define phase

Client, Enterprise & Competitive Intelligence for Product, Process & Systems Innovation

Dr. Rick L. Edgeman, University of Idaho

Six Sigma

IXCUSTOMER & COMPETITIVE INTELLIGENCE

FOR SYSTEMS INNOVATION & DESIGN

S IGMAS DEPARTMENT OF

STATISTICSDR. RICK EDGEMAN, PROFESSOR & CHAIR – SIX SIGMA BLACK BELT

[email protected] OFFICE: +1-208-885-4410



Six Sigma

IXS IGMAS DEPARTMENT OF

STATISTICS

DMAIC: The Define Phase



Six Sigma

IXS IGMAS

DEPARTMENT OF

STATISTICS

a highly structured strategy for acquiring, assessing, and applying customer, competitor, and enterprise intelligence for the purposes of product, system or enterprise innovation and

design.



Six Sigma

TheVillain

level DPMO CP3

2 308,537 Not Applicable3 66,807 25%-40% of sales4 6,210 15%-25% of sales5 233 5%-15% of sales6 3.4 < 1% of sales

Each sigma shift provides a 10% net income improvement

Cost of Poorly Performing Processes

(CP3)

Why is Six Sigma Important?



Six Sigma

Six Sigma Innovation

Structured Problem-Solving with DMAIC:The Analytic Heartbeat of Six Sigma



Six Sigma

The DMAIC Model

Define Control

Measure ImproveAnalyze

Voice of the Customer

Institutionalization



Six Sigma

Six Sigma Road Map: R DMAIC SI

Breakthrough Stage Strategy Phase Objective

Identification Recognize Identify Key Business

Define Issues

Characterization Measure Understand Current

Analyze Performance Levels

Optimization Improve Achieve Breakthrough

Control Improvement

Institutionalization Standardize Transform How Day-to

Integrate Day Business is Conducted

Bre

akth

rou

gh

Str

ate

gy

Bla

ck B

elt

Pro

jects



Six Sigma

Define

Control

Improve Analyze

Measure

Six Sigma Innovation & the DMAIC

Algorithm

Define the problem and customerrequirements.Measure defect rates and documentthe process in its current incarnation.

Analyze process data and determinethe capability of the process.

Improve the process and removedefect causes.

Control process performance andensure that defects do not recur.



Six Sigma

Six Sigma Projects Begin with aDetailed Assessment of Customer Needs

DEFINE:

A. Identify project CTQs: what does the customer think is essential?

B. The Team Charter represents the business case for the project.

C. Define and build a process map that relates measurableinternal processes to customer needs.

These will now be addressed in greater detail



Six Sigma

Define:A. Identify project CTQs: what does the customer think is

essential?Voice of the Customer (VOC)

That which is critical to the quality of the process according to your customer.

VOC tools:Surveys

Focus GroupsInterviews

Customer Complaints



Six Sigma

Advantages: Lower cost approach Phone response rate 70-90% Mail surveys require least

amount of trained resources for execution

Can produce faster results

Disadvantages:Mail surveys can get incomplete

results, skipped questions, unclear understanding

Mail surveys 20-30% response ratePhone surveys: interviewer has

influential role, can lead interviewee, producing undesirable results

Advantages:Group interaction generates

informationMore in-depth responsesExcellent for getting CTQ

definitionsCan cover more complex

questions or qualitative data

Disadvantages: Learning’s only apply to those

asked, difficult to generalize Data collected typically qualitative

vs. quantitative Can generate too much anecdotal

information

Focus GroupsFocus Groups

SurveysSurveys



Six Sigma

Advantages:Specific feedback Provides opportunity to respond

appropriately to dissatisfied customer

Disadvantages: Probably not adequate sample

size May lead to changing process

inappropriately based on 1-2 data points

Advantages:Can tackle complex

questions and a wide range of information

Allows use of visual aidsGood choice when people

won’t respond willingly and/or accurately by phone/mail

Disadvantages:Long cycle time to completeRequires trained, experienced

interviewers

Customer ComplaintsCustomer Complaints

InterviewsInterviews



Six SigmaSurvey Development

Information What do I need to know when this study is

complete? What is my budget? What information will the survey provide that

cannot be obtained elsewhere? How much time do I have to complete the

study? Who will be surveyed and how do I reach these

people?



Six Sigma

Survey Development Steps • Review survey objectives.

• Determine appropriate sample.• Identify specific areas of desired information.• Write draft questions and determine measurement scales.• Determine coding requirements.• Design the survey.• Pilot the survey–both the individual questions as well as the

total survey against the objectives.• Revise and finalize.

Creation of Electronic Surveyswww.zoomerang.com or

www.surveyz.com



Six Sigma

Define:A. Identify project CTQs: what does the customer think is essential?

• Who is the customer and what do they want? This may be derived from:Business Goals; Complaint Information; Customer Surveys or Focus Groups;

Benchmarking Data; Executive-Level Discussions; or Job-Specific Discussions.

We need a “Process / Product Drill-Down Tree”Y = f(X1, X2, …)

“Big Y” is a function of X1, X2, … where the X’s are internal process characteristicsor ‘CTQs’ that can be controlled. CTQs represent customer desired outcomes.

Drill Down Trees Integrate Customer CTQs and Business Strategy.

In this drill down tree the “Big Y” is decomposed into “little y’s” that are subprocesses of Y.This “drill down” continues through DEFINE and MEASURE. The X’s are part of ANALYZE.



Six SigmaProcess/Product Drill Down Tree

Black Belts/Green Belt work on removing defectson selected CTQ’s by improving processes.

Black Belts/Green Belt work on removing defectson selected CTQ’s by improving processes.

• Customer requirements (customer CTQ’s)

• Process requirements (process CTQ’s)

How Customer CTQ’s Become Project CTQ’s

Important To Our Customer

Sub -Process/Service

B


C

Product/Process/Service

Single Cell

Projects

Process -Based Projects

CT

Q P

roje

cts

Con

trol

labl

e B

y U

s

Define product and/or process tree

and identify product and process CTQ’s

Define product and/or process tree

and identify product and process CTQ’s


A

Process 4

Process 1

Process 2

Process 3

CTQ 9CTQ 1 CTQ 2 CTQ 3 CTQ 4 CTQ 5 CTQ 6 CTQ 7 CTQ 8



Six Sigma

Define:B. The Team Charter represents the business case for the project.

a. Define the BUSINESS CASE for the project – that is, what is its importance?What are the consequences of NOT doing the project? What are the priorities?How does it fit with business initiatives of the organization?

b. Provide a problem statement that describes the opportunities for improvementand a goal statement that defines the improvement objective.

Problem Statement + Goal Statement = Team Focusc. Define the Process – place appropriate boundaries on the process, that is itslimitations and constraints.

d. Select the team – this should be carefully done and needs-based. Also necessaryis determination of the role, responsibilities and expectations of each team member.



Six Sigma

SMART•Problem & Goal Statements

Should be:Specific

Measurable

Attainable

Relevant

Time-Bound



Six Sigma

Define: The Team Charter Business Name: Project Name:Project Charter:

Prepared by: _____________ Version: ___________ Date: ________

` Champion: _____________ Process Owner: _____________________Team Leader: ____________ Coach: ___________________________

Approval Signatures

Champion: ______________ Process Owner: _____________________Other Stakeholder : ________ Other Stakeholder:___________________

as needed as needed



Six Sigma

Define: The Team Charter

Table of Contents

1. EXECUTIVE SUMMARY …………………………………………………3 2. PROJECT OBJECTIVES…………………………………………………3 3. PROJECT SCOPE ……………………………………………………..…3 4. BUSINESS CASE …………………………………………………………3 5. PROJECT ORGANIZATION ……………………………………………3 6. SCHEDULES……………………………………………………………….4 7. COMMUNICATION PLAN ……………………………………………...4 8. PROJECT CONTROL PROCEDURES ……………………...…………4 9. PROJECT ASSUMPTIONS ……………………………..………………4 10. CONFLICT RESOLUTION ………………………………………………. 5



Six Sigma

Define: The Team Charter1.0 EXECUTIVE SUMMARY

Provide a brief description of the project, its goals and objectives. This is the “elevator speech” for the project.

2.0 PROJECT OBJECTIVES

Describe what the project hopes to accomplish. If this project’s purpose is to design a new product or service, describe same. At a high-level, describe the potential customers of the new product/service and their needs.

Include goals or targets for the new product or service (customer and business related). If the project’s purpose is to redesign an existing product, service or process, develop problem and goal statements. Attempt to quantify the “pain” and associated goals using data.



Six Sigma

Define: The Team Charter3.0 Project ScopeDescribe the project deliverables (i.e. a new product or redesigned and implemented business process) and the boundaries of the project. This is a further definition of the what is to be designed / redesigned. Scope aspects to consider include products / services and/or processes to be designed / redesigned, facilities to be employed, organizational structures or labor agreements, compensation plans, and use of existing hardware/ software platforms. As the project progresses, the scope may be refined via a Multi-Generational Product / Process Plan (MGPP). Include the MGPP here.

4.0 Business CaseDescribe why this particular project is important to the business. This may include a description of a business opportunity, and / or a cost/benefit analysis. This latter analysis may include tangible and intangible benefits and costs. Assumptions made should be clearly documented. This section may also include a risk analysis, focused on factors that could act as barriers to the projects success. The risk analysis should identify the risk factor, and mitigation strategies identified to manage the risks.



Six Sigma

Eight Steps for Establishing Project Boundaries

5. Map your process– Map the process at it works today (as is).– Map the informal processes, even if there is no formal, uniform process in

use.

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



Six Sigma

Define: The Team Charter5.0 PROJECT ORGANIZATION

Define how the project is to be run. This includes who will work on the project, roles & responsibilitiesof project members and supporting staff (i.e. Master Black Belts) and reporting relationships to the champion/management. A project organization chart and roles and responsibilities matrix may be shownhere. The matrix should include each role, the role’s responsibilities, the business resource(s) assigned to the role and the level of commitment for each resource. 6.0 SCHEDULES & RESOURCES

Describe when the project should be completed and the key project milestones. Initially, the projectcompletion date (define what “completion” means) and milestones based on the steps of DMADV may beincluded. As the project is better defined, more detailed project plans may be included in Gantt / PERT format. The DMADV Tollgates may be used to develop a work-breakdown structure for the project. Based on the resource commitments identified in Section 5.0 of the Charter, the schedule can be resource loaded (either to determine the “finish date” based on available resources, or to identify required resources based on a targeted completion date).



Six Sigma

Define: The Team Charter 7.0 COMMUNICATION PLAN Define how the project team will communicate with business leaders, staff and other stakeholders. A table such as shown below is an easy way of summarizing the communication plan. Included are examples of typical communication types:

CommunicationType

Audience Frequency Responsibility Delivery Mechanism

Task Status Project Team

Weekly Project Manager E-Mail

Phase Completion Champion / Review Board

End of each Phase

Project Manager Project Phase Meeting

Design Outputs Various As Needed Project Team Design Review Meeting



Six Sigma

Define: The Team Charter8.0 PROJECT CONTROL PROCEDURES: Describe how the project will be controlled andmanaged. Depending on the project’s scope, risk and perhaps regulatory issues, the extent of thenecessary control processes will vary. Some control processes to consider include:

Quality Assurance Plan Test Plan Progress Control Change Control Issue Resolution Problem Reporting & Resolution Risk Management Change Acceleration Processes

9.0 PROJECT ASSUMPTIONS: This section should document any assumptions that have notpreviously been covered and that are important to the success of the project. These may includemarket or organizational conditions, availability of resources or others.

10.0 CONFLICT RESOLUTION: Describe and Contractually Commit to the expectations ofeach team member, deliverables required of each member, dates and formats of those deliverablesacceptable and unacceptable means and forms of communication, and agreed upon means of resolving project-related conflicts among team members.



Six Sigma

Project Scope On 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? Under what (if any) constraints must the team work? What is the time commitment expected of team members? What are the advantages to each team member for the time

commitment?



Six SigmaEight Steps for Establishing Project

Boundaries1. Identify the customer

– Who receives the process output? (May be an internal or external customer)

2. Define customer’s expectations and needs– Ask the customer– Think like the customer– Rank or prioritize the expectations

3. 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

4. Identify CTQ’s for those deliverables– What are the specific, measurable attributes that are most critical in the

deliverables?– Select those attributes that have the greatest impact on customer

satisfaction.



Six Sigma

The SIPOC Model

Suppliers Customers

Inputs OutputsProcess

Steps

Inform Loop



Six Sigma

Six Sigma COPIS Model

Customers Suppliers

Outputs InputsProcess

Steps

The Voice of the Customer (VOC) is aggressively sought and rigorously evaluated and used to determine needed outputs and hence the optimal process configuration needed to yield those outputs and their necessary inputs for which the best suppliers

are identified and allied with.

From Concept to Market: the Voice of the Customer

How does Six Sigma Work?



Six Sigma

Define:C. Define and build a process map that relates measurable internal

processes to customer needs. (COPIS)

The High-Level Process Mapa. Displays the relationship between the customer and the process;

b. Identifies key inputs; and c. Identifies key customer requirements.C – customer’s key requirements; O – outputs; P – process steps; I – Inputs; S – suppliers

Customers Suppliers

Outputs InputsProcess

Steps



Six Sigma

Process Mapping: Top-Down Flowchart – The “What’s” a. List the fundamental process steps. Limit your list to about five major steps. b. Write these down, in the order they occur, from left to right across the top of a

writing surface.c. Under each major step, list – in the order of occurrence, the major sub-processes

that compose the major step (again, only five or six of these).

A B C D EA.1

A.2

A.3

A.4

B.1

B.2

C.1

C.2

C.3

E.1

E.2

E.3

D.1

D.2

D.3

D.4



Six Sigma

Process Mapping: Deployment Flowchart – “What’s” & “Who’s” – a. List the fundamental process steps in the order they occur. b. Across the top of your writing surface, list the names of the people

or organizations involved in the process.c. Beneath the name(s) of those responsible for the first step, draw a

box and list the step in that box.d. If any other entities assist or advise those with primary responsibility

for that step, list the entity name and draw an oval around it. Connect these ovals to the box.

e. Repeat this process for the second and subsequent steps.

In this way we will have both the “what” and “who” listed.



Six Sigma D

ep

loym

en

tF

low

ch

art

Entity 1 Entity 2 Entity 3 Entity 4 Entity 5

Step A

Step B

Step C

Step D

Step E

Step F



Six Sigma

Process Mapping: Detailed Flowchart

1. Draw the first symbol and record adescription of the process step therein.

2. Do similarly with all remaining processsteps, connecting these to indicateprocess flow.

3. Stop when you have mapped the (portion of the) process of interest.

Each symbol should represent only one action or one “yes/no” decision.

Operation

Measurement

Input / Output

Decision

Transportation Start / Stop

Start / Stop

Operation

Document

DelayOperation

Decision

Yes

No

Operation

No

Decision

YesOperation

DecisionNo

Yes Yes Storage



Six Sigma

IXS IGMAS DEPARTMENT OF

STATISTICS

End of Session

define phase

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