IBM-09: Six Sigma Tools and Techniques

Lecture 1: Introduction
A. Ramesh PhD
Department of Management Studies
Indian Institute of Technology Roorkee
ramesh.anbanandam@gmail.com

Class Venue and Time

Room No.LHC204
Monday From 8 AM - 8.55 AM
Wednesday - From 8 AM - 8.55 AM
Friday - From 8 AM - 8.55 AM

Welcome!!!
About me!!!

Flow of Presentation
1.
2.
3.
4.
5.
6.

Course content
Evaluation scheme
Six Sigma
Definition of quality
Dimensions quality
History of quality

1. Course content

Module 1(10 Hours) - Introduction

History, definition, dimensions, responsibility for quality
Six Sigma Basics Overview & Implementation
Define phase, Measure phase, Process Flow Charting/Process
Mapping
Basic Tools
Probability
Overview of Distributions and Statistical Process
Probability and Hazard Plotting
Six Sigma Measurements
Basic Control Charts
Process Capability and Process Performance Metrics

Module 2 (12 Hours) - Six Sigma Analysis Phase

Visualization of Data,
Confidence Intervals and Hypothesis Tests,
Inferences : Continuous Response,
Inference : Attribute (Pass/Fail) Response,
Comparison Tests : Continuous Response, Comparison Tests : Attribute
(Pass/Fail) Response,
Bootstrapping,
Variance Components,
Correlation and Simple Linear Regression,
Single Factor (One Way) Analysis of Variance (ANOVA) and Analysis of
Means (ANOM),
Two-Factor (Two-Way) Analysis of Variance,
Multiple Regression
Logistic Regression, and Indicator Variables.

Module 3 (10 Hours) - Six Sigma Improve Phase

Benefiting from Design of Experiments (DOE)
Understanding the Creation of Full and Fractional
Factorial
2K DOEs
Planning 2K DOEs Design and
Analysis of 2K DOEs
Response Surface Methodology

Module 4 (10 hours) - Lean Six Sigma

Lean and its Integration with Six Sigma process,
Integrating of Theory of Constraints
Design for Six Sigma Manufacturing applications,
Service/Transactional Applications
DFSS Overview and Tools
Product DFSS, Process DFSS
Management of Six Sigma
Change Management
Project Management and Financial Analysis, Team
Effectiveness, Creativity

References
S.
No.

Name of Authors/Book/Publisher

Year of
Publication
/ Reprint

Breyfogle, Forrest: Implementing Six Sigma : Smarter Solutions Using

Statistical Methods, New York John Wiley & Sons

1999

Harry, Mikel and Rich Schroeder, Six Sigma : The Breakthrough Management
Strategy Revolutionizing the Worlds Top Corporations, New York
Doubleday

2000

Besterfield, D C and Besterfield C, Total Quality Management, Pearson

Education Asia

1999

Montgomery, D.C, Statistical Quality Control- A modern introduction, 6th

Edition, Wiley India

2010

Feigenbaum, Total Quality Control, 3rd Edition, McGraw Hill

1991

Hansen B L, and Ghare P M, Quality Control and Application, Prentice Hall

India

1993

2. Evaluation Scheme

Evaluation Scheme

Midterm Evaluation
End Term Evaluation
Mini Project
Surprise Quizzes

: 35 %
: 50 %
: 10 %
: 05 %

What is six sigma?

Six Sigma is. . .

A performance goal, representing 3.4 defects for every million
opportunities to make one
A series of tools and methods used to improve or design
products, processes, and/or services
A statistical measure indicating the number of standard
deviations within customer expectations
A disciplined, fact-based approach to managing a business and
its processes
A means to promote greater awareness of customer needs,
performance measurement, and business improvement

Whats in a name?
Sigma is the Greek letter representing the standard
deviation of a population of data.
Sigma is a measure
of variation
(the data spread)

What does variation mean?

20

Variation means that a

process does not produce
the same result (the Y)
every time.
Some variation will exist in
all processes.

15

10

-5

-10

Variation directly affects customer experiences.

Customers do not feel averages!

Measuring Process Performance

The pizza delivery example. . .

Customers want their pizza

delivered fast!

Guarantee = 30 minutes or less

What if we measured performance and found an

average delivery time of 23.5 minutes?
On-time performance is great, right?
Our customers must be happy with us, right?

How often are we delivering on time?

Answer: Look at
the variation!
30 min. or less

10

20

30

40

50

Managing by the average doesnt tell the whole story. The

average and the variation together show whats happening.

Reduce Variation to Improve Performance

How many standard

deviations can you
fit within
customer
expectations?

30 min. or less

10

20

30

40

50

Sigma level measures how often we meet (or fail to

meet) the requirement(s) of our customer(s).

The Empirical Rule If the histogram is bell shaped

Approximately 68% of all observations fall
within one standard deviation of the mean.

Approximately 95% of all observations fall

within two standard deviations of the mean.

Approximately 99.7% of all observations fall

within three standard deviations of the mean.

4.20

Empirical Rule
Data are normally distributed (or approximately
normal)
Distance from
the Mean

1
2
3

Percentage of Values
Falling Within Distance

68
95
99.7
21

Chebysheffs TheoremNot often used because interval is very wide.

A more general interpretation of the

standard deviation is derived from
Chebysheffs Theorem, which applies to all
shapes of histograms (not just bell shaped).
The proportion of observations in any
sample that lie within k standard deviations
of the mean is at least: For k=2 (say), the theorem states
that at least 3/4 of all observations
lie within 2 standard deviations of
the mean. This is a lower bound
compared to Empirical Rules
approximation (95%).
4.22

Centered normal distribution between Six Sigma limits

23

Effects of a 1.5 shift

24

The Six Sigma Evolutionary Timeline

1818: Gauss uses the normal curve
to explore the mathematics of error
analysis for measurement, probability
analysis, and hypothesis testing.
1736: French
mathematician
Abraham de
Moivre publishes
an article
introducing the
normal curve.

1924: Walter A. Shewhart introduces

the control chart and the distinction of
special vs. common cause variation as
contributors to process problems.
1896: Italian sociologist Vilfredo
Alfredo Pareto introduces the 80/20
rule and the Pareto distribution in
Cours dEconomie Politique.

1949: U. S. DOD issues Military

Procedure MIL-P-1629, Procedures

for Performing a Failure Mode Effects

and Criticality Analysis.

1960: Kaoru Ishikawa

introduces his now famous
cause-and-effect diagram.

1941: Alex Osborn, head of

BBDO Advertising, fathers a
widely-adopted set of rules for
brainstorming.

1970s: Dr. Noriaki Kano

introduces his two-dimensional
quality model and the three
types of quality.

1986: Bill Smith, a senior

engineer and scientist introduces
the concept of Six Sigma at
Motorola

1995: Jack Welch

launches Six Sigma at GE.

1994: Larry Bossidy launches

Six Sigma at Allied Signal.

Six Sigma Companies

Six Sigma and Financial Services

4- Definition of Quality

Definition of Quality
Delighting or
pleasing the
customer

Perfection

Elimination
of waste

Total
Customer
Service and
satisfaction

Fitness for
use
Doing it
right the first
time

Providing a
good usable
product

Consistency

Defining Quality

Quality is a predictable degree of uniformity and
dependability, at low cost and suited to the market
Deming

Quality is fitness for use
Juran

Quality is conformance to requirements
Crosby
30

Defining Quality

The degree to which a set of inherent

characteristics fulfills requirements.
ISO 9000:2000

31

Quality can be Quantified

Q = P/E
Where Q = Quality
P = Performance
E = Expectations
If Q is greater than 1.0, then the customer has a
good feeling about the product or service.
32

What Is Quality?


The degree of excellence of a thing

(Websters Dictionary)

The totality of features and characteristics

that satisfy needs ( ASQC)
Fitness for use

Modern definition of quality

Quality is inversely proportional to variability

5. Dimensions quality

36

Dimensions of Quality (Garvin (1987)

1.

Performance
Will the product do the intended job?

2.

Reliability
How often the product fail?

3.

Durability
How long the product last?

4.

Serviceability
How easy it to repair the product?

5.

Aesthetics
What does the product look like?

6.

Features
What does the product do?

7.

Perceived quality
What is the reputation of the company or its product?

8.

Conformance to standards
is the product made exactly as the designer intended?

Service Quality Dimensions and

Examples
Dimension

Examples

1. Tangibles

Were the facilities clean, personnel neat?

2. Convenience

Was the service center conveniently located?

3. Reliability

Was the problem fixed?

4. Responsiveness

Were customer service personnel willing and able

to answer questions?

5. Time

How long did the customer wait?

6. Assurance

Did the customer service personnel seem

knowledgeable about the repair?

7. Courtesy

Were customer service personnel and the cashier

friendly and courteous?

DMAIC The Improvement

Methodology
Define

Measure Analyze Improve Control

Objective:
DEFINE the
opportunity

Objective:
Objective:
Objective:
MEASURE current ANALYZE the root IMPROVE the
performance
causes of problems process to
eliminate root
causes

Objective:
CONTROL the
process
to sustain the gains.

Key Define Tools:

Cost of Poor
Quality (COPQ)
Voice of the
Stakeholder
(VOS)
Project Charter
As-Is Process
Map(s)
Primary Metric
(Y)

Key Measure
Tools:
Critical to Quality
Requirements
(CTQs)
Sample Plan
Capability
Analysis
Failure Modes
and Effect
Analysis (FMEA)

Key Control
Tools:
Control Charts
Contingency
and/or Action
Plan(s)

Key Analyze
Tools:
Histograms,
Boxplots, MultiVari Charts, etc.
Hypothesis Tests
Regression
Analysis

Key Improve
Tools:
Solution
Selection Matrix
To-Be Process
Map(s)

Define DMAIC Project

What is the project?
$

Project
Charter

Cost of
Poor
Quality

Stakeholders

Voice of
the
Stakeholde
r

Six Sigma
What is the problem? The problem is the Output (a Y

in a math equation Y=f(x1,x2,x3) etc).

What is the cost of this problem
Who are the stake holders / decision makers
Align resources and expectations

Define As-Is Process

How does our existing process work?
Move-It! Courier Package Handling
Process
Courier

Mail Clerk

In-SortClerk

In-SortSupervisor DistanceFeeClerk

WeightFeeClerk

Accounts
ReceivableClerk

Accounts
Supervisor

Out-SortClerk

Out-SortSupervisor

Observ e package
weight (1 or 2) on
back of package

Look up
appropriate
Weight Fee and
write in top middle
box on package
back
Add Distance &
Weight Fees
together and write
in top right box on
package back

Accounting

Take packages
f rom Weight Fee
Clerk Outbox to
A/R Clerk Inbox.

Take packages
f rom A/R Clerk
Outbox to
Accounts
Superv isorInbox.

Does EVERYONE
agree how the current
process works?

Circle Total Fee

and Draw Arrow
f rom total to
sender code

Write Total Fee

f rom package in
appropriate
Sender column on
Accts. Supv .s log

Take packages
f rom Accounts
Superv isor
Outbox to OutSort Clerk Inbox.

Delivery

Finalizing

Take packages
f rom Out-Sort
Clerk Outbox to
Out-Sort
Superv isorInbox.

Draw 5-point Star

in upper right
corner of package
f ront

Define the Non Value

Add steps

Sort packages in
order of Sender
Code bef ore
placing in outbox

Add up Total # of
Packages and
Total Fees f rom
log and create
client inv oice

Observ e sender
and receiv er
codes and make
entry in Out-Sort
Superv isors log

Deliv erPackages
to customers
according to N, S,
E, W route

Deliv er inv oiceto

client

Submit log to
General Manager
at end of round

Submit log to
General Manager
at conclusion of
round.

Submit log to
General Manager
at end of round

Define Customer Requirements

Listening Posts Industry Intel

What are the CTQs? What motivates the customer?

SECONDARY RESEARCH

Market
Data

Customer
Service

Industry
Benchmarking

Customer
Correspondence

PRIMARY RESEARCH
Survey
s

OTM

Focus Groups

Observations

Voice of the Customer

Key Customer Issue

Critical to Quality

Measure Baselines and Capability

What is our current level of performance?
Descriptive Statistics

Sample some data / not all data

Current Process actuals measured
against the Customer expectation
What is the chance that we will succeed
at this level every time?

Variable: 2003 Output

Anderson-Darling Normality Test
A-Squared:
P-Value:

10

20

30

40

50

95% Confidence Interval for Mu

Pareto Chart for Txfr Defects

Mean
StDev
Variance
Skewness
Kurtosis
N

23.1692
10.2152
104.349
0.238483
0.240771
100

Minimum
1st Quartile
Median
3rd Quartile
Maximum

0.2156
16.4134
23.1475
29.6100
55.2907

95% Confidence Interval for Mu

21.1423
19.5

100

22.5

23.5

24.5

40
20
0
te
La

79
79.0
79.0

nt
ou
Am

17
17.0
96.0

er s
Oth

4
4.0
100.0

25.5

26.5

25.1961

95% Confidence Interval for Sigma

8.9690

Percent

Count

60
50

Count
Percent
Cum %

21.5

95% Confidence Interval for Median

80

Defect

20.5

100

0.211
0.854

11.8667

95% Confidence Interval for Median

19.7313

26.0572

Measure Failures and Risks

Where does our process fail and why?
Subjective opinion mapped into an objective risk profile number

Failure Modes and Effects Analysis (FMEA)

Process/Product
Process or
Product Name:

Prepared by:

Responsible:

FMEA Date (Orig) ______________ (Rev) _____________

Process
Step/Part
Number

Potential Failure Mode

Potential Failure Effects

S
E
V

Potential Causes

X1
X2
X3
X4
etc

O
C
C

Current Controls

Page ____ of ____

D
E
T

R
P
N

Actions
Recommended

Resp.

Actions Taken

S
E
V

O
C
C

D
E
T

R
P
N

Analyze Potential Root Causes

What affects our process?
Ishikawa Diagram
(Fishbone)

Six Sigma

y = f (x1, x2, x3 . . . xn)

Analyze Validated Root Causes

What are the key root causes?
Pareto Chart for Txfr Defects
100

100

60
40

Percent

Count

80

50

20
0

0
te

Defect

La

Count
Percent
Cum %

79
79.0
79.0

nt
ou
Am

17
17.0
96.0

er s
Oth

Experimental Design

4
4.0
100.0

Data
Stratification

Regression
Analysis

Pareto Chart for Amt Defects

100
15

60

10

40
5
20
0

Defect
Count
Percent
Cum %

Percent

Count

80

Process
Simulatio
n

0
n cy
rre
Cu

12
70.6
70.6

al
ric
Cle

3
17.6
88.2

er
Oth

2
11.8
100.0

Six Sigma

y = f (x1, x2, x3 . . . xn)

Critical Xs

Improve Potential Solutions

How can we address the root causes we identified?

Address the causes, not the symptoms.

Evaluate

Clarify

Generate

y = f (x1, x2, x3 . . . xn)

Critical Xs

Divergent | Convergent

Decision

Improve Solution Selection

How do we choose the best solution?
Solution Selection Matrix
Qualit
y

Solution

Time

Sigma

Cost

Six Sigma
Implementation
Bad
Good

Solution
Right
Wrong

Nice
Try

Nice
Idea

Solution
Implementatio
n Plan

Time

CBA

Other

Score

Control Sustainable Benefits

How do we hold the gains of our new process?
Some variation is normal and OK
How High and Low can an X go yet not materially impact the Y
Pre-plan approach for control exceptions

Process Control System (Business Process Framework)

Process Owner:
Process Description:

Direct Process Customer:

CCR:

Date:

Flowchart
Customer

Sales

Specs
&/or
Targets

Measures
Responsibility Contingency
(Tools)
(Who)
(Quick Fix)
Where &
Frequency

Remarks

35

Review
appliation for
completeness

No

Application
Complete?

P2 - # of
incomplete
loan
applications

UCL=33.48

Individual Value

1.1
Application & Review
1.2
Processing
1.3
Credit review
1.4
Review
1.5
Disclosure

Branch Manager

Key
Measure
ments
P1 - activity
duration,
min.

Apply for
loan

Complete
meeting
information

Processing

Measuring and Monitoring

Loan Service
Manager

25

Mean=24.35

LCL=15.21

15
0

10

20

Observation Number

30

DFSS The Design Methodology

Design for Six Sigma
Define

Measure Analyze Develop

Verify

Uses
Design new processes, products, and/or services from scratch
Replace old processes where improvement will not suffice

Differences between DFSS and DMAIC

Projects typically longer than 4-6 months
Extensive definition of Customer Requirements (CTQs)
Heavy emphasis on benchmarking and simulation; less emphasis
on baselining

Key Tools
Multi-Generational Planning (MGP)
Quality Function Deployment (QFD)

Champions
Promote awareness and execution of Six Sigma
within lines of business and/or functions
Identify potential Six Sigma projects to be executed
by Black Belts and Green Belts
Identify, select, and support Black Belt and
Green Belt candidates
Participate in 2-3 days of workshop training

Black Belts
Use Six Sigma methodologies and advanced tools (to
execute business improvement projects
Are dedicated full-time (100%) to Six Sigma
Serve as Six Sigma knowledge leaders within
Business Unit(s)
Undergo 5 weeks of training over 5-10 months

Green Belts
Use Six Sigma DMAIC methodology and basic tools
to execute improvements within their existing job
function(s)
May lead smaller improvement projects within
Business Unit(s)
Bring knowledge of Six Sigma concepts & tools to
their respective job function(s)
Undergo 8-11 days of training over 3-6 months

Evolution of Quality Management (13/19)

6 Sigma
QMS
Taguchi
DOE
SPC
Inspection
1930

1940

1975

1985

1990

2000

Thank You