Define Phase Six Sigma Fundamentals Six Sigma Fundamentals

Define Phase Six Sigma Fundamentals

Six Sigma Fundamentals Understanding Six Sigma Fundamentals Process Maps Voice of the Customer Cost of Poor Quality Process Metrics Selecting Projects Elements of Waste Wrap Up & Action Items OSSS LSS Yellow Belt v 9. 1 - Define Phase 2 © Open. Source. Six. Sigma, LLC

What is a Process? Why have a process focus? – So we can understand how and why work gets done – To characterize customer & supplier relationships – To manage for maximum customer satisfaction while utilizing minimum resources – To see the process from start to finish as it is currently being performed – Blame the process, not the people proc • ess (pros′es) n. – A repetitive and systematic series of steps or activities where inputs are modified to achieve a value-added output OSSS LSS Yellow Belt v 9. 1 - Define Phase 3 © Open. Source. Six. Sigma, LLC

Examples of Processes We go thru processes everyday. Below are some examples of processes. Can you think of other processes within your daily environment? • • • • • Injection molding Decanting solutions Filling vial/bottles Crushing ore Refining oil Turning screws Building custom homes Paving roads Changing a tire OSSS LSS Yellow Belt v 9. 1 - Define Phase 4 Recruiting staff Processing invoices Conducting research Opening accounts Reconciling accounts Filling out a timesheet Distributing mail Backing up files Issuing purchase orders © Open. Source. Six. Sigma, LLC

Process Maps • The purpose of Process Maps is to: – Identify the complexity of the process – Communicate the focus of problem solving • Process Maps are living documents and must be changed as the process is changed – They represent what is currently happening, not what you think is happening. – They should be created by the people who are closest to the process Step A Step B Step C Step D Finish In Start sp ec t Process Map OSSS LSS Yellow Belt v 9. 1 - Define Phase 5 © Open. Source. Six. Sigma, LLC

Process Map Symbols Standard symbols for process mapping (available in Microsoft Office™, Visio™, i. Grafx™ , Sigma. Flow™ and other products): A PARALLELAGRAM shows that there are data A RECTANGLE indicates an activity. Statements within the rectangle should begin with a verb A DIAMOND signifies a decision point. Only two paths emerge from a decision point: No and Yes An ELLIPSE shows the start and end of the process An ARROW shows the connection and direction of flow A CIRCLE WITH A LETTER OR NUMBER INSIDE symbolizes the continuation of a flowchart to another page OSSS LSS Yellow Belt v 9. 1 - Define Phase 1 6 © Open. Source. Six. Sigma, LLC

High Level Process Map One of the deliverables from the Define Phase is a high level process map, at a minimum it must include: – – – Start and stop points All process steps All decision points Directional flow Value categories as defined below • Value Added: – Physically transforms the “thing” going through the process – Must be done right the first time – Meaningful from the customer’s perspective (is the customer willing to pay for it? ) • Value Enabling: – Satisfies requirements of non-paying external stakeholders (government regulations) • Non-Value Added – Everything else OSSS LSS Yellow Belt v 9. 1 - Define Phase 7 © Open. Source. Six. Sigma, LLC

Process Map Example The Process Map below is for a call center. B START REVIEW CASE TOOL HISTORY & TAKE NOTES LOGON TO PC & APPLICATIONS SCHEDULED PHONE TIME? N N Z Y TRANSFER APPROPRIATE? TRANSFER CALL PROVIDE RESPONSE PHONE& NOTE DATA ENDS Y WALK-IN N CALL PUT ON HOLD, REFER TO REFERENCES PHONE DATA CAPTURE BEGINS ANSWER? DETERMINE WHO IS INQUIRING Y ANSWER? N C Y ENTER APPROPRIATE SSAN (#, 9 s, 0 s) CREATE A CASE INCL CASE TYPE DATE/TIME, & NEEDED BY N Y Y AUTO ROUTE N Y CASE CLOSED OFF HOLD AND ARRANGE CALL BACK PHONE DATA ENDS ADD TO RESEARCH LIST B OSSS LSS Yellow Belt v 9. 1 - Define Phase F UPDATE ENTRIES INCL OPEN DATE/TIME N CASE TOOL RECORD? ACCESS CASE TOOL OLD CASE QUERY INTERNAL HRSC SME(S) DETERMINE NATURE OF CALL & CONFIRM UNDERSTANDING N IF EMP DATA NOT POPULATED, ENTER N ACCESS CASE TOOL D A EXAMINE NEXT NOTE OR RESEARCH ITEM IMMEDIATE RESPONSE AVAILABLE? Y Y SCHEDULED PHONE TIME? N CALL or WALK-IN? Z E C LOGON TO PHONE TIME LOGOFF PHONE, CHECK MAIL, E-MAIL, VOICE MAIL Y A D Z 8 N TAKE ACTION or DO RESEARCH Y CLOSE CASE W/ DATE/TIME E GO TO F or E DEPENDING ON CASE E NEXT F © Open. Source. Six. Sigma, LLC

Cross Functional Process Map When multiple departments or functional groups are involved in a complex process it is often useful to use cross functional Process Maps. – Draw in either vertical or horizontal swim lanes and label the functional groups and draw the Process Map Start Request transfer Attach ACH form to Invoice ACH – Automated Clearing House. Produce an Invoice No Vendor info in FRS? Yes General Accounting OSSS LSS Yellow Belt v 9. 1 - Define Phase Fill out ACH enrollment form Receive payment End Match against bank batch and daily cash batch Input info into web interface Maintain database to balance ACH transfers Accepts transactions, transfer money, and provide batch total Bank Financial Accounting Vendor Department Sending Fund Transfers Review and Process transfer in FRS 9 3. 0 Journey Entry 21. 0 Bank Reconciliation © Open. Source. Six. Sigma, LLC

Process Map Exercise objective: Using your favorite process mapping tool create a Process Map of your project or functional area. 1. Create a high level Process Map, use enough detail to make it useful. • It is helpful to use rectangular post-it’s for process steps and square ones turned to a diamond for decision points. 2. Color code the value added (green) and non-value added (red) steps. 3. Be prepared to discuss this with your mentor OSSS LSS Yellow Belt v 9. 1 - Define Phase 10 © Open. Source. Six. Sigma, LLC

Do you know your Customer? Knowing your customer is more than just a handshake. It is necessary to clearly understand their needs. In Six Sigma we call this “understanding the CTQ ’s” or critical to customer characteristics. Critical to Customer Characteristics Voice Of the Customer OSSS LSS Yellow Belt v 9. 1 - Define Phase 11 © Open. Source. Six. Sigma, LLC

Voice of the Customer or VOC seems obvious; after all, we all know what the customer wants. Or do we? ? The customer’s perspective has to be foremost in the mind of the Six Sigma Belt throughout the project cycle. 1. Features • • Does the process provide what the customers expect and need? How do you know? 2. Integrity • • Is the relationship with the customer centered on trust? How do you know? 3. Delivery • • Does the process meet the customer’s time frame? How do you know? 4. Expense • • Does the customer perceive value for cost? How do you know? OSSS LSS Yellow Belt v 9. 1 - Define Phase 12 © Open. Source. Six. Sigma, LLC

What is a Customer? There are different types of customers which dictates how we interact with them in the process, in order to identify customer and supplier requirements we must first define who the customers are: External – Direct: those who receive the output of your services, they generally are the source of your revenue – Indirect: those who do not receive or pay for the output of your services but have a vested interest in what you do (government agencies) Internal - those within your organization who receive the output of your work OSSS LSS Yellow Belt v 9. 1 - Define Phase 13 © Open. Source. Six. Sigma, LLC

Value Chain The relationship from one process to the next in an organization creates a “Value Chain” of suppliers and receivers of process outputs. Each process has a contribution and accountability to the next to satisfy the external customer. External customers needs and requirements are best met when all process owners work cooperatively in the Value Chain. Careful – each move has many impacts! OSSS LSS Yellow Belt v 9. 1 - Define Phase 14 © Open. Source. Six. Sigma, LLC

What is a CTQ? • Critical to Quality (CTQ ’s) are measures that we use to capture VOC properly. (also referred to in some literature as CTC’s – critical to customer) • CTQ ’s can be vague and difficult to define. – The customer may identify a requirement that is difficult to measure directly so it will be necessary to break down what is meant by the customer into identifiable and measurable terms Service: • Competence • Reliability • Accuracy • Timeliness • Responsiveness • Access • Courtesy • Communication • Credibility • Security • Understanding Product: • Performance • Features • Conformance • Timeliness • Reliability • Serviceability • Durability • Aesthetics • Reputation • Completeness OSSS LSS Yellow Belt v 9. 1 - Define Phase 15 © Open. Source. Six. Sigma, LLC

Developing CTQ’s Step 1 Step 2 Step 3 OSSS LSS Yellow Belt v 9. 1 - Define Phase • • Identify Customers Listing Segmentation Prioritization • • • Validate CTQ s Translate VOC to CTQ s Prioritize the CTQ s Set Specified Requirements Confirm CTQ s with customer • • • Capture VOC Review existing performance Determine gaps in what you need to know Select tools that provide data on gaps Collect data on the gaps 16 © Open. Source. Six. Sigma, LLC

Cost of Poor Quality (COPQ) • COPQ stands for Cost of Poor Quality • As a Six Sigma Belt, one of your tasks will be to estimate COPQ for your process • Through your process exploration and project definition work you will develop a refined estimate of the COPQ in your project • This project COPQ represents the financial opportunity of your team’s improvement effort (VOB) • Calculating COPQ is iterative and will change as you learn more about the process No, not that kind of cop queue! OSSS LSS Yellow Belt v 9. 1 - Define Phase 17 © Open. Source. Six. Sigma, LLC

The Essence of COPQ • COPQ helps us understand the financial impact of problems created by defects. • COPQ is a symptom, not a defect – Projects fix defects with the intent of improving symptoms. • The concepts of traditional Quality Cost are the foundation for COPQ. – External, Internal, Prevention, Appraisal • A significant portion of COPQ from any defect comes from effects that are difficult to quantify and must be estimated. OSSS LSS Yellow Belt v 9. 1 - Define Phase 18 © Open. Source. Six. Sigma, LLC

COPQ - Categories Internal COPQ Prevention • • • Quality Control Department • Inspection • Quarantined Inventory • Etc… Detection External COPQ • Warranty • Customer Complaint Related Travel • Customer Charge Back Costs • Etc… OSSS LSS Yellow Belt v 9. 1 - Define Phase Error Proofing Devices Supplier Certification Design for Six Sigma Etc… 19 • • Supplier Audits Sorting Incoming Parts Repaired Material Etc… © Open. Source. Six. Sigma, LLC

COPQ - Iceberg Warranty Inspection Recode Rejects Visible Costs Lost sales Engineering change orders Time value of money (less obvious) More Set-ups OSSS LSS Yellow Belt v 9. 1 - Define Phase Late delivery Expediting costs Excess inventory Working Capital allocations Hidden Costs Rework Long cycle times Excessive Material Orders/Planning Lost Customer Loyalty 20 © Open. Source. Six. Sigma, LLC