Varsigma Blackbeltbookv3 200722 145259

Innovation Practioner Design Engineering
(TRIZ) Expert
Lean Six Sigma
Green Belt
Lean Six Sigma

Black Belt
Process Improvement Design Engineering
Lean Expert
Lean Six Sigma Black Belt
Lean Six Sigma
Master Black Belt by
Dr. Shantanu Kumar
Certified Business Analyst

Certified Risk Manager
Strategic Leadership
Decision Sciences
KEY
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IDEA
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RESEARCH
Data Analytics Expert Quantitative Project

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MANAGEMENT
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Management
Value Engineering
Business Strategy
Simulation
DR. SHANTANU KUMAR
Lean Six Sigma Black Belt Book of Knowledge
Dr. Shantanu Kumar

E-mail address: sk@varsigma.com
Table of Contents
What is Six Sigma? ..................................................................................................... 1
History and Evolution of Lean Six Sigma ................................................. 1
Six Sigma and Balanced Scorecard .......................................................... 2
Example projects and initiatives ............................................................. 3
Understanding Lean .................................................................................................. 4

Why do we want to lose excess Fat? ...................................................... 4
Simple Lean tools with extraordinary benefits....................................... 6
Lean - Total Productive Maintenance ................................................... 11
Statistics for Lean Six Sigma ..................................................................................... 18

Elementary Statistics for Business ........................................................ 18
Types of Variables .................................................................................. 21
Summary Measures ............................................................................... 23
Managing Six Sigma Projects ................................................................................... 38

Managing Projects ................................................................................. 38
What is a Project? .................................................................................. 38
Managing Change .................................................................................. 45
Define ...................................................................................................................... 47
Define Overview .................................................................................... 47
Step 1- Generate Project Ideas .............................................................. 48

Step 2- Select Project ............................................................................. 65
Step3- Finalize Project Charter and High Level Map ............................ 67
Define Phase Summary .......................................................................... 74

Define Phase Tollgate checklist ............................................................. 75
Measure .................................................................................................................. 76
Measure Phase Overview ...................................................................... 76
Step 4 - Finalize Project Y, Performance Standards for Y ..................... 77
Step 5- Validate measurement system for Y ........................................ 78

Step 6- Measure current performance and Gap ................................... 90
Measure Phase Summary .................................................................... 102
Measure Phase Tollgate checklist ....................................................... 103
Analyze .................................................................................................................. 104

Analyze Phase Overview...................................................................... 104
Step 7- List all Probable X’s.................................................................. 105
Step 8- Identify Critical Xs.................................................................... 125

Step 9- Verify Sufficiency of Critical X’s for project ............................ 148
Analyze phase Summary...................................................................... 148
Improve ................................................................................................................. 150

Improve Phase Overview..................................................................... 150
Step 10- Generate and evaluate Alternative Solutions ...................... 151
Step 11-Select and optimize best solution.......................................... 161

Step 12- Pilot, Implement and Validate solution................................ 186
Improve Phase Summary ..................................................................... 187
Improve Phase Tollgate Checklist ....................................................... 188
Control .................................................................................................................. 189

Control Phase Overview ...................................................................... 189
Step 13- Implement Control System for Critical X’s ........................... 190
Step 14- Document Solution and Benefits .......................................... 200
Step 15-Transfer to Process Owner, Project Closure .......................... 202
Control Phase Summary ...................................................................... 202

Control Phase Tollgate Checklist ......................................................... 203
Appendix ............................................................................................................... 204

Minitab Path ........................................................................................ 206

Preface
Lean Six Sigma Black Belt preparatory module introduces basic tools and techniques that are most important for
Black Belts. The objective of this book is to familiarize readers with Lean Six Sigma tools, application of the tools and
techniques in business scenarios and also enable them to absorb more during the classroom. In this preparatory
module, learners are introduced to
 Elementary Statistics
 Basics of Six Sigma Project Management
 DMAIC Roadmap, tools and techniques
 Six Sigma Glossary
 Practice data files
 Reference Study links
Black Belt workshop primarily focuses on application of Six Sigma tools and techniques in different business
situations. During the workshop, we will explore multiple case studies across industries, and also complete a practice
project. Therefore, it is imperative for Black Belt participants to thoroughly study the preparatory module before
attending the workshop. You may list down your questions and share it with the facilitator on the 1st day.
We have invested over 3000 hours of research in developing Lean Six Sigma Black Belt Workshop and continues to
invest 480-640 hours/ year of content research and development exclusively for Black Belt workshop. We encourage
you to participate in this activity.
If you spot an error or would like to suggest changes, or want to share specific case studies, articles, please e-mail us
at sk@varsigma.com
Regards,
Dr. Shantanu Kumar

http://in.linkedin.com/in/shantanukumar3

Chapter
1
What is Six Sigma?
History and Evolution of Lean Six Sigma
Defining Six Sigma
Six Sigma has been labelled as a metric, methodology, a management and now a philosophy. Green Belts, Black Belts,
Master Black Belts, Champions and Sponsors have been trained on Six Sigma as a metric and methodology, however
very few have experienced or been exposed to Six Sigma as an overall management system and a way of life.
Reviewing the metric and the methodology will help create a context for beginning to understand Six Sigma as a
management system.
Six Sigma is a vehicle for strategic change and an organizational approach to performance excellence. It is important
for business operations because it can be used both to increase top-line growth and also reduce bottom line costs.
Six Sigma can be used to enable:
 Transformational change by applying it across the board for large-scale fundamental changes
throughout the organization to change processes, cultures, and achieve breakthrough results.
 Transactional change by applying tools and methodologies to reduce variation and defects and
dramatically improve business results.
When people refer to Six Sigma, they refer to several things:

Table
It is a philosophy It is based on facts & data

It is a structured approach to solve problems or
It is a statistical approach to problem solving
reduce variation
It refers to 3.4 defects per million opportunities It is a relentless focus on customer satisfaction
Strong tie-in with bottom line benefits Metric, Methodology, Management System
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Six Sigma as a methodology provides businesses with the tools to improve the capability of their business processes.
For Six Sigma, a process is the basic unit for improvement. A process could be a product or a service process that a
company provides to outside customers, or it could be an internal process within the company, such as a billing or
production process. In Six Sigma, the purpose of process improvement is to increase performance and decrease
performance variation. This increase in performance and decrease in performance variation will lead to defect
reduction and improvement in profits, to employee morale, Quality of product, and eventually to business excellence
The name “Six Sigma” derives from statistical terminology; Sigma(s) means Standard Deviation. In a production
process, the “Six Sigma standard” means that the defective rate of the process will be 3.4 defects per million units.
Clearly Six Sigma indicates a degree of extremely high consistency and extremely low variability. In statistical terms,
the purpose of Six Sigma is to reduce variation to achieve very small standard deviations.
When compared with other Quality initiatives, the key difference of Six Sigma is that it applies not only to product
Quality but also to all aspects of business operation by improving key processes. For example, Six Sigma may help
create well-designed, highly reliable, and consistent customer billing systems; cost control systems; and project
management systems.
Six Sigma and Balanced Scorecard

The Balanced Scorecard was first developed in the early 1990s by two guys at the Harvard Business School: Robert
Kaplan and David Norton. The key problem that Kaplan and Norton identified in today’s business was that many
companies had the tendency to manage their businesses based solely upon financial measures that may have worked
well in the past; the pace of business in today’s world requires better and more comprehensive measures. Though
financial measures are necessary, they can only report what has happened in the past, where your business has been
and they are not able to report where it is headed.
Balanced Scorecard is a management system, not a measurement system. Yes, measurement is a key aspect of the
Balanced Scorecard, but it is much more than just measurement: it is a means of setting and achieving the strategic
goals and objectives for your organisation. Balanced Scorecard is a management system that enables your
organisation to set, track and achieve its key business strategies and objectives. Once the business strategies are
developed, they are deployed and tracked through what we call the Four Legs of the Balanced Scorecard. These four
legs are made up of four distinct business perspectives: Customer Leg, Financial Leg, Internal Business Process Leg,
Knowledge, Education, and Growth Leg.
 Customer scorecard: Measures your customers’ satisfaction and their performance requirements —
for your organisation and what it delivers, whether it is products or services.
 Financial scorecard: Tracks your financial requirements and performance.
 Internal Business Process scorecard: Measures your critical to customer process requirements and
measures.
 Knowledge, Education, and Growth scorecard: Focuses on how you train and educate your
employees, gain and capture your knowledge, and how Green Belt/Black Belt use it to maintain a
competitive edge within your markets
Six Sigma projects should positively impact these Key Performance Indicators; therefore Balanced Scorecard is
closely monitored. Six Sigma is Management System for executing business strategy. Six Sigma is a solution to
help organizations to:
 Align their business strategy to critical improvement efforts
 Mobilize teams to attack high impact projects
 Accelerate improved business results

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Govern efforts to ensure improvements are sustained

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Example projects and initiatives
 Defect reduction
 e.g. Reducing no of bugs in a software
 e.g. Reduction of defects in apparel
 Yield improvement
 e.g. Increasing the % loan application processed versus loan application received
 e.g. Increasing Sales per hour
 Improved customer satisfaction
 e.g. Improving CSAT scores in an ITES process
 e.g. Reducing attrition or turnover
 e.g. Reducing transaction processing time, Average Handling time etc
 Higher net income
 e.g. Improving Occupancy % of a multiplex
 e.g. Reducing and controlling raw inventory
 e.g. Reduction of Non-value add time in a process
 Continual improvement
Let’s list a few potential projects
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Chapter
2
Understanding Lean
Why do we want to lose excess Fat?
Defining Lean
Lean operation principles are derived from the Lean manufacturing practices. Lean manufacturing is a very effective
strategy first developed by Toyota. The key focus of Lean is to identify and eliminate wasteful actions that do not
add value to customers in the manufacturing process. Because Lean deals with production system from a pure
process point of view, and not a hardware point of view, it has been found that the principles of Lean can be readily
adopted in other types of processes, such as office process and product development process. Therefore, Lean
operation principles can be used greatly to improve the efficiency and speed of all processes.
The strategy part of Lean looks at balancing multiple value streams (i.e., typically, a family of products or services)
and integrating the work done in operations and in the rest of the organisation (be it a factory, a hospital, a software
development company) with the customer in mind. The concept is simple. "Lean" describes any process developed
to a goal of near 100% value added with very few waste steps or interruptions to the workflow. That includes physical
things like products and less tangible information like orders, request for information, quotes, etc.
Lean is typically driven by a need for quicker customer response times, the proliferation of product and service
offerings, a need for faster cycle times, and a need to eliminate waste in all its forms. The Lean approach challenges
everything and accepts nothing as unchangeable. It strives continuously to eliminate waste from all processes, a
fundamental principle totally in alignment with the goals of the Six Sigma Management System. These methods are
especially effective in overcoming cultural barriers where the impossible is often merely the untried.
Lean, like any other major business strategy, is best if driven from the top, linked into the organisation's performance
measurement systems, and used as a competitive differentiator. This is what we would like to do however
sometimes reality differs. In most instances, the Champions driving this approach should look for pilot areas in the
organisation to test the concept and see if a business case for Lean can be built over time. One cannot just flip a
switch and get the whole organisation doing this anyway, so starting small and building from there can be a valuable
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approach.

Lean in the Office
Lean in an assembly manufacturing plant tends to focus on one-piece flow. In a process or job shop, it tends to focus
on eliminating wait time. The idea of eliminating wait time and defining "standard work" also applies to the office
and administrative environments. Most overhead departments and activities do not have effective metrics. Standard
work does not exist for most tasks. Most overhead departments would score poorly in a 5S assessment (Sort, Set-
order, Shine, Standardize, and Sustain). Many administrative or transaction type systems are typically designed to
handle the most complex transactions. These problems can cause excessive rework, delays in processing, and
confusion. A few examples:
 An account closing process typically takes a long time to do because a flood of transactions take place
at the end of the period: journal entries, special analysis, allocations, report preparation, etc. The
excessive transactions cause accounting departments to be somewhat chaotic places at the end of the
period. Adopting Lean in this world is different from a factory, but the goal is still stable amounts of
work, flexible operations (within defined parameters), and pull from the customers of the process.
 Imagine a purchase order going through a process. Ninety-nine percent of its processing life is going to
be "wait" time. It may also have re-work problems as people try to get the information right, and in
terms of workload balance, some purchase orders are more difficult to do than others. This is not so
different from what goes on in the factory. Many of these problems can be individually addressed using
Kaizen and Lean Teams.
 Multiple re-inputs of information into Excel spread sheets, Access data bases, requirements generators,
etc. Or the different languages used inside a business for the same physical product. Purchasing has a
different numbering scheme than engineering, which has a different numbering scheme than
accounting. And someone is supposed to keep a matrix up-to-date that maps these relationships now
there's a value adding activity from a customer perspective!
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Simple Lean tools with extraordinary benefits
What is 5S?
5S is a process and method for creating and maintaining an organised, clean, and high performance workplace. 5S
enables anyone to distinguish between normal and abnormal conditions at a glance. 5S is the foundation for
continuous improvement, zero defects, cost reduction, and a safe work area. 5S is a systematic way to improve the
workplace, our processes and our products through production line employee involvement. 5S can be used in Six
Sigma for quick wins as well as control. 5S should be one of the Lean tools that should be implemented first. If a
process is in total disarray, it does not make sense to work on improvements. The process needs to be first organised
(stabilized) and then improved.
The 5 S’s are:
 Sort – Clearly distinguish needed items from unneeded items and eliminate the latter.
 Straighten /Stabilize/ Set in Order – Keep needed items in the correct place to allow for easy and
immediate retrieval.
 Shine – Keep the work area clean.
 Standardize – Develop standardized work processes to support the first three steps.
 Sustain – Put processes in place to ensure that the first four steps are rigorously followed.
Figure: 5S Image from www.tpfeurope.com

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What is Kaizen?
Kaizen is a Japanese word that means to break apart to change or modify (Kai) to make things better (Zen). Kaizen is
used to make small continuous improvements in the workplace to reduce cost, improve quality and delivery. It is
particularly suitable when the solution is simple and can be obtained using a team based approach. Kaizen assembles
small cross-functional teams aimed at improving a process or problem in a specific area. It is usually a focused 3-5
day event that relies on implementing “quick” and “do-it-now” type solutions. Kaizen focuses on eliminating the
wastes in a process so that processes only add value to the customer. Some of the 7 wastes targeted by Kaizen teams
are:
 Waiting/Idle Time/Search time (look for items, wait for elements or instructions to be delivered)
 Correction (defects/re-work & scrap - doing the same job more than once)
 Transportation (excess movement of material or information)
 Overproduction (building more than required)
 Over-processing (processing more than what is required or sufficient)
 Excess Motion (excess human movements at workplace)
 Storage/warehousing (excess inventory)
The benefits of doing Kaizen are less direct or indirect labour requirements, less space requirements, increased
flexibility, increased quality, increased responsiveness, and increased employee enthusiasm. Figure below shows a
Kaizen team in action discussing improvements.
Figure: A Kaizen Team at Boeing in Action

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Poka-Yoke
Poka-Yoke is a structured methodology for mistake-proofing operations. It is any device or mechanism that either
prevents a mistake from being made or ensures that the mistakes don’t get translated into errors that the customers
see or experience. The goal of Poka-Yoke is both prevention and detection: “errors will not turn into defects if
feedback and action take place at the error stage.” (Shigeo Shingo, industrial engineer at Toyota. He is credited with
starting “Zero Quality Control”). The best operation is one that both produces and inspects at the same time.
There are three approaches to Poka-Yoke:
 Warning (let the user know that there is a potential problem – like door ajar warning in a car)
 Auto-correction (automatically change the process if there is a problem – like turn on windshield wipers
in case of rain in some advanced cars)
 Shutdown (close down the process so it does not cause damage – like deny access to ATM machines if
password entered is wrong 3 times in a row)
Figure: Poka-Yoke Example – Possibility of

Parachute failing to open should not exist
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7 Wastes in Lean
The 7 Wastes (also referred to as Muda) in Lean are:
Table: 7 Wastes in lean
W O R M P I T
Waiting Over-Production Rework Motion Over-processing Inventory Transportation
The underutilization of talent and skills is sometimes called the 8th waste in Lean.
Waiting is non- productive time due to lack of material, people, or equipment. This can be due to slow or broken
machines, material not arriving on time, etc. Waste of Waiting is the cost of an idle resource. Examples are:
 Processing once each month instead of as the work comes in
 Waiting on part of customer or employee for a service input
 Delayed work due to lack of communication from another internal group.
Over-Production refers to producing more than the next step needs or more than the customer buys. Waste of Over-
production relates to the excessive accumulation of work-in-process (WIP) or finished goods inventory. It may be
the worst form of waste because it contributes to all the others. Examples are:
 Preparing extra reports
 Reports not acted upon or even read
 Multiple copies in data storage
 Over-ordering materials
Rework or Correction or defects are as obvious as they sound. Waste of Correction includes the waste of handling
and fixing mistakes. This is common in both manufacturing and transactional settings. Examples are:
 Incorrect data entry
 Paying the wrong vendor
 Misspelled words in communications

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 Making bad product or materials or labour discarded during production

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Motion is the unnecessary movement of people and equipment. This includes looking for things like documents or
parts as well as movement that is straining. Waste of Motion examines how people move to ensure that value is
added. Examples are:
 Extra steps
 Extra data entry
 Having to search for something for approval
Over-Processing refers to tasks, activities and materials that don’t add value. Can be caused by poor product or
process design as well as from not understanding what the customer wants. Waste of Over-processing relates to
over-processing anything that may not be adding value in the eyes of the customer. Examples are:
 Sign-offs
 Reports that contain more information than the customer wants or needs
 Communications, reports, emails, contracts, etc that contain more than the necessary points (concise is better)
 Voice mails that are too long
 Duplication of effort/reports
Inventory is the liability of materials that are bought, invested in and not immediately sold or used. Waste of
Inventory is identical to over-production except that it refers to the waste of acquiring raw material before the exact
moment that it is needed. Examples are:
 Transactions not processed
 Bigger “in box” than “out box”
 Over-stocking raw materials
Transportation is the unnecessary movement of material and information. Steps in a process should be located close
to each other so movement is minimized. Examples are:
 Extra steps in the process
 Moving paper from place to place
 Forwarding emails to one another

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Lean - Total Productive Maintenance
Total Productive Maintenance (TPM) is a maintenance program which involves a newly defined concept for
maintaining plants and equipment. The goal of the TPM program is to markedly increase production while, at the
same time, increasing employee morale and job satisfaction. TPM brings maintenance into focus as a necessary and
vitally important part of the business. It is no longer regarded as a non-profit activity. Down time for maintenance is
scheduled as a part of the manufacturing day and, in some cases, as an integral part of the manufacturing process.
The goal is to hold emergency and unscheduled maintenance to a minimum.
A holistic system to maximize equipment efficiency by participation from all departments and through autonomous small
group activities, it Improves process control as team is trained and follows the standards and procedures established by the
Six Sigma project.
Benefits of Lean – Total Productive Maintenance
• Increased productivity
• Reduced breakdown
• Reduced defects
• Reduction in maintenance cost
• Reduced stock
• Zero accidents
• Improved morale
Autonomous Maintenance (Jishu Hozen)
This pillar is geared towards developing operators to be able to take care of small maintenance tasks, thus freeing up the
skilled maintenance people to spend time on more value added activity and technical repairs. The operators are responsible
for upkeep of their equipment to prevent it from deteriorating.
Involving operators in routine care and maintenance of critical plant assets offers three major benefits. The most obvious
is reduced maintenance labor cost. In addition, the proximity of the operator to the asset greatly reduces or eliminates
travel time, waiting for availability and other inefficiencies. Overall, autonomous maintenance represents a much better
use of resources. To be truly world-class, maintenance and production must function as an integrated team. Involving the
operators in routine care and maintenance of the plant's assets will begin to crumble the traditional barriers between these
two departments.
The ultimate reason for autonomous maintenance is simply that it saves money and improves bottom-line profitability.
Operators are typically under used and have the time to perform these lower-skilled tasks. Transferring these tasks to
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operating teams, improves the payback on the burdened sunk cost of the production workforce and at the same time
permits more effective use of the maintenance crafts.
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Kaizen
"Kai" means change, and "Zen" means good (for the better). Kaizen is the opposite of big spectacular innovations.
Kaizen is small improvements carried out on a continual basis and involves all people in the organization. Kaizen
requires no or little investment. The principle behind Kaizen is that a large number of small improvements are more
effective in an organizational environment than a few large-scale improvements. Systematically using various Kaizen
tools in a detailed and thorough method eliminates losses. The goal is to achieve and sustain zero losses with respect
to minor stops, measurement and adjustments, defects, and unavoidable downtimes.
Kobetsu Kaizen uses a special event approach that focuses on improvements associated with machines and is linked
to the application of TPM. Kobetsu Kaizen begins with an up-front planning activity that focuses its application where
it will have the greatest effect within a business and defines a project that analyses machine operations information,
uncovers waste, uses a form of root cause analysis (e.g., the 5 Why approach) to discover the causes of waste, applies
tools to remove waste, and measures results.
The objective of TPM is maximization of equipment effectiveness. TPM maximizes machine utilization, not merely
machine availability. As one of the pillars of TPM activities, Kaizen activities promote efficient equipment and proper
utilization of manpower, materials, and energy by eliminating 16 major losses.
Examples of Kobetsu Kaizen to make machines easier to maintain include:
 Relocating gauges and grease fittings for easier access.
 Making shields that minimize contamination.
 Centralizing lubrication points.
 Making debris collection accessible.
Planned Maintenance
Planned maintenance, then, is a maintenance program designed to improve the effectiveness of maintenance through the
use of systematic methods and plans. The primary objective of the maintenance effort is to keep equipment functioning
in a safe and efficient manner. This allows production to meet production targets with minimum operating cost.
It is aimed to have trouble free machines and equipment producing defect free products for total customer satisfaction.
This breaks down maintenance into 4 "families" or groups which were defined earlier.
 Preventive Maintenance
 Breakdown Maintenance
 Corrective Maintenance
 Maintenance Prevention
With Planned Maintenance we evolve our efforts from a reactive to a proactive method and use trained maintenance
staff to help and train the operators to better maintain their equipment. Production involvement is extremely
important. Without this, any maintenance program will be jeopardized. Commitment to the success of a
maintenance program must extend from top production management through the front-line supervisors. If
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production management is not committed to a maintenance program, then unrealistically high or low requirements
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may be made of the maintenance forces. Either situation can cause poor performance and low morale.

Quality Management
Quality Maintenance (QM) targets customer satisfaction through defect free manufacturing of the highest quality
products. The focus is on eliminating non-conformances in a systematic manner. Through QM we gain an
understanding of what parts of the equipment affect product quality, eliminate quality concerns, and then move to
potential quality concerns. The transition is from reactive to proactive (From Quality Control to Quality Assurance).
Quality Management activities control equipment conditions to prevent quality defects, based on the concept of
maintaining perfect equipment to maintain perfect quality of products. These conditions are checked and measured
in time series to verify that measured values are within standard values to prevent defects. The transition of
measured values is trended to predict possibilities of defects occurring and to take countermeasures before defects
occur.
QM activities to support Quality Assurance through defect free conditions and control of equipment. The focus is
on effective implementation of operator quality assurance and detection and segregation of defects at the source.
Opportunities for designing Poka-Yoke (foolproof system) are investigated and implemented as practicable.
Education and Training
The goal of training is to have multi-skilled revitalized employees whose morale is high and who are eager to come
to work and perform all required functions effectively and independently. The focus is on achieving and sustaining
zero losses due to lack of knowledge / skills / techniques. Ideally, we would create a factory full of experts.
Operators must upgrade their skills through education and training. It is not sufficient for operators to learn how to
do something; they should also learn why they are doing it and when it should be done. Through experience
operators gain “know-how” to address a specific problem, but they do so without knowing the root cause of the
problem and when and why they should be doing it. Hence it becomes necessary to train operators on knowing why.
This will enable the operators to maintain their own machines, understand why failures occur, and suggest ways of
avoiding the failures occurring again. The different phases of skills are:
Phase 1: Do not know.

Phase 2: Know the theory but cannot do.
Phase 3: Can do but cannot teach
Phase 4: Can do and also teach.
Policy
 Focus on improvement of knowledge, skills and techniques.

 Creating a training environment for self-learning based on felt needs.
 Training curriculum / tools /assessment etc conductive to employee revitalization
 Training to remove employee fatigue and make work enjoyable.
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Safety, Health and Environment
The focus is on creating a safe workplace and surrounding areas that are not damaged by our process or procedures.
This pillar plays an active role in each of the other pillars on a regular basis.
The target of the Safety, Health & Environment pillar is:
 Zero accident
 Zero health damage
 Zero fires
Office TPM
Office TPM should be started after activating four other pillars of TPM (JishuHozen, Kobetsu Kaizen, Quality
Maintenance, and Planned Maintenance). Office TPM must be followed to improve productivity, efficiency in the
administrative functions, and identify and eliminate losses. This includes analyzing processes and procedures
towards increased office automation. Office TPM addresses twelve major losses:
 Processing loss
 Cost loss including in areas such as procurement, accounts, marketing, sales leading to high inventories
 Communication loss
 Idle loss
 Set-up loss
 Accuracy loss
 Office equipment breakdown
 Communication channel breakdown, telephone and fax lines
 Time spent on retrieval of information
 Unavailability of correct on-line stock status
 Customer complaints due to logistics
 Expenses on emergency dispatches/purchases.
Benefits
 Involvement of all people in support functions for focusing on better plant performance
 Better utilized work area
 Reduce repetitive work
 Reduced inventory levels in all parts of the supply chain
 Reduced administrative costs
 Reduction in number of files
 Reduction of overhead costs (to include cost of non-production/non capital equipment)

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Productivity of people in support function

 Reduction in breakdown of office equipment
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 Reduction of customer complaints due to logistics

 Reduction in expenses due to emergency dispatches/purchases
 Reduced manpower

Pull Systems
Traditional systems are based on “Push” – keep making items even if not needed downstream. This causes excess
inventory, rework, scrap. In a Pull system, we pull work only when needed in the right Quantities. Push systems can
be summarized as ‘‘Make a lot of stuff as cheaply as possible and hope people will buy it.’’Pull systems can be
summarized as ‘‘Don’t make anything until it is needed, then make it fast.’’ A pull system controls the low and the
quantity produced by replacing items when they are consumed. How do we make value flow at the pull of the
customer? Pull system requires overloading and flexible processes.
A pull system is exactly what it sounds like. The production of a product or system is varied depending strictly on the
demand from the customer or the market, not from forecasts or previous performance. While most businesses strive
to use a pull business model from end user to shop floor, it is rare for this to happen, as there are usually some
aspects of the supply chain that are push systems.
A pull system is one in which the supply chain sends a product through the supply chain because there is a specific
demand for that one product, as opposed to creating inventory and “pushing” the product out to distributors,
wholesalers, vendors, or customers so they have to keep inventory, or worse, the production company has to keep
inventory. A “push” supply chain is the exact opposite: they consist of many warehouses, retail stores, or other
outlets in which large amounts of inventory are kept to satisfy customer demand on the spot.
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Figure: Push and Pull approach

Continuous Flow (for reducing Cycle Time)
In a continuous flow production process in which a unit undergoes each stage of production sequentially. The unit remains
at the first stage until that particular segment is complete; it is then sent to the next stage, where the process is repeated.
This method continues until the unit has completed all sequences of the production process.
According to this tactic, it is important to go for improvement effort continuously something that calls for an amalgamation
of all the fundamentals that are involved in the process of manufacturing. By ensuring a minimum level of wastage, error
free production and cost saving approach, the Continuous Flow Manufacturing or CFM process intends to obtain a balanced
production line.
The CFM system is usually implemented in discrete manufacturing in an attempt to deal with the production volumes
comprising discrete units of production in a flow. It is to be mentioned that there is more possibility of the discrete
manufacturing to be performed in batches of product units that are moved from one process to another inside the factory.
During a work-time or run-time, each process is likely to add value to the batch.
A product that fails to satisfy the needs of a customer may turn out to be a product that has lacked in efficiency and quality.
Under the CFM system a manufacturer produces that product only which has demand in the market. Some of the pros that
are associated with CFM include more efficiency, flexibility, cost saving & greater satisfaction of the customers.
• One piece flow of work between process steps
• Minimal or no inventory between steps
• True continuous flow is hard to achieve (use supermarkets, pull signals)
16
Figure: Batch & Queue Processing VS Continuous Flow Processing

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In simple words, we can say that CFM is a particular process that is implemented to develop improved process flow through
diligent team work as well as combined problem solving.

Single Minute Exchange of Dies (SMED)
SMED (Single-Minute Exchange of Dies) is a system for dramatically reducing the time it takes to complete equipment
changeovers. The essence of the SMED system is to convert as many changeover steps as possible to “external” (performed
while the equipment is running), and to simplify and streamline the remaining steps. The name Single-Minute Exchange of
Dies comes from the goal of reducing changeover times to the “single” digits (i.e. less than 10 minutes).
A successful SMED program will have the following benefits:
• Reduce changeover time between making different products/services

• Enables reduction in batch sizes & overall reduction in cycle time
• Lower manufacturing cost (faster changeovers mean less equipment down time)
• Smaller lot sizes (faster changeovers enable more frequent product changes)
• Improved responsiveness to customer demand (smaller lot sizes enable more flexible scheduling)
• Lower inventory levels (smaller lot sizes result in lower inventory levels)
• Smoother startups (standardized changeover processes improve consistency and quality)
Figure: SMED
SMED was developed by Shigeo Shingo, a Japanese industrial engineer who was extraordinarily successful in helping
companies dramatically reduce their changeover times. His pioneering work led to documented reductions in
changeover times averaging 94% (e.g. from 90 minutes to less than 5 minutes) across a wide range of companies.
Changeover times that improve by a factor of 20 may be hard to imagine, but consider the simple example of
changing a tire:
• For many people, changing a single tire can easily take 15 minutes.
• For a NASCAR pit crew, changing four tires takes less than 15 seconds.
Many techniques used by NASCAR pit crews (performing as many steps as possible before the pit stop begins; using
a coordinated team to perform multiple steps in parallel; creating a standardized and highly optimized process) are
also used in SMED. In fact the journey from a 15 minute tire changeover to a 15 second tire changeover can be
considered a SMED journey.
In SMED, changeovers are made up of steps that are termed “elements”. There are two types of elements:
17
• Internal Elements (elements that must be completed while the equipment is stopped)
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• External Elements (elements that can be completed while the equipment is running)
The SMED process focuses on making as many elements as possible external, and simplifying and streamlining all
elements.

Chapter
3
Statistics for Lean Six Sigma
Elementary Statistics for Business
The field of statistics deals with the collection, presentation, analysis, and use of data to make decisions, solve
problems, and design products and processes. Statistical techniques can be a powerful aid in designing new products
and systems, improving existing designs, and designing, developing, and improving processes
Statistical methods are used to help us describe and understand variability. By variability, we mean that successive
observations of a system or phenomenon do not produce exactly the same result. We all encounter variability in our
everyday lives, and statistical thinking can give us a useful way to incorporate this variability into our decision-making
processes. For example, consider the gasoline mileage performance of your car. Do you always get exactly the same
mileage performance on every tank of fuel? Of course not—in fact, sometimes the mileage performance varies
considerably. This observed variability in gasoline mileage depends on many factors, such as the type of driving that
has occurred most recently (city versus highway), the changes in condition of the vehicle over time (which could
include factors such as tire inflation, engine compression, or valve wear), the brand and/or octane number of the
gasoline used, or possibly even the weather conditions that have been recently experienced. These factors represent
potential sources of variability in the system. Statistics gives us a framework for describing this variability and for
learning about which potential sources of variability are the most important or which have the greatest impact on
the gasoline mileage performance.
Descriptive statistics focus on the collection, analysis, presentation, and description of a set of data. For example,
the United States Census Bureau collects data every 10 years (and has done so since 1790) concerning many
characteristics of residents of the United States. Another example of descriptive statistics is the employee benefits
used by the employees of an organisation in fiscal year 2005.These benefits might include healthcare costs, dental
costs, sick leave, and the specific healthcare provider chosen by the employee.
Inferential statistics focus on making decisions about a large set of data, called the population, from a subset of the
data, called the sample. The invention of the computer eased the computational burden of statistical methods and
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opened up access to these methods to a wide audience. Today, the preferred approach is to use statistical software
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such as Minitab to perform the computations involved in using various statistical methods.

Basic terms and Sampling Methods
Now, in order to become familiar with sampling, you need to become familiar with some terms.
A population, also called a universe, is the entire group of units, items, services, people, etc., under investigation for a fixed
period of time and a fixed location.
A sample is the portion of a population that is selected to gather information to provide a basis for action on the population.
Rather than taking a complete census of the whole population, statistical sampling procedures focus on collecting a small
portion of the larger population. For example, 50 accounts receivable drawn from a list, or frame, of 10,000 accounts
receivable constitute a sample. The resulting sample provides information that can be used to estimate characteristics of
the entire frame.
There are four main reasons for drawing a sample.
 A sample is less time-consuming than a census.
 A sample is less costly to administer than a census.
 A sample is less cumbersome and more practical to administer than a census.
 A sample provides higher-quality data than a census.
There are two kinds of samples: non-probability samples and probability samples.
In a non-probability sample, items or individuals are chosen without the benefit of a frame. Because non-probability
samples choose units without the benefit of a frame, there is an unknown probability of selection (and in some cases,
participants have self-selected). For a non-probability sample, the theory of statistical inference should not be applied to
the sample data. For example, many companies conduct surveys by giving visitors to their web site the opportunity to
complete survey forms and submit them electronically. The response to these surveys can provide large amounts of data,
but because the sample consists of self-selected web users, there is no frame. Non-probability samples are selected for
convenience (convenience sample) based on the opinion of an expert (judgment sample) or on a desired proportional
representation of certain classes of items, units, or people in the sample (quota sample). Non-probability samples are all
subject to an unknown degree of bias. Bias is caused by the absence of a frame and the ensuing classes of items or people
that may be systematically denied representation in the sample (the gap).
Non-probability samples have the potential advantages of convenience, speed, and lower cost. However, they have two
major disadvantages: potential selection bias and the ensuing lack of generalized ability of the results. These disadvantages
offset advantages of non - probability samples. Therefore, you should only use non-probability sampling methods when
you want to develop rough approximations at low cost or when small-scale initial or pilot studies will be followed by more
rigorous investigations.
You should use probability sampling whenever possible, because valid statistical inferences can be made from a probability
19
sample. In a probability sample, the items or individuals are chosen from a frame, and hence, the individual units in the
population have a known probability of selection from the frame.
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The four types of probability samples most commonly used are simple random, stratified, systematic, and cluster. These
sampling methods vary from one another in their cost, accuracy, and complexity.

 Simple Random Sample
In a simple random sample, every sample of a fixed size has the same chance of selection as every other sample of that
size. Simple random sampling is the most elementary random sampling technique. It forms the basis for the other random
sampling techniques. With simple random sampling, n represents the sample size, and N represents the frame size, not the
population size. Every item or person in the frame is numbered from 1 to N. The chance of selecting any particular member
of the frame on the first draw is 1/N. You use random numbers to select items from the frame to eliminate bias and hold
uncertainty within known limits.
Two important points to remember are that different samples of size n will yield different sample statistics, and different
methods of measurement will yield different sample statistics. Random samples, however, do not have bias on average,
and the sampling error can be held to known limits by increasing the sample size. These are the advantages of probability
sampling over non-probability sampling.
 Stratified Sample
In a stratified sample, the N items in the frame are divided into sub populations or strata, according to some common
characteristic. A simple random sample is selected within each of the strata, and you combine results from separate simple
random samples. Stratified sampling can decrease the overall sample size, and, consequently, lower the cost of a sample.
A stratified sample will have a smaller sample size than a simple random sample if the items are similar within a stratum
(called homogeneity) and the strata are different from each other (called heterogeneity). As an example of stratified
sampling, suppose that a company has workers located at several facilities in a geographical area. The workers within each
location are similar to each other with respect to the characteristic being studied, but the workers at the different locations
are different from each other with respect to the characteristic being studied. Rather than take a simple random sample of
all workers, it is cost efficient to sample workers by location, and then combine the results into a single estimate of a
characteristic being studied.
 Systematic Sample
In a systematic sample, the N individuals or items in the frame are placed into k groups by dividing the size of the frame N
by the desired sample size n. To select a systematic sample, you choose the first individual or item at random from the k
individuals or items in the first group in the frame. You select the rest of the sample by taking every kth individual or item
thereafter from the entire frame.
If the frame consists of a listing of pre-numbered checks, sales receipts, or invoices, or a preset number of consecutive items
coming off an assembly line, a systematic sample is faster and easier to select than a simple random sample. This method
is often used in industry, where an item is selected for testing from a production line (say, every fifteen minutes) to ensure
that machines and equipment are working to specification. This technique could also be used when questioning people in
a sample survey. A market researcher might select every 10th person who enters a particular store, after selecting a person
at random as a starting point; or interview occupants of every 5th house in a street, after selecting a house at random as a
starting point.
A shortcoming of a systematic sample occurs if the frame has a pattern. For example, if homes are being assessed, and
20
every fifth home is a corner house, and the random number selected is 5, then the entire sample will consist of corner
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houses. Corner houses are known to have higher assessed values than other houses. Consequently, the average assessed
value of the homes in the sample will be inflated due to the corner house phenomenon.

 Cluster Sample
In a cluster sample, you divide the N individuals or items in the frame into many clusters. Clusters are naturally occurring
subdivisions of a frame, such as counties, election districts, city blocks, apartment buildings, factories, or families. You take
a random sampling of clusters and study all individuals or items in each selected cluster. This is called single-stage cluster
sampling.
Cluster sampling methods are more cost effective than simple random sampling methods if the population is spread over
a wide geographic region. Cluster samples are very useful in reducing travel time. However, cluster sampling methods tend
to be less efficient than either simple random sampling methods or stratified sampling methods. In addition, cluster
sampling methods are useful in cutting cost of developing a frame because first, a frame is made of the clusters, and second,
a frame is made only of the individual units in the selected clusters. Cluster sampling often requires a larger overall sample
size to produce results as precise as those from more efficient procedures.
Types of Variables
Variable: In statistics, a variable has two defining characteristics:
 A variable is an attribute that describes a person, place, thing, or idea.

 The value of the variable can "vary" from one entity to another.
For example, a person's hair colour is a potential variable, which could have the value of "blonde" for one person
and "brunette" for another.
Data could be classified into two types: attribute data and measurement data.
Attribute Data
o Attribute data (also referred to as categorical or count data) occurs when a variable is either classified into
categories or used to count occurrences of a phenomenon.
o Attribute data places an item or person into one of two or more categories. For example, gender has only
two categories.
o In other cases, there are many possible categories into which a variable can be classified. For example, there
could be many reasons for a defective product or service.
o Regardless of the number of categories, the data consists of the number or frequency of items in a particular
category, whether it is number of voters in a sample who prefer a particular candidate in an election or the
number of occurrences of each reason for a defective product or service.
o Count data consists of the number of occurrences of a phenomenon in an item or person. Examples of count
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data are the number of blemishes in a yard of fabric or number of cars entering a highway at a certain
location during a specific time period.
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o The colour of a ball (e.g., red, Green, blue) or the breed of a dog (e.g., collie, shepherd, terrier) would be
examples of qualitative or categorical variables.
o Examples of discrete data in non-manufacturing processes include:
 Number of damaged containers

 Customer satisfaction: fully satisfied vs. neutral vs. unsatisfied
 Error-free orders vs. orders requiring rework
Measurement Data
o Measurement data (also referred to as continuous or variables data) results from a measurement taken
on an item or person. Any value can theoretically occur, limited only by the precision of the measuring
process.
o For example, height, weight, temperature, and cycle time are examples of measurement data.
o E.g. suppose the fire department mandates that all fire fighters must weigh between 150 and 250
pounds. The weight of a fire fighter would be an example of a continuous variable; since a fire fighter's
weight could take on any value between 150 and 250 pounds.
o Examples of continuous data in nonmanufacturing processes include:
 Cycle time needed to complete a task
 Revenue per square foot of retail floor space
 Costs per transaction
From a process point of view, continuous data are always preferred over discrete data, because they are more
efficient (fewer data points are needed to make statistically valid decisions) and they allow degree of variability in
the output to be quantified. For example, it is much more valuable to know how long it actually took to resolve a
customer complaint than simply noting whether it was late or not.
Variables can also be described according to the level of measurement scale.
There are four scales of measurement: nominal, ordinal, interval, and ratio. Attribute data classified into categories
is nominal scale data—for example, conforming versus nonconforming, on versus off, male versus female. No
ranking of the data is implied. Nominal scale data is the weakest form of measurement. An ordinal scale is used for
data that can be ranked, but cannot be measured—for example, ranking attitudes on a 1 to 5 scale, where 1 = very
dissatisfied, 2 = dissatisfied, 3 = neutral, 4 = satisfied, and 5 = very satisfied. Ordinal scale data involves a stronger
form of measurement than attribute data. However, differences between categories cannot be measured.
Measurement data can be classified into interval- and ratio-scaled data. In an interval scale, differences between
measurements are a meaningful amount, but there is no true zero point. In a ratio scale, not only are differences
between measurements a meaningful amount, but there is a true zero point. Temperature in degrees Fahrenheit or
Celsius is interval scaled because the difference between 30 and 32 degrees is the same as the difference between
38 and 40 degrees, but there is no true zero point (0° F is not the same as 0° C).Weight and time are ratio-scaled
variables that have a true zero point; zero pounds are the same as zero grams, which are the same as zero stones.
Twenty minutes is twice as long as ten minutes, and ten minutes is twice as long as five minutes. 22
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Summary Measures
 Population: A population consists of a set of all measurements for which the investigator is interested.
 Sample: A sample is a subset of the measurements selected from the population.
 Census: A census is a complete enumeration of every item in a population.
We use measures of central tendency (Mean, Median) to determine the location and measures of dispersion
(Standard Deviation) to determine the spread. When we compute these measures from a sample, they are statistics
and if we compute these measures from a population, they are parameters. (To distinguish sample statistics and
population parameters, Roman letters are used for sample statistics, and Greek letters are used for population
parameters.)
 Central Tendency: The tendency of data to cluster around some value. Central tendency is usually
expressed by a measure of location such as the mean, median, or mode.
Measures of Central Tendency
 Mean (Arithmetic Mean)
The mean of a sample of numerical observations is the sum of the observations divided by the number of
observations. It is the simple arithmetic average of the numbers in the sample. If the sample members are denoted
by x1, x2, ... , xn where n is the number of observations in the sample or the sample size, then the sample mean is
usually denoted by𝑥and pronounced "x-bar”. The population mean is denoted by 
The arithmetic mean (also called the mean or average) is the most commonly used measure of central tendency.
You calculate the arithmetic mean by summing the numerical values of the variable, and then you divide this sum by
the number of values.
For a sample containing a set of n values, X1, X2. . .Xn, the arithmetic mean of a sample (given by the symbol X called
X-bar) is written as:
𝑺𝒖𝒎 𝒐𝒇 𝒕𝒉𝒆 𝑽𝒂𝒍𝒖𝒆𝒔
̅=
𝒙
𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒕𝒉𝒆 𝑽𝒂𝒍𝒖𝒆𝒔
X i
X  i 1
n
23
To illustrate the computation of the sample mean, consider the following example related to your Personal life: the
time it takes to get ready to go to work in the morning. Many people wonder why it seems to take longer than they
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anticipate getting ready to leave for work, but very few people have actually measured the time it takes them to
get ready in the morning. Suppose you operationally define the time to get ready as the time in minutes (rounded
to the nearest minute) from when you get out of bed to when you leave your home. You decide to measure these
data for a period of 10 consecutive working days, with the following results:

Table
Day Time 1 2 3 4 5 6 7 8 9 10
Minutes 39 29 43 52 39 44 40 31 44 35
To compute the mean (average) time, first compute the sum of all the data values, 39 + 29 + 43 + 52 + 39 + 44 + 40
+ 31 + 44 + 35, which are 396. Then, take this sum of 396 and divide by 10, the number of data values. The result,
39.6, is the mean time to get ready. Although the mean time to get ready is 39.6 minutes, not one individual day in
the sample actually had that value. In addition, the calculation of the mean is based on all the values in the set of
data. No other commonly used measure of central tendency possesses this characteristic.
CAUTION: WHEN TO USE THE ARITHMETIC MEAN
Because its computation is based on every value, the mean is greatly affected by any extreme value or values. When
there are extreme values, the mean presents a distorted representation of the data. Thus, the mean is not the best
measure of central tendency to use for describing or summarizing a set of data that has extreme values.
 Median
It is the point in the middle of the ordered sample. Half the sample values exceed it and half do not. It is used, not
surprisingly, to measure where the center of the sample lies, and hence where the center of the population from
which the sample was drawn might lie. The median of a set of data is that value that divides the data into two equal
halves. When the number of observations is even, say 2n, it is customary to define the median as the average of the
nth and (n+ 1) st rank ordered values.
The median is the value that splits a ranked set of data into two equal parts. If there are no ties, half the values will
be smaller than the median, and half will be larger. The median is not affected by any extreme values in a set of data.
Whenever an extreme value is present, the median is preferred instead of the mean in describing the central
tendency of a set of data.
To calculate the median from a set of data, you must first rank the data values from smallest to largest. Then, the
median is computed, as described next.
We can use Equation to compute the median by following one of two rules:
Rule 1: If there are an odd number of values in the data set, the median is the middle ranked value.
Rule 2: If there is an even number of values in the data set, then the median is the average of the two values in the
middle of the data set.
𝒏+𝟏
24
𝑴𝒆𝒅𝒊𝒂𝒏 = 𝒓𝒂𝒏𝒌𝒆𝒅 𝒗𝒂𝒍𝒖𝒆
𝟐
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Where n = the number of values

To compute the median for the sample of 10 times to get ready in the morning, you place the raw data in order as
follows:
Table
29 31 35 39 39 40 43 44 44 52
RANKS
1 2 3 4 5 6 7 8 9 10
Median=39.5
Using rule 2 for the even-sized sample of 10 days, the median corresponds to the (10 + 1)/2 = 5.5 ranked value,
halfway between the fifth-ranked value and the sixth ranked value. Because the fifth-ranked value is 39 and the sixth
ranked value is 40, the median is the average of 39 and 40, or 39.5. The median of 39.5 means that for half of the
days, the time to get ready is less than or equal to 39.5 minutes, and for half of the days, the time to get ready is
greater than or equal to 39.5 minutes.
 Mode
The mode of a sample is that observed value that occurs most frequently.
Measures of Dispersion (Spread)

A second important property that describes a set of numerical data is variation. Variation is the amount of
dispersion, or spread, in a set of data, be it a sample or a population. Three frequently used measures of variation
are the range, the variance, and the standard deviation
 Range
The range is the simplest measure of variation in a set of data. The range is equal to the largest value minus the
smallest value. The smallest sample value is called the minimum of the sample, and the largest sample value is called
the maximum. The distance between the sample minimum and maximum is called the range of the sample.The range
clearly is a measure of the spread of sample values. As such it is a fairly blunt instrument, for it takes no cognizance
of where or how the values between the minimum and maximum might be located.
Range = largest value – smallest value
Using the data pertaining to the time to get ready in the morning
Range = largest value – smallest value
Range = 52 – 29 = 23 minutes
This means that the largest difference between any two days in the time to get ready in the morning is 23
25
minutes.
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 Inter-quartile Range
Difference between third and first quartile (Q3 - Q1)

Quartiles divide the sample into four equal parts. The lower quartile has 25% of the sample values below it and 75%
above. The upper quartile has 25% of the sample values above it and 75% below. The middle quartile is, of course,
the median. The middle half of the sample lies between the upper and lower quartile. The distance between the
upper and lower quartile is called the inter-quartile range. Like the range, the inter-quartile range is a measure of
the spread of the sample. It measures variability or dispersion.
The Variance and the Standard Deviation

Although the range is a measure of the total spread, it does not consider how the values distribute around the mean.
Two commonly used measures of variation that take into account how all the values in the data are distributed
around the mean are the variance and the standard deviation. These statistics measure how the values fluctuate
around the mean.
A simple measure around the mean might just take the difference between each value and the mean, and then sum
these differences. However, if you did that, you would find that because the mean is the balance point in a set of
data, for every set of data, these differences would sum to zero. One measure of variation that would differ from
data set to data set would square the difference between each value and the mean and then sum these squared
differences. In statistics, this quantity is called a sum of squares (or SS).This sum of squares is then divided by the
number of observations minus 1 (for sample data) to get the sample variance. The square root of the sample variance
(s2) is the sample standard deviation (s). This statistic is the most widely used measure of variation.
Sample Variance and Sample Standard Deviation:

The standard deviation of a sample of numerical observations is a measure of the spread or range of the sample
values. It is derived from the distance of each point in the sample from the sample mean (positive distance to the
right, negative to the left). These distances are the deviations of the title - they are deviations from the sample mean.
If you sum the squared deviations, and then divide by one less than the sample size, you get what is known as the
sample variance. Typically this is denoted by ‘s2’. The sample variance is a useful measure in itself of the variability
in the sample values, but its units of measurement are the square of those of the sample values themselves. The
standard deviation of a sample is the (positive) square root of the sample variance, and is usually denoted by ‘s’. It
is a measurement on the same scale as that of the original sample values. The population standard deviation is
denoted by 
The standard deviation cannot be less than zero. If the standard deviation of a sample is zero, then all sample values
are the same. If the sample values are not all the same then they must exhibit some form of variability. How much
variability the sample values exhibit is encapsulated by the standard deviation. If the standard deviation is small,
then the sample values cluster close to the sample mean. If the standard deviation is large then the sample values
are widely dispersed. 26
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The steps for computing the variance and the standard deviation of a sample of data are
COMPUTING s2 AND s
To compute s2, the sample variance, do the following:
1. Compute the difference between each value and the mean.
2. Square each difference.
3. Add the squared differences.
4. Divide this total by n– 1.
To compute s, the sample standard deviation, take the square root of the variance.
Table 5 illustrates the computation of the variance and standard deviation using the steps for the time to get
ready in the morning data. You can see that the sum of the differences between the individual values and the
mean is equal to zero.
Table 5
Difference Between the X and

Time ( X ) Squared Difference Around the Mean
the Mean
39 - 0.6 0.36
29 - 10.6 112.36
43 3.4 11.56
52 12.4 153.76
39 - 0.6 0.36
44 4.4 19.36
40 0.4 0.16
31 - 8.6 73.96
44 4.4 19.36
35 - 4.6 21.16
Mean = 39.6 Sum of Differences = 0 Sum of Squared Differences = 412.4
You calculate the sample variance S2 by dividing the sum of the squared differences computed in step 3 (412.4)
by the sample size (10) minus 1:
𝐒𝐚𝐦𝐩𝐥𝐞 𝐕𝐚𝐫𝐢𝐚𝐧𝐜𝐞 (𝐬 𝟐 ) = 𝟒𝟏𝟐. 𝟒⁄𝟗 = 𝟒𝟓. 𝟖𝟐

27
Because the variance is in squared units (in squared minutes for these data), to compute the standard deviation,
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you take the squared root of the variance. Thus:
𝐒𝐚𝐦𝐩𝐥𝐞 𝐬𝐭𝐚𝐧𝐝𝐚𝐫𝐝 𝐝𝐞𝐯𝐢𝐚𝐭𝐢𝐨𝐧 (𝐬 ) = √𝟒𝟓. 𝟖𝟐 = 𝟔. 𝟕𝟕

As summarized, we can make the following statements about the range, variance, and standard deviation.

Characteristics of Range, Variance and Standard Deviation
 The more spread out or dispersed the data is, the larger will be the range, the variance, and the standard
deviation.
 The more concentrated or homogeneous the data is the smaller will be the range, the variance, and the
standard deviation.
 If the values are all the same (so that there is no variation in the data), the range, variance, and standard
deviation will all be zero.
 The range, variance, or standard deviation will always be greater than or equal to zero.
EQUATIONS FOR THE VARIANCE AND STANDARD DEVIATION

n
 X i  X 2
s 2  i 1
n 1
n
 X i  X 
2
s  i 1
n 1
Where
𝑋 = Sample Mean
n = Sample Size
Xi =ith Value of the Variable X
𝒏 𝟐
∑ (𝑿𝒊 − 𝑿) = summation of all the squared differences between the X values and 𝑋
𝒊=𝟏
n
 X i  X 
2
s 2  i 1
n 1
412.4
𝑠2 = = 45.82
10−1
28
𝑠 = √45.82 = 6.77
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GRAPHICAL PLOT
 Histogram:
A histogram (from the Greek histos meaning mast of the ship – vertical bars of the histogram) of a sample of
numerical values is a plot which involves rectangles which represent frequency of occurrence in a specific interval.
A Histogram can be used to assess the shape and spread of continuous sample data.
Histogram of Transaction Time
10
8
Frequency
0
30 40 50 60
Transaction Time
Worksheet: Transaction.mtw
 Scatter Plot
A graph of a set of data pairs (x, y) used to determine whether there is a statistical relationship between the variables
x and y. In this scatter plot, we explore the correlation between Weight Gained (Y) and Calories Consumed (X)
Scatterplot of Weight gained vs Calories Consumed

1200
1000
800
Weight gained
600
400
200
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0
Page
1500 2000 2500 3000 3500 4000

Calories Consumed
Worksheet: Calories Consumed.mtw

 Box Plot
Box Plot can be used to show the shape of the distribution, its central value, and variability.
The median for each dataset is indicated by the black center line, and the first and third quartiles are the edges of
the Green area, which is known as the inter-quartile range (IQR). The extreme values (within 1.5 times the inter-
quartile range from the upper or lower quartile) are the ends of the lines extending from the IQR. We may identify
outliers on boxplots by labeling observations that are at least 1.5 times the interquartile range (Q3 – Q1) from the
edge of the box and highlighting the data point as an asterisk. . These points represent potential outlier.
This graph shows the distribution of data by dividing the data into four groups with the same number of data
points in each group. The box contains the middle 50% of the data points and each of the two whiskers contain
25% of the data points.
It displays two common measures of the variability or spread in a data set.
• Range: It is represented on a box plot by the distance between the smallest value and the largest
value, including any outliers. If you ignore outliers, the range is illustrated by the distance between the
opposite ends of the whiskers
• Inter-quartile Range (IQR): The middle half of a data set falls within the inter-quartile range.
Did you know: Box plot was introduced by John Tukey in 1977
Boxplot of Transaction Time

70
60
Transaction Time
50
40
30
20
Figure
Worksheet: Transaction.mtw
30
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Random Variable and Probability Distributions
 A random variable is a variable whose value is determined by the outcome of a random experiment.
 A discrete random variable is one whose set of assumed values is countable (arises from counting). The
probability distribution of a discrete random variable is a discrete distribution. E.g. Binomial, Poisson
 A continuous random variable is one whose set of assumed values is uncountable (arises
from measurement.). The probability of a continuous random variable is a continuous distribution. E.g.
Normal
 Binomial distribution
Binomial distribution describes the possible number of times that a particular event will occur in a sequence of
observations. The event is coded binary; it may or may not occur. The binomial distribution is used when a researcher
is interested in the occurrence of an event, not in its magnitude. For instance, in a clinical trial, a patient may survive
or die. The researcher studies the number of survivors, and not how long the patient survives after treatment. The
binomial distribution is specified by the number of observations, n, and the probability of occurrence, which is
denoted by p.
Other situations in which binomial distributions arise are quality control, public opinion surveys, medical research,
and insurance problems
The following conditions have to be met for using a binomial distribution:
• The number of trials is fixed
• Each trial is independent
• Each trial has one of two outcomes: event or non-event
• The probability of an event is the same for each trial
Suppose a process produces 2% defective items. You are interested in knowing how likely is it to get 3 or more
defective items in a random sample of 25 items selected from the process. The number of defective items (X)
follows a binomial distribution with n = 25 and p = 0.02.
One of the properties of a binomial distribution is that when n is large and p

is close to 0.5, the binomial distribution can be approximated by the standard
normal distribution. For this graph, n = 100 and p = 0.5.
Figure
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 Poisson distribution
The Poisson Distribution was developed by the French mathematician Simeon Denis Poisson in 1837.The Poisson
distribution is used to model the number of events occurring within a given time interval. The Poisson distribution
arises when you count a number of events across time or over an area. You should think about the Poisson
distribution for any situation that involves counting events. Some examples are:
 the number of Emergency Department visits by an infant during the first year of life,
 The number of white blood cells found in a cubic centimetre of blood.
Sometimes, you will see the count represented as a rate, such as the number of deaths per year due to horse kicks,
or the number of defects per square yard.
 Four Assumptions
Information about how the data was generated can help Green Belt/Black Belt decide whether the Poisson
distribution fits. The Poisson distribution is based on four assumptions. We will use the term "interval" to refer to
either a time interval or an area, depending on the context of the problem.
 The probability of observing a single event over a small interval is approximately proportional to the size
of that interval.
 The probability of two events occurring in the same narrow interval is negligible.
 The probability of an event within a certain interval does not change over different intervals.
 The probability of an event in one interval is independent of the probability of an event in any other non-
overlapping interval.
The Poisson distribution is similar to the binomial distribution because they both model counts of events. However,
the Poisson distribution models a finite observation space with any integer number of events greater than or equal
to zero. The binomial distribution models a fixed number of discrete trials from 0 to n events.
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 Normal Distribution
The most widely used model for the distribution of a random variable is a normal distribution. Whenever a random
experiment is replicated, the random variable that equals the average (or total) result over the replicates tends to
have a normal distribution as the number of replicates becomes large. De Moivre presented this fundamental result,
known as the central limit theorem, in 1733. Unfortunately, his work was lost for some time, and Gauss
independently developed a normal distribution nearly 100 years later. Although De Moivre was later credited with
the derivation, a normal distribution is also referred to as a Gaussian distribution.
A Normal distribution is an important statistical data distribution pattern occurring in many natural phenomena,
such as height, blood pressure, lengths of objects produced by machines, etc. Certain data, when graphed as a
histogram (data on the horizontal axis, amount of data on the vertical axis), creates a bell-shaped curve known as
a normal curve, or normal distribution.
Normal distribution is symmetrical with a single central peak at the mean (average) of the data. The shape of the
curve is described as bell-shaped with the graph falling off evenly on either side of the mean. Fifty percent of the
distribution lies to the left of the mean and fifty percent lies to the right of the mean. The spread of a normal
distribution is controlled by the standard deviation. The smaller the standard deviation, more concentrated the
data. The mean and the median are the same in a normal distribution. In a normal standard distribution, mean is 0
and standard deviation is 1
For example, the heights of all adult males residing in the state of Punjab are approximately normally distributed.
Therefore, the heights of most men will be close to the mean height of 69 inches. A similar number of men will be
just taller and just shorter than 69 inches. Only a few will be much taller or much shorter.
The mean (μ) and the standard deviation (σ) are the two parameters that define the normal distribution. The mean
is the peak or center of the bell-shaped curve. The standard deviation determines the spread in the data.
Approximately, 68.27% of observations are within +/- 1 standard deviation of the mean; 95.46% are within +/- 2
standards deviations of the mean; and 99.73% are within +/- 3 standard deviations of the mean.
For the height of men in Punjab, the mean height is 69 inches and the standard deviation is 2.5 inches. For a
continuous distribution, like to normal curve, the area under the probability density function (PDF) gives the
probability of occurrence of an event.
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Page

Approximately 68.27% of men in Punjab are between 66.5 (m
- 1s) and 71.5 (m + 1s) inches tall.
Figure
Approximately 95.46% of men in Punjab are between 64 (m -

2s) and 74 (m + 2s) inches tall.
Figure
Approximately 99.73% of men in Punjab are between 61.5 (m

- 3s) and 76.5 (m + 3s) inches tall.
Figure
A useful link for calculating probabilities: http://www.graphpad.com/quickcalcs/probability1.cfm
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Case Study- Transaction time
Two teams(S and B) completed 1000 transactions in a month. We recorded the
transaction time of 100 randomly selected transactions per team. The service level
agreement states that transaction should be completed within 30 minutes. (Data available
in Transaction. mtw)
 If two teams have similar average transaction time against a promised transaction
time of 30 minutes, would you be correct in saying that they are equally good?
 To comment on which one is better, would you like to consider variation in
transaction time? If yes, how would you like to measure variation?
 What’s the probability of failure?
 Consider 20000 transactions processed by each vendor every year, and any late
transaction attracts $150 penalty, what’s the estimated loss (in lieu of penalties) for each
team
 What are the graphical plots that you will prefer to display this data to your team
and stakeholders?
Variable Count Mean StDev Min Q1 Median Q3 Max Range IQR
Team B 100 19.48 3.689 11 17 20 22 27 16 5
Team S 100 19.46 5.518 5 16 20 23 29 24 7
 Mean:____________________________________________________
 Median:___________________________________________________
 Standard Deviation:_________________________________________ 35
 Range: ___________________________________________________
Page
 Inter-Quartile Range:________________________________________

Stat>Basic Statistics>Display Descriptive Statistics
Graph>Box Plot
36
Page

Graph>Probability Distribution Plot
37
Page

Chapter
4
Managing Six Sigma Projects
Managing Projects
Six Sigma is different from other quality or process improvement methodologies- ‘IT DEMANDS RESULTS’. These
results are delivered by PROJECTS that are tightly linked to customer demands and enterprise strategy.The efficacy
of Six Sigma projects is greatly improved by combining project management and business process improvement
practices.
What is a Project?
A project is a temporary endeavor undertaken to create a unique product, service, or result. The temporary nature
of project indicates a definite beginning and end. The end is reached when the project's objectives have been
achieved or when the project is terminated because its objectives will not or cannot be met, or when the need for
the project no longer exists. Temporary doesn't necessarily mean short in duration. Temporary doesn't generally
apply to the product, service, or result created by the project; most projects are undertaken to create a lasting
outcome.
The logical process flow
A logical process flow as explained by Thomas Pyzdek is as follows:
1. Define the project’s goals and deliverables.
a. If these are not related to the organisation’s strategic goals and objectives, stop. The project is
not a Six Sigma project. This does not necessarily mean that it isn’t a “good” project or that the
project shouldn’t be done. There are many worthwhile and important projects that are not Six
Sigma projects.
2. Define the current process.
3. Analyze the measurement systems.
4. Measure the current process and analyze the data using exploratory and descriptive statistical methods.
a. If the current process meets the goals of the project, establish control systems and stop, else
38
5. Audit the current process and correct any deficiencies found.
a. If the corrected process meets the goals of the project, establish control systems and stop, else
Page
6. Perform a process capability study using SPC.

7. Identify and correct special causes of variation.
a. If the controlled process meets the goals of the project, establish control systems and stop, else

8. Optimize the current process by applying statistically designed experiments.
a. If the optimized process meets the goals of the project, establish control systems and stop, else
9. Employ breakthrough strategy to develop and implement an entirely new process that meets the
project’s goals.
10. Establish control and continuous improvement systems and stop.
Project Plan
 Develop the Project Charter
Project charters (sometimes called project scope statements) should be prepared for each project and subproject.
The Project Charter includes the project justification, the major deliverables, and the project objectives. It forms the
basis of future project decisions, including the decision of when the project or subproject is complete. The Project
Charter is used to communicate with stakeholders and to allow scope management as the project moves forward.
The Project Charter is a written document issued by the Project Sponsor. The Project Charter gives the project team
authority to use organisational resources for project activities.
 Conduct a Feasibility Analysis- Is This a Valid Project?
Before launching a significant effort to solve a business problem, be sure that it is the correct problem and not just
a symptom. Is the “defect” Green Belt/Black Belt are trying to eliminate something the customer cares about or even
notices? Is the design requirement really essential, or can engineering relax the requirement? Is the performance
metric really a key business driver, or is it arbitrary? Conduct a project validation analysis and discuss it with the
stakeholders
 Project Metrics
At this point Green Belt/Black Belt know who the project’s customers are and what they expect in the way of
project deliverables. Now Green Belt/Black Belt must determine precisely how Green Belt/Black Belt will
measure progress toward achieving the project’s goals.
 What Is the Total Budget for This Project?

Projects consume resources, therefore to accurately measure project success, it is necessary to keep track of
how these resources are used. The total project budget sets an upper limit on the resources this project will be
allowed to consume. Knowing this value, at least approximately, is vital for resource planning.
 How Will I Measure Project Success?

Green Belt/Black Belt should have one or more metrics for each project deliverable.
 Metrics should be selected to keep the project focused on its goals and objectives.
 Metrics should detect project slippage soon enough to allow corrective action to avert damage.
 Metrics should be based on customer or Sponsor requirements.
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 Financial Benefits
Preliminary estimates of benefits were made previously during the initial planning. However, the data obtained by
the team will allow the initial estimates to be made more precisely at this time. Whenever possible, “characteristics”
should be expressed in the language of management: dollars. One needn’t strive for to-the-penny accuracy; a rough
figure is usually sufficient. It is recommended that the finance and accounting department develop dollar estimates;
however, in any case it is important that the estimates at least be accepted (in writing) by the accounting and finance
department as reasonable. This number can be used to compute a return on investment (ROI) for the project.
 How Will I Monitor Satisfaction with Project Progress?
Six Sigma projects have a significant impact on people while they are being conducted. It is important that the perspectives
of all interested parties be periodically monitored to ensure that the project is meeting their expectations and not becoming
too disruptive. The Green Belt/Black Belt should develop a means for obtaining this information, analyzing it, and taking
action when the results indicate a need. Data collection should be formal and documented. Relying on “gut feeling” is not
enough.
Means of monitoring includes but not limited to Personal interviews, Focus groups, Surveys, Meetings, Comment cards.
Green Belt/Black Belt may also choose to use Stakeholder analysis and Force Field analysis to proactively assess change
management challenges that lie ahead.
 Work Breakdown Structures (WBS):
The creation of work breakdown structures involves a process for defining the final and intermediate products of a project
and their interrelationships. Defining project activities is complex. It is accomplished by performing a series of
decompositions, followed by a series of aggregations. For example, a software project to develop an SPC software
application would disaggregate the customer requirements into very specific engineering requirements. The customer
requirement that the product create 𝑥 charts would be decomposed into engineering requirements such as subroutines
for computing subgroup means and ranges, plotting data points, drawing lines, etc. Re-aggregation would involve, for
example, linking the various modules to produce an xbar chart and display it on the screen.
 Creating the WBS
The project deliverables expected by the project’s sponsors were initially defined in the Project Charter. For most Six Sigma
projects, major project deliverables are so complex as to be unmanageable. Unless they are broken into components, it
isn’t possible to obtain accurate cost and duration estimates for each deliverable. WBS creation is the process of identifying
manageable components or sub-products for each major deliverable.
 Project Schedule Development
Project schedules are developed to ensure that all activities are completed, reintegrated, and tested on or before
the project due date. The output of the scheduling activity is a time chart (schedule) showing the start and finish
times for each activity as well as its relationship to other activities in the project and responsibility for completing
the activity. The schedule must identify activities that are critical in the sense that they must be completed on time
to keep the project on schedule.
40
The information obtained in preparing the schedule can be used to improve it. Activities that the analysis indicates
Page
to be critical are prime candidates for improvement. Pareto analysis can be used to identify those critical elements
that are most likely to lead to significant improvement in overall project completion time. Cost data can be used to
supplement the time data and the combined time/cost information can be analysed using Pareto analysis

 Project Deadline
 What is the latest completion date that allows the project to meet its objective?
 What are the penalties for missing this date? Things to consider are lost market share, contract penalties,
fines, lost revenues, etc.
 Activity Definition
Once the WBS is complete, it can be used to prepare a list of the activities (tasks) necessary to complete the project.
Activities don’t simply complete themselves. The resources, time, and personnel necessary to complete the activities
must be determined. A common problem to guard against is scope creep. As activities are developed, be certain that
they do not go beyond the project’s original scope. Equally common is the problem of scope drift. In these cases, the
project focus gradually moves away from its original Charter. Since the activities are the project, this is a good place
to carefully review the scope statement in the Project Charter to ensure that the project remains focused on its goals
and objectives.
 Activity Dependencies
Some project activities depend on others: sometimes a given activity may not begin until another activity is complete. To
sequence activities so they happen at the right time, Green Belt/Black Belt must link dependent activities and specify the
type of dependency. The linkage is determined by the nature of the dependency. Activities are linked by defining the
dependency between their finish and start dates
 Estimating Activity Duration
In addition to knowing the dependencies, to schedule the project Green Belt/Black Belt also need estimates of how
long each activity might take. This information will be used by senior management to schedule projects for the
enterprise and by the project manager to assign resources, to determine when intervention is required, and for
various other purposes.
 Identify Human Resources and other resources
Needed to complete the Project - All resources should be identified, approved, and procured. Green Belt/Black Belt
should know who is to be on your team and what equipment and materials Green Belt/Black Belt are acquiring to
achieve project goals. In today’s business climate, it’s rare for people to be assigned to one project from start to
finish with no additional responsibilities outside the scope of a single project. Sharing resources with other areas of
the organisation or among several projects requires careful resource management to ensure that the resource will
be available to your project when it is needed.
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 Visualize Project plan using Gantt Charts
A Gantt chart shows the relationships among the project tasks, along with time estimates. The horizontal axis of a
Gantt chart shows units of time (days, weeks, months, etc.). The vertical axis shows the activities to be completed.
Bars show the estimated start time and duration of the various activities.
Figure: Visualization of Project plan using Gantt chart
 Analyse Network Diagrams
A project network diagram shows both the project logic and the project’s critical path activities, i.e., those
activities that, if not completed on schedule, will cause the project to miss its due date. Although useful, Gantt
charts and their derivatives provide limited project schedule analysis capabilities. The successful management
of large-scale projects requires more rigorous planning, scheduling, and coordinating of numerous, interrelated
activities. To aid in these tasks, formal procedures based on the use of networks and network techniques were
developed beginning in the late 1950s. The most prominent of these procedures have been PERT (Program
Evaluation and Review Technique) and CPM (Critical Path Method).
Critical Path Method systems are used to:
 Aid in planning and controlling projects
 Determine the feasibility of meeting specified deadlines
 Identify the most likely bottlenecks in a project
 Evaluate the effects of changes in the project requirements or schedule

42
 Evaluate the effects of deviating from schedule

Page
 Evaluate the effect of diverting resources from the project or redirecting additional resources to the project.
Project scheduling by CPM consists of four basic phases: planning, scheduling, improvement, and controlling.

The planning phase involves breaking the project into distinct activities. The time estimates for these activities are then
determined and a network (or arrow) diagram is constructed, with each activity being represented by an arrow.
The ultimate objective of the scheduling phase is to construct a time chart showing the start and finish times for each
activity as well as its relationship to other activities in the project. The schedule must identify activities that are critical in
the sense that they must be completed on time to keep the project on schedule.
It is vital not to merely accept the schedule as given. The information obtained in preparing the schedule can be used to
improve it. Activities that the analysis indicates to be critical are candidates for improvement. Pareto analysis can be used
to identify those critical elements that are most likely to lead to significant improvement in overall project completion time.
Cost data can be used to supplement the time data. The combined time/cost information can be analyzed using Pareto
analysis.
The final phase in CPM project management is project control. This includes the use of the network diagram and time chart
for making periodic progress assessments. CPM network diagrams can be created by a computer program or constructed
manually.
The Critical Path Method (CPM) calculates the longest path in a project so that the project manager can focus on the
activities that are on the critical path and get them completed on time.
Figure: Example Critical Path Method (CPM) 43

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Managing Teams
Stages of a Team - The four stages that all teams go through are shown below. In each phase, the project leader
has to use different techniques to push the team along.
•Identifying and informing members

•Everyone is excited at the new responsibilities
Form •Use Project Charter to establish a common set of expectations for all team members
•Teams start to become disillusioned. Why are we here, is the goal achievable?
•Identifying resistors, counselling to reduce resistance.
•Help people with the new roles & responsibilities
Storm •Have a different person take meeting minutes, lead team meetings etc
•Communication of norms (rules), building up of relationships amongst members.

•Productivity of team is increasing
Norm •Help team push to the next stage
•Contribution from the members- Ideas, innovation, creation.

•All members contribute to the fullest.
•Teams should reach this stage quickest for the best results.
Perform •Motivate team members by recognition, financial rewards, quick-win opportunities.
Some of the problems with teams are:

 Groupthink – which is the unquestioned acceptance of teams’ decisions
 Feuding – fighting between different team members
 Floundering – teams that take forever to reach a decision
 Rushing – teams that want to skip all steps and finish the project soon
44
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Managing Change
We will discuss three change management tools: Force Field analysis, Stakeholder analysis, and Resistance
analysis.
Force Field Analysis

Force Field Analysis is a useful technique for looking at all the forces for and against a decision. It helps in identifying
the restrainers and drivers to change. In effect, it is a specialized method of weighing pros and cons. By carrying out
the analysis Green Belt/Black Belt can plan to strengthen the forces supporting a decision, and reduce the impact of
opposition to it. Figure below shows an example of Force Field analysis. In this example, there are 4 forces for the
change and 2 forces against the change. This indicates that there are more forces for the change. Can Green
Belt/Black Belt think of deploying some action items to further increase the forces for change?
Figure: Sample Force Field Analysis
Stakeholder Analysis
Stakeholder Analysis is a technique that identifies individuals or groups affected by and capable of influencing the
change process. Assessment of stakeholders and Stakeholder issues and viewpoints are necessary to identify the
range of interests that need to be taken into consideration in planning change and to develop the vision and change
process in a way that generates the greatest support. The following parameters are used to develop the
segmentation of the stakeholders:
 Levels of Influence: High, Medium, Low

 Level of Impact: High, Medium, Low
 Minimum Support Required: Champion, Supporter, Neutral
 Current Position: Champion, Supporter, Neutral, Concerned, Critic, Unknown
 Stakeholder Action Plan
 The plan should outline the perceptions and positions of each Stakeholder group, including means
of involving them in the change process and securing their commitment
 Define how Green Belt/Black Belt intend to leverage the positive attitudes of enthusiastic
stakeholders and those who “own” resources supportive of change
 State how Green Belt/Black Belt plan to minimize risks, including the negative impact of those who
will oppose the change

45
Clearly communicate change actions, their benefits and desired Stakeholder roles during the change
process
Page
 This plan should be updated regularly and should continue throughout the life of the project.

Resistance Analysis
Technical Resistance: Political Resistance:
Stakeholders believe Six Sigma produces feelings of Stakeholders see 6 Sigma as a loss of power and
inadequacy or stupidity on statistical and process control
knowledge
Strategy: Address issues of “perceived loss” straight
Strategy: Focus on high level concepts to build on. Look for Champions to build consensus for 6
competencies. Then add more statistical theorems as Sigma and its impact on change
knowledge base broadens
Organisational Resistance: Individual Resistance:
Stakeholders experience issues of pride, ego and loss Stakeholders experience fear and emotional
of ownership of change initiatives. paralysis as a result of high stress
Strategy: Look for ways to reduce resistance by Strategy: Decrease the fear by increased
engaging stakeholders in the process involvement, information and education
John Kotter’s 8 Step Change Management Plan

John Kotter considers ‘lack of communication’ as one of the most common reasons for project failure. According to
John Kotter, the following eight steps can be followed to enable change within an organisation.
 Step 1: Increase Urgency

 Step 2: Build a Guiding Team
 Step 3: Get the Vision Right
 Step 4: Communicate for Buy-In
 Step 5: Empower Action
 Step 6: Create Short-Term Wins
 Step 7: Don’t Let Up
 Step 8: Make Change Stick
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Chapter
5
Define
Define Overview
A Lean Six Sigma project starts out as a practical problem that is adversely impacting the business and ultimately ends
up as a practical solution that improves business performance. Projects state performance in quantifiable terms that
define expectations related to desired levels of performance and timeline.
The primary purpose of the define phase is to ensure the team is focusing on the right thing. The Define phase seeks
to answer the question, "What is important?" That is, what is important for the business? The team should work on
something that will impact the Big Y's - the key metrics of the business. And if Six Sigma is not driven from the top, a
Green/Black Belt may not see the big picture and the selection of a project may not address something of criticality
to the organisation.
The objective is to identify and/or validate the improvement opportunity, develop the business processes, define
Critical Customer Requirements, and prepare an effective project team. The deliverables from the Define phase
include:
 Identification of CTQ (Critical to Quality)/Output Measure

 Project Charter
 High Level Process Map
The three steps that enable us to do so are:
Step 1 • Generate Project Ideas
Step 2 • Select Project
Step 3 • Finalize Project Charter and High level process map

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Step 1- Generate Project Ideas
The Key Performance Indicators (KPIs) that are tracked by businesses to measure its progress towards strategic
objectives are usually displayed together on a scorecard. This scorecard is reviewed by management on at least a
monthly basis to identify problem areas and take corrective actions as needed. There are four primary areas within a
scorecard: Financial, Customer, Internal Business Processes, and Learning & Growth. Some indicators are lagging
indicators in the sense that they talk about what has already occurred. An example of a lagging indicator is revenue
in the last quarter. It can be an important indicator for the business to know about but it does not tell the full story
of what is going to happen in the future. Hence, scorecards must also contain indicators that predict future
performance. These indicators are called leading indicators. For example, if we know that all employees are trained
20 hours this year, this could be a leading indicator of future employee performance. Following are some traditional
KPIs that businesses track within their scorecard:
Table
Financial Indicators Customer Indicators

 Revenue (amount of money collected by  Customer Returns (Amount of $$ returned
selling products or services) by customers – an indicator of how
 Cost of Goods Sold (amount of money satisfied customers are with
expended to produce products or services) products/services)
 Gross Income (difference between  Warranty (More the money spent on
Revenue & Cost of Goods Sold) warranty, less satisfied are the customers)
 Net Income (profitability of the company  Net Promoter Score (NPS – will our
after subtracting all expenses) customers recommend us to others based
 Percentage of Industry Sales (PINS – on survey results)
indicator of market share)  On time delivery (% of products/services
 Earnings per Share delivered on time)
 Cash Flow (Amount of money earned vs.  Number of Complaints Received
spent during the indicated period)  Customer Churn
Internal Business Process Learning & Growth

 Efficiency (Productivity indicator for key  Training duration per Employee
resources)  Labour Productivity
 New Product Introduction Time (Time  Staff Turnover
taken for development of new products)  Pace of Promotion
 Net Revenue by Product (Indicator of which  Six Sigma or Lean Benefits
products contribute to revenue

48
Material or Production Costs
 Quality Indicators (Re-work)
Page
 Production Cycle Time

Project ideas may be generated from (a) Voice of Customer, (b) Voice of Business and (c) Cost of Poor Quality. The
common sources of such Project ideas are
Table
Customer Dashboards Surveys and Scorecards

Internal/External Audits Financial Analysis of Business Units/ Center
Benchmarking Data Focus Groups
VOC, VOB and COPQ data help us develop project themes which can help us understand the Big Y (output).
Voice of the Customer (VOC) is obtained from the downstream customer, the direct recipient of the process/service.
This can be internal (Process Partner) to the company or an external customer.
 When obtained from an internal Process Partner, it tends to be very specific, but might need to be
validated with information from the ultimate external customer (as external requirements flow
backwards through the broader process steps)
 When obtained from an ultimate external customer, the needs must often be translated into something
meaningful for the process/service developer
“Voice of the Customer” (VOC) is the expression of customer needs and desires
 May be specific – “I need delivery on Tuesday”
 May be ambiguous – “Deliver faster”
It can be compared to internal data (“Voice of the Process”) to assess our current process performance or process
capability
Voice of the Business (VOB) is often best obtained from the Process Owner
 Tends to be very specific. Example: Lead time of 2 hrs, labour efficiency of 85% of standard.
 These are usually in reference to the health of the organization
 Examples: Process Cost Efficiency, Repair Costs, etc. (Derived primarily from the business - VOB)
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The different categories of performance metrics can be
Quality
•Product or Service Features, Attributes, Dimensions, Characteristics Relating to the Function of

the Product or Service, Reliability, Availability, Taste, Effectiveness - Also Freedom from Defects,
Rework or Scrap (Derived Primarily from the Customer - VOC)
Cost
•Process Cost Efficiency, Price to Consumer (Initial Plus Life Cycle), Repair Costs, Purchase Price,
Financing Terms, Depreciation, Residual Value (Derived Primarily from the Business – VOB)
Speed
•Lead Times, Delivery Times, Turnaround Times, Setup Times, Cycle Times, Delays (Derived
equally from the Customer or the Business– VOC/VOB)
Service and Safety
•Service Requirements, After-Purchase Reliability, Parts Availability, Service, Warranties,

Maintainability, Customer-Required Maintenance, Product Liability, Product/Service Safety
Corporate Social Responsibility
•Ethical Business Conduct, Environmental Impact, Business Risk Management, Regulatory and
Legal Compliance
Some common Project themes are

Table
Product returns or High Warranty Cost Customer Complaints

Accounts receivables or Invoicing issues Cycle time, Lead time
Yield Improvement, Re-work or Scrap
Defective Services or Products
Reduction
Capacity Constraints, Inventory Resource Utilisation
Post the team that has the pertinent VOC, VOB and COPQ data, they then need to translate this information into
Critical Customer Requirements (CCR's). A CCR is a specific characteristic of the product or service desired by and
important to the customer. The CCR should be measurable with a target and an allowable range. The team would
take all the data, identify the key common customer issues, and then define the associated CCR's. The Critical
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Customer Requirements (CCR's) often are at too high a level to be directly useful to the team. So the next step is to
take the applicable CCR's and translate them into Critical to Quality (CTQ) measures. A CTQ is a measure on the output
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of the process. It is a measure that is important to meeting the defined CCR's.

 A CTQ is a Product or Service Characteristic that satisfies a Customer Requirement or Process
Requirement
 There are measures which relate to the three important parameters of product or service output –
quality, cost and delivery.
 Three important measures -
 Critical to Quality
 Critical to Cost
 Critical to Delivery
 All the three above are referred in some companies as CTQ because cost and delivery are considered part
of quality. Some companies consider the three separately.
Table
Big Y Reduce Operational Expenditure

Voice of Business Collection of accounts receivable is taking too long
CCR Accounts Receivable to be closed within 60 days
CTQ Time to receive payments
Of course there are multiple alternative methods to drill down to an appropriate CTQ. Project team may also choose
to drill down to the Project CTQ from the Big Y.
Few examples of CTQs
Warranty Cost % errors in Patient Registration Form
Average Handling Time Claims Processing Cycle time
Waiting time Idle time
Defects % Defective %
Daily Sales Outstanding % Incomplete Applications
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Exercise- Let’s identify the CTQs
VOC/VOB CTQ
“I want this product delivered faster”
The multiplex was not completely occupied
“We need faster answers to our queries”
Not a lot of people are visiting the mall
Insurance document was incorrectly filled
“I want the pizza delivered hot”
“Last year, we spent a lot of money to fix

products in warranty”
“I had to wait for so long to get an operator
to answer my query”
“We aren’t able to process transactions
within the time promised to the customer”
“Loan application forms submitted by loan
officers have too many errors”
Exercise - Let’s list a few CTQs of your workplace
_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
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_________________________________________
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_________________________________________

Kano Model Analysis
The Kano Model of Customer (Consumer) Satisfaction classifies product attributes based on how they are perceived
by customers and their effect on customer satisfaction. These classifications are useful for guiding design decisions.
Project activities in which the Kano Model is useful
o Identifying customer needs
o Determining functional requirements
o Concept development
o Analyzing competitive products
Other tools those are useful in conjunction with the Kano Model
o Eliciting Customer Input
o Prioritization Matrices
o Quality Function Deployment
Introduction
The Kano Model of Customer satisfaction divides product attributes into three categories: threshold, performance,
and excitement. A competitive product meets basic attributes, maximizes performance attributes, and includes as
many “excitement” attributes as possible at a cost the market can bear.
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Figure: Kano Model

 Threshold Attributes
Threshold (or basic) attributes are the expected attributes or “musts” of a product, and do not provide an opportunity
for product differentiation. Increasing the performance of these attributes provides diminishing returns in terms of
customer satisfaction, however the absence or poor performance of these attributes results in extreme customer
dissatisfaction. An example of a threshold attribute would be brakes on a car.
Threshold attributes are not typically captured in QFDs (Quality Function Deployment) or other evaluation tools as
products are not rated on the degree to which a threshold attribute is met, the attribute is either satisfied or not.
Attributes that must be present in order for the product to be successful, can be viewed as a 'price of entry.' However,
the customer will remain neutral toward the product even with improved execution of these aspects.
o Bank teller will be able to cash a check
o Nurses will be able to take a patient's temperature
o Mechanic will be able to change a tire
o Keyboards will have a space bar
Customers rarely mention this category, unless they have had a recent negative experience, because it is assumed to
be in place.
 Performance Attributes
Performance attributes are those for which more is generally better, and will improve customer satisfaction.
Conversely, an absent or weak performance attribute reduces customer satisfaction. Of the needs customers
verbalize, most will fall into the category of performance attributes. These attributes will form the weighted needs
against which product concepts will be evaluated.
The price for which customer is willing to pay for a product is closely tied to performance attributes. For example,
customers would be willing to pay more for a car that provides them with better fuel economy.
 Excitement Attributes
Excitement attributes are unspoken and unexpected by customers but can result in high levels of customer
satisfaction, however their absence does not lead to dissatisfaction. Excitement attributes often satisfy latent needs
– real needs of which customers are currently unaware. In a competitive marketplace where manufacturers’ products
provide similar performance, providing excitement attributes that address “unknown needs” can provide a
competitive advantage. Although they have followed the typical evolution to a performance than a threshold
attribute, cup holders were initially excitement attributes.
Increased functionality or quality of execution will result in increased customer satisfaction. Conversely, decreased
functionality results in greater dissatisfaction. Product price is often related to these attributes. Examples are:
o The shortest waiting time possible in the bank drive-up window
o The shortest waiting time possible for the nurse to answer the patient call button
o The auto mechanic performing the services on the car as efficiently and inexpensively as possible
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o Tech support being able to help with a problem as quickly and thoroughly as possible
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 Other Attributes: Products often have attributes that cannot be classified according to the Kano Model.
These attributes are often of little or no consequence to the customer, and do not factor into consumer
decisions. An example of this type of attribute is a plate listing part numbers can be found under the hood on
many vehicles for use by repairpersons.

Customers get great satisfaction from a feature - and are willing to pay a price premium. However, satisfaction will
not decrease (below neutral) if the product lacks the feature. These features are often unexpected by customers and
they can be difficult to establish as needs up front. Sometimes called unknown or latent needs.
o The drive-up bank teller greets you by name; remembers you from a previous visit
o The nurse brings you a book that you mentioned you enjoy
o The mechanic cleans and vacuums the car making it better than when you brought it in
o The tech support individual emails you a $5 coupon to compensate for the issue
Customers rarely provide VOC on this category because they don't know to expect it. Innovation is needed to provide
this level of quality consistently.
Application of the Kano Model Analysis
 A relatively simple approach to applying the Kano Model Analysis is to ask customers two simple questions
for each attribute:
o Rate your satisfaction if the product has this attribute?; and
o Rate your satisfaction if the product did not have this attribute?
Customers should be asked to answer with one of the following responses:

A. Satisfied
B. Neutral (It's normally that way)
C. Dissatisfied
D. Don’t care
 Basic attributes generally receive the “Neutral” response to Question 1 and the “Dissatisfied” response to
Question 2. Exclusion of these attributes in the product has the potential to severely impact the success of
the product in the marketplace.
 Eliminate or include performance or excitement attributes that their presence or absence respectively leads
to customer dissatisfaction. This often requires a trade-off analysis against cost. As Customers frequently rate
most attributes or functionality as important, asking the question “How much extra would you be willing to
pay for this attribute or more of this attribute?” will aid in trade-off decisions, especially for performance
attributes. Prioritization matrices can be useful in determining which excitement attributes would provide
the greatest returns on Customer satisfaction.
 Consideration should be given to attributes receiving a “Don’t care” response as they will not increase
customer satisfaction nor motivate the customer to pay an increased price for the product. However, do not
immediately dismiss these attributes if they play a critical role to the product functionality or are necessary
for other reasons than to satisfy the customer.
The information obtained from the Kano Model Analysis, specifically regarding performance and excitement
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attributes, provides valuable input for the Quality Function Deployment process.
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Quality Function Deployment
In a few words: The voice of the customer translated into the voice of the engineer
To design a product well, a design team needs to know what it is they are designing, and what the end-users will
expect from it. Quality Function Deployment is a systematic approach to design based on a close awareness of
customer desires, coupled with the integration of corporate functional groups. It consists in translating customer
desires (for example, the ease of writing with a pen) into design characteristics (pen ink viscosity, pressure on ball-
point) for each stage of the product development (Rosenthal, 1992).
Quality function deployment (QFD) is “a system to assure that customer needs drive the product design and
production process”. Ultimately the goal of QFD is to translate often subjective quality criteria into objective ones
that can be quantified and measured and which can then be used to design and manufacture the product. It is a
complimentary method for determining how and where priorities are to be assigned in product development. The
intent is to employ objective procedures in increasing detail throughout the development of the product.
Quality Function Deployment was developed by Yoji Akao in Japan in 1966. By 1972 the power of the approach had
been well demonstrated at the Mitsubishi Heavy Industries Kobe Shipyard (Sullivan, 1986) and in 1978 the first book
on the subject was published in Japanese and then later translated into English in 1994 (Mizuno and Akao, 1994).
In Akao’s words, QFD "is a method for developing a design quality aimed at satisfying the consumer and then
translating the consumer's demand into design targets and major quality assurance points to be used throughout the
production phase. ... [QFD] is a way to assure the design quality while the product is still in the design stage." As a
very important side benefit he points out that, when appropriately applied, QFD has demonstrated the reduction of
development time by one-half to one-third. (Akao, 1990)QFD is a cross-functional planning tool which is used to
ensure that the voice of the customer is deployed throughout the product planning and design stages. QFD is used
to encourage breakthrough thinking of new concepts and technology. Its use facilitates the process of concurrent
engineering and encourages teamwork to work towards a common goal of ensuring customer satisfaction.
The basic concept of QFD is to translate the requirements of the stakeholders into product design or engineering
characteristics, and subsequently into process speciﬁcations and eventually into production requirements. It is a
method that structures the translation of stakeholders’ requirements into technical speciﬁcations which are mainly
understood by engineers.
Every translation involves a matrix. Through a series of interactive matrices, QFD can be employed to address almost
any business situation requiring decisions involving a multitude of criteria, requirements or demands. This stems from
QFD inherently employing and orchestrating many of the Total Quality Management tools and processes in a rigorous
and strategic fashion. When used in the evaluation phase of a project, QFD can assure that all relevant issues have
been addressed and can provide a new basis for prioritizing projects.
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The 3 main goals in implementing QFD are:
 Prioritize spoken and unspoken customer wants and needs.
 Translate these needs into technical characteristics and specifications.
 Build and deliver a quality product or service by focusing everybody toward customer satisfaction.
Since its introduction, Quality Function Deployment has helped to transform the way many companies:
 Plan new products
 Design product requirements
 Determine process characteristics
 Control the manufacturing process
 Document already existing product specifications
Application of QFD in various fields:

 How a process/technique can become environmentally friendly, high quality products are still maintained
and technologies are available to curb the process emissions. Such as environmental design, sustainable
design, environmentally-conscious processes or products, clean technologies, and green products or systems.
 QFD can be effectively used are regulatory compliance, emission reduction, pollution and loss prevention
programmes, construction or operating permit acquisition, and equipment procurement (equipment leaks).
The House of Quality

A house of quality (HOQ) involves the collection and analysis of the “voice of the customer” which includes the
customer needs for a product, customers’ perceptions about the relative importance of these needs and the relative
performance of the producing company and its main competitors on the needs. It also requires the generation and
analysis of the “voice of the technician” which includes the technical measures converted from the customer needs,
technicians’ evaluations of the relationship between each customer need and each technical measure, and the
performance of the relevant companies in terms of these technical measures.
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Figure: Quality Function Deployment Template
The HOQ Elements

A typical HOQ contains some of the following elements or concepts:
 “a”- Customer needs (WHATs)
This is the generally the first portion of the House of Quality (HOQ) matrix to be completed and also the most
important. It documents a structured list of a product’s customer requirements described in their own words (the
voice of the customer). These are the requirements of customers for the product expressed in the customer’s
language. The team then gathers information from customers on the requirements they have for the product or
service. The information gathered through conversations with the customer to describe their needs and problems. In
order to organize and evaluate this data, the team uses simple quality tools like Affinity diagrams and Tree diagrams.
The completed Affinity Diagram can then be used as the basis of a Tree Diagram. This is constructed from the top
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down with each level being considered in turn for errors and omissions. The result is a family tree type hierarchy of
customer needs. If there are many customer needs, grouping them into meaningful hierarchies or categories is
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necessary for easy understanding and analysis. This structure is then documented in the customer requirement
portion of the HOQ matrix.

 “b”- Planning Matrix
This matrix contains the correlation between each pair of customer needs (WHATs) through empirical comparisons.
The information is provided by customers and usually is difficult to obtain since a lot of pairwise comparisons are
needed. The purpose of completing this correlation matrix is for the company to identify where trade-off decisions
and further research may be required. Firstly it quantifies the customer’s requirement priorities and their perceptions
of the performance of existing products. Secondly it allows these priorities to be adjusted based on the issues that
concern the design team.
o Importance Weighting
The first and most important measure in this section is the requirement Importance Weighting. This figure quantifies
the relative importance of each of the customer requirements (described in the left hand portion of the HOQ matrix)
from the customer’s own perspective. This measure is often shown in a column alongside the customer requirement
descriptions in the left section of the HOQ matrix.
A questionnaire is used to gather these importance weightings. In this a customer is asked to give importance for
each documented requirement. On a scale from 1 - 5, customers then rate the importance of each requirement. A
better but more involved approach is to use the Analytical Hierarchy Process (AHP). This also utilizes a questionnaire
but offers the customer pairings of requirement to consider. They choose the most important from this pair. These
results are then interpreted into numerical weightings using a matrix.
The other measures which are determined by the design team can also be included in the planning matrix. These can
include:
o Planned satisfaction Rating
The planned Satisfaction Rating quantifies the design team’s desired performance of the envisaged product in
satisfying each requirement.
o Improvement Factor
It can be then calculated by subtracting the performance score of the company’s existing product from its planned
performance score i.e. the number of improvement points. This difference is multiplied by an improvement
increment (e.g. 0.2) and this is added to 1 to give the improvement factor.
o Sales-point
A sales-point is a kind of possibility which will give your company a unique business position. This measure can be
used to a weight to those requirements which can be utilized to market the product (Usually between 1 and 1.5). A
“strong” sales point is reserved for important WHATs where each comparing company is rated poorly. A “moderate”
sales point means the importance rating or competitive opportunity is not so great. And a “no” sales point means no
business opportunity. Numerically, 1.5, 1.25 and 1 are assigned to strong, moderate and no sales point respectively.
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Additional measures (e.g. environmental impact, competitor’s future actions etc.) can also be included where these
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are deemed useful by the team.

o Overall Weighting
An Overall Weighting relating to each requirement can then be calculated by multiplying the importance Weights by
the improvement Ratio and the Sales Point.

 “c”- Technical measures (HOWs) Voice of Company
This section of the House of Quality (HOQ) matrix is also referred to as engineering Characteristics or the Voice of the
Company. It describes the product in the terms of the company. This information is generated by the QFD design
team who identify all the measurable characteristics of the product which they perceive are related to meeting the
specified customer requirements. These are design specifications, substitute quality characteristics, engineering
attributes or methods, which can relate to and measure customer needs. The technical descriptors are attributes
about the product or service that can be measured and benchmarked against the competition. Technical descriptors
may exist that your organization is already using to determine product specification, however new measurements
can be created to ensure that your product is meeting customer needs.
In the same way that customer requirements are analyzed and structured, affinity and tree diagrams are applied to
interpret these product characteristics.
 “d” - Interrelationship Matrix (of WHATs vs. HOWs)
This section forms the main body of the House of Quality matrix and can be very time consuming to complete. Its
purpose is to translate the requirements as expressed by the customer into the technical characteristics of the
product. Its structure is that of a standard two dimensional matrix with cells that relate to combinations of individual
customer and technical requirements. It is the task of the QFD team to identify where these interrelationships are
significant. Each combination of customer and technical is considered in turn by the QFD team. E.g. How significant
is Padding thickness is satisfying comfortable when hanging?
This matrix is a systematic means for identifying the level of relationship between each WHAT and each HOW. The
relationship matrix is where the team determines the relationship between customer needs and the company's ability
to meet those needs. The team asks the question, "what is the strength of the relationship between the technical
descriptors and the customers needs?" The level of interrelationship discerned is weighted usually on a four point
scale (High, Medium, Low, None) and a symbol representing this level of interrelationship is entered into the matrix
cell.
 “e”- Roof / Correlation Matrix
The triangular “roof” matrix of the House of Quality is used to identify where the technical requirements that
characterize the product, support or impede one another. As in the interrelationship section, the QFD team work
through the cells in this roof matrix considering the pairings of technical requirements these represent.
For each cell the question is asked: Does improving one requirement cause a deterioration or improvement in the
other technical requirement? Where the answer is a deterioration, an engineering trade- off exists and a symbol is
entered into the cell to represent this (usually a cross or “-“). Where improving one requirement leads to an
improvement in the other requirement, an alternative symbol is entered into the cell (Usually a tick or “+”). Different
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levels of such positive or negative interaction (e.g. Strong/Medium/ Weak) can be indicated using different coloured
symbols.
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The information recorded in the roof matrix is useful to the design team in several ways. It highlights where a focused
design improvement cloud leads to a range of benefits to the product. Also focuses attention on the negative
relationships in the design. These can represent opportunities for innovative solutions to be developed which avoid
the necessity for such compromises being made.

The correlation matrix is probably the least used room in the House of Quality; however, this room is a big help to
the design engineers in the next phase of a comprehensive QFD project. Team members must examine how each of
the technical descriptors impact each other. The team should document a strong negative relationships between
technical descriptors and work to eliminate physical contradictions.
 “ f “ - Technical Priorities (Goals for the HOWs)
The producing company can set performance goals on each HOW to be more technically competitive. At this stage
in the process, the QFD team begins to establish target values for each technical descriptor. Target values represent
"how much" for the technical descriptors, and can then act as a base-line to compare against.
The relative importance of each technical requirement of the product in meeting the customer’s specified needs, can
be simply calculated from the weightings contained in the planning and interrelationship weighting is multiplied by
Overall Weighting from the Planning matrix. These values are then summed down the columns to give a score for
each technical requirement.
 “g” - Competitive Benchmarking
Each of the technical requirements that have been identified as important characteristics of the product can be
measured both for the company’s own existing product and the available competitive products. This illustrates the
relative technical position of the existing product and helps to identify the target levels of performance to be achieved
in a new product.
This is to technically evaluate the performance of the company’s product and its main competitors’ similar products
on each HOW. To better understand the competition, engineering then conducts a comparison of competitor
technical descriptors. This process involves reverse engineering competitor products to determine specific values for
competitor technical descriptors.
 “h” - Design Targets
The final output of the HOQ matrix is a set of engineering target values to be met by the new product design. The
process of building this matrix enables these targets to be set and prioritized based on an understanding of the
customer needs, the competition’s performance and the organization’s current performance. The QFD team now
needs to draw on all this information when deciding on these values.
This is not necessarily the end of the QFD process. The output of this first HOQ matrix can be utilized as the first stage
of a four part QFD process referred to as the Clausing Four-Phase Model. This continues the translation process using
linked HOQ type matrices until production planning targets are developed. This approach allows the “Voice of the
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Customer” to drive the product development process right through to the setting of manufacturing equipment
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Figure: Completed Quality Deployment Matrix
In practice, it is both difficult and unnecessary to include all the HOQ elements described above. In fact, different
users build different HOQ models involving different elements from the above list. The most simple but widely used
HOQ model contains only the customer needs (WHATs) and their relative importance, technical measures (HOWs)
and their relationships with the WHATs, and the importance ratings of the HOWs. Some models include further the
customer competitive assessment and performance goals for the WHATs. Some authors add one or both of the two
correlation matrices into this simple model. Fewer models include the technical competitive assessment since this
information is difficult to deal with and, as such, goals and probability factors for the HOWs appear seldom in HOQ
studies—even if these are included, they are hardly incorporated into the computation of the importance ratings of
the HOWs, which are usually obtained by the formula (Importance rating of the How’s) that does not relate to
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technical competitive assessment at all.
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Goal Means Diagram
Drill down tree
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Step 2- Select Project
A good Six Sigma project should:
 Impact a key business goal
 Require analysis to uncover the root cause of the problem. The cause and solution of the problem should
be unknown or not clearly understood.
 Address a source of customer pain or dissatisfaction
 Focus on improving a key business process
 Produce quantifiable results (e.g. financial savings, customer satisfaction)
 Be able to be completed in time to make a difference to the business goal
 Be scoped so that results can be achieved in reasonable timeframe, possible 2-3 months for Green Belt
projects, and 4-6 months for Black Belt.
Ideally, Green Belts and Black Belts are expected to work on projects and are not directly responsible for generation
or selection of Six Sigma projects. Six Sigma projects are selected by senior management on certain criteria. These
criteria include linkage between the proposed project and company strategy, expected timeline for project
completion, expected revenue from the projects, whether data exists to work on the problem, whether the root
cause or solution is already known. Table shows a typical project selection template used by management to pick
projects. The projects that have the highest net score are the ones that get picked for execution.
Table: Example Project Selection Template
Project
Number Sponsor Costs Benefits Timeline Strategy Risk Score
Description
Reduce Inventory
1 Job Smith levels for 123 0 1,00,000 6 months High Low 4.4
series product
Improve efficiency
2 Bob Bright for machine 456 - 5000 2,00,000 6 months Medium Low 5.0
2333
John Improve employee

3 0 40,000 3 months High Medium 4.0
Travolta retention by 5%
Reduce cycle time

4 Peter Hunt for making 1000 1,00,000 1 year Medium Low 3.4
products
Improve customer 2.8

5 Bill Richards 0 0 1 year High Low
satisfaction scores 65
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Some basic guidelines that can be considered for selecting a project are:
 Result
 Does it have significant impact on customer satisfaction? Customer First (Customers are known to be the
lifeblood of every business and to support these vital resources, businesses spend a significant amount
of time and effort maintaining customer satisfaction)
 Does the project strongly relate to business goals? (Revenue Growth, Cost Reduction, Capital Reduction,
Key Business Objectives, On Time Delivery, Lead Time, Quality, Customer Satisfaction)
 Effort
 Can the project be completed in 3 to 6 months? ---A Good Project Must Be Manageable. Prolonged
projects risk loss of interest and start building frustrations within the team and all the way around. The
team also runs the risk of disintegrating
 What not to Select?
 It should neither be a “bean-sized” project so that the improvements are too small to be appreciated,
nor a “world-hunger” project wherein implementing the solutions is beyond the control of the
stakeholders.
 What Problem to Select?
 The cause of this problem should be unknown or not clearly understood .There shouldn’t be any
predetermined or apparent optimal solution. If Green Belt/Black Belt already knows the answer, then
just go fix it!
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Step3- Finalize Project Charter and High Level Map
Project Charter
The Project Charter is used to establish a clear understanding of the project amongst the team, the Project leader,
Champion, Sponsor and stakeholders. It is a written document and works as an agreement between management
and the team about what is expected. It includes a documented business case, opportunity for improvement, goals,
scope, timeline and members of the project team. The Project Charter is the key document that defines the scope
and purpose of any project. The Charter functions as the communication vehicle for the team, the Sponsor, Process
Owner and Champion, the team leader, and all other team members involved. It is used to assure that the team sees
the vision of leadership, and understands what the project opportunity and performance improvement goals are,
what is expected of the team and keeps the team focused and aligned on the organisational priorities. It transfers
the project from the champion to the project team.
One common misconception is that the Project Charter is written and then not touched again. The team should refer to the
Charter often to ensure that the project is staying on track. In addition, it should be considered a living document that may
be revised as the team learns more in the Define and the Measure phase.
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Elements of a Project Charter
Table
•Why should we do this? What is the benefit?

Business Case •How does this project align with the business strategy?
•What is the quantified value of the project ($$$)?
•What are the boundaries of the initiative (start and end points of the process or parts
Project Scope of a system)?
•What authority do we have? What is not within scope?
•What “pain” are we or our clients experiencing?

Opportunity or •What is wrong or not working?
Problem Statement •Why do we think we can generate the value proposition described in the Business
Impact?
•What are our improvement objectives and targets?

Goal Statement •Is the Goal statement ‘SMART’
•How will success be measured? What specific parameters will be measured?
•Who are the team members?

Team Selection •What is their role?
•How much time will be dedicated to the project?
•How are we going to get this done?

Project Plan •When are we going to complete the work?
•What are the major milestones (tollgates)?
 Business Case
The business case describes the benefit for undertaking a project. The business case addresses the following
questions:
 What is the focus for the project team?
 Does it make strategic sense to do this project?
 Does this project align with other business initiatives (Critical Success Factors)?
 What benefits will be derived from this project?
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 What impacts will this project have on other business units and employees?
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 Opportunity Statement
The opportunity statement describes the “why” of undertaking the improvement initiative. The problem
statement should address the following questions:
 What is wrong or not working?

 When and where do the problems occur?
 How extensive is the problem?
 What is the impact “pain” on our customers / business / employees?
 Goal Statement
The goal statement should be most closely linked with the Opportunity statement. The goal statement defines
the objective of the project to address the specific pain area, and is SMART (Specific, Measurable, Achievable,
Relevant and Time-bound). The goal statement addresses:
 What is the improvement team seeking to accomplish?
 How will the improvement team’s success be measured?
 What specific parameters will be measured? These must be related to the Critical to Cost, Quality, and/or
Delivery (Collectively called the CTQ’s).
 What are the tangible results deliverables (e.g., reduce cost, cycle time, etc.)?
 What is the timetable for delivery of results?
 Project Scope
The project scope defines the boundaries of the business opportunity. One of the Six Sigma tools that can be used
to identify/control project scope is called the In-Scope/Out-of Scope Tool. Project Scope defines:
 What are the boundaries, the starting and ending steps of a process, of the initiative?
 What parts of the business are included?
 What parts of the business are not included?
 What, if anything, is outside the team’s boundaries? Where should the team’s work begin and end?
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 Team Roles & Responsibilities
Green Belt
 Is the Team Leader for a Project within own functional area
 Selects other members of his project team
 Defines the goal of project with Champion & team members
 Defines the roles and responsibilities for each team member
 Identifies training requirements for team along with Black Belt
 Helps make the Financial Score Card along with his CFO
Black Belt
 Leads project that are cross-functional in nature (across functional areas)
 Ends role as project leader at the close of the turnover meeting
 Trains others in Six Sigma methodologies & concepts
 Sits along with the Business Unit Head and helps project selection
 Provides application assistance & facilitates team discussions
 Helps review projects with Business Unit Head
 Informs Business Unit Head of project status for corrective action
Master Black Belt:

 Participates in the Reviews and ensures proper direction.
 Trains and coaches Process Owners on Process Management principles
Team Member:
 A Team Member is chosen for a special skill or competence
 Team Members help design the new process
 Team Members drive the project to completion
Subject Matter Expert (SME):

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 Is an expert in a specific functional area

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May be invited to specific team meetings but not necessarily all of them
 Provides guidance needed to project teams on as needed basis

Project Sponsor:
 Acts as surrogate Process Owner (PO) until an owner is named
 Becomes PO at Improve/Develop if PO is not named
 Updates Tracker with relevant documents and pertinent project data
 Part of senior management responsible for selection / approval of projects
Process Owner:
 Takes over the project after completion
 Manages the control system after turnover
 Turns over PO accountability to the new Process Owner if the process is reassigned to another area or another
individual
Deployment Champion:
 Responsible for the overall Six Sigma program within the company
 Reviews projects periodically
 Adds value in project reviews since he is hands-on in the business
 Clears road blocks for the team
 Has the overall responsibility for the project closure
 Project Plan
The project plan shows the timeline for the various activities required for the project. Some of the tools that can be
used to create the project timeline are the Network diagram or the GANTT chart. We may also like to identify the
activities on critical path, milestones for tollgate reviews to ensure that timely completion of the project.*Please refer
to Chapter 4 to learn more about Project Management practices
Project Charter sections are largely interrelated: as the scope increases, the timetable and the deliverables also
expand. Whether initiated by management or proposed by operational personnel, many projects initially have too
broad a scope. As the project cycle time increases, the tangible cost of the project deployment, such as cost due to
labour and material usage, will increase. The intangible costs of the project will also increase: frustration due to lack
of progress, diversion of manpower away from other activities, and delay in realization of project benefits, to name
just a few. When the project cycle time exceeds 6 months or so, these intangible costs may result in the loss of critical
team members, causing additional delays in the project completion. These “world peace” projects, with laudable but
unrealistic goals, generally serve to frustrate teams and undermine the credibility of the Six Sigma program.
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High Level Process Map
Process maps are graphical representations of a process flow identifying the steps of the process, the inputs and
outputs of the process, and opportunities for improvement. Process maps can cross functional boundaries if the start
points and stop points are located in different departments or if several persons from different departments are
responsible for satisfying specific customer need. Process maps are applicable to any type of process: manufacturing,
design, service, or administrative. Process maps are used to document the actual process and helps locate value and
Non-Value added steps. These maps can be an excellent way to communicate information to others and train
employees.
It can be very useful to start with a high level process map of five to ten steps representing the sub-processes. This
helps to establish the scope of the process, identify significant issues and frame the more detailed map later.
SIPOC is an acronym for Suppliers – Inputs – Process – Outputs – Customers. It is a high level process map that
describes the boundaries of the process, major tasks and activities, Key Process Input and Output Variables, Suppliers
& Customers. When we refer to customers, we usually talk about both internal and external customers. It can be
used to identify the key stakeholders and describe the process visually to team members and other stakeholders. A
Stakeholder is anyone who is either impacted by the project or could impact the outcome of the project. Not everyone
is a stakeholder but a project may have several stakeholders including employees, Suppliers, customers, shareholders
etc.
Suppliers: Provide inputs

Inputs: Data / unit required to execute the process
Process Boundary: Identified by the hand-off at the input (the start point of process) and the output (the end point
of the process)
Outputs: Output of a process creating a product or service that meets a customer need
Customers: Users of the output
Suppliers Inputs Process Output Customer
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Table: Shows a filled out SIPOC matrix

Suppliers Inputs Process Output Customer
Employee Active Employee Project Manager and

Employees
Setup Data Record Team
Set Up Resources
Active
Contractor Project Manager and
Contractors Contractor
Setup Data Team
Record
Employees & Planning Project Manager and

Project Schedule
Contractors Meeting Team
Assign Activities
to Resources
Contracting Statement Project Manager and
Project Schedule
Officer of Work Team
Payroll Employee
Rate Table System Administrator
Department Pay Rates
Assign Rates to
Resources
Contractor
Contractors Rate Table System Administrator
Pay Rates
Labour Cost Project Manager and

Employees Timesheets
Report Team
Enter Time
Contractors Sheets Labour Cost Project Manager and
(Time & Timesheets
Report Team
Materials)
Enter Vendor
Contractors Invoices Contractor Cost Project Manager and
Invoices
(Fixed Priced) Report Team
Project Monthly
Timesheet & Summarize and CIO, Program
Management Performance
Invoices Report Costs Managers, VP Finance
System Reports
A SIPOC helps the Six Sigma team and those working on the process to agree the boundaries of what they will
be working on. It provides a structured way to discuss the process and get consensus on what it involves before
rushing off and drawing process maps.
1. Define the Outputs of the process. These are the tangible things that the process produces (e.g. a
report, or letter).
2. Define the Customers of the process. These are the people who receive the Outputs. Every Output
should have a Customer.
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3. Define the Inputs to the process. These are the things that trigger the process. They will often be
intangible (e.g. a customer request)
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4. Define the Suppliers to the process. These are the people who supply the inputs. Every input should
have a Supplier. In some “end-to-end” processes, the supplier and the customer may be the same
person.
5. Define the sub-processes that make up the process. These are the activities that are carried out to
convert the inputs into outputs.

Define Phase Summary
Key points to remember:
1. In Define Phase, Project ideas are generated and a project is selected.
2. Primary CTQ and Secondary CTQs are identified from VOC, VOB and COPQ.
3. A project charter is created which consists of Background of the project, CTQ and Goals, Business case, Team
members, Project Scope and Project Plan.
a) Goals should be SMART
b) Business Case should be clearly written as it creates urgency in top management and management
realizes the need of the project
c) Project Scope – In-scope and Out-scope elements can be listed or we may use SIPOC to scope the
project. It reduces the risk of scope creep.
d) Project Plan mentions the milestones and timelines of the project.
e) Project Charter is a living document and can/may be revised. Revisions should be signed off by the
project sponsor
4. SIPOC helps us identify the inputs and their supplier, output and their customers and the high level process
map. It may also be used for scoping a project
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Define Phase Tollgate checklist
 Has the project been chosen because of its alignment with Organisation goals and the strategic direction of the
‘business’?
 What is the problem statement – detailing (what) is the problem, (when) was the problem first seen, (where)
was it seen, and what is the (magnitude or extent) of the problem. Is the problem measured in terms of Quality,
Cycle Time, Cost Efficiency, net expected financial benefits? Ensure there is no mention or assumptions about
causes and solutions.
 Does a goal statement exist that defines the results expected to be achieved by the process, with reasonable
and measurable targets? Is the goal developed for the “what” in the problem statement, thus measured in
terms of Quality, Cycle Time or Cost Efficiency?
 Does a financial business case exist, explaining the potential impact (i.e. measured in dollars) of the project on
the organisation budgets, Net Operating Results, etc.?
 Is the project scope reasonable? Have constraints and key assumptions been identified?
 Who is on the team? Are they the right resources and has their required time commitment to the project been
confirmed by your Sponsor and team?
 What is the high level Project plan? What are the key milestones (i.e. dates of tollgate reviews for DMAIC
projects)?
 Who are the customers for this process? What are their requirements? Are they measurable? How were the
requirements determined?
 Who are the key stakeholders? How will they be involved in the project? How will progress be communicated
to them? Do they agree to the project?
 What kinds of barriers/obstacles will need assistance to be removed? Has the risk mitigation plan to deal with
the identified risks been developed?
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Chapter
6
Measure
Measure Phase Overview
The primary purpose of the Measure phase is to answer the question, "How are we doing?" In other words, the team
must baseline the current state of each CTQ or CTP. Many times in a project, the critical measure identified by the
team is not an already reported measure. Although the team may not think the measure is meeting the goal, they
need to collect data to verify the current performance level.
The deliverables from the Measure phase include:

 Operational definition
 Measurement system analysis
 Data collection plan
 Baseline Performance
critical customer requirements, and prepare an effective project team. The three steps that enable us to do so are:
Step 4 • Finalize Project Y, Performance Standards for Y
Step 5 • Validate Measurement System for Y
Step 6 • Measure Current Performance and Gap

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Step 4 - Finalize Project Y, Performance Standards for Y
Data collection can be difficult. To help, the team should use operational definitions and data collection plans.
Operational definition has been constant source of worry for Measurement system reliability.
 Operational Definition
An Operational Definition is a precise definition of the specific Y to be measured. The data collected using this
definition will be used to baseline the performance. The purpose of the definition is to provide a single, agreed upon
meaning for each specific Y. This helps in ensuring reliability and consistency during the measurement process
although the concept is simple, the task of creating a definition should not be underestimated. A clear concise
operational definition will ensure reliable data collection and reduction in measurement error.
Table
CTQ Performance Characteristics

CTQ
Data Type Operational definition LSL USL Target
Measure
A B c d1 d2 d3
 a: CTQ Measure is a measurable characteristic of output

 b: Data type, whether it is continuous or discrete
 c: A clear, concise detailed definition of a measure. Operational definitions should be very precise and
be written to avoid possible variation in interpretations.
 d: Specification limits are usually derived from customer needs or stated by the customer
o USL- Upper Specification limit
o LSL- Lower Specification limit
CTQ Performance Characteristics
CTQ Measure Data Type Operational Definition LSL USL Target
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Step 5- Validate measurement system for Y
Measurement System Analysis
One important step in the Measure phase, sometimes skipped by inexperienced Six Sigma teams, is conducting a
Measurement System Analysis (MSA). MSA is carried out to verify that the measurement system produces valid data,
before the team makes data-based decisions.
A measurement system is defined as the collection of operations, procedures, gauges and other equipment,
software, materials, facilities, and personnel used to assign a number to the characteristic being measured.
Measurement System Analysis is a critical part of any Six Sigma Project, regardless of the environment (e.g.
transactional, service, etc.). The philosophy behind this kind of study is applicable to all project types. Depending on
the type of data, the statistical analysis will be different. For a continuous measurement, there are a variety of
statistical properties that can be determined: stability, bias, precision (which can be broken down into repeatability
and reproducibility), linearity, and discrimination.
For a discrete measurement, estimates of the error rates can be determined from within appraiser, each appraiser
versus standard, between appraisers, and all appraisers versus standard. The properties related to both continuous
and discrete measures are discussed below.
What is Measurement System Analysis?

Measurement System Analysis refers to methods used to evaluate our measurement systems and determine
whether we can trust our data. The evaluation of measurement system should be done prior to capability analysis,
control charting or any other analysis to prove that the measurement system is accurate and precise, and the data
are trustworthy.
Properties of Continuous Measurement
 Bias or Accuracy
The difference between the average measured value and a reference value is referred to as bias. The reference value
is an agreed-upon standard, such as a standard traceable to a national standards body (see below). When applied to
attribute inspection, bias refers to the ability of the attribute inspection system to produce agreement on inspection
standards. Bias is controlled by calibration, which is the process of comparing measurements to standards. The
concept of bias is illustrated in figure below
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Figure: Bias Illustrated

 Repeatability
AIAG defines repeatability as the variation in measurements obtained with one measurement instrument when used
several times by one appraiser, while measuring the identical characteristic on the same part. Variation obtained
when the measurement system is applied repeatedly under the same conditions is usually caused by conditions
inherent in the measurement system. ASQ defines precision as “The closeness of agreement between randomly
selected individual measurements or test results. NOTE: The standard deviation of the error of measurement is
sometimes called ‘imprecision’”. This is similar to what we are calling repeatability. Repeatability is illustrated in
Figure below
Figure: Repeatability Illustrated
 Reproducibility
Reproducibility is the variation in the average of the measurements made by different appraisers using the same
measuring instrument when measuring the identical characteristic on the same part. Reproducibility is illustrated in
Fig.24.
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Figure: Reproducibility Illustrated

 Stability
Stability is the total variation in the measurements obtained by a measurement system on the same master or
parts when measuring a single characteristic over an extended time period. A system is said to be stable if the
results are the same at different points in time. Stability is illustrated in Fig.25.
Figure: Stability Illustrated
 Linearity
The difference in the bias values through the expected operating range of the gage. Linearity is illustrated in
Fig.26.
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Figure: Linearity Illustrated

Measurement System Discrimination
Discrimination, sometimes called resolution, refers to the ability of the measurement system to divide
measurements into “data categories.” All parts within a particular data category will measure the same. For example,
if a measurement system has an illustrated resolution of 0.001 inch, then items measuring 1.0002, 1.0003, 0.9997
would all be placed in the data category 1.000, that is, they would all measure 1.000 inch with this particular
measurement system. A measurement system’s discrimination should enable it to divide the region of interest into
many data categories. In Six Sigma, the region of interest is the smaller of the tolerance (the high specification minus
the low specification) or six standard deviations. A measurement system should be able to divide the region of
interest into at least five data categories. For example, if a process was capable (i.e., Six Sigma is less than the
tolerance) and σ = 0.0005, then a gage with a discrimination of 0.0005 would be acceptable (six data categories), but
one with a discrimination of 0.001 would not (three data categories). When unacceptable discrimination exists, the
range chart shows discrete “jumps” or “steps.”
Measurement System Analysis is a critical part of any Six Sigma Project, regardless of the environment (e.g.
transactional, service, etc.). The philosophy behind this kind of study is applicable to all project types. Depending on
the type of data, the statistical analysis will be different. For a continuous measurement, there are a variety of
statistical properties that can be determined: stability, bias, precision (which can be broken down into repeatability
and reproducibility), linearity, and discrimination.
For a discrete measurement, estimates of the error rates can be determined for within appraiser, each appraiser
versus standard, between appraisers, and all appraisers versus standard. The properties related to both continuous
and discrete measures are discussed below.
Gage repeatability and reproducibility study (Gage R&R Study)

A Measurement System Analysis (MSA) method which evaluates your measurement system’s precision and
estimates the combined measurement system repeatability and reproducibility. A Gage R&R Study helps you answer
whether your measurement system variability is small compared with the process variability, how much variability
in the measurement system is caused by differences between operators, and whether your measurement system is
capable of discriminating between different parts.
For example, several inspectors measure the diameter of screws to make sure they meet specifications. You want to
make sure you trust your data so you examine whether the inspectors are consistent in their measurements of the
same part (repeatability) and whether the variation between inspectors is consistent (reproducibility).
Although the number of inspectors, parts, and trials will change for your particular application, a general procedure
follows:
 Step 1: Collect a sample of 15 screws that represent the entire range of your process.
 Step 2: Randomly choose 3 inspectors from the regular operators of this process (they should be trained and
familiar with the process because you are trying to estimate the actual process, not the best or worst case).
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 Step 3: It is best to randomize the order of the measurements, but sometimes this is not always possible. An
alternative could be to randomize the order of the operators then have each one measure all 15 screws in
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random order. Record the data in a Minitab worksheet.

 Step 4: Repeat step 3 for the second trial.

When all the trials have been completed, we can analyse the collected data. According to the Automobile Industry
Action Group (AIAG) you can determine whether your measurement system is acceptable using the following
guidelines.
If the Total Gage R&R contribution in the %Study Var column (% Tolerance, %Process) is:
 Less than 10% - the measurement system is acceptable.

 Between 10% and 30% - the measurement system is acceptable depending on the application, the cost of
the measuring device, the cost of repair, or other factors.
 Greater than 30% - the measurement system is unacceptable and should be improved.
MSA Checklist
Before conducting MSA, it is suggested that the following checklist must be considered.
 Determine the gage. Are there more than one gauges for the same data? If yes, after MSA, use only the
most suitable one.
 Define the procedure of measurement.
 Are there any standards available? If yes, are they correct and updated? If yes, are they used thoroughly?
If no, plan with the team to do the same.
 Define the design intent of the gage or demand from supplier
o Discrimination (Resolution/ Granularity)
o Accuracy
o Precision
 Determine design for Gage R&R :
o Crossed Designs: It is used where each part can be subject to repeated measurements. In this
design, each part is inspected by each operator. Example – Weight of a drug
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o Nested Designs : It is used where the same part cannot be used for repeated measurements as the
parts get destroyed on testing. In this design, each operator is given different parts from the same
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batch. Example – Measuring the effect of a drug by dissolving it in a chemical.

Continuous Gage R&R approach
1. Prepare MSA checklist

2. Select 3-5 parts that span the entire range of variation of the process. Parts/Samples should be
representative of the population.
3. Study should be done for all operators performing the measurement. Typically, 3-5 operators are selected.
4. Each operator should take at least three measurements on each part to check for repeatability. The study
should be conducted blind so that operators don’t recall prior readings.
• Select neutral part numbers 1-2-3
• Randomize operator measurement of parts rather than measuring in sequence.
• Collect data separately with each operator to avoid interference
5. Enter data into Minitab and perform the analysis.
6. Carry out MSA by ANOVA method as it gives more information*
7. Analyze the result based on the criteria decided for acceptance
8. Conclusions should include analyses by all applicable tools and not only Gage R&R study
9. The measurement system must be corrected and baseline redefined before the data is used for the
project.
Calculations behind GR&R numbers
 %Contribution =  2 GR&R /  2Total x 100%

 % Study Variation =  GR&R / Total x 100% = %Contribution
 %Tolerance = 6* x  GR&R / Tolerance x100%
 SN Ratio =  Parts/  GR&R
 Number of Distinct Categories = Round (SN Ratio x 1.41)
Exercise: A company assembles wire connectors. The final wire length is measured in mm manually by operators.
The tolerance is ±125mm. Measurement by the same gage is carried out for three parts by three different
operators. Find if the system is acceptable. Worksheet: Gage2.mtw
Go to Minitab Gage R&R tool: Stat > Quality Tools > Gage Study > Gage R&R Study (Crossed)
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A. Shows contribution of components to the total variation. The three colors are Blue (% with respect to
tolerance), Green (% with respect to study variation), Orange (% with respect to variance). For a good gage,
we expect most of the contribution to the total variation should come from the parts and very minimal
(less than 30%) should come from the Gage R&R. If all three colors are there, interpret the blue color bars.
If the tolerance has not been specified, then there will not be any blue bars, in which case interpret the
green color bars.
B. The graph is useful to find stability of repetitive measurements by operators. Graph shows results for each
operator inspecting each part. If each operator is consistent in measuring the parts, this graph should be
close to zero and be in control. Investigate causes or re-measure for points going beyond the control limits.
C. Depicts capability to detect different samples. The red control limits indicate gage variation (error). The
graph shows average part means. Since most of the variation should come from the parts, we expect the
part means to be bigger than the gage variation. This means that the operators can discern between
different parts. For a good gage, maximum number of points should go outside the control points.
D. Sample to sample variation is shown. For a good gage, we expect to see consistent values for each part
being measured by different operators. We do expect to see different means for different parts. The
means joining the parts should not be horizontal.
E. Shows mean of measurements by operators. Each operator measures three different parts. So, on an
average all the measurements for each operator should be consistent. For a good gage, we expect to see a
horizontal line joining the means.
F. Shows how different each operator’s measurements are for the same and different sample. Values should
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be same for the same sample. For a good gage, all line should be on top of each other. This chart can help
identify if there is an interaction between the part and the operator. This chart will identify if there is an
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operator who is not consistent with others or if there is a part that is hard to measure.

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Classification Criteria
Accept Caution Reject
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% Contribution <1% 1-9% >9%
% Study Variation or %Tolerance <10% 10-30% >30%

No of Distinct Categories >10 4-9 <4

What is an Attribute Measurement System?
Attribute measurement systems are the class of measurement systems where the measurement value is one of a
finite number of categories. The most common of these is a go/no-go gage which has only two possible results.
Other attribute systems, for example visual standards, may result in five to seven classifications, such as very good,
good, fair, poor, very poor.
How can we assess the reliability of an Attribute Measurement system?
Attribute Agreement Analysis: Some measurement systems categorize items by their attributes to separate
“good” items from “bad” ones, sort samples into “blue,” “green,” and “cyan” groups, and assign invoices to
“engineering,” “production,” or “sales” departments. These types of measurement systems are called attribute
measurement systems because they determine or measure one or more attributes of the item being inspected.
The question is, how repeatably and reliably can one of these systems determine the specific attribute we are
looking for? For example, how repeatably and reliably does your attribute measurement system detect “bad” disk
drives from among all the “good” ones being completed in production? To quantify how well an attribute
measurement system is working, Attribute Agreement Analysis is performed.
Properties of Discrete Measurements

For discrete measurements, a blind study may also be done. An expert would usually determine whether the product
is good or bad. Then, a variety of good and bad units is given to two or three appraisers. The appraisers each then
determine if they think the product is good or bad.
They are asked to look at the same unit more than once, without knowing that they had evaluated the unit
previously. This is called the "within appraiser" error rate. It can then be determined how well all the appraisers are
able to get the same result on the same product, the "between appraiser" error rate. In addition, it can be
determined how well the appraisers agree with the expert, known as the "appraiser versus standard" error rate.
Attribute Repeatability& Reproducibility (AR&R)

Attribute gauge studies are typically used when the measurement result is binary, such as defect/no defect or
successful/unsuccessful, although rating scales can also be validated with this method. Multiple measurement
system operators are chosen to measure a sample set two or more times. In this way, both repeatability (variation
within the operator) and reproducibility (variation between the operators) can be quantified. In an attribute study,
a standard can be used for comparison with the results from the measurement system operators. The standard is
the 'truth' and any discrepancy from truth due to the measurement system is considered as an error (or defect).
AR&R studies can be done using statistical software packages which provide graphical output and other summary
information; however, they are often done by hand due to the straightforward nature of the calculations.
We use Attribute Agreement Analysis to answer:
 Does the appraiser agree with himself on all trials?

 Does the appraiser agree with the known standard on all trials?
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 Do all appraisers agree with themselves and others on all trials? (within and between appraisers)

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Do all appraisers agree with themselves, others, and with the standard?
AR&R studies can be done using statistical software packages which provide graphical output and other summary
information; however, they are often done by hand due to the straightforward nature of the calculations.

Attribute Agreement Analysis Procedure
1. Set aside 15 to 30 test samples of the item you’re measuring. Make sure these samples represent the
full range of variation being encountered and make sure approximately equal amounts of each possible
attribute category
2. Create a “master” standard that designates each of the test samples into its true attribute category.
3. Select two or three typical inspectors and have them review the sample items just as they normally
would in the measurement system, but in random order. Record their attribute assessment for each
item.
4. Place the test samples in a new random order, and have the inspectors repeat their attribute
assessments. (Don’t reveal the new order to the inspectors!). Record the repeated measurements.
5. For each inspector, go through the test sample items and calculate the percentage of items where their
first and second measurements agree. This percentage is the repeatability of that inspector.
6. Going through each of the sample items of the study, calculate the percentage of times where all of the
inspectors’ attribute assessments agree for the first and second measurements for each sample. This
percentage is the reproducibility of the measurement system.
7. You can also calculate the percent of the time all the inspectors’ attribute assessments agree with each
other and with the “master” standard created in Step 2. This percentage, which is referred to as the
Accuracy (effectiveness) of the measurement system
Industry Standard
Team Accuracy Data
Measurement system status Remarks
Kappa Collection
>0.9 Acceptable measurement system Yes
Measurement system
0.7-0.9 Acceptable with caution Yes
needs improvement
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Fix measurement system,

<0.7 Unacceptable No re-evaluate before data
collection

Case Studies
Q. The quality supervisor wants to assess the reliability of this measurement system. The quality supervisor got
20 customer application forms checked by 3 quality representatives. He passed the same 20 customer
application forms again to the 3 quality representatives to be checked again. Worksheet: Sales Check.mtw
Is the measurement system acceptable?

Can we collect data?
Q. A quality team checks patient registration form and determines whether the form is complete or incomplete.
The quality supervisor wants to assess the reliability of this measurement system. The quality supervisor got 30
patient registration forms checked by 4 quality representatives. He passed the same 30 patient registration
forms again to the 4 quality representatives to be checked again. The quality representatives didn’t know that
they are checking the same forms. Can we collect data using this measurement system?
Worksheet: Patient Registration.mtw
Q. The service team at Fantard Shuttered Bank checks application forms to verify whether all documents are
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complete. There have been recent complaints about sending incomplete application forms to the credit check
team. The Service manager wanted to assess the reliability of the current inspection activity and therefore got
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25 application forms checked by 4 service team executives. The service manager sent the same application forms
again to the 4 service team executives for inspection. The 4 service team executives weren’t aware that they
were inspecting the same forms. Is this Measurement system acceptable? Worksheet: Shuttered Bank.mtw

Step 6- Measure current performance and Gap
Data Collection Plan
Once Measurement system reliability has been established, team develops a data collection plan of Y measure. It is
a plan defining the precise data that will be collected, the amount of data that will be collected, a description of the
logistical issues - who, where, when data will be collected - and what will be done with data collected.
Table
When will How will X data that can

Y Operational Data Sample Who will collect
the data be data be be collected at
Measure Definition Source Size the data
collected collected the same time
Customer type;
Difference
application
between the
method, day of
barcode info on
the week;
receipt and Data
First 21 Representative
Cycle barcode on IT Process collection
300 days of the initiating call; IT
time customer System Representatives form, IT
month rep; wait time;
notification minus reports
rep sending
nonworking hours
notification,
(holidays,
process sub-
weekends)
step cycle times
The figure above shows an example data collection plan for a project focused on reducing cycle time.
 Collecting the Data
One major determinant of the duration of a Six Sigma project is the time required to collect the data. The time
required is dependent on how frequently the data are available in the process and the ease of collection. The
team needs to be involved in the data collection to make sure it is done right and that any anomalies or problems
are recorded and understood. This will make the analysis of the data in the Analyse phase easier.
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Baseline Performance
Once the team collects the data, they must answer the question "How are we doing?" by base lining the Y data.
This is the final step in the Measure phase. The process baseline provides a quantifiable measure of the process
performance before any improvement efforts have been initiated. Process baselines are a critical part of any
process improvement effort, as they provide the reference point for assertions of benefits attained.
There are a variety of metrics that can be used to baseline these Y’s. These metrics include Sigma Level, Cp and
Cpk, First time Yield and Rolled Throughput Yield. The team should select a metric that is appropriate for their
business.
 Sigma Level
Sigma Level is a very commonly used metric for evaluating performance of a process. Sigma level can be
computed for continuous data, discrete data and yield; therefore can be computed for most Y measures. Sigma
level corresponds to a certain Defects per million opportunities (DPMO). Higher the Sigma Level (Z), lower is the
DPMO which simply means lower defect rate.
Table
Zlt(Sigma Level Long Zst(Sigma Level Short

DPMO
term) term)
1 2.5 158655.25
1.5 3 66807.20
2 3.5 22750.13
2.5 4 6209.67
3 4.5 1349.90
3.5 5 232.63
4 5.5 31.67
4.5 6 3.40
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Sigma level computation methods
Situation 1: Continuous data, Specification limits, mean and standard deviation

1. Check whether data are normally distributed (Stat>Basic Statistic>Graphical Summary)
2. Compute Mean and standard deviation (Stat>Basic Statistic>Graphical Summary)
3. Input Specification limits, Mean and standard deviation in the sigma level calculator
Example: VarSigma has specified to the Hotel that the temperature in the training room should be 21+-3
degrees. The average room temperature is 22 and standard deviation is 2. What is the Sigma level?
Situation 2: Discrete Data, Sample Size, Defects, OFE known

1. Find DPO = Defects/ (OFE*Sample Size)
2. DPMO= DPO*1000000
3. Copy DPMO in the sigma level calculator
Example: 500 mobiles were inspected. We inspected 5 characteristics in each mobile. We observed 224 defects.
What is the Sigma level?
Situation 3: Discrete Data, Sample Size, Defects, OFE unknown

1. Find DPU = Defects/ Sample Size
2. Copy DPU in the sigma level calculator
Example: 1000 projectors were inspected. We observed 116 defects. What is the Sigma level?
Situation 4: Discrete data, Sample Size, Defectives

1. Find Yield = Non-Defectives/ Sample Size
2. Copy Yield in the sigma level calculator
Example: 1000 shirts were inspected. 31 shirts were defective. What is the Sigma level?
Term Expansion
OFE Opportunities for error
TOFE Total Opportunities for error
DPO Defects per opportunity
DPU Defects per unit
DPMO Defects per million opportunities
RTY Rolled throughput Yield
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FTY or FPY First time Yield or First Pass Yield
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Practice Exercises for continuous data
Exercise 1: A shirt manufacturer wants to assess the performance of Shirt Cutting machine. He has audited 100 16'’
neck size shirts. The shirt accepted specification is 16+-0.5. What is Zst value?
Worksheet: Neck Measurement.mtw
Exercise 2: A KPO processes reimbursement bills for their customers. The average time to process should be no
more than 30 minutes. What is the probability of processing the reimbursement bills within 30 minutes? What is
Zst value?
Worksheet: Reimbursement bill.mtw
Exercise 3: The maximum time allowed to complete a platelet count test is 90 minutes. The lab analyst randomly
selected a sample and recorded the time taken to carry out each test. Please find the current Sigma Level (Zst).
Worksheet: Platelet count.mtw
Exercise 4: The circumference of the cricket ball should be between 224mm-229 mm. Dookaburra collected a
sample of 100 cricket balls and recorded the circumference of the cricket balls. Please compute Zst. Worksheet:
Cricket Balls.mtw
Practice Exercises for discrete data
Exercise 5: Laptops are being inspected to check whether the following components are functional: RAM,
Motherboard, Screen, Hard disk, Bluetooth, DVD-Drive, and Memory Slot. 500 laptops are inspected and 119
defects are observed. What is Zst?
Exercise 6: The circuit board of projectors is inspected. The OFE is unknown. 1000 projectors are inspected and 43
defects are observed. What is Zst?
Exercise 7: Phone calls are recorded at a call centre and later evaluated. A sample of 200 calls are heard by the
quality representatives and evaluated based on a Call Quality Checklist. There are 14 Opportunities for error in
each call. 284 defects were observed in the sample of 200 calls. What is Zst?
Exercise 8: 2000 petri-dishes are inspected. 42 are defective. What is Zst?
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Practice Exercises for continuous data (sub-grouped data)
Exercise 9: We measured length of 50 samples of an auto part 10 samples each for five days (1-5) to analyze
process capability. Data was found to be normally distributed and specifications given are 25cm  4cm. Conduct
process capability analysis and find sigma levels – ZLT, ZST, ZEnt and ZGoal for 50% defect reduction with the
following data. Worksheet: CAP NORMAL LENGTH.mtw
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 Non-Normally distributed data
If data are not normally distributed, we must consider the following

 Check if the data is recorded correctly.
 Is the measurement system adequate?
 Is there process tweaking going on?
 Are data from different populations being mixed?
 Is the data constrained by physical limits (flatness)?
 Is there possibility of central limit theorem being used?
If the data are truly non-normally distributed, we can transform the data. When we transform the data, we also need
to transform the specifications.
Box Cox Transformation
 Can be used when we have positive data points
 Provides a value, , (Lambda) that indicates the appropriate transformation.
o Ynew = Yold 
 Look for special values of in the 95% confidence band for Lambda. Pick a value if any of the following
belong in the confidence interval:
o  = 2, Square Transformation
o  = 0.5, Square Root Transformation
o  = 0, Logarithmic Transformation
o  = -0.5, Reciprocal Square Root Transformation
o  = -1, Reciprocal Transformation
Example: Please analyse the length data provided in worksheet ‘Tiles.mtw’ and compute the sigma level. USL
=8
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 Yield
 Traditionally, Yield is the proportion of correct items (conforming to specifications, we get out of a
process compared to the raw items you put in----Output versus Input
 Example: Let’s take the process of inflating tires on cars in an assembly line, a study may reveal that of
360 cars that went through the tire inflation process during a day’s production, 354 were later found to
have the pressure within the required specification limits. The traditional yield is
354/360=0.9833=98.33%. It may be considered misleading.
Let’s take a look at this process in detail
 Tire after inflation is immediately inspected to ensure that it meets the required pressure specification
limits. In this example, inspection detected 94 tires that don’t comply with pressure specification. The
operators corrected 88 tires, leaving 6 that couldn’t be brought back to specification and therefore
scrapped.
 FTY =266/360=0.7388= 73.88%---FTY focuses on yield of the process before inspection and rework is
carried out.
Metric Formula Comments
Out In  Scrap Scrap It may be considered misleading as

Y   1
Traditional Yield In In In it obscures the impact of
inspection and rework
Shows the likelihood of an item

FTY In  Scrap  Re work Scrap  Re work
FTY   1 passing through a process
First time Yield In In
successfully the very first time
First Pass Yield
without inspection and rework
RTY
n The combined overall likelihood of
RTY   FTY
Rolled throughput an item passing through all steps
i 1
Yield successfully first time
Submit Requisition Confirmation

Purchase
Fill out requisition entered to sent to
92% requisition 95% to purchase 85% the 95% order sent 99% requisition co-
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to supplier
dept computer coordinator
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RTY =

 Capability Indices
Process capability is the ability of the process to meet the requirements set for that process. One way to
determine process capability is to calculate capability indices. Capability indices are used for continuous data
and are unit less statistics or metrics.
 Cp
 It is the potential capability indicating how well a process could be if it were centred on target. This is
not necessarily its actual performance because it does not consider the location of the process, only the
spread. It doesn't take into account the closeness of the estimated process mean to the specification
limits.
 It compares the width of a two-sided specification limits to the effective short term width of the process.
 The Specification width is the distance between USL and LSL.
 To determine the process width, Six Sigma practitioners defined the effective limits of any process as
being three standard deviation limits from the average. In a normally distributed population, 99.73% of
the variation is within ± 3s of Process Average and therefore considered as Process width
 Cp only compares the width of specification and process and therefore any change of process average
isn’t accounted in Cp
Example: VarSigma has specified to the Hotel that temperature in the training room should be between 21+-
3 degrees. The average room temperature is 22 and standard deviation is 0.5. What is Cp?
USL=24 sst = 0.5

Inputs
LSL=18 Cp= (USL-LSL)/6sst

Cp
Target=21 Cp= (24-18)/

(6*0.5)=6/3=2
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 Cpk
 It is the resultant process capability as it not only considers variation; it also takes into account the
location of the data by considering the closeness of the mean to the specification limits.
 It compares width of the specification and width of the process while also accounting for any change in
process average (location of central tendency)
 Rule of thumb: Cpk >1.33, indicates that the process or characteristic is capable in short term.
 Values less than this may mean variation is too wide compared to specification or the process average
(location) is away from target or a combination of width and location
Mean =22
sst = 0.5
Cpu =(USL-Mean)/3sst
Inputs
USL=24 = (24-22)/(3*0.5)=1.33
Cpk
Cpl =(Mean-LSL)/3sst
LSL=18
=(22-18)/(3*0.5)=2.67
Target=21
Cpk = min (Cpu, Cpl)
=min (1.33,2.67)
=1.33
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Exercise 1: For an electronic manufacturing process a current has specifications of 100
+- 10 milliamperes. The process mean and estimated standard deviation are 107.0 and
1.5, respectively. Please compute Cp, Cpk
Cp
Cpk
Move Mean closer to target Reduce Variation
Exercise 2: An extrusion die is used to produce aluminium rods. The diameter of the rods
is a critical quality characteristic. Specifications on the rods are 0.5035 +- 0.0010 inch.
The process average is .5031 and estimated standard deviation is 0.0003. Please
compute Cp, Cpk
Cp
Cpk
Move Mean closer to target Reduce Variation
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Measure Phase Summary
 In Measure phase, CTQ operational definition and performance standard is documented. It ensures that
the enterprise has one definition of the CTQ
 Measurement System Analysis helps us assess the reliability of the data collected using the current
measurement system in place. If measurement system is unreliable, assessment of current performance
is unreliable
 Attribute Agreement Analysis can be carried out to evaluate the repeatability, reproducibility and
accuracy of the measurement system
 Once the Measurement system is validated and reliability of the Measurement system is established,
data collection plan for CTQ is created.
 Current Performance is evaluated/assessed using the collected data. We may choose to evaluate current
performance using
o Sigma Level – Sigma level can be computed for continuous and discrete data
o Process Capability Indices like Cp, Cpk, Pp, Ppk
 Evaluation of current performance acts as a baseline to which post project process performance can be
compared to and we can evaluate whether any improvement has taken place
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Measure Phase Tollgate checklist
 Has a detailed Process Map been completed to better understand the process and problem, and show
where in the process the root causes might reside?
 Has the team identified the specific input (x), process (x), and output (y) measures needing to be
collected for both effectiveness and efficiency categories (I.e. Quality, Speed, and Cost Efficiency
measures)?
 Has the team developed clear, unambiguous operational definitions for each measurement and tested
them with others to ensure clarity and consistent interpretation?
 Has a clear, reasonable choice been made between gathering new data or taking advantage of existing
data already collected by the organization?
 Has an appropriate sample size and sampling frequency been established to ensure valid representation
of the process we are measuring?
 Has the measurement system been checked for repeatability and reproducibility, potentially including
training of data collectors?
 Has the team developed and tested data collection forms or check sheets which are easy to use and
provide consistent, complete data?
 Has baseline performance and process capability been established? How large is the gap between
current performance and the customer (or project) requirements?
 Has the team been able to identify any ‘Quick Wins’?
 Has the team completed the baseline savings documentation?
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Chapter
7
Analyze
Analyze Phase Overview
In the Analyze phase, the question to be answered is "What is wrong?" In other words, in this phase the team
determines the root causes of the problems of the process. The team identified the problems of the process in the
Define and Measure phases of the project. The key deliverable from this phase is validated root causes. The team
will use a variety of tools and statistical techniques to find these root causes. The team must choose the right tools
to identify these root causes as if there is no fixed set of tools for a certain situation. The tools chosen are based on
the type of data that were collected and what the team is trying to determine from the data. The team usually would
use a combination of graphical and numerical tools. The graphical tools are important to understand the data
characteristics and to ensure that the statistical analyses are meaningful (e.g., not influenced by outliers). The
numerical (or statistical) analyses ensure that any differences identified in the graphs are truly significant and not
just a function of natural variation.
The team should have already identified the process outputs - CTQ's and CTP's, or the little Y's - in the Define phase.
The X's are process and input variables that affect the CTQ's and CTP's. The first consideration in the Measure phase
is to identify the x data to collect while base lining these y variables. The y data are needed to establish a baseline of
the performance of the process. The x data are collected concurrently with the Y's in this phase so that the
relationships between the X's and Y's can be studied in the Analyse phase will impact the Big Y's - the key metrics of
the business. And if Six Sigma is not driven from the top, a Green/Black Belt may not see the big picture and the
selection of a project may not address something of criticality to the organization.
critical customer requirements, and prepare an effective project team. The three steps that enable us to do so are:
Step 7 • List All Probable X’s
Step 8 • Identify Critical X's

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Step 9 • Verify Sufficiency of Critical X's for the project

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Step 7- List all Probable X’s
Most project executions require a cross-functional team effort because different creative ideas at different levels of
management are needed in the definition and the shaping of a project. These ideas are better generated through
brainstorming sessions.
Qualitative Analysis
 Brainstorming
Brainstorming is used at the initial steps and during the Analyze phase of a Project to identify potential factors that
affect the output. It is a group discussion session that consists of encouraging a voluntary generation of a large
volume of creative, new, and not necessarily traditional ideas by all the participants. It is very beneficial because it
helps prevent narrowing the scope of the issue being addressed to the limited vision of a small dominant group of
managers. Since the participants come from different disciplines, the ideas that they bring forth are very unlikely to
be uniform in structure. They can be organized for the purpose of finding root causes of a problem and suggest
palliatives. If the brainstorming session is unstructured, the participants can give any idea that comes to their minds,
but this might lead the session to stray from its objectives.
 Five Why’s Analysis
Asking "Why?" may be a favourite technique of your three year old child in driving you crazy, but it could teach
you a valuable Six Sigma quality lesson. The 5 Whys is a technique used in the Analyze phase of the Six Sigma
DMAIC methodology. By repeatedly asking the question "Why" (five is a good rule of thumb),Green Belt/Black
Belt can peel away the layers of symptoms which can lead to the root cause of a problem. Although this
technique is called "5 Whys," you may find that you will need to ask the question fewer or more times than five
before you find the issue related to a problem. The benefits of 5 Why’s is that it is a simple tool that can be
completed without statistical analysis. Table shows an illustration of the 5 Why’s analysis. Based on this analysis,
we may decide to take out the non-value added signature for the director.
Table: 5 Why's Example
Customers are unhappy because they are being shipped products

that don't meet their specifications.
Why Because manufacturing built the products to a specification that is

different from what the customer and the sales person agreed to.
Why Because the sales person expedites work on the shop floor by calling
the head of manufacturing directly to begin work. An error happened
when the specifications were being communicated or written down.
Why Because the "start-work" form requires the sales director's approval
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before work can begin and slows the manufacturing process (or stops
it when the director is out of the office).
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Why Because the sales director needs to be continually updated on sales

for discussions with the CEO.

 Affinity Diagram
If the ideas generated by the participants to the brainstorming session are few (less than 15), it is easy to clarify,
combine them, determine the most important suggestions, and make a decision. However, when the suggestions
are too many it becomes difficult to even establish a relationship between them. An affinity diagram or KJ method
(named after its author, Kawakita Jiro) is used to diffuse confusion after a brainstorming session by organizing the
multiple ideas generated during the session. It is a simple and cost-effective method that consists of categorizing a
large amount of ideas, data, or suggestions into logical groupings according to their natural relatedness. When a
group of knowledgeable people discuss a subject with which they are all familiar, the ideas they generate should
necessarily have affinities. To organize the ideas, perform the following:
a. The first step in building the diagram is to sort the suggestions into groups based on their relatedness
and a consensus from the members.
b. Determine an appropriate header for the listings of the different categories.
c. An affinity must exist between the items on the same list and if some ideas need to be on several lists,
let them be.
d. After all the ideas have been organized; several lists that contain closely related ideas should appear.
Listing the ideas according to their affinities makes it much easier to assign deliverables to members of
the project team according to their abilities.
 Cause-and-Effect Analysis
The cause-and-effect (C&E) diagram—also known as a fishbone (because of its shape) or Ishikawa diagram (named
after Kaoru Ishikawa, its creator)—is used to visualize the relationship between an outcome and its different causes.
There is very often more than one cause to an effect in business; the C&E diagram is an analytical tool that provides
a visual and systematic way of linking different causes (input) to an effect (output). It shows the relationship between
an effect and its first, second and third order causes.
It can be used to identify the root causes of a problem. The building of the diagram is based on the sequence of
events. “Sub-causes” are classified according to how they generate “sub-effects,” and those “sub-effects” become
the causes of the outcome being addressed.
 The first step in constructing a fishbone diagram is to define clearly the effect being analyzed.
 The second step consists of gathering all the data about the key process input variables (KPIV), the
potential causes (in the case of a problem), or requirements (in the case of the design of a production
process) that can affect the outcome.
 The third step consists of categorizing the causes or requirements according to their level of importance
or areas of pertinence. The most frequently used categories are:
o Manpower, machine, method, measurement, mother-nature, and materials for manufacturing
o Equipment, policy, procedure, plant, and people for services
Subcategories are also classified accordingly; for instance, different types of machines and computers can be
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classified as subcategories of equipment.
 The last step is the actual drawing of the diagram. The diagram is immensely helpful to draw a mind map
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of the cause and effect relationship
The fishbone diagram does help visually identify the potential root causes of an outcome. Further statistical
analysis is needed to determine which factors contribute the most to creating the effect.

Figure: Fishbone Diagram
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Process Mapping
Many business processes are poorly defined or totally lacking in description. Many procedures are simply described
by word of mouth or may reside in documents that are obsolete. In process management, often by simply trying to
define and map the process, we provide a means for both understanding and communicating operational details to
those involved in the process.
 It also provides a baseline, or standard, for evaluating the improvement. In many cases, merely defining
and charting the process as it can reveal many deficiencies such as redundant and needless steps and
other non-value-added activities.
 Process mapping allows the team to represent the process associated with their problem in a way that
others find easy to understand, making the job of defining the current process easier.
 It also allows people to easily understand where waste exists in the process and where the process has
been poorly defined
The first step in analyzing process map is developing detailed process maps. The initial AS-IS process maps should
always be created by cross functional team members and must reflect the actual process rather than an ideal or
desired state.
 Start with a high level map: It can be very useful to start with a high level process map of say five to ten
steps. Six Sigma team would have developed a High Level process map (SIPOC) in Define Phase. This
helps to establish the scope of the process, identify significant issues and frame the more detailed map.
 Six Sigma team may choose a Top-Down Flow Chart describes the activities of the process in a
hierarchical order or Functional Deployment Flow Chart that shows the different functions that are
responsible for each step in the process flow chart.
 Map the process like a flowchart detailing each activity, arrow and decision. For each arrow, boxes, and
diamond, list its function and the time spent (in minutes, hours, days).
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Table: Typical Symbols used in Process Maps

Functional Deployment Flow Chart: A functional deployment flow chart shows the different functions that are
responsible for each step in the process flow chart. An example is shown below:
Responsible
Clerk Supervisor Materials Scheduler
Steps Management
Log-in Order
Prioritize Order N
Review for
Specifications Y
Materials Explosion
Schedule Fabrication
Inspection N
Distribution Y
Figure: Example Process Maps with Functions Shown
How to develop a functional Deployment Flowchart

• Step 1: List the major steps of the process in the order in which they occur. This might be the output of your
work with a top-down flowchart or you might use some other technique to create this list.
• Step 2: Across the top of your board, flip chart or paper write the names of the people or organizations
involved in the process.
• Step 3: Under the name of the person or organization responsible for the first step in the process, draw a
box and write that step in the box. If more than one person or group is responsible for a step, extend the
box so it is also under the name of that person or group.
• Step 4: If any of the other people or groups help or advise the ones with primary responsibility for that step,
draw an oval under the names of those people or groups.
• Step 5: Connect the ovals to the box with the process step in it.
• Step 6: After the first step is complete, put the second step under the people responsible for it.
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• Step 7: Connect the first step to the second step, and then add ovals for any helpers or advisors in the second
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process step. Keep going this way with all the steps in the process.

The second step is analysing the process map for:
Time: One of the most effective lean tools used in understanding waste in a process map is Value add/ Non-Value
add analysis. It assists in analysing
 Time-per-event (reducing cycle time)
 Process repeats (preventing rework)
 Duplication of effort (identifying and eliminating duplicated tasks)
 Unnecessary tasks (eliminating tasks that are in the process for no apparent reason)
 Identifying and segregating Value-added and non-value-added tasks
The objective of non-value added analysis is to:

 Eliminate the hidden costs that do not add value to the customer
 Reduce unnecessary process complexity, and thus errors
 Reduce the process cycle time
 Reduce cost and increase capacity through better utilization of resources
 Reduce inventory
 Increase revenue (e.g., reduce development process cycle time to introduce new products to market
faster)
What are VA and NVA activities?
Value-Added Step:
 Customers are willing to pay for it.
 It transforms the product/ service.
 It’s done right the first time.
Non value-added Step:

 Is not essential to produce output and does not add value to the output.
 Includes:
o Defects, errors, omissions.
o Preparation/setup, control/inspection.
o Over-production, processing, inventory.
o Transporting, motion, waiting, delays.
Non Value Added Steps can be further classified

 Required NVA
o Business necessity (e.g. accounting)
o Employee necessity (e.g. payroll)
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o Process necessity (e.g. inspection)
 NVA – Waste
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o WORMPIT

How do we carry out VA/NVA analysis?
VA / NVA Analysis Procedure
 Step 1: Map the process like a flowchart detailing each activity, arrow and decision.
 Step 2: For each arrow, box, and diamond, list its function and the time spent (in minutes, hours, days) on
the value-added check list
 Step 3: Now become the customer. Step into their shoes and ask the following questions:
o Is the customer not willing to pay for it?
o Is this inspection, testing, or checking?
o Is this just “fix it” error correction work or waste?
 Step 4: If the answer to any of these questions is “yes”, then the step may be non-value-added.
o If so, can we remove it from the process? Much of the idle, non-value-adding time in a process lies
in the arrows: Orders sit in in-boxes or computers waiting to be processed, calls waiting in queue for
representative to answer. How can we eliminate delay?
 Step 5: How can activities and delays be eliminated, simplified, combined, or reorganized to provide a faster,
higher quality flow through the process?
o Investigate hand-off points: how can you eliminate delays and prevent lost, changed, or
misinterpreted information or work products at these points? If there are simple, elegant, or obvious
ways to improve the process now, revise the flowchart to reflect those changes.
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Risks: Process Maps can be analysed to determine prevalent risks in the current process. Failure Mode and Effects
Analysis is a structured and systematic process to identify potential design and process failures before they have a
chance to occur with the ultimate objective of eliminating these failures or at least minimizing their occurrence or
severity. FMEA (Failure Modes and Effects Analysis) can help us determine potential failure modes, potential failure
effects, severity rank of the failure effect, potential causes of failure, occurrence rank of the failure, current process
controls and the effectiveness of the control measures.
 Identifying the areas and ways in which a process or system can fail (failure mode)
 Estimating risk associated with specific causes
 Identifying and prioritizing the actions that should be taken to reduce those risks
 Evaluating and documenting proposed process plans or current control plans
What is Risk Assessment?
Risk assessment is the determination of quantitative and qualitative value of risk related to a concrete situation and a
recognized threat (also called hazard).
What does Risk Analysis include?
Risk analysis includes
 Identification of risks
 Estimation of their likelihood of occurrence
 Estimation of their causes and the magnitude of their potential impact
 Risk evaluation and Development of risk mitigation plan
Failure modes and effect analysis is a structured method to identify failure modes, determine the severity of the failure,
cause of the failure, frequency of the failure, current controls in place and efficiency of the controls. This enables us to
evaluate current risks in the process and thereafter developing an action plan to mitigate risks.
FMEA Operating Definition
Failure Mode and Effects Analysis is a structured and systematic process to identify potential design and process failures
before they have a chance to occur with the ultimate objective of eliminating these failures or at least minimizing their
occurrence or severity. FMEA helps in
 Identifying the areas and ways in which a process or system can fail (failure mode)
 Estimating risk associated with specific causes

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 Identifying and prioritizing the actions that should be taken to reduce those risks
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 Evaluating and documenting proposed process plans or current control plans

What is Failure Mode?
A Failure Mode is:
 The way in which the product, service, input, or process could:

o Fail to meet requirements of the end user
o Cause downstream operations to fail
 Things that could go wrong:
o Total failure
o Partial failure (too much, too little, too fast, or too slow)
o Unintended result
 Best to be stated in terms of failing to perform a function
Combination of Failure Modes
 Often, catastrophes are the result of more than one failure mechanism which occur in tandem.
 Each individual failure mechanism, if it had occurred by itself, would probably have resulted in a far less “deadly
outcome”.
Cause and Effect
 Effects are usually events that occur downstream that affect internal or external customers.
 Root causes are the most basic causes within the process owner’s control. Causes, and root causes, are in the
background; they are an input resulting in an effect.
 Failures are what transform a cause to an effect; they are often unobservable.
PFMEA (Process Failure Modes and Effect Analysis
How does PFMEA help?
The process FMEA supports processes in reducing risk of failures by:
 Identifying and evaluating process functions and requirements
 Identifying and evaluating potential product and process related failure modes, and the effects of the potential
failures on the process and the customers
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 Identifying potential manufacturing, assembly or service process causes
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 Identifying process variables on which to focus process controls for occurrence reduction or increased
detection of the failure conditions
 Enabling the establishment of a priority system for preventive/corrective actions and controls

Process FMEA doesn’t rely on design changes to overcome limitations in the process. PFMEA assumes the product/service
as designed will meet the design intent. Potential failure modes that can occur because of design weakness may be included
in PFMEA. Their effect and avoidance is covered by Design FMEA.
What about the Design issues?
During the development of a PFMEA, a team may identify design opportunities which if implemented, would either
eliminate or reduce the occurrence of a failure mode. Such information should be provided to Process Improvement/
Design expert for consideration and possible implementation.
Who should develop PFMEA?
PFMEA is developed and maintained by multi-disciplinary (or cross functional) team typically led by the Green Belt/ Black
Belt/Process Owner.
Developing PFMEA
 The PFMEA begins by developing a list of what the process is expected to do and not do.It is also known as the
process intent
 Identification of the product/service effects from the DFMEA should be included
 A flow chart of the general process should be developed. It should identify the product/process characteristics
associated with each operation.
 The process flow diagram is a primary input for development of PFMEA. It helps establish the scope of the
analysis.
o The initial flow diagram is generally considered a high level process map
o A more detailed process map is needed for identification of potential failure modes
 The PFMEA should be consistent with the information in the process flow diagram
 Requirement(s) should be identified for each process/ function. Requirements are the outputs of each
operation/step and related to the requirements of the product/service. The Requirement provides a
description of what should be achieved at each operation/step. The Requirements provide the team with a
basis to identify potential failure modes
 Other sources of information may include but not limited to
o Cause and Effect Matrix

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o Lesson learned from previous product or similar process
o Known failure modes based on historical data

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o Performance indicators (Cp, Cpk, Sigma level, FTY, RTY) data of similar process
 Once we have most of the required information, we can fill out the Process FMEA form

PFMEA Template
Process or
Prepared Page ____ of
Product
by: ____
Name:
Responsibl FMEA Date (Orig)________

e: (Rev) ___________
Current Process Action Results

SEV
RPN
Potential Responsibility
Process Potential Potential Recommend
Cause(s)/ and
OCC
DET
SEV
OCC
DET
RPN
Step / Requirement Failure Effects ed Action
Mechanism( Controls Controls Completion s
Function Mode of Failure Action(s)
s) of Failure Prevention Detection Date Taken
d g i m
a1 a2 b c f h h j k l n n n n
Body of the PFMEA
 ‘a1’- Process Step and Function: Process Step/Function can be separated into two columns or combined into
a single column. Process steps may be listed in the process step/function column, and requirement listed in
the requirements column
o Enter the identification of the process step or operation being analyzed, based on the numbering
process and terminology. Process numbering scheme, sequencing, and terminology used should be
consistent with those used in the process flow diagram to ensure traceability and relationships to
other documents.
o List the process function that corresponds to each process step or operation being analyzed. The
process function describes the purpose or intent of the operation.
 ‘a2’- Requirements: are the inputs to the process specified to meet the design intent and other customer
requirements.
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o List the requirements for each process function of the process step or operation being analyzed.
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o If there are multiple requirements with respect to a given function, each should be aligned on the
form with the respective associated failure modes in order to facilitate the analysis

 ‘b’- Potential Failure Mode – is defined as the manner in which the process could potentially fail to meet the
process requirements (including the design intent). The team should also assume that the basic design issues
which result in process concerns, those issues should be communicated to the design team for resolution
o List the potential failure mode(s) for the particular operation in terms of the process requirement(s).
o Potential failure modes should be described in technical terms, not as a symptom noticeable by the
customer
 ‘c’- Potential effect(s) of failure are defined as the effects of the failure mode as perceived by the customer(s).
o The effects of the failure should be described in terms of what the customer might notice or
experience, remembering that the customer may be an internal customer, as well as the End User.
o For the End User, the effect should be stated in terms of product or system. If the customer is the next
operation or subsequent operation (s), the effects should be stated in terms of process/operation
performance.
 A few questions we can ask to determine the potential effect of the failure
o Does the potential failure Mode physically prevent the downstream processing or cause potential
harm to equipment or operators?
o What is the potential impact on the End User?
o What would happen if an effect was detected prior to reaching the End User?
 ‘d’- Severity is the value associated with the most serious effect for a given failure. The team should agree on
evaluation criteria and a ranking system and apply them consistently, even if modified for individual process
analysis. It is not recommended to modify criteria for ranking values 9 and 10. Failure modes with a rank of 1
should not be analyzed further.
 ‘e’- Classification column may be used to highlight high priority failure modes or causes that may require
additional engineering assessment. This column may also be used to classify any product or process
characteristics (e.g., critical, key, major, significant) for components, subsystems, or systems that may require
additional process controls.
 ‘f’- Potential causes(s) of Failure Mode is defined as a indication of how the failure could occur, and is described
in terms of something that can be corrected or can be controlled. Potential causes of failure may be an
indication of a design or process weakness, the consequence of which is the failure.
o Identify and document every potential cause for each failure mode. The cause should be detailed as
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concisely and completely as possible.
o There may be one or more causes that can result in the failure mode being analyzed. This results in
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multiple lines for each cause in the table or form. Only specific errors or malfunction should be listed.
 ‘g’- Occurrence is the likelihood that a specific cause of failure will occur. The likelihood of occurrence ranking
has a relative meaning rather than an absolute value.

o Estimate the likelihood of occurrence of a potential cause of failure on a 1 to 10 scale. A consistent
occurrence rank should be used to ensure continuity.
o The occurrence ranking number is a relative ranking within the scope of FMEA and may not reflect
the actual likelihood of occurrence.
o If statistical data are available from a similar process, the data should be used to determine the
occurrence ranking. In other cases, subjective assessment may be used to estimate the ranking.
 ‘h’-Current process controls are descriptions of the controls that can either prevent to the extent possible, the
cause of failure from occurring or detect the failure mode or cause of failure should it occur. There are two
types of Process Controls to consider
o Prevention: Eliminate (prevent) the cause of the failure or the failure mode from occurring, or reduce
its rate of occurrence
o Detection: Identify (detect) the cause of failure or the failure mode, leading to the development or
associated corrective action(s) or counter-measures
o The preferred approach is to first use prevention controls, if possible. The initial occurrence rankings
will be affected by the prevention controls provided they are integrated as part of the process. The
initial detection rankings will be based on process control that either detect the cause of failure, or
detect the failure mode
 ‘i’-Detection is the rank associated with the best detection control listed in the detection controls column.
Detection is a relative ranking within the scope of the individual FMEA. Detection is a relative ranking within
the scope of the individual FMEA. In order to achieve a lower ranking, generally the planned detection control
has to be improved.
o When more than one control is identified, it is recommended that the detection ranking of each
control be included as part of the description. Record the lowest ranking in the detection column
o Assume the failure has occurred and then assess the capabilities of all the “Current Process Controls”
to detect the failure
o Do not automatically presume that the detection ranking is low because the occurrence is low, but do
assess the ability of the process controls to detect low frequency failure modes and prevent them
from going further in the process.
o Random quality checks are unlikely to detect the existence of an isolated problem and should not
influence the detection ranking.

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‘j’ - RPN stands for Risk Priority Number which is the product of Severity, Occurrence and Detection
o RPN = Severity (S) * Occurrence (O) * Detection (D)

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o Within the scope of the individual FMEA, this value can range between 1 and 1000
 Determining action priorities – Once the team has completed the initial identification of failure modes and
effects, causes and controls, including rankings for severity, occurrence and detection, they must decide if

further efforts are needed to reduce the risk. Due to the inherent limitation of resources, time, technology,
and other factors they must choose how to best prioritize these efforts.
o The initial focus of the team should be oriented towards failure modes with highest severity ranks.
When the severity is 9 or 10, it is imperative that the team ensure that the risk is addressed through
existing design controls or recommended actions.
o For failure modes with severities of 8 or below the team should consider causes having the highest
occurrence or detection rankings. It is the team’s responsibility to look at the information, decide upon
an approach, and determine how to best prioritize their risk reduction efforts which best sever their
organization and customers.
 ‘k’- Recommended Action (s) – In general, prevention actions (i.e. reducing the occurrence are preferable to
detection actions. The intent of any recommended action is to reduce rankings in the following order: severity,
occurrence, and detection. Example approaches to reduce these are explained below:
o To reduce Severity(S) Ranking: Only a design or process revision can bring about a reduction in the
severity ranking.
o To reduce Occurrence (O) Ranking: To reduce occurrence, process and design revisions may be
required. A reduction in the occurrence ranking can be effected by removing or controlling one or
more of the causes of the failure mode through a product or process design revision.
o To reduce Detection (D) Ranking: The preferred method is the use of error/mistake proofing. A
redesign of the detection methodology may result in a reduction of the detection ranking. In some
cases, a design change in the process step may be required to increase the likelihood of detection (i.e.
reduce the detection ranking)
 ‘l’ - Responsibility and Target Completion data – Enter the name of the individual and organization responsible
for completing each recommended action including the target completion date.
 ‘m’- Action(s) Taken and Completion Date- After the action has been implemented, enter a brief description
of the action taken and actual completion date
 ‘n’- Severity, Occurrence, Detection and RPN – After the preventive, correction action has been completed,
determine and record the resulting severity, occurrence, and detection rankings. Calculate and record the
resulting RPN
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Severity: A numerical measure of how serious is the effect of the failure.
Table: PFMEA Severity Evaluation Criteria
Criteria :Severity of effect

Criteria :Severity of effect on Product on Process
Effect Rank Effect
(Customer Effect) (Manufacturing /Assembly
Effect)
Potential failure affects safe vehicle operation Failure to May endanger the operator
Failure to
and/ or involves noncompliance with 10 meet (machine or assembly) without
meet safety
government regulation without warning safety and warning
and or/
or/
regulatory
Potential failure affects safe vehicle operation regulatory May endanger the operator
requiremen
and/ or involves noncompliance with 9 requireme (machine or assembly) with a
ts
government regulation with a warning nts warning
100% of the product may have

Loss of primary function (vehicle inoperable , Major
8 to be scrapped. Line shut down
does not affect safe vehicle operation) Disruption
Loss or or stops the ship.
Degradatio
n of A portion of production run
Primary Degradation of primary function (vehicle may have to be scrapped.
Significant
Function operable, but at reduced level of 7 Deviation from primary process
Disruption
performance) including decreased line speed
or added manpower.
Loss of Secondary Function (vehicle operable , 100% of production run may

Loss or but comfort/ convenience functions 6 have to be reworked off line
Degradatio inoperable) and accepted.
Moderate
n of
Disruption
Secondary Degradation of Secondary Function (vehicle A portion of production run
Function operable, but comfort/convenience functions 5 may have to be reworked off
at reduced level of performance) line and accepted.
Appearance or Audible Noise, Vehicle 100% of production run may

operable, item does not conform and noticed 4 have to be reworked in station
by most customers (>75%) before it is processed.
Moderate
Disruption
Appearance or Audible Noise, Vehicle A portion of production run
Annoyance operable, item does not conform and noticed 3 may have to be reworked in
by many customers (50%) station before it is processed.
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Appearance or Audible Noise, Vehicle
Minor Slight inconvenience to
operable, item does not conform and noticed 2
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Disruption process, operation or operator.

by discriminating customers (< 25%)
No Effect No discernible effect 1 No Effect No discernible effect

Occurrence
Occurrence: A measure of probability that a particular failure will actually happen.
The degree of occurrence is measured on a scale of 1 to 10, where 10 signifies the highest probability of occurrence.
Table: PFMEA Occurrence Evaluation Criteria
Likelihood of Criteria: Occurrence of Cause – PFMEA

Rank
Failure (Incidents per items/vehicles)
≥ 100 per thousand

Very High 10
≥ 1 in 10
50 per thousand
9
1 in 20
20 per thousand
High 8
1 in 50
10 per thousand
7
1 in 100
2 per thousand
6
1 in 500
.5 per thousand
Moderate 5
1 in 2,000
.1 per thousand
4
1 in 10,000
.01 per thousand

3
1 in 100,000
Low
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≤ .001 per thousand
2
1 in 1,000,000
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Very Low Failure is eliminated through preventive control 1

Detection: A measure of probability that a particular failure or the cause in our operation shall be detected in current
operation and shall not pass on to the next operation. (Would not affect the internal/ external customer)
Table: Detection Evaluation Criteria
Opportunity for Likelihood of

Criteria: Likelihood of Detection by Process Control Rank
Detection Detection
No detection Almost
No process control; cannot detect or is not analyzed 10
Opportunity Impossible
Not likely to detect at Failure Mode and or/ Error (Cause) is not easily detected (e.g.
9 Very Remote
any stage Random Audits).
Problem Detection Failure Mode Detection Post Processing by operator through

8 Remote
Post Processing visual/tactile/audible means.
Failure Mode detection in station by the operator through

Problem Detection at visual/tactile/audible means or post processing through the use
7 Very Low
Source of attribute gauging (go/no-go, manual torque check/clicker
wrench etc.).
Failure Mode post processing by the operator through the use of

Problem Detection variable gauging or in station by the operator through the use of
6 Low
Post Processing attribute gauging (go/no-go, manual torque check/clicker
wrench, etc.).
Failure Mode or Error (Cause) detection in -station by the

operator through the use of variable gauging or by automated
Problem Detection at
controls in-station that will detect discrepant part and notify the 5 Moderate
Source
operator (light, buzzer, etc.). Gauging performed on setup and
first-piece check (for set-up causes only).
Failure Mode detection post-processing by automated controls

Problem Detection Moderately
that will detect discrepant part and lock parts to prevent further 4
Post Processing High
processing.
Failure Mode Detection in station by automated controls that will

Problem Detection at
detect discrepant part and automatically lock parts in station to 3 High
Source
prevent further processing. 121
Error (Cause) detection in-station by automated controls that will
Error Detection and/or
detect the error and prevent the discrepant part from being 2 Very High
Problem Prevention
made.
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Detection not Error (Cause) prevention as a result of fixture design, machine

applicable; Error design or part design. Discrepant parts cannot be made because 1 Almost Certain
Prevention the item has been error proofed by process/product Design.

Case Study- Manhattan Cab Company
The Manhattan Cab Company would like to assess risks in capturing customer address during tele-booking. The most
common error observed is incorrectly entering customer address usually due to language barrier or system outage.
The error occurs in 1 in 30,000 cases approximately due to language barrier. In case of System Outage while entering
customer address, the representatives write the address in a notepad. Representatives enter the address when the
system becomes functional however 1 in 200,000 cases, incorrect address is entered. If the customer address is
incorrect, it would result in missing customer pick up by the scheduled pick up time. Customers rate this 8 out of 10
on Severity ranking scale.
The Manhattan Cab Company has introduced a few control measures to safeguard customers from the effects of
these errors
1. Driver details (Driver Name, Car Number, Phone number of the driver) is messaged to the customer 30
minutes before scheduled pick up time
2. The driver calls customer 20 minutes before scheduled pick up time.
These control measures help the driver and the customer to connect with each other. Driver and customers are able
to co-ordinate with each other and the driver is able to reach the customer by the scheduled pick up time in 83 out
of 100 incorrect customer address cases
3. The representatives call customers to confirm the address they have entered into the CRM and also to
share the booking number. This is only done in system outage cases. This helps in detecting and
correcting errors. Usually when all control measures are used, approximately 88-90% of errors are
corrected before customer feels the effect of the failure. Control Measures 1 and 2 apply in all cases.
Case Study- Invoice Processing

During the invoice analysis process, incorrect customer address will result in invoice not reaching the customer. It is
considered an inoperable error and therefore ranked 8 on severity scale. It may be because of customer providing incorrect
data, which would happen 1 in 50000 cases. It can be also be a data entry error in Customer Account Creation Process and
does happen 1 in 100 cases of the cases. There aren't any checks available for data entry. We do confirm the address with
customer before customer account is created and there aren't any errors after confirming with the customer
During invoice analysis, incorrect tax amount and tax code in invoice are common failure modes. Customer doesn’t pay the
invoice amount until invoice is corrected. It is ranked 8 on Severity scale. It can happen due to incorrect tax code in Order
Management system or Account Receivable system or Tax code changes weren't updated in Account Receivable system. It
isn't possible to validate incorrect tax code entry or tax code changes not updated in Account Receivable system however
Incorrect Tax code in Order Management system is automatically validated in Order Management system and it detects
97.5% + errors. Incorrect tax code does occur 1 in 10000 cases , Incorrect Tax code in Account Receivable system occur
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around 1 in 400 , Tax code changes not updated occur almost 1.25% of the occasions
During invoice follow up, it is observed that analysts aren’t able to understand customer queries and therefore payments
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are delayed (Severity -7) due to delayed resolution of queries. This may happen due to analyst communication skills which
occurs approximately 1 in 200 cases or the analyst is not aware of customer open issues which occurs 1 in 150000 cases.
There isn’t a control mechanism for analyst communication skills however call logs are mandatory for every customer
contact. The call logs available 97.5% + of the calls.

Graphical Tools
Data displayed graphically helps us develop hypothesis and determine further analysis plans. We can use
 Box Plot
 Histogram
 Pareto Plots
Pareto Plots
The Pareto chart is based on the Pareto principle. Vilfredo Pareto was an economist in the early 1900's who
discovered that 80% of all the wealth was held by 20% of all the people. This became known as the 80/20 rule and it
was found to be applicable to more than the economy. Eighty percent of the warehouse space is taken up by 20% of
the part numbers. Eighty percent of the defects are caused by 20% of the defect types. The Pareto chart is a bar
chart. The height of the bars indicates the count, or frequency, of occurrence. The bars represent one grouping of
the data, such as defect type. The idea motivating this chart is that 80% of the count will be due to 20% of the
categories. The bars are arranged in descending order, therefore the dominant group can be determined and it will
be the first bar on the left. This chart can be used in a variety of places in a Six Sigma project.
Pareto Chart of Complaints

400 100
300 80
Frequency
Percent
60
200
40
100
20
0 0
Complaints rt od ol lo
c g rs er
po Fo tr Al kp to th
s on Hs v a O
an C s k
El
e
Tr m
p De
Te
Frequency 164 90 45 34 22 19 17
Percent 41.9 23.0 11.5 8.7 5.6 4.9 4.3
Cum % 41.9 65.0 76.5 85.2 90.8 95.7 100.0
Figure
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Worksheets: Complaints.mtw
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Some applications of Pareto
 Human Resources – A human resources manager wants to know which day of the week the greatest number
of resumes are received
 Information Technology – The Green Belt team needs to investigate which departments are using the most
LAN storage
 Sales – A salesperson wants to review last quarter’s sales figures by product line
 Accounting – The accounting manager wants to review late payments by customer segment
 Administration – The administration head wants to review total complaints by type of service.
Exercise: Post a recent promotional campaign, Kitibank monthly credit card applications increased from 4500 to 8000. They
would usually have 11% incomplete applications however now the % increased to 19%. The process manager listed down
all the sections in the form and frequency of each section not been completed. Please carry out appropriate analysis to
identify the vital few sections which when fixed will reduce % incomplete applications.
Solutions
 No of sections in an application form:____________________________________________________
 No of sections explaining 75%-85% of the errors:___________________________________________
 No of sections explaining the remaining error:_____________________________________________
Stat>Quality Tools>Pareto Chart
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Step 8- Identify Critical Xs
Hypothesis Testing
Hypothesis testing is a statistical analysis where a hypothesis is stated, sample data are collected, and a decision is
made based on the sample data and related probability value. This testing can be used to detect differences such as
differences between a process mean and the target for the process, differences between two suppliers, or
differences between multiple employees.
To conduct a hypothesis test, the first step is to state the business question involving a comparison. For instance, the
team may wonder if there is a difference in variability seen in thickness due to two different material types. Once
the business question is posed, the next step is to convert the business language or question into statistical language
or hypothesis statements. Two hypothesis statements are written.
The first statement is the null hypothesis, H0. This is a statement of what is to be disproved.
The second statement is the alternative hypothesis, Ha. This is a statement of what is to be proved. Between the two
statements, 100% of all possibilities are covered. The hypothesis will be focused on a parameter of the population
such as the mean, standard deviation, variance, proportion, or median.
The type of hypothesis test that could be conducted is based on the data type (discrete or continuous) of the y data.
For instance, if the data are continuous, the analysts may want to conduct tests on the mean, median, or variance.
If the data are discrete, the analysts may want to conduct a test on proportions.
Hypothesis Testing
A statistical hypothesis is an assumption about a population parameter. This assumption may or may not be true.
The best way to determine whether a statistical hypothesis is true would be to examine the entire population. Since
that is often impractical, researchers typically examine a random sample from the population. If sample data are not
consistent with the statistical hypothesis, the hypothesis is rejected.
Hypothesis Tests
Statisticians follow a formal process to determine whether to reject a null hypothesis, based on sample data. This
process, called hypothesis testing, consists of four steps.
o State the hypotheses: This involves stating the null and alternative hypotheses. The hypotheses are
stated in such a way that they are mutually exclusive. That is, if one is true, the other must be false.
o Formulate an analysis plan: The analysis plan describes how to use sample data to evaluate the null
hypothesis. The evaluation often focuses around a single test statistic.
o Analyze sample data: Find the value of the test statistic (mean score, proportion, t-score, z-score, etc.)
described in the analysis plan.
o Interpret results: Apply the decision rule described in the analysis plan. If the value of the test statistic is
unlikely, based on the null hypothesis, reject the null hypothesis.
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 The Language of Hypothesis
The Null Hypothesis (H0)

o A statement of ‘No difference’
o It is a statement you are testing in order to determine whether or not that statement is true
o In other words, observations are the result purely of chance
o An example expression is H0: A = B
Alternative Hypothesis (Ha)

o A statement of ‘difference’
o It is that there is a real effect and the observations are affected by the effect and some pure
chance variation
o It depends on the direction of the effect we are looking for. For example,
o For Example: Ha: AB or Ha: A>B or Ha: A<B
 Decision Errors
There is always possibility of errors in the decisions we make. Two types of errors can result from a hypothesis
test. They are:
o Type I error. A Type I error occurs when the researcher rejects a null hypothesis when it is true.
The probability of committing a Type I error is called the significance level. This probability is
also called alpha, and is often denoted by α.
o Type II error. A Type II error occurs when the researcher fails to reject a null hypothesis that is
false. The probability of committing a Type II error is called Beta, and is often denoted by β. The
probability of not committing a Type II error is called the Power of the test.
Steps of Hypothesis testing using the p-value approach
 State the null hypothesis H0, and the alternative hypothesis Ha.
 Choose the level of significance () and the sample size, n.
 Determine the appropriate test statistic and sampling distribution.
 Collect the data and compute the sample value of the appropriate test statistic.
 Calculate the p-value based on the test statistic and compare the p-value to .
 Make the statistical decision. If the p-value is greater than or equal to , we fail to reject the null
hypothesis. If the p-value is less than , we reject the null hypothesis.
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 Express the statistical decision in the context of the problem.
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Hypothesis tests and Graphical Tools
If Output and Input Appropriate Test Graphical Examples

Tool
Y is… X is …
Continuous Discrete more than ANOVA (single factor) Boxplot, Compressive strength of concrete
2 categories frequency plots, using various brands of cement.
Kruskal Wallis
histogram
Moods Median
Continuous Discrete in 2 2- sample t-test Boxplot, Average handling time compared
categories frequency plots, for two teams carrying out same
Mann_Whitney
histogram process
Continuous Continuous Regression Scatter Plot Diesel consumed vs speed
Discrete Discrete in 2 2-proportion test % defects of Team A versus %

categories defects of Team B
Discrete Discrete multiple Chi-square test Pareto Analysis Number of errors in coding vs
categories number of defects in testing
Parametric Hypothesis tests

 F-test
A fast food chain may want to evaluate variation in cutlet diameter across two units, and therefore carry out F-test
to compare variances of two groups
o F-test is used to compare variances of two groups. It tests the hypothesis whether there is any difference
between two population variances
o F-test results help us determine whether we should assume equal variances or not while carrying out 2-
independent sample t test
 Bartlett/Levene test
Consider the same fast food has more than two units to compare the diameter of the cutlet. The F - test is limited to
two groups. Therefore Bartlett/Levene test should be used to compare variances of multiple groups
o Levene and Bartlett tests can be used to test variances of several groups.
o Bartlett test for variances assumes that the data follows normal distribution however Levene tests
doesn’t make any such assumption. Levene test for variances is a non-parametric equivalent of Bartlett
test.
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o Test for equal variances is carried out to satisfy assumption of homoscedasity (equal variances) for
ANOVA-One way
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 2-sample t test
An assembly operation requires a 6-week training period for a new employee to reach maximum efficiency. A new
method of training was proposed and an experiment was carried out to compare the new method with the standard
method. A group of 18 new employees was split into two groups at random. Each group was trained for 6 weeks,
one group using the standard method and the other the new method. The time (in minutes) required for each
employee to assemble a device was recorded at the end of the training period. Here the X is the training method
and the Y is the assembly time. The two levels of the factor training method are ‘standard’ and ‘new’. The analyst
may carry out 2-sample t test to compare the time required to assemble a device for two levels of training.
o 2- independent sample t-test compares and tests the difference between the means of two independent
populations
o 2 –independent sample t- test are of two types and we choose one of them depending on F-test results
o 2-independent sample t-test assuming equal variances
o 2-independent sample t-test assuming unequal variances
 ANOVA-One Way: Testing for differences among mean of multiple groups
Sometimes, a hypothesis test involves testing for differences in the mean level of a Y for an X with three or more
levels. A factor (X), such as baking temperature, may have several numerical levels (e.g., 300 degrees, 350 degrees,
400 degrees, 450 degrees) or a factor such as the preferred level may have several categorical levels (low, medium,
high). This type of hypothesis test is called a completely randomized design.
When the numerical measurements (values of the CTQ) across the groups (levels of the [X]) are continuous and
certain assumptions are met, you use the analysis of variance (ANOVA) to compare the population means of the
CTQ for each level of X. The ANOVA procedure used for completely randomized designs is referred to as a one-way
ANOVA and is an extension of the t test for the difference between the means. Although ANOVA is an acronym for
analysis of variance, the term is misleading because the objective is to analyze differences among the population
means, not the variances. However, unlike the t test, which compares differences in two means, the one-way ANOVA
simultaneously compares the differences among three or more population means. This is accomplished through an
analysis of the variation among the populations and also within the populations. In ANOVA, the total variation of the
measurements in all the populations is subdivided into the variation that is due to differences among the populations
and variation that is due to variation within the populations. Within-group variation is considered a random or
experimental error. Among-group variation is attributable to treatment effects, which represent the effect of the
levels of X, called a factor, used in the experiment on the CTQ or Y.
Simply Analysis of Variances- One Way tests to determine whether means of several groups are equal or not 128
Underlying Assumptions of ANOVA- One way
o Within each sample, the values are independent
o The k samples are normally distributed
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o The samples are independent of each other

o The k samples are all assumed to come from populations with the same variance

• 2 proportion test
A hypothesis test for two population proportions to determine whether they are significantly different. This
procedure uses the null hypothesis that the difference between two population proportions is equal to a
hypothesized value (H0: p1 - p2 = P0), and tests it against an alternative hypothesis, which can be either left-tailed
(p1 - p2 < P0), right-tailed (p1 - p2 > P0), or two-tailed (p1 - p2 ≠ P0 ).
• Chi-Square test of association
A hypothesis test to test the independence between categorical variables. For example, a manager of three customer
support call centers wants to know if a successful resolution of a customer's problem (yes or no) depends on which
branch receives the call. The manager tallies the successful and unsuccessful resolutions for each branch in a table,
and performs a chi-square test of independence on the data. In this case, the chi-square statistic quantifies how the
observed distribution of counts varies from the distribution you would expect if no relationship exists between call
center and a successful resolution.
Non-parametric tests
The most commonly used statistical tests (t-tests, Z-tests, ANOVA, etc.) are based on a number of assumptions. Non-
parametric tests, while not an assumption-free, make no assumption of a specific distribution of the population. The
qualifiers (assuming) for non-parametric tests are always much less restrictive than for their parametric
counterparts. For example, classical ANOVA requires the assumptions of mutually independent random samples
drawn from normal distributions that have equal variances, while the non-parametric counterparts require only the
assumption that the samples come from any identical continuous distributions.
Also, classical statistical methods are strictly valid only for data measured on an interval or ratio scales, while non-
parametric statistics apply to frequency or count data and to data measured in nominal or ordinal scales. Since
interval and ratio data can be transformed to nominal or ordinal data, non-parametric methods are valid in all cases
where classical methods are valid; the reverse is not true. Ordinal and nominal data are very common in Six Sigma
work. Nearly all customer and employee surveys, product quality ratings, and many other activities produce ordinal
and nominal data.
So if non-parametric methods are so great, why do we ever use parametric methods? - When the assumptions hold,
parametric tests will provide greater power than non-parametric tests. That is, the probability of rejecting H0 when
it is false is higher with parametric tests than with a non-parametric test using the same sample size. However, if the
assumptions do not hold, then non-parametric tests may have considerably greater power than their parametric
counterparts.
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It should be noted that non-parametric tests perform comparisons using medians rather than means, ranks rather
than measurements, and signs of difference rather than measured differences. In addition to not requiring any
distributional assumptions, these statistics are also more robust to outliers and extreme values.
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Table: Non Parametric Tests
Minitab Non- Parametric

Parametric Test What It Does
Analogs
Performs a one-sample sign test of the median and calculates the
1 sample sign corresponding point estimates and confidence interval. 1-sample Z-test
1-sample t-test
1-sample sign test makes no assumptions about population symmetry.
Performs a one-sample Wilcoxon signed rank test of the median and
calculates the corresponding point estimate and confidence interval
1-sample 1-sample Wilcoxon test assumes the data comes from a symmetric 1-sample Z-test
Wilcoxon distribution, such as the uniform or Cauchy distributions. If you cannot 1-sample t-test
justify this assumption of symmetry, use the nonparametric 1-sample sign
test, which does not assume a symmetric distribution.
Performs a hypothesis test of the equality of two population medians and

Mann-Whitney 2-sample t-test
calculates the corresponding point estimate and confidence interval.
Kruskal-Wallis performs a hypothesis test of the equality of population

medians for a one-way design (two or more populations). This test is the
Kruskal-Wallis One-Way
generalization of the procedure used by the Man-Whitney test.
ANOVA
See also: Mood’s median test.
Performs a hypothesis test of the equality of population medians in a one

way design. Sometimes called a median test or sign scores test. Mood’s
median test is more robust against outliers than the Kruskal-Wallis test,
Mood’s Median but is less powerful (confidence interval is wider, on the average) for One-way
test analysing data from many distributions, including data from the normal ANOVA
distribution.
See also: Kruskal-Wallis test.
Performs a non-parametric analysis of a randomized block experiment.

Randomized block experiments are a generalization of paired Two-way
Friedman experiments. The Friedman test is a generalization of the paired sign test ANOVA
with a null hypothesis of treatments having no effect. This test requires
exactly one observation per treatment-block combination.
Test whether or not the data order is random. Use Minitab’s stat > Quality
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Runs tests None
Tools > Run Chart to generate a run chart
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Test for equal variances. This method considers the distances of the Bartlett’s test
observations from their sample median rather than their sample mean.
Levene’s test
Using the sample median rather than the sample mean makes the test
more robust for smaller samples.

Case Study
Q. The length of 25 samples of a fabric are taken at random to get the following data. Mean and standard
deviation from the historic 2 years study are 150 and 4 respectively. Test if the current mean is greater
than the historic mean. Assume to be 0.05. Worksheet: 1-sample Z
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Q. The mean diameter of the bolt manufactured should be 10mm to be able to fit into the nut. 20 samples
are taken at random from production line by a quality inspector. Conduct a test to check with 95%
confidence that the mean is not different from the specified value. Assume data is Normal. Generally the
standard deviation of population is not known. In such cases the test statistic is T. We use 1-sample t test
to prove our hypothesis.
Worksheet: 1-Sample T.mtw
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Q. An analyst at a department store wants to evaluate a recent credit card promotion. To
this end, 500 cardholders were randomly selected. Half received an ad promoting a reduced
interest rate on purchases made over the next three months, and half received a standard
seasonal advertisement. Did the advertisement promoting reduced interest rate increase
purchases? Worksheet: Promotion.mtw
Solution:
Y (Response) ____________________________________________________________
 Data type: ________________________________________________________
X (Factor) _______________________________________________________________
 Data type :_________________________________________________________
Test___________________________________________________________________
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Normality test
F-test
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2-sample t test
Q. F&B manager wants to determine whether there is any significant difference in the
diameter of the cutlet between two units. A randomly selected sample of cutlets was
collected from both units and measured? Analyze the data and draw inferences at 5%
significance level. Please state the assumptions and tests that you carried out to check
validity of the assumptions. Worksheet: Cutlets.mtw
Solution:
Y (Response) ____________________________________________________________
 Data type: ________________________________________________________
X (Factor) _______________________________________________________________
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 Data type :_________________________________________________________

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Test___________________________________________________________________

Q. A financial services organization outsourced their back-office operations to three
different vendors. The contracts are up for renewal and the CEO wants to determine
whether they should renew contracts with all vendors. Vendor with the least transaction
time will be preferred. CEO wants to evaluate whether to renew individual contracts or
consolidate. CEO will renew individual contracts if the performance of all vendors is
similar. Worksheet: Transaction time.mtw
Solution:
Y (Response) ____________________________________________________________
 Data type: ________________________________________________________
X (Factor) _______________________________________________________________
 Data type :_________________________________________________________
Test___________________________________________________________________
Normality test
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Stacking Data
Bartlett test
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Analysis of Variance (ANOVA)
Q. A hospital wants to determine whether there is any difference in the average Turnaround
time of reports of the laboratories on their preferred list. They collected a random sample
and recorded Turnaround time for reports of 4 laboratories. TAT is defined as sample
collected to report dispatch. Analyze the data and determine whether there is any
difference in average turnaround time among the different laboratories at 5% significance
level. Worksheet: LabTAT.mtw
Solution:
Y (Response) ____________________________________________________________
 Data type: ________________________________________________________ 138

X (Factor) _______________________________________________________________
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 Data type :_________________________________________________________
Test_________________________________________________________________

Q. Marks and Sparks home-ware division have been planning to launch a new sales incentive
program for their sales executive. The sales executives have earlier suggested that men
won’t buy, women will. Analyze the data and determine whether there is evidence at 5%
significance level to support this hypothesis. Worksheet: Marks&Sparks.mtw
Solution:
Y (Response) ____________________________________________________________
 Data type: ________________________________________________________
X (Factor) _______________________________________________________________
 Data type :_________________________________________________________
Test___________________________________________________________________
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Q. WWR Research Company uses 4 regional centres in India (North, South, East, and West)
to input data of questionnaire responses. They audit a certain % of the questionnaire
responses versus data entry. Any error in data entry renders it defective. The manager
wants to check whether the defective % varies by regional office. Worksheet –
Questionnaire Defectives.mtw
Solution:
Y (Response) ____________________________________________________________
 Data type: ________________________________________________________
X (Factor) _______________________________________________________________
 Data type :_________________________________________________________
Test___________________________________________________________________
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FAQs
Why do we check whether the data follows normal distribution before 2-sample t test and ANOVA?
• 2- independent sample t-test and ANOVA assumes that the data follows normal distribution and therefore we
carry out normality test. We may carry out Anderson-Darling normality test and if p-value is more than alpha,
we consider that data follows normal distribution
What is F-test for?
• F-test is used compare variances of two groups. It tests the hypothesis whether there is any difference between
two population variances. F-test results help us determine whether we should assume equal variances or not
while carrying out 2-independent sample t test
What is 2-independent sample t-test for?
• 2- independent sample t-test compares and tests the difference between the means of two independent
populations. 2 –independent sample t- test are of two types and we choose one of them depending on F-test
results
• 2-independent sample t-test assuming equal variances or assuming unequal variances
What is Levene and Bartlett test for?
• Levene and Bartlett tests can be used to test variances of several groups. Bartlett test for variances assumes
that the data follows normal distribution however Levene doesn’t make any such assumption.
What is ANOVA for?
• Analysis of Variances- One Way tests to determine whether means of several groups are equal or not
• Underlying Assumptions of ANOVA- One way
• The samples are independent of each other and within each sample, the values are independent
• The k samples are normally distributed and are assumed to come from population with the same
variance
What is 2-proportion test for?
• 2- Proportion test---A hypothesis test to compare two population proportions to determine whether they are
significantly different.
What is the Chi-Square test of independence for?
• It tests the independence between categorical variables. For example, a manager of three customer support
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call centers wants to know if a successful resolution of a customer's problem (yes or no) depends on which
branch receives the call. The manager tallies the successful and unsuccessful resolutions for each branch in a
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table, and performs a chi-square test of independence on the data. In this case, the chi-square statistic
quantifies how the observed distribution of counts varies from the distribution you would expect if no
relationship exists between call center and a successful resolution.

Sample Size Determination
Exercise: Project Leader will like to detect a
difference of 2 minutes in average transaction time of
current process versus historical average using
sample data. The standard deviation that has been
historically observed is 5 minutes. Please determine
the minimum sample size required for 1 – sample t
test (Ha: ≠)
Power: 90%
Significance: 5%
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Exercise: Project Leader wants to compare whether
current sample defect % of 12% is truly less than
historical defect % of 16%. Please determine the
minimum sample size required for 1 – proportion test
(Ha:<)
Power : 90%
Significance: 5%
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Correlation and Regression
Let’s take a look a few scenarios.
 Administrative – A financial analyst wants to predict the cash needed to support growth and increases
in capacity.
 Market/Customer Research – The marketing department wants to determine how to predict a
customer’s buying decision from demographics and product characteristics.
 Hospitality – Food and Beverage manager wants to see if there is a relationship between room service
delays and order size.
 Customer Service - GB is trying to reduce call length for potential clients calling for a good faith estimate
on a mortgage loan. GB thinks that there is a relationship between broker experience and call length.
 Hospitality - The Green Belt suspects that the customers have to wait too long on days when there are
many deliveries to make at Six Sigma Pizza.
In the scenarios mentioned here, there is something common, i.e. we want to explore the relationship between
Output and Input, or between two variables. Correlation and Regression helps us explore statistical relationship
between two continuous variables.
 Correlation
Correlation is a measure of the relation between two or more continuous variables. The Pearson correlation
coefficient is a statistic that measures the linear relationship between the x and y. The symbol used is r. The
correlation value ranges from -1 to 1. The closer the value is to 1 in magnitude, the stronger the relationship
between the two.
 A value of zero, or close to zero, indicates no linear relationship between the x and y.
 A positive value indicates that as x increases, y increases.
 A negative value indicates that as x increases, y decreases.
The Pearson correlation is a measure of a linear relationship, so scatter plots are used to depict the relationship
visually. The scatter plot may show other relationships.
Correlation Analysis measures the degree of linear relationship between two variables
o Range of correlation coefficient : -1 to +1
• Perfect positive relationship +1
• No Linear relationship 0
• Perfect negative relationship -1
o If the absolute value of the correlation coefficient is greater than 0.85, then we say there is a good
relationship.
• Example: r = 0.9, r = -0.95, r = 1.0, r = -0.9 describe good relationship
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• Example: r = 0.0, r = -0.3, r = +0.24 describe poor relationship.
 Correlation values of -1 or 1 imply an exact linear relationship. However, the real value of correlation is in
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quantifying less than perfect relationships. Finding that two variables are correlated often informs a
regression analysis which attempts to further describe this type of relationship.
The figure below shows a scatter plot with correlation coefficient r=0.982.

Scatterplot of Weight gained vs Calories Consumed
1200
1000
800
Weight gained
600
400
200
1500 2000 2500 3000 3500 4000

Calories Consumed
Figure
Worksheet: Calories Consumed.mtw
 Regression
A natural extension of correlation is regression. Regression is the technique of determining a mathematical equation
that relates the x's to the y. Regression analysis is also used with historical data - data where the business already
collects the y and associated x's. The regression equation can be used as a prediction model for making process
improvements.
 Simple Linear Regression
Simple linear regression is a statistical method used to fit a line for one x and one y. The formula of the line is
where b0 is the intercept term and b1 is the slope associated with x. These beta terms are called the coefficients
of the model. The regression model describes a response variable y as a function of an input factor x. The larger
the b1 term, the more change in y given a change in x. 145
In Simple Linear Regression, a single variable “X” is used to define/predict “Y”
 e.g.; Wait Time = b0 + (b1) x (Deliveries) + E (error)
 Simple Regression Equation: Y = b0 + (b1) * (X) + E (error)
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 Y=mx+c+e
o m= slope, c= constant/intercept, e= error

Regression terms
Types of Variables
 Input Variable (X’s): These are also called predictor variables or independent variables. It is best if the
variables are continuous
 Output Variable (Y’s): These are also called response variables or dependent variables (what we’re trying
to predict). It is best if the variables are continuous.
R-squared-also known as Coefficient of determination- The coefficient of determination (r2) is the ratio of the
regression sum of squares (SSR) to the total sum of squares (SST). It represents the % variation in output
(dependent variable) explained by input variables/s or Percentage of response variable variation that is
explained by its relationship with one or more predictor variables.
Prediction and Confidence Interval: These are types of confidence intervals used for predictions in regression
and other linear models.
 Prediction Interval: It represents a range that a single new observation is likely to fall given specified
settings of the predictors.
 Confidence interval of the prediction: It represents a range that the mean response is likely to fall
given specified settings of the predictors.
The prediction interval is always wider than the corresponding confidence interval because of the added
uncertainty involved in predicting a single response versus the mean response.
Exercise: Is there a statistical relationship between calories consumed and weight gained? If 3300 calories are
consumed, how much weight will be gained? Worksheet: Calories Consumed. Mtw
Graph>Scatter Plot
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Stat>Basic Statistics>Correlation
Stat>Regression>Regression
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Exercise: Regional Sales Manager of a Cosmetic company want to investigate the relationship between
total advertisement expenditure and total sales. The Regional Sales Manager also wants to predict total
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sales based on total advertisement expenditure. Analyze the data to find the following: Rsq, Regression
Equation, if Adspend is 45000, Sales =________________? Worksheet: Adspend_Sales.mtw

Step 9- Verify Sufficiency of Critical X’s for project
Although a statistical analysis may show that there is a statistically significant difference, there may not be a
practical difference. In other words, the difference may not be big enough to be of importance to the business.
The bigger the sample size used in an analysis, the smaller the deviation from the null hypothesis that may be
detected. Always remember to check for outliers that may be influencing results. And finally, ask whether this
difference means anything practically.
Analyze phase Summary

1. All inputs are listed and potential inputs identified from the list using tools like Onsite Investigation,
Ishikawa Diagram etc
2. Potential inputs are identified from sources of waste, risks and variation
3. Potential inputs are validated using quantitative tools like Hypothesis Testing
a) To compare averages of two samples/populations---2-sample t-test
b) To compare medians of two samples/populations – Mann Whitney test
c) To compare averages of more than two samples/populations- --- ANOVA
d) To compare medians of more than two samples/ populations – Kruskal Wallis or Moods Median
test
e) To compare proportions of two samples / populations---- 2 –proportion test
f) To compare proportions of more than two samples/populations---- Chi Square test of
Homogeneity
4. Correlation and Regression may also be used
a) Scatter plot helps us visually determine the correlation between two continuous variables.
b) Correlation helps us determine the degree of linear association between two continuous
variables
c) Regression helps us determine the equation to predict/forecast Y
d) Check whether statistically validated Inputs (Critical Xs) have sufficient capability to realize
improvement in Y (output)
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Analyze phase Tollgate checklist
 Has the team conducted a value-added and cycle time analysis, identifying areas where time and resources
are devoted to tasks not critical to the customer?
 Has the team examined the process and identified potential bottlenecks, disconnects, and redundancies that
could contribute to the problem statement?
 Has the team analyzed data about the process and its performance to help stratify the problem, understand
reasons for variation in the process, and generate hypothesis as to the root causes of the current process
performance?
 Has an evaluation been done to determine whether the problem can be solved without a fundamental ‘white
paper’ recreation of the process? Has the decision been confirmed with the Project Sponsor?
 Has the team investigated and validated (or revalidated) the root cause hypothesis generated earlier, to gain
confidence that the “vital few” root causes have been uncovered?
 Does the team understand why the problem (the Quality, Cycle Time, or Cost Efficiency issue identified in
the Problem Statement) is being seen?
 Has the team been able to identify any additional ‘Quick Wins’?
 Have ‘learning’s’ to-date required modification of the Project Charter? If so, have these changes been
approved by the Project Sponsor and the Key Stakeholders?
 Have any new risks to project success been identified, added to the Risk Mitigation Plan, and a mitigation
strategy put in place?
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Chapter
8
Improve
Improve Phase Overview
In the Improve phase, the team has validated the causes of the problems in the process and is ready to generate a
list of solutions for consideration. They will answer the question "What needs to be done?" As the team moves into
this phase, the emphasis goes from analytical to creative. To create a major difference in the outputs, a new way to
handle the inputs must be considered. When the team has decided on a solution to present to management, the
team must also consider the cost/benefit analysis of the solutions as well as the best way to sell their ideas to others
in the business. The deliverables from the Improve phase are:
 Proposed solution(s)
 Cost/benefit analysis
 Presentation to management
 Pilot plan
Step 10 • Generate and Evaluate Alternative Solutions
Step 11 • Select and Optimize best solution
Step 12 • Pilot, Implement and Validate the Solution
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Step 10- Generate and evaluate Alternative Solutions
The first task in the Improve phase is to develop ideas for improving the process. The traditional method for
developing improvement ideas is to use conventional brainstorming however Green Belt/Black Belt may also choose
alternative ways to generate creative ideas in a team. Let’s explore few of those techniques in the following section.
Ideation Techniques
 Brainstorming (Round-Robin)
Most project executions require a cross-functional team effort because different creative ideas at
different levels of management are needed in the definition and the shaping of a project. These ideas
are better generated through brainstorming sessions. Brainstorming is a tool used at the initial steps or
during the Analyze phase of a project. It is a group discussion session that consists of encouraging a
voluntary generation of a large volume of creative, new, and not necessarily traditional ideas by all the
participants. It is very beneficial because it helps prevent narrowing the scope of the issue being
addressed to the limited vision of a small dominant group of managers. Since the participants come from
different disciplines, the ideas that they bring forth are very unlikely to be uniform in structure. They can
be organized for the purpose of finding root causes of a problem and suggest palliatives.
 Brainstorming using De-Bono Six Thinking Hats
Dr. Edward de Bono developed a technique for helping teams stay focused on creative problem solving
by avoiding negativity and group arguments. Dr. Bono introduced Six Thinking Hats which will represent
different thought processes of team members, and also discussed how we can harness these thoughts
to generate creative ideas. These hats are:
 The White Hat thinking requires team members to consider only the data and information at hand.
With white hat thinking, participants put aside proposals, arguments and individual opinions and review
only what information is available or required.
 The Red Hat gives team members the opportunity to present their feelings or intuition about the subject
without explanation or need for justification. The red hat helps teams to surface conflict and air feelings
openly without fear of retribution. Use of this hat encourages risk-taking and right-brain thinking.
 The Black Hat thinking calls for caution and critical judgment. Using this hat helps teams avoid
“groupthink” and proposing unrealistic solutions. This hat should be used with caution so that creativity
is not stifled.
 The Blue Hat is used for control of the brainstorming process. The blue hat helps teams evaluate the
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thinking style and determine if it is appropriate. This hat allows members to ask for summaries and helps
the team progress when it appears to be off track. It is useful for “thinking about thinking.”
 The Green Hat makes time and space available for creative thinking. When in use, the team is
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encouraged to use divergent thinking and explore alternative ideas or options.

 The Yellow Hat is for optimism and a positive view of things. When this hat is in use, teams look at the
logical benefits of the proposal. Every green hat idea deserves some yellow hat attention.

This technique is called the Six Thinking Hats. It can be used to enhance team creativity and evaluate
ideas. This technique can be applied during solution or idea generation and also can assist in building
consensus. This technique has been used world-wide, in a variety of corporations. During the Green Belt
training, we will discuss how we can utilize this concept to generate creative ideas and also to build
consensus on generated ideas.
 Creative Thinking using Probing Methods
Structured Probing methods are extremely helpful in lateral thinking and problem solving approaches.
Process Improvement experts also consider challenging an idea, or disproving an idea to be an initiation
point for creative ideas. Most scientists, innovators will like to probe to understand the existence,
validity and feasibility of an idea and this helps in improving and optimizing the idea, and may also trigger
a new idea.
 Why do we have this process step?

 Who else could be doing it?
 How can we change this step?
 What can be altered?
 When else can the activity be performed?
 Can we remove or replace this activity with something else?
 Can we combine some tasks?
 Can we apply some learning from other sources?
 Can we minimize the impact of certain aspects?
 Can we maximize impact of certain aspects?
 Can we rearrange sequence of tasks?
Probing is considered the child’s method. Children learn more through probing their parents, family and
friends, similarly auditors probe to get requisite information. Journalist uses it to remove layers of hidden
information. Scientist probe themselves to think more on the challenges that they face.
Benchmarking
Benchmarking is a popular method for developing requirements and setting goals. In more conventional terms,
benchmarking can be defined as measuring your performance against that of best-in-class companies, determining
how the best-in-class achieve those performance levels, and using the information as the basis for your own
company’s targets, strategies, and implementation.
Benchmarking involves research into the best practices at the industry, firm, or process level. Benchmarking goes
beyond a determination of the “industry standard” it breaks the firm’s activities down to process operations and
looks for the best-in-class for a particular operation. For example, to achieve improvement in their parts distribution
process Xerox Corporation studied the retailer L.L. Bean.
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Benchmarking must have a structured methodology to ensure successful completion of thorough and accurate
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investigations. However, it must be flexible to incorporate new and innovative ways of assembling difficult-to-obtain
information. It is a discovery process and a learning experience. It forces the organization to take an external view,
to look beyond itself. The essence of benchmarking is the acquisition of information.

 The process begins with the identification of the process that is to be benchmarked. The process chosen
should be one that will have a major impact on the success of the business.
 Once the process has been identified, contact a business library and request a search for the information
relating to your area of interest. The library will identify material from a variety of external sources, such as
magazines, journals, special reports, etc. Internet, organization’s internal resources, Subject Matter experts
in key department and of course network of contacts is immensely helpful in this research.
 Look for the best of the best, not the average firm. One approach is to build a compendium of business
awards and citations of merit that organizations have received in business process improvement. Sources to
consider are Industry Week’s Best Plant’s Award, National Institute of Standards and Technology’s Malcolm
Baldrige Award, USA Today and Rochester Institute of Technology’s Quality Cup Award, European
Foundation for Quality Management Award, Occupational Safety and Health Administration (OSHA), Federal
Quality Institute, Deming Prize, Competitiveness Forum, Fortune magazine, United States Navy’s Best
Manufacturing Practices, to name just a few.
 Green Belt/Black Belt may wish to subscribe to an “exchange service” that collects benchmarking
information and makes it available for a fee. Once enrolled, Green Belt/Black Belt will have access to the
names of other subscribers—a great source for contacts. Don’t overlook your own suppliers as a source for
information. If your company has a program for recognizing top suppliers, contact these suppliers and see if
they are willing to share their “secrets” with you. Suppliers are predisposed to cooperate with their
customers; it’s an automatic door-opener. Also contact your customers. Customers have a vested interest in
helping you do a better job. If your quality, cost, and delivery performance improve, your customers will
benefit. Customers may be willing to share some of their insights as to how their other suppliers compare
with you. Again, it isn’t necessary that you get information about direct competitors. Which of your
customer’s suppliers are best at billing? Order fulfilment? Customer service?
 Another source for detailed information on companies is academic research. Companies often allow
universities access to detailed information for research purposes. While the published research usually omits
reference to the specific companies involved, it often provides comparisons and detailed analysis of what
separates the best from the others. Such information, provided by experts whose work is subject to rigorous
peer review, will often save Green Belt/Black Belt thousands of hours of work.
 After a list of potential candidates is compiled, the next step is to choose the best three to five targets. As
the benchmarking process evolves, the characteristics of the most desirable candidates will be continually
refined. This occurs as a result of a clearer understanding of your organization’s key quality characteristics
and critical success factors and an improved Knowledge of the marketplace and other players. This
knowledge and the resulting actions tremendously strengthen an organization.
Benchmarking is based on learning from others, rather than developing new and improved approaches. Since the
process being studied is there for all to see, benchmarking cannot give a firm a sustained competitive advantage.
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Although helpful, benchmarking should never be the primary strategy for improvement. Competitive analysis is an
approach to goal setting used by many firms. This approach is essentially benchmarking confined to one’s own
industry. Although common, competitive analysis virtually guarantees second-rate quality because the firm will
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always be following their competition. If the entire industry employs the approach hit will lead to stagnation for the
entire industry, setting them up for eventual replacement by outside innovators.

Pugh Matrix
Pugh Matrix was introduced by Stuart Pugh. Pugh Matrix Concept Selection is a quantitative technique used to rank
the multi-dimensional options of an option set. It is frequently used in engineering for making design decisions but
can also be used to rank investment options, vendor options, product options or any other set of multidimensional
entities.
Pugh Matrix refers to a matrix that helps determine a solution from a list of potential solutions. It is a scoring matrix
used for concept selection, in which options are assigned scores relative to some pre-defined criteria. The selection
is made based on the consolidated score. The Pugh matrix is a tool to facilitate a methodical team based approach
for the selection of the best solution. It combines the strengths of different solutions and eliminates the weaknesses.
This solution then becomes the datum of the base solution against which other solutions are compared. The process
is iterated until the best solution or concept emerges.
The basic steps of the Pugh Concept Selection Process are
 Develop a list of the selection criteria. For evaluating product designs, list VOC requirements; for evaluating
improvement proposals, list customer requirements or organizational improvement goals.
 Develop a list of all potential improvement solutions or all product designs to be rated.
 Select one potential improvement or product design as the baseline - all other proposals are compared to
the baseline.
o For product designs, the baseline is usually either the current design or a preferred new design.
o For improvement proposals, the baseline is usually the improvement suggested by the team or an
improvement that has strong management support.
o The current solution in place may also be used as a baseline
 Enter the baseline proposal in the space provided.
 Enter the selection criteria along the left side of the matrix and the alternative product or improvement
proposals across the top of the matrix.
 Apply a weighting factor to all the selection criteria. These weights might not be the same for all projects, as
they can reflect localized improvement needs or changes in customer requirements. A 1-to-9 scale or 1-to-
5 scale can be used for weighting the importance of the selection criteria, using 1 for the least important
criteria and 5 or 9 for the most important criteria.
 Based on team input, score how well the baseline proposal matches each of the selection criteria. Use a 1-
to-9 or 1-to-5 scale for scoring the baseline, using 5 or 9 for very strong matches to the criteria, and 1 for
very poor matches to the criteria. We may also use 1 for strong match. The moderator may define the scale.
 For each alternative proposal, the team should determine whether the alternative is Better, the Same, or
Worse than the baseline, relative to each of the selection criteria:
o Better results in a +1 score
o Same results in a 0 score
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o Worse results in a -1 score.
 Multiply the scores by the criteria weights and add them together to obtain the weighted score.
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Table: Example Pugh Matrix
Evaluation Criteria Imp Datum B C D
Ease of guests finding the lobby for check - in 3 S S S -
Minimum weight times for check in the process 5 S - - +
Minimum errors in the room assignment 5 S - S S
Appearance of the lobby area cleanliness 4 S - - -
Sum of Same 4 1 2 1
Sum of Positives 0 0 0 1
Sum of Negatives 0 3 2 2
Weighted Sum of Positives 0 0 0 5
Weighted Sum of Negatives 0 14 9 7
 Scoring the Proposed Solutions
Each Proposed Solution is rated on how well it addresses a selection criterion compared with the Baseline Solution.
For each Proposed Solution, select whether it is Better than the Baseline Solution, the Same as the Baseline Solution
(default), or Worse than the Baseline Solution.
 Solution Scores
Based on your choice of Better, Same or Worse for each Proposed Solution (relative to the Baseline Solution), three
scores are calculated:
 Weighted Score: Each Better rating receives a raw score of 1, each same rating receives a raw score of 0, and
each Worse rating receives a raw score of -1. The raw scores are multiplied by the Importance of Selection
Criteria, and the sum of the raw scores times the Importance is the Weighted Score. A higher Weighted Score
is better.
 Worse/ Weighted Negative Score: Tracks the number of times that a Proposed Solution is rated worse than
the Baseline Solution. The lower the Worse Score, the better a proposed solution is relative to the Baseline
Solution.
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 Better/Weighted Positive Score: Tracks the number of times that a Proposed Solution is rated better than
the Baseline Solution. The higher the Better Score, the better a Proposed Solution is relative to the Baseline
Solution.
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Risk Analysis
Project leader may choose to carry out FMEA to analyze risks and solution. Solutions are not devoid of risks, and
therefore analyzing the potential impact of the solution on the risk parameter is important.
Consensus Building tools

Multi- voting
By design, brainstorming generates a long list of ideas. However, also by design, many are not realistic or feasible.
The Multi-voting activity allows a group to narrow their list or options into a manageable size for sincere
consideration or study. It may not help the group make a single decision but can help the group narrow a long list of
ideas into a manageable number that can be discussed and explored. It allows all members of the group to be
involved in the process and ultimately saves the group a lot of time by allowing them to focus energy on the ideas
with the greatest potential.
 When to use Multi-voting

When the group has a long list of possibilities and wants to narrow it down to a few for analysis and discussion and
or when a selection process needs to be made after brainstorming.
Guidelines for Conducting the Multi-voting Activity:
 Brainstorm a list of options: Conduct the brainstorming activity to generate a list of ideas or options.
 Review the list from the Brainstorming activity: Once Green Belt/Black Belt have completed the list, clarify
ideas, merge similar ideas, and make sure everyone understands the options. Note: at this time the group is
not to discuss the merits of any idea, just clarify and make sure everyone understands the meaning of each
option.
 Participants vote for the ideas that are worthy of further discussion: Each participant may vote for as many
ideas as they wish. Voting may be by show of hands or physically going to the list and marking their choices
or placing a dot by their choices. If they so desire, participants may vote for every item.
 Identify items for next round of voting: Count the votes for each item. Any item receiving votes from half
the people voting is identified for the next round of voting. For example, if there are 12 people voting, any
item receiving at least six votes is included in the next round. Signify the items for the next vote by circling
or marking them with a symbol, i.e., all items with a star by the number will be voted on the next round.
 Vote again. Participants vote again, however this time they may only cast votes for half the items remaining
on the list. In other words, if there are 20 items from the last round that are being voted on, a participant
may only vote for ten items.
 Repeat steps 4 and 5. Participants continuing voting and narrowing the options as outlined in steps 4 and 5
until there is an appropriate number of ideas for the group to analyze as a part of the decision-making or
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problem solving process. Generally groups need to have three to five options for further analysis.
 Discuss remaining ideas. At this time the group engages in discussing the pros and cons of the remaining
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ideas. This may be done in small groups or the group as a whole.

 Proceed with appropriate actions. At this point the group goes to the next steps. This might be making a
choice of the best option or identifying the top priorities.

Item Number of Votes
1. Have a meeting agenda
2. Inform participants why they have to

attend meeting
3. Have someone take notes at the meeting
4. Have a clear meeting objective
5. Reduce the number of topics to be

discussed at each meeting
6. Start and end meetings on time
Figure: Multiple Voting Activity
Nominal Group Technique

A technique that Supplements Brainstorming. Structured approaches to generate additional ideas, surveys the
opinions of a small group, and prioritize brainstormed ideas. Nominal (meaning in name only) group technique (NGT)
is a structured variation of a small-group discussion to reach consensus. NGT gathers information by asking
individuals to respond to questions posed by a moderator, and then asking participants to prioritize the ideas or
suggestions of all group members. The process prevents the domination of the discussion by a single person,
encourages all group members to participate, and results in a set of prioritized solutions or recommendations that
represent the group’s preferences. The nominal group technique is a decision making method used among groups
who want to make their decision quickly, as by a vote, but want everyone's opinions taken into account. First, every
member of the group gives their view of the solution, with a short explanation. Then, duplicate solutions are
eliminated from the list of all solutions, and the members proceed to rank the solutions, 1st, 2nd, 3rd, 4th, and so
on. The numbers each solution receives are totaled, and the solution with the lowest (i.e. most favoured) total
ranking is selected as the final decision. Figure below shows results of the nominal group technique. Each idea was
ranked by several team members. The idea with the lowest total score is selected as the winner. In this example
(Idea N).
 Structured to focus on problems, not people. To open lines of communication, tolerate conflicting ideas.
 Builds consensus and commitment to the final result. Especially good for highly controversial issues
 Nominal Group Technique is most often used after a brainstorming session to help organize and prioritize
ideas
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1 Item Number
Card Rating Value 6
Idea Scores
Idea 1 Totals
8,8,6,7,8,2 6/39
Idea 2
6,5,4,7,3 5/25
Idea N
3,2,2,1 4/8
Figure: Example of Nominal Group Technique with ideas rated
The Four Step Process to Conduct Nominal Group Technique:
 Generating Ideas: The moderator presents the question or problem to the group in written form and reads
the question to the group. The moderator directs everyone to write ideas in brief phrases or statements and
to work silently and independently. Each person silently generates ideas and writes them down.
 Recording Ideas: Group members engage in a round-robin feedback session to concisely record each idea
(without debate at this point). The moderator writes an idea from a group member on a flip chart that is
visible to the entire group, and proceeds to ask for another idea from the next group member, and so on.
There is no need to repeat ideas; however, if group members believe that an idea provides a different
emphasis or variation, feel free to include it. Do not proceed until all members’ ideas have been documented.
 Discussing Ideas: Each recorded idea is then discussed to determine clarity and importance. For each idea,
the moderator asks, “Are there any questions or comments group members would like to make about the
item?” This step provides an opportunity for members to express their understanding of the logic and the
relative importance of the item. The creator of the idea need not feel obliged to clarify or explain the item;
any member of the group can play that role.
 Voting on Ideas: Individuals vote privately to prioritize the ideas. The votes are tallied to identify the ideas
that are rated highest by the group as a whole. The moderator establishes what criteria are used to prioritize
the ideas. To start, each group member selects the five most important items from the group list and writes
one idea on each index card. Next, each member ranks the five ideas selected, with the most important
receiving a rank of 5, and the least important receiving a rank of 1 (Green Belt/Black Belt may change the
rank i.e. rank 1 can be the best and rank 5 can be the worst).
After members rank their responses in order of priority, the moderator creates a tally sheet on the flip chart
with numbers down the left-hand side of the chart, which correspond to the ideas from the round-robin.
The moderator collects all the cards from the participants and asks one group member to read the idea
number and number of points allocated to each one, while the moderator records and then adds the scores
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on the tally sheet. The ideas that are the most highly rated by the group are the most favoured group actions
or ideas in response to the question posed by the moderator.
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 When to Use NGT
NGT is a good method to use to gain group consensus, for example, when various people (program staff,
stakeholders, community residents, etc.) are involved in constructing a logic model and the list of outputs for a
specific component is too long and therefore has to be prioritized. In this case, the questions to consider would be:
“Which of the outputs listed are most important for achieving our goal and are easier to measure? Which of our
outputs are less important for achieving our goal and are more difficult for us to measure?”
 Disadvantages of NGT
• Requires preparation.
• Is regimented and lends itself only to a single-purpose, single-topic meeting.
• Minimizes discussion, and thus does not allow for the full development of ideas, and therefore can be a less
stimulating group process than other techniques.
 Advantages of NGT
• Generates a greater number of ideas than traditional group discussions.

• Balances the influence of individuals by limiting the power of opinion makers (particularly advantageous for use
with teenagers, where peer leaders may have an exaggerated effect over group decisions or in meetings where
established leaders tend to dominate the discussion).
• Diminishes competition and pressure to conform, based on status within the group.
• Encourages participants to confront issues through constructive problem solving.
• Allows the group to prioritize ideas democratically.
• Typically provides a greater sense of closure than can be obtained through group discussion.
Delphi Technique
Delphi Technique is a method of relying on a panel of experts to anonymously select their responses using a secret
ballot process. After each round, a facilitator provides the summary of the experts’ opinions along with the reasons
for their decisions. Participants are encouraged to revise their answers in light of replies from other experts. The
process is stopped after pre-defined criteria such as number of rounds. The advantage of this technique is that if
there are team members who are boisterous or overbearing, they will not have much of an impact on swaying the
decisions of other team members.
The Delphi technique, mainly developed by Dalkey and Helmer (1963) at the Rand Corporation in the 1950s, is a
widely used and accepted method for achieving convergence of opinion concerning real-world knowledge solicited
from experts within certain topic areas.
The Delphi technique is a widely used and accepted method for gathering data from respondents within their domain
of expertise. The technique is designed as a group communication process which aims to achieve a convergence of
opinion on a specific real-world issue. The Delphi process has been used in various fields of study such as program
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planning, needs assessment, policy determination, and resource utilization to develop a full range of alternatives,
explore or expose underlying assumptions, as well as correlate judgments on a topic spanning a wide range of
disciplines. The Delphi technique is well suited as a method for consensus-building by using a series of questionnaires
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delivered using multiple iterations to collect data from a panel of selected subjects. Subject selection, time frames
for conducting and completing a study, the possibility of low response rates, and unintentionally guiding feedback
from the respondent group are areas which should be considered when designing and implementing a Delphi study.

Delphi technique’s application is observed in program planning, needs assessment, policy determination, resource
utilization, marketing & sales and multiple other business decision areas.
Fowles (1978) describes ten steps for the Delphi method:
 Formation of a Delphi team to undertake a Delphi on a subject.
 Selection of expert panel(s).
 Development of the first round questionnaire
 Testing the questionnaire for proper wording.
 Transmission to the panel lists.
 Analysis of 1st responses
 Preparation of 2nd round.
 Transmission of 2nd round questionnaires to the panel lists
 Analysis of the 2nd round responses (7 to 9 may be repeated to get consensus)
 Preparation and presentation of report
Organizations do customize these steps to meet their requirements, as they may have time constraints and large
number of iterations may not be possible.
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Step 11-Select and optimize best solution
Experiments
Designed experiments play an important role in quality improvement. While the confidence intervals and hypothesis
tests previously discussed are limited to rather simple comparisons between one sample and requirements or
between two samples, the designed experiments will use ANOVA (analysis of variance) techniques to partition the
variation in a response amongst the potential sources of variation.
The traditional approach, which most of us learned in high school science class, is to hold all factors constant except
one. When this approach is used we can be sure that the variation is due to a cause and effect relationship or so we
are told. However, this approach suffers from a number of problems:
 It usually isn’t possible to hold all other variables constant.
 There is no way to account for the effect of joint variation of independent variables, such as interaction.
 There is no way to account for experimental error, including measurement variation.
The statistically designed experiment usually involves varying two or more variables simultaneously and obtaining
multiple measurements under the same experimental conditions. The advantage of the statistical approach is
threefold:
 Interactions can be detected and measured. Failure to detect interactions is a major flaw in the OFAT
approach.
 Each value does the work of several values. A properly designed experiment allows Green Belt/Black Belt to
use the same observation to estimate several different effects. This translates directly to cost savings when
using the statistical approach.
 Experimental error is quantified and used to determine the confidence the experimenter has in his
conclusions.
Much of the early work on the design of experiments involved agricultural studies. The language of experimental
design still reflects these origins. The experimental area was literally a piece of ground. A block was a smaller piece
of ground with fairly uniform properties. A plot was smaller still and it served as the basic unit of the design. As the
plot was planted, fertilized and harvested, it could be split simply by drawing a line. A treatment was actually a
treatment, such as the application of fertilizer. Unfortunately for the Six Sigma analyst, these terms are still part of
the language of experiments.
Experimental area can be thought of as the scope of the planned experiment. For us, a block can be a group of results
from a particular operator, or from a particular machine, or on a particular day—any planned natural grouping which
should serve to make results from one block more alike than results from different blocks. For us, a treatment is the
factor being investigated (material, environmental condition, etc.) in a single factor experiment. In factorial
experiments (where several variables are being investigated at the same time) we speak of a treatment combination
and we mean the prescribed levels of the factors to be applied to an experimental unit. For us, a yield is a measured
result and, happily enough, in chemistry it will sometimes be a yield.
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The objective is to determine the optimum combination of inputs for desired output considering constraints.
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Black belts use Design of Experiments (DOE) to craft well-designed efforts to identify which process changes yield
the best possible results for sustained improvement. Whereas most experiments address only one factor at a time,
the Design of Experiments (DOE) methodology focuses on multiple factors at one time. DOE provides the data that
illustrates the significance to the output of input variables acting alone or interacting with one another.

"A branch of applied statistics dealing with planning, conducting, analyzing and interpreting controlled tests to
evaluate the factors that control the value of a parameter or group of parameters."
DOE provides these advantages over other, more traditional methods:
 Evaluating multiple factors at the same time can reduce the time needed for experimentation.
 Some well-designed experiments do not require the use of sophisticated statistical methods to understand
the results at a basic level. However, computer software can be used to yield very precise results as needed.
 The costs vary depending on the experiment, but the financial benefits realized from these experiments can
be substantial.
The figure below depicts an example of a relationship between the components that DOE examines:
 Process input variables, normally referred to as x variables and as factors in DOE terminology.
 Process output variables, normally referred to as y variables and as responses in DOE terminology.
 The relationship between input variables and output variables.
 The interaction, or relationship, between input variables as it relates to the output variables.
Figure: Example of relationship between components that DOE examines
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DOE Terminology
Certain terms are frequently used with DOE that need to be defined clearly.
 Factor: A predictor variable that is varied with the intent of assessing its effect on a response variable. Most
often referred to as an "input variable."
 Factor Level: A specific setting for a factor. In DOE, levels are frequently set as high and low for each factor.
A potential setting, value or assignment of a factor of the value of the predictor variable. For example, if the
factor is time, then the low level may be 50 minutes and the high level may be 70 minutes.
 Response variable: A variable representing the outcome of an experiment. The response is often referred
to as the output or dependent variable.
 Treatment: The specific setting of factor levels for an experimental unit. For example, a level of temperature
at 65° C and a level of time at 45 minutes describe a treatment as it relates to an output of yield.
 Experimental error: An error from an experiment reveals variation in the outcome of identical tests. The
variation in the response variable beyond that accounted for by the factors, blocks, or other assignable
sources while conducting an experiment. Certain terms are frequently used with DOE that need to be defined
clearly.
 Experimental run: A single performance of an experiment for a specific set of treatment conditions.
 Experimental unit: The smallest entity receiving a particular treatment, subsequently yielding a value of the
response variable.
 Predictor Variable: A variable that can contribute to the explanation of the outcome of an experiment. Also
known as an independent variable.
 Repeated Measures: The measurement of a response variable more than once under similar conditions.
Repeated measures allow one to determine the inherent variability in the measurement system. Repeated
measures are known as "duplication" or 'repetition."
 Replicate: A single repetition of the experiment. See also replication.
 Replication: Performance of an experiment more than once for a given set of predictor variables. Each of
the repetitions of the experiment is called a "replicate." Replication differs from repeated measures in that
it is a repeat of the entire experiment for a given set of predictor variables, not just a repeat of measurements
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of the same experiment. Note: Replication increases the precision of the estimates of the effects in an
experiment. Replication is more effective when all elements contributing to the experimental error are
included. In some cases replication may be limited to repeated measures under essentially the same
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conditions. In other cases, replication may be deliberately different, though similar, in order to make the
results more general.
 Repetition: When an experiment is conducted more than once, repetition describes this event when the
factors are not reset. Subsequent test trials are run again but not necessarily under the same conditions.

DOE Applications
Planning the experiment is probably the most important task in the Improve phase when using DOE. For planning to
be done well, some experts estimate that 10-25% of your time spent should be devoted to planning and organizing
the experiments
The purpose of DOE is to create an observable event from which data may be extracted and decisions made about
the best methods to improve the process. DOE may be used most effectively in the following situations:
o Identifying factors that produce a specific response or outcome
o Selecting between alternative approaches to effect the best outcome
In DOE, a full factorial design combines levels for each factor with levels for all other factors. This basic design ensures
that all combinations are used, but if factors are many, this design may take too much time or be too costly to
implement. In either case, a fractional factorial design is selected as the number of runs is fewer with fewer
treatments.
DOE Planning Process

The project team decides the exact steps to follow in the Improve phase. Steps to include in the Improve phase may
actually be identified in the Measure and Analyze phases and should be noted to expedite later planning in the
Improve phase. What follows is a suggested guide for planning the experiment(s) to be conducted in the Improve
phase. The suggested process may be modified depending on the exact situation.
To use DOE, follow these steps:
1. Establish experiment objectives: Objectives differ per project, but the designs typically fall into three categories
to support different objectives:
 Screening – used to identify which factors are most important.
 Characterization – used to quantify the relationships and interaction between several factors.
 Optimization – used to develop a more precise understanding of just one or two variables.
2. Identify factors to be considered

 Label both input variables (x factors) and output variables (y responses) in the experiment.
 Use information collected in prior phases to assist in the identification process.
3. Finalize an experiment design

 Select a design for the experiment.
 Choose a design type (full factorial, fractional factorial, or others) that meets the experiment’s objectives.
 Determine how the factors are measured.
 Consider the resources needed and determine whether a practice run or pilot experiment may be needed.
4. Run the experiment

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 Run the experiment and collect the data. Place initial data in the results column of a design array, a graphical
representation of the experiment factors and results. Roll over Page Resources and click on Design Array for
an example.
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 Minimize the chance for human error by carefully planning where human error could occur and allow for
the possibility in the planning process.
 Randomize the runs to reduce confounding (defined later in this topic).
 Document the results as needed depending on the experiment.

5. Analyze the results of the experiment
 Review the results of the experiment(s).
 Examine the relationships among input variables (factors) acting together and with regards to the output
variable(s) (responses).
6. Make decisions on next steps

 Based on the results, determine next steps.
 Are additional runs of the experiment needed?
 Do the levels need to be modified prior to conducting the experiment again?
 If the results point to an optimal solution, implement the factors and the levels of choice and look at the
Control phase to sustain the desired improvements.
Design Array
Table: Example of Design of Array
A: TEMPERATURE B: TIME C: CATALYST VOLUME RESULTS (YEILD %)

1 - - -
2 + - -
3 - + -
4 + + -
5 - - +
6 + - +
7 - + +
8 + + +
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Barriers to the Planning Process
In all projects, barriers present themselves as obstacles to the project’s successful completion. The Improve phase
of DMAIC is no exception. The following are examples of the types of barriers to watch for during planning for an
experiment:
 Objectives or purpose are unclear – the objectives are not developed and fully understood.
 Factor levels are either set too low or too high – factor levels set inappropriately can adversely affect the
data and understanding of the relationships between factors.
 Unverified or misunderstood data from previous phases may lead to errors in planning and assumptions.
 Experimentation is a cost, although DOE is more cost effective than some other options like OFAT (one-
factor-at-a-time) experiments, the costs can be too expensive and need to be considered carefully.
 Lacks of management support – Experiments require the full support of management in order to effectively
use the resources required.
Selecting Experiment Factors
Identifying process variables, both inputs/factors and outputs/responses, is an important part of the planning
process. While the selection process varies based on the information gathered in the Analyze phase and the
objectives of the experiment, variables should be selected that have the following basic characteristics:
 Important to the process in question – Since many inputs and output variables may exist in a process, most
experiments focus on only the most critical inputs and outputs of a process. Such emphasis makes it more
likely to successfully improve the most relevant parts of a process and, on a practical level, limits the number
of variables and the cost of conducting the experiment.
 Identifiable relationships to the inputs and the outputs – If relationships are already evident based on prior
information gathered, the design of the experiment can be more focused on those factors with the most
positive impact on outputs.
 Not extreme level values – The information related to the level values of the factors should not be extreme.
Values that reflect a reasonable range around the actual performance of the factors usually yield the best
results.
There is no magic formula or equation for selecting the factors. The guidelines listed above and a review of the
analysis work done in previous phases should provide a good basis for selection. Remember, the goal of Improve is
to model the possible combination of factors and levels that yield valid and necessary results. We recommend the
use of process experts for selecting experimental factors and levels based on prior analysis. The prior analysis should
suggest what the critical factors are and where the levels should be set for a first run in the experiment.
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Other Planning Considerations
The DOE planning phase may include other considerations for the project team.
 Iterative process: One large experiment does not normally reveal enough information to make final
decisions. Several iterations may be necessary so that the proper decisions may be made and the proper
value settings verified.
 Measurement methods: Ensure that measurement methods are checked out prior to the experiment to
avoid errors or variations from the measurement method itself. Review measurement systems analysis to
ensure methods have been reviewed and instruments calibrated as needed, etc.
 Process control and stability: The results from an experiment are more accurate if the process in question
is relatively stable.
 Inference space: If the inference space is narrow, then the experiment is focused on a subset of a larger
process such as one specific machine, one operator, one shift, or one production line. With a narrowed or
focused inference space, the chance for “noise” (variation in output from factors not directly related to
inputs) is much reduced. If the inference is broad, the focus is on the entire process and the chances for
noise impacting the results are much greater.
 Types of Experiment Designs: Part of planning an experiment is selecting the experiment design.
o 2-level, 2 factor: The simplest of design options, the 2-level, 2-factor design uses only four
combinations or runs. The number in the first column represents the run number. The "+" symbol
represents the high level; the "–" symbol represents the low level.
Table: Example of 2 level, 2 factor
Factor A Factor B
1 + +
2 + -
3 - +
4 - -
o Full Factorial
Table: Example of Full Factorial
A: Temperature B: Time C: Catalyst Volume Results (Yield %)

1 - - - 72
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2 + - - 90
3 - + - 79
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4 + + - 89
5 - - + 78
6 + - + 88
7 - + + 81
8 + + + 85

This design option includes all levels and all factors for a given process. The advantage of a full
factorial design is that all factors and levels are part of the experiment, thus ensuring the most
complete data.
If there are 2 levels and 6 factors (26), then there are 64 possible runs for the experiment. A common
description of factorial experiments is the designator Lf where f is the number of factors in the
experiment and L is the number of levels.
o Fractional Factorial: This design is best used when you are unsure about which factor influences the
response outcome or when the number of factors is large (usually considered to be 5 or more). A
fractional factorial uses a subset of the total runs. For example, if there are 2 levels and 6 factors
(26), then there are 64 possible runs for the experiment. For a fractional factorial, the experiment
could be reduced to 32 runs or perhaps even 16 runs. An example of this may be viewed later in this
topic.
Design Principles: Black Belts adhere to a set of design principles to assist in the proper experiment design.
 Power: The equivalent to one minus the probability of a Type II error (1-β). A higher power is associated with
a higher probability of finding a statistically significant difference. Lack of power usually occurs with smaller
sample sizes.
The Beta Risk (i.e., Type II Error or Consumer’s Risk) is the probability of failing to reject the null hypothesis
when there is a significant difference (i.e., a product is passed on as meeting the acceptable quality level
when in fact the product is bad). Typically, (β) = 0.10%. This means there is a 90% (1-β) probability you are
rejecting the null when it is false (correct decision). Also, the power of the sampling plan is defined as 1-β,
hence the smaller the β, the larger the power.
 Sample Size: The number of sampling units in a sample.
Determining sample size is a critical decision in any experiment design. Generally, if the experimenter is
interested in detecting small effects, more replicates are required than if the experimenter is interested in
detecting large effects. Increasing the sample size decreases the margin of error and improves the precision
of the estimate. There are several approaches to determining sample size including, but not limited to:
Operating Characteristic Curves, Specifying a Standard Deviation Increase, and Confidence Interval
Estimation Method.
Note: In a multistage sample, the sample size is the total number of sampling units at the conclusion of the
final stage of sampling.
 Balanced Design: A design where all treatment combinations have the same number of observations. If
replication in a design exists, it would be balanced only if the replication was consistent across all the
treatment combinations. In other words, the number of replicates of each treatment combination is the
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same.
 Replication: Performance of an experiment more than once for a given set of predictor variables. Each of
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the repetitions of the experiment call a replicate. Replication differs from repeated measures in that it is a
repeat of the entire experiment for a given set of predictor variables, not just a repeat of measurements of
the same experiment. Replication involves an independent repeat of each factor combination in random
order. For example, suppose a metallurgical engineer is interested in studying the effect of two different
hardening processes: oil quenching and saltwater quenching on an aluminium alloy. If he has five alloy

specimens and treats them in each of the hardening processes, we will make ten observations. These should
be done in random order to maintain the properties of replication. First, the experimenter can obtain an
estimate of the experimental error which becomes a basic unit of measurement for determining whether
observed differences in the data are really statistically different. Second, if the sample mean is used to
estimate the true mean response for one of the factor levels in the experiment, replication permits the
experimenter to obtain a more precise estimate of this parameter.
 Repetition: When an experiment is conducted more than once, repetition describes this event when the
factors are not changed or reset. Subsequent test trials are run again but not necessarily under the same
conditions.
 Efficiency: In experimental designs, efficiency refers to an experiment that is designed in such a way as to
include the minimal number of runs and to minimize the amount of resources, personnel, and time utilized.
 Randomization: The process used to assign treatments to experimental units so each experimental unit has
an equal chance of being assigned a particular treatment. Randomization validates the assumptions made
in statistical analysis and prevents unknown biases from impacting conclusions. By randomization we mean
that both the allocation of the experimental material and the order in which the individual runs or trials of
the experiment are to be performed are arbitrarily determined.
For example, suppose the specimens in a metallurgical hardness experiment are of slightly different
thicknesses and the effectiveness of the quenching medium may be affected by the specimen thickness. If
all the specimens subjected to the oil quench are thicker than those subjected to the saltwater quench,
systematic bias may be introduced into the results. This bias handicaps one of the quenching media and
consequently invalidates our results. Randomly assigning the specimens to the quenching media alleviates
this problem.
 Blocking: The method of including blocks in an experiment in order to broaden the applicability of the
conclusions or to minimize the impact of selected assignable causes. The randomization of the experiment
is restricted and occurs within blocks.
 Order: The order of an experiment refers to the chronological sequence of steps to an experiment. The trials
from an experiment should be carried out in a random run order. In experimental design, one of the
underlying assumptions is that the observed responses should be independent of one another (i.e., the
observations are independently distributed). By randomizing the experiment, we reduce the bias that could
result by running the experiment in a “logical” order.
 Interaction effect: The interaction effect for which the apparent influence of one factor on the response
variable depends upon one or more other factors. The existence of an interaction effect means that the
factors cannot be changed independently of each other.
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 Confounding: Indistinguishably combining an effect with other effects or blocks. When done, higher-order
effects are systematically aliased so as to allow estimation of lower-order effects. Sometimes, confounding
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results from poor planning or inadvertent changes to a design during the running of an experiment.
Confounding can diminish or even invalidate the effectiveness of the experiment.
 Alias: An alias is a confounded effect resulting from the nature of the designed experiment. The confounding
may or may not be deliberate.

Types of Design
Completely randomized design: An experimental plan where the order in which the experiment is performed is
completely random, for example,
Table: Example of Completely Randomized Design
Level Test Sequence Number

A 7,1,5
B 2,3,6
C 8,4
Randomized-block design
When focusing on just one factor in multiple treatments, it is important to maintain all other conditions as constant
as possible. Since the number of tests to ensure constant conditions might be too large to practically implement, an
experiment may be divided into blocks. These blocks represent planned groups that exhibit homogeneous
characteristics. A randomized block experiment limits each group in the experiment to exactly one and only one
measurement per treatment.
For example, if an experiment is going to cover two shifts, then bias may emerge based on the shift during which the
test was conducted. A randomized block plan might measure each item on each shift to reduce the chance for bias.
A randomized block experiment would arbitrarily select the runs to be performed during each shift. For example,
since the coolant temperature in the example below is probably the most difficult to adjust, but may partially reflect
the impact of the change in shift, the best approach would be to randomly select runs to be performed during each
shift. The random selection might put runs 1, 4, 5 and 8 in the first shift and runs 2, 3, 6 and 7 in the second shift.
Another approach that may be used to nullify the impact of the shift change would be to do the first three replicates
of each run during the first shift and the remaining two replicates of each run during the second shift.
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Table: Example of Randomized Block Design
Run # Feed Speed C Temperature Average Surface Finish Reading
1 .01 1300 100 10

2 .01 1300 140 4
3 .01 1800 100 6
4 .01 1800 140 2
5 .04 1300 100 7
6 .04 1300 140 6
7 .04 1800 100 6
8 .04 1800 140 3
For example, assume we are conducting a painting test with different materials, material A and material B. We have
four test pieces of each material. Ideally we would like to clean all of the pieces at the same time to ensure that the
cleaning process doesn’t have an effect on our results; but what if our test requires that we use a cleaning tank that
cleans two test pieces at a time? The tank load then becomes a “blocking factor.” We will have four blocks, which
might look like this:
Table
Material Tank Load Test Piece Number

A 1 7
B 1
B 2 5
A 2
B 3 3
A 6
B 4 4
A 8
Since each material appears exactly once per cleaning tank load we say the design is balanced. The material totals
or averages can be compared directly.
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Latin-square designs
A Latin square design involves three factors in which the combination of the levels of any one of them and the levels
of the other two appear once and only once. A Latin square design is often used to reduce the impact of two blocking
factors by balancing out their contributions. A basic assumption is that these block factors do not interact with the
factor of interest or with each other. This design is particularly useful when the assumptions are valid for minimizing
the amount of experimentation.
1. The Latin square design has two limitations: The number of rows, columns, and treatments must all be the
same (in other words, designs may be 3X3X3, 4X4X4, 5X5X5, etc.).
2. Interactions between row and column factors are not measured.
Table: Example of Latin Square Design (3x3)
Engine configuration
Aircraft I II III
1 A B C
2 B C A
3 C A B
Three aircraft with three different engine configurations are used to evaluate the maximum altitude when flown by
three different pilots (A, B, and C). In this case, the two constant sources are the aircraft (1, 2, and 3) and the engine
configuration (I, II, and III). The third variable – the pilots – is the experimental treatment and is applied to the source
variables (aircraft and engine). Notice that the condition of interest is the maximum altitude each of the pilots can
attain, not the interaction between aircraft or engine configuration. For example, if the data shows that pilot A
attains consistently higher altitudes in each of the aircraft/engine configurations, then the skills and techniques of
that pilot are the ones to be modelled. This is also an example of a fractional factorial as only nine of the 27 possible
combinations are tested in the experiment.
Suppose we wish to compare four materials with regard to their wearing qualities. Suppose further that we have a
wear-testing machine which can handle four samples simultaneously. Two sources of variation might be the
variations from run to run, and the variation among the four positions on the wear machine. The Latin square plan
is as in Table 34 (the four materials are labelled A, B, C, D).
Table
Position Number
Run (1) (2) (3) (4)
1 A B C D
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2 B C D A
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3 C D A B
4 D A B C
Since each material appears exactly once per cleaning tank load we say the design is balanced. The material totals
or averages can be compared directly.

Design of Experiments – Illustration
Worksheet: CSAT.mtw
Y = SATISFACTION
X1= SPEED
X2 = QUALITY
X3 = SERVICE
Objective: Maximize ‘SATISFACTION’
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Simulation
Simulation is a means of experimenting with a detailed model of a real system to determine how the system will
respond to changes in its structure, environment, or underlying assumptions. A system is defined as a combination
of elements that interact to accomplish a specific objective. A group of machines performing related manufacturing
operations would constitute a system. These machines may be considered, as a group, an element in a larger
production system. The production system may be an element in a larger system involving design, delivery, etc.
Simulations allow the system or process designer to solve problems. To the extent that the computer model behaves
as the real world system it models, the simulation can help answer important questions. Care should be taken to
prevent the model from becoming the focus of attention. If important questions can be answered more easily
without the model, then the model should not be used. The modeller must specify the scope of the model and the
level of detail to include in the model. Only those factors which have a significant impact on the model’s ability to
serve its stated purpose should be included. The level of detail must be consistent with the purpose. The idea is to
create, as economically as possible, a replica of the real world system that can provide answers to important
questions. This is usually possible at a reasonable level of detail. Well-designed simulations provide data on a wide
variety of systems metrics, such as throughput, resource utilization, queue times, and production requirements.
While useful in modelling and understanding existing systems, they are even better suited to evaluate proposed
process changes. In essence, simulation is a tool for rapidly generating and evaluating ideas for process
improvement. By applying this technology to the creativity process, Six Sigma improvements can be greatly
accelerated.
 Predicting CTQ Performance

A key consideration for any design concept is the CTQ that would result from deploying the design. It is often very
difficult to determine the overall result of a series of process steps, but relatively easy to study each step individually.
Software can then be used to simulate the process a number of times and calculate the performance of CTQ at the
end of the series.
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Step 12- Pilot, Implement and Validate solution
Pilot
A pilot is a test of a proposed solution. This type of test has the following properties:
 Performed on a small scale, usually on a subset of the target population
 Used to evaluate both the solution and the implementation of the solution
 Purpose is to make the full scale implementation more effective
 Provides data about expected results and exposes issues/ challenges in the implementation plan
Pilot Study helps to

 Identify previously unknown performance problems, improve the solution and understand risks of the
solution
 Validate expected results and facilitate buy-in from stakeholders, cross-functional team.
 Smooth implementation with limited or no teething issues
Full Scale Implementation

The team first develops a plan to implement the one or more solutions selected in the Improve phase.
It is important to create a solution implementation plan based on the results from the pilot plan and pilot
implementation. A big piece of the solution implementation plan is to leave tools to help the owner manage the
process after the team has gone on to other projects. A large-scale project may require dealing with multiple
processes and sub-processes, multiple implementation locations, a large number of implementation teams and
several different disciplines and methodologies.
Full Scale Implementation should be treated as a project in itself, and project management practises should not be
ignored.
What plan should include but not limited to:
 Potential Risk analysis – Failure Modes and Effect Analysis
 Solution Implementation Schedule
 Training Plan
 Communication Plan
 Cost and Benefit Analysis
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Improvement Validation
Once full scale implementation has been successfully completed, Green Belt/Black Belt should
 Revalidate the measurement system to ensure that data collected post improvement is reliable
 Collect data for Output (Y) to evaluate performance post full scale implementation
o Sigma level –Sigma level computed during the Measure phase acts as a baseline and can be
compared with Sigma level computed in Improve phase
o Cp, Cpk – Similarly process capability indices can also be compared post improvement versus
baseline
o Hypothesis tests: If sample data are collected post improvement, Hypothesis test should be carried
to ascertain whether the improvement is observed is significant
o FMEA – Process FMEA may also be revised to cover the new changes in the process. It will help in
ascertaining whether the solution and changes induced by solution have affected the risk
parameters of the process.
The main deliverable of Improve phase is Selected Solution.
Improve Phase Summary

1. Alternative solutions are generated to control/ influence the critical factors.
a. We may ideate using Brainstorming and Creative Thinking
b. Benchmarking can help us learn from others across functions and industries.
c. Process Modeling can help us develop alternative process flows to reduce bottlenecks.
d. Design of Experiments enable us to find the optimum combination of inputs for desired Y
2. Alternative Solutions are evaluated and an optimum solution is chosen.
a. Pugh Matrix may be used to compare alternative solutions
b. FMEA (Failure modes and effect analysis) can be used to analyze risks of solutions
c. To build consensus on alternative solutions, Delphi, Multi-voting and Nominal group technique may
be used.
3. Selected Solution is piloted, and if pilot is successful, full scale implementation is carried out.
4. Post Full Scale implementation, performance of Y (Output) is re-evaluated to check whether significant
improvement has taken place.
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Improve Phase Tollgate Checklist
 What techniques were used to generate ideas for potential solutions?
 What narrowing and screening techniques were used to further develop and qualify potential solutions?
 What evaluation criteria were used to select a recommended solution?
 Do the proposed solutions address all of the identified root causes, or at least the most critical?
 Were the solutions verified with the Project Sponsor and Stakeholders? Has an approval been received to implement?
 Was a pilot run to test the solution? What was learned? What modifications were made?
 Has the team seen evidence that the root causes of the initial problems have been addressed during the pilot? What
are the expected benefits?
 Has the team considered potential problems and unintended consequences (FMEA) of the solution and developed
preventive and contingency actions to address them?
 Has the proposed solution been documented, including process participants, job descriptions, and if applicable, their
estimated time commitment to support the process?
 Has the team developed an implementation plan? What is the status?
 Have changes been communicated to all the appropriate people?
 Has the team been able to identify any additional ‘Quick Wins’?
 Have ‘learning’s’ to-date required modification of the Project Charter? If so, have these changes been approved by the
Project Sponsor and the Key Stakeholders?
 Have any new risks to project success been identified and added to the Risk Mitigation Plan
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Chapter
9
Control
Control Phase Overview
In the Control phase, the emphasis is on maintaining the gains achieved. The question the team is trying to answer
is, "How can we guarantee performance?". In the Improve phase, the team had a successful pilot and also got an
opportunity to tweak the solution. They used this information to plan the solution implementation and carried out
full scale implementation. It is time now to ensure that, when they finish the project, the success that they have
observed will be sustained. This involves transferring the responsibility to the process owner.
The deliverables in the Control phase are:

 Process Control Plan
 Solution documentation and Validation of Benefits
 Successful transfer to Process Owner

Step 13 • Implement Control System for Critical X’s
Step 14 • Document Solution and Benefits
Step 15 • Transfer to Process Owner, Project Closure
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Step 13- Implement Control System for Critical X’s
Control System is the complete strategy for maintaining the improved process performance over time. It identifies
the specific actions and tools required for sustaining the process improvements or gains.
The objective is
 To ensure that the process stays in control after the solution has been implemented.
 To quickly detect the out of control state and determine the associated special causes so that actions can
be taken to correct the problem before non-conformances are produced.
 Green Belt/Black Belt will develop a control plan which the process owner will use as a guideline for
sustaining the gains. Control plan provides a written summary description of the systems used in
minimizing process and service variation
 Control plans do not replace information contained in detailed instructions
 In a grand sense the control plan describes the actions that are required at each phase of the process
including receiving, in-process, outgoing, and periodic requirements to assure that all process outputs will
be in a state of control
Ultimately, the control plan is a living document reflecting current methods of control and measurement systems
used
 What is the process that is being controlled?
 What measures (numbers) are we monitoring?
 For each measure, what are the “trigger point” values where action should be taken?
 What action should be taken when a “trigger point” is reached? Who is responsible for taking action?
A control plan includes but not limited to

Table
Control Plan
Process Documentation Communication Plan
Data Collection Plan Audit/Inspection Plan
Mistake Proofing System Risk Mitigation System
Response/Reaction Plan Statistical Process Control
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Mistake Proofing (Poka Yoke)
Mistake Proofing is a method for avoiding errors in a process. The simplest definition of "Mistake Proofing” is that it
is a technique for eliminating errors by making it impossible to make mistakes in the process. It is often considered
the best approach to process control.
A Poka-Yoke device is any mechanism that either prevents a mistake from being made or makes the mistake obvious
at a glance. The ability to prevent mistakes is essential because the cause of defects lies in errors committed due to
imperfect processes. Defects result from either being unaware of the errors or neglecting to do anything to correct
them.
Mistake Proofing Techniques
Technique Prediction/Prevention Detection
When a mistake or defect has been

Shutdown When a mistake is about to be made
made
Defective items cannot move on the

Control Errors are impossible
next step
Immediately when something goes

Warning That something is about to go wrong
wrong
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Inspection/Audits
Inspection isn’t the most likely control method however they may be the only option left if we are unable to identify
a suitable mistake proofing measure. We can classify inspection as
 Source Inspection: Inspection carried out at source or as close to the source of the defect as possible.
Mistakes detected close to source can be reworked or corrected before it is passed.
 Informative Inspection: Inspection carried out to investigate the cause of any defect found, so action can be
taken. It only provides information on defect after it has occurred.
 Judgment Inspection: Inspection carried out to separate good units from bad units once processing has
occurred. It doesn’t decrease the defect rate
Statistical Process/ Quality Control

Common Cause and Special Cause
Common Cause Variation
In any process, regardless of how well-designed or carefully maintained it is, a certain amount of inherent or natural
variability will always exist. This natural variability or “background noise” is the cumulative effect of many small,
essentially unavoidable causes. In the framework of statistical quality control, this natural variability is often called
a “stable system of chance causes (common causes).” A process that is operating with only chance causes of variation
present is said to be in statistical control. In other words, the chance causes (common causes) are an inherent part
of the process.
Special Cause Variation
In a process, other kinds of variability may occasionally be present. This variability in key quality characteristics can
arise from sources like improperly adjusted machines, operator errors, defective raw materials, untrained resources,
system outage etc. Such variability is generally large when compared to the background noise, and usually stands
out. We refer to these sources of variability that are not part of the chance cause pattern as assignable causes or
special causes. A process that is operating in the presence of assignable causes is said to be out of control. Production
processes will often operate in the in-control state, producing acceptable product for relatively long periods of time.
Occasionally, however, assignable causes will occur, seemingly at random, resulting in a “shift” to an out-of-control
state where a large proportion of the process output does not conform to requirements. A major objective of
statistical process control is to quickly detect the occurrence of assignable causes or process shifts so that
investigation of the process and corrective action may be undertaken before many nonconforming units are
manufactured. The control chart is an online process-monitoring technique widely used for this purpose.
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Types of Control Charts
Control charts may be classified into two general types.
 Attribute Control Charts

Many characteristics are not measured on a continuous scale or even a quantitative scale. In these cases, we
may judge each unit of product as either conforming or nonconforming on the basis of whether or not it
possesses certain attributes, or we may count the number of nonconformities (defects) appearing on a unit
of product. Control charts for such quality characteristics are called attributes control charts. We will
explore the following charts
o Area of opportunity charts for count data:
 Number of defects charts for constant areas of opportunity – c chart
 Number of defects per unit charts for variable areas of opportunity – u chart
o Proportion nonconforming charts (p-charts) for classification data:
 Proportion of nonconformities for constant subgroup size- np chart
 Proportion of nonconformities for variable subgroup size – p chart
 Variable Control Charts:

Many characteristics can be measured and expressed as numbers on some continuous scale of
measurement. In such cases, it is convenient to describe the quality characteristic with a measure of central
tendency and a measure of variability. Control charts for central tendency and variability are collectively
called variables control charts. The chart is the most widely used chart for monitoring central tendency,
whereas charts based on either the sample range or the sample standard deviation are used to control
process variability.
o Charts based on individual measurements for subgroups of n = 1 – Individual and moving range
chart
o Charts based on subgroups of n>=2:
 Subgroups of 2 ≤ n ≤ 8: Mean and range chart
 Subgroups of n > 8: Mean and standard deviation chart
COMPUTING CONTROL LIMITS
 Process mean of the statistic ± 3 standard deviations of the statistic so that

 Upper control limit (UCL) = process mean of the statistic + 3 standard deviations of the statistic
 Lower control limit (LCL) = process mean of the statistic – 3 standard deviations of the statistic
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I Chart of pH
1
6.50
UCL=6.430
6.25
Individual Value
_
6.00 X=6.015
5.75
LCL=5.601
5.50
1 3 5 7 9 11 13 15 17 19 21 23 25
Observation
Figure
Worksheet: Detergent.mtw
A typical control chart is shown in Figure above, which is a graphical display of a quality characteristic that has been
measured or computed from a sample versus the sample number or time. Often, the samples are selected at periodic
intervals such as every hour. The chart contains a center-line (CL) that represents the average value of the quality
characteristic corresponding to the in-control state. (That is, only chance causes are present.) Two other horizontal
lines, called the upper control limit (UCL) and the lower control limit (LCL) are also shown on the chart.
There is a close connection between control charts and hypothesis testing. Essentially, the control chart is a test of
the hypothesis that the process is in a state of statistical control. A point plotting within the control limits is
equivalent to failing to reject the hypothesis of statistical control, and a point plotting outside the control limits is
equivalent to rejecting the hypothesis of statistical control.
The most important use of a control chart is to improve the process. We have found that, generally
 Most processes do not operate in a state of statistical control.
 Consequently, the routine and attentive use of control charts will identify assignable causes. If these causes
can be eliminated from the process, variability will be reduced and the process will be improved.
 The control chart will only detect assignable causes. Management, operator, and engineering action will
usually be necessary to eliminate the assignable cause. An action plan for responding to control chart signals
is vital.
In identifying and eliminating assignable causes, it is important to find the underlying root cause of the problem and
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to attack it. A cosmetic solution will not result in any real, long-term process improvement. Developing an effective
system for corrective action is an essential component of an effective SPC implementation.
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Minitab
 Stat>Control Charts>Attributes Charts>c
 Stat>Control Charts>Attributes Charts>u
 Stat>Control Charts>Attributes Charts>np
 Stat>Control Charts>Attributes Charts>p
 Stat>Control Charts>Variable Charts for Individuals>I-MR
 Stat>Control Charts>Variable Charts for Subgroups>Xbar-R
 Stat>Control Charts>Variable Charts for Subgroups>Xbar-S

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Example: Torque is measured daily once, in first hour of production and recorded. Draw a suitable control chart to
find if it is in control. Worksheet: IMR_TORQUE
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Example: A maker of snack foods has just launched a new dried fruit packaging line. Material usage is showing an
adverse variance for the last month, and a Six Sigma team is investigating overfills/under-fills as a potential source
of waste. As a starting point, data was collected over twenty hours of operation consisting of a subgroup of 5
observations per hour. The team wanted to assess the behavior of the process, so X-bar and R charts were created,
(measurement is ounces per package, with a target weight of 8.0 oz.). Worksheet: XbarR.mtw
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Example: Data for number of LED television defective is given. Find if the process is controlled. Worksheet:
P_Defectives.mtw
Example: From every lot of 50 assembled TV PCBs, 13 are randomly inspected by the quality personnel and reported
for defectives. Find if the data is in control. Worksheet: NP_Defectives.mtw
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Example: A cell phone manufacturing company makes 1000 cell phones in each lot. It tracks the number of defects
that it observes in each lot shown in the following table. Determine if the process is in control. Worksheet:
C_Defects.mtw
Practice Exercises
Q. A telephone service center wants to assess whether its call answering system is in control. The total number of
incoming calls and number of unanswered calls were recorded for 21 days. Each unanswered call is a defective.Is the
process in control? Worksheet: Unanswered.mtw
Q. A manufacturer of projector lamps wants to assess whether or not its process is in control. Samples of lamps were
taken every hour for three shifts (24 samples of 300 lamps) and tested to see whether or not they work. Defectives
are lamps that do not work. Is the process in control? Worksheet: Projector.mtw
Q. Quality team inspects transactions versus checklist. There are seven opportunities for error in each transaction.
100 transactions are inspected every day and numbers of errors are recorded. Is the process in control? Worksheet:
Checklist.mtw
Q. An accounts department started an improvement project to try to reduce the number of internal purchase forms
that its users completed incorrectly. The number of incomplete forms for every day is recorded. Is the process in
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control? Worksheet: Purchase Form.mtw

Q. A Winegrower wants to assess the stability of bottle filling process. The fill heights of 12 bottles at the same
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temperature are inspected every week. Is the process in control? Worksheet: Fill Height.mtw
Q. Credit card application processing time is recorded for 1 credit card every day to determine whether the process
is in control. Is the process in control? Worksheet: Credit Card.mtw

Step 14- Document Solution and Benefits
Solutions should be documented for review and replication in other processes in the organization. It also acts a
lessons learnt document for other Green Belts and Black Belts.
 Standardization and Solution Replication

One of the powerful aspects of Six Sigma is to take successful implementations and expand them across the
organization. This is accomplished with replication and standardization.
 Replication is taking the solution from the team and applying it to the same type or a similar type of process.
 Standardization is taking the lessons/solutions from the team and applying those good ideas to processes
that may be dissimilar to the original process improved.
The team should consider standardization and replication opportunities to significantly increase the impact on the
sigma performance of processes to far exceed the anticipated results by the pilot and solution implementation.
As the implementation expands to other areas, four implementation approaches can be combined or used
independently. The appropriate approach will depend on the resources available, the culture of the organization and
the requirements for a fast implementation. The four approaches are:
 A sequenced approach is when a solution is fully implemented in one process or location; implementation
begins at a second location.
 A parallel approach is when the solution is implemented at two or more locations or processes
simultaneously.
 A phased approach is when a pre-determined milestone is achieved at one location; the implementation at
a second location begins.
 A flat approach is when implementation is done at all target locations, companywide.
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 Project Benefits
The results of the improvement and financial benefits need to be monitored (generally) for one year.
The project leader should prepare a Project Closure Document. A Project Closure document displays the results of
the project, control activities, status of incomplete tasks, approval of key stakeholders (for example, the process
owner, finance, quality systems, and environmental) to confirm that the project is complete. This document is often
used as the formal hand-off of the project to the process owner. It provides a formal place to record final project
results, document key stakeholder approvals and a record of the status of the improved process at the completion
of the project. This record may be the basis for ongoing auditing.
A Project Closure document should examine the following:

 Record all pertinent performance and financial data.
 Reference controls (or the control plan).
 Review and resolve any incomplete tasks.
 Obtain signatures (varies by project and organization).
 Finance – Are financial benefits valid?
 Process owners – Do they accept the controls and do they agree the project is complete?
 Environmental, health, and safety – Do they agree that all procedures and policies have been followed?
 Quality systems – Have sufficient verifiable controls been instituted to ensure project success? Have all
procedures and policies been followed?
 Project technical support (for example, Master Black Belt) – Does the project meet the requirements of the
process improvement model that is used?
 Management (for example, Champion) – Does management agree that the project is completed?
 Green Belt/Black Belt should first obtain the signature of an independent quality group to confirm that
controls are: (1) in place, (2) verifiable, and (3) sufficient to ensure the project benefits will continue to
accrue. Without such controls, the project should not be approved for closure.
 Financial benefits may be soft, which can be difficult to measure (for example, improved product lets us keep
a key customer, reduced order to delivery time, reduced environmental emissions, improved ergonomics,
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and standardization of product/process).

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Step 15-Transfer to Process Owner, Project Closure
In the Control phase, the team needs to ensure that when they finish the project, the success that they have seen in
implementation will continue. This involves transferring the responsibility to the process owner. This may require:
 Process control plan
 Review meetings to communicate the state of the process.
 Updated flowcharts, procedures and statement of work
 Statistical Process/Quality Control measures including control plan
 Out-of-Control Action Plans, Response Plans to define how irregularities in the process are handled
As the project wraps up, a couple of additional activities may be appropriate:

 The team might consider evaluating how the team worked together
 Management may devise rewards to recognize the work and success of the team
Recognition and celebration of a successful Six Sigma drives process excellence philosophy within the organization
and managing change becomes simpler
A Six Sigma project does not really "end" at the conclusion of the Control phase. There should be opportunities to
extend the success of this project team in other areas. The team and champion may share the knowledge gained
with others, replicate the solution in other processes, and develop standards for other processes based on what they
learned from their solution implementation. The team may continue to examine the process to look for opportunities
for continuous process improvement.
Control Phase Summary

1. Control Plan is created to monitor and sustain improved performance. A control plan may have
a. Audit plans
b. Risk Mitigation Plans
c. Statistical Process/ Quality Control Measures
d. Visual Controls
e. Poka Yoke Measures
2. Control charts detect the presence of special cause and alert us. Control charts don’t assess capability or
conformance to specification. It only helps us determine process stability.
3. Control plan is shared with the process owner, discussed and process is handed over to the process owner.
Process owner diligently follows the control plan to sustain performance
202
Page

Control Phase Tollgate Checklist
 Has the team prepared all the essential documentation for the improved process, including revised/new Standard
Operating Procedures (SOP’s), a training plan, and a process control system?
 Has the necessary training for process owners/operators been performed?
 Have the right measures been selected, and documented as part of the Process Control System, to monitor
performance of the process and the continued effectiveness of the solution? Has the metrics briefing plan/schedule
been documented? Who owns the measures? Has the Process Owner’s job description been updated to reflect the
new responsibilities? What happens if minimum performance is not achieved?
 Has the solution been effectively implemented? Has the team compiled results data confirming that the solution has
achieved the goals defined in the Project Charter?
 Has the Financial Benefit Summary been completed? Has the Resource Manager reviewed it?
 Has the process been transitioned to the Process Owner, to take over responsibility for managing continuing
operations? Do they concur with the control plan?
 Has a final Storyboard documenting the project work been developed?
 Has the team forwarded other issues/opportunities, which were not able to be addressed, to senior management?
 Have “lessons learned” been captured?
 Have replication opportunities been identified and communicated?
 Has the hard work and successful efforts of our team been celebrated?
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Page

Appendix
 Minitab Path
AAA Attribute Agreement Analysis
µ Population Arithmetic Mean
5S Sort Set-order Shine Standardize and Sustain
AIAG Automotive Industry Action Group
ANOVA Analysis of Variance
AR&R Attribute Repeatability and Reproducibility
BCR Benefit Cost Ratio
C&E Cause and Effect
CCR Critical Customer Requirement
cdf Cumulative distribution function
CFM Continuous Flow Manufacturing
CL Centre Line
COPQ Cost of Poor Quality
CP, CPk Process Capability Indices (Short Term)
CPM Critical Path Method
CTP Critical to Process
CTQ Critical to Quality
DFSS Design for Six Sigma
DMADV Define, Measure, Analyze, Design, Validate/Verify
DMAIC Define, Measure, Analyze, Improve, Control
DOE Design of Experiments
DPMO Defects per Million Opportunities
DPU Defects per Unit
FMEA Failure Modes & Effects Analysis
FTY First time Yield / First pass Yield
Ha Alternate Hypothesis
HACCP Hazard Analysis and Critical control points
Ho Null Hypothesis
HOQ House of Quality
IDOV Identify, Design, Optimize, Validate/Verify
IQR Inter Quartile Range
IRR Internal Rate Of Return
204
Kaizen Continuous Improvement

KPI Key Performance Indicator
Page
KPIV Key Process Input Variables

KPOV Key Output Process Variables
LCL Lower Control Limit
MSA Measurement Systems Analysis

Muda Waste
NGT Nominal Group Technique
NPS Net Promoter Score
NPV Net Present Value
NVA Non-Value Added
OFAT One factor at a time
OSHA Occupational Safety and Health Administration
PDCA Plan Do Check Act
pdf Probability density function
PERT Program Evaluation and Review Techniques
PINS Percentage of Industry Sales
pmf Probability mass function
PO Process Owner
PP, PPK Process Capability Indices (Long Term)
PVF Present Value Factor
QFD Quality Function Deployment
QM Quality Management
R&R Repeatability and Reproducibility
ROI Return On Investment
RPN Risk Priority Number
RTY Rolled Throughput Yield
s Sample Standard Deviation
s2 Sample Variance
SIPOC Suppliers Input Process Output Customer
SMART Specific Measurable Achievable Relevant Time bound
SME Subject Matter Expert
SMED Single minute exchange of die
SPC Statistical Process Control
TPM Total Productive Maintenance
UCL Upper Control Limit
USL Upper Specification Limit
VA Value Added
VOB Voice of Business
VOC Voice of Customer
WACC Weighted Average Cost of Capital
WBS Work Breakdown Structure
Zlt Sigma level long term
205
Zst Sigma Level short term

α (Alpha) Probability of type I error
Page
β (Beta) Probability of type II error

 Population standard deviation

Minitab Path
Descriptive Statistics: Stat>Basic Statistics>Graphical Summary
Mean, Standard Deviation
Minimum, Maximum, Median, Quartiles, Stat>Basic Statistics>Descriptive Statistics
Confidence Intervals,
Descriptive Statistics
Sample size, Test for Normality

Row/ Column Statistics Calc>Row Statistics
Calc>Column Statistics
Pareto / Describe Categorical Data Stat>Quality Tools>Pareto Chart
Normality Test Stat>Basic Statistics>Normality Test
or
Stat>Basic Statistics>Graphical Summary
Confidence Intervals - Mean, Median, Stat>Basic Statistics>Graphical Summary
Standard Deviation
Ind. & Moving Range Chart Stat>Control Charts> I-MR
X-Bar & R Control Chart Stat>Control Charts> Variables Charts for
Control Charts
Subgroups>Xbar-R
X-Bar & s Control Chart Stat>Control Charts> Variables Charts for

Subgroups>Xbar-S
Attribute Control Chart Stat>Control Charts>Attribute Charts (p, np, c, u)
Measurement System – Attributes Stat>Quality Tools>Attribute Agreement

MSA
Analysis
Histogram Graph>Histogram
Graphical
Analysis
Dot Plot Graph> Dot Plot

Box Plot Graph>Box Plot
Scatter Plots Graph>Scatter plot
206
Page

Test of 2 Binomial Proportions Stat>Basic Statistics>2Proportions
Power of Test, Sample Size Stat>Power>2sample t
Hypothesis Test – Means Stat>Basic Statistics>1 sample t-test

Stat>Basic Statistics>2 sample t-test
Stat>Basic Statistics>Paired t
Hypothesis Testing
Stat>ANOVA>One-Way ANOVA
Hypothesis Test – Variation Stat>Basic Statistics>Test for 2 Variances

Stat>ANOVA>Test for Equal Variances
Hypothesis Test – Medians Stat>Nonparametric>One-Sample Wilcox

>Kruskal-Wallis
>Mood's Median Test
Chi-Square Test Stat>Tables>Cross Tabulation and Chi-Square

Stat>Tables>Chi-Square test
One-Way ANOVA Stat>ANOVA>One-Way
Correlation Stat>Basic Statistics>Correlation

Regression
Simple linear regression Stat>Regression>Regression
207
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Innovation Practioner Design Engineering

Lean Six Sigma

Process Improvement Design Engineering

Certified Business Analyst

Data Analytics Expert Quantitative Project

Lean Six Sigma Black Belt Book of Knowledge

Dr. Shantanu Kumar

Understanding Lean .................................................................................................. 4

Lean - Total Productive Maintenance ................................................... 11

Statistics for Lean Six Sigma ..................................................................................... 18

Managing Six Sigma Projects ................................................................................... 38

Step 1- Generate Project Ideas .............................................................. 48

Define Phase Summary .......................................................................... 74

Lean Six Sigma Black Belt Book of Knowledge

Analyze .................................................................................................................. 104

Step 8- Identify Critical Xs.................................................................... 125

Improve ................................................................................................................. 150

Step 11-Select and optimize best solution.......................................... 161

Improve Phase Tollgate Checklist ....................................................... 188

Control .................................................................................................................. 189

Control Phase Summary ...................................................................... 202

Appendix ............................................................................................................... 204

Lean Six Sigma Black Belt Book of Knowledge

Dr. Shantanu Kumar

Lean Six Sigma Black Belt Book of Knowledge

When people refer to Six Sigma, they refer to several things:

It is a philosophy It is based on facts & data

Six Sigma and Balanced Scorecard

Govern efforts to ensure improvements are sustained

Lean Six Sigma Black Belt Book of Knowledge

 e.g. Reducing no of bugs in a software

 e.g. Reduction of defects in apparel

 e.g. Increasing Sales per hour

 Improved customer satisfaction

 e.g. Improving CSAT scores in an ITES process

 e.g. Reducing attrition or turnover

 e.g. Reducing transaction processing time, Average Handling time etc

 Higher net income

 e.g. Improving Occupancy % of a multiplex

 e.g. Reducing and controlling raw inventory

 e.g. Reduction of Non-value add time in a process

Let’s list a few potential projects

Lean Six Sigma Black Belt Book of Knowledge

Lean Six Sigma Black Belt Book of Knowledge

Lean Six Sigma Black Belt Book of Knowledge

The 5 S’s are:

 Shine – Keep the work area clean.

Figure: 5S Image from www.tpfeurope.com

Lean Six Sigma Black Belt Book of Knowledge

 Transportation (excess movement of material or information)

 Overproduction (building more than required)

 Over-processing (processing more than what is required or sufficient)

 Excess Motion (excess human movements at workplace)

 Storage/warehousing (excess inventory)

Figure: A Kaizen Team at Boeing in Action

Lean Six Sigma Black Belt Book of Knowledge

There are three approaches to Poka-Yoke:

Figure: Poka-Yoke Example – Possibility of

Lean Six Sigma Black Belt Book of Knowledge

Table: 7 Wastes in lean

 Processing once each month instead of as the work comes in

 Waiting on part of customer or employee for a service input

 Delayed work due to lack of communication from another internal group.

 Preparing extra reports