Six Sigma Black Belt Program

Define & Measure phase

1

General Introduction

 Objectives of Black Belt Training  Why 6 Sigma in our organization?  Benefits of 6 Sigma

2

Objectives of Black Belt training
• To develop professionals in quantitative analytical skills, project management, group dynamics, team building and change management to address the organizational challenges. To build quality in to the systems to meet and exceed customer requirements.

3

Why 6 Sigma in our organization?
• Overall strategy is to: Accelerate improvements in all processes and services by: - Identifying customer needs - Crafting a value proposition - Designing business models Reduce cost of poor quality by eliminating waste, reducing defects and variations To delight the Customers / Clients To Grow revenues, Sustain Margins, Improve revenue productivity, Grow human capital

• • •

4

Benefits of 6 Sigma
When the principles and methodologies of Six Sigma are properly applied in a business process, they return positive top line & bottom-line results. Some of the 6 Sigma Benefits are * Improved overall customer satisfaction * Increased productivity and added value * Improved capacity and output * Reduced total defects and cycle time * Increased product and service reliability * Improved process flow * Improved ROI
5

Introduction to Quality

 

Fundamental Principles Quality Concepts

6

Aim So High… You’ll Never Be Bored…
The greatest waste of our natural resources is the number of people who never achieve their potential. Get out of that slow lane. Shift into that fast lane If you think you can’t, you won’t. If you think you can there’s a good chance you will. Even making the effort will make you feel like a new person. Reputations are made by searching for things that can’t be done and doing them.
Attitude Habit

Knowledge

Skills

7

Moving up the competency ladder
Unconsciously Competent

1. Unconsciously Incompetent 2. Consciously Incompetent 3. Consciously Competent 4. Unconsciously Competent
Consciously Incompetent Consciously Competent

4
Unconsciously Incompetent

3 2 1
8

Quality Concepts
Quality
Simply stated, quality comes from meeting customer expectations. This occurs as a result of four activities: • • • • Understanding customer requirements Designing products and services that satisfy those requirements Developing processes that are capable of producing those goods and services Controlling and managing those processes so they consistently deliver to their capabilities.

9

Importance of Quality
Classical Business Model PROFIT = PRICE - COST Classical Quality Belief Better Quality Means: Modern Technology Modern Machinery High Skilled Resources In short BETTER QUALITY = HIGH COST In short BETTER QUALITY = LOW COST Six Sigma Approach Better Quality Means: Less Defects Less Reworks Less Buffer Low Cycle Time

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Quality’s contribution to Profitability
Quality
•Better products and services •Improved processes

Customer Satisfaction
Compete with value

Market Share

External
Product Quality
•Reduced Scrap •Improved customer Response time

Price

Productivity
•Decreased •Cycle time •Elimination of setup time

Internal

Profit

Process Quality
•Reduced Rework •Elimination of in process •inspection

Cost
Opportunity for profit

Organization
11

Typical Waste….
Wastes of Manufacturing Process
• Defects • Waiting • Processing • Over production • Motion • Inventory • Transportation • Under-utilization • Safety hazards

Wastes of Service Industry
• Defects
--- rework

• Unsatisfied Customer
---Customer not satisfied, wrong input

• Under-utilization of Resources
--- Poor usage of infrastructure , manpower

• Over- Processing
--- Over-support to customer ,unwanted information

• Redundant Process steps
--- Wrong processes / methods

Wastes Kill ….. Business and Profits
12

Cost of Poor Quality
Inspection Warranty Rejects Rework (tangible) (tangible) Scrap

Traditional Quality Costs
(Easily Identified) 4~ 6% of Sales

Lost sales

Additional Costs of Poor Quality
(Difficult or impossible to measure)

Long cycle time Late delivery

25~35% of Sales
(intangible) (intangible)

Lost Customer Loyalty Excess inventory Expediting costs

Lost Opportunity Lost Opportunity

13

Cost of Poor Quality (COPQ)?

Costs incurred due to product or process quality not meeting the customer requirement all the time.
Costs that would not exist if there were no defects.

14

Cost of Quality Categories
Internal Failure Costs - costs that would disappear if no defects existed in the product prior to shipment to the customer. External Failure Costs - costs that would disappear if no defects were shipped to the customer. Appraisal Costs - costs incurred to discover the condition of the product (during “first pass through”). Prevention Costs - costs incurred to keep failure and appraisal costs to a minimum.

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Internal Failure Costs
Before shipment to customer

Examples • Scrap (labor and material) • Rework • Retest / Recheck/ Re-inspection / Re-testing • Productivity loss due to defects • Excess inventories • Failure analysis • 100% sorting inspection

16

External Failure Costs
After shipment to customer

Examples
• Lost business • Warranty • Dealing with complaints • Returned product • Price concessions due to lower grade product

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Appraisal Costs
Examples

Maintaining test equipment

• Quality audits / Transaction Monitoring • Materials consumed through destructive testing • Incoming, In process & Final inspection & testing • Quality system audits • Inspection & testing of materials & services

18

Prevention Costs

Examples
• Maintaining production/operations equipment • Process Control & Capability evaluation • Process improvement: -Error proofing -FMEA -DOE • Training

19

Evolution of Quality

1980s: Six Sigma

1960s: Japanese Quality Movements

1940s: Statistical Process Control

1920s: Invention of Control Charts by Walter A. Shewhart, Bell Labs
Each Phase Built on the Structure and Gains From the Previous Phases
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DEMING’S Philosophy

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Deming’s 14 points for Quality Management (Principles of transformation)
1. Create constancy of purpose for continual improvement of product and service. : Replace short-term reaction with long-term planning. 2. Adopt the new philosophy for economic stability. 3. Cease dependency on inspection to achieve quality. : If variation is reduced, there is no need to inspect manufactured items for defects, because there won't be any. 4. End the practice of awarding business on price tag alone. 5. Improve constantly and forever the system of production and service. : Constantly strive to reduce variation. 6. Institute training on the job. : If people are inadequately trained, they will not all work the same way, and this will introduce variation.
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Deming’s 14 points for Quality Management
7. Adopt and institute modern methods of supervision and leadership. 8. Drive out fear. Deming saw management by fear as counter- productive in the long term, because it prevents workers from acting in the organization's best interests. 9. Break down barriers between departments and individuals. : The concept of the 'internal customer', that each department serves not the management, but the other departments that use its outputs. 10. Eliminate the use of slogans & posters : Another central TQM idea “it's not people who make most mistakes - it's the process they are working within. Harassing the workforce without improving the processes they use is counter-productive”

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Deming’s 14 points for Quality Management
11. Eliminate numerical quotas. : Deming saw production targets as encouraging the delivery of poor-quality goods. 12. Remove barriers that rob the hourly worker of the right to pride in workmanship. : Many of the other problems outlined reduce worker satisfaction. 13. Institute a vigorous program of education and retraining. 14. Define top management’s permanent commitment to ever-improving quality and productivity.

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Introduction to Six Sigma

25

Introduction to 6 Sigma
 Six Sigma History  Success Stories  Definitions and Drivers  6 Sigma : What Makes It Different?  6 Sigma : Meaning  6 Sigma : Benefits  6 Sigma : The Organization

26

Six Sigma History
In 1979 during a executive meeting, Motorola engineers stated “The real problem at Motorola is that our Quality stinks” They had data confirming 10 - 20% of annual revenues was spent on correcting poor Quality, costing the company 800 - 900 million US $ PA To get rid of this problem Motorola came up with Six Sigma Breakthrough strategy.

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Motorola

And the Results?
1997

5.6σ
Products Manufactured

~ 16 Billion

1986

4.2σ

In 1988 Bob Galvin (CEO Motorola) while accepting first “Malcom Baldrige National Quality Award ” for Motorola, described about something called as Six Sigma.
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Six Sigma History
Since then, hundreds of companies around the world have adopted Six Sigma as a way of doing business.

Six Sigma is a Structured, Project based approach to achieve BREAKTHROUGH results, leading to sustainable and significant FINANCIAL impact on our organization through intensive application of statistical tools and techniques by our people.

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Success stories - General Electric General Electric’s, Jack Welch describes Six Sigma as the most important initiative GE has ever undertaken. GE had an operative income of 10% for decades and they were not able to improve this despite various efforts. After implementation of Six Sigma GE was able to improve its operative income from 10% in 1995 to 16.7% in 1998.
As Jack Welch explains it: The best Six Sigma projects begin not inside the business but outside it, focused on answering the question—how can we make the customer more competitive? What is critical to the customer’s success? . . . One thing we have discovered with certainty is that anything we do that makes the customer more successful inevitably results in a financial return for us.
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Asea Brown Boveri

ABB, after application of Six Sigma has reduced
measurement equipment error by 83%. The company also made drastic improvements in material handling resulting in an annual estimated cost savings of US $775000.

31

Allied Signal

Allied Signal, which was on the verge of
bankruptcy was made profitable by CEO Larry Bossidy through Six Sigma. The company implemented Six Sigma program in 1994. The cumulative impact on the savings in the direct costs during this period was more than US$ 2 billion.
Allied’s leaders view Six Sigma as “more than just numbers—it’s a statement of our determination to pursue a standard of excellence using every tool at our disposal and never hesitating to reinvent the way we do things.”

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A Six Sigma Journey • • 1987 to 2006

Over the past few decades six sigma has evolved from a focus on defects to cost reduction to value creation.

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Companies Implemented 6 Sigma -Worldwide
Dupont Sony Black and Decker Kodak Microsoft

GE

Allied Signal

Motorola Corporation Ford Federal Express Johnson and Johnson IBM American Express Caterpillar

Johnson Controls

Toshiba

Asea Brown Boveri

Texas Instruments Citibank 34

Definition & Drivers
6 Sigma
• A comprehensive and flexible system for achieving, sustaining and maximizing business success

6 Sigma Drivers
• Close understanding of customer needs • Disciplined use of facts, data, and statistical analysis • Diligent attention to managing, improving, and reinventing business processes Six Sigma - A concept for Quality improvement
The Goal of Six Sigma is not to achieve six sigma levels of quality. It is about improving profitability, though improved quality and efficiency are the immediate by-products of Six Sigma.
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Definition of Quality as per Six Sigma
Quality is a state in which value entitlement is realized for the consumer and the provider in every aspect of business relationship.
• Entitlement for companies means that they have rightful expectation to produce quality products at the highest possible profits. • Entitlement for customer means they have a rightful level of expectations to high-quality goods at the lowest possible cost.

36

6 Sigma : What Makes It Different?
• Six Sigma metric provides a standard for communicating process status and improvement goals. • Project selection tied to organizational strategy / balanced scorecard  Customer focused / proactive vs. customer driven / reactive. • Project outcomes / benefits tied to financial reporting system. • Recognition and reward system established to provide motivation. • Executives and upper management drive the effort through: – Understanding Six Sigma. – Significant financial commitments. – Actively selecting projects tied to strategy. – Setting up formal review process. – Selecting Champions. – Determining strategic measures.
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Six Sigma v/s TQM and ISO
ISO
Focus on Money Leadership & Top-Down Support Continuous Improvement Deployment Strategy & Guidelines Measurement Criteria of Quality Goals Performance Targets Application of Statistical Tools Quality Career Path Extension to Cost, Cycle Time & Other Business Issues Integration of Business Goals with Quality Functional Focus Project Approach 38

TQM

Six Sigma

6 Sigma: Meaning
• Reduce Variation to the half of Tolerance Band • Minimize defects to the level of 3.4 defects per million opportunities

6σ Definition

σ It is a Greek term which

LSL
Defect !

USL

LSL
Defect !

USL

designates the spread or distribution about the mean of any process.

Precise But not Accurate: Not Accurate Not Precise Process is off target : High variation in the process

6

It is a metric that indicates how well the monitored business process performs. Higher the no., better the process.

Six sigma tool tries to reduce variation in the process and shifts process mean towards the target

LSL

USL

39

Example 1
Time taken to process order - Advisor A
45 44 43 42 41 40 39 38 37 36 35 1 2 3 4 5 6 Order no.
40

USL

Time in Minutes

Process mean is 40 40

LSL

7

8

9

10

Time taken to procees order - Advisor B 45 44 43 42 41 40 39 38 37 36 35 1 2 3 4 5 6 Order no
USL

Time in Minutes

Process mean is 40 40

LSL

7

8

9

10

41

Time taken to process order - Advisor A & B
45 44 43 42 41 40 39 38 37 36 35 USL

Time in Minutes

B

40

A
1 2 3 4 5 6 7 8 9

LSL 10

Order no

Which Advisor will you prefer ?
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6 Sigma Goal
From Fixing products and services to become acceptable

The Goal
To Optimized processes that produce defect free products and services

Quantum Leap

30 20 10

Before

After

Influence of 6 Sigma

0 0 10 20 30 40 50
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Process before and after Six Sigma

A Six Sigma Landing .
Target USL

LSL

Six Sigma is about on target performance with reduced variability around the target
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Understanding

Sigma Level

Consider 10,00,000 (1 Million) planes take off per year. The plane crash results…at each Sigma Level will be as follows
2 sigma – 3,08,537 Planes per year 3 sigma – 66,807 year 4 sigma – 6,210 year planes per
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Planes per

Sigma Level and Quality
Sigma Level 1 2 3 4 5 6 Defects Per Million Opportunities 691,462 308,507 66,807 6,210 233 3.4 % Defects 69 % 31 % 7% 0.6 % 0.02% 0.00034%

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Six Sigma Process
Predictably twice as good as what the customer wants 6σ
LSL

−6σ σ 1 σ 1 σ 1

3σ σ 1 σ 1

+ 6σ σ 1

USL

1

2

3

4

5

6

7

8

9

10 11

12

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Sigma –
A measure of variation from “target”.

LSL

USL 1 Std. Dev. / 1 Sigma

One standard deviation around the mean is about 31% of the total “opportunities” included with in specification limit.
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If we can fit six standard deviations on both side of the mean in between our target and the specification limits . . .

LSL 6 5 4 3 2 1 1 2 3 4 5 6

USL

6 Std. Dev. / 6 Sigma

….. then 99.99966% of our “opportunities” are included!

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6 Sigma : Benefits
• Cost reduction • • • • • • Generates sustained success Sets a performance goal for everyone Enhances value to customers Accelerates the rate of improvement Promotes learning Executes strategic change • Productivity improvement • Market-share growth • Customer retention • Cycle-time reduction • Defect reduction • Culture change • Product/service development • And many more.
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6σ Methodology

Y

=

f(X)
Focus of the 6σ Approach of Problem solving

Which one should we focus on the Y or X?

Y
■ Dependent Function ■ Output ■ Effect ■ Symptom ■ Monitor

X1,.…,Xn
■ Independent Variable ■ Input ■ Cause ■ Problem ■ Control object

6σ Application assures that problem is solved by focusing on the factors that cause the problem.
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Lets Avoid This Situation !
If we don’t know the relationship between the Output (Y) and the Inputs (X’s) all we can do is to monitor and sort the good from the bad Y’s. And Pray Hard that Y will turn out good !

Or
Implement Six Sigma ... It discovers relationships between Y & Xs
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Y = f (X)
Everything has a cause. Cause influences the effect

Focus on the cause (x) to change the response

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Pr = f (V)
Problem is any deviation from the defined standards of a distinguishing feature.

Focus on source of variation to eliminate the problem

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V=E-O
Variation is the gap; A deviation from the expectation

Measure the variation. We can’t improve what is not measured.

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Continual Improvement
Continual Improvement act plan act do check do check do
6σ / ISO / COPC / e-SCM Performance Management System

Performa nce

Assura nce Time
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Six Sigma Organization, Roles and Responsibilities

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Six Sigma Organization
Six Sigma focuses on reducing the variation in every process , makes intensive use of the statistical tools, enables decisions based on facts & data rather than gut feelings and puts customer in first place . Every improvement we are doing in house must be ultimately linked with the customer satisfaction whether it is internal or external . There must be strong and clear linkages between the internal processes, which ensures the end customer satisfaction . To transform our organization into Six Sigma organization , we must ensure that six sigma is used as a philosophy / strategy and not a tool . In an essence , It's a new way of managing the

6 Sigma : The Organization

Leadership Commitment at Executive Level Governance Review,Enable,Monitor,Institutionalise e.g. Quality leaders, Master Black Belts etc. Implementation Scope, Apply Six Sigma Tools And Enhance Business Processes e.g. Project sponsors, BU Managers, BB, GB, YB – who apply Six Sigma on-the-job
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Six Sigma Deployment Model
Link Six Sigma to overall business strategy Creat Customer Feed back process Determine strategic goals and objectiv es Allocate appropriate resources Dev elop incentive plan & reward system Establish accountibilit y in annual performanc e reviews Creat a core six sigma leadership team with defined responsibilit ies Champion / Top Management Deployment Extend the initiative in other group companies

Ispat Industries Ltd. Six Sigma Deployment Process

MBB / Six Sigma

Design and implement six sigma deployment

Creat an ov erall training plan

Design training Material & Periodic updates

Define a project selection process & criteria

Establish project review & project trac mechanism

Define a project validation & project closeout process .

Evaluate cultural obstacles & raise red alerts to manageme nt

Design a common database of closed projects & key learnings

Compile the lessons learned & share best practices .

Project Champion /

core team

Identify opportunities for breakthrough improv ement

Identify appropriate project leaders & arriv at e cross functional team

Ensure resource av ailability for project execution

Review the team progress, remove barriers and resolv e issues

Appreciate and recognize good efforrts. Motivate project team

Ensure controls are in place and project gains are sustained forev . er

Belt / Project Team

Black Belt / Green

BU Managers

DEFINE the project. Pboblem statement, Objectiv e, Scope, Team, Timeline

MEASURE the response v ariable Y. Baseline, Target, MSA

ANALYZE the negative effect. Identify root causes(X 's) & verify statisticaly

IMPROVE peroformance ( Y's) by implementing the counter solutions for X 's

CONTROL the KPIV's to sustain improved Y. Control plan, Control chart etc..

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Organization / Infrastructure
Sponsor
Senior executive who sponsors the overall Six Sigma Initiative and who is responsible for implementing Six Sigma within the business. Select meaningful business impact projects. Responsible for achieving Six Sigma project results. Identify, prioritize, select & scope projects. Review, track, and report Six Sigma project progress and results. Eliminate project barriers, assure proper project resources. Reward, recognize Six Sigma project team Achievements.

Master Black Mentor black belts on their projects. Ensures effective application of DMAIC. Coach on appropriate, effective use of Six Sigma Tools & effective project Belt
management to achieve on-time results. Helps sponsor in improvement opportunity identification. Apply Six Sigma skills and expertise to their own Projects. Train BBs, Sponsors and Managers in Six Sigma.

Black Belt

Highly experienced person with four weeks of classroom training, has managed several projects and is an expert in Six Sigma methods / tools. Organize, plan and lead Six Sigma projects. Escalates project barriers to sponsors. Project tracking, reporting. Apply Six Sigma skills and expertise to project execution. Responsible for coaching / mentoring / training Green and Yellow Belts, team members and for helping the Sponsor keep the initiative on track

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Organization / Infrastructure
Project leader Understand DMAIC Process and Sustain Improvements. Provide domain /
Process expertise. Accountable for timely completion of projects. Support improvements. Identifies project team and ensures their availability.

Green Belt

Professional who leads small scope Six Sigma projects. Typically has one week of classroom training in methods, statistical tools, and (sometimes) team skills, participates in Black Belt project team or leads smaller projects. Typically has two days of classroom training in methods and basic statistical tools, participates on a Green Belt project team or leads smaller improvement projects.

Yellow Belt

Team Member Professional who has general awareness of Six Sigma. (through no formal

training) and who brings relevant experience or expertise to a particular project. Apply Six Sigma tools with help of Black / Green / Yellow Belts Contribute ideas during meetings and carry out action items. Collect and analyze data Lead small activities such as process capability studies, measurement system studies, verifying causes and solutions. Implement and sustain solutions.

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Six sigma Roles
Black Belt
• Organize, plan & lead Six Sigma projects • Project barrier escalation to sponsors • Project tracking & reporting coaching / mentoring / training Green & Yellow Belts, team members

Green Belt
• Participates in Black Belt project team. • Leads smaller projects

Team Members
• Bring expertise to projects • Contribute ideas during meetings and carry out action items • Collect and analyze data • Lead small activities • Implement & sustain solutions

Yellow Belt
• Leads smaller improvement projects

Master Black Belt
- Mentor black belts on their projects - Ensures effective application of DMAIC - Helps sponsor in improvement opportunity identification - Apply Six Sigma skills & expertise to their own projects - Train BBs, Sponsors &

Sponsor
- Sponsors the overall Six Sigma initiative - Select meaningful business impact projects - Eliminate project barriers, assure proper project resources. - Reward, recognize Sigma project team achievements

Project Leader
- Understand DMAIC Process and Sustain improvements - Accountable for timely completion of projects - Provide domain / Process expertise - Support improvements. Identifies project team and ensures their availability

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Champion or Sponsor
Requirements
• Representative of Top Management • Has Authority over the scope of project • Statistical Knowledge is preferable • Experience in carrying out Quality improvement Projects is preferable

Responsibilities
At Start: * Identify the Goals of the Project * Select the Project Leader or Black Belt * Ensure the Project Scope is under his control * Identify Milestones * Prepare Project Schedule On Going: • Provide Resources • Conduct Periodic Review & add value • Ensure the Project is on Right Track • Control Budget At End: • Handle Implementation Issues • Quantify the Project Results • Verify whether the Goals are achieved • Prepare Future Action Plan, if required • Conclude Project
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Master Black Belt
Requirements
• Sound knowledge of Statistical Tools are required • Good Communication & Teaching Skills are essential • Should be a Good Consultant

Responsibilities
At Start: • Create Six Sigma awareness among top management • Provide guidance & training for gathering Voice of Customer’s & Stakeholders • Help to identify projects • Provide guidance to prepare Project Charter • On Going: • Provide training on various Statistical Tools useful at different phases of the project life cycle • Give Statistical Consultancy at different phases of the project life cycle

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Black Belt
Requirements
• Statistical Knowledge essential • Experience in Data Collection, Analysis & Interpretation required • Should posses Leadership Qualities • Should posses Good Communication Skills

Responsibilities
At Start: • Select Team Members • Prepare Project Charter • Identify Ys On Going: • Analyze Ys & compute Baseline Sigma Value • Identify Xs • Establish relationships between Ys & Xs • Optimize Xs • Devise Control Mechanism to ensure that Xs are at optimum always. At End: • Be equivalent to Master Black Belt. • Conducts programs on Statistical tools • Facilitates Business Unit Head for project selection
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Green Belts \ Team Members
Responsibilities
On Going: Collect data on Ys Help BB to analyze Ys data. Be part of identifying Xs Collect data on Xs Help BB to establish relationship between Xs &Ys Help BB to optimize & control Xs Help design the new process Drive the project to completion At End: * Green Belt will be equivalent to Black Belt

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Team Members
• Guidelines for team members – Manageable team size up to 5 people – People who are part of the process – People who are benefited by removal of pain area – People who have domain knowledge – People from same location – Guest members as required

68

Project Teams
G
Champion

Black Belt

B
Green Belt

G

G

Team Members

69

Team Dynamics
Skills
Problem Solving Technical/ Functional Interpersonal

Accountability

Performance Results

Mutual Accountability Small group of people Individual Accountability

e dg nt le e ow cem Kn a n h En

C Wo ollec t rk Pro ive du ct

Specific Goals

Common Approach Meaningful Purpose

Commitment
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Deployment Strategy
 Elements of 6 Sigma Deployment  Role Matrix  Training  Certification Criteria  Project Classification  Project Benefits Evaluation

71

Elements of 6 Sigma Deployment
1.Project Identification To contribute to the bottom-line of the organization, client satisfaction, etc

•Branding • Yearly Awards •dedicated facilities and staff

6. Fostering Quality Culture

2. Project Classification
•Black Belt Project •Green Belt Project •Yellow Belt Projects

Six Sigma is being implemented in the organization as a catalyst for change in culture and achieve competitive advantage. DMAIC methodology is being used to develop and fine tune both core and enabling processes. Six Sigma Deployment plan is properly documented as PACE guidelines.

5. Project Benefits Evaluation
Project Benefits (QNI) = Project Savings – Project Expenditure

Top Management Commitment

3.Enhanced Training and certification
•Awareness Program •Yellow Belt Training •Green Belt Training •Black Belt Training

4. Review Mechanisms
•Program Reviews •Project Reviews

“commitment for Six Sigma” and “Champions/ Sponsors” are the most powerful success factors

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Team Structure - Role Matrix
Role Description Quality Team Operations / Support Team HR Team SS Executive Committee (EC) Training Curriculum preparation and implementing improvements as per recommendations Preparing the Training Calendar Identifying the Trainers Certifying the Trainers Defining the Selection Criteria and improving the same on an ongoing basis Identifying the Trainees Selection of Projects based on ongoing experience and Business Goals Sponsor for the Project Project Management / Coordination Project Execution Project Certification Review of training material √ √

√ √ √ √ √ √ √ √ √ √ √

Respective BB / GB / YB √


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Types of Training
 Awareness Program – The program will be of a 4 Hrs duration. This is engagement specific and will be conducted internally by the dedicated certified trainer.  Yellow Belt Training – Two continuous days as stipulated in the program calendar  Green Belt Training – Five Days program spread over 3 months (2days + 2days + 1day) as stipulated in the program calendar  Black Belt Training – 20 Days program spread over 4 months, 5 continuous days every month as stipulated in the program calendar. For YB/GB/BB trainings all trainees are expected to be fully available during the training period

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Certification Criteria
 All trainees would need to attend a 2 day YB session/ 5 day GB session / 20 days BB session & pass the respective certification examination.

 Qualifying mark would be 70% for YB, 75% for GB & 80% for BB

 Project Certification will be granted to the BB, GB and YB identified and dedicated for the particular project

 Certification will be done internally by the Certification Board. The criteria for certification will be  Complete training  Pass the examination  Meet any of the options as mentioned in the next page.
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Certification Criteria
1 Black Belt Certification 2 3 4

OPTIONS 5

Green Belt Certification
Black Belt Project Leader Green Belt Project Leader

Yellow Belt Certification

Yellow Belt Project Leader Yellow Belt/ Green Belt/ Black Belt Project Member 76

IMPACT

Project Classification

Green Belt Yellow Belt
Complexity

Black Belt X

Black Belt Projects
Projects that have cross functional scope and are of high impact and complexity with respect to NET revenue earnings / NET savings. (Expected savings $ 50,000/ annum min). • Should complete within 4 to 6 months • Base line, target and savings should be validated by Financial representative Green Belt Projects • GB projects are less complex than BB projects. (Expected savings $10,000-$ 50,000/ annum) • Should complete within 2 to 4 months • Base line, target and savings should be validated by Financial representative Yellow Belt Projects • YB projects are Cell wise projects, where cross functional team is not required and very limited statistical knowledge required to carry out the project • This projects are taken as value addition to GB projects. YB projects by 77 themselves do not generate / save revenue. •

Project Benefits Evaluation
Hard (Tangible) Benefits Soft (Intangible) Benefits
Definition: Any measurable Improvement which can be Quantified and converted into Dollar Savings. Examples:
• • • • • •

Reduction of 3 FTE’s 1% market share Increase Eliminate 2 Temporary Positions Definition: Any measurable Rework down 20% Improvement Lower vendor cost per transaction which cannot be quantified and Save 1 temp. worker 2 hrs of work converted per week • Eliminate 30% call volume into Dollar Savings. • Decrease AHT of the process by 60 Examples: secs • Increase Customer Satisfaction • Reduction in past due receivables Scores by $10MM • Benefits (QNI) Scores Improve VOC = Project Savings – Project Expenditure Project • 1. Project Improving Federal / State regulatory Charter will include Sign-off from Finance Analyst Compliance authentication is done by Sponsor, Head Quality and Finance Dept. The 2. Project validation / Scores return on the project is verified. 3. Only upon successful completion of the project, the respective BB will be eligible for certification. 78

Six Sigma Project Identification and Selection

79

Project Identification & Selection
 Project Selection approach  Project Sources and Selection Criteria  Kano Model  CTQ Tree  Quality Function Deployment

80

Project Selection Approach
Steps What is the process ? Who are the potential customers ( Internal, External, Business owners) What are the process deliverables ? What is the Unit of Measurement ? Is Measurement System in place ? What is the Current Performance (Baseline) ? What is a expected / targeted performance ? Does gap exists ? Does gap carries significant impact to customer / business ? Identify the improvement approach Continuous Improvement OR Re designed ?

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SS Project Selection Approach – Identifying Critical processes
Approach Steps
Business Unit Business

Tools
Business Process Framework

Approach Description
One of the Business / Functional unit (e.g. Operations / Purchase Process flow steps

Business Process Business Process

Process Flow Chart Customer Surveys Brain storming Prioritization Step I Step II

Step III

Step IV

Step V

Step VI

Step VII

Identify Critical Process Identify Critical Process

Study Process Process

High level process mapping

Study the critical process and the pain areas identified during customer survey

Identify Customers Identify Customers

SIPOC

Identify External & Internal (Business Owner & other functions) for the critical process

List out Customer List out Customer Expectations/Deliverables Expectations/Deliverables

SIPOC

Categorize the customer expectations (VOC / Pain areas) from critical process obtained form from surveys in to Deliverables of Quoting process

Does Process Exists? Yes

No A

B

Sub Process Flow Chart

For each deliverable of critical process identify If the sub process or product / service feature exists

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Six Sigma Project Selection Approach (Contd.)
Approach Steps
A Are Metrics in place? Define Metrics & Define Metrics & implement implement data collection plan data collection plan

Tools
SIPOC Data collection checklists Dashboard Enterprise Performance Management Matrix Process Capability Control Charts

Approach Description
For each deliverable of critical process identify unit of measure & measurement system

Ensure that the critical process metrics are linked with Business objectives, Strategy & VOC

Validate the Metrics Validate the Metrics

Collect data for all critical process metrics to define baseline process performance

Process Base lining Process Base lining

Does Gap Exists? Yes Does Process exists? B

No

Explore need of Explore need of performance performance excellence excellence

Conduct a gap analysis between the critical process baseline performance and targeted / customer expected performance level Process Performance Enhancement If the sub process does not exist for a metric / feature apply DMADV or Process Re Engineering Approach.

No

Apply DMADV // Apply DMADV Process Process Re Engineering Engineering

implementation 1. 2. DMAIC DMADV Re Design / Re Engineer Problem Solving Approach

Yes

Long Term Approach – Long Term Approach – Apply DMAIC Apply DMAIC Quick wins – Quick wins – Apply REIS Apply REIS

3. 4.

If the sub process exists for a metric / feature apply DMAIC for long term approach OR Problem solving approach for Quick wins for early realization of improvements where solutions are known

83

SS Project Selection Approach
– Identifying Undesirable Conditions
1. Identify the undesirable business process conditions. (Customer complaints, VOC, Quality reports, Monthly performance indicators) 2. Quantify the undesirable conditions in to Defect (%, PPM, DPMO, Sigma level) or Cost . 3. Identify the potential causes for the undesirable conditions. (High level process map, C & E analysis, Pareto analysis) 4. Arrive at the vital few potential causes and prioritize . (NVA's, Multivoting, 80:20 principle )

5. Identify the business process to which each prioritized suspected cause belongs to .

6. Select the core or enabling process for improvement, quantifying the gap between current performance and what customer wants (Process Deliverable).

Six Sigma Project 1 Define Measure

Six Sigma Project 2 Define Measure

Six Sigma Project N Define Measure

Appl Appl y... y...

Analyze Improve

Analyze Improve Control

Analyze Improve Control

Target : Reliable (Stable & controlled) processes, Satisfied Customers, Happy Employees

Control

84

Improvement Methodology Selection
Process Improvement

Product / Process Development : Where a sub process does not exist to take care of the customer requirement

Product / Process Performance Enhancement : Where the sub process exists but unable to meet the customer requirement with current process performance level

Product / Process Metric monitoring : Where the tentative solutions are known and systematic execution is required to ensure the Improved process performance & sustenance

DMADV (Define, measure, analyze, design and validate)

DMAIC (Define, measure, analyze, improve and control)

REIS (Recognize, evaluate, implement and sustain)

Design processes that do not exist for e.g. knowledge management

Enhance process metrics e.g. turnaround time, customer problem resolution effectiveness etc

Monitor and reduce errors in the process e.g. ineffective call close etc

85

Six Sigma DMAIC Project Flow
Define Tollgate Measure Tollgate Analyze Tollgate Improve Tollgate Control Tollgate

D
Define Define
Step 1: Identify customer & their care abouts. Covert their needs in to Critical to Satisfaction (CTS) i.e. CTQ – Critical to quality, CTC – Critical to Cost & CTD Critical to Delivery. Step 2: Develop Project Charter

M
Measure Measure
Step 3: Take the snapshot of the process, how the process performing currently & fix the baseline. Step 4 : Validate the measurement system from which we collect the data.

A
Analyze Analyze
Step 5: Identify the key process input variables that affects the outputs most. Step 6 : Verify the identified causes to see whether those are real or not.

I
Improve
Step 7: Determine the solutions to optimize the output & eliminate / reduce defects & variations. Step 8 : Implement the solutions partly & statistically verify their impacts on output.

C
Control
Step9 : Put the control in place to sustain the gains made by the process improvement. Step 10 : Integrate in daily work by Process Owner & team

Phase Deliverables
Required • List of Project CTQs • QFD/CTQ Tree • Project Charter • SIPOC Tools Box • Project Risk Assessment • Stakeholder Analysis • High Level Project Plan • In Scope/Out of Scope • Customer Survey Methods (focus groups, interviews, etc.) Required • Process Baseline capability Operational definition, • Specification limits, target, defect definition for Project Y(s) • Measurement System Analysis Tools Box • Benchmarking • Data Collection Plan • Gage R&R • Process Map • FMEA • Pareto Analysis • • • • • • • • Required Data Normality Test List of Statistically Significant Xs . List of vital few Xs & their verification Tools Box RCA / Fishbone Diagram Hypothesis Testing Correlation & Regression Analysis Required • Optimization of Xs • Improvement verification • Tolerances on Vital Few Xs Required • Post Improvement Capability • Improvement tracking • Process Control Plan • Process Owner Signoff Tools Box • Control Charts • Control Plan • Hypothesis Testing • Error Proofing

Tools Box • Design of Experiments • Improved Process Maps • FMEA on new process

86

Six Sigma DMADV Project Flow
Define Tollgate Measure Tollgate Analyze Tollgate Design Tollgate Validate Tollgate

D
Define
Se 1 Identify new tp : product, Process, Service

M
Measure Measure
Step 3: Identify caustomer & their care abouts (CTQ)

A
Analyze Analyze
Step 5: Develop design alternatives

D
Design Design
Step 7: Optimize the micro level design parameters Step 8 : Evaluate and verify the micro level design.

V
Validate Validate
Step9 : Validate results on full scale & Put the controls in place to sustain the gain. Step 10 : Integrate in daily work by Process Owner & team

Step 2: Develop Project Charter

Step 4 : Identify , deploy data collection plan & process base lining

Step 6 : Develop & evaluate high level design capability

Phase Deliverables
Required • Customer surveys, Interviews • Project Charter Tools Box • High Level Project Plan • In Scope/Out of Scope • Customer Survey Methods (focus groups, interviews, etc.) Tools Box • Benchmarking • Data Collection Plan • CTQ Tree • Affinity Diagram • Process capability • MSA Required • Operational definition, • Specification limits, • Current Performance • Performance target, • defect definition Required Required •• Design alternatives Design alternatives •• Selection of best Selection of best alternative alternative •• Detail design Detail design requirements requirements •• High level design High level design capability predicated capability predicated Tools Box Tools Box •• Benchmarking Benchmarking •• Design scorecard Design scorecard •• FMEA FMEA •• Layout diagrams Layout diagrams •• Process map //model Process map model •• Prototyping Prototyping Required • Optimization • Of design parameters • Prediction model • Design Verification • Updated design scorecard Tools Box • Design of Experiments • Improved Process Maps • Updated FMEA • Software simulation • Pilot / Test plan • Design score card • Tolerance analysis • Process management chart Required Required •• Post Design Capability Post Design Capability •• Scale up decisions Scale up decisions •• Full scale process Full scale process implementation implementation •• Improvement tracking Improvement tracking •• Process Owner Signoff Process Owner Signoff Tools Box Tools Box •• Control Charts Control Charts •• Control Plan Control Plan •• Process capability Process capability •• Design scorecard Design scorecard •• Process management Process management chart chart •• Standards & Standards & Procedures Procedures

87

Problem Solving (Quick Win) Project Flow
R
Recognize
S e 1 Identify tp : Improvement area/ Problem Step 2: Define Problem statement & Goal statement
Phase Exit Review

E
Evaluate

Phase Exit Review

I
Implement

Phase Exit Review

S
Sustain

Phase Exit Review

Step 3: Evaluate the causes for problem

Step 5: Identify the countermeasures / solutions Step 6: Implement the countermeasures / solutions

Step 7: Validate results on full scale & Put the controls in place to sustain the gain. Step 8 : Integrate in daily work by Process Owner & team

Step 4 : List the vital causes

Phase Deliverables
Required • Customer surveys, Interviews • Problem & Goal statement • Business dashboard Tools Box • In Scope/Out of Scope • Customer Survey Methods (focus groups, interviews, etc.) • Problem solving charter Required • Vital causes Required • List of countermeasures/ solutions • Countermeasure / solution implementation plan Tools Box • Countermeasure Matrix • Implementation plan Required Improvement tracking Process Control Plan Process Owner Signoff

Tools Box

Tools Box • Control Charts • Control Plan • Visual Management

• Cause & Effect Analysis

88

Project Sources and Selection Criteria

Sources of Project Generation C-Sat / V-Sat Short Term / Long Term Organizational Goals (Business and operations) Service Level Transaction Quality Resource Utilization Engagement Targets client complaints etc

Six Sigma Project Selection criteria • Business Filters
• • • • contribute to bottom-line of the organization Drastic, long term, risk free Improvement Solution Not known No other teams working on project

Project Filters
• • • • Availability of Data Measurable Time bound Realistic and Attainable
89

Customers Perception
• • Project identification begin not inside the business but outside it Focus on answering the following questions: * How can we make the customer more competitive? * What is critical to the customer’s success? Anything we do that makes the customer more successful inevitably results in a financial return for us. • • Kano Model is one of best technique to collect and understand Voice of Customer (VOC) Business and operational goals can be analyzed by CTQ Drill down or Quality Function Deployment

90

Customers
Who is a customer? One who is paying for your service or product a person who buys goods or services

Types of customers •External or internal •Lost customers •Prospective customers

91

What do customer & shareholders want?
ct, odu t pr , righ me . ed ht ti e I ne at rig d pric oo at g

What do customer wants?
Utility:They buy product or service for a need Time : They want it when they need it Value : They pay for it only if they perceive a value
e tom cus ce voi r

What do shareholder wants?

The business must successfully serve the customers “ Wants “ and Still provide good profits.

ers tom cus ofit py r hap ood p ed g I ne and

der hol ar e Sh ce voi

92

Kano Model

CUSTOMER’S WANTS

•Must Be •Satisfiers •Delighters Delighters
No penalty for not doing them However, if you do them, you get bonus points

Satisfiers
The better we do, the happier the customer is (Plane gets to the destination on time)

Performance

Must Be
The better I do, the less dissatisfied the customer is. (e.g., airlines get no credit for getting bags to you on-time)

Customer Satisfaction
93

Kano Model : Exercise
Exercise 1: Classify the following as Must Be, Satisfiers & Delighters 1. Air Conditioner free with every purchase of four wheeler 2. Availability of hot water in 5 star hotel bath room 3. More mileage per liter of fuel Exercise 2: 1. Identify a Must Be, Satisfier & Delighter from your own process

94

Gather voice of the customer
* Review existing voc data * Decide what to collect * Select tool to collect *Collect data

Voice of Customer : Ways to Capture
• • • • • SURVEYS FOCUS GROUPS INTERVIEWS WORD OF MOUTH COMPLAINTS
95

Voice of Customer : Ways to Capture
Surveys :
A method of gathering information From a sample representing the population these are comprehensive data driven information vehicles that are useful in capturing customer requirements as well as measuring performance against those requirements.

Focus groups:
in this group you group together similar customers and ask for their opinion on the requirements as well as performance against those requirements

Customer interviews:
could be informal or Structured. Informal interviews give good insight into the customer perspective of the product and services and depends on probing open ended questions
96

Voice of Customer : Ways to Capture
Word of mouth:
the customer feedback comes through direct and different channels. Internal: employee feedback External: reports from known sources

Be a customer yourself :
feel the quality of Service yourself

97

Voice Of The Customer
Sample Comments/Data

“I’m Tired Of Having To Call up for this Lousy Product Every Ten Days” “I simply don’t understand what the Customer Support Professional Talks about ” “Why Don’t You Guys Get Your Act Together?!”

“The Phone Must Have Rung Ten Times Before I Got An Answer” “I’m Not Very Happy With Your Service”

What do we do with VOC input?
98

Translating Customer Needs To Requirements
Voice Of The Customer
I Am Always On Hold Or Transferred To The Wrong Person.

Key Issue(s)
Want To Talk To The Right Person Quickly

Requirement
Add Additional Menu Items To Voice System (BAD) Customer Gets To The Correct Person The First Time (GOOD)

I’m Getting My Bill At Different Times Of The Month.

Consistent Monthly Bill

 

Customer Wants Timely Bill (BAD) Customer Bill Received Same Day Of Month (GOOD)

Take Too Long To Process The Application.

Speed Up Loan

 

Customer Wants Fast Loan (BAD) Customer Receives Approval On Customer Request Date (GOOD)

99

Exercise 1.1
Translating Customer Needs (VOCs) To Requirements. 1. Refer to your workbook.
2. You have given a “Voice Of Customer (VOC)” 3. Using these VOC - Identify key issues customer is facing - Identify the specific requirements which will tackle these issues

100

Collection of Voice of Customer (VOC)
Step 1: Get the Voice of Customer (VOC) and the importance rating through survey, feedback, market research, etc. Example: VOC of a BPO company VOC
Utilization of billable resources should be maximum Abandoned calls should be minimum Right & Complete Resolution Talk Time should be reasonable Good Customer Service Skills

Rating
Very Important Important Very Important Important Important

101

Step 2: Quantify the Customer rating numerically. VOC
Utilization of billable resources should be maximum Abandoned calls should be minimum Right & Complete Resolution Talk Time should be reasonable Good Customer Service Skills

Rating
5 3 5 3 3 Very Important: 5 Important: 3 Reasonable: 1

Step 3: Get Voice of Stakeholder.
Voice of Stakeholder Buffer should be minimum Reduce loss of login hours Reduce Rework Increase CSat Score Reduce Customer Complaints Rating Very Important Important Important Very Important Very Important
102

Step 4: Quantify Stake holder's voice.
Voice of Stakeholder4 Buffer should be minimum Reduce loss of login hours Reduce Rework Increase CSat Score Reduce Customer Complaints Rating 5 3 3 5 5 Very Important: 5 Important: 3 Reasonable: 1

103

Requirements

Step 5: Map the Customer Requirements & Stake Holder Requirements to Business and Operational Goals.
Rating Quality High Medium High High Cycle Time

Training Multi Tasking Medium Medium Medium Medium High

Utilization of billable resources should be maximum Abandoned calls should be minimum Right & Complete Resolution Talk Time should be reasonable Good Customer Service Skills Buffer should be minimum Reduce loss of login hours Reduce Rework Increase CSat Score Reduce Customer Complaints

5 3 5 3 3 5 3 3 5 5

High High

Medium Medium High High High Medium Medium Medium

High high

104

Step 6: Calculate importance ranking to Business and Operational Goals.
Requirements Utilization of billable resources should be maximum Abandoned calls should be minimum Right & Complete Resolution Talk Time should be reasonable Good Customer Service Skills Buffer should be minimum Reduce loss of login hours Reduce Rework Increase CSat Score Reduce Customer Complaints Rank Rating 5 3 5 3 3 5 3 3 5 5 High High High 124 Medium Medium Medium Medium Medium 118 42 55 Quality High Medium High High Cycle Time High High Medium Medium Medium High High High Training Multi Tasking Medium

105

Step 7: Identify Key Process Output Variables or CTQ’s (Ys).
KPOV’s (Ys) Quality Cycle Time Ranking 124 118

Identify Six sigma projects to improve these KPOV’s

106

Exercise 1.2 (10 minutes)
Six Sigma project identification through VOC 1. Refer to your workbook.
2. Identify Six Sigma projects for the areas identified through VOC 3. Allowable time : ----- Minutes

107

CTQ (Critical to Quality) & CTQ Tree
The basic reason any process exists for is to satisfy the requirements of the customer / Stakeholders.

The critical customer satisfaction parameters can be broadly categorized under Cost, Quality, Delivery, Service, productivity etc which are called as CTQs CTQ is a Product , Process or Service characteristic that satisfies a Customer Requirement (External & Internal – Business Owners, all functions )

Business CTQ Business Y

Customer CTQ

Internal CTQ Process Y Project CTQ Project Y
108

Business Objective
Voice of customer / Organizational Goals/ Pain Areas

Business Y

Identification of Improvement Areas

Process Y

Customer Satisfaction Score

Service Level Agreement

Transactional Quality

Development Cost

Resource Utilization

Project Y

Six Sigma Black Belt & Green Belt Projects Leading to significant Top line improvement with Customer Satisfaction & Bottom line impact through Revenue generation and cost saving
109

CTQ TREE
A methodology to break the CTQ’s in the over all level to the CTQ’s at sub process level
Example 1: CTQ Tree for the KPOV: Quality Voice & Accent Voice Quality Empathy Cycle Time Example 2 : CTQ Tree for the KPOV: Cycle Time Waiting Time

Quality Data Quality

Culture

Handling Time

110

Examples of Customer CTQs
A Car Purchaser
• • • • • Mileage Spacious Low price/affordable High technology Loan Facility • • • • •

A Prospective Employee
Good Salary Location Preference Flexible Working Hours ESOPs Good working place

Order Management Client
Service Quality • • • • Customer Sat (Ext) Customer Sat (Int) Service CSat (Ext) Service CSat (Int) • • • • Yield Productivity 1st Touch Cycle Time Case Res Cycle Time 111

CTQ Drill Down responsibility Matrix

•Define what is critical (CTQ) to Business •Define your Customer •Explore Customer CTQ •Define Internal CTQ / Critical Business Process

Champion, BB Champion, BB Champion, BB Champion, BB

112

Exercise 1.3 (15 minutes) Drawing a CTQ Tree
1. Refer to your workbook.
2. Draw a CTQ tree for your any one of the project you have selected 3. Allowable time : ----- Minutes

113

Quality Function Deployment (QFD)
What is QFD?
• • QFD begins with Customer. It is also called House of Quality QFD links the needs of the customer with design, development, engineering, manufacturing and service functions. It helps organizations seek out both spoken and unspoken needs, translate these into actions and designs, and focus various business functions toward achieving this common goal. QFD empowers organizations to exceed normal expectations and provide a level of unanticipated excitement that generates value. The basic idea of QFD is to translate the voice of customer, throughout the marketing, R&D, engineering and manufacturing stages of product development.
114

Quality Function Deployment (QFD)
• • It is a structured approach that facilitates the translation of the customers voice into specific requirements. These specific requirements are mapped to the design process production process and delivery processes to determine the process and design requirements. Quality function deployment allows customers to prioritize their requirements Benchmark with competition, help optimize and to attain competitive advantage

• •

115

Quality Function Deployment (QFD)
QFD: When to use ?
• • • • To develop new product or service capability, specially for complex ones. For products and services where clarification and prioritization of efforts on key customer wants is needed. For developing or refining existing internal systems in order to build or product delivery capability. For development of products or services that do not have a clear mapping of the customer requirements and the design attributes.

116

Quality Function Deployment (QFD)
Benefits of QFD
• QFD brings in involvement of all the departments thus improving the communication among them. Provides excellent frame work for deployment of quality cost & delivery. cross functional

Since QFD is a documentation process it helps in reducing mistakes. Brings robustness in the product.

117

Quality Function Deployment (QFD)
How to build one?
1. The first portion of QFD matrix is the Customer Requirements. All the VOC that have been translated into tangible requirements form the Customer Requirements part. 2. The second part, on the right hand side of QFD, is the Planning Matrix. It is used to quantify Customers’ requirement priorities and their perception of the performances of existing products. This is done through Importance Weighting of the Customer Requirements. 3. The third part of QFD is the Technical Requirement section. This describes the product or service in the terms of the company and it includes all the measurable characteristics of the product / service that might be related to meet the customers’ requirements. Often an additional row is included to illustrate the direction in change of variables which is supposed to result in improvement in product / Service performance. 4. The fourth part of QFD is Interrelationships section. This is used to translate the customer requirements into the technical characteristics of the product / service. Inter-relationships between each of the Customer requirements and technical characteristics are analyzed. Generally, the level of inter-relationship is shown with the help of symbols denoting a 3 point scale (High, medium, low ). Each level of inter-relationship is assigned a score. Generally a score of 5-3-1 is used to denote High-medium-low-none.
118

Quality Function Deployment (QFD)
5. The fifth part of QFD is the Roof. This is used to denote the areas where the technical requirements characterizing the product or service support or inhibit each other. Where there is a deterioration because of interaction, “-” sign is used. Where there is an improvement in one characteristic because of the other, “+” sign is used. 6. The final component of QFD is the Targets. It summarizes the conclusions drawn form the matrix and team’s discussion. It consists of three parts: a) Technical Priority b) competitive Benchmarks and c) Targets. a) Technical Priority signifies the relative importance of each of the technical requirement in meeting the Customers’ specified needs. It is calculated by summing up the products of interrelationships weightings with the overall weighting in the planning matrix. b) Competitive Benchmarking: Each of the technical requirements identified as important characteristic of the product or service are compared vis-à-vis the existing product and the competitors’ product. c) Targets: The final outcomes of QFD are the targets. These are a set of target engineering values to be met by the new product or service.

119

D

M

A

I

C

Quality Function Deployment (QFD) Structure
3
Roof

2

Technical Requirements

4 1
Customer Requirements INTER- RELATIONSHIPS Planning Matrix

5

6 7

Techincal Priorities Targets

120

STEP - 1

Customer Requirement : Basically focus on desired deliverable/outcomes from the process Customer Importance : Rating of Customer requirement on a scale of 1-5

3
Roof

2

Technical Requirements

4 1
Customer Requirements INTER- RELATIONSHIPS Planning Matrix

5

ce

121

STEP - 2

3

Technical Requirement : This describes the product or service in the terms of the company and it includes all the measurable characteristics of the product / service that might be related to meet the customers’ requirements ; Basically focus on input parameters which will have direct/indirect impact on deliverable/outcomes of the process;

Roof

2

Technical Requirements

4 1
Customer Requirements INTER- RELATIONSHIPS Planning Matrix

5

Technical

nce

122

STEP - 3

Roof : It shows the inter-relationship between two or more inputs Parameters ` + ’ means positive relationship ` - ’ means negative relationship

+

+

3
Roof

2

Technical Requirements

4 1
Customer Requirements INTER- RELATIONSHIPS Planning Matrix

5

ce

123

STEP - 4

3

Inter-Relationship Block : It shows the interrelationship between inputs parameters and output deliverable ` 5 ’ means Strong relationship ` 3 ’ means Medium relationship ` 1 ’ means Weak relationship ` 0 ’ means No relationship

Roof

2

Technical Requirements

4 1
Customer Requirements INTER- RELATIONSHIPS Planning Matrix

5

ce

124

STEP - 5

Planning Matrix : Our Product : Rating of existing product/service on scale of 1-5 against customer requirements Competitor A/B : Rating of Competitor product/services against our customer requirements

3

Roof

2

Technical Requirements

4 1
Customer Requirements Planning INTER- RELATIONSHIPS Matrix Competitor Rating shall be benchmark rating

5

ce

125

STEP - 5

3

Planned Rating : Target rating for customer requirement based on competitor rating Improvement Factor : Ratio of Planned rating and Our product Rating Sales Point : Rating of Sales team (sales perception)on ability to sell the product/services based on how well each customer need is met, on scale of 1.1, 1.3 and 1.5

Roof

2

Technical Requirements

4 1
Customer Requirements Planning INTER- RELATIONSHIPS Matrix 1.1 : Low inter-relationship
1.5 : Strong inter-relationship

5

ce

1.3 : Medium inter-relationship 126

STEP - 6

3

Overall Weighting : Product of Sales Point, Improvement factor and Customer Importance Technical Priorities : signifies the relative importance of each of the technical requirement in meeting the Customers’ specified needs. It is calculated by summing up the products of interrelationships weightings with the overall weighting in the planning matrix.

Roof
5 5 8.7 13 43.5 65

2

Technical Requirements 3 5.9 17.7
3 1 3 5 10.8 4.4 7.3 32.4 4.4 21.9 39 224

4 7.8

1

Customer Requirements

INTER- RELATIONSHIPS

Planning Matrix

5

e
127

STEP - 7
Targets : The final outcomes of QFD are the targets. These are a set of target engineering values to be met by the new product or service.

3
Roof

2

Technical Requirements

4 1
Customer Requirements INTER- RELATIONSHIPS Planning Matrix

5

e
128

4 House QFD
Customer Measurements (HOW’s)

r e mt s u C o s QT C ’ ) s TAH W ’ (

House of Quality #1
r e mt s u C o s ne m r us ae M t e ) s TAH W ’ (
Customer Customer House House

Internal Actions (HOW’s)

House of Quality #2
l an e n r t I s not c A i ) s TAH W ’ (
Function Function House House

Process Requirements (HOW’s)

House of Quality #3
ss ec o P r s ne m ri uqe R t e ) s TAH W ’ (
Process Process House House

Process Variables (HOW’s)

House of Quality #4
Control Control House House

Define

Improve

Control
129

Points to Remember in QFD
Do’s
 Focus on the end-user

Don’ts

Charts as the ends & not the means  Find reasons to succeed, not excuses for failure  If there are no “tough spots” the first time, it probably is not being done right !
130

Don’t apply QFD on everything Avoid too much chart focus Don’t hurry up & get done

A Restaurant Example – Manila Pizza
CTQs from VOC (WHAT’s) – – – – – – Type of Menu Economic aspect Presentation of staff Type of service Quality of service Quality of Food 3 4 3 3 4 5

Importance Rating

Measurements on CTQs (HOW’s) – – – – – – – – – – Varieties available in terms of Chinese, Indian, Continental food Price Availability of parking space Food served at right temperature Waiting time for food/order Options to pay ( Cash/Debit card/Credit card) Cleanliness of cutlery / attendant’s attire Staff courtesy Taste of food Ambience

131

Define

Capturing Customer Requirement along with importance rating

132

Improve

133

Control

134

Exercise 1.4 (30 minutes)
Preparing the first two houses of the QFD 1. Refer to your workbook.
2. Prepare the first two houses of the QFD for a given example

135

Brainstorming & Multi-voting Example
• Below table illustrates the number of group members & total ideas generated

Now each member gives votes to ideas (maximum one vote to each idea) & below is the vote distribution for ideas

Top ideas whose vote count adds upto 32 are as below (30 is not possible), there are 7 such ideas

136

Brainstorming & Multi-voting Example
• Take these 7 ideas for further round of multi-voting

Give each member 4 votes (round off 50% of 7 to next higher integer) & ask them to distribute these 4 votes among these 7 ideas. Below could be the distribution in this fresh round of voting

Take top ideas whose vote count adds upto 9

This list is manageable

137

Points to Remember in Brainstorming
• • • All ideas are important, don’t out rightly reject any idea Participation should be ensured from all team members To ensure this, project teams could use the round-robin method of idea generation It’s advised to use the Black Belt as the facilitator here

138

Exercise 1.5 (15 minutes)
Multi-voting 1. Refer to your workbook.
2. Do a multi-voting exercise for a given example

139

A Right Project Selection is key to success
Right Project Selection • Selecting the right project can have a tremendous effect on your business. If done properly, • Processes will function more efficiently in 3 to 6 months, employees will feel satisfied and • Appreciated for making business improvements and ultimately stakeholders will see the benefit Wrong Project Selection • If project selection is done improperly, a project may be selected that doesn't have the full business buy-in, project roadblocks may not be removed due to other business priorities, the team may feel Ineffective and the end result may be less than ideal. No one wins in this situation

140

Six Sigma Project Selection Filters 1. Company Filters and 2. Six Sigma Filters
Once the potential projects are identified next step is to verify, whether these are six sigma project or not ? There are two type of filters to qualify the potential projects as six sigma projects. They are 1) Company filters and 2) Six Sigma Filters

141

1. Company Filters
Aligned with Aligned with company company Strategy? Strategy? Yes No Does project lead Does project lead USD--- min. per annum? USD--- min. per annum? 1) Is it aasevere 1) Is it severe pain in the process pain in the process 2) Is documental proof 2) Is documental proof available to prove pain available to prove pain 3) Is the pain sensed by 3) Is the pain sensed by process experts process experts No Why do it? Why do it? Drop Drop No

Yes

Yes (all 3)

Can ititbe completed in Can be completed in 44to 66months? to months? Yes

No

Scope is too large. Scope is too large. Consider making Consider making Multiple projects. Multiple projects.

Move to Six Sigma Filters

142

2. Six Sigma Filters
Is the solution Is the solution already known? already known? No Is needed data Is needed data available to quantify the available to quantify the problem? problem? Yes Is the root Is theyes root cause known? cause known? No Is someone else Is someone else working on the problem? working on the problem? no No Yes Implement the other Implement the other team’s solution team’s solution Yes Derive and implement Derive and implement the solution the solution No Implement aadata Implement data collection plan collection plan yes Implement the Implement the solution solution

Six Sigma Potential Project

143

Types of Projects
1. Projects cutting across processes focusing on CTQ. 2. Projects cutting across CTQ focused on process. 3. Projects focusing on a specific CTQ for a process.

144

SS Project Execution Process Map
Client & Top Management

Voice Of Customer & Pain Areas

Champion

Recognition of Improvement opportunity

Problem Definition Project Agreement & Target setting Project Review at Pre-defined Frequency (MBB & Champion)

MBB

Project Evaluation & Methodology selection (DMAIC / DMADV)

Finance Controller

Initial Financial Validation

Final Financial Validation

Project Validation, Closure and signoff by champion, MBB and Financial controller

BB

Project Charter (Champion / sponsor) Project Kick Off (MBB & Champion are secondary resp.) Project Execution ( DMAIC / DMADV ) (MBB & Champion are sponsor )

GB & Team

Integration & Deliver

Improvement Project Execution
1- MBB 1- BB, 1- GB 4 - PA DMAIC Project

Project 1

Project 2 Project 3

Business Process Improvement

1- BB, 1- GB 4 - PA DMADV Project

Project 1

Project 2 Project 3 Project 2 Project 3
146

1- GB 4 - PA REIS Project

Project 1

Six Sigma DMAIC Methodology

147

Overview of DMAIC Methodology
 DMAIC Vs DMADV  DMAIC Methodology – Define – Measure – Analyze – Improve and – Control

148

DMAIC Vs DMADV
IMPROVEMENT PROCESS CREATION PROCESS

(DMAIC)
Define, Measure, Analyse, Improve and Control Improve processes, products, services, and organisation to 6 Sigma quality

(DMADV)
Define, Measure, Analyse, Design and Validate Create new processes, products, services, and plants to 6 Sigma quality. It is also Called DFSS

DM

AI C

V AD

Leverage and sustain the gains achieved by improvement and creation with BPMS, QMS, COPC etc
149

DM

Process Management
PROCESS MANAGEMENT

DMAIC Methodology

Step 5: CONTROL

Step 1: DEFINE

DMAIC Define Define project goals & customer (internal & external) deliverables Measure Measure the process to determine current performance

DMAIC
Step 4: IMPROVE

Step 2: MEASURE Improve Improve the process by eliminating
defects Control Control future performance

Analyze Analyze and determine the root cause of the defects

Step 3: ANALYZE

150

Define
Objective:
is to define the problem in a clear manner and in a way that is related to an internal or external customer.

Deliverables:
• • • Fully trained team, committed to work on improvement project. Customers identified and defined (CTQ’s) Project charter and Process map

• • • •

Check points:
Trained team Customers (and CTQ’s) Project Charter Business process mapping (SIPOC) Process Map
151

Measure
Objective
to measure what you care about most, making certain that your measurement approach is sound and not based on questionable formulas or data.

Deliverables:
• Key measures identification, data collection plan, data on process variation performance baseline, sigma level calculation.

Check points:
• • • • • • • Identification of Key measures - Defining high impact defects Data Collection Plan - Data collection Measurement system analysis Process Variation Long term and short term variability accounted for. Performance Baseline/Sigma Calculation Measure baseline process performance (capability, yield, sigma level).
152

Analyze
Objective
is to look for the critical root causes of the variability by applying statistical tools to determine what factors are contributing to the problem.

Deliverables:
• Data and process analysis, root cause analysis, quantifying the gap/opportunity.

Check points:
• • • • Data and Process Analysis – Identification of gaps between current performance and the goal performance Root Cause Analysis- Verify and quantify the root causes of variation Quantifying the Gap/Opportunity - Determine the performance gap.

153

Improve
Objective is to determine and confirm the optimal solution. Deliverables: • Generate (and test) possible solutions, select the best solutions, design implementation plan Check points: • Generating (and Testing) Possible Solutions • Selecting the best Solution (s) • Designing Implementation Plan

154

Control
Objective
is to be sure the quality improvements remain in effect and the problem does not recur.

Deliverables:
• Documentation and implementation of monitoring plan, standardized process, documented procedures, response plan established and deployed, transfer of ownership (project closure).

Check points:
• • • • Monitoring Plan Process Standardization Documented Procedures Transfer of Ownership (Project Closure)

155

Define Phase

156

Define
Define Opportunit ies

1.0

Main Activities
Step 1: • Identify customer & their care about. • Convert their needs in to Critical to Satisfaction (CTS) i.e. CTQ – Critical to quality, CTC – Critical to Cost & CTD Critical to Delivery. Step 2: • Develop Project Charter reporting improvement opportunity and effective project team

Defi ne

Main Tools used
Project Charter

Define Phase Outcomes
Baseline

VOC

Problem Statement Goal Statement Project team

Business Case Project Scope Project Timeline

Gap Analysis

• • • • • • •

Target

SIPOC OC SI Process Process Map

List of Project CTQs QFD/CTQ Tree Signed off Project charter Team Charter CCRs SIPOC Macro Level Process Map
157

Define Phase Topics
 Project Charter  Team Charter  SIPOC  Process Mapping – Top Down Model – Cross Functional Process Mapping & – ICOM model

158

Project Charter

159

Project Charter
What Is A Project Charter?
• A project charter is a document that provides purpose and goals for an improvement team

Six Major Elements of a Project Charter
1. Business Case Explanation Of Why To Do This Project 2. Problem And Goal Statements Description Of The Problem/Opportunity And objective In Clear, Concise And Measurable Terms 3. Project Scope Defined project beginning and end points 4. Milestones Key Steps And Dates To Achieve Goal 5. Roles People, Expectations, Responsibilities 6. Financial Impact Savings, impact on bottom-line

160

Business Case
Business Case Development • The business case describes the benefit for undertaking a project. The business case addresses the following questions: – Does this project align with other business initiatives? – What is the focus for the project team? • • • What impacts will this project have on other business units and employees? What benefits will be derived from this project? Has the value of the benefits been quantified?

161

Problem Statement
Description Of The “Pain”

What Is Wrong Or Not Meeting Our Customer’s Needs? • Who is the customer of the process ?
• What is the process ?

When And Where Do The Problems Occur? How Big Is The Problem? What’s The Impact Of The Problem?
• • • If I let it be what will happen ? If I reduce it what will happen ? If I increase it what will happen ?

162

Problem Statement Example
Poor Example:
Weak Problem statement Our Fatal accuracy score is at 80% against the client target of 95% and we Need to improve it

Improved Example:
Fatal accuracy score (what) this quarter (when) has been observed to be at 80% for the last 4 months (extent) against the client target 95% which has significant impact on customer satisfaction. (impact)

163

The Problem Statement
Key Considerations/Potential Pitfalls

• • • • • •

Is The Problem Based On Observation (Fact) or Assumption (Guess)? Does The Problem Statement Prejudge A Root Cause? Can Data Be Collected By The Team To Verify and Analyze The Problem? Is The Problem Statement Too Narrowly or Broadly Defined? Is A Solution Included In The Statement? Would Customers Be Happy If They Knew We Were Working On This?

164

The Goal Statement
Project Objective

• Definition of The Improvement The Team Is Seeking To Accomplish • Starts With …. Reduce, Eliminate, Control, Increase. • Tends To Start Broadly – Eventually Should Include Measurable Target And Completion Date • Must Not Assign Blame, Presume Cause, Or Prescribe Solution!

165

SMART Problem And Goal Statements

Specific Measurable Attainable Relevant Time Bound
166

Goal Statement Example
Poor Example: Put in place a Transaction monitoring evaluation system to increase the fatal accuracy. Improved Example: Increase the fatal accuracy from the existing 80% to 95% by the end of first quarter 2005.

167

Project Scope
• What Process Will The Team Focus On? • What Are The Boundaries Of The Process We Are To Improve? Start Point? Stop Point? • What Resources Are Available To The Team? • What (If Anything) Is Out Of Bounds For The Team? • What (If Any) Constraints Must The Team Work Under? • What Is The Time Commitment Expected Of Team Members? What Will Happen To Our “Regular Jobs” While We Are Doing The Project?
168

8 Steps to Scope a Project
1. Identify the customer • Who receives the process output? • May be an internal or external customer 1. Define customer’s expectations and needs • Ask the customer • Think like the customer • Rank or prioritize the expectations 1. Clearly specify your deliverables tied to those expectations • What are the process outputs? • Tangible and intangible deliverables • Rank or prioritize the deliverables • Rank your confidence in meeting each deliverable 1. Identify CTQ’s for those deliverables • What are the specific, measurable attributes that are most critical in the deliverables • Select those that have the greatest impact on customer satisfaction

169

8 Steps to Scope a Project
5. Map your process • The process of producing the deliverables • The process as it is working prior to the project • If you are delivering something, there is a process, even if it has not been formalized 6. Determine where in the process the CTQ’s can be most seriously affected • Use a detailed flowchart • Estimate which steps contain the most variability 7. Evaluate which CTQ’s have the greatest opportunity for improvement • Consider available resources • Compare variation in the processes with the various CTQ’s • Emphasize process steps which are under the control of the team conducting the project 8. Define the project to improve the CTQ’s you have selected • Define the defect to be attacked

170

Importance of Scoping
• Poor/improper scoping may result in following: – Team loses interest in the project – Project becomes difficult to implement – Even after implementation, the desired/significant benefits are not seen – Team focuses on trivial pain areas, and missing out the vital ones – Process selected is too broad to handle or too small to realise breakthrough improvements.

171

Milestones
• A preliminary High Level Project Plan with dates • Tied to phases of DMAIC process • Should be aggressive (don’t miss “ window of opportunity “) • Should be realistic ( don’t force yourself into corrective rather than preventative solutions)
1-May Define Measure Analyze Improve Control 7-May 16-Jun 23-Jun 7-Jul

Week : Review Charter with Champion Collect VOC Complete Map Validate Map Collect Data

1 X

2

3 4

X X

X X X X

172

Take Aways –Project Charter
• • • • • Key elements of a charter include: Business Case, Problem and Goal Statements, Project Scope, Milestones, and Roles. The team charter is a vital part of the project’s overall success. It communicates the project direction to all members of the team. A Problem Statement describes what is wrong while a Goal Statement defines the improvement objective. A charter clarifies what is expected of the project team, keeps the team focused, keeps the team aligned with organizational priorities, and transfers the project from the champion to the improvement team

173

Period

Project Charter
Goal statement:
Problem Statement :

Example

Start
1 Mar 05

End
30 May 05

Project Sponsor MBB Project Leader Black Belt Name
MEMBERS

Responses
xxxxxx
Xxxx (YB) xxxxxxxxx

Reduction of rework from 38% to 5%

Sign

The rework percentage in this quarter (Apr’05 to June’05) has been observed to be at 38% based on the system reports which is leading to over stretching of PE to meet the production targets.
In-scope :
All exiting sub – processes in the process

jkafkj jkjklaj dxcv Target

Out-scope :
Any new sub-process to be adding with in the project period

Measurable Goals : Rework reduction Unit: Percentage

Current

σCurrent σTarget

38

5

2.5

4.2

Business case

Estimated Saving Expected, ( 1 Fin. Year)
Revenue Enhancement Expense Reduction

Rework is one of the main concern area in our xxx process. Due to rework, most of our PE are over stretching their working hours. Our quality percentage is being maintained below the SLA. The client also concern about the issue and suggested to take action with in 3 months to improve the same. Failure of the same may lead to employee attrition and loss of business.
IMPCHG/QLTY/TMPL/6111 Version 1.0, Copy if printed

Loss Avoidance Costs

50,000 USD

Basic Schedule Define 16.03.05 Measure 25.03.05 Analyze 07.04.05 Improve 21.04.05 Control 06.05.05

174

Project Scoping responsibility Matrix

Scope the Project Develop Team Charter

GB, BB, Champion GB, BB

175

Exercise 1.6 (15 minutes)
Project Scoping 1. Refer to your workbook.
2. Define in-scope & out-scope given project example

176

Team Charter

177

Team Charter
Team Roles Refresh Sponsor • Review the project progress once a month • Provide/modify direction/alignment with business realities • Provide resources required from time to time • Remove Roadblocks Black Belt/MBB • Provide content knowledge on Six Sigma tools to the team Project Leader • Keep the team focused. Arrange logistics and team meetings and raise issues with Sponsor Team Member (s) • Participate in meetings, collect data, do analysis using Quality tools, provide subject matter expertise related to process Team Charter explains following •How do you want the champion to work with the team? • Is the team’s role to implement or recommend? • When must the team go to the champion for approval? What authority does the team have to act independently? • What and how do you want to inform the champion about the team’s progress? • What is the role of the team leader and the team coach? • Are the right members on the team? Functionally? Hierarchically?

178

Exercise 1.7 (45 minutes)
Team Charter – Breakout Activity 1. Refer to your workbook.
2. Practice writing problem and goal statements

179

A Good Project
• A good project: • Problem & goal statement clearly stated • Defect and opportunity definition is clearly understood • Does not presuppose a solution • Clearly relates to the customer and customer requirements • Aligns to the business strategy • Uses the tools effectively • Data driven • A bad project: • Project is not focused – scope is too broad • Not clear on what you are trying to fix • Solution is already known/mandated without proper investigation • Difficult to see linkage to customer needs • Working on a project that will not move the needles • Little or no use of tools
180

SIPOC

181

SIPOC
SIPOC:
• A tool to identify all relevant elements of a process • Helps to understand a complex process better • Graphic display of steps, events and operations that constitute a process S - Suppliers I - Inputs Process

P -

O - Outputs C Customers

182

SIPOC
Suppliers
– People who provide input to the process

Inputs
– Information, material etc., goes into the process from some other group of people (supplier)

Process
– Process is a series of activities that takes an input, adds value to it and produces an output for a customer

Outputs
– Output of a process creating a product or service that meets a customer need

Customers
– Users of the output
183

Information Flow & Measures
Flow
Requirements Requirements

Thinking

S
Suppliers

I
Inputs

P
Process

O
Outputs

C
Customers

Input Measures

Process Measures
Measures That Are Internal To Your Process. They Include Quality and Delivery Measures Important To Your Internal Customers As Well as Waste and Cycle Time Measures.

Output Measures

The Key Quality and Delivery Requirements Placed On Your Suppliers.

Output Measures Are Measures Used To Determine How Well Customer Needs And Requirements Are Met. 184

SIPOC: Uses
• To know who supplies input to the process • To know what are the inputs to the process • To know step by step flow of process • To know the outputs of process • To know the customer of a process

185

Steps to create SIPOC
1. Attaining a full understanding of all the steps of a process. This is done by looking at processes from customer’s point of view. 2. Clearly define the process start and end boundaries 3. Brainstorm list of all process steps. Go on the floor, walk through the process and interview people working on the process as needed. 4. Recorded process steps using a sticky-note method. In this method each step in the process is recorded on a sticky-note and built in front of the individual completing the work. 5. Discuss, review & modify process step sequence to agree on “As Is” process map. 6. Add suppliers, inputs, outputs, customers 7. Add Input, Process, & Output measures
186

SIPOC: Format
Supplier A B Inputs X1 X2 Process Output Y1 Y2 Customer Alpha Beta

C

X3

Y3

Gamma

187

SIPOC: Example 1: Contract Management : Contract Publishing
SIPOC LEVEL I

Contract Management : Contract Publishing

Supplier
Scanning Team

Input
Electronic Documents Job Aid: Four-Eye principle, Commodity Classification, Template from Emptoris, Asignatory list

Process
1.Receive scanned images 2.Sanity Check

Output

Customer

3.Assign Contract Number

Contract Record

ABC Bank

Global SourcingABC Retained

4. Upload Data Vendor folder in shared drive

P2P Arthur

5.Create Vendor Folder in the shared drive Vendor Number from SAP, Contract template from Emptoris

6. Review Contract record

Contract Number.xls, Contract Information Sheet

7.Publish Contract

8.Update Contract Tracking Sheet

188

Contract Management : Contract Enquiry
SIPOC LEVEL I

Contract Management : Contract Enquiry

Supplier
Global SourcingABC Retained

Input
Query Received

Process
1. Receive Query and review

Output
Resolution Document

Customer

2. Update Query tracker sheet

ABC Bank

Job Aid 3. Verify Authorization P2P Contract Management Onshore Team Communication to the Enquirer Contract Number.xls, Authorization Sheet 4. Check Availability P2P Arthur

5. Get information/document

6. Communicate to the user

7. Close query in the tracker

189

Contract Management : Contract Review
SIPOC LEVEL I

Contract Management : Contract Review

Supplier
Global SourcingABC Retained

Input
Electronic Documents

Process
1. View & analyze electronic document

Output

Customer

Job Aid

2. Check Contract Compliance

Review Record

ABC Bank

P2P Contract Management Onshore Team

3. Validate Contract Data Emptoris P2P Arthur

4. Check terms & conditions Vs ABC standard terms & conditions Contract Number.xls 5. Create Contract Summary records

190

SIPOC: Example 2: Call Handling
S
Agents Team Managers

I
Incoming Call ACD

P
Call Opening Spanish?

O
Y
Completed Call Interpreter Performance Reports

C
Caller Client

Confirmation Auditors IVR Verification Number of agents, Managers, Auditors, Certified / On training Experience /Vintage Process Knowledge Listening / Accent, speaking & keyboardin g Skills App Number of ACD calls, Pattern, Q Spanish? Nature of Query App Response Uptime of ACD, Alltel Noise? No of lines per step, Time per step, Time holding for response, Call Accuracy, Quality, Cycle Time Assistance Response Escalate?

Internal Customers

Speed of answer

Y

Calls abandoned & Time Quality Talk Time Wrap Time Hold time Resolved ?

Satisfactio n score ASA Agent productivit y Talk Time Wrap Time % Abandoned Aband Time

N
Closing After Call Work

Input Measures

Process Measures

Output Measures AHT,ACW

191

Exercise 1.8 (20 minutes)
SIPOC
1. Refer to your workbook. 2. Draw the SIPOC for your process

192

Process Mapping

193

Process
“Process is a series of activities that takes an input, adds value to it and produces an output for a customer ’’
RESOURCE S

INPUT

PROCES S MEASURE S SLAs

OUTPU T

194

Process Mapping Definition

Process mapping is a graphical display of steps, events and operations that constitute a process.

195

Why Process Mapping?
• • • • • • • Validates our understanding of the process with the client (The way work gets done) Identifies hidden process steps Helps to understand weak links in the process Eliminate the ambiguity & brings standardization Helps to identify data collection point during measure phase Imparts training to others To design the “ to be” process
196

Flowchart Vs. Process Map Flowchart Process Map

May only shows the connected steps in a process

Goes further showing who is doing what, with whom, when, for how long and with what documents. It shows how operational decisions are made

197

Process Map Symbols Symbol Meaning
Start or End of Process Activity or Process Step Decision or Inspection Point Delay Connector Document Data Direction of Flow
198

Basic Types of Process Maps • Linear Process Maps
It can be used when – The process is not very complicated – Micro level (detailed) map is “dropped down” from the macro (high level) process steps.
Call Opening Confirmation Verification Assistance Response Closing

• Cross Functional Process Maps
(also known as “Swim Lane process map”)

Dept 1

Step 1

It can be used when – The process complicated consists of several activities between different departments or groups.

Dept 2

Step 1

Step 4

Dept 3

Step 3
Dept 4

199

“As Is” Process Map in define phase
• Objective of “As Is” process map in define phase is to identify hidden process steps in process. • It helps to understand weak links in the process • It also helps to identify non value adding process steps in the process

200

Steps to create “As Is” Linear Process map
1. Attaining a full understanding of all the steps of a process. This is done by looking at processes from customer’s point of view. 2. Clearly define the process start and end boundaries 3. Brainstorm list of all process steps. Go on the floor, walk through the process and interview people working on the process as needed. 4. Record individual process steps on the sticky-note / post it

.

5. Discuss, review & modify process step sequence to agree on “As Is” process map.
201

Analyze “As Is” Linear Process map
Next Step : Analysis of As Is process map 1. Analyze process map to identify NVA’s. (identify unnecessary approvals, isolating rework, removing duplicate forms and investigating decisions leading to no results) 2. Identify data collection & decision making points. 3. Compare with “To Be” process map to identify the gaps.

202

“As Is” Linear Process map : Example 1
Call Opening
Collect data on % Spanish calls

A

Spanish? No

Yes

Interpreter

Response

Confirmation

Assistance
Collect data on % escalated calls

Yes Verification NVA On hold Escalate? No Call closing
Collect data on % accuracy

Assistance After call work

A

NVA

= Non value added activity

203

“As Is” Linear Process map : Example 2
Business Unit A Are Metrics in place? Define Metrics & implement data collection plan

Business Process

Identify Critical Process

Validate the Metrics

Study Process

Process Base lining

Identify Customers List out Customer Expectations/Deliverables

Does Gap Exists? Yes Does Process exists? Yes

No

Explore need of performance excellence Apply DMADV / Process Re Engineering

No

B

Does Process Exists? Yes A

No

B

Long Term Approach – Apply DMAIC Quick wins – Fix it

204

Steps to create “As Is” cross functional map
1. Attaining a full understanding of all the steps of a process. This is done by looking at processes from customer’s point of view. 2. List all departments or groups involved in the process. (Record in left column of swim lanes) 3. Clearly define the process start and end boundaries 4. Brainstorm list of all process steps. Go on the floor, walk through the process and interview people working on the process as needed. 5. Record individual process steps on the sticky-note / post it. 6. Discuss, review & modify process step sequence to agree on “As Is” process map.

205

Analyze “As Is” Cross functional Process map
Next Step : Analysis of As Is cross functional process map 1. Analyze process map to identify NVA’s. (identify unnecessary approvals, isolating rework, removing duplicate forms and investigating decisions leading to no results) 2. Identify data collection & decision making points. 3. Compare with “To Be” process map to identify the gaps. 4. Identify the cross functional complexities involved in the process.

206

Cross Functional Process Mapping
Function 1
Step 4 Step 5

Step 3

Function 2
Step 2

Function 3

Step 1

Step 8

Step 9

Function 4

Step 6

Step 7

207

Client & Top Management

Voice Of Customer & Pain Areas

Example 1

Project Sponsor

Recognition of Improvement opportunity

Problem Definition Project Agreement & Target setting Project Review at Pre-defined Frequency (MBB & Champion)

MBB

Project Evaluation & Methodology selection (DMAIC / DMADV)

Finance Controller

Initial Financial Validation

Project Validation, Closure and signoff by champion, MBB and Financial controller

BB

Project Charter (Champion sponsoror.) Project Kick Off (MBB & Champion are secondary resp.) Project Execution ( DMAIC / DMADV ) (MBB & Champion are sponsoror.)

GB & Team

Integration in Deliver

208

Example 2 : Photo Process
Photographer
Take Photograph Return home Place film in Pre paid envelope Send to Processor 1 Day Delay 3 days Process Negative Produce Prints 1 hr Inspect N Await Photograph Send to Photographer 3 days Y OK ? Package for posting

Postal System

Processor

Photograph to be framed

Inspect Photograph Y Frame N Store in album

The flowchart below depicts the activities involved from taking a photo to developing, framing and storing the result.

209

Example3: Import process
Imports Planning Get Options details from Logistics if reqd. Supplier Finance Forwarder / Clearing Agent Customs

Plan & Schedule

Obtain price & Prepare P.O Approve P.O Fax / Mail copy to supplier Direct Payment or Check payment Site Draft terms LC Request for LC Open LC & send Copy to Imports Prepare Order Ack & Send to Company

Verify LC OK Inform & send Copy to supplier Follow-up material A

Not OK

Verify correctness Of LC & Inform

210

Example3: Import process
Imports A Arrange material Collect material Arrange shipment & Details to company/Supplier Send documents to company And Supplier Prepare checklist for Internal circulation Advise finance for Insurance Send to clearing agent For preparation of BE Receive info from Bank Send to Imports for certification Arrange for payment & Retire documents Send documents to Clearing agent Send documents to Imports Prepare Bill of Entry & Files with Customs B Send documents To bank Arrange Insurance Supplier Finance Forwarder / Clearing Agent Customs

Check & certify docs

211

Example3: Import process
Imports Supplier Finance Forwarder / Clearing Agent B Inspect & ascertain Customs Duty Customs

Inform Company - Imports Prepare RFC to finance customs duty Prepare payment and Send to clearing agent Deposit amount in Customs & clear the goods

Inform Company-Imports for Collection of material Inform W.H to collect The material

W.H – Collect the material & prepare GR

Move to Stores.

212

Other Types of Process Maps

• Top Down Model • ICOM

213

Macro to Micro (M2M) Process Map
It can be used when - Team wants to pay attention to the important process steps in detail.

The Process
Step 1 Step 2 Step 3 Step 4

The Sub-Process

The Micro-Process

214

Example 1 : Quotation Sub-Processes
Research Create Proposal Refine Proposal Accept Quote

Previous Agreement Look up Previous Purchase History Look up Previous Quote History Look up Cross geo customer quoting Look up

Guided selling tool maps requirements to offerings Create initial proposal with all relevant options
Optional

Refine proposal (iterative)

Quote Acceptance

Create final proposal

Profile defined
Optional indirect

Escalate concession request

Validate customer and proposal precredit check credit rating lookup

Concession process 215

Other process mapping models (additional information)

ICOM
Input:
The material / information which enters in to the system with specified process capability
Input

Control

Process

Output

Control :
The systems, policies which control or governs the process.
Mechanism

Output :
The value added material / information through the process and entitled for next process
Single Process

Mechanism :
The entity which may consume or act as resource for processing. Eg. Machine, computer, Agent

fsdafdf

High Level Process Or Multiple processes

216

ICOM Model (additional information)
It can be used when - Team want to map processes hierarchically

Level 0

Business/Enterprise

1

Level 1

Basic process structure of the business

Increasing level of detail

1.1

Level 2

1.2 1.3

Sub-process

1.3.1 1.3.2 1.3.3

Level 3

Activities within Sub-process

217

ICOM Model – Example (Process : Call Handling )
SOP SLA Customer Agent press Call Button to attend call Database Rules of verification Rules of verification Data base Data base Identified Identified Type Connected Genuine Identification Agent of call Obtaining the Call caller Of Type Requirement Verifies of call Of caller Caller & authorization Server, Software Agent training Server, Software Agent training Soft skills Caller’s requirement Database SOP Processed information Searching and processing of information Server, Software Agent’s training & Process Knowledge SOP SLA Completed Completed call ACW Agent does after Call work (ACW) Server, Software Agent’s training & Process Knowledge Agent ready to take Agent press to next call button to give access to attend next call SOP SLA Peripheral

Peripheral

Database Information as requested Agent provides by caller information to caller Answered call Soft skills

Hold call and Obtain information from supervisor

No Need to verify from supervisor? Yes

SOP SLA Termination of call

Satisfied Agent check caller for the Caller satisfaction Soft skills Agent’s training

Peripheral

218

Exercise 1.9 (20 minutes)
Process Mapping
1. Refer to your workbook. 2. Draw the process map for your process

219

Measure Phase

220

Main Activities

Measu re
Tools used

Step 3: • Take the snapshot of the process, how the process performing currently & fix the baseline. Step 4 : • Validate the measurement system from which we collect the data.

Measure Phase Outcomes

Data Collection Plan

Operational Definitions • Measurement System Process Analysis Map Gage R&R • Data Collection Formats and Plans • Process Baseline • capability • Specification limits, FMEA Baseline and target • target, defect Benchmarking setting definition for Project Preparation FMEA Process Improve Y(s) Preparation FMEA Process Improve
221

Measure Phase Topics
 Data Collection Plan – Operational Definition – Develop Measurement Plan – Data Collection – Data Display and evaluation of Data Fundamentals of Minitab Basic Statistics – Measures of Central Tendency – Measures of Dispersion – Probability Distribution

 

222

Measure Phase Topics
 Gage R&R – Gage R&R for Continuous Data – Gage R&R for Attribute Data  Process Capability  Process Sigma Level Calculations

223

Why to Measure ?
If we can’t accurately measure something We don’t know enough about it

We can’t control it We are at the mercy of chance!!!

224

Science of Six Sigma
When you measure what you are speaking about and express in numbers, you know something about it. Scientific Explanation : Very little progress is possible in any field of investigation without the ability to measure. The progress of measurement is in fact the progress of science ! Non Scientific Explanation : If you can not measure, just forget it ! It will be a sheer waste of time.

Without data you are just a loud mouth with an opinion ..
225

Data Collection Plan

Foundation of six sigma is Data based decision making, Data drives decisions and actions !!!
226

What is data Data are measurements or observations we record and use to understand, characterize, optimize or control something such as process.

227

Knowledge is Power
Knowledge is not based on opinion, rather it is derived from facts & data.

In order to efficiently collect the data & effectively analyze it, to extract the maximum knowledge available, one must rely On statistical techniques.

228

Use of Statistics

Data Statistics convert to Usable Information
229

Data Collection Plan
Decide objective

Step 1 Operational definition

• Define a Metric

Step 2 Develop Measurement Plan Step 3 Data Collection Step 4 Data display

• What, How, by Whom the measurement will be done • Stick to procedure/plan

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

Evaluation of Data 230

Operational Definition
An operational definition is a precise description of the specific criteria used for the measures (the what), the methodology to collect the data (the how), the amount of data to collect (how much) and who has the responsibility to measure the data When developing an operational definition, it is important for the team to fully understand and agree that the DEFINITION reflects exactly what information the team is attempting to gather on the process. Clarity is more important when developing and selecting the measures that will be used to determine the SIGMA PERFORMANCE of the process.

231

Operational Definition
Example : Operational definitions may determine whether, a team is required to count all the defects on an invoice (required to calculate defects per million opportunities) or the total number of defective invoices (any invoice with any defect) or the type of defects encountered on an invoice (to eliminate the most common defects first). Each of these cases may require a very different approach for gathering the data.

232

Operational Definition
Operational definition provides the foundation for the team to 1. Reach an agreement on what data to be collected. 2. Build consistency and reliability into data collection. 3. Fully agree on how a particular characteristic of a process is to be measured.

233

Example of Operational Definition.
Poor Operational Definition: Cycle time of a transaction Good Operational Definition: Collect data for all transactions processed from 1-Aug-05 to 31-Aug-05. The cycle time of each transition will be determined by the date and time of transaction download from client server by an agent/CSR to the date and time of the PROCESSED transaction was submitted in client server as per the client server system time.

234

Exercise: Operational Definition
Write operational definitions for the following cases 1) Maximization the server availability 2) Reduction of the attrition rate in ABZ 3) Improving the quality percentage a process 4) Reduction of call handling time 5) Minimization of abandoned calls in a call center

235

Develop Measurement Plan
Measurement Plan Determining current process performance usually requires the collection of data. When developing a measurement plan ensure that: – The data collected is meaningful – The data collected is valid – All relevant data is collected concurrently
What is the Purpose of Collecting the Data? Will it serve the purpose ? How will you collect the data?
-what result will you measure? -what kind of cause will you analyze for the ineffective process?

What kind of tool will be required?
-form, check sheet ?

All related Data collected? -Sample size, frequency, sampling method? Is the Data Collecting method is adequate? -who will collect the data? -where can we collect the data? -when will we collect the data? -what kind of assistance will be necessary?
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Data Classification
Before data collections starts, classify the data into different types: continuous or discrete. This is important because it will:

Provide a choice of data display and analysis tools Dictate sample size calculation Provide performance or cause information Determine the appropriate control chart to use Determine the appropriate method for calculation of Sigma

– – – –

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Types of Data Continuous Data
Description
Binary : Classified into one of two categories Measured on a continuum or scale Count : Counted discretely Ordered categories : Rankings or ratings

Discrete Data

Example
% of applications with or without errors. Time (in hours) to process an application Number of errors in an application. Customer satisfaction rating of call center service. 238

Continuous Data
Data generated by – Physically measuring the characteristic – Generally using an instrument – Assigning an unique value to each item
Examples: 1. The time it takes to write a proposal. 2. The time it takes to conduct a feasibility study. 3. The time it takes to close the books each month. 4. Invoice amounts. 5. Sales order amounts. 6. Handling Time, Time to Certify PEs, etc. Continuous Data: Example (Call Waiting Time in Secs)
SL No. 1 2 3 4 5 6 7 8 9 10 Waiting Time 98 103 100 100 99 101 97 102 100 99 SL No. 11 12 13 14 15 16 17 18 19 20 Waiting Time 102 98 101 101 99 100 101 99 100 102

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Discrete Data
Data generated by

Good

NOGO

GO

Bad

• Classifying the items into different groups based on some criteria • All the items classified into a group will have same value

Examples:
• • Gender, Shade Variation, etc. Escalations, Repeat Calls, Defective Transactions, Defects in Transactions etc.

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Defects versus Defective
Out of these 09 Invoices…
Quantity: AAAAA Price: $BBBBB Date: YY/YY/YY
      

there are...

Quantity: AAAAA Price: $BBBBB Date: YY/YY/YY
      

Quantity: AAAAA Price: $BBBBB Date: YY/YY/YY
      

3 Defective Invoices 6 Defects

Quantity: AAAAA Price: $BBBBB Date: YY/YY/YY
      

Quantity: AAAAA Price: $BBBBB Date: YY/YY/YY
      

Quantity: AAAAA Price: $BBBBB Date: YY/YY/YY
      

Quantity: AAAAA Price: $BBBBB Date: YY/YY/YY
      

Quantity: AAAAA Price: $BBBBB Date: YY/YY/YY
      

Quantity: AAAAA Price: $BBBBB Date: YY/YY/YY
      

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Example of Opportunities
Only three line items on this invoice are critical to the customer. ( Quantity, Price, Date)

Quantity: AAAAA Price: $BBBBB Date: YY/YY/YY       

Errors in the rest of the invoice are not critical

Hence, there are 3 opportunities per invoice even though the invoice contains more than 3 line items.
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Discrete : Binary Data (Binomial)
• Classifying the items into only two groups based on some criteria • Each item will fall in either of the two groups • All the items classified into a group will have same value • Expressed or summarized as proportion p or percentage

Examples:
• Gender, Escalations, Repeat Calls, Defective Transactions, etc • An invoice is either “complete” or “incomplete”. • A delivery is either “late” or “not late”. • A product is either “damaged” or “not damaged”. • A hotel room is either “dirty” or “clean”. • A sales pitch is either a “thumbs up” or “thumbs down”.
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Binary Data : Example
(Month wise Escalation of Transactions)
Month Jan Feb Mar Apr May Jun No. of Transactions Processed 2000 2500 1500 3000 4000 3500 No. of Transactions Escalated 20 30 14 27 40 33

Proportion of Escalated Transactions p = No. of Transactions Escalated / Total No. of Transactions Processed = (20 + 30 + 14 + 27 + 40 + 33) / (2000 + 2500 + 1500 + 3000 + 4000 + 3500) = 164 / 16500 = 0.0099 ≅ 0.01 = 1 % On an average, 1 % of Transactions are escalated
244

Discrete : Count Data (Poisson)
Data generated by • Counting the exact number of occurrences of the characteristic in a group of items. • It takes integer values as 0,1,2,-,-,-, • Expressed or summarized as average number of occurrences

Examples:
• Number of fatal defects in transactions processed • Number of accidents in the city during June 2005 • Number of suicides in the city during 2004. • The number of errors on twenty invoices. • The number of computer system failures in a month.

245

Count Data: Example
(Data on Defects found during Transaction Audit)
No. of Items Audited No. of Defects 100 3 50 4 76 0 82 1 172 5 150 10 89 1

Average Number of Defects = Total No. of Defects / Total No. Audited = (3 + 4 + 0 + 1 + 5 + 10 + 1) / (100 + 50 + 76 + 82 + 172 + 150 + 89 ) = 0.033 On an average 0.033 defects found per Transactions On an average 3.3 defects found per 100 Transactions

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Exercise 1.10 (20 minutes)
Type of Data
1. Refer to your workbook. 2. Identify the type of data given in example

247

Data Measurement Plan Format
Performance measure Operational Definition Data Source Sample & location size Who will Data collection How will collect period date be the data collected

Cause Data
Other data that should be collected at the same time

Time to process a transaction

Date and time of transaction Client was download from client server server by an agent to the date and time system of the PROCESSED transaction time. was submitted in client server

256

Raju Smita

1-Aug-05 to 31-Random Aug-05 selection

Type of transaction, Day of week, Agent name

The data is being collected to measure the performance is called PERFORMANCE DATA. On the other hand, CAUSE DATA, focus on why the process performs as it does. Cause data supports the problem solving by helping to isolate root causes of the problems. Most of the times, however, we won’t know enough about potential causes until we have determined our processes current performance level. Be prepared to document current performance first, then brainstorm potential causes and collect additional data related to those causes at a later date.
248

Data Collection
While collecting data ensure that the data measurement plan is followed. Note any deviations from the plan. Avoid bias and ensure consistency. Use various tools like check sheets to record and grouping of the data. Ensure that the sample selected is representative of the population. If there is any concern on this issue, record the things that may cause the data collected to not be representative of the population. Data Rich Ensure Effective and Efficient Data Collection
249

Poor Information

Sampling

250

Sampling Objectives
• • Understand the purpose and advantages of sampling Understand the application of different sampling techniques to ensure accurate process representation Gain experience in asking appropriate questions to ensure a robust sampling plan is implemented effectively and efficiently Understand guidelines and formulas used to determine sample size

251

Basic Definitions and Symbols
Population (N): The entire set of objects or activities for a process μ: the mean (arithmetic average) calculated for a population σ: the standard deviation calculated for a population Sample (n): a group that is a part or subset of a population x: the mean (arithmetic average) of a sample s: the standard deviation of a sample

252

Sampling Definition
Sampling is the process of: Collecting only a portion of the data that is available or could be available, and drawing conclusions about the total population (statistical inference)
Population
x x x x x x x x x x x x x x x x x x x x x N = 5000

Sample
x x x x x x x x

n = 100

Example: Estimating the average height of students in a college by measuring the heights of only 250 students (250 is a subset of entire students population).
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Sample ….. When ?
When to ….. • Collecting all the data is impractical or too costly • Data collection can be a destructive process • When measuring a high-volume process When not to …… • A subset of data may not accurately depict the process, leading to a wrong conclusion (every unit is unique-e.g., structured deals)

254

Kinds of Sampling
Random Sampling • This sampling ensures that the characteristics of the population are collected with equal possibility.

Stratified Sampling • Make stratifying plan for population characteristics. • Select the sample among each stratified group

Group A

Group B

255

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

• •

256

Sampling: Methodology
• • • • Select a sample of items from the population Measure the characteristics on each item in the sample Calculate the sample statistics Provide the sample statistics as an estimate of population statistics

257

Methodology: Example
To estimate the average height of students in a college Select a sample of items from the population, say 250 students

Measure the characteristics on each item in the sample i.e. measure the height of all the 250 students in the sample

Calculate the sample statistic i.e Calculate the average height of 250 students ( = 5.5 feet)

Provide the sample statistic as an estimate of population statistics Estimate of average height of students in the college = 5.5 feet
258

Methodology: Issues
The following are the Waiting Times (Seconds) values of 36 Calls:

Mean Waiting Time = 28.55

10 50 30

30 60 34
259

The following data is a sample of 10 from the above data:

Sample Mean = 25.3

Sample Statistics may not be exactly equal to Population Statistics

Methodology: Issues
The following data is another sample of 10 from the parent data:

Sample Mean = 27.8

The estimate may vary from sample to sample

26

40
260

To overcome these issues Confidence Intervals are developed

Confidence Interval: Methodology
• • • • Select a sample of items from the population Measure the characteristics on each item in the sample Calculate the sample statistics Provide two limits: an upper bound & a lower bound to the population statistics such that the true value of population statistics will lie within these limits with a specified level of confidence

261

Continuous Data: CI for Population Mean
• • • Select a sample of n items from the population Measure the characteristics on each item in the sample Calculate the sample Mean & Standard Deviation (SD). Then

(1-α ) % Confidence interval : Sample Mean ± Constant (confidence level) x Standard Error (SD of Sample Mean)

262

Continuous Data: CI for Population Mean
(1-α ) % Confidence interval on Mean: Sample Mean ± Z α /2 x SD / √n Z α /2 is the Standard Normal variate for an area of α /2 as shown in figure
4 3 2 1 0 -3 -2 -1 0 1 2 Z α /2 3
263
α /2

Continuous Data: CI for Population Mean

α 0.05 0.01 0.10

CI 95 % 99 % 90 %

Zα /2 1.96 2.57 1.64

Obtained from Z table

264

CI for Population Mean: Example
The following are the Waiting Times (Seconds) values of 36 Calls:

10
Mean Waiting Time = 28.55 Sample Mean = 25.3 Sample SD = 15.34

30 60 34
265

The following data is a sample of 10 from the above data:

50 30

CI for Population Mean: Example
95 % Confidence interval on Mean: Sample Mean ± 1.96 x SD / √n = 25.3 ± 1.96 x 15.34 / √10 = 15.79 to 34.80 Similarly, 2nd Sample:

Sample Mean = 27.8 Sample SD = 11.94

95 % Confidence Interval on Mean:

27.8 ± 1.96 x 11.94 / √10 = 20.39 to 35.20

26

40
266

Exercise 1.11 (20 minutes)
CI for Population Mean
1. Refer to your workbook. 2. Calculate CI for a given example

267

Discrete Data: CI for Proportion
Collect a sample of size n from the population Calculate sample proportion p Calculate Standard error (SE): √(p(1-p)/n) Then (1 - α ) % CI interval for Population Proportion: p ± Z α /2 x √(p(1-p)/n) 95 % CI interval for Population Proportion: p ± 1.96 x √(p(1-p)/n)

268

Exercise 1.12 (20 minutes)
CI for Discrete data
1. Refer to your workbook. 2. Calculate CI for a given example

269

Sample Size Calculation: Continuous Data
Using 95 % CI True value of population Mean will lie between Sample Mean ± 1.96 SD / √n Then Population Mean - Sample Mean < 1.96 SD / √n ( with 95 % Confidence) Hence To estimate the population mean with an accuracy of say 5 I.e Population Mean - Sample Mean < 5 I.e 5 = 1.96 SD / √n n = (1.96 SD / 5)2 Sample Size required to estimate population mean with an accuracy of 5: (1.96 SD / 5)2
270

Sample Size Calculation: Methodology Continuous Data

Collect a small sample

Calculate Sample Mean & Standard Deviation Equate accuracy required to 1.96 SD / √n Solve for n

271

Exercise 1.13 (20 minutes)
Sample Size Calculation for continuous data
1. Refer to your workbook. 2. Calculate sample size for a given example

272

Sample Size Calculation: Discrete Data
Using 95 % CI True value of population proportion will lie between p ± 1.96 x √ p(1-p) / n where p is sample proportion Then Population Proportion - Sample Proportion < 1.96 x √ p(1-p) / n Hence To estimate the population proportion with an accuracy of say 0.01 I.e Population proportion - Sample proportion < 0.01 I.e 0.01 = 1.96 x √ p(1-p) / n n =1.962 p (1-p) / 0.012 Sample Size required to estimate population proportion with an accuracy of 0.1: 1.962 p (1-p) / 0.012

273

Sample Size Calculation: Methodology Discrete Data
Collect a small sample

Calculate Sample proportion p Calculate Standard Deviation √(p(1-p) / n) Equate accuracy required to 1.96 √(p(1-p) / n) Solve for n

274

Exercise 1.14 (40 minutes)
Sample Size Calculation for discrete data
1. Refer to your workbook. 2. Calculate sample size for a given example

275

Data Display and Evaluation
Once we collect the data, it is always preferable to evaluate the data for its accuracy and usage prior to calculation of the capability of the process As a initial step, display the data using Patero charts, Scatter plot, control charts, Histogram or Normality etc to look for data errors, trends and outliers. Be prepare to collect more data or different data based on the above observations. Evaluate the data to confirm that the data is dependable, consistent, reliable and representative. Also ensure that, we get similar results if we repeat the data collection. Finally confirm that the data collected provide the information we need.
276

Fundamentals of Minitab
(Statistical Package)

277

Once you start Minitab, Minitab opens with two main windows.

Session Window It displays the results of your analysis in text format.
Column

Data Window It contains an open worksheet, which is similar in appearance to a spread sheet. We can open multiple work sheets.
Row Cell

278

Column with Text data

Column with Numeric data

Column with date/time data

Column Name To be written by us

Row Number

All the columns are formatted by default to Numeric data. As per the requirement we can reformat the columns. Right click mouse>Format Column>numeric/text/date.
279

File
Most of the functions of the File Menu are similar to Excel sheet. Open existing or new files Save file Print files, etc.

Edit
Most of the functions of the File Menu are similar to Excel sheet. Cuts, Paste cells, Undo, redo Clear cells etc.
280

Data
It is very useful function menu in Minitab. to immunize the duplicate data entry in the work sheets. Using this menu, we can subset the worksheets, split and merge work sheets. Minitab automatically opens multiple data windows. We can transpose and sort the columns. Group of the points from the graphs can be selected and corresponding data subset can be stored in separate work sheet.
281

Calc
Calculator: Data in various columns can be computed and stored in separate column Column and Row statistics: Various statistics like mean, SD etc can be calculated for the data listed in the column / row Random data: Can be generated for all the distributions Probability Distribution: All the distribution statistics can be calculated.
282

Stat
All sorts of statistical analysis can be done for the data stored in various columns in the work sheet.

Graphs
Various graphs can be plotted using this menu

Editor
Used for Formatting of the columns

283

Basic Statistics

284

Describe Sets of Continuous Data
The following three characteristics can describe the continuous data set

1. Measures of Central Tendency
1. Mean 2. Median 3. Mode

2. Measures of Dispersion
1. Range 2. Variance 3. Standard Deviation

3. Shape
1. Histogram

285

Continuous Data: Measures of Central Tendency

1. Mean 2. Median 3. Mode

286

Mean: • Numerical value indicating the central value of data • Sum of all observations / Total number of observations Suppose x1, x2, - - - xn be the data, then Mean = (x1+ x2 + - - -+ xn ) / n = Σ xi /n Mean: Sum of all observations / Total number of observations Continuous Data : Example Call Waiting Time = (98 + 103 + 100 + 100 + 99 + 101 + 97 + 102 + 100 + 99 + 102 + 98 + 101 + 1.01 + 99 + 100 + 101 + 99 + 100 + 102) / 20 = 200.2 / 20 = 100.1 Minutes

287

Median:

• Middle Value • Value which divides observations arranged in ascending or descending order into two equal halves Case 1: Total number of observations is odd Median: Middle Value Case 2: Total number of observations is even Median: Average of two middle values

Median: Example Call Waiting Time in Minutes
97 100 98 100 98 101 99 101 99 101 99 101 99 102 100 102 100 102 100 103

Total Number of observations: 20 (even) The middle Values : 100 & 100 (10th value and 11th value) Median: Average of 2 middle values = (100 + 100) / 2 = 100
288

Mode:
• The observation which occurs maximum number of times in the data

Example Call Waiting Time in Minutes
97 100 98 100 98 101 99 101 99 101 99 101 99 102 100 102 100 102 100 103

Total Number of observations: 20 (even) The observation with maximum number of occurrences : 100 Mode: 100

289

Continuous Data : Measures of Dispersion

1.Range 2.Variance 3.Standard Deviation

290

Range: Definition
Range: Maximum value – Minimum Value

Example:
5 15 4 9 7 8 3 5 2 2

Maximum Value = 15 Minimum Value = 2 Range = 15 – 2 = 13

291

Range: Issues
It depends only on extreme values Hence affected by outliers
16 14 12 10 8 6 4 2 0 1 2 3 4 5 6 7 8 9 10

Range

Better measure of Dispersion is “Standard Deviation”
292

Standard Deviation: Definition
Square root of the average squared deviation from mean Indicates On an average how much each value is away from the Mean

Example :
5 15 4 9 7 8 3 5 2 2

Step 1: Calculate Mean = (5+4+7+3+2+15+9+8+5+2) / 10 Mean = 6

293

Example: Standard Deviation
Step 2: Take deviations from Mean
16 14 12 10 8 6 4 2 0 1 2 3 4 5 6 7 8 9 10

-1 9

-2 3

1 2

-3 -1

-4 -4
294

Example: Standard Deviation

Step 3: Since some values are positive & rest are negative, while taking sum they will cancel out. So square the values & Sum 1 81 4 9 1 4 9 1 16 16

Sum of Squares = 142

295

Example: Standard Deviation
5 15 -1 9 1 81 4 9 -2 3 4 9 7 8 1 2 1 4 3 5 -3 -1 9 1 2 2 -4 -4 16 16 Step 1: Calculate Mean, Mean = 6 Step 2 : Take deviations from Mean Step 3: Since some values are positive & rest are negative, while taking sum they will cancel out. So square the values & Sum

Sum of Squares = 142

Step 4: Standard Deviation = √(Sum of Squares / (n -1)) = √(142 / (10 -1)) = √ 15.77 = 3.972 Variance = (SD)2 = 15.77
296

Standard Deviation: Example 2
Data x1 x2 x3 x4 x5 x6 x7 x8 x9 x10 Sum n Mean 98 103 100 100 99 101 97 102 100 99 999 10 99.9 (xi – Mean) -1.9 3.1 0.1 0.1 -0.9 1.1 -2.9 2.1 0.1 -0.9 3.61 9.61 0.01 0.01 0.81 1.21 8.41 4.41 0.01 0.81 28.9

Call Waiting Time in Minutes

(xi – Mean)2

S D = √ (28.9) / (10 – 1) = 1.7919

297

Continuous Data: Graphical Representation of Data: Histogram
Example: Call Waiting Time Data 97 100 98 100 98 101 99 101 99 101 99 101 99 102 100 102 100 102 100 103

Total Number of observations : 20 Minimum Value Maximum Value Number of Classes : 97 : 103 : √ n = √ 20 = 4.47 ≅ 5

Class Interval : (Maximum – Minimum) / Number of Classes : (103 – 97) / 5 = 1.2
298

Construction of Frequency Table
Lower Limit of a Class • 1st Class Lower Limit : Minimum Value • Lower Limit of any class other than 1st class : Upper Limit of Previous Class Upper Limit of a Class • Lower Limit of the Class + Class Interval

Construction of Frequency Table
SL No 1 2 3 4 5 Lower Limit 97 98.2 99.4 100.6 101.8 Upper Limit 98.2 99.4 100.6 101.8 103 Tally Marks lll llll llll llll llll Frequency 3 4 5 4 4
299

Graphical Representation of Data: Histogram

6 5 4 3 2 1 0 98.2 99.4 100.6 101.8 103

300

Exercise 1.15 (40 minutes)
Mean, Median, Standard Deviation and histogram
1. Refer to your workbook. 2. Calculate Mean, Median, Standard Deviation and construct histogram for a given example

301

Probability & Normal Distribution

302

Probability Definition
Ratio of number of favorable outcomes to total number of outcomes

Example Number of tosses of a coin = 100 Number of times Head occurred = 49 Number of times Tail occurred = 51 Probability of getting Head in a toss of coin =Number of Times Head occurred / Total number of tosses = 49/100 = 0.49 = 0.5 (Approximately)

303

Example 1 :
The day wise average waiting time in seconds (AWT) of calls for 10 days is given below:

a. Calculate the probability that average waiting time > 60 Seconds? b. Calculate the probability that average waiting time < 50 seconds
a. Probability of AWT > 60

= Number of cases with AWT > 60 / Total number of cases = 2 / 10 = 0.2 20 % of the days AWT will be more than 1 Minute b. Probability of AWT < 50 seconds = Number of cases with AWT < 50 / Total number of cases = 1 / 10 = 0.1 10 % of the days AWT will be less than 50 seconds
304

50 61

Example 2 :
The number of transactions processed per day by 40 member team for 12 days during transition is given below:

Suppose the SLA on productivity is minimum 720 transactions per day, calculate the risk of not meeting the SLA? Risk of not meeting SLA = Probability that productivity < 720 transactions = Number of days with Productivity < 720 / Total number of days = 1 / 14 = 0.071

Risk of not meeting SLA is 7 %

750 810

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Issues
To estimate probability using this method, huge amount of data is required

Solution
When data is less, identify the underline distribution & estimate probability from the distribution

306

Statistical Distributions
Continuous distribution •Normal distribution Discrete distribution •Binomial distribution •Poisson Distribution

307

Normal Distribution
Definition: Consider the following data on Average Handling Time (AHT) in minutes of 16 Days:
2.3 2.7 2.5 2.4 Plot of the Data:
5 4 3 2 1 0 2.1 2.3 2.5 2.7 2.9
308

2.4 2.5

2.6 2.6

2.3 2.2

2.7 2.8

2.5 2.4

2.5 2.6

Plot of the Data:
3

2

1

0 2.2 2.3 2.4 2.5 2.6 2.7 2.8

• Bell Shaped • Symmetric • Total Area under the curve is 1 Then : Normal Curve & Data follows Normal Distribution
309

Normality Test : Probability Plot using Minitab
Step1: Copy the data to Minitab worksheet column Step 2: Choose Stat > Basic Statistics > Normality Test

310

Step3: Enter the Column Title to the Variable Text Box and Click OK button

311

Step 4: Minitab Output

Interpretation: If P-Value ≥ 0.05, then Data is Normal
312

Standard Normal Distribution
If Data follows Normal Distribution then (Data - Mean) / SD will follow Standard Normal Distribution For Standard Normal Distribution: Mean = 0 SD = 1

313

Standard Normal Distribution: Example
Data: 2.3 2.5 Mean = 2.5 SD = 0.1225 Z : (Data - Mean ) / SD -1.633 0.00 Mean = 0.00 SD = 1.0 1.633 -0.8165 -0.8165 0.00 0.8165 0.8165 0.00 2.7 2.4 2.4 2.5 2.6 2.6 2.5

314

Standard Normal Distribution: Properties
4 3 2 1 0 -3 -2 -1 0
68.26% 95.46% 99.73%

Between Mean ± 1 SD : 68.26 % of Values will lie Mean ± 2 SD : 95.46 % of Values will lie Mean ± 3 SD : 99.73 % of Values will lie

1

2

3

315

3

2

1

0 2.3 2.4 2.5 2.6 2.7

If data follows normal distribution, then the probabilities can be estimated from Normal Curve Example: The probability that AHT will be more than 2.6 Minutes is the area above 2.6 Minutes in Normal Curve
316

3

2

1

0 2.3 2.4 2.5 2.6 2.7

Example: The probability that AHT will be less than 2.35 Minutes is the area below 2.35 Minutes in Normal Curve

317

Normal Distribution: Examples
The Time to Certify PE’s is normally distributed with mean 40 days and standard deviation 8 days. If the client wants that all PEs shall be certified within 34 to 48 days, estimate the chance of meeting client requirement? Mean = 40 SD = 8 Let x be the Time to Certify PE Case 1: Probability of certifying PEs within 34 days P(x < 34) Transforming to Standard Normal P[((x - Mean) / SD ) < ((34 - 40)/8)] = P ( z < -0.75)
318

Normal Distribution: Examples
Case 1: P ( z < -0.75)
4 3 2 1 0 -3 -2 -1 0 1 2 3

From Standard Normal Tables P(z < -0.75) = 1 – 0.7733 = 0.2266
319

Case 2: Probability of certifying PE in > 48 days

P ( x > 48) = P (z > (48 - 40) / 8) = P ( z > 1)

4 3 2 1 0 -3 -2 -1 0 1 2 3

320

Normal Distribution: Examples
Case 2: From Standard Normal Tables P (z > 1 ) = 0.1587 Chance of Meeting Client Requirement = 1 – 0.2266 - 0.1587 = 0.6147 = 61.47 % OR Chance of Meeting Client Requirement = 0.7733 - 0.1587 = 0.6147 = 61.47 %
4 3 2 1 0 -3 -2 -1 0 1 2 3
321

Exercise 1.16.1 (20 minutes)
Probability distribution for continuous data
1. Refer to your workbook. 2. Calculate probability distribution for a given example

322

Handing Non normal data

Handling Non Normal Data

323

Binomial Distribution:
If the data is binary, then probabilities are estimated using Binomial Distribution

324

Binomial Distribution: Example
On an average, 2 % of the transactions processed in a process are defective. On a particular day, out of 400 transactions audited 21 turned out to be defectives. Is it an indication that the process performance deteriorated? Let p = 2 % = 0.02 Number of Transactions Audited (n) = 400 Number of Defectives (d) = 21 The probability of getting 21 defectives out of 400 when p = 2 % = 0.02 is calculated using Binomial Distribution as shown below P(getting x = 21 defectives out of 400 transactions) = nCxpx(1-p)n-x =
40 0

C21 0.0221 (1-0.02)400-21

325

Binomial Distribution: Example
Let p = 2 % = 0.02 Number of Transactions Audited (n) = 400 Number of Defectives (d) = 21 The probability of getting ≤ 20 defectives out of 400 when p = 2 % = 0.02 is calculated using Binomial Distribution as shown below P ( x ≤ 20) = P ( x = 0 ) + P ( x = 1 ) + P ( x = 2 ) + - - - + P ( x = 20) P ( getting x = 20 defectives out of 400 transactions ) = nCxpx(1-p)n-x =
40 0

C20 0.0220 (1-0.02)400-20

326

Calculation of Binomial Probabilities using Minitab
Step 1: Copy the defective data to Minitab Worksheet as shown below:

327

Calculation of Binomial Probabilities using Minitab
Step 2: Go to Calc Probability Distributions Binomial

328

Calculation of Binomial Probabilities using Minitab
Step 3: Select Cumulative probability, Enter Number of trials, Probability of success, Input Column, Option Storage and click ‘OK’ button

329

Calculation of Binomial Probabilities using Minitab
Step 4: Minitab will calculate Binomial Probabilities as display in Optional Storage Column as shown below

Note: % Chance = Probability x 100
330

Binomial Distribution: Example
p = 2 % = 0.02 From Binomial Distribution, Number Audited (n) Defectives (d) 400 400 400 400 400 400 400 400 400 400 400 0 2 4 6 8 10 12 14 16 18 20 Chance of getting d or less defects (%) 0.03 1. 31 9.73 31.09 59.26 81.79 93.81 98.38 99.66 99.94 99.99
331

Binomial Distribution: Example
Let p = 2 % = 0.02 Number of Transactions Audited = 400 From Binomial Distribution, Probability of getting less than 20 defectives in 400 transactions = 0.9999 Hence Probability of getting 20 or more defectives = 1 – 0.9999= 0.0001 ≅ 0 i.e. if the process is operating at 2 % defectives: the chance of getting 21 defectives out of 400 is almost 0 , Process performance is deteriorated.

332

Exercise 1.16.2 (20 minutes)
Probability distribution for Binomial Distribution
1. Refer to your workbook. 2. Calculate probability distribution for a given example

333

Poisson Distribution:
If the data is Count, then probabilities are estimated using Poisson Distribution

334

Poisson Distribution: Example
The average number of repeat calls per day in a voice process is 20. On a particular day , there were 25 repeat calls. Is there any problem with the process that day? Let λ : Average number of Repeat Calls = 20 The probability of getting x ≤ 24 calls when average number of repeat calls is 20 is calculated using Poisson distribution as follows P ( x ≤ 24) = P ( x = 0) + P ( x=1)+ P ( x = 2) + - - - + P ( x=24) P ( x = 24 when λ = 20) = e-λ λ x / x! = e-20 2024 / 24!

335

Calculation of Poisson Probabilities using Minitab
Step 1: Copy the different values of repeat calls to Minitab worksheet as shown below:

336

Calculation of Poisson Probabilities using Minitab
Step 2: Go to Calc Probability Distributions Poisson

337

Calculation of Poisson Probabilities using Minitab
Step 3: Choose Cumulative probability, Enter Mean, Input column & Optional storage as shown below and click “OK” button.

338

Calculation of Poisson Probabilities using Minitab
Step 4: Minitab will display the probabilities in the Optional storage column as shown below

Note: % Chance = Probability x 100
339

Poisson Distribution: Example
Average number of repeat calls per day = 20 Average Repeat Calls 20 20 20 20 20 20 Repeat Calls (d) 0 5 10 15 20 24 Chance of getting d defects or less (%) 0.00 0.01 1.08 15.65 55.91 84.32

340

Poisson Distribution: Example
Average number of repeat calls per day = 20 From Poisson Distribution, Probability of getting less than 25 repeat calls = 0.84 Hence Probability of getting 25 or more repeat calls = 1 - 0.84= 0.16 = 16 % i.e. if the process is operating at 20 repeat calls per day: the chance of getting 25 repeat calls is 16 % 16 % is large enough to conclude that there is nothing wrong in the Process.

341

Exercise 1.16.3 (20 minutes)
Probability distribution for Poisson Distribution
1. Refer to your workbook. 2. Calculate probability distribution for a given example

342

Gauge R&R (Measurement System Analysis)

343

Introduction
When ?
Identify the Project Define Measure

Identify Y(CTQ)

Gage R&R for Y

Data Collection Baseline

Baseline Process Capability

• •

Gage R&R is pre-requisite for data collection / analysis Gage R&R study is a method to evaluate measurement system to determine the amount of variation it contributes to the total observed process variation. In Manufacturing industries, gages are evaluated for repeatability (of readings when a component is measured multiple times) and Operators / inspectors are evaluated for reproducibility (of same readings when the component is measured by different operations). In service industries, Appraisers will be assessed instead of
344

Importance of Gauge R&R
• • • • It is a method to determine how good the data is A Simple method to aid in improving the measurement system A simple method to evaluate new gage / agents repeatability A simple method to quantify measurement reproducibility

Examples
• A black belt wants to reduce the variability in transaction time • A black belt wants to improve the quotation process • A black belt wants to assess the process knowledge of the agents

345

Measurement System What is Measurement ?
To give the value to express specific function of a certain material.

What is Measurement System ?
A given value is called measurement data. All equipment and tools to get the measured data are termed gage. Gage, operator, software, measurement method and process are termed as measurement system.
346

Why Worry about Measurement Variation?
Consider the reasons why we measure:
Verify How might measurement product/process conformity to variation affect these decisions? specifications
Process Measurement

Assist in continuous improvement activities
Process Measurement

What if the amount of measurement variation is unknown

?

Measurement variation can make our process capabilities appear worse than they are.

347

Accounting For Changes
While we can come up with many explanations, they would fit into three general categories
• Simple Day-to-day Random Variation • An Event That Changed the Distribution of Calls Coming in to Agents • A Difference in How Calls Are Classified Between You and the People Classifying Calls Yesterday Expected Variation A Change to the Process A Change to the Measurement System

How Can We Determine the Cause?
348

Sources of variation

Product Variability (Actual variability)

Measurement Variability

Total Variability (Observed variability)

349

Observed Process Variation

Actual Part to Part Variation Long Term Process variation Short Term Process variation

Measurement Variation

Within Sample Variation

Variation due to operators

Variation due to Gage

Reproducibility Issue

Repeatability Issue

σ2Total

= σ2Part-Part

+

σ2R&R

To study & reduce the process variation the measurement variation has to be identified and separated from process
350

Accuracy (Bias)
The difference between the observed average of measurements and the true average of the items measured.

Accuracy

Observed Average

True Average

351

Repeatability
The variation due to the Gauge. The variation observed when the same Appraiser monitors/evaluates the same transaction repeatedly using same facilities / aids. Master Master Value Value Good Repeatability Poor Repeatability

Mean

Mean

352

Reproducibility
Appraiser to Appraiser Variation The variation observed when different Agents process the same transaction using the same facilities / aids.
Master Master Value Value

Good Reproducibility

Poor Reproducibility

Operator 1 Operator 2 Operator 3

Operator 1 Operator 2 Operator 3
353

Stability
The variation in the average of at least two sets of measurements obtained with a gage as a result of time on the same pieces.

Stability

Time 1

Time 2

354

Methods of performing Gage R&R Studies.
Xbar-R Method
Continuous Data

General use. It does not evaluate the interaction effect. It evaluates the interaction effect of the agents also. More effective when extreme values are present

ANOVA Method

Discrete Data

Attribute Agreement Analysis
355

Exercise: Gage R & R– Continuous Data
Given the data below for reading by 3 appraisers on 6 calls with 2 trails, determine whether the measurement system is acceptable Call ID 1 2 3 4 5 6 Appraiser A 1 65 100 85 85 55 100 2 60 100 80 95 45 100 Appraiser B 1 55 100 80 80 40 100 2 55 95 75 75 40 100 Appraiser C 1 50 100 80 80 45 100 2 55 100 80 80 50 100

356

Gage R & R– Continuous Data
Step 1: Copy the data to Minitab worksheet as shown below

357

Gage R & R– Continuous Data
Step 2: Choose Gage R&R Study (Crossed) from Stat Menu as shown below:

358

Gage R & R– Continuous Data
Step 3: Enter Part Numbers, Operators & Measurement Data. Choose Xbar and R as shown below Click “OK” button

359

Gage R & R– Continuous Data
Step 4: Minitab will give the following Output
Source Total Gage R & R Repeatability Reproducibility Part-To-Part Total Source Total Gage R & R Repeatability Reproducibility Part-To-Part Total Variation Var Comp 17.434 7.338 10.096 411.568 429.002 StdDev (SD) 4.1754 2.7088 3.1774 20.2871 20.7154 % Contribution 4.06 1.71 2.35 95.94 100 (6 * SD) 25.052 16.253 19.065 121.723 124.274 (%SV) 20.16 13.06 15.34 97.95 100

If < 20 %. Gage acceptable Else if > 30 %, Gage not acceptable Else some problem with gage, use with caution

360

Gage R & R– Continuous Data
Step 5: Graphical Output 1
G age R&R (Xbar/ R) for Data
Gage name: Date of study: Reported by: Tolerance: Misc:

Com ponents of Variation
100
% Contribution % Study Var

80

P rc n e et

60

40

20

0

Gage R&R

Repeat

Reprod

Part-to-Part

Graphical Representation of the first table in the previous slide
361

Gage R & R– Continuous Data
Step 5: Graphical Output 2
G age R&R (Xbar/ R) for Data
Gage name: Date of study: Reported by: Tolerance: Misc:

Xbar Chart by Appraiser
A 100 Sample Mean 80 60 40 _ _ UCL=83.11 X=77.36 LCL=71.61 B C

R Chart by Appraiser
A 10 Sample Range B C UCL=9.98

5

_ R=3.06 LCL=0

0

Interpretation: All points in R chart should be within the control limits for all Appraisers Xbar chart for all appraisers should have more or less same pattern and most of the points should fall outside control limits.

362

Gage R & R– Continuous Data
Step 5: Graphical Output 3
G age R&R (Xbar/ R) for Data
Gage name: Date of study: Reported by: Tolerance: Misc:

Data by Call Id
100 90 80 70 60 50 40 1 2 3 Call I d 4 5 6

Interpretation: All readings for each call is shown with their means connected. Ideally the variation around mean for different calls should be equal and minimum.
363

Gage R & R– Continuous Data
Step 5: Graphical Output 4
G age R&R (Xbar/ R) for Data
Gage name: Date of study: Reported by: Tolerance: Misc:

Data by Appraiser
100 90 80 70 60 50 40 A B Appraiser C

Interpretation: All readings for each appraiser is shown with their means connected. Ideally the variation around mean for different appraisers should be equal and minimum. 364

Gage R & R– Continuous Data
Step 5: Graphical Output 5
Gage R&R (Xbar/ R) for Data
Gage name: Date of study: Reported by: Tolerance: Misc:

Appraiser * Call Id Interaction
100 90 80 Average 70 60 50 40 1 2 3 Call I d 4 5 6
Appraiser A B C

Interpretation: Ideally the lines should overlap or at least parallel. Large deviations from parallelism indicates lack of agreement among appraisers with respect different calls. 365

Gage R&R for Continuous Data
Example: Gage R & R for Transition Cycle Time
A Team Lead in a finance related data process is responsible to monitor and control the cycle time a sub-process. This sub-process is well established and consumes almost equal amount of time to process each transaction. Over period of time volumes are increased and agents are also increased proportionately. But he observed that currently, the variation in cycle time is very high and not meeting the SLA some times. He wondered how it can happen? He is in doubt about the agents capability and likes to measure and assess the same.

He chosen 2 agents and 10 transactions. He has conducted Gage R&R study by processing each transaction twice by each agent. The transactions are selected on random basis for the processing.
366

Summary of Case Study (Manual Calculations)
10 Transactions, 2 Agents Each Agent processed each transaction twice Data Collection

Transaction
367

Gage R & R: Example
Repeatability: Variation due to measurement instrument Variation occurs when same operator measures the same part again and again Operator 1 2 Range 20 1 23 1 21 1 27 0 18 1 21 2 21 1 17 2 23 1 23 2 Rbar 1.2 Operator 2 2 20 24 21 26 18 21 24 20 23 25 Rbar

Part 1 2 3 4 5 6 7 8 9 10

1 21 24 20 27 19 23 22 19 24 25

1 20 24 19 28 19 24 22 18 25 26

Range 0 0 2 2 1 3 2 2 2 1 1.5

368

Gage R & R: Example
Repeatability: Variation due to measurement instrument Variation occurs when same operator measures the same part again and again

Variation due instrument : Average of Rbars = 1/2(1.2 + 1.5) = 1.35 Repeatability (EV) = K1 x Average Rbar = 1.19681

Trails 2 3

K1 0.8862 0.5908

369

Gage R & R: Example
Reproducibility: Variation caused by operators Variation occurs when same part is measured by different operators

Part
370

Gage R & R: Example
Reproducibility: Variation caused by operators Variation occurs when same part is measured by different operators Overall Variation between operators : Difference between xbars = (22.35 - 21.9) = 0.45 Reproducibility AV) = √((xbar diff x K2)2 – (EV2 / n r)) = √((0.45 x 0.7071)2 – (1.196812 / 10 x 2)) = 0.1739 n: Number of Parts r: Number of trails Operators 2 3 K2 0.7071 0.5231
371

Gage R & R: Example
Total Gage R & R : √Repeatability2 + Reproducibility2 = √( 1.196812 + 0.17392) = 1.2094

372

Gage R & R: Example
Part Variation:

Part
Rp: Mean max – Mean min = 27.00 – 16.00 = 11
373

Gage R & R: Example
Part Variation: Rp: Mean max – Mean min = 27.00 – 16.00 = 11 Part Variation (PV): K3 x Rp = 0.3146 x 11 = 3.4606 Parts 2 3 4 5 6 7 8 9 10 K3 0.7071 0.5231 0.4467 0.4030 0.3742 0.3534 0.3375 0.3249 0.314
374

Gage R & R: Example
Total Variation: Total Variation: √ Gage R &R2 + Part Variation2 Total Variation: √ 1.20942 + 3.46062 = 3.6658

375

Gage R & R: Example
Summary Table: Source Repeatability Reproducibility Total Gage R &R Part Variation Total Variation

% Study variation is SD 5.15 x SD % Study Var 32.99% > 30% hence variation in processing 1.19681 6.1636 32.64 time is not acceptable.
0.1739 1.2094 3.4606 3.6658 0.8956 6.2284 17.8221 18.8791 04.74 32.99 94.40 100

Reasons shall be investigated and improvement plan shall put in place.

376

Summary of Case Study (Using Minitab)
10 Transactions, 2 Agents Each Agent processed each transaction twice Data Collection

Transaction
377

Enter the data in Minitab as shown
Select Stat>Quality Tools> Gage Study> Gage R&R (Crossed)

Click on columns as shown

Choose either ANOVA or Xbar&R. It is preferable to chose ANOVA as it also analyses the interaction effect
378

% Study variation is 35.28% > 30% hence variation in processing time is not acceptable. Reasons shall be investigated and improvement plan shall put in place.

379

Total Gage R&R. Focus only on Green Bars. These represents the % of total variation contributed from the data. The Gage R&R should be only 10% of total variation. Rest should be attributed to within transactions Variation. 35.28% is not acceptable Part-to-part variation (transaction to transaction) (estimate of process variation) Agent to Agent (Reproducibility) Within Agent (Repeatability) Represents the repeatability. Presence of of assignable causes (point out of control point) indicates stability problem. Excessive common cause variation to be addressed Represents the reproducibility. The detectable shift in the pattern on X-bar chart and inconsistent pattern are unwarranted.
Remember : Most of the points should fall outside control limits.

380

This graph shows the data for the 10 transactions for each Agent. It display the raw data and highlights the average of those measurements

Similar to top graph but the data is presented by Agent instead of Transaction. The graph will help identify Agent issues

This graph shows the data for each Agent for all the Transactions. Represents the Bias. Ideally, all the lines should overlap each other
381

Exercise 1.17 (20 minutes)
Gage R & R– Continuous Data
1. Refer to your workbook. 2. Calculate Gauge R & R for a given example

382

Gage R&R for Discrete Data
Example: Gage R & R for evaluate appraiser process knowledge
An Engagement Team Lead (TL) considered 10 transaction and chosen 2 appraisers at random for Gage R&R study. The transactions were evaluated on “Correct” or “Incorrect” basis. For all the 10 transactions actual results (Standard) are also available with TL. 2 appraisers processed each transaction twice within gap of one week. The results are as follows. Study the Gage R&R.
TRANSACTION NUMBER STANDARD TRIAL 1 CORRECT INCORRECT INCORRECT CORRECT INCORRECT CORRECT CORRECT CORRECT INCORRECT CORRECT CORRECT CORRECT INCORRECT INCORRECT INCORRECT CORRECT CORRECT INCORRECT INCORRECT CORRECT RADHA TRIAL 2 CORRECT INCORRECT INCORRECT INCORRECT INCORRECT CORRECT CORRECT CORRECT CORRECT CORRECT TRIAL 1 CORRECT INCORRECT INCORRECT CORRECT INCORRECT CORRECT CORRECT CORRECT INCORRECT CORRECT KRISHNA TRIAL 2 INCORRECT INCORRECT INCORRECT CORRECT CORRECT CORRECT CORRECT CORRECT INCORRECT CORRECT

1 2 3 4 5 6 7 8 9 10

383

Note: Minitab 13 is used. Commands are similar to Minitab 14

Enter the data in Minitab worksheet. Test1 and test 2 results of same appraiser should be at one place, as shown

384

Analyze Results

Select Stat > Quality Tools > Attribute Agreement Analysis

385

Analyze Results

Click on columns as shown

Enter 2, 2, Radha, Krishna
Click on columns as shown

386

Percent Repeatable by appraiser
(it should be >=80%)

387

Repeatability Vs Standard

388

Percentage Reproducibility For all appraisers (it should be >=80%)

Percentage Reproducibility For all appraisers Vs Standard (it should be >=80%)

389

Assessment Agreement

Pictorial Representation
Within Appraiser

Date of study: Reported by: Name of product: Misc:

Appraiser vs Standard

100 90 80 70 60 50 40 30

100

[ , ] 95.0% CI
90 80 70 60 50 40 30

Percent

Percent

RADHA

KRISHNA

Percent

RADHA

KRISHNA

Appraiser Appraiser Since R&R is less than 80%, root causes to be identified and corrective actions to be taken. Reconduct study to assess the improvement.

390

Rules for Gauge R&R study conclusions
Case 1: Continuous Data If Total gage R &R %SV < 20 % , Measurement system is acceptable If Total gage R &R %SV between 20 % to 30 % Some problem with measurement system, use with caution If Total gage R &R %SV between > 30 % Measurement system is unacceptable. Case 2: Discrete Data If Gage R &R (Agreement) > 80 % Measurement system is acceptable Else, Measurement system is unacceptable.

391

Exercise 1.18 (20 minutes)
Gage R & R– Attribute (Discrete) Data
1. Refer to your workbook. 2. Calculate Gauge R & R for a given example

392

Process Capability

393

Process Capability
Process Capability Refers to the inherent or natural variation of a process Common Process Capability Indices 1. Potential capability Cp 2. Achieved capability Cpk Process Capability Cpk A methodology to check whether the process have the capability to meet the customer requirements Customer requirements are also expressed as Lower Specification Limit (LSL) = 50 Days Upper Specification Limit (USL) = 60 Days
394

Potential capability Cp:
A measure of the ability/potential to meet the customer specifications Example 1: Specification: 55 ± 5 Days Allowed variation = 50 Days to 60 Days Natural Variation = 52 Days to 58 Days Natural Variation < Allowed variation Hence Example 2 : Process have the capability to satisfy customer Specification: 55 ± 5 Days Allowed variation = 50 Days to 60 Days Natural Variation = 48 Days to 62 Days Natural Variation > Allowed Variation Then Process doesn’t have the capability to satisfy customer
395

Potential capability Cp:
If the data is normally distributed, then Natural variation : Mean ± 3 SD

Example:
Mean = 55 Days & SD = 1 Day Natural Variation = 55 – (3 x 1) to 55 + (3 x 1) = 52 Days to 58 Days

396

Potential capability Cp:
Ratio of allowed variation to Total variation Cp = Allowed variation / Natural variation = (USL – LSL) / ((Mean + 3 SD) – (Mean - 3 SD)) = (USL – LSL) / 6 SD A Process has the capability to meet customer requirements if Allowed variation > Natural variation (USL – LSL) > 6 SD Cp > 1

Preferably Cp should be greater than 1.34

397

Potential capability Cp: Example
The Time to Certify Agents in days is given in the table below. If the client requirement on Time to Certify Agents is 50 to 90 days, check whether the process has the capability to meet the client requirement ?
85 80 75 75 80 70 65 70 75 75 60 75 80 85 70 60 75 50 60 65

USL = 90 Days LSL = 50 Days Mean = 71.5 SD = 9.2

Cp = (USL – LSL) / 6 SD = (90 – 50) / (6 x 9.2) = 40 / 55.2 = 0.72

Conclusion ?
398

Potential capability Cp: Issues
• • Cp checks only whether the process has the potential to meet the requirements Cp never checks whether the Process is actually meeting requirements

399

Potential capability Cp: Issues
Example:
Process: Training Process Specification : 55 ± 5 Days Process 1 Mean SD USL – LSL 6 SD Cp 55 1 10 6 1.66 Process 2 52 1 10 6 1.66 Process 3 58 1 10 6 1.66 Characteristic: Time to Certify Agents

400

Potential capability Cp: Issues
Example: Process: Training Process Specification : 55 ± 5 Days Characteristic: Time to Certify Agents Process 1 Cp Allowed variation Total process variation Cp = 1.66 for all 3 processes all 3 process have the capability to meet customer requirement But only Process 1 is meeting customer requirement Hence Achieved Capability Index is developed
401

Process 2 1.66 50 to 60 49 to 55

Process 3 1.66 50 to 60 55 to 61

1.66 50 to 60 52 to 58

Achieved Capability Index Cpk:
Cpk = Min [Cpl, Cpu] Cpl = (Mean – LSL) / 3 SD Cpu = (USL - Mean) / 3 SD Cpk checks whether the process is centered.

402

Achieved Capability Index Cpk: Graphical Representation
LSL USL

Cpl = a / c = (Mean – LSL ) / 3 SD
1.2 1 0.8 0.6 0.4 0.2 0 1
3 SD c a b

Cpu = b / d = (USL - Mean ) / 3 SD

2

3

4
Mean

5
d

6

7
+ 3 SD 403

Achieved Capability Index Cpk: Example
6 12

Example: USL : 12 Mean : 9 LSL: 6 SD : 1

1.2 1 0.8 0.6 0.4 0.2 0 6
- 3 SD

3

3

Cpu = 3 / 3 = 1 Cpl = 3 / 3 = 1

Cpk = Min [1 , 1] = 1

Cpk = 1
7
3

8

9
Mean

10
3

11

12
+ 3 SD 404

Achieved Capability Index Cpk: Example
6 12

Example: USL : 12 Mean : 8 LSL: 6 SD : 1

1.2 1 0.8 0.6 0.4 0.2 0 5
- 3 SD 3

2

4

Cpu = 4 / 3 = 1.33 Cpl = 2 / 3 = 0.66

Cpk = Min [1.33, 0.66] = 0.66

6

7

8
Mean

9
3

10

11
+ 3 SD

Cpk < 1, Process doesn’t meet the customer requirements.

405

Achieved Capability Index Cpk: Example
6 12

Conclusion: Cpu = 3 / 3 = 1 Cpl = 3 / 3 = 1

1.2 1 0.8 0.6 0.4 0.2 0 6
- 3 SD

3

3

Cpk = Min [1 , 1] = 1

Cp = (USL – LSL) / 6 SD = 6 /6 = 1

When process Mean is at center of Specification then

7
3

8

9
Mean

10
3

11

12
+ 3 SD

Cpk =Cp

406

Potential capability Cp: Issues
Example: Process: Training Process Specification : 55 ± 5 Days Process 1 Mean SD USL – LSL 6 SD Cp Cpk 55 1 10 6 1.66 1.66 Process 2 52 1 10 6 1.66 0.67 Process 3 58 1 10 6 1.66 0.67 Characteristic: Time to Certify Agents

407

Relationship of Cp and Cpk

Cp =2 Cp =2 Cp =2 Cp =2 Cp =2

Cpk = 2 Cpk = 1.5 Cpk = 1 Cpk = 0 Cpk = -0.5

LSL

USL

Mean

408

Exercise 1.19 (20 minutes)
Process Capability
1. Refer to your workbook. 2. Calculate process capability for a given example

409

Process Sigma Level Calculations

410

Process Capability for Continuous Data
General Guidelines
1. Ensure that the data collected is free from measurement error 2. Ensure that the data is true representation of the population 3. Ensure that the process is stable 4. Ensure that the data is following Normal distribution. 5. If data is not normal, check for the transformed functions. 6. Still, data is non-normal, recheck the data or check whether the data fit in any non-normal distribution.

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Process Capability for Continuous Data
Z Calculation for Normal Distribution Data
If data is normal follow the following sequence. • Calculate Ppk using Minitab. • Sigma multiple Long term of the process is = Zlt = (3 * Ppk) • Sigma multiple Short term of the process is = Zst = (3 * Ppk)+1.5 • Note the DPMO also from Minitab output.

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Data Transformation
Typically one sided specification processes have skewed data. In such cases we transform the data points and specifications to convert data into a normal data. Transformed data for Y may be in the form of Y2, Y3, Y0.5, Ln(Y) etc. We can also use the Box-Cox transformation available in Minitab or apply instead of try out all the combinations. Transformation used for Y is also applied to LSL and USL However, test of normality should be done again to check if the transformed data has now become normal

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Process Capability for Continuous Data Example 1
The cycle time (in Minutes) of each transaction in a day on both the shifts was collected. The SLA for the cycle time of the process is 60min. Calculate the process capability.

Cycle Time 50 51 50

Enter the data in Minitab

Shift 1 1 1

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Stability Test
Select Stat>Control Charts> Variable charts for Individuals> IMR chart

Click Cycle time

Click OK

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Stability Test
I-MR Chart of Cycle Time_ 1
UCL=62.65 I ndividual Value 60 55 50 45 40 1 4 7 10 13 16 Observation 19 22 25 28 LCL=40.09

_ X=51.37

All the points in the I-MR control chart are within control limits. No significant trends also. So, it is a stable process. Note: If there are any out of control point, the related data to be analyzed and eliminate the assignable cause. Then, remove that data point and continue.

15

UCL=13.86

Moving Range

10

5

__ MR=4.24

0 1 4 7 10 13 16 Observation 19 22 25 28

LCL=0

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Select Stat>Basic Statistics> Normality Test Click ‘cycle time’ in ‘Variable’ field
Probability Plot of Cycle Time
Normal
99 Mean StDev N AD P-Value 51.37 4.206 30 0.696 0.062

Normality Test

95 90 80

Percent

70 60 50 40 30 20 10 5

P-Value is great than 0.05. So, it is a normal Distribution.
40 45 50 Cycle Time_ 1 55 60

1

Since the data is satisfying all the pre-requisites, we can calculate the process capability for this process.
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Capability Test
Select Stat>Quality Tools>Capability Analysis>Normal Click Cycle time Enter 1

Enter 60 in Upper Spec.

Click OK

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Select Stat>Quality Tools>Capability Analysis
Process Capability of Cycle Time
USL
Process Data LSL * Target * USL 60 Sample Mean 51.3667 Sample N 30 StDev(Within) 3.76009 StDev(O verall) 4.24218

Capability Test

Within Overall
Potential (Within) Capability Cp * CPL * CPU 0.77 Cpk 0.77 O verall Capability Pp PPL PPU Ppk Cpm * * 0.68 0.68 *

40
O bserved Performance PPM < LSL * PPM > USL 0.00 PPM Total 0.00

45

50

55

60

Exp. Within Performance PPM < LSL * PPM > USL 10836.64 PPM Total 10836.64

Exp. O verall Performance PPM < LSL * PPM > USL 20919.46 PPM Total 20919.46

Ppk =0.68 Zlt = (3 * Ppk) = 2.04 Zst = (3 * Ppk)+1.5 = 3.45 DPMO = 20919.46 419

Process Capability for Continuous Data Example 2
HR is working on reduction of recruitment cycle time. 30 data points are collected to set the baseline capability, as shown below. The SLA is 60 days. Calculate the baseline capability of the process.

Recruitment Cycle time 50 51 50
Enter the data in Minitab
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Stability Test
Select Stat>Control Charts> Variable charts for Individuals> IMR chart

Click Recruitment Cycle time

Click OK

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Stability Test
I-MR Chart of Recruitment Cycle time
60 I ndividual Value 55 50 45 40 1 4 7 10 13 16 Observation 19 22
1

UCL=61.45

_ X=51.37

Some of the points are crossing control limits. No significant trends also. So, it is a not a stable process.

LCL=41.28
1

25

28

12 Moving Range 9 6 3 0 1 4 7 10 13 16 Observation 19 22 25 28

UCL=12.39

__ MR=3.79

LCL=0

Since there are some out of control points, the related data to be analyzed and eliminate the assignable cause. Then, remove that data point and continue.

Let us continue with the same data now.

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Normality Test
Select Stat>Basic Statistics> Normality Test Click ‘Rec. cycle time’ in ‘Variable’ field
Probability Plot of Recruitment Cycle time
Normal
99 Mean StDev N AD P-Value 51.37 4.115 30 0.911 0.018

95 90 80

Percent

70 60 50 40 30 20 10 5

P-Value is less than 0.05. So, it is a non-normal Distribution. So look for the transformation.

1

40

45

50 55 Recruitment Cycle time

60

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Select Stat>Control Charts>Box-Cox Transformation

Data Transformation
Ensure dot on top option

Click Recruitment Cycle time Enter 1 Enter C2 It store the transformed data in C2 column Click Ok

Click on Options

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Data Transformation
Box-Cox Plot of Recruitment Cycle time
Lower CL

4.2

Lambda (using 95.0% confidence) Estimate 3.03 -1.26 * 3.03

4.0

Lower CL Upper CL Rounded Value

Lambda Value = 3.03

StDev

3.8

3.6 Limit 3.4

3.2 -5.0 -2.5 0.0 Lambda 2.5 5.0

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Data Transformation
Select Stat>Basic Statistics> Normality Test Click ‘Box-Cox’ in ‘Variable’ field

Probability Plot of Box-Cox
Normal
99 Mean StDev N AD P-Value 155934 35099 30 0.673 0.071

95 90 80

Percent

70 60 50 40 30 20 10 5

P-Value is greater than 0.05. So, The transformed data is following normal Distribution.
100000 150000 Box-Cox 200000 250000

1

50000

Now let us calculate the process capability
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Select Stat>Quality Tools>Capability Analysis>Normal

Capability Test
Click on Box-Cox

Click Rec. cycle time

Enter 1

Enter 60 in Upper Spec. Click Box-Cox button

Enter Lambda value 3.03 Click others
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Select Stat>Quality Tools>Capability Analysis
Process Capability of Recruitment Cycle time
Using Box-Cox Transformation With Lambda = 3
USL* Within O verall Potential (Within) Capability Cp * CPL * CPU 1.00 Cpk 1.00 O verall Capability Pp * PPL * PPU 0.84 Ppk 0.84 Cpm *

Capability Test

Process Data LSL * Target * USL 60 Sample Mean 51.3667 Sample N 30 StDev(Within) 3.36268 StDev(O verall) 4.15021 After Transformation LSL* Target* USL* Sample Mean* StDev(Within)* StDev(O verall)* * * 244230 155371 29657.1 35265.1

transformed data

75000 O bserved Performance PPM < LSL * PPM > USL 0.00 PPM Total 0.00

100000 125000 150000 175000 200000 225000 Exp. O verall Performance PPM < LSL* * PPM > USL* 5872.39 PPM Total 5872.39

Exp. Within Performance PPM < LSL* * PPM > USL* 1366.91 PPM Total 1366.91

Ppk =0.84 Zlt = (3 * Ppk) = 2.52 Zst = (3 * Ppk)+1.5 = 4.02 DPMO = 5872
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Process Capability for Attribute Data
We can use Capability Analysis (Binomial) if the data meet the following conditions. • Each item is the result of identical conditions. • Each item can result in one of two possible outcomes (success/failure, Go/No go) • The probability of success (or failure) is constant for each item. • The outcomes of the items are independent of each other.

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Process Capability for Attribute Data - Example
A Black belt is working on project to reduce the defective transaction in a process. He has collected data for 30 days as shown below. Calculate the baseline Capability of the process.

Sl No 1 2 3

Trasa

Enter the this data in Minitab
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Capability Test
Select Stat>Quality Tools >Capability Analysis>Binomial

Click on ‘Defective Transactions

Click on ‘No. of Transactions

Target, by default 0. Value can be entered if there is any target.

Click OK
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Capability Test
Proportion

Binomial Process Capability Analysis of Defect
P Chart 0.4 UCL=0.3819 _ P=0.2093 % Defective 20.93 18.90 23.07 0.00 209302 189000 230745 0.8088 0.7364 0.8816

The P-Chart Verifies that the process is in a state of control. In this case there is no out of control point. The proportion defective is 20.93%. Cumulative % defective is the running average of the percentage defective. It verifies that you have collected data from enough samples to have a stable defective estimate. The rate appears to be stabilizing around 21%

0.2

0.0 1 4 7 10 13 16 19 22 25 28 Sample

LCL=0.0367

Tests performed with unequal sample sizes Cumulative % Defective Summary Stats 22.8 % Defective 21.6 20.4 19.2 18.0 5 10 15 20 Sample 25 30 (using 95.0% confidence) % Defective: Lower CI : Upper CI : Target: PPM Def: Lower CI : Upper CI : Process Z: Lower CI : Upper CI :

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e Transations
Rate of Defectives

Capability Test
Defective rate plot verifies that the % defective is not influenced by the number of items sampled. Data should appear randomly distributed.

45

50 Sample Size

55

Dist of % Defective

ar

0

5

10 15 20 25 30 35

Histogram of % defective displays the over all distribution of the % defectives from the samples collected
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1 4

7 10 13 16 19 22 25 28 Sample

45

50 Sample

Tests performed with unequal sample sizes

Binomial Process Capability Analysis of Defective Transations
P Chart 0.4 Proportion UCL=0.3819 _ P=0.2093 % Defective

Cumulative % Defective

Sum ary Stats m (using 95.0% confidence) %Defective: Lower CI: Upper CI: Target: PPM Def: Lower CI: Upper CI: Process Z: Lower CI: Upper CI: 20.93 18.90 23.07 0.00 209302 189000 230745 0.8088 0.7364 0.8816
Tar 6.0 4.5 3.0 1.5 0.0

Dist of % D

Rate of Defectives

22.8
30 20 10 45 50 Sample Size 55

0.2

% Defective
Sum ary Stats m

21.6 20.4 19.2 18.0
Tar 6.0 4.5 3.0 1.5 0.0

0.0 1 4 7 10 13 16 19 22 25 28 Sample

LCL=0.0367

Tests performed with unequal sample sizes Cumulative % Defective

Dist of % Defective

(using 95.0% confidence)
22.8 % Defective 21.6 20.4 19.2 18.0 5 10 15 20 Sample 25 30

%Defective: Lower CI: Upper CI: Target: PPM Def: Lower CI: Upper CI: Process Z: Lower CI: Upper CI:

20.93 18.90 23.07 0.00 209302 189000 230745 0.8088 0.7364 0.8816

5

10

15 20 Sample

25

30

0

5

10 15 2

0

5

10 15 20 25 30 35

Capability Test
Results: P-chart indicates that process is stable as there are no data points out of control The chart of cumulative % defective show that the estimate of the overall defective rate appears to be settling down around 21%. The process Z is around 0.8, which is very poor. This process could use a lot of improvement

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Process Sigma Multiple for Discrete Data
Terminology Unit:
A unit is the tangible & measurable characteristic of a process input / output. Defects are observed / counted in the output characteristic of a unit (Denoted as Y)

Examples:
Every Call received by a call center Agent: Each employee recruitment cycle time Each transaction processed by agent The transaction not meeting the customer requirement Non-availability of system Unit= Call Unit = Employee Unit = Transaction Unit: Transaction Unit = System

Defect:
• • • A defect is a failure to conform to requirements Any type of undesired result is a defect. A failure to meet one of the acceptance criteria of a customer. A defective unit may have one or more defects.
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Specification Vs Characteristic
Specification is a customer-defined tolerance for the output unit value. There may be two sided specifications. Specification form the basis of any defect measurement exercise on continuous data A characteristic is a customer-defined expectation on the output unit. Characteristic from the basis of any defect measurement exercise on discrete data There may be multiple characteristics defined on a single unit. It is also possible to have a combination of specifications and characteristic on an single unit

Specification : Continuous Data

Characteristic : Discrete Data

Example: Transaction processing
Unit: Each transaction processed
Some of the defect definitions may be 1) Transaction not completed before 24min = Specification 2) Transactions not submitted in to client server after processing = Characteristic 3) Transactions submitted with out filling up the amount = Characteristic
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Opportunity for Defect:
Any critical characteristic which is routinely inspected before passing the item is an opportunity for defect. (or) Opportunity for the error in a process is the number of steps / task / actions in the process, where there is a possibility of committing error, that may result in a defect. Concept of OFD is applicable only when defect measurement is discrete.

Recollect the operational definition >>>>>> “Clarity is more important when developing and selecting the measures that will be used to determine the SIGMA PERFORMANCE of the process. e.g. Operational definitions may determine if a team is to count all the defects on an invoice (required to calculate defects per million opportunities) or the total number of defective invoices (any invoice with any defect) or the type of defects encountered on an invoice (to eliminate the most common defects first). Each of these cases may require a very different approach for gathering the data”
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Examples:
• For example, if client wants to ensure that each transactions to be completed with in 20 min, it can be considered as specification and follow the continuous data path.

If client is interested in controlling defective transactions, the entire unit is either good or Bad. A proportion can be calculated (Binominal).

If operation head or client head is interested in minimizing the abandoned calls and team is interested in identifying the steps / task / actions in the process, First team suppose to map the process and identify the steps which results in abandoned calls and those steps can be considered as Opportunity for Defect.

In some cases, client may scope the improvement area. In that situation, team can consider only that portion and identify the Opportunities for Defects.

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Examples:
• If the measurement and improvement of process characteristics calls for noting all the defects, each detail of the process to be considered OFD. • If there is no limit to the number of defects that can be counted, It is not possible to count the non-defects, poison distribution can be used.

If operation head or client head is interested in minimizing the abandoned calls and team is interested in identifying the steps / task / actions in the process, First team suppose to map the process and identify the steps which results in abandoned calls and those steps can be considered as Opportunity for Defect.

439

Exercise for DPMO calculation for Discrete data
The Inspection result for a set of 100 Purchase Orders (PO) are given in the Table below: Cause of Rejection Number of Defects Supplier Name Incorrect Supplier Door # Incorrect Quantity Higher than that in Indent Quantity less than that in Indent Price is higher than that in the Indent Price is lower than that in the Indent Number of Defects = Number of Opportunities for Defects = 1 1 3 1 2 2

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DPU: Defects Per Unit
The ratio of Number of Defects found to the total Number of Items Inspected Cause of Rejection Supplier Name Incorrect Supplier Door # Incorrect Quantity Higher than that in Indent Quantity less than that in Indent Price is higher than that in the Indent Price is lower than that in the Indent Number of Defects = 10 DPU = Number of Defects / Total Number Units Inspected = 10 / 100 = 0.1 Number of Defects 1 1 3 1 2 2

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DPO: Defects Per Opportunity
Ratio of total number of Defects to the total number of opportunities in the inspected lot. Cause of Rejection Supplier Name Incorrect Supplier Door # Incorrect Quantity Higher than that in Indent Quantity less than that in Indent Price is higher than that in the Indent Price is lower than that in the Indent Number of Defects 1 1 3 1 2 2

DPO = Defects / (Opportunities x Total number of Units Inspected) DPO = 10 / (100 x 4) = 0.025

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DPMO: Defects Per Million Opportunity
DPMO = DPO x 1000000 Cause of Rejection Supplier Name Incorrect Supplier Door # Incorrect Quantity Higher than that in Indent Quantity less than that in Indent Price is higher than that in the Indent Price is lower than that in the Indent Number of Defects 1 1 3 1 2 2

DPO = Defects / (Opportunities x Total number Inspected) DPO = 10 / (100 x 4) = 0.025 DPMO = DPO x 1000000 = 0.025 x 1000000 = 25000
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Yield:
Yield = e-DPU Cause of Rejection Supplier Name Incorrect Supplier Door # Incorrect Quantity Higher than that in Indent Quantity less than that in Indent Price is higher than that in the Indent Price is lower than that in the Indent Number of Defects 1 1 3 1 2 2

DPU = Defects / (Total Number Inspected) = 10 / 100 = 0.01 Yield = e-DPU = e-0.01 =0.99005 = 99 %
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ZST: Short Term Sigma Value
Z is the Standard Normal Variate equivalent to DPO obtained from Z table. Cause of Rejection Supplier Name Incorrect Supplier Door # Incorrect Quantity Higher than that in Indent Quantity less than that in Indent Price is higher than that in the Indent Price is lower than that in the Indent Number of Defects 1 1 3 1 2 2

DPO = Defects / (Opportunities x Total number Inspected) DPO = 10 / (100 x 4) = 0.025 ZST = 1.96 From conversion tables
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ZLT : Long Term Sigma Value ZLT = ZST - 1.5 Cause of Rejection Supplier Name Incorrect Supplier Door # Incorrect Quantity Higher than that in Indent Quantity less than that in Indent Price is higher than that in the Indent Price is lower than that in the Indent DPO = 0.025 ZST = 1.96 From conversion tables ZLT = ZST - 1.5 = 1.96 - 1.5 = 0.46
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Number of Defects 1 1 3 1 2 2

Exercise 1.20 (20 minutes)
Sigma level calculations
1. Refer to your workbook. 2. Calculate process capability for a given example

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Some Helpful Hints:
• It is always preferable to deal with continuous data. Continuous data is measured on a continuum or scale. • Collect the cause data along with performance data for initial quick wins. Once you determine the entire processes, collect the additional data related to those causes. • Always evaluate the colleted data, before calculating the base line capability

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Some Helpful Hints:
• Proportion Defective: The entire unit is either good or bad. A proportion can be calculated. Assume Binomial • Count of defects: There is no limit to the number of defects that can be counted. Assume poison. • Calculate Zlt value using Ppk (noted in Minitab output) instead of Cpk, as Ppk is represents the long term process capability • Not all the percentages are discrete or count data. Eg. % system availability. If both the numerator and denominator are determined by measuring the % is considered continuous data.

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Exercise D & M Phase deliverables
Deliverables

Table 1: Raw data on Transaction time of express Teller
Woking day Appraiser A 1 2 3 4 5 63 69 57 58 79 55 57 58 65 73 57 66 63 68 70 65 63 61 65 70 55 63 60 64 68 66 61 51 66 66 63 63 53 67 62 59 69 56 57 60 Transaction Times(sec) Appraiser B 56 60 61 60 65 62 58 61 62 61 56 65 69 59 66 60 58 62 69 67 53 65 65 61 61 63 64 57 68 70 64 59 60 58 80 61 56 59 62 79 Appraiser C 61 61 66 57 74 56 55 66 61 72 62 70 61 65 71 62 66 57 58 75 64 66 62 65 71 52 63 59 67 78 59 61 58 59 76 65 61 55 72 68

1 Type of data 2 Descriptive Statistics (Mean, Median, Mode, SD, Histogram) 3 Sample Size & confidence interval (Accuracy required 10 Secs) 4 Probability of getting transaction time between 55 to 65 seconds. 5 Probability of getting transaction time > 70 seconds 6 Normality Test 7 Process Capability ( LSL : 58 Secs, USL : 65 Seconds) 8 Sigma level calculation 9 Gauge R & R

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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Week 1 Define & Measure Phase
Sigma level calculations
1. Refer to your workbook. 2. Calculate process capability for a given example

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Thank You

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