MGMT 425- Exam II

Generating Ideas

"Brainstorm" to develop potential solutions.

Defects (or Errors) per Million Opportunities

(Number of defects discovered / opportunities for error) * 1,000,000

Process Capability Index (Cp)

(Upper Specification Limit (USL) - Lower Specification Limit (LSL) / 6 sigma (sigma being the standard deviation of the process) -Cp is the ratio of the specification range to the process variation.

Developing and using control charts

- Prepare - Collect data - Determine initial control limits - Analyze the chart - Use for ongoing control

Control charts for variables data

- X-bar and R-charts - X-bar and s-charts - Charts for individuals (x-charts) - Fraction nonconforming (p) chart - P-chart with average sample size - C-chart for nonconformances per unit - U-chart for nonconformances per unit

Reengineering goal

- is to achieve quantum leaps in performance. -Requires fundamental understanding of processes, creative thinking to break away from old traditions and assumptions, and effective use of information technology.

dashboards

- typically consist of a small set of measures (five to six) that provide a quick summary of process performance -often use graphs, charts, and other visual aids to communicate key measures and alert workers and managers when performance is not where it should be

A Repeatability and Reproducibility (R&R) Study

-A study in a measurement system using statistical analysis. -This study can quantify the error, uncertainty or maximum resolution of a test or inspection system.

Total Quality Management

-Based largely on worker empowerment and teams -Activities generally occur within a function, process, or individual work-place. -Training is generally limited to simple improvement tools and concepts -Focused on improvements with little financial accountability

Six Sigma teams are comprised of several types of individuals

-Champions -Master Black Belts -Black Belts -Green Belts -Team Members

Attribute Vs Variable Measurement

-Collecting attribute data is usually easier because an assessment can usually be done more quickly by a simple inspection or count, whereas variable data require the use of some type of measuring instrument. -However, attribute measurement requires a much larger sample size than variable measurement to obtain the same amount of statistical information. -This difference can become significant when inspection of each item is time-consuming or expensive.

standard addresses the following elements

-Definition of SPC goals -Conditions for a successful SPC system -Elements of the SPC system

Mistake-Proofing Processes:Typical reasons for mistakes and errors

-Forgetfulness due to lack of reinforcement or guidance -Misunderstanding or incorrect identification because of the lack of familiarity with process or procedures -Lack of experience -Absentmindedness and lack of attention, especially when a process is automated

Kaizen

-Japanese word that means gradual and orderly continuous improvement. -focuses on small, gradual, and frequent improvements over the long term with minimal financial investment, and participation by everyone in the organization.

Six Sigma Philosophy

-Owned by business leader champions. -Cross-functional projects -Training 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.

X-bar and s-charts

-Process Monitoring and Control -Estimating Process Capability

Plan

-Studying the current situation and describing the process (inputs, outputs, customers, suppliers); -understanding customer expectations; gathering data; -identifying problems; -testing theories of causes; -developing solutions and action plans

(Process or business) Agility

-Term used to characterize flexibility and short cycle times. - is crucial to such customer-focused strategies as mass customization.

(Process or business) Flexibility

-The ability to adapt quickly and effectively to changing requirements. -rapid changeover from one product to another -rapid response to changing demands -the ability to produce a wide range of customized services

Reproducibility, or appraiser variation (AV)

-The variation when using the same measuring instrument by different individuals to measure the same parts. - Indicates how consistent workers or inspectors are in using measurement instruments

Processes

-a sequence of linked activities that is intended to achieve some result. - involve combinations of people, machines, tools, techniques, materials, and improvements in a defined series of steps or actions. Think about assembly line Exs: Producing a good or service for a customer within or outside the organization.

Treatment errors examples

-lack of courteous behavior, and failure to acknowledge, listen, or react appropriately to the customer -Poka-yoke; training, training, training!

Six Sigma's focus on

-measureable bottom-line results, -a disciplined statistical approach to problem solving, -rapid project completion, and -organizational infrastructure makes Six Sigma a powerful approach for improvement.

Task errors

-not doing the task correctly - work not requested, work on the wrong order, or working too slowly

Value-creation Process examples

-product design (good or service) activities that develop functional product specifications -production/delivery (making and/or delivering the good or service)

implementing SPC, must consider the four issues

1.: Basis for Sampling 2. Sample Size 3. Sampling Frequency 4. Location of Control Limits

Implementing Six Sigma

1.Conformance Problems 2. Efficiency Problems 3. Unstructured Performance Problems 4. Product Design Problems 5. Process Design Problems

. A core competency:

1.Contributes significantly to customer benefits. 2: It provides access to many products and markets. 3: It is difficult for competitors to imitate.

Control systems have four components:

1: A standard or a goal, which are defined during the planning and design processes. Reflected by measurable quality characteristics. 2: A means of measuring accomplishment (of the task or process). 3: Comparison of results with the standard to provide feedback. 4: The ability to make corrections as appropriate. Control should be the foundation for organizational learning. U.S. military; after-action review, or debrief: 1: What was supposed to happen? 2: What actually happened? 3: Why was there a difference? 4: What can we learn? Side Note: A U.S. Navy pilot is only as good as his last landing (on an aircraft carrier)! Every landing is recorded, and reviewed afterward.

Preventing mistakes can be done in three ways

1: Designing potential defects and errors out of the process. Best approach; eliminates any possibility that the error or defect will occur and will not result in rework, scrap, and wasted time. 2: Identifying potential defects and errors and stopping a process before they occur. Inspection, alarms, prevents defects and errors, but results in some non-value-added time. 3: Identifying defects and errors soon after they occur and quickly correcting the process. Can prevent costly defects or errors in the future, but does result in some scrap, rework, and wasted resources.

learning cycle

1: Planning 2: Execution of plans 3: Assessment of progress 4: Revision of plans based upon assessment findings

Poka-yoke : Focused on two aspects:

1: Prediction, or recognizing that an error is about to occur and providing a warning, and 2: Detection, or recognizing that a defect has occurred and stopping the process. Examples from manufacturing: Machine sensors, step-counters, passwords, parts with keys that can only fit one way, etc.

DPMO

3.4 or fewer errors or defects per million opportunities

Principles of Six Sigma

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

Six Sigma

A business improvement approach that seeks to find and eliminate causes of defects (manufacturing) and errors (services) by focusing on outputs that are critical to customers and clear financial return for the organization.

Process Capability Study

A carefully planned study designed to yield specific information about the performance of a process under specified operating conditions

Manufacturing classifications of defects: 1: Critical Defect:

A critical defect is one that judgement and experience indicate will surely result in hazardous or unsafe conditions for individuals using, maintaining, or depending on the product and will prevent proper performance of the product.

Process Decision Program Chart

A method for mapping out every conceivable event and contingency that can occur when moving from a problem statement to possible solutions.

Interrelationship Digraph

A tool for identifying and exploring casual relationships among related concepts or ideas.

Affinity Diagram

A tool for organizing a large number of ideas, opinions, and facts relating to a broad problem or subject area

Arrow Diagrams

A tool for sequencing and scheduling project tasks

Tree Diagram

A tool to map out the paths and tasks necessary to complete a specific project or reach a specified goal

Matrix Data Analysis

A tool to take data and arrange them to display quantitative relationships among variables to make them more easily understood and analyzed

Process Map (flow chart)

A visual means of describing a process, including decision points. -Microsoft Visio is very handy at this! -also used in Root Cause Analysis, to figure out how a process works, and how it can be improved.

Seven Management and Planning Tools

Affinity Diagram Interrelationship Digraph Tree Diagram Matrix Diagram Matrix Data Analysis Process Decision Program Chart Arrow Diagrams

Poka-yoke

An approach for mistake-proofing processes using automatic devices (or alarms) or simple methods to avoid human error. -Also known as idiot-proofing!

Throughput Yield (TY)

An estimate of the number of units that have no non-conformances: TY = e-NPU

Kaizen blitz

An intense and rapid improvement project in which a team or department throws all of its resources into an improvement project over a short time period.

Nonconformance

Any defect or error associated with a unit of work. Defect= a term most often used in Manufacturing Error= a term most often used in Services

Variable Measurement

Applies to dimensional quantities such as length, weight, time, or any other value on a continuous scale of measurement.

c-Charts

Applies when the number of opportunities or non-conformances in each sampling unit is constant.

Improve

Brainstorming; design of experiments; mistake proofing (Poka-Yoke); lean production; Deming cycle; seven management and planning tools

Redefining and analyzing the problem

Collect and organize information, analyze the data and underlying assumptions, and reexamine the problem for new perspectives, with the goal of achieving a workable problem definition.

Errors in manual inspection

Complexity Defect rate Inspection rate

P-chart / Fraction nonconforming (p) chart

Control charts that monitor the proportion of non-conforming units

Control

Control charts; training, standard operating procedures (SOPs)

Hugging the Center Line

Control limits may be too wide, or miscalculated.

($$) Appraisal Costs

Costs associated with efforts to ensure conformance to requirements, generally through measurement and analysis of data to detect non-conformances (inspections, which are costly). Categories of appraisal costs include the following: • Test and inspection costs associated with incoming materials, work-in-process, and finished goods, including equipment costs and salaries (inspectors, supervisors, quality managers and quality engineers) • Instrument maintenance costs due to calibration and repair of measuring instruments • Process measurement and control costs, which involve the time spent by workers to gather and analyze quality measurements

($$$) Internal Failure Costs

Costs incurred as a result of unsatisfactory quality found before the delivery of a product to the customer (this would be final inspection or final burn-in, quite expensive, since the product is now in its finished state): • Scrap and rework costs, including material, labor, and overhead • Costs of corrective action, arising from time spent determining the causes of failure and correcting production problems • Downgrading costs, such as revenue lost when selling a product at a lower price because it does not meet specifications • Process failures, such as unplanned machine downtime or unplanned equipment repair

Cycles

Cycles are short, repeated patterns in the chart, alternating high peaks and low valleys.

DMAIC

Define, Measure, Analyze, Improve and Control

Lean Six Sigma

Defined as an integrated improvement approach to improve goods and services and operations efficiencies by reducing defects, variation and waste

Guiding Principles

Defines the culture and values of the organization

Mission Statement

Defines the firm's reason for its existence; it answers the question "why are we in business?" A mission statement might include a definition of products and services the organization provides, technologies used to provide these products and services, types of markets, important customer needs, and distinctive competencies or the expertize that sets the firm apart from others. -Should be based in the present

Vision Statement

Describes where the organization is headed and what it intends to be; it is a statement of the future that would not happen by itself.

: Process Design Problems

Designing new processes or substantially revising existing processes.

Evaluating and Selecting Ideas

Determine whether the ideas have merit and will achieve the problem solver's goal.

Study

Determines whether the trial plan is working correctly by evaluating results, recording and learning, determining whether any further issues or opportunities need be addressed

Lean production

Eliminate waste in all forms, including defects requiring rework, unnecessary processing steps, unnecessary movement of materials and people, waiting time, excess inventory, over-production, identifying and eliminating non-value-added activities throughout the value chain.

Custom Improvement Methodologies

FADE- Focus, Analyze, Develop and Execute DRIVE= Define, Recognize, Identify, Verify and Evaluate

Master Black Belts

Full-Time Six Sigma experts who are responsible for Six Sigma strategy, training, mentoring, deployment and results. -Highly trained in how to use Six Sigma tools and methods, and provide advanced technical expertise.

Black Belts

Fully-Trained Six Sigma experts with extensive technical training who perform much of the technical analysis required in Six Sigma projects. -Advanced knowledge of tools and DMAIC methods. -Mentor and develop Green Belts.

Green Belts

Functional employees who are trained in introductory Six Sigma tools and methodology and work on projects on a part-time basis, assisting Black Belts while developing their own knowledge and expertise.

Conformance Problems

High levels of defects, service failures, or customer complaints.

Sudden shift in the Process Average

If eight consecutive points fall on one side of the center line, one could conclude that the mean has shifted

Team Members

Individuals from various functional areas who support specific projects

Process Owners

Individuals or groups, who are accountable for process performance and have the authority to control and improve their process. Owners can be high-level executives all the way down to workers running a manufacturing cell.

np-chart (for Number Nonconforming)

Instead of using a chart for the proportion of non-conforming units, an alternative is to plot the number of non-conforming units in each sample -sample size need to be constant

Cost of Quality Measures: ($) Prevention Costs

Investments made to keep non-conforming products from occurring and reaching the customer, including the following specific costs (designing in the quality in the product, this is usually the less expensive option): • Quality planning costs, such as salaries of individuals associated with quality planning and problem-solving teams, the development of new procedures, new equipment design, and reliability studies • Process control costs, which include costs spent on analyzing production processes and implementing process control plans • Information systems costs expended to develop data requirements and measurements • Training and general management costs, including internal and external training programs, clerical staff expenses, and miscellaneous supplies

Project Management

Involves all activities associated with planning, scheduling, and controlling projects. Although every project is unique, many projects have similar underlying processes; thus, viewing them from a process management perspective can be beneficial.

Lean Vs Six Sigma

Lean is focused on efficiency by reducing waste and improving process flow, whereas Six Sigma is focused on efficiency by reducing errors (services) and defects (manufacturing)

Value-Creation Processes

Making (product) or supplying (service) something that a customer is willing to pay for! -those most important to "running the business"

Measures and indicators examples:

Manufacturing, Variables Data: Diameters of machined ball bearings measured with a micrometer -> average diameter and the range of measurements (Statistical Process Control x-bar and R-Chart) or standard deviation (Statistical Process Control x-bar and s-Charts) of a sample of ball bearings. -Manufacturing, Attributes Data: Percentage of faucets that have cosmetic defects (Statistical Process Control Fraction Nonconforming (p) Chart). -Services: Percentage of orders filled accurately (Statistical Process Control Fraction Nonconforming (p) Chart), or the time taken to fill and ship a customer's order (Statistical Process Control x-bar and R-Chart).

Benchmarking

Measuring your performance against that of best-in-class companies, determining how the best-in-class achieve those performance levels, and using the information as basis for your own company's targets, strategies and implementation

Statistical Process Control (SPC)

Methodology for monitoring a process to identify special causes of variation and the signal the need to take corrective action. -provides a means by which a firm can demonstrate its quality capability. -relies on control charts

Evolution of Six Sigma

Motorola. General Electric. Texas Instruments. Boeing. 3M. T he big manufacturing companies.

Attribute data, the two important quality measures are the: Proportion nonconforming (or Proportion Defective in manufacturing)

Number of nonconforming units found / Number of units inspected. Usually displayed as a percentage. For example: (8 / 100)*100 = 8%

($,$$$) External Failure Costs

Occurs after poor-quality products reach the customer (this is the most expensive of all quality costs): • Costs due to customer complaints and returns, including rework on returned items, cancelled orders, and freight premiums • Product recall costs and warranty claims, including the cost of repair or replacement as well as associated administrative costs • Product liability costs, resulting from legal actions and settlements

unusual patterns may arise in control charts

One Point outside the Control Limits Sudden shift in the Process Average Cycles Trends Hugging the Center Line Hugging the Control Limits

A nonconforming Unit of Work

One unit of work that has one or more defects or errors.

Several factors organization affect how work is organized

Operational and organizational guidelines. Standard practices that have developed over the firm's history often dictate how and organization organizes and operates. 2: Management style. The management team operates in a manner unique to a given organization. Management style might be formal or informal, or democratic or autocratic. 3: Customer influences. Customers, such as government agencies, may require formal specifications or administrative controls. Thus, the organization needs to understand and respond to these requirements. 4: Size. Large organizations have the ability to maintain formal systems and records, whereas smaller ones may not. 5: Diversity and complexity of product line. An organization suitable for the manufacture of a small number of highly sophisticated products may differ dramatically from an organization that produces a high volume of standard goods. 6: Stability of the product line. Stable product lines generate economies of scale that influence supervision, corrective action, and other quality-related issues. Frequent changes in products necessitate more control and commensurate changes to the quality system. 7: Financial stability. Quality managers need to recognize that their efforts must fit within the overall budget of the firm. 8: Availability of personnel. The lack of certain skills may require other personnel, such as supervisors, to assume duties they ordinarily would not be assigned.

The Deming Cycle

Plan, Do, Check and Act cycle - improvement comes from the application of knowledge -continuous improvement

Process management

Planning and administering the activities necessary to achieve a high level of performance in key organizational processes, identifying opportunities for improving quality and operational performance, and customer satisfaction. -Consists of three major activities; design, control and improvement

Task errors Examples

Poka-yoke; computer prompts, color-coded cash register keys, pre-measured scoops, special trays for surgical instruments, standardized lists and protocols.

Product Design Problems

Poorly designed products

Define

Project charter; cost of quality analysis; Pareto analysis; high-level process mapping

Process improvement methodologies

Redefining and analyzing the problem. Generating ideas. Evaluating and selecting ideas. Implementing ideas.

Core competencies

Refers to an organization's areas of greatest expertize that provide a sustainable competitive advantage in the market place or service environment

Outsourcing

Refers to the practice of transferring the operations of a business function to an outside supplier.

: Implementing Ideas

Sell the solution and gain acceptance by those who must use them.

Champions

Senior-Level managers who promote and lead the deployment of Six Sigma in a significant area of the business

SMART, an acronym for good measurements:

Simple (easy and cost-effective to obtain) Measurable (clear and un-ambiguous) Actionable (information to make good decisions for process management) Related (clearly related to what is important to customers - both external and internal - and for running the business) Timely (measurements need to be available and communicated to workers and managers when they need the results from the measurements)

5S's

Sort: Set in Order; Shine (clean); Standardize; Sustain

Matrix Diagram

Spreadsheets" that graphically display relationships between ideas, activities, or other dimensions in such a way as to provide logical connecting points between each item.

Projects

Temporary work structures that start up, produce products or services (often unique), and then shut down. Side note: Think of Fluor Corporation (headquartered here in Irvine); "Fluor is one of the world's largest publicly traded engineering, procurement, construction (EPC), maintenance, and project management companies. Fluor works with governments and Clients in diverse industries around the world to design, construct, and maintain complex and challenging capital projects."

key tools used in Lean Production

The 5S's Visual Controls Efficient Layout and Standardized Work Pull Production Single Minute Exchange of Dies Total Productive Maintenance Source Inspection Continuous Improvement

Breakthrough

The accomplishment of any improvement that takes an organization to unprecedented levels of performance. -Fixing common causes of variation

Control

The activity of ensuring conformance to the requirements and taking corrective action when necessary to correct problems and maintain stable performance. -Process control methods are the basis for effective daily management. -long-term improvements cannot be made to a process unless the process is first brought under control. -Control is different from improvement

Process Capability

The capability of a process to produce output that conforms to specifications. -

Precision

The closeness of repeated measurements to each other. Precision relates to the variance of repeated measurements. Low precision is the result of random variation that is built into the instrument, such as friction among its parts.

Production (of a good or service):

The collection of activities an operations involved in transforming inputs (physical facilities, materials, capital, equipment, people, and energy) into outputs (products and services). Examples; machining, mixing, assembly, filing orders, or approving loans. A process perspective links together all necessary activities and increases one's understanding of the whole system, rather than focusing on a small part.

Accuracy

The difference between the true value and the observed average of a measurement. Accuracy is measured as the amount of error in a measurement in proportion to the total size of the measurement.

Reengineering

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed.

Act

The improvements become standardized, and the final plan is implemented as a current best practice. -This process then leads back to the Plan stage for identification of other improvement opportunities.

Inspection Rate

The inspector's performance degrades rapidly as the inspection rate increases.

Complexity

The number of defects caught by an inspector decreases with more parts and less orderly arrangement.

Vertical Integration

The opposite of outsourcing, in which certain business functions are acquired and consolidated within a firm. For example, a firm may purchase a key supplier to strengthen its value chain.

Common Quality Measurements: Unit of Work

The output of a process or an individual process step.

Do

The plan is implemented on a trial basis, such as in a laboratory, pilot production, or with a small group of customers. -Data from the experiment are gathered

Attribute Measurement

The presence or absence of non-conformances in a unit of work, or the number of non-conformances in a unit of work. Often collected by visual inspection and expressed as proportions and counts.

Strategic Planning

The process of envisioning the organization's future and developing the necessary goals, objectives, and action plans to achieve that future

Takt time

The ratio of the available work time to he required production volume necessary to meet customer demand.

Cycle Time

The time it takes to accomplish one cycle of a process (from order to delivery, from input to output, etc.). One of the most important metrics in process management!

Repeatability, or equipment variation (EV)

The variation in multiple measurements of a quality characteristic by an individual worker or inspector using the same instrument. Repeatability indicates how consistent a measuring instrument is. It is influenced by the condition of the measurement instrument, environmental conditions such as noise or lighting, the workers overall health and eyesight, and the process used to take the measurement such as how the part is positioned in the gage.

The 5S's

These tools define a system for work-place organization and standardization.

Non-conformances per unit (NPU) (or Defects per Unit in manufacturing)

Total number of non-conformances / Number of units inspected 260/100 = 2.6 NPU

Mistake-Proofing Processes

Typical mistakes in production are omitted steps in -a process, -setup errors, -missing parts, -wrong parts, -incorrect adjustments

Efficiency Problems

Unsatisfactory performance that causes dissatisfaction from the standpoint of non-customer stakeholders, such as financial managers. -High cost, excessive inventory, low productivity, process inefficiencies.

u-Charts

Used when the number of opportunities for non-conformances in each sampling unit is not constant.

Analyze

Value Stream Map Takt time

SPC was first proposed by

Walter Shewhart in the 1920s

Measure

What questions are we trying to answer? What type of data will we need to answer the question? Where can we find the data? Who can provide the data? How can we collect the data with minimum effort and with minimum chance of error? Run charts; check sheets; descriptive statistics; measurement system evaluation (gage R&R); process capability analysis; benchmarking

Hugging the Control Limits

When each sample is taken from a different process.

Out of Control (Process)

When special causes of variation are present

Defect Rate

When the product defect is low, inspectors tend to miss more defects than when the defect rate is higher.

Statistical Control, or just Control.

When the variation in the process is due to common causes of variation alone, we say that the process is in

2: Major Defect:

a major defect is one not critical but likely to result in failure or to materially reduce the usability of the unit for its intended purpose.

Strategies

are broad statements that set the direction for the organization to take in realizing its mission and vision

Control limits

are chosen statistically to provide a high probability that points will fall between these limits if the process is in control

Action Plans

are the tactics that an organization must carry out to achieve its strategic objectives.

Strategic Objectives

are what an organization must change or improve to remain or become competitive.

component variability study

assesses the relative contribution of different sources of total variation. - uses a designed experiment to evaluate the sources of variability.

A peak performance study

determines how a process performs when only common causes of variation are present. - done over a short time interval under carefully-controlled conditions.

Process control plan

documented control procedures identified in a plan, such as SOPs for inspection, measurements, testing, etc

Design

ensuring that the inputs to the process are adequate, and that the process can achieve its requirements.

term Six Sigma is based on a statistical measure

equates to 3.4 or fewer errors or defects per million opportunities (DPMO)

Treatment errors

errors between the person providing the treatment and the person being treated.

Six Sigma projects are driven by

expected financial returns

Improvement

focuses on continually seeking to achieve higher levels of performance, i.e. reduced variation, higher yields, fewer defects and errors, smaller cycle times, etc.

Control

focusing on maintaining consistency in output by assessing performance and taking corrective action when necessary.

Value Stream Map

highlight value-added versus non-value added activities, and include times that activities take

Work Systems

how the work of an organization is accomplished -involve the workforce, key suppliers and partners, contractors, collaborators and other components of the supply chain needed to produce and deliver products, services, and business and support systems.

Customer errors during an encounter

inattention, misunderstanding, or simply a memory lapse, and include failure to remember steps in the process or to follow instructions. -Poka-yoke; customer prompts, airplane lavatory lights that only go on after the door has been locked, etc.

Strategy Deployment

involves developing specific action plans to achieve strategic objectives, ensuring that adequate financial and other resources are available to accomplish the action plans, developing contingencies should circumstances require a shift in plans and rapid execution of new plans, aligning work unit, supplier, or partner activities as necessary, and identifying performance measures for tracking progress

Goal of Strategy Development

is envisioning the future for purposes of decision making and resource allocation

Process Capability

is measured by computing numerical indexes. -The distribution of process output (length, time, weight, etc.) can differ in both location and spread relative to the specifications.

3: Minor Defect:

is one not likely to materially reduce the usability or the item for its intended purpose, nor have any bearing on the effective use or operation of the unit.

Measurement

is the act of collecting data to quantify the values of product, service, process, and other business metrics.

Customer errors in preparation

not bringing the right documents, not understanding the (customer) requirements for the service engagement - Poka-yoke; checklists, simplifying the process, etc.

Customer errors at the resolution stage

not providing feedback, not executing appropriate post-encounter actions. -Poka-yoke; tray-return and thrash receptacles at fast food places.

Support Processes

provide the infrastructure for value-creating processes (think finance, HR, employee-training, accounting, legal, maintenance, etc.), but does not directly add value to the product or service. -most important to an organization's value creation processes, employees, and daily operations

The ISO standard ISO 11462-1

provides guidance for organizations wishing to use SPC to meet statistical methods.

Measures and indicators

refer to the numerical results obtained from measurement.

Continuous improvement

refers to both incremental changes, which are small and gradual, and breakthrough improvements, which are large and rapid.

Breakthrough improvement

refers to discontinuous change, (not Kaizen), which result from innovative and creative thinking; often motivated by stretch goals, or breakthrough objectives.

control chart

run chart to which two horizontal lines, called control limits are added -the Upper Control Limit (UCL) and the Lower Control Limit (LCL).

A process characterization

study is designed to determine how a process performs under actual operating conditions, which may include both common and special causes of variation. -performed over a moderately long time interval to capture any and all variations that might occur.

Effective strategy development requires a

systematic process that involves participation by all necessary stakeholders, ensures that relevant and important data and information are captured and analyzed, address both short- and long-term time horizons, addresses key strategic challenges, and leads to innovation and sustainability

Organizational structure

the clarification of authority, responsibility, reporting lines, and performance standards among individuals each level of the organization

Strategy

the pattern of decisions that determines and reveals an organization's goals, policies, and plans to meet the needs of its stakeholders - Provides a roadmap to achieve a vision of what the organization should and could be three, five, or more years into the future

Trends

the result of some cause that gradually affects the measurement and causes the points on a control chart to gradually move up or down.

C-chart for nonconformances per unit U-chart for nonconformances per unit

those that monitor the number of non-conformances per unit

Tangible errors

unclean facilities, dirty uniforms, document errors -Poka-yoke; checklists, inspections, audits, etc.

Unstructured Performance Problems

unsatisfactory performance by processes that are not well-specified or understood. -Employee turnover, low employee satisfaction

typical Six Sigma Black Belt training curriculum

• Elementary Statistical Tools (basic statistics, statistical thinking, hypothesis testing, correlation, simple regression) • Advanced Statistical Tools (design of experiments, analysis of variance, multiple regression) • Product Design and Reliability (quality function deployment, failure mode, and effects analysis) • Measurement (process capability, measurement systems analysis) • Process Control (SPC, control plans) • Process Improvement (process improvement planning, process mapping, mistake proofing) • Implementation and Teamwork (organizational effectiveness, team assessment, facilitation tools, team development)

Selecting Six Sigma Projects : Factors that should be considered

• Financial return, as measured by costs associated with quality and process performance, and impacts on revenues and market share • Impacts on customers and organizational effectiveness • Probability of success • Impact on employees • Fit to strategy and competitive advantage

DMAIC Tools and Techniques: Seven Traditional, Visual, Quality Tools

• Flowcharts • Check Sheets • Histograms • Pareto Diagrams • Cause-and-Effect Diagrams (Fishbone or Ishikawa diagrams) • Run Charts • Control Charts

Return on Quality (ROQ)

• Quality is an investment. • Quality efforts must be made financially accountable. • It is possible to spend too much on quality. • Not all quality expenditures are equally valid.

Environmental Assessment

• The organization's Strengths, Weaknesses (both internal), Opportunities and Threats (both external) (SWOT analysis, see below) • Early indications of major shifts in technology, markets, customer preferences, competition, or the regulatory environment • Long-term organizational sustainability, including needed core competencies, and projections of future performance and competitors' or comparable organizations' future performance • The ability to execute the strategic plan

Key Practices for a Strategic Focus on Performance Excellence

• Understand the organization's operating environment and its key relationships with customers, suppliers, partners and stakeholders. • Understand the competitive environment, the principal factors that determine success, the organization's core competencies, and strategic challenges - business, operational, and human-resource related - associated with organizational sustainability. • Gather and analyze relevant data and information pertaining to such factors as the organization's Strengths, Weaknesses, Opportunities and Threats (SWOT analysis); emerging trends in technology, markets, customer preferences, competitors, and the regulatory environment; long-term organizational sustainability; and the ability to execute strategic plans. • Develop and refine a systematic approach for conducting strategic planning and setting strategic objectives, including identifying blind spots, leveraging strengths, and addressing challenges over appropriate time horizons. • Develop and align short-term action plans with long-term strategic objectives, ensure adequate resources and the ability to sustain outcomes, assess financial and other risks associated with the plans, and communicate them throughout the organization. • Derive human resource plans required to accomplish longer-term strategic objectives and shorter-term action plans that address the potential impacts on the workforce and potential changes to workforce capability and capacity needs. • Identify key measures or indicators for tracking progress on action plans, ensure that the measurement system reinforces organizational alignment, and project performance of these key measures compared with competitors or comparable organizations to identify gaps and opportunities. • Determine the organization's core competencies, and understand how they relate to the mission, competitive environment, and strategic objectives. • View the work performed within the organization as a system, and make rational decisions about the mix of internal and external work processes that can best achieve the organization's mission.

Lean Six Sigma in Services key measures of performance

•Accuracy, as measured by correct financial figures, completeness of information, or freedom from data errors. •Cycle time, which is a measure of how long it takes to do something, such as pay an invoice •Cost, internal costs of process activities, driven by Accuracy and Cycle Time •Customer satisfaction, which is typically the primary measure of success