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Six Sigma Approach to Quality

 Six sigma is a new approach to process
control first practiced by companies such as
General Electric and Motorola to achieve near
zero defects in processes
 Elements of six-sigma
 Understanding customer needs well
 Appropriate and disciplined use of data and
statistical tools
 Statistical analysis and a closer attention to
managing and improving business processes using
a set of tools

Mahadevan (2010), “Operations Management: Theory & Practice”, 2nd Edition, © Pearson Education

Why near zero defects
Examples of 99% quality
Sl.
No.

Process
Description

Impact of 99% quality

1

Guest Check
out

Every three days one guest checks out
without paying the bill

2

Quality of food
served

Every day 20 orders of fried eggs have
human hair in them

3

Facilities up
keep

Every day 15 tables in the restaurant
have soiled linen

4

Training & Skill
Development

Every day 250 plates are broken

5

Order taking &
Delivery

Every day the drinks of 40 guests gets
mixed up

6

Laundry

Every day 20 guests do not get back the
right laundry

Mahadevan (2010), “Operations Management: Theory & Practice”, 2nd Edition, © Pearson Education

How is it different from
traditional approach?
 A new metric, Defects Per Million Opportunities, to
predict/assess the quality of a business process
 A new methodology, DMAIC (Define-MeasureAnalyze-Improve-Control), to ensure that very
high levels of quality could be assured in the
chosen business processes thereby generating
favourable outcomes to both the business and the
customers
 An organizational framework for ensuring the
above outcomes are generated on a sustained
basis

Mahadevan (2010), “Operations Management: Theory & Practice”, 2nd Edition, © Pearson Education

Defects Per Million Opportunities
(DPMO)
 It indicates how many defects a process
generates in a million opportunities
 While service industries find it convenient to use
DPMO, manufacturing organizations use Parts Per
Million (PPM). Both are conceptually same.

 If in a process
 “k” Denotes the number of opportunities for making a
defect per unit of execution of that process
 “n” Number of units of observation of the process
 “d” Number of defects that occurred in that process
during the observation
 The defects per opportunity =  d  * 1,000,000
k *n

Mahadevan (2010), “Operations Management: Theory & Practice”, 2nd Edition, © Pearson Education

© Pearson Education . “Operations Management: Theory & Practice”.DMAIC Methodology Define Measure Analyze Control Improve Mahadevan (2010). 2nd Edition.

DMAIC Methodology  Define   Define the problem. project scope. “Operations Management: Theory & Practice”. © Pearson Education . the requirements. project charter Set goals for improvement  Measure   Identify variables to be measured. 2nd Edition. the type of measurement Data collection and synthesis  Analyze     Develop a set of tools for analysis Apply graphical tools of analysis Identify possible sources of variation and “vital” few root causes Explore means of eliminating them Mahadevan (2010).

2nd Edition. “Operations Management: Theory & Practice”. © Pearson Education .DMAIC Methodology  Improve   Generating and validating improvement alternatives Creating new process maps for the process  Control    Develop control plan Establish revised standard measures to maintain performance Develop relevant raining plans to maintain standards Mahadevan (2010).

Organization for six sigma  Process Owner  supervisor or a manager who takes responsibility for various steps of a process that is responsible for delivering some output to the customer. © Pearson Education . This includes Master Black Belt. The depth of training and experience differentiates these three. “Operations Management: Theory & Practice”. three terminologies are used to indicate these organizational entities. 2nd Edition. Black Belt and Green Belt. Mahadevan (2010). It could be the in a particular work area where the improvement project has been identified  Team Leader & Members  Team leader (the project leader) and the members will comprise of the employees in the chosen work area  They will have day-to-day operational control of activities In six sigma.

process design & analysis.  This includes statistical tools. sorts out issues cutting across other parts of the organization. approves projects and provides the necessary support in terms of resources Mahadevan (2010). small group improvement. “Operations Management: Theory & Practice”. © Pearson Education . change management. use of QC tools for improvement etc.Organization for six sigma  Six sigma coach  A consultant or a senior person in the organization who offers expert knowledge on various aspects of six sigma. 2nd Edition.  Sponsor  A member of the senior management who oversees the overall progress and implementation  Helps the team refine the project scope.

2nd Edition.Statistical Process Control  Collective set of tools & techniques used to develop a quality assurance system when business processes exhibit variations is known as Statistical Process Control (SPC)  Key issues addressed in SPC based quality assurance system:   How does one ensure that the random events are indeed rare events? How do we know whether the observed changes are due to random variations or assignable causes? Mahadevan (2010). © Pearson Education . “Operations Management: Theory & Practice”.

2nd Edition. © Pearson Education . it clearly points to the existence of assignable causes    Errors due to operator skill level differences Changes in the operating condition of an equipment Changes introduced in the standard operating procedures  In the case of assignable causes. “Operations Management: Theory & Practice”. the system will drift from desired level of performance over time Mahadevan (2010).Common & Assignable Causes  Two types of variations occur in business processes  Chance variations due to common causes  Common causes are those due to random events that cannot be controlled  Non-random variations due to assignable causes  When observed variations are not statistically found to be due to random events.

Quality Assurance using SPC Some terminologies Designed Standard  Centre of specification limits (Target)  Upper Specification Limit (USL)  Lower Specification Limit (LSL)  (USL – LSL): Desired tolerance This represents the voice of the customer Status of process  Centre of the process (Process Average)  Upper Control Limit (UCL)  Lower Control Limit (LCL)  (UCL – LCL): Spread of the process This represents the voice of the process Mahadevan (2010). “Operations Management: Theory & Practice”. 2nd Edition. © Pearson Education .

© Pearson Education . “Operations Management: Theory & Practice”. 2nd Edition.Control Chart A generalised representation Upper Control Limit (UCL) Plot of sample data Process Average Lower Control Limit (LCL) Mahadevan (2010).

Setting up a process control system Choose the characteristic for process control Choose the Measurement method Choose an appropriate Sampling procedure Choose the type of Control Chart Calculate control limits Plot the data & Analyse Mahadevan (2010). “Operations Management: Theory & Practice”. © Pearson Education . 2nd Edition.

“Operations Management: Theory & Practice”. Pressure and Heat specifications Conformance to product specifications Conformance to equipment specifications Vibrations and other variations in equipments and sub-systems Conformance to specifications of the automation & control system  4 Service Systems    Number of defects in various business processes Errors in processing documents Conformance to waiting time/lead time related specifications Mahadevan (2010). 2nd Edition.Characteristics for process control Some examples Sl. 1 Type of Applications Component Manufacturing Characteristic for Measurement  Conformance of physical measurements of components and sub-assemblies to specifications Conformance to operating characteristics of machines and other resources involved in the process  2 Final Assembly    Number of defects in the product Conformance to test specifications Number of missing elements 3 Process Industries     Temperature. No. © Pearson Education .

“Operations Management: Theory & Practice”. © Pearson Education . 2nd Edition.Choosing a characteristic Examples from service industry  How long does it take to complete the patient admission process in a hospital?  How dissatisfied were the customers when they stayed in a hotel for a holiday?  Does our process of understanding customer requirements needs improvement?  How capable are my sub-processes in software development? Mahadevan (2010).

2nd Edition. © Pearson Education .Measurement Methods  Attribute Based   simple clustering of the characteristic into a few categories (such as good or bad) Two frequently used attribute measures are:  Proportion of defects (denoted as p)  Number of defects (denoted as c)  measurements are easy to make. weight) measurement will be expensive and more time consuming but will provide a wealth of information about the process Mahadevan (2010). quick & less expensive. but reveal very little information about the process  Variable Based   Detailed observation of the characteristic (such as length. “Operations Management: Theory & Practice”. diameter.

© Pearson Education . 2nd Edition. “Operations Management: Theory & Practice”.Types of Control Charts  Variable based control chart  X bar and R Charts  Attribute based control chart  P chart  C chart Mahadevan (2010).

m Attribute measures  Proportion of defects – p p m  No. each of these measures can be computed for each sub-group m measurements are used for establishing the sampling distribution and control chart These means are nothing but the process average (center line) of the respective control charts formed using each of these measures. . of defects – c m Variable measures  Mean .X  Range – R Attribute measures  Proportion of defects – p  No.Criterion Sub-group size Sub-group measures Notations for control charts Number of subgroups Mean of the sampling distribution of the sub-groups Notation n Variable measures  Mean . of defects .c   c m Standard deviation of the sampling distribution of the sub-groups Attribute measures  Proportion of defects – p  p (1  p ) n  No. c  c Three standard deviations on either side of the center line are the control limits for the respective charts.X   X m  Range – R   R Explanation Each sub-group consists of n observations Based on the n observations. of defects .

X bar and R Chart Setting control limits Computations for the X chart X  X  Process average or center line: m Upper Control Limit : UCL X  X  A2 R Lower Control Limit: UCL X  X  A2 R Computations for the R chart Process average or center line: R  R m Upper Control Limit : UCL R  D4 R Lower Control Limit: UCL R  D3 R * The values A2. © Pearson Education .3) Mahadevan (2010). 2nd Edition. D3 and D4 can be read directly from tables (see table 6. “Operations Management: Theory & Practice”.

M.114 2.880 1.777 Source: Juran.268 2. J.337 0.004 1.282 2.419 0. pp 385. Mahadevan (2010). “Operations Management: Theory & Practice”. Gryna. “Quality Planning and Analysis”.577 0.864 1.136 0. (1995).483 0.184 0. 2nd Edition.924 1.308 D3 0 0 0 0 0 0.574 2. and F. 3 rd Edition.816 1.729 0.M. Tata McGraw-Hill.373 0.076 0.223 D4 3.023 0.Coefficients for computing LCL and UCL in X-bar and R charts* Sample size (n) 2 3 4 5 6 7 8 9 10 A2 1. © Pearson Education . New Delhi.

“Operations Management: Theory & Practice”.34 1 2 3 4 5 6 7 8 9 Sample Number 10 11 12 Mahadevan (2010).36 12.49 12.35 12. 2nd Edition.47 12.38 12. © Pearson Education 13 14 15 .40 12.37 12.43 12.48 12.X bar Chart An example X-bar Chart Mean Diameter (cms) Sample Means Centre Line UCL LCL 12.45 12.42 12.50 12.46 12.44 12.39 12.41 12.

22 0.R Chart An example R Chart Mean Range (cms) Sample Range Centre Line UCL LCL 0. 2nd Edition.16 0.04 0.12 0.24 0.26 0. © Pearson Education 13 14 15 .18 0.20 0. “Operations Management: Theory & Practice”.28 0.02 0.14 0.10 0.08 0.06 0.00 1 2 3 4 5 6 7 8 9 Sample Number 10 11 12 Mahadevan (2010).

2nd Edition. © Pearson Education .P chart Setting the control limits Computations for p chart Process average or center line: p  p m Upper Control Limit : UCL p  p  3 p(1  p) n Lower Control Limit: LCL p  p  3 p (1  p ) n Mahadevan (2010). “Operations Management: Theory & Practice”.

© Pearson Education 11 12 .12 0. 8 9 10 Mahadevan (2010). “Operations Management: Theory & Practice”.09 0. 2nd Edition.P Chart An example p Chart p Centre Line UCL LCL 0.15 0.00 1 2 3 4 5 6 7 Sample No.18 0.03 0.06 0.21 Proportion of defects 0.

2nd Edition. “Operations Management: Theory & Practice”. © Pearson Education .C Chart Setting up the control limits Computations for c chart c  Process average or center line: c  m Upper Control Limit : UCLc  c  3 c Lower Control Limit: LCLc  c  3 c Mahadevan (2010).

2nd Edition. © Pearson Education 9 10 .C Chart An example (with an outlier) c Chart c Centre Line UCL LCL 24 Number of defects 21 18 15 12 9 6 3 0 1 2 3 4 5 6 Sample No. 7 8 Mahadevan (2010). “Operations Management: Theory & Practice”.

2nd Edition. © Pearson Education 9 10 . “Operations Management: Theory & Practice”. 7 8 Mahadevan (2010).C Chart Is this process behaving normally? c Chart c Centre Line UCL LCL 24 Number of defects 21 18 15 12 9 6 3 0 1 2 3 4 5 Sample No.

When to stop the process? 15 points in a row in Zone C +3 Zone A +2 Zone B +1 Zone C Zone C -1 Zone B -2 Zone A -3 Mahadevan (2010). © Pearson Education . 2nd Edition. “Operations Management: Theory & Practice”.

“Operations Management: Theory & Practice”. © Pearson Education . 2nd Edition.When to stop the process? 14 points in a row alternating up and down +3 Zone A +2 Zone B +1 Zone C Zone C -1 Zone B -2 Zone A -3 Mahadevan (2010).

steadily increasing or decreasing  Fourteen points in a row.When to stop the process? Additional rules  One point beyond Zone A  Nine points in a row in Zone C or beyond  Six points in a row. “Operations Management: Theory & Practice”. 2nd Edition. alternating up and down  Two out of three points in a row in Zone A or beyond  Four out of five points in a row in Zone B and beyond  Fifteen points in a row in Zone C Mahadevan (2010). © Pearson Education .

“Operations Management: Theory & Practice”. 2nd Edition. © Pearson Education .Predictive capability of processes Which process is better? Spread of a process is indicative of its capability Mahadevan (2010).

Predictive capability of processes Offset Which process is better? A process that is aligned closer to the desired target is likely to be more capable Process B Process A LSL Target USL Mahadevan (2010). “Operations Management: Theory & Practice”. 2nd Edition. © Pearson Education .

“Operations Management: Theory & Practice”. Mahadevan (2010). 2nd Edition. © Pearson Education .Process Capability  Process Capability is defined by the spread of the process  Potential capability (Cp) is defined as the ratio of the difference in specification limits to the process spread Cp = Specification Range (USL  LSL)  Pr ocess Capability 6  Actual capability (Cpk) takes into consideration the extent to which the process has deviated from the desired target Cpk =   Pr ocess Centre  LSL  Min    3     USL  Pr ocess Centre     3    .

50 7 ppm 1.255 ppm 0.614 ppm 0.Process Capability & Defects Process Capability Index (Cpk) Total Products outside twosided specification limits 0.0018 ppm Source: Quality Planning & Analysis.25 453.861 ppm 0. © Pearson Education .00 0.395 ppm 1. 3e Mahadevan (2010).70 0. “Operations Management: Theory & Practice”.50 133.20 318 ppm 1. 2nd Edition.00 2. Juran & Gryna.80 16.34 ppm 2.700 ppm 1.60 71. Chapter 17.

2nd Edition. “Operations Management: Theory & Practice”. © Pearson Education .Six sigma quality A graphical representation Cp  (USL  LSL)  2  (USL  LSL)  12  A spread of  6 6 Mahadevan (2010).

2nd Edition. “Operations Management: Theory & Practice”. © Pearson Education .Acceptance Sampling  A method in which the decision with regard to acceptance or otherwise of a lot of incoming material is based on the observations made using a sample  Setting up a system for acceptance sampling requires addressing the following questions:  What is the size of the sample required for assessing the quality?  What should be the criteria for acceptance of the lot?  Is it enough to have just one sample or is it desirable to go for multiple samples  How do we assess the impact of the choice of the above parameters on the quality level in the long run? Mahadevan (2010).

2nd Edition. the sample size (n1.Sampling Plan  A sampling plan describes  the Lot size (N)  size of the sample to be assessed (n)  the acceptance number (c): the number of defects permissible in the observed sample  Therefore. “Operations Management: Theory & Practice”.) and the acceptance number (c1. c2 etc. n2 etc.) needs to be specified Mahadevan (2010). n. for each of the plan. a single sampling plan is denoted by (N. c)  In the case of multiple sampling plans. © Pearson Education .

© Pearson Education .Acceptance Sampling Operating Characteristics  Acceptable Quality Level (AQL): the percent defect that the buyer is willing to tolerate in the lot delivered by the supplier  Lot Tolerance Percent Defective (LTPD): the worst quality beyond which the manufacturer is not willing to accept the incoming lot  Producer’s risk: the risk supplier faces in getting his/her lot rejected when indeed it was conforming to the agreed terms  Consumer’s risk: the risk that a manufacturer faces of accepting a lot with poor quality beyond his/her tolerance level  Operating Characteristics (OC) Curve: A graphical representation of a sampling plan that reveals the above aspects of a sampling plan Mahadevan (2010). “Operations Management: Theory & Practice”. 2nd Edition.

000 Producer’s Risk 0.01 0.12 0. c=2 Probability of acceptance 0.700 0.20 0.16 0.900 OC Curve for n=500.09 0. © Pearson Education .03 0.800 0.100 Risk 0.07 0.600 0.10 0.14 0.000 Percent defective AQL LTPD Mahadevan (2010).04 0.Operating Characteristics Curve Example 18.05 0.02 0.00 Consumer’s 0.18 0.500 0.300 0.400 0.08 0.5 1. 2nd Edition. “Operations Management: Theory & Practice”.06 0.200 0.

Defects Per Million Opportunities. 2nd Edition. “Operations Management: Theory & Practice”. to predict/assess the quality of a business process.  A new methodology. © Pearson Education . DMAIC (Define-Measure-AnalyzeImprove-Control)  An organizational framework for ensuring the above outcomes are generated on a sustained basis Mahadevan (2010).Statistical Process Control Chapter Highlights  Six sigma is a new approach to process control based on as set of principles that enable organizations improve their quality to near zero defects level  Six sigma quality control differentiates itself from the traditional quality control methodology on the basis of three features:  A new metric.

2nd Edition.Statistical Process Control Chapter Highlights…  All processes exhibit variations on account of two causes  Common causes of variations happen on account of random events  Assignable causes introduce variations that can be detected and eliminated  Setting up a process control system involves  choosing a characteristic to control  identifying a measurement method and  developing a relevant control chart  A plot of the data helps a quality manager to assess if the process is in control and also helps her to detect any impending shift in process parameters Mahadevan (2010). © Pearson Education . “Operations Management: Theory & Practice”.

© Pearson Education . It also helps to target for a sixsigma quality improvement programme. 2nd Edition.  Acceptance sampling is used to accept a lot of items based on the observed number of defects in the sample drawn out of the lot  The performance of an acceptance sampling plan could be judged by developing an Operating Characteristics (OC) curve for the plan  An acceptance sampling design results in a certain amount of risk for both the customer and supplier Mahadevan (2010). “Operations Management: Theory & Practice”.Statistical Process Control Chapter Highlights…  Superimposing the specification limits on the control chart helps an organisation to assess the process capability and the likely number of defects that the process will produce.