IE 197

Six Sigma DMAIC

Lecture 2.
Simple Tools for Problem Definition
07.07.2010
T-31 days

If all you have is a hammer,

everything looks like a nail.

It is be6er to solve the right problem incorrectly;

Than to solve the wrong problem
correctly.

Focused Problem Statement

What
Why

When

A concise statement that species the problem, its magnitude,

loca@on, and @me-frame
A clear and specic problem statement provides a clear, unied
direc@on for the members of a project team; it also prevents
project failure by being clear and specic about the issue being
resolved by the project
Before going deep-dive into data collec@on;
Before thinking about root causes;
Before thinking of solu@ons;

Remove the
fever

High Fever

Business Symptom
Pain felt elsewhere
as a result

Missed Exams

Remove the
in+luenza

Influenza

Remove the
virus

Presence of virus

We have a lot of unful+illed customer

orders
This is obviously not a focused problem statement.
What does it lack?

Over the past year (when), we have been averaging 30 unfullled

customer orders per month (how much) in the chocolate powder line
(where). This has resulted in $300,000 in actual lost sales per month and
$500,000 opportunity losses (impact)

Problem Statement: donts

The problem statement should not address more than one problem.
The problem statement should not assign a cause.
The problem statement should not assign blame.
The problem statement should not oer a solu@on.

The Business Case

What

A concise statement that states the business value of

the project

Why

To jus@fy to stakeholders why the project was

selected, in monetary and business terms

When

During project ini@a@on

1.

Specic system or process being scru@nized

2.

The area of the business aected

3.

The base goal or objec@ve not being met

4.

The resul@ng problems or issues

5.

The es@mated impact, in monetary or other metric

The drying process of the manufacturing plant has been suering from an
average down@me rate of 30%.
This causes WIP to build up in the mixing tanks, which results in WIP
further building up downstream.
At any given @me, we have about 24 hours worth of inventory in the
mixing tanks. We lose on the average about $300,000 worth of customer
orders every month due to our inability to deliver on @me.

Can you iden/fy the 5 elements of an eec/ve business case

from this example?

The drying process (process) of the manufacturing plant (area of business)

has been suering from an average down@me rate of 30% (devia2on from
baseline or standard).
This causes WIP to build up in the mixing tanks, which results in WIP further
building up downstream. At any given @me, we have about 24 hours worth of
inventory in the mixing tanks (resul2ng issue or problem).
We lose on the average about $300,000 worth of customer orders every
month due to our inability to deliver on @me (impact)

SMART Objectives
What

SMART statements that indicate the level of

improvement expected from improvement eorts

Why

Objec@ve statements sets the boundaries for the

project scope in terms of work to be accomplished,
deliverables, and @me

When

AXer dening the problem

SMART Objectives
Specic. Whats the specic purpose of the project?
Measurable. Objec@ve must be quan@able and veriable. Should include
such things as quality, quan@ty, cost, and @meliness.
Aggressive, but a4ainable. Should be challenging but realis@c.
Relevant. Must be relevant to business goals
Time-bound. Must state a deni@ve @me-frame.

Find out how to lower the number of

unfulfilled customer orders
This is obviously not a SMART objective statement.

What does it lack?

 Our goal is to reduce (specic and aggressive) the number of

unfullled customer orders from 30 to 0 a month (measurable and

a9ainable), by the end of January 2010 (2me-bound). Doing so will
result in increased revenues of $800,000 per month (relevant)

Affinity Diagram
What

A simple tool used to organize ideas, facts, opinions, issues

into natural groupings

Why

To nd themes in customer, process, business statements;

to encourage par@cipa@on; to be more systema@c in
consolida@ng ideas

When

Used when scoping projects, dening problems, brainstorming root

causes and solu@ons

N o t a l l people a r e c r e a t e d e q u a l .

N o t a l l products a r e c r e a t e d e q u a l .

N o t a l l customers a r e c r e a t e d e q u a l .

N o t a l l problems a r e c r e a t e d e q u a l .

Pareto Principle
Developed by economist Vilfredo Pareto
The cri2cal few >> 80-20 rule
Items of interest are iden@ed and measured on a common

scale

Pareto Chart
What

A data display tool that breaks down discrete observa@ons

into separate categories for the purpose of iden@fying the
Vital Few.

Why

To priori@ze problems and poten@al root causes;

To avoid shiXing the burden, where the solu@on removes
some causes but worsens others

When

Used in dening the problem;

Used in iden@fying and verifying root causes aXer iden@fying
and exhaus@ng all poten@al root causes

Problem Category

Frequency

Percent (%)

No adviser

68

48.6

Not eligible

20

14.3

No class available

19

13.6

Printing Problems

16

11.4

Long line in payment

10

7.1

No assessor

3.6

Others

1.4

152

100

Total

Problem Category lists all problems/ issues observed during a dened @me period of
the study.
Frequency shows the number of occurrence of each problem/issue during the
dened @me period of the study.
Percent (%) rela@ve frequency in percent = (Frequency/Total)*100%

24

High-level process modeling

Before we go deep dive into the specic details of a process we need to able to

understand the following:

What is the intent of the process?

What are the boundaries of the process?
What are the inputs? What are the outputs?
Who are the customers of the process?

The SIPOC Analysis for Constraints is a useful tool for high-level ini@al process

deni@on

SIPOC
What

Stands for Supplier-Input-Process-Output-Customer; a high-

level process mapping format that captures the voice of the
customers and suppliers in the whole process chain

Why

To dene the scope and boundaries of the process targeted

by the improvement project; to align process with top level
customer requirements

When

In the Dene, Ini@a@on, or Formula@on of Problem Phase

How to Create the SIPOC

Who
supplies
each
input?

Process
Start

What
inputs are
required
to enable
this
process?

Process
Name

What does
the process
expect of
each input?

Process
End

What are
the
outputs?

What does
each
customer
expect from
each
output?

Who is the
customer
of each
output?

SIPOC
High-level SIRPORC for the Billing process at a restaurant

The Project Charter:

Integrative Tool

Sample 1

Sample 2