6s Quality Background and Overview

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Background and OverviewQuality and Productivity Improvement

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MEASURE THE CURRENT PERFORMANCE

DEFINE THE OPPORTUNITY

IMPROVE PROCESS EFFICIENCY

ANALYZE THE CURRENT PROCESSES

CONTROL AND ADJUST NEW PROCESSES

IMPLEMENT IMPROVEMENTS

• Determine breakthroughs, design future state: new process, new “Sigma” level

• Create dashboards, scorecards and plans

• Perform cause-effect analysis to determine reasons for gaps in performance

• Map the process, gather initial performance data and determine current “Sigma” level

• Obtain client input, factors Critical to Quality (CTQ)

• Improve on what matters most to the client

• Significantly impact the bottom line

• Measure improvements and breakthroughs

• Report dashboard, scorecard data and client feedback

• Execute plans, overcome barriers

• Transition to the new process

Client Driven, Consistent,

Metrics Focused, Results Oriented

A DMAIIC Overview

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Key Tools:

Define Analyze Improve Implement ControlMeasure• Launch the project

using “One DayLaunch Process”

• Define project objectives/ outcomes

• Identify sponsor/ key stakeholders

• Select team, define responsibilities and launch

• Create high-level project plan

• Define decision makingapproach

• Determine “thin cut” and iterative approach

• Create high-level process map• Obtain client input,

priorities and CTQ’s• Gather initial metrics

– Historical Performance

– Current performance

– Existing ABC data• Determine process

current “Sigma” level

• Develop initial value proposition: opportunities & targets; Make Go/No Go Decision

• Analyze current processes, associated metrics

• Collect /interpret data ;

benchmarking information

• Complete people and technology analysis for critical processes

• Identify improvement breakthroughs

• Identify high gain alternatives, select preferred

approach• Design future state

– Process– Organization– Technology– Metrics/ Set Targets

• Determine new “Sigma” target• Perform C/B analysis• Review and update CSA• Design dashboards and

scorecards• Create high-level

implementation approach

• Complete risk analysis

• Train• Communicate• Execute• Test/Measure

Results• Develop Control

Methods• Manage change

• Report dashboard and scorecard data

• Create feedback loop for areas of focus

• Adjust process• Identify Replication Opportunities

• Develop Future Plans

• Project Charter• Stakeholder Analysis

Template• Communication

Strategy and Action Plan

• Process Maps• Customer Interviews,

Focus Groups, Surveys

• CTQ Specification• Pareto• Histogram• Control Chart• Run Chart• Sigma Calculation

• Cause-Effect Diagram

• Scatter Diagrams• Benchmarking’• Value/ Throughput

Analyses

• Brainstorming• Storyboarding• Cost/Benefit• Sigma Calculation

• Pilot Testing• Pareto Chart• Control Chart• Histogram• Process Management

Chart

• Control Chart• Histogram• Storyboard• Sigma Calculation

1 Week 2 Weeks 4 - 5 Weeks TBD Ongoing

A Closer Look at DMAIIC as a Process Improvement Method

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When Do You Use DMAIIC?

Incremental Improvement of Existing Product/Service/Process: Root Cause Analysis “Local” Process Improvement

Redesign of Existing Product/Service/Process: End-to-End Process Projects

New Product/Service/Process Design

Instituting Process Management

DMAIIC Tip: Tailor Application to Your Specific Project, Don’t Use It As a “Cookbook”

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What Does It Take to “DO DMAIIC?” What Do I Need

Six Sigma Tools—Process Analysis

Process Depiction

Process Diagnosis—Statistical Methods

Diagnostic

Predictive

Control/Management “People” Tools

—Team Facilitation—Change Facilitation

Project Management Tools—Cost, Schedule, Resources, Risk

Who’s Involved?� Teams (Generally)� Appropriate Representation� Appropriate Skill Sets

How Long Does It Take?� Depends on Scope,

Commitment� GE’s Target - 4 - 6 months

DEFINE

MEASURE

ANALYZE

IMPROVE

IMPLEMENT

CONTROL

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Market Deal Execute DealComplete

Transaction

Defect = When output does not meet client requirements

Input Output

Workflow

Six Sigma Will be a Key Part of Our Toolkit

Six Sigma is a business management approach

The goal is to fully align workflows with client requirements

This leads to higher client satisfaction, increased revenues, lower costs and decreased error rates

The focus is to reduce defects

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Defects Per MillionSigmaLevel Translation

66,803 3 1.5 misspelled words per page6,200 4 1 misspelled word per chapter233 5 1 misspelled word in a set of encyclopedias3.4 6 1 misspelled word in all the books that fit in a small library

Six Sigma Enables Businesses to Measure the Efficiency of Their Processes

A Sigma is a statistical measure of defects generated by a business process

Sigmas range in value, the higher the sigma the fewer the defects

A 3 Sigma process meets client requirements 93.3% of the time.

A 6 Sigma process meets client requirements 99.9997% of the time.

Consider this example…. If you published books….

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Define - 1.0Quality and Productivity Improvement

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The DMAIIC Process Improvement Method

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1.0 Define

Objective

Launch an improvement project, define project objectives/outcomes, select team, define responsibilities, create high-level project plan, identify sponsors/ key stakeholders, prepare a communication plan.

Key Topics

1.1 Launch the Project

1.2 Define Project Objectives and Outcomes

1.3 Identify Sponsors/ Key Stakeholders

1.4 Prepare a Communication Plan

1.5 Characteristics of Effective Teams

1.6 Define Toll Gates

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Follow-up(2 Hours)

(1 Week after Launch Meeting)

Initiative Selection

Pre-Launch Meetings/Activities

Launch Meeting(1 Day) Ongoing

•Business Manager, Sponsor, Coach determine what business level improvements will yield bottom line results

•Select End-To-End process as reengineering candidate

• Sponsor/Coach Meet: Solidify business case and objectives; determine initial scope, outcomes; skills needed

• Sponsor Selects Team Leader

• Team Leader/ Sponsor/ Coach Select Team

• Sponsor/ Team Leader/ Coach Meet: Plan Launch Meeting agenda

• Sponsor/ Team/ Team Leader Meet: Sponsor charges team with its responsibility

• Team attends to do most of the upfront project planning. Team works with the coach to focus on client requirements and review key process mapping tools, metrics concepts to produce:

• Project scope statement– Targeted outcomes\

success criteria– Stakeholder

analysis– High-level project

plans– Data collection plan

(including client data)

– Initial metrics– Decision /

Responsibility Matrix

– Initial current state process map

– Likely process improvements

• Coach works with team to facilitate project, monitor deliverables, overcome implementation barriers, evaluate progress relative to goals.

• Team reviews and agrees on the remaining elements of the project plan. May include:

– Metrics – Client

engagement – Communication

strategy– Milestones and

timetables

1.1 Launch the Project

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1.2 Define Project Objectives and Outcomes Objective

Fully define the objectives/ outcomes of the project and ensure that the project is aligned to the business strategy.

Key Topics Linking the Project to a Business Need Creating a Team Charter

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Creating a Team Charter

The elements of a team charter are:

Business Case: Purpose and Impact

Objectives: Project Goal Project Scope: Boundaries Project Plan: Activities Team Selection: Who and

What Solution Evaluation

Criteria: Weight and Rating

months rating $ rating months rating

Solution Evaluation Criteria

Implementation Time Scale Cost Benefit Scale Payback Period Scale

Business Case•Why should we do this?•What pain are we experiencing?Objectives•What are our improvement goals and targets?Project Scope•What authority do we have?•What processes do we need to address?•What is not within scope?Project Plan•How will we get this done?•When will we complete this work?Team Selection•Who are the team members?•What responsibilities will they have?

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Business Case

Purpose

Describes the benefit for undertaking a project and addresses the following questions:

Does this project align with other business initiatives? How will this project affect other business units and individuals? What is wrong or not working? When and where do the problems occur? How extensive is the problem? What is the impact/ “pain” on our clients? Our Business? Our People? Does it make strategic sense to address this problem? What benefits will be derived from this project? Has the value of the benefits been quantified?

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Objectives

PurposeStates project outcomes as SMART goals: specific, measurable, attainable, relevant and timebound.

What is the improvement team seeking to accomplish? What does the desired state look like? What specific parameters will be measured? What are the tangible, “hard” deliverables/results (e.g., reduce cost, cycle time, etc.)? What are the intangible, “soft” deliverables/results? What is the timetable for delivery of results?

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Project ScopePurpose

Defines the boundaries of the project.

Project Scope What are the boundaries, the starting and ending steps of the process? What parts of the business are included? What parts of the business are not included? What, if anything, is outside the team’s boundaries?

Compensation Cross-BusinessActivities

TransactionAccounting

Execute Transaction

Y2KProgramsMarket

Deal

ManagePosition

In-Frame/Out-of-Frame Tool:

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Project Plan

PurposeIdentifies the activities necessary to complete the project and contains the overall schedule.

Milestones What are the key activities (high level, 5–7 steps) that must be taken to complete the initiative? What are the key milestones in the project plan (e.g., team kickoffs, major step completion dates, presentation dates, etc.)?

Resource Requirements What resources (people, materials, space, dollars, etc.) will be needed to complete the initiative?

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1.4 Communication PlanMajor Communication Channels

• Most permanent (most binding, hardest to move away from)• Least expensive• Most efficient, communicates to many people quickly• Provides consistency of message• Useful to direct, instruct, inform

• Dramatic, visible• Provides shared experience; “bonding”; builds identity• Facilitates involvement• Useful to signal a new direction, to begin to get buy-in• Good symbolism, e.g., town meetings, plant shutdowns, eradication of reserved parking• Demonstrates values-behavior consistency, commitment

• Effective for persuasion• Carefully attended to by the receiver(s)• Labor intensive; often expensive, time-consuming• Useful to assess perceptions, beliefs, degree of resistance• Builds credibility• Demonstrates commitment, interest, support

Written

Events/Symbols

Face-to-face (one-on-one; one-on-many)

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Measure – 2.0Quality and Productivity Improvement

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2.0 Measure Objective

Create high level process map, obtain client input, priorities and CTQ’s, gather initial data/ metrics, determine current process Sigma level, develop initial value proposition, make Go/No Go decision.

Key Topics

2.1 Measure Step Guide Lines

2.2 Core and Enabling Processes

2.3 Process Mapping

2.4 Defining Client Requirements

2.5 Performance Measures

2.6 Data Collection

2.7 Variation

2.8 Six Sigma

2.9 Go/No Go Decision Making

2.10 Team Dynamics

2.11 Toll Gates

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2.1 Measure Step Guidelines Form a “holistic” understanding of the process

What are the activities? What are the critical metrics? What systems are involved? What people are involved? What data and information is critical? What is the voice of the customer? What is the voice of the process?

Identify current performance levels How does the process perform relative to “critical to quality” requirements?

Determine how data you gather affects the project objectives Given information that you gather, do you need to reset/refine the project

objectives?

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A

PROCESS MAPPING SYMBOLS

Activity

Actor

Activity; indicates actions performed as part of the process. The statement inside thesymbol should begin with a verb.

Actor; role which performs the activity, ie. trader, mid-office manager, client, etc.

Outcome; indicates endpoint of a process.

Connector; indicates connection to another section of the process.

Trigger; indicates what initiates an instance of the process.

Decision; indicates evaluation or inspection. There will always be two direction arrows - one for “yes”, one for “no” decisions.

Control Point; indicates point at which a control is applied.

Process Mapping Symbols

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Factors Critical to Quality (CTQ’s)

What is a CTQ?Important to the client — “client cares about it”

Value proposition

Specifies requirement — “must-have” or “must be” attributes Ultimately satisfy Potentially delight

Can be measured

Establishes a target Client specifications Acceptable range of performance

To be useful, we must ultimately convert the Voice of the Customer data into factors Critical to Quality in the client’s eyes. We can then use these as requirements to assess the performance of our processes. CTQ’s are not defined to the point that a clear target with specifications is established, they are not useful in determining our current defect levels.

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Translating the VOC into CTQ’s: Clients Listen to statements and comments made by clients Determine what factors really drive a client to call Morgan vs. the competition

What product features, service features, attributes, dimensions, characteristics (reliability, availability, etc.) cause a client to call us?

Determine the best way to measure performance relative to these factors / specifications

Determine what targets we would need in order to meet the client’s factors / specifications

Assess current performance relative to these factors / specifications How are we doing today?

Client Need (“CTQ”) Metric Current Performance Target Client: Satisfaction

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Displaying Data

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2.7 Variation

• Variation means that a process does not produce exactly the same result every time the product or service is delivered.

• Variation exists in all processes

• Measuring and understanding variation in our business processes helps identify specifically what the current level of performance is and what needs to change in order to reduce the variability and reduce the defects delivered to customers.

Data Variation

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The Sigma Scale

Note: These Values Include the 1.5 “Sigma Shift”

Z(“Sigma”)

DPMO Defect ReductionFactor

2 308,537 -

3 66,807 4.6

4 6,210 10.8

5 233 26.7

6 3.4 68.5

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2.11 Toll gates Did you view the process holistically: activities, information, people,

systems, etc?

Was the process flowed to the appropriate level?

Were the client (external, internal, stakeholders) needs identified and prioritized?

Were measurable Critical to Quality requirements identified?Do these correlate to the important client needs?

Was the current level of performance determined for the critical metrics?

Were targets established based on client needs?

Did you refine the problem and goal statements?

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Analyze – 3.0Quality and Productivity Improvement

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3.0 Analyze

ObjectiveAnalyze data collected during Measure to determine why the process performs as it does today, identify and quantify cause and effect relationships.

3.1 Process Stratification and Analysis Analyze and interpret data collected during Measure Collect/interpret benchmarking data

3.2 Search for Sources of Variation Further define cause and effect relationships

3.3 Validate Root Causes Validate, quantify and prioritize root causes of current performance

3.4 Toll Gates

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3.1 Process Stratification & AnalysisAnalyze the process in detail to clearly define a specific problem on which the team will concentrate its root cause analysis.

The opportunity will narrow in focus after the initial data is analyzed.

Data can be stratified in many ways: Time Process components (activities, decisions, etc.) Causes Defects Other Factors

— Location— Department— Job Type— Shift— Product or Service Line— Market— Site

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Pareto AnalysisIdentify the “vital few”

Pareto analysis organizes data to show what major factors contribute to the problem being analyzed.

Typically, about 80% of the problems result from 20% of the causes.

Pareto provides focus for root causes Analysis. Defects Found

2

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Ishikawa Diagram

Cause and Effect Diagram

The cause and effect diagram assists in reaching a common understanding of the problem and exposes the potential drivers of the problem.

CAUSES

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3.4 Toll Gates

Was the problem stratified to a manageable size?

Was a cause and effect analysis performed?

Were important process variables/root causes identified?

Were these root causes verified with data?

Are the variables/causes actionable?

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Improve – 4.0Quality and Productivity Improvement

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4.0 ImproveObjective

Identify improvement breakthroughs, identify high gain alternatives, select preferred approach, design the future state, determine the new Sigma level, perform cost/benefit analysis, update CSA, design dashboards/ scorecards, create a preliminary implementation plan.

Key Topics

4.1 Identify Improvement Breakthroughs Apply idea-generating tools and techniques to identify potential solutions that

eliminate root causes

4.2 Identify/Select High Gain Alternatives Develop criteria to evaluate candidate improvement solutions Think systematically and holistically Prioritize and evaluate the candidate solutions against the solution evaluation

criteria Conduct a feasibility assessment for the highest value solutions Develop preliminary solution timelines and cost-benefit analysis to aid in

recommendation presentation and future implementation planning

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Key Topics (Continued)4.3 Design Future State Redraw the process map

4.4 Present Recommendations Refine a stakeholder assessment to support the development of a "winning and

accepted" recommendation Develop the necessary details and documentation needed to effectively

present and articulate the solution and its value to various organization constituencies

Develop the presentation model, materials and action plan for presenting the team's recommended solution(s)

4.4 Implementing Change Become familiar with the elements of effective organization change Assess opportunities to build effective change management considerations into

the recommended solution(s)

4.6 Toll Gates

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4.1 Identify Improvement BreakthroughsObjective

To introduce the team to different tools and techniques that can be used to stimulate collective thought to produce a large number of improvement ideas.

Key Topics Prepare for Idea Generation Traditional Idea Generation Non-Traditional Idea Generation

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Sources of Solutions

Internal Best Internal Best PracticesPractices

Implementation Implementation TeamTeam

Thought LeadersThought Leaders

ExternalExternal

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4.6 Toll Gates

Do the identified solutions address important process variables/root causes?

Can the team actually implement these solutions? Are the solutions cost-beneficial? Will/do the solutions achieve the desired target for

improvement? Do you have an adequate/effective action plan? Did you consider and create “bashing” plans for likely barriers? When are results expected to be seen?

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Implement – 5.0Quality and Productivity Improvement

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5.0 Implement

Objectives Develop a pilot implementation plan, execute the pilot, interpret and

learn from the results, create a full implementation plan, execute the full solution, measure the results, develop control methods, manage the change

5.1 Develop the Pilot Plan What, Why and When to Pilot: Define the objectives and evaluation

criteria for a pilot solution Elements of a pilot plan How to pilot

5.2 Execute Pilot/ Interpret and Learn from the Results Conduct the pilot Measure and verify results Determine next steps: build experience and lessons learned to support

full scope implementation

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5.0 Implement (continued)

5.3 Plan and Implement the Full Solution Expand the pilot and create a plan for a full scope solution Identify potential implementation problems Develop a process control system for holding the improvement gains

5.4 Toll Gates

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5.1 Develop the Pilot Plan

Objective

Develop a plan for testing the solution on a small scale; test the design and prepare for full implementation.

Key Topics What, Why, and When to Pilot Elements of a Pilot Plan How to Pilot

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What, Why, and When to Pilot

What is a pilot?A pilot is the trial implementation of a proposed design on a reduced scale.

Benefits of Conducting a Pilot: A better understanding of the

impacts of the designed solutions Experience with taking a solution

design from paper to real operations “Reality test” of a design’s integrity An opportunity to improve the

design before implementation on a larger scale

Minimizes risks associated with cost and potential problems

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5.4 Toll Gates

Were the process variables/root causes impacted “positively?”

Did the indicator selected in “Define” or “Measure” move in the desired direction?

Was the improvement target achieved?

If not, is there an understanding of why?

Has a means of standardizing the successful changes been identified (procedure, standard, protocol, specification, etc.)?

Has responsibility (and authority) to standardize the changes been delegated?

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Control – 6.0Quality and Productivity Improvement

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6.0 Control

Objective Run the new process, continuously improve the “engine”, report

dashboard and scorecard data, create feedback loop for areas of focus, adjust as needed, identify replication opportunities.

6.1 Verify Solution Results Verify that the process reliably meets client requirements Determine future continuous improvement opportunities

6.2 Identify Replication Opportunities Process replication and solution standardization Process Management as a Continuous Improvement strategy

6.3 Lessons Learned Incorporate lesson learned into the business

6.4 Toll Gates

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6.1 Verify Solution Results

Objective

Validate that the implemented solution is having the desired or intended impact on the performance of the process.

Key Topics Verify that process reliably meets client requirements Determine future continuous improvement opportunities

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6.4 Toll Gates

Is the improved process stable (no assignable causes of variation)?

Is the improved process capable (what is the current sigma level)?

Have opportunities to replicate successful changes been identified?

What remains of the original problem?

What are the plans to address this?

What went well and could have gone better in the project (Project Plus/Deltas)?

6s Quality Background and Overview

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Transcript of 6s Quality Background and Overview