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Lean Six Sigma Black
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Quality Gurus
2
Quality Gurus
3
Quality Gurus
Dr. Walter Shewhart (1891-1967)

• Known for framing the problems of failures in terms of “assignable causes” and “chance cause” variation.
• Known for the introduction of the SPC – control charts as a tool for distinguishing between assignable
and chance cause variation.
• Invented control charts which are widely used across industries to monitor processes and to determine
when there are changes in a process.
• Known for the introduction of the continuous improvement cycle – Plan –Do –Check –Act (PDCA).
4
Quality Gurus
Dr. W Edward Deming (1900-1993)

• Made a significant contribution to Japan’s reputation for innovative, high quality products and for its
economic power.
• Championed the work of Walter Shewhart including statistical process control, operational definitions and
“Shewhart Cycle" which had evolved into PDSA (Plan-Do-Study-Act).
Dr. Joseph M Juran (1904-2008)

• Made a significant contribution to Japan’s reputation for innovative, high quality products and for its
economic power.
• Known for Juran Trilogy – quality planning, quality control and quality improvement.
• First to apply the work of Vilfredo Pareto to quality issues - “vital few and trivial many”.
5
Quality Gurus
Dr. Kaoru Ishikawa (1915-1989)

• Considered as a key figure in the development of quality initiatives in Japan, particularly the quality circle.
• Best known for the Ishikawa or fishbone or cause and effect diagram often used in the industrial
processes analysis.
• Translated, integrated and expanded the management concepts of W. Edwards Deming and Joseph M.
Juran into the Japanese system.
Philip B Crosby (1928-2001)

• Philip Crosby is known for his four absolutes of quality management:
• Quality means conformance to requirements.
• Quality comes from prevention.
• Quality performance standard is zero defects.
• Quality measurement is the price of non-conformance.
6
Six Sigma History
7
Evolution of Six Sigma
What does Quality Mean?
Detecting and correcting Preventing defects in the first place

mistakes in the product or through manufacturing controls and
such that it meets product design such that it meets
compliance standards. performance standards.
8
Evolution of Six Sigma
“
“
The real problem at Motorola • Late 1970s - Motorola started experimenting with
problem solving through statistical analysis.
is that our quality stinks
• Motorola started Six Sigma approach to achieve it’s one
……1979, Art Sundry of the top ten corporate goal of improving the quality by
ten times within five years in 1981.
• The term “Six Sigma” was coined by Bill Smith, an
engineer with Motorola.
“
A product found defective • 1987 - Motorola officially launched it’s Six Sigma
program as follows:
and corrected during
- Improve quality 10 times by 1989.
manufacturing had high
- Improve quality 100 times by 1991.
probability of failing during
- Achieve six sigma (3.4 DPMO) performance by 1992.
early use by customer
- Motorola won the first Malcolm Baldridge National
……1985, Bill Smith Quality Award in 1988.
9
Origin of Six Sigma
Beginning Focus on how

of a new Improve the Lower Lower the product was
quality. production cost. production time. designed and
era at made.
Motorola.
Motorola gained a return of

USD 800 million in two years
10
Growth of Six Sigma - GE
Scope of six sigma

1998/99 - Green 2002/03 - Green Belt initiative has
Belt exam certification became changed from
Jack Welch
certification became the criteria for ‘manufacturing’ to
launched Six Sigma
the criteria for promotion to the entire business
at GE in Jan,1996.
management management roles – service, product
promotions at GE. at GE. design and
innovation.
11
Focus of Six Sigma
Reduce Variation Reduce Defects Delighting Customer
Reduce Cost Reduce Cycle Time

12
Sigma Levels and PPM
Sigma Level Part per Million (PPM)
2 3,08,000
3 66,800
4 6,210
5 230
Mumbai's Dabbawalla are at

more than Six Sigma level 6 3.4
13
Six Sigma - Its significance
99% Good (2.8 Sigma) 99.99967% Good (6 Sigma)
20,000 lost articles of Unsafe drinking water Seven articles One unsafe minute
mail/ hour for almost 15 minutes lost per hour every seven months
each day
5,000 incorrect Two short or long 1.7 incorrect One short or long
surgical operations per landings at most major operations per week landing every five years
week airports each day
200,000 wrong drug No electricity for almost 68 wrong prescriptions One hour without
prescriptions each year seven hours each month per year electricity every 34 years
14
Multiple meanings of Sigma
Standard Process Management

deviation capability philosophy
• The Greek symbol • A statistical measure • View processes/

‘sigma’ which means of a process’s ability measures completely
standard deviation. to meet customer from a customer point
requirements (CTQs). of view.
• Is a measure of • Continual improvement.
variation. • Process Sigma= 6s
• Integration of quality and
equates to 3.4
daily work.
defects per million
opportunities. • Satisfying customer
needs profitably.
15
Six Sigma
Organization
16
Six Sigma Team
Apex Council
Champion or Sponsor
Process owner
Master Black Belt
Black Belt
Green Belt
Team Members
17
Apex Council
Top Management
• Accountable for Six Sigma business results.
• Develop a strong case for Six Sigma.
• Plan and actively participate in implementation.
• Create a vision and market “change”; Become a
powerful advocate.
• Set clear (SMART) objectives.
• Hold itself and others accountable.
• Demand specific measures of results.
• Communicate results (including setbacks).
• Helping to quantify the impact of Six Sigma
efforts on bottom line.
18
Champion or Sponsor
Senior Manager
• Oversees a Six Sigma project.
• Is accountable to the Apex Council.
• Sets rationale and goal for project.
• Be open to changes in project definitions.
• Find resources (time, support, money) for team.
• Help the team overcome roadblocks; smoothen
implementation.
• Focus on data-driven management.
• Identify and recruit other key players.
• Assist in identifying and developing training
materials.
19
Process Owner
Functional Head
• Implements solutions through Black Belts and
project teams.
• Provide resources and helps resolve conflicts.
• Accountable to the Apex Council.
• Owns end-to-end process.
• Sets goals for projects.
• Project review: timeline and project is on track.
• Responsible for holding the gains.

20
Master Black Belt
Six Sigma Coach

• Advise and mentor Black Belts and teams. • Gather and analyze data on team activities.
• Communicate with champions and apex council. • Plan and execute training.
• Establish and adhere to a schedule for projects. • Help teams promote and celebrate successes.
• Deal with resistance to Six Sigma. • Document overall progress of Six Sigma.
• Resolve team conflicts.
• Estimate, measure and validate savings.

21
Black Belt
Facilitator
• Six Sigma implementation experts with the ability to
develop, coach, and lead multiple cross-functional
process improvement teams.
• Use tools to quickly and efficiently drive improvement.
• Facilitate to keep team focused on the project objective.
• Ensure that the Six Sigma methods are followed.
• Help teams learn and understand Six Sigma tools and
techniques through regular project reviews.
• Responsible for the ultimate success of the project.
• Trains and develops Green Belts.
• Spread Six Sigma awareness throughout the
organization.
22
Green Belt
Project Team Leaders

• Lead and Execute Six Sigma as part of their daily jobs.
• Keep the project team focused on the project goal.
• Extract equal participation from all team members.
Counsel non participating team members and motivate
them to participate.
• Ensure discipline of Team Meetings is followed and that
every meeting starts with an Agenda. Ensure MOM is
distributed the same day.
• Regularly follow up with team members to ensure that
assigned tasks are completed on time.
• Manage conflicts and seek intervention of Process
Owner / Champion if necessary.
• Dual responsibility of being process experts as well as
trained resource on Six Sigma methods and quality tools.
23
Team Members
Process Experts
• Team members are vital for success.
• Good knowledge of product, process, customer.
• Willing to work in teams.
• Time to work on projects.
• Active in Data collection.
• Responsible for improvement.
• High Participation.
24
Typical Project Life Cycle and Effort
Sponsor/Champion Black Belt/Green Beltand Six Sigma Team Functional Team and Process Owner
Level of Effort
Define Project D M A I C Integrate into DailyWork

25
Project
Management –
Knowledge Areas
26
Knowledge Areas
1 2
• Understanding
Organization Culture Generation of • Project identification
Organizational project ideas
• Creating the culture for Culture and selection
• Selection of projects
Excellence of Projects
• Risk Identification
• Risk assessment Risk Project • Effective ways of
Management Timeline
• Risk response managing time
• Risk Control
4 3
27
Understanding
Organization
Culture
28
Understanding organization culture
Refers to norms, beliefs, values Within the same industry, different

and assumptions which binds organizations might have different
people together in an structure ( i.e., traditional, flat,
organization and thereby matrix structure etc.) and culture.
creating shared meaning Some organization successfully
manage and implement change
Organization because the culture encourage
Culture and support cross functional
integration. Some rely on
independent project team because
their dominant culture would not
Research suggest that there
support innovation and speed
exist a strong connection
necessary for success.
between organization culture
and project success.
29
Creating the culture for excellence
1 3 5
Genuine Actions are

Boundaryless
focus on where the
customers
2 process is
4 collaboration 6
Drive for
Data and
Proactive perfection;
fact- driven
management Tolerate
management
Failure
30
Genuine focus on customers
Companies have often been appalled to

find how little they really understand about
their customers.
To create the culture of excellence,

customer focus becomes the top priority.
The focus for business excellence is

characterized by a continuous and thorough
understanding of our customer. We need to
ensure our customers feel and see the
benefits of our excellence culture.
31
Genuine focus on customers
32
Data and fact driven management
Excellence culture helps managers answer two essential

questions to support data-driven decisions and solutions.
What How do we use that

1 data/information 2 data/information to
do I really need? maximum benefit?
33
Action are where the process is
Whether focused on designing

1 products and services,
measuring performance,
improving efficiency and
customer satisfaction, or even
running the business, business
excellence positions the process
as the key vehicle of success.
Mastering processes is a way to

2 build competitive advantage in
delivering sustainable value to
customers.
34
Proactive management
Questioning why
Focusing on we do things
Proactive problem
Defining instead of blindly
management prevention rather
ambitious goals defending them.
means making than firefighting.
Being proactive habits out of what and reviewing
means acting in are, too often, them frequently.
advance of neglected
events rather business
than reacting to practices:
them.
35
Proactive management - Quiz
A colony of Frogs used to live in a pond.
One day the leader of the frogs notices the growth of

Water Hyacinth in the pond
The rate of growth is such that it doubles every day.
The pond will be completely filled with Water Hyacinth

on the 50th day.
On that day the pond will become inhabitable, and

frogs must evacuate before that.
Frogs need 10 days for all to evacuate.
On which day at the maximum, the frogs need to start

evacuation or else all will not survive?
36
Boundary less collaboration
“Boundarylessness” is one of Jack

Welch’s mantra for business success.
The opportunities available through

improved collaboration within
companies and with vendors and
customers are huge.
Billions of dollars are lost every day

because of disconnects and outright
competition between groups that
should be working for a common
cause: providing value to customers.
37
Drive for perfection
How can you be driven to achieve

perfection and yet also tolerate
failure? In essence, though, the two
ideas are complementary.
No company will get even close to

excellence without launching new
ideas and approaches – which
always involve some risk.
If people who see possible ways to

be closer to perfect are too afraid of
the consequences of mistakes,
they’ll never try.
38
Generation of
project ideas and
Selection of
projects
39
Generation of project ideas
Strategy 1 For launching a 4 Customer’s Requirement

lean six sigma
program in an
Identify Policy 2 organization, 5 Industry Trends
generation of
project ideas
Initiatives 3 could be from 6 Business
Objectives
However, the improvement projects should be aligned to organization’s Vision, strategic goal. In order to achieve that during the early stage for
selection of lean six sigma projects and cross functional team member, it is recommended to involve the leadership team (Steering Committee)
40
Project selection
• Project selection is one of the most critical and challenging
“
Some feel that project selection activities faced by Six Sigma companies.
is the Achilles heel of Six Sigma.
One quickly learns that if • Selecting appropriate projects is one of the biggest
projects are not selected challenges facing Six Sigma Teams
properly the Six Sigma initiative • Most organizations are able to identify a host of project
can be at risk: Projects don't opportunities, but the difficulty arises in sizing and
deliver the expected bottom-line
results, the organization
becomes frustrated with the
effort, and slowly but surely,
“ packaging those opportunities to create meaningful
projects. To be successful, the project selection process
must be well defined and disciplined. One process that
has proven successful incorporates a three-step
attention and resources are approach.
focused on other initiatives. • Step 1 – Establish a Project Selection Steering
Source: Ronald D. Snee “Dealing with the Committee
Achilles’ Heel of Six Sigma Initiatives,”
Quality Progress, March 2001 • Step 2 – Generate Project Ideas
• Step 3 – Assess and Prioritize Projects
41
Project selection steps
Step 1 - Establish a Project

Step 2 – Generate Project Ideas
Selection Steering Committee
A project selection steering committee should The frustrations, issues, problems and opportunities visible
include managers who have been trained as inside the company are key sources of potential projects.
Six Sigma Champions, as well as other key These ideas should be examined during a project selection
Six Sigma knowledge resources, such as the workshop. Two weeks before the workshop, the project
deployment Champion and Master Black Champions each compile a list of project opportunities from
Belts or Black Belts, who bring experience in their areas, keeping in mind that Six Sigma projects should
determining the feasibility and manageability align with the organizational strategy and be linked to core
of projects under consideration. business issues. Using predefined guidelines, the
opportunities are accompanied by supporting project
rationale data including defect type, historical volumes and
financial impact. The project Champions meet with their
team members to identify which process improvements are
beneficial to the business, customers and employees.
42
Project selection steps
Step 3 – Assess and prioritize projects
Identify Screen Scope

Identify Prioritize
project initial and
value defined
opportun opportun define
levers projects
ities ities projects
Identify Value levers in • Initial health checks • Score each project as • Assign • Evaluate projects using
the business High/ Med/Low for opportunities to evaluation criteria.
• Review of performance
benefit and effort project sponsors
• Strategic data- identification of gaps • Update Benefit / Effort.
for project
• Review plotted results
• Financial • Collection of data to definition. • Review plotted results.
quantify opportunities • Select highest priority
• Customer • Complete draft • Prioritize projects based on
opportunities for further
• Translate opportunity project charters techniques.
• Operational analysis
areas into project ideas
(Process) • Schedule project launch
43
Project selection roadmap
Deep Dive / Select Deliver and

Generate Project ideas Implement
Analyze project Evolve
Strategy
Translation opportunities
Identify Policy
Initiatives
Screen Spot-
Creating Implementation
check Rank
Customer Business case
Enrich
requirements
Industry trends
Defining ROI
Business objectives Translation opportunities
Put On Hold /
Rejected
Steering committee will assess and select

project as per prioritization matrix
44
Selecting the right project
LSS project selection is done based on project selection matrix.

Step1 – Select criteria and assign weightage to the criteria. Wherever the answer is, put number 1
Criteria Weightage 1 (No) 2 (Mostly No) 3 (Possibly) 4 (Mostly Yes) 5 (Yes)
Is there a sponsor or champion? 3 1
Do project goals align with the corporate goals? 4 1
Is data available or accessible? 3 1
Are the defects well defined? 3 1
IS the process a stable process? 1 1
Will there be immediate benefits to the customers? 5 1
Will there be benefit to the organization? 5 1
Can the project be completed within 5-6 months? 3 1
The solutions are unknown for this proejct? 4 1
Is it likely a discovered solution will be implemented 3 1
Would a new solution cost little to no cash? 5 1
Are Six Sigma team members available for this project? 3 1
Can the inputs in the processes be controlled? 5 1
Can the process be imporved without a full redesign? 2 1
Will the improvements maintain or improve quality across the value chain? 5 1
45
1. Divide weightage by 3 and put it 2. Multiply each of the summed weighted by the number at the
Step 2
into the answered box top. In this case 1*1,4.3*2,4.7*3,3.3*4, 4.7*5
Criteria Weightage 1 (No) 2 (Mostly No) 3 (Possibly) 4 (Mostly Yes) 5 (Yes)

Is there a sponsor or champion? 3 1
Do project goals align with the corporate goals? 4 1.3
Is data available or accessible? 3 1
Are the defects well defined? 3 1
IS the process a stable process? 1 0.3
Will there be immediate benefits to the customers? 5 1.7
Will there be benefit to the organization? 5 1.7
Can the project be completed within 5-6 months? 3 1
The solutions are unknown for this proejct? 4 1.3
Is it likely a discovered solution will be implemented 3 1
Would a new solution cost little to no cash? 5 1.7
Are Six Sigma team members available for this project? 3 1
Can the inputs in the processes be controlled? 5 1.7
Can the process be imporved without a full redesign? 2 0.7
Will the improvements maintain or improve quality across the value chain? 5 1.7
Summation 1.0 4.3 4.7 3.3 4.7
Multiply each of the summed weighted scored by the number at the top 1 8.7 14 13.3 23.3
Step 3 – Add up the total answer. In this case it is 60.33. Then divide the sum by the total of weighted sum i.e 60.33/18 which is 3.351.
The answer is the score of the project.
46
Project selection criteria based on the score

Score DMAIC Viability
< 2.0 Not a viable DMAIC Project
2.0 – 3.0 Possible viable but needs further deep diving
Above 3.0 A viable DMAIC Project

47
Estimated savings
Approaches for estimating savings
Cost reduction- Reduce cost/unit. For e.g., if energy

consumption or fuel consumption is reduced, then, if that
reduction value is spread out across the production, then per
unit savings can be determined. Which can be extrapolated by
multiplying it with the total production
Cost avoidance – Identify Revenue

the opportunity loss. For e.g., enhancement –
Avoiding capex, and utilizing Opportunity for
that amount to improve existing increasing the revenue
capacity improvement. share.
48
Project Timelines
49
Effective ways of managing time
Plan schedule management Define activities:

Usually, many project managers fail to Once you have your time
plan this and end up delaying the management plan, you can start
projects. But, before you can identifying and defining all activities
complete the other steps, you need to be done in the project. Many
to plan how you will manage your often a breakdown structure (WBS)
schedule. Some questions you is used to help define activities and
should answer are: tasks within a project. Major
What software or tool will you use? milestones also gets determined.
• Who will be responsible for using

the software?
• How often will the schedule be Sequence activities:
reviewed? After we have all the tasks required
• What controls will be put in place to for the project success, we can
ensure everyone stays on start sequencing them using the
schedule? network diagram
50
Effective ways of managing time
Estimate resources: Develop the project schedule:

The term ‘resources’ often refers to This can be done by inputting your
people. However, you also need to activities, durations, start and end
identify which tools, materials, dates, sequencing, and
systems, budget and other resources relationships into a scheduling
you will need for each task to be application.
completed.
Control the schedule:

Estimate durations: Once your schedule is created, it needs
Once you know which tasks must be to be monitored and controlled.
completed and what you need to Progress needs to be reviewed and
accomplish them, it’s time to estimate updated on a regular basis so you can
how long it will take to complete each compare your actual work completed
activity. Some project managers use against the plan. You will be able to
PERT (Program Evaluation Review monitor if you are behind the schedule
Technique) to estimate the durations. or on your planned schedule.
51
Risk management
52
Risk management
What is Risk management?

It is the process used by project managers to
minimize any potential problems that may
negatively impact a project’s timelines and
results. Risk is any unexpected event that
might affect the people, processes, technology,
and resources involved in a project. Unlike
issues, which are certain to happen, risks are
events that could occur, and you may not be
able to tell when. Because of this uncertainty,
project risk requires serious preparation in
order to manage them well.
53
Risks Control Risks Identification

1 2
Risk
manage
ment
process
Risk Response Risks Assessment

4 3
54
Risk management process
Risk Management Process
Risk Risk Risk Response Risk

Identification: Assessment Plan Control
Create Risk breakdown • Risk Assessment Matrix

• Mitigating Risk- • Maintaining a formal
structure. is done based on
document from all the
• Avoiding Risk
• External – Outside the • Likelihood of occurring above steps - Risk
organization , beyond the • Transfer of risk Register
• Impact
scope limit of LSS team
• Retaining • Communicate the Risk to
• Internal – Risk that would the stakeholders
occur within the organization • Contingency plan
• Update the Risk register
• Technical – Risk related to for any new risk
technical issues identified.
• Management – Lack of
funding
55
Risk breakdown structure (RBS)
Project Risk
External Internal Technical Management
• Environmental • Resource availability • Change In Technology • Lack of Funding

• Regulatory • Product become absolute • Scope change to DMADV
• Suppliers and contractors • Substitute products in the
market
• Change in Market Trend
• Extend of timeline
• Competitors
• High attrition rate
• Demand
List down all the possible events

56
Risk assessment
Risk assessment is done based on

For Example
significance of each event in terms of
Change of technology
would have high impact on
Impact or consequences your project but the
Likelihood for an likelihood is low
of that event on your
event to occur –
project(CTQ) – Define
(e.g. 1-5)
scale (1-5) Loss of key SME would not
only have high impact but
also have high probability of
occurring.
57
Risk response plan
Response to risk are classified as

Changing the project to eliminate the risk Some Risk such as
earthquake, flood,
• Substitute product/Demand – Do a pandemic, act of
market assessment to find out if there is God are so large
any substitute product or demand for that it is not
that product will be constant so that you feasible to mitigate
can keep that project for later stage. or transfer.
Done in 2 ways either you Reserve Budget
reduce the likelihood, or you can be absorbed
reduce the impact for such event
Such plan are
• Loss of key SME, either Transfer of Contingenc made effective
organization retain Mitigating Risk
risk y plan after the risk is
them by giving recognized.
incentives or by
providing cross training Avoiding
to reduce the impact. Retaining
Risk
Passing on the
risk to another
party. Using a
contractor to do
the job, insurance,
BOOT(Build-Own-
Operate-Transfer)
58
Risk control
Risk Control is all about
Maintaining a
formal document Communicate the Update the Risk
from all the above Risk to the register for any
steps - Risk stakeholders new risk identified.
Register
59
DMAIC vs DMADV
60
DMAIC Vs. DMADV
Define
project
scope
 
Does
Process
exist?
Measure Measure
DMADV Analyze Analyze

DMAIC
(DFSS) Design Improve
Verify Control
61
DMAIC methodology
62
DMADV methodology
63
DMAIC approach
What are customer

expectations of the process?
Measure
2
What are customer Why, when and where do
expectations of the process?
Define 1 3 Analyze
defects occur?
5 4
How can we make the Control Improve How can we fix the process?
process stay fixed?
64
Introduction to
Lean
65
History of Lean
66
The pioneer of Lean
The
TheFord
FordModel
ModelTTwas wasan anAmerican
American
car
carbuilt
builtbetween
between1908
1908and and1928
1928
bybythe
theFord
FordMotor
MotorCompany
Companyofof
Detroit,
Detroit,Michigan.
Michigan.ItItisisone
oneofofthe
the
most important cars in history
most important cars in history
because
becauseititwas
wasone
oneofofthethefirst
firstcars
cars
totobe
besold
soldfor
forvery
verylittle
littlemoney,
money,
making
makingititeasy
easyfor
forpeople
peopletototravel
travel
from
fromplace
placetotoplace.
place.
HenryFord’s
Henry Ford’srevolutionary
revolutionary
advancementsininassembly-line
advancements assembly-line
automobilemanufacturing
automobile manufacturingmade made
theModel
the ModelTTthethefirst
firstcar
cartotobe
be
affordablefor
affordable foraamajority
majorityofof
Americans.
Americans.
67
Lean origin
1908
Before: cars were built at one spot and
the workers moved from car to car.
After: Ford implemented a moving

line and kept the workers stationary
68
Origin of Lean
Three men were

especially
prominent in
creating the
Toyota
Production
Sakichi Toyoda Kiichiro Toyoda Taiichi Ohno
System (TPS)
Lean Enterprise Sakichi Toyoda was the inventor
of Automatic Looms who founded
Kichiiro Toyoda was the son of
Sakichi Toyoda. He travelled to
Taiichi Ohno rose to become
the Executive Vice President of
the Toyota Group USA to study the Ford Motors Toyota. He was inspired by the
operation system and adapted operations of Walmart and
that to Toyota Production created the Pull System
69
What is Lean?
“
All we are doing is looking
at a timeline from the
moment the customer gives
us an order to the point
when we collect the cash.
And we are reducing that
“
time line by removing the
non-value added steps
Taiichi Ohno,
Toyota Production System 1978
It is all about
waste elimination and flow creation!
70
Lean History
House of
Toyota Shingijutsu Womack
“Improved “Translated
“Flow” Flow” concepts”
1902 1930 1978
1900- 1940 -
1990
“Built in 1940 Toyota 1980 Toyota
Quality” Motor Production
Company System
Sakichi Ltd
Toyoda
71
3M – 3 Enemies (Losses)
MURI
Overburden
MURA 3M – 3 MUDA
Unevenness Enemies Waste
(Losses)
72
Waste: Muda (無駄)
Muda means wastefulness, uselessness and

futility, which is contradicting value-addition. Value-
Muda Type 1 includes non-value-added activities in the
added work is a process that adds value to the
processes that are necessary for the end customer. For example,
product or service that the customer is willing to
inspection and safety testing does not directly add value to the
pay for. There are two types of Muda, Type 1 and
final product; however, they are necessary activities to ensure a
Type 2.
safe product for customers.
Muda Type 1 includes non-value-added activities
in the processes that are necessary for the end
customer. For example, inspection and safety
testing does not directly add value to the final
product; however, they are necessary activities to
ensure a safe product for customers.
Muda Type 2 includes non-value added activities in Muda Type 2 includes non-value added activities in the
the processes, but these activities processes, but these activities
are unnecessary for the customer. As a result, are unnecessary for the customer. As a result, Muda
Muda Type 2 should be eliminated. Type 2 should be eliminated.
73
The 8 Classical Wastes
Unevenness
Waiting Overproces
sing
Motion
W O Over
Production
M Types O
of
WASTE Inventory
I Waste
T S
D
Defects
Transport Skills
Overburden
▪ Waste not defined, not easy to see ▪ Waste is “tangible”

▪ Reactive improvement ▪ Identify many small opportunities
▪ Can’t discern sources of waste ▪ Leads to large overall change
▪ Problems repeat ▪ Continuous improvement
74
Transportation
Some
Effects:
Causes:
Movement of
information or
• Reverse Flow • Poor Ergonomics
materials that
• Zig-Zag process layout • Safety Hazards
does not add • Multi-level shop floors • Increased Lead time
value. This could • Non availability of proper MHE
be within or
outside the work
area.
75
Inventory
A company's Some
merchandise, Effects:
Causes:
raw materials,
and finished and
unfinished
• Bulk purchases • Huge capital investment
products which
• Huge variety of items (no • More space required
have not yet commonization)
been sold but • Improper line balancing
stored in different
stages. Having
more than the
minimum stocks
necessary for the
process.
76
Motion
Some
Effects:
Causes:
Operators /
persons making
• Zig-Zag process layout • Poor Ergonomics
movements that
• Non-availability of proper tools • Very Low productivity(silent killer)
are straining or • Work station not fit ergonomically
unnecessary,
such as looking
for parts, tools,
documents etc.
77
Waiting
Some
Effects:
Causes:
Operators /
persons standing
• No line balancing • Process delays
idle as machine
• Communication gaps • Productivity loss
cycles or • Lack of Andon systems
equipment failed
or required parts
have not arrived
yet..
78
Over Production
Some
Effects:
Causes:
Operators /
persons standing
• High setup change times • Erosion in Profitability
idle as machine
• Fluctuating demands • Increase in Inventory
cycles or • Improper line balancing
equipment failed • Inconsistency in raw material supplies
or required parts
have not arrived
yet..
79
Over Processing
Some
Effects:
Causes:
Providing or
• Lack of awareness or skills • Erosion in Profitability
creating MORE
• Process not studies • Increased process time
than the • Improper tools
customer
specification
requirement.
80
Defects
Some
Effects:
Causes:
Providing or
• Lack of skills • Increase in production cost
creating MORE
• Machine failures • Results in rework
than the • Quality errors • Results in shortage
customer • Increased scrap
specification
requirement.
81
8 kinds of waste (muda)
T Transport
I Inventory
M Motion …are all linked with each other

and reinforcing each other.
W Waiting
To remove waste,
O Over-production
we should recognize waste.
O Over-engineering
D Defects
Acronym: TIM WOODS

82
Waste Examples
Waste Type Definition Example
Unnecessary movement of items resulting in wasted efforts and Conveyor Belts for transporting raw material from warehouse to
Transportation
cost. plant
Pile up of semi processed or finished goods that block working

Inventory Loan Applications pied up on the managers table for approval.
capital and hold up cash flow.
Pharmacist moving around the whole shop in order to fetch

Motion Unnecessary movement of people to perform an activity.
medicines from various drawers
Human Intellect Overutilization or underutilization of talent. Engineer being used as operator for operating machine.
Waiting Waiting for the next process step. Waiting for your turn to meet the doctor at OPD in hospital
Over- Five to six reviews / signatures on Purchase Orders before

Too much processing of information.
Processing sending to Supplier and yet wrong material gets delivered.
Producing goods for maintaining machine utilization in spite of no

Over-
Producing more than the requirement. customer need or order. Over production will always lead to
Production
inventory buildup.
Car doors rejected in paint shop due to dents or surface

Defects Any process or activity that results in rework.
unevenness.
83
Waste: Mura (斑)
For example, in a manufacturing line, products need to pass

through several workstations during the assembly process.
When the capacity of one station is greater than the other
stations, you will see an accumulation of waste in the form of
overproduction, waiting, etc. The goal of a Lean production
system is to level out the workload so that there is no
unevenness or waste accumulation.
Mura means unevenness, Mura can be avoided through the Just-In-Time ‘Kanban’
non-uniformity, and systems and other
irregularity. Mura is the pull-based strategies that limits overproduction and excess
reason for the existence inventory. The key
of any of the seven
concept of a Just-In-Time system is delivering and producing
wastes. In other words,
the right part,
Mura drives and leads
to Muda. at the right amount, and at the right time.
84
Waste: Muri (無理)
Muri means overburden, beyond one’s power,

excessiveness, impossible or unreasonableness. Muri can
result from Mura and in some cases be caused by
excessive removal of Muda (waste) from the process.
Muri also exists when machines or operators are utilized for
more than 100% capability to complete a task or in an
unsustainable way. Muri over a period of time can result in
employee absenteeism, illness, and breakdowns of
machines.
Waste: Muri (無理)
Standardize work can help avoid Muri by designing the
work processes to evenly distribute the workload and not
overburden any employee or equipment.
85
Toyota Production
System (TPS)
86
Toyota Production System : An Overview
Back in 1940s, Toyota

based their production
system on moving
assembly line
Toyota Production
System (TPS) was
developed by Taiichi
Ohno and Eiji Toyoda
between 1948-1975
Post World War II,
when Japanese Ohno drew lots of
industry was ideas from the West
decimated, the Toyoda and a lot of
family decided to start experimentation to
their automotive ultimately develop
company called In line with their new TPS
Toyota venture, Taiichi Ohno
was given the
assignment of scaling
up Toyota
automobiles to new
heights in line with the
American companies
87
Toyota Production system (TPS) : Pillars
TPS
Goal: Low Cost, High Quality, Short Lead Time, No Waste
Just In Time TPS pillars Jidoka
Heijunka Standardized Work Kaizen
Stability
88
TPS pillars
1 2 3
Just In Time
Jidoka Heijunka
(JIT)
• JIT is one of the pillars of TPS • Jidoka is one of the two pillars of TPS • Heijunka, in Japanese refers to levelization
• JIT refers to a system of production that • Jidoka highlights the causes of problems • Leveling the type and quantity of production over a
makes and delivers just what is needed, • Also referred as autonomation, i.e. fixed period of time
just when it is needed, and just in the automation with human intelligence. As it • Heijunka enables organization meet demand while
amount needed gives an equipment the ability to distinguish reducing wastes in the entire value chain
• JIT aims for complete elimination of waste between good and bad parts without operator • For instance: Assume that a toy producer receives
to achieve the best possible quality, intervention. orders for 500 of the same toy per week: 200
lowest possible cost and use of • Here, the machine detects a problem and orders on Monday, 100 on Tuesday, 50 on
resources, and the shortest possible communicates it via problem display board Wednesday, 100 on Thursday, and 50 on Friday.
production and delivery lead times Instead of trying to meet demand in sequence of
• The operators can confidently continue
performing work at another machine, as well the orders, the toy producer would use heijunka to
as easily identify the root cause and prevent level demand by producing an inventory of 100
recurrence toys near shipping to fulfill Monday’s orders.
Every Monday, 100 toys will be in inventory. The
• Once the root cause is rectified, the rest of the week, production will make a 100 toys
improvements are incorporated in the per day – a level amount.
standard workflow
89
TPS pillars
4 5
Standardized
Kaizen
Work
• The foundation of daily operation in TPS is • Kaizen is a Japanese word for the philosophy
Standardized Work that defines management’s role in
• Standardized Work sets up the best work continuously encouraging and implementing
sequence for each process. Once the best small improvements involving everyone.
sequence has been determined, it is • It is the process of continuous improvement in
always repeated in exactly the same way, small increments that make the process
thereby avoiding wastes, errors and more efficient, effective, under control, and
sustaining quality adaptable. (Refer Kaizen in detail under the
• It focuses on simplification by breaking down Lean ManagementTools)
complex processes into their sub processes
and then improving them
90
Goal of TPS
Goal of TPS
Design out
overburden Enable the Elimination of
Follow 5s at
(muri), production Participation of problems or
every step of the
inconsistency process as all resources in imperfection so
production
(mura), and flexible as the work process as to reduce
process
eliminate waste possible inventory
(muda)
91
Outcome of TPS
Outcome of TPS
Practiced by
one of the ten
Reduction in Improvement of largest Faster
Lower cost
lead time quality companies response
across the
world
92
Recognize Phase
93
Recognize Phase
Strategies for
Cost of poor
understanding Quality
customer (COPQ)
requirements Quality
Function
Deployment
(QFD)
Balance
Scorecard Voice of
(BSC) Customer
(VOC)
94
Balanced
Scorecard
(BSC)
95
What is Balanced Scorecard?
Balanced Scorecard is a
performance management
system for implementing strategic
planning and achieving
continuous improvement at all
levels of an organization. What is
Balanced
Scorecard?
BSC enables an
organization to
measure what is critical
to an organization i.e.
value drivers
96
Balanced Scorecard : An overview
BSC broke the

traditional
performance
measurement BSC enables
that focused only management to
Balanced on external provide a
Scorecard as a accounting data balanced
concept was first approach with a
published by mix of both
Robert Kaplan financial and non-
and David P financial measures
Norton in 1992, each compared to
later followed by a 'target' value
a book in 1996. within a single
concise report
97
Why Balanced Scorecard?
Improves organization’s
performance by measuring
BSC increases focus on
strategy and results 01 what really matters Aligns 02
organization’s strategy with
employees on a daily basis
Improves communication of
the organization’s vision
Focuses on key drivers for
future performance 03 and strategy Prioritize 04
projects, products, and
services
98
Balanced Scorecard Model
The Balanced Scorecard model views the organization from four perspectives viz; Financial, Internal Business
Process, Learning & Growth, and Customer
Financial Internal Business Processes

In order to succeed financially, how In order to satisfy our shareholders
do we appear to our shareholders? and customers, what business
process do we excel at?
Vision &
Customer Strategy Learning & Growth
In order to achieve our vision, how do In order to achieve our vision,
we appear to our customers; what is how do we create value and
important to our customers? innovate ourselves?
99
Balanced Scorecard Model – Financial Perspective
This perspective views organizational financial performance and the use of financial resources
Return on Financial
Investment results
01 02
03
Return on Capital
Employed
100
Balanced Scorecard Model – Internal Process Perspective
This perspective views organizational performance through the lenses of the quality and efficiency related to our
product or services or other key business processes
COPQ Process
Alignment
01 02
03
Process Automation
/ Innovation
101
Balanced Scorecard Model – Learning & Growth Perspective
Employee
Turnover
This perspective views
organizational performance
through the lenses of human
capital, infrastructure, Training &
Job Learning
Learning &
technology, culture and other Expertise Opportunities
Growth
capacities that are key to
breakthrough performance
Job
Satisfaction
102
Balanced Scorecard Model – Customer Perspective
Cost
This perspective views

organizational performance from
the point of view the customer or Delivering
Service value to Time
other key stakeholders that the the
organization is designed to serve customer
Quality
103
Balanced Scorecard Advantages
Aligns the
organization’s vision
and mission to
business strategy .
Enables better
decision making.
Balanced Improves internal and
Scorecard external
communication. Provides the
Advantages
management with a
comprehensive picture
of the processes.
Monitors organization
performance .
104
Balanced Scorecard Disadvantage
Time consuming
High
implementation
Balanced cost
Does not provide
Scorecard recommendations.
Disadvantage
The BSC relies heavily on a well define strategy

and understanding of linkages between strategic
objectives and metrics. Without the same, the
implementation could fail.
105
Cost Of Poor
Quality(COPQ)
106
What is cost of poor quality?
Costs incurred due to not In other words, COPQ can

having 100% confidence that be defined as costs that
product or process quality is would disappear if there
perfect all the time. were no defects
Actual cost – Ideal cost = COPQ

Actual cost – Ideal cost = COPQ
107
108 Lean Six Sigma Black Belt training programme – Part 1
creation!!!
spectacular
The ICEBERG
Nature’s most
The Iceberg of Cost Of
Poor Quality (COPQ)
Lean Six Sigma Black Belt training programme – Part 1
The ICEBERG
Nature’s most
Hidden 15-25%
spectacular
of Total Cost
creation!!!
109
Only
Only 20% ofof the
the iceberg
iceberg isvisible.
isvisible.
The remaining 80% is

The remaining is hidden
hidden below
below the
the ocean
ocean surface.
surface.
This
This 80%
80% has
has the
the potential
potential to
to sink the TITANIC…..
sink the TITANIC…..
110
Cost of poor quality
Prevention Cost (Cost of Conformance) Appraisal Cost (Cost of Conformance)

• Quality education • Test
• Process design • Measurements
• Defect cause removal • Evaluations and assessments
• Process change • Problem analysis
• Quality audit • Detection
• Preventive maintenance • Inspection
• Test equipment maintenance
Internal Failure Cost COPQ External Failure Cost

(Cost of Non Conformance) (Cost of Non Conformance)
• Re-inspection and retest • Returned products
• Scrap • Legal exposure and costs
• Rework • Liability and damage claims
• Repairs • Poor availability
• Service • Malfunction
• Defect removal • Replacement
• Lost production • Poor safety
• Complaint administration and warranty
111
Hard saves vs Soft saves
Six Sigma is primarily aimed at reducing

spending by eliminating defects and
inefficiencies.
Two types of savings categories:
• Hard Savings
The absolute removal of spending
• Soft Savings
The removal of spending from a specific

process step, but the spending still takes
place and the resources are not applied to
another productive use.
112
Hard saves vs Soft saves
The Cost of Estimate the

Develop SOW Poor Quality potential savings
(Define phase) (COPQ) is the project could
used to: yield (Measure
phase)
Quantify the actual

savings once
improvements have
been made (Validate
phase)
113
Cost Of Poor Quality
(COPQ)
114
COPQ Simulation exercise
Team Training, Inc (TTI) provides training services to a wide variety of service
and manufacturing companies. The person who answers the phone at TTI
doesn’t have the time or knowledge to answer questions from callers. He
transfers each caller to the appropriate person. Often, the “appropriate
person” is not in the office. Some clients or potential clients hang up rather
than leave voice mail messages because they need information right away.
TTI’s marketing representative prepares a contract to be signed by the client
requesting the training. Several iterations of the contract are often needed
until, finally, the contract matches the customer’s needs. Every version of the
contract is proofread by a TTI clerk before mailing it to the client.
Occasionally, a TTI representative misinterprets a client’s needs. In these
cases, the training misses the mark and the client is not pleased.
It is difficult to reach people at the client organizations. So, the TTI materials
representative estimates the number of course manuals needed for a given
training session. Of course, she over-estimates to make sure everyone has a
manual. Rush print jobs and overnight shipments of manuals are routine.
List the Failure Costs
115
Voice Of Customer
(VOC)
116
How do you know that there is a problem?
01 02 03 04
The machine was not
I am on hold for a long
working, and I have to wait long to
period before I get I am not happy with the
technician came after receive the goods that
connected to the right Quality of the product.
two hours of raising the I ordered.
executive.”
issue
05 06 07 08
There are many We had to pay a huge The cost of production
There is always a
rejections in the penalty for not being is too high; we need to
delay in fixing my
product lot you have complied to the do something to make
product.
sent to us. statutory requirement. it cost effective.
117
A customer
is someone
who
Uses your product or service A customer could be:
• External: Individuals or organizations
outside of your business who are usually
Decides to buy your product or service associated with paying money for your
products and services.
• Internal: Colleagues who receive products,
services, support or information from your
Pays for your product or service process – i.e., Engineering, Manufacturing,
Quality, Marketing.
• Regulatory: Any government agency that
has standards the process or product must
Gets impacted by your
conform to – i.e., OSHA, EPA, FDA etc.
product or service
118
Define products or services Are your customers – External

Identify related process.
provided to customer. and (or) Internal ?
PROCESS DELIVERABLE CUSTOMER

Internal
Hiring Technical Person placed in the
Director / Manager
Personnel position
Operations Hiring External
Accounts Payable Payment of invoices Suppliers
Internal
Correct order delivered Customer who placed
Order Delivery
to the correct person order
External
Supplychain Finance
Collection of Customer who
Analyzed reports
information & analysis outsourced the work
119
Before you
How does
approach to a the
business customer
problem, ask view my
these questions process?
What does the What does

customer look at the customer
to measure my The approach towards any problem must be
need from me
performance? to fulfill his
“Outside-In”, that is view the problem from
process? customer’s perspective.
120
Performance Needs vs. Business Requirements
Define how the process must perform Define the operating parameters around the process
These primarily comes from our internal/external

These primarily come from the value chain partners.
customers.
Examples: Lead time (e.g., time to get equipment), Defect Examples: Cost reduction, capital limitations, space limitations,
free (e.g., injury free, pain free) Low cost etc. development time limitations, supplier capability etc.
Don’t be distracted or wowed by ‘features’ (e.g., bells and

whistles) asked for by the Customers. Features are often,
though not always, just solutions to Performance Needs
(and not business requirements?).
Validate the need for the feature or, better yet, gather the
base need.
Avoid solutions until the Improve phase.
121
Performance Need Categories:
Service and Corporate

Quality Cost Speed
Safety Responsibility
Product or Service Process Cost Lead Times, Environment, Ethical Business

Features, Efficiency, Cost of Delivery Times, Health and Safety Conduct, Business
Characteristics service, FTEs Turnaround Times, Policy, Service Risk Management,
Relating to the involved, Purchase Setup Times, Requirements, Environment,
Function of the Price, Repair Delays, Up Time, After-Purchase Health and Safety
Product or Service, Costs, Equipment Reliability, Parts Policy, Code of
Reliability, Maintenance Availability, Availability, Conduct.
Availability, Costs. (Derived equally Service,
Effectiveness, (Derived Primarily from the Warranties,
Recovery, from the Customer or the Maintainability,
Customer Returns, Business – VOB). Business – Customer-
Defects, Rework or VOC/VOB). Required
Scrap (Derived Maintenance,
Primarily from the Product Liability,
Customer – VOC). Product/Service
Safety, Recordable
Injuries, Lost Time.
122
Translating VOC to CTQ
VOC C T Qs
Identify customer Gather verbatim VOC Translate to needs statement

KEY STEPS segments that need to and determine service and develop a CTQ - project
be targeted quality issue Y metric output characteristic
CTQs: Critical To Quality Characteristics

A specific measurable attribute of the output that is a key requirement for customer satisfaction
123
Gather Voice Of Customer (VOC)
Key Considerations In
Collecting Customer Data:
What What budget Ensure

contact/relation is available? customer
ship do you expectations
have with the are aligned with
customer? How much our intentions/
Collector’s
certainty to do actions.
bias may
affect what is you need to
heard. What are your move forward
time constraints? with the project?
124
Identify Customer
Identify customer
Now? Gather verbatim VOC • Review existing VOC data
segments that need to and determine service • Decide on what to collect
be targeted quality issue
• Use appropriate tools to gather VOC
- Surveys
- Interviews
What? - Be a customer
- Focus group
• List your - Customer observation
customers
- Listening posts
• Define customer
segments - Competitive comparison
• Narrow the list of • Collect data
customers
• Gather VOC
125
Steps for Gathering VOC
• The first step in gathering the VOC, is The Greatest Value Can Come From a
customer segmentation. Small Portion of Your Customer Base
– All customers are not created
equal, and do not create equal value
– Avoid “squeaky wheel” syndrome
• If customers aren’t segmented, it may prove
impossible to get a single “voice,” and the
multiple voices may lead in opposite
directions.
• Customers should be segmented or
grouped according to their similar need for
products and services
• Identify and focus on the most important
segments
Total Customers Total Value
126
Customer Segmentation:
Price and Service
800.00%
Economic Descriptive Attitudinal
• Revenue • Geographic • Price 600.00%
• Frequency • Demographic • Value
400.00%
• Size of Customer • Product feature • Service
• Cost • Industry 200.00%
• Strategic goals
0.00%
01 02 03 # of Customers
Price Service
127
Select Sources of Customer Information
• Existing Company Information i.e. product returns, market share, etc.

Internal and • Industry Experts
01 External Data • Secondary Data
• Competitors
• Complaints / feedbacks /
Sources of • Client SPOC
Listening Social media handles
Customer 02 Post • Customer Service
•
•
Billing & collection
Accounts Receivable
Information Representatives
• Interviews
Research • Surveys – global survey/ tax department survey etc.
03 Methods • Focus Groups – dedicated department/ functions
• Observations from the business around
128
Pros and Cons of each method of data collection
Tool Cost Benefits Disadvantages
• Gathers a lot of data from many sources

• An individual must decide to leave feedback, skewing results to people who
Feedback Low • Can be geared towards numeric data for easier
feel strongly one way or the other
analysis
Survey via • Can randomly select, which allows you to draw • Requires a lot of labor hours
High
phone conclusions for the entire population • Customers may be annoyed by unwanted phone calls
• Can randomly select, which allows you to draw

Survey via conclusions for the entire population • The customers must send it back for it to count. Because many people won’t do
Medium
mail • Lower cost alternative to phone or in-person so, you have to send more surveys to get a statistical sampling.
survey
• Ongoing ability to seek feedback • Requires an establish social media following.

Social Media Low • Ability to ask question on the fly • Relies on followers and fans, which means you are asking for feedback from
• Possibly the least expensive option for VOC people who already favor your brand in some way
• Limits data pool to local customers or those willing to travel.

Focus group • Let's moderators seek more in-dept answers or
High • Can’t use data to make assumptions about the general population
in person feedback immediately
• Customers may be less inclined to be honest when face to face with surveyors
• Let's moderators seek more in-dept answers or

Focus group
Low feedback immediately • Can’t use data to make assumptions about general population.
online
• Doesn’t require travel
129
Example
While we reviewed the customer feedback forms of few customers who availed our services of relocations, following were the VOCs.
Which VOC should we initiate the project for?
The packing material was not

The delivery of my household items The goods received at the
adequate, and many items
was not as per the schedule destination were damaged
were not packed safely
people were not having The supervisor was rude and

I was not able to connect with
knowledge and were not able was not willing to adjust with
the customer service
to handle my stuffs properly additional request
The quality of material used

I had to wait too long on call I was charged more than the
was not good and it tore
before getting connected estimates provided to me
multiple times while packing
130
Quality Function
Deployment (QFD)
131
Origin of Quality Function Deployment
The “voice of the QFD originated In Japanese, In 1978 Yoji Akao

customer” is the in Bridgestone ‘deployment’ and Shigeru
term to describe Tires and refers to an Mizuno published
Quality Function these stated and Mitsubishi Heavy the first work on
Deployment extension or
unstated Industries in late broadening of this subject
(QFD) is a customer needs 1960s and early showcasing how
structured activities and
or requirements. Quality Function 1970s when they hence ‘Quality design
approach to used quality considerations
defining Deployment(QFD) Function
is a system for charts that take Deployment’ could be deployed
customer needs customer to every element
or requirements designing a product means the
or service based on requirements responsibilities of competition
and translating into account in
them into specific customer demands for producing a
that involves all their product quality item must
plans to produce design process
products to meet members of the be assigned to all
those needs. producer or supplier parts of a
organization corporation.
132
Quality Function Deployment – Multiple definition
“ The key to improving

quality is linking the
design of products or
services to the
“
Quality Function Deployment
also known as QFD is a
technique that believes in
designing the products and
services to reflect the desire
and tastes ofcustomers
QFD is a systematic way of
documenting and breaking
down customer needs into
manageable and actionable
detail.
processes that QFD is a method for translating

customer requirements into an
It is an orderly process for
determining critical quality
produce them appropriate company program characteristics
and technical requirements at
each phase of the product
realization cycle.
133
Why Quality Function Deployment?
QFD is a
planning
QFD is a QFD provides a
QFD reduces QFD is a methodology
proven better tracking
the uncertainty technique that that organizes
technique that system for
involved in promotes relevant
can reduce future design or
product and cross-functional information to
start up time process
process design teamwork facilitate better
and costs improvements
decision
making
134
How does Quality Function Deployment works?
A product feature or process

step that must be controlled to
guarantee that you deliver what
the customer wants
135
Quality Function Deployment : Structure
Relationship
Matrix
Customer
importance ratings How?
Customer wants
Importance
ratings
QFD, is also known as House Technical

of Quality due to its structure
attributes
like a building block and roof
136
Quality Function Deployment : Structure
Ranks the importance – Establish the “How’s” –

Establishes the customer
1 needs (What’s) 2 how important are the
“What’s” to the customer?
3 How to satisfy
customer needs?
Create a correlation between Evaluate the impact of each

Establish a importance
4 the “What’s” and “How’s” (H-
Strong, M-Medium, L-Weak)
5 function / process / product/
service on the customer wants
6 rating for each “What”
End the QFD with the

Establish targets for each
7 Evaluate competing products 8 “How / What” correlation 9 self assessment for each
How and What
137
Quality Function Deployment : Example
Let us look at building a House of Quality for a Pizza business.
Basis customer wants,

Let us list out Establish “How”
determine the
1 basic customer 2 importance ratings (on
3 to satisfy
wants: customer wants:
a scale of 1-10)
• Good taste • Good taste (9) • Delicious fresh toppings

• Low price • Low price (7) • Appropriate weight, size,
• Low fats and healthy • Low fats and healthy (8) thickness and shape
• Appearance • Appearance (7) • Low fatty eatables
• Fresh and hot delivery • Fresh and hot delivery (8) • Pizza Color
• Good texture • Good texture (8) • Variety and density of toppings
138
4 5
Establish correlation between “What” Evaluate the impact of each function

and “How”: Here we have used the / process / product/ service on the
scale of (1,3,6) customer wants
1 being the lowest and 6 being the
highest. Pizza color and
139
Establish importance
rating for each “what”
140
7
The Weight,
Shape, Size
and Thickness
of pizza is
Evaluate competing importance to
the customer
products Here we are
considering our
competition two pizza
companies i.e. Company
A and Company B (G =
Good, F = Fair, P = Poor)
141
Benefits of Quality Function Deployment
The results we can expect by carrying

out the QFD studies are many:
• Better understanding of customer needs

• Improved organization on development projects
• Improved introduction to production
• Fewer design changes late in development
• Fewer manufacturing start-up problems
• Reputation for being serious about quality
• Increased business
• Documented product definition based on
customer requirements
142
Define phase
143
Benefits of Quality Function Deployment
Collect the VOC Determine the CTQ

1 2
Define
Develop the Project Charter 4 3 Map the High Level Process

144
Learning outcomes:
At the end of the DEFINE phase you will be able to:
Create the Project Charter
Translate the VOC into CTQ
Create a Macro Map
Identify the Problem

145
Segregate and Prioritize VOCs:
How do I analyze
these countless
VOCs ?
Affinity Diagram (> than 10 VOC) Kano Model (up to 10 VOC)

146
Affinity Diagram
Record each Without talking For each Draw the final

VOC on a post it sort, the ideas grouping create affinity diagram
note in bold simultaneously as summary or connecting all
letters. a team into 5 –10 header cards finalized header
related groupings. using cards with their
consensuses. grouping.
147
Bucketing the VOC’s
VOC 6 VOC 8 VOC 10
VOC 7 VOC 5 VOC 9
VOC 12 VOC 11 VOC 4

148
Various customer requirements for a Loan process
Know status of loan Available

during application outside normal Has access to
business hours Professional experts
Can apply over phone
Responsive to Knowledgeable Provides answers
Low interest rate Easy access to capital my calls reps to questions
Flexible Easy Availability Personal Advise/

Product Process Interface Consulting
149
Affinity diagram – An Example
Flexible product Easy process Availability Personal interface Advice/consulting
Low interest rate Easy application Will come to my facility Knowledgeable reps Knows about my finances
Available outside normal

Variable terms Easy access to capital Professional Knows about my business
business hours
All charges clearly stated Quick decision Available when I need to talk Friendly Makes finance suggestions
Pay back when I want Can apply over phone Responsive to my calls Make me feel comfortable Cares about my business
No prepayment Know status of loan during

Talk to one person Patient during process Has access to experts
penalties/ charges application
Know status of loan (post- Available outside normal Provides answers to

Pre-approved credit
approval) business hours questions
Organize VOC into broad categories

150
Kano Model
151
Kano Model - background
This model was published in 1984 by Dr Noriaki Kano, professor of Quality

Management at the Tokyo University of Science. Its core concept is based on
the assumption that a product or service is not only a set of functionalities. It is
also about consumers’ emotions.
Basically, the Kano model forces you to

Prof. Noriaki Kano think about how to relate the products or
services to the consumers’ needs.
152
Kano Model
▪ To identify & prioritize the full ▪ Gather sorted customer needs.

range of the customers needs.
▪ Classify the needs into 3
How to built?
▪ Kano model helps to describe Categories:
which needs, if fulfilled contribute
Purpose
to customer dissatisfaction - Must be
neutrality or delight. - More the better
▪ Kano Model Identifies: - Delighters
- Must be needs – Critical to ▪ If there is insufficient data to
customer expectation. enable the classification, collect
- More is better – Critical to addition data on VOC.
customer satisfaction. ▪ Prioritize the customer needs to
- Delighter – Converting wants develop the CTQ.
to needs.
153
Kano Model
Basic Requirements are “must-be’s”. They are the

most important needs of customers. They are Must-be
required and expected to be there. These are the
needs the customer assumes will be met. When
requirements
these requirements are unfulfilled, the customer is These requirements are such where the customer
greatly dissatisfied and when fulfilled, the expects a certain level of sufficiency and anything
customer is neutral (i.e., they do not produce exceeding that level increases the customers
additional satisfaction). satisfaction. A direct positive correlation exists between
An example could be a shirt with a buttonhole that satisfaction levels and the degree of presence of these
One- performance requirements. The more performance
is sewed shut.
dimensional requirement elements needs are met, the better it is for
requirements the product or service.
An example could be a restaurant providing faster
services to its customers. Faster the speed more will be
Delighter Requirements are “attracters”. Their the satisfaction to the customers as customers would not
presence in a product/process is unexpected and like to wait much for the food to be served to them.
fulfill the latent needs of a customer. They lead to
great satisfaction if found present. When delighters
are absent, the customer still is neutral (& not Delighters
dissatisfied).
An example could be a restaurant providing
complementary desserts to its customers.
154
Prioritizing VOC for CTQ Identification – Kano model
SATISFACTION
MORE THE BETTER
DELIGHTERS + (One-dimensional)
INNOVATION COMPETITIVE PRIORITY
• Free upgrades • Seat comfort

• Individual movies and games • Quality of refreshments
• Special staff attention/services • Friendliness of staff
• Computer plug-ins • Baggage speed On-time
(power sources) arrival
DYSFUNCTIONAL - + FUNCTIONAL
MUST BE
CRITICAL PRIORITY
• Safe arrival
• Accurate booking
• Baggage arrives with passenger
• 99 per cent system uptime
-
DISSATISFACTION
155
Application of the Kano Model
Frame the questions carefully while gathering information from the customers:
1. I like it that way

2. I expect it that way
Functional form If the delivery of the goods is faster, how
of question 3. I am neutral
would you feel?
4. I dislike, but can accept it
5. I dislike it that way
1. I like it that way

2. I expect it that way
Dysfunctional If the delivery of the goods is as-is, how
form of question 3. I am neutral
would you feel?
4. I dislike, but can accept it
5. I dislike it that way
156
Evaluation of the Kano Model
Dysfunctional
Customer Requirements
1. Like 2. Expect 3. Neutral 4. Live with 5. Dislike
1. Like Q A A A O
2. Expect R I I I M
Functional 3. Neutral R I I I M
4. Live with R I I I M
5. Dislike R R R R Q
Legends:
A: Attractive O: One-dimensional
M: Must Be Q: Questionable result
R: Reverse I: Indifferent
157
Example
158
Determine Critical To
Quality (CTQ)
159
Example: Translating VOC to CTQs
Good customer requirements:

Once the Voice of the Customer • Are specific and measurable (and the method of measurement is specific)
has been gathered, that • Are related directly to an attribute of the product or service
information must be translated
• Don’t have alternatives and don’t bias the design toward a particular approach or technology
into Critical Customer
Requirements (CCRs). • Are complete and unambiguous
• Describe what, not how
Voice of After Clarifying,

Critical Customer Requirements
the Customer the Key Issue(s) Is...
Customer wants the tax Sharing the Tax returns at

“I always gets the tax return to be received least 21 days before the
return at the nth hour early enough for their tax filing deadline.
before the deadline.” internal finance team to
perform the check.
160
Problem Statement from CTQ
• ‘You take too much time in getting back to me!’

Verbatim • ‘These forms are too cumbersome!’
• ‘I should be able to access the training content whenever I need them’
• Quick response.
Specific
need (CCR) • User friendly forms.
• System and training content availability.
• Process turn around time not more than 10 minutes.
CTQs • Improve the uptime of LMS by 40%.

Validate CTQ • Form < 2 pages and < 10 minutes to complete.
with customer
What gets measured gets managed… help ensure measurable CTQs

161
Measurements are critical
01 03
If we can’t
accurately
If we don’t know If we can’t control
measure
much about it, we it, we are at the
something, we
can’t control it. mercy of chance.
really don’t know
much about it.
02
162
Examples
VOC / VOB CCR
Deliver me product faster Delivery to be done in 30 mins.
Newly built multiplex is empty
Response to the query should not take that long
Not a lot of people are visiting the mall
There are many defects in the batch we produced
We are not profitable on the production; the costs are over running the
estimated budgets.
We don’t see many customers returning to us with business year on year.
We could not process the loan documents within the time promised to
customer
Loan application form submitted by officer has too many errors
The time taken from Prototype to Manufacturing is very high

163
SIPOC
164
SIPOC
Identify the process variables and evaluate their

relationships using SIPOC and other tools.
When defining a process, it is very important to identify the
start and end points.
A thorough understanding of the process inputs and
outputs and their relationship is the key step in process
improvement.
A SIPOC is that tool that will help us understand this
relationship and have better understanding of the high-
level view of the process.
The acronym stands for:
• Supplier
• Inputs
• Process
• Output
• Customer
165
SIPOC
Customer: The recipient of the

process output – may be
internal or external
Supplier: The
provider of inputs
to your process
Output: The products
or services that result
from the process
SIPOC
Input: Materials,
resources or data
required to execute
your process
Process: A collection of activities that takes
one or more kinds of input and creates output
that is of value to the customer
166
SIPOC
Boundary - Boundary -
S (Start of (Completion
Process) of Process) C
U O U
P I
U S
P N
T T
L P PROCESS P O
I U
U M
E T
T E
R R
Requirements, Specs and Information

167
SIPOC Example
Let us look at an example of Purchase Order (P.O.) Requisition to finalApproval
Supplier (S) Input (I) Process (P) Output (O) Customer (C)
User Department Stock List Generate Purchase Requisition Purchase Requisition User Department HOD
User Department 1. Purchase Requisition Approved Purchase

Approve Purchase Requisition Procurement
HOD 2. Budget Requisition
1. Approved Purchase
Procurement
Requisition Raise Request of Quotation Request for Quotation Approved Vendors
2. List of Approved Vendors
Approved Vendors Techno commercial evaluation

Quotation Shortlisted Quotation Procurement
received quotation
Procurement Shortlisted Quotation Select preferred vendor Quotation of preferred Vendor Procurement
Procurement Quotation of preferred Vendor Prepare purchase order Purchase order Signing Authority
Signing Authority Purchase order Approve purchase order Approved purchase order Preferred vendor
168
Project Charter
169
What is a Project Charter?
A project charter is a document stating the purposes of the

project. It serves as an informal contract that helps the
team stay on track with the goals of the enterprise.
It is one pager document which clarifies what is expected
from the project; by when and who all are involved. It also
talks about the impact/ consequences of the problem and
lists down the benefits of the project.
A Charter:
• Clarifies what is expected of the project.
• Keep the team focused.
• Keeps the team aligned with organizational priorities.
• Transfers the project from the Champion to the
Improvement Team.
• Used as a tool by the Apex Council to review project
progress.
170
Components of Project Charter
Problem Project Project Team

Business Case Goal Statement Project Scope
Statement Timelines Members
Does project “Y” What is the What is the Clearly defining Key milestones/ Who are the key
link to business problem/ estimated target project’s In timelines/detailed resources ?
Y’s? opportunity of for scope and Out plan What will be the
improvement? improvement? of Scope roles of BBs/
Sponsor/ MBB’s
171
Business Case
Why is the project worth doing? Justify the

resources necessary to engage in the project.
Why is it important to do now? (Priority)
What are the consequences of not doing this

project? (impact)
How does it fit with business

initiatives and targets?
172
Problem Statement
Frame the questions carefully while gathering information from the customers:
What is wrong or not When and where What’s the
How big is the
meeting our does the impact of the
problem?
customer’s needs? problem occur? problem?
Since When What is the What a Problem Statement

What is the is this impact on should not do is Assign a
problem? problem the Cause or Blame and
existing? process? Include a Solution.
Where is How did you
the know about
problem? it?
173
Problem Statement – An example
Example 1
“There has been late
payments done by some of Poor Statement
our clients and its leading to Because our customers are dissatisfied with our service, they are late paying their bills.
mismanagement of the
Improved Statement
cashflows in the
organization.” In the last 6 months (when) 20% of our repeat customers – not first timers (where) – were over 60
days late (what) paying our invoices. When surveyed, all of these customers reported extreme
“As observed from the credit dissatisfaction with our service (what). The current rate of late payments is up from 10% in 1990 and
report (how did you know) represents 30% of our outstanding receivables (how big). This negatively affects our operating cash
flow (impact).
for the last 3 months (when),
12% of our customers are
late, by over 45 days in Example 2
paying their bills (what). This Poor Statement
represents 20% (magnitude)
Customers are unable to access the call center half the time leading to high revenue losses.
of our outstanding
receivables & negatively Improved Statement
affects our operating cash During the year 2003, (when) 40% of our customers (extent) were unable to access the call center at
flow (consequence).” the first attempt (what). This causes dissatisfaction to our customers and a loss of revenue
opportunities to the organization (impact).
174
Goal Statement
• The Goal Statement defines the team’s improvement objective.

• Define the improvement the team is seeking to accomplish.
• Must not assign blame, presume cause, or prescribe solution!
• Goal Statement has four parts:
- Start with a verb (e.g., reduce, eliminate, control, increase).
- Focus of project (cycle time, accuracy, etc.).
- Has a definite Target (by 50%, by 75%).
- Has a definite deadline (completion time).
Specific Measurable Achievable Realistic Time bound

175
Goal Statement – An example
Example 1
“There has been late
payments done by some of Poor Statement
our clients and its leading to Because our customers are dissatisfied with our service, they are late paying their bills.
mismanagement of the
Improved Statement
cashflows in the
organization.” In the last 6 months (when) 20% of our repeat customers – not first timers (where) – were over 60
days late (what) paying our invoices. When surveyed, all of these customers reported extreme
“As observed from the credit dissatisfaction with our service (what). The current rate of late payments is up from 10% in 1990 and
report (how did you know) represents 30% of our outstanding receivables (how big). This negatively affects our operating cash
flow (impact).
for the last 3 months (when),
12% of our customers are
late, by over 45 days in Example 2
paying their bills (what). This Poor Statement
represents 20% (magnitude)
Customers are unable to access the call center half the time leading to high revenue losses.
of our outstanding
receivables & negatively Improved Statement
affects our operating cash During the year 2020, (when) 40% of our customers (extent) were unable to access the call center at
flow (consequence).” the first attempt (what). This causes dissatisfaction to our customers and a loss of revenue
opportunities to the organization (impact).
176
Project Scope
Project Scope helps us to understand the start and end point for the process and also gives an
insight on project constraints and dimensions. It’s an attempt to define what will be covered in the
project deliverables. Scoping sharpens the focus of the project team & sets the expectations right.
There are two types of scoping:
• Longitudinal Scoping
• Lateral Scoping
Absence of proper scoping may result in the team losing interest in the project. Project becomes
difficult to implement. Even after implementation, the desired benefits are not seen. Team focuses
on trivial pain areas and missing out the real ones. Process selected is too broad to handle.
• Longitudinal Scoping: Longitudinal scoping is done on the length of the process e.g. – From the
receipt of PO till the delivery at the distributor's go-down
• e.g. – From the time of customer reporting the complaint till final satisfaction confirmation.
Mostly the ‘start’ & ‘end’ points are fixed.
• Lateral Scoping is done on the breadth of the process e.g. – All dispatches from North & South
regions e.g. – Calls received during general shift
177
Project Timelines / Milestones / Project Plan
Project milestone in a charter specifies

timelines for completion of each phases
with signed tollgates.
It is a preliminary, high level project plan

with dates, which is tied to phases of
DMAIC process. It should be aggressive
(don’t miss “Window of Opportunity”) yet
should be realistic (don’t force yourselves
into “Band-aid” solution).
The project milestones to further include a

detailed project plan (Gantt chart) along
with a documented communication plan.
178
Project Team Members
Champion / Sponsor Black Belt Green Belt Six Sigma Team
• Head of the business • Coaches the team • Project Leader • Participates in the
unit / function • Help champions • Selects team members meetings
• Project owner • Help plan meetings • Plans team meetings • Helps execute the project
• Barrier remover tasks
• Observe team’s • Leads meetings
• Funds project performance • Implements the
• Make recommendation
recommendations or
• Resource aligner • Reviews projects with or changes
changes
• Project Reviewer Business unit head
• Army of people driving
the project with Project
Leader
179
Roles and Responsibilities of Team Members
Members Role Define Measure Analyze Improve Control
Six Sigma
Name 1 A A A A A
champion Approver of the team
A decisions
Six Sigma
Name 2 Deployment A A A A A
leader Resource to the team, one
whose expertise and skills
Name 3 Master Black Belt A A A A A R may be needed on an ad-
Name 4 Process Manager A I I A A hoc basis
Name 5 Black Belt R R R R R

Member of the team, whose
Deployment M expertise will be needed on
Name 6 R R R R R
Leader a regular basis
Subject Matter
Name 7 M M R R R
Expert Interested Party, one who
will need to be kept
Name 8
Process
M M R R R I informed on direction, and
Executive
findings during the project
Name 9 Trainer M M R M R
Name 10 Trainer M M R M R
180
Sample Project Charter
LEAN SIX SIGMA PROJECT CHARTER
Problem Statement Business Case
From last 6 months the avg. TAT of discharge for TPA & corp. patients has Hospital earn 35 - 40% of the revenue from TPA and Corporate Patients. But from last 6
increased to 5 hours. This delay leads to huge customer dissatisfaction. If unsolved months the avg. TAT of discharge process for TPA & Corp. patients has increased up to
it will lead to a revenue loss of INR 40,00,000 per annum and loss of reputation. 288 mins. This delay has a cascading effect on the further patient transfers which leads to
a revenue loss of INR 40,00,000 per annum and huge customer dissatisfaction. By doing
this project of 50% reduction in avg. discharge TAT will lead to a potential profit of INR
40,00,000/- per annum.
Goal Statement Process Boundaries
To reduce the Average TAT for discharge of TPA & Corp. patients by 50% i.e., Start: Consultant / Medical Officer writes discharge Order in Patient's file (TPA &
from 288 mins. to 150 mins. by July 2010. Corp.)
CTQ Metric Baseline Target
Avg. TAT Hours 288 150 Stop: Patient vacates the Room
Completion Schedule
Project Out of Scope Phase Target Actual
All other patient discharge process Define 25th April 2010 24th April 2010
Measure 23rd May 2010 23rd May 2010
Project Assumptions Analyze 28th June 2010 2nd July 2010
• Project depends on a cross-functional team and assumes that team members Improve 28th July 2010 27th July 2010
would support the project.
• There would be no special causes like any kind of pandemic or so. Control 20th August 2010 28th August 2010
181
Summary
• The key elements of a Project Charter includes:

• Business case; Problem statement; Goal statement; Project Scope;
Milestones and Roles.
• Team Charter plays a vital role in overall project’s success. It clearly
communicates the direction to all team members.
• A crystal-clear problem statement defines what is wrong and Goal statement
defines your project’s objectives.
• A project charter clarifies what is expected from you project; by when do we

expect it; who all are involved and brings everyone on same page.
• A team is very important, because its not just collection of individuals. Make sure
everyone is clear about their roles and is focused on achieving the same goal.
18
2
Great Project
Be clearly Be aligned Be felt by the Work with Show

bound with with critical customer. other projects improvement
defined goals. business There should for combined that is locally
If it looks too issues and be a significant effect. actionable.
big, it is. initiatives. impact. Global or local
It enables full ‘themes’
support of
business.
183
Project selection
Success factors Common pitfalls To be successful Avoiding pitfalls

• Project scope is • Resourcing of • Set up project • Identify and get
manageable project is scope charter and committed
• Project has inadequate have it reviewed resources
identifiable defect • Duplicating • Measure where up-front
• Project has another project defects occur in • Research
identifiable impact • Losing project the process database and
momentum • Assess and translate where
• Adequate buy-in
quantify potential possible
from key • Picking the easy
stakeholders X, not the critical X impact up-front • Set up milestones
• Perform and
stakeholder communications
analysis plan
184
Workout Session
Create a
Project Charter
“
me and I may remember,

“
Tell me and I forget, teach
involve me and I learn

18
5
Precision Delivery Inc. (PDI) is a package pickup and delivery service for homes and small businesses.
PDI specializes in packages 50 pounds or less and has a full-price rebate policy for any pickup or delivery
made outside the customer-designated 15-minute window. PDI advertising proudly states, “Pick-up and
delivery at your convenience, not ours.”
PDI has facilities at 2 locations, Downtown and Suburbia, each servicing customers within a 15-mile radius
with pickup and deliveries made by truck or bicycle. Customers designate a 15-minute window for their
packages to be picked up or delivered. PDI charges customers $5 per package plus $1 per pound (50-
pound maximum).
PDI Sales Operators receive pickup and delivery requests by phone from customers. Dispatchers issue
instructions to Field Operators for pickups and deliveries. To ensure prompt service, Dispatchers plan for
30 minutes of travel time, one way, for each pickup or delivery and target arrival time for the start of the
15-minute window. Under current procedures, travel time in excess of 45 minutes will result in a rebate
and travel time less than 30 minutes results in idle time for the Field Operator. Field Operators return
Case
directly to the dispatch facility after each pickup or delivery.

PDI pays a subcontractor who offers bike and truck time on demand, only for round-trip road time and idle
time at the customer destination. PDI accountants have calculated the Field Operations variable cost for
delivery, pickup, and idle time at $7.50/hour for bicycles and $15.00/hour for trucks. All other costs are
fixed at $5,000 per week. Pickups and deliveries are made Monday through Friday, 8:00 a.m. to 4:00 p.m.
Over the last six months, Operations MIS reports indicate 45% occurrences of not meeting timeliness of
deliveries and pickup. As a damage control measure, Sales Operators were instructed to remind
customers of the PDI price rebate policy. Additionally, a short survey was sent out to a small group of
established customers. Survey results disclosed an appreciation of price rebates, but a preference for
deliveries within the promised 15-minute window.
18
6
Define phase tollgate review
A successful define phase ends with all the following deliverables
A definition of
An what success will
A
An understanding of look like that has
comprehensive A Team Charter
understanding of the process with been agreed on
Project case with
the Voice of the a SIPOC and by the team
with a Project responsibilities members and
Customer scope
Charter Sponsors / Apex
boundaries
Council.
187
Define phase recap
Customers VOC High Level Process Map Project Charter
• Internal / External • Affinity Diagram • SIPOC • Business Case

• Kano Model • Problem Statement
• VOC to CTQ • Goal Statement
conversion
• Project Scope
• Project Timelines
• Project Team
Members
188
Questions
1 2 3
When there is no Which of the following Process Mapping
process, which is not a part of Project during the define
approach should Charter? phase must be
you avoid? a) Project Scope mapped as the
a) DMAIC way you want the
b) Business Case process to be?
b) DMADV c) Potential Causes a) True
c) IDOV d) Problem / Opportunity b) False
d) None of the Statement
above e) Project Timelines
189
Measure phase
190
Measure Phase Roadmap
01 02 03 04 05
Map the Process Plan for data Collect the data Calculate the Estimate Potential
collection and and measure it Process Sigma Savings
Validate the Level
Measurement
System
191
Learning outcomes
At the end of the MEASURE phase you will be able to
Map process Validate the Best method How to How to

using different Measurement for data calculate the calculate the
techniques System collection Sigma Level estimated
savings
192
Map the detailed
process
193
What is a Process?
Process is a collection of activities that takes one or more inputs and transforms them into outputs
that are of value to the customer.
Inputs outputs
Supplier(s) Customer(s)
194
Why map the process?
The developing reality – at least three versions:
What you think it What it actually is What you would

is… … like it to be…
195
Different techniques for Process Mapping:
Process Flow Cross Functional Value Stream

Diagram/Flowchart Deployment Map Mapping
No
Yes
196
Standard symbols used in Process Flow Diagram
Start point / Activity Box Decision box Document / Direction

End point Form /
Template
197
Example – Process Flow Diagram
198
Example – Functional Deployment Map
199
Functional Deployment Map - Inference
5 Decision boxes for only 3 activities

Investigate for Quick Wins
Too Many Paths Crossing Each Other Too Much Clutter

Investigate for Quick Wins Investigate for Quick Wins
200
Applications used for process mapping
MS
MS Visio/Excel
Visio/Excel Gliffy
Gliffy yEd
yEd CADe
CADe OmniGraffle ––
OmniGraffle
/PowerPoint/
/PowerPoint/ Specially
Specially for
for
Word
Word Mac users
Mac users
and many applications….

201
Quick Wins
01 02 03 04 05
It is very important Implementing quick These quick wins Important point to All such
for a Lean Six wins gives can be any one or remember is that observations need
Sigma Project confidence to more of the either; Quick Wins cannot to be recorded and
Team to identify management that • A standard change the work planned for
few “Quick Wins” team is doing work checklist for done nor can they implementation in
based on the “AS- and also they help ensuring nothing change the Improve Phase.
IS” process map. to silence the is left unnoticed sequence of doing
These quick wins critics. • A standard work, because that
need to be such template for any would impact the
that they can format that CTQ and in that
implemented records data or case the Define
immediately. information Phase becomes
• A SOP for doing redundant.
repetitive kind of
work by many
operators
202
Data Types
203
What is Data?
Data is a collection of information that conveys quality, quantity,

facts, numbers, statistics or any sort of meaningful information
about a process performance. Data may represent abstract ideas or
concrete measurements.
Data is collected using techniques such as measurement,

observation, query, or analysis, and typically represented as
numbers or characters which may be further processed.
Before getting into analysis, raw data is typically cleaned, outliers

are removed, and obvious instrument or data entry errors must be
corrected.
204
Types of Data – Discrete and Continuous
Discrete (Attribute) Data Continuous (Variable) Data

• Data that can be counted is termed as a Discrete • Data that can be measured (with a unit value) is
or Attribute data. termed as a Continuous or Variable data.
• Binary (Yes/No, Defect/No Defect). • Continuous data can be broken down into
increments with infinite number of possible values.
• Ordered categories (1-5).
Examples
• Counts.
Examples • Cycle time (measured in days, hours, minutes,
etc.).
• Number of incomplete applications.
• Weight (measured in tons, pounds, etc.).
• Count of the defects observed in the process.
• Number of Green Belts trained.
205
Why do we need data?
Choice of data display and analysis tools
Amount of data required: continuous data often

requires a smaller sample size than
discrete data
Information about current and historical process

performance
206
Examples
01 Percent defective parts in hourly production Discrete
02 Percent cream content in milk bottles (comes in four bottle container sets)
03 `Time taken to respond to a request
04 Number of blemishes per square yard of cloth, where pieces of cloth may be of variable
size
05 Daily test of water acidity
06 Number of accidents per month
07 Number of defective parts in lot of size 100
08 Length of screws in samples of size ten from production lot
09 Number of employees who took leave in the last 5 years

207
Collect the data
208
Data Collection
Word of caution: Ineffective data leads to ineffective conclusions
Why collect What to How to collect? Collect data Ensure

data? collect ? consistency
& stability
• The purpose of • Identify • Formulate data • Pilot collection • Develop

the data measures collection plan and validation measurement
collection • Define • Sampling plan system analysis
exercise operational strategy • Train data • Test and validate
definitions • Pilot data collectors • Monitor and
• What data to be collection plan improvise
collected
209
Data Collection
Data collection occurs multiple times throughout DMAIC. The data

collection plan described here can be used as the guide for data
collection. This help us ensure that we collect useful, accurate data
that is needed to answer our process questions.
Data collection plan needs to be prepared / referred for data

collection on Y in Measure phase and X’s in Analyze phase.
It is important to be clear about the data collection goals to ensure

the right data is collected. If your data is in the wrong form or
format, you may not be able to use it in your analysis.
Operational definitions help to guide how CTQ will be measured.

The critical factor is that any two people using the operational
definition will be measuring the same thing in the same manner.
210
Operational Definition
What is an Operational Definition? Purpose of Operational Definition

• An operational definition is a clear, concise • To remove ambiguity: Everyone has a
description of a measurement and the process consistent understanding.
by which it is to be collected. • To provide a clear way to measure the
characteristic.
‒ Identifies what to measure.
‒ Identifies how to measure it.
‒ Makes sure that no matter who does
the measuring, the results are consistent.
211
Operational definition example
What is the measure that it does

What are you trying to measure?
not include?
The number of files meeting the NA

criteria (not rejected) out of the
total number of files submitted.
Basic operational definition of

Calculation:
the measurement.
The number of files meeting the % compliance = (total number of

criteria (not rejected) out of the files meeting the criteria (accepted)
total number of files submitted. / total number of files submitted) *
100
212
Operational definition example (Contd.)

not include?
Time spent on revising the Tax Time spent on end to end tax
returns returns calculation for correct files

Calculation:
the measurement.
Time spent on rectification after Average TAT for rectification =

first error identified Total time spent on rectification /
No. of rectification requests
received
213
Operational definition example (Contd.)

not include?
Average Cost Overbudget NA

Calculation:
the measurement.
Amount of cost spent extra over Average Cost overbudget= Total

the budgeted cost of the project extra amount spent over budget
(Actual cost – budget cost) /
Number of projects where extra
amount spent
214
Data Collection Plan
A good data collection plan should cover the following:
How?
What?
What method of sampling to be used. (Simple
Operational definition should answer this.
Random/ Stratified/ Systematic)
Where? How much?

Source from where the data needs to be What is the quantum of data to be collected.
collected. (Sample Size / Complete Population)
When? Who?
Frequency of data collection. (once in a day/ per The operator who is responsible to collect the
shift/ once in a week) data for you.
215
Sampling techniques
The Six Sigma team would always face a question ‘How much data do we need to have a valid sample?’ Though an important
part of data collection is to obtain a sample of reasonable size, it is one of many questions to be addressed during the
planning and development of a data collection strategy. Sample size is just one aspect of a valid data collection activity.
The validity of the data is impacted by many things: For example, operational definitions, data collection procedures and
recording.
In process improvement, there are several questions to keep in mind relative to sampling:
• Is the data representative of the situation or is bias possible? • What are the key considerations for either a process or
• Why am I sampling? To improve or control a process or to population situation?
describe some characteristic of a population? • What is the approach to sampling (e.g., random, systematic,
etc.) and approximately how many to sample.
216
When to Sample?
Collecting all the data is impractical.
High cost implications due to population study.
Time availability.
Data collection can be a destructive process (crash testing of cars).
When measuring a high-volume process.

217
Population and Sampling
An entire set of items is called the Population.
What is Sample?
The small number of items taken from the population to
make a judgment of the population is called a Sample.
The numbers of samples taken to make this judgment is
called Sample size.
218
Sampling Techniques
Simple Stratified Systematic Sampling

Radom Sampling Random Sampling Sampling subgroups
Every unit has the Random sampling from Includes every nth unit. Subgrouping is the
same chance of being proportional subgroups The formula is process of putting
selected. of the population. measurements into
k = N/n (where N is
Example: Survey across Example: Average cycle population size and n is meaningful groups to
organization to know –”What time for LC issuance better understand the
the sample size).
percentage of employees process of different important sources of
have visited the intranet in countries. Each country is a Example: Suppose you want variation..
last seven days. Select strata (segment). Collect to sample 10 calls from the
employees from Population random data from each 150 calls received in a day. Example: While studying the
at random And collect data. strata. 150/10=15, so every 15th arrival rate of documents as
call is chosen. dispatched by the customer.
The entire day is split up into
quadrants, rational being the
arrival rate of documents is
similar within each quadrant
and different between
quadrants.
219
Confidence Level and Confidence Interval
• Confidence Level will always be 95% for normal transactional and

manufacturing businesses. Medical, space and aeronautics will be diff.
• Confidence Interval (CI) represents the range for the Population Mean based on
value of Sample Mean.
• If Sample Mean = 56 and the CI = (53, 59), then the Population Mean will
always lie between 53 and 59.
• Confidence Level is directly proportional to Sample Size. If Confidence Level
increases (95% - 99%), Sample Size will also increase. If Confidence Level is
100%, then Sample = Population.
• Confidence Level is directly proportional to Confidence Interval (CI). For higher
Confidence Level, the CI range will increase, provided sample size remains the
same.
• At 95% confidence, the CI range may be + 5%, but at 99% confidence the CI
range for the same parameter will increase to + 10%, provided sample size
remains the same.
• Sample Size versus Confidence Interval is inverse relation, where with
increasing Sample Size range of Confidence Interval decreases and vice versa.
220
Data collection plan - Example
A format of an excel spread sheet that can be used for creating

data collection plans for our projects. The sample data collection
plan below is for the project CTQ, in this example, number of
rejections.
However one should remember that based on C-E diagram and
the SIPOC all those Xs which the team feels to have a influence
over the Y should also be included in the data collection plan.
Example of a data collection plan

Measure Operational Target Source Sample size Report extraction When Data period
Definition frequency
No. of Any transaction 0.50% Rejection report All data points Daily End of 3 weeks
Rejections marked as from xxx system the day
‘Rejected’ in the
XXX system
221
Measurement
System Analysis
222
Introduction to MSA
• Our day-to-day working is being impacted by more and more data. We have become a data driven society.
• In business and industry, we are using data in more ways than ever before.
• Today manufacturing companies gather massive amounts of information through measurement and inspection.
When this measurement data is being used to make decisions regarding the process and the business in general it
is vital that the data is accurate. If there are errors in our measurement system, we will be making decisions based
on incorrect data. We could be making incorrect decisions or producing non-conforming parts. A properly planned
and executed Measurement System Analysis (MSA) can help build a strong foundation for any data-based decision-
making process.
What is measurement What is a

What is measurement
system analysis measurement
system variation?
(MSA)? system?
223
What is Measurement System Analysis (MSA)
• MSA is defined as an experimental and mathematical method

of determining the amount of variation that exists within a
measurement process. Variation in the measurement process
can directly contribute to our overall process variability. MSA
is used to certify the measurement system for use by
evaluating the system’s accuracy, precision and stability.
• Measurement systems analysis is a method for determining
whether a measurement system is acceptable. For a
continuous response variable, use measurement system
analyses to determine the amount of total variation that is
from the measurement system. For an attribute response
variable, use measurement system analyses to evaluate the
consistency and accuracy of appraisers.
• A measurement system analysis is a critical component for
any quality improvement process. Evaluate your
measurement system before using control charts, capability
analysis, or other analyses, to prove that your measurement
system is accurate and precise, and that your data are
reliable.
224
What is Measurement System?
Definition
Before we dive further into MSA, we should review the definition of a measurement system and some of the common
sources of variation. A measurement system has been described as a system of related measures that enables the
quantification of characteristics. It can also include a collection of gages, fixtures, software and personnel required to
validate a particular unit of measure or assess the feature or characteristic being measured.
• The sources of variation in a measurement process can include the following:
• Process – test method, specification
• Personnel – the operators, their skill level, training, etc.
• Tools / Equipment – gages, fixtures, test equipment used and their associated calibration systems
• Items to be measured – the part or material samples measured, the sampling plan, etc.
• Environmental factors – temperature, humidity, etc.
All these possible sources of variation should be considered during Measurement System Analysis. Evaluation of a
measurement system should include the use of specific quality tools to identify the most likely source of variation. Most
MSA activities examine two primary sources of variation, the parts and the measurement of those parts. The sum of
these two values represents the total variation in a measurement system.
Total Variation = Part to Part Variation + Measurement system Variation.
225
What is measurement system variation?
• Measurement system variation is the variation that occurs when you measure something. Specifically, measurement
system variation is the sum of variation from repeatability and reproducibility.
• Any component of a measurement system, such as a gage, a procedure, and software, can be a source of variation.
Measurement system
Repeatability Reproducibility
variation
226
Sources of Process Variation
Overall Variation
Part-to-Part Variation Measurement System Variation
Measurement System Variation Measurement System Variation
Measurement System Variation Measurement System Variation

227
Sources of Process Variation
Part-to-Part Variation: The variability in measurements across different parts. Ideally, differences between parts (Part-
to-Part) should explain most of the variability.
Measurement System variation: Measurement system variation is all variation associated with a measurement
process. Potential sources of variation include gages, standards, procedures, software, environmental components,
and so on. Like any other process, a measurement system is subject to both common-cause and special-cause
variation. To control the measurement system variation, you must first identify the sources of the variation, then you
must either eliminate or reduce the various causes. Measurement system variation is split into two sources:
Repeatability: Repeatability is the variation due to the measurement device. It is the variation that is observed when
the same operator measures the same part many times, using the same gage, under the same conditions.
Reproducibility: Reproducibility is the variation due to the measurement system. It is the variation that is observed
when different operators measure the same part many times, using the same gage, under the same conditions.
Reproducibility can be split into two sources:
• Operator: The variability in measurements due to different operators.
• Operator-by-Part: The variability in measurements due to different operator/part combinations after considering part
and operator separately.
228
Why Perform MSA
• An effective MSA process can help assure that the data being
collected is accurate and the system of collecting the data is
appropriate to the process.
• Good reliable data can prevent wasted time, labor and scrap in a
manufacturing process.
• To verify the adequacy of measurement system for Y when
establishing process baseline.
• To verify the adequacy of measurement system when verifying
causes.
• To verify the adequacy of measurement system when verifying
solutions.
• To verify the adequacy of measurement system when controlling
the X’s.
229
Why Perform MSA
Example
• A major manufacturing company began receiving calls from several of their
customers reporting non-compliant materials received at their facilities sites.
The parts were not properly snapping together to form an even surface or
would not lock in place.
• The process was audited and found that the parts were being produced out of
spec. The operator was following the inspection plan and using the assigned
gages for the inspection. The problem was that the gage did not have
adequate resolution to detect the non-conforming parts.
• An ineffective measurement system can allow bad parts to be accepted and
good parts to be rejected, resulting in dissatisfied customers and excessive
scrap. MSA could have prevented the problem and assured that accurate
useful data was being collected.
230
Validate Measurement System - Objective
To determine what percentage the Total Observed Variation is due to Measurement Device and Measurement Method
in addition to the true Part to Part variation.
To statistically verify that the current measurement system provides:
• Unbiased results
• Minimal variability within the measurement system.
• True representative values of the factors being measured
Gage system error within a measurement system is the sum of:
Bias Stability Sensitivity Repeatability Reproducibility

(Accuracy)
231
Types of Measurement Errors - Key Definitions
Accuracy Repeatability Reproducibilit Stability Sensitivity

The difference between The variation in The variation in the The variation in the The ability of the
the observed average measurements average of average of at least two measuring instrument
of measurements and obtained with a gage measurements taken sets of measurements to detect the smallest
the true average of the when used several by different operators obtained with a gage unit of change in
items measured. times by one operator using the same gage as a result of time on measured value.
while measuring the while measuring the the same pieces
identical characteristic identical characteristic
on the same sample on the same pieces.
piece.
232
Bias (Accuracy) and Repeatability
Precise Not Precise
Accurate
Inaccurate Bias
You can correct for Bias

You can not correct for Imprecision
233
How to perform Measurement System Analysis (MSA)
• MSA is a collection of experiments and analysis performed to

evaluate a measurement system’s capability, performance and
amount of uncertainty regarding the values measured. We
should review the measurement data being collected, the
methods and tools used to collect and record the data.
• Our goal is to quantify the effectiveness of the measurement
system, analyze the variation in the data and determine its likely
source. We need to evaluate the quality of the data being
collected regarding location and width variation. Data collected
should be evaluated for bias, stability and linearity.
• During an MSA activity, the amount of measurement uncertainty
must be evaluated for each type of gage or measurement tool
defined within the process Control Plan.
• Each tool should have the correct level of discrimination and
resolution to obtain useful data. The process, the tools being
used (gages, fixtures, instruments, etc.) and the operators are
evaluated for proper definition, accuracy, precision, repeatability
and reproducibility.
234
How to perform Measurement System Analysis (MSA)
Data Classification:
• Before analyzing the data and the gages, tools, we
must determine the type of data being collected in
sample. The data could be Variable data or Discrete
one.
• Attribute data is classified into specific values, whereas
Variable or continuous data can have infinite number of
values.
235
Gage R & R
Variable Gage R & R Study:

For gages or instruments used to collect variable continuous data, Gage
Repeatability and Reproducibility (Gage R & R) can be performed to evaluate
the level of uncertainty within a measurement system.
To perform Gage R & R we need:
• At least two operators (persons doing the measuring) should participate. Two
or three operators are typical.
• At least 10 parts should be measured. The same characteristic is measured
on each part. These are 10 units of the same type product that represent the
full range of manufacturing variation.
• Each operator needs to measure each part two or three times. Parts should
be measured in random order.
• Parts should be masked so that operator does not realize that he / she is
measuring the same part number of times.
236
Variable Gage R&R – Acceptability Criteria
Study Variation (SV%) % Contribution Acceptable Criteria
0% to 10% Less than 1% Good Measurement System
10% to 30% 1% to 9% Conditionally Accepted

(Depending on the Criticality of the Application)
Greater than 30% Greater than 9% Not Acceptable
Number of Distinct
Less than 5 Not Acceptable
Categories
237
Variable Gage R&R using Minitab
Refer the data sheet – Thickness. MTW in Minitab

Choose Stat > Quality Tools > Gage Study > Gage R&R Study (Crossed).
238
Results for: Thickness.MTW Gage R&R

%Contribution
Gage R&R Study - ANOVA Method Source VarComp (of VarComp)
Two-Way ANOVA Table With Interaction Total Gage R&R 0.0044375 10.67
Source DF SS MS F P Repeatability 0.0012917 3.10
Part 9 2.05871 0.228745 39.7178 0.000 Reproducibility 0.0031458 7.56
Operator 2 0.04800 0.024000 4.1672 0.033 Operator 0.0009120 2.19
Part * Operator 18 0.10367 0.005759 4.4588 0.000 Operator*Part 0.0022338 5.37
Repeatability 30 0.03875 0.001292 Part-To-Part 0.0371644 89.33
Total 59 2.24913 Total Variation 0.0416019 100.00
α to remove interaction term = 0.05
Study Var %Study Var
Source StdDev (SD) (6 × SD) (%SV)
Total Gage R&R 0.066615 0.39969 32.66
Repeatability 0.035940 0.21564 17.62
Reproducibility 0.056088 0.33653 27.50
Operator 0.030200 0.18120 14.81
Operator*Part 0.047263 0.28358 23.17
Part-To-Part 0.192781 1.15668 94.52
Total Variation 0.203965 1.22379 100.00
Number of Distinct Categories = 4
The number of distinct categories is less Measurement System does not meet the
than 5, therefore it is not acceptable. criteria as the SV% and Contribution %
exceed the criteria
239
Breaking down overall variation
100%
Overall Variation (source 89.33+10.67)
89.33%
100%
Part-to-Part Variation Measurement System Variation (source 89.33+10.67)
2.19% 7.56%
Variation due to
Variation due to Repeatability
Reproducibility
2.19% 5.37%
Operator Reproducibility Operator by Part Interaction

240
Range Chart must be in

statistical control over all
operators.
If special cause is present,
2 implement counteraction then
redo the test.
In this case, the range chart is
acceptable
241
Attribute Agreement Analysis
It is also important to have good repeatability and reproducibility

when obtaining attribute data.
If one operator, for example, decides a unit has an “appearance”

defect and another operator concludes the same unit has no
defect, then there is a problem with the measurement system.
Similarly, the measurement system is inadequate when the same

person draws different conclusions on repeat evaluations of the
same unit of product.
An attribute measurement system compares each part to a

standard and accepts the part if the standard is met.
The screen effectiveness is the ability of the attribute measurement

system to properly discriminate good from bad.
242
Attribute Agreement Analysis- Acceptability Criteria
While 100% is the most desirable result in Attribute Agreement Analysis , the following guidelines are frequently used:
Kappa Guideline
0.90 to 1.00 Acceptable
0.80 to 0.90 Marginal
Less than 0.80 Not Acceptable
Key Points
01 02 03
Before collecting new data, evaluate the Before using existing data, try to estimate Don’t delay a Six Sigma project due to a
gage using MSA for either variable or the trustworthiness of the data. poor MSA. Keep the project moving with
attribute data. non numerical analysis wherever possible,
such as Process Analysis, Waste
Identification, identification of Non-Value-
Added Activities, and improve the gage as
the project goes forward.
243
Measure the data
244
Measure the data
Data measurements
Measures of Central Measures of Dispersion /

Tendency Variation
• Mean • Range
• Median • Variance
• Mode • Standard Deviation
245
Measures of Central tendency
Placement Time for an Analyst’s Positions (in days)
22, 26, 26, 31, 33, 37, 37, 42, 52, 52, 52, 57, 59
Mean or Average
The sum of the values in a data set divided by the X = 40.5 days
number of values.
Mode
Mode = 52 days
The most frequently occurring data value.
Median
The middle observation in the data set that has Median = 37 days
been arranged in ascending or descending order
246
Measures of Central tendency
Placement Time for an Analyst’s Positions (in days)
22, 26, 26, 31, 33, 37, 37, 42, 52, 52, 52, 57, 59
Range
The largest data value minus the smallest data Range = Max - Min Range = 37
value.
Variance (s2)

2
s2 = (x - x )
The average deviation of all data values s2 = 162.67
from the mean. n - 1
Standard Deviation (s)

 ( x - x )2 s = 12.74
The square root of variance is s=
standard deviation. n - 1
247
Graphically
present the data
248
Characteristics of variable data
The following characteristics of a data set can provide

considerable insight:
• Shape (Histogram)
• Central Tendency (Mean, Median, Mode)
• Variation (Range, Standard Deviation, Variance)
• Distribution (Normal and Skewed Distributions)
• Graphical Analysis (Histogram, Box Plot)
249
Histogram
• A histogram is a frequency polygon in which data are grouped into classes.

• The height of each bar shows the frequency in each class.
25
20
20
Frequency
15
12
10
10
5 4 3
1
0
250
Example: Histogram
For each of 50 placements, the time (in days) it took to place a person in the position was recorded.
22 26 30 19 22 31 34 29 28 18
16 22 31 24 26 36 28 33 36 24
26 27 35 14 26 30 33 26 31 36
28 33 18 26 29 30 22 30 24 31
27 21 28 35 32 28 33 28 23 25
251
Example: Histogram
A histogram is a bar graph in which data are grouped into classes. The height of each bar shows how
many data values fall in each class.
25
20
20
Frequency
15
12
10
10
5 4
3
1
0
10-15 15-20 20-25 25-30 30-35 35-40
Days
252
Histogram – Number of Bins
• When creating a histogram, the data must be properly

grouped in order to understand the shape of the data
No of Data Points No of Classes
distribution.
• For the given sample size, the right number of classes Under 50 5-7
should be used.
50-100 6-10
In Minitab, refer the file ‘PotatoChip.MTW’ to create a 100-250 7-12

histogram.
What might you conclude from the histogram? Over 250 10-20
253
Shapes of Data Sets
Bell Shaped
Normal Distribution. This what we want to see in our Histogram`s
Bell Shaped
Double-Peaked
Shows that data has been gathered from two different sources. These are two
Normal Distributions, but from two different machines, shifts, production lines or
operators. Also, if this is representative of Vendor data, then it is possible that
Double-Peaked previous rejected lots are being mixed with new lot or vendor is outsourcing
production.
Plateau
This type of distribution demonstrates lack of Standard Process.
Plateau
254
Shapes of Data Sets
Truncated Skewed
Comb
Comb: Truncated and Skewed

This shape signifies that data with This type of distribution signifies that off spec data has been omitted from the
high variation has been mixed with data set. A clear case of data manipulation.
data with low variation.
Isolated-Peaked
This type of distribution demonstrates the existence of special incidents or causes in the process.
The figure on the left signifies the normal everyday operations of the process illustrated through the
Normal Distribution. The smaller figure on the right demonstrates the excess variation in the
process on specific days only, due to some identifiable special condition that does not exist or
Isolated-Peaked occur every day. It is a sporadic incident that occurs once in a while and needs to be addressed
through structured Corrective and Preventive actions. The basic process need not be tampered.
Only the specific sporadic cause needs to be addressed.
255
What is Normal Distribution?
01 02 03
Normal or Gaussian distribution is It is defined as a continuous This is the most important

a descriptive model that describes frequency distribution of infinite probability distribution in statistics
real world situations. range (can take any values not just and important tool in data analysis.
integers as in the case of Binomial
and Poisson distribution).
256
Characteristics of Normal Distribution
01 It links frequency distribution to probability distribution.
02 Has a bell shape curve and is symmetric.
03 It is symmetric around the mean: two halves of the curve are the same (mirror images).
04 In a perfectly centered Normal Distribution; mean = median = mode.
05 The total area under the curve is 1 (or 100%).

257
Properties of Normal Distribution
Since many process outputs have this shape, the properties of the normal curve can be used to make
predictions about the process population.
258
-3s -2s -1s 68.27% +1 +2 +3

s s s
95.45%
99.73%
259
Box plot
Box Plot is a graphical tool to

Box Plot enables to understand Box Plot gives the location of
display central tendency (median)
the distribution of data (quartiles). data.
and dispersion (range).
Box Plot enables to get a quick Box Plot indicates imminent

Box Plot is usually used at the
comparison of two or more instability in the process, through
initial stages of data analysis.
processes. illustration of outliers.
260
Box plot
* Outlier
*
*
Upper Adjacent Value
Q3 – Upper Quartile (75 per cent) value
Each segment Median

represents 25
Q1 – Lower Quartile (25 per cent) value
per cent of the
data points
Lower Adjacent Value
We can calculate the Inter Quartile Range (IQR): Q3 – Q1

261
Things to look for in a Box plot
Are the boxes about equal or Do the groups appear normal or

Are there any outliers?
different sizes? skewed?
Refer the data sheet – Pipe.MTW in Minitab

Choose Graph> Box Plot > Multiple Y’s Simple
262
Box Plot using Minitab
Interpretation:
• Week 1 median is 4.985, and the interquartile range is
4.4525 to 5.5575.
• Week 2 median is 5.275, and the interquartile range is
5.08 to 5.6775. An outlier appears at 7.0.
• Week 3 median is 5.43, and the interquartile range is 4.99
to 6.975. The data are positively skewed.
• The medians for the three weeks are similar. However,
during Week 2, an abnormally wide pipe was created,
and during Week 3, several abnormally wide pipes were
created.
263
Check the data
distribution
264
Test for Normality
A normal curve originates from a histogram. A histogram is a frequency distribution chart showing the number of times
a given value of the parameter we are trying to measuring occurs.
Minitab uses the Anderson-Darling test to determine if a set of data can be treated as normal data.
Interpreting the P-value:
The P-value is the probability of getting the particular sample if the population is normal.
P-value < 0.05 means that the chance of getting this sample from a normal population is very small (less than 5%).
Stat > Basic Statistics >Normality Test
Null Hypothesis: Data is Normal

Alternate Hypothesis: Data is not Normal
Since the P-value > 0.05 we conclude that
the data follows a normal distribution.
265
Introduction to
Minitab
266
Introduction to Minitab
• Minitab is a statistical software that is widely used

across businesses and industries to solve or
analyze complex statistical problems.
• Minitab provides convenient features that
streamline your workflow, a comprehensive set of
statistics for exploring your data, and graphs for
communicating your success.
267
Introduction to Minitab
• Session Window: The Session window displays

the results of your analyses in text format. Also, in
this window, you can enter session commands Columns
instead of using Minitab’s menus.
• Worksheet: The worksheet, which is similar to a Rows
spreadsheet, is where you enter and arrange your
data. You can open multiple worksheets.
268
Data Window Elements
Edit Last Dialog

Box
Cut, Copy, Paste
Save
Project Redo, Undo
Open
Project
269
Worksheet Elements
The Data Entry

Arrow
There is a data
entry arrow
above row 1,
which indicates
the direction the
cursor will move Column Name Row
after the “Enter” Remember
key is pressed The column name row is
located just above row 1of the When data is entered into Minitab, the program will read it as one of the
worksheet. Column names can three formats:
be up to 31 characters and may • Numeric
contain space • Text
• Date / Time
270
Combine data into single column
Stack Data
• Stack Data
• Go to Minitab
• Select: Data>Stack Columns
• Double click C1, C2 and C3 and the data is put in the
variables box
• Click OK
271
Combine data into single column
Stack Data
• Minitab can stack data from to multiple columns to

single column.
272
Distribute data into different columns
Unstack Data
Qtr Sales Store

1 52 Denver
1 36 Boston
1 63 Seattle
Unstack Data
2 46 Denver
• Go to Minitab
2 32 Boston
• Select: Data>Unstack Columns
2 71 Seattle • Double click C2 and C3 and
3 51 Denver the data is put in the variables
3 35 Boston box
3 68 Seattle • Click OK
4 50 Denver
4 29 Boston
4 66 Seattle
273
Distribute data into different columns
Unstack Data
• Minitab can unstack

data from single column
to multiple columns.
274
Data Format for import to Minitab
When a data is imported to Minitab, it expects the data

to fulfil following conditions for a proper
interpretation:
• Unlike MS Excel, Minitab does not have blank rows
between the column name and row name.
• There are no total rows in the worksheet.
• Columns must not contain special characters or
symbols.
275
Data Import
At time, you may have to enter or import data into a

Minitab worksheet before you start an analysis.
You can enter data in a Minitab worksheet in the
following ways:
• Type the data directly into the worksheet.
• Copy and paste the data from other applications.
• Import the data from Microsoft Excel files or text files.
After your data are in Minitab, you might need to edit
cells or reorganize columns and rows to prepare the
data for analysis. Some common manipulations are
stacking, specifying column names, and editing data
values.
276
Import Excel file to Minitab
• Export MS Excel file to Minitab.

• Open the excel file from Minitab and click ok.
277
Import Excel file to Minitab
278
Projects and Worksheets
In a project, you can perform analyses, and generate graphs. Projects contain one or more worksheets.
Project (.MPX) files store the following Worksheet (.MWX) files store the
items: following items:
• Worksheets • Columns of data

• Graphs • Constants
• Session window output • Matrices
• Session command history • Design objects
• Dialog box settings • Column descriptions
• Window layout • Worksheet descriptions
• Options
279
Process
Capability
280
What is Process Capability?
Process capability is a simple tool which helps us determine if a

process, given its natural variation, is capable of meeting the
customer requirements or specifications.
Helps to determine if there has been a change in the process.
Also enables the six sigma team to determine the percent of the
product/service not meeting the customer requirement.
281
Measuring the Capability
• Sigma is a statistical unit of measure, used to

denote the value of standard deviation in a set of
variable data.
• For a given process, Sigma Level is a metric that
indicates how well a process is performing.
• In Six Sigma, the capability of a process to meet
customer specification is captured by the Process
Sigma Level.
• Hence as value of Standard Deviation (s)
decreases the Process Sigma Level increases.
Let us look at different scenarios in a process.
282
What is Process Control?
A Process is in statistical control when it is stable...

100% of the individual data values are within the spread
of natural variation (+-3s) of the process.
And, therefore, predictable...

283
What is “Out of Control” process?
An unstable process...
100% of the individual data values are NOT within the
spread of natural variation (+3 ) of the process.
Few data values fall beyond the +3 limits and are
referred to as “OUTLIERS”.
…is unpredictable
284
Common Cause vs. Special Cause
Type of variation Characteristics
Inherent to the process

• Expected
Common cause • Predictable
• Normal
• Random
Inherent to the process

• Expected
Special cause • Predictable
• Normal
• Random
285
Common Cause vs. Special Cause
Only "COMMON" causes of variation are present in

a Stable Process.
This variation is Random and Routine.
"SPECIAL" causes of variation are

present in an Unstable Process.
This variation is Non-Random and
Sporadic
Some points in time are exceptional
when compared to the rest.
286
Process Control vs. Process Capability
Process Control = Stability over time.
Process Capability = Ability of a

stable process to meet
specifications.
Lower Upper
Specification Specification
Limit Limit
287
Examples of Stable and Capable processes
LSL
Process is Stable and Capable
USL
Process is Stable
but not Capable
LSL
USL
288
Control Limits vs. Specification Limits
Upper Control Limit Control Limits are statistical bounds (the natural
bounds of the data) used to determine process
stability.
Statistically Control Limits are equivalent to + 3 s.
Control limits are determined by the data (voice of the
Lower Control Limit
process).
Specification Limits are applied to individual

measurements.
Specification limits are decided by people (voice of
the customer).
LSL USL
289
Methods to Calculate Process Capability
Process capability
Cp / Cpk PPM / DPMO
• When the data is Continuous • When the data is Discrete

290
Determine
Process
Capability
Variable Data
291
Stable and Capable Process
Process capability exists when VOC and VOP are combined
LSL USL
VOC VOP
LSL USL
L J L
292
LSL USL
Individual
Measurements
6s
• A stable process provides the most reliable estimates of process capability.

• A process is said to be capable when the ± 3s points of the distribution of individual
measurements are contained well within the specification limits.
293
A B
LSL USL LSL USL
C D
LSL USL LSL USL
What can be said about the capability of these four processes?

294
How capable is the process?
6s
6s 6s
LS L USL
L S L A Very U S L LSL Highly USL
Capable Process Capable Process
Capable Process
295
Steps for evaluating process capability for variable data
01 02 03 04
Assure the data is Estimate the average and Determine the process’ Quantify process
normally distributed. standard deviation of the potential capability. performance.
process.
296
Process variation vs Specification
Let us assume that for a normally distributed stable process, the average is 178.6 and the standard
deviation is 3.6. The process target is 171, USL = 182, LSL = 160.
Process Variation
USL = 182
LSL = 160
At + 3s that is 99.73% of the time, the process is

producing products that falls between 167.8 and
189.4.
However, as per customer specification, we want all
167.8
178.6 189.4 product to fall between 160 and 182.
X
x − 3s x + 3s
297
Determine the potential process capability
LSL USL
Process is just about meeting the
Cp = 1 specification but centering needs
attention.
Process variation well under

Cp > 1
control. Larger the Cp, better the
process.
Cp < 1 Process variation exceeds

specification in this case. Process
is producing defects.
298
Determine the potential process capability
The Cp index reflects the potential of the process if the average were perfectly centered between the specification limits.
Cp = USL - LSL
6s
Cp = 182 - 160
6s
For the given example, the potential process capability Cp is 1.01.

299
Quantify actual process performance (Cpk)
To estimate the percentage of product / process that falls outside the specification limits, we compute Cp (upper) and
Cp (lower).
USL = 182
LSL = 160 167.8 178.6 189.4
z lower is the number z upper is the number

of standard deviations of standard deviations
between the Process Average between the Process Average
and the Lower Specification Limit. and the Upper Specification Limit.
300
The Cp index reflects the potential of the process if the average were perfectly centered between the
specification limits.
Z = USL - X Z = X - LSL
(upper)
s (lower) s
Minimum of Z (upper) & Z (lower)

C =
PK 3
301
The Cp index reflects the potential of the process if the average were perfectly centered between the
specification limits.
= 182.0 178.6 178.6 160

Z Z =
(upper) 3.6 (lower) 3.6
Z = 0.94 Z = 5.17
(upper)
(lower)
Cpk = 0.94 / 3 = 0.31

302
Unlike the Cp, the Cpk index takes into account off-centering of the process. The larger the Cpk index, the
better.
LSL USL LSL USL
6s 6s
CP = 1 CP = 1
CPK = 1 Cpk < 1
303
What is Sigma?
“Sigma” (Standard deviation) is a measure of variation.
Lower Specification Limit
Upper Specification Limit

± Standard Deviation
(“Sigma”)
Plus or minus one standard deviation around the mean is about 68% of the total process output.
304
What is a Six Sigma process?
If we can squeeze six standard deviations in between

our process average and the customer’s requirements…
Lower Specification Limit
Upper Specification Limit

6 5 4 3 2 1 1 2 3 4 5 6
Then 99.99966% of our “opportunities” meet customer requirements!

305
LSL USL
MEAN 1 2
-3 -2 -1
3
• Conceptually, for Normal Distributions, the Sigma Level is equal to the number of std deviations that can be fit between
mean and either specifications.
• Since in this case we can fit only one std dev between mean and specs, the sigma level is 1 sigma.
• Correspondingly as per property of normal distribution, the percentage of output meeting customer
requirement is 68%
306
LSL USL
-6 -5 -4 -2 -1 1 2 4 5 6
-3
MEAN 3
• In this case , we can fit 3 std dev between mean and secs, so sigma level = 3 sigma.
• Percentage of o/p meeting customer req = 99.73%
307
• In this case , we can fit 6 std dev between mean and secs, so sigma level = 6 sigma.
• Percentage of o/p meeting customer req = 99.99967%
LSL USL
• 99.99967%
• 100 – 99.99967
• 0.00034%
• DPMO = 0.00034*10^6/100 = 3.4
• 6sigma = 3.4 DPMO
-6 -5 - 4 -3 -2 -1 1 2 3 4 5 6
MEAN
308
Fundamentals of Process Improvement
• Reduce Standard Deviation

• As we keep reducing value of std dev; we can fit more
std between Mean and Cust Spec.
• Quiz: As sigma value goes down; Sigma Level goes
up. –True / False (True)
• As a result, more and more area under the curve start
falling within specification
• So, area under the curve within specification increases
and area under the curve outside of specification
decreases.
• As a result, Defect decreases.
• Process Capability Increases
309
Checking stability for variable data in Minitab
• To identify the average and standard deviation of a

process, we first need to check the distribution i.e. if it
is normal distribution?
• Let us refer the data sheet – Piston.MTW in Minitab
for the same.
• We check the normality of the data.
Choose Stat> Basic Statistics> Normality Test.
310
Checking stability for variable data in Minitab
The Anderson-Darling test's p-value at 0.892 indicates that the data follows a normal distribution.
311
Determine
Process
Capability
Discrete Data
312
Defect
Defect
A defect refers to a specific quality characteristic for an
item, such as a tear, scratch, or discoloration. A defect
indicates that the product result is not entirely as
intended.
For example, analysts at a textile company inspect towels for tears,
pulls, or improper stitching and record the number of defects. Each
towel can have 1 or more than 1 defect, such as tear; pull; stitching
error etc.
For example, a car is one finished unit in a process. A car also
contains many different areas that are assembled to create a finished
vehicle. Any of these areas – the seats, the dashboard, the engine,
the exhaust system, etc. – could have defects.
313
Defective
Defective:
A defective refers to whether the overall status for an
entire item is acceptable or not. Therefore, the data is
often of the form yes/no, pass/fail, or defective/non-
defective. Because an item may have many quality
characteristics, it may have many defects, but the item
itself is either defective or not defective.
For example, an analyst inspects a sample of bulbs from a supplier
and counts the number of broken bulbs in each sample.
Again, using the car scenario, this means that 10 cars can have a
maximum 10 defective units, because each car represents one unit.
314
Attribute Data - DPMO
315
Example
Invoice Invoice Invoice Invoice Invoice

• Amount $: 😁 • Amount $: 😁 • Amount $: 😁 • Amount $: 😁 • Amount $: 😡
• Acct Num: 😡 • Acct Num: 😁 • Acct Num: 😡 • Acct Num: 😡 • Acct Num: 😡
• Quantity: 😁 • Quantity: 😁 • Quantity: 😡 • Quantity: 😁 • Quantity: 😡
• Date: 😁 • Date: 😁 • Date: 😁 • Date: 😁 • Date: 😁
Invoice Invoice Invoice Invoice Invoice

• Amount $: 😁 • Amount $:😡 • Amount $: 😁 • Amount $: 😁 • Amount $: 😁
• Acct Num: 😡 • Acct Num: 😡 • Acct Num: 😁 • Acct Num: 😁 • Acct Num: 😁
• Quantity: 😁 • Quantity: 😁 • Quantity: 😁 • Quantity: 😁 • Quantity: 😁
• Date: 😡 • Date: 😁 • Date: 😡 • Date: 😁 • Date: 😁
Units = Defects = Defective = Defect Opportunities =

316
Attribute Data – PPM and DPMO
• Department: Purchase
• Defect: Incorrect entry
• Total Defects: 56
• Unit: Each MIS report (monthly)
• No of units inspected: 5,000
• DPU (defects per unit) = Total Number of defects / Total number of units inspected
• DPU = 56 / 5000 = 0.0112
• PPM = DPU * 10^6 = 11,200
317
Attribute Data – PPM and DPMO
• Department: Loan application processing department

• Defect: any field updated incorrectly in system
• Defect opportunities: Name incorrect; DOB incorrect; Mobile number incorrect; Address incorrect
• No of Opportunities per form: 4
• Unit: Each form processed in a month
• No of units inspected: 5,000
• Total Defects: 67
• No. of defect opportunities per sample: 4
DPO = Total Number of Defects

Total number of units inspected * Opportunities per unit
• DPO = 67 / 5,000 *4 = 0.0033

• DPMO = DPO*10^6 = 3,350
318
Sigma and DPMO table
319
320
321
Exercise for Calculation of DPMO
Insert Pour, De-mold

Chemicals Foam Pad
Components Rise & cure Pad
Opportunities
2 3 2
per Pad
Opportunities
Per 100 Pads
Number of Defects
7 6 9
(in 100 Pads)
Defects Per
Opportunity (DPO)
Defects per Million

Opportunities
(DPMO)
322
Estimating
Potential Savings
323
Estimating Potential Savings
Two ways to save an organization money are cost avoidance and cost savings. Although these two concepts are similar,
they also include important differences that can impact your budget.
What is cost avoidance? What is cost savings?
Refers to strategies that prevent a business or Cost savings are expense mitigation strategies that
organization from spending unnecessary money in the lower existing spending or debt quantities. Cost
future. Since the expenses saved using cost savings are usually tangible and measurable. Cost
avoidance are usually hypothetical, they don't typically savings measures will appear in documents such as
appear in documents such as a budget or financial your budget and financial statements since they affect
statement. If a cost avoidance measure doesn't work, existing line items, when comparing one accounting
it might appear on a financial statement as the period to the next.
additional expense that you were unable to avoid.
By preemptively solving the need for future spending,
you can reduce future financial pitfalls and challenges.
324
Example
Examples of cost avoidance Examples of cost savings

A manufacturer obtains a new piece of equipment that A construction company has provided concrete work for
must be shut down and serviced on a biweekly basis. many years. Recently, their cost of cement has increased
After analyzing the company's production schedule, they due to higher demand and market conditions. A company
notice a span of a few hours at night, every two weeks, representative negotiates a lower cost with the supplier on
when almost no units are being produced. Since this is the condition that they will do business together long-term.
already down time in the company's manufacturing flow, This is an example of cost savings because it lowers an
they schedule maintenance for these hours instead of existing, documented business expense.
shutting down when demand is high. This is an example
of cost avoidance, because they are anticipating and
avoiding future expense.
325
Introduction to
Non – Normal
Data
& Data
Transformation
326
Non- Normal Data
• Some data sets are not normally distributed. For example, some measures have zero or some other constant as a
physical block.
• Examples: Time, concentricity, warpage, flatness
327
Non-Normal Process
Sometimes data sets are not normal because the process is not yet in statistical control.
Average Chart
UCL
LCL
Range Chart
UCL
Once the process is stabilized, the data may

form a Normal Distribution
328
Handling Non-Normal Data
When a data set is naturally non-normal, we can still make predictions about the population.
In such a case, we must either…
Transform the data (for example, take the log of every data value) to achieve a Normal Distribution. Use some other type of
distribution that approximates the actual shape of the data.
329
What is data transformation?
Data Transformation is a technique whereby we transform

a non-normal data by applying a function to the data that
changes its values so that they more closely follow a
normal distribution.
Why transform data?
• We transform the data to achieve a normal distribution
• However, if the data is not being transformed, one could
use the Weibull Distribution to make predictions.
Types of Transformation Techniques

• There are various traditional approaches to data
transformation. But the most commonly used are Box-
Cox Transformation and Johnson Transformation
330
Box Cox Transformation
• Box Cox transformation is a popular power transformation method

developed by George E.P. Box and David Cox.
• Data transforms are usually applied so that the data appear to more
closely meet assumptions of a statistical inference model to be applied
or to improve the interpret-ability or appearance of graphs.
• This transformation is easy to understand and provides both within-
subgroup and overall capability statistics.
• Minitab finds the optimum power transformation, wherein it finds the
best value for lambda ( 𝛌𝛌)
331
Box Cox Transformation
The formula for Box-Cox transformation is Common lambdas ( 𝛌𝛌) for data transformation:
332
Johnson Transformation
• The Johnson transformation uses a different algorithm than the Box-

Cox transformation.
• The Johnson transformation function is selected from three families of
functions in the Johnson system as it covers wide variety of
distributions by changing parameters. Minitab helps one to find this
optimum parameter.
• Johnson Transformation is very powerful, and it can be used with data
that include zero and negative values
• Use this when the Box-Cox transformation does not find a suitable
transformation.
333
Data transformation using Minitab
Processing Time
7.84 1.85 10.04 14.15
6.17 2.32 2.17 1.88
5.91 3.91 5.76 46.2
29.78 8.1 16.75 2
3.02 3.18 4.25 4.68
1.91 12.72 6.73 5.06
3.9 13.26 4.28 6.53
7.42 5.94 3.21 21.2
3.04 1.92 11.35 7.04
• Let us consider an example of ‘Processing Time’ 6.53 18.69 1.74 13.28
10.58 0.77 4.49 5.83
• Test for Normality 7.65 6.4 5.39 13.78
3.97 12.05 13.03 1.02
• If P < 0.05, try to transform the data 42.4 26.3 4.88 1.53
19.59 1.37 13.32 7.83
6.36 10.71 5.29 11.97
8.7 7 2.46 6.62
6.06 5.39 5.16 22.44
15.17 6.14 6.64 8.8
10.1 18.63 13.26 7.02
14.7 4.26 23.46 9.73
19.84 5.38 18.58 4.54
21.54 18.05 1.64 2.7
9.42 3.29 1.95 4.71
5.69 15.84 15.85 4.15

334
Processing Time
• The P value is < than 0.05, the data does not fall 7.84 1.85 10.04 14.15
a normal distribution. 6.17 2.32 2.17 1.88
5.91 3.91 5.76 46.2
29.78 8.1 16.75 2
3.02 3.18 4.25 4.68
1.91 12.72 6.73 5.06
Probability Plot of Processing Time 3.9 13.26 4.28 6.53
Normal 7.42 5.94 3.21 21.2
99.9 3.04 1.92 11.35 7.04

Mean 9.271
StDev 8.040 6.53 18.69 1.74 13.28
99
N 100
10.58 0.77 4.49 5.83
AD 4.910
95
P-Value <0.005 7.65 6.4 5.39 13.78
90
80 3.97 12.05 13.03 1.02

70
42.4 26.3 4.88 1.53
Percent
60
50 19.59 1.37 13.32 7.83
40
30 6.36 10.71 5.29 11.97
20
8.7 7 2.46 6.62
10
5 6.06 5.39 5.16 22.44
1 15.17 6.14 6.64 8.8
10.1 18.63 13.26 7.02

0.1
-20 -10 0 10 20 30 40 50 14.7 4.26 23.46 9.73
Time 19.84 5.38 18.58 4.54
21.54 18.05 1.64 2.7
9.42 3.29 1.95 4.71
5.69 15.84 15.85 4.15

335
Processing Time
Stat > Quality Tools > Johnson Transformation 7.84 1.85 10.04 14.15
6.17 2.32 2.17 1.88
5.91 3.91 5.76 46.2
29.78 8.1 16.75 2

Johnson Transformation for Processing Time
Probability Plot for Original Data Select a

3.02 3.18 4.25 4.68
Transformation
1.91 12.72 6.73 5.06
99.9 0.68
N 10
0.60 3.9 13.26 4.28 6.53
99 AD 0
P-Value for AD test

4.91
P-Value <0.005
0.45
90 0 7.42 5.94 3.21 21.2
0.30
Percent
50 3.04 1.92 11.35 7.04

0.15
RefP 6.53 18.69 1.74 13.28
1
0.00
0
0.2 0.4 0.6 0.8 1.0 1.2 10.58 0.77 4.49 5.83
1 Z Value
0. 7.65 6.4 5.39 13.78
1 0 25
(P-Value = 0.005 means ≤ 0.005)
50
3.97 12.05 13.03 1.02
Probability Plot for Transformed Data
99.9 42.4 26.3 4.88 1.53
N
99 10
P-Value for Best Fit: 19.59 1.37 13.32 7.83
0
90 0.611286 Z for Best Fit: 0.68
AD 0.288
Best Transformation Type: SB 6.36 10.71 5.29 11.97
P-Value
Percent
50 0.611 Transformation function equals

2.96250 + 1.11379 × Ln( ( X + 0.0682000 ) / ( 116.065 - X ) ) 8.7 7 2.46 6.62
10 6.06 5.39 5.16 22.44

1 15.17 6.14 6.64 8.8
0.1
-4 -2 0 10.1 18.63 13.26 7.02
2
14.7 4.26 23.46 9.73
The P value for the transformed data is > than 19.84 5.38 18.58 4.54
21.54 18.05 1.64 2.7

0.05, the data now falls a normal distribution. 9.42 3.29 1.95 4.71
5.69 15.84 15.85 4.15

336
Processing Time
Stat > Control Charts > Box Cox Transformation 7.84 1.85 10.04 14.15
6.17 2.32 2.17 1.88
5.91 3.91 5.76 46.2
29.78 8.1 16.75 2
3.02 3.18 4.25 4.68

Box-Cox Plot of Processing Time 1.91 12.72 6.73 5.06
30
λ 3.9 13.26 4.28 6.53
Lower CL Upper CL
(using 95.0% confidence)
7.42 5.94 3.21 21.2
Estimate 0.04
25
Lower CL -0.21 3.04 1.92 11.35 7.04
Upper CL 0.30
6.53 18.69 1.74 13.28
Rounded Value 0.00
20 10.58 0.77 4.49 5.83
7.65 6.4 5.39 13.78

StDev
3.97 12.05 13.03 1.02

15
42.4 26.3 4.88 1.53
19.59 1.37 13.32 7.83

10
6.36 10.71 5.29 11.97
8.7 7 2.46 6.62

Limit
5
6.06 5.39 5.16 22.44
-
1 0 1 2 15.17 6.14 6.64 8.8
3
λ 10.1 18.63 13.26 7.02
14.7 4.26 23.46 9.73
Minitab calculates the optimum value wherein the 19.84 5.38 18.58 4.54
21.54 18.05 1.64 2.7

sum of squares of error is minimum. In this case 9.42 3.29 1.95 4.71
the minimum value is 0.04 5.69 15.84 15.85 4.15
337
Click on options button in the Box Cox Transformation window
Create a new column in Minitab – Processing Time New

338
Once you have the data in the new column, run the Test of Normality to check for the distribution
Stat > Basic Statistics > Normality Test
Probability Plot of Processing Time New

Normal
99.9
Mean 1.901
99 StDev 0.835
4
95 N 100
90 AD 0.345
80 P- 0.479 The P value for the transformed data is greater
Value
70
60 than 0.05, the data now falls a normal distribution.
50
40
Percent
30
20
10
5
0.1
-1 0 1 2 3 4 5
Processing TimeNew
339
Non-Normal data with Weibull transformation
• If we are unable to find a transformation that successfully converts non-normal data into a normal distribution, then
can use the Weibull distribution, directly, to estimate the percentage of product beyond specifications.
• The Weibull is a family of distributions
• The Weibull has two parameters
‒ 𝛃𝛃 or the “shape” parameter
 or the “scale” parameter
• Minitab estimates these two parameters from the data set that is being analyzed.
• When 𝛃𝛃 1, the Weibull distribution is exponential. When 𝛃𝛃 3.5 the Weibull distribution approximates the
Normal distribution.
340
Using Non-Normal data
Data Type - Variable
Run Test of Normality
Is there a No
Is P-value special cause Transform the data. Is
> 0.05? No p-value > 0.05?
variation
Yes
Yes
Eliminate special cause Is data
(5%) with risk mitigation normal?
plan
Use theory of normal

curve to make Yes
No
predictions
Use Weibull Distribution to
make predictions
341
Measure Phase Toll Gate Review:
• The team has defined the operational definition of the CTQ and is
understood by all involved in data collection
• The team has agreed upon the key measurements and come up
with a baseline measurement of the process performance.
• The team has analyzed measurement systems and identified any
issues that might contribute to the analysis errors
• Where possible, the team has corrected the measurement system
to remove the error risks
• The team has measured the process data in terms of Central
tendency and Dispersion
• The team has validated the data distribution and calculated the
process Sigma level.
• The sponsor or champion has reviewed and signed off on all
elements of the measure phase.
342
Measure Phase Recap
• Data Types – Continuous Data & Discrete Data

• Collect the data
‒ Operational Definition
‒ Data Collection Plan
• Validate the Measurement System
‒ Gage R&R
‒ Attribute Agreement Analysis
• Measure the Data
‒ Measurements of Central Tendency
‒ Measurements of Dispersion/ Variation
• Graphically present the data
‒ Histogram
‒ Box Plot
• Check Process Stability
• Calculate Process Capability – Cp/Cpk &
PPM/DPMO
• Estimate the Potential Savings
343
Questions
The hierarchy of Control Limits Vs Customer Specifications for a process that is both stable and capable
should be?
a. Mean; UCL; USL; LCL; LSL c. USL; UCL; Mean; LCL; LSL
b. USL; LSL; Mean; UCL; LSL d. UCL; USL; Mean; LSL; LCL
Suppose the test scores of 600 students are normally distributed with a mean of 76 and standard deviation of
6. What is the approx. number of students scoring between 70 and 82?
a. 272 c. 260
b. 408 d. 136
What is the defect?
A. A feeling that the process is causing a problem
B. Something we should ignore if possible
C. Something that customer is paying for.
D. A measurable characteristic not conforming to a customer requirement
344
Analyze Phase
345
Analyze Phase Roadmap
01 02 03 04 05
Review the Brainstorm and Apply Lean Validate the Validate the
process map RCA Principles assumptions with Parameters using
Hypothesis Correlation
346
Learning outcomes
At the end of the ANALYZE phase, you will be able to:
Identifying the Applying the Prioritizing Validate Find the

Root causes Lean using Pareto causes using correlation and
Principles Hypothesis use regression
equation
347
Root Cause Analysis
Process
Outputs
(Ys)
Input
Variables
(Xs)
Process Variables (Xs)
What Are The Vital Few Process Inputs And Variables (X’s)
That Affect CTQ Performance Or Output Measures (Y’s) ?
348
Root Cause Analysis
Why do a root cause analysis?

• Use the process data to understand the problem and identify the vital few
root causes in order to reduce variation that the customer experiences.
• Eliminate actions based on intuition and preconceived ideas.
• Recalibrate project scope.
• Establish performance goals for the process.
• Allows teams to develop sustainable process improvements that will lead to
long-term benefits.
• Determine potential benefit of project.
349
Process analysis
350
Review the Process Map
351
Exercise – Analyze the process map
Based on the approach for Process Analysis explained in previous slide

352
Process analysis
with Lean-
Value Stream Mapping
353
What is a value stream?
• A value stream is all the activities required to bring a service/product

from a customer request to fulfillment/completion.
• All the activities involved in creating value for the customer
• The process starts with raw material or information and ends with the
end customer.
• The process involves functions both internal and external to the firm.
• Activities can be described as value added (VA) or non-value added
(NVA)
• Value stream mapping (VSM) is a method of creating a picture which
shows the flow of information, material, activities and people through
a process from end to end.
• It uses a standard set of symbols and metrics and enables the
identification of value (through the eyes of the customer) and the
identification of
• It can then be used to identify opportunities for improvement.
• Value Stream Maps can be used to understand the current process
and can also be used to design the future state process.
354
What value stream mapping can show….
• Material flow/movement. • Value added time versus lead time.

• Information flow. • Level of rework at each step.
• People movement. • Waste.
• Tools and equipment movement. • Systems.
• Inventory levels. • Activities.
355
What does VSM look like?
The diagram below shows an example value stream map. The example is taken from the investment bank and shows the
flow of a trade through IB operations where there is a requirement for manual intervention to settle.
RSU responsibility Auto Allocation of Mails

being done by the team using macros and rules Post Settlement Confirmed
in Chennai in outlook Client
Trade ~ 2,000 daily transactions
Approximately Daily volume
Post Setts: 2,000 Breaks

Middle Office
Internals: 600 Breaks
FTE: ~4FTE Have standard e-

mail template
Matching Logic for

proposed matching of Create SOP for No auto
Internals to be revisited handling Breaks population using
query
Post settlement team Reconciliation Investigation Action/Amendment Matching

300+300 CP
700 breaks breaks
Allocation of Breaks Manual Proposed Identify the reason for Collateral relating to Match off in Internal
Internal: 500 Internal:
(flown into the system) Matching Breaks and resolve the mortgage is registered system and provide
breaks 50+50 CP
same Charge based on comms to client
breaks
jurisdiction
Vol: 30 Vol: 60 Vol: 75 Vol: 90 Vol: 105

CT ~1 min (for one break CT ~1 min (for one CT ~15 min (for one
CT ~10 min (for one request) CT ~1 min (for one request)
allocation) proposed match) Investigation)
FTE: 5 FTE: 15 FTE: 17 FTE: 10 FTE: 19
C/T = 28 mins
Lead time = 23,640 mins

1 Min 1 Min 15 min 10 mins 1 Min
Value Add % = 0.12%
IRD – Post Settlement/Internals –VSM

356
Why use a value stream map?
• Provides an overview of the end to end value stream.

• Links information and material flows.
• Enables the visualization of waste within the system.
• Enables clear targeting of waste elimination.
• Acts as a good communication tool for operations.
• Provides a framework for improvement discussions.
• Enables discussion as to how an operation functions and how it should function.
• Prevents operations from focusing on large improvement opportunities that have little impact.
Value Stream
01 Suppliers 02 Processes 03 Customers

357
Value Stream Mapping - Symbols
Worker / Operator
Processing Box
Process Box Customer
• C/T: 12s
• C/O: 15 min
• 1 Worker
Withdrawal
Supplier
Push Arrow Transport

Finished Goods
Manual Information Flow

Document
Manual Observation
Database Digital Information Flow
Problem Idea
358
VSM Step by Step Guide
Information Flow
Material Flow
Lead
Time Ladder
359
VSM Step by Step Guide – Step 1
Draw the Customer and the Supplier and the Customer

requirements by them
Requirements of the
customer
360
Draw all the Process Steps that are

required for completion of the process.
Customer
Requirements of
the customer
Step 1 Step 2 Step 3 Step 4

361
List all the attributes of the Process: 5) Systems used

1) Name of the Process Step 6) Process step success metric (eg. Processing Time, %
2) Department/ Role performing this Process Step Accuracy, % Rework etc.)
3) Activities being performed in the Process Step Customer
4) Number of FTEs
Requirements of
the customer
1
Step 2 Step 3 Step 4
Step 1
2
Dept. 1
• Activity 1
• Activity 2
3
• Activity 3
System
5
4
Process Time: Process Time: Process Time: Process Time:

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List the Inputs and the wait time between the processes.
Map the time taken for each of the process steps.
Customer
Requirements of
the customer
Dept. 1
• Activity 1
• Activity 2
• Activity 3
System

363
Connect all the steps and the flow in the process.

Customer
Requirements of
the customer

Dept. 1
• Activity 1
• Activity 2
• Activity 3
System

364
VSM Example
Supplier Customer
7 pointed star in
red or blue
Requests
Broker 1 product every
Applications
The customer The customer
30 seconds
Delivery Times
1 batch
Delivery Times
Excessive with 12 items
transport 100% defects
per batch
Step 1: Step 2: Step 3: Step 4: Step 5: Step 6:

200 m 400 m 400 m 300 m 200 m
Receive delivery Allocate locator Allocate Calculate cost of Generate Produce invoice.
slip and add SN. codes. distance fee. product and product.
record.
Vol = 1 Vol = 1 Vol = 1 Vol = 1 Vol = 1 Vol = 1

C/T = 1 min C/T = 2 mins C/T = 3 mins C/T = 3 mins C/T = 2 mins C/T = 3 mins
FTE = 1 FTE = 1 FTE = 1 FTE = 1 FTE = 1 FTE = 1
1 1 1 6 1
1 2 3 3 12 90
1 2 3 3 2 3
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Calculate metrics
Timeline
• A timeline shown below the process map helps to illustrate value added versus non value added time.
Non value added
Total value
added time =
Value added
Lead time =
• Dividing the value added time by the total time gives an indication of waste levels (Efficiency of
process/Value added ratio – VAR).
• A similar process can be used to capture other information e.g. inventory levels and distance travelled.
366
Waste analysis
We can divide work into three categories:
Waste (Non Value Added) Value Added Necessary Non Value Add
All other meaningless, Any activity that physically changes Any work carried out, which is
non essential activities i.e. eight the material or information being necessary under current conditions
waste categories. Aim is to worked on and increases its value. but does not increase value
Eliminate. Aim is to Maximise. e.g. Compliance. Aim is to
Minimise.
367
Terms you should know
Cycle Time (C/T)

01 The time an operator/analyst takes to complete a step in the process.
Inventory
02 Build up of work between steps in the process that prevents seamless flow to the customer.
Lead time
03 The time taken for the development and delivery of a product or service to a client from the time
the request was made.
Necessary non value add

04 A step that does not directly impact the customer but it’s important in terms of compliance and
legal guidelines. E.g. compliance guidelines; regulatory guidelines to be adopted.
Non value add step (NVA)

05 Meaningless/non essential activities that do not add value to the customer i.e. eight waste
categories.
368
Terms you should know
Process Map
06 A term used to describe a portrayal of the operation, systems, people and process with
supporting documentation accompanying each process step.
Pull
07 A flow mechanism where products or services are pulled through the value stream once
they are required to be worked on next.
Push
08 A flow mechanism where products or services are pushed through the value stream
once complete.
Queue Time
09 The waiting time or the idle time between steps, its also known as Lag time.
Value Add (VA)

10 The steps which physically changes the material or information being worked on and
increases its value
369
Points to Remember
• Start with the customer – information flow

• Identify the product or service that is being worked on
• Determine your process steps from cradle to grave
• Identify the time it takes to perform the task without delays
(starting or within the process) or interruptions within the total
cycle time
• Identify and quantify the time it takes to perform the task including
delays and interruptions – lead time (LT = CT + delays)
• Investigate the causes of the waste between processes – what
are the barriers to flow?
• Calculate total processing time (cycle time) versus total lead time
(throughput/turnaround)
370
VSM- Simulation Exercise
This case exercise is intended to develop the skill of reading and

comprehending a complex customer input on the processes they
follow, from where a BB is supposed to decipher and create an AS-
IS flow map. Then deliberate on the same to identify the value,
wastes and then evolve a possible, FUTURE state map and if time
permits an IDEAL state map as well.
Setting is such that the roles are assumed to be at different corners of
the office and all transmissions are physical exchanges and manual
clerical job. Best possible effort needed at different locations are
provided in seconds within brackets. All invoices must be out of office
by the best time of 09:30AM before the morning Gemba rounds of
Manager starts.
Post creation of the maps at different stages, it is expected that the
professional must assess the lean efficiency metrics such as VA,
NVA, Total Turn Around Time, and Takt time by simulating for 5
minutes assuming arrival pattern is in series with a fixed time interval
to create a complete case work up. This is intended to be performed
individually and then presented to coordinator.
371
Case Study
Bharat Paper Co. Ltd is into manufacturing and distribution of newsprint. Customer generates PO at a rate of 1 per 30
seconds and first note arrives at 0900AM. The delivery operator who receives the order adds time of collection, serial
number at 09:03AM (90 seconds) and passed on to the incoming analyst who receives at 09:08AM who adds the
locator code (70 seconds) from the code catalogue which takes up to 09:10AM.
Incoming analyst pass the same to delivery operator for verifying locator code (150 seconds), where it remains up to
09:15AM minutes. The filled up delivery note from delivery operator goes to incoming analyst in a different department
requiring 2 minutes to reach and there adds distance code based on locator code and at 09:18AM (60 seconds) it
passes to delivery operator where it remains till 09:20AM from where distance fee analyst takes possession of the
same on which he creates a distance fee request slip based on distance code (180 seconds) which takes up to
09:25AM and returns to delivery operator for verification to identify issues in locator code, where it gets holed up till
09:30 AM and then passes on to customer accounts manager for verification that takes till 09:38AM (60 seconds).
Customer accounts manager calculates the total in invoice log and adds distance fee to invoice before both papers
passed on to delivery operator (60 seconds). Delivery operator affixes validation stamp on invoice and without delay
transmits the invoice to outward analyst who validates the invoice (45 seconds) by 09:45AM and sends to customer
where customer logs the time of receipt at 09:50AM.
372
Lean Principles
373
Principles of Lean Thinking
1. Identify
Value
The Lean Enterprise Institute (LEI), founded by James P.

5. Perfection 2. Map
Womack and Daniel T. Jones in 1997, introduced the five
key lean principles: value, value stream, flow, pull, and The Value
Seek perfection
perfection. stream
4. Pull 3. Flow
Establish Pull Create flow
374
Principle 1 – Identify Value
What is value?
Who defines value?
According to Womack and Jones – Value is expressed in terms of a specific product or service (or both) which meets
customers’ need at a specific price at a specific time.
The key question to be asked here is – What is the timeline? What is the price point? What are the other requirements
that must be met?
Introduction of instant account opening

Account opening takes 3 to 4 days
with online documentation
Providing value to the customers is the only reason for the existence of our business.
375
Principle 2 – Map the value stream
According to Womack and Jones – Mapping the value stream is a step in taking a specific product or service (from
scratch) to its final recipient i.e. the end customer.
What is a Value Stream?

• Value stream map is a sequence of steps taken to create product / service to the end customer
• Value stream mapping identifies the Value Added (VA) / Non-Value Added (NVA) / Value Enablers (VE) steps in a
process and quantifies time spent on each step
• Eliminate the NVA’s that contribute to the highest time to the process.
Supplier Value Stream Supplier
Sub Process / Activities
Start Finish
376
Principle 3 – Create Flow
What is a Flow?
It is a movement of the product or service from the supplier to the end customer
Womack and Jones advises – “make the value creating steps occur in tight sequence, such that the product or
service flow smoothly towards the end customer.”
• The rationale behind flow is that the product or service flow smoothly in the value chain without interruptions
• Waiting time and hand-offs are eliminated from the process flow
Customer walks in the Customer walks in the Customer walks in the

bank for account opening bank for account opening bank for account opening
Customer documentation rework,

applications are waited at the branch
before sending it across to the main
processing center
377
Principle 4 – Establish Pull
Pull is the movement of product or service from the supplier to the customer
only when the customer needs it.
• Making or processing the product only when there is a customer demand
• Create a “Just in Time” manufacturing or delivery
• Reduced storage, stockpile, inventory
Customer Pull’s from the
value stream
Customer places an
Order Processing Customer receipt of order
order online
378
Principle 5 – Seek Perfection
Perfection or Continual Improvement is a never ending

journey towards delivering world class product or service to
your end user or customer.
• Mistake proof the process
• Include process improvement as part of the organization
culture
• Continuously keep fine tuning the process
• Restart from 1 to 4
379
Identify possible
causes
380
Brainstorming
Alex Osborn
The word brainstorming was originally introduced by Alex F. Osborn in 1953 through his book Applied
Imagination: Principles and Procedures of Creative Thinking.
Osborn suggested that the participants in the group should have varying amounts of experience in the task
that was at hand, however, he discouraged mixing participants from various levels in the company’s
hierarchy within a brainstorming group. Other specifics that Osborn suggested were that participants had to
be adequately informed in advance about the problem that would be tackled during the brainstorming session
so that the creative focus would be on the specific problem.
381
Cause and Effect diagram
A visual tool used by an improvement team to brainstorm and logically organize possible causes for a
specific problem or effect.
Measurement Methods Machinery
Potential High Y
(Effect)
Level Causes (Xs)
Mother Nature People Materials
• Summarize potential high-level causes.

• Provide visual display of potential causes.
• Stimulate the identification of deeper potential causes.
382
Cause and Effect Diagram
Brainstorm the “major” cause categories and connect to the centerline of the Cause & Effect diagram.
Measurement Methods
Why is there a
delay in
processing?
People Machinery
383
Example of Fish Bone Diagram
Location Staff Procedures
Picking & choosing work

Inconsistencies
No clear cut off for bringing payments over at the
Low staff morale end of the day
Workload Never leave on
Poor Location time Poor CMR management
Temperature stress
Bad weather can Not even in Blamed for lost
office
Poor staff payments
Referrals not actioned
Delay Post Bags
knowledge
Parking for Nanny state Unclear Procedure documents
B5+ only No Co-operation Incorrect filing
Difficulty understanding cut off
Noisy Between Incorrect inputs times
environment departments By staff Lack of Training
No sort code Too much jargon
prep Staff thrown in at the
deepend Unclear Guidelines
Lack of big picture
Poor Facilities awareness
Premises cramped Lack of Resource
Staffing problems Procedures not trained
More training required for
Poor toilets
Too much workload new staff
Small staff room Short or no Staff are clicky Lack of training means
lunches
Office too hot & payments go back more
Difficult for staff to Unnecessary
stuffy than once
get time off procedures cause delays
Understaffed team
Delayed or
Incorrect
Payments
Communication
Poor Team Management Customer Education
Poor communication
Not accessible Bulk payments Persistent IT failure
Not enough feedback
Illegible details from Intermittent software
Ops perceived as poor relations Lack of incentives customer letter failures
No time to lead the team Customers too Systems unstable
demanding
Lack of information Eclipse unrealiable
Poor Planning Staff not praised
provided
No Management Unaware of cut off times AFTS goes slow at times
forecasting Or pricing Customer System down
RM’s hard to get hold of time
No capacity planning for the customer
Low morale due to Favours for local corporates Screen quality

Mismanagement of staff Too much expected of
staff from Management AFTS screen too small
Don’t keep KYC up to date
Can’t always read account
amount on screen
Management Customer Equipment

384
Sorting the Possible Causes
Lack of Solution OR Direct

Non-Controllable Causes Likely and Controllable Causes
Improvements
These are causes that the team These are causes that are actually These causes are the causes that
unanimously conclude are beyond solutions that can be implemented have passed the above two filters
the control of the present process directly and need no further and need further analysis.
boundaries or outside the physical analysis. They are usually stated
location of the process execution. as lack of resources, equipment,
tools or training.
385
Taking to next level
Brainstorming + Affinity
List of Potential Causes
Non-Controllable Causes Direct Improvement Causes Likely Root Causes
• Statutory Norms Stated as “LACK OF…..” Three Categories

• Global Policies Provide ones that are feasible with • Events – Validated through
• Acts of God regards to cost and ease of Pareto and Why? Why? Why?
• Environmental Issues procurement. This will lead to buy Analysis
in from the workforce and help in • Theories – Validated through
implementation phase Hypothesis Testing. P<0.05
validates root cause
• Parameters – Validated through
Regression Analysis. Fit
Regression Model
386
Why-Why analysis
• The immediate next step after the segregation is to attack the likely and controllable causes and ask at least 3 – 5
why’s?….. for each cause. This is called root cause drill down.
• Only after we have asked why 3 - 5 times to each of the likely causes, we will be able to arrive at the possible root
cause, also known as KPIV.
387
A Monumental Mystery
1. Why?:
Because of usage of Harsh Chemicals to clean the monument.
2. Why?
Harsh chemicals were used to clean bird droppings
3. Why?
Birds Feasted on spiders on the monument
Problem: 4. Why?
The Jefferson Monument in Spiders Feasted on Midgets/ Gnats on monuments
Washington DC was falling
apart/ deteriorating. 5. Why?
Midgets/ Gnats were attracted to the lights at dusk.
Root Cause: Timing of
the dusk lights.
388
Pareto Analysis
What is a Pareto Diagram?

• A Pareto chart is a bar chart that graphically ranks defects from largest to smallest, which can help prioritize quality
problems and focus improvement efforts on areas where the largest gains can be made.
• Pareto analysis was conceptualized by an Italian economist – Vilfredo Pareto.
• In his endeavor, Pareto tried to prove that distribution of wealth and income in societies is not random, but there is a
consistent pattern.
• In his study – Principle of Unequal Distribution, he proved that 80% of wealth in Italy is controlled by 20% of elite.
• The concept was formulated in six sigma by Dr Joseph Juran.
• Juran extended this principle of 80-20 to quality control stating that most defects in a production are a result of small
percentage of the cause of the defects – which he described as “vital few from trivial many”.
• Therefore, Pareto analysis is based on the principle that 80% of problems find their roots in 20% causes.
• In other words, it is a diagram that shows 20% of the inputs (X’s) cause 80% of the problems with dependent
process outputs (Ys).
389
Pareto Analysis
Minitab path:
Refer the data: “Clothing Defect”.
• Click on Stat → Quality Tools → Pareto
Chart.
• In Defects or attribute data in,
enter Defect.
• In Frequencies in, enter Count.
• Select Combine remaining defects into
one category after this percent, and
enter 95.
• Click OK.
390
Pareto Analysis
In the above graph, 45.2% of the defects are missing buttons and 23.3% are stitching errors. The cumulative
percentage for missing buttons and stitching errors is 68.5%. Thus, the largest improvement to the entire clothing
process might be achieved by solving the missing button and stitching problems.
391
Tackling the other causes
• The non-controllable causes need to be factored into the improved

process so that they do not affect the Process Capability.
• The team should launch initiatives to implement actions for the lack
of solutions or direct improvements. This can happen in parallel as
the project progresses.
392
Hypothesis
Testing
393
Hypothesis Testing
• Hypothesis testing is a statistical test used to determine if the

hypothesis that was assumed for the sample of data is true for the
entire population or not.
• Hypothesis testing is a method for testing a claim or hypothesis
about a parameter in a population, using data measured in a
sample.
Examples:
• Purchase team assuming that there is a difference in Vendor A
cycle time and Vendor B cycle time
• Production manager assuming that Shift A productivity is better
than Shift B.
• ABC Pharmaceuticals vaccine is more effective than XYZ
Pharmaceuticals vaccine.
394
Why Hypothesis Testing?
• There are certain times when a graph or computed statistics

cannot tell us whether a difference between two processes is
statistically significant or not. In these scenarios, the decision could
be unexpected or uncertain. Therefore, a statistical hypothesis test
is performed to determine whether there is a difference.
• We use hypothesis test In the Analyze Phase to verify the potential
vital few inputs or causes to confirm which are the true or actual
vital few inputs or causes.
• To evaluate and quantify the improvement, we use hypothesis
testing in the improve phase.
• In the control phase, hypothesis test is used to verify that the
implementation is producing the expected outcomes.
395
Hypothesis Testing Steps
• State the hypothesis (Null & Alternative)

• Set the criteria for a decision (Level of significance “α” )
• Select the appropriate hypothesis test
• Calculate the test statistic
• Make decision (Fail to reject Null or Reject Null)
396
Types of Hypothesis
Null hypothesis (H0): Alternative hypothesis (H1 / Ha):
• Null is the hypothesis which is tested. • There is a significant difference between the two or
• There is NO significant difference between the two more groups that were selected for the test.
or more groups that were selected for the study • The term “Alternative hypothesis" refers to a claim
• Null Hypothesis is considered as the Status Quo. that completely contradicts a null hypothesis by
Meaning, there is no change between sample asserting that the true value of a population
statistics and population parameter. parameter is greater, less, or not equal to the value
given in the null hypothesis.
Example:
• Alternate hypothesis is the purpose of the study.
• The call resolution time for Team A is same as What we are trying to prove.
Team B for the same process.
Example:
• Which can be represented as H0: µ1 = µ2
• The call resolution time for Team A is not equal or
more than or less than Team B for the same
process.
• Which can be represented as H1: µ1 ≠ µ2 or µ1 >
µ2 or µ1 < µ2
397
Significance Level (“α”)
• The decision to reject or retain the null hypothesis is

called significance.
• The threshold value or criteria by which one can
reject or fail to reject the null hypothesis is known as
the level of significance.
• In other words, the risk of rejecting the null hypothesis
when it is true.
Significance Level (“α”)

398
Determining Significance Level (“α”)
• Most used Confidence level is 95% or we can say

that in decimals it is 0.95.
• Confidence level states that at what level of
confidence you want your hypothesis or
assumption to be true.
• Level of significance (α) = 1 – confidence level =
1 - 0.95 = 0.05 or 5%
• For critical processes we use confidence level at
99% (Ex: Aviation Industry, Pharmaceutical etc.)
• In those cases, Level of significance (α) = 1 -
0.99 = 0.01 or 1%
399
Risk of Hypothesis
Now as we know that there are some %age of risks (Ex: 10%, 5%, 1%) involved while taking the decision so let
us know about what are those risks.
Null Hypothesis is…… False True
Rejected Correct Decision (True Positive)
Fail to Reject Correct Decision ( True negative)

Type I Error, False Positive,
Rejected
Alpha “α” Error and Producer risk.
Type II Error, False Negative,
Fail to Reject
Beta “β” Error and Consumer’s risk.
400
Risk of Hypothesis
Example:
Let's consider a hypothetical example, I am having fever and I am assuming that I am malaria positive.
So here,
Ho = I am not Malaria positive, and
Ha = I am Malaria positive
Means, I will be treated for Malaria,

Rejected and I am infected. Which is true
positive.
Means, I will be not treated for

Fail to reject (accepted) Malaria, and I am not infected. Which
is true negative.
401
Risk of Hypothesis

• Means, I will be treated for
malaria when I am not infected.
Rejected Which is false positive.
• Alpha “α” Error
• Type I Error
• Means, I will not be treated for
malaria while I am infected. Which
Fail to reject (accepted) is false negative.
• Beta “β” Error
• Type II Error
402
Type I Error (“α” Error)
Example:
Let's consider another example,
• An automotive company had set a limit of 2% defective for the auto components it receives from one of its vendor.
• A sample of 1000 parts taken for inspection out of 5000 lot. Out of which, 30 parts found defective means 3%
defective which is greater than the acceptable limit of 2%.
• The shipment was rejected by the customer.
• A 100% inspection was done by vendor, and they found that only 55 parts were defective in that lot. Which means
only 1.1% defective.
• In this scenario, 1.1 percent of the parts were defective as compared to an acceptable level of 2%, hence rejecting
the shipment was an error.
• If we convert this scenario into hypothesis language, we can say that the null hypothesis is rejected but, the lot was
well within acceptable limit.
• In this case we have committed Type I error or “α” error. This is also known as producer’s risk because the
manufacturer or the producer is affected
403
Type II Error (“β” Error)
Example:
In the same example,
• A sample of 1000 parts taken for inspection out of 5000 lot. Out of which, only 11 parts found defective means 1.1%
defective which is less than the acceptable limit of 2%.
• The shipment was accepted.
• But while using the components it was found that there were 130 defective parts in the lot. Which means 2.6%
defective.
• In this scenario, 2.6% of the parts were defective as compared to an acceptable level of 2%, hence accepting the
shipment was an error.
• If we convert this scenario into hypothesis language, we can say that we failed to reject the null hypothesis while,
the lot was not within acceptable limit.
• In this case we have committed Type II error or “β” error. This is also known as consumer’s risk. Because here the
consumer is affected
404
How to select hypothesis!!!
With 1 set of data to a specific With 1 set of data with With More than 2 or
Comparing
standard (1:Standard) another set of data (1:1) multiple sets of data
• 1 sample Z-test (More than 30 • 2 sample t-test

For Mean samples) (Independent groups)
• One-way Annova
(Continuous Data) • 1 sample t-test (</= to 30 • Paired t (Dependent
samples) groups)
For Proportion(%) • 1 proportion test • 2 proportion test • Chi-Square Test for

(Discrete Data) association
For Variance
• 1 variance test • 2 variance • Equal variance
(Continuous Data)
For Median
(Non-Parametric
• 1 sample sign test • Mann Whitney • Mood’s Median
test)
(Continuous data)
405
Path for Hypothesis tests in Minitab (Reference)
Type of Test (Mean) Path

1-Sample Z Stat > Basic Statistics > 1-Sample Z…
1-Sample t Stat > Basic Statistics > 1-Sample t…
2-Sample t Stat > Basic Statistics > 2-Sample t…
Paired t Stat > Basic Statistics > Paired t…
One-Way Anova Stat > ANOVA > One-Way…
Type of Test (Proportion) Path

1 Proportion Stat > Basic Statistics > 1 Proportion…
2 Proportion Stat > Basic Statistics > 2 Proportion…
Chi-Square Test for Association Stat > Tables > Chi-Square Test for Association…
406
Path for Hypothesis tests in Minitab (Reference)
Type of Test (Mean) Path

1 Variance Stat > Basic Statistics > 1 Variance…
2 Variance Stat > Basic Statistics > 2 Variance…
Test for Equal Variance Stat > ANOVA > Test for equal variance…
Type of Test (Proportion) Path

1 sample sign Stat > Nonparametrics > 1 sample sign…
Mann Whitney Stat > Nonparametrics > Mann Whitney…
Mood’s Median Stat > Nonparametrics > Mood’s Median…
407
Path for Hypothesis tests in Minitab
1-Sample Z
1-Sample t
2-Sample t
Paired t
1 Proportion
2 Proportions
408
One-Way ANOVA
409
Chi-Square Test for Association

410
1 Sample Z test
When to use: Assumption for 1 Case Study Hypothesis:

When the population Sample Z test: Example: Ho: µ = 33 (Avg. call
standard deviation is • Data should be (Refer The Excel File resolution time = 33
known, sample size is continuous “Call res. Time”) min.)
more than 30, 1- A team leader is
• Should be following Ha: µ < 33 (Avg. call
sample z test is claiming that his team's
a normal distribution resolution time < 33
performed to compare call resolution time is min.)
the sample mean to the • Population Standard less than that of the
population mean. deviation should be company standard
known which is currently at 33
minutes. To prove his
claim, his manager took
last 60 days data with a
population standard
deviation of 1.5
minutes. Help him to
prove whether the team
leader's claim.
411
1 Sample Z test
• Step 1: Copy the data from excel to Minitab

• Step 2: Select the path (Stat > Basic Statistics > 1-Sample Z..)
• Step 3: Select the column from the work sheet
• Step 4: Enter the known SD and select the perform hypothesis test
and enter hypothesized mean
• Step 5: Go to options & select Confidence level & Alternative
hypothesis
412
1 Sample Z test
Test Result
Inference
• Sample Mean = 32.152
• The 95% upper bound for mean is 32.471 means, in the
current context, the maximum mean value for the population
would be 32.471.
• As the hypothesized mean is more than the 95% upper
bound, we can say that the test is significant, and we can
reject the null hypothesis.
• P-Value is 0.000 < 0.05. Reject Null Hypothesis.
• The claim is valid
Note:
• Easy Remember Technique:
• “P” Low Null should go. (Reject Null)
413
1 Sample T test

When the population Sample Z test: Example: Ho: µ = 4 (Avg.
standard deviation is • Data should be (Refer The Excel File transportation time = 4
unknown, sample size continuous “Logistics”) business days)
is less than 30, 1- One of your competitor
• Should be following Ha: µ > 4 (Avg.
sample T test is claims to transport
a normal distribution transportation time > 4
performed to compare products from point A to business days)
the sample mean to a point B in 4 business
standard mean. days. But your logistics
team assumes that its
more than 4 business
days. They shared with
you the data from that
company's last 30
deliveries. check if your
logistic team is correct
or not?
414
1 Sample T test

• Step 2: Select the path (Stat > Basic Statistics > 1-Sample t..)
• Step 3: Select the column from the work sheet
• Step 4: Select the perform hypothesis test and enter hypothesized
mean or the standard value
hypothesis
415
1 Sample T test
Test Result
Inference
• Sample Mean = 5.0833
• The 95% lower bound for mean is 4.9212 means, with the
current sample, the minimum mean value for the population
would be 4.9212.
• As the hypothesized mean is less than the 95% upper
bound, we can say that the test is significant, and we can
reject the null hypothesis.
• The claim of your logistic team is valid
416
2 Sample T test

2-sample t test is used Sample t test: Example: Ho: µ1 = µ2 (Mean of
to compare the mean of • Data should be (Refer The Excel File team A Assy. time =
two independent continuous “Assembly”) Mean of team B Assy.
groups. A production manager time) (The difference
• Should be following
feels that there is a will become 0)
a normal distribution
difference between Ha: µ1 ≠ µ2 (Mean of
• The samples should Team A and team B in team A Assy. time ≠
be independent. assembling a specific Mean of team B Assy.
mechanical component. time) (The difference
Last 25 days data will not be 0)
collected. Check
whether he is correct or
not.
417
2 Sample T test

• Step 2: Select the path (Stat > Basic Statistics > 2-Sample t..)
• Step 3: Select the columns from the work sheet (Sample 1
& Sample 2)
hypothesis
418
2 Sample T test
Test Result
Inference
• The 95% upper & lower bound for the difference in
mean for Sample 1 and sample 2 is (-0.224 to 0.949)
• As the hypothesized difference is falling in the 95%
upper & lower bound difference range, we can say that
the test is not significant, and we can not reject the null
hypothesis.
• P-Value is 0.220 > 0.05. Fail to reject Null Hypothesis.
• We can say that there is no difference between Team A
and Team B
419
Paired T test

Paired t test is used to Sample t test: Example: Ho: µ1 = µ2 (Mileage of
compare the mean of • Data should be (Refer The Excel File cars without additive =
two dependent groups. continuous “Additive”) Mileage of cars with
Researchers have additive) (The
developed an additive difference will become
to improve the mileage 0)
• The samples should of petrol cars. They Ha: µ1 < µ2 (Mileage of
be dependent chose 15 cars and cars without additive <
measured their mileage Mileage of cars with
in the lab condition, additive) (The
with and without difference will be less
additive. Use than 0)
hypothesis test to
check whether the
additive is effective or
not?
420
Paired T test

• Step 2: Select the path (Stat > Basic Statistics > Paired t..)
• Step 3: Select the columns from the work sheet (Sample 1 &
Sample 2)
hypothesis
421
Paired T test
Test Result
Inference
• The 95% upper bound for the difference in mean for
Sample 1 and sample 2 is -0.351.
• As the hypothesized difference is more than the 95%
upper bound difference, we can say that the test is
significant, and we can reject the null hypothesis.
• We can say that the mileage of cars without additive is
less than that of with additive.
422
One-Way ANOVA

ANOVA is used to Sample t test: Example: Ho: µ1 = µ2 = µ3
compare the mean of • Dependent (Refer The Excel File (Mean throughput time
more than 2 variable should be “ABC Auto TPT”) of Noida = Bengaluru =
independent groups. continuous Three plants of ABC Chennai) (All means
Automotive Ltd. In are equal)
Noida, Bengaluru & Ha: µ1 ≠ µ2 = µ3 or µ1
Chennai are producing = µ2 ≠ µ3 (Mean
• The samples should similar parts. The CEO throughput time of
be independent of the company wants Noida ≠ Bengaluru =
to identify if there is a Chennai or Noida =
difference in throughput Bengaluru ≠ Chennai)
time between the (At least one mean is
plants. different or Not all
means are equal)
423
One-Way ANOVA

• Step 2: Select the path (Stat > ANOVA > One-Way…)
• Step 3: Select the columns from the work sheet into responses (Type of confidence interval)
• Step 4: Go to options & select Confidence level & Alternative hypothesis
• Step 5: Go to Graphs select the interval plot
424
One-Way ANOVA
Test Result
Inference
• P-Value is 0.263 > 0.05. Fail to reject null.
• In the Interval plot, overlap of means can be observed in the 95% CI.
• We can conclude that there is no significant difference in the means.
425
1 Proportion Test
When to use: Case Study Example: Hypothesis:

1 proportion test is used to (Refer The Excel File “ABC Auto Ho: p = 0.55 (Proportion of
determine whether a population TPT”) people supporting = 55% or less)
proportion is significantly A political party is thinking to Ha: p > 0.55 (Proportion of
different from a hypothesized support an independent people supporting > 55%)
value. candidate from a particular
constituency. But the party
decided to support only if more
than 55% of the constituency
support him. Your team collected
the data of 1640 people and
found that 870 have chosen to
vote him. Suggest the party to
take decision
426
1 Proportion Test
• Step 1: Select the path (Stat > Basic Statistics > 1 Proportion)
• Step 2: Select the summarized data from drop down
• Step 3: Enter the data in the given area
• Step 4: Select the perform hypothesis test and enter
hypothesized proportion.
hypothesis
427
1 Proportion Test
Test Result
Inference
• Sample proportion = 0.53
• The 95% lower bound for p is 0.510217 means, with the
current sample, the minimum proportion for the
population would be 0.51 or 51%.
• As the 95% lower bound proportion is less than
hypothesized proportion, we can say that the test is not
significant, we failed to reject the null hypothesis.
• P-Value is 0.944 > 0.05. Fail to reject Null Hypothesis.
• Proportion of people supporting the candidate is equals
to 55% or less
428
2 Proportion Test

2 proportion test is used to (Refer The Excel File “Defect Ho: p1 - p2 = 0 (Defect
determine whether there is percentage”) proportion in night shift = Defect
significant difference between A manager wants to validate if proportion in day shift) (The
proportion of two groups. the defect percentage in night difference will become 0)
shift is more than the day shift. Ha: p1 - p2 > 0 (Defect
He collected data of the last 6 proportion in night shift > Defect
months. proportion in day shift) (The
difference will > 0)
429
2 Proportion Test
• Step 1: Select the path (Stat > Basic Statistics > 2 Proportion)
• Step 2: Select the summarized data from drop down
• Step 3: Enter the data in the given area (Sample 1 & Sample 2)
• Step 4: Select the perform hypothesis test and enter
hypothesized proportion.
hypothesis
430
2 Proportion Test
Test Result
Inference
• Normal approximation P-Value is 0.410 > 0.05. Fail to
reject Null Hypothesis.
• There is no difference in the defect percentage.
431
Chi-Square Test

The Chi-Square Test for (Refer The Excel File “Medical Ho: The variables are
Association is used to determine Billing ”) independent there is no
if there is any association A medical billing company association between the
between two variables. operating in 6 different regions variables
across the US, wants to know if There is no association
there is a relation in region and between the region and claim
claim denial rate of medical bills. denial rate
They have collected last six
months data of different regions. Ha: The variables are not
Verify whether there is an independent. Association
association or not. between the variables exist.
There is association between
the region and the claim
denial rate exist
432
Chi-Square Test

• Step 2: Select the path (Stat > Tables > Chi-Square Test for Association..)
• Step 3: Select the column containing the data from the work sheet
• Step 4: Enter the labels for the table (optional)
• Step 5: Go to statistics check (tick) the Chi-square test box & in the counts
check both option
433
Chi-Square Test
Test Result
Inference
• Pearson P-Value is 0.000 < 0.05. Reject Null Hypothesis.
• There is association between region and claim denial exists.
434
1 sample sign test

Testing the equality for the (Refer The Excel File Ho: Price index for homes < to
median of a single population “EXH_STAT.MTW”) 115
Price index values for 29 homes Ha: Price index for homes > than
in a suburban area in the 115
Northeast were determined. Real
estate records indicate the
population median for similar
homes the previous year was
115. This test will determine if
there is sufficient evidence for
judging if the median price index
for the homes was greater than
115
435
1 sample sign test
Select: Stat > Nonparametrics > 1-Sample Sign
Set the hypothesis on Minitab

436
1 sample sign test
Sign Test for Median: PriceIndex
Sign test of median = 115.0 versus > 115.0
N Below Equal Above P Median

PriceIndex 29 12 0 17 0.2291 144.0
Since the P-value is greater than level of significance (0.05), we fail to reject
the null hypothesis.
Therefore we fail to conclude that the price index for homes is greater than
115
437
Mann Whitney Test

Determine whether two (Refer The Excel File Ho: There is no significant
populations have the same “EXH_STAT.MTW”) difference between the medians
population median Samples were drawn from two of diastolic blood pressure of
populations and diastolic blood both the population.
pressure was measured. You Ha: There is a significant
will want to determine if there is difference between the medians
evidence of a difference in the of diastolic blood pressure of
population locations without
both the population.
assuming a parametric model for
the distributions. Therefore, you
choose to test the equality of
population medians using the
Mann-Whitney test with a = 0.05
rather than using a two- sample
t-test, which tests the equality of
population means.
438
Mann Whitney Test
Select: Stat > Nonparametrics > Mann-Whitney

439
Mann Whitney Test
Mann-Whitney Test and CI: DBP1, DBP2

N Median
DBP1 8 69.50
DBP2 9 78.00
Point estimate for η1 - η2 is -7.50

95.1 Percent CI for η1 - η2 is (-18.00,4.00) W = 60.0
Test of η1 = η2 vs η1 ≠ η2 is significant at 0.2685 The test is significant at
0.2679 (adjusted for ties)
Since the P-value is greater than level of significance (0.05), we fail to reject
thenull hypothesis.
Therefore we conclude that there is no difference between population medians
440
Mood’s Median Test

• Mood's median test can be (Refer The Excel File Ho: All medians are equal
used to test the equality of “CARTOON.MTW”))
Ha: At least one median is
medians from two or more One hundred seventy-nine different
populations and, like the participants were given a lecture
Kruskal-Wallis Test, provides with cartoons to illustrate the
an nonparametric alternative subject matter. Subsequently,
to the one-way analysis of they were given the OTIS test,
variance. which measures general
intellectual ability.
• Mood's median test is
sometimes called a median Participants were rated by
test or sign scores test. educational level:
0= preprofessional,
1 = professional,
2 = college student
441
Select: Stat > Nonparametrics > Mood’s Median Test

442
Results for: Cartoon.MTW
Mood Median Test: Otis versus ED
Mood median test for Otis

Chi-Square = 49.08 DF = 2 P = 0.000
Individual 95.0% CIs
ED N≤ N> Median Q3-Q1
0 + -+ - + +--
47 9 97.5 17.3 (-----*-----)
1 29 24 106.0 21.5 (------*------) (----*----)
2 15 55 116.5 16.3 + -+ - + +-- 96.0 104.0 112.0 120.0
Overall median = 107.0
Since the P-value is less than level of significance (0.05), we reject the null hypothesis.
Here, the participant scores are classified as being below or above the overall median. The p-value < than 0.05
indicates that the medians are not equal.
443
Probability Value or “P” Value
Definition:
• There is a probability is that the samples were taken from the same population that was being analyzed.
Explanation:
• If a sample is taken from a population, the population's characteristics and the sample's statistics won't differ much,
and a high probability value (P-value) would suggest the same.
• A high P-value, like 0.55, indicates that there is 55% chance that the sample represents the population.
• When the P-value is low, for an example 0.01 means there is only a 1% likelihood that the sample represents the
population.
Sample 1 Sample 2
High probability Low probability sample is
sample is drawn drawn from the
Population from the population population
444
Probability Value or “P” Value
Definition:
• The probability that the value which is being tested will fall within the specified confidence interval at a specified level
of confidence.
Explanation:
• For reference, have a look at the Average Handling Time summary in the graph below.
• We can see that the range of the 95 percent confidence

interval for the mean lies between 9.860 and 10.268. Now let’s
test the three hypothesised means to see how our P-value
changes.
• The P-value will be more than 0.05 if we test new means that
are inside the confidence interval i.e., from 9.860 to 10.268,
less than 0.05 if we test new means that are outside the
confidence interval, and exactly 0.05 if we test new means
those are exactly on the confidence interval i.e., for 9.860 &
10.268
445
Applications of Hypothesis Testing – DMAIC Phases
P value
Phase Purpose Intended outcome Preferred type of test
expected
To prove statistical difference between current mean • 1 sample t for Normal

Measure To validate the improvement target P < 0.05
median and target mean / median • 1 sample sign for skewed
• 2 sample t
To validate Root Causes stated as • ANOVA
To prove that the observed difference between the
theories and to take decision on • 2 Proportion
Analyze original data and the trial data is real and change will P < 0.05
whether or not to implement the • Chi SQ
significantly benefit the outcome of the process.
change • Mann Whitney
• Moods Median
To compare data on the "Y" before and after
• 2 sample t
To validate that improvement claimed improvement and prove that after improvement data
• 2 Proportion P < 0.05
is real on "Y" is statistically and significantly different from
• Mann Whitney
Measure Phase data on "Y"
Improve To compare the post improvement data on the "Y" with
the Set Target and determine whether it has been
To validate whether the improvement • 1 sample t for Normal
achieved. Even if the 2-sample test validates that the P > 0.05
target has been achieved or not • 1 sample sign for Skewed
process has improved, we need to know whether we
have actually achieved the target.
Any situation when it is required to To compare mean of current performace data against
Other than • 1 sample t for Normal
understand whether current a Target Performance and determine whetehre we are P > 0.05
Six Sigma • 1 sample sign for skewed
performance is meeting set target meeting the target or not
446
Correlation &
Regression
Scatterplot
447
Correlation Analysis
When to use: Assumption for Case Study Hypothesis:

• Correlation is a correlation Example: Ho: There is no
statistical analysis analysis: (Refer The Excel File correlation between the
which determines the • Both variables must “Car weight”) two variables.
association or be continuous A car manufacturer Ha: There is correlation
relationship between wants to know whether
• Should be normally between the two
two variables. there is a relationship
distributed variables exist.
• When we have two between weight of the
variables say X and car & mileage
Y, to check whether
X is influencing Y or
not correlation
analysis is used.
448
Path for correlation in Minitab
Correlation
449

• Step 2: Select the path (Stat > Basic Statistics > Correlation...)
• Step 3: Select the columns from the work sheet to variables
• Step 4: Go to options & select Pearson correlation from dropdown
option then select Confidence level
• Step 5: Go to Graphs select correlation and p-value from dropdown
450
An Interesting Anecdote on Correlation Analysis
451
A complaint was received by the Pontiac Division of General Motors:

• ‘This is the second time I have written to you, and I don’t blame you for not answering me, because I sounded crazy,
but it is a fact that we have a tradition in our family of ice cream for dessert after dinner each night, but the kind of
ice cream varies so, every night, after we’ve eaten, the whole family votes on which kind of ice cream we should
have, and I drive down to the store to get it. It’s also a fact that I recently purchased a new Pontiac and since then
my trips to the store have created a problem….
• You see, every time I buy a vanilla ice-cream when I start back from the store my car won’t start. If I get any other
kind of ice cream, the car starts just fine. I want you to know I’m serious about this question, no matter how silly it
sounds “What is there about a Pontiac that makes it not start when I get vanilla ice cream, and easy to start
whenever I get any other kind?” The Pontiac President was understandably skeptical about the letter but sent an
Engineer to check it out anyway.
• The latter was surprised to be greeted by a successful, obviously well-educated man in a fine neighborhood. He had
arranged to meet the man just after dinner time, so the two hopped into the car and drove to the ice cream store. It
was vanilla ice cream that night and, sure enough, after they came back to the car, it wouldn’t start. The Engineer
returned for three more nights. The first night, they got chocolate. The car started. The second night, he got
strawberry. The car started. The third night he ordered vanilla. The car failed to start.
452
• Now the engineer, being a logical man, refused to believe that this man’s car was allergic to vanilla ice cream. He
arranged, therefore, to continue his visits for as long as it took to solve the problem. And toward this end he began
to take notes: He jotted down all sorts of data: time of day, type of gas uses, time to drive back and forth etc.
• In a short time, he had a clue: the man took less time to buy vanilla than any other flavor. Why? The answer was in
the layout of the store. Vanilla, being the most popular flavor, was in a separate case at the front of the store for
quick pickup. All the other flavors were kept in the back of the store at a different counter where it took considerably
longer to check out the flavor.
• Now, the question for the Engineer was why the car wouldn’t start when it took less time. Eureka – Time was now
the problem – not the vanilla ice cream!!!! The engineer quickly came up with the answer: “vapor lock”. It was
happening every night; but the extra time taken to get the other flavors allowed the engine to cool down sufficiently
to start. When the man got vanilla, the engine was still too hot for the vapor lock to dissipate!!!
453
Test Result Inference

• Pearson Correlation Coefficient r = -0.994 and p value = 0.000
• Means, There is a strong negative correlation between the two
variables exist.
• Mileage of car is inversely proportional to weight of the car.
Correlation Coefficient (r) Guideline
±0.70 to ±1.00 Strong Correlation
±0.50 to ±0.69 Moderate Correlation
±0.2 to ±0.49 Low Correlation
±0.00 to ±0.19 Very low or no correlation
Note: Remember correlation doesn’t imply causation

always!!!
454
Regression Analysis

• While correlation is used to CEO of the company ABC wants Ho: Amount spent on ad doesn’t
understand the direction, to predict revenue on the basis influence revenue ( X doesn’t
shape and strength of a of amount spent on influence Y)
relationship between 2 advertisement. Ha: Amount spent on ad does
variables, regression analysis influence revenue ( X does
creates a predictive equation influence Y)
to quantify this relationship.
• Regression analysis explains
how to mathematically relate
an independent variable to a
dependent variable.
455
Regression Analysis
Equation:
• Regression Equation is Y = MX+C or Y = β0+ β1X
Were,
• Y = Dependent Variable
• X = Independent Variable
• β0 / C = Y-interceptor or constant (Where X = 0)
• β1 / M = Slope
456
Path for Regression Analysis in Minitab
Fitted Line Plot…

457
Regression Analysis

• Step 2: Select the path (Stat > Basic Statistics > Regression >
Fitted Line Plot...)
• Step 3: Select the Response or Y and Predictor or X from the
work sheet
458
Regression Analysis
Test Result
Inference
• Coefficient of determination R-Sq = 95.71% and p value = 0.000
• R-Sq = 95.71% Means, 95.71% of variability in revenue depends on
the amount spent on advertisements.
459
Correlation &
Regression
Multiple Linear Regression
460
Multiple Regression
Multiple Regression: Overview Use of Multiple Regression
• Multiple regression is to compare relationship • When process input variables and the output is
between a continuous dependent variable (Y) and continuous, multiple regression can be used to
several continuous independent variables (X1,X2…) investigate the relationship between the inputs and
the outputs
461
Multiple Regression
Let's take a quick look at an example

Some researchers observed the following data on 20 individuals with high bloodpressure:
• blood pressure (y = BP, in mm Hg)
• age (x1 = Age, in years)

• weight (x2 = Weight, in kg)
• body surface area (x3 = BSA, in sq m)
• duration of hypertension (x4 = Dur, in years)
• basal pulse (x5 = Pulse, in beats per minute)
• stress index (x6 = Stress)
The researchers were interested in determining if a relationship exists between blood pressure and age, weight, body
surface area, duration, pulse rate and/or stress level.
462
Multiple Regression
Pt BP Age Weight BSA Dur Pulse Stress

1 105 47 85.4 1.75 5.1 63 33
2 115 49 94.2 2.1 3.8 70 14
3 116 49 95.3 1.98 8.2 72 10
4 117 50 94.7 2.01 5.8 73 99
5 112 51 89.4 1.89 7 72 95
6 121 48 99.5 2.25 9.3 71 10
7 121 49 99.8 2.25 2.5 69 42
8 110 47 90.9 1.9 6.2 66 8
9 110 49 89.2 1.83 7.1 69 62
10 114 48 92.7 2.07 5.6 64 35
11 114 47 94.4 2.07 5.3 74 90
12 115 49 94.1 1.98 5.6 71 21
13 114 50 91.6 2.05 10.2 68 47
14 106 45 87.1 1.92 5.6 67 80
15 125 52 101.3 2.19 10 76 98
16 114 46 94.5 1.98 7.4 69 95
17 106 46 87 1.87 3.6 62 18
18 113 46 94.5 1.9 4.3 70 12
19 110 48 90.5 1.88 9 71 99
20 122 56 95.7 2.09 7 75 99
463
Multiple Regression
Select: Stat> Regression> Regression> Fit Regression Model

464
Multiple Regression
Regression Analysis: BP versus Age, Weight, BSA, Dur, Pulse, Stress

Coefficients
Analysis of Variance
TermCoef SE Coef T-Value P-Value VIF
Source DF Adj SS Adj MS F-Value P-Value
Regression 6 557.844 92.9740 560.64 0.000 Constant -
2.56 -5.03 0.000
Age 1 33.331 33.3306 200.99 0.000 12.87
Weight 1 39.172 39.1718 236.21 0.000
BSA 1 0.947 0.9472 5.71 0.033 Age 0.7033 0.0496 14.18 0.000 1.76
Dur 1 0.330 0.3305 1.99 0.182
Pulse 1 0.444 0.4444 2.68 0.126
Stress 1 0.442 0.4421 2.67 0.126 Weight 0.9699 0.0631 15.37 0.000 8.42
Error 13 2.156 0.1658
Total 19 560.000
Model Summary BS3.78 1.58 2.39 0.033 5.33

S R-sq R-sq(adj) R-sq(pred)
0.407229 99.62% 99.44% 99.08%
Dur 0.0684 0.0484 1.41 0.182 1.24
Pulse -
0.0516 -1.64 0.126 4.41
0.0845
The R-sq value indicates that the predictors explain
99.62% of the variation in BP.
Stress 0.00557 0.00341 1.63 0.126 1.83
Thus proving that the model fits the data well.
465
Multiple Regression
Regression Analysis: BP versus Age, Weight, BSA, Dur, Pulse, Stress

Regression Equation
BP = -12.87 + 0.7033 Age + 0.9699 Weight + 3.78 BSA + 0.0684 Dur - 0.0845 Pulse
+ 0.00557 Stress
Fits and Diagnostics for Unusual Observations
Obs BP Fit Resid Std Resid

19 110.000 110.932 -0.932 -2.64 R
R Large residual
466
Multi-Collinearity
• One of the assumption of model

accuracy is that X’s are not
correlated
• Multi-Collinearity is a condition
wherein high correlation exists
between two independent
variables
• This means the two variables

contribute redundant information
to the multiple regression model
• Can lead to unstable coefficients

(large standard error)
467
Problem with Multi-Collinearity
Multicollinearity can cause severe problems:

• Calculations of coefficients and standard errors are affected (unstable, inflated variances)
• Difficulty in assessing any particular variable’s effect
• Opposite signs (from what is expected) in the estimated parameters
• If two input variables x1and x2are highly correlated, then p-value for both might be high
468
Detecting Multi-Collinearity
Variance Inflationary Factor (VIF) is used to measure collinearity
1
VIF =
1 −𝑅𝑅2
Where;
𝑅𝑅2 = Coefficient of determination
If VIF > 5, X is correlated with the other explanatory variables

469
Checking Multi-Collinearity
Select: Stat> Basic Statistics> Correlation
• High values of pairwise correlation (generally > 0.8) provide warnings of potential
multicollinearity problems
• We see that Weight and Body Surface Area are most highly related to Blood Pressure.
470
Checking Multi-Collinearity- Relook at the output
Regression Analysis: BP versus Age, Weight, BSA, Dur, Pulse, Coefficients

Stress Term SE Coef T-Value P-Value VIF
Analysis of Variance
Source DF Adj SS Adj MS F-Value P-Value Coef
Regression 6 557.844 92.9740 560.64 0.000 Constant - 2.56 -5.03 0.000
Age 1 33.331 33.3306 200.99 0.000
12.87
Weight 1 39.172 39.1718 236.21 0.000
BSA 1 0.947 0.9472 5.71 0.033 Age 0.0496 14.18 0.000 1.76
Dur 1 0.330 0.3305 1.99 0.182 Since the P-value for Dur, Pulse and
0.70
Pulse 1 0.444 0.4444 2.68 0.126 Stress is higher, we can say that these
33
Stress 1 0.442 0.4421 2.67 0.126 factors do not impact BP
Weight 0.0631 15.37 0.000 8.42
Error 13 2.156 0.1658 0.96
Total 19 560.000
99
Model Summary BSA 1.58 2.39 0.033 5.33
S R-sq R-sq(adj) R-sq(pred)

0.407229 99.62% 99.44% 99.08% 3.78
Dur 0.0484 1.41 0.182 1.24
0.06
84
Pulse - 0.0516 -1.64 0.126 4.41
VIF values greater than 5 suggest that the 0.0845
regression coefficients are poorly estimated Stress 0.00341 1.63 0.126 1.83
due to severe multicollinearity. We can see 0.0055
higher VIFs for Weight and BSA 7
471
Checking Multi-Collinearity with Matrix Plot
• A matrix plot is a two-dimensional matrix of individual plots.

• Matrix plots are good for, among other things, seeing the two variable relationships among
a number of variables all at once
• Matrix Plots help to identify the meaningful relationships with a single graph.
472
Select: Graph> Matrix Plot> With Groups

473
Multi-collinearity exist between Weight and Body Surface Area (BSA). The correlation coefficient between
the two variables can be estimated through correlation
474
Checking Multi-Collinearity with correlation
Select: Stat> Basic Statistics> Correlation
We see that Weight and Body Surface Area are most highly related to Blood Pressure.
475
Correlation &
Regression
Logistics Regression
476
• Logistic Regression also creates a prediction equation, but for a discrete dependent variable (Y)
• Logistic Regression can be applied to output data that are Binary (yes or no), or Ordinal (high, medium,
low), or Nominal (North, South, East, West)
• As part of this course, we only focus on Binary Logistic Regression
• While the result of logistic regression is similar to least squares regression (a prediction equation), the math
to get there is much different as it is based on natural logarithm and odds ratio
Usually a transactional projects often utilize non-continuous data like:
• Was the service provided in an appropriate manner?
• Was the order filled?
• Was the product available for shipping?
• Degree of agreement scales, satisfaction ratings
• Defect severity ratings (A is better than B is better than C)
Refer the worksheet EXH_REGR.MTW.

Select: Stat> Regression> Binary Logistic Regression> Fit Binary LogisticModel
Example: You are a researcher who is interested in understanding the effect of smoking and
weight upon resting pulse rate. The response-pulse rate have been categorizedinto low and high.
Investigate the effects of smoking and weight upon pulserate.
477
478
Increments for odds ratios:

• Change the units for calculating the odds ratio from the units
in the data for a continuous predictor.
• The coefficient for a variable when the model uses the logit
link function represents the change in the log odds for an
increase of one unit in the predictor.
• In some cases, a change of one unit in the data is too small to
be meaningful.
• For example, if the predictor is mass in grams, a change of 1
gram can be too small to matter. Enter 1,000 to see the
change in the odds ratio for a kilogram
479
Select graphs – 3 in one

480
Binary Logistic Regression: RestingPulse versus Weight,

Smokes
Method
Link function Categorical predictor Logit (1,
coding 0)
Rows used 92
Response Information
Variable Value Count
RestingPulse Low 70 (Event)
High 22
Total 92
Deviance Table
Source Adj Dev Adj Mean Chi-Square P-Value
Regression D2 7.574 3.787 7.57 0.023 Since the P-value for Weight and Smokes is lesser
F Weight 1 4.629 4.629 4.63 0.031 than the level of significance, there is enough
Smokes 1 4.737 4.737 4.74 0.030 evidence to indicate that both has a significant
impact on Resting Pulse
Error 89 93.640 1.052
Total 91 101.214
481

Smokes
Model Summary
Deviance Deviance
R-Sq R-Sq(adj) AIC
7.48% 5.51% 99.64
Coefficients
Term Coef SE Coef VIF
Constant -1.99 1.68
Weight 0.0250 0.0123 1.12
Smokes Yes
-1.193 0.553 1.12
Odds Ratios for Predictors

Continuous Odds Ratio
Unit of Change
95% CI
Weight 10 1.2843 (1.0101, 1.6330)
Odds Ratios for Categorical Predictors

Level A Level B Odds Ratio 95% CI
Smokes
Yes No 0.3033 (0.1026, 0.8966)
482

Smokes
Odds ratio for level A relative to level B Regression
Equation
P(Low) = exp(Y')/(1 + exp(Y'))

There are two equations, one for each level of the
Smokes variable.
Smokes
No Y' = -1.987 + 0.02502 Weight a
The constant term is more negative for the people who
smoke, so these people have a lower probability of having
Yes Y' = -3.180 + 0.02502 Weight
lower resting pulse.
Goodness-of-Fit Tests
Because there is no interaction with weight in the model,
Chi-Square P-Value
Testa DF the coefficient is the same in both equations.
Deviance 89 93.64 0.348

Pearson 89 88.63 0.491
Hosmer-Lemeshow 8 4.75 0.784
Fits and Diagnostics for Unusual Observations

Observed
Obs Fit Resid Std Resid
Probability
56 0.0000 0.8689 -2.0159 -2.04 R

86 1.0000 0.3828 1.3858 1.46 X
R Large residual X Unusual X

483
Deviance Residual Plots for RestingPulse

Normal Probability Plot
99.9 30 Histogra
99 m
90
Frequenc
20
Percen
50
t
10 10
y
1
0. 0
1 -2 0 2 4 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0
1.5
Residua
l Residual
Versus
Order
1
0
Residu
-1
al
-2
1 10 20 30 40 50 60 70 80 90
Observation Order
The Normality Plot does not follow a line & Histogram shows a bimodal pattern which means the data is
not enough for normal approximation theory to apply.
484
Multivariate
Analysis
485
Multivariate Analysis
Multivariate analysis is used to analyze the data

when we have made multiple measurements on the
items or subjects
In multivariate analysis, we can choose to
• Analyze the covariance structure of the data to
understand or to reduce the data dimensions
• Assign observations to the groups
• Explore relationship tween categorical variables
486
Tools used in Multivariate Analysis
MANOVA: Multivariate Principal Component

Multiple Regression Factor Analysis
Analysis of Variance Analysis
487
MANOVA- Multivariate Analysis of Variance
• MANOVA is used to determine whether the means between two or more groups differ when you have multiple
continuous response variables i.e., multiple Y’s dependent variable, Multiple X’s that are categorical, and optional
covariates
• The response variable should be correlated. It is multivariate version of the ANOVA version.
• For example, an analyst at a manufacturer of shoes products wants to study the affects of different leathers on the
strength and flexibility of the products. Since strength and flexibility are correlated response variables, the analyst
performs a general MANOVA to analyze the data.
488
Exercise
A manager of a car auto parts supplier wants to assesses the flexibility and the quality ( Both response “Y”) of the
clutch system that they provide. The clutch system are manufactured using two different methods at three plants.
The manager wants to determine whether the method and the plant affect the final product. To assess how method
and plant affect both response variables at the same time, the manager collects data and does a general MANOVA.
A significance level of 0.10 was used to perform the analysis.
Step1 –Export clutch Flexibility and Quality Rating's data in Minitab

Step 2 – Stat > ANOVA > General MANOVA
Step 3 –
• In Response > Flexibility rating, Quality rating
• In Model > Method, Plant, Method*Plant
489
Exercise
• The p-value for method are statistically significant at 0.1

significance level
• The p-value for plant are statistically insignificant at 0.1
significance level.
• The p-value for interaction are statistically significant at
0.1 significance level reveals that the effect of the
method depends on plant
490
Principle Component Analysis
Principle Component analysis The goal of principal Principal components can be

is used to identify a smaller components analysis is to used before performing a
number of uncorrelated explain the maximum amount of regression analysis, to avoid
variables, called "principal variance with the fewest number multicollinearity or to reduce the
components", from a large set of principal components. number of predictors relative to
of data. With this analysis, we the number of observations.
create new variables called as
principal components that are
linear combinations of the
observed variables.
491
Principle Component Analysis- Explanation
By looking at the height data it becomes easier of us to distinguish the persons. But suppose they almost have the
same height, then perhaps it becomes difficult for us to differentiate because the variance is lower.
Person Height
Alex 145
Ben 160
Chris 185
In the second scenario we have another data set for weight. But since the variance in weight is very small, we still
have to rely on height . But suppose if the height and weight have got the same variance, then it would become difficult
for us to choose the variable to delete.
Person Height weight
Alex 145 68
Ben 160 67
Chris 185 69
PCA combines both height and weight to create two brand new variables. It could be 30% height and 70% weight, or
87.2% height and 13.8% weight, or any other combinations depending on the data that we have.
These two new variables are called the first principal component (PC1) and the second principal component (PC2).
492
Principle Component Analysis- Exercise
A bank requires information such as - income, education, age, current residence, tenure with current employer,
savings, debt, and number of credit cards - of the applicants for processing the loan. The Bank manager wants to
reduce the number of variables, so he collects 30 loan applicants data to analyze. The manager wants enough
components to explain 90% of the variation in the data.
Step1 –Export Loan Applicant's data in Minitab

Step2 - Stat > Multivariate > Principal component
Step 3- In variable > select C1-C8
Type of Matrix > Correlation
Correlation – It is used to measure the relationship between two variables.
Covariance – Whereas covariance measures the movements of two variables, but it does not indicate the degree to
which those two variables are moving in relation to one another. So, covariance refers to the measure of how two
random variables will change when they are compared to each other.
Eg: Monitoring the ROI on two investment. A positive covariance means both investment’s returns tend to move
upward or downward in value at the same time. An inverse or negative covariance, on the other hand, means the
returns will move away from each other. So when one rises, the other one falls.
493
90.7 % of the variance is

explained by the first four
component , So the administrator
decides to use these components
to analyze loan application. OR
use the eigen value which are > 1
The first principal
component(PC1) explains 44.3%
of the total variation. The
variables that correlate the most
with the first principal component
(PC1) are Age (0.484),
Residence (0.466), Employ
(0.459), and Savings (0.404).
494
Use the component that are on the Scree

plot before it start the line trend
Age (0.484), Residence (0.466), Employ

(0.459), and Savings (0.404) have large
positive loadings on PC1. These component
measures long term financial stability
Debt and Credit Cards have large negative

loadings on PC2. These components
primarily measures the candidate credit
history
495
Factor Analysis
The Factor Analysis is used to Factor analysis summarizes data We can model each original
assess the structure of data by into a few dimensions by variable as a linear function of
evaluating the correlations condensing large number of these underlying factors
between variables. variables into a smaller set of
latent factors that we do not
directly measure or observe, but
which may be easier to interpret
496
Factor Analysis- Exercise
The Human Resource department measures the job applicant on various variables such as - academic records,
appreance, communication skills, company fit, experience, job fit, letter, likeability, organization, potential , resume
and self confidence . They rate each job applicant on these 12 variables using a 1 (low) through 10 (high) scale. The
HR manager wants to identify the underlying factors that explain these variables and for that he collects the data for
50 job applicants. Previous analysis determined that 4 factors account for most of the total variability in the data.
Step1 –Export Job applicant's data in Minitab

Step 2 – Stat > Multivariate > Factor Analysis
Step 3 – • Must be 1 and cannot exceed the total number of
• In variables select C1-C12. variables
• Select one factor for every 3 variables in our data
• In number of factors to extract > 4 • If not known leave blank and select principal
• Method of Extraction > Maximum likelihood component instead of maximum likelihood
• Type of Rotation > Varimax
497
• Calculate the factor loading for each

variables in the analysis
• The loading indicates how much a factor
explains each variable.
• Large Loading (+/-) indicates that factor
strongly influence the variable
• Small Loading (+/-) indicates that factor
has weak influence the variable
• Unrotated Factor loading are often difficult
to interpret.
498
Factor1> Employee Fit, and Potential

growth have large positive loadings on
Factor1
Factor2> Personal Qualities
Factor3> Work Skills
Factor4> Writing Skills
Together all four factors descries 75.4% of

the variation in data
499
500
Time Series
Analysis
501
Forecasting-Types
Forecasting Techniques are used in business to estimate the future value based on current
and past data. For example,
• What will be the demand of a particular item A in the next three months based on last twelve months data.
• How many products to order in next three month based on last twelve-month data.
There are three categories
• Qualitative technique - Based on Human judgement where we don't have historical data to forecast demand for a
newly launched product. Use of expert opinion for a short period of time. E.g. Delphi Method
• Causal Technique - Regression Model.
• Time series Model - Use statistical technique when sufficiently large amount of past data are available.
We will discuss some techniques of time series model only

502
Time Series Model
The quality of a forecasting depends on how well the data fits the model. These models assume that future demand
will follow the historical pattern that contain both
Systematic component Random component

Contains factors relating to Unmeasurable factor that causes the historical data
and the forecasted data to vary from systematic
• Level: Average demand over a period (Intercept)
component
• Trend: Upward or downward movement of demand
The difference between the systematic component and
(Slope, that needs to be smoothened)
the random component is known as Forecasting error
• Seasonality : Demand in some period is
Types of time series models are
comparatively higher than the other.
• Moving Average
• Double exponential
• Winter’s Model
503
Moving Average-Exercise
• This technique is used to provide short term forecast and the data shouldn't have a trend or seasonal component.
• Check for any trends before using moving average method
Exercise:
An analyst wants to predict the sales of an electronic items by using moving average method. He collects sales data
and the number of commercials that were broadcast during the previous 60 weeks.
504
• Step1 - Check for trend – Export sales data

in Minitab Stat > Time series > Time series
plot
• Step2 - Stat > Timeseries > Moving Average
• Step3 – Select
‒ Variables > Sales
‒ Moving Average Length > 2 ( Number of
data points or observations that the
Minitab will use to calculate the MA )
‒ Number of Forecast > 6
505
Interpretation of Results
From the plot it can be observed that
the data fits the model
The Analyst can be 95% sure that the sales

could be between 53 and 67 for the next 6
month
506
Analyze Phase Toll Gate Review:
• The team has identified the potential root

causes from process door & data door
approach.
• The team has prioritized the identified root
causes.
• The team has validated the root causes using
the appropriate methodology.
• The sponsor or champion has reviewed and
signed off on all elements of the analyze
phase.
507
Analyze Phase recap:
Cause Identification Data Door Approach Data Door Approach

• C&E Diagram • Hypothesis Testing • Correlation & Regression
• 5 Whys ‒ Linear Regression
• Type I & Type II Errors
• Pareto Analysis ‒ Multiple Regression
• Test for Means (1SZ, 1STest, 2ST, ‒ Logistics Regression
Process Door Approach Paired T, 1 WAY ANOVA) • Multivariate Analysis
• Lean Principles • Test for Proportion (1P, 2P, Chi-sq) ‒ MANOVA
• Test for Median (1 sample sign ‒ Principle component analysis
Cause Prioritization ‒ Factor Analysis
test, Mann whitney, Mood’s
• Control Impact Matrix Median) • Time Series Analysis
‒ Moving average
• Multi Voting ‒ Double exponential
• SME Consultation ‒ Winter’s Model
508
Questions
509

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Lean Six Sigma Black

Belt Training Program

©2019 Grant Thornton India LLP. All rights reserved.

Dr. Walter Shewhart (1891-1967)

Dr. W Edward Deming (1900-1993)

Dr. Joseph M Juran (1904-2008)

Dr. Kaoru Ishikawa (1915-1989)

Philip B Crosby (1928-2001)

What does Quality Mean?

Detecting and correcting Preventing defects in the first place

Beginning Focus on how

Motorola gained a return of

Scope of six sigma

Reduce Variation Reduce Defects Delighting Customer

Reduce Cost Reduce Cycle Time

Sigma Level Part per Million (PPM)

Mumbai's Dabbawalla are at

99% Good (2.8 Sigma) 99.99967% Good (6 Sigma)

Standard Process Management

• The Greek symbol • A statistical measure • View processes/

Master Black Belt

• Provide resources and helps resolve conflicts.

• Accountable to the Apex Council.

• Owns end-to-end process.

• Sets goals for projects.

• Project review: timeline and project is on track.

• Responsible for holding the gains.

Six Sigma Coach

• Resolve team conflicts.

• Estimate, measure and validate savings.

Project Team Leaders

• Good knowledge of product, process, customer.

• Willing to work in teams.

• Time to work on projects.

• Active in Data collection.

• Responsible for improvement.

Define Project D M A I C Integrate into DailyWork

Refers to norms, beliefs, values Within the same industry, different

Genuine Actions are

Companies have often been appalled to

To create the culture of excellence,

The focus for business excellence is

Excellence culture helps managers answer two essential

What How do we use that

Whether focused on designing

Mastering processes is a way to

A colony of Frogs used to live in a pond.

One day the leader of the frogs notices the growth of

The rate of growth is such that it doubles every day.

The pond will be completely filled with Water Hyacinth

On that day the pond will become inhabitable, and

Frogs need 10 days for all to evacuate.

On which day at the maximum, the frogs need to start

“Boundarylessness” is one of Jack

The opportunities available through

Billions of dollars are lost every day

How can you be driven to achieve

No company will get even close to

If people who see possible ways to

Strategy 1 For launching a 4 Customer’s Requirement

• Project selection is one of the most critical and challenging

Step 1 - Establish a Project

Step 3 – Assess and prioritize projects