ISDS 720 Final
Statisticians use the sigma symbol to
designate standard deviation
Standard Deviation
"A measure that is used to quantify the amount of variation or dispersion of a set of data values."
Standard Deviation Symbol
"Standard deviation in math formulas is represented by the Greek letter known as sigma"
Why Focus on Variation?
"reducing the variation stakeholders experience is the key to quality and continuous improvement" - ASQ
Quality - ISO 9000 - 2015
"the degree to which a set of inherent characteristics of an object fulfills requirements" "object" is too narrow! • service • information • thoughts!
Quality - English Oxford
"the standard of something as measured against other things of a similar kind; the degree of excellence of something"
Quality - ISO 8402 - 1986
"the totality of features and characteristics of a product or service that bears its ability to satisfy stated or implied needs"
If All You Have Is A Hammer...
...then every problem looks like a nail
Agenda:
1. Benchmarking 2. Best Practices 3. Define Future State 4. Change Management
Agenda:
1. Education and Training 2. Documentation 3. Process Controls 4. Control Plan
Agenda:
1. Project Selection 2. Project Charter 3. Team Development
Agenda:
1. Stakeholder Insights 2. Data Collection Tools 3. Mapping Tools 4. Big Data
W Edwards Demming
14 Points for management and system for profound knowledge
TQM (Total Quality Management)
A corporate culture characterized by increased customer satisfaction through continuous improvements in which all employees in the firm actively participate.
Cause and Effect Fishbone Diagram
A diagram used to search for the cause(s) of a problem; also called fishbone diagram.
Big Data
A massive volume of both structured and unstructured data that is so large it is difficult to process using traditional techniques. It can be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions
Best Practices
A procedure demonstrated, by research and experience, to produce superior results and is suitable for widespread adoption as a standard. Consider what best practices could apply to current challenge. People don't know what they don't know.
Sales and Operations Planning (S&OP)
A process to strategically direct an organization to competitive advantage through effective management of demand and supply. "The ultimate Best Practice" Sales and Operations Planning: A process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customer-focused marketing plans for new and existing products with the management of the supply chain. The process brings together all the plans for the business (sales, marketing, development, manufacturing, sourcing, and financial) into one integrated set of plans. It is performed at least once a month and is reviewed by management at an aggregate (product family) level. The process must reconcile all supply, demand, and new-product plans at both the detail and aggregate levels and tie to the business plan. It is the definitive statement of the company's plans for the near to intermediate term, covering a horizon sufficient to plan for resources and to support the annual business planning process. Executed properly, the sales and operation planning process links the strategic plans for the business with its execution and reviews performance measurements for continuous improvement. Bla bla bla. See: aggregate planning, production plan, production planning, sales plan, tactical planning.
Focus Group
A small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its products, or other given issues. Depends on the target demographic.
5 Traits of Dysfunctional Teams
Absence of Trust Fear of Conflict Lack of Commitment Avoidance of Accountability Inattention to Results
Prevention Costs
All the costs incurred to reduce the defects created by a service or process.
External Failure Costs
All the costs to correct a defect after a product or service is received by the customer.
Internal Failure Costs
All the costs to correct a defect before a product or service is received by the customer.
Appraisal Costs
All the costs to inspect, judge, identify, and sort out defects with a product or service.
No Shortage of Measurements
An analysis commissioned by the National Quality Forum identified 1,367 quality measures... ...used by 48 state and regional healthcare systems
Balance Scorecard
An approach to move beyond financial measurements that are far to common and create a more balanced message. Customer Process People Financial
Analyze
Analyze the information to determine root causes. Get to Root Cause: Do not jump to solutions before knowing the true root causes of the issues.
Analyze
Analyze the information to determine the root causes of the problem
Opportunity
Any chance to be annoying For most products and services - there are numerous opportunities to have a defect Not just one thing can go wrong - there can be dozens of opportunities Understanding the opportunities to annoy, or have a defect, is a key aspect of six sigma Example What can annoy you when buying from a vending machine?
Defect
Anything that annoys a stakeholder
Gather Improvement Ideas
Benchmarking Best practices Stakeholder suggestions Create a best practice! Start an emerging trend!
CTQ Example
Branches from: Needs -> Drivers -> CTQS
Define Future State
Co-create with Stakeholders that will live with the changes. Many will have to implement them.
Organize For Success
Champion Provides overall leadership and direction Ensures availability of resources such as people and funding Assists in the resolution of issues Steering Committee Provides business leadership, direction, and alignment Reviews project progress Removes roadblocks Stakeholders Have an inherent interest in the project and will be impacted Many have responsibility for implementing the changes required Many will benefit directly from the improved performance Project Manager Manages the overall project plan, scope, budget, and resources Provides communication on project status to all stakeholders Works with appropriate people to resolve project issues Project Team Members Provides subject matter expertise Helps with data collection and analysis Performs detailed project tasks Program Management Office (PMO) Assists with alignment to greater program and other initiatives Assists with project tracking and communication Provides project management expertise Sample Roles & Responsibilities • Champion: Julia • Steering Committee: Jose, Fred, and Xiang • Stakeholders: Operations, Sales, Marketing, Finance, and Supply Chain • Project Manager: Karen • Team Members: Clair, Maria, Steve, and Ester - Technology Expert: Francis - Technology Partner: Our Software Provider • Program Management: Martin, Director of Operational Excellence
Change Management curve
Change introduced Shock Denial Anger Blame Acceptance Problem solving Decision making Action Implementation
Data Collection
Check Sheet, Run Chart, Fishbone Diagram (Cause and Effect)
Benchmarking
Comparing the performance of your products, services, or processes with those of competitors and best-in-class organizations. 4 Types: Internal Competitive Functional Generic Process You should benchmark organizations in other industries with similar processes.
"Exceeding" Expectations?
Consider the concept of over-engineering a product or service to exceed expectations If a customer has not specified the overengineering and will not pay or appreciate it... ...then why should a supplier spend money exceeding expectations?
Statistical Process Control
Control Chart - Measurement over Time
Control
Control new process until improvements are ingrained. Policies and Procedures Education and Training Statistical Process Control Control Plan
Control
Control the new process until improvements are ingrained
Instructions
how to perform a task within a process how to carry out a procedure much more detailed than a procedure
Walter Shewhart
Created the Shewhart Cycle, Control chart, and the quality profession.
Job Rotation
Cross training is half the battle... You must leverage the training and have people work in the multiple roles they are able to support!
Project Charter
Current Situation Desired Situation Statement of Need Scope Benefits Costs Justification Organize for Success
Strategy Map
Customer - Objective Objective Process - Objective Objective Objective People - Objective Objective Financial - Objective Objective Objective
Getting on the RightPage
Reaching consensus on the items Reaching consensus on the priority Everyone votes and engages in the discussion
Process Mapping
Decisions
Define
Define the nature of the problem
Define
Define the nature of the problem Project Charter: Organize for Success Justification Costs Benefits Scope Statement of Need Desired Situation Current Situation Customer Input Plan: Voice of the customer Gantt Chart: A time and activity bar chart that is used for planning, managing, and controlling major programs that have a distinct beginning and end. There is no "agreed" upon format for a project charter: The format and level of detail should fit the needs of your organization.
Desired Situation
Describe a desired situation that reflects fixing the bad and leveraging the good in your current situation. What are the best practices and emerging trends? Sample Desired Situation • The best companies in our industry have 98% customer service levels • A focus on reducing variation and eliminating waste can decrease inventory by 25 to 50% • Quality at the source and other techniques can improve overall quality to 99% • Employee retention is high • We need to improve processes that support our strategic initiatives
Benefits
Describe the benefits in terms of improved capabilities and reduced costs. Consider all stakeholders and draw a direct link to one or more strategic initiatives. Sample Benefits: • Shipping customer orders on time will reduce costs by $2.5 million and increase revenue by $15 million • Cutting inventory will produce a one-time savings in tied-up cash and on-going savings in carrying cost • Improving quality will reduce scrap costs by $10 million and rework costs by $5 million • Well-defined processes will drive the right behaviors and improve employee retention • We will make significant progress on our strategic initiative to create a sustainable organization
Costs
Describe the costs of the project in terms of time and money. What are the onetime vs. on-going costs? Typical Costs: • Project team time • Steering committee time • Education time and costs • Food and beverage Other Potential Costs • Travel • Software • Equipment • Construction Sample Costs • Project team time will be 4 people for 160 total hours each over a 4 month period - $22,400 • Steering committee time will be 4 people for 8 total hours each over a 4 month period - $3,200 • Education time and cost includes 2 people to a training class and 8 hours of training for 30 employees - $18,000 • Travel to 3 finished goods warehouses will cost $4,000 for each trip - $12,000
Current Situation
Describe the current situation in terms of processes, poor performance, and strategic initiatives. What's happening now? Sample Current Situation: • Customers are complaining about service which is running at 82% • Inventory is too high and running 5% above last year • Quality is too low and is running at 97.4% • Employee retention is poor with lots of fire fighting and dysfunctional behaviors • We have a strategic initiative to create a sustainable organization
Statement of Need
Describe the gap between the current situation and the desired situation. What do you need to do? Sample Statement of Need • We need to get customer service to 98% • We need to reduce inventory by 25% • We need to improve overall quality to 99% • We need to improve employee retention • We need to support our strategic initiative to create a sustainable organization
Scope
Describe the project boundaries. What's included? What's excluded? Materials Products Services Information Locations Shifts Sample Scope • This project is for the mega-new mobile phone case • It will start at issue of raw materials and end at receipt by the finished goods warehouses • It includes injection molding, assembly, packaging, inspection, and logistics at 1 manufacturing site in Fort Collins and 4 regional warehouses • This project does not include new equipment for manufacturing, assembly, packaging, inspection, and movement
Mistake Proofing
Design the process in a way that prevents errors from happening. AKA - Poka Yoke (Japanese) Alignment guide pins Egg carton - reduce breakage and you don't have to count each egg. Get organized : Tool sets,
Source Inspection
Determines "before the fact" whether conditions exist for creating high quality products and services. The purpose of the inspection is to improve the process and is not intended to sort out defects.
Dysfunction can lead to
Disasters
Interquartile Range
Divide data set into quartiles - four equal parts 1 to 25 - 26 to 50 - 51 to 75 - 76 to 100
Don't Get Carried Away "Any intelligent fool can make things bigger and more complex... ...It takes a touch of genius, and a lot of courage to move in the opposite direction." -Albert Einstein
Don't jump to big and complex processes. Have the courage to seek simplification.
Education and Training
Education - Why we do something Training - How to do something
Champions
Executives responsible for providing leadership, resources, and coaching. Champions must accurately select projects and ensure solutions benefit the organization
Quality at the Source
Everyone Has Customers Customer's Specify Value Specify Value Drives Quality Up The Supply Chain The supplier of products, services, or information meets expectations specified by the customer eliminating the need for incoming inspection
Who Can Argue?
Everything varies Reducing variation is the key to improvement Lacking understanding means no improvement
The Scope Creep
Expanding the objectives of a project after the charter is in place. 1. Stay focused on the business objectives 2. Additions should link to deletion of something else 3. Nice to haves are out of the question 4. You only need a couple of friends
Input for Control Plan
Failure Mode Effects Analysis Risk Priority Number Control Plan
Kaouru Ishikawa
Fishbone diagram is named after him. Responsible for translating Demming's work for the Japanese. Failure is seed of success.
Six Sigma Means
For 1 million: 999,996.6 are good 3.4 are defective
Force Field Analysis
For change Against change C H A N G E
5 Stages Team Development
Forming Storming Norming Performing Adjourning
Change Management
Gap analysis - current state and future state
We Make Robots
Head attaches to the body The head attachment needs to be 15 inches in diameter The body attachment needs to be 15 inches in diameter If the head does not fit the body, then heads will roll!
Getting Input
How can you get your customers and other stakeholders to provide their requirements and expectations?
Pareto Principle
Named after Vilfredo Pareto, Italian economist Vilfredo observed in 1906 that 80% of the land in Italy was owned by 20% of the population
Types of Visual Controls
Identify Problems Simplify Flow Current Information Performance Tracking Examples: Equipment Status (identify problems) Tool Storage (identify problems) Kanban Bins (Japanese for card that you can see) (simplify flow) Department Status (current information) People and Calls (performance)
Justification
If justified, clearly state how the benefits exceed the costs. Which stakeholders will be impacted? Sample Justification • Benefits exceed the costs... • This project will improve customer satisfaction • This project will improve employee retention as we reduce the fire fighting and dysfunctional behaviors
One Step Away...
If you only know how to do one thing... ...then you are only one step away from becoming obsolete.
Improve
Improve process through effective solutions Mistake Proofing: Design the process in a way that prevents errors from happening Benchmarking: Comparing the performance of your products, services, or processes with those of competitors and best-in-class organizations. Best Practices: Six Sigma Reduce Variation Eliminate Defects
Visual Controls
In an instant, everyone can see: What's right What's wrong What's been done What's left to do
What is Variation?
Inevitable change in the results from a process because everything varies
Joseph Juran
Instrumental in changing how organizations think of quality. "Quality is fitness for you"
Many Sources
Internal Market Research Government Statistics Scientific Research
4 Costs of Quality
Internal Failure External Failure Prevention Appraisal
Types of Inspection
Judgment Informative Source
Gantt Chart
Karol Adamiecki devised the first "Gantt" chart back in 1896. He was a Polish engineer turned management professor who came up with the idea of displaying processes visually to make it easier to see production schedules. Henry Gantt had the same idea, years later, in 1910. Gantt started planning visually with bar charts to allow supervisors in the steel works to see if production was on track or behind schedule. Gantt's name got attached to this way of planning, but it's generally recognized that Adamiecki had the idea first.
Five Whys
Keep asking why and you'll get to the root cause.
Measure
Measure existing performance and gather data and facts There should be lots of data.
Measure
Measure existing performance by gathering data Check sheet Run Chart Typical Project Is Data Intense
Run Chart
Measurement over Time
Standard Deviation
Most common measure of variations. = standard deviation X = each measurement M = mean of all measurements n = sample size (the number of measurements)
Mode
Most often Find the number that occurs the most Can be a tie, but if none over once, then no mode
Emerging Trends
New techniques, New materials, new technology to help improve process.
Histogram
Normal variation, looks like a bell curve.
Norming Stage
People are beginning to be more accepting. Everyone is working towards a common goal.
Changeover Time
Period required to change from producing the last good product or service of one batch... ...to producing the first good product or service of the next batch Pit crews: The focus of keeping the car and river on the track and less time in the pit. Surgery to Surgery: Cleaning up an OR room between surgeries so hospital can make more money. Airlines: Airplane spends minimum time on the ground.
Appendix Options
Risk Analysis Gantt Chart PERT Appendix Options
Project Charter Appendix
Risk Analysis Gantt Chart PERT Chart Voice of the Customer
Documentation
Policies Procedures Instructions
Future State
Process Map Value Stream Map
PERT Chart
Program evaluation and review technique
Considerations
Quality Variation Goal Methodology
Phil Crosby
Quality is free Do it right the first time.
Mapping Tools
SIPOC Process Mapping Value Stream Mapping Current State vs. Future State Affinity Diagram
Strategy is saying NO!
STOP working on the wrong stuff
Samsung's Cost of Quality!
Samsung estimates their debacle will cost $2.3 billion in lost operating profits. The bigger damage will be to the brand.
Be Cautious
Say one thing Do something else
Risk Priority Number
Severity * Frequency * Detectability Tire: Haircut: Quote: 9 * 2 * 4 10 * 1 * 8 7 * 4 * 7 72 80 196
Problem Statement
Similar a clear concise description of the issues that need to be addressed by a problem solving team
Project Selection
Six Sigma projects must align with and support the organization's strategy.
There is no "agreed" upon definition for Six Sigma!
Some versions have been completely watered down by dropping all references to the statistical perspective at the very foundation of the name
Judgment Inspection
Sorting the defects out of the acceptable product or service, sometimes referred to as "inspecting in quality." The consensus is that "inspecting in quality" as not an effective approach.
Data Dumps
Specific to the software. Most six sigmas have hundreds to millions of rows of info that need to be collected and prepared before Analyze phase.
Strategy Development
Stakeholders
Informative Inspection
Successive checks have a downstream step check the output of the prior step. Self-checks allow workers to assess the quality of their own work. Using data "after the fact" to provide feedback and reduce defects.
SIPOC Definition
Suppliers Inputs Process Outputs Customers
Root Cause Analysis
Symptom of the problem is "the weed." It is above the surface and is obvious. The underlying causes of the problem is "the root." It is below the surface and is not obvious.
Quality is Relative
The degree of meeting requirements or expectations... ... relative to similar things
Storming Stage
Team members seek acceptance of their ideas and compete with each other for status. They have have different opinions on how things should be done. This often results in conflict.
Performing Stage
Teams are functioning at a very high level. The focus is reaching the goals as a group.
There is no "agreed" upon requirements for each belt
The amount of training and proof of expertise is all over the map - it is caveat emptor (buyer beware)
Mean
The average! Add up all the numbers and then divide by the number of numbers
Range
The difference between the largest data item in the set and the smallest For example, the set of data is: 73, 76, 79, 84, 87, 88, 90, 91, and 94 The range is 94 - 73 = 21
Range
The difference between the largest data item in the set and the smallest For example, the set of data is: 73, 76, 79, 84, 87, 88, 90, 91, and 94 The range is 94 - 73 = 21
Median
The middle! Sort your numbers from smallest to largest and then pick the one in the middle. Often used for home prices.
Adjourning Stage
The project is coming to an end and team members are moving off in different directions. Some are making commitments to remain close and seek to cross paths on another project.
Learning Curve
The rate of improvement expressed in terms of the percent change in per unit average cost (time, materials, etc.) as a function of doubling output. For example, a 90% learning curve means that the per unit average cost falls to 90% of the previous cost as output doubles.
Caution
There is no "agreed" upon format for a project charter
Identify The Keepers
Throw out the trash
Cross Training
Training someone in an activity that is related to their current job. This increases flexibility, improves morale, and facilitates problem solving.
Critical Path Method
Total the duration time for each possible path The highest value is the critical path The activities you need to focus on
Statement of Need vs. Problem Statement
Use either one.
Customer Input Plan
Voice of the customer. Some say conduct during Define. Professor says conduct during Measure Phase.
Prioritize Improvements
Vote
"father of the quality movement"
W. Edwards Deming estimated that: "lacking an understanding of variation resulted in situations where 95% of management actions result in no improvement."
Henry Ford
What do you need? I need a faster horse!
Forming Stage
When the team first meets each other. The team leader needs to be clear about team goals. And provide clear direction regarding the project.
Belts
Yellow Belt Green Belt Black Belt Master Black Belt
Six Sigma Roles
Yellow Belt - Project team members and subject matter experts Green Belt - Project team members, subject matter experts, and project managers Black Belt - Project managers, instructors, and six sigma support experts Master Black Belt - Six sigma program managers, strategy support, and instructors
Six Sigma Training
Yellow Belt ~ 4 to 8 hours Green Belt ~ 6 to 10 days Black Belt ~ 15 to 20 days Master Black Belt ~ 10 additional days
Standard Deviation Tables
You may remember a textbook from a statistics class... ...and those pages in the back that had millions of numbers
To be effective in Project Management
You must be alert for dysfunctional behavior
Procedures
a set of actions that is the official or accepted way of doing something how a process needs to be done an established or official way of doing something
Value Stream Mapping
a special type of flowcharting tool used to analyze where value is or is not being added as material flows through a process
Failure Mode Effects Analysis
a tool for identifying how a product, service, or process might fail... ...and the effects of that failure a tool for identifying the severity of failures when they occur... ...and the estimated frequency of occurrences... ...and the likelihood of failures being detected before they occur Simplified FMEA
Structured Methodology
define, measure, analyze, improve, control
Affinity Diagram
group ideas, opinions, concepts, and issues
Six Sigma Goal
less than 3.4 defects per million opportunities to have a defect
Policies
principles, rules, and guidelines formulated or adopted by an organization to reach its long-term goals
Project Charter Outline
provide decision makers with a compelling case and supporting data to make an informed decision 1. Current Situation 2. Desired Situation 3. Statement of Need 4. Scope 5. Benefits 6. Costs 7. Justification 8. Organize for Success
What's Six Sigma Mean?
six - a number that comes after 5 and before 7 sigma - the 18th letter of the Greek alphabet
Risk Analysis Definition
the identification of potential threats... ...and analysis of the vulnerabilities of a project to these threats Threat 1: Project team resources Threat 2: Data quality & availability Threat 3: Merger with company X Threat 4: Customer resistance Threat 5: Not aligned with strategy Threat 6: Scope creep
Check Sheet
too big too small just right (Give ticks)
Reactive Sources
• Complaints • Technical Support Calls • Customer Service Calls • Comment Cards • Sales Reporting • Returns • Warranty Claims • Website Activity • FAQs
Examples of Appraisal
• Counting parts from storeroom • Checking forecast for reasonableness • Inspecting hotel room after cleaning • Measuring lumber at job site
How can the 80-20 rule apply?
• In sales: 80% of your business comes from 20% of your customers • In productivity: 80% of your accomplishments come from 20% of your tasks • In day-to-day business: 80% of the work you do is from 20% of your products or services • In marketing: 80% of your achieved response comes from 20% of your marketing efforts • In customer service: 80% of the complaints come from 20% of your customers
Proactive Sources
• Interviews • Focus Groups • Surveys • Sales Visits • Direct Observation • Market Research • Benchmarking • SEO Techniques • Joint Projects
Examples of Prevention
• Investing is six sigma program • Installing test equipment • Training courses for employees • Pre-flight checklist • ISO program • Supplier certification programs
Examples of External Failure
• Newspaper not delivered • Overcooked food is served • Incorrect invoice is issued • Computer battery starts fire • New appliance doesn't work • Missing parts assemble-it-yourself • Running out of anything
Examples of Normal Distribution
• SAT scores • Heights of people • Blood pressure • Salaries (comparable jobs) • IQ scores
Examples of Internal Failure
• Sales order has wrong part numbers • Burnt pizza is tossed out and remade • Job description has wrong requirements • Forklift breaks down • Retesting a failed electronic device • Fixing a bug in a software program • Missing information on loan application
Easy to See
• Start date of the project • Project tasks • When tasks start and finish • How long each task will take • How tasks group and overlap • Finish date of the project
Ask Stakeholders
• What's important to you? • What's a defect? • How are we doing? • How do we compare? • What do you like? • What don't you like? • How can we do better?
