Six Sigma Assessment Tools

There are a number of Six Sigma tools for assessing the quality of a product or service. Among those that are most widely used in Six Sigma are:

First is the Pareto Chart. Pareto charts are often used to determine the “vital few” causes that are responsible for the majority of defects or complaints regarding a product or service. Named after 19th century economist Vilfredo Pareto, the chart was first defined by JM Juran in 1950. The principle behind the vertical bar graph suggests that most effects come from relatively few causes; that is, 80% of the effects come from 20% of the possible causes.

Second is the Quality Function Deployment Matrix. It is used to help associate customer demands with design requirements.

Third is the Cost of Quality Trend Analysis. It examines changes in the cost of quality over time.

Fourth is the Cause-and-Effect Diagram that is used to help understand the factors that affect the quality of a process.

Fifth is the Process Map. It is used to chart the flow or interrelationships in a process.

And the last one is the Six Sigma Calculator that converts between DPM, Cpk, Z, SQL, and other quality metrics.

Achieving Six Sigma in your processes is like in building a house, where you need the right tools to make a sturdy structure.

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DMAIC on Accounting Processes

The Six Sigma project here was deployed three years ago. Yet the lessons to be learned from it still apply to this day.

The aim was to reduce the cycle time of submitting error-free monthly reports by the accounting department. Top management puts a Six Sigma team to do the task. Part of the task would be to identify the need for the project, the costs and benefits, the resources required, and the time frame. The team gathered that management wanted a monthly accounting report to be completed in seven days and that the report should never be completed in less than four days and never later than 10 days. Team members identified the project charter as
follows:

Reduce (direction) the variability in the cycle time (measure) to produce an error-free accounting report (process) from the current level of seven days plus or minus three days to seven days plus or minus a half-day (target) by January 10, 2002 (deadline).

To be able to do this successfully, the team knew that they needed to apply the DMAIC model.

At the Define Phase, the team prepared a business charter, found out the relationships between suppliers-inputs-process-outputs-customers (SIPOC), and gathered and analyzed ?Voice of the Customer? data to identify the Critical to Quality (CTQ) characteristics important to customers.

At the Measure Phase, the team developed operational definitions for each CTQ variable, performed studies to establish the veracity of the measurement procedure, and then established baseline capabilities. This is how the team did it.

First, the members of the Six Sigma team defined ?variability in cycle time? such that all relevant personnel agreed upon the definition. Second, they performed a study to determine the veracity of the measurement process. Finally, the team members collected baseline data about variability in cycle time, and statistically analyzed it.

At the Analysis Phase, the team then identified upstream variables (X) for each CTQ; operationally defined, collected baseline data, performed studies to determine the veracity of the measurement process, and established baseline capabilities for each X; and went on to understand the effect of each X on the CTQ. Team members identified all input and process variables that affected variability in cycle time, known as X. This activity, referred to as process mapping, included flowcharting.

The Improvement Phase involved designing experiments to understand the relationship between the CTQs and the Xs, determining the optimal levels of critical Xs that minimize variability in the CTQs, developing action plans to implement the optimal level of the Xs, and conducting a pilot test of the revised process.

And at the Control Phase, the team avoided potential problems with the Xs in risk management and mistake-proofing, standardized successful process revisions, put control to the critical Xs, documented each control plan, and turned the revised process over to the process owner.

The process owner in turn needed continue to work toward improvement, that being the distribution of days to produce the report. This translated to a report being early or late about once every 24,500 years.

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VOC
CTQ
DMAIC

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Six Sigma Fifth Step: the Control Phase

At the Control Phase, you begin to control the new system by implementing the ongoing improvement measures. The aim is to keep the problem from recurring. To be able to do that, your organization must learn to institutionalize the improved system through the modified policies, procedures, operating instructions, and other management systems. You need to specify process control method; establish on-going controls for the process based on prevention of special cause variation using statistical process control techniques; document the improvement processes; and record all the processes/steps in improvement phase using the decision tree
and reaction plan.

Below are the key concepts for the Control Phase.

CONTROL - Key Steps:
- Standardise Process(es)
- Document Procedures
- Develop and Deploy Process Control Systems
- Project Evaluation
- Control Tollgate

CONTROL - Key Deliverables:
- Standardised, Documented Process
- Implemented an Ongoing Process Monitoring Plan
- Developed & Deployed a Response Plan
- Identified Opportunities to Replicate Changes and Share Best Practice

CONTROL - Core Tools:
- Balanced Score Card
- Flow Charts (Process Maps)
- Sampling
- Standardisation
- Control Charts
- Performance Management
- Data Collection
- Plan Response
- Plan Stratification
- Documentation

DMAIC
Six Sigma DMAIC Quick Reference

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The Six Sigma Fourth Step: the Improve Phase

The Improve phase involves finding optimum values of response variables and major impact factors. It begins the process of actually composing the improvement project teams and providing Six Sigma and project-related training to the team members.

If at the Analyze Phase you define the Xs and the Ys, at the Improve phase, you now design experiments to understand the relationship between the Ys and the vital few Xs and major noise variables. This phase aims to generate actions for the implementation of the levels of the vital few Xs that optimize the shape, spread, and center of the distributions of the Ys; developing action plans; and conducting pilot tests of the action plans. This is based on Six Sigma for Green Belts and Champions: Foundations, DMAIC, Tools, Cases, and Certification

The Improve Phase has the following key concepts:

IMPROVE - Key Steps:
- Generate Solutions
- Select Solutions
- Implementation Planning
- Prepare Change Management Strategy
- Improve Tollgate

IMPROVE - Key Deliverables:
- Solution Design Developed and Documented
- Solution Validated on a Small Scale or Pilot
- Approved Cost Benefit Proposal for Validated Solution
- Implementation Plan Develop and Executed

IMPROVE- Core Tools:
- Brainstorming
- Failure Mode & Effect Analysis
- Project Management
- Change Management
- Pareto Charts
- Sampling
- Segmentation
- Cost Benefit Analysis
- Prioritisation Techniques
- Design of Experiments
- Process Capability
- Stakeholder Analysis
- Frequency Plots
- Flow Charts (Process Maps)
- Process Sigma Stratification

DMAIC
Six Sigma Quick Reference Guide

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DOE

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Six Sigma Third Step: the Analyze Phase

At the Analyze Phase, you study existing information to determine the relationship between the output and the potential input identified during the Measure Phase. In an interesting article, the Analyze Phase has five steps.

1. Develop a more detailed process map (that is, more detailed than the process map developed in the SIPOC analysis of the Define phase).
2. Construct operational definitions for each input or process variable (called Xs).
3. Perform a Gage R&R study on each X (test the adequacy of the measurement system).
4. Develop a baseline for each X.
5. Develop hypotheses between the Xs and Ys.

In other words, at this Phase you start gathering all your data ang getting down to improving your processes. The Ys are the output measures used to determine whether the CTQs are met. Team members prepare a detailed process map identifying and linking the Xs and Ys.

Below are the key concepts of the Six Sigma Analyze Phase.

ANALYSE - Key Steps:
- Identify Possible Causes
- Narrow to Root Causes
- Validate Root Causes
- Financially Quantify the Improvement Opportunity
- Analyse Tollgate

ANALYSE
- Key Deliverables:
- Identified and Validated Root Causes of Variation in the Process
- Estimate of Potential Financial Benefits

ANALYSE
- Core Tools:
- Affinity Diagram
- Hypothesis Tests
- Scatter Plots
- Brainstorming
- Non Parametric Comparisons
- Segmentation
- Cause & Effect Diagram
- Pareto Charts
- Stratification
- Control Charts
- Regression Analysis
- Sub-Process Maps
- Design of Experiments
- Sampling
- Frequency Plots
- Time Series Plots

DMAIC
Analyze Phase Quick Reference

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Six Sigma Second Step: the Measure Phase

At the Measure Phase, you will now measure capability of current process performance, comparing with the benchmark–critical customer requirements. This is the time to understand the process and start taking steps to solve the problem that is identified at the Define Phase.

In this Phase, too, you need to refin your Six Simga project. Look at this example.

Statement: It takes in average 3.2 days to answer customer request.
Findings: 10% of the requests are processed within a day
20% of the requests are incomplete
70% of the requests are improperly routed through the system
Defect Definition: Every time a request is improperly routed in the system.

In other words, you have now identified the problem, it is now time for you to develop the metrics or measures to further understand the problem or opportunity. One important consideration here is to measure the satisfaction level of your customer.

Below are the key concepts of the Six Sigma Measure Phase.

MEASURE - Key Steps:
- Select and Agree on a Project Measure (’Y')
- Develop a Data Collection Plan
- Describe and Display Baseline
- Variation Calculate Process Sigma
- Measure Tollgate

MEASURE - Key Deliverables:
- Identified Project Output Measure (’Y')
- Data Collection Plan Developed and Implemented
- Baseline Variation for Project ‘Y’
- Data Graphically Displayed
- Calculated Process Sigma

MEASURE - Core Tools:
- Control Charts
- Gage R&R
- Process Sigma
- Data Collection Forms
- Kano Analysis Sampling
- Data Collection Plan
- Measurement Systems Analysis
- Segmentation
- Flow Charts (Process Maps)
- Pareto Charts
- Stratification
- Frequency Plots
- Prioritisation Techniques
- Time Series Plots
- Failure Mode Effect Analysis
- Process Capability

DMAIC
Measure Phase Quick Reference
Measure Phase Quick Reference
Conference on Measure Phase: Improve Business Results through Customer Satisfaction

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metrics
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Six Sigma’s First Step: The Design Phase

We often hear in quality circles the phrase, “do it right the first time.” In Sig Sigma deployments using the DMAIC, the first step—Define—should then be the most crucial. This is where problems are identified and overcome in a process of continual improvement. However, we too often do not give importance to the design phase itself. In the language of Six Sigma, this phase uses the define-characterize-optimize-verify (DCOV) model as its process. Most will agree that the verify stage of DCOV presents the most stumbling blocks.

At this stage, we need to undergo design reviews. Essentially, design reviews are used to:

*Provide a guideline for peer-oriented assessment and coaching
*Provide a method to assess design status and implement corporate timing guidelines of quality and reliability methods
*Serve as a requirement for assessing and scoring product development. A design review is integral to any of the three component requirements of a quality system for product engineering.

Furthermore, the design review can be applied to:

*Product design organizations or activities (e.g., department, section or program module teams).
*The PMT approach is particularly relevant if the organization is dealing with specific products.
*An organization’s internal and external engineering activities.

Also, design reviews should have the following characteristics:

1. Focuses on engineering for quality and reliability?not on program status.
2. Conducts peer review by another assigned PMT?not by senior management.
3. Distributes working documents to a coaching PMT in advance of the review?not “walking in cold and shooting from the hip.”
4. Has an honest discussion and learning from each other, helping both PMTs to improve.

It is believed that without understanding and internalizing these four fundamentals, our design review will just be another show in an endless parade of quality tools. Read more

Below is an overview of the key concepts of the Define phase.

DEFINE - Key Steps:
- Charter a Team Conduct Stakeholder Analysis
- Determine Customer Critical to Quality
- Requirements (CTQ’s)
- Map Processes (SIPOC)
- Define Tollgate

DEFINE - Key Deliverables:
- Project Charter (With Clear Link to Business Strategy)
- Validated Customer CTQ’s
- Stakeholder Management Plan
- High Level Process Map (SIPOC)

DEFINE - Core Tools:
- Affinity Diagram
- Flow Charts (Process Maps)
- SIPOC
- Business Case,
- Project Charter
- Stakeholder Analysis
- CTQ Tree
- Rolled Throughput Yield
- Voice of the Customer (VOC)

DMAIC

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Six Sigma Through Alan Harrison’s Eyes

Alan Harrison is Head of Kaizen & Continuous Improvement at Weir Pumps Ltd., a leading organization in the design, manufacture, and service of engineered pumps and fluid handling systems. He had a Black Belt training in ABB Power Transformers and then later trained and certified by Dr. Mikel Harry, the original developer of Six Sigma in the U.S.

Harrison has always believed in achieving more with less and have always challenged the way he and others approach issues; questioned systems and assumptions. He claims himself to be a pragmatic thinker. To him Lean and Six Sigma are a way of thinking and a way of going about the business. Using facts and statistics to describe and better understand real-world processes, these processes can help an organization make right improvements in a right way.

He is among those who see the benefit of combining both Lean (usually linked with the Toyota Production system) and Six Sigma methodologies. Harrison believes that both share the same core values as well as most of the improvement tools. Although Lean is driven more by production strategy, a 1-piece, pull system, flow, and Six Sigma by statistics; the two complement each other very well.

“I believe that Six Sigma, Lean, Business Process Re-engineering, Kaizen projects etc are all happening at the task level: when someone needs to do something by a specified time. The goal of any improvement approach is to define, in an effective and efficient way, what needs to be done, by whom, how, why and by when,” Harrison said.

If you are an organization therefore seeking for process improvements, you find out what your organization and customers ?crave for.? In short, listen to both your internal and external Voice of the Customer (VOC) techniques. Harrison suggested the following steps to determine which initiative(s) to take:

1. Learn about your customers? wants and values
2. Align your business purpose with those wants and values
3. Understand where you are, and where you want to be, both in absolute terms and relative to other organisations
4. Educate and align everyone within the organisation to understand where the company wants to be and key elements of that journey.
5. Translate these into practical objectives, prioritise the gaps and attack them
6. Support the right people to use the right tools at the right time to keep closing those gaps.
7. Embed 5Why?s and ?Gemba? into everyone?s behaviour. I believe that those two are like communication; you can never have enough.
8. Where are you finding the biggest potential for savings?

Six Sigma Interview with Alan Harrison, Weir Pumps Ltd

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BoA Turns to Six Sigma

Bank of America boss Ken Lewis, the man who helped build Bank of America (BoA) into the largest consumer bank in the U.S. through a series of shootouts.

“We never had a lot of conflict inside the bank, because we always focused our aggression outward,” says Hugh McColl, the architect of BoA’s expansion. “To do that, I always kept an enemies list. Ken keeps the enemies list alive.”

On top of their list these days is Citigroup, or expand as big as Citigroup, if not bigger. Lewis aims at achieving Citigroup’s dominance in investment banking, and the ultimate goal is to become known as the world’s leading bank. For Lewis, who has built a first in banking–the first coast-to-coast-franchise, this is not an impossible dream. He has done it for BoA.

BoA has 5,880 branches—half as many as McDonald’s and almost seven times as many as Citigroup. The beauty of the franchise is that it is strongest in America’s fastest-growing markets, specifically California, Florida, and the rest of the south east. Those areas are also rich in banking’s most dynamic demographic: Hispanics. BoA holds $635bn (?349bn, E521bn) in deposits, one-fifth more than the number two, J P Morgan Chase; in its footprint, it has one-seventh of the total.

?In consumer banking Bank of America is the franchise to beat,? says Charles Rauch, an analyst with S&P.

BoA derives 95% of its revenues from the US and does two-thirds of its business with consumers and small companies. It harvests revenues through millions of tiny transactions each day, from garnering fees on credit cards and mortgages to making car and home equity loans. The recent deal to purchase credit card giant MBNA for $35bn sets BoA further apart. When the deal closes, it will be the country?s biggest credit card provider. The new mission: Grow fast anyway.

Lewis wants to build the most efficient bank in the US. And to do that he is turning into Six Sigma. He has already commissioned 100 Six Sigma?trained General Electric people. In BoA?s case, Six Sigma will be able to improve processes from collecting bad loans to writing mortgages. The payoff is more production and fewer errors?all tracked by sophisticated statistical measures.

Lewis deployed Six Sigma to derive a metric that BoA had never before considered: the number of products each banker sells each day. He found that 20% of the employees in a branch were selling 80% of the mortgages, loans and credit cards, and that many employees sold almost nothing. Now he imposes minimum daily sales quotas?typically, around a half-dozen products a day?for every banker. There?s a carrot to match the stick: New incentives mean star producers can earn half their base pay in bonuses.

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Lean and Six Sigma in the European Defence Industry

My previous post, Six Sigma Spreading Like Wildfire is indeed true. Six Sigma is now combined with Lean Sigma and used in the defence industry, especially in today’s European defence industry and military forces when improving structure and product quality has become the main focus.

Organizations in the industry are convinced to maintain their competitive advantage if they implement and effectively execute quality strategies such as Lean and Six Sigma methodologies.

Because of this demand for integrating Lean and Six Sigma tactics, and achieving a seamless collaboration of the military forces and the European defence industry, marcus evans defence, one of the world’s leading business information companies providing global business intelligence and information for strategic and effective decision-making, has introduced the Lean and Six Sigma for Defence Conference. The conference will take place on November 2-4, 2005 in Brussels, Belgium. The event will include case studies, relevant accounts, instructive examples and supportive workshops concerning the Lean and Six Sigma practice. At this event key tools and expertise knowledge will be specified, allowing military and industry personnel the ability to effectively execute Lean and Six Sigma quality projects.

Keynoting the event will be General John G. Coburn (Ret.), Former Commanding General, US Army Materiel Command and currently, CEO and Chairman of Vision Technologies Systems - USA.

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