Lean Six Sigma Green Belt

by
Rajiv Purkayastha
Introduction Module Lean six sigma MBB
Expectations & Objectives-
 Objectives

• In this course, Participants will

– Learn Six Sigma tools applicable to the industry

– Practice application of Six Sigma tools

– Enhance readiness for applying Six Sigma concepts within the

organization
 Competitive Environment

Western Technology

Japanese Quality Industry Chinese Prices

Domestic Competition

4
Overview of Six Sigma
 What do we need to do?

Make large breakthrough improvements to -

 Reduce cost

 Improve Quality

 Faster Delivery

6
 What is Six Sigma ?

 Measure of Quality
 Process For Breakthrough Improvement
 Enabler for Culture Change
 What is Six Sigma ?
Six Sigma is a process driven methodology that uses statistical analysis to
drive breakthrough improvements & reduce inherent variability.

 The term “sigma” is a statistical term that measures how far a given
process deviates from perfect .
 For a business /manufacturing / transactional / service process, the
sigma capability (z-value) is a metric that indicates how well that
process is performing. The higher the sigma capability, the better.

As defects ...the Sigma capability ‘Z’

D
go down... Z
goes up
 What is Six Sigma ?
Six Sigma is
• Measure of Quality
• Process For Breakthrough Improvement
• Enabler for Culture Change

 Six Sigma means = 3.4 defects per million opportunities

= 99.9996% accuracy

Customer
Target Specification

1s
2s
3s
4s
5s
6s
 What is Six Sigma ?
Is 99% accuracy is good enough ?

Which is the World‟s busiest Airport? Hartsfield-Jackson

Atlanta International Airport

How many flights does it handle everyday? Approximately 1000

99% Good (3.8 Sigma) 99.99966% Good (6 Sigma)

Ten short or long landings daily One short or long landing every 2.7 years

Unsafe drinking water for 15 minutes each

One unsafe minute every seven months
day
No electricity for almost seven hours each
One hour without electricity every 34 years
month

1 incorrect surgical operation per 100 3.4 incorrect operations per million
 s Level Across industries

11
 What is Six Sigma ?
• Measure of Quality
• Process For Breakthrough Improvement
• Enabler for Culture Change

 Process For Breakthrough Improvement

 6 Sigma provides a process based approach for Breakthrough & continuous
improvement.
 It is independent of the measurement involved & can be used to improve any
business process

Customer
Target Specification
Target
Customer
Specification

3σ Process 1s
1s 2s
3s 6σ Process
2s 4s
3s 5s
6s
Before After
 An Exercise

30 MINS

5 MINS 60 MINS

Restaurant A
30 MINS 30 MINS 40 MINS

Restaurant B Restaurant C
Which Process is better & why?
 What is Six Sigma ?
• Measure of Quality
• Process For Breakthrough Improvement
• Enabler for Culture Change

 Enabler for Culture Change

 Six Sigma requires a change in the way any organization works
 Driven from top
The Difference Six Sigma brings,
• Driven by the Customer requirements
• Pays attention to Total Business
• Focuses on the Processes
• High on Methodology & Data
• Looks Forward as well as Backward
• High on People
• Aims for Optimal solution rather than what‟s simply „good enough‟
 Understanding Variation

15
 Understanding Variation

Don’t worry !
That rope is one
inch thick on the
average.

“Average” - a common measure hides problems

by disguising variation

Response Times
55 60 58 66 55 62 58 65 61 58 62 60 61 60 62 58 60 59
70

Process 1 Process 2

Customer does not understand average

60

50

1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9

Unit

16
Understanding Variation

Average
River
Depth -4ft

Focus on Average can turn any

17 business “Red”
 Reduce the
Variation &
Shift the
Mean

18
 What is Six Sigma ?

Six Sigma is a project based improvement methodology

The unit of Six Sigma
deployment in an organization
High
Performance of CTQ / KPI*

are Six Sigma Improvement

Projects which are executed
by task force like teams for a
duration of 3-6 months and
results in accelerated
development of the KPI / CTQ.
Low

Past 6 Sig. Project Future ““All improvement takes place

--------Time-------- project by project, and in no
other way.”
* KPI : Key performance indicator -Joseph M. Juran ( 1904-2008)
CTQ : Critical to quality American Quality Guru

In a full- fledged Six Sigma deployment , large number of improvement projects run
concurrently in the organization bringing in dramatic improvement .All projects must
address a CTQ ( based on customer voice) or CTP ( driven by business voice).
 Six Sigma Methodology

To achieve and sustain this accelerated improvement , Six Sigma uses

“D – M – A – I – C” methodology

D Define Opportunities  Focus on “real problems”

directly related to enterprise
strategy
M Measure Performance  Realize results in 3-6 months
 Utilize multiple tools and
A Analyze reasons for defects techniques, especially
statistics

I Improve Performance
 Sustain improvements over
the long-term
 Disseminate improvement
C Control Performance throughout the organization
 Facilitate customer-focused
change
 Six Sigma Overview: DMAIC Approach

An Iterative Process For Making Improvement…

What are customer expectations of

the process?

How can we make the

process stay fixed?
What is my current capability?

How can we fix the process?

Why, when and where do defects
occur?
6-Sigma process is 20,000 times better than 3-
Sigma Process
 Six Sigma Concept
Six Sigma Means 3.4 Defects in a million Opportunities

1.0σ 697,692 DPMO 30.23% Yield

2.0σ 308,770 69.12%

3.0σ 66,807 93.32%

4.0σ 6,209 99.379%

5.0σ 233 99.9767%

6.0σ 3.4 99.999666%

Six Sigma Evolution
 Origin and Evolution of Six Sigma

• 1981
• Introduced by Motorola in response to Japanese competition

• 1986
• Bill Smith, a senior engineer & scientist at Motorola‟s communications
division introduces the concept, crafts the original statistics & formulas,
standardizes the way „defects‟ are counted in response to increasing
complaints from the field sales force about warranty claims
• Bob Galvin, CEO, Motorola makes it the way to deliver products

• 1988
• Motorola wins Malcolm Balridge National Quality Award
• Shares the methodology

• 1993-94
• ABB, Texas Instruments, Allied Signal embark on journey
 Origin and Evolution of Six Sigma (cont)

• 1995
• Allied Signal CEO Larry Bossidy persuades Jack Welch, CEO of GE into
Six Sigma

• 1998
• Jack Welch reports savings to date of $1 Bln from Six Sigma and predicts
savings of $ 6.6 Bln from Six Sigma

• Late 1990’s
• Six Sigma finds popularity in fields other than manufacturing, like in
service, financial services, supply chain management etc.
 Return on Investment

Annual Savings

Savings % Turnover

$1.5 billion 1.4%

$1 billion 3.0%

$500 million 3.3%

$600 million 2.6%

$300 million 3.3%

$85 million 1.3%

 Impact of Six Sigma Approach

Process before and

after Six Sigma
before after

30

20
Application of
Six Sigma

10

0
0 10 20 30 40 50
Six Sigma : Harvesting the fruits

Sweet Fruit
Design for Six Sigma (DFSS)
5 s Wall - Must Address Designs

Bulk of Fruit
Process Characterization and
4 s Wall - Must Improve Internally
Optimization
Low Hanging Fruit
Seven Basic Tools
3 s Wall - Demand Improvement

Ground Fruit
Logic and Intuition
 Benefits of Six Sigma
Organisation Customer

 Process Improvement in every sphere 6s  Improved products and services

 Hard data for every business decision  Greater synergy with customer
 Alignment with customer  Lower price / faster response

Employee

 Enhanced analytical, communication and presentation skills

 Opportunity to hone skills in diverse areas of problem solving

 Career growth through knowledge gain, visibility and certification

“Six Sigma is the only program I’ve ever seen where customers
win, employees are engaged in and satisfied by, shareholders
are rewarded, everybody who touches it wins.”
Jack Welch, Ex-Chairman of GE

* Source : QAI Website

Overview of Lean
 Lean is waste reduction

Remove
Waste

Lean Transformation
Covers Transformation of the Entire Value Chain

“Creating the Roadmap for the Future”

 The Underlying Premise of Lean

“Time to Cash”
Traditional
Customer Waste Product
Order Delivery

Time in Value Stream, “Lead Time”

Lean
Customer Waste Product Speed
Order Delivery Cost
Time in Value Stream, “Lead Time”

A relentless focus on reducing Lead time to reduce costs

. . . by driving out WASTE and SPEEDING up the process
 The Theory of Lean

• Let customers say what is of value to them

• Reduce non-value adding activities in the system,
causing process speed to increase
• Faster process speed positively relates to less waste, less cost, less
work in process (WIP), less complexity, higher quality and happier
customers
• Work to eliminate the root causes of the waste and allow for one-
piece, continuous flow

CUSTOMER WASTE PRODUCT

ORDER DELIVERY

TIME
 Value and Waste

VALUE:
An activity that transforms or shapes raw
material or information to meet customer
needs

WASTE:
• Activities that consume time, resources and
space, but do not contribute to satisfying
customers needs

Customers will pay for value…

they will not pay for waste
All wastes are categorized into 8 types
 DOWNTIME (The 8 Wastes, explained)

Defects • Waste related to poor quality (Supply Chain)

• Waste related to mistakes and missed expectations (Back-office, Support functions)

Overproduction • Producing more product than needed for immediate consumption or customer requirements (Supply Chain)
• Performing tasks earlier than needed, pulling resources from higher priorities (Back-office, Support functions)

Waiting • Product, people, or machines delayed due to earlier processes (Supply Chain)
• System elements which cannot perform tasks, due to upstream considerations (Back-office, Support functions)

Not Tapping • Waste due to not fully utilizing resources available (including human intellect)
• Waste related to resisting new ways of thinking or performing functions
Potential

Transportation • Waste related to physical movement of product to different locations (Supply Chain)
• Waste related to moving physical or virtual elements across locations (Back-office, Support functions)

Inventory • Waste related to storing product without specific, current requirements (Supply Chain)
• Collecting physical or virtual elements, without actual/immediate need (Back-office, Support functions)

Motion • Waste related to movement of people or equipment within a task

• Waste related to poor ergonomics, or movement within the „envelope‟ of the body

Excess • Waste related to not understanding actual customer requirements

• Performing tasks & functions with greater depth than actually required for the purpose at hand
Processing
Classified - Internal use
39
 Benefits of Lean

• Productivity

• Quality

• On-time delivery

• Capacity

• Profit
Upward Trend

• Cost Downward Trend

• Defects

• Lead time

• Space

• Waste Isn’t LEAN worth it !!!!!!!!!

 Lean and Six Sigma : Comparison

Lean Six Sigma

• Speed and flexibility • In-depth root cause analysis and
solutions
• Involves all employees
• Builds highly trained and skilled
• Positive results in short time-frame staff
• Based on industrial engineering • Used for solving more complex,
principles larger issues
• Less scientific: Often trial and error • Strong, positive results take longer
to achieve
• Robust infrastructure

• In many cases Improvement projects leverage a combination of Lean &

Six Sigma approaches and tools
• Variation, quality problems, hidden x‟s? => Six Sigma
• Cycle time, x‟s easy to see? => Lean
Lean Six Sigma Vs Traditional Process
Improvement Methods

Traditional Six Sigma

Quality programme Business strategy

Mainly involve quality Involves everyone, including

department management

Focuses on processes which create

Focus on defects or eliminate defects

Driven by Cost of Quality Driven by Voice of Customer

Focus on application - project

Focus on training oriented
What Six Sigma IS NOT ?
• Six Sigma Is Not:
– NOT A Quality Standard
• Unlike ISO or COPC or CMMI or..
• Hence:
• No Rule Books
• No Global Bodies to Govern it
• No Audits or Assessments
• No Particular Target Performance levels

• Which Means: Organization decides

– When to Use Six Sigma (vis-à-vis other methods & models)
– Where to Deploy Six Sigma (Which Division, Location.. Etc.)
– What Six Sigma must focus (Process or Product)
– What Sigma Level to Target
– What Pace Should Six Sigma Be Deployed
The Six Sigma Goal
• Because of the use of the sigma terminology, Six Sigma is frequently
perceived as a statistics program. This is not the case: Statistics is used solely
as a toolset for interpretation and clarification of data

• The focus is on tool selection & application. Use and interpretation of data
calculations are left to computers and software

• The ultimate goal is not to produce Six Sigma statistics but companies whose
systems and processes are as close to perfection as possible. This is what the
ultimate goal of Six Sigma is. This is a cultural revolution and changes the
way the organization works!
Six Sigma: Comparison

• What is different in Six Sigma?

– Six Sigma project is typically targeted to a specific characteristic of a
product or service and not to the complete product or service. The product
or service requirements is typically broken down into smaller and more
manageable project areas. These project areas could be initiated for
improvement simultaneously.
– Six Sigma focuses on across the process improvement encompassing
all operations or functions making it more effective.
– Six Sigma facilitates creation of process specific goals within an
organization from the customer’s perspective. This forces the
organization to critically examine the way processes run. This evaluation
ensures that the organization constantly seeks out newer and better ways
of working --- be it technology up gradation or process redesign.
– Six Sigma facilitates simplification of systems and processes within
an organization ultimately leading to creation of effective control systems
to manage
Six Sigma: How does it work

Best In Class

Design for Continuous Improvement

Improvement DMAIC Projects

Process Management

Process Management is the Foundation

Six Sigma: The Organization

The Organization:
Leadership-Governance Linkage
Exec Staff (who “sponsor” Six Sigma Initiative)
Quality Leaders (who “manage” Six Sigma Initiative
Leadership –
Commitment at
Executive Level
Governance-Implementation
Linkage
Governance –
Financial Reviewers
Review, Enable, Monitor, Institutionalize
Human Resources
e.g. Quality Leaders, Master Black Belts, etc.
Project Sponsors
Six Sigma Experts

Implementation –
Scope, Apply Six Sigma Tools and Enhance Business Processes
e.g. Green Belts –top performers who apply Six Sigma on-the-job

Investing in dedicated resources

 Key Players in Six Sigma Projects

Champions/Sponsors: Trained business leaders who lead the deployment of Six

Sigma in their respective business area

Master Black Belts : Fully-trained quality leaders responsible for Six Sigma
strategy, training, mentoring, deployment and results

Black Belts : Fully-trained Six Sigma experts who lead

improvement teams, work projects across the business and
mentor Green Belts

Green Belts : Fully-trained individuals who apply Six

Sigma skills to projects in their job areas

Yellow Belt Individuals who receive

specific Six Sigma training and who
support projects in their areas
Six Sigma: The Roles in the Organization

• Quality Leader:
– Cascade Customer Needs into Business Imperatives
• Develop & Deploy
– Operational Effectiveness Measures
– Continual Improvement Culture
• Master Black Belt:
– Identify Areas of Improvement… drive Change
– Spin off Projects
• Mentor them to meet goals
– Coach & Train employees in Six Sigma Tools
• Black Belt:
– Lead Projects… applying the methodology
– Dedicated Change Agents …18 to 24 Months stint.
– Coach Green Belts & Mentor GB projects
• Green Belt:
– Trained in Six Sigma tools…
– Part time Six Sigma… approx 30-40 % time
– Does improvement project… in their Process.
 Characteristics of an Effective Six Sigma Practitioner
(Green Belt)

 I Can Do Attitude
 Change Leadership Skills
 Effective Communicator
 Understanding of the Business
 Project & Stakeholder Management
 Technical Aptitude
 Team Player and Leader
 Result Oriented
 Customer Advocacy
 Enjoy & passionate about job
Six Sigma Deployment in Organization – Best
Practices Seen

• Typically an organization deploying Six

Sigma would have
– Dedicated and part time resources leading improvement projects

– Projects is the medium to deploy Six Sigma

– Typically a percentage (1 to 2% ) of the workforce are dedicated with

about 5 to 10 percentage workforce, at a given time, being part time
resources in Six Sigma

– Selection of projects is critical, as the projects must be addressing the

pertinent issues in the business

– Senior leadership involvement and participation in project selection is a

MUST.
Translating Business Issues
to Projects
 Improvement Project Portfolio Management

Data and Information Sources: Identify Prioritization

Opportunities for and
•Strategic Objectives
Improvement Resources
•Annual Goals
•Customer Feedback
•Process and Product
Performance Metrics
•Process Reviews Evaluate Charter and
Results Train Teams
•Employee Surveys
•Supplier Performance
•Benchmarking

Implement Create
Solutions Solutions
 Six Sigma Deployment in Organization Best Practices Seen

• Considerations for project selection

1. The Context
1. Customer based: Higher revenue, Improved customer value
that drives behavior.
2. Efficiency based: Lower costs, Higher utilization
3. Process centric: Repeatability, Reproducibility, Scalability
and reliability
4. Employee centric: Higher employee loyalty, Retention.
5. Business /Stakeholder / Suppliers centric: Growth, Vendor
management, Culture

2. Ease to replicate or translate the success across the business

 Six Sigma Deployment in Organization
Best Practices Seen

Considerations for project selection

3. Associated Risks
i. Probability of success: Is it tied to the sponsors‟ goal or
objective? Realistic time to completion?
ii. Complexity of the project: More complex lower the
probability of success.
iii. Clarity of the problem and the scope: Can it be articulated in
numbers or words?

4. The Financial perspective

i. The benefit to cost estimate.
ii. Resources requirement - Skill sets required
 Prioritization

• Categories used for Issues Prioritization

1. Risks Involved

2. Benefits expected

3. Efforts Required
 1. Risks Involved Criteria

1. Gestation period for completion

2. Probability of success
3. Clarity of the Issue
4. Clear Project Boundaries
5. Data availability
6. Domain of Influence
7. Alignment with KRA‟s of the
Sponsor
8. …
 2. Project Benefits

• Project Benefits
– What about Project Benefits?
• Have an estimate at this stage
• Benefits estimates help:
– Prioritize
– Motivate
– Set out the Bottom line focus
from start
• Benefits Criteria?
– Be Auditable
• Documented
– Incremental
• What are the Benefit Types?
– Hard Benefits/ Tangible Benefits
– Soft Benefits / Intangible Benefits
 Tangible vs Intangible Benefits

• Tangible Benefits
1. Rework reduction
2. Increased utilization or productivity
3. Lower cost per unit of service
4. Interest savings
5. Improved cash flow
6. Customer retention

• Intangible Benefits
1. Satisfaction improvement
• Customer
• Employee
2. Improvement in compliance scores
3. Improvement in employee morale
4. Other projects making use of project artifacts
 Expected Benefits Classification

1. Bottom-line hard dollar

– Decreases existing business costs
– Takes cost off the books or adds revenues to the books
2. Cost Avoidance
– Avoids, incremental costs that have not been incurred but would have
occurred if project were not performed
3. Lost profit avoidance
– Avoids lost sales that have not been incurred, but would have occurred if
project had not happened
4. Productivity
– Increases in productivity which improves utilization of existing resources
5. Profit enhancement
– Potential sales increase, which would increase gross profit
6. Intangible
– Improvements to operations of business which can be necessary to
control, protect, and/ or enhance company assets but are not quantifiable
Project Selection on Financial Results Basis
 3. Efforts Criteria

• Criteria for Efforts could include:

1. Complexity of the Issue

2. Resource required
i. People
ii. Hardware/Software
3. …
 Resource Identification Criteria

• Some suggested criteria…

1. Past Performance
2. Time Availability
3. Communication
4. Process Knowledge
5. Leadership
6. Analytic bent
7. Credibility
8. …
 Reward and Recognition Criteria

• Some criteria…

1. On Time
2. Met Goals
3. Customer Feedback
4. Financial Savings
5. Project Management
6. Leadership demonstration
7. Complexity of project
8. Project scope
9. …
Thanks!!!
What is Six Sigma?
 What is Six Sigma?

• Six Sigma is a measurement „Yardstick”

• Determines capability of process
• Higher capability means lower defect possibility

• Sigma
• In Statistics represents variation for a process (standard deviation)

• Six
• Number of standard deviations possible to be fitted between the
Mean and the specification
• When it is at Six we expect no more than 3.4 defects per million
opportunities
 Six Sigma Concept (cont)

How many
Standard 1.5 Std dev : 1.5
deviations Sigma
can we fit in
2 Std dev : 2
between the
Sigma
Mean and
the
Specification 3 Std dev : 3
Limits? Sigma
4 Std dev : 4
Sigma
6 Std dev : 6
Sigma
LSL Mean USL
 Six Sigma Concept (cont)
Centered Process
Target Mean, T Process Mean, m
LSL USL

6.0 s 6.0 s
1 in a Billion 1 in a Billion

+/- 1 Sigma

+/- 2 Sigma

+/- 3 Sigma

+/- 4 Sigma

+/- 5 Sigma
 Six Sigma Concept (cont)
Six Standard deviation on either side is 2 Defects in Billion NOT 3.4 in Million

Target Mean, T Process Mean, m

LSL USL

1 in a Billion 1 in a Billion

1σ=
15.8655 % 15.8655 %
68.3%

2.2750 % 2σ = 95.45% 2.2750 %

0.1350% 3σ = 99.73% 0.1350 %

0.003 17% 4σ = 99.9937% 0.003 17 %

0.000 029 % 5σ = 99.999 942% 0.000 029 %

0.000 000 1% 0.000 000 1 %

6σ = 99.999 9998%
Shift and Drift over Time
 Six Sigma Concept (cont)
Six Sigma : Process Shifted towards Right, Post this we have 3.4 in Million

Target Mean, T Process Mean, m

LSL USL

1.5
s
7.5 s 4.5 s
3.4 in a Million

At 7.5 s +/- 1 Sigma 1.5 Shift

There are To any one side
Zero Defects +/- 2 Sigma is the
This Side Worst Case
+/- 3 Sigma Scenario

+/- 4 Sigma

+/- 5 Sigma
 Six Sigma Concept (cont)
Six Sigma : Process Shifted Towards Left, Post this we have 3.4 in Million

Process Mean, m Target Mean, T

LSL USL

1.5
s

3.4 in a Million
4.5 s 7.5 s

1.5 Shift +/- 1 Sigma

To any One Side
is the
+/- 2 Sigma
Worst Case
Scenario
+/- 3 Sigma

+/- 4 Sigma

+/- 5 Sigma
What is a Six Sigma Process and where does the 1.5 Sigma Shift occur?
A popularly accepted definition of a six sigma process is one in which there are about 3.4 defects per million opportunities. i.e. Defects
per million and the sigma level of a project can be used as project management statistics to evaluate the quality of a project.
The ideal goal for process capability is 3.4 defects per million which is almost negligible in number and considered a near-zero defect
process. But, statistically a six sigma process means 2 defects per billion opportunities.

So, how did 2 per billion become 3.4 per million for a six sigma process? This is normally attributed to the 1.5 sigma shift

A layman’s perspective on the 1.5 Sigma Shift

To understand the math behind the 1.5 sigma shift in project management statistics, consider a desired goal which has to be achieved
within a particular environment and certain environmental conditions.

1) Any goal or result will have to be planned keeping 2 things in mind:

a. The goal itself under standard environmental conditions
b. Changing environmental conditions which may result in variation

However stable any process is, over an extended period of time, the environmental conditions change, which causes variation. Thus at
the planning stage, these environmental changes need to be balanced by a compensation factor in order to account for these changes to
ensure that the long term goal is met.
When expressed in an equation format, the following is obtained

“Short Term Goal = Long Term Goal + Appropriate Compensation Factor for Environmental Changes”

Keeping the above equation in mind, consider the following

In terms of statistics, 2 defects per billion opportunities in a project correspond to six sigma and 3.4 defects per million
opportunities corresponds to 4.5 sigma.
The overall goal is a near-zero defect process, or a 4.5 Sigma Level for the process in the long term.
The environmental changes and the magnitude of this change is 1.5 Sigma (Calculated empirically by Motorola as the Long Term
Dynamic Mean Variation)
Thus the Short Term Sigma Level (6) = Long Term Sigma Level (4.5) + Compensation Factor (1.5 Sigma Shift)
i.e. a Short Term goal of a 6 Sigma Level translates to 3.4 defects per million opportunities (4.5 Sigma Level) over the Long Term.
Short-term versus Long-term
Lean Six Sigma Green Belt
by
Rajiv Purkayastha
Six sigma MBB
D M A I C
Define Phase
 Iterative Process

Define

Control Measure

Improve Analyze

3
 Define Phase Overview

What is the Define phase?

The Define phase is when your team identifies:

Who your customers are and what their requirements are for your products and services

The reason for doing the project and project boundaries

The project team members and how they will work together

What process you are trying to improve and what the process map looks like
 Define Phase Overview

Why is the Define phase important?

This phase is important because it clearly and precisely describes the goals of

the project, aligns the project with organizational priorities and lays the

groundwork that will allow the team to remain focused.

 Define Phase Overview

Steps involved in the Define phase:

Define 1: Identify Project CTQ’s

Define 2: Develop Team Charter

Define 3: Define Process Map

6
 Identify Customers

Who is a Customer?
Anyone who receives or uses the service or
the product we offer

“A customer is the most important visitor on

our premises. He is not an interruption in our
work. He is the purpose of it. We are not
doing him a favor by serving him. He is
doing us a favor by giving us the opportunity
to do so”.

Mahatma Gandhi quoted this in 1890,

7
 Who is your customer?

• A customer is someone who

– Uses your product or service
– Decides to buy your product or service
– Pays for your product or service
– Gets impacted by your product or service

• Internal & External customers

• Primary & Secondary customer

8
 Identify Customers

Types of Customer?
Geographic Location?
Customer can be:
Internal
External
Direct
Indirect or Intermediate

Even there can be various

Mercedes segments of customers
Small/big (Business Volume)
Maruti 800

9
 Voice of Customer

• Six Sigma begins with the customer

• Customers find it easier to define what they do not want

• Customer CTQs are defined by customers

• Sources of customer CTQs

– Survey results
– Service reviews
– Meetings

10
 Examples of Voice of Customer

A Car Purchaser A TV Purchaser

• Flat Screen
• Good Acceleration
• Good Sound
• Spacious • NTSC / PAL Compatible
• Affordable • Affordable
• Power Steering • Good After Sales Service

• Loan Facility

A Caller to Help Desk A Prospective Employee

• Quick Answering • Good Salary

• Courteous Response • Location Preference

• Quick Problem Resolution • Flexible Working Hours

• ESOPs
• Separate Cabin
11
 Example of an Air Conditioner

Customer voice

VOC Table
 Identify Customers

Some Facts…….
Bad News
Out of 100 dissatisfied Customers
 Only 4 complain
 96 don't complain and just go away
Out of 96 who go away
 Only 5 will eventually try your product/services
 91 will never come back

Even More Bad News

Out of 100 dissatisfied Customers
 A typical dissatisfied customer will tell at least 10 more people
about the bad experience. Only 4 complain
 1 in 5 will tell 20 people.
.
 Identify Customers

Facts Cntd…….

Good News
95 out of 100 will do the business with you again if
Complaint is resolved accurately and quickly

The Paradox- Businesses spend six times more to

attract new customers than they do to keep old ones
…….do we listen to our customer ?

14
 Voice Of Customer

Voice Of Customer (VOC)

The term Voice of the Customer (VOC) is used to describe customers’ needs and their
perceptions of your product or service.

VOC/ VOB data helps an organization to:

decide what products and services to offer.
identify critical features and specifications for those products 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.
15
Voice of Customer: Ways to capture

• Surveys

• Focus groups

• Interviews

• Word of Mouth

• Complaints … existing channels

• Intermediaries
Translate VOC to CTQ

• Illustration: Voice of the customer

– “Today I phoned this airline.
– I got through their number after several attempts.
– Then I was put on hold.
– Then I had to step through many option menus..
– I could not find what I wanted in any of these options. Hence,
– I was asked to wait for the „Next Available Operator‟.
– The voice said „All our Customer Service Representatives are currently
busy serving other customers like you‟. It kept repeating „Your call is
important to us. Please be on the line. You will lose your position in the
Queue if you hang up now‟
– I was desperate. I decided to hold on.
– After many minutes of listening to boring music, I finally got through
– But the Customer Service Representative told me , to meet them
personally”
• Question: What is the VOC in the above situation?
Translate VOC to CTQ

• Want/Need:
– VOC: I want simple & quick service,
• I want easy menu systems
• I want the service, I am seeking to be one of the options
• I want an operator to talk to me as soon as possible
• I want the solution available to my kind of challenge.
– VOC mapped to Service/Product Requirement:
• Ease of use, as seen by the customers
• End to End Cycle Time, as seen by the customers
• Ability to Provide Service that the customers want
– VOC translated to Measurements:
• # of minutes taken to reach an operator
• # of minutes taken to complete the service
• Whether or not the service requested was provided
• Customer‟s rating on 1-5 point scale in a survey
• on various parameters such as „Ease of Use‟, „Prompt Service‟.
Translate VOC to CTQ

• CTQ:
– #minutes taken to reach an operator:
• Average Time, Maximum Time, Median Time etc.
• or % of calls which exceeded a particular time limit
– not to exceed a Maximum limit set (Quality Goal)
– #minutes taken to complete the service:
• Average Time, Maximum Time,
• or % of calls which exceeded a particular time limit
– not to exceed a Maximum limit set (Quality Goal)
– %times the service requested was provided:
• not to fall below a Minimum limit set (Quality Goal)
– % of Customers rating 5 on 1-5 point scale in a survey:
• on various parameters such as „Ease of Use‟, „Prompt Service‟
– not to fall below Minimum limit set (Quality Goal)
 Critical To Quality (CTQ)

CTQ (CRITICAL TO QUALITY)

A CTQ is a Product or Service Characteristic that satisfies
a Customer Requirement or Process Requirement

CTQ Types
Business CTQ
Profitability, C Sat, E Sat……….
Customer CTQ
On-time Delivery, Defect Levels……….
Unit CTQ
Profitability, Seat Utilization………………
Project CTQ
Errors/LOC, Schedule Variance %….
21
Cont….
 CTQ

Customer CTQ
Voice Measure
CTQ
Specification
Examples

Customer Voice : Steel sheet thickness is not

uniform
CTQ : Sheet thickness
CTQ Measure : Thickness in mm
CTQ Specification : Specified thickness
22
 Example

Lets take an Example of a

Coffee Shop

23
 Tools to analyze VOC and to define CTQ
• Case 1: Too many Requirements - Use Affinity Diagram
– Affinity diagram, as the name suggests organizes large amount of
qualitative inputs into more meaningful categories.
– How do we make an affinity diagram?
• Groups Ideas / data that seem to belong together
• Let it emerge and not have predefined groups already
• Clarify ideas/data if need be
• See if smaller sets belong to a larger group
• Build consensus
• Name the group finally
• Case 2: Prioritizing Requirements – Use Kano Model
– Kano Model can help in prioritizing requirements as
• Must Be
• One Dimensional
• Delighter
• Case 3: Translating customer needs to quantitative requirements – Use CTQ Tree
 Why Create CTQ Tree

• Translates broad customer requirements into specific

critical to quality (CTQ) requirements

• Helps team to move from high level to detailed

specifications

• Ensures that all aspects of need are identified

 CTQ Drill-down

Customer Voice On Time Delivery

Factory A Factory B Factory C

On time Reliable Transit

Despatch Internal CTQs Lead Time

Product X Product Y Transport A Transport B

Pain Area
26
 CTQ Drill-down

• „On Time Delivery‟ is a Customer Voice

• There are 2 internal CTQs for „On Time Delivery‟
• All internal CTQs may not be attached to a CBP

Internal CTQ On Time Despatch

Internal CTQ Reliable Transit Lead Time

27
 Process for VOC to CTQ

Collect and
Identify customers analyze reactive Analyze data to
and determine system data, generate a key list
what you want to then fill gaps of customer needs
Know with proactive in their language
approaches

Translate
Set specifications customer
for CTQ language into
CTQ
 Kano Diagram

• Kano analysis classifies customer CTQs into three categories based upon
the impact of the need on his satisfaction

Unstated Needs
Satisfaction

Stated Needs

Service Delivery

Implied Needs

Dissatisfaction
 Implied Needs
• Taken for Granted by Customer

• Lack of Delivery causes high Dissatisfaction

• Delivery does not cause Satisfaction

• Noticed only by its absence

• A Dissatisfier
Example-
1. Basic need for a hospital is to have qualified doctors & standard
equipment.
2. At any restaurant, if we order sweet tea, and they bring it, they don‟t get
any credit for it; if they bring unsweetened tea, we‟re unhappy.

30
 Stated Needs

• Demanded by Customer

• Delivery causes Satisfaction

• Lack of delivery causes Dissatisfaction

Example –

1. More mileage performance in a car

2. Less waiting time in airport.

31
 Unstated Needs
• Not usually thought of by Customer

• Delivery causes high Satisfaction

• Lack of delivery does not cause dissatisfaction

• Noticed only by its presence / delivery

• A Satisfier

Example –

Internet access on a plane is not expected so will not upset if not present but will
delight if it is.

32
 Shifting Needs

•Over a period of time, Delighters become Stated Needs

•Over a period of time, Stated Needs become Implied Need

Stated Implied
Delighters
Needs Needs

Time 33
 VOC EXAMPLE

VOC/VOB CTQ Defect Definition Measure Kano Status

“Your cars take Engine starts Engine start time Time from Must be
too damn long to fast is greater than turning of key
start.” 3 seconds to sustained idle
(in seconds)

Time from
“Do you have Call answered Any call answered beginning of Less the better
more than one promptly after third ring first ring to
person greeting.
answering the
phones there?”

34
 Project Charter

A project charter is a written document that provides purpose, goals and

direction for the project team.

Project Charter :
• Clarifies what is expected of the team

• Keeps the team focused

• Keeps the team aligned with organizational priorities

• Transfers the project from the champion to the improvement team

35
 D M A I C
Business Case Scope
In Scope
1)……………………………………………………………………………………
2) ……………………………………………………………………………………
Out of Scope
1) ……………………………………………………………………………………
2) ……………………………………………………………………………………
Problem Statement Definition of a Defect

Goal Statement CTQs

1) ……………………..……………………………………………………… 2)
……………………………………………………………………………… 3)
………………………..…………………………………………………… 4)
………………………………………………………………………………
Process Measurement Benefits
Current Target Projected Savings from the Project:
Benchmark Process Improvement:
% Yield
Sigma Level Roles
Milestones Sponsor

15th Aug 1st Sept 15th Sept 15th Oct 30th Oct Champion

Define Master Black Belt

Measure DGM
Analyze Black Belt
Improve Green Belt
Control Team Members

Big Y Alignment
Stakeholder Big Y Alignment Stakeholder Big Y Alignment

Customer Customer Satisfaction Management Digitization / Automation

Employee Employee Satisfaction Customer Network Quality Improvement

Management Process Institutionalization Management Productivity Improvement

36
Shareholder OPEX / CAPEX Optimization Shareholder Revenue Enhancement
 Project Charter

Elements of Project Charter

Project Charter Elements

Business Case
Problem and Goal Statement
Prepare Scope
Milestones
Roles

37
 The Business Case (Why Project)

 Why is the project worth doing?

 Why is it important to do it now?

 What are the consequences of NOT doing the project?

 What activities have higher or equal priority?

 How does it fit with the business initiatives and target?

 Examine and include assessment of intellectual property

38
 Problem Statement

Poor Example:
The Problem Statement is an objective description Our customers are angry with us and
of the “pain” experienced by internal and/or
late in paying their bills.
external customers. Problem Statement must tell
us:
Improved Example:
• What is wrong or not meeting
In the last 6 months, 20% of our
our customer‟s needs?
repeat customers are over 60 days late
• When and where do the
paying our invoices. The current rate
problems occur?
of late payments is up from 10% in
• How big is the problem? 1990 and represents 30% of our
• What is the impact of the outstanding receivables This
problem? negatively affects our operating cash
flow
39
 Examples

Incorrect
Projects are delayed because we do not have a good project
management system

Correct
4 Projects out of 10 completed between Jan to Dec’ 2016
were delayed beyond the scheduled completion date
resulting in a annualised COPQ of USD 1 million.

40
 The Goal Statement

 Definition of the improvement, team is seeking to accomplish?

 Starts with a verb (reduce, eliminate, control, increase)
 Tends to start broadly–eventually should include a measurable target and
completion date
 Must not assign blame, presume cause, or prescribe a solution!

41
 Examples

Incorrect
Install a new testing methodology for reducing customer
end rejections

Correct
Reduce customer end rejections by 50% by August
2017.

42
 Project Scope

• Purpose
– The Project scope defines the boundaries of the business
opportunity.

• Project Scope
– What are the boundaries,the starting and ending steps of a
process.of the initiatives?
– What parts of the business are included ?
– What parts of the business are not included ?
– What ,if anything,is outside the team’s boundaries?
 Longitudinal Scoping

• Longitudinal scoping is done on the length of the

process
– e.g. – From the receipt of PO till the delivery at the

distributor's go-down

– e.g. – From the time of customer reporting the complaint

till final satisfaction confirmation

44
 Lateral Scoping

• Lateral scoping is done on the breadth of the process

– e.g. – All despatches from North & South regions

– e.g. – Calls received during general shift

45
 Project Charter
Business Case
End to End Provisoning process begins from the date of purchase order raised by the Scope
customer to the implementation of link. This involves the series of activities performed In Scope
by Sales, Revenue Assurance, Network Planning, O&M, NOC Provisioning & Testing. This 1) End to End Provisioning orders of Clear Channel
data customers
integration of work shows the performance of whole organization to the customer and 2) Orders which do not require fiber extension
any delay in this end to end activity results in the customer dissatisfaction as well as Out of Scope
revenue loss. 1) End to End Provisioning orders of voice customers.
2) Orders require fiber extension.
Problem Statement
High Lead time for End to End Provisioning Process. Definition of a Defect
On the base of data for Sept’05 the lead time of end to end provisioning is 31 days with Any case where lead time for order provisioning from P.O.
defect level (>15days) is 67%. date to Link Handover is greater than 15 days.
Goal Statement CTQs
Reduction in Lead time for end to end provisioning to 15 days with defect level (>15 1) Average Lead time of Order Provisioning
days) to 25%  2) Defect Level for Order Provisioning (> 15 days)

Current Target
Average P.O. to Implementation 31 days 15 days Benefits
Defect Level% (>15days) 67 25 Enhanced Customer Satisfaction
Sigma Level 1.06 2.17
Revenue Enhancement
Milestones
Roles
1st Sep 15th Oct 15th Nov 30st Dec 15th Mar Sponsor N Arjun
Define Champion Ramamurthy Kolluri
Measure Master Black Belt Arun Malik
Analyze Black Belt Rajiv Purkayastha
Improve Team Members
KV, JJ, JM, KR, RS,RG, MKB,MG
Control
Big Y Alignment
Stakeholder Big Y Alignment Stakeholder Big Y Alignment
Customer Customer Satisfaction Management Digitization / Automation
Employee Employee Satisfaction Customer Network Quality Improvement
Management Process Institutionalization Management Productivity Improvement
Shareholder OPEX / CAPEX Optimization Shareholder Revenue Enhancement
Develop Team Charter
Business Case Start and Stop Points
Project boundaries
High level brief of process / project
WHY is it IMPORTANT to do this project?
Why is it important to do this project NOW?
What would happen if this project is not done?
Scope
What processes, systems, products, services,
What will be the impact of this project in case of a channels, etc. will you consider / exclude in this
successful closure? project?

In Scope

Out Scope
Problem Statement
WHAT is the problem?
How big is the problem? (use real data or leave blanks to
fill in when you get the data
Defect
When was the problem evident? (dates that the data
represents or was collected)>
What is the impact of the problem (time, $, customer
Goal
satisfaction, etc.)
Opportunity

Unit

Goal Statement DPMO

The Goal statement should be S*M*A*R*T*
(“ Specific, Measurable, Attainable, Relevant, Time bound) Sigma
Always start with a verb..”Increase, Reduce, Improve”
47
Team Activity…15 minutes
Develop a Team Charter for the following scenarios. Leave blanks where you do not have
numbers available

•Case A: Current AHT for the process is 22 as against a target of 18

•Case B: Cycle Time of the Full and Final Settlement is 30 days as against the industry average
of 14 days

•Case C: The CSat scores for the process are at 50% as against a target of 70%

•Case D: The current Attrition percentage for Daksh is at 6% (monthly) as against the industry
average of 4%

48
 Scoping Techniques

• Write inside the box what you think project covers

• Write outside the box what you think project excludes

Example for an „On time Despatch‟ project

Longitudinal
Any IT related work
Starts after receipt of PO from customer
Any transit delays
Ends at the despatch from factory
Lateral Product damages

Despatches from Mumbai plant Billing errors

All despatches during shift A Non-availability of customer
Despatch through transporter X

Project boundary
 Project milestones

 Should be preliminary, high-level project plan with dates

 Should be tied to phases of DMAIC process

 Should be aggressive (Don’t miss the “window of opportunity.”)

 Should be realistic (Don’t force yourselves into corrective rather than

preventative solutions.)

 Revisit and update initial plan – as appropriate

50
 Project Plan

• Purpose
To document the major milestones and timing.
• Project Plan

Jun‘16 Jul‘16 Aug‘16 Sep‘16 Oct‘16

W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W! W2 W3 W4 W! W2 W3 W4

Define

Measure

Analysis

Improve

Control
 Team Roles

People, expectations, responsibilities

 Who is the project sponsor (Unit Champion?)

 Clearly define the roles in the team (owner, members, etc)

 Is the team’s role to implement or recommend?

 What authority does the team have to act independently?

 What is the role of the team leader (Black/Green Belt) and the team
coach (Master Black Belt)?

 Are the right members on the team? Functionally? Hierarchically?

52
 Team

Sponsor
Champion
Black Belt
Green Belt
Yellow Belt
Members

53
 Teaming Roles

• Champion

– Is the Head of the Business Unit / Division / Location / Function

– Decides on the Green Belt for the project along with the Black Belt

– Must ensure that the Green Belt has the project deliverable in his objectives

– Reviews projects periodically

– Adds value in project reviews since he is hands-on in the business

– Clears road blocks for the team

– Has the overall responsibility for the project closure

54
 Teaming Roles
• Black Belt

– Trains others in Six Sigma methodologies & concepts

– Conducts programs on Statistical tools

– Sits along with the Business Unit Head and helps project selection

– Provides Application Assistance by facilitating team discussions

– Helps review projects with Business Unit Head

– Informs Business Unit Head of project status for corrective action

55
 Teaming Roles

• Green Belt

– Is the Team Leader for a Project

– Selects other members of his project team

– Defines the goal of project with Champion & team members

– Defines the roles and responsibilities for each team member

– Identifies training requirements for team along with Black Belt

– Helps make the Financial Score Card along with his CFO

56
 Teaming Roles

• Yellow Belt

– A Team Member is called as Yellow Belt

– Team Members help design the new process

– Team Members drive the project to completion

• Guidelines for team members

– Up to 2 people per project
– People who have stake in the process
– People who are benefited by removal of pain area
– People who have complementary skills

57
 ARMI Model

ARMI MODEL
Key Stakeholders Role Define Measure Analyze Improve Control
Mohammed Al Zarooni
Sponsor A I I I A
Rajiv Purkayastha MBB M M M M M
Publilius Syrus Finance Contoller M M M M M
Haider Ali HR Leader M M M M M
Ahmed M Habib Team Member M M M M M
Adel Ghafan Saeed Team Member M M M M M
Sushanta Singha Team Member M M M M M
Sourabh Team Member M M M M M
Vinod shankar Team Member M M M M M
Sanjeev gupta Team Member M M M M M

58
Characteristics of a Good Team

ROLES NORMS
Do
What are some of
all members
the ground rules
know what is
that the team follows?
expected of them?

GOALS RELATIONSHIPS
Are the goals Is the team continuously
clearly stated, accepted working to build
and agreed upon by and maintain rapport
all team members? between its members?

59
GRPI Model

Team Members Goals Roles Processes Interpersonal Average

Abdur Rahim 100 100 80 100
Yousuf Ali Behzad 80 80 100 90
Tom Akers 100 90 100 100
Reem Ghassan 90 80 100 90
Mohd F. Alhmdan 90 90 100 100
Sourabh 80 80 90 100
Vinod Shankar
Masood Ali 90 80 100 100

60
 PROCESSES

• All activity takes place in terms of a process.

• Shocking lessons
– #1: Most people do not think in terms of processes.
They would rather think in terms of isolated events.

– #2: When convinced of the

value of thinking in terms of
processes, most people still
don‟t think in terms of
processes.
– #3:The word “process”
generates fear and resistance.
WORK AS A PROCESS

S C
U U
P S
P T
L Inputs Process Outputs O
I M
E E
R R
S S

– Applies to all kinds of work, whether repetitive in nature

or “one-of-a-kind.”
– Having a high-level view of a process helps to:
• define project boundaries (starting and ending points);
• describe where to collect data.

62
WHY CREATE A SIPOC MAP?

– To develop a high-level view of the process.

– To avoid “scope creep.”

– To highlight areas for improvement.

– To ensure focus on the customer.

63
SIPOC: INPUTS

Ideas Process

– You may end up with 50–100 input variables at

this point.
– We will continue to focus on using funneling tools
throughout the DMAI²C process.
64
SIPOC: HIGH-LEVEL PROCESS VIEW

Process

– A high-level view is often captured as a top-level

flowchart

Step 1: Step 2: Step 3: Step 4:

Bottling Labeling Inspecting Packaging

65
SIPOC: OUTPUTS

Process Information

66
QUESTIONS TO HELP WITH SIPOC

•Inputs/Suppliers
•Purpose – Where does the information
– Why does this process exist? or material you work on come
– What is the purpose of this process? from? Who are your
– What is the outcome? suppliers?
•Outputs – What do they supply?
– What product does this process make? – Where do they affect the
– What are the outputs of this process? process flow?
– At what point does this process end? – What effect do they have on
the process and on the
•Customers outcome?
– Who uses the products from this
process? •Process steps
– Who are the customers of this process? – What happens to each input?
– What conversion activities
take place?
 SIPOC EXAMPLE

Suppliers Inputs Process Outputs Customers

Manufacturer Copier Copies You

Office Supply
Company Paper File

Toner Making a Others

photocopy

Yourself Original

Power Company Electricity

Process Steps

Remove
Put original Adjust Press
Close Lid originals
on glass Settings START
and copies
SIPOC – Example

S I P O C
Suppliers Inputs Process Outputs Customers

End Customer Signed copy of C Sale order number Project

the Purchase Manager and
order from Project
Order Indent
customer execution team
Full Cost Model
Procedure for P
order booking
process Customer order Order backlog
booking projection

Major process steps

Create sale order/ Create order indent Carry-out costing Transfer the Order
Start Project definition & Full Cost Model Of Each line item
Seek FCM
with all documents to End
approval
in SAP (FCM) in the Sale order execution team
© ABB Group
9AKK105151D0121
HOW TO CREATE A SIPOC MAP

– Name the process.

– Clarify the start and the stop (boundaries) of the

process.

– List key outputs and customers.

– List key inputs and suppliers.

– Identify, name, and order the major process steps.

70
 Quality Function
Deployment (QFD) or House
of Quality
Definition of QFD
Quality Function Deployment (QFD) is a process used to determine product
development characteristics that combine technical requirements with customer
preferences

Structured methodology to identify and translate customer needs and wants into
technical requirements and measurable features and characteristics:

 From marketing and sales

 To research and product development

 To engineering and manufacturing

 To distribution and services

Used to identify Critical to Quality Characteristics (CTQ’s)

Yoji Akao is widely regarded as the father of QFD

Version 0.1
 Definition of QFD
Structured methodology to identify and translate
customer needs and wants into measurable features and
characteristics of a product or service

“Quality function deployment is a visual, connective

process that helps teams focus on the needs of customers
throughout total development”

Clausing, 1990
 QFD FLOWDOWN
Manufacturing Software Service
Environment Environment Environment

Customer Wants Customer Wants Customer Wants

Technical Requirements Product Functionality Service Requirements

Levels Of Granularity

Part Characteristics System Characteristics Service Processes

Manufacturing Process Design Alternatives Process Controls

Production Requirements

Flowdown Relates The Houses To Each Other

QFD Flowdown–Product Application
Functional
Requirements Part Characteristics
(HOW’s)
Processes
(HOW’s)
Requirements

House
Customer

Process
(WHAT’s)

of (HOW’s)
Requirements
Quality
Functional
House Variables
(WHAT’s)
#1 of (HOW’s)

Characteristics
Quality

(WHAT’s)
#2 House

Part
of

Processes
(WHAT’s)
House
Quality
of
Y #3
Quality
Y
#4
Key Functional
Requirements
Key Part
Characteristics X
Key
Manufacturing Key
Processes Process
Variables
 QFD Flowdown–Services
Application
Service
Requirements
(HOW’s) Service
Functions/Processes
(HOW’s)
Process Controls
Customer Wants

House (HOW’s)
(WHAT’s)

of
Quality
Requirements House
#1
(WHAT’s) of
Service

Functions/Proceses
Quality
#2 House

(WHAT’s)
Service
of
Quality
Y #3

Critical-to-Quality
Characteristics
(CTQ’s) Key X
Service
Processes
Key
Process
Variables
THE BASIC HOUSE OF QUALITY

Two Element Types In Each House

ä KEY ELEMENTS
ä INFORMATIONAL
ELEMENTS
 Voice of the Customer
KEY ELEMENTS - “WHAT’S”
ä What Does The Customer Want
ä Customer Needs
ä CTQs
ä Ys

Need 1
Need 2
Need 3
Need 4
Need 5
Need 6
Need 7
 Voice of the Customer
KEY ELEMENTS - CUSTOMER IMPORTANCE
ä How Important Are The What’s
TO THE CUSTOMER
ä Customer Ranking of their
Needs

Need 1 5
Need 2 5
Need 3 3
Need 4 4
Need 5 2
Need 6 4
Need 7 1
 Satisfy the Customer Needs
KEY ELEMENTS - “HOW’S”
ä How Do You Satisfy the
Customer What’s
ä Product Requirements

HOW 4
HOW 1
HOW 2
HOW 3

HOW 5
HOW 6
HOW 7
ä Translation For Action HOW'S
ä Xs
Need 1 5
Need 2 5
Need 3 3
WHAT'S HOW'S Need 4 4
Need 5 2
Need 6
4
Need 7
1
 Relating WHATs to the HOWs
KEY ELEMENTS - RELATIONSHIP
ä Strength of the Interrelation Between the
What’s and the How’s
ä H Strong 9
ä M Medium 3
ä L Weak 1

HOW 5
HOW 1
HOW 2
HOW 3
HOW 4

HOW 6
HOW 7
ä Transfer Function
ä Y = f(X) Need 1 5
H L L M
Need 2 5 H
Need 3 3
M M L
Need 4 4 H
Need 5 2 L M
Need 6 4
M L H
Need 7 1
L M
 Ranking The HOW'S
KEY ELEMENTS - TECH. IMPORTANCE
ä Which How’s are Key
ä Where Should The Focus Lie

HOW 3
HOW 1
HOW 2

HOW 4
HOW 5
HOW 6
HOW 7
Need 1 CI 45 5 5 15
Need 2 5
45
Need 3 3
9 9 3
Need 4 4
36
Need 5 2
2 6
Need 6 4
12 4 36
Need 7 1
1 M

ä TI = Scolumn
(CI *Strength) 57 41 48 13 50 6 21
Technical Importance
QFD Opportunity

 QFD is an opportunity to really listen:

 The customer knows what they want

 They often don’t directly verbalize

 Extra information surfaces

 Watch for what they say they don’t want

 Understand the types of needs of customers

 What does the customer voice?

 The Voice of the Customer (VOC) is also a process

 VOC is the independent process

 QFD is the dependent process

Version 0.1
 Examples of QFD

Version 0.1
Converting VOC to QFD
Translating Whats to Hows
Identify the Functions or
Processes

Project Management
that Impact Customer Wants

Field Engineer
Manufacturing
Engineering
Hows

Sourcing

Partners
What

Sales
Responsiveness to the Customer 5
Price & Product Competitiveness 3
Hardware Quality 5
Hardware On Time Delivery 4
Software Quality 3
Software On Time Delivery 4
Contract Understanding 3
Product Performance 4

Version 0.1
Converting VOC to QFD
The Relationship Between What & How Relationships
Direct & Strong= 9
Direct = 3
Indirect = 1
Evaluate the Impact of Each

Project Management
Function/Process on the
Customer Wants

Field Engineer
Manufacturing
Engineering

Sourcing
Hows

Partners
Sales
What
Responsiveness to the Customer 5 9 9 9 3 1 3 9
Price & Product Competitiveness 3 9 9 9
Hardware Quality 5 3 9 9 3 9
Hardware On Time Delivery 4 1 3 3 9 9 3
Software Quality 3 9 3 3 3
Software On Time Delivery 4 3 9 3 3 1
Contract Understanding 3 9 9 9 3 1
Product Performance 4
3 9 3 3 9

Version 0.1
Converting VOC to QFD

Project Management

Field Engineer
Manufacturing
Qualifying Importance

Engineering

Sourcing
Functions

Partners
What

Sales
Responsiveness to the Customer 5 9 9 9 3 1 3 9
Price & Product Competitiveness 3 9 9 9
Hardware Quality 5 3 9 9 3 9
Hardware On Time Delivery 4 1 3 3 9 9 3
Software Quality 3 9 3 3 3
Software On Time Delivery 4 3 9 3 3 1
Contract Understanding 3 9 9 9 3 1
Product Performance 4 3 9 3 3 9
115 96 225 144 107 75 142
Calculate the overall magnitude of
the impact each function/process
has on the customer wants QFD exercise
Version 0.1
OK, Let’s Walk Through A
Simple Example
 QFD Example
An Automobile Bumper

Customer Request:
There is too much damage to
bumpers in low-speed
collisions. Customer wants a
better bumper.
 QFD Example
An Automobile Bumper
Step 2: Determine Customer
Requirements/Constraints
– I want something that looks nice (basic)
– It must hold my license plate (performance)
– I want it strong enough not to dent (excitement)
– It must protect my tail-lights and head-lights
(performance)
– I don‟t want to pay too much (basic)
 QFD Example
An Automobile Bumper
: Translate Customer Requirements into
Measurable Engineering Specifications and
define target values
– Specify how license plate will be held
– Specify how to resist dents through material
yield strength, young's modulus, etc.
– Specify with a dollar amount the term
„inexpensive‟
 QFD Example
An Automobile Bumper
 House of Quality Example

Your team has been charged with designing

a new camera for Great Cameras, Inc.
The first action is
to construct a
House of Quality
House of Quality Example Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

What the
Technical
Attributes and
Evaluation

customer
wants Customer
importance
rating
(5 = highest)
Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
Color correction 1
House of Quality Example Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation
Low electricity requirements

Aluminum components

Ergonomic design
How to Satisfy
Auto exposure

Customer Wants
Paint pallet
Auto focus
 House of Quality Example Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

High relationship Technical

Attributes and

Medium relationship
Evaluation

Low relationship

Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
Color corrections 1

Relationship matrix
 House of Quality Example Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Relationships
between the things
we can do Low electricity requirements

Aluminum components

Ergonomic design
Auto exposure

Paint pallet
Auto focus
 House of Quality Example Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
Color corrections 1
Our importance ratings 22 9 27 27 32 25

Weighted
rating
 House of Quality Example
Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Company B
Company A
How well do competing
products meet customer
wants

Lightweight 3 G P
Easy to use 4 G P
Reliable 5 F G
Easy to hold steady 2 G P
Color corrections 1 P P
Our importance ratings 22 5
 House of Quality Example
Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Failure 1 per 10,000

Panel ranking
Target values
(Technical

2 circuits
attributes)

2’ to ∞
0.5 A

75%
Company A 0.7 60% yes 1 ok G
Technical
evaluation Company B 0.6 50% yes 2 ok F
Us 0.5 75% yes 2 ok G
 House of Quality Example

Low electricity requirements

Aluminum components

Ergonomic design
Auto exposure

Company A

Company B
Paint pallet
Auto focus
Completed
House of Lightweight
Easy to use
3
4
G P
G P

Quality Reliable
Easy to hold steady 2
5 F G
G P
Color correction 1 P P
Our importance ratings 22 9 27 27 32 25

Failure 1 per 10,000

Target values

Panel ranking
(Technical
attributes)

2 circuits
2’ to ∞
0.5 A
75%
Company A 0.7 60% yes 1 ok G
Technical
Company B 0.6 50% yes 2 ok F
evaluation
Us 0.5 75% yes 2 ok G
Measure

Lean Six Sigma Green Belt

by
Rajiv Purkayastha
Six sigma MBB
1
Measure Phase Overview

Why is the Measure phase important?

This phase is important because it ensures that accurate and reliable data is collected to measure

current process performance related to the customer CTQ.

2
Selecting CTQ Characteristics

Two tools are commonly used to determine CTQs

CTQ Drill Down Tree

Quality Function Deployment (QFD)

3
Define Performance Standards

What are the project tasks for completing Measure 5?

Develop operational definition for process to be measured

Identify target performance

Set specification limit(s)

Define unit, defect and defect opportunity1

4
 Performance Standard

Performance Standards
Upper
CTQ Measure Data Type Operational Definition Specification Target Segmentation Factors
1. Lead time to generate OCN
from P.O. date
2. Lead time to allocate
resource from date of OCN
generation 3.
Lead time to provision the link
from date of allocation of
resource 4. Lead time
to test the link after
Lead Time to close sev 1 provisioning date 5.
ticket = (Ticket closing Lead time for LCR signoff from
Lead Time to close sev 1 time - Ticket opening Same as upper testing date 6. Lead
tickets Continuous time) 2 hrs specification time to generate first time Bill

Operational Definitions is a precise description that tells how to get a value for the
characteristics (CTQ) we are trying to measure. It includes “ what something is” and
How to measure it”

5
 Operational Definition

An Operational Definition is a precise description that tells how to get

a value for the characteristic (CTQ) you are trying to measure.

It includes “what something is” and “how to measure it”.

Having an Operational Definition

 Will remove any ambiguity in the understanding of the CTQ
 Will give a clear method to measure the CTQ
 Will ensure that everyone has the same understanding on what to
measure & how to measure

At a minimum, a clear definition of defect is required

6
What Is an Operational Definition?

A definition that gives communicable meaning to a

concept by specifying how the concept is measured and

applied within a particular set of circumstances.

(Deming, 1986)

7
 Develop Operational Definitions

What is an Operational Definition?

An Operational Definition gives communicable meaning to a concept by
specifying how the concept is measured and applied within a particular set of
circumstances.
This definition highlights two important things about an Operational Definition :
It gives a precise meaning to the spoken or written word, forming a "common
language" between two or more people. It defines how a word or phrase is used
when it is applied in a specific context. This implies that words may have different
meanings when used in different situations.

For example, the Operational Definition of “count cars outside" can vary
depending on who understands what from it.

8
Develop Operational Definitions

•To remove ambiguity

»Everyone has a consistent understanding
•To provide a clear way to measure the characteristic
»Identifies what to measure
»Identifies how to measure it
»Makes sure that no matter who does the measuring,
the results are consistent

9
 Operational Definitions : Case Study

•A large computer manufacturer needs to improve its competitiveness

•Target : reducing the cycle time for one of its latest products

•Existing data revealed it took 5-10 days to fulfill orders

•Management‟s goal : 95% of orders for this product filled within 3 days

•Results from regional plants were obtained for several months

Factory % fulfilled within 3 days

1 73% “Heads should roll in
2 47% Factory 2, right?”
3 83%
4 67%

10
 Operational Definitions : Case Study

•The company found that the manufacturing plants defined “orders filled
within 3 days” differently
•Factory 2 counted the day the order was placed as Day 1. The other
factories counted the day after the order was placed as Day 1. When factory
2 recalculated its performance rate the same way as the other factories its
numbers jumped up to 77%.

Factory % fulfilled within 3 days

1 73%
2 47% = 77% when calculated the same
3 83% way as other factories
4 67%

11
 Operations Definitions : Scale of Scrutiny

Choosing The Level Of Measurement

• Measure one scale or level smaller than what your customer

measures

– For Example:

• If your customer measures cycle time in days, your scale of scrutiny

would be hours

• If your customer measures cycle time in hours, your scale of scrutiny

would be in minutes

• Scale of scrutiny may expose larger true variation

12
Operational Definition

Operational Definition Exercise

1. On-time Arrival of flight.

2. Server Downtime

13
1.4 Understand Data Characteristics

14
 Why Collect Data?

• Successful organizations have a common language to communicate

• Common language promotes objectivity in decision-making process

• Don‟t come up with great solutions for problems that don‟t exist

• A measure of „where we are‟ is critical to determining „where we should be‟

• Have you reached where you intended to? -- only data answers that question

• A good data collection simplifies the problem solving effort

• If the solution costs more than the problem, it‟s not worth it. A good data collection

should concentrate as much on measuring problems as it does on measuring solutions

15
 Usage of Data

• Data is used to classify, describe, improve & control – objects & situations

• Data provides an informative description of products and processes

• Data is derived from objects & situations in the form of measurement

• A measurement system is the tool / machine / method used to measure data

16
 Key Concepts

• Improvement can only occur if we understand where we are & where to go,
supported by a measurement system that validates both situations

• If the tool, by which we measure a characteristic, is not appropriate, able, or

accurate, effective improvement will not occur

• One must understand and quantify the measurement system

17
 Data Types

Data

Discrete Continuous

Data that can be categorized into a fixed Data that can be categorized into infinite
number of classes number of classes
That comes mostly in the form of choices as That can assume any value between two
yes / no, ok / not Ok given values
That cannot be measured but can be That can be measured using some equipment
categorized or otherwise

18
 Types of Data

• Discrete data
– Data that can take a limited number of values

– Examples

• Number of orders delivered late

• Number of days to resolve a problem

• Number of „yes‟ responses to a satisfaction survey

• Number of matches won by Indian cricket team

• Continuous Data

– Data that be expressed in either fractions or whole numbers

– Examples

Number of possible data points between 5 & 100

• Temperature of the room

• Exchange rate of a currency

19
Discrete Data Characteristics

Number of orders delivered late

Weekly Analysis
7
6
5
Orders

4
3
2
1
0
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8

20
 What is a Specification?

• A specification is a customer-defined tolerance for the unit characteristics

• There may be two-sided specifications

• Specifications form the basis of any defect measurement exercise

USL: Upper Specification Limit for a Performance

Parameter, anything above this is a defect.

LSL: Lower Specification Limit for a Performance

Parameter, anything below this is a defect.

Target: Ideally the middle point of USL & LSL.

LSL Target USL

21
 Examples

• Ticket booking example

– Unit: each ticket received by customer

– Defect definition: a ticket with wrong booking Defective ticket

a ticket not legible enough
a ticket given after 30 minutes

Pizza delivery example

– Unit: each order placed

– Defect definition: an order delivered after 20 minutes

an order not delivered hot
an order not delivered with salt & pepper
an order not delivered at all 22
 Unit, Opportunity and Defect
A Unit is the number of parts, sub-assemblies, assemblies or systems inspected or tested.

An Opportunity is a characteristic you inspect or test

A Defect is anything that results in customer dissatisfaction / any non conformance

In the example below:

The Customer ordered for squares with 5 white circles etched on the surface

Therefore:

Each square is a UNIT TOP or Total Opportunity

Each circle is an OPPORTUNITY is the product of Number
Each black circle is a DEFECT of Units with the Number
of Opportunities
Therefore we have:
4 Units
5 Opportunities per Unit
9 Defects
3 Defectives

23
 Defects per million opportunity

Formulas
Defects per Unit
• DPU = D/U
• 9/4 = 2.25
Total Opportunities
• TOP = U*OP
• 4*5 = 20
Defects per Opportunity (Probability of a Defect)
• DPO = D/TOP
• 9/20 = .45
Defects per Million Opportunities
• DPMO = DPO*1,000,000
• .45*1,000,000 = 450,000

24
Calculating Sigma Value (Z)
Unit, Defect & Defect Opportunity

Unit: The Item produced or processed

Ex: Code
Defect: Any event that does not meet the specifications of CTQ (It results
in customer dissatisfaction)
Ex: Delayed Delivery, Poor Program Performance
Defective: A Unit with one or more defects
Ex: Code
DPU: Defect Per Unit
Opportunity: Any measurable event that provide a chance of not meeting
specifications of CTQ
EX: No of types of defects
DPMO: Defect Per Million opportunities

Cont…. 25
 Calculating Sigma Value (Z)
Unit, Defect & Defect Opportunity Example

Unit  : A Code of 30 Lines

The Item produced or processed
Defect Opportunities  30 (Number of lines) The
The
Item
Item
produced
produced
or
or
processed
processed
Defects 2 The
The
Item
Item
produced
produced
or
or
processed
processed

DPU  No. Of Defects / No. of Units = 2/1 = 2 The

The
Item
Item
produced
produced
or
or
processed
processed
The Item produced or processed
DPO Defects Per Opportunity The Item produced or processed
The Item produced or processed

Number of Defects The Item produced or processed

= The Item produced or processed

Total number of opportunities The

The
Item
Item
produced
produced
or
or
processed
processed
The Item produced or processed

= 2/30 = 0.066666666
The Item produced or processed
.
.
.

DPMO Defects Per Opportunity X 106 30 Lines of Code

= 0.067 * 106 = 66666.67 DPMO

Cont…. 26
Calculating Sigma Value (Z)

27
Cont….
Calculating Sigma Value (Z)

Cont…. 28
 Yield

If we think of transactions as either defects (leading to unsatisfied customers) or good

(leading to satisfied customers), then we have described the potential outcomes of the
process. Another way to describe the proportion of good transactions is yield.

411 Defects
Defect Rate = 34%

796 Good
Yield = 66%

Total Transactions = Good + Defects

100% = Yield + Defect Rate
29
Types of Yield

Different types of Yield can impact the quality level we measure. Here are the types we will

review by looking at an example of statement printings.

•Classical Yield

•First Pass Yield

•Rolled Throughput Yield

30
Making a Statement

Customer Statements have the following requirements…

Entire
Address must be
correct

Each Line Item

must be correct

Each
Line Amount
must be correct

Total $ x,xx Total

must be correct

31
 Statement Printing Example

Four statements are printed and checked for errors. Those that contain errors are reprinted.
Here are the results...

• Wrong Address = 2
First
• Wrong Line Item = 2
Printing
• Wrong Amount = 1
• Wrong Total = 1
Total $ x,xx Total $ x,xx Total $ x,xx Total $ x,xx

Second • Wrong Address = 0

Printing • Wrong Line Item = 2
(Rework) • Wrong Amount = 1
• Wrong Total = 0
Total $ x,xx Total $ x,xx Total $ x,xx

Third
• Wrong Address = 0
Printing
• Wrong Line Item = 0
(Rework)
• Wrong Amount = 0
Total $ x,xx Total $ x,xx • Wrong Total = 0

32
 Classical Yield

If we count all statements that passed inspection in all three operations, our fulfillment would be 100%
(four out of four). This is the probability of statements having no defects after all rework has been
completed.

First
Printing
Total $ x,xx Total $ x,xx Total $ x,xx Total $ x,xx

Second
Printing
(Rework)
Total $ x,xx Total $ x,xx Total $ x,xx

Third
Printing Classical Yield= 100%
(Rework)
Total $ x,xx Total $ x,xx

Classical Yield includes statements that were reworked. 33

First Pass Yield
If we define our defect as statements failing to pass inspection on the first try, then our fulfillment is

only 25% (one out of four). This is the probability of having no defect without rework based on the

number of first-time, defect-free statements. This is a better measure of process performance than

Classical Yield

X X X
First
Printing
Total $ x,xx Total $ x,xx Total $ x,xx Total $ x,xx

First Pass Yield= 25%

34
First Pass Yield gives no credit for rework
Rolled Throughput Yield
A final look at yield concerns output that involves several steps. If we know the yield of each step, we
can multiply the percentages together to compute the probability that a transaction will go through all
steps correctly the first time

Take Card Enter List of Cards

Application Request to be Printed

Operation 1 Operation 2 Output

Performance
Level
95% 95% X 95% = 90.25%

99% 99% X 99% = 98.01%

35
Takeaways

There are three different types of yield

1. Classical

2. First Pass / Throughput

3. Rolled Throughput

• Rolled Throughput yield is the best yield measurement to determine how your process is

performing

• Adding inspectors does not guarantee better quality

• Six Sigma cannot be reached by inspection

36
Process Map Analysis
Why do we need a Process Map?

Table Phone Shadow

Pencil
stand Paper

Pad

Wire
Ring Pens

38
Why do we need a Process Map?

Process Mapping is a graphic display of steps & activities that constitute a process

39
 Process Mapping

Process

Every activity is a process. Anything which happens is an output of a

process.
 Shocking lessons
 Most people do not think in terms of
processes. They would rather think in
terms of isolated events.
 When convinced of the value of
thinking in terms of processes, most
people still don‟t think in terms of
processes.
 The word “process” generates fear and
resistance.
40
What is a Process?

• A process is a sequence of activities performed on an input to produce an

output

• A process must add value to the input

• Every process has at least one supplier & one customer

Process Mapping is as critical to a manufacturing operation as it is to a transaction

41
 Macro Process Map of a Pizza Home Delivery

No

Enter
Call Yes
Customer calls customer details
Answered?
in the system

Take Yes Confirm Take

card Credit card? payment order
details type details

No

Deliver &
Confirm
Despatch collect money,
all details
order if non-credit card
again
customer

42
Flowcharts

43
 What is a flowchart?

• A diagram illustrating the activities of a process

• One of Ishikawa‟s seven basic tools of quality.

44
Flowchart Symbols

45
 Proposed Patient
Preparation of
appointment book FLOW CHART
Appointment Procedure Opening of
appointment book

Refer to ships
corpsman, inform PT they
Appointment Fleet
can call at 1500 to make
shore or fleet?
their own appointments for
the next working day
Shore

Appointment
issued (PT reminded to
confirm 24 hours prior
to appointment

Did patient call Appointment canceled

Patient given Yes No and slot refilled by
confirmation number in to confirm 24 hours prior
to appointment? new patient

Standby patient
placed in
Does No
Appointment book appointment slot
patient show
marked “failure”
for appoints?

Yes Failure report submitted

from front desk to fleet
liaison
Appointment
book marked
“patient showed”
Fleet liaison sends
failure notices to
46 commands
Swim Lane Flowchart Example: Fulfillment Process

Sends Intimate Customer

Customer Order
Acknowledge
Order receipt Expected Del Date
Send Invoice and
goods To Customer
And Invoice details

Receive Raise Dispatch Generate Packing

Order Order Request Request

Management Standard Order or

Made to Order
Raise Production
Request

Invoice
Dispatch Pack Goods Arrange Generate
Invoice
Dispatch Goods
Transport

Follow up with Receive Delivery

Order Deposited
Producer Producer on
Schedule
in
Warehouse

Send
Transport Transport

47
Process Map

48
 VA and NVA

Every body
is busy but
How is it
the order is possible?
idle 90% of
the time

49
 VA and NVA

Value-added step:
•Customers are willing to pay for it
•It physically change the product.
•It‟s done right the first time.

Non value-added step:

•Is not essential to produce output
•Does not add value to the output.
•Includes:
•Defects , errors ,omissions.
•Preparation/setup, Control/inspection
•Inventory ,processing

50 •Transporting,motion,waiting , delays.
 VA and NVA

Required NVA‟s(Operational support activity)

•Business necessity (e.g. accounting)
•Employee necessity( e.g. payroll).
•Process necessity(e.g. Inspection?).

51
 VA and NVA

Value Adds Non Value Adds

•Entering order •Waiting
•Ordering materials •Storing

•Preparing drawing •Counting

•Inspecting
•Assembling
•Recording
•Packaging
•Testing
•Shipping to customer
•Reviewing
•Copying
•Filing
•Reworking
•Tracking
52
 Evaluation of Process Map

• Ask questions such as…

1. Does the process work as planned?
2. If not then what happens?
3. Are all required items / information identified and in the process
map?
• Look for opportunities to…
1. Eliminate steps
2. Perform steps in parallel
3. Rearrange steps
4. Simplify steps
5. Expedite steps
6. Implement less expensive operations
7. Ensure consistent performance

53
 WHAT DO YOU THINK ABOUT THIS
PICTURE?

ROOF
WIRES TREE
TREE

SKY STATUE
FLOWERS

GRASS
LAMP

POLE WINDOWS TILES

54
A PICTURE IS WORTH A THOUSAND WORDS...

55
 WHY PICTURES ARE IMPORTANT

Pictures/Displays of data stimulate

hypothesis generation which is a key step

in process improvement

56
“If I had to reduce my message to management
to just a few words, I‟d say it all had to do with
reducing variation.”

W. Edwards Deming

VARIATION: THE VOICE OF THE PROCESS

57
58
Discrete Data Characteristics

Number of orders delivered late

Weekly Analysis
7
6
5
Orders

4
3
2
1
0
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8

59
 Continuous Data Characteristics

• Usually illustrated in tables & histograms / frequency polygons

– A histogram or frequency distribution shows the number of data points in a data set that fall into

each of the frequency classes

– A frequency polygon is constructed by connecting the mid-points of each of the vertical bar in the

Histogram

90 95 100 115 120 125 130

60
Purpose of Graphs and Charts

61
Graphs Examples

62
Example Pie Chart

63
FREQUENCY DISTRIBUTION

AND

HISTOGRAM

64
WHAT DO THESE NUMBERS MEAN TO YOU ?

2.87, 2.85, 2.88, 2.85, 2.86, 2.85, 2.81, 2.82,

2.83, 2.85, 2.84, 2.84, 2.85, 2.86, 2.85, 2.84,
2.85, 2.85, 2.87, 2.81, 2.85, 2.82, 2.83, 2.85,
2.85, 2.86, 2.85, 2.86, 2.89, 2.85, 2.84, 2.84,
2.85, 2.85, 2.83, 2.82, 2.86, 2.83, 2.85, 2.86,
2.85, 2.84, 2.84, 2.87, 2.85, 2.86, 2.85, 2.84,
2.90, 2.88
PROBABLY NOTHING
MUCH ! 65
 NOW DO THE FOLLOWING

 Find the minimum value.

 Find the maximum value.
 Arrange all values between minimum &
maximum value in ascending order.
 For each number, in the table make a mark,
after reading each number from the given
jumble of numbers.

66
 YOUR TABLE LOOKS SOMETHING
LIKE THIS?

Value Tally Frequency

2.80 - 0
2.81 II 2
2.82 III 3
2.83 IIII 4
2.84 IIIIIIII 8
2.85 IIIIIIIIIIIIIIIIIII 19
2.86 IIIIIII 7
2.87 III 3
2.88 II 2
2.89 I 1
2.90 I 1
67
 THIS DATA NOW TELLS YOU...

 2.85 occurs with a maximum frequency of 38

%.
 Approximately 82% of the values lie between
2.83 and 2.87.

THIS TABLE THAT GIVES YOU THIS

DISTRIBUTION IS CALLED :

FREQUENCY DISTRIBUTION.
68
 NOW DO THIS

 For the same data, divide the range

(i.e... 2.9- 2.80 = 0.10) in equal no.of parts (say
5).

 Hence each part will be equal to 0.02.

 The table now will have values:

2.8-2.82, 2.82-2.84, 2.84-2.86, 2.86-2.88, 2.88-2.9

69
 NOW PLOT THE DISTRIBUTION AGAIN FOR
THE TABLE. IT LOOKS LIKE THIS...

Class Tally Frequency

2.80-2.82 IIIII 5
2.82-2.84 IIIIIIIIIIII 12
2.84-2.86 IIIIIIIIIIIIIIIIIIIIIIIIII 26
2.86-2.88 IIIII 5
2.88-2.90 II 2

The spread of each range is (e.g.. : 2.82 - 2.80 = 0.2 ) is

called Class Interval.

70
 THIS TELLS YOU THAT

• 52% of values lie in 2.84 - 2.86 range.

• What is the distribution in a given range.

• It is helpful when you have a large number

of values .

71
 KEY MANAGEMENT QUESTIONS FOR
UNDERSTANDING VARIATION

What does the process variation look like?

Is the process stable (free of special cause

variation)?

What is the level of process capability (meeting

customer expectations)?
72
HISTOGRAMS: VARIATION FOR A PERIOD OF TIME

DEFINITION A Histogram shows the shape, or

distribution, of the data by displaying how
often different values occur.
EXAMPLE “Number of Days for Approval”
Number of Occurrences

40
30
20
10
0
1 2 3 4 5 6 7 8
Number of Days for Approval
73
 HISTOGRAM

• A Histogram gives you the Frequency

distribution pictorially.
• The concept of X - Y axis and origin need not be
followed once you gain proficiency in drawing
histograms.
• The specified limits can be marked on
histograms to show the behavior of variation
versus the actual required values.

74
 LOOK AT THIS HISTOGRAM

LSL MIDVALUE USL

• Has its mid-value equidistant from both the

end values
• Is symmetric about the mid value?
This is the most likely histogram for a
Process Under Control
75
 MEASURES OF

CENTRAL TENDENCY

AND

DISPERSION

76
 1 2

This Suspended Pipe Is Horizontal The Same Pipe Has Now Tilted

WHY ?
The rope is tied at the center of The rope is tied away from the
gravity. center of gravity.

Center of gravity is the point where the entire mass of the body is
supposed to be concentrated.
Thus center of gravity is a measure of central tendency of a body.
77
WHAT IS THE MEASURE
OF CENTRAL TENDENCY OF A SET OF
NUMBERS?

• There are three ways in which Central

Tendency of Numbers can be measured.
• These are the 3 M’s
MEAN
MEDIAN
MODE
78
 MEAN

Mean or Average is normally signified by

Summationof all the values

Mean 
Number of values

Mathematically it can be represented as :

n

X i
X  i 1

n
Let us now find the mean of the values of our earlier data.

2.87  2.85  2.88  ....  2.88

X  2.849
50
79
 MEDIAN

• This is the value which has equal number of values above

it and below it, when arranged in ascending order.

• Mathematically :
 n
th th
n 
   Value    1  Value
  2 2  ; when n is even
 2

Median  

 th
 n  1 
 2  Value ; when n is odd

80
Referring to our earlier example and arranging in ascending
order we get,
2.81, 2.81, 2.82, 2.82, 2.82, 2.83,…..,2.88, 2.88, 2.89, 2.90
Number of values (n) = 50. This is Even.
th th
 50   50 
  Value    1  Value
 2   2 
Hence, Median 
2

25th Value  26th Value 2.85  2.85

   2.85
2 2

THIS IS THE MEDIAN FOR OUR EXAMPLE

81
 MODE

• This is the value which occurs with the highest

frequency.
• In our case it is 2.85 which occurred 19 times.

•We have thus calculated, The Mean, Median and

Mode for a given data set
•The Mean, Median and Mode are equal for a
symmetric unimodal distribution.
•They are not equal if distribution is not symmetric.
82
 MEASURES OF DISPERSION

 The extent of the spread of the values from the

mean value is called Dispersion.

 The measures of Dispersions are

– Range (R)
– Standard Deviation (s)
– Variance (s2)

Standard deviation is the most

commonly used measure of dispersion.
83
 STANDARD DEVIATION
OF POPULATION:

If X , X ,.......,X are sample values and  is their poulation mean.

1 2 n

 (X -  )
2
( X   )  ( X   )  .....  ( X   )
2 2 2
i
  1 2 n
 i 1

n n

OF SAMPLE :
If X1 , X 2 ,......., Xn are sample values and X is their sample mean.
n

2 2
( X1  X)  ( X 2  X)  .....  ( Xn  X) 2  (X i - X) 2
s   i 1

(n  1) (n - 1)

Degrees of freedom
84
 DEGREES OF FREEDOM

If you are told to decide 5 nos such that the average of
these nos is 10 you will realize that you are free to
select only 4 of the 5 nos and the 5th will necessarily be
fixed.
e.g. 10, 14, 3 & 17 are the four nos that you have
selected. The 5th no. necessarily will have to be 6.
The no. of values you are free to select is known as
the degrees of freedom (d.f.).
In this case the degree of freedom is 4.
In general d.f. = n-r ; where n is the no. of readings &
r is the no.of statistical parameters to be found.
85
 ALTERNATIVELY
n 2
X
2
2 2 2 2
i  nX
( X1  X 2  .....  Xn )  n X
s   i 1

(n  1) (n - 1)

( 2.87 2  2.85 2  .....  2.88 2 )  50( 2.849) 2

  0.0181
(50  1)

This is also known as

Root Mean Square Deviation (R.M.S.)
86
Range, R = Largest Observation - Smallest Observation
= Xmax -Xmin

Variance (s2 ) is the Square of Standard Deviation.

87
 Data Collection Plan
Frequency o
Measure Operational Who Collects
Measure Data Type Data Source Data
Type (Y, X) Definition Data
Collection

Time from
agent picking Switch /
AHT Y Continuous Greenbelt 100%
up the call to Avaya
call closure

Ratio of
Login hours Team
Login
X Continuous to Actual Member XYZ 100%
Efficiency
Working Name
Hours

Customers Team One per hou

Hang-up
X Discrete Reasons for Member ABC selected
Reasons
Hanging up Name Randomly

Data Collection Plan

88
 POPULATION AND SAMPLE

•The entire set of items is called the Population.

•The small number of items taken from the
population to make a judgment of the population
is called a Sample.
•The numbers of samples taken to make this
judgment is called Sample size.

POPULATION SAMPLE OF
SIZE THREE
89
 WHAT IS SAMPLING AND WHY DO IT?

– Sampling is
• Collecting a portion of all the data.
• Using that portion to draw conclusions (make
inferences).
– Why sample? Because looking at all the data may be
• Too expensive.
• Too time-consuming.
• Destructive (e.g., taste tests).

• Sound conclusions can often be drawn from a relatively

small amount of data.
90
Sampling Methods

Four methods of sampling:

•Random sampling

•Stratified sampling

•Clustered sampling

•Systematic sampling

91
Random Sampling
All items in the population have an equal chance of being chosen in the sample

Example: A customer satisfaction survey team picking the customers to be contacted at random

How to do random sampling

Generate random numbers from computer / printed tables

Write each unit on a piece of paper & deposit the slips in a box

92
Stratified Sampling

When to use Stratified sampling?

When the population consists of mixture of more than one strata, each forming a homogeneous group,
Stratified sampling can assure that sample represents the population adequately.

Like random samples, stratified random samples are used in population sampling situations, when
reviewing historical or batch data.

This method may be the only way to accurately capture performance for different segments of the
process.

M M M
M M M M
M F F
F F
M M M M M M F F M M M M M M F F

93
A sample of size 6 - 4 males & 2 females
 Clustered Sampling

When the population consists of clusters, each having large variation within the cluster, but clusters

are essentially similar to each other.

We select a random sample of the clusters and assume that these clusters represent the population as

a whole

This situation is quite opposite to the condition for stratified sampling

District 1 District 2 District 3 Sample

M F M M M F M F M F M F
F F M M
M M F M F F M F F
F F M F M

94
Systematic Sampling
•Systematic sampling is the selection of samples from a population according to a set schedule or plan

•Systematic sampling is typically used in process sampling situations when data is collected “real

time” during process operation.

•A frequency for sampling must be selected.

Every second item is being systematically picked

95
Sampling Bias

Regardless of the situation, a sample must be “representative” of the population. For practical

purposes a sample is representative if it accurately represents the target population. Consideration that

may hinder collection of a representative sample include:

•The cost and ease of obtaining samples

•Time constraints

•Unknown characteristics of the population

Samples that are not representative of a target population are called biased samples. Often, the biases

are not recognized until the collected data has been analyzed.

96
Sample Size Calculation

Sample size (n) depends on three things:

 Level of confidence required for the result, “How confident
we are that the result represents the true population”
 Level of confidence increases as sample size increases.
 Precision or accuracy (Δ) required in the result, “The error
bars or uncertainty in my result”
 Precision increases as sample size increases
 Variation in the process
 Higher the variation, high is the sample size for a
confidence level.

97
Sample Size Calculation

Continuous Data

2
Sample Size n = { (1.96 ) / }

  (Standard deviation) of the population tells us how much variation is

there in the process
 How to get Standard Deviation.
  is the Precision or accuracy of the process.
 How to get value for .

98
How To Estimate 

How to Estimate 

 Collect a small sample (at least 30) of subgroup 3 each, and

calculate range for each subgroup. R =(Max Value – Min Value).
Then Calculate Average Range (R-bar)

= R-bar / d2
 Collect individual Readings (X). Calculate Average (X bar). For
each value Subtract „X‟ from „X bar‟ ( X-X bar). Square all (X-X
bar) and Add . Use Formula below.

=  (X-X bar)2 / N

99
How to Determine 

Use business knowledge

Take the  from the sample size you can afford; for example,
with 95% confidence

 1.96 (σ  
  if n  15 and s  3
 n 

 1.96 x 3 
   1.51
 3.87 

Consider the minimum resolution of measurement equipment. For

example, don‟t set  to minutes if you can measure only hours.

100
Sample Size Example

Continuous Data Example:

Calculate sample size for a population having

Standard Deviation of 2.5 and at a precision
level of 0.5 and at confidence level of 95%.

{ (1.96 ) / }
2
Sample Size n =

= {1.96 * 2.5 / 0.5 }2= {9.8} 2

= 96.04

101
 Sample Size Calculation

Discrete Data
2
Sample Size n = { (1.96) / } p(1-p)

 P is proportion defective ( Number of units defective / total units)

102
 Sample Size calculator

https://www.surveymonkey.com/mp/sample-
size-calculator/

103
Estimate Population Parameters
from Sample Statistics

104
 Estimates
• Estimates are formed even in general life

• It is about making inferences about the population from a given sample

• Types of estimates

– Point estimate - a single number for the estimated population parameter

– Interval estimate - range of values for the estimated population parameter

(Confidence Interval)

• Interval estimates also indicate the probability of true population parameter being inside the

confidence interval that is known as confidence level

105
 Point Estimates
• Sample mean „Y‟is the point estimate of the population mean „µ‟

• Sample standard deviation „s‟is the point estimate of the population standard
deviation „σ‟

Y1 + Y2 + Y3 + … + Yn
Sample Mean „ Y ‟
n

( Y1 - Y )2 + ( Y2 – Y )2 + … + ( Yn – Y )2
Sample Variance „ s2 ‟
(n–1)

Sample Standard Deviation „ s ‟ s2 

106
 Confidence Intervals

• When we calculate statistics such as the mean for a data

set, we are making an estimate of the true value since we
are dealing with a sample of the population
• Based on our estimate from the sample we draw inferences
about the population
• Making decisions based on point estimates can be very
risky:
– The true value might vary considerably from the point estimate
– We should ask: what is the accuracy of estimate?
• Decisions should always be based on confidence intervals
not point estimates

107
 Confidence Intervals in words

All confidence intervals are constructed around:

(confidencescaling factor  measure of variation)

point estimate 
sample size

• As sample size increases

C.I. narrows

• As measure of variation increases

C.I. widens

• As confidence increases
C.I. widens
 Descriptive Statistics
Summary for mpg
A nderson-Darling N ormality Test
A -Squared 0.63
P -V alue 0.092

M ean 33.417
StDev 1.604
V ariance 2.572
Skew ness -0.21121
Kurtosis -1.16145
N 30

M inimum 30.450
1st Q uartile 31.861
M edian
3rd Q uartile
33.844
34.890
Inferential
Statistics
30 31 32 33 34 35 36
M aximum 36.162
95% C onfidence Interv al for M ean
32.818 34.016
95% C onfidence Interv al for M edian
32.378 34.380
95% C onfidence Interv al for StDev
9 5 % C onfidence Inter vals
1.277 2.156
Mean

Median

32.5 33.0 33.5 34.0 34.5

109
 Confidence Levels
Confidence 
Level Risk
90% 9 times out of 10 the true 0.1 Only 1 in 10 times will the true
value will lie within the value lie outside the confidence
confidence interval interval

95% 19 times out of 20 the 0.05 Only 1 in 20 times will the true
true value will lie within value lie outside the confidence
the confidence interval interval

99% 99 times out of a 100 the 0.01 Only 1 in 100 times will the true
true value will lie within value lie outside the confidence
the confidence interval interval

99.9% 999 times out of 1000 the 0.001 Only 1 in 1000 times will the
true value will lie within true value lie outside the
the confidence interval confidence interval

110
 Process Sigma Calculation

• Discrete Data
- Follow the Defects Per Million Opportunity (DPMO) method
- Have the yield calculation

• For Continuous Data

- Calculate the Z value
- Refer the Z distribution table and look up the sigma value

111
Process Sigma – Discrete Data

Concept Definition

Critical-To-Quality Customer performance requirements of a

Characteristics (CTQ) product or service

Unit The item produced or processed

Defect Any event that does not meet the

specifications of a CTQ

Any event which can be measured that

Defect Opportunity provides a chance of not meeting a
customer requirement

Defective A unit with one or more defects

112
Process Sigma – Discrete Data – DPMO Method

1. Number of Units processed N = __________

2. Number of Defect Opportunities Per Unit O = __________

3. Total number of Defects made D = __________

(include defects made and later fixed)

4. Solve for Defects Per Opportunity =

D
5. Convert DPO to DPMO DPO = N•O

DPMO = DPO • 1,000,000 = __________ • 1,000,000 = _________

6. Look up Process Sigma in
Abridged Process Sigma Conversion Table Sigma = __________

113
 A Normal Distribution Curve

Standard Normal Distribution

Normal Distribution • Average = 0
• Average = 25 68% • Standard Deviation = 1
• Standard Deviation = 5
95%

-¥ 99.7% +¥

VALUES (time): 10 15 20 25 30 35 40
Z-VALUES s : -3 -2 -1 0 1 2 3
- Z is a Unit of Measure that is Equivalent to the Number of
Standard Deviations a Value is Away From the Mean Value

114
Yield and Defect Probabilities For One Tailed Specification

Defect
Probability
Defect-Free
Probability
5%
95% Defect
Area
Yield + ¥+ ¥
-¥
Area Specificati
on
Limit Value

115
Yield and Defect Probabilities For Two Tailed Specification

Defect Defect
Probability Probability
5%
5%
Defect Area Defect-Free
Probability Defect
90%
Area
Yield
-¥ Area +¥
Specification
Limit Value

116
 Calculating the Z Value

Mean(μ) = 25
Normal Distribution
• Average = 25 Standard Normal Distribution
• Standard Deviation = 5 • Average = 0
• Standard Deviation = 1
68%
LSL = 10 USL = 35
95%
99.7%
-¥ +¥
VALUES (time): 10 15 20 25 30 35 40
Z-VALUES s : -3 -2 -1 0 1 2 3

LSL – μ Z USL – μ
Z USL =
LSL =
σ σ

117
 10 - 25 35 - 25
ZLSL = = -3 ZUSL = = 2
5 5

From Appendix 1:
Total area covered upto ZUSL = 0.977249938
Total area beyond ZLSL = 1 - 0.998650033 = 0.0707
Intercepted area between Z total = 0.977249938- 0.0707
= 0.90654

Yield = 0.90 = 90%

Sigma = 2.8

118
DPMO to Z Conversion Table

119
Z to DPMO Conversion Table

120
 Minitab Introduction
 MINITAB is the statistical software package of choice in
every major Six Sigma initiative around the world

MINITAB combines a comprehensive array of statistical

methods, graphics tools, and project organization features
in a user-friendly package that puts quality solutions within
anybody‟s reach.

Applicability
Control charts: To check whether the process is in
control
Capability analysis: To check whether the process is
operating within the specification limits
Design of Experiment: To further improve the process
121
Minitab Introduction

Simple to Use
Minitab's widespread use as a statistics instruction aid

Minitab allows professionals and statistics students

alike to use effectively.

Graphics
Minitab's immense collection of dynamic graphs and
graphics tools are very powerful.

Powerful Statistical Tools

Minitab is the right tool for the job when it comes to
data analysis and making quality improvements.

122
Minitab introduction and basics

Minitab Front Screen

This is
sessio
n
windo
w is
This
Data
windo
w

123
Minitab introduction and basics

Session Window : All statistical analysis are saved here.

Data Window : Worksheet data is displayed in the Data window.

Here we can add delete or modify data. Data can be extracted
from excel, can copy & paste the data in Data window.

Minitab accepts 3 types of data: Numeric, text and date/time

 Each worksheet file contains single worksheet.

 Worksheet can be added to the existing project or can be opened

in a new project

124
Minitab introduction and basics

Minitab saves the work in two types:

Save Current Worksheet : The worksheet or data window can

be saved. These type of file have an extension .mtw.

Save Project : The entire project analysis, data window,

Graphs which we make during analysis are saved
with an extension .mpj .

125
Minitab introduction and basics

Marked with black color in the file menu are the icons from where
worksheet or Project or both can be saved.

126
Minitab introduction and basics

Project Manager icon after clicking

here Project Manager will open

Project Manager Screen

Contd 127
Minitab introduction and basics

Project Manager- The Project Manager helps us to track the project

elements such as worksheets,Session window output, graphs etc.

Following are the subfolders in Project Manager:

1. Session window – All the project related work are saved here
like all statistical analysis, graphs. Any session window can be
opened by double clicking them. The session window contains the
following:

I. Any statistical output generated by MINITAB command

II. The command language used to generate
III. Command prompt for entering session commands

Session window is used to view the results of the analysis like mean,
medians, p-values.
128
 Minitab Introduction And Basic

2. History – The history of the project is maintained here.

3. Graphs – All graphs are saved here, which we do during analysis.

4. Report Pad – All the reports either statistical analysis or graphs are
appended here sequence-wise, once the appendage of some reports
has done.

5. Related Documents - Related documents folder contains a list

Of program files, documents, or internet URLs that are related to your
Minitab Project.This folder is used to quickly access project-related,
non-Minitab files for easy reference.

6. Worksheet – Data window is stored here.

129
Entering the data

130
Stacking

Stacking is used to arrange different columns or rows in one column or

row. In many statistical technique data of same form are required in to be
one column or one row.

131
Stacking

Following is the data set for bug resolution time( in mnts) per week.

66 72 73.5 73 69 73 72 74 72 71 74 72 70 67
71 72 69 73 74 66 71 70 70 75 61 66 68 68
63 70 68 69 69 62.7 68 74 71 69 70 72 67 69
73 73 71 68 69.5 73 75 66 69 66 73 68 74 73.5
70 67 72 75 68 69 71.5 71 72 69 67 68 66 65.5
66 62 62 63 67 65 66 65 65 65 64 67 69 68
63 62 63 64 68 62 67 61.7

Import all the data or copy the data & paste in Data Window.

132
Stacking

Following screen will appear-

133
Stacking

Perform the following steps for Stacking–

Choose Data > Stack > Columns.
Complete the dialog as shown below.

134
Stacking

The Result is shown below

135
Measurement System
Analysis

136
 Count the Occurrence of letter ‘I’ in the Paragraph

• A country preacher was walking the back-road near a church. He became thirsty so

decided to stop at a little cottage and ask for something to drink. The lady of the house

invited him in and in addition to something to drink, she served him a bowl of soup by the

fire. There was a small pig running around the kitchen. The pig was constantly running up

to the visitor and giving him a great deal of attention. The visiting pastor commented that

he had never seen a pig this friendly. The housewife replied: "Ah, he's not that friendly.

Actually, that's his bowl you're using!"

137
Gage R & R Exercise

138
Gage R & R Exercise

139
Gage R & R Exercise

140
Possible Sources Of Variation
Observed Process Variation

Actual Process Measurement

Variation Variation

Variation Variation
due to due to
Operators Gage

Reproducibility

Bias Stability Linearity Repeatability

To Address Actual Process Variability; The Variation Due To The Measurement 141
System
Must First Be Identified And Separated From That Of The Process
 Measurement System Analysis–Objectives
•Recognize that observed variation of a product/process includes the true variation of the
product/process & the variation due to the measurement system

•Identify & describe possible sources of variation in a measurement process

•Describe the importance of a validated measurement system

•Describe the terms precision, accuracy & resolution in relation to MSA

•Use appropriate tools to validate measurement system, analyze, and interpret results

– Gage R&R for continuous data

– Attribute R&R for discrete data

One of the objectives of the Measure Phase is to validate your measurement system. A Gage R&R
Study will help us do this!
The focus of this module is to review the methodology and tools to validate your measurement
system.
MSA = Measurement System Analysis
Gage R&R = Gage Repeatability & Reproducibility 142
 Why is MSA important?

Data is only as good as the process that MSA identifies how much variation is present in the

measurement process. Understanding measurement variation is necessary for identifying “true”

process variation and maximizing true Y improvements.

Without MSA, you run the risk of making decisions based on an inaccurate picture of your MSA

helps direct efforts aimed at decreasing measurement variation.

Excessive measurement variation distorts our understanding of what the customer feels

143
 What Are Some Types of Gages ?

• Variable Gages
– Heart Rate monitors
– Gas content monitors
– Graduated cylinders
– Pressure gages
– Thermometers TEXT

• Attribute Gages TEXT

TEXT
TEXT

– Spacer gages
TEXT TEXT

TEXT TEXT

TEXT TEXT

TEXT TEXT
TEXT

– Chromatic Standards
– Visual inspection (pass/fail)

144
Measurement System Errors

..
.. .
..
..
.
Precise NOT Accurate Accurate NOT Precise

. . .
.. . .
... . . .
145
Accurate AND Precise Neither Accurate, Nor Precise
Accuracy and Precision

Measurement System Error

Accuracy Precision

Bias Stability Linearity Repeatability Reproducibility

146
 Measurement System Characteristics

Accuracy
The difference between the average of observed values and the standard.

Stability
Variation in measurement when the same person measures the same unit
using the same measuring gauge over extended period of time.

Linearity
The consistency of the measurement across the entire range of the measuring
gauge

147
 Gage Repeatability

Gage repeatability is a measure of how consistently the same person (or system) measures the same event

over time using the same measurement system.

To find this value, we record how the same operator or system repeatedly measures the same event with the same

measurement system.

Since the event does not change, any change in the measurements must be due to variation in the measurement

process.

Transaction

148
 Gage Reproducibility
Gage reproducibility is a measure of how consistently several operators or measurement systems measure the

same event over time. To find this value, we have several people or systems repeatedly measure the same event. We

then look for differences in the results between the people or systems.

Transaction

149
 Measurement System Variation
Bias

Accuracy Linearity

Measurement
System Stability
Variation
Repeatability

Precision
Reproducibility

150
 Bias
Bias

True Observed
Value Average

Bias is the difference between the observed average of the measurements and the true value.

151
 Linearity
Non-Linearity
Gauge is measuring lower than true
value at high end
Measured Value

Reference Value

Linearity is the difference in bias values over the expected operating range of the measurement
gauge.

152
 Stability
Stability

Time Time
1 2

Stability is the variation (differences) in the average over extended periods of time using
the same gauge and appraiser to repeatedly measure the same part

153
 Repeatability
Repeatability

Repeatability is the variation between successive measurements of the same part, same
characteristic, by the same person using the same gauge.

154
 Reproducibility
Reproducibility

Operator Operator
1 2

Reproducibility is the difference in the average of the measurements made by different

people using the same instrument when measuring the identical characteristic on the same
pieces.

155
Measurement System Variation
Bias

Accuracy Linearity Calibration

Stability

Repeatability
Gauge R&R
Precision
Reproducibility

156
 Calibration
• The Bias of a gauge can be assessed by repeat measurements of a known reference unit

• This can be extended across the operating range of the gauge in a Gauge Linearity Study

• The Stability of the gauge can be assessed by control charting a reference unit

• Should not routinely recalibrate, instead if reference unit tests outside the control limits, then

re-calibrate

• If measurement device requires frequent recalibration, attempt to improve stability

Variable Gauge R&R

158
 Variable Gauge R&R
• Requirements:

• A minimum of two operators (recommend 3 or 4)

• At least 10 parts which should be chosen to represent the full range of manufacturing variation

(it may be acceptable to use fewer parts in some special cases)

• Each part should be measured two or three times in a random order

• Operators should not be aware of the previous result when measuring the same part

Part 10 Part 1
Part 5
Part 4
Part 3
Part 2
 Variable Gauge R&R
There are two methods available:

1. Analysis of Variance (ANOVA)

2. X-Bar and R

The ANOVA method is:

• the recommended approach

• takes into account any interactive effect between operator and part

160
 Variable Gauge R&R
Part-to-Part
Variation

Operator

Overall
Variation Reproducibility

Operator
Measurement by part
System Interaction
Variation

Repeatability

We want the Part-to-Part component to be large!

161
Variable Gauge R&R - Example
Part Operator 1 Operator 2 Operator 3
1 0.65 0.55 0.50
1 0.60 0.55 0.55
2 1.00 1.05 1.05
2 1.00 0.95 1.00
3 0.85 0.80 0.80
3 0.80 0.75 0.80
4 0.85 0.80 0.80
4 0.95 0.75 0.80
5 0.55 0.40 0.45
5 0.45 0.40 0.50
6 1.00 1.00 1.00
6 1.00 1.05 1.05
7 0.95 0.95 0.95
7 0.95 0.90 0.95
8 0.85 0.75 0.80
8 0.80 0.70 0.80
9 1.00 1.00 1.05
9 1.00 0.95 1.05
10 0.60 0.55 0.85
10 0.70 0.50 0.80
162
 Open Worksheet: Gauge R&R

Variable Gauge R&R - Minitab

Each operator measures
The Part numbers being each part twice
measured

Operators performing
measurements Individual measurements

In Minitab the data is entered in

single columns

163
Variable Gauge R&R - Minitab
Stat>Quality Tools>Gage Study>Gage R& R (Crossed)
Enter Part, Operator, Measurement
Check ANOVA Method

164
 Variable Gauge R&R - Minitab
Two-Way ANOVA Table With Interaction

Source DF SS MS F
P
Part 9 2.05871 0.228745 39.7178
0.000
Operator 2 0.04800 0.024000 4.1672
0.033
Part * Operator 18 0.10367 0.005759 4.4588
0.000
Repeatability 30 0.03875 0.001292
Total 59 2.24913 p  0.05 so all terms significant

Gage R&R Estimates of Variances for each

source
%Contribution
Source VarComp (of VarComp)
Total Gage R&R 0.0044375 10.67
Repeatability 0.0012917 3.10
Reproducibility 0.0031458 7.56
Operator 0.0009120 2.19
Operator*Part 0.0022338 5.37 165
Part-To-Part 0.0371644 89.33
 Variance Component Estimates
Part-to-Part
Variation
0.0371644 Operator
0.0009120
Overall
Variation
0.0416019 Reproducibility
0.0031458
Operator
Measurement by part
System Interaction
Variation 0.0022338
0.0044375

Repeatability
0.0012917

Variances are additive!

166
Gage R and R ANOVA Method: Example
Two-Way ANOVA Table With Interaction

Source DF SS MS F P
Call Number 2 592.667 296.333 205.154 0.000
Operator Num 2 6.889 3.444 2.385 0.208
Call Number * Operator Num 4 5.778 1.444 7.800 0.001
Repeatability 18 3.333 0.185
Total 26 608.667
Gage R&R The Total Gage R&R value under %
%Contribution contribution shows the measurement system
Source VarComp (of VarComp) error for this test, in this case 2.46% of the
Total Gage R&R 0.8272 2.46 variation in the data comes from the
Repeatability 0.1852 0.55 measurement system. We like it to be less
Reproducibility 0.6420 1.91 than 10%, so this measurement system is
Operator Num 0.2222 0.66 acceptable.
Operator Num*Call Number 0.4198 1.25
Part-To-Part 32.7654 97.54
The remaining variation comes from Part-to-
Total Variation 33.5926 100.00 Part variation. In this study, 97.54% of the
variation was due to variation in
Study Var %Study Var performance of the actual call cycle time –
Source StdDev (SD) (6 * SD) (%SV) true process variation.
Total Gage R&R 0.90948 5.4569 15.69
Repeatability 0.43033 2.5820 7.42
Reproducibility 0.80123 4.8074 13.82
Operator Num 0.47140 2.8284 8.13
Operator Num*Call Number 0.64788 3.8873 11.18
Part-To-Part 5.72411 34.3447 98.76
Total Variation 5.79591 34.7755 100.00

167
Number of Distinct Categories = 8
 Measurement System Metrics
• Gage R&R Output  Gage Variance (measurement system)

True Values Precision (Gage Variance)

Observed Values

• Precision of the measurement system (P):

P  6  2
MS  6   MS

– Precision includes both repeatability and reproducibility

? 168
Measurement System Metrics –
P/T
• Precision to Tolerance Ratio
– Addresses the fraction of the tolerance taken up by the gage variance

Tolerance  USL  LSL

6   MS 2
P /T 
–
USL  LSL
This fraction is usually expressed as a percentage
– Best case P/T < 10% -- Acceptable P/T < 30%

169
Measurement System Metrics –
P/TV
• Precision to Total Variance Ratio
– Addresses the fraction of the total variance taken up by the
gage variance
– Best Case < 10% Acceptable < 30%

6   MS
2
6   MS  MS  MS
P / TV    
6   total
2 6   total  total  historical

P  MS
%R & R  100%  100% Note: Not
TV  historical always equal!

170
MS Metrics – Number of Distinct
Categories
σ 
# Distinct Categories  round 
down Parts
1.41
 σMS 

• Number of Distinct Categories is the number

of distinct categories within the process data
that the measurement system can discern.
• The number of distinct categories is a
measure of the resolution
• The number of distinct categories is a DC#1 DC#2 DC#3 DC#4

function of the Repeatability & Xmeasured

X
Reproducibility X

• Acceptable: greater then equal to 4

Where is measured X? X is
somewhere in this distinct category,
but I don‟t know where.

171
 Gage Metric Summary
 MS
2
 MS
2
 MS  MS 6   MS σ Parts
or 1.41
 Total
2
 Hist
2
 total or  hist USL  LSL σ MS

%Contribution P/TV P/T Distinct

(%TV) (%R&R) (%Tolerance) Categories

No Issues < 1% < 10% < 10% >4

Marginally 10 -
1 - 9% 10 - 30% 3-4
Acceptable 30%
Do Not Use > 9% > 30% > 30% <3

?
 Rules of Thumb–Acceptable Ranges

Analyzing Gage R&R Results

1. R&R less than 10%–Measurement System “acceptable”

2. R&R 10% to 30%–May be acceptable–make decision based on classification of Characteristic,

Application, Customer Input, etc.

3. R&R over 30%–Not acceptable. Find problem, re-visit the Fishbone Diagram, remove Root

Causes. Is there a better gage on the market, is it worth the additional cost?

173
 Gauge R & R (Destructive testing)

Gage R&R Study (Nested) when each part is measured by only one operator,
such as in destructive testing . In destructive testing, the measured characteristic
is different after the measurement process than it was at the beginning. Crash
testing is an example of destructive testing.

Three operators each measured five different parts twice, for a total of 30
measurements. Each part is unique to operator; no two operators measured the
same part. You decide to conduct a gage R&R study (nested) to determine how
much of your observed process variation is due to measurement system
variation .

You need to use destructive testing, you must be able to assume that all parts
within a single batch are identical enough to claim that they are the same part.
If you are unable to make that assumption then part-to-part variation within a
batch will mask the measurement system variation.

174
 Attribute R&R – Terminology

• Appraiser Score (%) – the fraction of time the operator agrees with himself
during an attribute R&R

• Attribute Data – qualitative (go / no go) data that can be tallied for recording and
analysis

• Attribute Measurement System – a measurement system that compares each

part to a standard and accepts the part if this standard is met

175
• Operator Consistency (Trial Match)
– % of times an operator repeats his observation in trial 2 as compared to trial 1

• Mutual Consistency (Operator Agreement)

– % of times both operators are in complete sync

• Operator Efficiency (True Match)

– % of times an operator has both his observations matched with true value

• Measurement Efficiency (True Agreement)

– % of times both operators are in complete sync with the true value

176
 Attribute R&R – Method

• Setup
– Select 30 parts from the process. 50% passers, 50% defects
– If possible, select borderline or marginal good and bad samples
– Select inspectors – fully trained and qualified
• Execution
– Each inspector inspects the parts in random order to determine pass and fail.
Each inspector repeats the inspection I
• Analysis
– Enter the data into the spreadsheet AttributeR&R.xls to determine the
effectiveness of the measurement system.
• Evaluation
– Document the results.
– Implement appropriate actions to fix the process if necessary
– Rerun the study to verify the effectiveness of the fixes

AttributeR&R.xls

177
 Worksheet for Discrete Data

• Data to be filled only in “YELLOW‟ cells

178
Example for Discrete Data

179
 Attribute Measurement System

• An attribute measurement system compares each part to a standard and either accepts or

rejects the part.

• The screen effectiveness is the ability of the attribute measurement system to properly

discriminate good from bad.

• Screen effectiveness of 100% is desirable.

180
 Conducting Attribute Gauge
R&R
• 1. Select a minimum of 30 parts from the process. These parts should represent the full

spectrum of process variation (good parts, defective parts, borderline parts).

• 2. An “expert” inspector performs an evaluation of each part, classifying it as “Good” or

“Not Good.”

• 3. Independently and in a random order, each of 2 or 3 operators should assess the parts

as “Good” or “Not Good.”

• 4. Calculate effectiveness scores.

181
 Attribute Gauge R&R
Minitab Data Layout:
Open Worksheet: Attribute Gage R&R
Column containing Text column
parts being containing expert
assessed assessment (can use
words or numbers but
must be consistent)

Text column
Text column containing results of
containing operator measurements (can
performing use words or numbers
measurements but must be
consistent)

182
Attribute Gauge R&R
Stat>Quality Tools>Attribute Agreement Analysis
Enter “Results” in Attribute Column, “Part” in
Samples, “Appraiser” in Appraisers and “Expert” in
Known standard/attribute
Click on “Results” button and select
“Percentages…”

183
 Attribute Gauge R&R - Results
Attribute Agreement Analysis
Within Appraiser
Assessment Agreement Appraiser A was not
Appraiser # Inspected # Matched Percent (%)
A 30 28
95.0% CI
93.3 ( 77.9, 99.2)
consistent on two out of
B 30 30 100.0 ( 90.5, 100.0) thirty parts inspected
C 30 30 100.0 ( 90.5, 100.0)
# Matched: Appraiser agrees with him/herself across trials.

Each Appraiser vs Standard Appraiser A disagreed

Assessment Agreement with expert on two parts,
Appraiser # Inspected # Matched Percent (%) 95.0% CI Appraiser B and C
A 30 28 93.3 ( 77.9, 99.2) disagreed with expert on
B 30 29 96.7 ( 82.8, 99.9) one part
C 30 29 96.7 ( 82.8, 99.9)
# Matched: Appraiser's assessment across trials agrees with standard.

184
 Attribute Gauge R&R - Results
Assessment Disagreement
# Not Good/ # Good/
Appraiser Good Percent (%) Not Good Percent (%) # Mixed Percent (%)
A 0 0.0 0 0.0 2 6.7
B 1 6.7 0 0.0 0 0.0
C 1 6.7 0 Appraiser B0 assessed one
0.0 0.0
# Not Good/Good: Assessments across trials = Not Good / standard = Good.
part as Not
# Good/Not Good: Assessments across trials = Good / standard Good
= Not when the
Good.
# Mixed: Assessments across trials are not identical.standard (expert) assessed it
as Good
Between Appraisers
Assessment Agreement Appraiser A,B and C agreed
# Inspected # Matched Percent (%) 95.0% CI on 26 out of 30 parts
30 26 86.7 ( 69.3, 96.2)
inspected
# Matched: All appraisers' assessments agree with each other.

All Appraisers vs Standard Appraiser A,B and C all

Assessment Agreement agreed with the standard on
# Inspected # Matched Percent (%) 95.0% CI
30 26 86.7 ( 69.3, 96.2)
26 out of 30 parts inspected
# Matched: All appraisers' assessments agree with standard.

185
Attribute Gauge R&R - Results
Date of study:
Assessment Agreement
Reported by:
Name of product:
Misc:

Within Appraisers Appraiser vs Standard

100 95.0% C I 100 95.0% C I
P ercent P ercent

95 95
Percent

Percent
90 90

85 85

80 80

A B C A B C
Appraiser Appraiser

186
 Minitab Exercise

An educational testing company is training five new

appraisers for the written portion of the twelfth-grade
standardized essay test. The appraisers' ability to rate essays
consistent with standards needs to be assessed. Each appraiser
rated fifteen essays on a five-point scale (-2, -1, 0, 1, 2).

187
 Attribute Gauge R&R - Results
• The target effectiveness is always 100%

• Possible Corrective Actions include:

– Operator Training

– Clarification of Standards

– Simplification of Standards

– Conversion to Variable Data

3.0 Normal Distribution

189
 Introduction to Normal distribution

• Developed by astronomer Karl Gauss

• Most prominently used distribution in statistics

• Applicability to many situations where given the population knowledge, we need to predict

the sample behavior

• It comes close to fitting the actual frequency distribution of many phenomena

– Human characteristics such as weights, heights & IQ‟s

– Physical process outputs such as yields

190
Introduction to Normal Distribution

Normal Distribution with Figure 3.01

Mean =100
Standard Deviation = 10 1 unit
of
standard
deviation

-  + 
70 80 90 100 110 120 130

• It‟s a Probability Distribution, illustrated as N ( µ, σ )

• Simply put, a probability distribution is a theoretical frequency distribution
• Higher frequency of values around the mean & lesser & lesser at values away from mean
• Continuous & symmetrical
• Tails asymptotic to X-axis
• Bell shaped
• Total area under the Normal curve = 1

191
 Introduction to Normal Distribution

-  + 
µ
- 1σ + 1σ

31%
- 2σ + 2σ
69.20000%
- 3σ + 3σ
93.32000%
- 4σ + 4σ
99.37900%
- 5σ + 5σ
99.97700%
- 6σ + 6σ
99.99967%
192
Normality
•We use Descriptive Statistics to test for Normality
•Paste your Y data into Minitab
•Now click on Stat>Basic Statistics>Graphical Summary

193
Normality
•In the „Variables‟ box select the column with the project Y data
•Click on OK

194
Normality
•Look for the p value. If it is greater than 0.05, your data is Normal, else Non Normal
•Also look at the shape to check for skewness and modality

Summary for AHT

A nderson-Darling N ormality Test
A -S quared 0.95
P -V alue 0.014

M ean 97.193
S tD ev 58.210
V ariance 3388.383
S kew ness -0.02812
Kurtosis -1.37899
N 30
M inimum 13.854
1st Q uartile 37.133
M edian 114.406
3rd Q uartile 143.781
50 100 150 200
M aximum 195.408
95% C onfidence Interv al for M ean
75.457 118.929
95% C onfidence Interv al for M edian
44.795 134.463
95% C onfidence Interv al for S tD ev
9 5 % C onfidence Inter vals
46.359 78.252
Mean

Median

40 60 80 100 120 140

195
Normality
If a data set is normal, it means that
1. The area to the right of the curve is the same as the area to the left of the curve
2. Mean equals Median equals Mode
3. The P-value is greater than 0.05.
4. The ends run parallel to the X Axis

196
Shape
Distributions you could encounter
The standard normal distribution

A skewed distribution, with one tail longer than the other. Data can be Right (positively) skewed or Left
(negatively) skewed

197
Shape
A double-peaked curve often means that the data actually reflects two distinct processes with
different centers. You will need to re look at your data and check out on different processes /
segmentation factors you might have missed out on. Data can be Unimodal, Bimodal, Trimodal
or Multimodal

Outliers in a histogram – bars that are removed from the others by at least the width of one bar –
sometimes indicate that perhaps a separate process is included, but one that doesn't happen all the
time.

198
3.22 Process Sigma Multiple for Continuous Data

199
What is A Six Sigma Process?

Target Specification Limit

Higher 66807 Defects

Probability Per Million
of Failure Opportunities
1

3 ‟s
Higher this
number,
Lower the
chance of Much Lower

3.4 Defects
producing a Probability Per Million
defect of Failure Opportunities
1

6 ‟s

200
 Concept of Process Shift

Short term capability

Sample at Time 3

Sample at Time 2
Shift
Sample at Time 1
Long term performance

LSL T USL
201
 Key Concepts

• Short term capability (ZST)

– It is the capability or the potential performance of the process, in control at any point of time

• Long term performance (ZLT)

– It is the actual performance of the process over time

• Subgroups

– Several small-sized samples collected consecutively, each sample forms a sub-group

• Sub-groups are chosen so that data points are likely to be identical within subgroup, but different
between subgroups

• Process shift (ZST – ZLT)

– It reflects how well a process is controlled, usually a factor of 1.5 is used

202
 Concept of Process Shift

• Over time, a typical process will shift by approximately 1.5 standard deviations

• In other words, long term variation is typically 1.5 standard deviations more than the
short term variation

• This difference is called the Sigma shift, which is an indicator of process control

• This shift could be due to different operators, raw material, wear & tear, time, etc.

• Standard deviation of the sample is called as the long term deviation.

• DPMO is always calculated on the long term standard deviation

• Discrete data Z values as studied in the previous session have been adjusted for shift

203
ZST, ZLT & DPMO

• DPMO indicates long-term performance (Z LT)

• Long term performance adjusted by a factor of 1.5 gives short term capability (Z ST)

• Short term capability is the sigma multiple of the process (Z ST = Z LT + 1.5)

204
Process Variations

Common Cause Special Cause

White Noise Black Noise

Un-assignable Cause Assignable Cause

Random Systematic

205
 WHAT IS VARIATION ?

• No two things in nature are alike.

• This is also true for manufactured products.
• This dissimilarity between two products for the
same characteristic is called variation.
• The variation may be or can be made to be so
small so as to make the product SEEM similar.
• When we say that 2 things are similar we actually
mean that it is not possible to measure the variation
present within the accuracy of the existing
measuring equipment.
• Variation between 2 products are compared for
SIMILAR features or characteristics.
206
 TYPES OF VARIATION

• Variations among pieces at the same

time
• Variations across time

207
 6.50 6.55 7.00

6.55 a.m.  5 minutes.

This man wants to reach his work place by 6.55 a.m.. But he
can not do so, exactly at 6.55 a.m. daily. Sometimes he
reaches earlier (but almost never before 6.50 a.m.).
Sometimes he reaches later (but almost never after 7.00 a.m.).
WHY ?
208
 THIS IS BECAUSE....

OF CERTAIN FACTORS WHICH

• Affect the time he takes
• He cannot control
• Vary randomly
e.g. The traffic you encounter under normal course of travel

THE VARIATION THAT OCCURS DUE TO THESE KIND

OF FACTORS IS CALLED INHERENT VARIATION OR
COMMON CAUSE VARIATION OR WHITE NOISE.
e.g.. m/c vibration,tool wear etc.

209
UNDER NORMAL SCHEME OF OPERATION

Maximum deviation
Inherent
Aimed value Variability
(white noise)
Minimum deviation

210
TODAY HE IS EARLY ! PROBABLY BECAUSE :
• His watch was running fast.
WHY ? • He got a lift.
• His bus driver took a shortcut.
• He stayed over in the colony.
• He had some important work to
be finished before 7.30.
These causes are characteristic of
6.30 a specific circumstance and do
not occur in the normal scheme
of actions.

Variation due to these types of

reasons is called assignable or
special cause variation or black
noise
211
 GRAPHICAL DISPLAY OF VARIABILITIES

CASE I T
O
Assignable (Black noise) Assignable T
Variability Variability A
L
Inherent
V
Variability Aimed Value A
R
I
A
B
Assignable Assignable I
Variability L
Variability I
T
CASE II CASE III Y

212
Stability
We use Run Charts to test for Stability.
To check for stability (any special causes of variation)of your data, arrange your data in a time
sequence in to Minitab
Now click on Stat>Quality Tools>Run Chart

213
Stability
•In the “Single Column” section, select the project Y
•In the sub group size, either provide a constant number or an ID column (for instance date)
•Click on OK

214
 Stability
In the graphical output, you need to look for Clustering, Mixtures, Trends and Oscillations. If the p

value for any of these is LESS than 0.05, your project Y displays special causes of variation

In case your data displays any special causes of variation, you need to isolate it and analyze it carefully

before moving on to Hypothesis testing

Run Chart of AHT

200

150
AHT

100

50

0
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Observation
Number of runs about median: 17 Number of runs up or down: 17
Expected number of runs: 16.00000 Expected number of runs: 19.66667
Longest run about median: 4 Longest run up or down: 3
A pprox P-Value for C lustering: 0.64491 A pprox P-Value for Trends: 0.11678
A pprox P-Value for Mixtures: 0.35509 A pprox P-Value for O scillation: 0.88322

215
 Sample Run chart
Run Chart for C4

83

Run1
78
C4

73
Run2

68

5 15 25
Observation

Number of runs about median: 17.0000 Number of runs up or down: 16.0000

Expected number of runs: 13.4800 Expected number of runs: 16.3333
Longest run about median: 3.0000 Longest run up or down: 3.0000 216
Approx P-Value for Clustering: 0.9252 Approx P-Value for Trends: 0.4348
Test for Randomness

217
Mixture Pattern

218
Cluster Pattern

219
Oscillating Pattern

220
Trend Pattern

221
 Process Variations

• Short term variation (Common Cause)

– Variance inherent in the process (natural variation)

– Also called within sub-group variation

– Small number of samples, each sample collected in a short interval
– Common cause variation is captured
– Common causes can not be identified & corrected (process re-design would be
needed)

• Long term variation (Common + Special Cause)

– Added variation due to factors external to the usual process (abnormal variation)

– Also called overall variation (sample standard deviation for all samples put together)
– Large data collected over time
– Special causes (different operators, raw material, wear & tear) lead to increase in
variation
– Special causes need to be identified & corrected for improvement
222
– Long term variation is always greater than the short term variation
Calculating Process Variations
• Let‟s understand the concept of short & long term variations. Below is
the data given on the pizza delivery time spread over 3 days. Each
day‟s data can form a sub-group.

223
 Calculating Process Variations

nsg1 = size of subgroup 1

= 10

Within sub-group variation for day 1 is Σ (49.8-48)2 + (49.8-49)2 + (49.8-48)2 + …. = 107.6

Between subgroup variation for day 1 is (Grand average – day 1 average)2 * nsg1 = 54.4

Total variation within sub-groups is 107.6 + 386.1 + 530.1 = 1023.8

Total variation between subgroups is 54.4 + 6.9 + 100.3 = 161.67

Overall variation * is 1023.8 + 161.67 = 1185.5

* Overall variation can also be calculated as per usual sample variance formula 224
 Calculating Process Variations
Within sub-group variation for day 1 is Σ (49.8-48)2 + (49.8-49)2 + (49.8-48)2 + …. = 107.6
Between subgroup variation for day 1 is (Grand average – day 1 average)2 * nsg1 = 54.4

Total variation within sub-groups is 107.6 + 386.1 + 530.1 = 1023.8

Total variation between subgroups is 54.4 + 6.9 + 100.3 = 161.67

Overall variation is 1023.8 + 161.67 = 1185.5

Total variation within sub-groups

Sigma short term SST =
(Total sample size – number of subgroups)

SST = 1023.8 / 27 = 6.2

Overall variation
Sigma long term SLT =
(Total sample size – 1)

SLT = 1185.5 / 29 = 6.4

225
Analyzing the Sub-group Data

• Below 2 graphs illustrate the overall variation vis-à-vis sub-

group variation

• Difference in means over 3 days indicates the process control

Average = 48

Subgroup 1 Subgroup 2 Subgroup 3

226
 Process Capability (CP)

Process Capability USL - LSL

=
CP 6 SST

ZST = 3 CP

LSL USL

• CP is a measure of short term process capability

• CP relates the process short term variation with the customer specification limits

• It does not take into account how centered data is

• For a six sigma process, CP = 2 (ZST = 3 * 2 = 6)

• That means this process can fit 12 standard deviations between USL & LSL

227
 Limitations of Process Capability (CP)

20 140 20 140

LSL USL LSL USL

SST = 10 CP = 2 ZST = 6 SST = 10 CP = 2 ZST = 6

• Even though almost 40% of the data is outside specification limits in graph 2, it is
still a Six Sigma capable process, however, not performing to its potential

• CP can not be used for one-sided specifications

• To address these issues, another measure, called CPK is used K stands for

Katayori, which means shift of the process and measures the amount of potential
228
Capability Index (CPK)

USL - Y Y - LSL
CPU = CPL =
3 SST 3 SST

CPK = Minimum ( CPU , CPL ) ZST = 3 CPK

For one sided specifications

• CPK is a measure of actual short term process performance

• It considers the data centering & forces the mean to be between the specifications

• CPK enables ZST computation for one sided specifications

• CP >= CPK

• If CP is >>> CPK, process is capable but not performing up to its potential

229
Performance Index (PPK)

USL - Y Y - LSL
PPU = PPL =
3 SLT 3 SLT

PPK = Minimum ( PPU , PPL ) ZLT = 3 PPK

• PPK is a measure of actual long term process performance

• It is similar to CPK except that it uses the long term standard deviation

• PPK enables ZLT computation for both one sided & two sided specifications

• Difference between PPK & CP indicates the shift in the process

230
Key Concepts

• Capability is an internal measurement of the process behavior

• Performance is an external view of the process behavior

• Processes studied in actual projects may not have a shift of 1.5

• Due to limitations of multiple shift factors & CP, process sigma multiple
calculations for continuous data start from PPK

ZST

Data PPK ZLT

LSL, USL,
Mean, Variance DPMO

231
Visualizing the Continuous Data

• Below is the histogram drawn on the time

15

taken in pizza delivery

10

Frequency
5

35 40 45 50 55 60
Time taken in delivering pizza

232
 Computing Sigma Multiple for Pizza Delivery

• Assume that the customers expect the pizza delivered latest within 1 hour (USL)

We already know that

Mean = 47.5 SST = 6.2 SLT = 6.4

USL - Y 60 - 47.5
PPU = = = 0.65
3 SLT 3 * 6.4

PPK = 0.65 ZLT = 3 *0.65 = 1.95

DPMO = 25588 ZST = 1.95 + 1.5 = 3.45

233
 Using Minitab for Continuous Data Z Calculation

Process Capability Analysis for time taken in pizza delivery

Process Data
ST USL
USL 60.0000
Target *
LT
LSL *
Mean 47.4667
Sample N 30
StDev (ST) 6.21507
StDev (LT) 6.44895

Potential (ST) Capability

Cp *
CPU 0.67
CPL *
Cpk 0.67
Cpm *
30 40 50 60 70
Overall (LT) Capability Observed Performance Expected ST Performance Expected LT Performance
Pp * PPM < LSL * PPM < LSL * PPM < LSL *
PPU 0.65 PPM > USL 33333.33 PPM > USL 21868.43 PPM > USL 25979.72
PPL * PPM Total 33333.33 PPM Total 21868.43 PPM Total 25979.72
Ppk 0.65
234
 Key Concepts
• There is hardly any shift in the process

• Observed performance indicates the DPMO calculation if the data is treated as

discrete (i.e. > 60 & <= 60 )

• Expected DPMO values are different from the observed DPMO because expected
values are calculated as per the fitted normal probability distribution

• DPMO of the process is 25979, as per the expected long term performance

235
Process Capability (Minitab)

236
237
238
Non Normal Data

239
What to do when the data is Non-Normal

• Transform your data from non-normal to normal.

– Possibilities:
• Take the log (any base) of your raw measurements.
• Raise your individual measurements to a power. (Skewed to
the right? Try powers less than 1.)
• Use the reciprocal (1/y) of your individual measurements
OR

• Collect more data (usually >25-30 points for each factor being
investigated)

240
 Caution in Data Transformation !
• When you transform your data, you must also transform your
specs.

• You will use the transformed data through out the analysis of
your data.

• Use transformation of data as the last resort after checking

all other alternatives such as more data collection, validating
data consistency or use of tools that are robust to normality
assumption

241
 Transformation using Box Cox Method

• When continuous data or variable data collected does not show normality,
the data can be transformed using equations which will convert the data to
normal
• Box Cox is the most commonly used variance stabilizing transformation
model
• The method used is first to estimate the appropriate lambda, and then
based on the lambda value the mathematical transformations to be carried
out
• Data transformation using Box Cox method involves determination of the
appropriate  (lambda) value in the following transformation equation
– YT = Y  when  is not equal to 0.
– YT = Log e (Y) , when  = 0
Where YT is the transformed data and Y the
original data.
242
 Box and Cox Transformation

• For carrying Box Cox Transformation in Minitab follow:

– Stat > Control Chart > Box Cox

• Having done the Box Cox transformation we need to determine

the optimal  value (which is returned by Minitab in the Box
Cox plot).

• This optimal value is used as a guide to choose the practical 

value. Thus if  = -1.034 is the returned optimal value by
Minitab, a practical value would be  = -1.

• Thus when
–  = 1, there is no transformation
–  =-1, YT = 1/ Y
–  =0.5, YT = SQRT (Y)
243
Box and Cox Transformations

Lambda value Transformation

2 Y‟=Y2

0.5 Y‟= √Y

1 No transformation
0 Y‟=lnY

-0.5 Y‟=1/ √Y

-1 Y‟=1/Y
2
-2 Y‟=1/(Y )

244
 Interpreting Box Cox Plots

• The estimated or optimal  is

0.225, with the competing 
Box-Cox Plot for Non Normal D
values on the upper side
being 0.282 and on the lower 95% Confidence Interval

side 0.169. 300 Last Iteration Info

Lambda StDev

• The practical value of  in Low 0.169

Est 0.225
22.866
22.747

this case could be 1/4th root

Up 0.282 22.734
200

implying a fourth root

StDev
transformation 100

• The red vertical lines

represent the 95% 0
confidence interval of the -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0
Lambda
true value of  .
• Should  =1 be found within
this confidence interval we
do not need to transform the
data. 245
 Normality Plots for transformed data
Normal Probability Plot

.999 • The practical value of  in

this case could be 1/4th root
.99
.95
Probability

.80
.50
.20
implying a fourth root
.05
.01
transformation
.001

0 50 100 150 200 250

Non Normal D
Average: 38.8449
StDev: 42.7417
N: 50
Anderson-Darling Normality Test
A-Squared: 2.908
P-Value: 0.000
• The adjacent normality
plots
Normal Probabilityare
Plot shown for the raw

data (Non Normal Data) and

the transformed data using
.999
.99
.95

the fourth root.

Probability

.80
.50
.20
.05
.01
.001

1 2 3 4
Fourth Root
Average: 2.24321 Anderson-Darling Normality Test
StDev: 0.665470 A-Squared: 0.227
N: 50 P-Value: 0.805 246
 Box-coz Transformation

Probability Plot of Warping

Normal
99.9
Mean 2.923
StDev 1.786
99 N 100
AD 1.028
95 P-Value 0.010
90
80
70
Percent

60
50
40
30
20
10
5

0.1
-4 -2 0 2 4 6 8 10
Warping

247
248
249
250
251
252
Process Capability -
Non-normal Data

253
 Reasons for Failing a Normality Test

1. A shift occurred in the middle of the data

2. Mixed populations

3. Truncated data

4. Rounding to a small number of values

5. Outliers

6. Too much data

7. The underlying distribution is not normal

254
Process Capability –
Attribute Data

255
 Discrete Probability Distributions

• We have learnt the Normal distribution which is a continuous distribution

• While dealing with discrete data, we must be familiar with discrete distributions

• Two of the useful discrete distributions are

– Binomial Distribution
– Poisson Distribution

• Like any probability distribution, these distributions also help in predicting the sample
behavior that has been taken from a population

256
 Introduction to Binomial Distribution

• It‟s a probability distribution for discrete data

• Binomial distribution is on defectives

• It is named after Swiss mathematician Jacob Bernoulli

• It is an application of the population knowledge to predict the sample behavior

• Binomial distribution describes discrete data resulting from a process

– Tossing of a coin a fixed number of times

– Success or failure in an interview

• A process is called a Bernoulli processes when

– Process output has only two possible values (defective / OK, pass / fail, yes / no)
– Probability of each outcome remains constant over time
– Outputs are statistically independent

257
 Characteristics of Binomial Distribution

• A Binomial distribution is described by following equation

Probability of exactly r n!
P(r) = pr (1 - p) n - r
successes out of a sample size of n r ! (n – r) !

nC
Where p= probability of success r
r= number of successes desired
n= sample size
Mean of a Standard Deviation
Binomial
Distribution
µ=np of a Binomial
Distribution
σ= n p (1 – p)

A! is calculated as follows: 5! = 5*4*3*2*1 = 120

4! = 4*3*2*1 = 24

258
 Example
• We know that the tossing of a coin has only two outcomes – head or tail

• Probability of each outcome is 0.5 & it remains fixed over time

• Also, outcomes are statistically independent

• If we want to know what is the probability of getting 5 heads if we toss the coin 8 times, we

can use the binomial equation to find that

Here p= probability of success = 0.5

r= number of successes desired = 5

n= sample size = 8
8!
P(5) = 0.55 (1 – 0.5)8-5 = 21.87%
5 ! (8 – 5) !

259
 Introduction to Poisson Distribution

• It‟s also a probability distribution for discrete data

• Poisson distribution is on defects Tool

• It is named after Simeon Denis Poisson

• It is an application of the population knowledge to predict the sample behavior

Poisson Distribution
• Poisson distribution describes discrete data resulting from a process

– Number of calls received by a call center agent

– Number of accidents at a signal

• Unlike Binomial distribution that deals with the binary discrete data, a Poisson
distribution deals with integers that can take any value

260
 Characteristics of Poisson Distribution
• Let‟s understand the distribution by applying it to number of cars arriving at a particular signal in the rush hour

– Mean number of cars that arrive at the signal in the rush hour can be known from past data

– If we divide the rush hour into small intervals of one second each, we can state the following:

• Probability of exactly one car arriving a the signal in every one second interval is very small & is constant for

every one second interval

• Probability that 2 or more cars will arrive within a second interval can be approximated to zero

• It does not matter where that one second interval appears in the rush hour

• Number of cars arriving in one particular second interval is independent of number of cars in another second

interval

• These statements are true for any process that follows Poisson‟s distribution

261
 Characteristics of Poisson Distribution

• A Poisson distribution is described by following equation

Probability of exactly x λx e -λ
P(x) =
occurrences in a Poisson distribution x!

Where λ (lambda) = mean number of occurrences during interval

x = number of occurrences desired

e = base of the natural logarithm (equals 2.71828)

Mean of a Standard Deviation

Poisson
Distribution
µ=λ of a Poisson
Distribution
σ=λ

262
 Example

• Suppose we want to investigate the efficiency of safety measures taken at a dangerous signal.
Past records show that mean number of accidents every week is five at this signal. If the
number of accidents follow a Poisson distribution than we can calculate the probability of any
number of accidents happening in a week.

Given λ= 5 per week

Now probability of no accidents per week

50 e -5
= 0.006
P(0) = 0!
Probability of exactly one accident per week
51 e -5
= 0.03
P(1) = 1!
Probability of more than two accidents per week =

= 1 – [ P(0) + P(1) + P(2) ]

1 – [ 0.006 + 0.03 + 0.08 ] = 0.884

263
Target – 3.4 dpm
3.4 defects per million

(99.9997% Good Quality)

264
 Cpk / DPM Conversion Table

• We need a minimum Cpk value of 1.5 to achieve 3.4 DPM when we have a stable process

• We can test for stability and calculate Cpk for variable data using the Capability Study

265
266
 Capability Study – Binomial Data

• Over 10 working days a random sample of orders were checked for accuracy

• A pass / fail criteria was used for assessment

267
 Order Accuracy Data

Day Sample Size Defectives

1 87 0
2 95 1
3 76 0
4 124 1
5 69 2
6 86 0
7 77 1
8 98 0
9 87 0
10 96 1
268
 Minitab – Binomial Capability

Open Worksheet: “TSS Binomial Capability”

Select: Stat> Quality Tools>Capability Analysis>Binomial

269
 P C har t
Minitab Output
Binomial Process Capability Analysis of Defectives
Rate of Defectives

6
0.03 U C L=0.03169

% Defective
P r opor tion

4
0.02

0.01 _ 2
P =0.00670
0.00 LC L=0 0
1 2 3 4 5 6 7 8 9 10 80 100 120
Sample Sample Size
Tests performed w ith unequal sample sizes

C umulative % Defective Dist of % Defective

Tar
1.6 S ummary S tats
(using 95.0% confidence) 4.8

1.2 % Defectiv e: 0.67

% Defective

3.6
Low er C I: 0.25
0.8 U pper C I: 1.45
Target: 0.00 2.4

0.4 P P M Def: 6704

Low er C I: 2464 1.2
U pper C I: 14534
0.0
P rocess Z: 2.4727 0.0
2 4 6 8 10 0.0 0.5 1.0 1.5 2.0 2.5 3.0
Low er C I: 2.1826
Sample
U pper C I: 2.8117

270
Summary Statistics

This gives the actual PPM Defective (DPM) = 6704

This value can be converted to an approximate Cpk Value using the
Cpk/DPM conversion table

A 95% confidence interval is returned for DPM

(2464 to 14534)
The confidence interval assumes the process is stable

271
 Capability Study – Poisson Data

• The data on the next page was collected from 20 consecutive working days

• The data refers to the number of errors found in daily transactions

272
 Transactional Errors Data

Day Trans Errors Day Trans Errors

1 326 3 11 345 5

2 543 1 12 432 4
3 456 2 13 573 4
4 301 1 14 387 2
5 297 1 15 361 1
6 420 0 16 489 2
7 421 1 17 317 0
8 564 3 18 379 1
9 289 0 19 423 2
10 378 3 20 499 4

273
 Minitab – Poisson Capability
Open Worksheet: “TSS Poisson Capability”
Select: Stat> Quality Tools>Capability Analysis>Poisson

274
 Minitab Output
Poisson Capability Analysis of Errors
U C har t Defect Rate
Sample C ount P er Unit

0.015
0.015 U C L=0.01426
0.010
0.010

DP U
_
0.005 0.005
U =0.00488

0.000 LC L=0 0.000

1 3 5 7 9 11 13 15 17 19 300 400 500
Sample Sample Size
Tests performed w ith unequal sample sizes

C umulative DP U Dist of DP U
Tar
0.010 S ummary S tats
(using 95.0% confidence) 4.8

M ean DP U : 0.0049
0.008 3.6
Low er C I: 0.0035
U pper C I: 0.0066
DP U

0.006 M in DP U : 0.0000 2.4

M ax DP U : 0.0145
Targ DP U : 0.0000 1.2
0.004

0.0
5 10 15 20 0 2 4 6 8 0 2 4
0 0 00 0 0 0 0 00 0 1 01 0 1
Sample 0. 0. 0 . 0. 0 . 0. 0 . 0 .

275
 Summary Statistics

Yield = e–DPU = e–0.00488 = 0.995131

This is equivalent to a DPM of 4869

Our DPM of 4869 can be converted to an approximate Cpk Value using the

Cpk/DPM conversion table

A 95% confidence interval is returned for DPU

(0.0035 to 0.0066)

The confidence interval assumes the process is stable

276
Process Capability –
Summary

277
 Variable v Attribute Data
• Variable Data allows us to calculate capability indices (Cp, Cpk) directly

• Achieving a stable process with a Cpk value of 1.5 or more at the end of our project

means that we have achieved 6 Sigma

• Achieving a Cpk value of 1.5 for a variable measure (y) would mean that we would have

3.4 DPM or less

• The Six Sigma target for each attribute measure is the same – 3.4 DPM or less

278
 Capability
Process
Metrics
Output
y

Attribute Variable
Data Data

Defective Items Cp
Defects per Unit Cpk

DPM

279
Cause and Effect Analysis (Ishikawa Diagram, Fishbone)

 Also called “Cause & Effect‟ or „Ishikawa‟ diagram

 Focus of Fishbone is to arrive at the root causes of the problem areas identified through multi-

voting / process mapping

 Plug in Brainstorming session output in to the Fishbone Diagram using the 5M‟s and 1P.

(Machine, Method, Material, Measurement, Mother Nature(or Environment) and Personnel.

280
Cause and Effect Analysis (Ishikawa Diagram, Fishbone)

Cause-and-Effect Diagram
Measurements Material Personnel

E C A

Project Y

F D B

Environment Methods Machines

281
Example

282
Example: Computer Downtime

283
Failure Mode & Effect Analysis (FMEA)

• FMEA is a simple tool to prioritize the failure modes & actions

• By understanding why and how we fail, we can plan for success

• It works on the belief that proactiveness saves time

• We shall focus on Process FMEA (Design FMEA is used in designing products)

284
 FMEA Concept & Output

Effect
Severity

Failure Risk Action

Process / Product
Characteristics Mode Cause Priority Plan
Number
Occurrence

Control
Detectability

• Risk Priority Number (RPN) = S*O*D

• Severity, occurrence & detectability are measured on a scale of 1-9

285
FMEA Table

286
 FMEA - Definitions
• Failure Mode: The manner in which part/process can fail to meet
specification. Usually associated with a defect or non – compliance
– How can the process/ part fail to meet specifications?
– What would a customer (End user, subsequent operations or
service) consider objectionable - regardless of specifications?

• Failure Effect: Impact on customer if failure mode is not prevented or

corrected. Customers can be downstream or end user
– What are the consequences of the failure?

• Cause: A deficiency that results in a failure mode.

– Causes are sources of variability associated with key process input
variables (KPIV).
– Causes are described in terms of something that can be corrected
or can be controlled.

287
 Steps in creation of Process FMEA
1. List the process steps and their associated Xs.

2. For the X, list all the ways that the X can fail, known as Failure Modes
• The most common mistake here is to list why it would fail as
opposed to how
• Example of Failure Modes for any X are
i. X is too high (excess amount entered in invoice)
ii. X is too low (less amount entered in invoice)
iii. X is intermittent/variable (inconsistent amount entries in
invoices)
iv. X is missing (amount not entered in invoice)

• Any X can have multiple Failure Modes and each must be

dealt with separately by adding additional rows in the FMEA

288
 Steps in creation of Process
FMEA (cont)
3. For each Failure Mode, list the Effects that the Failure Mode would
have on the downstream Customer(s)
• These can remain grouped in one cell in the spreadsheet as you consider
them as a whole and focus on the worst case of them as you proceed (i.e.
don‟t create additional rows in the worksheet at this stage)

4. For each Failure Mode, list the Cause of the Failure Mode.
• Each Failure Mode can have multiple Causes
• Unlike the Effects column, the Causes are all dealt with separately, and
an individual row should be created for each Cause
• The Cause is the “why” the Failure Mode occurs

• At this point we have a three step causal chain: the Cause, which
causes the Failure Mode, which in turn causes the Effect
289
Steps in creation of FMEA (cont)
5. For each individual Cause, list the current set of Controls for the
causal chain: Cause -> Failure Mode -> Effect
• Be specific about the Controls

6. The Severity, Occurrence, and Detection rates are scored based on a

scoring matrix

7. For each Failure Mode score the severity of the worst case of the list
of effects associated with the Failure Mode as per the scoring table

8. For each Cause (usually multiple per Failure Mode), rate the
likelihood of occurrence as per the scoring table

9. For each Control group (one group per Cause) list the detection rate
of the combined group of Controls

290
 FMEA Definitions

• Risk Priority number (RPN)

– The output of an FMEA is the "Risk priority Number” (RPN)
– RPN is a calculated number based on information you provide
regarding the potential failure modes, the effect and the current
ability of the process to detect the failures before reaching the
customer

– It is calculated as the product of three quantitative ratings, each one

related to the effects, causes and controls

RPN = Severity X Occurrence X Detection

Effects X Causes X Controls
291
 FMEA - Definitions
• Risk Priority Number, RPN Terms
– Severity (of effect)
• Importance of effect on customer requirement.
• Could also be concerned with safety and other risks if failure
occurs.
– Occurrence (of cause)
• Frequency with which a given cause occurs and creates failure
mode
– Detection (Capability of current controls)
• Ability of current control scheme to detect

• The causes before creating failure mode

• The failure modes before causing effect
• All three use a scale of 1-10, with 1 being best or lowest risk,10 being
worst or highest risk
292
 FMEA Definitions
• Current Controls:
– The mechanism that prevent or detect the failure mode before
it reaches the customer.
– Current controls include SPC, Inspections, Monitoring,
Training, Preventive Maintenance

• Recommended action: Corrective actions to reduce occurrence,

and/or detection ratings.
– Directed at the highest RPN and critical severity items.

– Focus is usually in the order

1. Detection (Controls) first, then
2. Occurrence, then
3. Severity

293
 FMEA Rating Scale (sample
guidelines)
Rating Severity of Effect Likelihood of Occurrence Ability to Detect
10 Lose Customer Cannot detect
Very high:
Serious Impact on customer's business or Failure is almost inevitable
9 Very remote chance of detection
process
8 Major inconvenience to customer Remote chance of detection
High: Repeatable Failures
7 Major defect noticed by most customers Very low chance of detection
6 Major defect noticed by some customers Low chance of detection
Moderate:
Major defect noticed by discriminating
5 Occasional Failures Moderate chance of detection
customers
4 Minor defect noticed by most customers Moderately high chance of detection
3 Minor defect noticed by some customers High chance of detection
Low:
Minor defect noticed by discriminating Relatively few Failures
2 Very high chance of detection
customers
1 No effect Remote: Failure is unlikely Almost certain detection

294
FMEA (Failure Mode Effect Analysis) –
Another example
Severity Scale : The consequence should a failure occur

Rating Guideline

10 Bad Cause injury

9 Lead to compliance issue or legal issue
8 Render the product or service unfit for use
7 Causes extreme dissatisfaction
6 Partial malfunction of product or service
5 Cause a loss of performance leading to complaint
4 Causes minot performance loss
3 Small irritant witrh no loss of performance
2 Unnoticed with minor effect on performance
1 good Unnoticed and no effect on performance

295
 FMEA (Failure Mode Effect Analysis) -
Another example
Occurence Scale : Frequency of Failure

Rating Duration Probability Scale

10 Bad More than once a day >30%

9 Once every 3-4 days <= 30%
8 Once per week <=5%
7 Once a month <=1%
6 Once every 3 months <=0.03%
5 Once every 6 months <= 10 per lakh
4 Once a year <= 6 per lakh
3 Once every 1-3 years <=6 per Million
2 Once every 3-6 years <=3 per 10 Million
1 Good Once every 6- 100 years <=2 per billion

296
FMEA (Failure Mode Effect Analysis) -
Another example
Detection Scale: probability of a failure being detected

Rating Guideline

10 Bad Defect caused by failure goes undetected

9 Occasional units checked for defects
8 Units are systematically sampled and checked
7 All units are manually inspected
6 Units manually inspected with mistake proofing modifications
5 Process is monitored and manually inspected
4 SPC used with instant reaction to out of control condition
3 SPC as above coupled with 100% inspection of surrounding out of control conditions
2 All units automatically inspected
1 Good Obvious defect and is prevented from reaching the customer

297
FMEA Example

Repeat the same exercise for another failure mode – match abandoned

298
 FMEA Template
Pizza Delivery
Process Failure Effect Seve Cause Occur Current Controls Detec RPN
Step Mode rity rence tion
… … … … … … … … …
… … … … … … … … …
Baked for more Baked Pizza is
Pizza not fit time 5 compared with 7 280
for eating (1/100 * 2/100) = sample
Baking Over Baked 8 1/500
(does not Baked at Over
endanger Temperature 6
customer (1/100 * 8/10) =
safety) 1/125
Under Baked … … … … … … …
… … … … … … … … …
… … … … … … … … …

299
152
 FMEA Template
Pizza Delivery
Process Failure Effect Seve Cause Occur Current Controls Detec RPN
Step Mode rity rence tion
… … … … … … … … …
… … … … … … … … …
Baked for more
Pizza not fit time 5 Buzzer for 4 160
for eating (1/100 * 2/100) = Overtime
Baking Over Baked 8 1/500
(does not Baked at Over
endanger Temperature 6
customer (1/100 * 8/10) =
safety) 1/125
Under Baked … … … … … … …
… … … … … … … … …
… … … … … … … … …

300
153
 FMEA Template
Pizza Delivery
Process Failure Effect Seve Cause Occur Current Controls Detec RPN
Step Mode rity rence tion
… … … … … … … … …
… … … … … … … … …
Baked for more Auto Ejector at
Pizza not fit time 2 Required Time with 7 112
for eating (1/100 * 2/100) = detection against
1/500 sample
Baking Over Baked 8
(does not Baked at Over
endanger Temperature 6
customer (1/100 * 8/10) =
safety) 1/125
Under Baked … … … … … … …
… … … … … … … … …
… … … … … … … … …

301
154
Lean Thinking

A principle driven, tool based philosophy that focuses

on eliminating waste so that all activities/steps add
value from the customers perspective.

Imagine Office Processes with:

• Higher Customer Satisfaction
• Shorter Lead Time
• Higher Flexibility
• Higher Quality
• Lower Costs
• Higher Employee Satisfaction

302
 Organizational Challenge

The challenge is to make

• what the customer wants,
• when the customer wants it,
• at a price the customer is willing to pay.

303
 What is Lean?

 Learning to see waste

 Eliminating waste by

 Continuously Improving everything

304
PERCEPTION Vs ACTUAL WORK

How long does it take to:

Change a wheel in a Car 15 mins 7 Secs
Win a Wimbledon Final Match 2.5 hours 3 mins

Manufacture a sports shoe 8 hours 30 mins

Lean is all about finding & removing the waste 305

 Lean at Toyota – How it Started?
Foundation

1902

Sakichi Toyoda, founder of the

Toyota group, invented an
automated loom that stopped
anytime a thread broke.

1937

Toyota Motor Company Ltd. is

created from the Toyoda
Automatic Loom Works.

306
Foundation
Lean at Ford - 1908

Before
Cars were built in one spot and
the workers moved from car to
car. This was called the „gypsy
production‟ system.

After
Ford used a big rope and
winch to pull the cars along the
assembly line and kept the
workers stationary.

307
Organizational Challenge
CRAFT MANUFACTURING - Late 1800’s
Car built by workers who walked around the car
Built by craftsmen with pride
Components hand-crafted, hand-fitted
Excellent quality
Very expensive
Few produced

308
Organizational Challenge
Starting about 1910, Ford and his right-hand-man,
Charles E. Sorensen, fashioned the first
comprehensive Manufacturing Strategy.

They took all the elements of a manufacturing system--

people, machines, tooling, and products-- and arranged
them in a continuous system for manufacturing the
Model T automobile.

309
Organizational Challenge

Ford is considered by many to be the first practitioner

of Just In Time and Lean Manufacturing.

310
Organizational Challenge

Assembly line - Henry Ford

Low skilled labor, simplistic jobs, no pride in work

Interchangeable parts
Affordably priced for the average family
Millions produced - identical

311
Customer Expectation

• Much better quality

• More customized variants
• Just-in-time delivery
• Shorter lead times
• And freedom to order in small quantities

…..At Lower & Lower Prices

312
 3
Cost Vs. Selling Price 1
3

Profit
Cost
DON’T WAIT...
NOW IS THE Selling Price
TIME
Loss

Time
How to survive?
Henry Ford‟s production line
was developed in 1913. The
idea was inspired by a trip to
an abattoir. 314
 1909 Model T Ford
Any colour you like provided it is Black! - Standardised
Any colour you like provided it is black!

Model T Ford
1909.

Vertically integrated – even

farmed sheep!

315
316
 Scientific Management
“Whenever a workman proposes an improvement, it should be
the policy of the management to make a careful analysis of the
new method, and if necessary conduct a series of experiments
to determine accurately the relative merit of the new
suggestion and of the old standard. And whenever the new
method is found to be markedly superior to the old, it should
be adopted as the standard for the whole establishment“,
F.W.Taylor, Principles of Scientific Management, 1911.

Standardisation and best practice deployment

317
 How to Survive?

• During 1970s, Japanese were redefining the

manufacturing paradigms.
• Began to incorporate quality
– into cost focused strategy
• Discovered the power of FLOW
– Use of TIME as a new competitive dimension
Toyota Production System was born

318
Toyota Production System

• After World War II, Toyota was almost bankrupt.

• Post war demand was low and minimising the cost per unit
through economies of scale was inappropriate. This led to
the development of demand-led pull systems.
• The Japanese could not afford the expensive mass
production facilities of the type used in the USA so they
instead focused on reducing waste and low cost
automation.
• Likewise, Toyota could not afford to maintain high
inventory levels.

319
Founders of the Toyota Production System (TPS)

Taiichi Ohno Shigeo Shingo

(1912 †1990) 1909 †1990

320
 Just-in-Time Manufacturing
“In the broad sense, an approach to achieving excellence in a
manufacturing company based upon the continuing
elimination of waste (waste being considered as those things
which do not add value to the product). In the narrow sense,
JIT refers to the movement of material at the necessary time.
The implication is that each operation is closely synchronised
with subsequent ones to make that possible”

JIT became part of Lean Manufacturing after the publication of

Womack’s Machine that Changed the World in 1991

321
 Lean Manufacturing goals

Waller, D.L.,,1999,”Operations Management: A Supply Chain Approach”, (Thompson, London)

322
 Lean Manufacturing

• Arose in Toyota Japan as the Toyota Production System

• Replacing complexity with simplicity
• A philosophy, a way of thinking
• A process of continuous improvement
• Emphasis on minimising inventory
• Focuses on eliminating waste, that is anything that adds cost
without adding value
• Often a pragmatic choice of techniques is used

323
 Toyota Production System

• Technologies and practices can be copied.

• However, Toyota remains at the forefront, primarily because it
is a learning organisation.
• Problem solving methods are applied routinely and are
completely ingrained.
• The employees are continually engaged in Kaizen (continuous
improvement).
• Many aspects of TPS are based upon embedded tacit
knowledge.

324
 What if Flow is not proper?
• Traffic jam
• Trains/ flight not on time
• Blood pressure
• Heart attack
• Flood/ draught
• High Inventory
• High lead time
• Increased cost
What else…

325
 Taiichi Ohno …

All we are doing is looking at the time line from the moment the
customer gives us an order to the point when we collect the
cash.

And we are reducing

that time line by
removing the non-value
added wastes.
Taiichi Ohno,
1988 Product
Customer
Order Waste Shipment

Long “T”
326
 Toyota Management
Cells or flexible assembly lines
Broader jobs, highly skilled workers, proud of product
Low lead time
Excellent quality mandatory
Costs being decreased through process improvement.
Global markets and competition
 Lean Management

• During 1980s Americans realized that the things are

not the same anymore.
• Japanese were not only making better cars, they
were also doing it cheaply.
• Toyota was making cars in America at 25% less
cost.
• Severely denting American market share.

328
 Lean Management Philosophy

An outcome of study of Toyota Production Systems, by a team of

researchers in USA, led by James Womack & Daniel Jones.
Their books detailing how Toyota has emerged, as the world’s most
efficient automaker popularized Lean Manufacturing as a new
manufacturing philosophy.
The first book was published in 1990 as
“The Machine That Changed the World”

329
Covers Transformation of the Entire Value Chain

“Creating the Roadmap for the Future”

330
 The Underlying Premise of Lean

“Time to Cash”
Traditional
Customer Waste Product
Order Delivery

Time in Value Stream, “Lead Time”

Lean
Customer Waste Product Speed
Order Delivery Cost
Time in Value Stream, “Lead Time”

A relentless focus on reducing Lead time to reduce costs

. . . by driving out WASTE and SPEEDING up the process
331
 The Theory of Lean

• Let customers say what is of value to them

• Reduce non-value adding activities in the system,
causing process speed to increase
• Faster process speed positively relates to less waste, less cost, less
work in process (WIP), less complexity, higher quality and happier
customers
• Work to eliminate the root causes of the waste and allow for one-
piece, continuous flow

CUSTOMER WASTE PRODUCT

ORDER DELIVERY

TIME
332
 Value and Waste

VALUE:
An activity that transforms or shapes raw
material or information to meet customer
needs

WASTE:
• Activities that consume time, resources and
space, but do not contribute to satisfying
customers needs

Customers will pay for value…

they will not pay for waste
333
What is Value addition?

Any activity that qualifies following 3 criteria:

1. There should be some form of change.

2. It should be done right the first time.

3. Customer should be ready to pay for it.

Let us find out how lean has been developed.

334
 Value
• That customer is willing
to pay
• That changes products
color, function, shape,
other attributes so that
the product is getting
closer to the customers
requirements
• That we do right at first
time
 Wastes
• Those processes which directly do not create
value for customers (muda, mura, muri) :
– that are not necessary, and must be eliminated
– That are necessary, because these are supporting
value-add processes, cannot be eliminated (like
transporting)
• Muda – 8 wastes of lean
• Mura – not leveled workflow
• Muri – overloading of workers and assets

336
 Value Added Time & Activity
• Value added is the amount by which the dollar/rupee value of a
product (including raw materials and minerals) increases as it
proceeds through the various stages of its processing, manufacturing
and distribution.
• Value added time is time directly spent on increasing the
value of a product (including raw materials and minerals) as it
proceeds through the various stages of its processing, manufacturing
and distribution.
• Value added activities are those actions efficiently,
effectively, and directly related to increasing the value of a product
(including raw material and minerals) as it proceeds through the
various stages of its processing, manufacturing and distribution.

337
 VA/NVA
VA / NVA - Process Time
Value Added Non Value Added Necessary NVA
Set Ups Customer Specified
Queues Regulatory
Rework… Technology Limitation…

5%

35% In many
manufacturing
processes up to
60% 95% of the process
time can attribute to
NVA activity.

338
 NVA examples
• Waiting for materials to be brought to production/processing
work centers
• Time spent doing personal work on the computer and on
personal phone calls
• Spending time searching for materials, tools, supplies,
information, etc. that are not in their proper location
• Arriving at the work center late and leaving the work center
early
• Maintenance employees making numerous trips to get the right
repair parts and tools
• Attending a training session and never using/or be allowed to
use the information/skills presented

339
 NVA examples
• Knowingly producing “off spec” product just to
make the production goal
• Equipment failures (computer systems to the
behemoth draglines) causing idle time
• Bottlenecks of all sorts (mining, manufacturing,
distribution, administration, etc.) that create dead
time
• Waiting for approvals or direction from leadership
• Waiting for assistance from various support
functions
• Correcting inaccurate information provided by
others (e.g., time cards, production reports,
purchase requisitions, inventory levels, budgets)

340
 VA/NVA Exercise
Segregate the following into VA & NVA

• Entering orders
• Copying reports • Preparing
Engineering
• Waiting for parts drawings
• Filling information
• Recording
• Obtaining multiple
• Moving WIP • Revise/reworking approvals
• Testing
• Tracking WIP • Processing customer
• Kitting/staging deposits
• Reviewing
• Ordering Raw • Selling concert
• Inspection
material tickets
• Assembling products
• Counting Parts
• Examining patients
• Shipping to
customers • Checking
• Filing Insurance
• Fuelling delivery
trucks
claims
341
 VA NVA
•Entering orders •Reviewing

•Inspection
•Ordering Raw materials
•Waiting for parts
•Shipping to customers
•Recording
•Assembling products
•Copying reports
•Preparing Engineering drawings •Counting parts
•Fuelling delivery trucks •Moving WIP

•Examining patient •Testing

•Filing information
•Processing customer deposits
•Obtaining multiple approvals
•Filling insurance claims
•Revising/Reworking
•Selling concert tickets
•Checking

•Tracking WIP

•Kitting/staging

342
 VA/NVA Exercise
• Write your workplace VA/NVA & present.

343
What is Value addition?

Any activity that qualifies following 3 criteria:

1. There should be some form of change.

2. It should be done right the first time.

3. Customer should be ready to pay for it.

Let us find out how lean has been developed.

344
 TOTAL, BASIC & ADDED WORK CONTENT
TOTAL = BASIC + ADDED + IDLE TIME

Basic work content is the irreducible minimum time

of performance. It is hardly achievable.

Added work content is time added due to either

improper method or due to improper design of the
product.

Idle time is when the man & m/c are both inactive.
It may happen due to workers or management
both.
345
Lean Vs Mass Production
Conventional Thinking Lean
Produce as Much as possible Produce only what the customer needs

Productivity = Utilization Productivity = Through put

Produce Large batches Small batches, single piece where possible

Extensive set up change batch to batch Single minute set up change

Purchase large Economic order quantities Purchase small lots just when needed

Line stoppage = loss of productivity line stoppage at abnormality fixes issues

quicker… and deliver more!

346
 Stage Lean Approach
2: Map the Value
1: Identify Stream
Value
Map all of the steps… value added
Define value in from the & non-value added… that bring a
customers perspective and product or service to the customer
express value in terms of
specific processes
LEAN 3: Establish
Flow
5: Pursue The continuous movement of
Perfection products, services & information
smoothly end-to-end throughout
Complete elimination of the process
waste so all activities
create value for the
customer

4: Establish
NothingPull
is done by the upstream
process until the downstream
customer signals the need
347
 Lean Thinking
The Five Components:
1. Specify Value from the end customer’s
perspective.
2. Identify the Value Stream for each product family
and remove waste.
3. Make the Product Flow through the Value Stream.
4. So that customer can Pull from the producer.
5. Constantly pursue Perfection.

348
 Value
• Define Customer : clearly understand who the
customer is.
• Define Value : Quality, schedule, target cost etc.
• Ask how your current products and processes
dissatisfy your customers value expectations,
• Price?
• Quality?
• Reliable Delivery?
• Rapid response to changes?

349
 Value Stream
• Lean Management is an end-to-end collection
of processes that create value for the
customer
• The value stream includes
– People
– Tools and technologies
– Physical facilities
– Communication channels
– Policies and procedures

350
 Value Stream
Identify all of the steps currently required to
move products from order to delivery :
• Challenge every step: why is this necessary?
What does the customer think?
• Critically assess value addition at each step.
• Eliminate / minimize non-value-added
activities.

Tip : Use Value Stream Mapping Tool

351
 Flow
Line-up all the steps that truly create value so
they occur in rapid sequence;

• Produce each product, everyday, in direct proportion to demand.

• Require that each step in the process be,

– Capable , right every time (SIX SIGMA)

– Available, always able to run (TPM)
– Adequate, with capacity to avoid
bottleneck. (right size tooling).

352
 Flow
3
5
3
• “Flow” refers to the movement of material through the plant.
• The material should not be stagnant at any point in time from the
receiving of raw material to the shipping of finished products.
 Pull
Customer should Pull value through the Value Stream;

• Through lead time reduction & correct value specification, let customers
get exactly what they want & exactly when they want.

354
 Pull System

A method of controlling the flow

of resources by replacing what
has been consumed.

355
 3

Pull System 5
6

A method of controlling the flow of resources

by replacing what has been consumed

Supplier Process Supermarket Customer Process

 Push Vs. Pull System

Push System Pull System

Large Lots Small Lots
Hidden Problems Visual Shop Floor Management
Waste Minimal Waste
Poor Communication Good Communication
Approximation/Forecast Actual/Real Time Information

Make All We Can Just In Make What the Customer Needs

Case We Need It! When Needed
In the Quantity Needed!

357
Pull System Function
3
5
8

Material Flow

Replenishment
Signal
Work Authorizations

Final
Work-
station

Customer
 Perfection
Continuously Pursue Perfection;

• Create a clear vision.

– Production ideal state.
– Customer Value
• Make waste visible & evident.
• Problem Solving

359
Buzzing Lean Terminology

• Continuous Flow

• Just-in-Time

• MUDA

• Action Workout

• Pull Production

• Lead Time

• Visual Management

• Value Stream

360
Buzzing Lean Terminology

Continuous Continuous Flow

Flow

Just-in-Time • One of the five principles of Lean

MUDA • Involves continuous movement of products, services, or information

Action from end-to-end in a process
Workout
• Minimizes batch processing
Pull
Production

Lead Time Batch Processing – 1 minute per piece Continuous Flow – Make One Dispatch One

Visual
Management

Value
Stream A B C A B C
Cycle Time = 30++ Min Cycle Time = 12 Min
361
Buzzing Lean Terminology

Continuous Just-in-Time (JIT)

Flow

Just-in-Time • Philosophy of providing the right part, item, or information in the right
place, in the right amount, and at the right time
MUDA

Action • Against the mass production principle

Workout

Pull
• Reduces all cost associated with inventory
Production

Lead Time

Visual
Management

Value Low
Stream inventory
Against
costs
mass
production

362
All about Waste (3M) - Identifying it and Removing it

MUDA = Waste of using resources without creating added

value
MURI = Waste of overburdening people or
equipment/resources
MURA = Waste of unevenness, variability in processes

363
Buzzing Lean Terminology

Continuous MUDA
Flow

Just-in-Time • Any type of waste element that adds no value to the product
MUDA
• Increases cost and lead in time
Action
Workout • Eight types of wastes are: motion, waiting, overproduction,
Pull
processing, defects, inventory, and transportation.
Production

Lead Time

Visual
Management
Processing
Waiting Cost
Value
Stream

Transportatio
n
Overproduction
364
Inventory
The 8 Wastes

365
DOWNTIME (The 8 Wastes, explained)

Defects • Waste related to poor quality (Supply Chain)

• Waste related to mistakes and missed expectations (Back-office, Support functions)

Overproduction • Producing more product than needed for immediate consumption or customer requirements (Supply Chain)
• Performing tasks earlier than needed, pulling resources from higher priorities (Back-office, Support functions)

Waiting • Product, people, or machines delayed due to earlier processes (Supply Chain)
• System elements which cannot perform tasks, due to upstream considerations (Back-office, Support functions)

Not Tapping • Waste due to not fully utilizing resources available (including human intellect)
• Waste related to resisting new ways of thinking or performing functions
Potential

Transportation • Waste related to physical movement of product to different locations (Supply Chain)
• Waste related to moving physical or virtual elements across locations (Back-office, Support functions)

Inventory • Waste related to storing product without specific, current requirements (Supply Chain)
• Collecting physical or virtual elements, without actual/immediate need (Back-office, Support functions)

Motion • Waste related to movement of people or equipment within a task

• Waste related to poor ergonomics, or movement within the „envelope‟ of the body

Excess • Waste related to not understanding actual customer requirements

• Performing tasks & functions with greater depth than actually required for the purpose at hand
Processing

366
 Waste #1: Defects

This is the waste related to Examples :

poor quality, such as:
Incorrect data entry
• Input errors AR collection not as per the
• Creating defects timeline
Invoice error
• Routing defects
Improper account code
• Finding defects
Invoices not matching with PO
• Correcting defects
Credit Terms & Default clauses
• Recording defects not properly negotiated with the
• Reporting defects customer

367 of 42
 Waste #2: Over-Production

This is waste related to Examples :

producing ahead of
customer requirements, Processing paperwork before the
such as: next person is ready for it.
Producing 60 invoices in a day
• Over-ordering when client wants only 40
invoices processing in a day
• Early scheduling
• Producing more product
than is required for
immediate sale or shipping

368
 Waste #3: Waiting

This is waste related to system imbalances &

flow related issues, such as: Examples :
• People waiting for processes to finish
• Processes waiting for the previous process Invoices waiting in queue before being
to complete processed
• Product waiting for the rest of the batch to Redundant approvals
be completed Unbalanced workload
• Anything which should be „flowing‟ but is Waiting „on-hold‟on the phone for getting
standing still clarification from units on invoices
discrepancy
Waiting for a signature to proceed with an
order

369
 Waste #4: Not Tapping Potential

Waste due to not fully utilizing Examples in

resources:
Not leveraging the qualities
• Not utilizing human potential of individual to the fullest.
• Not soliciting and using the Keeping improvement ideas
to yourself
ideas of others
Not participating in team
• Not engaging people in the discussions
change process
Not inviting outside eyes to
• General resistance to change evaluate local processes
Squashing the ideas of
younger teammates

370
 Waste #5: Transportation

This is waste related to Examples :

movement of people,
product, and machines, Multiple approvals
such as:
Files moving from one desk to
another
• People and product An invoice with error being
moving between taken for further processing
workstations
• People and product
moving within work areas
• Movement of product
between functional areas

371
 Waste #6: Inventory

This is waste related to

materials and product in Examples
excess of current customer More stationary than required
requirements, such as: Documents/ records hold beyond retention
period.
Batch processing of invoices
• Raw materials Processed invoices not delivered to customer

• WIP (work-in-process)
• Finished goods

372
 Waste #7: Motion

This is waste related to people and machine

movement within a task, such as: Examples
• Hand and arm motion
• Machine stroke/cycle Searching for information for
• Control movement on equipment
matching the PO detail from
invoice

Collection agency going to wrong

address
Scattered departments in an
organization

373
 Waste #8: Excess Processing

This is waste related to misunderstanding

customer requirements, such as:
Examples :

• Cleaning in excess of requirements (and re-

cleaning)
• Inspections
Surplus/redundant steps in a
• Moving product, then moving again
process
• Generating trash
• Other non-value-added steps Excessive no of meetings
Requiring various signature
levels for minor purchases
Endless refinements/ approvals
before sending presentation to
your boss / customer

374
 Which is the ‘worst’ waste?

Depending on where you are in the

process, some wastes affect you more
than others.

However, OVERPRODUCTION is
generally seen as the „worst‟ waste,
because it can be the root cause all of
the other wastes.

REMEMBER, all 8 wastes exist in every

process, to one degree or another! 375
 MURA

Mura means IRREGULARITY

Whenever a smooth flow of work is interrupted

in an operator’s work, the flow of parts and
machines, or the production schedule, there is
mura

376
 MURA
Mura means IRREGULARITY
It can occur in:
• Production
• Parts flow
• Equipment usage
• Work done by team members
• Information flow
• Material deliveries, causing shortage or
overstock

377
 MURA
• Benefits of eliminating Mura:
– Shorter Lead times
– Lower WIP
– Faster response time
– Lower cost
– Greater production flexibility
– Higher quality
– Better customer service
– Higher revenue
– Higher throughput
– Increased profit !

378
 MURA
Time Overburden !! Takt Time
4’30”
5”

4” Wait
Time
3” Balanced

2”

Cycle Cycle Cycle

1”
Time Time Time
2’45” 5’20” 4’25”
Team Member A Team Member B Team Member C

379
 MURI
Muri means strenuous conditions for both workers and
machines as well as for the work process.
•When machines are overburdened
– We run the risk of causing safety hazards, equipment breakdowns
and manufacturing defects.
•When team members are overburdened:
– The safety of the team members can be endangered
– Workers are more likely to become exhausted or fatigued
– It becomes difficult for team members to do each job with
attention to detail. This increases the frequency of defects, which
in turn adversely affects the quality.

380
 MURI
Muri means STRENUOUS WORK

• A profusely sweating operator

• Squeaking sound from the machine
• A newly hired worker assigned to do the job of a veteran without
adequate training

381
 MUDA MURA MURI

382
Buzzing Lean Terminology

Continuous Action Workout (Kaizen)

Flow

Just-in-Time
• Team-based activity focused on quickly solving problems through
MUDA physical simulation and evaluation

Action • Also referred to as Kaizen

Workout

Pull • Means by which workers are able to communicate their ideas and
Production create change
Lead Time

Visual
Management

Value
Stream

Takt Time

383
 Kaizen
Kai + zen
(Change for the better)

384
 Kaizen Kaizen Event

The definition of “Kaizen” has been Americanized

to mean "Continual Improvement." A closer
definition of the Japanese meaning of Kaizen is
"to take apart and put back together in a better
way."
 Real Sense
• Everyday Improvement

• Everybody Improvement

• Everywhere Improvement
 ISOLATI
SECRECY
ON
“Do you have
any ideas ?” “Here‟s what
we are doing”
“What problems
COMMUNICATION
Can we solve ?”“Here‟s where
We are going”
“How can we make
this better ?”
 Kaizen Event
• Identify a problem

• Brainstorm with employees

• Make the improvement

• Monitor results

• Adjust as necessary

• Apply to like processes

388
 Must requirements for Running Kaizen

• One Kaizen Facilitator from Quality Team

• Drive from Leadership for kaizen

• Reward & recognition

389
 Kaizen Closure report
Project ID: Start Date
Leader:

Problem Statement:- Members:

End date
Location
Bench Mark

Target

Analysis Root cause:

W W W Counter Measure

hy hy hy
1 2 3

Benefi
Improvement Trend:

ts:

Horizontal Deployment
 Kaizen reward and Recognition
( Every 6 months)
1. Top 3 winners from furniture plant
2. One award for maximum no. of projects
nominated from each department
3. One award for maximum no. of projects
nominated from single individual
4. Consolation prize to all the participants
5. Certificate of participants for all
 Project recognition criteria

Jury Members :- Manager from particular department& Quality Head

Evaluation Criteria
Sl No. Criteria Score

1 Process Improvement 10
2 Cost Saving 15
3 Process parameter improvement 15
4 Customer satisfaction 10
5 Employee satisfaction 05
6 Innovation 10
7 Sustaining Period 10
8 Quantum Change(average & variation) 10
9 Replication possibility 05
10 Standardization( automation,process & review) 10

Total Marks for each project is 100

Buzzing Lean Terminology

Continuous Pull Production

Flow

Just-in-Time • Customer-centric activity where production is based upon the client

requirements
MUDA
• Reduces waste by minimizing overproduction
Action
Workout • Uses demand-related signals from clients
Pull
Production
One more
Supplier Okay please! Customer
Lead Time

Visual
Management

Value
Stream

393
 Buzzing Lean Terminology

Continuous Lead Time

Flow

Just-in-Time • Refers to the total time from when an order is placed until the
MUDA finished product is shipped.

Action
• Decreased lead time results in JIT-favoring production environment
Workout

Pull
Production Product Demand Initiates Process Cycle

Lead Time
Process Process
Visual Raw Materials cycle Processing cycle Final Product
Management

Value
Time
Stream

Lead
Time

394
Buzzing Lean Terminology

Continuous
Flow
Visual Management

Just-in-Time • Means by which anyone can tell at a glance if the production activities are
MUDA proceeding normally or not

Action
• A communication, discipline, and pacing tool
Workout

Pull
Production

Lead Time

Visual
Management

Value
Stream

Organize and arrange what you need!! 395

 Definition
• Visual Management
– a system of visual signals
(indicators & controls) that
convey information about
system status and desired
behaviors in the workplace

396
Background &
 Types
• A VISUAL of Applications
INDICATOR relates information
and data to employees in the area.
For example: charts showing the daily
production of a line, or Chart depicting where
cleaning activity is to be done etc
• A VISUAL CONTROL is intended to actually
control or guide the action of the group
members.
For example: Danger signs, Warning charts,
Shadow boards etc 397
Background &
 Examples
• Visual indicatorsof Visual
convey Indicators
system status:

Andon lights show line status Display boards convey metrics

Thermometers indicate temperature

This light shows when These lights indicate sound level

recording is taking place
Popup thermometers indicate
when the turkey is done
398
Application
 Examples
• Visual of Visual
controls indicate desiredControls
behaviors:

Stop signs control traffic flow Stop lights control traffic flow

Shadow boards control tool position

(and indicate missing tools as well)

Parking spaces control These lines control

auto storage locations traffic & travel
Signage controls actions
399
Application
5 S and Visual Management

400
WHAT PROBLEMS DO U COMMONLY ENCOUNTER
AT YOUR WORKPLACE

• HIGH ABSENTEEISM
• HIGH TURNOVER
• DEMOTIVATED EMPLOYEES
• DISORDERED/ CLUTTERED
ENVIRONMENT
• MISTAKES/ERRORS
THE SOLUTION TO ALL THESE
PROBLEMS IS

5S
 What is 5S ?

 5S is a simple but highly effective set of techniques

 5S methodology was developed in Japan
 5S is the foundation for any continuous improvement
 5S removes waste from work environment through
better workplace organization, standardization, visual
communication and general cleanliness

A necessary pre-condition for

improvement culture
What are the 5Ss ?
5Ss Japanese English Meaning

Remove unwanted items from

1S SEIRI SORT
the work place

A place for everything and

2S SEITON SET
everything in its place

3S SEISO SHINE Cleaning with meaning

Establish Standards for first

4S SEIKETSU STANDARDISE
3Ss

Sustain & improve the first

5S SHITSUKE SUSTAIN
4Ss
 1. ORGANISATION(SEIRI)

• Decide what you need

• Remove unnecessary clutter

• All tools, gauges, materials, classified and then stored

• Remove items which are broken, unusable or only

occasionally used
 RED
RED TAG TECHNIQUE TAG

• GIVE STAFF RED LABELS

• ASK STAFF TO GO THROUGH EVERY ITEM IN THE
WORK PLACE
• ASK IF NEEDED & THOSE THAT ARE NEEDED,IN
WHAT QUANTITY
• NOT NEEDED RED TAG IT
• STORE IN THE RED TAG AREA
 RED
TAG
For wavering items

• PLACE THE SUSPECTED ITEMS IN THE RED

TAG AREA FOR ONE WEEK
• ALLOW THE STAFF TO REEVALUATE THE
NEEDED ITEMS
• AT THE END OF WEEK THOSE WHO NEED
ITEMS SHOULD BE RETURNED
 ORGANISATION

PRIORITY FREQUENCY OF USE HOW TO USE

Low Less than once per year Throw away

Once per year Store away from the
workplace

Avg. Once per month Store together but

Once per week offline

High Once Per Day Locate at the

workplace
 ORDERLINESS(SEITON)

• ONCE YOU HAVE ELIMINATED ALL

THE UNNEEDED ITEMS

• NOW TURN TO THE LEFT OVER

ITEMS
 ORDERLINESS(SEITON)

Organise layout of tools and equipment

–Designated locations
–Use tapes and labels
–Ensure everything is available as
it is needed and at the “point of
use”
 Examples Of Types Of Waste
Avoided By Set In Order-Advantages

• The Waste of Motion

• The Waste of Searching
• The Waste Of Human Energy
• The Waste of excess inventory
• The Waste of defective locations
• The Waste of unsafe conditions
 Cleaning/inspection Check list
Main
response
Point

Clean
e
Lubricat
Replace
Restore
No.

1 Is there any dirt or dust in the oil inlet? O

2 Do the oil level indicators show adequate levels? O
3 Can the oil level indicators be clearly seen? O
4 Are there crack in the oil tank? O
5 Is the oil tank bottom dirty? O
6 Is the oil in the tank dirty? O
7 Is there any oil leakge from the tank? O O
8 Are oil levels adequate? O
9 Is the correct type of oil being used? O
 4S : Standardize Practices

• Color coding (Tools, jigs, fixtures….)

• Poke-yoke
• Responsibility labels
• Wire management (PCs, LCDs)
• Inspection marks
• Prevention of dust, dirt, noise and vibration
• I-can-do-it-blindfolded
• Visual control signs
 5S Leads to

House Keeping Orderliness

Orderliness Cleanliness

Cleanliness LEADS TO Quality

Quality Productivity

Productivity Success

Success Happiness
 BEFORE-AFTER

• Before • After

431
BEFORE-AFTER

432
 5S Leads to

House Keeping Orderliness

Orderliness Cleanliness

Cleanliness LEADS TO Quality

Quality Productivity

Productivity Success

Success Happiness

433
Overview of “KANBAN”

434
 What is Kanban?
4
3
5

In Japanese language, the word

•“Kan” means “Card" and
• "ban" means “Signal".

So “Kanban” refers to as
“Signal Cards".
KanBan

 KanBan is a pull-material replenishment

system, based on the principle that
material is pulled through the production
process based on actual usage.
 Kanban uses visual signals, usually a
card (KanBan card), to move material
through the value chain.

436
 KanBans / Signals

There are two types of Kanban cards:

– a conveyance card (C-Kanban)
– a production card (P-Kanban)

Signals come in many forms other than cards, including:

– an empty crate
– an empty designated location on the floor

437
 How Kanban works : A simple example
Let's assume you are manufacturer of Head Lamp.
–Components required : Lens
–Packaging : Pallets
–No. of lenses per pallet : 50
• When the pallet is empty, the person assembling the Head Lamps takes a
“Card” that was attached to the pallet and sends it to the “Lens”
manufacturing area. Another pallet of “Lens” is then manufactured and sent to
the Head Lamp assembler.
–A new pallet of “Lenses” is not made until a
“Signal Card” is received.
• This is “Kanban”, in it's simplest form.

438
 Kanban Control System
• Card or other device that communicates demand for work or materials from
the preceding station
• A method of Just-in-Time inventory replenishment that originated in Japan.
• Paperless production control system
• Authority to pull, or produce comes from a downstream process.

Kanban techniques can be used by both manufacturing” and “non-

manufacturing” org’s

439
 KANBAN Card
Address Location

Supplier Name KANBAN #

AMTAX
Supplier Code
0500
W22X
Shipping Frequency Safety Stock Days
5 Times/Week 9 1

440
 Why Consider Kanban Control?

 Lower inventory investment

 Better “customer” service

 Reduced administrative costs

441
 What makes Kanban Control
different ?
• Kanban is “pull” based – driven by actual
usage not forecasts

• Kanban replenishment is simple ?

442
 Kanban System
Can use different methods to trigger replenishment activity

– Kanban cards are the most common

– Kanban containers are frequently

– bar coding of cards / containers helps when

automating Kanban systems

443
 Kanban System
Not suited for all inventory items – look for

– items with frequent usage

– items with short lead times

– items with “willing” suppliers

444
 4
Replenishment Flow for Kanban Cards 4
5

When container is empty, signal

sent to source to replenish Kanban

Wait until minimum order

quantity is reached
Empty
New

Planner determines when to Wait

add / remove cards

Full

When received, Kanban status is

updated and container is moved to In-Process
usage area When order minimum is
reached, a Job, PO, or Move
Order is created
 Types of Kanban
• Production Kanban
– authorizes production of goods
• Withdrawal/Conveyance Kanban
– authorizes movement of goods
• Kanban square
– a marked area designated to hold items
• Signal Kanban
– a triangular kanban used to signal production at the previous
workstation
• Material Kanban
– used to order material in advance of a process
• Supplier Kanban
– rotates between the factory and suppliers

446
4
4
7
 Conveyance Kanban
Conveyance Kanban Card

Part number to produce: M471-36 Part description: Valve Housing

Lot size needed: 40 Container type: RED Crate

Card number: 2 of 5 Retrieval storage location: NW53D

From work center: 22 To work center: 35

448
 Production Kanban
Production Kanban Card

Part number to produce: M471-36 Part description: Valve Housing

Lot size needed: 40 Container type: RED crate

Card number: 4 of 5 Completed storage location: NW53D

From work center: 22 To work center: 35

Materials required:
Material no. 744B Storage location: NW48C
Part no. B238-5 Storage location: NW47B

449
 How Kanban Operates
When a worker at downstream Work Center #2 needs a
container of parts, she does the following:
• She takes the C-Kanban from the container she just emptied.
• She finds a full container of the needed part in storage.
• She places the C-Kanban in the full container and removes the P-
Kanban from the full container and places it on a post at Work Center
#1.
• She takes the full container of parts with its C-Kanban back to Work
Center #2.

450
4
5
1
4
5
2
 4
5
Determining Number of Kanbans 3

average demand during lead time + safety stock

No. of Kanbans =
container size

dL + S
N =
C
where

N = number of kanbans or containers

d = average demand over some time period
L = lead time to replenish an order
S = safety stock
C = container size
 4
5
Determining Number of Kanbans: Example 4

d = 150 bottles per hour

L = 30 minutes = 0.5 hours
S = 0.10(150 x 0.5) = 7.5
C = 25 bottles

dL + S (150 x 0.5) + 7.5

N= =
C 25
75 + 7.5
= = 3.3 kanbans or containers
25

Round up to 4 (to allow some slack) or

down to 3 (to force improvement)
 Exercise: Number of Containers
There are two adjacent work centers, one
of which is fed parts from the other. The
production rate of the using work center is
165 parts per hour. Each standard Kanban
container holds 24 parts.
It takes an average of 0.6 hour for a
container to make the entire cycle from the
time it leaves the upstream center until it is
returned, filled with parts, and leaves again.
The safety stock factor of the system is
observed to be 0.2.
How many containers are needed?
455
 JIT - Just In Time / Continual Improvement
• Kanban is directly associated with Just-In-Time (JIT) delivery.

– However, Kanban is not another name for just-in-

time delivery.
– It is a part of a larger JIT system.

• There is more to managing a JIT system than just Kanban and

– there is more to Kanban than just inventory

management.

456
Value Stream Mapping
 What is Value Stream?

• A value stream is all the actions (Both value added and

Non Value added) currently required to bring a transaction
though the main flows essential to every transaction

• Taking a value stream perspective means working on the

big picture , not individual processes, and improving the
whole, not just optimizing the parts

458
Steps in Value Stream Mapping
Product
Family

Current State
Drawing

Future-State
Drawing

Work Plan and

Implementation

459
460
 Value Stream – Traditional Thinking
Supply Chain Value Stream
Traditional Process
SUPPLIERS Departments CUSTOMERS
Raw Materials Manufacturing W. Housing Distribution Merchandising Finished Goods

11 22 33 44

461
Value Stream – Customer Focused
Thinking Supply Chain Value Stream
Thinking –
SUPPLIERS Customer Focused CUSTOMERS
Raw Materials Manufacturing W. Housing Distribution Merchandising Finished Goods

11 22 33 44

462
463
464
465
466
 A Few Mapping Tips
4
6
7
• Always collect current-state
information while walking along
the actual pathways of material
and information flows yourself.
• Begin with a quick walk along the
entire door-to-door value stream.
• Begin at the shipping end and
work upstream.
• Bring your stopwatch and do not
rely on standard times or
information that you do not
personally obtain.
• Map the whole value stream
yourself.
• Always draw by hand in pencil.
 4

Current State Map

6
8

Step 1: Select a Product Family

Step 2: Form a Team
Step 3: Understand Customer Demand
Step 4: Map the Process Flow
Step 5: Map the Material Flow
Step 6: Map the Information Flow
Step 7: Calculate Total Product Cycle Time
 4
6

Step 1: Select a Product Family 9

Identify your product families from the

customer end of the value stream.
A family is a group of products that pass
through similar processing steps and over
common equipment.
If your product mix is complicated, create a
matrix with assembly steps and equipment
on one axis, and your products on the
other axis.
 4
7
Step 1: Select a Product Family 0

ASSEMBLY STEPS & EQUIPMENT

1 2 3 4 5 6 7 8 9
P A X X X X X
PRODUCT
R B X X X X X X FAMILY
O C X X X X X X
D
D X X X X X X
U
C E X X X X
T F X X X X X X
S G X X X
 4

Step 2: Form a Team

7
1

Select a cross-functional team

Select team members who are familiar with the

product

Ensure that team members are trained in the use of

VSM

Designate a Value Stream Manager

THIS IS CRITICAL
 4

Who is responsible for the Value Stream? 7

2

PROCESS 1 PROCESS 2 PROCESS 3 Customer

The Value Stream Manager!

 Data Collection
4
7
3
Data To Collect
 Shipping/Receiving  Work-in-process
schedules inventory
 Pack sizes at each
 Overtime per week
process
 Process cycle times
 Demand rates by
 Number of product
process (Takt Time) variations at each
 Working hours and step
breaks  Batch (lot) sizes
 Scrap
 Inventory Points  Changeover times
(location & size)  Rework  Changeover
 How Operations are frequencies
 Downtime
scheduled
 4
7
Step 3: Understand Customer Demand 4

Mapping starts with the customer requirements.

Represent the customer’s assembly plant with a
factory icon, placed in the upper right-hand portion
of the map.
Underneath this icon, draw a data box recording the
requirements of the customer.
VSM Icon : Outside Source
4
7
5

XYZ Corporation

Suppliers
Customers
Outside Sources Ext. Job Shops
 4

VSM Icon: Data Box 7

6

Data Box

C/T = 45 sec Used to record information

concerning A
C/O = 30 sec manufacturing process,
department, customer, etc.
3 Shifts

Scrap = 2%
Open at Bottom
Uptime = 98% For Additional
Data
 4
7
Step 3: Understand Customer Demand 7

Bruce
Assembly
Bruce
Assembly
24000pcs/mo
- 15,000 “A”

Outside Source - Customer

- 9000 “B”

Tray=20 pcs
2 shifts
 4
7
Step 3: Understand Customer Demand 8

24000pcs/mo Bruce
-15000 type A Assembly

- 9000 type B
Tray=20 pcs
2 shifts

Data Box
24000pcs/mo
- 15,000 “A”
- 9000 “B”

Tray=20 pcs
2 shifts
Step 4: Map the Process Flow

• Draw the basic production processes by using a process box.

• The process boxes must be arranged in the sequence of their
occurrence.
• Draw the data box for each production process recording the cycle
time, changeover time, reliability, available work time, etc. for each
individual process.

479
VSM Icon : Process
4
8
0

Name of the Manufacturing

Process
Process

No. of Operators
2

Symbol for Operator

 VSM Icon : Process

Assy. Cell

“U-Cell” with
Three Operators

One process box equals an area of flow. All processes should be

Labeled.

481
 VSM Icon : Process
4
8
2

PC&L
Department runs
MRP Software
For Material Planning
MRP

Also used for departments such as Production Control, sales &

 4
8
Step 4: Map the Process Flow 3

Bruce
Assembly

PROCESS 1
2400pcs/mo
- 15,000 “A”
- 9000 “B”
1 Tray=20 pcs
2 shifts

Manufacturing Process
PROCESS 1 PROCESS 2 PROCESS 3 PROCESS 4 PROCESS 5 SHIPPING

Staging
1 1 1 1
1
Step 4: Map the Process Flow 4
8
4
C/T = 1 sec
Bruce
C/O = 1 hr Assembly

Uptime=80%
27000 s avail
EPE=2 2400pcs/mo
- 15,000 “A”
- 9000 “B”
weeks
Data Box for
Tray=20 pcs
2 shifts

the Process
PROCESS 1 PROCESS 2 PROCESS 3 PROCESS 4 PROCESS 5 SHIPPING

Staging
1 1 1 1
1

C/T = 1 sec C/T =24 sec C/T =31 sec C/T =52 sec C/T=25 sec
C/O = 1 hr C/O =15 min C/O =10 min C/O = 0 C/O = 0
Uptime=80% Uptime=100 Uptime=85% Uptime=95 Uptime=100
27000 s avail 27000 s avail 27000 s avail 27000 s avail 27000 s avail
EPE=2 weeks 2 shifts 2 shifts 2 shifts 2 shifts
Step 5: Map the Material Flow

• Material Flow is drawn from left to right

on the bottom half of the map in the
order of processing steps, not according
to the physical layout of the plant.

485
Inventory

Count and time should be

Noted.

330 pieces
1 Day
Truck Shipment

Note frequency of shipments.

Mon + Wed
Movement of production Material that is produced
Material by PUSH and moved forward before
the next process needs it;
usually based on a
schedule.
Movement of finished
Goods to the customer
Step 5: Map the Material Flow
Bruce
Assembly

I
4200 A 24000pcs/mo
- 15000 “A”
2300 B - 9000 “B”

Inventory Triangle showing Tray=20 pcs

2 shifts

the amount of inventory

PROCESS 1 PROCESS 2 PROCESS 3 PROCESS 4 PROCESS 5 SHIPPING
I I I I I Staging
4200 A 1 1050 A 1 1400 A 1 1000 A 1 2400 A
1
2300 B 550 B 850 B 625 B 1100 B

C/T = 1 sec C/T =24 sec C/T =31 sec C/T =52 sec C/T=25 sec
C/O = 1 hr C/O =15 min C/O =10 min C/O = 0 C/O = 0
Uptime=80% Uptime=100 Uptime=85% Uptime=95 Uptime=100
27000 s avail 27000 s avail 27000 s avail 27000 s avail 27000 s avail
EPE=2 weeks 2 shifts 2 shifts 2 shifts 2 shifts
 Step 5: Map the Material Flow
Bruce
Assembly

PUSH
24000pcs/mo
- 15000 “A”
- 9000 “B”

Arrow Tray=20 pcs

2 shifts
I
Sheets
5 days

PROCESS 1 PROCESS 2 PROCESS 3 PROCESS 4 PROCESS 5 SHIPPING

I I I I I Staging
4200 A 1 1050 A 1 1400 A 1 1000 A 1 2400 A
1
2300 B 550 B 850 B 625 B 1100 B

C/T = 1 sec C/T =24 sec C/T =31 sec C/T =52 sec C/T=25 sec
C/O = 1 hr C/O =15 min C/O =10 min C/O = 0 C/O = 0
Uptime=80% Uptime=100 Uptime=85% Uptime=95 Uptime=100
27000 s avail 27000 s avail 27000 s avail 27000 s avail 27000 s avail
EPE=2 weeks 2 shifts 2 shifts 2 shifts 2 shifts
 Step 5: Map the Material Flow
Bruce
Assembly

Craig Steels
Company
Craig Steels 24000pcs/mo
Company - 15000 “A”
- 9000 “B”

Tray=20 pcs

Outside Source - Supplier 2 shifts

I
Sheets
5 days

PROCESS 1 PROCESS 2 PROCESS 3 PROCESS 4 PROCESS 5 SHIPPING

I I I I I Staging
4200 A 1 1050 A 1 1400 A 1 1000 A 1 2400 A
1
2300 B 550 B 850 B 625 B 1100 B

C/T = 1 sec C/T =24 sec C/T =31 sec C/T =52 sec C/T=25 sec
C/O = 1 hr C/O =15 min C/O =10 min C/O = 0 C/O = 0
Uptime=80% Uptime=100 Uptime=85% Uptime=95 Uptime=100
27000 s avail 27000 s avail 27000 s avail 27000 s avail 27000 s avail
EPE=2 weeks 2 shifts 2 shifts 2 shifts 2 shifts
 Craig Steels
Company Step 5: Map the Material Flow
50 sheet stack Bruce
Assembly

24000pcs/mo
- 15000 “A”
Mon + - 9000 “B”
Wed
Tray=20 pcs
50 sheet stack 2 shifts

Data Box for Supplier 1X

indicating pack size daily

I
Sheets
5 days

PROCESS 1 PROCESS 2 PROCESS 3 PROCESS 4 PROCESS 5 SHIPPING

I I I I I Staging
4200 A 1 1050 A 1 1400 A 1 1000 A 1 2400 A
1
2300 B 550 B 850 B 625 B 1100 B

C/T = 1 sec C/T =24 sec C/T =31 sec C/T =52 sec C/T=25 sec
C/O = 1 hr C/O =15 min C/O =10 min C/O = 0 C/O = 0
Uptime=80% Uptime=100 Uptime=85% Uptime=95 Uptime=100
27000 s avail 27000 s avail 27000 s avail 27000 s avail 27000 s avail
EPE=2 weeks 2 shifts 2 shifts 2 shifts 2 shifts
 Step 6: Map the Information
Flow
• The information flow is drawn from
right to left in the top half of the map.

494
 Production Control

Craig Steels Bruce

Company MRP Assembly

24000pcs/mo
50 sheet stack - 15,000 “A”
- 9000 “B”

Tray=20 pcs
2 shifts

Mon + Prod Ctrl

Wed

MRP

1X
daily

I
Step 6: Map the Information Flow
sheets
5 days
PROCESS 1 PROCESS 2 PROCESS 3 PROCESS 4 PROCESS 5 SHIPPING
I I I I I Staging
4200 A 1 1050 A 1 1400 A 1 1000 A 1 2400 A
1
2300 B 550 B 850 B 625 B 1100 B

C/T = 1 sec C/T =24 sec C/T =31 sec C/T =52 sec C/T=25 sec
C/O = 1 hr C/O =15 min C/O =10 min C/O = 0 C/O = 0
Uptime=80% Uptime=100 Uptime=85% Uptime=95 Uptime=100
27000 s avail 27000 s avail 27000 s avail 27000 s avail 27000 s avail
EPE=2 weeks 2 shifts 2 shifts 2 shifts 2 shifts
 Production Control 30 day
Forecast
Craig Steels Weekly Bruce
Company Fax MRP Assembly
Daily
Order

24000pcs/mo
50 sheet stack - 15,000 “A”
30 day - 9000 “B”
Forecast Tray=20 pcs
2 shifts

Mon + Daily
Wed
Order

Weekly
Fax
1X
daily

I
Step 6: Map the Information Flow
sheets
5 days
PROCESS 1 PROCESS 2 PROCESS 3 PROCESS 4 PROCESS 5 SHIPPING
I I I I I Staging
4200 A 1 1050 A 1 1400 A 1 1000 A 1 2400 A
1
2300 B 550 B 850 B 625 B 1100 B

C/T = 1 sec C/T =24 sec C/T =31 sec C/T =52 sec C/T=25 sec
C/O = 1 hr C/O =15 min C/O =10 min C/O = 0 C/O = 0
Uptime=80% Uptime=100 Uptime=85% Uptime=95 Uptime=100
27000 s avail 27000 s avail 27000 s avail 27000 s avail 27000 s avail
EPE=2 weeks 2 shifts 2 shifts 2 shifts 2 shifts
 Production Control 30 day
Forecast
Craig Steels Weekly Bruce 4
Company Fax Assembly
MRP Daily 9
Order
7
24000pcs/mo
50 sheet stack - 15,000 “A”
- 9000 “B”

Tray=20 pcs
Twice a week scheduling 2 shifts

Mon +
Wed

Daily ship
schedule
1X
daily

I
Step 6: Map the Information Flow
sheets
5 days
PROCESS 1 PROCESS 2 PROCESS 3 PROCESS 4 PROCESS 5 SHIPPING
I I I I I Staging
4200 A 1 1050 A 1 1400 A 1 1000 A 1 2400 A
1
2300 B 550 B 850 B 625 B 1100 B

C/T = 1 sec C/T =24 sec C/T =31 sec C/T =52 sec C/T=25 sec
C/O = 1 hr C/O =15 min C/O =10 min C/O = 0 C/O = 0
Uptime=80% Uptime=100 Uptime=85% Uptime=95 Uptime=100
27000 s avail 27000 s avail 27000 s avail 27000 s avail 27000 s avail
EPE=2 weeks 2 shifts 2 shifts 2 shifts 2 shifts
 Step 7: Calculate Total Product Cycle Time

• Draw a timeline under the process boxes and

inventory triangles to compile the production lead
time.
• Production lead time is the time it takes one part to
make its way through the shop floor, beginning
with arrival as raw material through to shipment to
the customer.
• Next, add up only the value-adding (processing)
times for each process.
• Compare the value added to total lead time.

498
499
500
501
502
503
504
505
506
507
508
509
Current State Map

510
 Drawing the Current State Map

 Always collect current state information while walking along the

actual pathways of material (transaction) and information flows
yourself

 Begin with a quick walk along the entire door to door value stream

 Begin at the shipping end of the work stream

 Bring your stop watches and do not rely on standard times or

information that you do not personally obtain.
• Possible exceptions (machine uptime, scrap rate/ rework rate etc)

 Map the whole stream yourself

 Always draw by pencil

511
Paper Airplane Factory
Example of Current State Value Stream Map

512
 Customer Requirements

• 48 planes in 15 Min

• Planes to be defect free, in case there is a defect then

customer has to be asked whether this can be shipped

• The material shipped by the supplier

• Paper supplier supplies material in batches of 20 only

• Number of workers at each workstation: 2

513
 Work done at each Workstation
Supplier supplies raw material only
in batches of 20
MATERIAL Step # 3: NOSE FOLD
IDENTIFICATION Paper Clip
“Cart”

04/10/98 Lot #1 04/10/98 Lot #1

04/10/98 Lot #1
04/10/98 Lot #1
04/10/98 Lot #1 04/10/98
04/10/98 Lot
Lot#1
#1
04/10/98 Lot #1 04/10/98
04/10/98 Lot
Lot#1
#1
04/10/98 Lot #1 04/10/98
04/10/98 Lot#1
Lot #1

Step #1: FUSELAGE FOLD

Step # 4: WING FOLD

04/10/98 Lot #1

Step # 2: NOSE FOLD

Note

The images exhibit the

04/10/98 Lot #1
production of a 6 piece
Batch 514
Finished current state Map

515
 Key point

• Value stream mapping uses Seconds rather

than Minutes for cycle times and all other
calculations

516
 Note the Inventory

• As you walk the products material flow note

the places where you find the inventory

• Use the inventory symbol for such locations

• If inventory accumulates in more than one

location between two processes draw a
triangle for each location
517
 Push vs Pull

• To qualify as a pull in a services

environment subsequent transaction should
not be moved to the next person till the next
person has accepted the transaction
processed earlier
– This may be achieved through system
controlled movement of files between people or
– This may be achieved through physical bins
laid between staff
518
E.2 Creating the
Future State Map

519
Steps in Value Stream
Mapping
Product
Family

Current-
State
Drawing

Future State
Drawing

Work Plan and

Implementation
520
Takt Time

521
 The word takt has German Origins
The word takt is taken from the German, which means rhythm of music. Takt time
determine how fast a process needs to run to meet customer demand. It is about
having a rate of processing that meets the rate of sales.

Takt Time = Net available working time per day

Customer demand per day

Net available working time per day is total work time minus meetings, breaks, lunch
and other non value added activities.

522
 Example
In a financial service company, there is a demand for 500 credit cards per day. What is the
takt time of the process? Assume that the cards are processes in one shift every day and the
duration of a shift is eight hours, of which 30 minutes is devoted to breaks, lunch and
meetings

Takt Time = (8- ½) hr x 60 min x 60 seconds

500

Takt Time =
27,000 = 54 seconds/ unit
500

This means one card needs to be processes every 54 second to meet the customer
demand.

523
 Takt time and Cycle Time

Takt Time - How often do we need to complete one transaction

Cycle Time – How much Total time do we take to complete one

transaction

Cycle Time
Headcount =
Takt Time

524
 How many operators are needed to meet
Takt?

Remainder in # of operators
calculation Guideline / Target
(after paper Kaizen)
Do not add extra operator, further reduce waste and
<0.3
incidental work
Donot add extra operator yet, after two weeks of cell
0.3 - 0.5 operation and kaizen, carefully evaluate if enough
waste & incidental work can be taken out
Add an extra operator if necessary and keep reducing
>. 0.5 waste& incidental work to eventually eliminate the
need for that operator in that cell

525
Example (cont‟d)
• How to calculate Headcount?

34 sec cycle = 2 workers needed

time
18 sec takt time

 This is how resources are properly allocated to meet

customer demand:
• Anymore workers than 2 = Over production
• Any less than 2 workers = Not meeting customer
demand

526
 SMED
(Set-Up Reduction)

Single Minute
Exchange of Dies

527

52
Batch to Single Piece Production

528
529
530
 Overview-
In this presentation we will discuss the following questions
and learn how to use SMED for continuous improvement.
Through a “Kaizen Event”-(Change for the Better) we will
improve.

– What is SMED?
– Why is it important?
– Where should it be used?
– How do we use it?
– How do we sustain it?
– Who is responsible?
– Where do we go from here?
531

53
 What is SMED? Single Minute Exchange of Dies

• SMED (Changeover Reduction) is a tool

supporting Lean Manufacturing. It is used
to control and decrease downtime due to
changeovers.
• SMED supports the concept of continuous
improvement through the removal of waste.
• SMED will make the job more structured,
repeatable and easier.
• SMED will take care of our Customers 532
53
 What is SMED? Single Minute Exchange of Dies
 SMED is about increasing productivity by
decreasing the time from the last good product to
“Set-up
the first good Reduction”
product.
Time taken to switch
process and equipment
First
First
Different
Different
Item
Item
Last Processed
Processed
LastItem
Item
Type
Type
Processed
Processed

Set- up Time 533

53
Background & History |

Where did this come from?

• Developed in the 50‟s 60‟s by Shigeo Shingo,
chief engineer of Toyota
» Land costs in Japan were very high, not
feasible to store large inventories of vehicles

» Quick Changeover provided a solution to the

common large batch sizes

» More importantly, there is nothing new here,

all common sense things, once we change the
way we look at inventory.

534
 Shingo’s Success

1. “A Revolution in Manufacturing: The SMED System”

2. Toyota, using his techniques, reduced setup time from

days to three minutes

535
 When is the Changeover Complete?

1. Running product A

2. Downtime = Muda or Waste

3. Running product B

536
 Why Quick Changeovers?

1. Quick changeovers reduce lead time

2. Increase overall velocity

3. Machines only create value when they are running and not
sitting idle

537
 Why Quick Changeovers?

1. Reduce lot sizes

2. When lot sizes are reduced, the customer’s lead time is

also reduced

3. This is because most of the lead time is waiting (queue

time)

538
 Quick Changeovers Reduce Inventory

Fast changeovers greatly reduce the need for

inventory buffers

539
 Improves On-Time Delivery Performance

Removing the non-value added time results in the customer

getting their product sooner

540
 The Customer
Why is SMED important?
• Reducing set-up time helps us to better serve our customer
needs.
– Decreases lead time
• Smaller batch sizes
– Increases flexibility
• Growth opportunities
– Increases “Customer On Time” delivery
• Get product when they want it
– Supports Takt Time-(Time a product takes to meet a demand-cycle
time)
• Run to Customer demand not standard
– Allows us to keep all Customers happy
541
• Each Customer gets what they want
54
 Why is SMED important?
Cycle Time
• Better able to provide all customers with
what they want quicker & decrease inventory.
AAAABBBBCCCC DONE 4 3
Custome
r
CCCCBBBBAAAA IN

Schedu 1 2
le
ABCABCABCABC DONE 4 3
Custome
r
CBACBACBACBA IN

Schedu 1 2 542
 Why is SMED important?
• Think how would you handle your own
household.
• Would you buy a weeks worth of groceries
or a months worth at a time. Why?

1. Money-Cash Flow
2. Space-Inventory
3. Don‟t need so much-Buy when needed
4. Perishable-Obsolete 543

54
 Why is SMED important?
• Line down time is costly. We need shorter changeover
time.
• We are losing money when the line is down.
– Increases profit
– Increases uptime
– Creates capacity
– Creates space in the warehouse
– Increases flexibility
– Reduces cost per unit
– Makes it easier for the operator to change over
– Easier to train new operators
– Keeps all Customers happy 544

54
 How do we use SMED?
Define set-up & set “Fence Posts”

Running Product Running Product

First Good
Last Good

A B
Product

Product
545
 50
How do we use SMED?
• Set a goal of at least a 50% reduction from
the current state.

Running Product Running Product

First Good
Last Good

A B
Product

Product
546

54
 7 Steps to Implementing SMED

Step-1

1. Observe the current methodology

– Watch a full changeover at least once – more is
better
– Videotape is best

547
 How do we use SMED?
• Videotape the area and then review the video recording
with the team and document the “Current State.”-
Initial Set-Up Time
– Capture the steps used in the
changeover.
– Document waste as it is
observed.
– Stay focused on the current
state. (Fence Posts)
– Try not to jump ahead to
improvement ideas.
– If the video is unclear, visit the area (“Gemba-Work Place”)
to gain a better understanding of the steps involved.
548

54
 How do we use SMED?
• Use the video to perform time observations.

– List each step as you observe the video.

– Capture the time for each step & the total
time.
– Capture walk & waiting times separately
(This will help with later steps).
– Observe waste in the process and make
notes.
– Total time from each step should equal
the total time of the changeover.
– List each step on large easel paper. Have
three columns to the right for Takt time,
Total time and Pro Forma of each step.

549

54
 How do we use SMED?
Document
the Current
State
• Create a Bar Chart to illustrate8000 8250 1250 Take pallets

the current state.

8000 to warehouse

7000
7750

7500

7250

– Show each step and the time it

7000 500 Tail off cartons
6750

6000 6500 1250 Pack cans

takes. 6250

6000

5750

– Try to stay proportional when 5000 5500

5250 250 Cap cans

5000 500 Actuate cans

building the chart.

4750

4000 4500

4250
2250 Gas cans

– Use the chart as a base line to

4000

3750

3000
3500

measure improvements.
3250

3000

2750

2500

2000
– This is the Current State Bar
2250 1500 Fill cans
2000

1750

1500

Chart. 1000 1250

1000

750 750 Get cans

500

0
250

550

55 Current Interna
 Step 2

2. Separate the INTERNAL and EXTERNAL activities. Internal

activities are those that can only be performed when the
process is stopped, while External activities can be done
while the last batch is being produced, or once the next
batch has started. For example, go and get the required
tools for the job BEFORE the machine stops.

551
 Step 3

3. Convert (where possible) Internal

activities into External ones (pre-
heating of tools is a good example of
this).

552
 How do we use SMED?
Internal
External
• Move internal steps to Aerosol Changeover Setup Checklist Line 5

external steps.
PRODUCT: Shift: Date: C/O Time:
SFO# ATI# : Concentrate# :

STEP
I E Communication Y/N C/A Required
1 E Notify Formulation 90 min. prior to C/O (Radio ready)
2 E Notify An-Lab 90 min. prior to C/O (Radio Ready)
3 E Notify PQA 90 min. prior to C/O
4 E Notify Material Handler 90 min. prior to C/O
5 E Filler Operator has established Radio Contact with Formulations

– Internal steps are those steps

Changeparts Tools
I E Machine Component # Pre staged Operator Verified Present C/A Required
6 E Depal N/A

that take place when the machine

7 E Filler, Valves
8 E Gasser/Crimper
9 E Checkweigher/Coder N/A N/A N/A N/A
10 E Tipper

has gone down for the

11 E Capper
12 E Case Erector
13 E Case Packer N/A N/A

changeover. (We are not

14 E Tailoff/Case Coder N/A N/A
15 E Case Taper N/A N/A
16 E Tube Taper N/A
17 E Stickers N/A N/A

making money)
18 E Other N/A N/A
I E Machine Bench Mark Average Actual C/O Time C/A Required
19 I Depal 14
20 I Filler 38+Flush 72
21 I Valves 10
22 I Crimper
23 I Gasser 26+Gas 77
24 I Checkweigher/Coder 13

– External steps are those steps

25 I Tipper 27 52
26 I Capper 26 57
27 I Case Erector 15 43
28 I Case Packer 58

that can be done either before the

29 I Bundler
30 I Tailoff/Case Coder/Taper 13
31 I Other 20

machine has gone down or after

Changepart
stored Status Check
I E Machine properly Changepart repair required Assigned To Complete
32 E Depal

the machine has started up. (We

33 E Filler, Valves
34 E Gasser/Crimper
35 E Checkweigher/Coder N/A

are still making money)

36 E Tipper/Hand Actuate
37 E Capper
38 E Case Erector
39 E Case Packer/Hand Packer
40 E Tailoff/Case Coder/Taper N/A
41 E Tube Taper
42 E Stickers N/A
43 E Other
553

55
Implemented by:
 How do we use SMED? Internal
External
• Separate Internal from External activities. Move Internal
to External.

– Internal- What has to be done when the machine is down.

– External- What can be done while the machine is still running.

• Eliminate adjustments- “Poka Yoke”-Error Proofing

• Kaizen- (“Change for the Better”) Internal activities and 5S
External activities.
• Eliminate Set-Up. (Tools, blocks, gauges, markings)
554

55
 Brainstorming Ideas
• Look at the waste you 8000 8250

8000
1250 Take pallets
to warehouse

7000
7750

observed in the video and

7500

7250

7000 500 Tail off cartons

6750

6000 6500 1250 Pack cans

brainstorm ideas to remove it.

6250

6000

5750

5000 5500

5250 250 Cap cans

5000 500 Actuate cans

• Write ideas into action items

4750

4000 4500

4250

4000
2250 Gas cans

3750

on colored post-its. 3000

3500

3250

3000

2750

2500

2000 2250 1500 Fill cans

• Target the largest time blocks

2000

1750

1500

1000 1250

1000

750 Get cans

on the Current State Bar

750

500

0
250

Current Internal E
Chart.
Walking-
Rearrange Make Move to Different Standardize
Point of
Steps Tool-less External Method Bolts 555
Use
55
 How do we use SMED?
• Eliminate Adjustments Make It Simple
– Figure out how to turn “Adjustments” into “Settings”
• Think about locating holes, stop blocks, color coding, gauges
• No more tweaking
• Make the first part a good part every time

Gas Weight Adjustment Matrix for AL4 Gasser

Handle Height In Inches

(Measure From Top of Booster Plate to Top of Handle)
Tuff Stuff 22 oz Tire Foam 18 oz Tire Shine 18 oz SOAG 21 oz Sct. H/W 15 oz Gumout 16 oz Gumout 19 oz Fix-A-Flat 12 oz Aqua Net 11 oz Fix-A-Flat 16 oz Fix-A-Flat 20 oz 3M Dust. 10 oz 10 141 115 114 109 114 101 xxx 191
TO

A31 A70/DME A70/DME A70/DME A70 A110 A110 134A DME 134A 134A 152A
FROM 25.2 +/- 2 26.0 +/- 2 26.1 +/- 2 30.0 +/- 2 42.8 +/- 2 46.5 +/- 2 55.1 +/- 2 88.0 +/- 2 91.6 +/- 2 117.5 +/- 2 143.0 +/- 2 287.5 +/- 2 9 121 99 98 94 98 88 xxx 164
Tuff Stuff 22 oz
A31 _ 0 Turns 0 Turns 1/4 Turn 1 1/4 Turns 1 1/2 Turns 2 1/4 Turns 2 Turns 3 3/4 Turns 3 Turns 3 3/4 Turns 11 Turns
8 101 83 82 79 82 73 xxx 137
25.2 +/- 2
7 82 67 66 64 66 60 xxx 110
Tire Foam 18 oz
A70/DME 0 Turns _ 0 Turns 1/4 Turn 1 1/4 Turns 1 1/2 Turns 2 1/4 Turns 2 Turns 3 3/4 Turns 3 Turns 3 3/4 Turns 11 Turns 6 62 51 50 49 50 45 110 83
26.0 +/- 2
Tire Shine 18 oz 5 42 35 34 34 35 30 74 56
A70/DME 0 Turns 0 Turns _ 1/4 Turn 1 1/4 Turns 1 1/2 Turns 2 1/4 Turns 2 Turns 3 3/4 Turns 3 Turns 3 3/4 Turns 11 Turns
26.1 +/- 2 4 23 19 18 19 19 16 57 29
SOAG 21 oz
3 4 xxx xxx xxx xxx xxx xxx xxx
A70/DME 1/4 Turn 1/4 Turn 1/4 Turn _ 1 Turn 1 1/4 Turns 1 3/4 Turns 1 3/4 Turns 3 1/2 Turns 2 3/4 Turns 3 1/2 Turns 10 3/4 Turns
30.0 +/- 2 DME A31 A46 A70 A70/DME A110 134A 152A
Sct. H/W 15 oz
A70 1 1/4 Turns 1 1/4 Turns 1 1/4 Turns 1 Turn _ 1/4 Turn 1 Turn 1 1/2 Turns 2 3/4 Turns 2 1/2 Turns 3 Turns 10 1/4 Turns
42.8 +/- 2 NOTE: 12 turns per 1 inch
Gumout 16 oz
A110 1 1/2 Turns 1 1/2 Turns 1 1/2 Turns 1 1/4 Turns 1/4 Turn _ 3/4 Turn 1 1/4 Turns 2 1/2 Turns 2 1/4 Turns 3 Turns 10 Turns
46.5 +/- 2
Gumout 19 oz Top of Handle
A110 2 Turns 2 Turns 2 Turns 1 3/4 Turns 1 Turn 3/4 Turn _ 1 Turn 2 Turns 2 Turns 2 3/4 Turns 9 3/4 Turns Grams per turn
55.1 +/- 2 DME 1.6
Fix-A-Flat 12 oz A31 1.3
134A 4 1/4 Turns 4 1/4 Turns 4 1/4 Turns 4 Turns 3 1/4 Turns 3 Turns 2 1/2 Turns _ 1/4 Turn 1 Turn 1 3/4 Turns 8 1/4 Turns A46 1.3
88.0 +/- 2 A70 1.2
Aqua Net 11 oz A70/DME 1.3
DME 4 1/2 Turns 4 1/2 Turns 4 1/2 Turns 4 1/4 Turns 3 1/2 Turns 3 1/2 Turns 2 3/4 Turns 1/4 Turn _ 3/4 Turn 1 1/2 Turns 8 Turns A110 1.2
91.6 +/- 2 134A 3
Fix-A-Flat 16 oz 152A 2.2
134A 6 1/4 Turns 6 1/4 Turns 6 1/4 Turns 6 Turns 5 1/4 Turns 5 1/4 Turns 4 1/2 Turns 1 Turn 1 1/2 Turns _ 3/4 Turn 7 Turns
117.5 +/- 2
Fix-A-Flat 20 oz

556
134A 8 Turns 8 Turns 8 Turns 7 3/4 Turns 7 Turns 7 1/4 Turns 6 1/2 Turns 1 3/4 Turns 3 Turns 3/4 Turn _ 6 Turns
143.0 +/- 2
3M Dust. 10 oz
152A 17 1/2 Turns 17 3/4 Turns 17 3/4 Turns 17 1/2 Turns 17 1/4 Turns 18 Turns 17 1/2 Turns 6 1/4 Turns 11 Turns 5 1/4 Turns 4 1/2 Turns _ Top of Booster Plate

55
287.5 +/- 2

= Adjust Down (Turn Clockwise) = Adjust Up (Turn Counterclockwise)

 How do we use SMED? “Muda”
Wasteful
Activity
• Look for the 8 wastes in the process?
– Defects- Creating WIP (Work in Progress) or waste
– Overproduction- Too much, too early
– Waiting Time- Waiting for something before
continuing
– Non-Utilized Talent- Damage to people
– Transportation- Moving people or materials
– Inventory- Accumulation of product to be worked
– Motion- Unnecessary human movement (Turning,
twisting, bending, taking steps, etc…)
– Extra Processing- Non value added to the
process 557

55
 7 Steps to Implementing SMED

4. Streamline the remaining Internal activities, by

simplifying them. Focus on fixings - Shigeo
Shingo rightly observed that it's only the last turn
of a bolt that tightens it; the rest is just
movement.

558
1. Only the final turn on a bolt
adds value
2. The interrupted screw (or
interrupted thread) provides
one means of clamping and unclamping something quickly. Artillery
breeches have been sealed in this manner since the nineteenth century.

559
7 Steps to Implementing SMED

5. Streamline the External activities, so that they are of a

similar scale to the Internal ones.

560
 7 Steps to Implementing SMED

6. Document the new procedure and

the actions that are yet to be
completed.

561
 7 Steps to Implementing SMED

7. Do it all again: For each iteration of the above process, a

45% improvement in set-up times should be expected, so it
may take several iterations to cross the ten-minute line.

562
 How do we use SMED?
1. Current State
I
2. Separate full steps to internal and external activity

E I E
3. Convert additional internal to external activity

4. Kaizen all remaining activity (Adjustments, tweaking)

E I E
5. Future State
E I E

Target 50% 563

E I E Improvement
 Parallel Operations Using Multiple
Operators

Level load the changeover

Balance the tasks

564
Teamwork - Parallel Operations
Using Multiple Operators

565
 Tollgate - Measure

•Detailed As-is Process Map

•Specifications & Defects

•Data Collection Plan

•Sampling Plan & Sample Size

•GRR for the measurement system

• Process Capability

• Lean

566