six sigma training material

Six Sigma March 10, 2010

Confidential | Six Sigma 76 /87

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Understanding Six Sigma March, 2010

Confidential | Six Sigma 1/87

Table of Contents

1. Introduction .................................................................................................................. 4

2. The Nature of Six Sigma .......................................................................................... 6

3. Six Sigma Organization ............................................................................................ 7

4. Six Sigma – CMM ........................................................................................................ 8

4.1. Indicators of Maturity ..................................................................................... 9

4.2. Reactive Projects Percentage ...................................................................... 9

4.3. Projects ‘Hit Rate’ ............................................................................................. 9

4.4. Cost of Quality ................................................................................................. 11

5. Six Sigma - A Gateway to process capability improvement .................... 11

5.1. What is Six Sigma? ........................................................................................ 12

5.2. Need six times more ..................................................................................... 12

6. What Makes Six Sigma So Powerful?................................................................ 13

6.1. Mathematics for six sigma .......................................................................... 14

7. Six Sigma Application ............................................................................................. 15

7.1. Define and measure ...................................................................................... 16

7.2. Measurement ................................................................................................... 16

7.3. Analysis .............................................................................................................. 17

7.4. Improve .............................................................................................................. 17

7.5. Control ................................................................................................................ 18

8. Basic Tools for Six Sigma ...................................................................................... 19

9. Seven Principles of six sigma ............................................................................... 20

9.1. Principle No 1 ................................................................................................... 20

9.2. Principle No 2 ................................................................................................... 20

9.3. Principle No. 3 .................................................................................................. 21

9.4. Principle No. 4 .................................................................................................. 22

9.5. Principle No. 5 .................................................................................................. 23

9.6. Principle No.6 ................................................................................................... 23

9.7. Principle No 7 ................................................................................................... 24

10. Six Sigma .................................................................................................................. 24

11. Concept significance ............................................................................................. 25

12. Statistical significance .......................................................................................... 28

13. Concept of 1.5 sigma shift ................................................................................. 30

14. Quality significance of six sigma...................................................................... 31

15. Key Concepts of Six Sigma ................................................................................ 31

16. Six sigma methodology ....................................................................................... 32

16.1. DMAIC versus DMADV .................................................................................. 32

16.2. The Similarities of DMAIC and DMADV .................................................. 32

16.3. The Differences of DMAIC and DMADV .................................................. 33

17. Six Sigma Organisation ....................................................................................... 35

17.1. Champions ........................................................................................................ 35

17.2. Master Black Belt ............................................................................................ 36

17.3. Black Belt ........................................................................................................... 36

17.4. Green Belt ......................................................................................................... 36



18. Six Sigma Requirements ..................................................................................... 37

18.1. Management Team Buy-In and Support ............................................... 37

18.2. Education and Training ................................................................................ 37

18.3. Resource Commitment ................................................................................. 38

18.4. Link to Compensation ................................................................................... 38

19. Six Sigma Implementation ................................................................................ 38

19.1. How to Select a Quality Improvement Project ................................... 38

19.2. Linking Quality to Finances ........................................................................ 38

20. Application of Six Sigma to Small Companies ............................................ 39

20.1. Management Team Buy-In and Support Easier ............................ 39

20.2. Education and Training Harder ............................................................... 39

20.3. Resource Commitment Slightly Harder ............................................... 40

20.4. Link to Compensation Easier .................................................................. 40

20.5. Selection of Project ........................................................................................ 40

20.6. Linking Quality to Finances ........................................................................ 42

21. CASE STUDY ............................................................................................................ 44

21.1. Six Sigma Implementation in GE ............................................................. 44

21.2. Potential Benefits of 6 sigma program .................................................. 45

21.3. Use of Scorecards........................................................................................... 45

21.4. Statistical Tools ............................................................................................... 47

21.5. Leadership is Key ........................................................................................... 49

21.6. An Example of GE's Success with Six Sigma ...................................... 49

21.7. Conclusion ......................................................................................................... 50

22. Quality Improvement Tools (QC Tools) ........................................................ 51

22.1. Introduction to QC Tools ............................................................................. 51

22.2. Tally sheet ......................................................................................................... 51

Purpose ................................................................................................................................. 51

Procedure ............................................................................................................................. 51

Problem ................................................................................................................................. 52

Month ..................................................................................................................................... 52

22.3. Graph .................................................................................................................. 53

Purpose ................................................................................................................................. 53

Procedure ............................................................................................................................. 53

22.4. Bar Chart ........................................................................................................... 54

22.5. Block Diagram ................................................................................................. 55

Fig. 5: Block Diagram: Problem Solving Process ................................................. 56

22.6. Histogram .......................................................................................................... 56

Purpose ................................................................................................................................. 56

Procedure ............................................................................................................................. 56

22.7. STRATIFICATION ............................................................................................ 57

Purpose ................................................................................................................................. 57

Procedure ............................................................................................................................. 57

22.8. SCATTER DIAGRAM ....................................................................................... 57

Purpose ................................................................................................................................. 58

Procedure ............................................................................................................................. 58

22.9. CONTROL CHART ............................................................................................ 58



Purpose ................................................................................................................................. 59

22.10. CONTROL CONTROL CHART – TALLY EXAMPLE .............................. 60

22.11. CONTROL CHART FOR ATTRIBUTES .................................................... 63

22.12. PROCESS CAPABILITY............................................................................... 64

22.13. PARETO DIAGRAM ...................................................................................... 65

Purpose ................................................................................................................................. 65

Procedure ............................................................................................................................. 65

22.14. Brainstorming ............................................................................................... 67

Purpose ................................................................................................................................. 68

Procedure ............................................................................................................................. 68

22.15. CAUSE AND EFFECT DIAGRAM .............................................................. 70

Purpose ................................................................................................................................. 70

Procedure ............................................................................................................................. 70

22.16. FLOW CHART ................................................................................................ 72

Procedure ............................................................................................................................. 72

22.17. ARROW DIAGRAM ....................................................................................... 73

Purpose ................................................................................................................................. 73

Procedure ............................................................................................................................. 73

Acquire .................................................................................................................................. 75

22.18. RELATIONS DIAGRAM ............................................................................... 76

Procedure Preparation of Relations Diagram consists of the following steps – .............................................................................................................................................. 76

22.19. TREE DIAGRAM ............................................................................................ 77

Purpose ................................................................................................................................. 77

Procedure ............................................................................................................................. 77

22.20. AFFINITY DIAGRAM ................................................................................... 78

Purpose ................................................................................................................................. 79

Procedure ............................................................................................................................. 79

22.21. COST-BENEFIT ANALYSIS ....................................................................... 80

22.22. CUSTOMER - SUPPLIER RELATIONSHIP CHECKLIST .................... 81

22.23. SELECTION OF RIGHT COMBINATION ............................................... 83



1. Introduction

“The quality performance” is the foundation stone of all types of

industries. The growth of an industry depends on its performance quality.

So checking out of the performance quality of an industry is something

which is inevitable. “SIX SIGMA” – The statistical representation, is

a process of quality measurement, which helps the organization in the

improvement of their quality.

Six Sigma is a systematical process of “quality improvement through the

disciplined data-analyzing approach, and by improving the organizational

process by eliminating the defects or the obstacles which prevents the

organizations to reach the perfection”.

Six sigma points out the total number of the defects that has come across

in an organizational performance. Any type of defects, apart from the

customer specification, is considered as the defect, according to Six

Sigma. With the help of the statistical representation of the Six Sigma, it

is easy to find out how a process is performing on quantitatively aspects.

A Defect according to Six Sigma is nonconformity of the product or the

service of an organization.

Since the fundamental aim of the Six Sigma is the application of the

improvement on the specified process, through a measurement-based

strategy, Six Sigma is considered as a registered service mark or the

trade mark. Six Sigma has its own rules and methodologies to be applied.

In order to achieve this service mark, the process should not

produce defects more than 3.4. These numbers ofdefects are considered

as “the rate of the defects in a process should not exceed beyond

the rate 3.4 per million opportunities”. Through the Six



Sigma calculation the number of defects can be calculated. For this there

is a sigma calculator, which helps in the calculation.

In order to attain the fundamental objectives of Six Sigma, there are Six

Sigma methodologies to be implemented. This is done through the

application of Six Sigma improvement projects, which is accomplished

through the two Six Sigma sub-methodologies. Under the improvement

projects came the identification, selection and ranking things according to

the importance. The major two sub-divisions of the improvement projects

are the Six Sigma DMAIC and the Six Sigma DMADV. These sub-divisions

are considered as the processes and the execution of these processes are

done through three certifications. The three types of certifications used

for the execution of the Six SigmaDMAIC and Six sigma DMADV are:

“Six Sigma Green Belts and Six Sigma Black Belts, which is

overseen by Six SigmaMaster Black Belts”.

The Six Sigma ensures the quality control, total quality management and

zero defects. Through the implementation of the Six Sigma it is made

sure that the goals are set on the improvement of all processes to reach

the level of better quality. “The Six Sigma” shows the organization’s

ability of highly capable processing in producing the outputs within the

limited specifications. Therefore it can be said that the processes that

operates with the Six Sigma quality, is able to produce a quality products

at a low rate of defects.

When a process attains the certification of Six Sigma quality, it is clear

that the organization has attained the standard deviations form the

means of the production till the specific limitations, and so can make sure

that there is no room for the items to fail to meet the specifications.

Altogether we can consider the Six Sigma as the professionalizing of the

quality management functions



2. The Nature of Six Sigma

In mid-80’s, six sigma began as a rigorous and absolute statistical

measurement reflecting no more than 3,4 defects per millions

opportunities (DPMO). Since that time, however, six sigma has been

perfected as a new science of doing business.

Traditionally, six sigma companies are only focusing on measuring defects

and meticulously eliminating them. A typical six sigma definition given by

Hill (1999) of Allied Signal, is as follows:

It is a customer focused continuous improvement strategy and discipline

that minimizes defects and variation and discipline that minimizes defects

and variation towards an achievement level of 3.4 defects per millions

opportunities in our product design, production and administrative

processes.

Harry (2000) defines six sigma initiative as follows:

Six sigma is a long-term forward thinking initiative designed to

fundamentally change the way corporations do business, it is first

and foremost designed to generate immediate improvements in

profit margins.

This definition also does not give complete picture of six sigma. In a

recent article Harry (2001) suggests that, all defects or errors represent

risk but not all forms of risk can be characterized in terms of defects. He

further says that six sigma is about the abatement of risk in everything a

business does or delivers. Thus Harry is suggesting that elimination of

defects is not the ultimate of six sigma and proactively reducing the

business risk is the real goal of six sigma.



Further, achieving the six sigma performance (3.4 DPMO) once is NOT

going to last forever, as changes in the customer requirements will

change the sigma level back to three sigma overnight. Today, customer

requirements, competition, technology are changing dynamically and

even we may not have sufficient time to achieve six sigma performance

levels. For example, a CD manufacturing company is working on

perfecting a process which is designed for 24 X speed and within 6-8

months time the CD drive manufactures have come out with faster drive

not leaving room for achieving the higher levels of performance in the

current process.

Another, important aspect of six sigma is, one many not try to achieve six

sigma performance in each and every process, it may not be required or

may not be economical. In the so-called six sigma companies also, six

sigma performance is achieved in a couple of processes. In large number

of processes 4 to 4.5 sigma performance may be more than justified in

very few critical processes only. In case of airlines, the fatality rate is

more than six sigma level and baggage handling process is still at three

sigma level.

3. Six Sigma Organization

In six-sigma language, an average company operates at three to four

sigma. Companies below three sigma performance may not survive for

long. Best-in-class companies are at six sigma performance.

One need not wait till we achieve the six sigma performance (3.4 DPMO)

to call an organization ‘six sigma organization’, Pande et. Al (2000)

suggests the following definition:



An organization that is actively working to build the themes and practices

of six sigma into its daily management activities, and is showing

significant improvements in process performance and customer

satisfaction.

The authors further add the following notes to this definition:

1. To qualify as six sigma organization, you do not need to have achieved

actual six sigma levels of performance on any process.

2. Simply using sigma measures or few tools does not qualify a company to

be a ‘six sigma organization’, either.

3. You don’t have to call it six sigma to be six sigma organization

4. Six Sigma – CMM

An organization typically becomes true ‘six sigma organization’ by

acquiring certain key competencies, which can help it in designing,

manufacturing and supplying world-class quality products and services at

lowest cost in the most effective and efficient manner, thus ensuring

continued growth of the business in the long term. Moreover, the so

called key competencies cannot be acquired over night and at different

points of time the organization may be at different points of time the

organization may be at different maturity levels. Thus this book proposes

‘six sigma competency maturity model’, shortly, six sigma – CMM.

The benchmarking reveals the following three key success factors:

• Right Projects

• Right People

• Right Roadmap & Tools

Based on the above three key success factors, self-assessment guide to

six sigma competencies is given in the following table: Detailed discussion

on these factors is given in Chapters 8 through 10.



4.1. Indicators of Maturity

Further, the following three parameters can be used as indicators of CMM

level of a six sigma organization.

• Reactive Projects Percentage

• Projects ‘Hit’ rate

• Cost of Quality

4.2. Reactive Projects Percentage

In the initial stages of six sigma deployment all or most of the projects

are of reactive type – reducing defects, errors, complaints etc. In this

stage the savings are very large and can be measured easily.

As the maturity level improves across the company, reactive projects will

reduce drastically, and eventually the number of proactive type projects

will increase. These proactive projects will ultimately reduce the business

risk.

4.3. Projects ‘Hit Rate’

Project approach to quality improvement is not new to six sigma. Quality

initiatives, such as TQM, BPR have the same approach. The data from

different surveys established that the failure rate in TQM companies is

around 60-75% (Hit rate of 25-40%) and in BPR the hit rate is 50%.

However, Lowenthal (2000) reported 83% hit are in six sigma companies,

based on a survey conducted in 40 companies.



Competency Maturity Level

Right Projects Right People Right Methodology & Tools

Uncertainty • Firefighting is the norm

• No formal projects

• No formal teams • Problems are solved through

experience • Tools are NOT

applied

Awakening • Project identification is adhoc

• Projects are NOT

well defined • Projects NOT

aligned to strategy

• Teams are formal • People

identification is adhoc

• Teams are in forming stage

• Methodology is applied partially

• Application of tools is adhoc

• Tools are applied with the help of facilitators

Enlightenment • Project identification is structured (Bottom-up)

• Projects are well defined and scoped properly

• Projects are aligned to strategy

• Team leaders and members are carefully selected based on well defined criteria

• Teams are in storming stage

• Champion support to teams is adhoc

• Structured methodology such as DMAIC is followed

• Right tools are applied

• Team leaders have

good understanding of the tools

Wisdom • Projects are identified from business need and

flow from strategy (Top-down)

• Projects are well defined and scoped

properly

• Teams are in norming stage

• Champion follows

a structured review process and extends full support

• Tollgates are used at all stages in methodology

• All members have good application knowledge of the tools

Certainty • Structured system such as Balanced Scorecard is used as a source of

identifying projects (Top-down)

• Projects are well

defined and scoped properly

• Projects are identified to reduce

the business risk

• Teams are in performing stage

• Champion and Team leaders are

in coaching and mentoring mode

• By incorporating the learning’s the methodology is refined

• New application of tools are discovered

• New tools are learned and applied



4.4. Cost of Quality

Cost of quality is again not new in six sigma. Traditional concepts suggest

that beyond an optimal defect level, improving quality will increase the

cost of quality instead of reducing it. This happens because the cost of

preventing defects will be very high when compared to damage cost.

5. Six Sigma - A Gateway to process capability improvement

3.4 Defects in 1 million, if you precision - engineered total quality, that is

what you get. Around world, quality obsessed CEO"S are chasing that

magic figure as they wield what could turn out to be the sharpest tool to

please customers, pump up profits, and eliminate flaws. Invented at

Motorola, perfected at GE and now practiced by a large number of

corporations in India, six sigma is converting defect prone businesses in

to powerhouses of perfection.

Such force flows from a simple, but stunningly sharp objective of 6 sigma

design, operate, and control every one of the processes in any company

in such a way that none of them yields more than 3.4 defects out of every

1 million units of output. With breath taking clarity, 6 sigma is telling

companies in clear, accurate, mathematical terms how good - or, more

likely bad-their quality levels are, how much they can improve, and what

progress they are making on that journey. And the Sigma strategists are

leveraging this knowledge to consummate improvements in quality not

just on the shop floor, but also all over their organization.



5.1. What is Six Sigma?

Principles of 6 sigma: At the strategic level the goal of six sigma is to

align an organization keenly to its market place and deliver real

improvements (and dollars) to the bottom line. At the operations level, six

sigma's goal is to move business product or service attributes within the

zone of customer specifications and to dramatically shrink process

variation - the cause of defects that negatively affects customers.

Obviously when market requirements change and a company's processes

don’t, the defect level rises while process sigma drops, followed closely by

market share and profits. Many things can complicate the process sigma

calculations: multiple customer requirements, multiple opportunities of

defects within one product or service, fragmented

Market segments, multiple process levels, and non-normal data

distributions. Fortunately six-sigma deals methods offer just as many

ways to deal mathematically with each of these complications.

The real challenge of six-sigma isn't the statistics. It is getting to the

point where one can meaningfully measure a business's current

performance against dynamic customers requirements while developing

the internal organizational abilities to respond to changing market place

conditions. Doing this means aligning organizational components inside

the company (leadership, strategy, people and technology) to give six

sigma efforts the momentum and staying power they need to succeed.

5.2. Need six times more

You've got it. For six sigma at its most powerful is tools that can quality

levels in every single process in your company not just on the shop floor.

In fact, that's precisely where its versatility steams. From your accounts



to your customer service, from your supply chain management to your

advertising, every process can be evolution the basis of its adherence to

Critical To Quality (CTQ) parameters. After all, defects can and do occur

in an engineering design, in the time it takes to treat a patient or even in

a banking transaction. All your processes, therefore, can deviate from the

ideal level, and cost you additional time, labour, and material.

But, using the sigma scale from 1 to 6, you can study competing levels of

capability and, then, raise yours to those standards. What six sigma does

is to allow you an efficient way of finding out where your greatest need is

and what your softest point is, and of addressing them in a measurable,

analytical, and objective way.

"The difference between six sigma and the other quality

approaches is that the others measure your abilities to meet

some quality. Six sigma actually measures the output of your

processes. So, it’s less theoretical and more real world".

6. What Makes Six Sigma So Powerful?

The explanation drawing on the original work in statistical process control

theorized by the grandfather of quality, Walter Stewart is deceptively

simple. The mathematical translation states that process that operates at

six sigma allows only 3.40 defects per million parts of output. The six, of

course, is the culmination of a progression that starts, for all practical

purposes, at Three Sigma (66,807 defects per million), and traverses

Four(6210) and Five(233). But there is much more to six sigma than

merely lowering the number of defects. The Greek letter, Sigma, is the

statistical short hand for standard deviation and what the metric really

refers to is the extent to which a process is capable of deviating from

preset specifications without causing errors. The higher the sigma rating,



the greater is this capability, with six sigma-allowing variations of up to 6

times the standard deviation without causing flaws.

6.1. Mathematics for six sigma

The mathematical interpretation of Six Sigma is crucial to implementing

the tool. The output of any process in your company the products rolling

off your assembly lines, the bills created by your accounts people, the pay

chouse delivered can be analyzed terms of the number of errors in it.

What Six Sigma analysis does is to measure every process on each of the

CTQ factors.

Consider, for instances, a process which, every hour, produces 100 units

of a particular component which should measure 100mm in length.

Measurements may show that while 95 out of the 100 units produced are,

indeed, 100mm long, the remaining 5 deviate from that ideal, each to a

different extent. This data can be used to calculate the standard

deviation, or sigma- the likelihood and extent of deviations from the norm

of the process. Assume that the value of sigma for this process turns out

to be 0.01.

The question, of course, is whether these deviations will be counted as

flaws under the given CTQ. This is determined by the upper and lower

specification limits of the products. If they allow those deviations that is,

if the upper and lower control limits of the process falls beyond the upper

and lower specification levels-the customer won't have a problem. What if

they don't? That's when the capability of the process has to be changed.

Six Sigma offers 2 approaches. One is to change the design of the

products in which this component is used so that it can accommodate

some of the variations in the length without malfunctioning. Thus, for

instance, the so-called design-width could be Three Sigma accounting

components with 3 times the standard deviation of the process.



In other words, components that measure between 99.07mm and

100.03mm will also be acceptable. Of course, that will still mean

eliminating those units whose sigma exceeds 3,but this will, at least,

lessen the number of defects in every sample.

The second approach is to make improvements in the process itself so

that the chances of defects are lowered. That will reduce the value of the

standard deviation, or sigma, of the process. If, say, the value of the

sigma can be halved through this method to 0.005, the acceptable

specification-limits-99.07mm and 100.03mm respectively-will

automatically become 6 times and not 3 times-the standard deviation. A

Six Sigma process will be yours. The implication? To take a process to Six

Sigma level, you must, ideally, adopt both approaches; changing the

design to increase the range of acceptability in the CTQ; and improving

the process to reduce its chances of variance.

7. Six Sigma Application

In conceptual terms, the primary aim is to identify, within each sub

process, the opportunities for defects, which can be arrived at through the

use of different statistical tools, such as regression analysis, design of

experiments, and Chi square testing. Whatever from a quality problem

takes a wrongly marked invoice, a defective spare, abnormally high

warranty costs the six-sigma strategy is to translate it into a metric

named Defect Per Opportunity, or DPO. This is further scaled down to

Defects Per Million Opportunities, or DPMO, reducing which becomes aim

of six sigma samurai. If a company can tackle its defects on a war

footing, the six-sigma exercise can be successful.



Be prepared to follow a precise sequence of well defined steps in applying

six sigma, classified into 4 phases, each of them requiring a specific

breakthrough. Before that, of course, you must identify the process that

you will apply the tool to. With the target established, the actual

implementation gets under way thus:

7.1. Define and measure

* Six Sigma overview and the DMIAC road map.

* Process mapping.

* Quality function deployment.

* Failure mode and effects analysis.

* Organizational effectiveness concepts, such as team development.

* Basic stats using Minitab.

* Process capability.

* Measurement system analysis.

7.2. Measurement

The starting point is the establishment of the metrics that will be

improved using six sigma. First, the CTQ characteristics of the process

have to be identified in order to focus your six sigma on areas that will

have the greatest impact on customer satisfaction. For instance , design

must turn out to contain the crucial CTQ in a manufacturing process while

speed might be more relevant in processing an order.

The output of the process , measured, measured as multiples of its sigma

under each CTQ, has to be recorded so that the DPO and DPMO can then

be calculated. These will be used as the starting points for setting new

targets, and proceeding with the subsequent steps. Since all

measurements are recorded, there is in-built in the system."



7.3. Analysis

This is the stage at which new goals are set, and the route maps created

for closing the gap between current and target performance levels. It

begins the benchmarking key product performance against the best in

class so that the sigma levels attained by comparable process can be

ascertained as the basis for new targets. Then , as a GAP analysis is

conducted to identify the factors that distinguish the best in class

processes from those being analysed so that areas of change can be

analysed so that areas of change can be identified.

Other statistical tools as well as other conventional quality techniques like

Brainstorming Root Cause Analysis , Fishbone Diagrams , Pareto Charts,

and the 5 Why Framework are used frequently . “Analysis is a key

component of any defect reduction programme. It’s only after you have

understood why and where you are going wrong can you rectify your

mistakes. “The aim is to identify what causes the defects in each sub

process so that they can be rectified, either by redesigning the product or

reengineering the process.

* Statistical thinking.

* Hypothesis testing and confidence intervals (F-tests and t-tests).

* Correlation analysis.

* Multivariate and regression analysis.

7.4. Improve

The objective of this phrase is to confirm, the key process variables, and

qualify their effect on the CTQs; identify the maximum ranges of the

specifications: and then, tackle the capability of the process on the two

fonts required by six sigma: enlarging the design width to accommodate

the greater variability in the output, and the use the findings of the



analysis stage to effect the process improvements. This is the stage

where the groundwork is translated into action. Of course, the output

must be measured continuously to monitor the extent of improvement

along the CTQ parameters.

*Analysis of variance.

*Design of experiments.

*Factorial experiments.

*Fractional factorials.

*Balanced block design.

*Response surface design.

7.5. Control

In the fourth and final stage of six sigma implementation, the new

process conditions are documented, and frozen into systems sit hat gains

are permanent. The process is assessed once more after settling in period

in order to check whether the improvements are sustained or not: "If a

quality programmed has to achieve meaningful results, the changes have

to be put into a formal structure. Otherwise, workers may go back to the

earlier process"

* Control plans

* Mistake proofing

* Special applications: discrete parts, continuous processes,

administration and design

* Final exercise



8. Basic Tools for Six Sigma

One of the key themes of six sigma is to make decisions on data. This

data is reflected by such popular six sigma saying as, “We don't what we

don't know (or don't measure)" and "In God we trust - all else being

data!”

To ensure we obtain the right data and transform it into actionable

information, we deploy statistical tools. These tools and closely related

concepts, such as the design of experiments, are key elements of six

sigma training and comprise up to half of the standard curriculum. The

other half consists various non-statistical tools, such as failure mode

effects analysis and quality function deployment, and softer organisation

skills, such as team and project leadership, critical to obtaining favorable

business results.

SIGMA DEFECT RATE

(PPM)

COST OF POOR

QUALITY(% OF

SALES)

COMPETITIVE

LEVEL

6σ 3.4 < 10% WORLD CLASS

5σ 233 10%- 15%

4σ 6210 15%- 2% INDUSTRY

AVERAGE 3σ 66807 20%-30%

2σ 308537 30%-40% NON-

COMPETITIVE 1σ 690000 > 40%



9. Seven Principles of six sigma

Here are 7 key principles critical to ensuring companies reap in

investment in six sigma business performance development.

9.1. Principle No 1

Successful six sigma implementation efforts area driven by committed

leaders with edge. The purpose and energy required to drive the six

sigma process in a large organization requires uncommon leadership.

Such leaders challenge conventional thinking and sometimes recommend

unpopular or unusual ideas as a part of focus organization on needed

change.

9.2. Principle No 2

Six sigma efforts must be integrated with existing initiatives, business

strategy, and key performance measures. Accompanies successful with

six sigma take great pains to integrate six sigma implementations with

corporate initiates, business strategy, and performance matrices that end

that is being applied to improving product development processes, for

example, to get products to market faster. Like leadership, this alignment

process can't be delegated; it must be spearheaded by senior

management team to drive home its importance to all employees.



9.3. Principle No. 3

Successful six sigma efforts are supported with a framework of process

thinking. Because it's such a robust approach to quality improvement, six

sigma can as noted help a company realize quantum leaps in quality and

competitiveness. But getting there remains a highly focused approach.

For example, because it is based on quantitative analysis of a business

and comparing a company's performance to customer requirements, six

sigma can't be implemented effectively in an organisation without

rigorous mapping of existing business process. Moreover, there must be

agreement as to what those processes are and what kind of output

customers expect from them.

It is the intersection of these outputs with critical customer requirements

what ultimately defines process sigma as well as long-term business

success for any company. Being able to examine (and close) the gap

between what a business produces and what customers demand is the

essence of six sigma. The width of gap can be used prioritize six sigma

efforts, since the lower the process sigma, the larger the gap.

Organizations that identify improvement projects not as isolated

endeavors but as part of this prioritized framework realize a faster

improvement rate. They are nexus of product output and market demand

instead of relying on intuition.




Six sigma requires disciplined customer and market intelligence

gathering. To make a company's six sigma efforts work, it must have a

disciplined process for keeping in touch with existing levels of customer

satisfaction and loyalty. It must also have an up-to-the-minute grasp of

what the market is doing and where it is going. Anecdotal information

about what customers want is not sufficient; critical customer

requirements must be know and measured

How does one determine these requirements? First, the company must

have a closed-loop process in place to gather customer and market

intelligence data. Then, it must translate the date into hard

measurements that can analyse regularly and compared to business

process outputs

Gathering data, analyzing them, and acting on them on a regular basis

are part of ensuring that the company's feedback loop remains closed and

that the company is consistently measuring against current market

requirements. Keep in mind that both current customer data and data

gathered from competitive customer should be used as the basis

analyzing what the market is doing. Doing these things can help

companies anticipate changes in customers needs or buying habits, track

trends, and see things coming that can negatively impact the bottom line




Six sigma projects must produce real savings or revenues. "This six sigma

thing has to pay its own way!”. This is cry of most business leaders when

they first hear about six sigma. The reaction is appropriate. Over the

years improvement initiate have promised a lot, but often delivered little.

Consequently, any six sigma programme a company implements should

be design to pay its way, at least from second year of implementation

onwards

9.6. Principle No.6

Six sigma efforts are led in the trenches by thorough trained core of full

time team leaders. Because six sigma is such an intense approach to

quality improvements, it requires the disciplined training and commitment

of dedicated practitioners

Companies considering six sigma should give careful thought to selection

and deployment of improvement team members and leaders. The number

of teams established should be weighed against the number of

improvement projects the company plans to run simultaneously and

amount of change the organization can absorb



9.7. Principle No 7

Six sigma is sustained reinforcement and reward of leaders who support

initiatives and improvement teams that carry them out. Companies get

what they measure and reward six sigma business improvement is no

exception. Because six sigma is fundamentally different from other quality

programmes, new incentives must be devised to organizations moving in

the right direction.

10. Six Sigma

Six Sigma is a disciplined, data driven approach and methodology for

eliminating defects (driving towards six sigma’s between lower and upper

specification limits) in any process -- from manufacturing to transactional

and from product to service.

The Statistical representation of Six Sigma describes quantitatively how a

process is performing. To achieve Six Sigma, a process must not produce

more than 3.4 defects per million opportunities. A Six Sigma defect is

defined as anything outside of customer specifications. A Six Sigma

opportunity is then the total quantity of chances for a defect.

The fundamental objective of the Six Sigma methodology is the

implementation of a measurement-based strategy that focuses on process

improvement and variation reduction through the application of six sigma

improvements Projects .This is accomplished through the use of two Six

Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC

process (defines, measure, analyze, improve, control) is an improvement

system for existing processes falling below specification and looking for

incremental improvement. The Six Sigma DMADV process (define,

measure, analyze, design, verify) is an improvement system used o

develop new processes or products at Six Sigma quality levels. It can also



be employed if a current process requires more than just incremental

improvement.

Six sigma was adopted in 1987 by Motorola Inc. through the efforts of

CEO Robert Galvin. Six Sigma quality is deemed necessary to survive in

the high technology industries. Six Sigma quality is not just product

quality it also means getting everything right throughout the corporation.

Everything from the invoices through internal and external

communications, information systems, sales support and down to the

level of janitorial services must adhere to the quality standards of Six

Sigma

11. Concept significance

Until recently, a process was judged to be satisfactory with a 3σσσσ

capability. This means that if process control limits were placed on a

process capability curve, the upper control limit (UCL) would be at 3σσσσ to

the right of center and the lower control limit (LCL) would be 3σσσσ to the left

of center (see Sigma capability curve). The area under the curve between

the two control limits (99.73% of the total area) represents the products

or services conforming to specifications. The area outside the control

limits (only 0.27% of the total area) represents an out-of-spec product or

service. When converted to defects per million (DPM), 0.27% equates to

2,700 DPM. Statisticians have found processes often shift up to 1.5σσσσ from

center. When a 3σσσσ process shifts 1.5σσσσ from center, only 93.32% of the

area under the curve remains inside the control limits. This equates to

67,000 DPM. When a process obtains 6σσσσ capability and the same 1.5σσσσ

shift from center occurs, the process produces only 3.4 DPM (see Sigma

capability chart).



Sigma Significance

Sigma numbers Defects per million

1.5σ 500,000

2.0σ 308,300

2.5σ 158,650

3.0σ 67,000

3.5σ 22,700

4.0σ 6,220

4.5σ 1,350

5.0σ 233

5.5σ 32

6.0σ 3.4

Six Sigma isn't twice as good as three Sigma, it's almost 20,000 times better.

Source: Control Engineering

Achieving total customer satisfaction requires a complete process and

obtaining 6 capability is proof the process is working. At Motorola it's

called Quality Systems Review; AlliedSignal and GE simply call it Six

Sigma. Regardless of the name, these are well-developed processes

tuned to produce excellent results.

In its purest form, 6σ is a measurement and analysis tool, but

knowledgeable practitioners know quality can be designed in. Using a

structured approach, a robust design can be developed. Robustness is

quantified by a capability index (Cp) which is the ratio of the maximum

allowable range of a characteristic to the normal ±3 variation. For

example, a 6σ design will yield a Cp equal to 2 ((UCL - LCL) / 6σ = 2).

Designs having a Cp of 2 or greater are capable of producing extremely

reliable products or services.



Key elements appearing in best practices design methodologies include:

• Understanding critical to quality (CTQ) external customer

requirements.

• Understanding CTQ internal customer requirements;

• Conducting failure mode and effects analysis (FMEA);

• Performing Design of Experiments (DOE) to identify critical

variables; and

• Benchmarking to remove ambiguity.



12. Statistical significance

Six sigma means six standard deviations. One standard deviation is a

value such that roughly two-thirds of all values in a set fall within the

range from one standard deviation below average to one standard

deviation above average. Sets of values which can be characterized by

the average and standard deviation may be modeled by the normal

distribution. For 6 sigma the total range spans 12 standard deviations. As

the sigma value increases, a larger area under the “bell curve” is

included: 50% at +- 0.67 sigma, 68.3% at +- 1 sigma, 99.7% at +-3

sigma, greater than 99.999999% at +- 6 sigma.

6σ concept assumes that a process can shift 1.5 standard deviations as a

regular matter. If the process shifts that much, they argue, the tails of

the process would lap over the tolerance limits if the process width were

kept at ±σ equating the tolerance of the process. To avoid that, they set a

target for a process where the limits are narrow enough so that a 1.σ shift

will not shift the edge of the process beyond the tolerance limit. To do

this, they equate the tolerance of the process to ±σ. The tail of the

process distribution is not supposed to be closer than 1σ to the edge of



the specification or tolerance limit. That means that the edge of the

process distribution should end at ±4σ from the center. The value of 4.5

comes from the value of 6 less the 1.σ shift.

Six Sigma at many organizations simply means a measure of quality that

strives for near perfection. But the statistical implications of a Six Sigma

program go well beyond the qualitative eradication of customer

perceptible defects. It’s a methodology that is well rooted in mathematics

and statistics.

The objective of Six Sigma Quality is to reduce process output variation

so that ±six standard deviations lie between the process specification

upper and lower limits. This will allow no more than 3.4 defect Parts per

Million (PPM) opportunities, also known as Defects Per Million

Opportunities (DPMO), to be produced.

As the process sigma value increases from zero to six, the variation of the

process around the mean value decreases. With a high enough value of

process sigma, the process approaches zero variation and is known as

“zero defects.”



Decrease your process variation (remember variance is the square of your

process standard deviation) in order to increase your your process sigma.

The end result is greater customer satisfaction and lower cost.

13. Concept of 1.5 sigma shift

Using the table we will find that 6 sigma actually translates to about 2

defects per billion opportunities, and 3.4 defects per million

opportunities, which we normally define as 6 sigma, really corresponds to

a sigma value of 4.5. Where does this 1.5 sigma difference come from?

Motorola has determined, through years of process and data collection,

that every process varies and drifts over time - what they call the Long-

Term Dynamic Mean Variation. This variation typically falls between 1.4

and 1.6.

After a process has been improved using the Six Sigma DMAIC

methodology, we calculate the process standard deviation and sigma

value. These are considered to be short-term values because the data

only contains common cause variation -- DMAIC projects and the

associated collection of process data occur over a period of months,

rather than years. Long-term data, on the other hand, contains common

cause variation and special (or assignable) cause variation. Because

short-term data does not contain this special cause variation, it will

typically be of a higher process capability than the long-term data. This

difference is the 1.5 sigma shift. Given adequate process data, you can

determine the factor most appropriate for your process.

The reporting convention of Six Sigma requires the process capability to

be reported in short-term sigma -- without the presence of special cause

variation. Long-term sigma is determined by subtracting 1.5 sigma from

our short-term sigma calculation to account for the process shift that is

known to occur over time.



14. Quality significance of six sigma

Quality, defined traditionally as conformance to internal requirements,

has little to do with Six Sigma. Six Sigma is about helping the

organization make more money. To link this objective of Six Sigma with

quality requires a new definition of quality. For Six Sigma purposes

quality can be defined as the value added by a productive endeavor.

Quality comes in two flavours, potential quality and actual quality.

Potential quality is the known maximum possible value added per unit of

input. Actual quality is the current value added per unit of input. The

difference between potential and actual quality is waste. Six Sigma

focuses on improving quality (i.e., reduce waste) by helping organizations

produce products and services better, faster and cheaper. In more

traditional terms, Six Sigma focuses on defect prevention, cycle time

reduction, and cost savings. Unlike mindless cost-cutting programs which

reduce value and quality, Six Sigma identifies and eliminates costs which

provide no value to customers, waste costs

15. Key Concepts of Six Sigma

At its core, Six Sigma revolves around a few key concepts.

Critical to

Quality:

Attributes most important to the customer

Defect: Failing to deliver what the customer wants

Process

Capability:

What your process can deliver

Variation: What the customer sees and feels

Stable

Operations:

Ensuring consistent, predictable processes to

improve what the customer sees and feels.



16. Six sigma methodology

16.1. DMAIC versus DMADV

What's the Difference Between Six Sigma DMAIC and DMADV?

We know that everything in business is a process, right? Sales people

have a list of companies and contacts that they work in a certain fashion

to produce a sale, production receives an order and schedules the

manufacturing, the product is built, packaged, shipped and invoiced.

When the packing department has a problem with their process, though,

should they fix it with a DMAIC or DMADV (also referred to as DFSS) type

project?

16.2. The Similarities of DMAIC and DMADV

Let's first look at the DMAIC and DMADV methodologies and talk about

how they're alike. DMAIC and DMADV are both:

• Six Sigma methodologies used to drive defects to less than 3.4 per

million opportunities.

• Data intensive solution approaches. Intuition has no place in Six

Sigma -- only cold, hard facts.

• Implemented by Green Belts, Black Belts and Master Black Belts.

• Ways to help meet the business/financial bottom-line numbers.

• Implemented with the support of a champion and process owner.



16.3. The Differences of DMAIC and DMADV

DMAIC and DMADV sound very similar,. The acronyms even share the

first three letters. But that's about where the similarities stop.

DMAIC Define

Measure

Analyze

Improve

Control

• Define the project goals and customer

(internal and external) deliverables

• Measure the process to determine current

• Performance

• Analyze and determine the root cause(s) of

the defects

• Improve the process by eliminating defects

• Control future process performance

When To Use DMAIC

The DMAIC methodology, instead of the DMADV methodology, should be

used when a product or process is in existence at company but is not

meeting customer specification or is not performing adequately.

DMADV Define

Measure

Analyze

Design

Verify

• Define the project goals and customer

(internal and external) deliverables

• Measure and determine customer needs and

specifications

• Analyze the process options to meet the

customer needs

• Design (detailed) the process to meet the

customer needs

• Verify the design performance and ability to

meet customer needs



The DMADV methodology, instead of the DMAIC methodology, should be

used when:

• A product or process is not in existence at your company and one

needs to be developed

• The existing product or process exists and has been optimized

(using either DMAIC or not) and still doesn't meet the level of

customer specification or six sigma level

Occasionally a project is scoped as a DMAIC for incremented process

improvement when it really required a DMADV methodology

improvement. And it was a month into the project that one realized this!

Don't be discouraged about the work one put into the DMAIC because 1)

it's happened to more businesses than just yours, 2)you understand the

process at a much greater detail than you did initially, and 3) you were

able to practice not just DMAIC skills but also DMADV.

Pick yourself up, dust yourself off and re-craft your define piece of the

project so you can begin with a fresh look at the project and solutions.

You never know what insights you'll have now that you may not have

been aware of before.



17. Six Sigma Organisation

Provide Vision, Lead

Review, Business decisions

Evoke behavioral change,

Provide required support

Train & Coach, Lead

Monitor, Drive improvement

17.1. Champions

Six Sigma champions are high-level individuals who understand Six

Sigma and are committed to its success. In larger organizations Six

Sigma will be lead by a full time, high-level champion, such as an

Executive Vice-President. In all organizations, champions also include

informal leaders who use Six Sigma in their day-to-day work and

communicate the Six Sigma message at every opportunity. Sponsors

are owners of processes and systems who help initiate and co-ordinate

Six Sigma improvement activities in their areas of responsibilities.

CHAMPIONS

FUNCTIONAL CHAMPION

MASTER BLACK BELT

BLACKBELTS

GREENBELTS

TEAM

•Helps Implementation

•Works with Black Belt on

project

•Indicate barriers to

function Leaders



17.2. Master Black Belt

This is the highest level of technical and organizational proficiency.

Master Black Belts provide technical leadership of the Six Sigma program.

Thus, they must know everything the Black Belts know, as well as

understand the mathematical theory on which the statistical methods are

based. Master Black Belts must be able to assist Black Belts in applying

the methods correctly in unusual situations.

17.3. Black Belt

Candidates for Black Belt status are technically oriented individuals held

in high regard by their peers. They should be actively involved in the

process of organizational change and development. Candidates may

come from a wide range of disciplines and need not be formally trained

statisticians or engineers. Black Belts receive 160 hours of classroom

instruction, plus one-on-one project coaching from Master Black Belts

or consultants.

17.4. Green Belt

Green Belts are Six Sigma project leaders capable of forming and

facilitating Six Sigma teams and managing Six Sigma projects from

concept to completion. Green Belt training consists of five days of

classroom training and is conducted in conjunction with Six Sigma

projects. Six Sigma Black Belts help Green Belts define their projects prior

to the training, attend training with their Green Belts, and assist them

with their projects after the training.



18. Six Sigma Requirements

While many other requirements are applicable, we personally believe that

these are the most important:

• Management Team Buy-In and Support

• Education and Training

• Resource Commitment

• Link to Compensation

18.1. Management Team Buy-In and Support

If your executive team is not fully supportive and proactive in establishing

your Six Sigma Quality initiative, you will be wasting everyone's time. As

with any successful initiative implementation, everyone's actions need to

be tied to the initiative.

A useful exercise in determining buy-in is to list out all the individuals of

the management team on a piece of paper. Then assign a positive,

neutral or negative to each person signifying what you believe to be their

support for the initiative. Your job, before beginning the implementation,

is to move every single person to at least a neutral position, if not

positive. Education can help with this goal.

18.2. Education and Training

What training is necessary? Well, it depends on who is getting trained.

Here's a snapshot table identifying the major groups of individuals, the

suggested training agenda, approximate cost and duration of the training.



18.3. Resource Commitment

As discussed above, Black Belts(BB) &/or Master Black Belt(MBBs) need

to be identified and trained. But more importantly, they need to be

assigned to your Six Sigma efforts almost 100%; 50% application yields

less than a 50% result. In addition to BBs and MBBs, you should be ready

to assign 5-15% of key employees' time to specific projects.

18.4. Link to Compensation

We all work and perform responsibilities for a paycheck, right? Just as you

expect your factory to produce Y widgets per hour and your bank to

process Z deposits per day, you should expect projects to be contributed

to and successfully completed in a prescribed time period. And employees

executing well should be compensated well. The quickest way to initiative

success is to tie results to the business bottom line, create performance

goals, and compensate employees appropriately.

19. Six Sigma Implementation

19.1. How to Select a Quality Improvement Project

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 shareholders will see the benefit.

19.2. Linking Quality to Finances

The Quality profession has always been about improving processes,

products and services. From TQM to PDCA to Six Sigma, all Quality

methodologies are focused on eliminating defects and the root causes of

those defects. It involves products that satisfy your customers, running

processes at greater efficiencies, producing less waste and increasing



business productivity. All of this, of course, is based on the fact that these

processes are driving financial benefits.

Now, we'll look at each of these areas with application to small

companies. After each major requirement will be a synopsis and

discussion around whether it is easier to implement Six Sigma Quality in a

small company or a large company.

20. Application of Six Sigma to Small Companies

20.1. Management Team Buy-In and Support Easier

Compared to large companies, small company management teams are

typically closer on a personal basis. Pulling the small company team

together for a short meeting can be done in minutes, as opposed to days

for a large company. Because smaller companies are more agile, it is

typically easier to achieve management team agreement that a standard

methodology can help achieve results. Although politics are always

present, less may be required in a smaller company to come to

agreement and buy-in for implementing Six Sigma Quality.

20.2. Education and Training Harder

Although the costs presented on page is somewhat standard, buying in

bulk always produces a discount. This is the main reason we believe

education and training is harder (costlier) for smaller companies. Time is

money -- time away from the office is lost revenue and production for

both small and large companies alike. But the return on investment is a

function of the potential savings of the business. For a behemoth like GE

or Motorola, standardized processes can yield enormous savings -- a large

potential exists prior to implementing Six Sigma. For smaller companies,

the savings potential may not be as great. The return on investment may

not be as quick or as significant. You know your business and processes

better than anyone else. How great are the potential savings?



20.3. Resource Commitment Slightly Harder

The key issue here is employee time. As mentioned above, time is money

for both employees that are partially assigned to teams and project

leaders. BUT -- we must remember to see the forest through the trees.

Any time dedicated to process improvement will be recouped in process

productivity going forward for all time. But it again boils down to the

potential savings that are available in your business.

20.4. Link to Compensation Easier

No brainer being able to link compensation to Six Sigma implementation

is much easier in a small company, compared to a larger company.

Decisions in general are quicker for small companies that are why they

are more agile. The key will be applying the rigor and written procedures

that larger companies do well. Formal performance appraisal systems

need to identify what is to be accomplished, what success looks and feels

like, and how an employee will be compensated. Just be sure to involve

your Human Resources representative to ensure that employee

responsibilities are being modified in the appropriate manner.

20.5. Selection of Project

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 shareholders will see the benefit. If 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, especially the quality manager

who may look to these same people the next time a need arises. So how

do we make sure we select projects in-line with business priorities?



Here are five guidelines to keep handy the next time we are evaluating

potential quality improvement projects:

• Ask business leader for the three greatest issues facing the

business. Make sure project is one of the issues or is directly

related. This will ensure that your management team is giving the

project the proper attention and quickly removing roadblocks.

• What are the three greatest issues as seen from the eyes of your

customers? Look through customer complaint logs, listen to call

center telephone conversations and call customers that have

stopped your company service. Create a Pareto Chart to prioritize

issues.

• Is the project manageable? Can the project realistically be

completed by a team within six months? If longer, you may lose

members as they move to other jobs or the team may feel

frustrated that they're not making a difference.

• Will the team have a measurable impact on the business processes

or financial bottom line? Don't embark on a project without knowing

what the benefits are to the business. This will keep team motivated

along the way.

• What is process capability? If you haven't been measuring your

process, how do you know it needs improvement? Make sure you

know what amount of defects the process is currently producing and

define your project desired outcome.

Every business is different and you should ensure that your specific

priorities are taken into account when evaluating potential projects.

Spreadsheets or databases can help you organize potential projects by

assigning evaluation categories, values and weightings to create a

consistent selection process.



20.6. Linking Quality to Finances

The Quality profession has always been about improving processes,

products and services. From TQM to PDCA to Six Sigma, all Quality

methodologies are focused on eliminating defects and the root causes of

those defects. It involves products that satisfy your customers, running

processes at greater efficiencies, producing less waste and increasing

business productivity. All of this, of course, is based on the fact that these

processes are driving financial benefits. If it didn't make sense financially,

would you still do it? In some cases you might, but as a rule of thumb you

can't sustain a business unless you bring in revenue and produce a profit.

The six sigma methodology, in particular, emphasizes the financial results

of a project. What does all of this do for your company?

1) Before a project is initiated, a scoping analysis of financial benefits

is performed. This allows management to Prioritize along with other

business specific factors, potential projects.

2) After or during the completion of a project, a final Financial Analysis

is performed based on the actual results of the project. This forces the

business to quantify the return on investment for the Quality

department. Is it paying off as you would expect any other investment

in the business?

3) It opens the eyes of management to what is actually happening on

the floor, in the shop and in the cubicles, translating day-to-day

activities into terms that they are concerned about - meeting the

budget, increasing profits and driving shareholder value.

4) It educates employees about the whole financial picture. Because

Six Sigma uses employees to drive projects and improvements, it also

modifies their work behaviors to cut costs and increase profits.



Many businesses have found the successful recipe for Quality. When

employees are allowed to exit from the intellectual vacuum where they

are deprived of business and financial information, they then can see the

whole picture. They understand how their actions do make a difference

and how they are needed to make business processes successful. You

don't need "Six Sigma" necessarily, but you do need to tie process

improvements to financial results in order to be successful. There are six

fundamental steps that must be achieved before Six Sigma can become a

reality within any organization:

Step-1: Successful performance improvement must begin with senior

leadership. Start by providing senior leadership with training in the

principles and tools they need to prepare their organization for success.

Using their newly acquired knowledge, senior leaders direct the

development of a management infrastructure to support Six Sigma.

Step-2: Systems are developed for establishing close communication with

customers, employees, and suppliers. This includes developing rigorous

methods of obtaining and evaluating customer, employee and supplier

input.

Step-3: Training needs are rigorously assessed. Remedial basic skills

education Is provided to assure that adequate levels of literacy is

possessed by all employees.

Step-4: A framework for continuous process improvement is developed,

along with a system of indicators for monitoring progress and success. Six

Sigma metrics focus on the organization's strategic goals, drivers, and

key business processes.

Step-5: Business processes to be improved are chosen by management,

and by people with intimate process knowledge at all levels of the

organization. Six Sigma projects are conducted to improve business

performance linked to measurable financial results.

Step-6: Six Sigma projects are conducted by individual employees and

teams lead by Green Belts and assisted by Black Belts.



Although the approach is simple, it is by no means easy. But the results

justify the effort expended. Research has shown that firms that

successfully implement Six Sigma perform better in virtually every

business category, including return on sales, return on investment,

employment growth, and share price increase.

21. CASE STUDY

21.1. Six Sigma Implementation in GE

GE launched a corporate wide quality improvement strategy in 1995 when

Jack Welch, chairman and CEO committed GE's empire to reach 6

quality by year 2000. Operating at about the industry average of 3 sigma

in 1995, Mr. Welch's vision is a stretch goal, but GE is making progress to

achieve 6 performance and estimates that 6 will contribute an extra

$5 billion to net earnings through the end of the century. In 1998 Mr.

Welch expects 6 to yield about $750 million in net benefits. Jack Welch,

Chief Executive Officer of GE, realized that attaining Six Sigma Quality will

require retraining their entire workforce to think and act like engineers -

an enormous feat with remarkable benefits.

When the program began ,GE selected 5 Criteria to measure

progress Towards an aggressive Six Sigma Goal

Sl No General Electric Balanced Score Card

1 Cost of Poor Quality Financial Customer Satisfaction Customer 2 Internal Performance Internal 3 Design for Manufacturing(DFM) Innovative & Learning

4 Supplier Quality

The above table compares the GE criteria with four traditional Balanced Score Criteria.



21.2. Potential Benefits of 6 sigma program

• Six Sigma oriented organizations will spend 1% or less of each sales

dollar on cost of non-conformance while a 4 Sigma organization will

spend as much as 25%.

• $200 million in documented savings over the cost of training for

1997 at GE

• Expected annual revenue and cost savings of $10 - 15 billion at GE

when Six Sigma is fully realized.

• GE's 1997 operating margin, a critical measure of business

profitability and efficiency, surpassed 15% level for the first time.

• The entire GE workforce actively involved in quality initiatives and

total customer satisfaction

Five Critical to Quality (CTQ) Measures taken by GE

Six Sigma Quality at GE starts and ends with the goal of total customer

satisfaction. To understand the needs of the customers, GE stresses five

"CTQ’s" –

1) Get the customers what they want

2) When they want it

3) On time

4) Undamaged

5) Working.

21.3. Use of Scorecards

These five CTQ’s were identified in the early stages of GE's efforts and are

continually assessed through the use of "Scorecards". Scorecards allow

rapid focus on products and processes that do not meet customer's

desires and track implemented solutions until the discrepancy is erased.



Once a project at GE is identified as meeting at least one of the CTQs, it is

then led through the Six Sigma process by a specially trained employee

known as a "Black Belt."

GE's Six Sigma Process: Define; Measure, Analyze; Improve;

Control

Using the techniques of Six Sigma, GE has identified and defined the phases used in optimising processes. These phases, known by the acronym DMAIC, are explicitly followed and with that, successful results

are noted. Each step in the cyclical DMAIC Process is required to ensure the best possible results. The DMAIC steps include the following:

Step 1: Define

• Define the Customer, their Critical to Quality (CTQ) issues, and the

Core Business Process involved.

• Define who customers are, what their requirements are for products

and services, and what their expectations are.

• Define project boundaries - the stop and start of the process.

• Define the process to be improved by mapping the process flow.

Step 2: Measure

• Measure the performance of the Core Business Process involved.

• Develop a data collection plan for the process.

• Collect data from many sources to determine types of defects and

metrics.

• Compare to customer survey results to determine shortfall.

Step 3: Analyze

• Analyze the data collected and process map to determine root

causes of defects and opportunities for improvement.

• Identify gaps between current performance and goal performance

• Prioritize opportunities to improve.

• Identify sources of variation.



Step 4: Improve

• Improve the target process by designing creative solutions to fix

and prevent problems.

• Create innovative solutions using technology and discipline.

• Develop and deploy implementation plan

Step 5: Control

• Control the improvements to keep the process on the new course.

• Prevent reverting back to the "old way".

• Require the development, documentation and implementation of an

ongoing monitoring plan

• Institutionalize the improvements through the modification of

systems and structures (staffing, training, and incentives).

21.4. Statistical Tools

In order to optimize any and all processes within GE, a thorough and

rigorous analysis of the applicable data is processed using Minitab, an

extremely powerful statistical data analysis program. Minitab enables

analyses such as:-

1) Run and Pareto charts

2) Fishbone diagram

3) Control charts: X-Bar, R, S, X-bar-R, X-Bar-S, and Box-Cox

Transformation for non-normal data, gage linearity and accuracy.

Minitab provides the means to accomplish all of these as well as calculate

sigma - the bottom line number needed for achieving success.

Training: An Integral Part of GE's Six Sigma Program

In order to become a Six Sigma company, GE has undertaken extensive

training of all personnel and ensured strong and determined leadership.

Since the onset of this massive training effort, excellent results have been

achieved.



The result of this training push is impressive as there are now nearly

4000 full-time quality 'Black Belts' (BB) and 'Master Black Belts'

(MBB). Additionally, there are more than 60,000 'Green Belt' (GB)

"part-time" project leaders who have completed at least one Six Sigma

project. All GB, BB and MBB projects must show a 90% reduction in dpm

to be called successful.

To become a GE certified Green Belt (GB), the following criteria must

be met.

• Complete 2 weeks of DMAIC training within a one year period

• Complete a total of two (2) Six Sigma Green Belt Projects within

each one year period.

To become a GE certified Black Belt (BB), the following criteria must

be met:

• Complete 2 full weeks of DMAIC training.

• Complete a total of eight (8) Six Sigma BB Projects in each one-

year period.

Black Belts are primarily focused on training/guiding/driving all Green

Belts under their jurisdiction to complete their 2 projects per year. Black

Belts will approve each phase of those projects while getting regional

manager concurrence on approving the "Define" & "Closure" phases of

each project. However, the individual Green Belt (and their respective

managers) will be held responsible for the completion of his/her own GB

Project; the purpose of the Black Belts is not to "complete" projects for

the GB, but rather to review, analyze, approve, and assist.

Master Black Belts must meet similar requirements to become certified as

do Black Belts, with the exception being MBB's must complete 4 weeks of

intense DMAIC training. As the BB is the mentor of the GB, the Master

Black Belt is the mentor, coordinator, and driver of GE's entire Six Sigma

program. Thus, they are vital to the success or failure of the program. A



"Champion" is usually the Business Manager for each particular

component. The champion is the one who sponsors the project as being

beneficial to his/her particular business unit and ultimately gives

approval. Champions may have many hundreds of projects under their

approval. And, before credit is given to management and quality workers,

a certified Black Belt must prove that the new process fixes the problem

permanently.

21.5. Leadership is Key

Since Jack Welch has tied promotions to quality improvement, employees

desiring to stay and prosper at GE have opened up to a complete change

in their way of thinking. Every employee is trained to think and act like an

engineer, i.e. analyze anything and everything; ensure everything

functions at an optimum level.

21.6. An Example of GE's Success with Six Sigma

One of GE Plastics' subsidiaries, Super abrasives, a leading manufacturer

of industrial diamonds, has fully embraced the Six Sigma program and its

successes clearly indicate the approach works. The following

improvements occurred at Super abrasives between Six Sigma's start in

1995 and the end of 1997:

• Operating margins rose from 9.8% to 25.5%

• Variable manufacturing costs fell 50%.

• The number of carats per manufacturing run rose 500%.

• On-time deliveries improved 85%.

• Product quality improved 87%.

• Late deliveries to customers declined 85%

• Billing mistakes fell by 87%

• Capital expenditures decreased by 40%



21.7. Conclusion

An enormous training effort is essential to a program such as GE's Six

Sigma Quality. It involves retraining an entire workforce to think and act

like engineers. GE has spent hundreds of millions of dollars since 1995 to

mold a workforce that lives customer satisfaction through continuous

quality improvement. The complexity of a Six Sigma Quality program

would be impossible to initiate and sustain without this type of dedicated

and thorough approach to training.

Such a training program is the result of nothing less than full dedication

from the entire leadership structure, starting at the top.

GE's increasing operating margins are the final proof that the combination

of inspired leadership and intensive training are the critical aspects of a

successful Six Sigma Quality program.



22. Quality Improvement Tools (QC Tools)

22.1. Introduction to QC Tools

There are certain simple tools and techniques which can naturally be

positioned within the TQM philosophy. Many of these tools can easily be

utilized for everyday problem solving or for realizing opportunities, and

can thus be effectively used to support the implementation of the

methodology for quality management and improvement.

This section contains a list of such tools, which, although by no means

exhaustive, includes the most popular and commonly used techniques;

these are briefly described and arranged in such a way as to be easy to

access.

22.2. Tally sheet

Tally Sheets are forms for recording data in a simple manner. There are

three main types of tally sheets;

a) Recording Tally Sheets

b) Inspection Tally Sheets, and

c) Check Lists

Purpose

To devise a simple form to facilitate collection of data

Procedure

The steps involved in creating Tally Sheets are -

a) Describe clearly the purpose of collecting data.

b) Decide who will collect the data and when, where and how it will be

collected.

c) Determine how much data will be required.



d) Decide the format for collecting and presenting data in suitable

classifications.

e) Prepare a draft form and check if it meets the purpose.

f) Finalise the form and give it a title.

g) Collect the data and present for further analysis.

Figure 1: Tally sheet

Problem Month

July August Septembe

r

Total

A III II IIII 09

B IIII III II 10

C IIII III IIII 12

D II III II 07

Total 14 11 13 38

Figure: 2: Tally sheet for Typing mistakes

Mistake Type July Total

Clerk 1 Clerk 2

Punctuation IIII III 07

Wrong Page

Numbers III IIII 07

Spelling IIII III 08

Missed

Paragraph III IIII 07

Centering IIII IIII 09

TOTAL 20 18 38



22.3. Graph

Graphs and Charts are pictorial presentations of data, making it easy to

spot trends, ratios, comparisons among different groups of data. The

more common types of graphs and charts are Line Graphs, Bar Charts,

and Pie Charts. In addition, there are a number of variants and

combinations of these.

Purpose

To present numerical data in an easy-to-spot visual form. Line graphs are

used to depict change or variation over time. Bar charts are used for

comparing quantities between persons, regions, time intervals etc. Pie

charts are used to show percentages or proportions of different

components of a specific item.

Procedure

The essential steps in the preparation of various types of graphs and

charts are -

1. Select the type of chart or graph most suitable for the type of data

to be depicted.

2. Decide the units and scales of items to be shown on X-axis and Y-

axis.

3. (In case of Pie chart scale is always the same - 100% = 3600)

4. Fill the information on the graph sheet.

5. Join required points to complete lines or bars.

6. Color or shade the lines or bars to distinguish between different

groups or classes. Provide a key to explain the meaning of the

colors and shadings.

7. Provide an appropriate title.



Figure: 3: Line Graph

100 Name of student -------------- Roll No. -----------

Class: ---------

95

90

85 Average

Marks

Obt. 80

75

70

1 2 3 4 5

6

Subject : Maths Phy Chem. Eng. Drawing Mechanics

22.4. Bar Chart

A bar chart is a graphical representation of discrete groups or categories

of data, shown in such a way that clear comparisons can easily be made.

A bar chart is frequently used to emphasize a point; this will dictate the

way in which the chart is drawn. The chart is normally used to emphasize

the variation and unevenness in data. Using this information, further

investigation could follow to determine why the variation was occurring.

The items are usually ranked from high to low, with the lengths of the

bars indicating the value or frequency that a bar represents.

A special version of the bar chart is the 100% bar chart which has all its

bars of equal lengths; each bar (representing 1000% of the item) is



subdivided according to the size of its components.

When the data are spread across a continuous range of values, a bar

chart is equivalent to a histogram.

AVERAGE TEMPERATURE DURING WINTER IN MUMBAI

1998 1999 2000

33

31`

29

27

25

October November December January

Figure : 4 : Bar Chart

22.5. Block Diagram

If every activity that is part of a process is represented by a block (box),

and all blocks are connected by lines representing the interfaces between

activities. A macro level view of the process is obtained; this is called a

block diagram. The diagram traces the paths that any information,

necessary actions or materials can take between the original input and

the final output of the process. For each activity in the process, there is a

determination of the output it produces, what other activities it feeds into,

and, through the identification for particular work activities, there is also a

determination of who performs the activity.



Fig. 5: Block Diagram: Problem Solving Process

22.6. Histogram

Histograms or Frequency Distribution Diagrams are bar charts showing

the distribution pattern of observations grouped in convenient class

intervals and arranged in order of magnitude.

Purpose

To study the pattern of distribution of observations and draw

conclusions based on the distribution.

Procedure

The steps in preparing histograms are

1. Collect data (a minimum of 50 observations) on a specific item.

2. Arrange all values in an ascending order.

3. Divide the entire range of values into convenient number (usually

≤ the square root of the number of observations) of groups each

representing an equal class interval.

4. Note the frequency of observations in each group.

5. Draw X-axis and Y-axis and decide the scales for class on X-axis

and number of readings or frequency on the Y-axis.

SELECTION DEFINITION ANALYSIS SOLUTIONS

PRESENTATION EVALUATIOTRIAL RUN

ACTION PLAN

FOLLOW-UP PREVENTIVE

ACTION REVIEW



6. Plot the points and draw bars.

7. Give the histogram a suitable title.

8. Study the pattern of distribution and draw conclusions regarding

normality of distribution and process capability.

22.7. STRATIFICATION

Stratification is a technique to present data into different groups or

categories to bring out the differences between groups and explain the

‘abnormality’ of histograms. The classification may be based on machines,

operators, shifts or any other source of variation.

Purpose

To ascertain the difference between different categories and to analyse

the reasons behind abnormal distribution or too wide dispersion shown by

the histogram of the total data.

Procedure

The steps for stratifying data starts with an ‘abnormal’ histogram of

composite data. The further steps are -

1. Examine the data for sources of variations.

2. Classify the composite data into different groups.

3. Prepare histograms of the reclassified data.

4. Examine the histograms of each group of data for ‘normality’.

5. Give the new histogram an appropriate title.

22.8. SCATTER DIAGRAM

Scatter Diagram is a special type of graph in which two characteristics

whose relation is to be studied are taken on the X and Y axes. A dot at an

appropriate point is placed on the graph for each observation. The pattern

made by the scatter of the dots can indicate if there is a relation between

the two and if so whether it is direct or inverse and whether it is strong or

mild.



Purpose

To test hbypothetical relationship between two sets of variables or

characteristics.

Procedure

The steps in the preparation of a scatter diagram are -

1. Tabulate available data.

2. Select the characteristics or variables to study the relationship.

3. Use X-axis for one and Y-axis for the other variable.

4. Decide appropriate scales.

5. For each observation involving the relation between the two

variables place a dot on the graph sheet.

6. Observe the pattern of distribution of the dots and infer as follows

a. If the dots are distributed randomly, there is no apparent

relationship.

b. If the dots are distributed closely around a sloping line, there is

a strong relationship.

c. If the dots are scattered loosely around such a line, there is

likelihood of a mild relationship.

d. If the slope of the line is from SW to NE, there is a direct and if

the slope is from SE to NW, there is an inverse relationship.

22.9. CONTROL CHART

Control Charts are graphical presentations showing if a process is under

control. Control charts are of two main types -

1. Control Chart for Variables or measurables, and

2. Control Chart for Attributes.

Control chart for attributes has a few categories like portion or percent

defective (p), number of defectives (pn), number of defects per unit (u)

and number of defects per subgroup (c).

Control charts are tools to monitor processes.



Purpose

The purpose of all control charts is to track a process with a view to take

timely corrective action as soon as the process goes out of control.

The steps involved in setting up control chart for variables - X & R charts

are

1. Determine the size of sample group.

2. Design a suitable Tally sheet.

3. Collect data under standard operating conditions (without

adjustments)

4. Calculate the average (X) and range (R, the difference between the

largest and the smallest value in the group).

5. Calculate the average of averages – X.

6. Calculate the average range - R.

7. Calculate the control limits for X chart using the formula

UCL = X + A2* × R

LCL = X – A2* × R

* Values of A2 for more common group sizes are given in table 1.

8. Calculate the control limits for the R chart using

UCL = D*4 × R

LCL = D*3 × R

* Values of D3 & D4 for common sample group sizes are given in the Table

1 for other group sizes refer to any standard book on SQC or SPC.

9. Divide the graph into two portions for (1) X Chart and (2) R Chart.

10. Periodic observations are taken on X-axis and X & R on Y-

axis.

11. Select appropriate scales and draw central lines and control

limits.

12. Plot the observations and look out for indications of the

process going out of control or other trends.



VALUES OF A2, D3 AND D4

Group Size A2 D3 D4

4 0.729 0 2.282

5 0.577 0 2.115

6 0.483 0 2.004

8 0.373 0.136 1.864

10 0.308 0.223 1.777

Table 1: Constants to calculate control limits

22.10. CONTROL CONTROL CHART – TALLY EXAMPLE

Commuting Times (min.) – A. M.

STEP 1 :

STEP 2 :

Xavg = 74.6

Ravg = 36.0

n = 5

STEP 3 :

UCL8 = Xavg + A2 Ravg

= 74.6 + (58) (36.0)

= 74.6 + 20.88

= 95.48

1

2

3

4

5

Week

6

7

8

9

10

55 90 100 70 55 75 120 65 70 100

75 95 75 110 65 85 110 65 85 80

65 60 75 65 95 65 65 90 60 65

80 60 65 60 70 65 85 90 65 60

80 55 65 60 70 65 70 60 75 80

X =

71

72 76 73 71 71 90 74 71 77

R=25 40 35 50 40 20 55 30 25 40



LCL8 = Xavg - A2 Ravg

= 74.6 – 20.88

= 53.72

UCLR = D4 Ravg

= (2.11) (36.0)

= 75.96

LCLR = D3 Ravg

= 0

STEP 4:

X Chart

100

95

90

85

80

Xavg = 85.48

75

70

65

60

55 LCL = 53.72

50

1 2 3 4 5 6 7 8 9 10

Fig 6: X CHART



80 R Chart

UCL = 75.86

75

70

65

60

55

50

45

40

Ravg = 36.0

35

30

25

20

15

10

5

LCL = 0

0

1 2 3 4 5 6 7 8 9

Fig 7. R CHART



22.11. CONTROL CHART FOR ATTRIBUTES

The steps for selling up a control chart for attributes are -

1. Decide the defect to be tracked.

2. Determine the type of chart (p, pn, u or c) that is applicable.

3. Design a suitable tally sheet and collect data.

4. Calculate the average and control limits.

5. Prepare a graph sheet with successive observations on X-axis and the

defect level on Y-axis. Select appropriate scales.

6. Draw the lines for average and control limits.

7. Plot the observations and join the points to get a line graph.

8. Look for signs of process going out of control or other trends to take

timely action.

Some occurrences that can give indications of the process going out of

control or show trends are:

1. A single observation out of control limits.

2. A series of seven consecutive observations on the same side of the

average.

3. A series of seven consecutive readings showing an increasing or

decreasing trend.

4. A cyclic, periodic or recurring wavy pattern. Cause must be

investigated.

5. Consecutive very high and very low readings may indicate

unnecessary adjustments



22.12. PROCESS CAPABILITY

The data collected for control charts can also be used to ascertain process

capability. One way to check if the process is capable or not is to draw

lines for specification limits on the control chart. If the difference between

UCL and LCL is less than specification tolerance, the process is capable of

meeting the specification; otherwise it is not capable. From the data one

can also directly assess process capability without drawing control charts.

The steps involved in this are:

1. Calculate standard deviation (σ) by using the applicable formula

In case of X and R chart (for variables) R

σ = ------ (value of d2 for different group sizes is given

below) d2

Group size 4 5 6 8 10

d2 2.06 2.33 2.53 2.85 3.85

In case of a p chart (for fraction defective)

p × (1 - p)

σ = √ n

2. Draw a histogram to ensure that the process is under control. If the

distribution is not normal, find the causes and eliminate them to get

normal histograms, before applying tests to check process capability.

3. Calculate Process capability index Cp using formula

Specification Tolerance

Cp =

Process Tolerance (= 6σ)

If the value of Cp is greater than or equals 1, the process is capable; if it

is less than 1, the process is not capable.



4. Evaluate the centering of the process by calculating index Cpk using

the formula.

Upper Spec. limit – X

C pk = ––––––––––––––––––––––– or 3σ

X – Lower Spec. Limit, = ————————— whichever is lower

3σ

5. If Cpk is greater than or equals 1, the process is meeting specification

requirements.

If Cp ≥ 1, but Cpk < 1, the process is capable, but is not meeting the

requirements because of poor centering.

22.13. PARETO DIAGRAM

Pareto Diagrams are a special type of histograms. The bars in Pareto

Diagrams are rearranged in descending order of their heights, showing

individual contribution of each factor as well as cumulative contributions.

Purpose

To identify high priority items by separating the ‘vital few’ from the ‘trivial

many’ or as they are now known ‘useful many’.

Procedure

Preparation of a Pareto Diagram has the following steps:

1. Design a suitable Tally Sheet to collect data. :

2. Collect required data.

3. Calculate the contribution of each item.

4. Arrange the items in descending order of their contributions. If there

are too many small items, combine them under ‘others’.

5. Draw X and Y axes. Different items (in descending order) are on X-

axis and the frequency of their occurrence on Y-axis. An additional Y-

axis is drawn on the right to indicate percentages. Select appropriate

scales.

6. Draw bars representing the frequency of the items.



7. Draw bars from the second item onwards at a level where the bar of

the previous item ends. This is an optional step not always

recommended, but it makes the next step easier.

8. Draw a line graph connecting the diagonals of the new bars drawn as

instructed in step 7.

9. Title the diagram suitably.

Fig 8: Pareto Diagram Problem:

In a film distribution company, customer complaints last year as follows;

Key Descendin

g

Cumulativ

e

A Broken Shipping

case

------------

5

D 40 40

B Damaged Film ------------

15

C 25 65

C Poor Print ------------

25

B 15 80

D Wrong Print ------------

40

F 08 88

E Subject in film not

treated well

------------

03

A 05 93

F Late Shipment -----------

08

G 04 97

G No Leaders Guide -----------

04

E 03 100

Total -----------

100

Make a pareto diagram for this company and select the most important problem

to solve.



100 100%

90

80

70

60 Most Important

Problem to solve

50 wrong print

40

30

20

10

D C B F A G E

22.14. Brainstorming

Brainstorming is a technique to generate a large number of ideas from

members of a group in a structured manner. Brainstorming is an activity

which promotes group participation and teamwork, encourages creative

thinking and stimulates the generation of as many ideas as possible in a

short period of lime.

The participants in a brainstorming meeting are invited on the basis of

their particular knowledge and experience, and are expected to contribute

to the topic under discussion. An atmosphere is created where everybody



feels free to express themselves. The production of random ‘off the top of

the head’ ideas is encouraged; the emphasis is on quantity rather than

quality. No criticism, expression of doubt or hasty judgment of the ideas

is allowed until after the brainstorming session; this is crucial if the

barriers to creative thinking (such as the fear of seeming foolish or

impractical) are to be overcome.

All ideas, without exception, are recorded and made visible to all the

participants. Each input and contribution is recognized as important, and

the output of the whole session is seen in context. The continuing

involvement of each participant is assured and the group's future is

reinforced by mapping out the exact follow up actions (analysis and

evaluation of the ideas) and the future progress of the project.

Purpose

To generate a large number of ideas or options or alternatives. As we

shall see in some of the tools to follow, the ideas may be for identifying a

problem or finding causes for the selected problem, or devising solutions,

or identifying areas of resistance to the implementation of the proposed

solution.

Procedure

The steps involved in Brainstorming are -

1. The group elects a facilitator.

2. Facilitator writes the topic and a short purpose of Brainstorming on

a flip chart.

3. He asks the members by turn to suggest one idea at a time. He

notes it down on the flip chart briefly.

4. After every member has had his first turn, he starts another cycle.

5. A member who has no fresh idea to offer may pass.

Ideas are not to be evaluated at this time, however, clarification

may be sought if the idea is not clear.

6. A member can build on an idea suggested by another member.



7. The process is continued till all members pass.

It is essential to remember some Do’s and Don’ts for idea-generation part

of the process of Brainstorming.

Do’s Don’ts

a. Encourage everyone to a. Lei some persons dominate

participate, others.

b. Stress quantity rather b. Criticise or ridicule an

than quality of ideas, idea however wild or silly.

c. Encourage humour, c. Permit interruptions.

d. Keep all ideas posted in a d. Tape record proceedings. manner all members can see. e. Restrict ideas.

Once the session on idea generation is complete, the group can take up

prioritising and selecting ideas for immediate follow-up. The steps

involved in this part of Brainstorming are -

1. Check if apparently identical ideas are really same or there is some

different angle.

2. Identify and group together related ideas.

3. Have a brief discussion in support of ideas (surely not against any

ideas) if desired.

4. Shortlist ideas for follow-up action by consensus or voting.

5. If voting is used every member gets the same number of votes, say

five or 10. One can give all votes to one idea or distribute his votes

one each to as many ideas or any other combination. The total votes

polled by each idea are counted and a priority list finalised.



22.15. CAUSE AND EFFECT DIAGRAM

Cause-and-Effect Diagrams, also known as Fishbone Diagrams because of

their shape or Ishikawa Diagrams after their founder Dr. Kaoru Ishikawa,

depict the relation between an ‘Effect’ and various possible ‘Causes’ for

the effect.

Purpose

To generate in a structured manner, maximum number of ideas regarding

possible causes for a problem by using brainstorming technique.

Procedure

Generation of a Cause-and-Effect diagram consists of the following steps -

1. Agree on the effect or problem for which causes are to be searched.

Display the 'Effect' and draw the backbone or spine.

2. Determine the main categories of causes.

3. Enter them in rectangles and connect them to the spine by the ‘middle

bones’.

4. Brainstorm to collect as many ‘causes’ in each category as possible

and enter them as sub-categories.

5. Discuss the relative importance of the causes.

6. Shortlist a few causes, by consensus or voting as the important

causes and circle them.

7. Test to verify the finding.



Figure 9: Cause & Effect Diagram

Employers Materials

How to Achieve

Company

Objective

Train & Develop All employees to their

full potential

Develop an effective company Business

Systems

Build Database of market &

customer Requirements

Ownership & Involvement

Suggestion Schemes

Reward & Recognition

Motivate & empower all Safety & Standardization Concern

Communication

Variety Reduction

Vendor Development

Value Engineering

Optimize Materials

Training Needs Identification

Product training

Skill Building

Succession Planning

Training & Development

Information Flows

Accurate & timely information

User friendly

Simplified Systems

Integrated business systems

Customer feedback

Price

Benchmark

After sales service

Improve customer Contact



22.16. FLOW CHART

Flow Charts are diagrams documenting the steps in a process using

standard symbols.

Purpose

To document clearly the flow of a process as a series of operational

steps as carried out at a given time. The Flow Charts are then used to

identify duplication of efforts or missing steps with a view to make the

process more efficient.

Procedure

The steps involved in the preparation of a flow chart of a process are -

1. Gather, from all related individuals, information on each step in

the process as it exists at the time.

2. If information from different sources is not tallying, check back to

find the exact situation.

3. Prepare a flow chart showing starting position and end of the

process, various steps, decision points and movement from step

to step. Use the following standard symbols.

Ellipses to show the start and finish of the process

Rectangles for individual steps in the process

Diamonds for decision points

Line with arrowheads indicates movement from step to

step with direction

4. Discuss with all concerned individuals to confirm that the

document actually depicts what happens. Make corrections if

necessary.



5. Study the chart for identifying any duplication, missing steps or

loopbacks.

6. Brainstorm to find ways of eliminating the deficiencies listed in

step 5.

7. Prepare a revised chart incorporating the suggestions for

improving the efficiency of the process. Get it approved.

8. Follow-up on the implementation to ensure accrual of gains.

22.17. ARROW DIAGRAM

Arrow Diagrams are flow charts of processes or projects showing all

necessary steps in appropriate order along with the time required for

each step, the earliest the step can be completed and the latest time

by which it must be completed. This tool is used as CPM (Critical Mean

Path) as well as in PERT (Programme Evaluation and Review

Technique).

Purpose

To plan and schedule projects or processes, monitor their progress.

Procedure

The steps in the preparation of an Arrow Diagram are

1. Identify all the steps or activities in the process or project.

2. Determine the order of activities and alternate routes.

3. Prepare a flow chart of the process or project.

4. Check the time required to perform each step or activity.



5. Determine the time for reaching various steps in the process.

Where a process converges after an earlier bifurcation, indicate

the higher of the converging routes’ timings.

6. For every step calculate the earliest possible time of completion

as well as the latest time by which the step must be completed to

complete the process on schedule.

7. On the route on which there is a ‘slack’, check if there is a

technical reason to favor early or late completion of the activity.

Indicate this as a note to the diagram.



Electrification

Procure Electric

Material

Estimates Procure building Foundation Superstructure

Roofing Plaster

Drawing & Design Work

Doors &

Windows

Painting & Finishing

Acquire Land

Fig. 11: Arrow Diagram ; Construction of a House

1

3 4 5

6 9

7 8 1

10

2

Material

Six Sigma March 10, 2010

Confidential | Six Sigma 76 /87

22.18. RELATIONS DIAGRAM

Relations Diagrams are cause and effect diagrams used in complex

situations, particularly when a number of causes are interrelated.

Purpose

To generate a diagram showing the relations between cause and effect as

well the interrelations between various causes.

Procedure

Preparation of Relations Diagram consists of the following steps –

1. Decide the problem or the ‘effect’ for which causes are to be found. Write

it in the big rectangle in the centre of the board or flip chart paper.

2. Brainstorm to generate primary causes and write them in different

rectangles around the central rectangle with effect. Connect each of the

causes to the effect with lines with arrows pointing towards the effect. It

would be convenient if causes likely to be related are written adjacent to

one another.

3. Keep asking 'why?' to generate secondary and tertiary causes for each of

the primary causes. Keep asking 'Why' till a root cause is reached. Follow

the same procedure for all the primary causes.

4. Connect secondary, tertiary and root causes to the effect through a

series of lines with the arrows always pointing towards the effect.

5. If the primary causes are also related as cause and effect, connect them.

Connect the other related causes to show as many interrelations as

possible.

6. Identify the root causes to which the effect is connected by a large

number of routes. Such root causes are likely to be the causes

contributing maximum to the effect.

Six Sigma March, 2010

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7. Reach a consensus on the main contributory causes for follow-up action.

If need be voting can be used as described under brainstorming.

8. Give the diagram a suitable title.

22.19. TREE DIAGRAM

Tree Diagrams are visual presentations of means of achieving goals in a

cascading sequence of goals-means-goals-means. These are arranged as a

tree with branches and sub-branches.

Purpose

To develop alternative means for solving a problem.

Procedure

The steps in the preparation of a Tree Diagram are –

1. Define the problem and the primary goal or objective. Keep it wide

enough so that no possible solution is excluded.

2. Brainstorm to find the means to achieve the primary goal.

3. The means identified in step 2 become the secondary goals. Brainstorm

again to find the means to achieve the secondary goals.

4. Continue the process by asking the key question 'How?' every time.

5. When one reaches the end of the line going down to some basic means,

brainstorming is done again to identify a few of the alternative means

which are most likely to contribute to the solution of the defined

problem.


Note:

A set of cards for the primary and secondary goals may be used to facilitate

collection or ideas before drawing the diagram.



Fig.12: Tree Diagram

22.20. AFFINITY DIAGRAM

This is an organizing tool, useful, for example, in sorting out ideas generated

through a brainstorming session. It is particularly necessary when a large

amount of information, ideas, opinions or issues have been collected in

situations when a process needs defining, or customer requirements need

identifying, or when a problem needs solving.

The technique organizes the collected pieces of information into groupings

based on the natural relationships that exist among them. The number of

groupings is limited to a maximum of 10. A single piece of information can

constitute an independent group in its own right. A heading is created for

each group, capturing its meaning.

Reward & Ascertain Recognition

Identify work

Capability

Develop a list

Motivation

Education

Good Faculty

Skill Developments

Empowerment

Better Facilities

Involvement

Transport

Housing

Training

needs

Training



The technique is useful in reducing an otherwise unmanageable amount of

information into a smaller number of homogeneous groups which are much

easier to handle independently, prioritize in order of significance or allocate

to specific projects for further study or investigation.

Affinity Diagrams are visual presentations of ideas arranged in groups of

related ones from among a very large number of ideas.

Purpose

To group ideas generated by brainstorming into groups of closely related

ones. The tool is particularly useful for deciding characteristics and features

of new products being developed.

Procedure

Preparation of Affinity Diagram consists of the following steps

1. Decide the topic.

2. Collect ideas by brainstorming.

3. Rearrange the ideas into groups of related ideas. Use a card for

each group.

4. Arrange the groups according to the relationship among the

groups.

5. Present the arrangement in the form of an Affinity Diagram.




Fig. 13: An Affinity diagram of House

22.21. COST-BENEFIT ANALYSIS

This is a technique for assessing the viability of an action in monetary terms.

The costs of taking a particular action are compared to the benefits

achievable from the future outcome. It can also be used to compare, in

money terms, a number of problem solutions or plans of action

Technical Details

• Floor Plan

BUILD UP AREA

• No. Of Rooms

• Details of Material

used

Location

• Central Gardens

• Near to school &

Offices

• Good Transport,

Telegraph, Postal,

educational facilities

Nearby

Amenities

• Water Park

• Cafeteria

• Club

• Library

Features

• Air conditioned

• Mosaic designer tiles

• Kitchen Garden Lift

• High quality fittings

Economy

• Reasonable Pavia

• Easy installment

• Loan facility



A necessary first step should be to decide on the period over which the cost-

benefit analysis will be performed. All the potential costs in setting up the

action or solution should be considered at this stage. The next step is to

consider all the factors involved which will either incur costs or provide

benefits. Consideration should be given to hidden cost factors such as

training, maintenance costs and so on. Costs and benefits should be

estimated conservatively.

The final analysis should be based on the calculation of the benefit to cost

ratio, and the net benefit, perhaps in conjunction with non-financial aspects.

The results can be used to evaluate a number of options.

22.22. CUSTOMER - SUPPLIER RELATIONSHIP CHECKLIST

This type of checklist can be used to help in the assessment of the

relationship between the supplier and the (external or internal) customer. It

can help in the identification of customer requirements, in the better

definition of the process, and in the unbiased assessment of the process

performance and of customer satisfaction or dissatisfaction. The checklist

should attempt to answer the following questions, which can be allocated to

three main groups:

Group 1. Questions about issues concerning relationships with the

customer:

1.1. What are your primary inputs - in terms of product or service?

1.2. Who are your customers - internal and external recipients of your

output?

1.3. What are your customer's requirements? What are the methods you

use to determine these requirements?



1.4. How satisfied are your customers with your product or service? How do

you measure their satisfaction?

Group 2. Questions about issues concerning the process performance:

2.1 What are the characteristics of your process output that can be

measured to determine whether it meets your customer's

requirements?

2.2 What major quality problems prevent you from meeting your

customer's requirements?

2.3 What are the obstacles standing in the way of resolving these quality

problems, and what would it take to remove these obstacles?

Group 3. Questions about issues concerning the relationship with the

supplier:

3.1 Which suppliers or subcontractors affect your capability to meet your

customer’s requirements? How do you select them?

3.2 What are your primary supplies and what are your requirements for

these supplies?

3.3 How do you communicate your requirements to your suppliers and

subcontractors? Do you help them to meet these requirements?

3.4 How satisfied are you with your suppliers or subcontractors? Do you

provide feedback to them about their performance?



22.23. SELECTION OF RIGHT COMBINATION

In the preceding pages, we have seen numerous tools for achieving,

maintaining and improving quality. In theory, all the 17 tools stand on their

own and can be used alone. However, in practice, in work life situations, one

may need to use a combination of several of them in a series, one after the

other. To point this out we have sometimes used data collected for one tool

while illustrating the use of another tool. (E.g. in examples of Histogram and

Pareto Chart, we used data collected in the examples of Tally Sheets).

Most statistical tools start with collection of data, for which an appropriate

Tally Sheet has to be designed as the first step. In most judgmental tools,

generating a large number of ideas or alternatives is very important. The

technique of Brainstorming will be used for idea generation. This too has

been usually mentioned among the steps in the procedure for the tool.

Besides this, for solving a problem, a series of tools may have to be used.

For instance, one may use a Cause-and-Effect Diagram to find the causes for

a problem, collect data (Tally Sheet), study the relative contributions of

various causes and prioritise (Pareto Diagram), analyse the data (using

Scatter Diagram of Stratification) and after solving the problem, may

monitor the process by using an appropriate Control Chart.

If the problem is more complex, one may use a Relations Diagram to study

the causes of the problem and then use a Tree Diagram to search for

solutions. For developing a new product, one may use an Affinity Diagram to

group customer requirements in convenient categories and then use a Matrix

Diagram or Matrix Data Analysis Diagram to assist in designing the new

product to meet those requirements.



The tools based on the use of statistics can be employed by an expert

working alone, but the judgmental tools can be used to advantage only by

teams of trained practitioners of the tools. These tools will require

interaction between different functions within the company and teamwork

between members of groups making use of the tools. The importance of

teamwork and active participation of various functions cannot be

overemphasized.

Experience and practice of tools will be the best guides in the selection of the

right tool or combination of tools for a given purpose. As mentioned in the

introduction, the tools are easy to understand but difficult to master. Only

practice will make you perfect. So, make frequent use of the tools and

techniques and develop expertise in their use.



Table 2: SPC TOOLS – SELECTION (SUMMERY)

TOOL OBJECTIVES METHODOLOGY WHEN TO USE

TYPICAL USER

1. PDCA

(Plan, Do, Check, Act )

Problem solved

by trial & error

Plan the work; execute it;

take action if there is deviation between desired & actual results. Repeat the cycle time till deviation is

reduced to zero.

When

powerful tools unknown.

Mostly line

workers.

2. Data

collection & Analysis

− Assess Quality

Control − Control a product

− Regulate a process

− Accept / Reject a

product − Interpret observations

Define specific reason for

collecting data. Decide on mes. criteria Attribute vs. Variable vs. Rank; assure

accuracy of measuring equipment ( min. 5 times greater than produced requirement ) ; randomise,

stratify data collection ( time , material, machine, operator, type & location of

defects ) analyse data using several S.P.C. D.O.E. tools.

At all times Universal.

3. Graph charts

− Display trends

− Condense data

− Explain to other

Select two or more parameters to be displayed; determine method of display (bar, line of circle or graphs

are the most common); Select the most appropriate scale of the parameter for maximum visual impact.

At all times Universal.

4. Check sheets

* Tally

Sheets

− Transform raw data

into categories

Group cells in

semipictorial fashion

Determine categories into which data into which

subdivided ( e.g. types of defects, location of defects, days in the week, etc. ).

Enter quantities in each category. * For tally sheets divide

variable being recorded into 10 levels or cell. Plot cell boundaries or mid points.

Make tally ( with slash marks) of the number of observation in each cell.

In preparation for a

Histogram or Frequency Distribution

Curve.

Universal.



5. Histogram

Frequency Distribution

Translate data into a picture of

the average & spread of a quality

characteristics

Convert tally sheet data into bar graph (Histogram) or

line graphs (Frequency Distribution) showing the relationship between various

values of a quality characteristics & the number of observations (or percentage of the total) in

each value.

For process capability

studies in pre production or production

Universal tool for

prioritization in mfg. Or white collar

work.

6. Brain

storming

* Generate as

many ideas to solve a problem of improve a process utilizing

synergistic power of a group.

from the trivial many. Concentrate attention on the

former

* Gather a group most

concerned with problem; define problem precisely ask each member to write down the cause of problem or

improvement ideas; then, open the floor for an outpouring of ideas, rational

or irrational; no criticism allowed. Record ideas; narrow down the most worthwhile ideas.

* Initial

problem solving “ Process” Improvement

Quality

Circles Improvement teams

7. Cause &

effect (Ishikawa Fish bone

Diagram)

* Organise

problem causes into main groups &

subgroups in order to have total visibility of all causes &

determine where to start corrective action

* Define the problem;

constructed a “Fishbone” diagram with the major causes (e.g. material,

machine, method & man) as the main “branches” & add detail causes within each main causes as “twigs”.

Quantify the speed limits established for cause & its effect upon the problem. If relationship between the

cause & effect can be shown quantitatively draw a box around the cause. If the

relationship is difficult to quantify underline the cause. If there is no proofs that a cause is related to the

effect, do not mark the cause with a circle. Experiments with these in

PDCA fashion until root cause is located.

Problem

Analysis

Universal



8. Control Charts

Maintain the parameter with

minimum variation after major cause

causes have been captured & reduced.

Select the control parameter product characteristics study

process capability. Set control limits – Monitoring process

• Not for problem

solving • Production

control

Engineers, technicians,

workers

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