Measure phase - six sigma

Measure phase - Six sigma

1. Measure phase Basic of six sigma

2. Six sigma methodology

3. Measure phase MEASURE the current process or performance. Identify what data is available and from what source. Develop a plan to gather it. Gather the data and summarize it, telling a story to describe the problem. This usually involves utilization of graphical tools . Measurement is critical throughout the life of the project and as the team focuses on data collection initially they have two focuses: D etermining the start point or baseline of the process. L ooking for clues to understand the root cause of the problem.

4. What Measurements are Important and What Tools Should be Used ? Select Customer Critical to Quality (CTQ) Characteristics; a- Define Defect, Opportunity, Unit and Metrics. b- Detailed Process Map of Appropriate Areas) Define Performance Standards (Numbers & Units); Establish the Data Collection Plan, Validate the Measurement System, Collect the Necessary Data.

5. Measure phase tools SIPOC Diagram (Supplier, inputs, process, output, customer) VOC (voice of customer) KANO analysis (classifying customer needs) Quality function deployment QFD (house of quality) Flow diagram (process mapping) Pareto chart (vital few needs)

6. SIPOC diagram SIPOC diagram is a tool used by a team to identify all relevant elements of a process improvement project before work begins . A SIPOC Process Definition helps the Process Owner and those working on the process to agree the boundaries of what they will work on. It is similar and related to process mapping and ‘in/out of scope’ tools, but provides additional detail .

7. SIPOC Diagram Suppliers: The individuals, departments, or organizations that provide the materials, information, or resources that are worked on in the process being analyzed Inputs: The information or materials provided by the suppliers, transformed , consumed, or otherwise used by the process . Process: The macro steps or tasks that transform the inputs into outputs: the final products or services Outputs: The products or services that result from the process . Customers: The individuals, departments, or organizations that receive the outputs, the products or services, generated by the process

8. Questions must be asked to perform SIPOC diagram 1. For which stakeholder does this process primarily exist? 2. What value does it create? What output is produced? 3. Who is the owner of this process? 4. Who provides inputs to this process? 5. What are the inputs? 6. What resources does this process use? 7. What steps create the value? 8. Are there subprocesses with natural start and end points?

9. C reate the SIPOC diagram as following: 1. Create a simple, high-level process map of the process. Perform the steps below using brainstorming rules. 2. Identify the outputs of this process. 3 . Identify the customers who will receive the outputs. 4. Identify the inputs needed for the process to create the outputs. 5 . Identify the suppliers of the inputs. 6 . Clean up the lists by analyzing, rephrasing, combining, moving, etc. 7. Create a SIPOC diagram. 8 . Review the SIPOC with the project sponsor and process owner. Modify as necessary.  

10. How to create SIPOC diagram

11. SIPOC diagram

12. Who is customer? A customer is any person or organization that receives a product or service (output) from our work activities (process ). Internal customers are colleagues or departments who receive products, services, support or information from your process . External customers are individuals or organizations outside of your business who are usually associated with paying money for your products and services. Regulatory: Any government agency that has standards the process or product must conform to – i.e. ACCC, EPA, FDA,

13. Customers Define “Quality” Ease of Use Aesthetics Timeliness Accuracy Flexibility & Options Price & Cost Customer You must understand what the customers of your process care about!

14. Performance Need Categories The challenge is to understand how your customers, stakeholders, process owner, etc. define and prioritize the various needs and expectations they have of your products and services, or constraints they may inject. Product or Service Features, Attributes, Dimensions, Characteristics Relating to the Function of the Product or Service, Reliability, Availability, Effectiveness, Recovery, Customer Returns, Defects, Rework or Scrap (Derived Primarily from the Customer - VOC) Process Cost Efficiency, Prices to Consumer (Initial Plus Life Cycle), Repair Costs, Purchase Price, Financing Terms, Depreciation, Residual Value, Raw Material, Energy Efficiency (Derived Primarily from the Business - VOB) Lead Times, Delivery Times, Turnaround Times, Setup Times, Delays, Up Time, Equipment Availability, Rolling Speed, Flexibility (Derived from the Customer or the Business – VOC/VOB) Health, Safety and Environment Policy, Service Requirements, After-Purchase Reliability, Parts Availability, Service, Warranties, Maintainability, Customer-Required Maintenance, Product Liability, Product/Service Safety, Recordable Injuries, Lost Time, Environmental Incidents Quality Cost Speed Service and Safety Corporate Responsibility Ethical Business Conduct, Business Risk Management, Health Safety and Environment Policy, Code of Conduct

15. Voice Of the Customer (VOC) The “ voice of the customer ” is a process used to capture the requirements/feedback from the customer (internal or external ) to provide the customers with the best in class service/product quality. The “voice of the customer” is the term used to describe the stated and unstated needs or requirements of the customer. The voice of the customer can be captured in a variety of ways: Direct discussion or interviews, surveys, focus groups, customer specifications

16. Importance of Voice of the Customer (VOC) • It ensures that the problem and goal are defined in terms that truly relate to customer requirements. • It avoids cost and time cutting solutions that actually hurt service or relations with customers. • It provides insight into possible output measures of the process. • It helps to create a climate of positive change; sometimes just listening to customer feedback is a huge leap in customer satisfaction – aka Hawthorne Effect. • It enables you to translate the often vague customer comments into measurable statements called Critical to Quality (CTQ) metrics.

17. Determine what to measure: listen to customers Effective process improvement means that the measure we use in our business is directly linked to our customers . Step 1 : Develop a customer–Focused business strategy Step 2 : Listening to the VOC Step 3 : Translating voice of the customer (VOC) into critical customer requirements (CCRs ). Step 4 :Developing measures and indicators

18. Develop customer focused strategy customer-focused strategy as a view on business that puts customers at the center of business decisions. Customer-focused strategies –place the spotlight on the people that keep your business afloat - your customers. These types of strategies are designed to help you know who your key customers are and understand what entices them to stay loyal while singing your business's praises. Customer value is the outcome of a process that begins with a business strategy anchored in a deep understanding of customer needs . Customer value is The difference between what a customer gets from a product, and what he or she has to give in order to get it

19. customer-focused strategy

20. Not all customers create equal value. In order to discover growth opportunities, gain a competitive advantage, it is helpful to segment customers. Customer segmentation will also play a role in step 2, listening to the VOC . Typically, various customer segments deliver disproportionate value: i.e., the greatest value can from a small potion of your customer base. Customer value

21. Customer segmentation Market/ customer Segmentation: Process of dividing the market into subsets of consumers with common needs or characteristics. It can be a powerful means to identify unmet customer needs. It is most effective when a company tailors offerings to segments that are the most profitable and serves them with distinct competitive advantages. This prioritization can help companies develop marketing campaigns and pricing strategies to extract maximum value from both high- and low profit customers.

22. Customer segmentation

23. How does a person begin to listen to the VOC and collect customer information?

24. How to Collect VOC 1. Brainstorm a list of stakeholders; they could be customers, suppliers, process owners, regulators, sponsors, groups that are somehow affected, groups that somehow affect the process. 2. Prioritize the results into three categories; “ A” category for those groups that benefit most or are affected “B” category ,the most negatively from the process and “C ” category for those groups that are affected the least . 3. As a team, first hypothesize what you think the VOC is for each customer group and person involved in the process.

25. How to Collect VOC 4. From your hypothesis, build interview questions. See separate templates and online resources for possible non-leading questions. 5. Go out and ask individual customers and customer groups, as well as track what they show they want when they vote with their wallets or feet . 6 . Interview key internal process owners to understand each of their perspectives . 7. After data has been collected, sort through responses and de-duplicate.

26. How to Collect VOC 8 . Optionally, categorize responses by performing some sort of affinity diagramming or clustering activity. 9 . Identify solutions that customers have stated and place this information in a separate “Possible Solutions” document that the team will explore later in the Improve phase. 10. Include in your plans some traceability of VOC responses. To be able to go back to the customer group that made an interesting comment. 11. Your final list will then be used to convert the vague VOC into measurable CTQ’s.

27. KANO analysis The Kano model is useful in gaining a thorough understanding of a customer’s needs. You can translate and transform the resulting verbatim using the VOC of customer table that , subsequently, becomes an excellent input as the what’s in a QFD house of quality . The model involves two dimensions : Achievement (the horizontal axis) which runs from the supplier didn’t do it at all to the supplier did it very well . Satisfaction (the vertical axis) that goes from total dissatisfaction with the product or service to total satisfaction with the product or service.

28. KANO analysis

29. The three levels of need/ KANO analysis Threshold Attributes/ Expected Needs/ Must needs The entry level or must level expectation that fully satisfying the customer at this level simply gets a supplier into the market and they are also dissatisfiers because by themselves they cannot fully satisfy a customer. However, failure to provide these basic expectations will cause dissatisfaction . Performance Attributes/ Normal Needs These are the qualities, attributes, and characteristics that keep a supplier in the market. These next higher level expectations are known as the wants (VOC) or the satisfiers because they are the ones that customers will specify as though from a list. They can either satisfy or dissatisfy the customer depending on their presence or absence .

30. The three levels of need/ KANO analysis Excitement Attributes/ Exciting Needs These are features and properties that make a supplier a leader in the market. The highest level of customer expectations, as described by Kano, is termed delighters or the wow level qualities, properties, or attributes . KANO analysis in summary The Kano Analysis helps to identify unspoken needs before prioritization . It is intended to help prioritize customer needs .

31. KANO analysis in summary It should be linked to a company’s multi-generational project plan . Generation 1 has to cover the “must be’s .” The company must realize that customers’ expectations and/or needs vary over time . The information obtained from the Kano Model Analysis, specifically regarding performance and excitement attributes, provides valuable input for the Quality Function Deployment process.

32. Kano analysis

33. Kano analysis

34. Theme 1 Need 1 Need 2 Theme 2 Need 3 Need 4 Need 5 Theme 3 Need 7 Need 8 Affinity Diagrams An affinity diagram is a good tool for this purpose since it organizes language data into related groups Gather ideas from interview transcripts, surveys, etc. Generate customer need statements on cards or sticky notes Group the cards to find the “affinity” Label the groups of cards

35. Moves team from high-level customer needs to greater detail in order to define requirements A tool for breaking broad process steps or product features into greater detail Helps organize needs by level of detail s. Tree Diagrams Affinity Diagrams Tree Diagram

36. Tree Diagrams Primary Need Secondary Need Tertiary Need Customer Requirement Product/Service Customer Requirement Customer Requirement Customer Requirement

37. Tree Diagram Example: Pizza Customer wants “healthy choices” Crust Toppings Other ingredients Whole wheat Unbleached flour Cheese Sauce Additives Spices Oil No cheese Low-fat mozzarella Low-fat white cheddar Meats Vegetables

38. Quality Function Deployment (QFD) Quality Function Deployment (QFD ) is a customer driven product or service planning process. It is a methodology for translating customer requirements into company requirements at each stage from Concept Definition (R&D) to Process Engineering and Production and into the marketplace . The QFD matrix is a tool to translate CCRs (Critical To Customers) into CTQs (Critical to Quality ). QFD is also termed as: Voice of the Customer House of Quality Customer-Driven Engineering Matrix Product Planning

39. Quality Function Deployment (QFD) QFD is used to: Collect customer’s requirements/desires as specified by the customers in their own words Prioritize these desires Translate them into engineering/process requirements Establish targets to meet the requirements . The QFD process establishes customer objectives and measures and records them on a series of matrices. QFD matrix translates the CCRs into CTQs. The final score helps prioritize the CTQs and helps you decide which CTQs to tackle first.

40. The QFD Methodology Identify both internal and external customers. Create a list of customer requirements/desires ( Whats ) by Asking the customer, questions such as “What are the important features of  The Product” Capturing the customer’s own words or “ Voice of the Customer ” Categorizing the Whats into groups/buckets if needed. Prioritize the above collected Whats on a scale of 1-5, with 5 being the most important. This ranking is based on the VOC (Voice of Customer) data. The CCRs ( Whats ) are listed vertically in the first column and all related CTQs ( Hows ) are listed horizontally across the top . In the second column, assign 1 to 5 based on the importance of the CCRs, where 5 is the most critical to the customer.

41. The QFD Methodology Score each CTQ ( Hows ) on how strongly it correlates to each CCR. Remember we are looking at the absolution value of the correlation. It could be either positively correlated or negatively correlated. Use 5 for a strong correlation and 1 is a weak one. Leave it blank if there is no correlation. Some CCRs will have few CTQs that relate and rest unrelated. Compile list of CTQs ( Hows ) necessary to achieve the CCRs ( Whats .) Translate the CCRs from VOC ( Whats ) into CTQs ( Hows ) Arrows show direction for improvement (up for increasing, down for decreasing, etc.)

42. For each What , find out the correlation with each How . If the correlation is strong use 5. If its week use 1. If its in between, use a number 2,3,4 based on how strong the correlation is. Next multiply the importance rating for the CCR by the correlation score for each CTQ . Add up the scores vertically for each CTQ and place that value in the bottom score row. Once the score is computed for all CTQs, the ones with the highest scores are the highest priority Six Sigma project objectives to work on. The QFD Methodology

43. Quality function deployment QFD - House of Quality

44. Determining “Critical Customer Requirements” From Requirements to “Quality” A customer’s perception of value & performance represents their view of the “quality” of a product or service Their basis for evaluation is how well their requirements have been met Evaluations are also influenced by their “expectations” Quality = Actual Performance - Expectations All requirements are not created equal … Customers weight their requirements differently The most important customer requirements become those CTQs.

45. Translating VOC to CCRs What is a critical customer requirement? (CCR ) Important to the customer –“customer cares about it ” 1- Specifies requirement –“must have” or “must be” attributes. Can be measured. Establishes a target. - Customer specifications. - Acceptable range of performance . 2- Translating VOCs to CCRs: - Organize and verify customer needs data into CCRs. - Determine CCR priorities .

46. Translating VOC to CCRs 3- Determine CCR Priorities Translate all key VOC data into CCRs. List all CCRs identified. Prioritize CCRs based on how well they will meet the project objectives. Verify CCR priorities within the team and with the sponsor.

47. Critical to Quality (CTQ ) Critical to Quality (CTQ) Analysis VOC’s can be vague and difficult to define, that’s where CTQ’s come in. The customer may identify a requirement that is difficult to measure directly so it will be necessary to break down what is meant by the customer into identifiable and measurable terms.

48. Critical to Quality (CTQ ) Converting VOC to Critical-To-Quality (CTQs ) 1. Identify customer and stakeholder groups, and prioritize them. 2. Collect their qualitative VOC needs in their language, not assuming you already know it. 3. Analyze data and blend it to generate VOC lists, prioritized by segment. 4. Ask customers and stakeholders to translate their customer language into measurable CTQs. 5. Set your specifications for CTQs that match customer needs.

49. Converting CCR to Critical-To-Quality (CTQs )

50. Input, Output and Process Indicators Input, Output Process Indicators Y is an output performance measure – Output indicators or performance measures (Y’s) should be derived from the Voice of the Business and the Voice of the Customer. – Remember that “what gets measured is what gets done.” Make sure that your Y’s will drive the desired behavior. X’s are key input and process measures. – Machine Settings – Training Hours – Process Variables

51. Output indicator Output indicators (Y's) are those key metrics that measure the accuracy in meeting the Critical Customer Requirements (CCRs). Generally , they are measured after the product or service is complete. These indicators are not helpful in predicting, thus making them reactive rather than proactive . Output indicators are necessary because they help us to understand process performance from the customer's perspective. The key output indicators should be identified in or before the Define phase.

52. Define Performance Standards: Numbers & Units Measure – How are we doing? l Key Deliverables – Input, Output Process Indicators – Operational Definitions – Measurement System Analysis – Data measurement Plans – Data collection Forms – Baseline Performance

53. process indicators process indicators (x's). Preferably, the selected process parameters will have a direct affect on the output indicators (Y's). These are considered ideal process indicators and may be predictive. The team should ensure they have identified at least one process indicator for each CCR. These process indicators will be used in the Analyze phase to help validate root causes.

54. Input indicator From the SIPOC map, we identify the process inputs and can list input indicators. These may be less predictive than the process indicators but are just as important. Because they are inputs, they generally relate to the suppliers' performance. Once the output, process, and input indicators have been determined, the list can be examined for balance. It is important to confirm that the list is balanced from a financial, quality, productivity and timeliness viewpoint. Once the indicators have been identified, we can proceed to the next Measure steps: writing Operational Definitions and performing Measurement System Analysis (MSA).

55. Input, Output and Process Indicators

56. Define Performance Standards: Numbers & Units Operational Definitions – A precise definition of the specific Y to be measured Data measurement Plans – who, where, when the data will be collected and what will be done with data collected. Measurement System Study – To ensure the quality of the measurements obtained before using them in any analyses or decision-making. Data collection Forms – Forms to manually collect data. Baseline Performance – To document the “as-is” performance of the process. ( Cp , Cpk etc )

57. Define Performance Standards: Numbers & Units At this stage customer needs are translated into clearly defined measurable traits . OPERATIONAL DEFINITION : This is a precise description that removes any ambiguity about a process and provides a clear way to measure that process. An operational definition is a key step towards getting a value for the CTQ that is being measured .

58. Develop operational definitions . Mission Statement Definition Required for Definition required for Additional definition required for Reduce the number of late parts shipment late More than two days after order received When is the order consider received It is important to ensure that all team members agree on the definitions of key terms.

59. Define Performance Standards: Numbers & Units TARGET PERFORMANCE : Where a process or product characteristic is “aimed” If there were no variation in the product / process then this is the value that would always occur. SPECIFICATION LIMIT : The amount of variation that the customer is willing to tolerate in a process or product. This is usually shown by the “upper” and “lower” boundary which, if exceeded, will cause the customer to reject the process or product .

60. Analyze Symptoms A symptom is the outward, observable evidence of a problem. It is an output (Y) Examples : A Customer returns a defective product. A hotel guest waits a long time to check in. A customer must wait weeks for a replacement part. A customer closes an account because of dissatisfaction with the service. Clients are not seen until long after their scheduled appointment times.

61. Analyze symptoms Examples Some electronic components from a supplier are defective when tested. Billing errors are common. To analyze symptoms, a project team must: Develop operational definitions. Measure the symptoms. Define boundaries. Concentrate on the vital few .

62. Measure symptoms Data Helps Us ……. Separate what we think is happening from what is really happening . Confirm or disprove preconceived ideas and theories. Establish a baseline of performance. See the history of the problem over time. Measure the impact of changes on a process. Identify and understand relationships that might help explain variation. Control a process (monitor process performance) Avoid “solutions” that don’t solve the real problem.

63. Measure the Symptoms All business problems have symptoms that can be objectively measured. If you need to develop a measure, asking these questions may be helpful. How do customers evaluate the symptoms? Where is each symptom observed? What documentation exists? What method should be used to obtain the measure ? What is the appropriate unit of measure? Time: years, months, weeks, days,….. Cost of Poor Quality: Dollars Defects: Number of defects, or percentage.

64. A Good Data Collection Plan : a. Provides clearly documented strategy for collecting reliable data ; b. Gives all team members a common reference ; c. Helps to ensure that resources are used effectively to collect only critical data. The cost of obtaining new data should be weighed vs. its benefit. There may be viable historical data available.

65. A Good Data Collection Plan: We refer to “actual process variation” and measure “actual output”: a . what is the measurement process used? b. describe that procedure c . what is the precision of the system? d . how was precision determined e . what does the gage supplier state about: f . Do we have results of either a: * Accuracy * Precision * Resolution * Test-Retest Study ? * Gage R&R Study?

66. Flow diagram Shows where a process begins and ends, and also plots the major steps . With a flow diagram, we can: Walk through a process without leaving the room. Better understanding of the process. Define the scope. Reflects the process as it actually operates. Identify waste in the process: value added versus non value added steps

67. Flowchart: Six Sigma Uses

68. Symbols used in flow diagramming Activity Data-base connector Decision Document Start/Finish Direction

69. High level flow diagram

70. Detailed flow diagram

71. Deployment flow diagram

72. Which Flowcharting Technique Should You Use? High level flow chart Detailed flow chart Matrix flow chart To identify the major steps of the process and where it begins and ends. To display the complexity and decision points of a process. To help highlight handoff areas in processes between people or functions. To illustrate where in the process you will collect data To identify rework loops and bottlenecks To clarify roles and indicate dependencies

73. C reating flowchart perspective Flowcharts can map three different perspectives on a process: What you think the process is. What the process really is. What the process should be.

74. Steps to create a process flowchart : Discuss how you intend to use the flow diagram Decide on the desired outcome of the session High l evel or detailed Always construct a high level flow diagram before constructing a detailed one Define the boundaries of the process Document each step in sequence (flow should be from left to right or from top to bottom) . When you encounter a decision or branch, choose one branch and continue flow diagramming

75. Steps to create a process flowchart: 7. If you encounter a segment in the process that is unfamiliar to everyone in the room, make a note and continue flow diagramming 8. Go back and flow other branches from the decision symbols 9. Review the completed chart to see if you missed anything 10. Discuss on how the team will fill in the unfamiliar steps of the process and verify the accuracy of the flow diagram 11. When you are sure that the flow diagram is accurate and complete you can analyze it.

76. Analyzing a detailed flow diagram Examine each decision symbol. Is this a checking activity? Is this a complete check, or do some types of errors go undetected? Is this a redundant check ? 2. Examine each rework loop. Would we need to perform these activities if we had no failures? How “long” is this rework loop (steps, time lost, resources consumed, etc.) Does this rework loop prevent the problem from reoccurring ?

77. Analyzing a detailed flow diagram Examine each activity symbol. Is this a redundant activity? What is the value of this activity relative to its cost? How have we prevented errors in this activity ? 4. Examine each document or data base symbol: Is this necessary? How is this kept up to date? How can we use this information to monitor and improve the?

78. Potential pitfalls and problems in Interpretation Failure to document the actual process is an important pitfall that is caused by : The designers of the original process are drawing the flow diagram to process they designed “should be” not “as is .” Managers on the team are reluctant to draw parts of the actual process that are obviously illogical, for fear that they will be called to explain why they allowed it to be that way . Rework is assumed to be little and inevitable, so rework loops are either not seen or not documented by the team. Team members truly do not know how the process operates (in many cases, only the workers know )

79. Opportunity Flowchart

80. Value-Added & Non Value-Added Steps Value –Added Step: Customer are willing to pay for it. It Physically changes the product. It’s done right the first time . Non-value –Added Step: Is not essential to produce output. Does not add value to the output. includes: Defects, errors, omissions. Preparation/Setup, control/ inspection. Over-production & inventory. Transporting, motion, waiting, delays.