Few concepts one need to be clear about, before driving deep into Six Sigma

Define Phase


Critical To Quality - CTQ : CTQs (Critical to Quality) are the key measurable characteristics of a product or process whose performance standards or specification limits must be met in order to satisfy the customer. They align improvement or design efforts with customer requirements.CTQs represent the product or service characteristics that are defined by the customer (internal or external). They may include the upper and lower specification limits or any other factors related to the product or service. A CTQ usually must be interpreted from a qualitative customer statement to an actionable, quantitative business specification.To put it in layman's terms, CTQs are what the customer expects of a product... the spoken needs of the customer. The customer may often express this in plain English, but it is up to us to convert them to measurable terms using tools such as DFMEA, etc.

Charter : A document or sheet that clearly scopes and identifies the purpose of a Quality improvement project. Items specified include background case, purpose, team members, scope, timeline.

Flowchart : A flowchart is a graphical representation of a process, depicting inputs, outputs and units of activity. It represents the entire process at a high or detailed (depending on your use) level of observation, allowing analysis and optimization of workflow.A flowchart is a graphical representation of a process. It represents the entire process from start to finish, showing inputs, pathways and circuits, action or decision points, and ultimately, completion. It can serve as an instruction manual or a tool for facilitating detailed analysis and optimization of workflow and service delivery.

SIPOC : SIPOC stands for suppliers, inputs, process, output, and customers. You obtain inputs from suppliers, add value through your process, and provide an output that meets or exceeds your customer's requirements. SIPOC helps you not to forget something when mapping processes. Once the customers are identified, voice-of-the-customer data can be collected and customer requirements(CTQs) can be defined. The SIPOC diagram also helps scope the project, provides a high-level view of the workflow and helps ensure that all team members are seeing the project the same way.

Eg: SIPOC Diagram for High-Level Insurance Renewal


Measure Phase


Benchmarking : The concept of discovering what is the best performance being achieved, whether in your company, by a competitor, or by an entirely different industry.Benchmarking is an improvement tool whereby a company measures its performance or process against other companies' best practices, determines how those companies achieved their performance levels, and uses the information to improve its own performance.Benchmarking is a continuous process whereby an enterprise measures and compares all its functions, systems and practices against strong competitors, identifying quality gaps in the organization, and striving to achieve competitive advantage locally and globally.

Voice Of the Customer (VOC) : The "voice of the customer" is a process used to capture the requirements/feedback from the customer (internal or external) to provide the customers with the best in class service/product quality. This process is all about being proactive and constantly innovative to capture the changing requirements of the customers with time.The "voice of the customer" is the term used to describe the stated and unstated needs or requirements of the customer. The voice of the customer can be captured in a variety of ways: Direct discussion or interviews, surveys, focus groups, customer specifications, observation, warranty data, field reports, complaint logs, etc.This data is used to identify the quality attributes needed for a supplied component or material to incorporate in the process or product.

Voice Of the Business (VOB) : The "voice of the business" is the term used to describe the stated and unstated needs or requirements of the business/shareholders.

Analyze Phase


Pareto : The Pareto principle states that 80% of the impact of the problem will show up in 20% of the causes. (Originally stated: 80% of the wealth is owned by 20% of the people.) A bar chart that displays by frequency, in descending order, the most important defects. Proper use of this chart will have the cumulative percentage on a second y-axis (to the right of the chart). This chart-type is used to identify if the Pareto principle is evident in the data. If the Pareto principle is evident, about 20% of the categories on the far left will have about 80% of the impact on the problem.

Scatter : PlotA scatter plot, also called a scatter diagram or a scattergram, is a basic graphic tool that illustrates the relationship between two variables. The dots on the scatter plot represent data points. See the tool Scatter Plot.Scatter plots are used with variable data to study possible relationships between two different variables. Even though a scatter plot depicts a relationship between variables, it does not indicate a cause and effect relationship. Use Scatter plots to determine what happens to one variable when another variable changes value. It is a tool used to visually determine whether a potential relationship exists between an input and an outcome.

Histogram : A bar graph of a frequency distribution in which the widths of the bars are proportional to the classes into which the variable has been divided and the heights of the bars are proportional to the class frequencies.A histogram is a basic graphing tool that displays the relative frequency or occurrence of continuous data values showing which values occur most and least frequently. A histogram illustrates the shape, centering, and spread of data distribution and indicates whether there are any outliers.A graphic way to summarize data. Size is shown on the horizontal axis (in cells) and the frequency of each size is shown on the vertical axis as a bar graph. The length of the bars is proportional to the relative frequencies of the data falling into each cell and the width is the range of the cell. Data is variable measurements from a process.

Correlation : Correlation is a technique for investigating the relationship between two quantitative, continuous variables.Correlation is the degree or extent of the relationship between two variables. If the value of one variable increases when the value of the other increases, they are said to be positively correlated. If the value of one variable decreases when the value other variable is increasing it is said to be negatively correlated. If one variable does not affect the other they are considered to not be correlated.

Regression : The relationship between the mean value of a random variable and the corresponding values of one or more independent variables.A model for predicting one variable from another.A statistical analysis assessing the association between two variables.Regression analysis is a method of analysis that enables you to quantify the relationship between two or more variables (X) and (Y) by fitting a line or plane through all the points such that they are evenly distributed about the line or plane.

Hypothesis Testing : Hypothesis testing refers to the process of using statistical analysis to determine if the observed differences between two or more samples are due to random chance (as stated in the null hypothesis) or to true differences in the samples (as stated in the alternate hypothesis). A null hypothesis (H0) is a stated assumption that there is no difference in parameters (mean, variance, DPMO) for two or more populations. The alternate hypothesis (Ha) is a statement that the observed difference or relationship between two populations is real and not the result of chance or an error in sampling. Hypothesis testing is the process of using a variety of statistical tools to analyze data and, ultimately, to fail to reject or reject the null hypothesis. From a practical point of view, finding statistical evidence that the null hypothesis is false allows you to reject the null hypothesis and accept the alternate hypothesis.

Fishbone : A tool used to solve quality problems by brainstorming causes and logically organizing them by branches. Also called the Cause & Effect diagram and Ishikawa diagram.

5 Why's : The 5 why's typically refers to the practice of asking, five times, why the failure has occurred in order to get to the root cause/causes of the problem. There can be more than one cause to a problem as well. In an organizational context, generally root cause analysis is carried out by a team of persons related to the problem. No special technique is required.An example is in order:You are on your way home from work and your car stops:
· Why did your car stop? Because it ran out of gas.
· Why did it run out of gas? Because I didn't buy any gas on my way to work.
· Why didn't you buy any gas this morning? Because I didn't have any money.
· Why didn't you have any money? Because I lost it all last night in a poker game.I hope you don't mind the silly example but it should illustrate the importance of digging down beneath the most proximate cause of the problem. Failure to determine the root cause assures that you will be treating the symptoms of the problem instead of its cause, in which case, the disease will return, that is, you will continue to have the same problems over and over again.Also note that the actual numbers of why's is not important as long as you get to the root cause. One might well ask why did you lose all your money in the poker game last night?

Improve Phase


Brainstorming : A method to generate ideas. Groundrules such as -no idea is a bad idea- are typical. Benefit of brainstorming is the power of the group in building ideas of each others ideas.A problem solving approach/technique whereby working members in a group are conducting a deductive methodology for identifying possible causes of any problem, in order to surmount poor performance in any process or activity pursued by the group members and facilitator.

Design of Experiments - DOE : A Design of Experiment (DOE) is a structured, organized method for determining the relationship between factors (Xs) affecting a process and the output of that process (Y).Other Definitions:1 - Conducting and analyzing controlled tests to evaluate the factors that control the value of a parameter or group of parameters. 2- "Design of Experiments" (DoE) refers to experimental methods used to quantify indeterminate measurements of factors and interactions between factors statistically through observance of forced changes made methodically as directed by mathematically systematic tables.

Pugh Matrix : Refers to a matrix that helps determine which items or potential solutions are more important or 'better' than others. It is necessarily to be done after you capture VOC and before design which means after product planning QFD.It is a scoring matrix used for concept selection, in which options are assigned scores relative to criteria. The selection is made based on the consolidated scores. Before you start your detailed design you must have many options so that you choose the best out of them.This tool is also known as 'Criteria Based Matrix'The Pugh matrix is a tool used to facilitate a disciplined, team-based process for concept generation and selection . Several concepts are evaluated according to their strengths and weaknesses against a reference concept called the datum (base concept). The datum is the best current concept at each iteration of the matrix. The Pugh matrix allows you to1. Compare different concepts 2. Create strong alternative concepts from weaker concepts 3. Arrive at an optimum concept that may be a hybrid or variant of the best of other concepts The Pugh matrix encourages comparison of several different concepts against a base concept,creating stronger concepts and eliminating weaker ones until an optimal concept finally is reached. Also, the Pugh matrix is useful because it does not require a great amount of quantitative data on the design concepts, which generally is not available at this point in the process.

Failure Modes and Effects Analysis (FMEA) : A procedure and tools that help to identify every possible failure mode of a process or product, to determine its effect on other sub-items and on the required function of the product or process. The FMEA is also used to rank & prioritize the possible causes of failures as well as develop and implement preventative actions, with responsible persons assigned to carry out these actions.Failure modes and effects analysis (FMEA) is a disciplined approach used to identify possible failures of a product or service and then determine the frequency and impact of the failure.

House of Quality : The House of Quality is the first matrix in a four-phase QFD (Quality Function Deployment) process. It's called the House of Quality because of the correlation matrix that is roof shaped and sits on top of the main body of the matrix. The correlation matrix evaluates how the defined product specifications optimize or sub-optimize each other.

Control Phase


Control Chart : A graphical tool for monitoring changes that occur within a process, by distinguishing variation that is inherent in the process(common cause) from variation that yield a change to the process(special cause). This change may be a single point or a series of points in time - each is a signal that something is different from what was previously observed and measured.

Control Plan : The intent of a process control plan is to control the product characteristics and the associated process variables to ensure capability (around the identified target or nominal) and stability of the product over time.The process Failure Modes and Effects Analysis (FMEA) is a document to identify the risks associated with something potentially going wrong (creating a defect - out of specification) in the production of the product. The FMEA identifies what controls are placed in the production process to catch any defects at various stages on the processing.Every completed Six Sigma project should have not only a control chart (if applicable), but a control plan. This ensures that the process doesn't revert to the way it previously operated.

Note: In coming days i will try to make these definions even more simple and easy to understand and add examples if possible

Courtesy: http://www.isixsigma.com/dictionary/glossary.asp

Cost of Poor Quality - COPQ

With "The Great Sony battery recall" in news, i feel it would be appropriate to look at how much such mistakes cost and how they affect the companies involved. Let's have a look at the definition and then the news clips.

Definition
Cost of Poor Quality - COPQ consists of those costs which are generated as a result of producing defective material.This cost includes the cost involved in fulfilling the gap between the desired and actual product/service quality. It also includes the cost of lost opportunity due to the loss of resources used in rectifying the defect. This cost includes all the labor cost, rework cost, disposition costs, and material costs that have been added to the unit up to the point of rejection. COPQ does not include detection and prevention cost.

Battery recall estimated to cost Sony at least $430 million
October 19, 2006 14:17

Tokyo (Japan) - Trying to put an end to the guessing game as to how many more laptops will be added to the battery recall tally, Sony today revealed more details about the total impact from the massive, multi-million dollar recall. The electronics giant believes that the final count of affected laptops will reach 9.6 million, which is a a significant increase from the last official number of around 8 million.

Sony also updated its prediction on how much this headache is going to cost: In a 67% jump from the official estimate in August, the expected cost for recall restitutions is now set at around $430 million. Last month, Sony gave a low-end estimate of $267 million.
The list of impacted notebook manufacturers, which has been growing since the recall was first implemented months ago, now includes Dell, Apple, IBM, Lenovo, Toshiba, Fujitsu, Hitachi, and Sony.


Toyota looks into Prius safety, recalls 750,000 trucks
Posted 5/18/2005

Suspension problems lead to one of automaker's biggest-ever safety recalls. Plus, complaints of highway stalling emerge about popular hybrid.By MSN Money staff and wire reportsToyota, in one of its largest safety recalls ever, said Tuesday it is recalling more than 750,000 pickup trucks and sport-utility vehicles because of problems with the front suspension that could hinder steering. The recall comes a day after the company announced it would look into complaints that its wildly popular Prius hybrid car can suddenly stall at highway speeds.Toyota (TM, news, msgs) said the truck and SUV recall covers 774,856 vehicles in the United States, including the 2001-2004 model years of the Tacoma, the 2001-2002 versions of the 4Runner and the 2002-2004 model years of the Tundra and Sequoia.

Fires prompt huge Ford recall
Thursday, September 8, 2005
One of industry's largest recalls, 3.8 million trucks, comes as ailing automaker faces mounting lawsuits.
The Detroit News

With reports of engine fires mounting, Ford Motor Co. is warning owners of 3.8 million pickups and SUVs to have their cruise-control switches disconnected as part of one of the biggest recalls in automotive history.
The automaker said Wednesday that it is recalling a wide range of 1994-2002 model-year vehicles -- including its top selling F-150 pickup -- to fix cruise-control switches allegedly linked to more than 1,100 engine fires.
The defective cruise-control switch has grown into one of the most costly and widespread automotive safety problems since the Firestone tire recall and comes as Ford struggles to turn around its U.S. operations.
Fires linked to the switches have destroyed homes in Texas, Florida, California and elsewhere. In addition, wrongful-death lawsuits have been filed against Ford and two of its suppliers alleging that defective switches caused fires that killed a 74-year-old Iowa woman and a 4-year-old girl in Georgia. It's the fifth largest auto recall on record and follows a similar recall in January of 800,000 pickups and SUVs built in the 2000 model year.

Baby Formula Recall
Sep 16th 2006

WASHINGTON - There's a big recall of baby formula.
The Abbott health-care company says hundreds of thousands of bottles of infant formula distributed nationwide might not have enough vitamin C.

The recall is for approximately 100,000, 32-ounce plastic bottles of Similac Alimentum Advance liquid formula and approximately 200,000 bottles of Similac Advance with Iron.

Abbott spokeswoman Tracey Noe says the bottles are missing a special layer that keeps air out. When the oxygen enters the bottle, it causes the level of vitamin C to decrease over time.

If infants drink formula without enough vitamin C for two to four weeks, they could start exhibiting symptoms of vitamin C deficiency. Those include irritability with pain. Abbott says, so far, it hasn't had any medical complaints.


...History is replete with such incidents which hurt big companies their name and money.

Using the Power of ISO 9000 and Six Sigma Together

Six Sigma and ISO 9000 can be highly complementary. Unfortunately, the two concepts often are driven by different project leaders, competing for resources and therefore not delivering the best results. There is, however, a way to combine the power of both concepts to add value to a company.

An Overview of ISO 9000

ISO 9000 is a well-established international standard for quality management systems for all kinds of companies in nearly every industry. Developed by Technical Committee 176 of the International Organization for Standardization (ISO), it has evolved – based on input from companies and institutions – from a theoretical set of requirements in 1987 to a practical and process-oriented approach to assess the framework for quality management in 2000.

ISO 9000:2000 offers a process model and these underlying quality management principles:
Principle 1 – Customer focus
Principle 2 – Leadership
Principle 3 – Involvement of people
Principle 4 – Process approach
Principle 5 – System approach to management
Principle 6 – Continual improvement
Principle 7 – Factual approach to decision making
Principle 8 – Mutually beneficial supplier relationships

In the early stage of ISO 9000, there was no focus on continuous improvement apart from quality management system elements such as "control of non-conforming products" and "corrective and preventive action." Although, ISO 9000:2000 puts much more focus on customer orientation, the process approach to continuous improvement and fact-based management, this standard does not propose tools to meet those requirements. (References from "Six Sigma and ISO 9000:2000" by Praveen Gupta, February 2002 issue of Circuits Assembly.)
One of the strengths of ISO 9000 has always been those requirements that make an organization assess itself, which starts with internal audits once or twice a year and goes on to annual external third party audits performed by accredited certifying bodies. These requirements keep the ISO 9000 quality management system alive and up-to-date, avoiding the idea that ISO certification is a one-time event, a project just to reach the certification and to show the paperwork.

An Overview of Six Sigma

Six Sigma is a methodology for process improvement put together by Motorola in the mid-1980s and fine-tuned by such companies as AlliedSignal and General Electric in the 1990s. It has been developed into a way of doing business in some companies: "Completely satisfying customer needs profitably!" (former GE CEO Jack Welch). Within the methodology, Six Sigma has a rich and powerful toolbox for nearly every kind of process analysis, process management, process improvement and process design. This toolbox was developed by Six Sigma pioneers looking at the huge variety of tools and approaches developed during the decades when quality debuted as a major corporate issue. Thus, Six Sigma generally uses and enhances well-known and proven techniques. Although it had its start in manufacturing, it applies to all processes within any kind of company, Six Sigma's capability to deliver impressive business results is broadly recognized.

What about the long-term impact of Six Sigma?

Companies like General Electric and Johnson & Johnson have been deploying Six Sigma for years. How do they make sure that over time there is continuity in their Six Sigma initiative and, moreover, continuous improvement and customization of the principles applied in different business areas? Most Six Sigma companies recognize the different phases of the application of Six Sigma – starting from "enthusiastic support" through "implementation and delivery of results" and finally "now it's done, let's go back to our normal business." Especially at the later stage, Six Sigma needs strong leadership and tools to sustain the initiative. Therefore, some of these companies developed their own framework to assess the Six Sigma system. At General Electric, the corporate audit staff (normally responsible for financial audits) has been trained to conduct Six Sigma assessments. The contents of these gap assessments included:

Leadership – Quality culture, Six Sigma assessment and gap closure, communication
Measurements and Projects – Customer satisfaction results, process indicators, project initiation and progress, dashboards
Training – All staff training and involvement, Six Sigma training for different areas and levels
Resources – Appointment of Belts (internal consultants to drive Six Sigma projects), dedication of leaders to deploy and maintain Six Sigma
Results – Tangible and intangible results of process improvement
Reward and Recognition: Scorecards, various ways to recognize individuals and teams for their improvement contribution and for delivering results.
After having implemented this assessment system, the whole organization recognized a restart of Six Sigma and the full awareness that this is much more than a "flavor of the month."

Use Six Sigma Tools to Meet ISO 9000 Requirements

One of the major differences between both systems is that ISO 9000 is a shell of requirements without any tools, whereas Six Sigma is a methodology connecting tools and procedures for applying these tools through a "red thread."

Requirements of ISO 9000:2000 are, for example:

Define quality management information needs
Collect quality management system data
Provide quality management information
Improve quality management system

Tools provided by Six Sigma to meet these requirements are, for example:

Dashboards as a set of key performance indicators to monitor all processes at a reasonable degree for all relevant managerial levels.
Operational definitions to describe exactly how, when, where, with which tools, by whom, how often and how much data should be collected. Additionally, Six Sigma provides tools to address such questions as sample size and precision as well as capability, repeatability and reproducibility of data collection.
Data displays to help draw business-relevant conclusions and tests to justify the significance of conclusions drawn from data collected.
DMAIC: Define-Measure-Analyze-Improve-Control as a methodology for process improvement at a project level, which is – after necessary customization – applicable to all kinds of processes.

Use the ISO 9000 Framework to Assess a Six Sigma System

Looking at the new ISO 9000:2000 requirements and comparing these requirements with the self-developed Six Sigma gap-analysis shows the possibility of connecting both approaches and systems with each other. Six Sigma does not come with the assessment tool per se. This tool needs to be added after a certain time frame in order to keep the ball rolling and in order to help Six Sigma get into the company's bloodstream. ISO 9000 is designed to assess companies based on both external and internal requirements and to help close the gaps on a mid-term and long-term basis. By adding typical Six Sigma requirements to the ISO 9000:2000 internal audit questionnaires, a company can make Six Sigma part of its quality management system and improve the effectiveness and efficiency of the Six Sigma initiative significantly.

A side effect is that both approaches get aligned and do not compete for resources any longer. Since the goals of the two approaches are the same, there is a greater likelihood of an increase in bottom-line and top-line results on a long-term basis to increase customer satisfaction and employee commitment.

Conclusion: Improve Credibility and Sustainability

It is a waste to have a quality management system and process improvement approach existing side-by-side without any integration. Aligning ISO 9000 and Six Sigma can help improve the credibility of the ISO 9000 quality management system and the sustainability of the Six Sigma initiative at the same time. It can save resources and investments; and it enriches the way to manage the business.

Courtesy: iSixSigma.com

What is Six Sigma?

Six Sigma to many companies is a measure of quality with a continuous improvement program looking for perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects. (driving towards six standard deviations between the mean and the nearest specification limit).

The statistical representation of Six Sigma shows how well a process is performing. To achieve Six Sigma quality, a process must produce no more than 3.4 defects per million opportunities (99.9997 %) . An "opportunity" is defined as a chance for non-conformance, or not meeting the required specifications. This means we need to be nearly flawless in executing our key processes