LSSGB Lesson2 Define

Copyright 2014, Simplilearn, All rights reserved.


Lesson 2Define

Lean Six Sigma Green Belt

Copyright 2014, Simplilearn, All rights reserved.Copyright 2014, Simplilearn, All rights reserved.

Explain various components of project selection

Describe customer data collection methods

List various means of project documentation

Discuss risk analysis and management

Describe project management and planning tools

Explain the concepts used in evaluation of project performance

Describe the deliverables of Lean Six Sigma project

After completing this lesson, you will be able to:

Objectives

2


Define

Topic 1Project Identification


Project Selection

The five steps for selecting a project are as follows:

Identify organizational need

Identify the projects

Evaluate the projects

Select the right project

Review the project

Organization needs

projects to improve

and develop its

functional areas and

to serve and meet

customer needs.

Identify projects

that are aligned

with the

organizational need.

Evaluate the project

in the following

areas:

Net present

value

Cost benefit ratio

Internal ROR

Opportunity cost

Payback period

The project which

meets the

organizational

requirement is

selected and

initiated.

Project will be

reviewed to ensure

alignment to the

organizational

goals.

4


A business process has five elements: Supplier, Input, Process, Output, and Customer (SIPOC).

Process Elements

Supplier:A person or organization providing resources to the process concerned

Input:Information, material, or services provided by the supplier

Process:Set of steps which transforms the inputs into output

Output:Final product or service, outcome of the process

Customer:A person, process, or organization which uses the output

5


One or more changes in Supplier, Input, or the Process actions (SIP) will result in a change in the

process output.

If SIPs are stable, the output will be stable.

Relations between SIPs and output provide a method to define possible cause-effect relationships.

These relationships can be termed as closed-loop business systems.

SIPOutput Interaction

Supplier Input Process Output

6


SIPOCExample

SIPOC form for a call center:

Suppliers Inputs Process Output Customer

Telecom industry

IT industry

Phone connection

Computer or

system

Head set

Server or dialer

CSR or TSR

Opening call

Customer verification

Probing customer

Resolution

Closing

Problem solution User (existing

customer)

New customer

7


The following image represents where the process owner and stakeholders are placed in the

organizational hierarchy:

Owners and Stakeholders

Process Owner:Responsible for the performance and execution of the process.

Stakeholder: People who are affected by the organizations actions.

Stockholders Customers Suppliers Management Employees Society

8


Customers are the most important part of any business. A customer is someone who:

decides to purchase;

pays;

consumes; and

gets affected by a particular product or service.

It is essential to identify and understand the customer requirements so the products or services can

be designed according to these requirements.

There are two types of customersinternal and external.

Identify Customer

9


An internal customer is anyone within the business system who is affected by the product or the

service while it is being developed.

Internal Customers

Needs of an internal customer

Necessary tools, training, and specific instructions

Provision of company newsletters, projects,

storyboards, etc.

Awards and recognition

Importance of an internal customer

Activities directly impact final customer

Activities affect the next process in the system

Affects the quality of the end product

The satisfaction levels of the internal customers can be improved in various ways: increased internal communication through company newsletters, awards, recognition, constant trainings, and competitive environment.

!10


External customers are not a part of any organization; however, they are impacted by it. They are the

source of revenue for any business system and are therefore extremely important.

There are three types of external customers:

External Customers

Affected parties

They do not purchase the product or service. However, they are impacted by it.

End users

They purchase a particular product or service for their personal use.

Intermediate customers

They purchase a particular

product or service, modify or

assemble, repack, and resell

the product or service to an

end user.

11


Building a Business Case

A Business Case is needed to provide details to the management and team members on the

business values to be achieved by conducting a project.

Explore the improvements and opportunities while documenting a business case along with the

high level view on what business output is anticipated and by when.

A business case must capture the following:

Business outcome;

Effort needed;

Set of resources and their availability; and

Timeline.

12


Building a Business CaseDetails

The tangible benefits from the Lean Six Sigma project needs to be articulated using following factors:

Amount of cost reduction,

Ways to reduce turnaround time,

Focus on quality by reduction in defects, and

Ways to achieve customer satisfaction.

The business case is presented to stakeholder with the following details:

Executive summary brief

Strategic linkage

13


Financial Evaluation and Benefits Capture

Hard Savings

Actual reductions in money being spent, such as:

Reduced budgets,

Fewer employees,

Additional revenue opportunities,

Effort reduction,

Rework and scrap reduction, and

Reduction in work force.

Soft Savings

Intangible benefits such as:

Increase in customer satisfaction,

Employee morale,

Brand uplift and repeat customer.

Also includes the benefits arising from:

Less inventory and reduced testing,

Lower cycle times and improved yields,

Lower rework rates and reduced scrap.

The potential financial benefits from the Six Sigma project are captured by looking at the cost and

both hard and soft savings.

14


Financial Evaluation and Benefits CaptureSample

The given excel sheet is used to capture monthly costs and benefits to get a full picture of the cost

involved and the benefits realized.

Criteria/Factors M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 Total

Cost

Benefits

Net (Monthly)

Cumulative

This row captures all the cost that is incurred month over month.

This row captures the benefits expected to be realized.

In this row, calculate the net value (Benefits Cost for every month).

In this row, capture the monthly data and add the data to get a cumulative view of benefits up to that month.

15


The most important aspect of any process improvement project is the customers. Following are the

positive impacts of the project on both types of customers:

Effects on internal customer Effects on external customer

High level of motivation

High level of job satisfaction

Undertake additional roles and responsibilities

Focus on delivering their responsibilities

Improved team bonding

Solution to problems

Better product

Requirements are effectively met

Improved customer service

Customer satisfaction

Positive Effects of Project on Customers

16


Define

Topic 2Voice of the Customer


Collecting data from customers is very essential as it helps one consider the levels at which these

customers impact the business. Customer data or feedback is collected from internal and external

customers. Collecting customer data helps:

to fill the gaps and improve the various business processes in the organization;

to define a good quality product as perceived by the customer;

to identify qualities that make the competitors product or service better; and

to identify factors that provide a competitive edge to the product or service.

Collect Customer Data

Popular and common methods are surveys conducted through questionnaires, focus groups, individual interviews with the customers, and direct feedback from customers through call center data, emails, and feedback forms.

!18


Questionnaires can be given in the form of a survey. It is a method of deriving feedback from

individuals though structured questions, either personally or over emails, telephone, etc.

Following are the steps in the process:

Questionnaire

Scope of the surveyDefine the

survey group Pick a

methodologyDevelop a

questionnaire

Initially plan the

scope of the

survey. Make a list

of all the points

that need to be

covered.

Plan the

participants

required for the

survey.

Depending on the

time, budget, and

demography of

the participants,

decide on a survey

methodology.

Develop a brief,

professional, and

neat

questionnaire to

encourage

effective

participation.

Compilation

Scan the

questionnaires

and develop a

report.

19


Some advantages and disadvantages of questionnaires are listed below:

Advantages

Low-cost approach

Phone response rate: 7090%

Faster results

Analysis of mail questionnaires requires few

trained resources

Disadvantages

Incomplete results and unanswered questions

leading to a lack of clarity

Mail response rate: 2030%

During phone surveys, the interviewer may

influence the interviewee

Advantages and Disadvantages of Questionnaire

20


The popular methods of survey are the telephone survey and web survey.

Telephone Survey vs. Web Survey

Telephone Survey

This is used for general survey and when sample

size consists of generic population.

It is expensive and is conducted in limited time.

Clarification of some answers is possible.

Open-ended questions can be asked.

More respondents respond.

There might not be enough audio-video support,

so the data quality can be low.

Compilation & analysis of data consumes time.

Web Survey

This is used when survey is targeted at a specific

set of people and when the sample size is easily

accessible through the Internet.

It is low cost and respondents get enough time.

Clarifications for answers are not possible.

Open-ended questions cannot be asked.

Less respondents respond.

Audio and video support is possible, so the data

quality is better.

It simplifies the compilation & data analysis of

data collected.

21


Focus group is generally a small group of three to twelve individuals who assemble for one or two

hours to explore specific topics and questions.


Focus Group

Preparatory stage Planning stage Session Compilation

Identify scope of

focus group

Analyze the

problem that

needs to be

addressed

Finalize session

venue and time

Arrange a means

for transcription

Advertise session

details

Arrange for

refreshments

Facilitate

introductions

State the agenda

and transcription

factor involved

Record the

session

Retreat to an

observatory

Study

transcription

material

Make notes

22


Some advantages and disadvantages of focus group are listed below:

Advantages

Group interaction generates information

Provides in-depth responses

Addresses complex questions or qualitative data

Excellent for getting critical-to-quality definitions

Disadvantages

Learning is subjective and cannot be generalized

Data collected is qualitative rather than

quantitative

Generates anecdotes and incidents experienced

by the individuals in the group

Advantages and Disadvantages of Focus Group

23


Interview is a technique of questioning and probing an individual to gather information. It is informal

and encourages the interviewees to voice their opinion. Even though quite common for collecting

customer feedback, individual interviews can be time consuming.


Interview

Introduction and greetings

Gather feedback Compilation

Start the session with

a friendly greeting.

Understand

interviewees

background,

interests, and

knowledge level.

Avoid taking notes.

Display complete

attention to what the

participant has to

say.

Gather information

at all levels.

After the session,

make a list of the

points discussed, the

ideas that cropped

up, suggestions, etc.

24


Some advantages and disadvantages of the interview technique are listed below:

Advantages

Can tackle complex questions and cover a wide

range of information

Allows use of visual aids

Good choice when individuals dont respond

willingly and/or accurately by phone/mail

Disadvantages

Time consuming

Requires a trained and experienced interviewer

Advantages and Disadvantages of Interview

25


The table shows the importance and urgency of different kinds of input.

Importance and Urgency of Various Inputs

Criteria / Factors WeightageTelephone

SurveyWeb

SurveyInterview

Respondents availability 12 8 8 6

Lead data 6 8 8 9

Cost involved 20 3 9 1

Time consumption (organization perspective) 5 5 10 1

Availability of time from customer (for the survey) 5 3 10 4

Response rate of the customer 15 7 5 8

Judging the quality of data 10 1 6 10

Clarification 3 7 0 10

Visualizing feature 2 0 10 10

Compiling & analyzing data 2 3 10 3

Resource requirement 10 1 10 1

Preparation time 5 7 1 9

Accessibility to customer 5 8 8 4

TOTAL 100 471 744 522

26


There are pros and cons for gathering information from customer complaints.

Customer Complaints

Advantages

Availability of specific feedback directly from the

customer

An easy option to respond appropriately to every

customer

Disadvantages

Feedback in this method does not provide an

adequate sample size

May lead to process changes based on one or two

inputs from the customer

27


Product complaints and expedited service requests can act as inputs to the company for improving

their process.

Product Complaint vs. Expedited Service Request

Product Complaint

This arises when customer is dissatisfied.

Product is not meeting customer specification.

Product has to be improved.

Customer needs for product are not completely

identified.

Expedited Service Request

This arises when customer is in a hurry.

Service timelines are not meeting customer

requirements. Service has to be improved.

Customer timings need to be recalculated.

28


The table shows the importance and urgency of different kinds of input.

Importance and Urgency of Various Inputs

Factors Weightage Product complaintExpedited service

request

Identifying customer need 15 8 9

Cost involved 15 4 8

Time consumption (orgn. perspective) 2 3 9

Probing the customer 10 1 10

Availability of time from customer 10 1 10

Response rate of the customer 10 1 6

Clarification from customer 8 1 6

Retaining customer 10 1 10

Compiling & analyzing data 2 4 10

Resource requirement 8 1 2

Handling customer 10 1 10

TOTAL 100 260 817

29


Data collection tools will be selected based on the type of data to be collected. The key elements that

make these tools effective are as follows:

Data is directly collected from the primary source, reducing the scope for miscommunication or

loss of information.

Data is highly reliable as it is collected exclusively for the stated purpose.

Data is captured after understanding the organizational purpose, making data relevant.

Data is collected instantaneously when there is a requirement, making it up-to-date and valid.

Customer requirement is accurately defined with the data.

Key Elements of Data Collection Tools

The tools help to get enough information about customer requirement through which the process for improving or creating the product or service that the customer requires can be developed.!

30


Collected data must be reviewed to eliminate vagueness, ambiguity, and any unintended bias.

Review of Collected Data

Customer feedback sheet before review

Name:

Gender: Male/Female

Occupation: Student/Professional

Were sales executive supportive? Yes/No

Was the product delivered on assured time?

Yes/No

Please rate overall experience between

1 and 10 (1 lowest and 10 highest)

Customer feedback sheet after review

Name:

Gender: Male/Female

Occupation: Student/Professional/others (please specify)

Rate sales executives on the below areas: (10 high1 low)

o Politeness

o Ability to understand & identify problem

o Quick reply to queries

o Overall

Was the product delivered on assured time? Yes/No

Please rate overall experience between 1 and 10 (1 lowest

and 10 highest)

31


Voice of Customer

Who is the Customer?

What the customer said (VOC)

What the customer meant

What is the need?

When is the need felt?

Where is the need felt?

Why is the need felt?

How is the situation handled now?

Household Member

AC should be silent

Sound sleep At NightIn the bedroom

To remain fresh next morning

Uses a ceiling fan that makes a lot of noise

AC should be efficient

Good cooling

At NightIn the bedroom

It gets very hot in May-June

Uses a ceiling fan that is not so effective in summer

AC should be economic

Affordability N/A N/A Limited Finance N/A

The Voice of Customer (VOC) is a technique to organize, analyze, and profile the customers

requirements.

Following is an example for customer requirements while purchasing an air conditioner:

32


Importance of Translating Customer Requirements

Customer requirement is the data collected from customers that gives information on what they need

or want from a process.

Customer requirements are often high-level, vague, and non-specific.

Customer requirements when translated into critical process requirements that are specific and

measurable are called Critical To Quality (CTQ) factors.

A fully developed CTQ has four major elements:

output characteristic;

Y metric;

target; and

specification or tolerance limits.

33


Critical to Quality factors are quality parameters set by the organization relating to the customers

needs. CTQ tree is a diagram-based tool that helps develop and deliver quality products and services.

Critical to Quality

Identify Critical Needs Identify Quality DriversIdentify Performance

Requirements

Identify the critical needs that

the product has to meet.

Define the product

requirements in broad terms.

Ask the customers directly or

brainstorm on their needs

with people in direct contact

with customers.

Identify the specific quality

drivers that must be in place

to meet the needs.

Identify all of the drivers that

are important to the

customers.

Understand the factors that

are important to the

customers.

Identify the minimum

performance requirements.

Satisfy the requirements for

each quality driver to provide a

quality product.

Remember the things that may

affect your ability to deliver

these.

34


Quality Function Deployment (QFD) is a process to understand the customers needs and translate

them into a set of design and manufacturing requirements, while motivating businesses to focus on

its customers.

It helps companies to design and build more competitive products in less time and lesser costs.

It also helps you understand the following:

Quality Function Deployment

Customer requirements

Organizations strengths & weaknesses

Where the focus should

be

Areas where most of the work is to be done

35


Phases of QFD

Quality function deployment involves four phases. The output of a phase is the input of the next

phase.

Product Planning

Product Design

Process Planning

Process Control

Technical Requirements

Key Process Operations

Establishing process control plans, maintenance plans, and training plans to control operations

Key Parts Characteristics

Customer Requirements

Input Output

InputOutput

Input

Input

Output

Output

36


Structure of QFD

Quality function deployment or House of Quality (HOQ) comprises six steps:

37


Step 1Customer Requirements

The first part of the HOQ matrix is Customer Requirements.

This is a documented version of the customers

requirements for a product.

Customer requirements box is known as WHATS.

Inputs are collected through direct conversation with the

customers.

List of customer inputs must be structured before it enters

HOQ.

The organization can also collect customer requirements

by brainstorming with people who work with customers

directly.38


Customer RequirementsImportance Weightage

Customer requirements prioritization measures for each customer requirement are gathered from the

questionnaire and AHP.

High priority requirements are rated 1 and low priority requirements are rated 0.

For every requirement, calculate the sum of customers who voted it as high priority.

Calculate the percentage of these customers.

Customer RequirementsCustomers

Sum % Sum1 2 3 4 5

1 Lasts a long time 1 0 1 0 0 2 18.2%

2 Inexpensive 1 0 1 1 1 4 36.3%

3 Protects hood 0 1 1 1 0 3 27.3%

4 Doesnt rust 1 1 0 0 0 2 18.2%

Totals 11 100%

39


Step 2Planning Matrix

The second part of the HOQ matrix is Planning Matrix.

This provides a measure of customer satisfaction with the

existing products.

It is used to rate the industry competitors on each of the

customer requirements or WHATS.

It helps the organization to get an overview of their

performance when compared with industry competitors.

5-scale rating is used.

40


Step 3Technical Requirements

The third part of the HOQ matrix is Technical Requirements.

It is also known as Engineering Characteristics or Voice of

the Company.

This section describes products in terms of the company.

QFD team identifies all the measurable characteristics of

the product which are related to customer requirements.

It helps to identify the minimum performance

requirements that the organization must satisfy for each

WHATS.

Organizational factors that affect the ability to deliver the

desired high quality product need to be listed.41


Step 4Inter-Relationships Matrix

The fourth part of the HOQ matrix is Inter-Relationships

Matrix.

This section forms the main body in the HOQ matrix.

This section translates customer requirements into

technical characteristics of the product.

The QFD team identifies the significance of these inter-

relationships.

The level of inter-relationship is weighted on a scale.

Each level is assigned a score that is agreed by the QFD

team.

42


Step 5Roof

The fifth part of the HOQ matrix is Roof.

This speaks about the impact of HOWs on WHATSs.

This identifies where the technical requirements of the

product support or obstruct each other.

QFD team considers the pairing of the technical

requirements to form this matrix.

If improving one requirement leads to deterioration

trade-offs existMinus symbol is entered.

If improving one requirement leads to improvement of

the technical requirementTick or Plus symbol is

entered.43


Step 6Targets

This summarizes the conclusions drawn from the data from

the entire matrix and team discussions.

Technical Priorities: Each inter-relationship weighting is

multiplied by overall weighting from the planning matrix.

Competitive Benchmarks: These show the relative

technical position of the existing product and identify the

target levels of performance to be achieved in a new

product.

Targets: This is a final output of HOQ matrix and is a set

of engineering target values to be met by the new

product design.44


The output of the first HOQ matrix can be the first stage of the first QFD phase.

Post-HOQ Matrix

45


Define

Topic 3Project Management Basics


Problem Statement

The first step of project initiation is defining the problem

statement.

A problem statement should:

be a clear and concise description of the problem;

identify and specify the observed gap in performance

by setting the current baseline and measuring the gap

against customer needs; and

be quantifiable with metrics.

The problem statement cannot contain solutions or causes for the problem. !

Gap

Actual State

Required State

47


A project charter is a written document that defines a teams mission, scope of operation, objectives,

time frame, and consequences for the project. It is a formal approval from the senior management to

start the project. A project charter includes:

measurable objectives to be achieved from the project;

organizational and operation boundaries of the project; and

top management support and commitment.

Project Charter

Write Review Approve

A Green Belt writes the problemstatement and project charter.

The Black Belt is responsible to get the Champions approval for the project charter.

The project charter is reviewed by a Black Belt.

48


Some of the major sections of a project charter are as follows:

Project Charter Sections

Project name and description

Business need (problem statement)

Project managers name

Project purpose or justification, including ROI

Stakeholder requirements

Broad timelines

Major deliverables

Constraints and assumptions

Summary budget

49


A project plan is the final approved document which is used to manage and control the various

processes within a project and ensure seamless project execution. The project manager uses the

project charter as an input to create a detailed project plan.

Some of the major sections of a project charter are as follows:

Project Plan

Project management approach and scope statement

Work breakdown structure (WBS)

Cost estimates and schedule

Performance baselines and major milestones

Key or required staff

Open or pending decisions

Key risks

50


According to the Lean Six Sigma project plan:

The deliverables must be documented at all the phases of the project;

They are planned and documented in the define phase and are reviewed by the management;

The deliverables are then tracked and delivered by project team, within the stipulated time along

with the relevant information;

The project team reviews the project status with the management at the end of each phase; and

On the basis of the review, the feedback and guidance are provided by the leadership team.

Deliverables of a Lean Six Sigma Project

51


Deliverables of a Lean Six Sigma ProjectDetails

The high level deliverables expected of the Lean Six Sigma project phases are as follows:

Define phaseMeasure

phaseAnalyze phase Improve phase Control phase

Form the Cross-

functional team

Document the

project charter

(along with SIPOC,

VOC, CTQs,

benefits, and

timeline)

Identify the key

measures

Collect and plot the

data

Identify the process

variation in the data

Analyze the

measurement

system

Baseline the

process sigma level

Analyze the data

and processes

Perform correlation

and causation

analysis

Quantify the

process gaps and

sources of variance

Identify the

opportunities for

improvement

The team reviews of

the data collected

occurs

Perform FMEA to

design the solution

and plan for

improvements

Standardize the

processes across

the organization.

Develop the control

charts

Implement

monitoring plans

for the project

Establish the

response plan

Transfer ownership

Close the project

52


Pareto Chart

Pareto chart, also known as eighty-twenty rule or vital few,

trivial many, is a histogram depicting the frequency of

occurrence of events.

It plots all the causes for defects in a product or service.

Values are represented in descending order by bars.

Cumulative total is represented by the line.

80% of the effects come from 20% of the causes.

Thus, Pareto chart narrows the scope of the project, or

problem solving, by identifying the major causes affecting

quality.

80/20

53


A hotel receives plenty of complaints from its customers and the hotel manager wishes to identify the

key areas of complaints.

Pareto ChartsExample

Cause Number Percentage Cumulative

Cleaning 35 54.69% 54.69%

Check-in 19 29.69% 84.38%

Pool timings 4 6.25% 90.63%

Minibar 3 4.69% 95.31%

Room service

2 3.13% 98.44%

Other 1 1.56% 100.00%

Total 64 100.00%

54


Risk is an uncertain event or consequence that will probably occur during a project.

Risk impacts at least one of the four main project objectives (time, cost, quality, and scope).

Risk can be positive and enhance the success of the project as well as negative and pose a threat

to a projects success.

Terms used in risk analysis and management:

Risk probability: The likelihood that a risk will occur is called risk probability. To assess any risk is to

assess the probability and impact of the risk.

Issue: Issue is the occurrence of a risk.

Risk consequences: Risk consequences are the effects on project objectives if there is an

occurrence of a risk or issue.

Risk

55


Risk analysis and management is crucial to the success of a project.

Risk analysis is a five-step process:

Risk Analysis and Management

Identify risk Evaluate riskPrioritize and

preventImplement

Monitor and control

Potential risks are

identified using

qualitative

techniques like

interview,

brainstorming,

and check sheets.

Identified

potential risks are

evaluated using

the quantitative

methods under 3

criteria

occurrence,

severity, and

detection.

Identified risks are

prioritized based

on their RPN

number. Counter

or prevention

measures for the

risk are

brainstormed.

The identified

counter measures

are implemented.

The whole project

will be monitored

and controlled so

that the risk and

its impact are

under control.

56


Some elements of risk analysis are as follows:

Elements of Risk Analysis

Elements Description

Qualitative method Interviews, check lists, and brainstormingused to identify potential risks.

Quantitative method

Used to evaluate the cost, time, and probabilistic combination of individual uncertainties.

Feasibility The study of the project risk.

Potential impact Determining the impact of potential risks on a project.

RPN RPN of a failure is the product of its probability of occurrence, severity, and detectability.

Avoiding risk If the potential impact is huge, then avoiding the risk is the best option.

Mitigating risk The loss from mitigating a risk is much less than loss from temporarily avoiding the risk.

Accepting riskIf a risk cannot be avoided or mitigated, then it has to be accepted. The risk will be accepted if it doesnt greatly impact the cost, time, and product objective.

57


Benefits of Risk Analysis

Benefits of risk analysis are as follows:

Identified risk can be mitigated, transferred, or accepted.

When risk is identified in a task, slack time is provided as a buffer. Thus identifying risks helps in

setting up actual timeline for a project.

Identifying risks helps in setting realistic expectations from the project by communicating the risk

probability and consequence to stakeholders.

Contingency plans can be developed for identified risk. The project team is then well prepared to

work on the issue, thereby reducing the impact of the risk.

58


The potential risks of a project are assessed using the risk assessment matrix.

Risk Assessment Matrix

59


The following roles assist the smooth execution of a Six Sigma project:

Six Sigma Team and their Responsibilities

Roles Responsibility

Executive sponsor Source or conduit for project resources, usually the recipients of the benefits the project will produce

Process owners Work with the Black Belts to improve their respective process, provide functional expertise

Champions Upper level managers that control and allocate resources to promote process improvements

Master Black Belt Consultant who offers expertise in the use of Six Sigma tools and methodologies to team leaders

Black Belts Leaders of individual Six Sigma projects, a mentor to Green Belts by educating them in Six Sigma tools

Green Belts Lead project teams working in their areas of expertise

Executive Manages and leads the team to ensure smooth working of tasks, has the power to execute decisions

Coach Trains, mentors, teaches, and guides the team when required

Facilitator Acts as a guide and helps the team to understand their common objective

Sponsor Supports the event or the project by providing all the required resources

Team member Contributes to the performance of the team and actively participates to fulfil project objectives

60


Project Closure

Every project requires closure because without a formal closure process, project teams can fail to

recognize the end, and then the project can drag on, sometimes at great expense.

Project closure ensures the following:

Outcomes match the stated goals of the project.

Customers and stakeholders are happy with the results.

Critical knowledge is captured.

The team feels a sense of completion.

Project resources are released for new projects.

61


Goals of Project Closure Report

The project closure report is created to accomplish the following goals:

62


Affinity Diagram

The affinity diagram method is employed by an

individual or a team to solve unfamiliar problems

and when the consensus of the group is necessary.

Each member writes down ideas and opinions on

sticky notes. Each note can have a single idea.

All the sticky notes are pasted on a table or wall.

All the sticky papers are arranged according to

categories or thought patterns.

Each category is named with a header card

capturing the central idea of that category.

A boundary is drawn around them.

Pay is too low

Workers unkind Dont like

the people

Lighting is poor

Hours are too long

Air is Stuffy Cant live

on wage

Uncomfortable room

Work is not a challenge

Too Repetitive

Poor Compensation

Poor Work Environment

Poor Relationships

Lack of Motivation

Pay is too low

Hours are too long

Cant live on wage

Lighting is poor

Uncomfortable room

Air is Stuffy

Dont like the people

Workers unkind

Work is not a challenge

Too Repetitive

HeaderCards

Sticky paper

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Interrelationship Diagram

The interrelationship diagram is a technique

developed to illustrate the relationship

between ideas in more complex situations.

Each member writes down ideas and

opinions on sticky notes. Each note can

have a single idea.

All the sticky notes are pasted on a table

or wall.

A cause-effect arrangement of cards is

constructed by drawing an arrow between

the causes and the effects of the cause.

Lack of Quality Strategy

Inadequate Training Time

Lack of Knowledge of Quality Improvement

Confusion of Committees without

organization

Customer Focus

Lack of Focus

Responsibility Not clear

No StandardTQM

Method

Lack of Communication of

information

Lack of TQM Commitment by

top managers

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The tree diagram is a systematic approach

to outline and identify the tasks and

methods needed to solve a problem to

reach a predefined goal.

Note: The objective is noted on a card

and placed on the far left side of the

board.

Three different solutions are furnished

to achieve the goal.

Solutions to each issue are provided.

Tree Diagram

Need

Driver 1

Driver 2

Req A1

Req A2

Req B1

Req B2

Req C1

Req C2

Delighted with cappuccino

Hot but not too hot

Strong coffee flavor

Correct amount of sweetness

Espresso temperature

Steamed milk temperature

Fitness of grind of the coffee beans

Amount of ground coffee

Type of sweetener

Amount of sweetenerDriver 3

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Define

Topic 4Management and Planning Tools


Matrix diagrams show the relationship between objectives and methods, results and causes, tasks

and people, etc. They:

provide information about the relationship;

help determine the strength of relationships between a grid of rows and columns;

provide importance of task and method elements of the subject; and

help in organizing a large amount of inter-process related activities.

Matrix Diagram

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The following are five types of matrix diagrams:

Types of Matrices

Compares three lists against one another, a combination of two L type matrices joined in the y axis in a three dimensional space

Compares three lists, each against the other in pairs, two L type matrices joined at the y axis

Compares four lists, each against two other lists, in pairs, with two sets of elements on both the x and the y axes

Compares one list against the two others, in pairs, with two sets of elements on the y-axis which are split by a set of elements on the x-axis

Compares one list against another, with one set of elements on the x-axis and another along the y-axis

L Type Matrix

T Type Matrix

X Type Matrix

Y Type Matrix

C Type Matrix

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Defect per unit (DPU) is the average number of defects per unit of a product.

Defect per Unit

Calculate DPU for the matrix shown below.Q

Defect per Unit (DPU) =1 20 +2 5 +3 4 +5(1)

70+20+5+4+1=

47

100= 0.47

A

Defects per unit 0 1 2 3 5

Units 70 20 5 4 1

Defect per Unit (DPU) =Total number of defects

Total number of units

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Throughput Yield (TPY) is the number of acceptable pieces at the end of a process divided by the

number of starting pieces, excluding scrap and rework. TPY is used to measure a single process only.

If DPU is known, TPY can be calculated using the following formula:

Throughput Yield

Throughput Yield (TPY) = eDPU

Defect per Unit DPU = loge(TPY)

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Rolled Throughput Yield (RTY) is the probability of the entire process producing zero defects. It is

important as a metric when a process has excessive rework.

Total Defects per Unit (TDPU) is defined for a set of processes. RTY is calculated using the following

formula when the Total Defects per Unit (TDPU) is known:

RTY is the product of each processs First Pass Yield (FPY) when the defectives are known. FPY is

the number of products which pass without any rework over total number of units.

Rolled Throughput Yield

First Pass Yield (FPY) =Total number of units Number of Defectives units

Total number of units=Total number of quality products

Total number of units

Rolled Throughput Yield RTY = FPY1 FPY2 FPY3 FPYn

Rolled Throughput Yield (RTY) = eTDPU

Total Defects per Unit (TDPU) = loge(RTY)

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FPY and RTYExample

A company has three processes: A, B, and C. Given below is the data.

The output from process C is sent to the customer. Calculate the FPY and RTY.

First Pass Yield for Process A =Total number of quality products

Total number of units=

85

100= 0.850

First Pass Yield for Process B =Total number of quality products

Total number of units=80

90= 0.889

First Pass Yield for Process C =Total number of quality products

Total number of units= 1

Rolled Throughput Yield (RTY) = FPY1 FPY2 FPY3

Rolled Throughput Yield RTY = 0.850 0.889 1 = 0.75

Rolled Throughput Yield RTY = 75%

Q

A

Process Input parts from the supplier Input parts that passed inspection Reworked parts

Process A 100 85 5

Process B 90 80 5

Process C 85 85 0

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Define

Topic 5Business Results for Projects


Defect per Million Opportunities (DPMO), or Non-Conformities per Million Opportunities (NPMO), is a

measure of process performance. It standardizes the number of defects at the opportunity level and

allows comparison of the processes with different complexities.

Defect per Million Opportunities

Defect per Million Opportunities (DPMO) =Total number of defects

Total number of opportunities 106

Where, Total number of opportunities = Units * Number of opportunities per unit

There are 5 units with 5 defect opportunities each. The total number of defects are 8. Calculate DPMO.

Total number of opportunities = Units * Number of opportunities per unit = 5 * 5 = 25 total opportunities

Defect per Million Opportunities (DPMO) =Total number of defects

Total number of opportunities 106 =

8

25 106= 320,000

Q

A

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Cost of Quality (COQ) is the cost incurred by a process because it cannot consistently make a perfect

product.

The four types of COQ are as follows:

Cost of Quality

Preventive Cost

Cost incurred in preventing a failure

Example: Training and improvement programs

External Failure Cost

Cost associated with defects after a product reaches the customer

Example: Warranty, returned products, or lost reputation

Appraisal Cost

Cost incurred to test a product for quality conformance

Example: Testing, audits, and inspection

Internal Failure Cost

Cost associated with defects identified before a product reaches the customer

Example: Rework and scrap

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Quiz


QUIZ

a.

b.

c.

d.

Which of the following is an incorrect description of QFD?1

QFD is an iterative process.

QFD is similar to project management.

QFD identifies risk areas.

QFD converts customer requirements into design specification.

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QUIZ

a.

b.

c.

d.

Which of the following is an incorrect description of QFD?1

Answer: c.

Explanation: QFD focuses on identifying the voice of the customer, whereas Project management focuses on implementation.

QFD is an iterative process.

QFD is similar to project management.

QFD identifies risk areas.

QFD converts customer requirements into design specification.

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QUIZ

a.

b.

c.

d.

What is Rolled Throughput Yield?2

The probability of the entire process producing zero defects

A measure of process performance

The number of acceptable pieces at the end of a process

The number of products which pass without any rework

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QUIZ

a.

b.

c.

d.

What is Rolled Throughput Yield?2

Answer: b.

Explanation: Rolled Throughput Yield is the probability of the entire process producing zero defects.

The probability of the entire process producing zero defects

A measure of process performance

The number of acceptable pieces at the end of a process

The number of products which pass without any rework

80


QUIZ

a.

b.

c.

d.

Identification of external customer is important because:3

It helps identify customer requirements.

It ensures higher profit.

It eliminates futile advertisements.

It ensures a smooth product recall.

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QUIZ

a.

b.

c.

d.

Identification of external customer is important because:3

Answer: b.

Explanation: A company will be successful only if it meets the needs of the customers better than the competitors. Hence we need to identify the customers to gather their requirements.

It helps identify customer requirements.

It ensures higher profit.

It eliminates futile advertisements.

It ensures a smooth product recall.

82


QUIZ

a.

b.

c.

d.

Which of the following are not stakeholders?4

Potential suppliers

Potential competitors

Contract workers

Owners or stockholders

83


QUIZ

a.

b.

c.

d.

Which of the following are not stakeholders?4

Answer: c.

Explanation: The relevant stakeholders in any project are the stockholders, management, employees, suppliers, and customers.

Potential suppliers

Potential competitors

Contract workers

Owners or stockholders

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QUIZ

a.

b.

c.

d.

What is the main difference between risk analysis and risk management?5

Risk analysis includes risk handling while risk management includes risk monitoring.

Risk analysis refers to tools and risk management deals with consent.

Risk analysis evaluates risks, while risk management is a more inclusive process.

There is minimal difference between risk analysis and risk management.

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QUIZ

a.

b.

c.

d.

What is the main difference between risk analysis and risk management?5

Answer: d.

Explanation: Risk management is a complete process, while risk analysis is more specific and deals with evaluation of complex risks.

Risk analysis includes risk handling while risk management includes risk monitoring.

Risk analysis refers to tools and risk management deals with consent.

Risk analysis evaluates risks, while risk management is a more inclusive process.

There is minimal difference between risk analysis and risk management.

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QUIZ

a.

b.

c.

d.

Which Matrix diagram illustrates relationships in three planes?6

T type

X type

C type

L type

87


QUIZ

a.

b.

c.

d.

Which Matrix diagram illustrates relationships in three planes?6

Answer: d.

Explanation: C type Matrix diagram illustrates relationships in three planes. L type, T type, and X type are drawn on two planes.

T type

X type

C type

L type

88


QUIZ

a.

b.

c.

d.

Which of the following is not a Cost of Quality?7

Opportunity cost

Internal failure cost

External failure cost

Preventive cost

89


QUIZ

a.

b.

c.

d.

Which of the following is not a Cost of Quality?7

Answer: b.

Explanation: There are four types of Cost of Quality: preventive cost, appraisal cost, internal failure cost, and external failure cost.

Opportunity cost

Internal failure cost

External failure cost

Preventive cost

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QUIZ

a.

b.

c.

d.

The tangible benefits from the Lean Six Sigma project needs to be articulated in the following terms, except:8

Reduce Turnaround Time

Defects Reduction

Six Sigma Certification

Cost Reduction

91


QUIZ

a.

b.

c.

d.

The tangible benefits from the Lean Six Sigma project needs to be articulated in the following terms, except:8

Answer: d.

Explanation: The tangible benefits of Lean Six Sigma includes cost reduction, reducing turnaround time, and reducing defects. Six Sigma Certification is not a tangible process improvement.

Reduce Turnaround Time

Defects Reduction

Six Sigma Certification

Cost Reduction

92


QUIZ

a.

b.

c.

d.

Financial evaluation of the Lean Six Sigma project will include all of the following, except:9

New customers acquired

Reduction in rework and scrap

Effort reduction

Cost Reduction and/or Avoidance

93


QUIZ

a.

b.

c.

d.

Financial evaluation of the Lean Six Sigma project will include all of the following, except:9

Answer: b.

Explanation: While performing financial evaluation, the focus is on the cost reduction and/or avoidance and the benefits due to the reduction in the effort and rework and scrap. The new customers acquisition cannot be directly attributed in the financial evaluation.

New customers acquired

Reduction in rework and scrap

Effort reduction

Cost Reduction and/or Avoidance

94


QUIZ

a.

b.

c.

d.

Which of the following is not a part of hard savings?10

Fewer employees

Additional revenue opportunities

Employee morale

Reduced budgets

95


QUIZ

a.

b.

c.

d.

Which of the following is not a part of hard savings?10

Answer: d.

Explanation: Hard savings include reduced budgets, fewer employees, and additional revenue opportunities. Employee morale is a part of soft savings.

Fewer employees

Additional revenue opportunities

Employee morale

Reduced budgets

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QUIZ

a.

b.

c.

d.

Who are the people affected by the organizations actions?11

Process owners

Suppliers

Management

Stakeholders

97


QUIZ

a.

b.

c.

d.

Who are the people affected by the organizations actions?11

Answer: a.

Explanation: Stakeholders are the people who are affected by the organizations actions.

Process owners

Suppliers

Management

Stakeholders

98


QUIZ

a.

b.

c.

d.

Data collection tools will be selected on what basis?12

Products

Type of data

Suppliers

Customers

99


QUIZ

a.

b.

c.

d.

Data collection tools will be selected on what basis?12

Answer: c.

Explanation: Data collection tools will be selected based on the type of data to be collected.

Products

Type of data

Suppliers

Customers

100


QUIZ

a.

b.

c.

d.

What is the first step of project initiation?13

Creating QFD structure

Translating customer requirements

Preparing project closure report

Defining the problem statement

101


QUIZ

a.

b.

c.

d.

What is the first step of project initiation?13

Answer: a.

Explanation: The first step of project initiation is defining the problem statement.

Creating QFD structure

Translating customer requirements

Preparing project closure report

Defining the problem statement

102


QUIZ

a.

b.

c.

d.

Which of the following defines the number of defects observed in one unit?14

DPMO

RTY

FPY

DPU

103


QUIZ

a.

b.

c.

d.

Which of the following defines the number of defects observed in one unit?14

Answer: a.

Explanation: DPU is an important business measure because it defines the number of defects observed in one unit.

DPMO

RTY

FPY

DPU

104


QUIZ

a.

b.

c.

d.

Which of the following standardizes the number of defects at the opportunity level and allows comparison of the processes with different complexities?15

DPMO

RTY

FPY

DPU

105


QUIZ

a.

b.

c.

d.

Which of the following standardizes the number of defects at the opportunity level and allows comparison of the processes with different complexities?15

Answer: b.

Explanation: DPMO standardizes the number of defects at the opportunity level and allows comparison of the processes with different complexities.

DPMO

RTY

FPY

DPU

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Project selection includes identifying organizational need, identifying the projects, and

evaluation of the projects.

SIPOC is a macro-level map drawn in the define phase.

Quality Function Deployment (QFD) is a process to ensure that the customers wants and

needs are heard and translated into technical characteristics.

A business case highlights the problem area and opportunity along with the expected

business outcomes.

Financial evaluation helps in evaluating and documenting a project from end to end,

from both cost and benefits perspective.

Summary

Here is a quick recap of what we have learned in this lesson:

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Summary (contd.)

Here is a quick recap of what we have learned in this lesson:

Risk analysis includes identification, evaluation, prioritization and prevention of risk,

implementation, and monitoring and controlling of risk.

Cost of Quality (COQ) is the cost incurred by a process because it cannot consistently

make a perfect product.

Rolled Throughput Yield (RTY) is the probability of an entire process producing zero

defects.

Defect per Million Opportunities (DPMO), or Non-Conformities per Million Opportunities

(NPMO), is a measure of process performance.

Deliverables are expected from a Lean Six Sigma project at every phase, and they help us

document the expectations and keep the project on track.

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LSSGB Lesson2 Define

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