Chapter 9 - Process Improvement and Six Sigma

Tools for Root Cause Analysis

- "5 Why" technique - Cause and effect diagram - Scatter Diagram

Six Sigma Teams Members

- Champion - Master Black Belts - Black Belts - Green Belts - Team Members

Deming Cycle (PDSA)

- Changed check to study - The fundamental premise of PDSA is that improvement comes from the application of knowledge

Operational Definition

- Clarify Performance Measures

Quality Problem Categories

- Conformance - Efficiency - Unstructured Performance - Product Design - Process Design

Customer Improvement Method: DRIVE

- Define the problem - Recognize the Cause - Identify the Solutions - Verify the Actions - Evaluate the Results

Deming Wheel Characteristics

- Design the product with appropriate tests. - Make the product and test it in the production line and the laboratory. - Sell the product. - Test the product in service and through market research

What are custom improvement methods?

- FADE - DRIVE

Factors for Six Sigma Project Selection

- Financial impact, as measured by cost savings, increased revenues, or return on investment - Impacts on customers and organizational effectiveness - Probability of success Impact on employees - Fit to strategy and competitive advantage

Customer Improvement Method: FADE

- Focus - Analyze - Develop - Execute

Sigma Six Teams: Master Black Belt

- Full-time Six Sigma experts responsible for Six Sigma strategy, training, mentoring, deployment, and results. - They work across the organization to develop and coach teams, conduct training, and lead change but are typically not members of Six Sigma project teams.

Sigma Six Teams: Black Belts

- Fully-trained Six Sigma experts with extensive technical training who perform much of the technical analysis required in Six Sigma projects, usually on a full-time basis. - They have advanced knowledge of tools and DMAIC methods and often act as project team leaders. - They also mentor and develop Green Belts.

Sigma Six Teams: Green Belts

- Functional employees trained in essential tools and methodology and work on projects part-time, assisting Black Belts while developing their own knowledge and expertise. - one of the requirements for receiving a Green Belt designation is to complete a Six Sigma project successfully. - Successful Green Belts are often promoted to Black Belts.

DMAIC Process: Improve

- Generate ideas for removing or resolving the problem and improve the performance measures and CTQs

Lean Production Tools: Pull production

- In this system (also known as kanban or JIT), upstream suppliers do not produce until the downstream customer signals a need for parts

Sigma Six Teams: Team Members

- Individuals from various functional areas who support specific projects.

DMAIC Process: Control

- Maintain the improvements, which includes putting tools in place to ensure that the key variables remain within the maximum acceptable ranges under the modified process. - establishing the new standards and procedures, - training the workforce - instituting controls to make sure that improvements do not die over time using checklists, status reviews, or control charts.

Evolution of Six Sigma

- Motorola (mid-1980s) o Improve product and service quality ten times by 1989 and at least one hundredfold by 1991. Achieve six-sigma capability by 1992. o With a deep sense of urgency, spread dedication to quality to every facet of the corporation, and achieve a culture of continual improvement to assure total customer satisfaction. o There is only one ultimate goal: zero defects—in everything we do. - General Electric (the mid-1990s) o One of the critical learnings GE discovered was that Six Sigma is not only for engineers. § Plant managers can use Six Sigma to reduce waste, improve product consistency, solve equipment problems, or create capacity. § Human resource managers need it to reduce the cycle time for hiring employees. § Regional sales managers can use it to improve forecast reliability, pricing strategies, or pricing variation § For that matter, plumbers, car mechanics, and gardeners can use it to understand their customers' needs better and tailor their service offerings to meet customers' wants

Deming Cycle (PDCA)

- Plan - Do - Check - Act

Seven QC Tools

- Seven tools used to support quality efforts are simple so workers at all levels can use them efficiently. - All have a visual component o flowcharts o check sheets o histograms o Pareto diagrams o cause-and-effect diagrams o run charts o control charts

Creative Problem-Solving Method

- Understanding the "Mess"- identify symptoms o Finding Facts - gather data; operational definitions o Identifying Specific Problems - find the root cause o Generating Ideas - brainstorming o Developing Solutions - evaluate ideas and proposals o Implementing Solutions - make the solution work

Six Sigma

- a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and a clear financial return for the organization - based on a statistical measure that equals 3.4 or fewer errors or defects per million opportunities (DPMO). - incorporates many traditional statistical methods and quality improvement and control tools that have found widespread application over the last century

Problem

- a deviation between what should be happening and what is happening is important enough to make someone think the departure ought to be corrected.

Pareto Diagram

- a graphical description of a Pareto distribution.

Brainstroming

- a group problem-solving procedure for generating a large number of ideas through combination and enhancement of existing ideas. no criticism is permitted, and people are encouraged to - generate a large number of ideas through combination and enhancement of existing ideas

FADE Method: Focus

- a team selects the problem to be addressed and defines it, characterizing the current state of the process, why change is needed, what the desired result should be, and the benefits of achieving that result.

CTQ Tree

- a visual example of how one might "drill down" from Y to identify the critical X-factors - Y is the set of CTQs and X represents the set of critical input variables that influence Y.

Deming Cycle

- also known as the Deming Wheel - a simple adaptation of the scientific method for process improvement

Lean Six Sigma

- an integrated improvement approach to improve goods and services and operations efficiency by reducing defects variation, and waste. - addresses visible problems in processes, for example, inventory, material flow, and safety. - Six Sigma is more concerned with less visible problems, for example, variation in performance.

Quality Problem Categories: Efficiency

- an unsatisfactory performance that causes dissatisfaction from the standpoint of noncustomer stakeholders, such as financial or supply chain managers. - Typical examples are high cost, excessive inventory, low productivity, and other process inefficiencies - Solution: Lean tools

Quality Problem Categories: Conformance

- are characterized by an unsatisfactory performance that causes customer dissatisfaction. - The processes that create these results are typically well-specified and can be easily described. § Solution: Six Sigma

Characteristics of TQM

- based on worker empowerment and teams - activities generally occur within a function, process, or individual workplace - training is generally limited to simple improvement tools and concepts - focused on improvement with little financial accountability

Deming Cycle: Check

- check sales/complaints and confirm whether the customer is satisfied

Soikufu

- creative thinking or inventive ideas, capitalizing on worker suggestions.

Deming Cycle: Plan

- design the product

Project Management Body of Knowledge (PMBOK)

- developed by the Project Management Institute, defines 69 tools every project manager should master.

Similarities of Six Sigma and Lean

- driven by customer requirements, focus on real dollar savings, have the ability to make significant financial impacts on the organization, and can easily be used in non-manufacturing environments.

Deming Cycle: Do

- ensure that production makes the product as designed

Lean Production

- focus on the elimination of waste in all forms, including defects requiring rework, unnecessary processing steps, unnecessary movement of materials or people, waiting time, excess inventory, and overproduction. - A simple way of defining it is "getting more done with less."

DMAIC Process: Measure

- focuses on understanding process performance and collecting the data necessary for analysis.

Root Cause Analysis Tools: "5 Why" technique

- forces one to redefine a problem statement as a chain of causes and effects to identify the source of the symptoms by asking why, ideally five times.

Value Stream Map

- highlights value-added versus non-value-added activities and includes times that activities take. · refers to all activities involved in designing, producing, and delivering goods and services to customers · highlight value-added versus non-value-added activities and include times that activities take. · an important tool in lean thinking

Quality Problem Categories: Process Design

- involve designing new processes or substantially revising existing ones. - These might include new factory processes to manufacture a new product line or designing a more flexible assembly line. - Solution: Combined Approaches

Quality Problem Categories: Product Design

- involve designing new products that better satisfy user needs—customers' expectations that matter most to them. - Solution: Special Tools

Root Cause Analysis Tools: Cause and effect diagram

- is a simple graphical method for presenting a chain of causes and effects and for sorting out causes and organizing relationships between variables. - useful in assisting teams to generate ideas for problem causes and, in turn, serves as a basis for identify solutions.

Root Cause Analysis

- is an approach using statistical, quantitative, or qualitative tools to identify and understand the root cause.

Toyota A3 Report: Follow-up

- lists activities that will need to be completed after implementation along with the implementation results.

Basis for 3.4 DPMO

- nearly 100 percent of the area under a normal distribution is within three standard deviations on either side of the mean. - many standard statistical process control plans use sample sizes that only allow the detection of shifts of about two standard deviations. - The allowance of a shift in the distribution is essential, because no process can be maintained in perfect control. - "six-sigma quality level" corresponds to a process variation equal to half of the design tolerance while allowing the mean to shift as much as 1.5 standard deviations from the target.

FADE Method: Develop

- on creating a solution and implementation plan along with documentation to explain and justify recommendations to management who must allocate the resources.

Characteristics of Six Sigma

- owned by business leader champions. - projects are cross-functional. - focuses on a more rigorous and advanced set of statistical methods and DMAIC methodology. - requires a verifiable return on investment and focus on the bottom line.

DMAIC Process: Analyze

- problem starts with a fundamental understanding of the process - typically accomplished through detailed process mapping, expanding on the SIPOC diagram that is developed in the Define phase.

Creative

- seeing things in new or novel ways.

Sigma Six Teams: Champion

- senior-level managers who promote and lead the deployment of Six Sigma in a significant business area. - own Six Sigma projects and are responsible for their completion and results; typically, they also own the process that the project is focused on improving. - work toward removing organizational, financial, and personal barriers that might inhibit the successful implementation of a Six Sigma project.

Check Sheets

- special types of data collection forms in which the results may be interpreted on the form directly without additional processing

Toyota A3 Report: Target Condition

- specifies possible improvement ideas to solve the problem.

Root Cause

- that condition (or interrelated set of conditions) having allowed or caused a defect to occur, which, once corrected properly, permanently prevents the recurrence of the defect in the same, or subsequent, product or service generated by the process.

Tools for Lean Production

- the 5S's - visual control - efficient layout and standardized work - Pull production - Single minute exchange of dies (SMED) - Total productive maintenance - Source inspection - Continuous improvement

Breakthrough

- the accomplishment of any improvement that takes an Org to unprecedented levels of performance - attackes chronic losses or common causes in variation - Process improvement methodologies and tools provide the foundation as well as modern Six Sigma approaches

Pareto Distribution

- the characteristics observed are ordered from most considerable frequency to most minor

DMAIC Process: Define

- the first step is to define the problem clearly - This activity is significantly different from project selection. § Project selection generally responds to symptoms of a problem and usually results in a rather vague problem statement - Drill down to a specific problem statement (project scoping)

Root Cause Analysis Tools: Scatter Diagram

- the graphical component of regression analysis.

Project Scoping

- the process of drilling down to a more specific problem statement - Apply Pareto analysis

Takt Time

- the ratio of the available work time to the required production volume necessary to meet customer demand - When value stream is faster than the takt time, it generally means that waste in the form of overproduction is occurring; - When value stream is slower than takt time, the firm cannot meet customer demand.

FADE Method: Execute

- the solution is implemented, and a monitoring plan is established.

FADE Method: Analyze

- the team works to describe the process in detail, determine what data and information are needed, and develop a list of root causes for the problem

Quality Problem Categories: Unstructured Performance

- unsatisfactory performance by processes that are not well-specified or understood. - For example, a company might discover that employee turnover is much higher than desired or low employee satisfaction. - The factors that contribute to such results do not stem from processes that can easily be described. - Solution: Creative Thinking

Deming Cycle: Act

- use feedback to incorporate improvements in the next phase of planning

Data Sheets

- use simple columnar or tabular forms to record data. - to generate useful information from raw data, further processing generally is necessary

Toyota A3 Report: Background

- which contains a description of all pertinent information needed to understand the scope of the problem.

Toyota A3 Report: Cause Analysis

- which focuses on determining the cause of the problem.

Toyota A3 Report: Implementation Plan

- which identifies the steps that need to be accomplished to improve.

Toyota A3 Report: Theme

- which succinctly states the problem being addressed.

Toyota A3 Report: Current Condition

-deals with developing an understanding of the process using a value-stream map.

Principles of Six Sigma

1. Think in terms of key business processes and customer requirements with a clear focus on overall strategic objectives. 2. Focus on corporate sponsors responsible for championing projects, support team activities, help to overcome resistance to change, and obtain resources. 3. Emphasize such quantifiable measures as dpmo that can be applied to all parts of an organization: manufacturing, engineering, administrative, software, and so on. 4. Ensure that appropriate metrics are identified early in the process and that they focus on business results, thereby providing incentives and accountability. 5. Provide extensive training followed by project team deployment to improve profitability, reduce non-value-added activities, and achieve cycle time reduction. 6. Create highly qualified process improvement experts ("Green Belts," "Black Belts," and "Master Black Belts") who can apply improvement tools and lead teams. 7. Set stretch objectives for improvement.

Toyota A3 Report

a tool to consolidate and visualize information for solving quality problems, similar to DMAIC. The reports are comprised of seven sections: o Theme o Background o Current condition o Cause analysis o Target condition o Implementation plan o Follow-up

Formula for Sigma Level

k x process S.D. = Tolerance Range/2

process improvement themes

o Redefining and analyzing the problem - Collect and organize information, analyze the data and underlying assumptions, and reexamine the problem for new perspectives to achieve a workable problem definition. o Generating ideas - "Brainstorm" to develop potential solutions. o Evaluating and selecting ideas - Determine whether the ideas have merit and will achieve the problem solver's goal. o Implementing ideas - Sell the solution and gain acceptance by those who must use them

SIPOC Diagram

o Suppliers-Inputs-Process-Output-Customers - provide a broad overview of the process's key elements and help explain who is the process owner, how inputs are acquired, whom the process serves, and how it adds value.

Lean Six Sigma Metrics in Services

§ Accuracy · as measured by correct financial figures, completeness of information, or freedom from data error § Cycle time · which is a measure of how long it takes to do something, § Cost · the internal cost of process activities § Customer satisfaction · the internal cost of process activities

Tools for DMAIC: Control

§ Control charts § Standard operating procedures

Tools for DMAIC: Improve

§ Design of experiments § Mistake proofing § Lean production § Deming cycle § Seven management and planning tools

Lean Production Tools: Continuous Improvement

§ In order to make lean production work, one must get to the root causes of problems and permanently remove them. Teamwork is an integral part of continuous improvement in lean environments.

Lean Production Tools: Source Inspection

§ Inspection and control by process operators guarantees that product passed on to the next production stage conforms to specifications

Differences between Six Sigma and Lean

§ Lean addresses visible problems in processes, · lean is focused on efficiency by reducing waste and improving process flow, · lean tools are more intuitive and easier to ap-ply by anybody in the workplace, § Six Sigma is more concerned with less visible problems · focused on effectiveness by reducing errors and defects · Six Sigma tools require advanced training and expertise of Black Belt or Master Black Belt specialists

Tools for DMAIC: Define

§ Project charter § Cost of quality analysis § Pareto analysis § High-level process mapping

Tools for DMAIC: Measure

§ Run charts § Check sheets § Descriptive statistics § Measurement system evaluation § Process capability analysis § Benchmarking

Tools for DMAIC: Analyze

§ Scatter diagrams § Detailed process mapping § Statistical inference § Cause-and-effect diagrams § Failure mode and effects analysis § Root cause analysis

Lean Production Tools: Efficient Layout/Standardized Work

§ The layout of equipment and processes is designed according to the best operational sequence by physically linking and arranging machines and process steps most efficiently, often in a cellular arrangement. § Standardizing the individual tasks by clearly specifying the proper method reduces wasted human movement and energy.

Lean Production Tools: Total Productive Maintenance

§ Total productive maintenance is designed to ensure that equipment is operational and available when needed

Lean Production Tools: Visual Controls

§ indicators for tools, parts, and production activi-ties that are placed in plain sight of all workers so that everyone can understand the status of the system at a glance.

Lean Production Tools: Single minute exchange of dies (SMED)

§ refers to the rapid changeover of tooling and fixtures in machine shops so that multiple products in smaller batches can be run on the same equipment. § Reducing setup time adds value to the operation and facilitates a smoother production flow

Lean Production Tools: 5S's

§ sort · ensuring that each item in a workplace is in its proper place or identified as unnecessary and removed § set in order · to arrange materials and equipment so that they are easy to find and use. § shine · a clean work area. § standardize · formalize procedures and practices to create consistency and ensure that all steps are performed correctly. § sustain · means to keep the process going through training, communication, and organizational structures.

Run Chart

· Data such as production volume, cost, and customer satisfaction indexes are often plotted over time

DMAIC Cycle

· the process improvement approach used in Six Sigma - Define - Measure - Analyze - Improve - Control