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Six sigma define - v1.0


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Six Sigma Define phase

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Six sigma define - v1.0

  1. 1. Six Sigma
  2. 2. Introduction to Six Sigma Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services Six Sigma is statistical measure which indicates standard deviations within customer expectations Six Sigma promotes greater awareness of customer needs, performance measurement and finally business improvements
  3. 3. Six Sigma Methodologies D - Define M - Measure A - Analyze I - Improve C - Control D - Define M - Measure A - Analyze D - Design V -Verify
  4. 4. DEFINE MEASURE ANALYZE IMPROVE CONTROL Project CTQ Business Case Process Mapping Change Management No. Description Deliverables Tools 1 Project CTQ - Project Y Identity an opportunityVOC (Voice of Customer) Identity an customer Define CTQ 2 Outline Business Case Develop team charter Project Milestones 3 Process Mapping Define Project boundaries SIPOC
  5. 5. STEP 1 – Define Project CTQ  The 3 distinct deliverables are ◦ Defining and Opportunity  The Opportunity has clear boundaries and measurable goals  The opportunity is aligned with business-critical issue or initiative  The customer should feel the improvement  Opportunity is divided in two segments  Internal improvement opportunity  External improvement opportunity ◦ Identifying the Customer  The Customer is the recipient of output from process, product or service  Customer are of 2 types  Internal Customer - They receive the output from a business process like operation team or the service team.  External Customer – They are external to the company like the customer who pays bills, loan borrower etc.
  6. 6. STEP 1 – Define Project CTQ…Contd  Define CTQ(Critical to Quality) Parameters ◦ A CTQ is a product, process or service characteristic that satisfies a key customer requirement and /or process requirement. ◦ It is measurable like speed, accuracy, timeliness and cost ◦ Some examples of CTQ are opening an account, cost of having multiple accounts at the bank or wait time to receive the debit card, or patient wait time etc. ◦ The project CTQ has to be translated directly fromVoice of customer (VOC) and should be unbaised ◦ The mathematical equation Y = F(x)  Y = Customer CTQ or something that we need to improve  F(x) = An internal process that directly affects the customer CTQ
  7. 7. Determine the CTQ’s Identify All Potential Customers CollectVoice of the customer Identify Customer CTQ’s List all potential customers with appropriate segmentation Decide what to collect and select VOC tools • Organize all customer data and translate to a specific need • Identify and prioritize CTQ’s for each need.
  8. 8.  Identify All Potential Customer ◦ Define scope of project clearly defines the boundaries of process and recipients of output ◦ Segmenting customers (based on profitability, risk, region and complexity) helps to prioritize their needs and expectations  For eg. Improving the turnaround time in radiology department, the patients, doctors and regulators should be treated equally by considering what to improve  VOC of each person should carry the same weight  The project goals and risks should help prioritize what customers to focus during the problem and solution identification stages Milestone 1 : Determine the CTQ’s…contd
  9. 9.  The four tools ofVOC collection ◦ Surveys ◦ Focus groups ◦ Interviews ◦ Customer Complaints  If the above information is not available make you manage customer expectation appropriately ◦ Select customers carefully ◦ Explain your reason for gathering the information ◦ Clarify your ability to act on the information gathered ◦ Communicate your next steps to the customers  VOC also helps ◦ Decide what products and services to offer or eliminate ◦ Identify critical features for new or existing products and services ◦ Make process management a proactive system ◦ Decide where to focus your improvement efforts ◦ Get baseline measure of customer satisfaction through which to measure improvement. Milestone 2 : CollectVoice of the Customer
  10. 10.  Six Sigma tool used to organize and prioritize customer CTQ’s is called customer needs mapping Milestone 3: Identify the Customer CTQ’s Voice of the Customer Service/Quality issue Customer needs Output Characteristics What did the customer tell ? This should be the exact statement that the customer made What is wrong in the eyes of the customer based on what the customer told is and / or the data collected The team should agree on exactly what is the root cause of the customer unhappiness If that is what is wrong, what does the customer need? -Identify the need, not a solution -Provide clarification -Use measurable terms -Validate the need with the customer A concise Statement of the customer need as it applies to your product, process or service -Use measurable terms -Validate the output characteristics with project champion
  11. 11. Customer needs mapping example Voice of the Customer Service/Quality issue Customer needs Output Characteristics I am confused about how to sign up for online banking Access to online banking unclear Customer shows unhappiness Simplified online sign-up process Minimize number of steps required to sign up with proper instruction in each step
  12. 12.  Identified and selected a central area of improvement  Your customers  Project CTQ’s Summary of STEP 1 – Define the Project CTQ
  13. 13. STEP 2 – Outline the Business case  The Five robust components are ◦ Business case  An explanation of why project should be pursued ◦ Problem and goal statements  A description of the problem or opportunity  The project’s objectives should be clear, concise and presented in measurable terms ◦ Project scope  Boundaries of the project/product/service that need improvement  Inscope and outscope well defined ◦ Team roles  The resources, expectations and responsibilities are clearly laid out ◦ Financial benefits  The expected financial benefits are calculated based on expected improvements
  14. 14. ◦ Problem statements  The problem statement is an objective(quatifiable) description of the pain experienced by the internal/external customers as a result of poorly performing process or service Poor Problem statement “Our bank customers are angry with us, and they closed their accounts and moved to other banks “ Improved version of the problem statement “ In the third quarter(when), 20% of the customer closed the account and moved to other bank(what).The current attrition is up from 6% to 12%(magnitute).This has impacted the operating cash flow. ◦ Goal statements  The goal statement should define the team’s targeted improvements.  Since the root cause of the problem is not clear, typically the goal statement is ver high level and broad  Goal statement will be more clear after the analyze phase Problem and goal statements – Clear and measurable
  15. 15. ◦ The Project scope defines the boundaries of the project ie. Start and end points of the process or service that needs improvement ◦ A well defined scope helps reduce the probability of scope creep Project Scope
  16. 16. ◦ Six Sigma project have five types of roles involved in it  Project Champion  Project Leader (Green belt or Black belt)  Key stake holders  Core cross-functional team  Supplementary team ◦ Having team assigned to six sigma project  Helps reduce the project execution timeline  There will be more resources available to complete tasks  The probability of rework or errors will be reduced  Ensures buy-in from various functional areas Team Roles
  17. 17. ◦ Some six sigma project do not provide significant financial benefits like compliance etc. ◦ Some project do have financial benefits and calculating the approximate value helps prioritize improvement opportunities and creates motivation for the team. Financial Benefits
  18. 18.  A clear defined problem and goal statement  Clearly understood defect and opportunity definitions  A need for improvement related to customer requirements  Alignment of the project with business strategy  A manageable project scope  Identifiable and measurable impact  Adequate resources assigned to the project  As data driven project Summary of STEP 2 – Outline the Business case
  19. 19. STEP 3 – A High level Process Map  The main benefits of high level process map  Outlines the overall flow of information and material, starting with supplier and ending with customer  Provides a graphical of steps, events and operations and relationships of resources  Helps everyone involved in the project understand how the distinct parts of the company combine to provide a service or product  Tools used are  SIPOC – Stands for Supplier, Input, Process, Output and Customer  Benefits of using the SIPOC tool  Provides macro overview of the process and interrelation within business  Defines the process boundaries S I P O C Supplier Input Process Output Customer
  20. 20. SIPOC – An example Business case focusing in reducing the loan approval cycle time S I P O C Supplier Input Process Output Customer New or existing client Sales Representative Lease Document Setup account in system Complete packets Verification Prepare final documents Completed loan Application Package Prospective borrower Business needing leases
  21. 21.  A High level “as-is” process map of the area being focused should be developed  The graphical representation of the process will ensure all the constituents are in agreement regarding the scope of the project, process and service involved  Clearly defining the customer, the existing process outputs, major process steps, inputs to the process and individuals or entities that supply the inputs will eliminate all the assumptions and ambiguities Summary of STEP 3 – High level Process Map
  22. 22.  Define the customer (Internal or External)  Outline the customer’s critical to quality (CTQ) parameter  Develop a business case – determine the problem and goal statement, milestones, scope, resources and financial benefits  Define high level as is state of the business process  Gain consensus on the business case and mobilize the required resources. DEFINE PHASE SUMMARY
  23. 23.  Define the customer (Internal or External)  Outline the customer’s critical to quality (CTQ) parameter  Develop a business case – determine the problem and goal statement, milestones, scope, resources and financial benefits  Define high level as is state of the business process  Gain consensus on the business case and mobilize the required resources. Application of Six sigma case study – Define Phase Deliverables
  24. 24. Information  ProjectTitle : Improving customer ResponseTime  Champion : Sales Director  Internal Leader : Green belt expert  Key Stakeholder : Operations Manager, SalesTeam  Location:India Operations Case Study Business case Assignment Description  Vision : 100% delivery of loan documents to customer’s expectation date  Problem statement : Currently 30% of the loans are being delivered after the customer’s requested date, this has resulted in $25 million revenue loss.  Objective / Goals : Reduce variation in delivery of funds by 50% within six months  Financials: $ 28 million CTQ’s and Data  Business Issue: Sales are declining and customer complaints are increasing  Process boundaries  In Scope: Loan approval process  Out of scope: Collection and Disbursement Support and Resources Cross Functional Resources  Lending Sales Manager : Outlines customer needs  Lending Sales Rep : provides customer data  Lending Operations Supervisor: Process Expert  Six Sigma : Six Sigma expert  Other resources: IT Data Collection team
  25. 25. 1. What is Goal Statement? 2. How does collection of VOC help? 3. What is the purpose of Process map? 4. When do we say we say a process has achieved Six Sigma ? 5. What is difference DMAIC and DMADV? 6. What describes the customers' needs and their perceptions of your product of service? Define Phase - QUIZ