Six Sigma Define phase

1. Six Sigma

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. Six Sigma Methodologies
D - Define
M - Measure
A - Analyze
I - Improve
C - Control
D - Define
M - Measure
A - Analyze
D - Design
V -Verify

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. 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. 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. 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.  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.  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.  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. 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.  Identified and selected a central area of
improvement
 Your customers
 Project CTQ’s
Summary of STEP 1 – Define the Project
CTQ

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. ◦ 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. ◦ 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. ◦ 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. ◦ 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.  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. 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. 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.  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.  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.  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. 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. 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