belts - Responsibilities
Act as a breakthrough strategy expert.

Identify barriers or roadblocks. Lead and direct teams in project execution. Report progress to management. Determine the most effective tools to apply.
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Black Belts - Responsibilities
Prepare detailed project report in all the phases.

Get inputs from operators, first line supervisors and team leaders.
Train others.
Ensure that the results are sustained.
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Black Belt training program
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Black Belt training
While the Six Sigma methodology needs the involvement of all people across the organization, the bulk of implementing the breakthrough strategy rests on black belts. Black Belts possess the Six Sigma knowledge and skills necessary to implement, sustain and lead a highly focussed Six Sigma initiative within the organization.
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Black Belt training
Black Belt training is divided into four sessions. Each session is organized around the four core phases of break through strategy i.e. Measurement, Analysis, Improvement & Control. Usually the black belt training is completed in four months with one week devoted to class room instructions for each phase followed by three weeks in application of knowledge to the assigned project. The training program for each phase is depicted on the following slides.
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Black Belt training - Measurement phase

Training period 4 weeks ( 1 Week classroom instructions, 3 weeks on projects )
Components of training Select CTQ characteristic Define performance standards Establish data collection plan, validate measurement system & collect data.
Tools used* Customer surveys, QFD, FMEA Blue prints, customer surveys Histograms, control charts
*These tools have been covered in the relevant chapters.
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Black Belt training - Analysis phase

Components of training
Establish process capability
Tools used*
Process capability indices (Cp, Cpk),
Define performance objective Identify variation sources
Benchmarking Control charts, FMEA, Cause & effect diagram, Histograms.
*These tools have been covered in the relevant chapters
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Black Belt training - Improvement phase

Components of training Screen potential causes
Tools used* Pareto Analysis, FMEA, Cause & Effect.
Discover variable relationships Establish operating tolerances & pilot solution
FMEA, Process flowcharting, Cause & Effect.

Design of Experiments, Process capability study.
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Black Belt training - Control phase

Components of training Validate measurement system
Tools used Process flowcharting
Determine process capability Implement process control system & project closure
Capability indices Mistake proofing, SPC, Risk management.
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3. Define phase
Objectives of define phase Key steps of define phase Projects critical to customers Develop team charter
Define process map
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Objectives of define phase
To identify the process or product for improvement.

To develop an action plan. To obtain formal project approval.
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Key steps of the define phase
A. Identify project which are critical to customers.

B. Develop team charter / action plan. C. Define process map.
Each step is discussed in detail in the following slide.
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A. Identify projects critical to customers
The following steps are required for this purpose :I. Identify present & future customers. II. Analyze voice of the customer.
III Translate customer needs into Critical to Quality (CTQ) requirements.

IV. Integrate CTQs with business strategies. V. Identify projects for breakthrough improvements.
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A. Identify projects critical to customers

The following sources of input can be used to build the database on the customers and for identification of CTQs. Customer surveys Customer complaints Internal problems Benchmarking data with key competitors and Brainstorming
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B. Develop a team charter
The following steps are required for developing a team charter / action plan:I. Develop a business case - Relevance of the project, consequences of not undertaking the project and how does it fit with the business goals. II. Define problem / goal statement - Why are we not meeting our customer requirements, how significant is the problem, when & where do the problems occur and what is the impact of the problem.
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Develop a team charter
III. Assess project scope - Which processes will the team focus on, resources available to the team, the start & the end point.
IV. Define timeframe - This should contain complete list of activities to be undertaken alongwith realistic time frames. V. Define roles and responsibilities - Define the roles and responsibilities of various team members.
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C. Define process map
The following steps are required for process mapping :I. Define process II. Connect the customer to your process III. Map business process - The process map for the project includes customer and their key requirements, inputs, suppliers, process steps and outputs.
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4. Measurement phase
Objectives of Measurement phase
Understanding and controlling variation

Accuracy and precision Measurement of accuracy Measurement of precision
Understanding normal distribution

Meaning of a sigma process Various levels of sigma process Picturisation of accuracy and precision Calculating non-conformities
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Objectives of Measurement phase
Collect data for identified projects. Characterize data by using mean, standard deviation and z value. Understand various levels of sigma process. Measure non-conformances.
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Understanding & controlling variation
Variation is a basic phenomenon of nature. This effects all entities including products and processes. Variation is found in all stages of product life cycle including design & development, manufacturing, service and supplier processes. Controlling process variation is a key to achieving Six Sigma quality.
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Variation is responsible for the difference between one unit of product and another. It can also be defined as the difference between specifications and customer requirements. Variation is present in all processes. When it is present in one or more characteristics of a product or process, it causes poor quality and customer dissatisfaction.
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Products and processes are expected to vary because no two things are exactly alike. Differences result from material characteristics, methods, people, machine and environmental factors as depicted on the next slide.
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Sources of variation
Material
Assemblies Components Suppliers Consumables
Methods
Procedures Policies Accounting
Environment
Noise level Humidity Temperature Lighting
Variation
People
Training Experience Skill Attitude
Machine
Technology Variability Tooling Fixtures
Measurement
Counting Instruments Gauging Tests
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Causes of variation
Causes
Chance / Inherent Causes They have the influence on the output all the time.
Special / Assignable Causes They influence the output only once in a while.
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Chance / inherent causes of variation
Chance or inherent causes are sources of variation which are always present because of small day-to-day variables. These causes are inherently part of the process (or system) and affect everyone working in the process. They are typically due to a large number of small random sources of variation. Chance causes also contribute to the output variability because they themselves vary.
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Chance / inherent causes of variation
Each chance/inherent cause typically contributes a small portion to the total variation in process outputs. Inherent causes usually have a nonsystematic, random appearance. Process or system variability is defined in terms inherent causes because they are regular contributors. The variables involved in inherent causes may change slightly from day to day, but this is natural. They will always be present, and the best way to stay ahead of this situation is to plan for it.
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Special / assignable causes
These are causes that do not occur naturally and are unusual. These types of causes are not inherent part of the process (or system) all the time or do not affect everyone but arise because of specific circumstances. Special causes are sporadic contributors and are due to some specific circumstances. Process or system variability is defined without them. Special causes can be identified and efforts can be made to minimize their influence on the process.
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Accuracy & Precision
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Visually summarising data - Histograms
Histograms are one of the simplest ways to summarize the data in the visual form. Histograms give us the graphical picture of the data . It graphically depicts the frequency of occurrence of an event. On the X axis, the measured values or scale is plotted, and on the Y axis the frequency is plotted. Histograms are extremely important in analyzing variation in the processes.The example of an histogram is shown on the following slide.
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Visually summarising data - Histograms

60 50 40
Frequency
30 20 10 0
5 6 7 8 9 10 11 12 13 14 15 16 Thickness of output in mm
CTQ ( Critical to quality ) characteristic
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Measurement of central tendency -Accuracy
Accuracy is defined as closeness of agreement between observed values and known reference standard. Accuracy can be measured by measuring central tendency of the process.
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Accuracy
There are three popular measures of accuracy: Mean Mode Median The most commonly used measure of accuracy is mean ( simple arithmetic mean). Hence for the purpose of Six Sigma we confine our study on Mean only.
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Measurement of accuracy
Mean - it is the arithmetic average of the measurements. To find the mean, all the measurements X1, X2, X3, , Xn are added and their sum is divided by the number of measurements, n. Mathematically it is represented as:( X1 + X2 + X3 ++ Xn) n
Mean X =
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Measurement of dispersion - Precision
Precision is the measure of dispersion between several individual observations of relevant quality characteristics. Precision describes consistency of the process. Precision can be measured through :1. Range: Range is the difference between the largest and smallest measurement in a given set of observations. 2. Standard Deviation: Standard deviation in general terms is a measure of mean variation of values from the central tendency. Standard deviation is more reliable method of measuring precision, hence for the purpose of Six Sigma, we will confine our study on Standard deviation.
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Measurement of precision
Mean Deviation of values from central tendency can also be used to measure dispersion. However, there is one difficulty in the use of this measure, that the algebraic sum of all deviations is zero.
Standard deviation is calculated as root mean square of the deviations of observations from the mean which henceforth will be represented by abbreviation SD.
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Calculation of standard deviation

Standard deviation can be calculated by the following formula :If X1, X2 ,X3Xn are individual observations And X is the arithmetic mean (X12 + X22 +.+Xn2) - n ( X ) 2 Variance, V = (n - 1) Standard Deviation, SD = V
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Example to calculate standard deviation
Calculate standard deviation of 10, 11, 12, 13 , 14

Sl. 1 2 3 4 5 T otal X 10 11 12 13 14 60 X (Square) 100 121 144 169 196 730
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Calculation of Standard Deviation

X= 60 = 12
5
(X12 + X22 +.+Xn2) - n ( X )2 Variance, V = (n - 1) = = 2.5 SD = 2.5 =1.5811 730 - 5 x (12) 2 (5 - 1)
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Sigma
Standard deviation is also referred to as the Greek letter sigma in quality management literature. Consequently process variation can be described by how many sigmas ( i.e how many multiples of standard deviation or SD ) fit within the specification limits.The higher this number, the better is the quality and vice versa. Sigma is a statistical measure of the quality consistency for a particular process / product.
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Understanding normal distribution
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Normal Distribution
In practice generally we come across data which is of variable type and is measured on continuous scale. If there are no extraneous factors it follows a systematic pattern known as Normal Distribution. It can be derived after plotting histogram as explained in the next slide.
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Histogram
60 50 40
Frequency
30 20 10 0
5 6 7 8 9 10 11 12 13 14 15 16 Thickness of output in mm CTQ
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Normal curve
Normal Curve is a smooth symmetrical bell shaped curve as shown below. 60 50 40
Frequency
30 20 10 0
5 6 7 8 9 10 11 12 13 14 15 16 Thickness of output in mm CTQ
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Most commonly used intervals
In normal distribution, the most common intervals are : 1. Process mean - SD and process mean + SD i.e 1 Sigma 2. Process mean - 2 SD and process mean + 2 SD i.e 2 Sigma 3. Process mean - 3 SD and process mean + 3 SD i.e 3 Sigma
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% Population between Mean - SD & Mean + SD (1Sigma)

Mean = 10, SD = 2 Mean-SD =8 Mean+SD =12
% Population
9 - SD
10
11 + SD
12
13
14
15
16 17
% population between Mean - SD and Mean + SD or 1 Sigma = 68.3, This implies that 68.3% population lies between dimensions of 8 and 12
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% Population between Mean - 2 SD & Mean + 2 SD (2Sigma)

Mean = 10, SD = 2 Mean-2 SD=6 Mean+2 SD=14
% Population
8
-2 SD
10
11
12
13
14
15
16 17
+2 SD
% population between Mean - 2 SD and Mean +2 SD or 2 Sigma = 95.5 This implies that 95.5% population lies between dimensions 6 &14
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% Population between Mean - 3 SD & Mean + 3 SD (3 Sigma)

Mean = 10, SD = 2 Mean - 3SD =4 Mean + 3SD =16
% Population
7 - 3 SD
10
11
12
13 + 3 SD
14
15
16 17
% population between Mean - 3 SD and Mean +3 SD or 3 Sigma = 99.73 This implies that 99.73 % population lies between 4 & 16
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Range of observations for nearly 100% population
Range of observations for nearly 100% population (to be precise 99.73%) depends upon, mean of the process and standard deviation of the process. If it follows normal distribution the population lies between Mean - 3 SD & Mean + 3 SD i.e ( 3Sigma )
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What is a Sigma process
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Meaning of a Sigma process
From a sigma process we come to know that at what distance, in terms of the standard deviation, the specification limits are placed from the target value.
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Move beyond 3 sigma
Until a few years back all statistical process controls were designed on the basis of 3 sigma limits. It is only in the recent years that this concept has been challenged and the organizations have started looking for quality levels beyond 3 Sigma.
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3 Sigma process
LSL
Mean=8 SD = 2
USL
5 - 3 SD
10
11 12 13 + 3 SD
14
15
16
Note : LSL is Lower specification limit and USL is Upper specification limit.
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4 Sigma process
LSL Mean=8 SD = 1.33 USL
1 2
5 - 4 SD
10
11 12 + 4 SD
13 14
15
16
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5 Sigma process
LSL
Mean=8 SD = 1.07
USL
10
11 12 13 + 5 SD
14
15
16
- 5 SD
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6 Sigma process
Mean=8 SD = 1
LSL
USL
5 - 6 SD
10
11 12 13
14
15
16
+ 6 SD
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Precision
Lesser the standard deviation of the process, more precise or consistent is the process
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3 Sigma Vs 6 Sigma
The goal of Six Sigma program is to reduce the variation in every process to such an extent that the spread of 12 sigmas i.e. 6 Sigmas on either side of the mean fits within the process specifications. The figure on next slide shows what this looks like.
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3 Sigma Vs 6 Sigma
6 Sigma curve
LSL
3 Sigma curve
USL
10
11 12 13
14
15
16
In a 3 sigma process the values are widely spread along the center line, showing the higher variation of the process. Whereas in a 6 Sigma process, the values are closer to the center line showing less variation in the process.
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3 Sigma Vs 6 Sigma
The comparison on the previous slide also shows a process in which the process spread of Six Sigmas (ie. 3 Sigmas on either side just fits within the specifications). In this case one must be extremely careful to ensure that the process average never slips off the target, otherwise the curve will shift and nonconforming items will increase. With Six Sigma requirement the process mean can shift by as much as 1.5 sigma before the likelihood of non-conforming items is increased. Even if the process mean does shift off center by as much as 1.5 sigma, only 3.4 non-conforming items per million parts should result.
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Amount of process shift allowed

1.5 SD LSL SD = 1 1.5 SD USL
10
11 12 13
14
15
16
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Picturization of accuracy & precision
Accurate and Precision
Accuracy & precision of a process can be best explained by using the analogy of a rifle firing at a target.
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Accuracy and precision
With the center of the target taken to be the true value of the characteristic being measured and by the rifle shots representing the measured values, there are four combinations of accuracy and precision as depicted in the following slides.
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Inaccurate and imprecise
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Accurate and imprecise
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Precise but inaccurate
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Accurate and precise
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Six Sigma objective
As observed from the Picturization in the preceding slides, the objective of moving towards Six Sigma quality is to continuously achieve greater consistency of the processes by reducing the variation.
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Calculating non conformities
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The number of observations falling within the distribution frequency curve can be co-related with the area under the curve. Finding area ( percentage of non conformities ) under a normal curve requires the use of standard normal distribution table. It is conventional to use the letter z to denote the standard normal variate. The table for areas under normal curve are given at the end of this section.
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Sigma ratings in terms of Z
The z value corresponding to USL or LSL* tells us how many sigma the USL or LSL is from the process setting. Thus the z value corresponding to the specification limit gives the sigma rating of the process.
Note 1: As we know that most of the variable data that we come across in the industry follows normal distribution with certain mean and standard deviation. We define a variate Z( standardized normal variate ) which has a mean value 0 and standard deviation 1. This is done in order to make use of Standard Normal Tables.
* LSL is the lower specification limit & USL is the upper specification limit
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LSL
USL
Non conformities
Non conformities
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Formula for calculating % non conformities
With respect to LSL, ZL = ( LSL - X )/SD With respect to USL ZU = ( USL-X )/SD
Where X= Process mean SD = Process Standard deviation USL = Upper specification limit LSL = Lower specification limit respectively.
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Illustration for calculating % non conformities
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Histogram for rolling thickness

Spec: 1.6+/- 0.1 mm
Mean=1.58 SD=0.042
50 LSL 40 USL
30
20 10 0
1.465 1.505 1.545 1.585 1.625 1.665 1.705
Thickness
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Normal curve for the population

Spec: 1.6+/- 0.1 mm
Mean=1.58 SD=0.042
50
LSL
40 30 20 Proportion of defects
USL Proportion of defects
10
0
1.465 1.505 1.545 1.585 1.625 1.665 1.705
Thickness
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With respect to LSL,
ZL = ( LSL - X )/SD = ( 1.50-1.58 )/0.042 = -1.90

With respect to USL,
ZU = ( USL-X )/SD
= ( 1.70-1.58 )/0.042 = 2.86
The Percentage of values falling beyond specification limits, corresponding to the z value can be read from the standard normal table as 0.0287 and 0.0021 for ZU and ZL respectively. Total percentage of non conformities =2.87+0.21=3.08. (While referring to Normal distribution table, only absolute value of z should be taken.)
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Areas under normal curve - Normal distribution table Area
z
0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.10 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19
Area
0.500000 0.496011 0.492022 0.488033 0.484047 0.480061 0.476078 0.472097 0.468119 0.464144 0.460172 0.456205 0.452242 0.448283 0.444330 0.440382 0.436441 0.432505 0.428576 0.424655
z
0.20 0.21 0.22 0.23 0.24 0.25 0.26 0.27 0.28 0.29 0.30 0.31 0.32 0.33 0.34 0.35 0.36 0.37 0.38 0.39
Area
0.420740 0.416834 0.412936 0.409046 0.405165 0.401294 0.397432 0.393580 0.389739 0.385908 0.382089 0.378281 0.374484 0.370700 0.366928 0.363169 0.359424 0.355691 0.351973 0.348268
z
0.40 0.41 0.42 0.43 0.44 0.45 0.46 0.47 0.48 0.49 0.50 0.51 0.52 0.53 0.54 0.55 0.56 0.57 0.58 0.59
Area
0.344578 0.340903 0.337243 0.333598 0.329969 0.326355 0.322758 0.319178 0.315614 0.312067 0.308538 0.305026 0.301532 0.298056 0.294599 0.291160 0.287740 0.284339 0.280957 0.277595
z
0.60 0.61 0.62 0.63 0.64 0.65 0.66 0.67 0.68 0.69 0.70 0.71 0.72 0.73 0.74 0.75 0.76 0.77 0.78 0.79
Area
0.274253 0.270931 0.267629 0.264347 0.261086 0.257846 0.254627 0.251429 0.248252 0.245097 0.241964 0.238852 0.235762 0.232695 0.229650 0.226627 0.223627 0.220650 0.217695 0.214764
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z
0.80 0.81 0.82 0.83 0.84 0.85 0.86 0.87 0.88 0.89 0.90 0.91 0.92 0.93 0.94 0.95 0.96 0.97 0.98 0.99
Area
0.211855 0.208970 0.206108 0.203269 0.200454 0.197662 0.194894 0.192150 0.189430 0.186733 0.184060 0.181411 0.178786 0.176185 0.173609 0.171056 0.168528 0.166023 0.163543 0.161087
z
1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19
Area
0.158655 0.156248 0.153864 0.151451 0.149170 0.146859 0.144572 0.142310 0.140071 0.137875 0.135666 0.133500 0.131357 0.129238 0.127143 0.125072 0.123024 0.121001 0.119000 0.117023
z
1.20 1.21 1.22 1.23 1.24 1.25 1.26 1.27 1.28 1.29 1.30 1.31 1.32 1.33 1.34 1.35 1.36 1.37 1.38 1.39
Area
0.115070 0.113140 0.111233 0.109349 0.107488 0.105650 0.103835 0.102042 0.100273 0.098525 0.096801 0.095098 0.093418 0.091759 0.090123 0.088508 0.086915 0.085343 0.083793 0.082264
z
1.40 1.41 1.42 1.43 1.44 1.45 1.46 1.47 1.48 1.49 1.50 1.51 1.52 1.53 1.54 1.55 1.56 1.57 1.58 1.59
Area
0.080757 0.079270 0.077804 0.076459 0.074934 0.073529 0.072145 0.070781 0.069437 0.068112 0.0668072 0.0655217 0.0642555 0.0630084 0.0617802 0.0605708 0.0593799 0.0582076 0.0570534 0.0559174
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z
1.60 1.61 1.62 1.63 1.64 1.65 1.66 1.67 1.68 1.69 1.70 1.71 1.72 1.73 1.74 1.75 1.76 1.77 1.78 1.79
Area
0.0547993 0.0536989 0.0526161 0.0515507 0.0505026 0.0494714 0.0484572 0.0474597 0.0464786 0.0455139 0.0445654 0.0436329 0.0427162 0.0418151 0.0409295 0.0400591 0.0392039 0.0383635 0.0375379 0.0367269
z
1.80 1.81 1.82 1.83 1.84 1.85 1.86 1.87 1.88 1.89 1.90 1.91 1.92 1.93 1.94 1.95 1.96 1.97 1.98 1.99
Area
0.0359303 0.0351478 0.0343794 0.0336249 0.0328841 0.0321567 0.0314427 0.0307419 0.0300540 0.0293789 0.0287165 0.0280665 0.0274289 0.0268034 0.0261898 0.0255880 0.0249978 0.0244191 0.0238517 0.0232954
z
2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19
Area
0.0227501 0.0222155 0.0216916 0.0211782 0.0206751 0.0201821 0.0196992 0.0192261 0.0187627 0.0183088 0.0178643 0.0174291 0.0170029 0.0165858 0.0161773 0.0157775 0.0153863 0.0150034 0.0146286 0.0142621
z
2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 2.34 2.35 2.36 2.37 2.38 2.39
Area
0.0139034 0.0135525 0.0132093 0.0128736 0.0125454 0.0122244 0.0119106 0.0116038 0.0113038 0.0110106 0.0107241 0.0104440 0.0101704 0.0099031 0.0096418 0.0093867 0.0091375 0.0088940 0.0086563 0.0084242
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Areas under normal curve - Normal distribution table
Area
z
2.40 2.41 2.42 2.43 2.44 2.45 2.46 2.47 2.48 2.49 2.50 2.51 2.52 2.53 2.54 2.55 2.56 2.57 2.58 2.59
Area
0.00819755 0.00797623 0.00776023 0.00754941 0.00734365 0.00714284 0.00694686 0.00675565 0.00656915 0.00638717 0.00620967 0.00603658 0.00586778 0.00570315 0.00554264 0.00538617 0.00523365 0.00508493 0.00494003 0.00479883
z
2.60 2.61 2.62 2.63 2.64 2.65 2.66 2.67 2.68 2.69 2.70 2.71 2.72 2.73 2.74 2.75 2.76 2.77 2.78 2.79
Area
0.00466120 0.00452715 0.00439650 0.00426930 0.00414532 0.00402462 0.00390708 0.00379258 0.00368118 0.00357264 0.00346702 0.00336421 0.00326413 0.00316679 0.00307202 0.00297282 0.00289011 0.00280285 0.00271803 0.00263548
z
2.80 2.81 2.82 2.83 2.84 2.85 2.86 2.87 2.88 2.89 2.90 2.91 2.92 2.93 2.94 2.95 2.96 2.97 2.98 2.99
Area
0.00255519 0.00247711 0.00240123 0.00232744 0.00225574 0.00218600 0.00211829 0.00205243 0.00198847 0.00192630 0.00186586 0.00180721 0.00175023 0.00169486 0.00164115 0.00158894 0.00153828 0.00148904 0.00144130 0.00139493
z
3.00 3.10 3.20 3.30 3.40 3.50 3.60 3.70 3.80 3.90 4.00 4.10 4.20 4.30 4.40 4.50 4.60 4.70 4.80 4.90 5.00
Area
0.00134999 0.00096660 0.00068714 0.00048342 0.00033693 0.00023263 0.00015911 0.00010780 0.00007235 0.00004810 0.00003167 0.00002066 0.00001355 0.00000854 0.00000541 0.00000340 0.00000211 0.00000130 0.00000079 0.00000048 0.00000029
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z
5.10 5.20 5.30 5.40 5.50 5.60 5.70 5.80 5.90 6.00
Area
0.00000180 0.00000107 0.00000063 0.00000037 0.00000021 0.00000012 0.000000070 0.000000040 0.000000022 0.000000012
Note: Only absolute values of z should be taken while referring to this table.
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5. Analysis phase
Objectives of Analysis phase Definition of process capability Need for process capability Factors influencing process capability
Estimating process capability

Empirical rule Process capability indices - Cp index Process capability indices - Cpk index
Benchmarking
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Objective of Analysis phase
The objective of this phase is to study the stability, shape, center and spread of the process. To establish an improvement goal or the performance objective through benchmarking.
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Process capability
Process A combination of equipment, materials, people, methods and environment that act together to produce an output. The quality of the process is judged by the quality ( characteristic ) of the output.
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Process capability
Process capability The inherent variability of a quality characteristic that the process is capable of maintaining, when in a state of statistical control under a given set of conditions. Assuming normal distribution of the quality characteristic Process Capability = +/- 3 SD = Total spread of 6 SD.
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Process capability
Process capability is judged by comparing process performance with process requirements. Since meeting specification limits is one of the most basic requirements of a process capability study, it is extremely important to accurately verify and define the specification limits.
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Need for process capability
For meeting customer requirements/ specifications.

To compare actual performance of equipment with manufacturers claim. To compare the performance of two processes. To provide more realistic tolerances for component dimensions. Provide a basis for process control.
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Factors influencing process capability
1. Condition of machine/ equipment. 2. Type of operation and operational conditions. 3. Raw materials. 4. Skill of operators. 5. Measurement method / instruments. 6. Inspectors skill.
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Estimation of process capability
Visual from run chart. Frequency distribution and histogram. Control charts. Analysis of variances. Probability papers.
Note : Reduction of variability can be achieved through use of SPC tools and Design of Experiments.
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The empirical rule
We have seen in the earlier chapter that almost all (to be

accurate 99.73%) the process output from a normally distributed process lies between (process mean - 3 SD) and (process mean+ 3 SD).
The total spread of the process can thus be described as 6 SD
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99.73% population between process mean +/- 3 SD
LSL
USL
5 - 3 SD
10
11 12 13 + 3 SD
14
15
16
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Process capability indices : The Cp index
A major reason for quantifying process capability is to compute the ability of a process to hold product tolerances. A measure of this relationship is process capability ratio or Cp. Process capability is also known as potential capability. The Cp index is given by:Cp = Tolerance 6 SD
Where Tolerance = USL - LSL SD = Standard Deviation
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Process capability indices : The Cp index
Interpretations of Cp Cp > 1 : The process is quite capable Cp = 1 : The process is just capable Cp < 1 : The process is incapable The recommended value of Cp is 1.33 ( minimum) In order to achieve Six Sigma quality in the organization, we must reduce the variation in the process so as to achieve the value of Cp=2.
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Calculating defective PPM at various levels of sigma.
Quality level 2 Sigma 3 Sigma 4 Sigma 5 Sigma 6 Sigma
Cp 0.67 1.00 1.33 1.67 2.00
z 2 3 4 5 6
Defective PPM 22750 1350 32 0.3 0.001
Refer normal distribution table for finding defective parts per million ( PPM ) for corresponding z values.
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Impact of process capability
For individual parts, the ideal design is Cp = 2; in other words, the design specification is twice as wide as the true capability of the process. This is where the phrase Six Sigma Quality originated. Since the process capability is +/- 3SD, a design specification twice as wide would be +/- 6 SD.
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Impact of process capability
However, it is learnt from the industry experience across the world, that the processes rarely stay centered on their targeted nominals, shifts of 1.5 SD to either side of the mean are common, even in well controlled processes. Therefore in practice, an ultimate z-value of 4.5 is considered Six Sigma Quality. Consulting the z-table, we find that the probability of producing non conformities associated with a zvalue of 4.5 is 0.0000034. If this value is obtained, then only 3.4 out of every million parts manufactured will be defective.
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Calculating defective PPM with permissible shift of 1.5 SD at various levels of sigma. ( practical situation )
Quality level 2 Sigma 3 Sigma 4 Sigma 5 Sigma 6 Sigma
Cp 0.17 0.50 0.83 1.17 1.50
z 0.5 1.5 2.5 3.5 4.5
Defective PPM 308538 66807 6210 233 3.4
Refer normal distribution table for finding defective PPM for corresponding z values.
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Drawbacks of Cp
Cp however is not a very reliable measure as it does not tell us all. Consider the following four processes producing the same output X with specification 20+/- 4. Each of these processes have the Standard deviation of 1.
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Process 1
X=20 SD=1
LSL
USL
Cp=1.33
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Process 2
X=22 SD=1
LSL
USL
Cp=1.33
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Process 3
X=15 SD=1
LSL
USL
Cp=1.33
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Process 4
X=25 SD=1
LSL USL
Cp=1.33
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Calculation of Cpk index
Cpk is a measure of process performance capability The process performance index Cpk is given by:Cpk = Min [ USL - x , x - LSL ] 3SD 3SD Example : Specification : 20 +/- 4, SD = 1 Cp = Tolerance/6SD = 8/6 = 1.33
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Calculation of Cpk index - Example

Example : Specification : 20 +/- 4, SD = 1 Cp = Tol/6 SD = 8/6 = 1.33 x = 20, Cpk = Cp = 1.33 x = 22, Cpk = 0.67
x = 15, Cpk = -0.33 x = 25, Cpk = -0.33
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Calculation of Cpk index
In the previous slide we observe that, although the Cp value = 1.33 in all the four cases, but because of the shift in the process setting level we are getting Cpk values as 0.67 in 2nd case and hence the non conformities. Similar observations are noticed in 3rd and 4th case where we get the Cpk as -0.33.
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The Cpk index
Thus Cpk = Cp means the process is centered. Cpk < 1 means non- conformances are being produced. Cpk < 0 indicates that the process has been set beyond either of the two specification limits.
Note : Cpk is always less than or equal to Cp.
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Cp and Cpk indices
Therefore, the first step is to bring Cpk=Cp by proper centering of the process. The second step should be to improve the Cp value by decreasing the variation.
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Process capability indexes for one sided tolerances
One-sided Tolerances - The Cp and Cpk indexes are used for characteristics with two-sided tolerances - that is, processes with both upper and lower specification limits. Since many characteristics have only one-sided specifications, it is also convenient to have one-sided capability indexes.
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Process capability indexes for one sided tolerances

For processes that have only a Lower specification limit, LSL, the lower capability index Cpl is defined by:Cpl = x - LSL 3 SD
Correspondingly, when only an Upper specification exists, we define an upper capability index by:Cpu = USL - x 3 SD
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Establish a goal for improvement
Once the organization has completed the process capability study, the next step is to benchmark the processes with the best in class or world class parameters. Benchmarking is discussed on the following slides.
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Benchmarking
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Benchmarking
Benchmarking is quality by comparison for achieving better standards. In the global movement today, the competition is improving at a faster rate, and the only way to improve your relative quality and move upwards is to find out and implement the best industry practices.
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Benchmarking :Stages of improvement
World Class Recognized as the best Benchmarked by others Best in Class Exceeds customer expectations, outperforms all competitors and has clear competitive edge
Efficient Meets all internal requirements for cost margins, asset utilization, cycle-time and measures of excellence
Effective Satisfies all customer requirements
Incapable Is ineffective, inefficient and at the risk of failing. Needs major redesign
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Benchmarking methodology
Benchmarking can be of various types - competitive benchmarking, product benchmarking, process benchmarking and best practices benchmarking. Whatever be the category chosen by the organization, the benchmarking methodology remains the same in each case. Benchmarking methodology is explained through 5 simple steps in the following slide :-
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A. Identify processes to Benchmark
Select processes to benchmark. Measure current process capability and define goal. Understand detailed process which needs improvement.
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B. Select organization to Benchmark
Select organizations which perform your process.
Compile a list of world class process parameters.
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C. Compile the required information
Develop a detailed questionnaire to obtain desired information.

Obtain the desired information. The information can be obtained from various sources viz: internet, trade journals, professional associations, industry publications, industry experts, libraries etc.
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D. Analyze gaps
Too much information is as bad as too little. Gather and analyze only the information you need to make a direct comparison of performance. Compare like with like. Identify the performance gaps and develop an action plan to close the gaps. Also highlight and quantify the consequences of not closing the gap.
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E. Develop an action plan
Review observations of the gap analysis. Set new performance standards. Develop an action plan for meeting the new performance standards, identify process owners with their responsibilities and move to improvement phase.
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6. Improvement phase
Objectives of Improvement phase
Histograms Pareto analysis Control charts
Root Cause Analysis

Process flowcharting Failure Mode & Effect Analysis Quality Function Deployment Design of Experiments ( DOE )
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Objectives of Improvement phase
To develop a proposed solution to the existing problems.

To confirm that the proposed solution will meet the desired quality improvement goals. To identify resources required implementation of the solution. To plan and execute actual improvements. The tools and techniques for making improvement are discussed on the following slides :for successful
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Histogram
The frequency histogram can be described as a bar graph displaying the frequency distribution of specific processes, items and devices. This tool provides a valuable means for tracking variation. For instance, it can categorize product defect levels or distribution. The primary difference between the histogram and any other bar diagram is that the horizontal scale of the histogram represents a numerical scale.
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Histogram
A frequency histogram provides the basis for understanding the variation of both production and service scenarios with the visualization to identify opportunity easily with each area (histogram bars) while keeping track of variation. It must be pointed out that frequency histograms do not tell the total sources of variation and do not present a specific pattern over time.
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Constructing a Histogram
Constructing a histogram is quite simple. Microsoft bar chart can be used to draw a histogram. The following simple steps should be followed :1. Select insert Microsoft bar graph. 2. Feed in scale and their respective frequencies. 3.Since there is no gap between the bars in a histogram, select format data series. Click on options field and make the gap width between the bars=0. Please see the example of a histogram generated by Microsoft graph on the next slide.
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Constructing a Histogram
35 30 25 20 15 10 5 0 5 6 7 8 9 10
Machine set up time in minutes
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Pareto analysis
The Pareto principle is to concentrate on vital few rather than trivial many in tackling quality problems. The Pareto diagram is a tool for identifying few actually important causes for defectives which result in large proportion of defectives, instead of concentrating on large number of causes which contributes to a small proportion of the total defectives.
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Constructing a Pareto chart
A Pareto diagram is a bar chart of number of defectives with bars representing the number of defectives due to different sources arranged in descending order of their importance. A line graph of cumulative number of defectives (Ogive) is also drawn in the same chart. The causes are given along the x axis, the number of defectives are given on the left y axis and the cumulative %defectives is given along the right y axis.
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Constructing a Pareto chart

Data on defective cords
S No. Source of defectives No. of defectives Percentage defectives
1 2 3 4
Wrong Ply TPM Plyless Feeding Single end Wrong Cable TPM
75 150 30 45
25 50 10 15
Total
300
100
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Arranging data in descending order

Data on defective cords
S No. Source of defectives No. of defectives Percentage defectives Cumulative % defectives
1 2 3 4
Plyless Feeding Wrong Ply TPM Wrong Cable TPM Single end
150 75 45 30
50 25 15 10
50 75 90 100
Total
300
100
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Pareto analysis of defective cords

300 250 200
100% 80% 60%
150 100 50 0
Plyless feeding Wrong ply TPM Wrong cable TPM
Single end
40%
20%
0%
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Control charts - P charts
The p charts are used to control the overall number of defective units in a process. The proportion of non conforming items are plotted on this chart which gives us the graphical display of variability of the data.
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Example -construction of P charts

Day
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Total
Rejects
14 22 9 19 21 18 16 16 21 14 15 16 21 9 25 15 14 13 10 21 19 23 15 12 19 17 15 13 19 12 493
Tested
286 281 310 313 293 305 322 316 293 287 307 328 296 296 317 297 283 321 317 307 317 323 304 304 324 289 299 318 313 289 9155
Proportion
0.049 0.078 0.029 0.061 0.072 0.059 0.050 0.051 0.072 0.049 0.049 0.049 0.071 0.030 0.079 0.051 0.049 0.040 0.032 0.068 0.060 0.071 0.049 0.039 0.059 0.059 0.050 0.041 0.061 0.042
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Construction of P charts
Data points P=
Number of defective units Number of units in the sample
Process Average
P=
Total defective units

Total units observed
0.053
Upper control Limit ( UCL ) = P+3
P ( 1-P )
n
= 0.0926
Lower control Limit
= P-3
P ( 1-P )
=0.1508
n n=Average sample size= 305*

* Since the data size do not vary much around the mean value, P chart is simplified by taking the average sample size to calculate he control limits.
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Construction of P charts
The construction of control charts is very simple. Simply select the range of data points ( proportion column in the excel sheet ) and click the graph button. Select Line graph and the p chart is automatically calculated. The average, UCL and LCL can be manually displayed by drawing three additional lines on the graph. Please refer the next slide for the graph.
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P chart
0.1 0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 5
LCL 0.015 CL 0.053 UCL 0.0926
Days
15
25
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NP charts
The NP chart is used for plotting number of defectives instead of proportion defectives. This is another version of P chart and its applicability depends upon the interest of the end user.
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Example -construction of np charts

Day
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Total
Rejects
10 12 10 11 6 7 12 10 6 11 9 14 16 21 20 12 11 6 10 10 11 11 11 6 9 272
Sample size
100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 2500
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p = X1 + X2 + X3 +..Xk 275 = kn 25*100 np = 0.1088*100 =10.88
= 0.1088
UCL = np + 3
np ( 1-p )
=20.22
LCL = np - 3
np ( 1-p )
=1.54
n = subgroup sample size = 100
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25 20 15
Rejects
UCL 20.22
10 5 0 5
Days
Np 10.88
LCL 1.54
15
25
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Root cause analysis
In any organization numerous problems exist in all facets of its activities. The efficiency and survival of the organization depends on how promptly these problems are recognized and their root causes are isolated and eliminated. A systematic analysis of each potential problem area should be carried out to recognize the root causes which are responsible for creating the problem. This analysis is called Root Cause Analysis. This is more of a philosophy or a discipline rather than any isolated technique for continuous improvement.
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Tools & techniques for root cause analysis
Ishikawa or cause and effect diagram Histogram Pareto Analysis Control charts Brain Storming Flow Charting Process Capability Analysis Scatter diagram and regression analysis Statistically Design Experiment ( Design of Experiments )
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Cause & Effect diagram Material

Assemblies
Major and subsidiary causes

Environment
Methods
Procedures
Noise level Temperature
Consumables Components Suppliers Accounting Policies Lighting
Humidity
Effect
Variability Training Experience Technology Tooling Attitude Skill Fixtures Gauging Counting Instruments Tests
Men
Machine
Measurement
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Example of Cause & Effect diagram

Material
High lead time poor review system High inventory Poor quality of vendors Poor QC Poor MIS High variation Poor Lighting
Methods
Inadequate process control
Environment
High Noise level
Heat
Lack of Experience
Inadequate Training
Inadequate Instruments
Low operating profit
Old machines
Poor Maintenance
Low motivation Frequent breakdowns
No SPC
Inadequate measurement
Men
Machine
Measurement
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Typical causes for non conformance/ defects

Machine factors
Inadequate process capability Incorrectly designed tooling Worn tools, jigs or dies Poor maintenance Equipment effected by environmental factors such as heat, humidity etc.
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Material factors
Use of untested materials Mix-up of materials Substandard material accepted on concession because of non-availability of correct material Inconsistency in specifications on the part of vendors
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Men factors
Incorrect knowledge of setting up machines Careless operator and inadequate supervision Undue rush by the operator to achieve quality targets Lack of understanding of drawing instructions relating to a process Operator does not possess requisite skill for operating machines
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Method factors
Inadequate process controls Non availability of proper test equipments Test equipment out of calibration Vague inspection/ testing instructions Inspectors do not possess the necessary skill
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Click on the boxes to enter your Cause & Effect

Material Methods Environment
Click to enter
click
Men
Machine
Measurement
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Process flow Charting
Flow charting provides the basis for understanding the standard process procedures, the relationship between people and work to be done. Flowcharting is a very good tool for understanding and identifying process bottlenecks such as delays, excessive transportation, waiting time and queuing time. It also identifies key customers, suppliers and process owners by operational work unit, performance level, quality level and productivity at each process point. Flow charts can also identify source of errors, decision points and non-value adding operations.
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Flow chart of Printed circuit board

Receive PCB Parts from vendors Return part to vendors
Assemble parts in PCB
Test assembled PCB
Rework & Analyze
Inspect parts
Wait for Mfg.
Inspect PCB Parts good or bad
Bad
Parts good or bad
Bad
Good
Inspect parts
Good
Pack & Ship
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Sample : Seeking customer feedback and taking corrective action flow diagram.
Customer satisfaction dept.
Issue owners Surveys Customer satisfaction dept Issue identification Prioritization Ownership International marketing Administration Domestic Marketing Technical
Review actions Emerging issues Action plan
Complaints Customer Critical Situations
Delivery Other Service
Develop action plans Resolve issues Improve
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Failure Mode and Effects Analysis (FMEA)
FMEA is a structured analysis for identifying ways & methods in which the product or processes can fail and then plan to prevent those failures. FMEA is a proactive tool for reducing defects and non-conformities.
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Failure Mode and Effects Analysis (FMEA)
FMEA is a structured approach in :Identifying ways in which a process can fail to meet critical customer requirements. Estimating the risk of causes with regard to these failures. Evaluating control plan for preventing these failures. Prioritizing the actions for improving the process. FMEA is an extremely important tool for each phase of Six Sigma strategy viz. Measure, Analyze, Improve, Control.
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Advantages of FMEA
For improving the reliability and safety of the products. For improving customer satisfaction. Tracking actions to reduce non-conformities. New product development.
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Definition of terms
Failure Mode : It is a manner in which a part or a process can fail to meet specifications. It is usually associated with defect or non-conformities. Examples : Missing part, Oversized, Undersized, Incorrect price, Offspec parts.
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Definition of terms
Cause : Causes are sources of variation which are associated with key process inputs. Cause can be best defined as a deficiency which results in a failure mode. Examples : Instructions not followed, Lack of experience, Incorrect documentation, Poor handling etc.
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Definition of terms
Effect : Effect is the impact on the customer (both internal & external) if the failure mode is not prevented or corrected. Examples : Customer dissatisfaction, Frequent product breakdowns, Customer downtime.
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Relationship of cause, failure mode & effect
Cause
Failure Mode
Effect
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FMEA through Cause & Effect Diagram

Causes Causes Causes
Prevent or Detect
Failure Mode
Effect
Causes
Causes
Causes
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Steps in FMEA process
1. Develop a process map and identify process steps. 2. List key process outputs for satisfying internal and external customer requirements. 3. List key process inputs for each process steps. 4. List ways the process inputs can vary (causes) and identify associated failure modes and effects. 5. Assign severity occurrence and detection rating for each cause.
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Steps in FMEA process
6. Calculate risk priority number ( RPN) for each potential failure mode. 7. Determine recommended actions to reduce RPNs. 8. Establish time frame for corrective actions. 9. Take corrective actions. 10. Put all controls in place.
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Ranking terms used in FMEA calculations

Scale:1(Best) to 10 ( Worst)
Severity (SEV) : Severity indicates how severe is the impact of the effect on the customer. Occurrence (OCC) : This indicates the likelihood of the cause of the failure mode to occur.
Detection (DET) : This indicates the likelihood of the current system to detect the cause or failure mode if it occurs.
Risk priority number : This number is used to place priority to items for better quality planning. RPN = SEV X OCC X DET
See next slides for specimen best to worst ratings on a 10 point scale.
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Best to Worst ratings for FMEA calculations

Rating 1 Degree of Severity Customer will not at all observe the adverse effect Likelihood of Occurrence Very remote possibility Ability to detect Sure that the potential failure will be detected & prevented before reaching the next customer Almost sure that the potential failure will be detected before reachig the next customer Less chances that the potential failure will reach the next customer undetected
Customer will experience slight discomfort
Low failure with supporting documents
Customer will experience annoyance because of slight degradation of performance
Low failure without supporting documents
Customer dissatisfied due to reduced performance
Occasional failures
Some controls may detect the potential from reaching the next customer Moderate chances that the potential failure will reach the next customer
Customer is uncomfortable
Moderate failure rate with supporting documents
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Best to Worst ratings for FMEA calculations

Rating 6 Degree of Severity Warranty repairs Likelihood of Occurrence Modearate failure rate without supporting documents Ability to detect Controls are not likely to detect or prevent the potential failure from reaching the next customer Less chances that the potential failure will be detected or prevented before reaching the next customer Very less chances that the potential failure will be detected or prevented before reaching the next customer Existing controls will not detect the potential failure
High degree of customer dissatisfaction
High failure rate with supporting documents
Vey high degree of customer dissatisfaction
High failure rate with supporting documents
Negative impact on the customer
Failure is almost certain
10
Negative impact on the customer, people & society
Assured failure
Existing controls will not detect the potential failure
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FMEA Form: ( Column 1 to 9 )

Rank occurrence on a 1 to 10 scale List how the cause is presently being controlled Rank how well cause/failure can be detected on 1 to 10 scale
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Rank severity on 1 to 10 scale
1 Process Part No. 1 2 3 4 5
2 3 Potential failure mode Potential failure effect
4 SEV
5 Potential causes
6 OCC
7 Current Controls
8 DET
9 RPN
List failure modes for each step
List effects of each failure mode
List causes for each failure mode
RPN= SEV*OCC*DET
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FMEA Form contd: ( column 10 to 15 )

Designates people responsible for corrective action RPN is recalculated on completion of corrective action
10 11 Actions Recommended Responsibility
12 SEV
13 OCC
14 DET
15 RPN
List actions recommended on RPN pareto
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Quality Function Deployment ( QFD )
No matter how effectively a company meets the initial needs of the customers, it must remain constantly alert and responsive to the changing and increasing needs of the customers. Because if the company is not responsive to these changing needs, the passage of time will erode the early competitive advantages.
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QFD
QFD is a scientific technique for translating the voice of the customer into development of products and services. It is a complete product planning process as opposed to problem solving and analysis. The technique was invented by Akashi Fukuhara of Japan and first applied with very good results at Toyota.
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Putting QFD into practice
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Step 1 : List customer requirements and rank

Importance
Customer Requirements
Very Important on 10 point scale
Moderately Important
Slightly important
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Step 2 : List technical requirements to meet customer requirements
Technical Requirements
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Step 3 : Comparing product with the nearest competitor

Customer competitive evaluation on 5 point scale( 5 high , 1 low ) 1 2 3 4 5 Action
Rank
Competitor product
Our product
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Step 4 : Establish relationship between customer requirement and technical requirements
Strong relation Moderate relation Weak relation

Rank
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QFD matrix overview after step 4
Competitive evaluation
Rank
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Step 5 : Do competitive technical Assessment
Competitive evaluation Rank
Competitive Technical Assessment
5 4 3 2 1
Competitor assessment Our assessment
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Step 6 : Mention operational targets or action points
Competitive evaluation
Rank
Competitive Technical Assessment
Operational Targets
New Product
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QFD - customers voice
The whole process of the QFD can be linked to GIGO ( Garbage in garbage out ). This is because, if the voice of the customer has not been captured properly, the final product will also not be the one actually desired by the market place. It is therefore extremely important to capture the correct voice of the customer before taking any other step in the QFD planning process. We will explain this by the forthcoming example of new car development.
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Example : new car development
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A product development team wants to determine what the customers want in a new car. After interviewing about 120 car drivers, the team came out with the following chart of the customer requirements :
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Desired product attributes in a new car

Requirement
Easy to drive Quiet riding , no squeaks or rattles Excellently finished Smooth riding even on rough road Excellent gas mileage Aerodynamic design Hugs the road Free from breakdowns Fast acceleration Virtually maintenance free Durable - will last 150000 miles Protects the driver and passenger in case of accident Classic styling Has instruments to read critical functions Has many electronic devises Has convertible roof
Rank
5 4.8 4.6 4.5 3.9 3.8 3.7 3.6 3.5 3.4 3.3 3.2 3 2.2 2 1.4
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Translating into technical requirements
The product development team is all set to translate the requirements of the customer into technical requirements as per the QFD matrix. Fallacy : The survey is based on aggregate data management and its basic assumption is that there is one best answer for every one.
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Classification of needs
The product development team is asked by the CEO to classify the needs of various drivers and then give it a rating instead of proceeding simply with the aggregate data management. After the market survey the product development team divided the customer into two broad categories :1. The performance driver and 2. The practical driver The team then came with the following findings -
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Two different profiles of desired product attributes
Performance driver
Fast acceleration Aerodynamic design Hugs the road
Practical driver
Excellent gas mileage Virtually maintenance free Free from breakdowns
4
Easy to drive Excellently finished Quiet riding Classic styling Smooth riding
Easy to drive Durable Quiet riding Smooth ride Protects driver Excellently finished
Free from breakdowns Excellent gas mileage Protects drivers Durable Many electronic devices Convertible roof Virtually maintenance free
Many electronic devises Aerodynamic design Hugs the road Instruments to read functions Classic styling Convertible roof Fast acceleration
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New Car
The classification of the customer requirements clearly reveals that the attribute which is most important for the performance driver, is least important for the practical driver and vice versa. A simple listing of the customer requirements would have definitely ended up in the development of incorrect product for the market. Reading the voice of the customer is therefore the most critical and challenging aspect of the whole QFD process.
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QFD - Conclusion
It is therefore very important that your organization is constantly looking for the living customers instead of mythological ones created by aggregate data management. Once the voice of the customer has been properly captured, translating them into technical requirements should not be much of a difficulty.
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Design of experiments
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Design of experiments
Design of experiments (DOE) is a valuable tool to optimize product and process designs, to accelerate the development cycle, to reduce development costs, to improve the transition of products from research and development to manufacturing and to effectively trouble shoot manufacturing problems. Today, Design of Experiments is viewed as a quality technology to achieve product excellence at lowest possible overall cost.
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Objectives of Experimentation
The following are some of the objectives of experimentation in an industry : Improving efficiency or yield Finding optimum process settings Locating sources of variability Correlating process variables with product characteristics Comparing different processes, machines, materials etc Designing new processes and products.
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Various terms used in Experimentation
In the context of discussion on experimental designs, the common frequently used terms are : factor Level Treatment combination Response Effect Interaction
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Traditional approach
The traditional approach to product and process optimization is to conduct one variable at-a-time experiments. This approach though simple to plan and execute, suffers from several drawbacks. For instance, varying factor A from its nominal value A1 to some other value A2 may produce a given change in the quality of the product, when other factor B is at a value B1. However a different change in the quality of the product will result, when factor B is at a value B2. This effect known as interaction effect, can not be detected under traditional approach..
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Statistically designed experiments
A statistically designed experiment permits simultaneous consideration of all the possible factors that are suspected to have bearing on the quality problem under investigation and as such even if interactions effect exist, a valid evaluation of the main effect can be made. Scanning a large number of variables is one of the ready and simpler objectives that a statistically designed experiment would fulfill in many problem situations.
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Statistically designed experiments
Even a limited number of experiments would enable the experimenter to uncover the vital factors as which further trials would yield useful results. The approach has number of merits, it is quick, reliable and efficient.
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Basic principles of experimentation
Basic principles of Experimentation are : Randomization Replication Local Control
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Basic principles of experimentation
Randomization : is described as an insurance against extraneous factors. Replication : increases the sensitivity of the experiment i.e power of detecting differences between treatments. Local Control : reduces the effect of natural variability of materials, environmental conditions etc.
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Planning for experimentation
It is known widely that a properly well planned experiment helps to achieve better efficiency and hence certain amount of thinking must be done before deciding to carry out the experiment and actually conducting the experiment.
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Planning for experimentation

The various steps to be followed in this direction are listed below : Selection of area of study : Pareto analysis Proof of the need for experimentation Brain storming and Cause & Effect diagram : To list all the possible factors Classification of factors Interactions to be studied Response and type of model for analysis
Note : Pareto Analysis, Brain storming and Cause & Effect diagrams have already been covered in the previous slides.
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Proof of the need for experimentation
After having selected the area for experimentation we have to ensure that the problem is of Break through or Improvement nature and not a problem of control nature. For this purpose past data should be suitably analyzed and plotted on some process control chart to check whether the process is within statistical control or not. If the analysis shows lack of control or statistical instability, then it is a problem of control nature and experimentation may not be needed.
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Proof of the need for experimentation
However if the problem is of chronic nature and there is stability in the process, then it establishes the need for experimentation. Before deciding to carry out experimentation the need for experimentation must be established.
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Classification of factors
Tools like brainstorming and cause & effect diagrams helps in identification of factors and preparing a complete list of the factors involved in any experiment. Factors listed can be classified into three categories : 1. Experimental Factors 2. Control Factors 3. Error or Noise Factors
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1. Experimental factors are those which we really experiment with by varying them at various levels.
2. Control Factors are those which are kept at a constant (controlled) level throughout experimentation.
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3. Error or Noise factors are those which can neither be changed at our will nor can be fixed at one particular level. Effect of these factors causes the error component in the experiment and as such these factors are termed as error or noise factors.
Note : At the planning stage itself all the factors viz. Experimental, Control and error should be recognized. This will help to tackle them appropriately during experimentation.
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Response and type of model for analysis
The ultimate observations or data generated by the experiment is known as the response. The response may be : Continuous or measurement type and follows a normal distribution Continuous or measurement type but does not follow normal distribution
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7. Control phase
Objectives of control phase

Tools for effective control system Risk management Mistake proofing techniques Product design controls
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Objectives of control phase
To ensure that our processes stay in control after the improvement solution has been implemented and To quickly detect the out of control state and determine the associated causes so that actions can be taken to control the problem before non-conformances are produced.
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Control phase
Having achieved the improvement, it needs to be sustained. There is a general tendency for all processes to degrade unless there is an effective control mechanism which is able to detect incipient deviation in the process, which are then analyzed and necessary corrective action is taken to bring the process back to the state which was attained after planned improvement was effected. These control mechanisms must be integrated in the form of a quality management system document which should be made mandatory.
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Control phase
Unless we control the business processes in the form of documentation and ongoing process controls, processes will tend to degrade overtime and shall loose the gains achieved in the improvement activities.
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Tools for effective control system
I. SPC - This has already been covered in Measurement and Analysis section. II. Risk management III. Mistake proofing IV. Product design controls
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Risk management
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Risk management
Risk can be defined as the probability of an undesirable event occurring and the impact/consequence of that event. Risk management is a process of managing risk using risk abatement plans.
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Objectives of risk management plan

To identify and quantify risk elements viz. Technical, cost, marketing risk. To reduce risk by means of risk abatement plans integrated into processes
To Monitor progress of abatement plan To Highlight and manage risk as early as possible.
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Key steps of a risk management process
Identify risk elements and risk types Assign risk ratings i.e. probability and consequence of risk Prioritize risk as high medium and low Identify risk abatement plans for high and medium risks Incorporate the risk abatement plans into work plans.
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Ways to identify risk

1. FMEA (This has been already discussed in the chapter on Measurement 2. Past experience 3. Brainstorming
Whatever be the method it is important to analyze risk in terms of complex design issues, cutting edge technology issues, untested techniques, new manufacturing processes and high cost uncertainties.
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Methods of risk abatement
Involve customers/suppliers/manufacturing/field early in the process Model or simulate the process Use robust design Test Conduct periodic project reviews Complete analysis earlier Assure proper resourcing
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Mistake Proofing
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Mistake proofing
Mistake proofing is a scientific technique for improvement of operating systems including materials, machines and methods with an aim of preventing problems due to human error. The term error means a sporadic deviation from standard procedures resulting from loss of memory, perception or motion.
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Defect Vs errors
It is important to understand that defects and errors are not the same thing. A defect is the result of an error, or an error is the cause of defects as explained below. Cause
Error
Result
Defect
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Prevention of defects
Cause
Intermediate result
End result
Machine or human error
Detect error
Take action feedback
zero defect
Stop errors from turning into defects
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Types of error
Error in memory of PLAN : Error of forgetting the sequence/ contents operations required or restricted in standard procedures.
Error in memory of EXECUTION : Errors of forgetting the sequence/contents of operations having been finished.
Error in PERCEPTION of type : Error of selecting the wrong object in type or quantity.
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Types of error
Error in perception of MOVEMENT : Error of misunderstanding/misjudging the shape, position, direction or other characteristics of the objects.
Error in motion of HOLDING : Error in failing to hold objects. Error in motion of CHANGING : Errors of failing to change the shape, position, direction, or other characteristics of object according to the standard.
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Human error provoking situations
Inadequate written standards Too many parts Mix up Too many steps Specifications or critical conditions Too many adjustments Tooling change Frequent repetition Environmental factors
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Principles of mistake proofing
The principles of mistake proofing can be categorized into groups: A. Prevention of occurrence B. Minimization of effects
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A. Prevention of occurrence
Methods under this principle aim to prevent the occurrence of human errors from all stages of operations and make corrections unnecessary.This can be done through the following 3 methods : Elimination Replacement Facilitation
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Elimination
Elimination method aims to remove the system properties which generate operations/restrictions susceptible to human errors so as to make them unnecessary. Consider the error of an operator touching a high temperature pipe and getting burnt. One method of preventing this error is to make the pipe safe by covering it with insulating material. This improvement removes the property of the pipe which generates the restriction.
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Replacement
The replacement method aims to use more reliable methods than operators and make it unnecessary for operators to perform such functions as memory, perception or motion. The use of specially partitioned parts boxes holding specified number of parts to prevent the error of supplying incorrect number of parts is an example of foolproof method based on replacement.
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Facilitation
The principles of elimination and replacement described above make it unnecessary for operators to perform operations or note restrictions. In contrast to these, the purpose of facilitation is to make such functions as memory, perception and motion required in operations easy for the operators, and thus reduce the occurrence rate of human errors.
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B. Minimization of effects*
Methods under this principle aim to minimize the effects of human error and focus on processes where the errors develop into serious problems of quality,safety or efficiency. This can be divided into two categories :1. Detection and 2. Mitigation
*This principle is also known as Stop-in-time.
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Detection
The concept of detection is that even if a human error occurs, the deviations from standard states caused by it can be detected and corrected in the succeeding operation steps. The methods of correcting the detected deviations are classified into two types :1. Operators are informed or find by themselves the deviations and take necessary corrective action. 2. The deviations are automatically corrected without operators.
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Detection
There are two methods of informing the operator. The first method is to bring to the operators notice by alarms or the remained parts and the second method is by making the successive operations impossible.
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Mitigation
The mitigation method aims to make operations redundant or incorporate shock absorbing/protecting materials so as to mitigate the effects of human errors in their development process. Example : Consider the error of burning out the motor of a production machine by forgetting to switch off the power supply. The mitigation countermeasure is to install a fuse which cuts off the power supply when the temperature reaches certain point.
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Product Design Controls
Product design controls can be categorized in 3 parts Means of knowing the product Means of testing designs Means of regulating designs
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Means of knowing the product
Do the designers know the variety of application of the product.
Do they have complete information on the operating environments.

Do they have access to the user to discuss applications.
Do they know the potential field misuses of the product.
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Do they have clear understanding of product requirement on :
Performance Life Warranty period Reliability Maintainability Accessibility Safety Operating costs
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Have the non quantitative features of the product been defined in some manner?
Do the designers know the level of product sophistication suitable for the user involved? Are adequate design guidelines, standards, handbooks and catalogues available? Do the designers understand the interaction of their part of design with remainder of the design?
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Do the designers understand the consequences of a failure or other inadequacies of their designs on:1. The functioning of the total system 2. Warranty costs and
3. User costs ?
Do they know the relative importance of various components & characteristics within components? Do the designers know what are the manufacturing capabilities relative to the design of tolerances?
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Do the designers derive tolerances based on customer/functional needs or just use standard tolerances?
Do the designers know the shop and field costs incurred because of incomplete design specifications or designs required in change?
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Means of testing designs
Do the designers have the means of testing their design with regard to the following : a. Performance & reliability tests b. Tests for unknown design interaction or effects c. Pilot run
Is their an independent review of design? Have the detailed drawings been checked?
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Do the designers record analysis for the design? Do the designers receive adequate feedback from development tests, manufacturing tests, acceptance tests and user experience? Are the results quantified where possible including frequency of problems and costs to the manufacturer and user?
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Does failure information contain sufficient technical details on causes? Are the designers aware of material substitutions or process changes?
Do the designers receive notice when their designs specifications are not followed in practice?
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Means of regulating Design
Have the designers been provided with the means of regulating the design process? Are they provided with information on new alternative materials or design approaches? Have they been given performance information on previous designs?
Are the results of research efforts on new products transmitted to the designers?
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Are the approvals required from the designers to use products from the new suppliers?
Do the designers participate in defining the criteria for shipment of the product?
Can the designers propose changes involving trade-offs between functional performance, reliability and maintainability?
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Are designers told of changes to their designs before they are released? Have causes of design failures been determined by thorough analysis? Do designers have the authority to follow their designs through the prototype stage and make design changes where needed? Can the designers initiate design changes?
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Are field reports reviewed with designers before making decisions on design changes? Do designers understand the procedures and chain of command for changing a design?
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8. Implementation & deployment
Awareness of the present status Critical issues and superior choices Prerequisites of successful implementation
Creating six sigma focus

Deployment schedule
Awareness of the present status
It is extremely important for an organization to carry out an overall assessment of the present status to know their strengths and weaknesses. The following steps are important in conducting the assessment :-
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Steps in conducting assessment
Agree on the assessment parameters and criteria. Whatever be the criteria, it is important to cover all the major aspects like leadership, information and analysis, strategic planning, human resource utilization, quality assurance, business results and customer satisfaction.
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Educate the management in the criteria and adapt the criteria.
Form the internal information gathering team.

Train the team in the criteria and in the information gathering process.
Plan and conduct the information gathering process.
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Collate the information and write the factual report. Have objective external experts validate and assess the facts and provide feedback to senior management. Use this feedback as input to the strategic planning process, and plan the actions required to cause improvement.
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Organizational assessment
On the basis of business excellence model
CE
Please answer the following questions about your organization. Each question must be rated on a scale of 1-5, 1 being lowest and 5 being highest.
Note: To enable the users to enter their score and arrive at overall ratings, a separate utility package is also provided in MS Excel file Scoresheet in this CD.
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Leadership
1. Is the top management having personal visible involvement in all aspects of quality management? 2. Do they actively participate in creating and reinforcing customer focus throughout the organization? 3. Do they provide active support to the change program by providing appropriate resources? 4. Do they actively involve themselves in recognizing the employee/ team contributions?
Note: Please enter your score in MS Excel file Scoresheet given in this CD.
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Strategic planning
5. Does the company have a common vision which is shared by all the employees in its true sense?
6. Does the companys strategic planning address realignment of work processes to improve customer focus and operational performance? 7. Are the companys strategies targeted for quantified measurable improvement in important areas and Is building for future seen as more important than short term benefits?
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Strategic planning
8. Is commitment to resources for new facilities, process improvements and training done considering long term objectives? 9. Does the companys long term projections of operational performance effectively incorporate comparisons with competitors?
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Information management
10. Does the companys working system and procedures promote easy upward flow of information? 11. Do the employees feel free to share the information? 12. Is the companys information management system accessible to every one without any difficulty?
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Information management
13. Does the company periodically update its information management system?
14. Is the information system reliable and accurate for people to make decisions in time?
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Human resource focus
15. Does the companys business plan consider human resource capabilities for addressing quality leadership opportunities? 16. Is the investment in education and training decided considering employee needs and future business needs? 17. Does the company evaluate its human resource planning using employee feedback? 18. Does the company have an effective system for setting both quantitative and qualitative targets?
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19. Are the employees generally aware and meet performance standards?
the expected
20. Does the company make effort to integrate employees job performance with key quality improvement targets and business results?
21. Does the company have an effective appraisal system which takes care of the career progression of all the employees?
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22. Is the company concerned about employee well being? 23. Is the good performance suitably rewarded? 24. Is the employee motivation level high and good performance suitably rewarded ?
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Human resource satisfaction
25. Is the company able to realize the full potential of its people and peoples commitment to job is visible? 26. Are the existing system of incentive and reward adequate for maximum employee contribution? 27. Is the companys image as an employer good and the company is able to attract the best talent?
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Customer and market focus
28. Does the company address future needs taking into account competitors and changing customer expectations? 29. Does the company regularly evaluate and improve its processes based in changing customer expectations?
30. Does the company set performance standards and reviews them for further improvement?
31. Does the company trace system performance, with reference to set expectation level, using quality measures?
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32. Does the company regularly evaluate and improve their commitments for service performance to match customer expectations? 33. Does the company promptly resolve all formal and informal customer complaints? 34. Does the company regularly determine customers current and expected requirements? 35. Does the company determine specific product feature and their relative importance using customer listening techniques like QFD?
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36. Does the company analyze and use information on customer loss/gain and product performance to develop future strategies? 37. Does the company effectively determine customer satisfaction and make effective efforts to improve it further?
38. Does the companys customer satisfaction measure capture key information that reflects their likely future behavior?
39. Is the customer satisfaction level effectively compared with that of your key competitors by studies and independent surveys?
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Customer satisfaction
40. Does the company improve its system of determining customer satisfaction on a regular basis? 41. Does the company effectively use customer dissatisfaction indicators for making improvements? 42. Has the company achieved better customer satisfaction for its products and services in relation to its key competitors?
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Supplier focus
43. Does the company evaluate supplier performance with specified requirements/parameters through mutually agreed plans?
44. Does the company effectively communicate its quality requirements to the suppliers? 45. Does the company effectively evaluate if suppliers are meeting its quality requirements? 46. Does the company organize training programs for the suppliers to improve their ability to meet key requirements and response times?
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Supplier focus
47. Does the company have a system to generate healthy competition among suppliers of similar items to improve performance? 48. What is the level of your supplier satisfaction?
49. Are the suppliers paid in time ?

50. Does the company constantly endeavor for development of capabilities of its suppliers?
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Processes
51. Does the companys product design consider customers implied and future needs?
52. Does the company validate its product designs taking into account performance, process and supplier capabilities? 53. Does the company evaluate and improve design and design processes so as to improve product quality and cycle/response time? 54. Does the company determine the cause of variation, make corrections and integrate them into the process?
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Processes
55. Does the company analyze processes to achieve better quality, reduced cycle/response time and better operational performance? 56. Does the company regularly evaluate and the key business processes, their requirements, quality and operational performance?
57. Does the company regularly analyze and simplify the processes to achieve better quality, cycle-time and operational performance?
58. Does the company effectively use alternative technology for improvement?
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Processes
59. Does the company effectively use information from customers for business and support service process improvement? 60. Does the company make efforts to find out information from best in the class and make use of this information for process improvement? 61. Is the criterion of benchmarking well defined and documented?
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Processes
62. Does the companys work culture ensure precedence to quality over cost and response time considerations?
63. Is there a judicious planning for balancing cost, quality and time in every decision taken in the organization?
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Impact on society
64. Is the company effectively satisfying the needs and expectations of the society at large? 65. Does the company effectively evaluate possible impacts of its products and operations on society?
66. Does the company promote ethical conduct in all activities hat it does and are the companys ad-campaigns truthful and reflect facts?
67. Does the company effectively consider energy conservation and preservation of global resources?
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Company specific business results
68. Does your company enjoy product quality leadership for the range of products it deals with? 69. Is the companys growth over the last financial year comparable with the industry growth? 70. Are the overall financial results better that the last financial year and have the shareholder expectations been met?
Analyze your score
281 - 350 : Excellent. You are doing very well, but there is no room for complacency. 211 - 280 : Good. With a little effort you can do better. 141 - 210 : Average. Your direction is clear, but you need to intensify your efforts to move up. Less than 140 : Serious situation. You may not survive for a long time. Immediate action is required to change the present situation.
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Assessment report
At the end of the assessment, management should have a report that includes : Factual account that sets out how the organization operates today. A list of existing strengths and weaknesses to build upon. A list of present and future opportunities. A list of six Sigma projects to be undertaken.
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Critical issues & superior choices in Six Sigma implementation.
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A. Method focus versus problem focus.
It is a general tendency amongst organizations to latch on the ideas like SPC, JIT, QFD & DOE as if they were the panacea to all the problems. As soon as the new quality tool is introduced it becomes the focus of the company. Nobody is willing to pose a question of the real problem faced by the company. With the problem solving focus the question is what is the problem?. A problem focus enables us to select the appropriate solutions.
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B. Focus on productivity versus focus on quality improvement.
Even with a lot of talk on quality, management focus is generally directed towards productivity improvement with quality improvement as a by product. Management by & large has not understood that the focus on quality results in improved productivity as a by product. For Six Sigma to be really effective, organizations must focus on quality with productivity as a by product & not vice-versa.
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C. Soft progress versus hard progress.
Many organizations have a tendency to describe quality progress in soft terms (intermediate results) instead of hard terms(end results). Once such a practice is considered acceptable it almost becomes a norm. Some companies will describe how many black belts have been trained rather than how many have actually resolved problems that has resulted in breakthrough improvements. The top management must require progress reports in hard terms rather than soft terms.
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D. Improvement of manufacturing systems versus all other systems .
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Six Sigma efforts are usually talked about in the manufacturing sense. Other areas of business, which are equally important somehow receive scant attention. Many times organizations fail to define measurement metrics for marketing, Purchase, Quality assurance, Product engineering, Suppliers, Employees & Customers. Please see chapter on Measurement of business excellence for more details.
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Prerequisites of successful implementation
Highly visible top down management commitment to the initiatives. A proper measurement system to track the progress. This weaves accountability into six sigma initiatives and provides tangible picture of the organizations efforts. Internal and external benchmarking of the organization's products, services and processes.
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Prerequisites of successful implementation
Stretch goals to focus on changing the processes. Appointment and training of champions and black belts to promote initiatives . The champions must be able to provide necessary planning, teaching, coaching and consulting at all levels in the organization. Training and development at all levels.
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Creating Six sigma Focus
Six Sigma projects can be selected on the basis of any of the following criteria :Focus on project cost savings Focus on Deliverables Focus on the processes Focus on the problems
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Focus on project cost savings
Under this criteria the Six Sigma projects are selected for potential reductions in the fixed or variable costs. The organization should however be aware about the limitation of this approach, particularly when they are trying to propagate quality.
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Focus on deliverables
Under this approach the organization identifies the areas that are the greatest cause of customer dissatisfaction. High warranty costs is one area that the organization may want to look into. However this approach is also short sighted as it focuses on defects rather than the processes that create the defects.
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Focus on the processes
To select the Six Sigma projects by focussing on the processes is the best way to attack the root causes of defects and customer satisfaction concerns. It is important for the organization to identify critical processes which are operating at low sigma levels.
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Focus on the problems
Another way to select the Six Sigma project is to straightaway focus on the problem. Many a times there may be nothing wrong with the process, but the products may still not be doing very well. One example could be weak design of the product. The organization can straightaway focus on redesign of the products.
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Six Sigma deployment schedule

Week Activities
1 2-5 6 7 8-10 11 12-14 15 16-18 19 20-22 23-24
Champions create the vision of Six sigma in the organization Define the road map with comprehensive training plan Identify high impact Six sigma projects Class room training of Black belts on MEASURE phase Black belts work on projects & apply knowledge gained in the MEASURE phase Class room training of Black belts on ANALYZE phase Black belts work on projects & apply knowledge gained in the ANALYZE phase Class room training of Black belts on IMPROVE phase Black belts work on projects & apply knowledge gained in the IMPROVE phase Class room training of Black belts on CONTROL phase Black belts work on projects & apply knowledge gained in the CONTROL phase The Black belts review the results and select other areas of high impact
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9. Measuring business excellence
Measures of business excellence Non financial measures Employee related Operations related
Customers related
Financial measures
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Measures of business excellence
After implementing Six Sigma, the organization must assess the impact of the program on overall business results. Since six sigma has an impact on all the business functions, the organization must measure all the functions through quantifiable measures of excellence. To facilitate this assessment, sample measures of excellence for various functions are given on the following slides.
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Measures of business excellence
The measures of business excellence can be broadly classified into following two categories :A. Non financial measures B. Financial measures
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A. Non financial measures
Non financial measures can be further classified into three categories :I. Employee related II. Operations related III. Customers related
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I. Employee related
Employee satisfaction Awards presented
Internal promotions
Employee turnover Safety and health
Suggestions received and implemented
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II. Operations related

Operations related measures can be classified further into following categories : Marketing Purchase Manufacturing
Product Engineering
Quality Assurance Product reliability Accounting
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Operations related :- Marketing
1. Accuracy of forecast assumptions. 2. Number of incorrect order entries. 3. Overstocked field supplies. 4. Contract errors. 5. Late deliveries. 6. Customer complaints.
7. Warranty cost as a percentage of sales.
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Operations related :- Purchase
1. Premium freight cost/ demurrage charges.

2. Down - time because of parts shortages. 3. Number of Off specification parts used to keep line going.
4. Cycle time from start of purchase request until items in house.

5. Excess inventory. 6. Percentage of purchased material rejected on receipt.
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Operations related :- Manufacturing
1. Yield per ton of raw materials.

2. Percentage of parts scrapped. 3. Percentage of parts reworked.
4. Percentage of parts accepted on concession.

5. Percentage of final product graded as seconds. 6. Production per man / machine.
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Operations related :- Product engineering
1. Number of engineering changes per document.

2. Number of errors found during design review. 3. Number of errors found in design evaluation test.
4. Percentage of time over- run compared to planned time for development.

5. Percentage of cost over - run over estimated cost of development.
6. Number of tooling redesign after trial production.
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Operations related :- Quality Assurance
1. Percentage of lots rejected due to errors.

2. Percentage of products having defects detected by customers. 3. Number of engineering changes that should have been detected in design review. 4. Errors in inspection / test reports. 5. Cycle time to get corrective actions.
6. Percentage of appraisal cost compared to production cost.
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Operations related :- Product reliability
Mean time to failure. Failure rate. Probability of failure occurrence during given time interval. Probability of failure non-occurrence during given time interval. Mean life time. Mean time to first generate overhaul. Mean time to repair.
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Operations related :- Accounting
1. Percentage of late payments. 2. Time to respond to customer request for information. 3. Billing errors.
4. Incorrect accounting entries.

5. Payroll errors. 6. Errors in cost estimates.
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III. Customer related

Market share Market penetration New markets identified Overall customer satisfaction
Customer complaints
Customer retention R&D expenditure as a percentage of sales
New products and services introduced

Sales per employee
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B. Financial measures
The normal business pressures in todays world tend to cause more time to be spent on financial measures than any other element of business. We need to be sure that the strong signals sent by this attention in no way underestimates the importance of the non financial measures as discussed in the previous slides to improve the overall business performance.
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Financial measures
In addition, to the standards set of revenue and cost accountancy measures, the organizations must reduce their quality costs and eliminate all the non value adding activities from their system. Various categories of quality cost are given on the following slides :-
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Quality costs - Prevention costs

Market research Quality training programs. Contract review Design review Field trials
Supplier evaluation
Process plan review Process capability review Design and manufacture of jigs and fixtures Preventive maintenance
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Quality costs - Appraisal costs
Proto type testing

Vendor surveillance Incoming material inspection Process inspection/control Final inspection Laboratory testing / measurement Quality audits
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Quality costs - Internal failure
Design changes/ corrective action Scrap due to design changes Excess inventory Rectification / reject disposition of purchased material
Rework/rejection in manufacturing
Downgrading of end product Downtime of plant & machinery Trouble-shooting & investigation of defects
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Quality costs - External failure
Processing / investigation of customer complaint

Repair/replacement of sold goods Warranty claims Product liability & litigation costs Interest charges on delayed payment due to quality problems Loss of customer goodwill & sales
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Size of categories of quality costs
In most of the organizations working at 2 or 3 sigma there is less emphasis on prevention, and their main quality efforts are on appraisal with very little control on internal and external failure costs. Organizations must intensify their efforts on the preventive costs to reduce their overall cost of quality.
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1-10-100 Rule
1 Prevention
Rs
10
Stages
Correction
Rs Rs
Failure
100
Rs Rs
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Computing cost of poor quality

Am ount Prevention Costs Quality Administration QualityEngineering Reliability Engineering Training Total Prevention Appraisal Costs Inspection Test Vendor Control Measurement Control Materials Consumed Qulaity Audits Total Appraisal Percentage
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Computing cost of poor quality

Am ount Percentage
Internal Failure Costs Scrap Repair & rework Vendor Losses Failure Analysis Total internal External Failure Costs Failures-manufacturing Failures-Engineering Failure-Sales W arranty charges Failure Analysis Total External T otal Quality Costs
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Financial measures
Cost of quality as a percentage of sales

Profit before interest and financial charges Profit before and after tax Growth in profits over last year Return on assets Return on capital employed Return on sales
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Source of information and advice

General H.LAL
General H.Lal is a mechanical engineer. In 1971 he joined the Defence Quality Organization and held important appointments till in 1987 he was appointed Director General, Defence Quality Assurance Organization. After retirement he was appointed Director General, Bureau of Indian Standards. In addition to standards he pioneered the quality movement in India. By his sustained efforts through TV, print media and seminars he brought quality into national focus. He is also an internationally recognized quality expert and his new book ISO 9000 : Guidelines for developing countries has recently been published by ISO and UNCTAD/GATT. He is the chairman of MSD Council of BIS which formulates national standards of quality management . He is also an adviser to the UNITED NATIONS DEVELOPMENT ORGANIZATION( UNIDO ). He is currently the Director General , FICCI Quality Forum.
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Research, Artwork, Design and Development
Pravin Rajpal
Mr.Pravin Rajpal is a Chartered Accountant with more than 15 years of work experience in some of the best professionally managed companies in India. He worked for Eicher Consultancy Services, a premier management consultany company in India for 4 years. At present he is the CEO of Competitive Edge, Management Consultants.
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Feedback
We shall be very pleased to receive your feedback on this product. Please contact us at the following address:-
FICCI Quality Forum, Federation of Indian Chambers of Commerce and Industry, Federation House, Tansen Marg, New Delhi : 110001. Tel : 011-3739947, 011-3738760-70, Fax : 011-3320714 Email: ficci@ficci.com Website: http//www.ficci.com

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FICCI

Six Sigma - A Breakthrough Strategy

9. Measurement of business excellence

End slide show

1. Basic concepts of Six Sigma

Global acceptability and success stories

Most effective strategy

Limitations of other tools

Limitations of other tools

Six Sigma and error or defect rate

Six Sigma and error or defect rate

Levels of Sigma and defect rate

3 Sigma 4 Sigma 5 Sigma 6 Sigma

99.73 99.9937 99.999943 99.9999998

66807 6210 233 3.4

*Parts Per Million

Old concept of quality

New concept of quality

Knowing characteristics critical to customer

Six Sigma and cost of quality

Hidden costs of quality

Visible and hidden costs

Excessive use of material

Cost of quality at various levels of Sigma

How Six Sigma works

Clear focus on the bottom line

Objectives of Six Sigma

Impact of Six Sigma

The business improvement mechanism is shown in the next slide.

Six Sigma business improvement mechanism

Variation in output of processes causes defects

Aspects of Six Sigma

Reasons to adopt Six Sigma

Reasons to adopt Six Sigma

Success stories - General Electric

General Electrics, Jack Welch describes Six Sigma as

Allied Signal, which was on the verge of bankruptcy was

Asea Brown Boveri

ABB, after application of Six Sigma has reduced

Challenge for the Indian companies

2. Fundamentals of the breakthrough strategy

The Six Sigma roadmap- Breakthrough strategy Stage

Measure Analyze Improve Control

Integrate Six Sigma in day to day functioning.

The breakthrough strategy

Strategy at various levels

Strategies at various levels

Business perspective of the breakthrough strategy

Define what plans must be in place to realize improvement of each state.

Analyze the gaps in system performance benchmarks.

Standardize the systems that prove to be best-in-class.

Operations perspective of the breakthrough strategy

Define Six Sigma projects to resolve operational issues.

Improve Six Sigma project management system.

Process perspective of the breakthrough strategy

Define the processes that contribute to the functional problems.

Measure the capability of each process that offers operational leverage.

Improve the key product/service characteristics created by the key processes.

Six Sigma players and their responsibilities

Selecting the right people

Why the name Black Belts?

Characteristics of Six Sigma Black Belt

Understands the big picture of the business.

An expert in SPC and continuous improvement tools.