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Assessing Capability: Comparing The Voices of The Customer and The Process

This document discusses various methods for assessing process capability by comparing process performance to customer specifications. It defines key terms like yield, defect rate, sigma score, and short- and long-term capability indices. Yield measures the percentage of output meeting specifications, while defect rate measures nonconforming output. Sigma scores indicate how many standard deviations the process mean is from the nearest specification limit. Short-term indices assume ideal performance, while long-term indices account for degradation over time using a 1.5 sigma shift.

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Sium Adnan Khan 1511153030
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52 views32 pages

Assessing Capability: Comparing The Voices of The Customer and The Process

This document discusses various methods for assessing process capability by comparing process performance to customer specifications. It defines key terms like yield, defect rate, sigma score, and short- and long-term capability indices. Yield measures the percentage of output meeting specifications, while defect rate measures nonconforming output. Sigma scores indicate how many standard deviations the process mean is from the nearest specification limit. Short-term indices assume ideal performance, while long-term indices account for degradation over time using a 1.5 sigma shift.

Uploaded by

Sium Adnan Khan 1511153030
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 32

ASSESSING CAPABILITY:

COMPARING THE VOICES


OF THE CUSTOMER AND
THE PROCESS
Learning Objectives
• Dealing with measures of yield and defect rate
• Calculating and interpreting the sigma (Z) score of a
process or characteristic
• Using short- and long-term capability indices (CP, CPK,
PP, and PPK)
Capability
• Capability is how well the voice of the process or

characteristic matches up with the voice of the


customer

• In other words, how well a process performs in

meeting customer expectations.


Yield and Defect Rates
• A central task of Six Sigma is to understand how well processes or

characteristics meet their associated customer specifications.

Measuring yield
Traditional yield: Output versus input

• Yield is the proportion of correct items (conforming to specifications)

produced out of a process compared to the number of raw items put


into it.

• The traditional calculation of yield is often employed on the last, final

inspection step of a process to measure the effectiveness of the


overall process.
Example
• Out of the 352 cars that went through the tire-inflation
process during a day’s production, 347 were later found to
have a pressure within the required specification limits.
What is the traditional yield in this case?
Solution:
The Six Sigma perspective: First time yield
(FTY)
• The calculation known as FTY is often
much different than traditional yield.
• It captures the harsh reality of the
effectiveness of the process.
• First Time yield is:
Uncovering the hidden factory
• The hidden factory is a natural
outgrowth of a system’s inability to
correctly comply with required
specifications the first time through
the process.
• By measuring FTY, a company
objectively review and
acknowledge process effectiveness
• In the case of the example tire-
inflation process, the hidden factory
of in-process inspection and rework
accounts for 0.986 – 0.707 = 0.279
or 27.9 percent of production.
Rolled throughput yield (RTY)
• One way Six Sigma quantifies the complexity of a system is to count
the number of processes involved
• Then multiply each FTY together to get RTY.
• Ex: a purchase order process that is made up of five individual
process steps

• Even if the first time yields of the individual process steps are high, if the
overall process becomes more and more complex, the system rolled
throughput yield will continue to erode.
• For very complex systems — such as automobiles, aircraft, data switching
systems, enterprise-level business processes, and so on — a very high
individual first time yield must be achieved in order to have any hope of an
acceptable rolled throughput yield.
Defect Rate
• When a process or characteristic doesn’t perform within its
specifications, it produces a noncompliant condition, called a defect.
• Measuring defects and calculating how often they occur is like looking
at the flip side of the yield coin.
Defects equal failure
• Defining a defect as a noncompliance with specifications may seem
overly simplified.
• A characteristic exceeds a specification doesn’t necessarily mean that
the system it’s part of will break or stop functioning.
• For example, misspelling a customer’s name on a billing statement (a
defect)may or may not turn into a complaint (a failure) that costs
money to correct.
• Eliminating or reducing noncompliance with specifications always
reduces failures or breakdowns in customers’ experiences.
Defects per unit (DPU)
• Six Sigma applies to all areas of business and productivity and each
of these areas works on and produces different things.
• To bridge these diverse disciplines, in Six Sigma you call the thing
you’re working on a unit.
• A unit may be a discretely manufactured product, an invoice that
crosses desk, a month’s worth of continually produced product, a
hospital patient, or a new design
• A basic assessment of characteristic or process capability is to
measure the total number of defects that occur over a known number
of units.
Example
• if you process 23 loan applications during a month and
find 11 defects — misspelled names, missing prior
residence information, incorrect loan amounts — the DPU
for your loan application process is

• That means that for every two loans that leave your desk,
you expect to see about one defect.
Leveling the field: Defects per opportunity
(DPO) and per million opportunities (DPMO)
• Defect rate for a complex system is different than defect
rate of a simple system.
• A DPU for an automobile is viewed very differently than
the same per-unit defect rate on a bicycle.
• In order to compare defect rate of two different system is
to transform the defect rate into terms that are common to
any unit, whatever it is or however complex it may be.
• Two ways are doing this are:
• Defects per opportunity (DPO)
• Defects per million opportunities (DPMO).
Defects per opportunity (DPO)
• The common ground between any different units is
opportunity.
• An opportunity is a specific characteristic that can either
turn out as a defect or as a success
Examples of opportunities include the following:
• In a product, the critical dimension of diameter on an
automobile axle
• In a transactional process, the applicant’s mailing address
on a loan approval form
• In a hospital, getting the correct medical history records
into the patient’s file
• The number of opportunities inherent to a unit is a direct
measure of its complexity.
• Counting or estimating how many opportunities for
success or failure exist in an unit, reveals the complexity
of the respective unit.
• you may observe 158 out-of-specification characteristics
on an automobile. After some study, you also determine
that the number of opportunities for success or failure
within that automobile is 14,550. Its DPO is then

• For a bicycle, on the other hand, you may find only two
non-compliant characteristics among its 173 critical
characteristics. So its DPO is

• Even though an automobile and a bicycle are two very


different items with very different levels of complexity, the
DPO calculations shows both have about the same real
defect rate.
Defects per million opportunities (DPMO)
• When the number of opportunities on a unit gets large and the
number of observed defects gets small, calculated DPO
measurements become so small they’re hard to work with.
• Estimate the number of defects after running the process or observing
the characteristic for a long time
• When a process is repeated over and over again many times — like
an automobile assembly process, an Internet order process, or a
hospital check-in process — DPMO becomes a convenient way to
measure capability.

• Six Sigma is famous for its defect rate goal of 3.4 defects per million
opportunities.
Deciphering Sigma (Z) Score
• Six Sigma level of quality
• A sigma score depicts how many standard deviations can
fit between the mean and specification limit of any
process or specification.
• The sigma score can be applied to the performance of
anything that has a specification and a defect rate
• All sigma scores can be directly compared to see how
capable the process or characteristic is.
Breaking down how many standard
deviations can fit
• The central tendency of the performance distribution is
defined by its mean.
• The amount of variation in the performance, or the width
of the distribution, is defined by its standard deviation σ.
• how many standard deviations can be fitted between the
process or characteristic’s mean and its specification limit
SL?
• The exact number can always be calculated by the
formula
• the sigma score (sigma value or sigma) and the standard
deviation represented by the Greek letter sigma (σ) are
two different measures.
• Z score, Z value, Z, sigma score, sigma value, and sigma
are all different names for how many standard deviations
can fit between the mean and the specification limit
• Use a sigma (Z) score only on a characteristic that is
approximately normal
• The quickest way to check whether the distribution is
approximately normal is to create a dot plot or histogram.
• A low sigma (Z) score means that a significant part of the
tail of the distribution extends past the specification limit.
So A High score means fewer defects.
A sigma (Z) score can change in one of three ways:
• The location of the central tendency of the distribution —
the mean —moves either closer or farther from the
specification limit.
• The width of the distribution, as defined by the standard
deviation σ, changes.
• The location of the specification limit SL moves either
closer or farther from the characteristic or process
variation.
Comparing short-term versus long-term
sigma score calculations
• Using a short-term standard deviation, the sigma (Z)
score you calculate is a short-term sigma score ZST:

• Using a long-term standard deviation, you can calculate


the long-term sigma score ZLT:
Linking short-term capability to long-term
performance with the 1.5-sigma shift
• In the long term, a process or characteristic doesn’t
operate ideally like it does in the short term.
• One mathematical way to simulate the effect of the
degrading, long-term influences is to artificially move the
short-term distribution closer to the specification limit until
the amount of defects for the short-term distribution is the
same as that for the long-term distribution.
• Early practitioners of Six Sigma proposed that mathematically shifting
a characteristic’s or process’s short-term distribution closer to its
specification limit by a distance of 1.5 times its short-term standard
deviation would approximate the number of defects occurring in the
long term.
• This breakthrough idea can be applied directly to the calculation of
short-term and long-term sigma (Z) scores.
• Because ZST represents the number of short-term standard deviations
between the variation center and the specification, the sigma (Z)
score of the shifted distribution is

• But with the shifted distribution being equivalent, defect-wise, to the


long term distribution, the preceding equation can be rewritten as
• Measure the short-term variability of a process or characteristic and calculate
its short-term sigma score.
• Translate this score to the expected long-term defect rate performance, using
the 1.5 short-term standard deviation shift
• This long-term sigma score, ZLT, is communicated in terms of defects per
million opportunities, DPMO.
Capability Indices
• Capability indices are a set of measures that directly
compare the voice of the process to the voice of the
customer to quantify the capability of a process or
characteristic to meet its specifications.
Short-term capability index (CP)
• Compares the width of a two-sided specification to the effective
short-term width of the process.
• the width between the two rigid specification limits is simply the
distance between the upper specification limit (USL) and the
lower specification limit (LSL)
• the effective limits of any process as being three standard
deviations away from the average level.
• USL – LSL represents the voice of the customer’s requirements
• 6σST represents the inherent voice of the process
• CP= 1 means that the voice of the customer is equal to the
voice of the process.
• CP< 1 means that the process is wider than the specification,
with defects spilling out over the edges.
• CP > 1 means that the effective width of the process variation is
less than the required specification, with fewer defects
occurring.
Adjusted short-term capability index (CPK)
• The adjusted short-term capability index (CPK) takes care
of a problem with the short-term capability index CP
• Cp compares only the widths of the specification and the
process
• Both distribution have
the same calculated CP.
• They aren’t equally capable
as it’s offset from the center of
the specification
• The dotted line distribution has many more defects than
the solid distribution.
• In order to mitigate this discrepancy we need to adjust the
CP calculation for how far it’s off center
• simply compare the distance from the distribution center
to each of the specification limits with the half-width of the
short-term variation that should exist between the center
of the distribution and the specification limit.
• If the characteristic or process variation is centered
between its specification limits, the calculated value for
CPK is equal to the calculated value for CP.
• When the process variation moves off the specification
center, it’s penalized in proportion to how far it’s offset
Importance of CPK
• It compares the width of the specification with the width of
the process
• Account for any error in the location of the central
tendency
• A CPK greater than 1.33 indicates that a process or
characteristic is capable in the short term
• Values less than 1.33 tell you that the variation is either
too wide compared to the specification or that the location
of the variation is offset from the center of the
specification.
Example

Calculate Standard Deviation, CP and CPK

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