Total Quality Management – TQMB19-5

Session 04 → Six Sigma Project (Concepts) +

DMAIC Step 1 (Define)
Interpretation of Six Sigma

◼ Six Sigma as a metric

◼ Used as a measure for process capability/performance
◼ A common yardstick for the organization
◼ Six Sigma as a philosophy
◼ Six sigma process may not bring down the defect at 3.4
DPMO
◼ But the philosophy ensures employees understand the
importance of reducing sigma through projects
◼ Six Sigma as a management system
◼ Organization should express quality in terms of
capability level

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Three Emphasis Areas for Six Sigma

◼ Design for Six Sigma

◼ Product design excellence/ DFM
◼ Within all components of the development and new
product introduction process
◼ Transactional Six Sigma
◼ Operational excellence
◼ Within all components of the operation. Areas of focus
include Sales, HR, Finance, Materials, etc.
◼ Production Six Sigma
◼ Production excellence/ variation and defect reduction/
lean production techniques
◼ Within all components of the production and delivery
process Dipankar Bose - XLRI
Choosing Candidates for Six Sigma
Projects – Basic Terminologies
◼ Critical To Quality (CTQ)
◼ Customer generated/ Process generated/ Business
generated
◼ CTQ Metric or XY Metric
◼ Process metric/ Business result metric → Input = X
◼ Product metric = Y = f (X)
◼ Determine the critical Xs which affect the Y most
◼ Defect/Defective
◼ Opportunity & Defects Per Million Opportunities (DPMO)
◼ Cost Of Poor Quality (COPQ)

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XY Metric

Y = f (X1, X2, …, Xn)

Dependent Independent
Output Input
Effect Cause
Symptom Problem
Monitor Control

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Tree Diagram (One of 7 New Quality
Tools) – Critical to Quality (CTQ)
CTQ Detailed Specifications
Requirements Performance to
Response/Control Schedule
Customer (X)
Needs Requirement
Deviation from
A schedule in
Measure completed units
100% of committed
ships prior to 5:00 pm
Better Product arrives
Target as received on
Delivery (Y) on-time Customer receiving
dock
CTQ Driver Specification LSL = 0 hours late
Requirement Limit(s) USL = 6 hours early
C
Allowable
defect Rate < 3.4 DPMO
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Some Calculations

◼ Defects Per Million Opportunities (DPMO)

= ((Total Defects) / (Total Opportunities)) * 1,000,000

◼ Defects (%)
= ((Total Defects) / (Total Opportunities)) * 100

◼ Yield (%)
= 100 – (Defects Percentage)

◼ Process Sigma
= NORM.S.INV(1 – ((Total Defects)/(Total Opportunities)))
+ 1.5
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Some Additional Calculations

◼ Process Yield (PY) → Rework is part of output

◼ Final Yield (FY) → Product of individual PY

◼ Throughput Yield (TPY) → Rework is NOT part of output

◼ Also called First Pass Yield (FPY)
◼ DPU and TPY → Defects assume Poisson distribution
◼ DPU = – LN(TPY)
◼ Rolled Throughput Yield (RTY) → Probability of the entire
process producing zero defects
◼ Product of individual TPY
◼ RTY and TDPU → TDPU = – LN(RTY)
◼ Normalized Yield (NY) → Geometric mean of TPY
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Yield Calculation – Example

◼ Input =100 units

◼ Process A → Scrap = 5 units; Rework = 9 units
◼ Process B → Scrap = 3 units; Rework = 6 units
◼ Process C → Scrap = 4 units; Rework = 5 units
◼ Calculate PY for each process and overall PY or FY
◼ Calculate TPY or FPY for each process, RTY, NY, DPU and
TDPU

◼ PY-1 = 0.95; PY-2 = 0.968; PY-3 = 0.9565

◼ FY = Overall PY = 0.88
◼ TPY-1 = 0.86; TPY-2 = 0.905; TPY-3 = 0.902 (also FPY)
◼ RTY = 0.7024
◼ NY = (0.7024)^(1/3) = 0.8889 Dipankar Bose - XLRI
Yield Calculations – Another Example

◼ A process produces 50000 pencils. Three types of defect

can occur
◼ Blurred printing → 40
◼ Wrong dimensions (Length & Diameter) → 125
◼ Rolled ends → 10

◼ Calculate DPU, TPY, PPM, DPMO

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Yield Calculation – Combined Process
– Assignment 2.1
◼ Process 1A – Rework 10%, Scrap = 5%
◼ Process 1B – Rework 15%, Scrap = 2%
◼ Process 1C – Rework 5%, Scrap = 3%
◼ Process 2 – Rework 5%, Scrap = 10%

◼ 1 unit 1A, 1 unit 1B and 3 units 1C assembled and then

the assembled part is further processed in 2.

◼ Find PY, FY, FPY, RTY.

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DMAIC

◼ Define
◼ From potential problem identification to team
formation for selected project
◼ Measure
◼ From identification of key product parameter/process
characteristics to measurement of current state
◼ Analyze
◼ Identifies causes of variation by analyzing past/present
data
◼ Improve
◼ Remedy/ effectiveness of remedy/ implementation plan
◼ Control
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DMAIC Questions

◼ Define
◼ What are customer expectations of the
product/process?
◼ Measure
◼ What is the frequency of defects?
◼ Analyze
◼ Why/when/where do defects occur?
◼ Improve
◼ How can we fix the process?
◼ Control
◼ How can we make the process stay fixed?

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Six Sigma (Define Phase)

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DMAIC Phase1 – Define

◼ Identify potential projects

◼ Nomination for projects
◼ Pareto principle
◼ Evaluate potential projects
◼ Pareto Priority Index
◼ Vital few/ Useful many
◼ Selection of initial project
◼ Chronic problem/feasible/significant/measurable
◼ Problem/ Opportunity and Mission statement for project
◼ Select and launch project team
◼ Prepare Project Charter

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DMAIC Phase1 – Define – Tools

◼ Strategic alignment and goal deployment

◼ Cost of Poor Quality (COPQ) analysis
◼ Project management – Project selection and charting
◼ Tree diagram
◼ Critical-to-Quality (CTQ)/ Critical-to-Delivery (CTD)/
Critical-to-Cost (CTC)
◼ SIPOC (Supplier-Input-Process-Output-Customer) map
◼ Also called COPIS
◼ Voice of customer (VOC) analysis
◼ Also Voice of Business (VOB)/ Voice of Internal
Employee (VOIE)/ Voice of Process (VOP)
◼ Will be discussed through Kano categorization
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Strategic Alignment and Goal
Deployment
◼ Business Case
◼ Why the project? What happens if not done? How does
it fit with company vision?
◼ May include → Elevator Pitch/Speech
◼ Problem Statement
◼ What is wrong? When and where? Whom does it
impact? How big is impact?
◼ Should not discuss → Potential cause & Remedy
◼ Goal Statement → Should be SMART
◼ Scope and Milestones
◼ Roles and Responsibilities
◼ ARMI Model/ RASIC Model
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Cost Of Poor Quality (COPQ) – Types

◼ External failure costs Cost

◼ Internal failure costs Investment
◼ Appraisal costs
◼ Prevention costs Combined
◼ Hidden quality costs
Time/Effort

◼ Controversy over optimal COPQ level

◼ Optimal COPQ
◼ Preventive COPQ
◼ Proposes Zero defect

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Business Case – Templates

◼ Use the problem and the goal statement

◼ Convert it into a statement of business value

◼ (insert specific type of) performance for the (name specific

area) area isn’t meeting (define goal, target, or other
measure). Overall, this is causing (name type of) problems
that are costing us as much as Rs. (list specific amount) per
(insert time frame).
◼ The loss in (insert specific type of performance) as a result
of (name the problem) is Rs. (amount per unit, may be per
minute). Hence for (affected total number) the
management is losing Rs. (list total amount) per (insert
time frame, may be per day). Dipankar Bose - XLRI
Better Problem Statements – May
Include the Following
◼ Detail of the place where problem occurs
◼ Historical time frame
◼ What was the target performance?
◼ May be specification limits
◼ What is current average and maximum or minimum value
◼ May be control limits
◼ Effects of the problem
◼ Actual effects observed
◼ May be in 2 paragraphs also

◼ Mission Statement
◼ Future Target Performance within given time
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Poor Problem Statement – Examples

◼ Our customers are angry with us and are late in paying

their bills.
◼ Inventory levels are too high and must be reduced.
◼ Having too few forklifts is making inventory levels too
high.
◼ Human resources is taking too long to fill personnel
requests.
◼ Our hospital has a problem with the number of insurance
claim forms submitted with errors to the insurance
company.

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ARMI Model – Stakeholder Analysis
Tool – Template

Name Role D M A I C
Anthony Global Operating Leader I I I I I
Amar Champion & Operating Leader A A A A A
Akbar Master Black Belt A A A A A
Toofan Black Belt R R R R R
Vijay Project Lead M M M M M
Joy Training R R R R R
Shakal Member M/R M/R M/R M/R M/R
Gabbar Member M/R M/R M/R M/R M/R
Mogambo Member M/R M/R M/R M/R M/R
Natwarlal Technical M/R M/R M/R M/R M/R
Rahul Trainee M M M M M

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RASIC Model – Template from Internet

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SIPOC/COPIS – Steps

◼ Helps to identify the boundary of the project

◼ Steps
◼ First list all outputs and inputs
◼ List the customers against outputs and list the suppliers
against inputs
◼ Both suppliers and customers can be internal (also
utility) as well as external
◼ List all the sub-processes that are used to convert input
to output
◼ May include
◼ Process owner/ Process purpose/ Classification of
supplier and customer/Requirements
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SIPOC/COPIS – Example from Internet

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