RAM, LLC Six Sigma Intro Awareness Training

AWARENESS TRAINING - PHASE ONE

RAM

SIX SIGMAIntroduction & Concepts

Presented by:RAM Consulting Group, LLCRisk, Resiliency & Business Continuation PlanningVirginia, Maryland, District of [email protected]

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Module Objectives:12/11/2009

Presentation by: RAM Consulting Group, LLC

• Introduction to Key Terminology• Review of the Six Sigma DMAIC methodology• Review Six Sigma Data Driven Formula• Real life examples of why Six Sigma matters

“A poorly designed project plan is like a bent nail, impossible to drive straight!”

RAM

10 Six Sigma Myths12/11/2009

Six Sigma is simply about eliminating defects or errors Throw enough bodies at it and it will be successful If you call it Six Sigma, then it must be Six Sigma! If you don’t call it Six Sigma, then it’s not Six Sigma! Six Sigma slows down everything! Six Sigma works only in manufacturing settings Six Sigma doesn’t include customer requirements Six Sigma is simply TQM repackaged Six Sigma uses difficult-to-understand statistics Six Sigma is an accounting game without real savings On, and on, and on, and on…


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What is Six Sigma?12/11/2009

• Six Sigma is a multi-faceted philosophy that is Process-Focused and Data-Driven• Requires a prerequisite understanding of customer

needs; disciplined use of facts, data and statistical analysis• Diligent attention to managing, improving and

reinventing business processes


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What is Six Sigma (cont’d)?12/11/2009

• A philosophy focused on reducing variation to meet customer requirements (variation is the enemy!)

• Employs the *DMAIC methodology for using data to solve problems• A measure of performance quality equal to 3.4

defectives per 1 million units (also applicable to process defectives)

*DMAIC is an acronym for the methodology used to guide all Six Sigma projects


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What is Six Sigma (cont’d)?12/11/2009

• DMAIC is the basic component of the Six Sigma methodology

• The five (5) phases of the DMAIC methodology are:

1. Define2. Measure3. Analyze4. Improve5. Control

• DMAIC provides a structured approach to improve work processes by eliminating defect and/or error opportunities!


ProjectSuccess

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DMAIC Phases Defined12/11/2009


Phases Improvement DFSS Lean

Define1. Define and gain

approval for the project charter

1. Define and gainapproval for the project charter

2. Identify Voice of Customer (VOC)

3. Develop Critical to Quality (CTQ) measures

1. Define and gain approval for the project charter

Measure

1. Gather information on the current process

2. Identify the potential vital few inputs (x’s) affecting the project (Y)

1. Deploy the CTQs to design functions

2. Identify potential concepts and select the potential design

1. Assess how efficiently the product flows to meet the customer’s demand for value

Three Types of Six Sigma Projects

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Phase Improvement DFSS Lean

Analyze

1. Confirm the impact of the potential vital few inputs (x’s) identified in the Measure phase

1. Create the high and detailed levels for the design

2. Predict the capability of the design

1. Complete detailed analyses of select opportunities to design the future state

Improve

1. Complete detailed analyses of select opportunities to design the future state

1. Build, test and then pilot the design

1. Finalize and pilot Solutions

2. Analyze results and plan for deployment


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Phase Improvement DFSS Lean

Control

Deploy theselected solutionand verify that theproject goals solutions have been achieved

Deploy theselected solutionand verify that the project goalssolutions havebeen achieved

Deploy theselected solutionand verify thatthe project goalsolutions havebeen achieved


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Six Sigma Factoids12/11/2009

• All processes have variation - variation produces negative outcomes• Variation is the enemy!• To change or improve the end results of a process

(the “Y”), you have to identify the critical or vital few inputs (x’s) for that process to have an impact on the “Y”


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Six Sigma Data Driven Formula12/11/2009


Y = f(x) is a simple mathematical equation that relates inputs to the output ofa process. A set of inputs (x’s) are operated on by a process or function (f) thatresults in (=) an output or outcome (Y). Stated differently, the Y results from, or isa function of the x’s.

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Six Sigma Data Driven Formula12/11/2009


Y = f(x) is a simple mathematical equation that relates inputs to the output of a process. A set of inputs (x’s) are operated on by a process or function (f) thatresults in (=) an output or outcome (Y). Stated differently, the Y results from, or isa function of the x’s.

Y = f(x)

Where … Represents…

Y The output or outcome; also called the dependent variable

= The result of …

f The function (that is, the way or process) by which inputs are transformed into the output

(x)The inputs that are needed to create the output; also called the independent variable(s)

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Why Six Sigma Matters12/11/2009


99% is very Good, but…3.8 Sigma = 10,724 defectives per million units

99.99966% is Better, because…6 Sigma = 3.4 defectives permillion units

This would result in: This would result in:

• 5,000 surgical errors per week • 1.7 surgical errors per week

• 200,000 incorrect prescriptions per year

• 68 incorrect prescriptions per year

• 20,000 lost items of mail per hour

• 7 lost items of mail per hour

• 1.3 million defective papertransactions per day

• 200 defective paper transactions per day

• 10.9 million credit card transactions processed incorrectly per year

• 3,700 credit card transactions processed incorrectly per year

Examples

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LE 2Module 2 Objectives:

12/11/2009


• Explain DMAIC Process Phases• Introduction to Critical To Quality (CTQ) Concepts• The 5 Why Concept

“Well throughout and designed processes compliment each other!”

RAM

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LE 2DMAIC Process Phase 1 - Define

12/11/2009


Each step in the cyclical DMAIC Process is required and should be followed in succession to ensure the best possible results

Define•Define the customers, stakeholders and project team•Define customer Critical to Quality (CTQ) issues•Identify any existing appropriate core business processes•Define the requirements for the products or service•Define customer / stakeholder expectations•Define project boundaries - the scope, start/stop constraints•Define the process to be improved or created by mapping the current state process / flow (existing workflows only)

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LE 2DMAIC Process Phase 2 - Measure

12/11/2009



MeasureMeasure the performance of the Core Business Process involved.•Develop a data collection plan from the many sources, then use it to determine the types of defects and metrics.•Compare to customer survey results to determine shortfall or deltas

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LE 2DMAIC Process Phase 3 - Analyze

12/11/2009



AnalyzeAnalyze the data collected and process map developed during the measure phase to determine root causes of defects / errors and opportunities for improvement.•Identify gaps between current performance and goal performance •Identify sources of variation •Prioritize opportunities to improve

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LE 2DMAIC Process Phase 4 - Improve

12/11/2009



ImproveImprove the target process by designing creative solutions to fix and prevent problems. •Create innovative solutions using technology, structured repeatable approaches and disciplined tracking activities•Develop and deploy complimentary implementation plan(s)

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LE 2DMAIC Process Phase 5 - Control

12/11/2009



ControlControl the improvements to keep the process on the new course.•Prevent reverting back to the "old way" •Require the development, documentation and implementation of an ongoing monitoring plan •Institutionalize the improvements through the modification of systems and structures (staffing, training, incentives)

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LE 2Term Definitions – CTQ/CTC

12/11/2009


Term Definition Critical To Quality - CTQ

• CTQs are the internal critical quality parameters that relate to the wants and needs of the customer

• CTQs are what's important to the quality of the process or service to ensure the things that are important to the customer

• Term Definition Critical To Customer - CTC

• CTCs are what is important to the customer• They are not the same as CTQs - the two are often confused

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LE 2Term Definitions – CTQ/CTC

12/11/2009


Term Definition Critical To Quality - CTQ

• CTQs are the internal critical quality parameters that relate to the wants and needs of the customer

• CTQs are what's important to the quality of the process or service to ensure the things that are important to the customer

• Term Definition Critical To Customer - CTC

• CTCs are what is important to the customer• CTCs are not the same as CTQs - the two are often confused

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LE 2Term Definitions – CTQ Steps

12/11/2009


Start With The Customer•Before you can define your process defects, units and opportunities, you must understand the needs of your customers.

Gather Data•Voice of the Customer (Customer Needs, eSurveys, Focus Groups, Questionnaires, etc.) is the process of gathering customer comments/quotes and translating them into issues and specifications.

Compile Data Findings•The output from the comments, issues and specifications translates into the customer CTQ’s.•Typically, a product or service characteristic must be met to satisfy a customer specification or requirement.

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LE 2CTC Sample Scenario

12/11/2009


Critical To Customer – CTC Example:

For instance, that solid car door sound when closing it might be a CTC issue, while the dimensional tolerances and cushioning techniques needed to produce that satisfying sound are CTQs issues/requirements for the auto maker.

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LE 2CTQ Sample Scenario

12/11/2009


Process Area: Call Center• Customer Quote (CTC): “I consistently wait too long to speak to a representative.”• CTQ Name: Representative Responsiveness• CTQ Measure: Time on hold (seconds)• CTQ Specification: Less than 60 seconds from call connection to the automated

response system• Defect: Calls with hold time equal and greater than 60 seconds• Unit: Call• Opportunity: 1 per call

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LE 2The 5 why's Technique

12/11/2009


• The 5 whys technique refers to the practice of asking, five times, why the failure /error has occurred in order to get to the root cause or causes of the problem.

• There can be more than one cause to a problem.

• In an organizational context, root cause analysis is generally carried out by a team of persons related to the problem.

• No special technique, tools or training is required to effectively use the 5 whys technique.

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LE 2The 5 whys Technique

12/11/2009


Scenario:

You are on your way home from work and your car stops:

1.Why did your car stop? Because it ran out of gas.

2.Why did it run out of gas? Because I didn't buy any gas on the way to work.

3.Why didn't you buy any gas this morning? Because I didn't have any money.

4.Why didn't you have any money? Because I lost it all last night in a poker game.

5.Got to the root cause of the problem in only 4 whys!

TO BE CONTINUED…

RAM

SIX SIGMAIntroduction & Concepts

Presented by:RAM Consulting Group, LLCRisk, Resiliency & Business Continuation PlanningVirginia, Maryland, District of [email protected]

RAM, LLC Six Sigma Intro Awareness Training

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