This document outlines a Six Sigma case study conducted by Paper Organizers International to address complaints about Metallic Securing Devices (MSDs) breaking and failing to keep customer papers together. Baseline data found 60% of MSDs were defective in durability and functionality. A project was launched to decrease defects to 0.62% by improving MSD quality from vendors. Process maps, metrics, and data collection were used to understand sources of variation and develop objectives to minimize costs and complaints related to low MSD quality.

1. Six Sigma Case Study
v.2
Dr. Ron Tibben-Lembke
SCM 494

2. Six Sigma Case Study - POI
 Paper Organizers International
 Filing, organizing, and paper shuffling services
 Uses MSD (metallic securing devices)
 Increasing complaints from the Paper Shuffling
Department (PSD) about MSDs breaking and
failing to keep papers together
 Customers’ papers can get mixed together
 Purchasing wants to eliminate MSD complaints

3. Mission Statement
 “Put the right information in the right place.”
 Management created a list of objectives and
projects that will support those objectives

4. President Director of Paper Shuffling Dept
Business
Objectives
Increase #
of orders
Minimize
production
costs
Eliminate
employee
complaints
Business
Indicators
# orders per
Month
(c chart)
Increase #
of POI
services
used by each
customer
1. avg. #
services used
per customer,
per quarter
2. St dev. of
# serv. used
(x-bar and s)
Prod costs
per month
(I-MR chart)
# employee
complaints per
month (c chart)
Area
Objectives
Increase #
orders in
PSD
Increase #
Services
used by each
customer in
PSD
Minimize
production
costs in PSD
Eliminate PSD
employee
complaints
Area
Indicators
No. orders in
PSD / mo.
(c chart)
Potential 6
Sigma projects
New customer
promotions
project
1. avg. #
services used
per PSD
cust, per Q
2. St dev. Of
# serv. used
(x-bar and s)
Employee
Morale project
# PSD employee
Complaints/mo
(c chart)
MSD quality
project
Production
Costs in PSD/mo
(I-MR chart)
Existing
customer
promotions
project

5. Current Costs
 Management considers costs production
costs in PSD to be too high
 Avg. Production costs of $1.1m per month
 Standard deviation is $116k.
 R-bar / d2 = $116,672
 Average is “too high” but process is under control

6. 1400000
1300000
1200000
1100000
1000000
900000
800000
Subgroup 0 10 20 30 40 50 60 70
Individual Value
UCL=1393879
Mean=1096880
LCL=799881
400000
300000
200000
100000
0
Moving Range
UCL=364863
R=111672
LCL=0
I and MR Chart for Production C

7. Production costs Normally distributed
890000 930000 970000 1010000 1050000 1090000 1130000 1170000 1210000 1250000 1290000
10
5
0
Production Costs in PSD
Fr equen cy
Histogram of Production Costs in PSD

8. Prioritizing Six Sigma Projects
Potential Six Sigma Projects
Business objective
Increase # orders
Increase # POI services
used by each customer
Minimize production
costs
Eliminate employee
complaints
Weighted average of
potential
Weight
New Customer
Promotions
Existing
Customer
Promotions
MSD
Quality
Employee
Morale
0.35 3 3 0 0
0.10 1 3 0 0
0.40 0 0 9 3
0.15 0 0 9 9
1.15 1.35 4.95 2.55

9. Starting MSD Project
Champion and process owner make initial charter.
1. What is the name of the process? MSD purchasing
2. What is the aim? Purchase MSDs that improve
productivity and morale of PSD
3. What is economic rationale?
a. Why do it at all?
 Un-durable clips (<4 bends): lost papers, frustrated
employees lead to higher processing costs, inefficient
labor costs (60% cannot withstand test)
 Functionality (broken in box): sorting costs, frustrated
employees (60% of boxes have >5 broken MSDs)

10. Additional charter questions
b. Why do it now? High production costs, complaints
c. What business objectives are supported by project? Min.
costs, reduce complaints
d. Consequences of not doing: lower profits, more employee
complaints
e. What projects have higher priority? None.
4. What is the problem statement?
 Low-quality MSDs create additional production costs and
employee frustration
5. What is goal or desired state?
 100-fold increase in durability 0.6% from 60%
 10-fold every 2 years, so 100 over 4 year project
 100-fold would take from 600,000 DPMO to 6,000 DPMO,
set goal as 4 sigma (p. 739)

11. More charter questions
6. What is scope?
a. Boundaries? When purchasing receives purchase orders,
ends when MSD put in inventory
b. What is out of bounds? How employees use MSDs
c. What resources? $30,000, including salaries
d. Who can approve expenditures? Process owner
e. Can they go over $30,000? No.
f. What are obstacles? Budget, 21 weeks
g. What time commitment expected? Friday 8-9am
meetings, progress reports
h. What about regular duties? OT may be required, not in
budget

12. Gantt Chart for Project
Steps Resp. Week
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Define BA X X X X X X
Mesure BA X X
Analyze BA X X X
Improve BA X X X X X X
Control BA X X X X

13. MSD Project Benefits
7. Benefits:
a. Soft benefits: eliminating complaints from PSD
and increasing employee morale
b. Hard benefits (financial): minimizing labor costs

14. Labor savings – Clipping expenses
 100 employees, 40 hrs/wk, spend 10% of time
clipping = 400 hrs / wk clipping
 $25 / hr * 400 hrs * 50 wks = $500,000 annual
clipping expenses
 60% clips defective = $300,000? Currently?
 0.62% defective = $3,100? Improved system?
 Annually, 20,000 hrs clipping = 10 employees
 60% = 12,000 wasted clipping hours currently
 0.62% = 124 wasted hours under improved system
 Need 6 fewer employees
 This does not including time lost from clips failing
later, on work in process

15. Material Cost Savings
 300,000 projects per year, 10 clips each
=3,000,000 clips needed each year.
 0.60 defect means 1/(1-0.6) = 2.5 clips used
for each one needed = 7,500,000 used
 0.0062 means 1/(1-0.0062) = 1.00625
=3,018,000 clips used
 Savings of 4,482,000 clips = $44,820 per
year

16. Team Members
 Champion
 Process Owner
 Team Leader – Black Belt
 Team member 1
 Team member 2
 Finance representative
 IT representative

17. SIPOC Start
Purchasing
receives order from
Paper Shuffling
Department
Purchasing agent
calls vendor
Does vendor
have MSD
in stock?
Place order with
vendor
Receive order from
vendor
Store product
received into
inventory (new
boxes go on bottom
back of shelf)
PSD removes
products from
inventory
PSD uses Product
Stop
No
Yes
-Suppliers
-Inputs
-Process
-Outputs
-Customers

18. Voice of the Customer
 What emotions come to mind when you think about MSDs?
 What needs and wants come to mind when you think about MSDs?
 What complaints or problems would you like to mention about
MSDs?
 3 themes:
 Variation in durability
 Variation in color
 Variation in functionality (# broken MSDs in each box)
 CTQ-Critical to Quality factors Tech Specs
 Ability to withstand bending >= 4 bends w/o breaking
 The number of different MSD colors = 1 color of MSDs
 The number of broken MSDs in a box. <= 5 broken in box

19. Project Objectives
 1. Decrease (direction) the percentage that cannot
withstand four or more bends without breaking
(measure) bought by the purchasing department
(process) to 0.62 percent (goal) by Jan. 1, 2005
(deadline). Go for 4 sigma!
 2. Decrease (direction) the percentage of boxes of
MSDs with more than five broken clips (measure)
bought by the purchasing deparment (process) to
0.62 percent (goal) by Jan. 1, 2005 (deadline) Go
for 4 sigma!
 3. What happened to colors?

20. Measure phase-I Operationally Define
CTQs
 Operational definition for CTQ1: Durability
 Take top-front box
 Close eyes, randomly pull one out
 Count number of bends until breaking
 Do not count bend being made when it breaks
 If >= bends, then MSD conforms, else defective

21. Operationally Define CTQ2 -
Functionality
 Take top-front box
 Count the number of broken clips
 If number of broken is <= 5, box is
conforming
 If number is > 5, box is defective
 Use same boxes for both operational
definitions

22. Measure Phase-II Gage repeatability and
reproducibility
 10 top-front boxes tested by 2 inspectors,
each box twice
 Gage (or gauge) run chart shows no
difference between the measurements from
the two different inspectors

23. Box Inspector Count Functionality
1 1 1 10
1 1 2 10
1 2 1 10
1 2 2 10
2 1 1 9
2 1 2 9
2 2 1 9
2 2 2 9
3 1 1 5
3 1 2 5
3 2 1 5
3 2 2 5
4 1 1 4
4 1 2 4
4 2 1 4
4 2 2 4
5 1 1 5
5 1 2 5
5 2 1 5
5 2 2 5
Box Inspector Count Functionality
6 1 1 9
6 1 2 9
6 2 1 9
6 2 2 9
7 1 1 6
7 1 2 6
7 2 1 6
7 2 2 6
8 1 1 6
8 1 2 6
8 2 1 6
8 2 2 6
9 1 1 9
9 1 2 9
9 2 1 9
9 2 2 9
10 1 1 11
10 1 2 11
10 2 1 11
10 2 2 11

24. Gage name:
Date of study:
Reported by:
Tolerance:
Misc:
Runchart of Fuctionality by Box, Inspector
11
10
9
8
7
6
5
4
Fuctionality
Box 1 2 3 4 5
1
2
11
10
9
8
7
6
5
4
Fuctionality
Box 6 7 8 9 10

25. CTQ Baselines
 Hourly inspections for both
CTQs
 Durability is # bends for one
MSD before breaking
 Functionality is # of broken
clips
 Yield is percentage of
batches passing the
standard
 6/16 passed each
 Very similar to claim of 60%
unacceptable
Hour
Dura-bility
Function
-ality
Shift 1-Hr1 5 12
Shift 1-Hr2 7 4
Shift 1-Hr3 3 8
Shift 1-Hr4 2 6
Shift 1-Hr5 9 1
Shift 1-Hr6 2 5
Shift 1-Hr7 1 11
Shift 1-Hr8 1 9
Shift 2-Hr1 12 6
Shift 2-Hr2 9 6
Shift 2-Hr3 3 9
Shift 2-Hr4 1 5
Shift 2-Hr5 1 4
Shift 2-Hr6 1 5
Shift 2-Hr7 1 9
Shift 2-Hr8 4 10
Yield 0.375 0.375

26. 15
10
5
0
-5
Individual Value
Subgroup 0 5 10 15
UCL=12.21
Mean=3.875
LCL=-4.458
10
5
0
Moving Range
1
UCL=10.24
R=3.133
LCL=0
I and MR Chart for Durability
 I-MR charts show durability not stable over time.
 Different vendors, but deal with that soon

27. 7
6
5
4
3
2
1
0
1 2 3 4 5 6 7 8 9 10 11 12
Durability
number of boxes box
 Durability “dot plot” – shows how many boxes had a
particular durability level
 Graph doesn’t look like Normal distribution
 Maybe Poisson distribution

28.  C-chart not in control, shift 2 tester bent more
slowly, caused it to last longer

29.  C-chart for Functionality under control

30. Dot-plot for Functionality
 Dot-plot for Functionality looks Normally
distributed

31. Detailed
Process Map
Start
Purchasing
receives order from
Paper Shuffling
Department
Purchasing agent
calls vendor
Does vendor
have MSD
in stock?
Place order with
vendor
Receive order from
vendor
MSDs placed into
inventory (new boxes
go on the bottom
back of shelf)
PSD removes
box from
inventory
PSD uses MSDs
Stop
No
Yes
X1 – Vendor (Ibix or Office Optimum)
X2 – Size (Small or Large)
X3 – Ridges (With or Without)
X4 = Cycle time from order to receipt for MSDs
X5 = Discrepancy in count from order placed and
order received
X6 = Cycle time to place product in inventory
X7 = Inventory shelf time (in days)
X8 = Type of usage (Large stack of paper or
Small stack of paper)
 X’s also could be
defined in
measure phase

32. Operational Definitions for each X
 X1 – Vendor Ibix Office Optimum
 X2 – Size Small Large
 X3 – Ridges With Without
 X8 – Usage Large stack Small stack
 X4 – Cycle time, ordering to receipt (days)
 X5 – Discrepancy: # ordered vs. received
 X6 – Cycle time to place in inventory (days)
 X7 – inventory shelf life (in days)
Perform gage study on each, to make sure we can
measure consistently (repeatability and reproducibility)

33. Baseline Data
 Every hour for 2 weeks – 80 samples
 Collect info about:
 X1 vendor
 X2 size
 X3 ridges
 Y1 Durability
 Y2 Functionality
 Other factors studied separately

34. Sample Day Hour X1 X2 X3 X7 Durability Function
1 Mon 1 1 0 0 7 2 5
2 Mon 2 0 1 0 7 2 9
3 Mon 3 0 0 1 7 10 7
4 Mon 4 0 1 0 7 1 4
5 Mon 5 0 0 0 7 7 3
6 Mon 6 0 1 1 7 2 5
7 Mon 7 0 1 1 7 1 9
8 Mon 8 0 0 0 7 7 5
9 Tue 1 0 1 0 8 2 8
10 Tue 2 0 1 0 8 1 7
11 Tue 3 0 1 0 8 1 13
12 Tue 4 1 1 1 8 9 5
13 Tue 5 1 1 0 8 9 9
14 Tue 6 1 1 1 8 10 11
15 Tue 7 1 1 1 8 10 11
16 Tue 8 0 0 1 8 8 9
17 Wed 1 1 1 1 9 8 11
18 Wed 2 1 0 0 9 1 11
19 Wed 3 1 1 1 9 10 11
20 Wed 4 0 0 0 9 7 11
21 Wed 5 1 1 1 9 9 9
22 Wed 6 0 0 1 9 9 5
23 Wed 7 1 0 1 9 2 11
24 Wed 8 1 0 0 9 1 10
25 Thu 1 1 0 1 10 1 14
26 Thu 2 0 1 1 10 1 10
27 Thu 3 1 1 1 10 8 13
28 Thu 4 0 0 1 10 10 12
29 Thu 5 0 0 0 10 7 14
30 Thu 6 0 1 1 10 3 13

35. Sample Day Hour X1 X2 X3 X7 Durability Function
31 Thu 7 0 0 0 10 9 13
32 Thu 8 1 1 1 10 8 11
33 Fri 1 0 1 0 1 2 0
34 Fri 2 0 1 0 1 2 1
35 Fri 3 0 1 0 1 1 6
36 Fri 4 0 1 0 1 3 3
37 Fri 5 0 1 0 1 2 2
38 Fri 6 1 1 0 1 10 6
39 Fri 7 0 0 1 1 10 0
40 Fri 8 0 1 0 1 2 0
41 Mon 1 0 1 1 4 3 4
42 Mon 2 0 1 0 4 3 7
43 Mon 3 0 1 1 4 3 3
44 Mon 4 0 0 0 4 10 2
45 Mon 5 1 1 0 4 8 5
46 Mon 6 0 1 1 4 3 4
47 Mon 7 1 0 0 4 1 4
48 Mon 8 0 0 1 4 10 5
49 Tue 1 1 1 1 5 11 6
50 Tue 2 1 0 1 5 3 4
51 Tue 3 1 1 0 5 10 6
52 Tue 4 1 0 1 5 3 5
53 Tue 5 1 0 0 5 2 4
54 Tue 6 0 0 0 5 9 5
55 Tue 7 0 0 1 5 9 5
56 Tue 8 0 1 0 5 3 7
57 Wed 1 0 0 1 6 9 5
58 Wed 2 1 1 0 6 9 7
59 Wed 3 0 0 0 6 9 5
60 Wed 4 1 0 0 6 2 6

36. Sample Day Hour X1 X2 X3 X7 Durability Function
61 Wed 5 1 0 1 6 2 5
62 Wed 6 1 1 1 6 10 5
63 Wed 7 0 1 0 6 1 7
64 Wed 8 0 1 0 6 2 5
65 Thu 1 0 0 1 7 10 7
66 Thu 2 1 1 0 7 9 5
67 Thu 3 1 0 0 7 1 7
68 Thu 4 0 1 0 7 2 5
69 Thu 5 1 0 1 7 1 6
70 Thu 6 0 1 0 7 1 5
71 Thu 7 1 0 0 7 1 8
72 Thu 8 1 1 1 7 10 5
73 Fri 1 0 1 1 8 3 7
74 Fri 2 1 1 1 8 9 7
75 Fri 3 1 0 0 8 1 13
76 Fri 4 0 1 1 8 2 8
77 Fri 5 0 1 1 8 3 9
78 Fri 6 1 1 1 8 8 10
79 Fri 7 1 0 1 8 3 11
80 Fri 8 0 0 1 8 10 11
Legend:
X1 = Vendor (0 = Office Optimum and 1 = Ibix)
X2 = Size (0 = Small and 1 = Large)
X3 = Ridges (0 = Without and 1 = With)
X7 = Inventory shelf time, in days

37. Baseline results
 Durability 0.4625
 Functionality 0.425
 X1: Office Optimum 56.25%
 X2: Small 42.50%
 X3: Without ridges 50%
 X7: Shelf life average 6.5 days
 X7: Shelf life st. dev 2.5 days

38. Vendor (X1) and Durability
Maybe Ibix is more durable?
Ibix
Off Opt.

39. Size (X2) and Durability
Maybe small is more durable?
Large
Small

40. Ridges (X3) and Durability
Ridges
No ridges
Maybe ridges are more durable?

41. Shelf Life (X7) and Durability

42. Vendor (X1) and Functionality
Maybe Ibix is more functional?
Ibix
Off Opt.

43. Size (X2) and Functionality
Maybe large is more functional?
Large
Small

44. Ridges (X3) and Functionality
Ridges
No ridges
Maybe ridges are more functional?

45. Shelf Life (X7) and Functionality

46. Conclusions
 Durability – no large effects from any X’s.
 Vendor (X1=1 = Ibix) improves functionality
 Size (X2=1= large) improves functionality
 Ridges (X3=1) seem to improve functionality
 Shelf Life (X7) – lower values have better
functionality
 Best plan is to buy Ibix large MSDs with
ridges

47. Office Ibix small Lg No with Shelf
Opt. Ridges Ridges Life

48. Conculsions – 2
 Best to buy
 Ibix
 Small
 With Ridges
 Shelf life doesn’t matter?

49. X1=Off Opt
X1=Ibix
Small Large
No ridges Ridges

50. Conclusion?
 Ridges don’t seem to affect durability
 Buy small Office Optimum, or Large Ibix!

51. Functionality Main Effects
Age seems to be biggest factor, ridges, Vendor

52. Functionality Interaction Plot
X2=small
X2=large
No ridges Ridges

53. Improve Phase
 Conduct experiment to determine ideal
parameter values