Six Sigma Workshop for World Bank, Chennai - India

Six Sigma
Acknowledgement & Citations: Graphics and Concepts are borrowed from Six Sigma CBOK, ASQ and searchable articles on the web.. Respective original authors are gratefully
acknowledged.

MURALI NANDIGAMA, Ph.D. , SM.IEEE
Engineering Director, PayPal India Dev Center
• Engineering Analytics, Six Sigma, Quality
Engineering, InfoSec, Ops, Management

FAIR WARNING !!
• I would be taking you through an over simplified
interpretations for
– Six Sigma
– Lean Six Sigma and
– Continuous Process Improvements
And none of it is really the complete truth …
Imagine some thing like telling you that – PLANETS
REVOLVE AROUND SUN IN ELLIPTICAL ORBITS AND
EVERY YEAR EARTH COMPLETES ONE FULL ROTATION.
Don’t believe !!! Watch this video …..

What !
• Six Sigma is a disciplined, data-driven approach and methodology for
eliminating defects in any process -- from manufacturing to
transactional and from product to service.
• To achieve Six Sigma, a process must not produce
more than 3.4 defects per million opportunities.
• A Six Sigma opportunity is then the total quantity of
chances for a defect.

How !
This is accomplished through the use of two Six Sigma sub-methodologies:
DMAIC and DMADV.
• The Six Sigma DMAIC process (define, measure, analyze,
improve, control) is an improvement system for existing
processes falling below specification and looking for incremental
improvement.
• The Six Sigma DMADV process (define, measure, analyze, design,
verify) is an improvement system used to develop new
processes or products at Six Sigma quality levels.
• Both Six Sigma processes are executed by Six Sigma Green Belts
and Six Sigma Black Belts, and are overseen by Six Sigma Master
Black Belts.

Six Sigma as a Metric
( xi 
x
)2

1
 
n


Sigma = = Deviation
( Square root of variance )
Axis graduated in Sigma
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
68.27 %
95.45 %
99.73 %
99.9937 %
99.999943 %
99.9999998 %
result: 317300 ppm outside
(deviation)
45500 ppm
2700 ppm
63 ppm
0.57 ppm
0.002 ppm
between + / -
1
between + / -
2
between + / -
3
between + / -
4
between + / - 5
between + / - 6
=

3 Sigma Vs. 6 Sigma
The 3 sigma Company The 6 sigma Company
• Spends 15~25% of sales dollars on
cost of failure
• Spends 5% of sales dollars on cost of
failure
• Relies on inspection to find defects • Relies on capable process that don’t
produce defects
• Does not have a disciplined approach
to gather and analyze data
• Use Measure, Analyze, Improve,
Control and Measure, Analyze, Design
• Benchmarks themselves against their
competition
• Benchmarks themselves against the
best in the world
• Believes 99% is good enough • Believes 99% is unacceptable
• Define CTQs internally • Defines CTQs externally

Six Sigma is accomplished through the use of two Six Sigma
sub-methodologies: DMAIC and DMADV.
• The Six Sigma DMAIC process (define, measure, analyze,
improve, control) is an improvement system for existing
processes falling below specification and looking for incremental
improvement.
• The Six Sigma DMADV process (define, measure, analyze, design,
verify) is an improvement system used to develop new
processes or products at Six Sigma quality levels.
• Both Six Sigma processes are executed by Six Sigma Green Belts
and Six Sigma Black Belts, and are overseen by Six Sigma Master
Black Belts.

DEFINE
•Identify Project,
Champion and Project
Owner
•Determine Customer
Requirements and
CTQs
•Define Problem,
Objective, Goals and
Benefits
•Define
Stakeholder/Resource
Analysis
•Map the Process
•Develop Project Plan
MEASURE
•Determine Critical Xs
and Ys
•Determine
Operational
Definitions
•Establish Performance
Standards
•Develop Data
Collection and
Sampling Plan
•Validate the
Measurements
•Measurement Systems
Analysis
•Determine Process
Capability and Baseline
ANALYZE
•Benchmark the
Process or Product
•Establish Causal
Relationships Using
Data
•Analysis of the Process
Map
•Determine Root
Cause(s) Using Data
IMPROVE
•Design of Experiments
•Develop Solution
Alternatives
•Assess Risks and
Benefits of Solution
Alternatives
•Validate Solution using
a Pilot
•Implement Solution
•Determine Solution
Effectiveness using
Data
CONTROL
•Statistical Process
Control
•Determine Needed
Controls
(measurement, design,
etc.)
•Implement and
Validate Controls
•Develop Transfer Plan
•Realize Benefits of
Implementing Solution
•Close Project and
Communicate Results
When To Use DMAIC
• The DMAIC methodology, instead of the DMADV
methodology, should be used when a product or
process is in existence at your company but is not
meeting customer specification or is not performing
adequately.

DEFINE
• Define the
project goals
and
customer
(internal and
external)
deliverables
MEASURE
• Measure and
determine
customer
needs and
specifications
ANALYZE
• Analyze the
process
options to
meet the
customer
needs
DESIGN
• Design
(detailed) the
process to
meet the
customer
needs
VERIFY
• Verify the
design
performance
and ability to
meet
customer
needs
When To Use DMADV or DFSS
• A product or process is not in existence at your company
and one needs to be developed
• The existing product or process exists and has been
optimized (using either DMAIC or not) and still doesn't meet
the level of customer specification or six sigma level

Voice of the Customer
Measure Analyze Improve
Define Control
Institutionalization
The DMAIC Model

19
Six Sigma Fundamentals
Process Maps
Voice of the Customer
Cost of Poor Quality
Process Metrics
Six Sigma Fundamentals - DEFINE
Selecting Projects
Elements of Waste
Wrap Up & Action Items

20
What is a Process!
Why have a process focus!
– So we can understand how and why work gets done
– To characterize customer & supplier relationships
– To manage for maximum customer satisfaction while utilizing minimum
resources
– To see the process from start to finish as it is currently being performed
– Blame the process, not the people
proc•ess (pros′es) n. – A repetitive and systematic series of steps or activities where
inputs are modified to achieve a value-added output

We go through processes everyday. Below are some examples of those processes.
Can you think of other processes within your daily environment?
21
Examples of Processes
• Injection molding
• Decanting solutions
• Filling vial/bottles
• Crushing ore
• Refining oil
• Turning screws
• Building custom homes
• Paving roads
• Changing a tire
• Recruiting staff
• Processing invoices
• Conducting research
• Opening accounts
• Reconciling accounts
• Filling out a timesheet
• Distributing mail
• Backing up files
• Issuing purchase orders

22
Process Maps
• The purpose of Process Maps is to:
– Identify the complexity of the process
– Communicate the focus of problem solving
• Process Maps are living documents and must be changed as the process is
changed
– They represent what is currently happening, not what you think is happening.
– They should be created by the people who are closest to the process
Process Map
Start Step A Step B Step C Step D Finish

23
Process Map Symbols
Standard symbols for Process Mapping (available in Microsoft Office™,
Visio™, iGrafx™ , SigmaFlow™ and other products):
A RECTANGLE indicates an
activity. Statements within the
rectangle should begin with a
verb
A DIAMOND signifies a decision point.
Only two paths emerge from a
decision point: No and Yes
A PARALLELAGRAM shows that
there are data
An ELLIPSE shows the start and
end of the process
An ARROW shows the
connection and direction of
flow
1
A CIRCLE WITH A LETTER OR
NUMBER INSIDE symbolizes the
continuation of a flowchart to
another page

24
High Level Process Map
One of the deliverables from the Define Phase is a high level
Process Map, which at a minimum must include:
– Start and stop points
– All process steps
– All decision points
– Directional flow
– Value categories as defined below
• Value Added:
– Physically transforms the “thing” going through the process
– Must be done right the first time
– Meaningful from the customer’s perspective (is the customer willing to pay
for it?)
• Value Enabling:
– Satisfies requirements of non-paying external stakeholders (government
regulations)
• Non-Value Added
– Everything else

25
Process Map Example
A Process Map for a Call Center -
START
LOGON TO PC &
APPLICATIONS
SCHEDULED
PHONE TIME?
LOGON
Y
TO PHONE
CALL or
WALK-IN?
PHONE DATA
CAPTURE BEGINS
DETERMINE WHO
IS INQUIRING
ACCESS CASE TOOL
CASE TOOL
RECORD?
N
A
Z
CALL
WALK-IN
DETERMINE NATURE
OF CALL & CONFIRM
UNDERSTANDING
Y
N
C
B
D PHONE
TIME
Y
N
Z
B
C
REVIEW CASE
TOOL HISTORY &
TAKE NOTES
TRANSFER
APPROPRIATE?
IMMEDIATE
RESPONSE
AVAILABLE?
PUT ON HOLD,
REFER TO
REFERENCES
Y
N
Y
N
TRANSFER
CALL
ANSWER?
Y
N
QUERY INTERNAL
HRSC SME(S)
ANSWER?
Y
N
OFF HOLD AND
ARRANGE CALL
BACK PHONE DATA
ENDS
PROVIDE
RESPONSE
PHONE&
NOTE
DATA ENDS
D
ADD TO
RESEARCH
LIST
Z
LOGOFF PHONE, CHECK
MAIL,E-MAIL,VOICE MAIL
SCHEDULED
PHONE TIME?
N
Y
A
E
EXAMINE NEXT NOTE
OR RESEARCH ITEM
ACCESS CASE TOOL
ENTER APPROPRIATE
SSAN (#,9s,0s)
IF EMP DATA NOT
POPULATED, ENTER
OLD
CASE
Y
N
UPDATE ENTRIES
INCL OPEN DATE/TIME
CREATE A CASE
INCL CASE TYPE
DATE/TIME, &
NEEDED BY
AUTO
ROUTE
Y
ROUTE
CASE
CLOSED
N
Y
N
CLOSE CASE
W/
DATE/TIME
E
TAKE ACTION
or
DO RESEARCH
F
GO TO
F or E
DEPENDING ON
E
NEXT
CASE F

26
Cross Functional Process Map
When multiple departments or functional groups are involved in a complex process it
is often useful to use cross functional Process Maps.
– Draw in either vertical or horizontal Swim Lanes and label the functional groups and
draw the Process Map
Vendor Department
Accounting
Bank Financial
General
Accounting
Start Request
transfer
Sending Fund Transfers
Attach ACH
form to
Invoice
Produce an
Invoice
Fill out ACH
enrollment
form
Receive
payment End
Vendor
info in
FRS?
Input info into
web interface
Match against
bank batch
and daily cash
batch
Accepts transactions,
transfer money and
provide batch total
Review and
Process
transfer in
FRS
3.0
Journey Entry
Maintain database
to balance ACH
transfers
21.0
Bank
Reconciliation
ACH – Automated
Clearing House.
No
Yes

27
Do you know your Customer!
Knowing your customer is more than just a handshake. It is necessary to clearly
understand their needs. In Six Sigma we call this “understanding the CTQ ’s” or
critical to customer characteristics.
Voice Of the Customer Critical to Customer
Characteristics
The customer’s perspective has to be foremost in the mind of the Six Sigma belt throughout the
project cycle.
1. Features
Does the process provide what the customers expect and need?
How do you know?
2. Integrity
Is the relationship with the customer centered on trust?
How do you know?
3. Delivery
Does the process meet the customer’s time frame?
How do you know?
4. Expense
Does the customer perceive value for cost?
How do you know?

28
What is a CTQ!
• Critical to Quality (CTQ ’s) are measures that we use to capture VOC properly.
(also referred to in some literature as CTC’s – Critical to Customer)
• CTQ ’s can be vague and difficult to define.
• The customer may identify a requirement that is difficult to measure directly
so it will be necessary to break down what is meant by the customer into
identifiable and measurable terms
Product:
• Performance
• Features
• Conformance
• Timeliness
• Reliability
• Serviceability
• Durability
• Aesthetics
• Reputation
• Completeness
Service:
• Competence
• Reliability
• Accuracy
• Timeliness
• Responsiveness
• Access
• Courtesy
• Communication
• Credibility
• Security
• Understanding

29
Developing CTQ’s
Step 1
• Identify Customers
• Listing
• Segmentation
• Prioritization
Step 2
• Validate CTQs
• Prioritize CTQs
• Set Specific requirements
• Confirm CTQs with customer
Step 3
• Capture VOC
• Review current performance
• Determine Gaps that needs to be filled
• Select tools that provide data on gaps
• Collect data on the gaps

30
Cost of Poor Quality (COPQ)
COPQ stands for Cost of Poor Quality
As a Six Sigma Belt, one of your tasks will be to estimate COPQ
for your process
Through your process exploration and project definition work
you will develop a refined estimate of the COPQ in your project
This project COPQ represents the financial opportunity of your
team’s improvement effort (VOB)
Calculating COPQ is iterative and will change as you learn more
about the process

31
The Essence of COPQ
• COPQ helps us understand the financial impact of problems created by defects.
• COPQ is a symptom, not a defect
• Projects fix defects with the intent of improving symptoms.
• The concepts of traditional Quality Cost are the foundation for COPQ.
• External, Internal, Prevention, Appraisal
• A significant portion of COPQ from any defect comes from effects that are difficult to quantify
and must be estimated.

32
COPQ - Categories
Internal COPQ
External COPQ
• Warranty
• Customer Complaint Related Travel
• Customer Charge Back Costs
• Etc…
Prevention
• Error Proofing Devices
• Supplier Certification
• Design for Six Sigma
• Etc…
Detection
• Supplier Audits
• Sorting Incoming Parts
• Repaired Material
• Etc…
• Quality Control Department
• Inspection
• Quarantined Inventory
• Etc…

Time value of money
33
COPQ - Iceberg
Rework
Inspection
Warranty
Rejects
Lost sales
Late delivery
Engineering change orders
Expediting costs
Excess inventory
Long cycle times
Hidden Costs
Visible Costs
Lost Customer Loyalty
More Set-ups
Working Capital allocations
Excessive Material
Orders/Planning
Recode
less obvious

Primary Metric
• Primary Metric (used to measure process performance)
– The gage used to measure your success
– It must be consistent with the problem statement. It is used to track progress towards
your goals and objectives.
– It is usually reported as a time series graph of:
• Baseline data – averaged over a year, if available
• Target performance – goal or objective
• Actual (current) performance
• Examples:
– Rolled throughput yield (RTY) [versus FTY]
– Process Sigma Level or Ppk
– Defects per unit (DPU) [versus Proportion Defective]
The Primary Metric is how the success of your project will be measured

Sample Primary Metric
Product Returns
0%
1%
2%
3%
4%
5%
6%
7%
Aug-99
Sep-99
Oct-99
Nov-99
Dec-99
Jan-00
Feb-00
Mar-00
Apr-00
May-00
Jun-00
Jul-00
Aug-00
Sep-00
Oct-00
Nov-00
Dec-00
Return $ As % Sales $
Baseline
Actual
Objective

Secondary Metrics
• Secondary Metrics:
– Measurements of key input/output features, cycle time, or process resource usage that
may improve as a result of meeting objectives using the primary metric
– Can be “Drivers” or “Riders” – i.e. Vital X’s impacting the project (Primary Metric) or
“Good Consequential Metrics”
• Examples:
– Primary Metric : Cycle Time
– Secondary Metric : Reduced backorders
– Primary Metric : Defects per Unit
– Secondary Metric : Available Floor Space

Sample Secondary Metric
Pct of Orders Shipped within 24 hours
90%
91%
92%
93%
94%
95%
96%
97%
98%
99%
100%
Aug-99
Sep-99
Oct-99
Nov-99
Dec-99
Jan-00
Feb-00
Mar-00
Apr-00
May-00
Jun-00
Jul-00
Aug-00
Sep-00
Oct-00
Nov-00
Dec-00

Problem Statements – Exercise
• Break out into your groups. Using the guidelines of this module, each
group will rewrite these problems statements to make them better:
– The complaint rate for our customer service group is too high, probably
due to all of the new people in the department.
– Food Services order errors are too high. They must be reduced.
– Reduce measurement errors by cleaning the instruments more often.
– Consumable use is increasing too fast. Reduce consumable cost.
– Long term rolled throughput yield for Accounts Payable billing this year is
83% versus a past RTY of 95%.
– Long wait time for phone service. It takes customers about 30 minutes to
get an order completed.

Some Important Measurements
1. Select Customer Critical to Quality (CTQ) Characteristics;
2. Define Performance Standards (Numbers & Units);
3. Establish the Data Collection Plan,
4. Validate the Measurement System,
5. and Collect the Necessary Data.

Some useful tools in the MEASURE phase
Quality Function Deployment (QFD) which relates CTQs to measurable
internal sub-processes or product characteristics.
Process Maps create a shared view of the process, reveals redundant or
Unnecessary steps, and compares the “actual” process to the ideal one.
Fishbone Diagrams provide a structure for revealing causes of the effect.
Pareto Analysis provides a useful quantitative means of separating the vital
few causes of the effect from the trivial many, but require valid historical data.
Failure Modes and Effects Analysis (FMEA) identifies ways that a sub-process
or product can fail and develops plans to prevent those failures. FMEA is
especially useful with high-risk projects.

Measure: 1. Select Customer Critical to Quality (CTQ) Characteristics.
FAILURE MODES AND EFFECTS ANALYSIS (FMEA)
Failure Modes and Effects Analysis (FMEA) Process is a structured approach that has
the goal of linking the FAILURE MODES to an EFFECT over time for the purpose of
prevention. The structure of FMEA is as follows:
Preparation  FMEA Process  Improvement
a. Select the team
b. Develop the process map and steps
c. List key process outputs to satisfy internal and external customer requirements
d. Define the relationships between outputs and process variables
e. Rank inputs according to importance.

Measure 1: Select Customer Critical to Quality (CTQ) Characteristics.
FAILURE MODES AND EFFECTS ANALYSIS (FMEA)
Preparation FMEA Process  Improvement
a. Identify the ways in which process inputs can vary (causes) and identify associated FAILURE
MODES. These are ways that critical customer requirements might not be met.
b. Assign severity, occurrence and detection ratings to each cause and calculate the
RISK PRIORITY NUMBERS (RPNs).
c. Determine recommended actions to reduce RPNs.
d. Estimate time frames for corrective actions.
e. Take actions and put controls in place.
f. Recalculate all RPNs.
FAILURE MODE: How a part or process can fail to meet specifications.
CAUSE: A deficiency that results in a failure mode  sources of variation
EFFECT: Impact on customer if the failure mode is not prevented or corrected.

FMEA Standardized Rating System
1 < RPN = (Degree of Severity)*(Likelihood of Occurrence)*(Ability to Detect) < 1000
RATING DEGREE OF SEVERITY LIKELIHOOD OF OCCURRENCE ABILITY TO DETECT
1 Customer will not notice the adverse effect or it is
insignificant.
Likelihood of occurrence is
remote.
Sure that the potential failure will be found or
prevented before reaching the next customer.
2 Customer will probably experience slight annoyance. Low failure rate with supporting
documentation.
Almost certain that the potential failure will be
found or prevented before reaching the next
customer.
3 Customer will experience annoyance due to slight
degradation of performance.
Low failure rate without
supporting documentation.
Low likelihood that the potential failure will reach
the next customer undetected.
4 Customer dissatisfaction due to reduced performance. Occasional failures. Controls may not detect or prevent the potential
failure from reaching the next customer.
5 Customer is made uncomfortable or their productivity
is reduced by the continued degradation of the effect.
Relatively moderate failure rate
with supporting documentation.
Moderate likelihood that the potential failure will
reach the next customer.
6 Warranty repair or significant manufacturing or
assembly complaint.
Moderate failure rate without
Controls are unlikely to detect or prevent the
potential failure from reaching the next customer.
7 High degree of customer dissatisfaction due to
component failure without complete loss of function.
Productivity impacted by high scrap or rework levels.
Relatively high failure rate with
Poor likelihood that the potential failure will be
detected or prevented before reaching the next
customer.
8 Very high degree of dissatisfaction due to the loss of
function without a negative impact on safety or
governmental regulations.
High failure rate without
Very poor likelihood that the potential failure will
be detected or prevented before reaching the next
customer.
9 Customer endangered due to the adverse effect on
safe system performance with warning before failure
or violation of governmental regulations.
Failure is almost certain based
on warranty data or significant
DV testing.
Current controls probably will not even detect the
potential failure.
10 Customer endangered due to the adverse effect on
safe system performance without warning before
failure or violation of governmental regulations.
Assured of failure based on
warranty data or significant DV
testing
Absolute certainty that the current controls will not
detect the potential failure.

Measure: 2. Define Performance Standards: Numbers & Units
At this stage customer needs are translated into clearly defined measurable traits.
OPERATIONAL DEFINITION: This is a precise description that removes any
ambiguity about a process and provides a clear way to measure that process. An
operational definition is a key step towards getting a value for the CTQ that is being
measured.
TARGET PERFORMANCE: Where a process or product characteristic is “aimed”
If there were no variation in the product / process then this is the value that would
always occur.
SPECIFICATION LIMIT: The amount of variation that the customer is willing to
tolerate in a process or product. This is usually shown by the “upper” and “lower”
boundary which, if exceeded, will cause the customer to reject the process or product.
DEFECT DEFINITION: Any process or product characteristic that deviates outside
of specification limits.

Measure: 3. Establish Data Collection Plan, Validate the Measurement
System, and Collect Data.
A Good Data Collection Plan:
a. Provides clearly documented strategy for collecting reliable data;
b. Gives all team members a common reference;
c. Helps to ensure that resources are used effectively to collect only critical data. The
cost of obtaining new data should be weighed vs. its benefit. There may be viable
historical data available.
We refer to “actual process variation” and measure “actual output”:
a. what is the measurement process used? b. describe that procedure
c. what is the precision of the system? d. how was precision determined
e. what does the gage supplier state about: f. Do we have results of either
* Accuracy * Precision * Resolution * Test-Retest Study?
* Gage R&R Study?

Measure: 3... Establish Data Collection Plan, Validate the Measurement
System, and Collect Data. Note that our measurement process may also have variation.
a. Gage Variability:
Precision: Accuracy: Both:
b. Operator Variability: Differences between operators related to measurement.
c. Other Variability: Many possible sources.
Repeatability: Assess effects within ONE unit of your measurement system, e.g.,
the variation in the measurements of ONE device.
Reproducibility: Assesses the effects across the measurement process, e.g., the
variation between different operators.
Resolution: The incremental aspect of the measurement device.

Measure: 3. Establish Data Collection Plan, Validate the Measurement
System, & Collect Data.
GAGE R&R (Repeatability & Reproducibility) STUDY:
a. Operators – at least 3 recommended;
b. Part – the product or process being measured. It is recommended that at least 10
representative (reflects the range of parts possible) parts per study, with each
operator measuring the same parts.
c. Trial – each time the item is measured. There should be at least 3 trials per part,
per customer.
Source of Variation % Contribution
Total Gage Repeatability & Reproducibility R1 + R2
Repeatability R1
Reproducibility R2
Part-to-Part 100% - (R1 + R2)
Total Variation 100%

Analyze
Where are we now? Where are we going?
What can prevent us from reaching our goals?
At this stage we determine the process sigma level and regard
variation as an enemy. We must determine process capability,
that is, the ability of the process to meet customer requirements.
We require several “z-scores” to make this evaluation.
ZBENCH Zst ZLT ZLSL ZUSL
Where “BENCH” = benchmark, “st” = short term, “LT” = long term
“LSL” = lower specification limit, and “USL” = upper specification limit.
Client, Enterprise & Competitive Intelligence for Product, Process & Systems Innovation
Dr. Rick L. Edgeman, University of Idaho

Analyze
ZST = best performance that can be expected from a process
ZLT = allows for drift through time (1 to 2 sigma drift is typical)
ZLSL= (X – LSL) / S then determine PLSL(d)
ZUSL= (USL – X) / S then determine PUSL(d)
P(d) = PLSL(d) + PUSL(d) then apply inverse use of the Z-table to find
ZBENCH (long-term)
P(d) * 1,000,000 = DPMO or PPM
0.0X
Zx.y P(d) ZBENCH

Analyze
ZSHIFT = ZST – ZLT drift over time (DPMO tables assume 1.5)
ZST = (Specification Limit – Target) / ST
^
* process sigma is determined here
* indicates potential process performance if only
common cause variation is present.
ZLT = (Specification Limit - ) / LT
^
* reveals long-term process capability
* used to estimate DPMO or PPM (“parts per million” same as DPMO)
* includes special cause variation

Analyze:
An Alternative Means of Approximating the Sigma Capability for Your Process
Step Action Equations Your Calculations
1 What process do you want to consider? N/A Billing & Charging
2 How many units were put through the N/A 2,000
process?
3 Of the units that went into the process, N/A 1,800
how many were OK?
4 Compute process yield (step 3)/(step 2) 0.9000
5 Compute defect rate 1.0 – (step 4) 0.1000
6 Determine the number of potential N = number of 16
things that could create a defect critical-to-quality
characteristics
7 Compute the defect rate per CTQ (step 5)/(step 6) 0.00625
characteristic
8 Compute DPMO (step 7)*(1 million) 6,250
9 Convert DPMO to s value conversion chart About 4.0
10 Draw conclusions JUST ABOUT INDUSTRY AVERAGE

Analyze
Setting Performance Objectives
Critical to the Setting of Performance Objectives are the Concepts of
‘Baseline’, ‘Process Entitlement’, ‘Benchmark’ and ‘Benchmarking’
BASELINE: This is the process performance level at the start of the Six Sigma Project.
PROCESS ENTITLEMENT: This is our best expectation for process performance
(e.g., the ‘sigma level’) with the current technology – that is, without
substantial reengineering or investment. This can be estimated from Zst.
BENCHMARK: This is the current ‘best in class’ performance level.
BENCHMARKING: The process of finding the benchmark performance
level and then matching or exceeding that performance.

Analyze
Sources of Variation
This is the search for the Vital X’s – the factors that drive the customer CTQs.
Various statistical and quality methods are useful in this effort. Among these are:
HYPOTHESIS TESTING, which can
• Reveal Significant Differences in Performance Between Processes
• Validate Process Improvements
• Identify Factors that Impact the Process Mean and Variation.
FISHBONE or CAUSE-AND-EFFECT DIAGRAMS

CONTROL PHASE - SIX SIGMA
• Control Phase Activities:
• Confirmation of Improvement
• Confirmation you solved the practical problem
• Benefit validation
• Buy into the Control plan
• Quality plan implementation
• Procedural changes
• System changes
• Statistical process control implementation
• “Mistake-proofing” the process
• Closure documentation
• Audit process
• Scoping next project

How to create a Control Plan:
1. Select Causal Variable(s). Proven vital few X(s)
2. Define Control Plan
- 5Ws for optimal ranges of X(s)
3. Validate Control Plan
- Observe Y
4. Implement/Document Control Plan
5. Audit Control Plan
6. Monitor Performance Metrics

Control Plan Tools:
1. Basic Six Sigma control methods.
- 7M Tools: Affinity diagram, tree diagram, process
decision program charts, matrix diagrams,
interrelationship diagrams, prioritization matrices,
activity network diagram.
2. Statistical Process Control (SPC)
- Used with various types of distributions
- Control Charts
•Attribute based (np, p, c, u). Variable based (X-R, X)
•Additional Variable based tools
-PRE-Control
-Common Cause Chart (Exponentially Balanced
Moving Average (EWMA))

PRODUCT
MANAGEMENT
OVERALL GOAL
OF SOFTWARE
KNOWLEDGE OF
COMPETITORS
SUPERVISION
PRODUCT
DESIGN
PRODUCT
MANAGEMENT
PRODUCT
DESIGN
PRODUCT
MANAGEMENT
INNOVATION
CHARACTERISTICS:
• Organizing ideas into meaningful categories
• Data Reduction. Large numbers of qual.
Inputs into major dimensions or categories.
METHODS TO MAKE EASIER
FOR USERS
OUTPUT
INTUITIVE
ANSWERS
DIRECTORY
ORGANIZATION
SUPPORT
AFFINITY DIAGRAM

MATRIX DIAGRAM
Patient scheduled
Attendant assigned
Attendant arrives
Obtains equipment
Transports patient
Provide Therapy
Notifies of return
Attendant assigned
Attendant arrives
Patient returned
HOWS
Arrive at scheduled time 5 5 5 5 1 5 0 0 0 0 0
Arrive with proper equipment 4 2 0 0 5 0 0 0 0 0 0
Dressed properly 4 0 0 0 0 0 0 0 0 0 0
Delivered via correct mode 2 3 0 0 1 0 0 0 0 0 0
Take back to room promptly 4 0 0 0 0 0 0 5 5 5 5
IMPORTANCE SCORE 39 25 25 27 25 0 20 20 20 20
RANK 1 3 3 2 3 7 6 6 6 6
5 = high importance, 3 = average importance, 1 = low importance
WHATS
RELATIONSHIP
MATRIX
CUSTOMER
IMPORTANCE
MATRIX

COMBINATION ID/MATRIX DIAGRAM
Add features
Make existing product faster
Make existing product easier to use
Leave as-is and lower price
Devote resources to new products
Increase technical support budget
Out arrows
In arrows
Total arrows
Strength
(9) = Strong Influence
(3) = Some Influence
(1) = Weak/possible influence
Means row leads to column item
Means column leads to row item
Add features 5 0 5 45
Make existing product faster 2 1 3 27
Make existing product easier to use 1 2 3 21
Leave as-is and lower price 0 3 3 21
Devote resources to new products 1 1 2 18
Increase technical support budget 0 2 2 18
CHARACTERISTICS:
•Uncover patterns in
cause and effect
relationships.
•Most detailed level in
tree diagram. Impact on
one another evaluated.

How do we select the correct Control Chart:
Type
Data
Ind. Meas. or
subgroups
Normally dist.
data
Interest in
sudden mean
changes
Graph defects
of defectives
Oport. Area
constant from
sample to
sample
X, Rm
p, np
MA, EWMA or X - R
CUSUM and Rm
u
C, u
Size of the
subgroup
constant
p
If mean is big, X and
R are effective too
Ir neither n nor p are
small: X - R, X - Rm
are effective
More efective to
detect gradual
changes in long term
Use X - R chart with
modified rules
Attributes Variables
Measurement
Individuals of subgroups
Yes
No No
Yes
Yes
No
Yes
No
Defects Defectives

Additional Variable based tools:
1. PRE-Control
•Algorithm for control based on tolerances
•Assumes production process with measurable/adjustable quality
characteristic that varies.
•Not equivalent to SPC. Process known to be capable of meeting
tolerance and assures that it does so.
•SPC used always before PRE-Control is applied.
•Process qualified by taking consecutive samples of individual
measurements, until 5 in a row fall in central zone, before 2 fall in
cautionary. Action taken if 2 samples are in Cau. zone.
•Color coded
RED ZONE RED ZONE
YELLOW
ZONE
GREEN
ZONE
YELLOW
ZONE
1/4 TOL. 1/2 TOL. 1/4 TOL.
Low
Tolerance
Limt
Tolerance
Limt
High
Reference Line
PRE-Control
DIMENSION
NOMINAL
Reference Line
PRE-Control

2. Common Causes Chart (EWMA).
•Mean of automated manufacturing processes drifts because of
inherent process factor. SPC consideres process static.
•Drift produced by common causes.
•Implement a “Common Cause Chart”.
•No control limits. Action limits are placed on chart.
•Computed based on costs
•Violating action limit does not result in search for special cause.
Action taken to bring process closer to target value.
•Process mean tracked by EWMA
•Benefits:
•Used when process has inherent drift
•Provide forecast of where next process measurement will be.
•Used to develop procedures for dynamic process control
•Equation: EWMA = y^t + s (yt - y^t) s between 0 and 1
Exponentially weighted moving average

EWMA chart of sand temperature
150
100
50
0
1
4
7
10
13
16
19
22
25
28
Observations
Degrees
Sand
Temperature
EWMA
Sand Temperature EWMA Error
125 125.00 0.00
123 125.00 -2.00
118 123.20 -5.20
116 118.52 -2.52
108 116.25 -8.25
112 108.83 3.17
101 111.68 -10.68
100 102.07 -2.07
92 100.21 -8.21
102 98.22 3.78
111 101.62 9.38
107 110.60 -3.60
112 107.30 4.70
112 111.53 0.47
122 111.95 10.05
140 121.00 19.00
125 138.00 -13.00
130 126.31 3.69
136 129.63 6.37
130 135.36 -5.36
112 130.54 -18.54
115 113.85 1.15
100 114.89 -14.89
113 101.49 11.51
111 111.85 -0.85

Tool Summary
Y's
Continuous Data Attribute Data
Continuous Data
Regression Scatter plot Logistic regression
Time series plots Matrix Plot Time series plot
General Linear model Fitted line C chart
Multi-Vari plot Step wise Regression P chart
Histogram N chart
DOE NP chart
Best Subsets
ImR
X's X-bar R
Attribute Data
ANOVA Kruskal-Wallis Chi Square
Box plots T-test Pareto
Dot plots Logistic Regression
MV plot
Histogram
DOE
Homogeneity of variance
General linear model
Matrix plot

Project Closure
•Improvement fully implemented and process re-baselined.
•Quality Plan and control procedures institutionalized.
•Owners of the process: Fully trained and running the process.
•Any required documentation done.
•History binder completed. Closure cover sheet signed.
•Score card developed on characteristics improved and reporting method
defined.

Lean Principles
acknowledged.

Origin of Lean: Toyota Production System
Widespread recognition of Toyota Production System (TPS) as the model
production system grew rapidly with the publication in 1990 0f “The Machine
that Changed the World”, the result of five years of research led by
Massachusetts Institute of Technology.
The MIT research found that TPS was so much more effective and efficient than
traditional mass production that it represented a completely new paradigm and
coined the word lean production to indicate this radically different approach to
production

Toyota Production System
Toyota Production System (TPS) developed by Toyota Motor Corporation to
provide best quality, lowest cost, and shortest lea time through elimination of
waste.
TPS is comprised of two pillars
Just-in-Time and
Jidoka
TPS is maintained and improved through iterations of standardized work, and
kaizen, following PDCA, or the scientific method
Development of TPS is credited to Taichi Ohno. Toyota’s chief of production in
the post world war-II period

Taiichi Ohno
Taiichi Ohno, the architect of Toyota
Production System was born in 1912 in
Manchuria, joined Toyota in 1943 as an
assembly shop manager, by 1954 he was made
a Director of the company, following years of
intense analysis of job routines, cycle times,
and experimentation with process flow.
In 1960, as a general manager of the
Motomochi assembly factory, Ohno introduced
Kanban, the keystone of Just-In-Time. In 1970
Ohno became Executive Director of Toyota

From Mass to Lean
Ford went on to create “mass production”
at the Rouge plant in 1927-using big
machines, big batches
Toyota extended “flow production” to
cope with variety –using simple machines
and quick change tools
TPS or “Lean Production” was perfected
by 1970

Evolution of Lean
Lean Thinking
Lean Manufacturing
Lean Service
Lean Leadership

What is Lean?
Lean is an unending journey to become the
most innovative, most effective, and highly
efficient world class organization

Lean thinking
Focus on VALUE for the customer; specify it
clearly!
Identify the PROCESSES required to create the
desired value
Continually improve the process by improving
the Competence & Leadership skills of the
PEOPLE

Lean Manufacturing
“A manufacturing philosophy that shortens
time between the customer order and the
shipment by eliminating waste”

Lean Manufacturing
Specify value from the standpoint of the
customer
Identify the value stream for each product and
remove Non- value added activities/wastes
Make value flow towards the customer as
quickly as possible
Only at the pull of the customer
While striving for perfection (in products
and processes)

Lean Service
Solve my problem completely
Don’t waste my time
Provide exactly what I want
Provide exactly where I want it
Deliver value when I want it
Reduce the number of decisions I must make
to solve my problems

Objectives of LEAN
Improved
Profitability
Higher Customer Satisfaction
Enhanced Competitiveness
Lean Transformation

Creating Lean Organization
Management is about thinking.
Leading is about getting other people to think
To create the lean organization is to change the way of
thinking of people

Changing thinking
Changing thinking is actually one of the hardest things to do
Much of lean is counter intuitive and can be learned through
experiences
So learning from examples is key- and sharing the experience is
the best way to create lean organization
In due course of time you will discover that people like working
in a lean process better than in the old way

What is Lean?
“A systematic approach to identifying and
eliminating waste (non value added activities)
through continuous improvement by flowing the
product at the pull of customer in pursuit of
perfection”
- Definition by the MEP Lean Network

What is Value?
• Value: a capability provided to a customer
at the right time at an appropriate price, as
defined in each case by the customer.
• Value is created by the producer. From
customer’s point of view, this is why
producer exists.

What is Waste (Muda)?
• Waste is defined as any organizational
activity that absorbs resources but adds no
value
• Mistakes which require rectification
• Production of items no one wants so that
inventories pile up
• Processing steps which are actually not
needed
• Group of people in downstream activity
waiting because an upstream activity has
not delivered in time
• Goods and services which does not meet
the needs of customer

The Focus of Lean
• Lean focuses on elimination of waste
generated in the value stream
• Lean is about expanding capacity by
shortening cycle time between order and
shipment
• Lean is about understanding what is
important to customer
• Lean production is not about eliminating
the people

Lean Thinking?
• To manage the business from the customer
definition of value.
• To create perfect business processes which
can deliver value with minimum wasted
resources, efforts & time.
• To build a lean management system to
develop, sustain, and improve these
processes over time
• Be clear about customer purpose, before
designing the processes and then
developing the People.

In Search of Perfect Process!
• In fact we all are in search of perfect
process
• But perhaps most of us have not realized
this!
• The perfect process has some simple but
challenging attributes
• It creates precisely the right value for
customer.
• In the absence of correctly specified value,
every step in any process is muda (waste)!

The Perfect Process (in Summary)
• The right purpose (value)
• The best method (process)
• The highest sense of
accomplishment (people).
value value

Creating a Perfect Process
• Select the process you want to improve
(the most critical one)
• Form a project team to make improvement
• Draw a current state Value Stream Map
• Develop a future state Value Stream Map.
• Ask what changes in your organization will
be needed
• Devise an Action Plan
• Develop competence and inspire the
people
• Implement the necessary changes to create
the “future state” process
• Measure the performance compared with
the current state.
• Plan for every process, in order of
importance

Essence of Lean Thinking
• Focus on VALUE for the customer;
specify it clearly!
• Identify the PROCESSES required to
create the desired value
• Continually improve the process
(Move from current state to Future
State)
• By means of improving Managerial
Competence & Leadership skills of
the PEOPLE

Leadership Styles
Dictator style
Empowerment style
Lean style

Leader as Dictator
“Do it my way”
No transfer of responsibility
Command & control

Leader as Social Worker
“Do it your way” (during 80s & 90s)
Empowerment
Set the “Goals” and let every one do as
they pleased
Loss of focus, direction, and control

Lean Leadership
“Follow me”
Leads a very different way:
By setting the vision
(more why than how)
By building systems & perfect
processes that cascade
responsibility
By influence:
by example
by being knowledgeable
by getting into messy details
by coaching & teaching
through PDCA learning cycle
through questioning

Lean Six Sigma
acknowledged.

• 98
Lean Six Sigma: What is it?
• Lean and Six Sigma are both process improvement
methodologies
• Lean is about speed and efficiency
• Six Sigma is about precision and accuracy – leading to
data-driven decisions
• Both rooted in the 1980s (and earlier)
• Lean arose as a method to optimize auto manufacturing
• Six Sigma evolved as a quality initiative to reduce variance in
the semiconductor industry

99
Why Lean and Six Sigma
• Six Sigma will eliminate defects but it will not address the
question of how to optimize process flow
• Lean principles exclude the advanced statistical tools often
required to achieve the process capabilities needed to be
truly 'lean‘
• Each approach can result in dramatic improvement, while
utilizing both methods simultaneously holds the promise of
being able to address all types of process problems with the
most appropriate toolkit.
• For example, inventory reduction not only requires reducing batch sizes and
linking operations by using Lean, but also minimizing process variation by
utilizing Six Sigma tools.

100
Lean Six Sigma Goals and Benefits
• Achieve total customer satisfaction and improved
operational effectiveness and efficiency
• Remove wasteful/non-value added activities
• Decrease defects and cycle time, and increase first pass yields
• Improve communication and teamwork through a
common set of tools and techniques
• (a disciplined, repeatable methodology)
• Develop leaders in breakthrough technologies to meet
stretch goals of producing better products and services
delivered faster and at lower cost

• 101
Lean Six Sigma
Requires Behavioral Change
• Lean Six Sigma Challenges Us to:
• Think Differently
• Work Differently
• Ask Questions and Challenge the Status
Quo
• Make Decisions With Facts and Data
• Use New Principles, Tools and
Methodologies
“Early-on, when culture and change compete, culture wins.”
- Tom Quan, GlaxoSmithKline

102
To Successfully Deploy Lean Six Sigma
• Start with the customer … listen, listen, listen
• Leadership commitment and alignment … go beyond the
words … change behavior
• Create momentum for change
• Develop need, vision and plan
• Communicate, communicate, communicate
• Repeatedly execute and assess
• Develop necessary skill sets to obtain the desired future
state at all levels of the organization
• Involve Everyone: Leadership, Champion, Master Black Belt,
Black Belt, Green Belt, Employees

103
Basic Questions
• What are the customer
needs?
• Do our products or services
• answer the Voice of the
Customer
• at a price he is willing to pay?
• How do we know?

104
Lean Six Sigma Principles
• Specify value in the eyes of the customer
• Identify the value stream and eliminate waste /
variation
• Make value flow smoothly at the pull of the customer
• Involve, align and empower employees
• Continuously improve knowledge in pursuit of
perfection

Lean Six Sigma: A Powerful Methodology (DMAIC)
105
Define Measure Analyze Improve Control
what is important to
the customer:
Project Selection
Team Formation
Establish Goal
how well we are doing:
Collect Data
Construct Process Flow
Validate Measurement System
the process:
Analyze Data
Identify Root Causes
the process gains:
Ensure Solution is
Sustained
the process performance measures:
Prioritize root causes
Innovate pilot solutions
Validate the improvement

106
The Tools and Techniques
Define Measure Analyze Improve Control
Benchmarking
FMEA
IPO Diagram
Kano’s Model
Knowledge Based Mgt
Project Charter
SIPOC Model
Quality Function
Deployment
Voice of Customer
Task Appraisal / Task
Summary
Value Stream Mapping
Confidence Intervals
Measurement System
Analysis
Nominal Group
Technique
Pairwise Ranking
Physical Process Flow
Process Capability
Analysis
Process Flow Diagram
Process Observation
Time Value Map
Value Stream Mapping
Waste Analysis
Affinity Diagram
Brainstorming
Cause & Effect Diagram
e-test
F-test
Fault Tree Analysis
FMEA
Histogram
Historical Data Analysis
Pareto Chart
Reality Tree
Regression Analysis
Scatter Diagram
t-test
Thematic Content
Analysis
Tukey End Count Test
5 Whys
DFSS
DOE
Kanban
Mistake Proofing
PF/CE/CNX/SOP
Standard Work
Takt Time
Theory of Constraints
Total Productive
Maintenance
Visual Management
Work Cell Design
5S Workplace Organization
Control Charts
Control Plan
Reaction Plan
Run Charts
Standard Operating
Procedures
Takt Time :The available production time divided by customer demand

107
Definition of a Value Stream
The VALUE STREAM is the entire set of processes or activities performed to transform
the products and services into what is required by the customer.
The VALUE STREAM
Suppliers Design Procure Make Sell Customers
A Primary Focus is TIME,
Product and / or Service Flow
Information Flow: Quickly In All Directions

108
Understanding the Value Stream
• We are often part of a value creating stream
• Ultimately, the intent of the stream is to answer the end-user’s
needs
• Knowing who our customers are is the first step in understanding the
stream; our primary customer may not be the end-user
• Knowing how the stream and our piece works or doesn’t work in
meeting customer needs is what Lean Six Sigma is about
Happy
Customer
Their
Supplier
Our
Piece
Their
Service
Our
Supplier
Our
Customer

109
Summarizing the Power
of Lean Six Sigma
• Provides a world class business strategy
• Encourages a common vision and common language shared by all
• Promotes teamwork and REWARDS success
• Combines aggressive goals with a method and a set of tools
• Requires the application of tools throughout entire lifecycle of a
product or service
• Produces knowledge for improved cycle time, reduced defects,
and lower cost
Better products and services
delivered faster and at lower cost
=
Improved Customer Value

Continuous Process Improvement
acknowledged.

What is a SIPOC?
S
U
P
P
L
I
E
R
S
– A high-level map of your process that includes:
• Approximately 4-7 process steps
• Inputs that feed the process
• The Suppliers (sources) of those Inputs
• Outputs that result from the process
• The Customers (recipients) of those Outputs
– Keep it simple, and think carefully about the scope
C
U
S
T
O
M
E
R
S
Inputs Process Outputs

Why Create a SIPOC Map?
• SIPOC helps your team to:
• Define process boundaries (starting and ending points)
• Identify data collection opportunities
• Clarify who are the true customers of the process
• To avoid “scope creep.”
• To identify likely sources of performance problems
• To expose fundamental issues early in the project that
could change the direction of the team

When to Create a SIPOC
In the Early Stage of Any Project!
Ideas Process Information
– All work can and should be considered as a process

Questions to Help with SIPOC
From the Output/Customer End:
– Why does this process exist?
– What products, services or outcomes
does this process produce?
– How does this process end?
– Who uses the outputs or experiences
the results from this process?
– Who provides funding or staffing for
the process activities, and who cares
about the quality of outcome?
From the Input/Supplier End:
• What items or information gets worked
on?
• Where do the items or information
come from?
• What effect do the inputs have on the
process and on the outcome?
• How does this process start?
From the Middle – Inside the Process:
• What major steps happen to convert
inputs into outputs?
• What people or resources perform
those steps?

SIPOC - Process Development Example
NEUTROGENA CORPORATION
Green Belt Project- Line Trial Anytime
SIPOC
SUPPLIERS INPUTS PROCESS OUTPUTS CUSTOMERS
Industrial Ingineering
Maintenance
Warehouse
Package Development
Quality Assurance
Scheduling
Routing
Cost Estimate
Change Parts
Specs
B.O.M.
Protocol
LINE
TRIAL
EXECUTION
START STOP
Create/Deliver
Protocol
Deliver Supplies/
Change Parts
Line Set Up/Fine
Tune
Contact Line Trial
Team
Fill Product
Deliver Samples/
Documentation
Stability Samples
Validate Change Parts
Validate Fill Process
Validate Cost
Quality Validation
R&D
MFG
Package Dev
I.E.
QA
Suppliers Material
Labor

SIPOC Workshop
• Instructions:
– Prepare a SIPOC for the process of baking your
cake. Use the guidelines on the following page.
– Be prepared to share your work with the class.
– 15 minutes to prepare + 2 presentations (5
minutes each)

How to Create a SIPOC Map
• Name the process
• Identify, name, and order the major process steps (approximately 4-7
steps)
• Clarify the boundaries of the process – where it starts and where it stops
• List key outputs and customers
• List key inputs and suppliers

SIPOC– a Foundation for Next Steps
• The list of Customers from your SIPOC are the starting point for the Voice of the
Customer (step 3)
• The major process steps (macro map) from your SIPOC are the overview for later
detailed process mapping
• The Inputs, Process Steps, and Outputs on your SIPOC generates ideas for what
can and should be measured, which feeds the Data Collection Plan in the Measure
phase
• The SIPOC contains clues about potential root causes that drive performance.

Voice of Customer
• Understand why the Voice of the Customer (VOC) is critical
• Know how to create a plan for gathering VOC data
• Know both reactive and proactive ways to gather VOC
information
• Know how to analyze data through the use of affinity
diagrams and Kano diagrams
• Be able to use a CTQ tree diagram to identify customer
requirements and set specifications for them

What Is the Voice of the Customer?
• The term Voice of the Customer (VOC) is used
to describe customers’ needs in a process
improvement effort and their perceptions of
your product or service.

Why VOC Is Critical
• VOC data helps an organization and a project
to:
– Decide what products and services to offer
– Identify critical features and specifications for
those products, process outputs and services
– Decide where to focus improvement efforts
– Get a baseline measure of customer satisfaction
to measure improvement against
– Identify key drivers of customer satisfaction

Why Collect VOC Data
• Customer requirements change constantly
• Specifications tend to focus on technical data
only

VOC Process
• Outcomes
– A list of customers and customer segments
– Identification of relevant reactive and proactive sources
of data
– Verbal or numerical data that identify customer needs
– Defined Critical to Quality requirements (CTQ)
– Specifications for each CTQ
Based on Rath & Strong
1.
Identify
customers
and determine
what you need
to know
2.
Collect and
analyze
reactive
system data
then fill gaps
with proactive
approaches
3.
Analyze data
to generate
a key list
of customer
needs in
their language
4.
Translate
the customer
language
into CTQs
5.
Set
specifications
for CTQs

VOC Step 1: Identify Customers & Determine What You Need to Know
1.
Identify
customers
and determine
what you need
to know
• Goal
2.
Collect and
analyze
reactive
system data
then fill gaps
with proactive
approaches
3.
Analyze data
to generate
a key list
of customer
needs in
their language
4.
Translate
the customer
language
into CTQs
5.
Set
specifications
for CTQs
– Identify your customers
– Decide what you need to know about their needs
– Decide when and how you will get this information

Common Customer Segments
• Customer status: Former Customers, Current
Customers, Customers of Competitors,
Substitute Customers
• Where they are in the “customer chain”
– Internal user  Distributor End user
• Geography
• Industry, Division or Department
• Demographics

Do You Have Customer 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

Deciding the What and Why
• Revisit your charter—what is the purpose of your project?
• How does your purpose relate to customer 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?

Sample Questions
For all customers, you should ask questions such as:
1. What is important to you about our process/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 process/product/service?
What can we do to make your job easier?
6. What specific recommendations would you make to us?

VOC Step 2: Collect and Analyze Reactive and Proactive Data
1.
Identify
customers
and determine
what you need
to know
2.
Collect and
analyze
reactive
system data
then fill gaps
with proactive
approaches
3.
Analyze data
to generate
a key list
of customer
needs in
their language
4.
Translate
the customer
language
into CTQs
5.
Set
specifications
for CTQs
Reactive systems
•Information comes to you whether you take action or not
Proactive systems
•You need to put effort into gathering the information

Typical Reactive Systems
• Customer complaints (phone or written)
• Problem or service hot lines
• Technical support calls
• Customer service calls
• Claims, credits, contested payments
• Sales reporting
• Product return information
• Warranty claims
• 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, process outputs or services

Proactive VOC Systems
• Interviews
• Focus groups
• Surveys
• Comment cards
• Data gathering during sales visits or calls
• Direct customer observation
• Market research, market monitoring
• Benchmarking
• Quality scorecards

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

VOC Step 3: Analyzing Customer Data
1.
Identify
customers
and determine
what you need
to know
2.
Collect and
analyze
reactive
system data
then fill gaps
with proactive
approaches
3.
Analyze data
to generate
a key list
of customer
needs in
their language
4.
Translate
the customer
language
into CTQs
5.
Set
specifications
for CTQs
• Goal is to generate a list of key customer needs in their language.
• It is helpful to summarize this information in a meaningful way.

Six Sigma Workshop for World Bank, Chennai - India

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Six Sigma Workshop for World Bank, Chennai - India