Six Sigma MBA591

Types of measurement

attribute inspection, variable measurement, defect inspection

Define phase tools

ground rules worksheet, SIPOC, VOC analysis, CTQ tree, ROI tools

SIPOC suppliers-inputs-process-outputs-customers More common in service industries and banking.

helps with VOC and determining KPIVS and KPOVS -is a brainstorming tool, high level macro diagram used to identify suppliers and customers for a process - typically created with Define phase

How to determine if variables are in control?

- Control chart information can be used - operator can monitor production process and make necessary adjustments

*Clear direction is essential for -Maintaining focus, motivating staff and moving an organization forward

*Enabled workforce is necessary to... -achieving a competitive lean organization *Delivery value to the customer is... -Paramount to sustaining and growing an organization

*Management layers -Add complexity that undermines efficiency and contributes little to customer value (breed bureaucracy) *Top down approach Requires -top management support

*Staff levels -Too high: unnecessary staffing costs; -too low: long customer waiting times *Sustaining a lean culture is -a major management challenge because resistance to change is a major roadblock

What are Measurement errors and its causes

- Difference between a value measured and the true value - Error that occurs is one either of accuracy or of precision - Accuracy refers to how far from the actual or real value the measurement is. - Precision is the ability to repeat a series of measurements and get the same value each time. Precision is also known as Repeatability.

Measurements of Central limit theorem

- Group sample averages tend to be normally disributed - sample size n increases, normality increases - enables conclusions

CPM, what possibilities to shorten the critical path?

- verify critical activities - reduce duration - add resources - more work hours - reduce scope

activities make up pathways via connections > customers > outcomes. We want to know why they don't work is it the request or response from the connections?

-Activities are made up of content, sequence, timing, expected outcomes, location. -connections are binary = for every request there is a response and the problems will be tested here. -pathways have no loops or forks but if they do then there is a problem in one of the activities. -outcome needs to be DMAIC or use a scientific method to improve pathways/ connections/ activities

Ishikawa Diagram (Fishbone Diagram) or cause and effect diagram -tool for organizing team's knowledge about a process; organized or structured brainstorming

-An Ishikawa Diagram can be used to map the process input variables (PIVs) that affect each KPOV -• A type of Tree Diagram and another brainstorming tool -PIVs can be reduced with multi‐voting

7 basic quality tools

-Cause-and-Effect Diagram (Ishikawa or fishbone diagrams) -Checksheet (structured, prepared to collect data) -Control Chart (process changes over time 2 show variation is consistent (in control) or is unpredictable (out of control, affected by special causes of variation). -Barchart & Histogram (most commonly used graph for showing frequency distributions) -Pareto Chart (shows which factors are more significant) -Scatterplot (pairs of numerical data, one variable on each axis, to look for a relationship) -Flowchart/Stratification (separates data gathered from a variety of sources so that patterns can be seen)

What is needed in a process design ? (Remember A Process is a set of procedures and routines that comes after a product or service has been designed) -process is defined as Y=f(x) where y is output

-Customer needs a pterm-77rocess that proves a quality output with good time & cost. -Producer needs good priced inputs > output that meets/exceeds customers needs. -Marketplace needs a quality product at a competitive price as an output from a process that changes based on customers requirements. -Suppliers need dependable market for their products that are inputs to the process.

Operational Excellence Strategy (alignment > leadership > work system process > improvement) Executive lvl= Focusing on Outcomes. Determine greatest opportunity for improvement by region. Each director becomes responsible for weekly commitments. Planing, Reviewing, and documenting each weeks personal score card.

-Director lvl= Focus on Location. Rely overall message to managers by utilizing performance, problems, and action plan as a graph. "align the battles to win the war". Each manager becomes responsible for weekly commitments. Planing, Reviewing, and documenting each weeks personal score card. -Manager lvl= Focus on Process. Use the team to solve problems as a response to improve aligned performance outcomes. Each team member becomes responsible for weekly commitments. Planing, Reviewing, and documenting each weeks personal score card.

Daniel Ping- Universal Motivation (how to motive change individuals) we have rigid way of thinking and its hard to change that!

-Include the people in the making decision change (ask them what the benefits of change) -Tying the purpose of their job duty to the change (intrinsic motivation)

Define Phase - involves defining the problem or opportunity, determining the voice of the customer/customer requirements, and outlining the project purpose/scope.

-finalize project charter -VOC voice of customer analysis -determine (Key process output variable) KPOVS -link KPOVs to CTQs) critical to quality- metrics or requirements of what the customer needs) -perform initial financial estimates

Prevention Quality Control requires

-past data -management support - need a strategy (QC) -culture people will buy into -training for production, engineering, and mgt -in-line measurement (real time) -continual improvement

why do quality improvement efforts fail?

-people are set in their ways -a change in one area of a company can greatly change another area -misdiagnosis -management committment and delegation -training -ineffective teams -poor deployment

Project Charter Developed by champion team. -project objectives., deliverables, schedule, cost/benefit analysis, project stakeholder analysis

-reviews and finalizes project charter -presented during Champion tollgate project charter is project team's contract with champion group with direction and outcomes -is a living document and may be revised later

key characteristics of total quality> Quality Concepts are applied to every part of organization. -products -services -people -processes -environments

-strategy based -customer focused -scientific/systematic approach to decision making and problem solving -continuous improvment -employee involvement and empowerment

affinity diagrams generate project ideas

-used to collect and organize input -post it notes are used rather than discussion to gather equal input -can also be used when trying to sort through solution ideas -less invasive -non-threatening environment - use voting to rank groups of common themed ideas

3 fundamental challenges - Process They are found in every process and by every organization Defects effects Reduce process yield and increase the average unit cost of production, it can plague service too

1. Delays-when processes that deliver products or services are interrupted by idle periods, defects are detected after considerable processing has taken place, waste clearly a problem in many processes and errors= objective is to minimize or eliminate, a constant improvements made to these systems have been successful in reducing errors. 2. Output variation- goal is to minimize, 2nd major challenge faced by all businesses! design operational systems capable of producing consistent outcomes - focus on efficiency and quality 3. Monitoring and Control=Steps put into place that are capable of monitoring process output to determine when that process has changed and is in need of remedial action

What is the state of modern manufacturing?

1. Real time feedback: proactive vs. reactive -more data available faster - high definition metro-logy is the enabling technology 2. Additive manufacturing -3D printing for example 3. Personalization vs customization

portfolio analysis- a major activity in strategic planning whereby management evaluates the products and businesses that make up the company. To add or develop new family products.

1. Study basic physical/chemical/biological principles involved. 2. Use basic principles studied in step 1 to outline a family of products. 3. List modules required for each product. 4. Form a matrix with products composing the rows and function modules composing the columns. 5. Study matrix to determine what products to build.

Implementation Strategy

1. Top management support andterm-58 participation 2. Project identification 3. Resource allocation 4. Data based decision making 5. Measurement and feedback

How to create a lean culture ?

1. clear goals and objectives; 2. enable the members to contributes toward achievement of a customer-focused lean organization; 3. designing organizational structures and organizational processes must centre on customer value; 4. every effort must be made to encourage finding better ways of achieving customer value.

Steps to make a frequency diagram (haufig glockenkurve) - Frequency diagram shows the number of times each of the measured values occurs when the data were collected

1. collect the data 2. count the number of times each measurement occurs 3. Construct the frequency diagram --> different measured values on the x axis, frequency on y axis 4. Interpret considering shape, size, location

How to lead the change and advise top management?

1.Communicate need for a change, use data regarding market share, & benchmarking. 2. Communicate view of future w/ successful change. 3.Estable & communicate near, intermediate, & long term goals & metrics. 4.ID using SIPOC MODEL & use forces for change, reduce barriers to change. 5. Communicate early success & recognize those responsible. 6. Lock in improvements. 7. Establish the need for being a nimble, changing organization.

responsibilities of being 6 sigma certified 6 Sigma roles are divided into 2 segments.. -Initiative & Project Leadership 1. Deployment Leader (Initiative leader) 2. Champion- Top level manager who ensures projects are aligned with companies goals & missions.

3. Master Black Belt- authorizing body and have advanced knowledge in stats, provide tech support to black belts. 4. Black Belts- work full time on 6 sigma projects need to know stats and usually 4 projects/year 500k-5mil. 5. Green Belt-Work under black belt, has his regular job duties plus those assigned. 6. Yellow Belt- 7. Everyone Else-

crosby on quality

4 Absolutes of Qualitterm-66y Management: -Quality means conformance to requirements -Quality comes from prevention -Quality performance standard is zero defects -quality measurement is the price of non-conformance

7 Traps of Traditional Thinking 1. Shortcutting (Leaping 2 Solutions) How much time did you you think of root causes of the problem? 2. Blind Spots (assumptions, biases, mind-sets,) 3. Not Invented Here (if we didn't come up with it, won't work) How much time did you spend thinking of why previous solutions failed? 4. Satisficing (Satisfy+Suffice: Taking the 1st acceptable option: good enough) Did you refuse 2 compromise ? or did you pick a solution and rationalize why it would work?

5. Downgrading (revising the goal or situation to make success easier) Did you achieve the stated goals was possible? 6. Complicating (instinctively adding completist and cost as our 1st course of action) what cost and complexity did you add while trying to solve the problem ? 7. Stifling (dismissing the ideas of other in favor of your own) did you touch on the right answer in your discussion but dismiss it.

why a process map is an important tool? 1. We can use a process map to identify problems with immediate fixes 2. Easier to read for management 3. Simplifies complex problems 4. Shows the flow of the product

5. Helps identify data collection points 6. Helps identify decision points 7. Shows all value-added and non-value added steps 8 Clearly shows process inputs 9. Clearly shows process outputs

Analyze - Makes sense out of the data that is collected during measure to further reveal root cause, and point to a solution; shows the areas and amount of improvement that might be possible to make the critical quality characteristic "best in class"; descriptive statistics, inferential statistics, probability

Analyze Steps -Cause & effect: process door, hypothesis testing, regression analysis, design of experiments, data door

What is takt time? rate at which a finished product needs to be completed in order to meet customer demand

Available time / Customer demand 21 hours per day / 500 products per day demanded by customers = 0.042 hours per product.

Control (DMAIIC) measures have been implemented and steps are taken to make sure improvements are maintained; improvements are standardized and verified Control Tools Statistical Process Control, cost analysis, ISO 9000

Control Steps 1. Document and standardize 2. QC process chart 3. Ownership and monitoring 4. Process change management 5. Evaluate project results 6. Closure 7. Key learnings

Process Flow Maps understanding the system, identifying the problem m areas, barriers and or obstacles that can be targeted for improvement.

Current state process maps the people in the process should build the map, they use it and understand what happens, it should reflect not an idealized state but what actually happens

Failure Mode and Effects Analysis (FMEA) a procedure by which each potential failure mode in a system is analyzed to determine the results of effects there of on the system and to classify each potential failure mode according to its severity, the likelihood of it occurring, and the ability of the system to prevent it from occurring -see the potential costs of every possible way that any process could go wrong.

FMEA Flow Chart define each step in flow, list function, brainstorm potential failure modes, describe effects of the failures, determine severity of failures, determine probability of failure, determine detection rate of failure (control), assign RPN, take action to improve

Continuous changes They are incremental, not necessarily will eliminate major costs, but when taken together, small changes can add up to big savings Continuous changes process -Resumes its search for better ways of doing work

Disruptive changes They make significant contribution to process efficiency

Improve and Implement Steps 1. Generate solutions 2. Perform cost-benefit analysis 3. Select the solution 4. Assess risks 5. Run pilot 6. Plan implementation

Implement a project plan is developed and managed in a logical and planned fashion

Improvement are developed and evaluated in a logical and planned fashion; low cost and easy to implement The real challenge here is a classic one called 'RESISTANCE TO CHANGE'

Improvement Tools design of experiments (ANOVA, Factorial), simulation, cost justification, project management, correlation, regression (linear, multivariate)

How can the Cost of Poor Quality - COPQ be measured? -DOES NOT INCLUDE The cost of detection and prevention

It can be measured by : cost of labor to fix problem; cost of extra materials used; cost of lost opportunities since the process must focus on fixing problems; potential loss of market share; lower customer service levels and higher costs of processing including lower profits

What is Gage R&R Study?

It focus on whether an individual collecting the data or performing the tests is consistent across many measurements, and whether the variation between different people involved is the data collection is consistent. The first focus, consistency associated with a single individual, is called REPEATABILITY. The second focus, consistency across individuals performing the same task, is called REPRODUCIBILITY.

Hypothesis testing can help avoid what of experimental efforts by using existing data. Cost / time / effort

Know the Triple Constraint Time, Cost, Performance: Competing Project priorities (project metrics)

Lean Methodology identify customer value, draft value stream map, improve stream by removing waste, balancing workload, and flowing the process and pulling the product

Lean Effects improved delivery time, reduced waste, less cost Challenge to process are 1. Delays, defects, waste and errors; 2. Output variation; 3. Monitoring and control

Lean Culture - McKinsey More resilient, efficient and effective

Lean companies - McKinsey 4 disciplines 1. Clear direction; 2. Enabling contributions; 3. Customer Value; 4. Discovery better ways

Measuring phase Tools -Process Capability (Percent Non-Conforming,Capability Indices), -Measurement Systems Analysis (Gage R&R, Operational Definitions), - Cost of Quality (Appraisal, Detection, Failure)

Measure Steps 1. Identify metrics; 2. Prioritize metrics; 3. Data collection plane; 4. Validate measurement systems 5. Measure the process 6. Display data and identify process capability

Criticism of 6 Sigma

Need aggressive performance tracking and acct. for result, ee need to be willing to use stat. tools, pay more attention to steps rather than results. Six sigma is over sold, cost of infrastructure, cost of training belt, pacemaker needs higher standards.

Quality Control Method > Quality is measured as process variability and defect rates -meeting standards and expectations (fitness of us) -inversely proportional to variability

No control- inspection occurs at the customer, corrective action occurs as replace or refund, and waste is most as materials Detection-inspection occurs after manufacturing in inspection stage, corrective action happens as repair/scrap, and their is time and labor waste Prevention- inspection occurs before/during manufacturing, corrective action occurs as a shut down/ go to the toolbelt, and waste occurs some of the time as down time.

Pareto Analysis reflects the frequency or impact of problems; table or bar chart; guide to selecting opportunities and prioritizing

Pareto principle 80-20 Rule; point out significant frequencies or costs; based upon Juran's work

Hoshin Kanri

Planning process aligning goals, outcomes and key performance activities. Tightly controlled planning and execution protocol that requires goal setting, beginning at the high level. Lower levels of the organization required to form objectives and goals that support those of the next higher level.

Process Owner the individual who has the ultimate authority to change a process

Process Owner Tasks monitors the performance through key indicators, works with all Six Sigma project teams to enable them to successfully complete their projects, manages the process after completion of project to sustain gains made, continues to improve and/or innovate the process through the application of the PDCA cycle

Difference between control limits and specification limits -control limits: derived from data -spec. limits: determined by customer

Purpose of X bar and R charts -Ensuring and monitoring the control and the capability of a production process

SLA Service Level Agreement DOE Design Of Experiment (can yield a true cause & effect) DPU Defects per unit CPM Critical Path Method CLT Central Limit Theorem CLT Critical To Quality COPQ Cost Of Poor Quality KPIV Key process input variable CTQ Critical to Quality (identifies what is important to the customer)

RORI Return On Resource Investment RTY Roll Through Yield RPN Risk Priority Number VOC Voice Of Customer VOB Voice Of Business (profit) VOE Voice Of Employee VSM Value Stream Map

process behavior chart help us -figure out where to improve -shows us 2 types of variation (they both have many common causes) -false alarm when we mistake a common cause variation for special cause

Routine Variation- Common cause variation (predictable variation, no assignable causes, improved required fundamental change in process) Exceptional Variation- Special cause variation (unpredictable variation, some assemble causes, improvement comes from removing effect of assignable causes)

LABELS of 6 Sigma

SPC- Statistical process control TQM- Total Quality Management CQE- Certified Quality Engineer JIT- Just-in-time

What is Six Sigma? it was coined by motorola (rationalized that the mean shifts 1.5 standard deviations as time goes by, which affects the sigma level; sigma level should be 4.5)

Six Sigma is a measurement-based strategy for process improvement. aims at improving process and increasing customer satisfaction. The concept behind this approach is to reduce the variation in processes. This reduction leads to consistent and desired outcomes from processes. Hence, Continuous process improvement with low defects is the goal of this method. (3.4 defects / million)

if just doing six sigma and not lean, what would be different? Lean = focuses primarily on efficiency and minimization of waste; Six Sigma = focuses on quality and consistency

Six sigma-trying to only look at data you can measure that will impact parameters -only focus on KPIVS that impact KPOVS that impact variation of a product or service in question. with lean, we will also be concerned with eliminating waste, some KPIVS will need to be measured that have no impact on KPOVS

Lean is the workflow style that involves "engaging" the workforce; that even the lowest on the totem pole can offer insight for improvement. -Lean looks to reduce waste by using tools like Kaizen & 5whys. -Major goal of lean is to eliminate process steps that add little or no customer value.

Teamwork- well informed & trained employees who participate in decisions that that impact their function. -Clean, organized and well marked spaces -Flow systems instead of batch and queue (reduce batch to 1) -Pull systems in stead of push (replenish what the customer has consumed) -Reduced Lead Times though more efficient processing, setups, and scheduling.

Muda =Japanese term for anything that is wasteful and doesn't add value VS Kaizen continuous improvement (Kaizen events last 2-5 days)

The 7 Wastes 1. Overproduction 2. Inventory 3. Defects 4. Motion 5. Processing 6. Waiting 7. Transportation 8. Skill abuse

What could be a limit of MEASUREMENT step?

The accuracy of the tools used and the human errors made on this stage. This is a real problem because the entire lean six sigma study can be contaminated and it's outcome will be damaged.

and what is the cadence of accountability (weekly unconditional commitments made for each team to make progress towards improvement (perfection)

Then once we understand on what we will focus the team's attention, the cadence of weekly commitments (to win the necessary battles that enable the team/organization to win the war) becomes key. What will matter with the weekly commitments is how the team evolves from making commitments with a monthly target date, to breaking these down to accomplish the critical few things that will most impact the lead measure/scoreboard.

How to improve a process flow ?

There are several tools on 6 Sigma toolkit, that help define, design an improve process flow: SIPOC Diagram; Value Stream Map and Process Map.

Lean Six Sigma as a project

To justify the approval of a project, a plan must be established that covers at least four important categories: business case, charter, metrics, financial evaluation and benefits

What are the 8 classifications of Lean waste?

Transportation Inventory Motion Waiting Overprocessing Overproduction Defects Skills not utilized

What is Chaku-Chaku? 1-piece flow

What is the purpose of sampling? To save costs / time / money compared to quality testing every single product.

Knowledge of Variation 1. Variation is the voice of the system or process; 2. Use statistics to find special and common causes of it; 3. Reducing variation reduces costs 3 Types of variation - within piece, single unit - piece to piece, variation within parts produced in the same batch - Time to time, parts produced at different times

When people do not understand variation 1. See trends where there are no trends; 2. Blame and give credit to others for things over which they have little or no control; 3. Build barriers, decrease morale, and create an atmosphere of fear; 4. Never be able to fully understand past performance, make predictions about the future and make significant improvements in the process

DMAIC (Define, Measure, Analyze, Improve, Control) or action plan

a six sigma process that outlines the steps that should be followed to improve an existing business process (improvement methodology)

who defines quality goals? *whoever is paying or reviving care -for healthcare, whoever is providing care

bad quality is not what the customer wanted or expected, focus on who all the customers are (external and internal)

What is difference between lag (measures whether you've reached the goal) and lead measures (predictive and influenceable measure; your strategic bet; tells you if you're likely to reach the goal)

but the truth of the matter is that depending on your level in the organization, your lead measure may be a lag measure for another team (likely one that reports to you). What is most important is the we understand and ACT on lead measures at the team level (where we are focused on PROCESS).

swimlane diagrams flow chart that emphasizes the "who" and "what does what" aspect of process - very useful when trying to study handoffs between people and work groups

checksheets worksheet used to collect qualitative process output data such as compliance and adherence data standardizing forms ensure that data is collected in a reliable and reputable way

Steps to make a histogram

data are grouped into cells 1. Collect data + tally sheet 2. Calculate range 3. Create the cells by determining intervals, midpoints, boundaries 4. label axes 5. post the values 6. Interpret, shape spread location

interpret this vif (Variance Inflation Factor) 1=no correlation, 1-5 moderate, 5+ high correlation) Tools, Analyze, Measure Data

determine if data is skewed (mean>median then right skewed, if mean<median then left skewed) regression model (p-value for each term tests the null hypothesis that the coefficient is equal to zero (no effect). A low p-value (< 0.05) indicates that you can reject the null hypothesis meaning there was some effect or predictor variables are significant. a P-value >0.05 means not statistically significant.

ex of bad manufacturing quality -defective parts and/or assemblies -out of tolerance (not within spec limits) -missing components -contamination

ex of bad helthcare quality -poor outcomes due 2 failures -incorrect or inappropriate procedure -incorrectly performed procedure -wrong medication or wrong dose

To find Standard Dev. 1.Work out the Mean 2. Then for each number: subtract the Mean and square the result 3. Then work out the mean of those squared differences. 4. Take the square root of that and we are done!

hypothesis testing = t test = 2 variables nova = 3 or more Chi square= non parametric testing/data -Greek letters are population means. -alpha is level of significance (0.5) -Measure of Central tendencies (mean, median, mode) If mean > Median = right skewed, if < then left skewed. if = then no skew -Measures of Dispersion (Variance, Standard Dev, Coefficient Variable, Range)

measure phase goals to thoroughly understand the current state of process, collect reliable data on process speed, quality, costs, etc. to expose underlying causes of process variation.

lean 6 sigma measure phase process -CurrentStateProcessMapping -Identify Potential KPIVs -DataCollection -KPOVGraphing

Porter's 5 Forces Model

potential new entrants, enter market & drive prices down. bargaining power of buyers, to drive prices down bargaining power of suppliers, to drive prices up threat of substitute products, to substitute your product. rivalry among competitors, strength of completion in the industry.

Sources of Improvements

root causes, best practices, ideas from other projects, brainstorming, mind mapping, performance targets, benchmark ideas, discoveries during analysis, six thinking hats technique, project goals

potential KPIVS tool are CTQ tree/ Ishikawa Diagram

step. Link KPOVs to CTQs-tool> CTQ tree (critical to quality- metrics or requirements of what the customer needs)

Value stream mapping is systematic method used for evaluating the necessity of steps in a process.

technique used to analyze the flow of work, materials, and information currently required to bring a product or service to a cutomer begin with SIPOC. Process Map, Swimlane diagram etc and then add material flow add process and lead time including delays, queue time, processing, setup time, etc.

Statistical Process Control (SPC)

the application of statistical techniques to determine whether a process is delivering what the customer wants

Measuring Process Variability

the proportion of output that can be produced within design specifications; a long term prediction; measure of uniformity; can be measured only if all special causes have been eliminated and the process is in a state of statistical control

VOC analysis determine customer requirements for the process and determine whether these requirements are being met by the current processes -determine the potential opportunities for improvement -highlight barriers

two types of VOC data Reactive- arrives whether or not its collected (complaints by customers) easily attainable but often negative Proactive- requires collection by personnel (data such as delivery times) can be collected to provide both pros and cons, but more difficult to attain key

spaghetti diagram AKA transportation or workforce diagram, general flow of workers/parts redundancies of work flow areas for improvement dwell times on certain paths times waiting in place

used to visually represent the physical flow of work for a process understand "zones" - how often people go to a location are people carying stuff, interferences some areas getting congested, dwell time

does quality need goals?

yes! needs limits to fall between or be reached -spec limits for manufacturing -healthcare provider needs turnover rate of patients or % of proper care or mortality rate