Six Sigma

Measure Phase
BITS Pilani Rama Mohan KV
Faculty Department
Pilani Campus

Session 8 20th February2021

 BITS Pilani
Pilani Campus

< MM ZG539/QM ZG539, Six Sigma>

Lecture No. 8
Measure Phase

• Process and Metrics definition

• Process baseline estimates
• Capability Analysis

BITS Pilani, Pilani Campus

Objectives of Measure Phase

Process Definition : to ensure the specific process under study is clearly

defined

Metric definition : to define a reliable means of measuring the process,

relative to the project deliverables

Establish the process baseline : to quantify the current operating results

as a means of verifying previously defined business needs and to properly
substantiate improvement results

Evaluate measurement system: to validate the reliability of data for

drawing meaningful conclusions
Definition Of A Process

A collection of activities that takes one or more

inputs and transforms them into outputs that are
of value to the customer

Inputs Outputs

“The Business Process”

Overview of Data Collection Plan

Decide objective

Step 1 • Definition of Metric

Measure definition

Step 2 • What, How, by Whom the measurement will

Planning
be done

Step 3
Data Collection • Stick to procedure/plan

Step 4
• By Plotting (Graphing) the Data, the result can
Data presentation
be easily understood.

Analyze Data
Measurement Scales

Scale Definition Example Statistics

Nominal Only presence / absence of an Go/no Go: Success / Percent, Proprtion: chi
attribute: can only count items fail: accept / reject square

Ordinal Can say that one item has more Taste : attractiveness Rank order correlation
or less of an attribute than other
: can order a set of items
Interval Difference between any two Calendar time, Correlations, t tests, f
successive points is equal: often temperature tests, multiple
treated as a ratio scale even if regression
assumption of equal intervals is
incorrect: can add, subtract,
order objects
Ratio True zero point indicates absence Elapsed time, distance, Correlations, t tests, f
of an attribute: can add subtract, weight tests, multiple
multiply and divide regression
Types Of Data
Any Facts, Numbers or Texts Types of Data

Discrete Continuous

Binary Ordered Count

categories

Classified Rankings Counted Measured

Description into one of or ratings discretely on a
two categories continuum
or scale

% of Customer Number of Time (in

Example applications satisfaction errors in an hours) to
with or without errors rating of application process an
call center application
service

How Does The Customer Measure Your Process?

Discrete Data

Data generated by

• Classifying the items into different groups based on some criteria

• All the items classified into a group will have same value

Examples:

Sex, Shade Variation, etc.

Escalations, Repeat Calls, Defective Transactions, Defects in
Transactions etc.
Discrete :Binary Data

• Classifying the items into only two groups based on some criteria
• Each item will fall in either of the two groups
• All the items classified into a group will have same value
• Expressed or summarized as proportion p or percentage

Examples:

Sex, Escalations, Repeat Calls, Defective Transactions, etc

Count Data

Data generated by

• Counting the exact number of occurrences of the characteristic in a group of

items.
• It takes integer values as 0,1,2,-,-,-,
• Expressed or summarized as average number of occurrences

Examples:

• Number of fatal defects in transactions processed

• Number of accidents in the city during June 2003
• Number of suicides in the city during 2002.
Continuous Data

Data generated by

• Physically measuring the characteristic

• Generally using an instrument
• Assigning an unique value to each item

Examples:

Handling Time, Time to Certify PEs, etc.

Hardness, Strength, Weight, Diameter, etc.
In Data Collection, consider the following :-

• What is the Purpose of Collecting the Data?

• Will it serve the purpose ?
• How will you collect the data?
- what result will you measure?
- what kind of cause will you analyze for the ineffective process?
• What kind of tool will be required?
- form, check sheet ?
• All related Data collected?
- Sample size, frequency, sampling method?
• Is the Data Collecting method is adequate?
- who will collect the data?
- where can we collect the data?
- when will we collect the data?
- what kind of assistance will be necessary?
Method

Y: Cycle time
Definition: 1. from 15Th December 2004 to 15th January 2005
2. received from fax : the forms received by fax
3. all types of request form.
4. cycle time calculated for time between receipt and
sending fax.

Y Period Criteria Method Target

1. 2. 3. 4.
Planning of Measurement

Objective
- Collection of Meaningful Data
- Collection of Reasonable Data
- Collection of all Necessary Data

Data
Data Collection Planning

Theme Cycle Time Reduction Type Discrete/count

Time 8 AM~ 4PM, Step, every 2 hour
Period 15th Dec 2004 to 15th Jan 2005 Sample size 40
Method Test Equipment Peak Reading

Discrete Continuous
Unit Spec 5 ~ 10 min
Defect
Freq 4 groups, 10each
Opportunity
Sampling
 Objectives
■ Understand the purpose and advantages of sampling

■ Understand the application of different sampling techniques to ensure

accurate process representation

■ Gain experience in asking appropriate questions to ensure a robust

sampling plan is implemented effectively and efficiently

■ Understand guidelines and formulas used to determine sample size

Basic Definitions and Symbols

Population (N): The entire set of objects or activities for a process

μ: the mean (arithmetic average) calculated for a population

σ: the standard deviation calculated for a population

Sample (n): a group that is a part or subset of a population

x: the mean (arithmetic average) of a sample

s: the standard deviation of a sample
Sampling
Sampling is the process of:

Collecting only a portion of the data that is available or could be available, and drawing
conclusions about the total population (statistical inference)

Population Sample

x x x
x
x x x x
x
x x x x x
x x
x x x x
x x
x x x
x x
x x

N = 5000 n = 100
 Sample ….. When ?
When to …..
■ Collecting all the data is impractical or too costly

■ Data collection can be a destructive process

■ When measuring a high-volume process

When not to ……
■ A subset of data may not accurately depict the process, leading to a
wrong conclusion (every unit is unique-e.g., structured deals)
Kinds of Sampling

Random Sampling

This sampling ensures that the characteristics of

the population are collected with equal possibility.

Stratified Sampling
Group A Group B
First, make stratifying plan for population
characteristics.
Second, select the sample among each
stratified group
Sampling

Frequency of Sampling
• recommended more often for unstable processes (Systematic, Subgroup sampling)
• recommended less than usual for stable processes.
• to make a useful business decision we have to decide the precision of data and
frequency of data.

Sampling Guidelines

• check- is the sample representative of the population?

• check- is the process stable?
• check- is the data selected randomly?
• check- is data selected with equal possibility ?
• before we make conclusions we should be able to answer all the above
questions.
Sample Size
Continuous Data
The formula for the sample size necessary to produce results accurate to a specified confidence and
margin of error is:

where:
is known as the critical value, s is the population standard deviation.
n is the sample size. E is the permissible tolerance.

This formula can be used when you know the standard deviation s and want to determine the sample size
necessary to establish, with a confidence of (1-a) , and the mean value to be within + E. .

As a general rule of thumb, if your sample size is greater than 30, you can replace s by the sample
standard deviation s.
Sample Size
Discrete Data

The formula for the sample size necessary to produce results accurate to a specified confidence and
margin of error is: 2
n = (Z/E) * P * (1-P)

where:
p is proportion.
E is the permissible tolerance.
Z is the critical value at the confidence of (1-a )

If the population is small then the sample size can be reduced slightly. This is because a given sample size
provides proportionately more information for a small population than for a large population. The sample
size (n) can be adjusted using Finite Population Correction For Proportions

n’ = n / ( 1+ ( n -1)/N )
Here N is the population size
Measures of Central Tendency and Dispersion

Measures of
Central Tendency and Dispers
Review Of Variation
◼ All repetitive activities of a process have a certain
amount of fluctuation

◼ Input, process and output measures will fluctuate

◼ This fluctuation is called variation

◼ Variation is the voice of the process

Measurement

Frequency

Time Measurement

Run Chart Histogram

Variation Is A Primary Source Of Customer Dissatisfaction

5Ms & 1P

Xs
Methods Materials Machines

Why Variation?
Process
“Y”

Mother Measurement People

Nature

Xs
Responding To Special And Common
Cause Variation Different Improvement Strategies
Measurements

Common Common Special

Causes or Causes
MEASURE Special MEASURE
?

Investigate all of the

Investigate the specific
variation by identifying
data points related to
the “vital few” process
the special causes
Xs and input Xs
MEASURE
ANALYZE

Develop solutions for

Develop solutions for
special causes and
the “vital few” process
implement as
and input Xs
appropriate
IMPROVE
MEASURE
Statistical Process Control
“The application of statistical techniques for measuring
and analyzing the variation in processes”

Control Charts Are The Primary Tools In SPC

Variation And Control Charts

40
Upper Control Limi

30

20 Average

10

Lower Control Limi

0
0 10 20
Time Order of Sample
Determining If Your Process Is “Out Of Control”

Upper Control Limit

Zone A (UCL)

Zone B
Zone C
Average
Zone C
Zone B
Zone A
Lower Control Limit
(LCL)

Source: Memory Jogger Plus, ©1994 GOAL/QPC

Control Limits vs. Specification Limits
Control Limits
◼ Defined based on process
performance (+/- 3 estimated
standard deviations from the mean)
◼ Help determine if your process is
“in control” (without special cause
variation)
◼ Plotted on control charts
◼ Change when there is a verified,
significant change to your process
◼ Represent the voice of the process
Customer Specification Limits
◼ Defined based on feedback
from the customer(s)
◼ Help determine if your process
is producing defects
◼ Plotted on histograms
(not control charts)
◼ Change when your customers
say they do!
◼ Represent the voice of the
customer
Control Limits vs. Specification Limits
(continued)

• It is possible to have a stable (in control) process that has

unacceptable variation
• Assume both process A and B are statistically performing “in control”

PROCESS A PROCESS B
Lower Upper Lower Upper
Spec Limit Spec Spec Limit Spec
Limit Limit

Process A has Process B has

acceptable variation unacceptable variation
when evaluated against when evaluated against
customer specification customer specification
◼ When
limitsa process is in statistical control and has unacceptable variation,
limits
work on the reduction of variation due to common causes

◼ To reduce common cause variation, make improvements to the vital

few 5Ms and 1P
Selecting Measures For Control Charts
What Do I Monitor?

Process

Input Output
Variables (Ys)
(Xs)

◼ Key input and ◼ Key output

process measures (Y) from
measures (X) the customers’
that track perspective
variables Process Variables
identified in your (Xs)
project as Key
drivers of Project
Y variables Measure The Process And Not The People
Summary Of Variation And Control Charts
(continued)

• Control limits are calculated from the process data; specification limits come from the
customer: they are
both important
• Process variation can be stable and still be unacceptable; to reduce common cause
variation, make fundamental improvements to the vital few 5Ms And 1P
• Variation is the “voice of the process” – learn to listen and understand it

• Use control charts

 Selecting Control Charts
Continuous Discrete
Type Of Data
?

Need To Count
Type Of (defects)
Yes Detect Classification
Discrete
Small (defectives)
Data
Shifts ?
?

No Constant
No Yes Yes Constant No
Sample Opportunity
Rational Size ?
Individual Subgroups ?
Individuals Measurements Sample
Or Size
Subgroups <10
?
Yes No

Individuals
EWMA and Moving Range X and R X and S p-Chart np Chart c-Chart u-Chart
Chart Chart Chart Chart
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.
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.
Need for process capability

For meeting customer requirements/ specifications.

To compare actual performance of equipment with
manufacturer’s claim.
To compare the performance of two processes.
To provide more realistic tolerances for component
dimensions.
Provide a basis for process control.
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. Inspector’s skill.
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.
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

99.73% population between process mean +/- 3 SD

LSL USL

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

- 3 SD + 3 SD
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
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.
Calculating defective PPM at various levels of sigma.

Quality level Cp z Defective PPM

2 Sigma 0.67 2 22750

3 Sigma 1.00 3 1350

4 Sigma 1.33 4 32

5 Sigma 1.67 5 0.3

6 Sigma 2.00 6 0.001

Refer normal distribution table for finding defective parts per

million ( PPM ) for corresponding z values.
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.
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 z-value of 4.5 is 0.0000034. If this
value is obtained, then only 3.4 out of every million parts
manufactured will be defective.
Calculating defective PPM with permissible shift of 1.5 SD at various
levels of sigma. ( practical situation )

Quality level Cp z Defective PPM

2 Sigma 0.17 0.5 308538

3 Sigma 0.50 1.5 66807

4 Sigma 0.83 2.5 6210

5 Sigma 1.17 3.5 233

6 Sigma 1.50 4.5 3.4

Refer normal distribution table for finding defective PPM for

corresponding z values.
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.
 Process 1

X=20
SD=1

LSL USL

Cp=1.33
 Process 2

X=22
SD=1

LSL USL

Cp=1.33
 Process 3

X=15
SD=1

LSL USL

Cp=1.33
 Process 4

X=25
SD=1

LSL USL

Cp=1.33
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
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
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.
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.

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.
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.
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
?