The document defines key terms and deliverables for a Lean Six Sigma project. It explains that defining VOC (Voice of the Customer), VOB (Voice of Business), and CTQs (Critical to Quality requirements) is the first deliverable. This involves understanding the problem from the customer's perspective and how they define project success. Additional deliverables include defining the project scope, quantifying benefits, and developing a project management plan. Tools for each deliverable like affinity diagrams and project charters are also outlined.

1. Define VOC, VOB and CTQ Deliverable 1D

2. Define Module Roadmap Define 1D – Define VOC, VOB, and CTQ’s 2D – Define Project Boundaries 3D – Quantify Project Value 4D – Develop Project Mgmt. Plan Measure 5M – Document Process 6M – Prioritize List of X’s 7M – Create Data Collection Plan 8M – Validate Measurement System 9M – Establish Baseline Process Cap. Analyze 10A – Determine Critical X’s Improve 12I – Prioritized List of Solutions 13I – Pilot Best Solution Control 14C – Create Control System 15C – Finalize Project Documentation Green 11G – Identify Root Cause Relationships

3. Deliverables – Define # Deliverable Deliverable Concept & Tasks Primary Tool(s) Secondary Tool(s) 1D Define VOC, VOB and CTQs A project is started because a customer needs some problem to be solved. Deliverable 1D obtains customer input to understand the problem(s) that the customer is experiencing so that a project can be started. In addition to defining the problem, we also need to understand how the customer defines acceptability (specifications). VOC Worksheet Affinity Diagram Stratification tools (Pareto and other basic graphs) 2D Define Project Boundaries Once we understand the defect that needs to be improved (project Y), define the project boundaries and components of the project. This includes a well written problem statement, identifying what process produces the defect, how much improvement we will make, when it will be done, etc. This information is summarized in the project charter. Portions of deliverables 3D and 4D will also be on the charter. Project charter SIPOC Included / Excluded Elevator Speech 3D Quantify Project Value Determine the benefit to the customer and to JEA for improving the process. Internal customer benefits are typically hard or soft $ savings, productivity improvements, and employee satisfaction. External customer benefits are typically customer satisfaction, and price. Deliverable 3D documents these benefits. Project Benefits 4D Develop Project Management Plan To effectively manage a project, the GB/BB needs to identify team members, effectively interface with the project stakeholders, plus develop and manage to a project plan (milestones and timelines). This plan should be developed and shared with all stakeholders. ARMI Project plan Faces of resistance Stakeholder analysis Influence strategy

4. 1D - Define VOC, VOB and CTQ # Deliverable Deliverable Concept & Tasks Primary Tool(s) Secondary Tool(s) 1D Define VOC, VOB and CTQs A project is started because a customer needs some problem to be solved. Deliverable 1D obtains customer input to understand the problem(s) that the customer is experiencing so that a project can be started. In addition to defining the problem, we also need to understand how the customer defines acceptability (specifications). VOC Worksheet Affinity Diagram Stratification tools (Pareto and other basic graphs) Steps to Complete Deliverable: If a defect has not been already identified for improvement, obtain VOC and VOB to determine where process improvements are needed and to define the project defect. If historical data is present and if the project scope is not clear or appropriately sized, use the historical (baseline) data to stratify and/or segment the data (i.e.: Affinity Diagram, Pareto, etc) in an effort to better focus the defect, e.g.: Instead of “overtime” as a defect, stratifying the data may show that most of the overtime is in operations. In this case, “operations overtime” could be the project defect. Once defect has been clarified, obtain detailed VOC and VOB information to clarify the customer CTQs. Review the results of the above with the champion to confirm the project is supported by the business (placing this information in the project charter of deliverable 2M will usually facilitate this discussion).

5. Objectives – Define VOC, VOB and CTQ Upon completing this module, students should be able to: Discuss why the Voice of the Customer (VOC) and Voice of the Business (VOB) is critical. Create a VOC Worksheet to identify customer/business Critical to Quality (CTQs). Demonstrate the use of stratification tools: Pareto charts Stratification & Segmentation of Customers Affinity diagrams Identify gaps (potential Belt projects or improvement opportunities) between CTQs and current process performance.

6. VOC and VOB The term Voice of the Customer (VOC) is used to describe customers’ needs and their perceptions of your product or service. The term Voice of the Business (VOB) is used to describe business’ needs and perceptions of your product or service. 6 VOC / VOB data helps an organization… Decide where to focus improvement efforts Get a baseline measure of customer satisfaction to measure improvement against Decide what products and services to offer Identify critical features and specification for those products and services Identify key drivers of customer satisfaction

7. Understanding the VOC The “ V oice O f the C ustomer" is the term used to describe the stated and unstated needs or requirements of the customer. The “ V oice O f the C ustomer" can be captured in a variety of ways: Direct discussion or interviews, surveys, focus groups, customer specifications, observation, warranty data, field reports, complaint logs, etc. This process is all about being proactive and constantly innovative to capture the changing requirements of the customers with time.

8. Voice of the Customer Voice of the Customer is a disciplined, cyclical approach to obtaining, understanding, and prioritizing customer wants and needs (requirements). VOC is an element of, and derives from Quality Function Deployment When do you use it. Whenever there is a need to identify, understand, and prioritize customer requirements. Desired Outcome. Greater understanding of customer requirements. Increased/improved communication with customers. Identification of what your customer believes to be the most important, least satisfying attributes of your products/services.

9. Deliverable 1: Define Define VOC, VOB Voice of the customer Voice of the business Include any operating definition on this or a separate chart For this and all subsequent phases, add charts as appropriate to show “the story” for that phase. Example – a descriptive statistics chart is not listed with any specific deliverable, but it would probably be appropriate to show in the Define section.

10. Customer CTQ Tree . Need Drivers CTQ’s Q1= p2 = p1 = Q2 = KPI = Driver 1 Driver 2 Driver 3 General Hard to measure Specific Easy to measure Q2 =

11. Voice of the Business Our business at JEA is about balance. Our mission is “To improve the quality of life in the communities we serve by being the best electric, water and wastewater utility in the nation.” Delighting the customer must be accomplished while operating a financially viable and stable utility. Often, the VOB and VOC may seem to be or may be at odds. Each project must focus on a MEASURABLE outcome (Y). We call those outcomes CTQ’s (Critical-to-Quality) or Q’s on a Process Map

12. Significant Few A project must focus on significant opportunities We must separate the significant few from the trivial many How many $100 bills do you have? How many pennies?

13. Pareto Vilfredo Federico Damaso Pareto (vēlfrĕ'dō pärĕ'tō) (b. July 15, 1848, Paris -- d. August 19, 1923, Geneva) was an Italian sociologist, economist and philosopher. He made several important contributions especially in the study of income distribution and in the analysis of individuals' choices. He introduced the concept of Pareto efficiency and helped develop the field of microeconomics.

14. The Pareto Principle The Pareto principle was actually popularized by Joe Juran in the 1950’s about 30 years after Pareto’s death. This rule says that, in many situations, roughly 80% of the problems are caused by only 20% of the contributors. 14 The Pareto principle implies that we can frequently solve a problem by identifying and attacking its “vital few” sources.

15. OSHA Recordables at JEA Actual experiences summarized for a year Back 17 Hand 6 Feet 12 Torso 5 Head 3

16. A Bar Chart

17. A Pareto Chart

18. What to Look For: Relative Heights of the Bars Pareto Principle applies: one or a few categories account for most of the problem. Focus improvement effort on top one or two bars I f you see this… Pareto Principle does not hold: bars are all about equal height. Not worth it to investigate tallest bar. Look for other ways to categorize data, or look for different kind of data on this problem. Interpretation & Action

19. Day of the Week

20. Cause Analysis

21. In response to a corporate mandate to “improve customer satisfaction,” the senior manager at the state headquarters for an insurance agency decided to look at customer complaints from the previous year. The data are shown below in a table and a chart. How does looking at data in a chart aid your interpretation? What would you do next? Case Study: Insurance Complaints Type of Complaint 1996 Tally Service 126 Fire 42 Agent 21 School Insurance 2 Underwriting 2 TOTAL 193 Service Fire Service Service Service Agent Fire Service School Underwriting Agent Service Agent Service Service Service Fire Service • • • • • • • • • 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 Count Service Fire Agent School Ins. Underwriting Target Types of Complaints 1996 (193 complaints total)

22. Pareto Chart 0 10 40 50 60 70 8 0 90 100 Height of vertical axis should represent the sum of all occurrences Bar height shows relative importance; arranged in descending order with tallest bar on left Data are divided into categories 0 5000 10000 15000 20000 25000 Amount of Spoilage ($$) Produce Meat Dairy Bakery Other Category Grocery Store Spoilage by Department October- December 1997 “ Other” category is always last even if not the shortest Units clearly labeled A Pareto chart is a graphical tool that helps you break a big problem down into its parts and identify which parts are the most important.

23. Exercise: Creating & Interpreting a Pareto Chart Instructions: Open Minitab (refer to the following slide) and create a Pareto Chart in Minitab using this data Stat > Quality Tools > Pareto Chart Department Number of Complaints Banquet 8 Bell stand 3 Front desk 22 Health club 3 Housekeeping 14 Maintenance 12 Restaurant 7 Room service 67 Other 8 Total 144 5 Min

24. To Create a Pareto Chart in Minitab, Select: Stat > Quality Tools > Pareto Chart Enter your data categories and number of defects here

25. Enter the label, frequency information, and chart title, then click on OK

26. Creating & Interpreting a Pareto Chart Exercise Answers Look at the Pareto chart you’ve just constructed and answer the following questions. Which categories account for most of the problem? Complaints about room service and the front desk What would you do next to solve this problem? Choose one of these two areas to focus on (i.e.: room service). Make another Pareto chart to analyze the reasons that people call to complain about room service. Be prepared to discuss your answers with the class.

27. Chi-Square Goodness of Fit Ho: Proportion of all groups are equal Ha: Proportion of at least one group is different

28. Chi-Sq Goodness of Fit The Chi-square Goodness of Fit test is a one variable test that determines whether the proportion of counted items in each category fit a hypothesized distribution. This is the statistical test used with a Pareto chart to determine which groups are statistically different from others. The Goodness of Fit test is not available in Minitab, but is available in: Chi-sq GOF Calculator.xls

29. Chi-Sq Goodness of Fit Example Enter the following injury related data into the Goodness of Fit calculator Is there a disproportionate number of injuries in any of the categories? Assume that the proportion of injuries are equal for all categories Back 17 Hand 6 Feet 12 Torso 5 Head 3

30. What’s Statistically Significant? Back injuries are statistically significant

31. What’s Statistically Significant? Everything else is statistically the same

32. Who Are Your Customers? What are the outputs of your process? Who are the customers of that output? Are there particular groups of customers whose needs are especially important to your organization? You’ll learn about the SIPOC in the upcoming D2 Module. S U P P L I E R S C U S T O M E R S Outputs Inputs Process

33. Market Stratification & Segmentation Often there is no single voice of the customer. Different customers or types of customers usually have different needs and priorities. The different types of customers are often referred to as market segments. Market Do You Have Market Segments? If your customers seem to have similar needs across the board, you don’t necessarily have to divide them into segments If you suspect that different groups will have significantly different needs and that these differences will influence how you structure your process, product, or service, then it will be worthwhile to think in terms of segments

34. Market Segment Examples Common Market Segments include: Customer status: Former Customers, Current Customers Type of product or service they buy from you Quantity of product purchased: High, Medium, Low Geographic location Where they are in the “customer chain” Internal user  Distributor  End user Reason for buying Industry, Division or Department Demographics, such as gender or age

35. Customers as Bill Payers A - Pay when bill is received B - Pay one week after bill is received C - Pay when payment is due D - Pay to avoid late fee E - Pay to avoid cutoff F - Pay to restore service Most customers' payment behavior can be predicted . Customers whose behavior is changing warrant attention.

36. Customers as Financial Forces A - Top 700 or 40% of Revenue B - Next 1,300 or 10% of Revenue C - Balance or 50% of revenue

37. Customers as Political Voices A - Elected officials and staff B - Political activists C - Vote in elections D - Non-participants in political processes E – Future Customers Most customers' political behavior can be predicted.

38. JEA Receivables History

39. Receivables Case Study: Introduction A company that sells both products and associated services is trying to improve its billing process and payment of accounts receivables. A study of how long it takes customers to pay their bills shows the average at about 48 days, but many are extending to 90 days and more. 39 Frequency Plot of Accounts Receivable Payments 0 -10 11-20 21-30 31-40 4 1-50 51-60 61-70 71-80 81-90 90+ (days to pay) 10 20 30 40 50 60 count

40. Receivables VOC Plan: Who Customers and Segments Who Position in organization Accts. Payable vs. Purchasing Agents vs. End users Type of business Govt. & people who work with govt. vs. Non-govt. vs. Foreign vs. Distributors Type of payment Credit card vs. Purchase order vs. invoice vs. pre-pay by check Payment history on-time vs. late Organizations vs. Individuals

41. Deciding the “What and Why” What is the purpose of your project? How does your purpose relate to customer and business needs? What do you need to know about the needs of the customers you’ve identified to make sure your project’s purpose stays on track?

42. Sample Questions For all customers, you should ask questions such as: 1. What is important to you about our product/service? (Ask them to rank each of these needs in order of importance.) 2. What do you think of as a defect ? 3. How are we performing on the areas you consider important? 4. What do you like about our product/service? 5. What can we improve about our product/service? What can we do to make your job easier? 6. What specific recommendations would you make to us? 42

43. Receivables VOC Plan: “What & Why” WHAT & WHY What are your invoice requirements? For each requirement, follow up with: Does that mean you won’t pay if ______? How well do our processes and policies currently meet your requirements? How do our processes and policies compare with other vendors? What do you like about our invoicing processes and policies? What don’t you like? What specific changes you would like to recommend? Indicate specifically what you want to know about your customers. Develop customized versions of the following questions, which you can ask during face-to-face interviews. What’s important to you? What’s a defect? How are we doing? How do we compare to our competitors? What do you like? What don’t you like?

44. Basic VOC Systems 1. Reactive systems Information comes to you whether you take action or not 2. Proactive systems You need to put effort into gathering the information

45. Typical Reactive Systems Typical Reactive Systems… Customer complaints (phone or written) Problem or service hot lines Customer service calls Claims, credits, contested payments Major Accounts reporting Web page activity Reactive systems generally gather data on: Current and former customer issues or problems Current and former customers’ unmet needs Current and former customers’ interest in particular products or services

46. Proactive VOC Systems Proactive VOC Systems tend to focus on: Surveys Interviews Direct customer observation Data gathering during sales visits or calls Focus groups Market research, market monitoring Benchmarking Quality scorecards Comment cards

47. Face-to-Face Interaction Face-to-face interaction with customers can provide a wealth of data and knowledge that is unobtainable by other means. A good first step in proactive data collection is customer observation Get them to show you, in detail, how they use your product or service. Talk with them peer to peer, onsite. Ask “What are three things we could do to improve our product or service to you?” or conduct a lengthier interview if time permits. Ideally, you should have face-to-face interviews prior to any other data collection or extensive phone interviews.

48. Guidelines for Interviews Note: Prior to conducting any external interview or survey it’s required per MD140 “External Corporate Research” that JEA’s Research group review your questions. Be clear about the purpose of the interview and write a standard introduction for all interviewers to use Organize your questions Ask simply worded questions open-ended, unbiased questions Avoid questions that start with “are” or “do” or “can” since they can usually be answered yes/no Test the guide before using it with actual customers Let the interviewee do most of the talking and listen actively Question Starters Example What “What _____?” How “How does that work for you?” Could “Could you give me an example of ____?”

49. Interview Flow 5. Ask to be rated on a scale 1. Describe background and purpose 2. Establish the context 3. Ask open-ended questions 4. Summarize and rank the issues 6. Close the interview 7. Summarize your interview findings

50. VOC Plan: Final Touches The last step to finishing your data collection is to decide specifically how you will obtain the information, within what time frame the data gathering should take place, and how you will record the data. You must train everyone who will be gathering the VOC data Practice the interviews before talking to customers Periodically monitor the data collection; make adjustments as necessary SUMMARY: WHICH, HOW MANY, HOW & WHEN On the back of this form or a separate sheet, summarize your plans to gather and use both reactive and proactive sources. Indicate how much data you will get, how you will get it, and when. Include, for instance, when you will start and end the data collection, how you will record the data, and so on.

51. Receivables VOC Summary Plan 51 SUMMARY: WHICH, HOW MANY, HOW & WHEN On a separate sheet, summarize your plans to gather and use both reactive and proactive sources. Indicate how much data you will get, how you will get it, and when. Include, for instance, the number of interviews or surveys you plan to use, which customers you will contact, when you will start and end the data collection, and so on. Example: Will look at five different segmentation characteristics. Try to do at least 20 face-to-face interviews first, then follow up phone interviews and/or surveys for additional data. Work with statistician to identify appropriate sample size needed from base of 5,000 customer organizations. Carlos and LaShawn will pull together current reactive data we already have. Tina will work on the bookstore angle. Maury will work with customer service on adding info to customer contact calls. Work to begin this Friday and extend for three weeks. Deadline is July 26.

52. CTQ Definition and Elements CTQs are the translation of customer needs into quantified requirements for our product/service. CTQs are critical requirements placed on the product/service CTQ Product/Service Characteristic Measure Target/ Nominal Value Specification Limits Allowable Defect Rate Customer Need Business Goal Quick Lab Tests Six Sigma Performance Patient Wait Time Arrival to Departure (Minutes) 60 minutes 90 minutes <3.4 DPMO

53. Translating VOC into CTQs (CTQ = Critical to Quality) 53 need VOC CTQ Tree I want CTQ CTQ CTQ CTQ CTQ CTQ CTQ CTQ

54. Why Create a CTQ tree? Translates broad customer requirements into specific critical-to-quality (CTQ) requirements Helps the team to move from high-level to detailed specifications Ensures that all aspects of the need are addressed Use a CTQ Tree for… Unspecific customer requirements Complex, broad needs

55. Example: CTQ Tree Good Customer Service Knowledgeable reps Answers given by reps are correct Reps can answer questions asked by customer without further research Researched information returned quickly Friendly reps Customer greeted by name Customer not interrupted Short wait Time on hold Customer transferred immediately to the person who can help them Need Drivers CTQs General Specific Hard to measure Easy to measure

56. How to Create a Tree Diagram 1. List the customer needs. 2. Identify the major drivers for these needs (major means those which will ensure that the need is addressed). 3. Break each driver into greater detail. 4. Stop the breakdown of each level when you have reached the level of detail where you can measure whether you meet the customer need or not.

57. Worksheet Exercise CTQ Answers are correct Reps can answer questions Information returned quickly Customer greeted by name Customer not interrupted Time on hold Transfers immediate Potential Specification Method

58. Worksheet Exercise: Answers CTQ Answers are correct Reps can answer questions Information returned quickly Customer greeted by name Customer not interrupted Time on hold Transfers immediate Potential Specification Method Customer answers “yes” to “Will that solve the problem?” Customer question answered on first call Calls completed within 3 minutes Customer name used at least once in conversation No interruptions of customer in calls monitored by supervisor No more than 30 seconds on hold No more than 15 seconds to connect to party

59. Instructions: Use the blank tree diagram to translate a customer need from your project into a CTQ requirement. Be prepared to discuss your work with the class. Identify gaps between CTQs and current process performance. Project Worksheet Exercise: Generating CTQs 5 Min

60. CTQ Tree Exercise Need Drivers CTQs General Specific Hard to measure Easy to measure

61. Affinity Diagram

62. Affinitizing VOC VOC and VOB can come in several forms Complaints, about the defect Compliments about the service/product Solutions for how to fix the problem Regardless of what form the feedback comes in, it must be affinitized into common groups/topics in order to define the project correctly Service problem? Product quality problem? Cycle time problem? etc.

63. Affinity Diagram Goal: Generate a list of key customer needs in their language. Encourages breakthrough thinking Helps to gather and identify patterns in mountains of data Can be used to organize ideas, issues, and opinions Use an Affinity Diagram when… Analyzing qualitative customer data Dealing with complex problems or issues Organizing ideas, issues, and opinions 63 Timeliness Need 1 Need 2 Defect-free Need 3 Need 4 Need 5 Need 6 Need 7 Need 8 Statements written on individual cards or notes Notes are clustered based on intuition, not logic Title notes identify themes OK to have clusters of one note Can be several layers of clustering

64. Affinity Diagrams Tools Program Change Spare Parts Maintenance Not able to change the program No training in setting parameters Programs not available 15% of the time no spare parts are available Everybody has his own supply Only first operator can order No maintenance plan Wrong intervals Machine More Staff Different screw sizes Clamping Missing rails Access Operation Central control panel Test program not integrated

65. How to Create an Affinity Diagram Prework: select theme Prework: collect verbal data; share with team Write the issue in clear view of all participants Generate and record ideas Transfer data onto index cards or self-stick notes Group the cards to find the “affinity” Label the groups of cards Optional: group the clusters Draw the diagram

66. Pizza Delivery Affinity Diagram Example I want the pizza to have lots of toppings Why is it the delivery person never has correct change? Our last pizza was hot They always get my order mixed up with the other Barnes family 2 blocks down The last Pizza we got was great. Best ever! They promised 45 minute delivery and it got here in 35. I’m impressed! They promised 30 minute delivery and they were late. It was 35 minutes. At least the delivery person was friendly. The last time they mixed up our order, they gave it to us for free.

67. Pizza Delivery Affinity Diagram Example (cont’d) Delivery Service Quality I want the pizza to have lots of toppings Why is it the delivery person never has correct change? Our last pizza was hot They always get my order mixed up with the other Barnes family 2 blocks down The last Pizza we got was great. Best ever! They promised 45 minute delivery and it got here in 35. I’m impressed! They promised 30 minute delivery and they were late. It was 35 minutes. At least the delivery person was friendly. The last time they mixed up our order, they gave it to us for free.

68. Pizza Delivery Affinity Diagram Example (cont’d) Delivery Service Quality I want the pizza to have lots of toppings Why is it the delivery person never has correct change? Our last pizza was hot They always get my order mixed up with the other Barnes family 2 blocks down The last Pizza we got was great. Best ever! They promised 45 minute delivery and it got here in 35. I’m impressed! They promised 30 minute delivery and they were late. It was 35 minutes. At least the delivery person was friendly. The last time they mixed up our order, they gave it to us for free.

69. Pizza Delivery Affinity Diagram Example (cont’d) Delivery Service Quality I want the pizza to have lots of toppings Why is it the delivery person never has correct change? Our last pizza was hot They always get my order mixed up with the other Barnes family 2 blocks down The last Pizza we got was great. Best ever! They promised 45 minute delivery and it got here in 35. I’m impressed! They promised 30 minute delivery and they were late. It was 35 minutes. At least the delivery person was friendly. The last time they mixed up our order, they gave it to us for free. Pizza to be xx O F upon arrival Order is correct or it is free. All pizza’s delivered within 30 minutes of it’s order.

70. Learning Check – Define VOC, VOB and CTQ Upon completing this module, students should be able to: Discuss why the Voice of the Customer (VOC) and Voice of the Business (VOB) is critical. Create a VOC Worksheet to identify customer/business Critical to Quality (CTQs) / Interview Forms. Demonstrate the use of stratification tools: Pareto charts Stratification & Segmentation of Customers Affinity diagrams Identify gaps (potential Black Belt projects or improvement opportunities) between CTQs and current process performance.