Six Sigma Fundamentals

Define Phase

Six Sigma Fundamentals

Understanding Six Sigma

Six Sigma Fundamentals

Process Maps Voice of the Customer Cost of Poor Quality Process Metrics Selecting Projects Elements of Waste

Wrap Up & Action Items

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What is a Process?

Why have a process focus?

So we can understand how and why work gets done To characterize customer & supplier relationships To manage for maximum customer satisfaction while utilizing minimum resources To see the process from start to finish as it is currently being performed Blame the process, not the people

process (proses) n. A repetitive and systematic series of steps or activities where inputs are modified to achieve a value-added output

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Examples of Processes

We go through processes everyday. Below are some examples of those processes. Can you think of other processes within your daily environment?
Injection molding Decanting solutions Filling vial/bottles Crushing ore Refining oil Turning screws Building custom homes Paving roads Changing a tire Recruiting staff Processing invoices Conducting research Opening accounts Reconciling accounts Filling out a timesheet Distributing mail Backing up files Issuing purchase orders

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Process Maps

The purpose of Process Maps is to:

Identify the complexity of the process Communicate the focus of problem solving

Process Maps are living documents and must be changed as the process is changed
They represent what is currently happening, not what you think is happening. They should be created by the people who are closest to the process

Process Map

Start

Step A

Step B

Step C

Step D

Finish

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Process Map Symbols

Standard symbols for Process Mapping (available in Microsoft

Office, Visio, iGrafx , SigmaFlow and other products):
A RECTANGLE indicates an activity. Statements within the rectangle should begin with a verb
A DIAMOND signifies a decision point. Only two paths emerge from a decision point: No and Yes An ARROW shows the connection and direction of flow

A PARALLELAGRAM shows that there are data

An ELLIPSE shows the start and end of the process

A CIRCLE WITH A LETTER OR NUMBER INSIDE symbolizes the continuation of a flowchart to another page

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High Level Process Map

One of the deliverables from the Define Phase is a high level Process Map, which at a minimum must include:
Start and stop points All process steps All decision points Directional flow Value categories as defined below
Value Added: Physically transforms the thing going through the process Must be done right the first time Meaningful from the customers perspective (is the customer willing to pay for it?) Value Enabling: Satisfies requirements of non-paying external stakeholders (government regulations) Non-Value Added Everything else

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Process Map Example

A Process Map for a Call Center START

B
REVIEW CASE TOOL HISTORY & TAKE NOTES

Z
LOGOFF PHONE, CHECK MAIL,E-MAIL,VOICE MAIL

LOGON TO PC & APPLICATIONS

C
SCHEDULED PHONE TIME?

E
SCHEDULED PHONE TIME? TRANSFER APPROPRIATE?

Y A

Y N
LOGON TO PHONE IMMEDIATE RESPONSE AVAILABLE?

TRANSFER CALL

N
EXAMINE NEXT NOTE OR RESEARCH ITEM

PHONE TIME

Y
CALL or WALK-IN?

N Z

WALK-IN N
PUT ON HOLD, REFER TO REFERENCES

PROVIDE RESPONSE PHONE& NOTE DATA ENDS

ACCESS CASE TOOL

ENTER APPROPRIATE SSAN (#,9s,0s)

CALL
PHONE DATA CAPTURE BEGINS

IF EMP DATA NOT POPULATED, ENTER CREATE A CASE INCL CASE TYPE DATE/TIME, & NEEDED BY

DETERMINE WHO IS INQUIRING

ANSWER?

OLD CASE

N
QUERY INTERNAL HRSC SME(S)

Y
UPDATE ENTRIES INCL OPEN DATE/TIME

ACCESS CASE TOOL

AUTO ROUTE

ROUTE

DETERMINE NATURE OF CALL & CONFIRM UNDERSTANDING

ANSWER?

Y
CASE CLOSED ADD TO RESEARCH LIST

N Y
CLOSE CASE W/ DATE/TIME

N
CASE TOOL RECORD?

N C

Y B

OFF HOLD AND ARRANGE CALL BACK PHONE DATA ENDS

N
TAKE ACTION or DO RESEARCH

GO TO F or E DEPENDING ON CASE

E
NEXT

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Cross Functional Process Map When multiple departments or functional groups are involved in a complex process it is often useful to use cross functional Process Maps.
Draw in either vertical or horizontal Swim Lanes and label the functional groups and draw the Process Map Sending Fund Transfers
Department

Start

Request transfer

Attach ACH form to Invoice

ACH Automated Clearing House.

Vendor

Produce an Invoice

No

Fill out ACH enrollment form

Receive payment

End
Match against bank batch and daily cash batch

Financial Accounting

Vendor info in FRS?

Yes

Input info into web interface

Maintain database to balance ACH transfers

Accepts transactions, transfer money and provide batch total

General Accounting

Bank

Review and Process transfer in FRS

3.0 Journey Entry

21.0 Bank Reconciliation

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Process Map Exercise

Exercise objective: Using your favorite Process Mapping tool create a Process Map of your project or functional area. 1. Create a high level Process Map, use enough detail to make it useful.
It is helpful to use rectangular post-its for process steps and square ones turned to a diamond for decision points.

2. Color code the value added (green) and non-value added (red) steps. 3. Be prepared to discuss this with your mentor.

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Do you know your Customer?

Knowing your customer is more than just a handshake. It is necessary to clearly understand their needs. In Six Sigma we call this understanding the CTQ s or critical to customer characteristics.

Voice Of the Customer

Critical to Customer Characteristics

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Voice of the Customer

Voice of the Customer or VOC seems obvious; after all, we all know what the customer wants. Or do we??
The customers perspective has to be foremost in the mind of the Six Sigma Belt throughout the project cycle.
1. Features
Does the process provide what the customers expect and need? How do you know?

2. Integrity

Is the relationship with the customer centered on trust? How do you know?
Does the process meet the customers time frame? How do you know?

3. Delivery 4. Expense
Does the customer perceive value for cost? How do you know?

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What is a Customer?

There are different types of customers which dictates how we interact with them in the process. In order to identify customer and supplier requirements we must first define who the customers are:
External Direct: those who receive the output of your services, they generally are the source of your revenue Indirect: those who do not receive or pay for the output of your services but have a vested interest in what you do (government agencies) Internal - those within your organization who receive the output of your work
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Value Chain

The relationship from one process to the next in an organization creates a Value Chain of suppliers and receivers of process outputs. Each process has a contribution and accountability to the next to satisfy the external customer. External customers needs and requirements are best met when all process owners work cooperatively in the Value Chain.

Careful each move has many impacts!

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What is a CTQ?

Critical to Quality (CTQ s) are measures that we use to capture VOC properly. (also referred to in some literature as CTCs Critical to Customer) CTQ s can be vague and difficult to define.
The customer may identify a requirement that is difficult to measure directly so it will be necessary to break down what is meant by the customer into identifiable and measurable terms
Product: Performance Features Conformance Timeliness Reliability Serviceability Durability Aesthetics Reputation Completeness
Service: Competence Reliability Accuracy Timeliness Responsiveness Access Courtesy Communication Credibility Security Understanding
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Developing CTQs

Step 1

Identify Customers Listing Segmentation Prioritization

Step 2

Validate CTQ s Translate VOC to CTQs Prioritize the CTQs Set Specified Requirements Confirm CTQs with customer

Step 3

Capture VOC Review existing performance Determine gaps in what you need to know Select tools that provide data on gaps Collect data on the gaps
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Cost of Poor Quality (COPQ)

COPQ stands for Cost of Poor Quality

As a Six Sigma Belt, one of your tasks will be to estimate COPQ for your process
Through your process exploration and project definition work you will develop a refined estimate of the COPQ in your project This project COPQ represents the financial opportunity of your teams improvement effort (VOB) Calculating COPQ is iterative and will change as you learn more about the process

No, not that kind of cop queue!

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The Essence of COPQ

COPQ helps us understand the financial impact of problems created by defects. COPQ is a symptom, not a defect
Projects fix defects with the intent of improving symptoms.

The concepts of traditional Quality Cost are the foundation for COPQ.
External, Internal, Prevention, Appraisal

A significant portion of COPQ from any defect comes from effects that are difficult to quantify and must be estimated.

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COPQ - Categories

Internal COPQ
Quality Control Department Inspection Quarantined Inventory Etc External COPQ Warranty Customer Complaint Related Travel Customer Charge Back Costs Etc

Prevention

Error Proofing Devices Supplier Certification Design for Six Sigma Etc

Detection Supplier Audits Sorting Incoming Parts Repaired Material Etc

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COPQ - Iceberg
Inspection
Warranty Recode Rework

Rejects

Visible Costs

Engineering change orders

Lost sales

Time value of money More Set-ups Working Capital allocations

(less obvious)

Late delivery Expediting costs Excess inventory Long cycle times Excessive Material Orders/Planning

Hidden Costs
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Lost Customer Loyalty

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