Black Belt Six Sigma PDF

Six Sigma Black Belt Certification
Module 0 – Certification Exam and Course Overview

Module 0 – Certification Process
Outline
l  What is a Six Sigma Black Belt
l  Qualifications for taking the exam
l  ASQ Black Belt exam
l  Structure of this course
2
What is a Six Sigma Black Belt
l  Has extensive knowledge of Six Sigma principles, philosophy, tools, and
techniques
l  Leads Six Sigma Teams
l  Six Sigma activities usually full time
l  Has passed the ASQ Black Belt exam
3
ASQ Black Belt Exam
l  Fee is $459 or $309 for ASQ members
l  Apply on ASQ's Web site
l  Based on the ASQ Black Belt Body of Knowledge
http://asq.org/cert/resource/pdf/2015%20CSSBB
%20BOK.pdf
l  Bring #2 pencils
4
ASQ Black Belt Exam (cont'd)
l  150 Questions with 4 hours to complete
l  Pass is 80%
l  Open book
l  Your own notes are allowed, however the proctor will inspect your notes
and can reject them
l  No collections of questions and answers are allowed
l  Hand held calculators without an alphabetic keyboard are allowed. The
memory must be cleared
5
ASQ Black Belt Exam Content
Version instituted on March 7, 2015
l  Organization-wide Planning and Deployment (12 Questions)
l  Organizational Process Management and Measures (10 Questions)
l  Team Management (18 Questions)
l  Six Sigma Define (20 questions)
l  Six Sigma Measure (25 questions)
l  Six Sigma – Analyze (22 questions)
l  Six Sigma – Improve (21 questions)
l  Six Sigma – Control (15 questions)
l  Design For Six Sigma (DFSS) Framework and Methodologies (7
Questions )
6
ASQ Black Belt Exam Content (Cont'd)
As it is an open book exam, simple memorization of definitions and formulas
will not get a you a pass. You will need to be able to understand the material
in sufficient detail to enable you to successfully determine the answer by;
l  Evaluating,
l  Analyzing,
l  Applying, and
l  Creating
7
This Course
l  The course is divided into sections corresponding to the exam
l  The final section will be devoted to exam tips and trap, suggested reading
as well as 'night before' cram session
8
End of Module 0 – Certification Process
In this module we covered;
l  What is a Six Sigma Black Belt
l  Qualifications for taking the exam
l  ASQ Black Belt exam
l  Structure of this course
9
Module 1 – Organization-wide Planning and Deployment -
Organization-wide Considerations
Module 1 – Organization-wide Planning and
Deployment - Organization-wide Considerations
Outline
1.  Fundamentals of Six Sigma and Lean Methodologies
2.  Six Sigma, Lean, and Continuous Improvement Methodologies
3.  Relationships Among Business Systems and Processes
4.  Strategic Planning and Deployment for Initiatives
11
Module 1 – Fundamentals of Six Sigma and Lean
Methodologies
The philosophy of Six Sigma:

Defects are expensive; both in resources and in customer satisfaction
l 
Competitive Advantage is gained by meeting customer expectations

l 
Focus on processes
l 
Strong alignment to organizational goals

l 
Reducing process output variation to stay within the limits defined by the
l 
customer will yield significant returns.

Therefor, continuous improvement of an organization's processes is pursued
l 
via data analysis and the application of specific variance-reduction

techniques
12
Methodologies
The Fundamental Principals of Six Sigma are:
Y=f(X) + ε: All outcomes and results (the Y) are determined by inputs (the
l 
Xs) with some degree of uncertainty (ε)

To change or improve results (the Y), you have to focus on the inputs (the
l 
Xs), modify them, and control them

Variation is everywhere, and it degrades consistent, good performance. Your
l 
mission is to find it and minimize it!

Valid measurements and data are required foundations for consistent,
l 
breakthrough improvement
Only a critical few inputs have significant effect on the output. Concentrate
l 
on the critical few

Every decision and conclusion has risk (ε), which must be weighed against
l 
the context of the decision

13
Methodologies
l  Six Sigma was first developed in the late 1980s at Motorola in response to
their struggle to meet the demanding quality targets for complex
manufactured products.
l  Become widely known when Jack Welsh GE adopted it in 1994
l  Initially it was a quality measurement approach based on statistical
principles
l  Then it transformed to a disciplined process improvement technique based
on reducing variation within the system with the help of a number of
statistical tools
l  Roots lie in the works of Phillip B. Crosby, George D. Edwards, W. Edward
Deming, Walter Andrew Shewhart, Armand V. Feigenbaum, Joseph M.
Juran, Kaoru Ishikawa , and Genichi Taguchi
14
Methodologies
Phillip B. Crosby
Author of Quality is Free, one of the seminal texts of quality control
l 
Extolled the benefits of doing things right the first time

l 
Four cardinal rules of quality management:

l 
1.  the performance standard should be set as zero defects;

2.  quality is the same thing as conformance to requirements;
3.  quality is achieved by preventing defects;
4.  and the measure of quality’s value is the cost of nonconformance.
15
Methodologies
George D. Edwards
l  First president of the American Society for Quality
l  Head of the inspection engineering department for Bell Telephone
Laboratories
l  Instrumental in advancing Bell Lab's groundbreaking quality assurance
program.
16
Methodologies
W. Edwards Deming
l  One of the fathers of quality control
l  Key insight was the use of statistics for quality control
l  Another insight was the difference between common- and special-cause
variation
l  Best know for defining the “seven deadly diseases of the workplace” and
“14 points for management.”
17
Methodologies
Deming's seven deadly diseases of the workplace;
1. Lack of consistency in planning
2. Emphasis on short-term profits
3. Poor performance evaluation systems
4. Excessive turnover among employees
5. Overreliance on the metrics that are the easiest to obtain
6. Excessive medical costs
7. Excessive liability costs
18
Methodologies
Deming's 14 Points for Management
1. Maintain consistent purposes
2. Adapt a new philosophy
3. Eliminate dependence on inspection
4. Cease to award business based on price alone
5. Constant quality improvement
6. Provide on-the-job training for employees
7. Establish leadership
19
Methodologies
Deming's 14 Points for Management
8. Eliminate fear
9. Reduce interdepartmental barriers
10.  Reduce pressure on the workforce and eliminate quotas
11.  Eliminate ineffective management styles
12. Promote employee pride
13. Institute a vigorous program of education and self-improvement
14. The transformation is everybody's job
20
Methodologies
Walter Andrew Shewhart;
1.  The father of statistical quality control
2.  Formulate the statistical idea of tolerance intervals and to propose his data
presentation rules, which are listed below:
–  Data has no meaning apart from its context.
–  Data contain both signal and noise. To be able to extract
information, one must separate the signal from the noise within
the data.
3.  Originated the Plan-Do-Check-Act cycle popularized by Deming
4.  Long-time collaboration with Deming, who championed Shewhart's ideas
21
Methodologies
Armand V. Feigenbaum;
1.  Promoter of TQM
2.  Known for his 9 M's of quality; markets, management, men, money,
motivation, materials, machines, modern information sources, and
mounting (constantly improving) product requirements.
3.  One of the first to insist that the customer's perspective be used to assess
quality
22
Methodologies
Joseph M. Juran;
1.  Known for his three main components of quality management;
1.  Use of statistical quality control
2.  Quality improvement
3.  Quality planning
2.  Also one of the first to insist that the customer's perspective be used to
assess quality
3.  Advocated deep management involvement in the quality improvement
process
23
Methodologies
Kaoru Ishikawa ;
1.  Developed the Ishikawa or fish diagram for root cause analysis
2.  Major advocate of TQM and developed Quality Circles
Genichi Taguchi
1. Another advocate of TQM in Japan
2. Promoted the use of statistics in quality management
3. Wrote The Design of Experiments
24
Methodologies
Lean;
l  Lean a comprehensive system for decreasing waste and improving cycle
times and quality

l  The modern Lean approach was pioneered by Taiichi Ohno at Toyota during
the 70's, with inspiration drawn from the work of Deming and other pioneers
previously mentioned
l  Key tools concepts and methods include; Process Cycle Efficiency, Value
Stream Mapping, Spaghetti Diagrams, Kaizen, 5S, Visual Factory, SMED,
TPM, and Poke Yoke
25
Methodologies
The philosophy of Lean focuses on three areas: transparency, velocity, and

value
l  Transparency is easy access to useful information on an organization's
processes. As well errors are spotted and rectified immediately

l  Velocity, or flow, is the speed with which processes are completed
l  The most important measure of velocity is the interval between a
customer’s order and the delivery of the good or service

l  A key goal of lean is to increase velocity
l  Value is the set of qualities or characteristics for which a customer is willing
to pay. The customer is the sole authority as to what constitutes value

l  Another key goal of lean is to increase value and reduce waste
26
Methodologies
Value-Added vs. Non-Value-Added Activities;

l Value chain is a chain of activities that an organization performs in order to
deliver a valuable product or service to its customers

Value is defined by the customer, not by management
l 
A process is decomposed and each activity analyzed to see if it adds value

l 
or does not add value

Process is then improved and streamlined to reduce or eliminate non-value-
l 
added activities thus improving the value chain
27
Methodologies
Lean and Six Sigma
Complimentary to Six Sigma and the ASQ Black Belt BOK has expanded its
l 
coverage of Lean over the years

The Lean focus on waste can help uncover the root causes of the quality and
l 
variation issues that are Six Sigma's focus

Conversely less rework and inspection time means faster cycle time
l 
Both focus on creating value and reducing waste; Lean from the viewpoint of
l 
increasing flow and value and Six Sigma from the viewpoint of reducing
defects and other variations
Together they improve efficiency and effectiveness
l 
28
Module 1 – Six Sigma, Lean, and Continuous Improvement
Methodologies
l  Six Sigma and Lean should be used for processes that have a positive
impact on customers, though projects will also impact employees and share
either directly or indirectly
l  In order to identify possible initiatives, it is necessary to determine the
linkage between business process(s) in question and customer-perceived
value
l  Use Lean when focusing on cycle time improvement and Six Sigma when
quality is the focus, though a blended approach is often called for
29
Methodologies
l  Best used when;
l  The cause of the problem is unknown or not clearly understood
l  Problems are 'common'
l  In complex situations
l  Other approaches have failed
l  Can be used for both manufacturing and service delivery
30
Methodologies
l  Key to its success its the organization's commitment to process

improvement. If the organizational buy-in isn't there, then success using Six
Sigma and Lean will be unlikely
l  Also key to its success are Six Sigma trained personnel, especially the
assignment of a Black Belt to the project
l  The above fall into the assessment of organizational capability, which
encompasses;
l  Leadership
l  Capacity for learning and improvement
l  Knowledge and skills
l  Organizational Culture
31
Module 1 – Relationships Among Business Systems and
Processes
l  Aligning six sigma objectives with organizational goals is key to the success
of Six Sigma and to it being an organizational game changer
l  Start by understanding the organization's vision mission, and values
l  Vision is the tone setter
l  Mission elaborates on the vision
l  Values are reflected in the organization's culture and way of being. Look
for the values practiced not the one's publicized by management

l  The organization's strategic objectives are derived from the vision, mission
and values
l  Those objectives impact the priorities for each organizational driver
32
Processes
What are the key Organizational Drivers? In general they are;
l  Profit
l  Market Share
l  Customer Satisfaction
l  Efficiency
l  Product Differentiation
While quality is not mentioned above, it is key to successfully delivering on
the above drivers.
Take profit for example; a non-Six Sigma company typically spends 25%-40%
of its revenues fixing problems. Whereas Six Sigma companies typically
spend less than 5 percent of their revenues fixing problems
33
Processes
l  Improvements will address both incremental and breakthrough

improvements
l  Incremental improvement should be an on-going process and is a core
concept in Kaizen and one should look at the Lean tools and methods, such
as Kaizen Blitzes and SMED, for addressing
l  Some problems are of such scale and scope that a breakthrough is
necessary. It is these problems that should be tackled as a full-blown Six
Sigma project
l  In either case, the improvements need to tie back to one or more
organizational drivers
34
Processes
A suggested process for linking a Six Sigma/Lean initiative to the

organizational goals is as follows:
l  Assess the outlook and planned future path of the organization
l  Evaluate current performance related to the business drivers
l  Evaluate the capacity for change and improvement
l  Prioritize what initiatives should be pursued based on both necessity and
organizational capability
35
Processes
Each initiative should have a focus, such as:

l  Cost savings
l  Customer satisfaction
l  Process
l  Problems
l  Location
l  Supply chain
l  Product design
Of course there is often considerable overlap; e.g. customer satisfaction will
require the focus to include all other areas
36
Processes
l  A business system focus on performing an overall function, such as

producing a clock radio, or selling a clock radio
l  The system will be composed of multiple related processes and will
integrate with both internal and external systems
l  So just as one process feeds another, one system feeds another
l  Understanding the interrelationships is key to the success of most
improvement initiatives
l  One constructs a SIPOC (Supplier, Input, Process, Output, Customer)
model to do so
37
Processes
l  As the Six Sigma objective changes with the level view of the system in
question, it is necessary to deconstruct a the system into three levels
l  The Business Level - goal is to identify the Xs (Key Process Input
Variables - KPIVs) at the operational level that relate to changes in the Ys
(Key Process Output Variables - KPOVs) at the Business Level
l  The Operations Level - goal is to identify the Xs (Key Process Input
Variables - KPIVs) at the process level that relate to changes in the Ys
(Key Process Output Variables - KPOVs) at the Operations Level
l  The Process Level - goal is to identify the Xs (Key Process Input
Variables - KPIVs) that relate to changes in the Ys (Key Process Output
Variables – KPOVs)
l  The process level is where one looks at processes, people, machines,
suppliers, etc.
38
Processes
l  A stakeholder is a person, group, or external organization that has an

interest or 'stake' in what the organization does (or doesn't do)
l  Businesses stakeholders include; customers, suppliers, company
management, employees, stockholders, regulatory agencies, as well as
the community as a whole
l  Each stakeholder has unique relationship with the business, and many of
these relationships will impact or be impacted by the Six Sigma initiative
pursued
39
Processes
l  A business must excel in at least one category perceived as important by

its customer in order to succeed
l  Therefor, understanding who the customer is, what they want, and
delivering on it is key to the organization's long-term success
l  In this context, we are referring to external customers
l  External customers come in three flavors;
l  End-users/End-purchasers
l  Intermediate customers, such as retailers selling the product
l  Anyone else impacted by the product or service
l  Identifying external customers and their needs will be covered in the Define
phase
40
Processes
l  However there also internal customers

l  This is anyone inside the organization affected by, or supporting, the
product or service generated
l  Of most interest is the people involved with the next operation for which the
product or service is input
l  Goal is to let them pull the work they need and to not pass them defects
41
Processes
l  Suppliers are key stakeholders and their cooperation will enable
breakthrough improvements
l  Cultivate a win-win cooperative relationship, as only the supplier can
address any quality or delivery issues with the product, material, or service
they provide
l  Change suppliers if necessary in order to ensure quality and JIT delivery, as
you will never reach Six Sigma quality with Three Sigma suppliers
42
Processes
There are four basic approaches to involving suppliers:

1.  Demand the supplier implement Six Sigma. This usually only works if
an organization does sufficient business with the supplier to have the
leverage to make that demand. Other issue is the supplier may just
go through the motions a la ISO9000
2.  Projects at the supplier, where a customer Six Sigma team conducts
improvement projects on the supplier's systems. This is a quick fix
approach and gives the customer an excellent understanding of the
suppliers system. It does require the supplier to open up their
systems
3.  Offer the suppliers the opportunity to participate in the customer's
Green and Black Belt training sessions free of change in exchange
for engaging in several improvement projects
4.  Organize the supplier's Six Sigma program. This takes considerable
time, effort and expense
43
Processes
l  Employees are key to a successful Six Sigma initiative and winning
their cooperation in all phases of the project is essential
l  Both workers and functional managers can be suspicious and feel
threatened by the changes proposed
l  Proactive communication and engagement is necessary in order to
address those concerns
l  The union can be problematic if they are not engaged from day 1
l  Senior executives needs to be seen as championing Six Sigma
44
Processes
l  The Senior Executives provide the impetus, direction & alignment necessary
for Six Sigma ultimate success
l  The Senior Executives should:
•  Study Six Sigma management
•  Link company’s objectives to Six Sigma projects
•  Champion Six Sigma projects
•  Constantly review Six Sigma projects progress
45
Processes
l  The Process Owner is the manager of a process.

l  The process owner should be identified and involved in all Six Sigma
projects relating to their area.
l  A process owner should:
•  Empower employees to follow and improve best practice methods
•  Accept and manage the improved process after completion of the Six
Sigma project
•  Understand how the process works, the capability of the process, and
the relationship of the process to other processes in the organization
46
Module 1 – Strategic Planning and Deployment for
Initiatives
l  While Six Sigma and Lean is successfully used for 'tactical' improvements,
it is in the strategic arena of developing 'Organizational Capability'
l  Organizational Capability allows an organization to rapidly change and
adapt as well as develop best-of-breed processes
l  The linkage of Six Sigma projects to business strategy is vital for
developing Organizational Capability
l  Key tools to develop and support this linkage include; Hoshin Kanri (X-
matrix), portfolio analysis, SWOT analysis, PEST analysis, and
contingency planning
47
Initiatives
l  Hoshin Kanri is a method for setting strategic direction developed in Japan
during the 1960's and is a derivative of Management by Objectives
l  Believed to be dramatically superior to other forms of strategic planning;
especially for integratingTQM into strategic planning
l  It is also known as Hoshin planning, policy management, or policy
deployment
l  Hoshin planning is not a strategic planning tool in itself, but can be thought
of as a means for deploying an existing strategic plan
l  Translates the strategic goals into the required day-to-day activities
48
Initiatives
l  Hoshin planning requires that the organization understand what their
customers want in 5 to 10 years as well as what must be done to meet or
exceed their customer's expectations
l  This requires a planning system that has integrated the “Plan-Do-Study-Act”
process based on a clear long-term approach
l  The measurement system needs to focus on process and results,
identifying of what is strategically important.
l  The various departments should be aligned with decisions taken by people
who have the necessary information.
l  Planning should be integrated with daily activity and supported by good
vertical and cross-functional communication
l  Everyone in the organization needs be involved with planning to ensure a
significant buy-in to the overall process
49
Initiatives
The seven of the Hoshin planning model are;
1. Establish Organizational Vision
2. Develop Breakthrough Objectives
3. Develop Annual Objectives
4. Deploy Annual Objectives
5. Implement Annual Objectives
6. Monthly Review
7. Annual Review
The key tool for Hoshin planning is the X-Matrix, which is iteratively created
50
Initiatives
The X-Matrix
HOW
All items
Top Level
Improvement
are listed
Priorities
HOW
HOW WHO
Annual
MUCH
FAR in priority order
Targets
Breakthrough to Improve
Objectives
starting from
3-5 Year
Breakthrough
Annual Metrics the center
Objectives
RESOURCES
WHAT = Primary Responsibility
= Secondary Responsibility
OWNER
© Freeleansite.com
51
Initiatives
X-Matrix example
© bmgi.com
52
Initiatives
Cross-functional management (CFM) and Catch-Ball
l  CFM requires a significant change in the structure of management
relationships away from traditional silos, in order to allow continual checking

of goals in order to steer the organization to its new direction
l  Catchball refers to an idea or goal being tossed around from person to
person and being refined iteratively

l  Both are vital elements which requires constant communication, in order to
ensure the development of appropriate targets and means of achieving

them, as well as to their deployment at all levels
l  Communication processes must be implemented to ensure feedback in
bottom-up, top-down, horizontal and multi-directional horizontal. This

requires serious commitment to employee empowerment and continuous
improvement
53
Initiatives
l  The key difference between Hoshin planning and Management by
Objectives is the specific focus on measuring results through process rather
than targets
l  In Management by Objectives the target setting and measurement tends to
be on business tangibles such as profits and cost. Therefor, the
organization tends to engender a culture of individual orientated
management control and trouble shooting, rather than teamwork and
continuous improvement
l  Hoshin planning focuses on individuals making plans that are tied into a
company vision, diagnosis of company processes and comparing actual
results against the original targets
54
Initiatives
l  The benefits of integrating Hoshin planning with Six Sigma include;
l  Integration of strategic objectives with tactical improvement projects
l  The application of the plan-do-check-act iterative approach to business
process management
l  A parallel planning and execution methodology
l  A company-wide approach to the integration of projects into strategic
plans
l  improvements in communication
l  Increased consensus and buy-in
l  Cross-functional-management integration
55
Initiatives
SWOT analysis
l  Stands for Strengths, Weaknesses, Opportunities, and Threats
l  Can be used with Hoshin planning or stand-alone
l  Requires that a comprehensive appraisal of internal and external
situations be conducted
l  Brutal honesty is key to a successful SWOT analysis
56
Initiatives
PEST analysis
Stands for Political, Economic, Social and Technological analysis
l  Political - what degree does the government intervene in the economy.
e.g. taxation, regulation, and subsidies

l  Economic - includes economic growth, interest rates, exchange rates and
inflation
l  Social - includes the cultural factors, such as health consciousness,
population growth rate, age distribution, attitudes and emphasis on safety

l  Technological - includes the impact of emerging technologies, R&D
incentives and the rate of change
57
Initiatives
Other strategic planning tools include;

l  Portfolio analysis
l  Feasibility studies
l  Contingency planning
l  Business continuity planning
58
End Module 1
In this module we covered

l Fundamentals of Six Sigma and Lean Methodologies
l Six Sigma, Lean, and Continuous Improvement Methodologies
l Relationships Among Business Systems and Processes
l Strategic Planning and Deployment for Initiatives
Module 0 59
Module 2 - Leadership
Module 2 Leadership
Outline
1.  Roles and Responsibilities
2.  Organizational Roadblocks and Change Management
61
Module 2 –Roles and Responsibility
Senior Executive
l Provides the impetus, direction & alignment necessary for Six Sigma ultimate
success
The Senior Executive should:
l 
l  Study Six Sigma management

l  Link company’s objectives to Six Sigma projects
l  Champion Six Sigma projects
l  Constantly review Six Sigma projects progress
l  Must lead by example
62
Executive Committee Member
They are the top management of an organization

l 
Executive Committee Members should:

l 
l  Deploy Six Sigma throughout the organization

l  Prioritize and manage Six Sigma portfolio
l  Assign champion, BB and GB to Six Sigma projects
l  Remove barriers to Six Sigma management
l  Provide resources for Six Sigma management
l  Must lead by example
63
Process Owner
Is the manager of a process

l 
The process owner should be identified and involved in all Six Sigma projects relating
l 
to the process owner area

A process owner should:
l 
l  Empower employees to follow and improve best practice methods

l  Accept and manage the improved process after completion of the Six
Sigma project
l  Understand how the process works, the capability of the process, and
the relationship of the process to other processes in the organization
64
Champion
Managers who take a very active sponsorship and leadership role in conducting and
l 
implementing Six Sigma projects. Can be the Senior Executive

Champions should:
l 
l  Identify the project on the organizational dashboard

l  Provide an ongoing communication link between the project team and
Executive committee
l  Keep the team focused on the project by providing direction and
guidance
l  Assure that Six Sigma methods and tools are being used in the project
l  Lead by example
65
Master Black Belt
Takes a leadership role as keeper of the Six Sigma process and advisor to executives
l 
or business unit managers

Master Black Belt should:
l 
l  Counsel senior executives and business unit managers on Six Sigma
management
l  Continually improve and innovate the organization’s Six Sigma process
l  Apply Six Sigma across across both operations and transactions-based
process
l  Mentor Green Belts and Black Belts
66
Black Belt
A full time change agent and improvement leader.

l 
Black Belts should:

l 
l  Communicate with the champion and process owner about progress of
the project
l  Help team members design and analyze experiments
l  Provide training in tools and team functions to project team members
l  Coach Green belts leading projects limited in scope
l  Be comfortable with taking risks
l  Be effective communicators and influential
l  Have the required authority
67
Green Belt
Is an individual who works on projects part time, either as a team member for
l 
complex projects or as a project leader for simpler projects

Green Belts should:
l 
l  Define & review project objective with project’s champion

l  Facilitate the team through all phases of the project
l  Analyze data through all phases of the project
l  Train team members in the use of Six Sigma tools and methods through
all phases of the project
68
Module 2 –Organizational Roadblocks and Change
Management
l  According to recent studies, 60% of all Six Sigma projects fail to deliver the
expected results.
l  At Home Depot, for example, former CEO Robert Nardelli was fired after his strict
focus on Six Sigma negatively affected worker morale and consumer sentiment
l  3M also struggled with Six Sigma. Experts questioned whether Six Sigma’s
unyielding emphasis on efficiency stifled 3M’s spirit of creativity and innovation
69
Management
So where can Six Sigma go wrong?
l  No or little leadership endorsement is the number 1 cause of failed Six Sigma
implementation. This includes the superficial 'flavor of the week' style of
endorsement
l  Process improvements which perfectly 'achieve their objectives', but the workforce is
not be prepared to accept them as part of their daily routines
l  Implementing Six Sigma in isolation, ignoring employees, customers, and
innovations
l  Black Belt that are great at the technical side of Six Sigma but fail to properly
engage the workforce. This is made worse by management failing to communicate
the rational for the Six Sigma initiative and proposed changes
l  Performance appraisals not tied to successful long-term implementation
70
Management
l  Staff spending too much time on the the Six Sigma project, to the detriment of their
ability to meet their daily responsibilities
l  Six Sigma teams that are too large (6-9 is best)
l  Analysis paralysis – becoming trapped in the Measure or Analyze phase and never
moving to the Improve phase
l  Incomplete or incorrect data
l  The courage to embrace true change is lacking
l  Pursuit of short-term cost savings via job cuts. Staff feel like turkeys helping to
prepare for Thanksgiving
l  Totally focusing on the visible quantitive costs/savings at the expense of the
qualitative
71
Management
l  Poor or non-existent RCA and pressure to implement the first solution that comes to
mind
l  The pursuit of belts as the end itself, and not a means to the end
l  Reward systems which give bonuses to Black Belts based on savings made can
encourage gaming the system and cooking the books
l  The black belt guru mentality, even at a subtile level can make the people who do
the day-to-day work not respected and like they have no say
72
Management
l  The Six Sigma organization proactively embraces change by explicitly incorporating
change into their management system.
l  Full- and part-time change agent positions are created and a complete change-
supporting infrastructure is created. Roles include;
l  Official change agent a.k.a Champions
l  Sponsors
l  Advocate – sees an need for change and finds a sponsor
l  Informal change agent
l  There are three goals for implementing change;

1.  Change the way people in the organization think
2.  Change the norms
3.  Change the organization’s systems or processes
73
Management
l  A mechanistic approach to overcoming resistance to change is often doomed to fail
l  Start to think about your responses to change and put yourself in the shoes of those
impacted by the proposed changes
l  To do this, you need to both identity and understand who is impacted.
l  The first step to this is Stakeholder Analysis
74
Management
Stakeholder Analysis Process
1. Brainstorm all the people and organizations that will affect or be affected by the
project
2. Identify the specific interests the stakeholders have in your project, such as;
l  Benefits to the stakeholder
l  Changes the project might force the stakeholder to make
l  Real or perceived causes damage or conflict for the stakeholder
3. Grade the Stakeholders as Supporter, Neutral, or Blocker and as High or Low

influence based on your assessment of;
l  The role the stakeholder plays
l  The likelihood and impact (positive or negative) of the Stakeholder response
4. Devise possible actions to get stakeholder support and reduce opposition
Highly recommended to keep the results of this analysis to yourself
75
Management
l  Best approach to enabling change is to approach it from both a top-down and
bottom-up approach
l  The strategy and direction are provided from above (top-down) whilst the solutions
and approach to change is generated locally and fed back up the hierarchy (bottom-
up)
l  Empowerment of the organization's employees goes a long way to ensure effective
change and is core to the Kaizen philosophy and Deming's 14 principles
l  Provision of adequate training and orientation is also key to implementing change
76
Management
l  Effective Communication is key to a successful Six Sigma project.
l  Communications is conducted both formally and informally
l  Effective communication involves understand the characteristics of both
formal and informal communication
l  Formal communication is the flow of communication within the chain of
command
l  Informal communication is all other communication within the organization
77
Management
Top-Down Communication
l One of the three formal channels

l Flows from higher to lower levels
l Key aspect—subordinates react most effectively to those matters judged to be
of the greatest interest to the boss

l Selective screening is a problem
l Example forms: job instructions, memos, policies, procedures, manuals, etc.
78
Management
Bottom-Up Communication
l  One of the three formal channels
l  Flows from lower to higher levels
l  Most ineffective of the three channels
l  Employees need opportunities to be:
l  Heard
l  Anonymous
l  Example devices: suggestion boxes, group meetings, participative decision
making, grievance procedures, etc
79
Management
Horizontal Communication
l Flows from one level to an equal level
l Necessary for coordination of diverse organizational functions
l Most effective of the three channels
l Example devices: Internet, corporate intranets
80
Management
Barriers to Communication
Interpersonal barriers which include;

l  Problems with emotions and perceptions held by employees
l  Selecting the wrong channel for sending a message
l  Semantics
l  Sending inconsistent cues between verbal and nonverbal
81
Management
Organizational barriers
l  Status and power differences between lower and higher levels
l  Differences across departments of needs and goals
l  The communication flow may not fit the group's or organization's task
l  Formal channels may not be available for upward, downward, and horizontal
communications
82
Management
Informal Communication
l  Communications within organizations do not necessarily follow the formal

pathways
l  Most organizations have extensive networks of informal communications
l  Since they are ingrained into organizational life, you should use them to
benefit your Six Sigma initiatives
l  Elements of informal channels are:
l  Grapevine—75% accurate
l  Management by wandering around
l  Rumor—unverified belief in general circulation
83
End of Module 2
l  Roles and Responsibilities
l  Organizational Roadblocks and Change Management
84
Module 3 – Organizational Process Measures and Management
85
Module 3 Topics
1.  Impact on stakeholders
2.  Benchmarking
3.  Business measures
1. Performance measures
2. Financial measures
86
Module 3 –Impact on Stakeholders
A Six Sigma project may impact Stakeholders in the following manner;

l  Process inputs are changed which changes the requirements for the suppliers
l  Process procedure changes impact the staff executing and managing those
procedures
l  Process procedure changes may impact collective agreements
l  Process outputs are changed which impact customers
l  Changes to tooling and preventative maintenance schedules impact the suppliers of
those materials and PM services
87
Module 3 –Benchmarking
Benchmarking;
l  Is a process for obtaining a comparative measure
l  Comes in five types; internal, functional, competitive, collaborative and best
practices
l  Used to measure progress against the benchmark and create realistic and effective
performance standards
l  Dimensions typically measured are quality, time and cost
l  Recommended when a business suffers some sudden trauma such as the loss of a
major customer or ran afoul of a regulator
l  A business also should benchmark when a competitor is vastly outperforming it in a
particular area
l  Can provide evidence of the need for an improvement project
88
Benchmarking teams
l  Typically consists of between three and six staff members familiar with the targeted
process anything more than a dozen are ineffective
l  Each with different skills and areas of expertise with clearly-defined roles
89
Benchmarking is divided into five phases: planning, analysis, integration, action, and
maturity
1. Planning – Identify the target metrics of the process. Identify the other business
against which the target metrics and process will be compared.
2. Analysis - The benchmarking team makes a comprehensive account of the
practices being considered. Use the data collected to predict future performance
both for themselves and for the business used as a benchmark. This prediction of
future performance will bring to light the range of possible improvements.
3. Integration - Adjust the goals and meet with upper management to give a summary
of the findings and recommendations.
4. Action - Implement the recommendations resulting from benchmarking
5. Maturity - Assesses whether the prior four phases have led to positive changes.
The project only concludes when the best practices for the targeted process are in
line or ahead of industry standards. Also recommendations for continuous
improvements should be made.

90
Benchmarking planning key points to remember;

l  Determine what and why you’re benchmarking - Decide on the real reasons
you’re benchmarking. Identify what you want to benchmark and the reasons why
l  Identify the drivers – find the drivers that will be used to determine the particular
metric you are benchmarking.
l  Find a way to measure – how are you going to measure these driver?
l  State your current situation – here you need to find your base point – measure
your current performance.
l  Identify who or what you are going to benchmark against – who do you want to
compare against? Competitors? Best Practices?

91
Internal Benchmarking;
l  Is a comparison between similar processes or departments within the organization
l  Ensures the business develops appropriate performance metrics
l  Ensures that similar departments and processes are being measured in the same
way and that these standards have been approved by management
l  Useful for aligning the standards for training programs
92
Functional Benchmarking;
l  Is a specific comparison with a similar process in another business who's core
business might otherwise be quite different
l  Perform functional benchmarking when you want to improve performance in a very
narrow area
l  Entails identifying the relevant best practices and then creating a list of companies
that perform well in these areas
l  Recommended that the team begins with a list of a hundred possible companies and
then pursue four or five of these for your functional benchmark
93
Competitive Benchmarking;
l Can be defined as the continuous process of comparing a firm’s practices and
performance measures with that of its most successful competitors
l Select the best-in-class companies for each area to be benchmarked
l Measure the performance of the best-in-class companies for each benchmark being
considered
l Compare and use the comparison as input to your project selection process
l Enlisting the competitors cooperation is often difficult so look for public domain
information
l Solution is using a third-party to broker an sharing of information between you and
the competitor
94
Collaborative Benchmarking;
l Carried out collaboratively by groups of companies; either related subsidiaries or
otherwise independent companies collaborating
l Easiest when the collaborating organizations are not in a highly competitive industry;
such as education or healthcare

l Still possible in more competitive industries.
l Use standard benchmarking process
95
Best Practices Benchmarking;

l Is used to identifying and analyze world-class performance. This form of
benchmarking is used most when a company needs to go outside of its own industry
l The rational is that customer satisfaction is driven by critical-to-quality measures that
are similar regardless of the industry

l Challenge is to both identify the best-of-breed company and to deconstruct its
processes
96
There is a wealth of benchmarking information already gathered and available. Some

available sources are;
1. American Productivity & Quality Center (APQC)
2. APQC Knowledge Sharing Network
3. The Benchmarking Exchange
4. Best Practices, LLC & Global Benchmarking Council
97
Module 3 – Business Measures
In order to both understand where an organization is and how it is progressing, on

needs quantifiable metrics to baseline and to track progress.
l  The selected metrics must map back to the organizational drivers and will measure
process and financial performance
l  These metrics must be relevant to the problem or goal in mind.
l  All roads lead back to the concept of the Cost of Quality
l  There are widely-used financial metrics as well as balanced scorecards
l  Six Sigma also provides us with a set of key metrics
98
l  Key performance indicators (KPIs) are metrics monitored to ensure that a strategic
plan is being followed
l  They show the degree to which the goals have been achieved
l  Should be tied directly to strategic goals
l  Should relate to the customer needs and wants, whether those customers are
internal or external
l  Should be relatively easy to obtain.
l  Should make it possible to identify KPI-impacting waste and inefficiency
99
l  Product Performance Metrics

l  Supplies data about the features and functions of products
l  Data should be objective and should include all of the product’s features and
functions
l  Performance on quality improvement is a metric used when a number of different

strategic plans are run simultaneously
l  It indicates the number of projects completed and ongoing, the financial results,
and staff involved on each project

l  The financial results include the amounts gained, the amounts invested, and the
return on investment.
l  This metric enables a business to compare projects that may be quite different.
100
l  Competitive quality metrics focus on the aspects of product performance that
influence sales
l  These include the speed of transaction the accuracy of order fulfillment, as well as
the extent to which the delivered product meets customer expectations both for the
product itself and the transaction
l  The cost of poor quality metric is the gap between current costs and the costs that
would be incurred without any waste, error, or inefficiency
l  This can be hard to determine but workable estimates are possible
101
l  Performance of business processes metrics have only recently been refined to the
point that they are useful as KPIs
l  Business processes can so large that they are difficult to measure, so it is necessary
to deconstruct the process
l  Focus on measuring and establishing standards for cycle time, errors, and other
relevant values
l  Product and process deficiency can also be difficult to measure
l  Best represented as one would cost of poor quality
l  Important to measure as they contribute to the cost of poor quality
102
Key Financial Metrics;

l  Revenue growth
l  Market share
l  Margin
l  Cost of quality is a measure of cost required to create a product or service that
meets the customer's quality requirements
l  While higher quality usually means higher cost, continuous attention to the specific
factors that influence quality may result in lower costs without the sacrifice of quality
103
Key Financial Metrics;

Return on Investment (ROI) = (Net Profit/ Investment) × 100
l 
Return on Assets (ROA) = Net Income /Average Total Assets

l 
Net Present Value (NPV) = Each cash inflow/outflow is discounted back to its present
l 
value (PV). Then they are summed to give the NPV.

Where t is the time of the cashflow, i is the discount rate
Rt is the net cashflow at time
Internal Rate of Return (IRR) - the annualized effective compounded rate of return
l 
104
Key KPI → Detailed Metric → Activity → Process

→ Detailed Metric → Activity → Process
1.  An Activity is an action that has one or more processes associated to it; such as a
customer call received at a call center
2.  A process is a specific, repetitive, and systematic set of steps to be followed to
produce a specific value-added outcome; such as signing up a new customer for
cable service. Processes have inputs, processing steps, and outputs
105
Selecting a Key Business Measure or Key Performance Indicator (KPI);
Only focus on one key business measure or KPI

l 
The selected measure or KPI should tie in directly with the organization's strategic
l 
objective
Narrow in on the greatest opportunity for improvement
l 
Determine how success will be measured

l 
Break down to an actionable level of detail

l 
106
Several key Business Measures, Metrics, or KPIs fall into the following overall
categories;
Critical-to-cost
l 
Critical-to-schedule
l 
Critical-to-quality
l 
107
Critical-to-cost;
l  Identifies areas of a process that significantly increase the expense
l  Critical-to-cost metrics should include not only the typical cost of a task, but also the
increased cost of errors incurred in the performance of this task
l  If a lag time exists in a process, the critical-to-cost metrics should include the cost of
keeping inventory and WIP
l  The effects of errors on cost tend to multiply as the product moves farther down the
path
l  The amount of money required to align a product or service with quality baselines is
known as the cost of quality
108
Critical-to-schedule;
l Cycle time is the most common critical-to-schedule metric
l Cycle time is the duration required for the completion of a defined process
l Improvement of critical-to-schedule issues begins with distinguishing between
process steps that add value and process steps that do not add value
l Use process efficiency and velocity numbers to assess value added relative to cycle
time
109
Critical-to-schedule);
l In most Six Sigma projects, cycle time is considered secondary to metrics related to
quality or cost. However, it is a primary focus in Lean projects
l Focusing exclusively on reducing cycle time is likely to compromise quality
l It can be useful to baseline quality and cost metrics and then work to reduce cycle
time
110
Critical-to-quality;
l  A common critical-to-quality metrics is yield, or the amount of completed product
divided by the amount of product that began the process
l  The difference between perfection and reality is known as the scrap rate
l  While useful, it does not indicate where in the process errors occurred
l  Yield does not distinguish those pieces of scrap that can still be salvaged
l  Yield is noted as a decimal, where 1 would equal 100%
l  When multiple steps in a process are considered, Six Sigma teams use rolled
throughput yield, which measures the expected quality level after several steps
111
Balanced Scorecard;
Many Six Sigma professionals advocate the use of balanced scorecard metrics as a
method for ensuring that the project meets both customer and business needs.
The balanced scorecard approach includes;
Financial and non-financial metrics,
l 
Lagging and leading measures

l 
Across the following four areas:

l 
l  financial,
l  customer,
l  internal processes,
l  and employee learning and growth.
112
End of Module 3
l  Impact on stakeholders
l  Benchmarking
l  Business measures
l  Performance measures
l  Financial measures
113
Module 4 – Team Management
114
Module 4 – Topics
Outline
1.Team formation
2.Team facilitation
3.Team dynamics
4.Team Training
115
Module 4 – Team Formation
l  Cross-functional teams composed people with the skills needed to deliver the value
desired that are drawn from more than one department or functional area
l  As traditional organizations create barriers and rivalries between departments by
forcing department heads to play a 'zero-sum' budget game, these barriers and
rivalries can contaminate the cross-functional team
l  Another risk, is team members being pulled away to work on departmental activities
l  Process improvement teams focus on improving key characteristics of a process,
such a quality, cost, cycle time, etc. The focus is on the entire process
l  Process improvement teams can work on incremental changes or breakthrough
changes
l  Process improvement teams must be chartered and authorized to pursue process
improvement
l  They are usually cross-functional
116
l  Work groups focus on improvement within a given work area
l  The work area and team members are usually contained within a single department
or unit
l  Team members are usually at the same level and usually report to one manager
l  The underlying philosophy is that all workers have an important contribution to make
to the quality effort
l  An example of a work group is the quality circle
l  Quality circles work to continuously improve those processes under their direct
control
117
l  Self-directed teams usually have a broader, more on-going mission involving day-to-
day operations.
l  These teams are given some of the responsibilities that are usually reserved for
management. At the very least this includes the authority to plan and schedule their
own work, safety, maintenance and quality
l  Properly executed, the result is a leaner, more efficient organization, improved
employee morale and productivity, as well as better quality
l  Keys to success include;
l  Communication
l  Ongoing training
l  Trust and empowerment
l  Team-building
l  Feedback
118
l Virtual Teams are made up of members in different locations

l Use teleconferencing or Webex to meet and email and repositories to share
information
l Used when expertise is geographically separated or off-shored
l While challenging to manage it is quite possible to do so
119
Constraints that impact team type and management include;

l 
l  Geography and Time zones
l  Technology availability
l  Staff schedules
l  Management style and ideology
120
Team Roles
Facilitator
l  Ensures that all team members have the opportunity to provide input, that issues are
openly discussed
l  Assists the Teal Leader in keeping the team on-track
l  Summarizes progress
l  Provides methods for reaching decisions
l  Mitigate non-productive behavior and conflict-resolution
Scribe/Recorder
l  Records and publishes meeting minutes and action-items
l  Use visual aids as needed to record discussion points
121
Team Roles
Coach
l  Assists Team Leader and Facilitator in moving the team towards its goals
l  Helps provide resources for completion of action-items
Team Member
l  Participates in meetings
l  Communicate ideas and expertise
l  Listens with an open-mind to all ideas
l  Completes assigned action-items
122
Team member selection criteria
l  There are three main types of team members:

1.  Regular team members – Attend all meetings and participate in all team
activities.
2.  Ad hoc team members – Participate only when their expertise is required
3.  Resource team members – These team members are sources of
information, coaching assistance or resources
l  Match talents to specific needs and ensure that the key skills necessary for the
project are found on the team
l  Ensure buy-in, or at least openess to the improvement goal(s)
l  Ensure team member availability
l  Ensure the team as a whole has the authority to conduct the project
123
Team success factors

l Management support – proactive, tangible, consistent, and congruent management
support is critical to team success

l Clear goals – are they SMART (Specific, Measurable, Actionable, Relevant, and
Time-bound)
l Ground rules – Safety, meeting attendance, project involvement, escalation paths,
etc.
l Timelines and Time boxing
l Skill sets
l Team member commitment
l Experienced team leadership
l Adequate training
l Adequate resources
124
Module 4 – Team Facilitation
Motivational techniques
l Ensure that every team member feels part of the team and the project and feels they
are a significant contributor.

l Involve everyone in the decision making process.
l Acknowledge and reward all achievements
l Make sure their pay and perks are appropriate for the efforts they put in
l Allow social interaction at the workplace.
l Create a safe congenial work environment
l Organize occasional outings, dinners and accolades within the team
125
Motivational techniques
l Celebrate what has been accomplished
l Organize regular training sessions
l In the context of their expertise, give each team member suitable duties, roles, a
title, and some authority over their assigned work

l Make sure goals are achievable
l Occasionally, hand out tasks that challenge their expertise and creativity
l Establish team level performance metrics that tie back to corporate objectives
l As far as possible, use consensus to arrive at crucial decisions
l  Brainstorm all issues vital to the success of the team

l  While brainstorming ensure that team creativity isn’t limited
126
Demotivators
l Poor Communications
l Ignoring the achievements and accomplishments of the team along with the
individual achievements of the team members

l No Follow-Through
l Autocratic Behavior
l Favoritism
l Lack of Cross-Training
l Petty politics
l Unnecessary bureaucracy
l Lack of feedback
l Lack of direction
l Negative behavior unchecked
127
Team Stages and Dynamics
l  There are four stages of team development; Forming, Storming, Norming, and
Performing
l  Some authors add the Adjourning stage when the team is disbanded
l  Knowledge of these stages and strategies for moving through these stages help
team members to promote more effective collaborative processes
128
Team Stage 1; Forming

l  Definition: Stage 1 teams are generally new teams that are learning how to work
together
l  Characteristics of stage 1 teams: Members tend to be tentative and polite and to
have little conflict

l  Critical skills and activities: Stage 1 teams need to identify their purpose, develop
group norms, identify group processes, define roles, build relationships and trust
l  Role of facilitator/leader: Stage 1 teams usually need a strong leader who can
help the team go through its forming activities
129
Team Stage 2: Storming

l  Definition: Stage 2 teams have moved past the early forming stages and are now
encountering some disagreements and/or conflict. This is natural, but teams need to
find effective ways to handle conflict before they can move on to stage 3
l  Group characteristics: Members of stage 2 teams tend to exhibit increased
conflict, less conformity and “jockeying” for power.

l  Critical skills and activities: Stage 2 teams need to learn how to resolve conflict;
clarify their roles, power, and structure; and build consensus through re-visiting
purpose
l  Role of leader(s): Stage 2 teams need leaders and other team members who are
willing to identify issues and resolve conflict
130
During the Storming stage team members:

l Realize that the task is more difficult than they imagined
l Have fluctuations in attitude about chances of success
l May be resistant to the task
l And have poor collaboration
Questions to ask:
l Do we have common goals and objectives?
l Do we agree on roles and responsibilities?
l Do our task, communication, and decision systems work?
l Do we have adequate interpersonal skills?
131
During the Storming stage:

l Separate problem issues from people issues
l Be soft on people, hard on problem
l Look for underlying needs, goals of each party rather than specific solutions
l State your views in clear non-judgmental language.
l Clarify the core issues
l Listen carefully to each person’s point of view
l Check understanding by restating the core issues
132
Storming stage – Five Responses to Conflict

1. Avoidance - the least cooperative and assertive way to resolve a conflict, though ok
if the issue is insignificant
2. Accommodation - can be a valuable tool in conflict resolution, as long as it does
not engender resentment
3. Competition - Can be a great way to settle disputes and generate excellent work as
long as it doesn't get out of hand
4. Compromise - useful response to conflict when maintaining team harmony is more
important than coming up with the best possible solution
5. Collaboration - an effective style of conflict resolution when both parties have good
points. Also is appropriate when members of a team have different areas of
expertise, and so it is a good idea to combine their perspectives
133
Team Stage 3: Norming

l  Definition: Stage 3 teams have successfully moved out of the storming stage and
are ready to move to a higher level of communication and problem-solving
l  Group characteristics: Members of stage 3 teams demonstrate an improved
ability to complete tasks, solve problems, resolve conflict

l  Critical skills and activities: Stage 3 teams need to learn to engage in more
sophisticated problem-solving and decision-making, continue the use of effective

strategies for conflict resolution and take greater levels of responsibility for their roles
l  Role of leader(s): In stage 3, leaders become less directive, team members feel
empowered, and multiple leaders emerge
134
Team Stage 4: Performing

l  Definition: Stage 4 teams are at the highest level of performance and can process
their strengths and weaknesses while accomplishing their goals
l  Group characteristics: In stage 4, the team takes a flexible approach to roles and
structures depending on the task at hand. The team is able to evaluate its
effectiveness and views conflict is viewed as an opportunity. Stage 4 teams tend to
be energetic, creative, and fun!
l  Critical skills and activities: Stage 4 teams need to hold high expectations for their
performance. They often use sub-groups as well as the large group for decision-
making and task completion. Teams also recognize the need to ensure that all
members are in agreement with the role and purpose of sub-groups
l  Role of Leader: In a stage 4 team, it’s often difficult to identify the leader, because
everyone is sharing in leadership
135
Communication
l  Effective Communication is key to a successful Six Sigma project.

l  Communications is conducted both formally and informally
l  Effective communication involves understand the characteristics of both
formal and informal communication
l  Formal communication is the flow of communication within the chain of
command
l  Informal communication is all other communication within the organization
136
Top-Down Communication

l  Flows from higher to lower levels
l  Key aspect—subordinates react most effectively to those matters judged to
be of the greatest interest to the boss

l  Selective screening is a problem
l  Example forms: job instructions, memos, policies, procedures, manuals, etc.
137
Bottom-Up Communication

l  Flows from lower to higher levels
l  Most ineffective of the three channels
l  Employees need opportunities to be:
l  Heard
l  Anonymous
l  Example devices: suggestion boxes, group meetings, participative decision

making, grievance procedures, etc
138
Horizontal Communication

l Flows from one level to an equal level
l Necessary for coordination of diverse organizational functions
l Most effective of the three channels
l Example devices: Internet, corporate intranets
139
Informal Communication
l  Communications within organizations do not necessarily follow the formal

pathways
l  Most organizations have extensive networks of informal communications
l  Since they are ingrained into organizational life, you should use them to
benefit your Six Sigma initiatives
l  Elements of informal channels are:
l  Grapevine—75% accurate
l  Management by wandering around
l  Rumor—unverified belief in general circulation
140
l  Interpersonal barriers which include problems with emotions and perceptions
held by employees
l  Selecting the wrong channel for sending a message
l  Semantics
l  Sending inconsistent cues between verbal and nonverbal
141
l  Organizational barriers

l  Status and power differences between lower and higher levels
l  Differences across departments of needs and goals
l  The communication flow may not fit the group's or organization's task
l  Formal channels may not be available for upward, downward, and
horizontal communications
142
l Every Six Sigma project should include a communications plan

l The communications plan should contain
l  Stakeholder communications requirements
l  Information to be communicated, including format, content, frequency, and level of
detail
l  Who will produce the information
l  Escalation process
l The Stakeholder Analysis provides the list of stakeholders and their roles.
l From that can be derived the form of communication and frequency required by
each stakeholder
143
l Don’t bury crucial information

l Don’t be afraid to report bad information
l Short, frequent meetings are often very effective
l Stand-up meetings force people to focus on what they really need to communicate
l Only 7 percent of communication is through the content or words that are spoken,
so pay attention to the non-verbals and tone of voice
144
Geographic location and cultural background affect the complexity of project

communications
l Different working hours
l Language barriers
l Different cultural norms
l Lack of face-to-face communications
145
l Personality type profoundly impacts communications

l Introverts like more private communications, while extroverts like to discuss things in
public
l Intuitive people like to understand the big picture, while sensing people need step-
by-step details
l Thinkers want to know the logic behind decisions, while feeling people want to know
how something affects them personally

l Judging people are driven to meet deadlines while perceiving people need more
help in developing and following plans

Intuitive people like to understand the big picture, while sensing
people need step-by-step details.
Thinkers want to know the logic behind decisions, while feeling
people want to know how something affects them personally.
Judging people are driven to meet deadlines while perceiving
people need more help in developing and following plans
146
Team leadership models
Effective team performance begins with leader’s mental model of the situation and
their determinations as to what needs be done at each of the following steps;
1. Determine if the situation requires Action or just Monitoring
2. Determine if the action need to be at the Internal or External leadership level?
3. Determine if the intervention needs to be a Task, Relational, or an Environmental
intervention
Correctly executing the above steps creates high Performance

l 
147
Internal Leadership Task Functions

l Focus on goals by clarifying and/or getting agreement
l Restructure plans, processes, roles, etc. as needed in order to gain desired results
l Guide the decision-making process so that better results are obtained
l Train members through both formal and informal means
l Assess performance and deal with any issues as necessary
l Delegate and empower
148
Internal Leadership Relationship Functions

l Coach team members
l Use collaborative methods to engage all team members
l Manage conflict constructively and proactively
l Build commitment and esprit de corps through the use of ethical, servant leadership
l Satisfy team members' needs as much as feasibly possible
l Model the behavior you expect from your team members
149
External Leadership Environmental Functions

l Network to increase influence and gather information
l Represent your team in a way that shows them at their best
l Support for your team by gathering resources and recognition for your team, as well
as eliminating impediments to their performance

l Shield the team from environmental distractions
l Share information with the team
150
Module 4 – Team Dynamics
Group behaviors - Overbearing Team Member
l  Alienates people and makes them less likely to share their ideas or fully commit to
the project.
l  When appropriate for a given team member to have authority, do allow that member
some extra power related to their area of expertise

l  However, make sure that this dynamic does not extend into other areas
l  Never let any team member assert themselves without the data to support their
position
l  Do intervene if they continue to dominate in one way or another
l  Can use the nominal group technique
l  Worse case isolate them to work alone on one aspect of the project
151
Group behaviors – Reluctant Team Member
l  There will always be introverted and shy team member who's potential contributions
would be valuable
l  So put into place structures for eliciting their feedback
l  The leader could question each member of the team directly during each meeting
l  Or the shy team member can be given a specific brief, which they are required to
discuss at every meeting

l  But most important, is to give them air space by making sure the more talkative
team members do not take up all the air space.
152
Group behaviors – Feuds between Team Members
l  Feuds are extremely counterproductive and must be rooted out as soon as detected
l  Approaches to resolve the conflict include arbitration, counseling, and peer
mediation
l  Someone outside the team should deal with this, since any intervention by a team
member could be seen as taking sides

l  If the feuding team members are essential to the project and their dispute is
irreconcilable, they should be separated as much as possible

l  The leader should monitor closely and have individual consultations with all parties
concerned on a regular basis
153
Group behaviors – A Team Member feels their opinion is discounted
l  Every team member should feel that his or her insights and ideas are valued
l  Failure to do so will cause the team member to disengage and become alienated
l  Discounting can happen in directly such as when a team member’s suggestions or
ideas are rudely dismissed.

l  Or can happen more subtly, such as when a team member’s contributions are
ignored or passed over without comment

l  It is ok for team members to disagree, however, do foster an environment in which
team members can, in a respectful fashion, indicate why a particular idea won’t work
154
Group behaviors – Attributing Malice to Another Team Member
l  If team members begin to attribute malice to one another, the effect on the team is
poisonous
l  These negative assumptions are symptoms of poor communication
l  Call a meeting and address the nature of the disagreement and 'out' the
assumptions
l  Team members are responsible for explaining the rationale for their actions
l  Team members should, as much as possible, base their actions on information
available to the team as a whole
155
Group behaviors – The Rush to Accomplishment
l  Due to impatience, a team can make mistakes in their rush to accomplishment
l  Be conservative when establishing the project schedule
l  Maintain strict adherence to protocol
l  If you sense a strong hunger for success among the members of the team, then
assign those members some easy tasks to provide that quick hit of accomplishment
156
Team Roles
Team Leader
l  Usually a Black Belt
l  Chairs team meetings and keeps team focused on the goal
l  Monitors progress and communicates status
l  Manages administrative details
l  Establishes action-items for team members and follows-up on them
Sponsor/Authorizing Entity
l  Selects objective and scope
l  Organizes the team
l  Monitors progress via Team Leader's status reports
l  Arranges for resources
157
Group behaviors – Digressions
l  The team leader ensures that team communications remains focused and controlled
l  Every meeting should follow a strict agenda and should be time boxed, even to set
time limits for individual agenda items

l  May want to delegate a team member as the time-keeper during meetings with the
authority to interrupt and bring the meeting back on track

l  Though do allow fruitful conversations to continue
158
Group behaviors – Groupthink
l  Occurs when the desire for group consensus overrides people's common sense
desire to present alternatives, critique a position, or express an unpopular opinion

l  This lack of conflict or opposing viewpoints leads to poor decisions as the
alternatives are not fully analyzed, and not enough information is gathered to make
an informed decision
l  The easiest trap for a team to fall into as it is so subtile; did we all agree because the
date made it a no-brainer, or did we all agree just to agree?
159
Spotting groupthink. Look for;
l  Rationalizing that despite evidence to the contrary, the decision made is the best
one
l  The rest of the team pressures or penalize a dissenter into compliance
l  After a few successes, the team feels like any decision they make is the right one
l  Taking the moral high-ground as a rationale for a decision
l  The team sees outsiders as possessing a different and inferior set of
characteristics from themselves. These perceived negative characteristics are

then used to discredit the opposition
l  Members censor their opinions in order to conform
l  Because no one speaks out, everyone in the group feels the group's decision is
unanimous
160
Avoiding Groupthink
l  Check the fundamental assumptions behind important decisions
l  Validate the decision-making process
l  Evaluating the risks involved in going ahead with the decision
l  Use the following tools
l  Brainstorming
l  Delphi techniques
l  Nominal Group Techniques
161
Meeting management
l  Using and sticking to agendas is key to productive meetings. The agenda should be
published beforehand. However, relevant, fruitful conversation should be allowed to

run its course
l  Starting and finishing on time
l  Use time boxing for agenda items if necessary
l  Make sure everyone has a chance to have their say
l  Requiring pre-work by attendees and make sure any materials to be reviewed are
distributed in sufficient time to be properly reviewed

l  Ensuring that the right people and resources are available for the meeting
l  Always make sure action items are assigned
l  Is there an alternative means of communicating or garnering the information than
holding a meeting? e.g. The status meeting
162
Team Decision-making Methods - Brainstorming
Brainstorming can be used to identify alternatives, obtain a complete list of items and
l 
to solve problems
There are a variety of brainstorming techniques

l 
The common principle of brainstorming is to set aside the restrictive thinking

l 
processes so that many ideas can be generated
A good way to do that is silent brainstorming; which is also a good way to ensure that
l 
the introverts and shy team members have their say
163
Team Decision-making Methods - Brainstorming
Brainstorming can:
l  Break through traditional thinking about a problem
l  Generate new ways of thinking
l  Provide an environment for building on new ideas
l  Reduce the tendency to prematurely discard new ideas
l  Facilitate team building
l  Encourage team problem solving
l  Help prevent groupthink
164
Team Decision-making Methods - Nominal Group Technique (NGT)

A system for ranking non-objective data and is used primarily to create consensus or
agreement in groups
Normally implemented in six stages:
1. Participants are first presented by the session moderator in which an initial
statement of the topic area to be discussed
2. They are then directed to reflect individually on the topic
3. The group moderator asks a participant to state one of the responses he or she has
arrived at
4. The next stage involves consolidation and review of the ideas
5. They are then requested to establish the relative importance that should be
accorded to each of the response ideas
6. The final stage is the compilation of the results
165
Team Decision-making Methods - Nominal Group Technique (NGT)
The analysis of NGT data involves both qualitative and quantitative procedures
requiring four basic steps:
1. Categorization of initial problem statements into problem themes
2. Regrouping of problem themes within conceptual model to form major problem
dimensions
3. Calculation of a score or index reflecting the importance of each problem theme
4. Ranking of problem themes according to their importance index
166
Team Decision-making Methods - Multi-voting

l  AKA: sticking dots, weighted voting, multiple picking-out method (MPM)
l  Narrows a large list of possibilities to a smaller list of the top priorities or to a final
selection
l  Multi-voting is preferable to straight voting because it allows an item that is favored
by all, but not the top choice of any, to rise to the top
167
Team Decision-making Methods – Multi-voting Method

1. Display the list of options
2. Number (or letter) all items
3. Decide how many items must be on the final reduced list
4. Decide also how many choices each member will vote for. (Usually, five)
5. Working individually, each member selects the five items they think are most
important.
6. Then each member ranks the choices in order of priority, with the first choice ranking
highest
7. Each choice is written on a separate paper, with the ranking underlined in the lower
right corner
168
Team Decision-making Methods - Multi-voting

8. Tally votes
9. The easiest way to record votes is for the scribe to write all the individual rankings
next to each choice. For each item, the rankings are totaled next to the individual
rankings
10. If a decision is clear, stop here
11. Otherwise, continue with a brief discussion of the vote. The purpose of the
discussion is to look at dramatic voting differences, such as an item that received
both 5 and 1 ratings, and avoid errors from incorrect information or understandings
about the item.
12. Do not pressure anyone to change their vote
13. Repeat the voting process in steps 4 and 5. If greater decision-making accuracy is
required, this voting may be done by weighting the relative importance of each
choice on a scale of 1 to 10, with 10 being most important.
169
Module 4 – Team Training
Needs assessment
l The first step in the development of a training plan is a training needs assessment
l It provides the background necessary for designing the training program and
preparing the training plan

l The assessment process focuses on three major areas:
1. Process Audit - Are they operating as designed? Are they operated consistently?
Do the measurements show statistical control? The answers to these questions,
along with detailed observations of how the process is operated, are input to the
development of the training plan
170
Needs assessment
2.  Assessment of knowledge, skills and abilities - Identify deficiencies
observed during the process audits related to the employees' skills and
knowledge. Then determine the training needs related required to address the
identified deficiencies
1.  Assessment of employee attitudes - negative employee attitudes indicate
that the employee either questions the wisdom of the proposed changes, or
doubts the sincerity of the leadership. Regardless, it must be addressed by the
training plan
171
Delivery
Adult Learning Theory
l Uses approaches to learning that are problem-based and collaborative rather than
didactic
l Emphasizes greater equality between the teacher and student
l Six principles of adult learning outlined below.
1.  Adults are internally motivated and self-directed

2.  Adults bring life experiences and knowledge to learning experiences
3.  Adults are goal oriented
4.  Adults are relevancy oriented
5.  Adults are practical
6.  Adult learners like to be respected
172
Delivery
Modes of Learning
l The lecture method is used for creating a general understanding of a topic
l The discussion method uses two-way communication between the lecturer and the
trainees to increase learning opportunities

l E-learning encompasses several different types of technology assisted training,
such as distance learning, computer-based training (CBT), or Web-based training

(WBT). Effective at developing procedural knowledge. Can also be effective at
developing or modifying attitudes
l Simulations are designed to mimic the processes, events, and circumstances of the
trainee's job
l On-the-job training (OJT) uses more experienced and skilled employees to train less
skilled and experienced employees
173
Delivery
Modes of Learning
Job Instruction Technique (JIT)
There are four steps in JIT:
1. Prepare - create a written breakdown of the job. Then prepare an instructional plan
2. Present – consists of four activities: tell, show, demonstrate, and explain
3. Try Out – the trainee explains how to do the job, then tries it. When errors are
made, use them as a way for the trainee to learn what not to do and why
4. Follow Up - the trainer checks the trainees' work frequently in order to prevent
incorrect work habits from developing
174
Evaluation
The various techniques to evaluate training include:
l Feedback surveys
l Pre-training and post-training testing
l Observation of trainee performing the work
l Measurements related to task completion times and defect rates
175
End of Module 4
l Team formation
l Team facilitation
l Team dynamics
l Team Training
176
Module 5 – Define Phase – Overview of the Define Phase and
the Voice of the Customer
Module 5 – Define Phase –
Voice of the Customer
Outline
1.  Overview of the Define Phase
2.  What is the Voice of the Customer
3.  Voice of the Customer Process
4.  Customer identification
5.  Customer data
6.  Customer requirements
178
Outline
1.  Overview of the Define Phase
2.  What is the Voice of the Customer
3.  Voice of the Customer Process
4.  Customer identification
5.  Customer data
6.  Customer requirements
179
Module 5 – Define Phase - Overview of Define Phase
l  The Define phase focuses on identifying and articulating a project’s

important characteristics, including identification of the goals, objectives,
and scope of the project
l  The team members and sponsors are identified, as well as the proposed
schedule for the project
l  The desired result of the project is defined
l  The team also identifies the stakeholders, the input/output structure, and
the functions involved.
180
What Is the Voice of the Customer?
l  The term Voice of the Customer (VOC) is used to describe customers’
needs in a process improvement effort and their perceptions of your
product or service.
181
Using the Voice of the Customer
l Understand why the Voice of the Customer (VOC) is critical
l Know how to create a plan for gathering VOC data
l Know both reactive and proactive ways to gather VOC information
l Know how to analyze data through the use of affinity diagrams and Kano
diagrams
l Be able to use a CTQ tree diagram to identify customer requirements and set
specifications for them
182
l  VOC data helps an organization and a project to:
l  Decide what products and services to offer
l  Identify critical features and specifications for those products, process
outputs and services

l  Decide where to focus improvement efforts
l  Get a baseline measure of customer satisfaction to measure improvement
against
l  Identify key drivers of customer satisfaction
183
Why Collect VOC Data
l  Customer requirements change constantly
l  Specifications tend to focus on technical data only
l  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)
l  CTQ ’s can be vague and difficult to define
184
VOC Process
l  Outcomes
l  A list of customers and customer segments
l  Identification of relevant reactive and proactive sources
of data
l  Verbal or numerical data that identify customer needs
l  Defined Critical to Quality requirements (CTQ)
l  Specifications for each CTQ
185
Customer identification
l  Goal
l  Identify your customers
l  Decide what you need to know about their needs
l  Decide when and how you will get this information
186
l  What are the outputs of your process? Who are the customers of that
output?
l  Are there particular groups of customers whose needs are especially
important to your organization and project success?
l  What are the outputs of your process? Who are the customers of that
output?
l  Are there particular groups of customers whose needs are especially
important to your organization and project success?
187
Customer Identification
l  Customer status: Former Customers, Current Customers, Customers of
Competitors, Substitute Customers
l  Where they are in the “customer chain”
l  Internal user
l  Distributor
l  End user
l  Geography
l  Industry, Division or Department
l  Demographics
188
Customer Identification
l  If your customers seem to have similar needs across the board, you
don’t need to divide them into segments
l  If you suspect that different groups will have significantly different
needs, and that these differences will influence how you structure
your process, product, or service, then you need to think in terms of
segments
189
Customer Data
l  Revisit your charter—what is the purpose of your project?
l  How does your purpose relate to customer needs?
l  What do you need to know about the needs of the customers you’ve
identified to make sure your project’s purpose stays on track?
190
Customer Data
For all customers, you should ask questions such as:
1. What is important to you about our process/product/service? (Ask them to rank each
of these needs in order of importance.)
2. What do you think of as a defect?
3. How are we performing on the areas you consider important?
4. What do you like about our product/service?
5. What can we improve about our process/product/service?
What can we do to make your job easier?
6. What specific recommendations would you make to us?
191
Customer Data
l  Reactive Data Collection - Data comes in whether action is taken or not
l  Reactive collection generally gather data on:
l  Current and former customer issues or problems as
communicated by them
l  Current and former customers’ expressed interest in particular
products, process outputs or services as communicated by them

l  Proactive Data Collection – Requires action in order to gather data
192
Customer Data
Typical Reactive Data
l  Customer complaints
l  Problem or service hot lines
l  Technical support calls
l  Customer service calls
l  Claims, credits, contested payments
l  Sales reporting
l  Product return information
l  Warranty claims
l  Web page activity
193
Module – Define Phase –
Customer Data
Typical Proactive Data
l  Interviews
l  Focus groups
l  Surveys
l  Comment cards
l  Data gathering during sales visits or calls
l  Direct customer observation
l  Market research, market monitoring
l  Benchmarking
l  Quality scorecards
194
Customer Data
The last steps in planning your data collection are to decide;
l Specifically how the data will obtained
l Over what time frame the data gathering should take place
l And how will the data be recorded
195
Customer Requirements
l  Goal is to generate a list of key customer needs in their language
l  Summarize the data in a meaningful way
196
Voice of the Customer- Customer Requirements
Quality Function Deployment (QFD)
l  Is a process for translating customer requirements into appropriate company
requirements at each stage from research and product development to
engineering and manufacturing to marketing/sales and distribution
l  Understanding the VOC is key to successful QFD!!!
197
QFD was developed in Japan in the late 1960s by Professors Yoji Akao and
Shigeru Mizuno.
They aimed at developing a quality assurance method that would design
customer satisfaction into a product before it was manufactured. Prior quality
control methods like Ishikawa were primarily aimed at fixing a problem during or
after manufacturing.
198
QFD's Key Rationale:
1 Customers are our number one concern. Satisfied customers keep us
in business. Therefore, we must have an excellent understanding of
their needs.
2 Proactive product development is better than reactive product
development. QFD can help a company move toward a more proactive
approach.
3 Quality is a responsibility of everyone in the organization. QFD is a
team methodology which encourages a broader employee involvement
and focus.
4 The QFD methodology helps an organization determine the most
effective applications for many engineering and analytical tools such as:
Design of Experiments, Failure Analysis and Statistical Process Control.
199
QFD's Recognizes:
1.The Impact of Needs on the Customer
2.That Customer Needs Change With Time
3.The impact of Communication of Customer Wants Throughout the
organization
200
Where does QFD fit?
Quality Improvement Tools

QFD •  Taguchi Methods
•  FMEA’s • Statisical Process
- Planning Tool •  Fault Tree Analysis Control (SPC)
- Customer Driven •  Cause-Effect Diagram
•  Pareto
- Proactive •  Benchmarking
• Check Sheets
- Cross Functional Teams •  Pugh Concept Selection - Monitor
•  Etc
- Continuous Improvement
- Hold the “Gains”
201
QFD has four distinct phases:
1. Organization phase - select the product or service to be improved, form
the team, and define the focus of the QFD study
2. Descriptive phase - define the product or service from several different
directions
3. Breakthrough phase - select areas for improvement and define
improvement strategies
4. Implementation phase - define the new product and how it will be
manufactured
202
QFD Flow
Customer Requirements
Converted to
Company Measures
Converted to
Part Characteristics (Design)
Converted to
Manufacturing Process
Converted to
Production Requirements
203
When should QFD be used?
1 Customers are complaining or aren’t satisfied with your product or
service.
2 Market share has been consistently declining.
3 Extended development time due to excessive redesign, problem
solving, or fire fighting.
4 Lack of a true customer focus in your product development process.
5 Poor communications between departments or functions.
(Over-the -wall product development).
6 Lack of efficient and/or effective teamwork.
204
When should QFD be used?
1. Complex Product Development Initiatives
1. Communications Flow Down Difficult
2. Expectations Get Lost
2. New Product Initiatives / Inventions
1. Lack of Structure or Logic to the
Allocation of Development Resources.
3. Large Complex or Global Teams
1. Lack of Efficient And/or Effective
Processes
2. Teamwork Issues
4. Extended Product Development Times
1. Excessive Redesign
2. Changing Team
3. Problem Solving, or Fire Fighting.
205
Competitive Advantages from QFD;
l Fewer and Earlier Changes
l Shorter Development Time
l Fewer Start-up Problems
l Lower Start-up Cost

l Warranty Reduction
Knowledge Transfer
l 
Customer Satisfaction
l 
206
KANO MODEL
(Of Quality/Features)
207
Kano Model
l  Basic Quality – Is the level of quality or features that a
product is expected to have. It is in the dissatisfaction

region because in of itself, it isn't enough to satisfy the
customer
l  Expected Quality - Represents those expectations which
customers explicitly consider. The better it is, the more

satisfied the customer
l  Exciting Quality - Exciting quality represents unexpected
quality items
l  Competitive Pressure - constantly raise customer
expectations
208
Six Sigma Paradox
l  Six Sigma focuses on basic and expected quality
l  Excessive attention to Sigma can detract from creative
activities if not handled carefully

l  Long-term success requires that the organization innovate
l  Innovation is the result of creative activity, not analysis,
209
Voice of Translating
the customer for action
WHAT WHAT HOW
The items contained in this list are

usually very general, vague and
difficult to implement directly - they
require further detailed definition.
One such item might be good ride
which has a wide variety of meanings
to different people.
This is a highly desirable product
feature, but is not directly actionable.
Module 3 210
COMPLEX UNTANGLING
RELATIONSHIPS THE WEB WITH A MATRIX
HOW
WHAT HOW
WHAT
RELATIONSHIPS
Module 3 211
House of Quality is a
complex matrix diagram
extensively used in QFD
212
Module 5
3 – Define Phase –
House of Quality - What to look for
l  Blank rows - Unfulfilled customer wants
l  Blank columns - Unnecessary requirements. Incomplete customer
wants
l  Rows or columns with only weak relationships - Banking a lot on
“maybe’s”
l  Unmeasurable “HOWs” - Difficult to do what can’t be measured
l  Too many relationships - More than 50% relationships make it hard
to prioritize
l  Opportunities to excel
l  Negative correlations -Try to eliminate. Trade off if needed
l  Conflicting competitive assessments
213
House of Quality – Things to ask
•  How was the voice of the customer determined?
•  How were the design requirements (etc) determined? Challenge the usual in-
house standards.
•  How do we compare to our competition?
•  What opportunities can we identify to gain a competitive edge?
•  What further information do we need? How can we get it?
•  How can we proceed with what we have?
•  What trade-off decisions are needed?
214
House of Quality – Things to remember
•  The process may look simple, but requires effort.

•  Many of the entries look obvious - after they are written down.
•  If there aren’t some “tough spots” the first time, it probably isn’t being done
right!
•  Focus on the end-user customer.
•  Charts are not the objective.
•  Charts are the means of achieving the objective.
•  Find reasons to succeed, not excuses for failure.
215
QFD - Traps
l  QFD on everything
l  Inadequate priorities
l  Lack of teamwork
l  Wrong participants
l  Turf issues
l  Lack of team skills
l  Lack of support
l  Too much “chart focus”
l  Handling trade-offs
l  Too much internal focus
l  “Stuck on tradition”
l  “Hurry up and get done”
l  Failure to integrate QFD
216
The Supplier, Inputs, Process, Output, Customer (SIPOC) model;

Provides a comprehensive look at a process.
l 
SIPOC is used during the define stage of DMAIC to identify each top-level process,
l 
as well as its stakeholders

SIPOC is initiated with the creation of a flowchart or process map
l 
Typically, the first category to be identified is the outputs.

l 
217
Critical to X (CTx) is a general term that refers to methods used to optimize a

key measurable characteristic that is 'Critical To' the performance or customer
expectation
l  Critical to Quality
l  Critical to Cost
l  Critical to Delivery
l  Critical to Process
l  Critical to Safety
218
l  An excellent toll for Critical to X analysis is a CTQ Tree

l  Enables us to logically link the customer requirements to process
performance
l  Enables us to identify the valid metrics we need to generate from our
processes to enable us to meet the customer requirements
l  Starts with the customer requirements for the X in question
l  Lists the factors critical to the X (CTxs), drilling down to a meaningful level
l  Also helps us to identify the projects that we need to work on and which
ones have a clear linkage to the customer
l  Levels are:
1. VOC
2. Drivers
3. CTQ
219
Example CTQ Tree
©Simcrest
220
SIPOC;
The list of Customers from your SIPOC are the starting point for the Voice of the
l 
Customer analysis
The major process steps (macro map) from your SIPOC are the overview for later
l 
detailed process mapping

The Inputs, Process Steps, and Outputs on your SIPOC generates ideas for what can
l 
and should be measured, which feeds the Data Collection Plan in the Measure phase
The SIPOC contains clues about potential root causes that drive performance
l 
221
SIPOC;
Suppliers are those persons who contribute inputs to the process
l 
Inputs are defined as all of the knowledge, resources, and information required to
l 
produce the desired output

Process is defined as any task that translates inputs into outputs
l 
Outputs are the deliverables, or the products of the process

l 
Customers are all of those parties that receive the deliverables (outputs)
l 
Module 2 222
223
SIPOC Map Construction
1. Name the process
2. Clarify the start and the stop (boundaries) of the process
3. List key outputs and customers
4. List key inputs and suppliers
5. Identify, name, and order the major process steps (guideline: 5 – 7 maximum)
224
End of Module 5
What is the Voice of the Customer

l 
Voice of the Customer Process

l 
l 
Customer data
l 
Customer requirements
l 
225
Module 6 – Define Phase – Business Case & Project Charter
Module 6 – Define Phase – Business Case, Project Charter
and Project Management Tools
Outline
1.  Project Selection
2.  Business Case
3.  Problem Statement
4.  Project Scope
5.  Goals and Objectives
6.  Project Performance Measures
7.  Project Charter Review
8.  Project Management Tools
227
Module 6 – Define Phase – Project Selection
Three reasons to take on a project;

1. Make Money
2. Save Money
3. Because the government told us to
228
For the first two reasons, there are three ways to decide on a specific project;
1. An 'in your face' problem or opportunity
2. Brainstorming based on individual or organization knowledge of possible
areas for improvement or opportunities to pursue
3. Structure project selection approach based on data impacting the bottom
line metrics
229
There are various approaches to selecting a project that we have already

touched on. Even if you started with an 'in your face' or brainstorming project
selection process, it is highly recommended that you validate the selection
using a structured approach.
230
The structured approach.uses tools and data such as;

l Customer Feedback/Complaint Data
l Line Graph
l Run Charts
l Control Charts
l Process Flowcharting
l Layout Diagramming
l Process Watch
l Voice of Customer – Interviewing
l Stratification using Bar, Pie, Radar Charts, Pareto Analysis
231
Module 2 –Define Phase – Project Selection
Project Selection Process Deliverables;
Business Case – The Business Case is a high level description of the area of
concern. It answers two primary questions; what is the business rational for
considering the project and, what is our proposed focus for the improvement effort?
Project Charter – The Project Charter is a more detailed version of the Business
Case. It further focuses the improvement effort. It has two primary sections; basic
project information and, simple project performance metrics.
Cost Benefits Analysis (CBA) – The CBA is a comprehensive financial evaluation of

the project. It is concerned with the detail of the benefits in regard to cost &
revenue impact that is expected to be realized as a result of the project (usually
folded into the business case)
232
Module 6 – Define Phase – Business Case & Project
Charter
Responsible Frequency
Party Resources of Update
Champion/
Business Business Unit
Executive Sponsor N/A
Case Members
Project Black or Green Champion &

Ongoing
Charter Belt(s) Master Black Belt
Cost
Business Champion & Ongoing /
Benefits
Unit Financial Rep Black or Green Belt(s) D,M,A,I,C
Analysis
233
Module 6 – Define Phase – Business Case
The Business Case communicates the need for the project in terms of
meeting business objectives
It is comprised of:
The problem statement & Scope
l 
The product or service in question for external or internal customer

l 
Primary metric
l 
Baseline performance of primary metric

l 
Gap in baseline performance of the primary metric from business objective

l 
Cost-Benefit Analysis
l 
234
Module 6 – Define Phase – Business Case
Cost Benefit Analysis;

Benefits should be calculated on the baseline key business process performance
l 
relating to a business measure or KPI(s)

The Project Measure (Primary Metric) has to directly link between the process and its
l 
KPI’s
Goals have to be defined realistically
l 
Benefits should be annualized

l 
Benefits should be measured in accordance with Generally Accepted Accounting

l 
Principles (GAAP)
235
Module 6 – Define Phase – Project Charter
The Project Charter expands on the Business Case by clarifying the project
focus and performance measures. It is composed of;
Problem Statement – What is the defect or error in the process; and what
l 
are the consequences

l Objective Statement – What is the target process improvement
l Scope – Articulates the boundaries of the project
l Primary Metric – The actual measurement of the defect or error in the
process
l Secondary Metric(s) – Measures of potential consequences (+ / -) as a
result of changes in the process

l Charts – Of the Primary and Secondary Metrics over a period of time
l Standard Project Information – Key stakeholders, start & end dates, etc.
Module 4 236
Module 6 – Define Phase – Project Charter
A good Project Charter;

Will establish clear deliverables, so its success or failure can be measured
l 
Will direct employee efforts to the right areas because it will identify the key
l 
variables that affect performance at all levels

Will ensure that a proposed project does not interfere with other work
l 
performed in the company

Will ensure that the planned efforts are directed to the most important
l 
aspects of performance
Is a living document. Expect to revise it during the Measure phase
l 
237
Module 6 – Define Phase – Problem Statement
Problem Statement
l  A problem is the unsatisfactory result of a job or process

l  So what? What is the impact on the ‘customer’?
l  What problem or gap are you addressing?

l  What impact will closing the gap have on the customer?
l  How will you know things are better?

l  It should not include theories about solutions
238
Problem Statement
Use the 5W’s +1H to develop your problem statement
l  What are the symptoms? What happens when the problem appears?
l  Where do symptoms appear? Where don’t they appear?
l  When do symptoms appear? Where don’t they appear?
l  Who is involved? Who isn’t?
l  Why deal with it now?
l  How do we think it happened? How widespread is the problem?
239
Problem Statements
l  A poor problem statement
–  Product returns are too high and will be reduced by analysing first
and second level Pareto charts
l  A better problem statement

–  Product returns are 5% of sales resulting in a business unit negative
profit impact of $5M and reduced market share of 10%
240
For any process, variation is the main reason for poor performance, as it is;
•  The enemy of certainty
•  The enemy of customer satisfaction
•  Drives the unknown
•  Adds to customer (and employee) disbelief
•  Adds to lack of confidence in the ability of processes
•  Increases risk that a result will not meet expectations
•  Variation is a driver of defects
So the problem statement will very often point us a uncovering the reason for
variation
241
Module 6 – Define Phase – Project Scope
Project Scope
l  A project charter will include a clear description of the project scope
l  For a number of reasons, it is better for projects to have a limited scope
l  In general, Six Sigma projects should take no more than four months
l  For setting scope, ask “what represents a significant improvement?”
l  For example; X amount of an increase in yield or X amount of defect
reduction
l  Use Framing Tools to establish the initial scope; such as process maps,
Pareto charts, and other quality tools
242
Module 6 – Define Phase – Project Goals & Objectives
Project Goals and Objectives
l  Should address the problem statement
l  Quantify performance improvement
l  Should also identify timing
•  Needs to be Specific, Measurable, Actionable, Relevant, and Time-

bound
l  A poor objective

l  Reduce product returns by implementing performance measures and
objectives
l  A better objective

l  Reduce product returns of product line abc from 5% to 2.5% by the year
end, to reduce overall returns by 1% and saving $1M

243
Module 6 – Define Phase – Project Performance Measures
Establishing the Primary Metric:

l  The Primary Metric is a quantified measure of the defect or primary issue
l  Should be consistent with the problem statement and objectives
l  Links to the KPI or Key Business Measure
l  We can have only One Primary Metric. Recall the equation Y = f (X); well
once your defect is located then Y will be your defect. Your primary metric
will measure it
l  Serves as the indicator of project success
244
Primary Metric
l  Needs to include 3 series, plotted as a function of time:
• Baseline performance (average over past 12 months)

• Actual performance
• Objective / target performance
l  Examples:
• Rolled throughput yield (RTY)

• Process Sigma Level or Ppk
• Defects per unit (DPU)
245
Secondary Metrics:
l  Secondary Metrics measure potential changes that may occur as a result of
changes in the Primary Metric
l  Measures positive & negative consequences resulting from changes in the
process
l  Secondary Metric(s) drive the right behaviour
l  Can have multiple Secondary Metrics
l  Can be “Drivers” or “Riders” – i.e. Vital X’s impacting the project (Primary
Metric) or “Good Consequential Metrics”
246
Module 6 – Define Phase – Project Charter Review
Project Charter Review

l  The project charter is a living document that must be regularly reviewed and
updated during the course of the project
l  This is necessary as the charter is the high-level road map for the project
and must always point us to the destination
247
Module 6 – Define Phase – Project Management Tools
A Gantt chart shows the relationships among the project tasks, along with
time constraints. The horizontal axis of a Gantt chart shows the units of time.
The vertical axis shows the activities to be completed. Bars show the
estimated start time and duration of the various activities. The critical path will
be highlighted
248
PERT & CPM are used for project scheduling.

Project scheduling by PERT-CPM consists of four basic phases:
l 
l  Planning
l  Scheduling
l  Improvement
l  Controlling
A network (or arrow) diagram is constructed with each activity being
l 
represented by an arrow and graphically displays precedence
249
PERT Chart
250
Finding the Critical Path;

There are two time-values of interest for each event: its earliest time of
l 
completion and its latest time of completion

Slack time is the difference between the latest and earliest times for a given
l 
event. Thus, assuming everything else remains on schedule

The slack for an event indicates how much delay in reaching the event can
l 
be tolerated without delaying the project completion

Activities with slack times of zero are said to lie on the critical path for the
l 
project. A critical path for a project is defined as a path through the network
such that the activities on this path have zero slack
251
Work Breakdown Structure (WBS);

A process for defining the final and intermediate products of a project and
l 
their relationships
Goal is to reduce complex problems to a collection of discrete and
l 
manageable tasks
The WBS is represented as a tree diagram
l 
In the Define phase, WBSs are combined with Pareto analysis to organize
l 
problems before solutions are applied

In the Analyze phase, WBSs are used to organize all of the issues and
l 
complaints to be handled during the Improve phase
252
Toll-gate Review:
l  An evaluation point in a Six Sigma project
l  Facilitated by a Black Belt
l  All of the team members gather and discuss the success or failure of the
tasks just completed
l  Offers the opportunity to consider whether the objectives and goals have
been accomplished
l  Typically occurs at the end of every phase in the DMAIC or DMADV
process
l  Involve the use of check sheets, project deliverables documents, and
milestone lists
l  Should run according to an established structure and should be a brutally
honest assessment
253
Work Breakdown Structure (WBS);
254
RACI
l  Used to identify functional areas, key activities and ensure no ambiguities
exist in regards involvement
l  Stands for Responsible, Accountable, Consulted, and Informed
l  Responsible is the person or group responsible for performing the activity
in question
l  Accountable is the person or group with the authority or answerable for
the activity or decision in question “the single neck to choke'
l  Consulted is the person or group who has input into the activity or decision
l  Informed is the person or group who need only be informed when the
activity or decision occurred
255
RACI Matrix Example
© ASQ
256
RACI Matrix creation guidelines

l  Place accountability (A) and responsibility (R) at the level closest to the
action
l  There can only be one accountability (A) per activity
l  Authority must accompany accountability
l  Minimise the number of consults (C) and informs (I)
l  All roles and responsibilities must be documented and communicated
257
End of Module 6
l  Project Selection
l  Business Case

l  Problem Statement
l  Project Scope
l  Goals and Objectives
l  Project Performance Measures
l  Project Charter Review
l  Project Management Tools
258
Module 7 – Define Phase – Analytical Tools
Outline
1.  Affinity diagrams,
2.  Interrelationship diagrams
3.  Tree diagrams
4.  Prioritization Matrices
5.  Matrix diagrams,
6.  Process Decision Program Charts (PDPC)
7.  Activity Network diagrams
8.  Define Phase Summary & Review Questions
260
Affinity Diagram
•  Created in the 1960s by Japanese anthropologist Jiro Kawakita.
•  Tool for assimilating and understanding large amounts of information
•  Draw out common themes from a large amount of information
•  Discover all the hidden linkages
261
How to Create an Affinity Diagram – Silent Brainstorming

l  Gather a group together
l  Individual silent brainstorming
l  Record each idea with a marking pen on a separate sticky note or card.
l  Need a complete statements
l  Each participant reads and randomly posts their ideas on the wall
l  Other participants can ask for clarification when an idea is read
l  Do not place the notes in any order. Do not try to determine categories or
headings in advance
l  After all ideas are posted begin Silent Consensus
262
How to Create an Affinity Diagram – Silent Consensus

l  The entire team gathers around the posted notes
l  No talking during this step
l  Look for ideas that seem to be related in some way
l  Move the Post-Its and place them side by side
l  Repeat until all notes are grouped
l  Okay to have “loners” that don’t seem to fit a group
l  It’s all right to move a note someone else has already moved
l  If a note seems to belong in two groups, make a second note
263
How To Create an Affinity Diagram - Clarification Step
l Participants can discuss the “results” of the chart
l Any surprising patterns?
l Any reasons for moving controversial notes
l A few more changes may be made
l When ideas are grouped, select a heading for each group
l Look for a note in each grouping that captures the meaning of the group. If
not create one

l Place it at the top of the group
l highlight headers notes in a bright color
l Combine groups into “super groups” if appropriate
l Want 6 – 10 headers
l Take the time to do this step – it is the foundation for the other tools
264
Affinity Diagram Example

Issue Statement
Issues Affecting the High Staff Turnover
of Sunshine County Health Department
Header Cards:
Limited
Low Professional Low
Salary Development Morale
Work Public Health

Leadership
Environment Misunderstood
265
Interrelationship diagrams
Identifies and explores causal relationships among related concepts or ideas
l 
Can address problems with a complex network of causes and effects.

l 
Identifies key drivers and bottlenecks

l 
Entries (nodes) in the diagram are called concerns

l 
A concern with a high number of output arrows is a key cause

l 
A key cause affects a large number of other items

l 
Use the strategic factors derived from your affinity diagram to develop the
l 
concerns for your interrelationship diagram.
266
Interrelationship Diagraming Steps:
l Write each concern on a piece of paper in a circular pattern (allow room
between concepts)
l Number them to make comparison process easier to track
l Use pairwise comparisons (1-2, 1-3, 1-4…2-3, 2,4…3,4)
•  If there is a relationship draw arrow to effect

•  If there is no relationship leave blank
•  The can be no 2-way relationships
267
Interrelationship Diagraming Steps:
l Analyze the diagram
Count the arrows (# out - # in)

l 
Highest out are primary drivers or key causes

l 
Resources here can produce pronounced change

l 
Lowest are key bottlenecks

l 
Affected by many other options

l 
May be inhibiting other options from proceeding as required

l 
Highlight primary drivers and key bottlenecks

l 
Note: examine only cause and effect relationships. Likely will have arrows
l 
on only 50% of relationships

268
Interrelationship Diagram example
® Certified Six Sigma Black Belt Handbook. Milwaukee, Wisconsin, ASQ Quality Press
269
Tree diagrams
Deconstruct a high-level entity, factor, deliverable or plan into its component
l 
elements or tasks
Usage examples: deploy a quality plan, a work breakdown structure, or
l 
develop objectives, policies and implementation steps

Use the key drivers and bottlenecks identified from your interrelationship
l 
diagram .
l Refer to ideas associated with that factor on your affinity diagram.
l Develop a tree diagram including this information, and expand it into several
next level strategies to meet these targets
270
Creating a Tree Diagram

Work from left to right
l 
Start with the purpose to be accomplished

l 
Generate the high level targets or goals that must be completed to

l 
accomplish the purpose

Link each goal to the purpose (these are the first branches of the tree)
l 
Expand on each target to identify and define subordinate tasks to

l 
accomplish each target

Link each to their target
l 
Continue expansion process until final level is implementable.

l 
Review logic of completed tree (perhaps with larger group)

l 
271
Tree Diagram Example
Key Driver Goals CTQs
272*
272
Matrix Diagrams
Various types;
SMART Plan - Technique for structuring the task details when planning the
l 
implementation of a project. May use output from a WBS Tree

Correlation - Shows the relationship between one list of variables and
l 
another. Relationships are usually based on experience. Example is the

House of Quality
Matrix Data Analysis - Arranges a large array of numbers so that they may be
l 
visualized and comprehended easily
273
Prioritization Matrix (aka Criteria Matrix)
Prioritizes issues, tasks, characteristics, based on weighted criteria using a
l 
combination of tree and matrix diagram techniques

Prioritization matrices are designed to reduce the number of options to
l 
consider before implementation planning occurs
274
Prioritization Matrix (aka Criteria Matrix) Creation
1. Construct an L-Shaped matrix combining the options, which are the lowest-
level of detail of the tree diagram with the criteria
2. Determine the implementation criteria using any technique that will
satisfactorily weight the criteria
3. Prioritize the criteria using the weighting technique. Each team member
weights the criteria so the total weight equals 1, and the results are totaled for
the entire team.
4. Rank order the options in terms of importance by each criterion, average
the results, and round to the nearest whole number
5. Compute the option importance score under each criterion by multiplying
the rank by the criteria weight
275
Prioritization Matrix (aka Criteria Matrix) Example
© Changing Minds
276
Process Decision Program Charts (PDPC)
Maps out all contingencies when moving from statement of purpose to its
l 
realization
Typical applications
l 
l Establishing an implementation plan for improvement project
To perform contingency planning

l 
To anticipate problems and consider consequences

l 
To determine possible countermeasures

l 
277
Process Decision Program Charts (PDPC)
l A type of Tree Diagram

l First level: purpose
l Second level: activities to be undertaken

l Third level: steps in these activities
l Fourth level: what ifs? (contingencies)
l Fifth level: countermeasures (contingency plans)
278
Process Decision Program Charts (PDPC) Creation
1. The team refers to a previously completed data collection and analysis. This
data source can be a tree diagram, matrix diagram, a problem specification,
or some other tool reference
2. The next step is to construct a PDPC chart as outlined in the example
Conversion of an Assembly Line to Work Cells
3. First, list the project goal, followed by a lower level of primary activities
detailed further into required tasks. Ensure that all activities have been
considered from the data source
279
Process Decision Program Charts (PDPC) Creation

4. For each task or requirement, ask what-ifs. See example What if there is an
interruption in production output? What if there is equipment downtime?
5. For every what-if, consider what countermeasures can be taken. Connect
what-ifs and countermeasures to the tasks to complete the chart. Designate
countermeasures as practical and feasible = 0, or impractical and difficult = X.
6. Review the chart, make revisions if needed, and provide date of issue
280
Process Decision Program Charts (PDPC) Symbols
281
Process Decision Program Charts (PDPC) Example
282
Activity Network Diagram
A diagram of project activities that shows the sequential and simultaneous
l 
relationships of those activities using arrows and nodes, as well as the

dependencies
It is used to identify a project’s critical path, as well as the most likely project
l 
completion time, the most optimistic time, and the most pessimistic time
It is useful to pictorially depict the dependencies and opportunities for
l 
schedule optimization of a project

Can only show finish-to-start dependencies
l 
In process management it is very useful for optimizing the process time

l 
283
Activity Network Diagram Creation
1. First list down all the activities involved in the project
2. Find out the chronological order of the activities
3. Find out tasks that can be executed simultaneously
4. Arrows depict an activity, whereas the nodes depict the start and end of an
activity
5. There should be only a single Start and End Nodes for a project
6. Each task should be given unique node notations
7. Draw it out.
284
Activity Network Diagram Creation
1. First list down all the activities involved in the project
2. Find out the chronological order of the activities
3. Find out tasks that can be executed simultaneously
4. Arrows depict an activity, whereas the nodes depict the start and end of an
activity
5. There should be only a single Start and End Nodes for a project
6. Each task should be given unique node notations
7. Draw it out.
285
Activity Network Diagram Drawing it out
1. Find all of the activities that start at node 1. Draw their finish nodes and
draw arrows between node 1 and those finish nodes. Put the activity letter or
name and duration estimate on the associated arrow.
2. Continuing drawing the network diagram, working from left to right. Look for
bursts and merges. A burst occurs when a single node is followed by two or
more activities. A merge occurs when two or more nodes precede a single
node.
3. Continue drawing the project network diagram until all activities that have
dependencies are included in the diagram.
4. As a rule of thumb, all arrowheads should face toward the right, and no
arrows should cross in an AOA network diagram
286
Activity Network Diagram Example
287
Activity Network Diagram Calculations
1. First take note of which of the nodes will take the most amount of time, and which of
those nodes will to take the least amount of time
2. The Critical Path is a line that goes through all of the nodes that have the longest
expected completion times.
3. The expected completion time as defined by the critical path is know as the Most
Likely Time
4. To come up with the Most Optimistic Time, decide upon the shortest possible time
for each of the nodes, and then add those up
5. To come up with the Pessimistic Time decide upon the longest possible time for
each of the nodes, and then add those up
288
Activity Network Diagram Calculations
1. Expected Time = Optimistic + (4*Most Likely) + Pessimistic
6
2. Limits of Expected Variation = Optimistic – Pessimistic

6
289
End of Module 7
l  Affinity diagrams,
l  Interrelationship diagrams
l  Tree diagrams
l  Prioritization Matrices
l  Matrix diagrams,
l  Process Decision Program Charts (PDPC)
l  Activity Network diagrams
Now we will summarize the Define phase
290
Define Phase – Summary
l  Identify a process to improve
l  Identify the customer (internal or external)
l  Outline the customer’s critical to quality (CTQ) parameter(s)
l  Set our improvement goals
l  Identify other stakeholders
l  Develop a business case
l  Define a high-level as-is state of the business process
l  Gain consensus on the business case and mobilize the required resources
l  Develop a high-level process map
l  Plan our Six Sigma project
291
l  Identify a process to improve
l  Identify the customer (internal or external)
l  Outline the customer’s critical to quality (CTQ) parameter(s)
l  Set our improvement goals
l  Identify other stakeholders
l  Develop a business case
l  Define a high-level as-is state of the business process
l  Gain consensus on the business case and mobilize the required resources
l  Develop a high-level process map
l  Plan our Six Sigma project
292
Questions to Ask at Phase End
l  Will our customers relate to our CTQ list?
l  Are we working on the critical X's?
l  What sources of information and data are we using?
l  What is our As Is SIPOC?
l  Do we have consensus and buy in from our key stakeholders?
Now for a few review questions
293
Define Phase – Review Questions
Question #1
You are attempting to improve the soldering on a micro-processor used for a
new hand-held device. As a result you should build a list of Critical to Quality
Characteristics based on ____________________.
A. Service benefits
B. Product features
C. Price
D. Size of unit
294
Answer #1
B Product features
295
Question #2
A dairy learned through a Six Sigma project their ice cream products could be
stored at a temperature 2 degrees higher than they had historically used.
Since their energy costs for ice cream storage cost $6,000 per month per
degree of temperature, what was reported as the savings from this LSS
project?
A. $72,000
B. $144,000
C. $432,000
D. $720,000
296
Answer #2
B. $144,000
297
Question #3
In the Kano model, what quality starts in the Dissatisfaction region and moves
into the Satisfaction region?
A. Exciters
B. Expected
C. Basic
D. None of the above
298
Answer #3
B. Expected
299
Module 8 – Measure Phase – Process Analysis and
Documentation
Module 8 – Measure Phase – Process Characteristics
Outline
1.  Measure Phase Overview
2. Process Flow Metrics
3. Process Analysis Tools
301
Module 8 – Measure Phase Overview
Measure Phase
The team will focus on gathering the information necessary to complete the
l 
project
First, the team will attempt to define each relevant process in great detail
l 
It will be necessary to develop a group of metrics appropriate to the

l 
processes
No metric is complete until accompanied by a measurement analysis system
l 
that identifies and quantifies any common errors in the metric

The final general objective of the measure phase is to estimate process
l 
baselines
302
Module 8 – Measure Phase – Process Flow Metrics
The Hidden Factory

l  The hidden factory is the extra value-add output that would theoretically be
possible if the energy directed at creating waste were released and directed
instead at making good quality items
l  In 1977, the quality guru Armand Feigenbaum estimated the wasted effort
within the hidden factory might be 15% to 40% of total non-Six Sigma
company effort
l  The metric COPQ (cost of poor quality) is used to quantify the 'output' of the
hidden factory.
l  However, COPQ does not address loss of goodwill and loss of
competitiveness
303
Cost of Poor Quality (COPQ)

l  Through your process exploration and project definition work you will
develop a refined estimate of the COPQ in your project
l  This project COPQ represents the financial opportunity of your
team’s improvement effort – the Voice of Business (VOB)
l  Calculating COPQ is iterative and will change as you learn more
about the process
304
Cost of Poor Quality (COPQ)

l  COPQ helps us understand the financial impact of problems created by
defects.
l  COPQ is a symptom, not a defect
l  Projects fix defects with the intent of improving symptoms.
l  The concepts of traditional Quality Cost are the foundation for COPQ
l  External, Internal, Prevention, Appraisal
l  A significant portion of COPQ from any defect comes from effects that
are difficult to quantify and must be estimated.
•  Need to uncover and understand the hidden factory and other sources of
waste
305
Internal COPQ
l  Rework
l  Rejected supplier parts and materials
l  Inspection
l  Etc..
External COPQ
l  Returns
l  Warranty work
l  Loss of Customers
l  Etc...
306
306
While hard savings are always more desirable because they are easier
to quantify, it is also necessary to think about soft savings
COPQ – Hard Savings COPQ – Soft Savings
•  Labor Savings •  Gaining Lost Sales

•  Cycle Time Improvements •  Reduced Law Suites
•  Scrap Reductions •  Customer Loyalty
•  Hidden Factory Costs •  Strategic Savings
•  Inventory Carrying Cost •  Preventing Regulatory Fines
307
307
COPQ Prevention
l  Error Proofing
l  Supplier Certification
l  DFSS
l  Etc..
COPQ Detection
l  Supplier Audits
l  Rejected parts
l  Logged rework
l  Etc...
308
308
Key terms;
l  Work in Progress (WIP) is the work that is in its various stages
between raw materials entering the system and the final finished
product
l  Work in Queue (WIQ) is the work that is at a work station awaiting
processing
l  Lead Time - The average time it takes for one unit to go through
the entire process including time waiting between sub-processes

(aka throughput time or turnaround time
l  Lead Time = Cycle Time x units of WIP x number of operations +
queue time between processes
309
Key terms;
l  Order Lead Time – The time it take from when the customer orders
the product or service to when they receive it

l  Queue Time - The time between sub-processes that the item gets
moved or sits around waiting for someone to work on it (aka

Waiting and Transportation Time or Inventory/Transportation Time)
l  Process Time - The time that the item is being worked on by an
Operator (aka Touch Time). Focus is Operator time expended

l  Process Time = manual Work + Walking + Waiting
310
Key terms;
l  Value Add Time - Time for those process steps that actually value
to the item (aka Value Creating Time)

l  Machine Time - The time that a machine is working on the item, will
include waiting for a process to complete; such as glue to set

l  Process Lead Time = The time that the item or batch of items is
being worked on before it can be passed on to the next process

l  Process Lead Time = Processing Time * Batch Size
311
Key terms;
l  Cycle Time (CT) - The average time between completed units
coming out the end of the process

l  Cycle Time = Processing Time / # of Operators
l  Machine Cycle Time - The average time between completed units
coming out of a machine

l  Work Time Available – Actual work time after breaks, meeting, shift
setup and cleanup, and other planned non-working time is

deducted
l  Takt Time – your customer-driven cadence or drumbeat
l  Takt Time = Total Working Time Available / Target Units to
Produce
312
Key terms;
l Target Cycle Time = Operational Takt Time adjusted for other
factors, such as seasonal demand

l Change Over Time (CO) – time needed to set up for a new batch
l Pitch - how often work is released and monitored
l  Pitch = takt time * pitch batch size (the batch size released to
the pacesetter process)
l Change Over Batch Size - how many items get processed before a
Change Over is needed.

l Out of Cycle Work – mid-shift tasks that are not performed in every
cycle, but reduce time available to meet Takt Time, such as

palletizing, mid-shift inspections, etc
313
Process Cycle Efficiency Metric;

l Used to determine the most useful and positive ways to improve process
cycle time (velocity or flow)

Method for calculating process cycle efficiency is to divide value-added time
l 
by process lead time

Little's law - process lead time is calculated by dividing the number of items
l 
in a process by the number of times the process is completed in an hour

While 100% would represent that all activities added value, it is more typical
l 
to approach 25% efficiency process cycle efficiency after the implementation

of lean strategies; though on occasion transactional processes can approach
50%
314
Lean Metric Velocity
l  Velocity, in Lean, is a metric that indicates the rate at which value is added
during a process phase

l  The calculation of the lean metric velocity is used to help rank cycle time
improvement opportunities in order of importance as well as aid us in our

analysis of the the value stream
l  The basic formula for the calculation of Velocity is:
l  number of value-added steps / process lead time.
l  Process lead time is calculated according to Little’s law:
l  number of items in the process /number of times the process is completed
every hour
l  Initiating a process observation log should be done before attempting to
calculate velocity
315
Calculating Process Velocity
l  Categorize each task as value-added, non-value-added but necessary
(NVA type 1), or non-value-added and unnecessary (NVA type 2)

l Measure the process time for each task regardless of its value
l Measure the inspection time
l Measure move or transportation time
l Measure the queue time
Throughput Time = Process time + Inspection time + Move time + Queue time
Then add the times for each value-added task
l 
Process Velocity=Total throughput time/value-added time
316
Module 15 – Analyze Phase –
Process Drivers
Using Process Velocity
l Velocity indicates the degree to which a process responds to customer
demands
l If there is less work in progress, lead times are shorter and velocity is
greater
l  If the lead times are longer, then velocity is slower
l When velocity is slow, the business cannot respond quickly to new orders
from customers
l Looking at the various factors will point you in the best direction for making
improvements
Module 15 317
Module 8 – Measure Phase – Process Analysis Tools
Six Sigma has a process focus In order;

To understand how and why work gets done
l 
To identify and deconstruct customer & supplier relationships

l 
To manage for maximum customer satisfaction while utilizing minimum

l 
resources
To analyze and measure the process from start to finish as it is currently
l 
being performed
Resolve defects and errors by focusing on the process, not the people
l 
318
Process Boundaries and Interfaces;

l  Process Boundary defines the process entry and exit points where inputs flow in and
outputs flow out
l  Provides a clear picture of the process scope
l  Defines the external interfaces
l  Internal interfaces
l  Hand-off points within the process boundaries
l  Most critical where the process crosses functional or organizational
borders
l  Most process inefficiencies are related to insufficient interface communication (lack
of coordination)
l  Important to identify critical interfaces early on
319
Process Maps
A process map is a graphical representation of the flow of a process
l  Process maps are good at finding process complexities, shareholders, and
inefficient locations
l  Represents what is actually happening, not what you think is happening
l  The goal of process maps is to spot redundant, unnecessary decisions and
tasks and to discover ways to simplify processes
l  Should be created by the people who are closest to the process
320
Process Maps are used to;

l Identify areas for focus of improvement efforts
l Identify and eliminate non-value added steps
l Combine operations
l Assist root cause analysis
l Baseline for failure mode and effect analysis (FMEA)
l Identify potential controllable parameters for designed experiments
l Determine needed data collection points
l Eliminate unnecessary data collection steps
321
Types of Process Map

l  Basic process map
l  Detailed process map
l  Work-flow (spaghetti diagrams)
l  Top-down flowchart
l  Deployment flowchart
l  Opportunity flowchart
l  Current State / Future state maps
322
Process Maps
l  In the Define phase, they are used to record top-level processes
l  In the Measure phase, they are used to record the lower process levels and
reveal differences in the perceptions of shareholders
l  In the Analyze phase, process maps are used to investigate the sources of
variation or excessive cycle time
l  In the Control phase process maps may be used to record process
adjustments
323
By mapping processes we can identify important characteristics;

1. Process inputs (X’s)
2. Supplier requirements
3. Process outputs (Y’s)
4. Actual customer needs
5. All value-added and non-value added process tasks and steps
324
By mapping processes we can identify important characteristics;

6.Data collection points
• Cycle times
• Defects
• Inventory levels
• Cost of poor quality, etc.
7.Decision points
8.Problems that have immediate fixes
9.Process control needs
325
Standard symbols for Process Mapping;
RECTANGLE indicates a PARALLELAGRAM shows

step. Statements should input or output data
begin with a verb
DIAMOND indicates a decision ELLIPSE shows the start

point. Only two paths emerge and end of the process
from a decision point: No and Yes
ARROW shows the CIRCLE WITH A LETTER OR

1 NUMBER INSIDE symbolizes
connection and direction
the continuation of a
of flow
flowchart to another page
326
Process Maps
l  Should include
l  Major activities and tasks
l  Sub-processes
l  Process boundaries
l  Inputs
l  Outputs
l  Documents reality, not how you think the process is supposed to be
completed
l  Should identify opportunities for improvement
327
Steps for Process Mapping

l  Scope the process
l  Identify the start and end points of the process of interest
l  Document the top level process steps

l  Create a flow chart
l  Identify the inputs and outputs

l  What are the results of doing each process step? (Y’s)
l  What impacts the quality of each Y? (x’s)
l  Characterise the inputs
328
Classifying Inputs;
l Inputs can be classified as one of three types
l Controllable (C)
l  Things you can adjust or control during the process
l  Speeds, feeds, temperatures, pressures….
l Standard Operating Procedures (S)
l  Things you always do (in procedures or common sense things)
l  Cleaning, safety, etc.
l Noise (N)
l  Things you cannot control or do not want to control
(too expensive or difficult)

l  Ambient temperature, humidity, operator...
329
Process Maps come in two forms;

Linear Flow
Calls
Customer Take Make Cook Pizza Box Deliver Customer
for
Hungry Order Pizza Pizza Correct Pizza Pizza Eats
Order
This diagram shows the process steps in a sequential flow, generally

ordered from an upper left corner of the map towards the right side
330
Deployment Flow or Swim Lane

Customer
Customer Calls for Customer

Hungry Order Eats
Cashier
Take
Order
Pizza Box
Cook
Make Cook
Pizza Pizza Correct Pizza
Deliverer
Deliver
Pizza
The Swim Lane map shows who or which department is responsible for
the steps in a process. A timeline can be added to show how long it takes
each group to perform their work.
331
There are three views of a process;

1. What is documented
2. What is actually is
3. What it should be
332
The No Process Problem;
Many businesses and industries are notorious for their lack of “process-
l 
thinking.”
You may discover that there is no process for performing the work.
l 
In these cases, bypass the Analysis step and proceed directly to Improve to
l 
design and implement a production process that meets the needs of the
customers
Key question is “Why was there no process, and what other products and
l 
services are being ‘produced’ without a process?
Initially develop and implement the “best” process you can

l 
Then bring the people who work the process together to develop the best
l 
method
333
Process Exists, but not Followed. Either;

1. A “good” process exists (one that can “produce” the product/service at the
required quality levels), but it is not being followed.
Two questions come to mind:
1.  Does staff understand the importance of the “standards?”
2.  Does management emphasize their importance?
Solution is education and communication
334
Or;
2. A “bad” process exists. Of course, the process must be revised
But the questions must be asked
1.  Why are processes difficult to follow?
2.  Are suggestions for improvement not offered, or taken?
3.  Are the ad hoc 'processes' better?
335
Module 2 –Define Phase – Project Identification
Process Elements
Or;
2. A “bad” process exists. Of course, the process must be revised
But the questions must be asked
1.  Why are processes difficult to follow?
2.  Are suggestions for improvement not offered, or taken?
3.  Are the ad hoc 'processes' better?
Module 2 336
Value categories are;

Value Added:
Physically transforms the “thing” going through the process
l 
Adds quality or value

l 
Important from the customer’s perspective

l 
Value Enabling:
Satisfies the requirements of non-paying external stakeholders, such as
l 
regulators
337
Non-Value Added
The Japanese referred to non-value-added activities as Muda, which means
waste
Examples of non-value added activities include;

l  Overproduction/overprocessing
l  Correction/rework
l  Excess inventory
l  Excess Motion
l  Transportation
l  Waiting
338
The relationship from one process to the next in an organization creates a

l 
Value Chain of suppliers and receivers of process output.

Each process has a contribution and accountability to the next to satisfy the
l 
external customer
External customers needs and requirements are best met when all process
l 
owners work cooperatively in the Value Chain
339
339
Value Stream Mapping;

l A communication tool that depicts the flow of materials and
information through an organization or series of processes related to

the production of goods or services
Used to identify waste and redundancy in processes
l 
l  Will document both the current state and the future state
The current state value map is examined for steps that do not add
l 
value. These non-value-added steps need to be eliminated or

minimized
340

l The future state map depicts the process after planned
improvements have been implemented. Ideally it will be less

complicated than the current state, with a significant reduction in
non-value-added activities
Each activity in a process is represented on the map.
l 
Each activity is accompanied by information on: cycle time, down

l 
time, in-process inventory, path of information, and path of materials
341

l Value-adding steps should be separated from the the non-value-
adding steps in a way that makes them stand out

l This separation into the value stream and the 'waste' steps, focuses
ones attention on what is value-adding and what isn't

l The value stream is the process and the non-value streams the
operations
342

l Document customer demand
l Define processes using operational data
l Show material flow
l Show information flow
l Compute lead times (value adding time)
343
Key Value Stream Mapping terms;

l All the process flow key terms
l Kanban – signaling device to authorize the release of work
l Supermarket – a place where a standard amount of inventory is
stored in order to ensure uninterrupted supply to a downstream

process
l Bursts – signify where a Kaizen event is or will occur
344
Creating a Value Stream Map

1. Draw customer icon
2. Draw the outbound shipping icon and note the delivery frequency
3. Draw supplier icon
4. Draw the inbound shipping icon and note the delivery frequency
5. Add process boxes in left to right sequence. Add data boxes below
the process box
6. Add communication arrows. Note methods and frequencies
7. Gather process attributes and add to data boxes
8. Add operator symbols
345

9. Add inventory locations and levels in days of demand
10. Graph at bottom
11. Add push, pull, and FIFO icons
12. Add working hours
13. Add cycle and lead times
14. Calculate total cycle and lead times
15. Add other relevant information
346
l  Cycle Time and Takt Time should be measured in seconds per unit
l  Work Time Available should be measured in minutes per day
l  Best to deduct foreseeable Out of Cycle Work from the Work Time
Available prior to calculating Takt Time
347

Process data boxes should contain;
l Cycle time (CT): Observed & Effective
l Changeover time (CO) & frequency
l % Availability to Demand
l Number of operators
l % Quality level (first-pass yield)
l Batch size
348

l If the map contains an overwhelming number of flow interruptions,
then it is advisable to combine Process Boxes

l Don't worry too much about capturing every detail in an As Is VSM,
because it will change

l Do identify shared processes (used by two or more value streams).
These are referred to as monuments.

l Do identify iterative processes
349
Capturing Information
Time it;
l Cycle Time (CT) - Time for one part. Time before repeating
operation
l Change over time (CO) - Time to switch product type
350
Measure or count;
l Travel (TR) - How far does the Operator travel to do their job?
l Inventory (I) - Count the amount of inventory before and after the
process
351
Observe;
l Yield (Y) - % How many pass inspection
l Up Time (UP) - % machine is up and running
l Scheduled Changes (SC) -Number of scheduled changes per week
l Waiting time (WT) - Find how often Operators are waiting for
something to do. How often are they waiting for another operation to
be done
352
Ask;
l Correct Information (CI) - % of times the job instructions are correct
and accurate. How many times do Operators ask for clarification

l Operators per shift (OPS)
l Production Scheduling (PS)
l Inventory Flow up (IFU) - Where does inventory come from, all
sources
l Inventory Flow down (IFD) - Where does inventory go to, all places
353

Tips;
l Focus on a product family within single plant
l Get leadership approval and buy-in
l Conduct door-to-door process walk
l Encourage participation of all stakeholders
l Use pencil and paper to start
l Use your As Is process map as a starting point in your
understanding of the value stream
354

Tips;
l  Communicate to all areas before your visit
l  Introduce yourself and explain your purpose
l  Remember, the workers are the experts for their tasks!
l  Respect people and their work space
355
Value Stream Map Symbols – Note there is a lot of variation in these symbols;
© Flylib.com 356*
Sample Value Stream Map;
© Wikipedia
357
l Look for non-value-adding steps that are preparing for, or tidying up

for the value-adding step and are closely associated with work-
station or operator
l Look for steps that are related to transportation, approvals, logging,
or other ancillary activities

l Key metrics associated with value stream mapping are value adding
times and non-value adding times

l Always true that Lead Time >= Processing Time >= Value Add Time
358
Reducing Movement and Physical Space

l The Analysis phase often reveals that much time is lost simply moving from
one work site to another

l One of the most effective strategy for reducing cycle time often involves
consolidating the area in which a task is performed

l Another approach to reducing wasteful movement requires grouping
employees in multi-function teams rather than single-function departments

l A key tool for performing movement analysis is the Spaghetti diagram
359
Spaghetti Diagram;
l Used to track motion of a person, item, or activity related to a process via
continuous flow lines

l Identifies redundancies in the work flow and opportunities to expedite
process flow
l Also highlights major intersection points; these point are causes of delay
l Helps one see waste that would be otherwise overlooked.
l Like Value Stream maps, one should create current state and future state
diagrams
360
Spaghetti Diagram example – As Is and To Be
361
Circle Diagrams
AKA Handoff diagram
l 
Used to show linkages between individuals, departments, or processes

l 
Pictorially depict predecessor-successor relationships, as well as potential

l 
bottlenecks
Too many input or outputs from a given descriptor on the rim may indicate a
l 
bottleneck
362
Circle Diagram Example
©Flylib
363
Gemba Walk
l  Gemba is the Japanese term meaning "the real place." Also spelled
Genba
l  Refers to the place where value is created
l  The problems become visible, and the best improvement ideas will come
from going to the Gemba
l  Gemba walks are not scripted or bound by what one wants to ask
l  Gemba walks denote the action of going to see the actual process,
understand the work, ask questions, and lear
364
Gemba Walk
l  Objective is to understand the value stream and its problems rather than
review results or make superficial comments
l  Executives should expect to spend 45 to 60 minutes every week or two
Gemba walking with a Lean Sensei, for six months to a year, then do them
on their own
l  The more observation and problem solving with the employees on a Gemba
walk, the more successful and enduring the changes will be
l  Take Gemba walks throughout the improvement process
l  Having an outsider along is great as they have no preconceived ideas
365
Gemba Walk
l  A Gemba walk is not an opportunity to find fault in the employees. It is also
not a time to enforce policy (except for safety problems)
l  If it is used punitively, employees will shut down and resistance to change
will rise
l  It needs to be approached from a place of mutual respect and interest in
making things faster, safer, easier and better overall
366
Flow Charts
A standard diagramming technique that most people are familiar with
l 
In the Measure phase, flowcharts can be used to map a process as it is

l 
currently being performed or to identify how different shareholders perceive a

particular process or problem
Look for a preponderance of decision points, as this may lead to
l 
unnecessary delays or adverse variations
367
Analyze Work Documents

Deconstructing the process from manuals, and other instruction or training
l 
documents
Use to produce the various process and work flow diagrams
l 
Danger is that actual process may deviate from the documented process so
l 
best to observe and record the actual process
368
End of Module 8

Measure Phase Overview
l 
l  Process Flow Metrics

l  Process Analysis Tools
369
Module 9 – Measure Phase – Data Collection
Outline
1. Types of data
2. Measurement scales
3. Sampling
4. Data collection methods
371
Types of data - Qualitative
Attribute Data
l  Is always binary, there are only two possible values (0, 1)
l  Only indicates when something occurs, not the degree or severity
l  So difficult to identify if a problem is getting better or worse
Variable Data (Quantitative)

l  Discrete (Count) Data
l  Can be categorized in a classification and is based on counts.
l  Takes on only a finite number of points that can be represented by the
non-negative integers
372
372
Types of data - Quantitative
Continuous Data
l  Can be measured on a continuum,
l  It has subdivisions that are meaningful, such as; Time, Pressure, Conveyor
Speed, Material feed rate and Money
l  Always more desirable
l  In some cases Attribute Data can be converted to Continuous
373
373
Measurement Scale Definitions

•  Nominal Scale – data consists of names, labels, or categories. Cannot be
arranged in an ordering scheme. No arithmetic operations are performed for
nominal data
•  Ordinal Scale – data is arranged in some order, but differences between data
values either cannot be determined or are meaningless
•  Interval Scale – data can be arranged in some order and for which differences
in data values are meaningful. The data can be arranged in an ordering
scheme and differences can be interpreted.
•  Ratio Scale – data that can be ranked and for which all arithmetic operations
including division can be performed. (division by zero is of course excluded)
Ratio level data has an absolute zero and a value of zero indicates a complete
absence of the characteristic of interest.
374
Sampling methods
l One of your first decisions in the sampling arena is the type of study or
question(s) you have
l Take into account the rate of change of the process, the faster the process,
the more frequent should be the sampling

l Err on the side of more frequent
l Another factor is the number/value of items produced between samples as
there is a risk of missing a problem

l A sampling pattern that is too regular runs the risk of adversely affecting the
randomness of our sample and inadvertently syncing with some unknown

cycle
l Always ensure that sampling plans and data collection plans are properly
documented
375
Sampling must be:
l Representative of all segments (for example, locations, sizes, days of the

week, months, or shifts)
l Of adequate size;
l  Average or Standard Deviation - 30
l  Proportion Defective (P) – 300

l  Histogram, Scatter Diagram or Pareto chart – 50-100
l  Control Chart – 25-35
l  Free from bias
.
376
Sampling Terminology
Internal and External Validity
l  Sampling structured such that the sampled population has the same
characteristics as the target population is known to have internal validity
l  For external validity, the sample coverage must include all relevant
subpopulations
377
l  Population – The population we are interested in

l  Sampling Unit - Elementary units which are clearly defined, identifiable
and observable, and convenient for purpose of sampling
l  Frame – An identifiable subset of the population
l  Sample Design - The specification for all possible samples of a given type
with their corresponding probabilities
378
l  Probability Sampling – Sample is representative of the population and

each member of the population has an equal chance of being selected
l  Bias – Either unconsciously or consciously favoring the selection of one
member or group of the population than the rest
379
The 5 basic sampling methods
1.  Simple Random Sampling - When every unit in the population has the
same chance of being selected
2.  Stratified Sampling - When the population is divided into groups and a
sample is taken from each of the groups
3.  Systematic Sampling - Some criteria or method exists regarding the
selection of samples. For instance, every 10th. unit might be selected
4.  Cluster Sampling - A representative group is selected out of the
population, and then a random sample is drawn from that group
5.  Judgment Sampling - Relies on expert opinions in their selection of a
sample group. This mode of sampling is appropriate when the samples
must have particular characteristics not common to every member of the
population
380
Data Collection Plan
l  Provides a documented strategy for gathering the data
l  Answers questions like;
l  What data do we need?
l  What is the time frame for collecting them?
l  Who will collect the data?
l  Using what mechanism?
l  Needs to ensure that the collection process yields accurate and relevant
data
381
Check Sheets
l  A check sheet is a custom-designed tally sheet to collect data on
frequency of occurrence
l  A simple and effective way to display data
l  Provides a uniform data collection tool
l  Use when the data can be observed and collected repeatedly by either
the same person or the same location
l  Also effective for collecting data on frequency and identifying patterns of
events, problems, defects, and defect location, and for identifying defect
causes
l  Come in three forms; tally sheets, location check sheets and graphical or
distribution check sheets
382
Check Sheets
l  Tally Sheets are commonly used to collect data on quality problems and
to determine the frequency of events
l  Location Check Sheets are a diagram of the part or item where the
defects are marked; a familiar example is the rental car diagram where
you mark any damage. A variation is marking any error on a document on
the document itself
383
Check Sheets
l  Graphical or Distribution Check Sheets using a graphical form, the
person collecting the data is able to visualize the distribution of the data.
© Changing Minds
384
Data Coding
l  A systematic way in which to condense extensive data sets into smaller
analyzable units through the creation of categories and concepts derived
from the data
When to code;
l  When testing a hypothesis (deductive), categories and codes can be
developed before data is collected.
l  When generating a theory (inductive), categories and codes are generated
after examining the collected data
385
Data Coding
l  A systematic way in which to condense extensive data sets into smaller
analyzable units through the creation of categories and concepts derived
from the data
When to code
l  When testing a hypothesis (deductive), categories and codes can be
developed before data is collected.
l  When generating a theory (inductive), categories and codes are generated
after examining the collected data
386
Why Code?
l  It lets you make sense of and analyze your data.
l  For qualitative studies, it can help you generate a general theory.
l  The type of statistical analysis you can use depends on the type of data you
collect, how you collect it, and how it’s coded.
l  Coding facilitates the organization, retrieval, and interpretation of data and
leads to conclusions on the basis of that interpretation
387
Levels of Data Coding

l  Open - Break down, compare, and categorize data
l  Axial - Make connections between categories after open coding
l  Selective - Select the core category, relate it to other categories and
confirm and explain those relationships
When to to Develop Codes

l  For surveys or questionnaires, codes are finalized as the questionnaire is
completed
l  For interviews, focus groups, observations, etc. , codes are developed
inductively after data collection and during data analysis
388
Data Screening
l  Used to identify miscoded, missing, or messy data
l  Find possible outliers, non-normal distributions, other anomalies in the data
l  Can improve performance of statistical methods
l  Screening should be done with particular analysis methods in mind
Code Book
l  Allows study to be repeated and validated.
l  Makes methods transparent by recording analytical thinking used to devise
codes.
l  Allows comparison with other studies.
389
Selecting Codes and Coding Issues

l  Exhaustive – a unique code number has been created for each category
l  Mutually Exclusive – information being coded can only be assigned to one
category
l  Residual other – allows for the participant to provide information that was
not anticipated
l  Missing Data - includes conditions such as “refused,” “not applicable,”
“missing,” “don’t know”
l  Heaping – is the condition when too much data falls into same category
390
Assuring Data Quality and Integrity
l  Avoid emotional bias relative to tolerances
l  Avoid unnecessary rounding
l  With time sequence data, record in time order
l  If a characteristic changes over time, record the baseline measurements
and the measurements after stabilization
391
l  Ensure that data collectors are properly trained in the tools and the purpose
for collecting the data
l  Make sure that any external biases, such as seasonality, etc,, are
accounted for
l  Fully define the metrics in question
392
l  If statistics assume a normal population, determine if dispersion of data can
be represented by at least 8 to 10 resolution increments. If not, the default
statistic may be the count of observations.
l  Screen data to detect and cleanse data entry errors
l  Use objective statistical tests to identify outliers
l  Every important classification identification should be recorded along with
the data
393
End of Module 9
In this Module we covered
l  Types of data
l  Measurement scales
l  Sampling D
l  Data collection methods
394
Six Sigma Green Belt Certification
Module 10 – Measure Phase – Measurement Systems
395
Outline
1. Measurement System Analysis (MSA)

2. Measurement systems across the organization
3. Metrology
396
Measurement System Analysis (MSA)
l  Excessive measurement system variation, increases the risk of:

• Good service being rejected (a cost issue)
• Bad service being accepted (a quality issue)
l  It is important that we know how much of the measured variation of a
process is due to the variation in the actual process and how much is due to
variation in the measurement system
l  Overall objective is to reduce error
397

MSA can be used to:
l Compare internal inspection standards with the standards of your customer.
l Highlight areas where calibration training is required.
l Provide a method to evaluate inspector training effectiveness as well as
serves as an excellent training tool.

l Provide a great way to:
l  Compare existing measurement equipment.

l  Qualify new inspection equipment.
398
MSA is important to:

l Study the % of variation in our process that is caused by our measurement
system
l Compare measurements between operators
l Compare measurements between two (or more) measurement devices
l Provide criteria to accept new measurement systems
l Evaluate a suspect gage
l Evaluate a gage before and after repair
l Determine true process variation
l Evaluate effectiveness of training program
399
Module 12 – Measure Phase –
Measurement system analysis (MSA)
Error can be partitioned into specific sources:
• Precision
• Repeatability - within an operator or piece of equipment
• Reproducibility - operator to operator or attribute gage to attribute
gage
• Accuracy
• Stability - accuracy over time
• Linearity- accuracy throughout the measurement range
• Resolution
• Bias – Off-set from true value
–  Constant Bias
–  Variable Bias – typically seen with electronic equipment,
amount of Bias changes with setting levels
400
Appropriate Measures are:

l  Sufficient – available to be measured regularly
l  Relevant –help to understand/isolate the problems
l  Representative - of the process across shifts and people
l  Contextual – collected with other relevant information that might explain
process variability
401
Examples of what and when to measure:
l  Primary and secondary metrics
l  Decision points in Process Maps
l  Any and all gauges, measurement devices, instruments, etc
l  “X’s” in the process
l  Prior to Hypothesis Testing
l  Prior to modeling
l  Prior to planning designed experiments
l  Before and after process changes
l  To qualify operators
402

l The item to be measured can be a physical part, document or a scenario for
customer service.
l Operator can refer to a person or can be different instruments measuring the
same products.
l Reference is a standard that is used to calibrate the equipment
l Procedure is the method used to perform the test
l Equipment is the device used to measure the product
l Environment is the surroundings where the measures are performed
403
The Observed variation can be segmented as below
Observed Variation
Unit-to-unit (true) Variation Measurement System Error
Precision Accuracy
Repeatability Reproducibility Stability Bias Linearity
© OpenSource Six Sigma
404
Gage R+R
l  A precise metric is one that returns the same value of a given attribute
every time
l  Precise data are independent of who estimates them or when the
estimates are made
l  Precision consists of:
l  Repeatability
l  Reproducibility
Together they are know as Gage R+R
405
405
Gage R+R
l  Bias is defined as the deviation of the measured value from the actual
value.
l  Stability of a gauge is defined as error (measured in terms of Standard
Deviation) as a function of time.
l  Control Charts are commonly used to track Stability
l  Linearity is the difference in Bias values throughout the measurement
range in which the gauge is intended to be used. This shows the
accuracy of the measurements are through the expected range of the
measurement
l  Formula for Linearity is:
l  Linearity = |Slope| * Process Variation
l  % Linearity = |Slope| * 100
406
MSA’s fall into two categories:
Attribute
l  Pass/Fail
l  Document Preparation
l  Surface imperfections
l  Customer Service Response
Variable
l  Continuous scale
l  Discrete scale
l  Critical dimensions
l  Pull strength
407
MSA’s
l Transactional projects usually have Attribute based measurement systems

l Manufacturing projects generally use Variable studies, but can use
Attribute studies in some cases
408
Gage R+R Studies
l A set of trials conducted to assess the Repeatability and Reproducibility of

the measurement system
l Multiple people measure the same characteristic of the same set of
multiple units multiple times (a crossed study)

l These units are then randomized and a second measure on each unit is
taken
l Blind studies are the best; with the operators not knowing their measuring
is not part of a test

l The Analysis of Variance (ANOVA) can also be used to analyze Gage R&R
studies
409
Gage R+R Study Design Types

•  A Crossed Design is used only in non-destructive testing and assumes that
all the parts can be measured multiple times by either operators or multiple
machines
–  Gives the ability to separate part-to-part Variation from measurement
system Variation
–  Assesses Repeatability and Reproducibility
–  Assesses the interaction between the operator and the part
410
Repeatability - is the degree to which measurements taken of the same

'thing' under the same conditions will be equal
Reproducability - is the degree to which measurements taken of the same

'thing' in different locations by different people will be equal
411
Gage R+R Study Design Types

•  A Nested Design is used for destructive testing and situations where it is
not possible to have all operators or machines measure all the parts
multiple times
–  Assumes that all the parts within a single batch are identical enough to
claim they are the same
–  Nested designs are used to test measurement systems where it is not
possible to send operators with parts to different locations
–  Do not include all possible combinations of factors
–  Uses a slightly different mathematical model than the Crossed Design
412
Gage R+R Studies
l Estimates for a Gage R&R study are obtained by calculating the variance
components for each term and for error
l Repeatability, Operator and Operator*Part components are summed to
obtain a total Variability due to the measuring system

l We use variance components to assess the Variation contributed by each
source of measurement error relative to the total Variation
413
Gage R+R Study Results
% Tolerance or Study % Contribution Results are

Variance
< =10% < =1% Ideal
10-20% 1-4% Acceptable
20-30% 5-9% Marginal
=>30% =>10 Poor
414
Conducting a Gage R+R Study
Step 1: Call a team meeting and introduce the concepts of the Gage R&R
Step 2: Select parts for the study across the range of interest
–  If the intent is to evaluate the measurement system throughout the
process range, select parts throughout the range
–  If only a small improvement is being made to the process, the range of
interest is now the improvement range
Step 3: Identify the inspectors or equipment you plan to use for the analysis
–  In the case of inspectors, explain the purpose of the analysis and that
the inspection system is being evaluated not the people
Step 4: Calibrate the gage or gages for the study
–  Remember Linearity, Stability and Bias
415
Conducting a Gage R+R Study
Step 5: Have the first inspector measure all the samples once in random
order
Step 6: Have the second inspector measure all the samples in random order
–  Continue this process until all the operators have measured all the
parts one time
–  This completes the first replicate
Step 7: Repeat steps 5 and 6 for the required number of replicates
–  Ensure there is always a delay between the first and second inspection
Step 8: Enter the data into Minitab® or other stats package and analyze your
results
Step 9: Analyze results and make necessary changes
416
Example Gage R+R Study Control Sheet
417
Gage R+R Study Capability and Acceptability
418
Gage R+R Study Capability and Acceptability
419
Measurement systems across the organization
Identify how measurement systems can be applied to marketing, sales, engineering,
research and development (R&D), supply chain management, and customer
satisfaction data.
420
Measurement Systems Across the Organization
l  Measurement systems are not just for production. They can be applied
across the organization in areas such as; marketing, sales, engineering,

R&D, supply chain management, and customer satisfaction
l  These measurement systems will usually tie to balanced scorecard KPIs,
though other metrics can also be measured, such as inventory levels and
idle times for supply chain management
l  One of the main challenges is data quality, especially in regards to historical
data
421
Metrology
l  Is the study of measurement
l  It is concerned with:
l  The quality of the measurement system
l  The appropriateness of the metrics in question
l  Developing systems for creating new forms of measurement
Also addresses the development of protocols for assessing measurement

systems
422
Metrology
l  Six Sigma projects focus on scientific and applied metrology
l  Scientific metrology is the development of quantity systems, unit systems,
and new methods of measurement

l  Applied metrology is the practical use of measurement systems for
processes
l  It focuses on the tools and methods that can be used to achieve accurate,
traceable, and repeatable measurements
423
Metrological Traceability
l  The degree to which a measurement can be compared to a known standard
l  In metrology every measurement is assumed as somewhat inaccurate
l  Therefor knowing exactly how inaccurate a measurement is likely to be is
crucial
l  A measurement system is considered traceable when these uncertainties
can be calculated and accounted for

l  A measurement is also considered traceable when it can be compared
effectively with measurements taken at different times and under different

conditions
424
l  In Six Sigma, where the degree of precision is extremely important, it is
crucial for each successive measurement in a designed experiment to have

the same level of traceability
l  So one should always trying to improve the traceability of your metrics
l  This means coming up with increasingly better systems for calibrating
measurement devices
l  Calibration is the process of checking to see that a measurement device
has a close relationship with a known standard

l  For complex traceability operations, two distinct metrics are compared until
they can be calibrated against each other
425
Calibration
l  The basic calibration process begins when the instrument of measurement
is designed
l  The instrument must be durable enough to repeatedly produce similar
values
l  The extent to which the instrument will maintain its powers over a long time
is known as tolerance; which will have been set by the manufacturer

l  The manufacturer also will state how long the instrument can be expected
to maintain its quality if used under standard conditions
426
Calibration
l  The basic calibration process requires the definition of measurement
uncertainty for both the standard against which the instrument is compared
and the instrument itself
l  The standard should have at the most 25% of the measurement uncertainty
as the instrument
l  Then any discrepancies caused by variation in the standard should have a
negligible effect on the final results of the calibration process
427
Measurement Uncertainty
l  Applied metrology' focus it to reduce measurement uncertainty, which is
also referred to as error

l  Metrology assumes that almost every measurement contains some degree
of error
l  In order for a measurement system to be useful this degree of error must be
regular and measurable

l  Metrology studies are able to isolate situations in which measurement
errors are likely.

l  The tool commonly used for assessing measurement uncertainty is the
analysis of variance (ANOVA) gauge R&R study.
428
End of Module 10
l  Measurement System Analysis (MSA)

l  Measurement systems across the organization
l  Metrology
429
Module 11 – Measure Phase – Basic Statistics
Outline
1. Basic statistical terms
2. Central Limit Theorem
3. Descriptive statistics
4. Graphical methods
5. Valid statistical conclusions
431
Statistical Notation – Cheat Sheet
Summation An individual value, an observation
The Standard Deviation of sample data A particular (1st) individual value
The Standard Deviation of population data For each, all, individual values
The variance of sample data The Mean, average of sample data

The variance of population data
The grand Mean, grand average
The range of data
The Mean of population data
The average range of data
Multi-purpose notation, i.e. # of subgroups, A proportion of sample data
# of classes
A proportion of population data
The absolute value of some term
Sample size
Greater than, less than
Greater than or equal to, less than or
Population size
equal to
432
Normal Distribution
The normal distribution provides the basis for many statistical tools and techniques.
Definition
•  A probability distribution where the most frequently occurring value is in the
middle and other probabilities tail off symmetrically in both directions. This shape
is sometimes called a bell-shaped curve
Characteristics
•  Curve theoretically does not reach zero; thus the sum of all finite areas total less
than 100%
•  Curve is symmetric on either side of the most frequently occurring value
•  The peak of the curve represents the center, or mean, of the process
•  For practical purposes, the area under the curve represents virtually 100% of the
variation the process is capable of producing
433
Every Normal Curve can be defined by two numbers:

• Mean: a measure of the center, also known as the average
• Standard deviation: a measure of spread
µ
434
Parameters to describe spread
l  Range - Difference between highest and lowest value of the distribution
l  Influenced by Outliers
l  Variance - Average squared difference of data point from the average
l  Standard Deviation - Square root of the variance
435
Six Sigma uses the standard normal distribution as its measurement

system
The mean is µ and the standard deviation is denoted by σ.
436
Terms;
l Population: All the items that have the “property of interest” under study
l Frame: An identifiable subset of the population
l Sample: A significantly smaller subset of the population used to make an
inference
l Mode: the most common value
Median :The value which comes half way when the data are ranked in order
l 
Trimmed Mean: Is calculated by eliminating a specified percentage of the

l 
smallest and largest observations from the data set and then calculating the
average of the remaining observations
437
Formulas
Standard Deviation - Sample
Standard Deviation - Population
438
Formulas
Mean – Sample
Mean - Population
439
Formulas
Variance – Sample
Variance - Population
440
Formulas
Standard Error
441
Central Limit Theorem (CLT)
l  Asserts that the probability distribution of the sample means will
approach a normal distribution as the number of samples increases;
provided that they are simple random samples of uniform size
l  Applied in cases when the number of samples is relatively small or when
the true distribution is unknown
l  After about thirty samples, the data should approximate a normal
distribution
l  The central limit theorem is the basis for the most powerful of statistical
process control tools, Shewhart control charts
442
Confidence Interval (CI)
•  A confidence interval estimate of a parameter consists of an interval of
numbers along with a probability that the interval contains the unknown
parameter
•  The level of confidence in a confidence interval is a probability that
represents the percentage of intervals that will contain if a large number
of repeated samples are obtained
•  For example, a 95% level of confidence would mean that if 100
confidence intervals were constructed, each based on a different
sample from the same population, we would expect 95 of the intervals
to contain the population mean
•  Based on the premise of CLT – with enough samples your CI should be
95% (normal distribution)
443
Hypothesis Testing
l  A statistical testing of a hypothesis – H

l  The alternative or default hypothesis is: HA
l  A probability is established to test the “null” hypothesis (no relationship
between two measured variables)
l  95% confidence: would mean that there would need to be 5% or less
probability of getting the null hypothesis; the null hypothesis would then
be dropped in favor of the “alternative” hypothesis
444
l  Asserts that the probability distribution of the sample means will
approach a normal distribution as the number of samples increases;
provided that they are simple random samples of uniform size
l  Applied in cases when the number of samples is relatively small or when
the true distribution is unknown
l  After about thirty samples, the data should approximate a normal
distribution
l  The central limit theorem is the basis for the most powerful of statistical
process control tools, Shewhart control charts
445
Calculating Confidence Interval
There are four steps to constructing a confidence interval:

1.  Identify a sample statistic. Choose the statistic (e.g, sample mean,
sample proportion) that you will use to estimate a population parameter
2.  Select a confidence level. As we noted in the previous section, the

confidence level describes the uncertainty of a sampling method. Often,
researchers choose 90%, 95%, or 99% confidence levels; but any
percentage can be used
446
Calculating Confidence Interval
3.  Find the margin of error. Often, however, you will need to compute the
margin of error, based on one of the following equations.
l Margin of error = Critical value * Standard deviation of statistic
Margin of error = Critical value * Standard error of statistic

l 
4.  Specify the confidence interval. The uncertainty is denoted by the

confidence level. And the range of the confidence interval is defined by
the following equation.
Confidence interval = sample statistic + Margin of error
447
Descriptive statistics
Descriptive statistics describe the properties of empirical distributions, that is,
distributions of data from samples. There are three areas of interest: the
distribution’s location or central tendency, its dispersion, and its shape
Measures of Location (central tendency)
l Mean
l Median
l Mode
Measures of Variation (dispersion)

l Range - the difference between the largest score and the smallest score
l Interquartile Range - the difference between the 25th and 75th percentiles
l Standard deviation
l Variance
448
Measures of Shape
l Skewness - A measure of asymmetry. Zero indicates perfect symmetry; aka
a normal distribution. Positive skewness indicates that the ‘‘tail’’ of the

distribution is more stretched on the side above the mean. Negative
skewness indicates that the tail of the distribution is more stretched on the
side below the mean
449
Skewness formula For univariate data Y1, Y2, ..., YN
Where is the mean, s is the standard deviation, and N is the number of

data points
450
Measures of Shape
Kurtosis - Is a measure of flatness of the distribution. Heavier tailed
distributions have larger kurtosis measures. The normal distribution has a
kurtosis of 3
451
Kurtosis formula For univariate data Y1, Y2, ..., YN
Where is the mean, s is the standard deviation, and N is the number of

data points.
Some sources use excess kurtosis which uses a formula that gives a normal
distribution a value of 0. The formula subtracts 3 from the formula above.
452
Frequency Distributions
l An empirical presentation of a set of observations
l If it is is ungrouped, it simply shows the observations and the frequency of
each number
l If it is grouped, then the data are assembled into cells, each cell representing
a subset of the total range of the data

l  The frequency in each cell completes the grouped frequency
distribution.
Frequency distributions are often graphically displayed in histograms or
l 
stem-and-leaf plots
453
Frequency Distributions
l An empirical presentation of a set of observations
l If it is is ungrouped, it simply shows the observations and the frequency of
each number
l If it is grouped, then the data are assembled into cells, each cell representing
a subset of the total range of the data

l  The frequency in each cell completes the grouped frequency
distribution.
Frequency distributions are often graphically displayed in histograms or
l 
stem-and-leaf plots
454
l Cumulative Frequency Distributions
l The total frequency distributions up to and including a particular value
l In the case of grouped data, the cumulative frequency is computed as the
total number of observations up to and including a cell boundary

l Often displayed as an ogive
455
Graphical methods
l  A scatter diagram is a plot of one variable versus another.
l  One variable is called the independent variable and it is usually shown on
l  the horizontal (bottom) axis.
l  The other variable is called the dependent variable and it is shown on the
vertical (side) axis
456
Graphical methods
l  Scatter diagrams display different patterns that must be interpreted
Strong Positive Strong Negative No Correlation
457
Graphical methods
l  Scatter diagrams display different patterns that must be interpreted
Moderate Positive Moderate Negative Curviliniar
458
Scatter diagrams Key Points
l  Be sure that the independent variable, X, is varied over a su⁄ciently large
range. When X is changed only a small amount, you miss a correlation,
even though it really does exist
l  If you make a prediction for Y, for an X value that lies outside of the range
you tested, be advised that the extrapolation is highly questionable
l  Keep an eye out for the effect of variables you didn’t evaluate. It may
either wipe out the effect of your X variable or make you mistake the X
variable you are controlling as the true cause
l  Beware of ‘‘happenstance’’ data
l  If there is more than one possible source for the dependent variable, use
different plotting symbols for each source
459
Graphical methods
Normal Probability plots
A graphing technique for assessing whether or not a data set is
l 
approximately normally distributed

Data is plotted against a theoretical normal distribution in such a way that the
l 
points should form an approximate straight line.

Departures from this straight line indicate departures from normality
l 
Used to confirm if a normal distribution is a good model for the data

l 
460
Graphical methods
Normal Probability plots
Vertical axis: Ordered response values

Horizontal axis: Normal order statistic medians
461
Graphical methods
Creating Normal Probability Plots
Observations are plotted as a function of the corresponding normal order
statistic medians which are defined as:
Ni = G(Ui)
Where Ui are the uniform order statistic medians (defined below) and G is the percent
point function (inverse of the cumulative distribution function of the normal distribution
In addition, a straight line can be fit to the points and added as a reference line
462
Graphical methods
Histograms
l A pictorial representation of a set of dat.
l Created by grouping the measurements into ‘cells
l Are used to determine the shape of a data set.
l Displays the numbers in a way that makes it easy to see the dispersion and
central tendency and to compare the distribution to requirements

l Excellent troubleshooting tool
463
Graphical methods
Creating Histograms
1. Compute range of your data
2. Number of cells determined by sample size
l  100 or less = 7 to 10 cells
l  101-200 = 11 to 15 cells
l  201 or more = 13 to 20 cells
3. Compute width (W) of each cell W = range/# of cells
4. Compute ‘cell boundaries.
5. They have one more decimal place than the raw data values in the data set
6. Low boundary of the first cell is less than the smallest value in the data set
7. Other cell boundaries are found by adding W to the previous boundary
8. Determine into which cell each value falls and tabulate
9. Graph your histogram
464
Graphical methods
Example Histogram
465
Graphical methods
Histogram Tips
l Can be used to compare a process to requirements if you draw the
specification lines on the histogram

l Always construct a run chart or a control chart as histograms don’t show the
time sequence of the data

l Evaluate the pattern of the histogram to determine if you can detect changes
of any kind. Look for multiple peaks; though small samples often have
multiple peaks that merely represent sampling variation
l Compare histograms from different periods of time
l Stratify the data by plotting separate histograms for different sources of data.
This can sometimes reveal things that even control charts don’t detect
466
Graphical methods
Stem-and-Leaf Plots
l Stem-and-leaf plots are a variation of histograms and are especially useful
for smaller data sets (n<200)

l A major advantage of stem-and-leaf plots over the histogram, which groups
data in cells, is that the raw data values are preserved as it displays every
piece of data by showing the digits of each number
l The greatest common place value of the data is used to form stems
l So the stem Is the digit or digits that remain when the leaf is dropped
l The numbers in the next greatest place-value position are then used to form
the leaves
l So the leaf is the last digit on the right side of the number
467
Graphical methods
Stem-and-Leaf Plot Example
468
Graphical methods
Stem-and-Leaf Plot Tips
l Always put in a key
l Always put your data in order
l To work out the median, you must find the middle value
l If there are two middle values, you need the average
469
Graphical methods
Box-and-Whisker Plots
l Graphically depict groups of numerical data, via the box, through their
quartiles.
l Also have lines extending vertically from the boxes (whiskers) indicating
variability outside the upper and lower quartiles.

l Outliers may be plotted as individual points
470
Graphical methods
Box-and-Whisker Plots
l Use of the box as follows; the bottom and top of the box are always the first
and third quartiles, and the band inside the box is always the second quartile
(the median)
The ends of the whiskers can represent several possible alternative values,
l 
the more common being:

l  The minimum and maximum of all of the data
l  One standard deviation above and below the mean of the data
471
Graphical methods
Box-and-Whisker Plot Example
472
Valid Statistical Conclusions - Enumerative Statistics
l Enumerative statistics are used for evaluating random samples from given
populations
l Can be used to:
l Determine whether two samples were drawn from a known population
l Determine whether they were drawn from the same population
l Determine whether the samples were drawn without bias, thereby truly
represent the sample
473
Valid Statistical Conclusions - Enumerative Statistics
l  Can also provide a confidence level, an assumed distribution, and a set of
confidence intervals as well
l  Only issue is that they are drawn from a static, unchanging population. In
Six Sigma, often it is necessary to obtain information about dynamic
processes
l  As it is often necessary to obtain information about dynamic processes you
will need to use analytical statistics
474
Valid Statistical Conclusions - Analytical Statistics
l They provide information about processes in action by distinguishing

common- and special-cause variation
l Common-cause variation consistently occurs and influencing data in a
similar fashion in every occurrence

l Special-cause variation is unpredictable in its occurrence and effects
475
Valid Statistical Conclusions - Analytical Statistics
l Process control charts create an operational definition of special-cause

variation which notes the location and level of variation within a subgroup at
each moment in the process
l If enough subgroups can be collected,we will be able to predict the location
and extent of special-cause variation

l A key feature of analytical statistics is the consideration of time, which makes
it possible to pinpoint the moments in a process that need improvement
476
Valid Statistical Conclusions - Descriptive Statistics
l Are the statistical procedures that we use to describe the population we are
studying
l Can only be used to describe the group that is being studying; therefore they
cannot be generalized to a larger group
477
Valid Statistical Conclusions – Inferential Statistics
l  Are concerned with making predictions or inferences about a population

from observations and analyses of a sample
l  In order to do this, however, it is crucial that the sample is representative of
the group to which inferences or predictions will be mad
l  Use tests of significance, such as Chi-square or T-tests, to determine the
probability that the results of our analysis are representative of the
population that the sample represents and not chance occurrence
478
End of Module 11
l Basic statistical terms
l Central Limit Theorem
l Descriptive statistics
l Graphical methods
l Valid statistical conclusions
479
Module 12 – Measure Phase – Probability
Outline
1. Basic Probability Concepts
2. Statistical Distributions
481
Basic Probability Concepts
l  The probability of a given event (E) varies between 0 (no Probability of
occurrence) and 1 (100% probability of occurrence)
l  The sum of the probabilities of all possible events (multiple E’s) in then total
sample space (S) will always equal 1
482
Basic Probability Concepts – Definition of Probability
l  The ratio of the chances favoring an event to the sum total chances for and
against the event
l  Probability (P) is always expressed as a ratio
l  P = Chances Favoring / Sum total of chances for and against
l  P(Event) = # of points in sample space participating in the event /
Total # points
l  If an experiment is repeated a large number of times, (N), and the event (E)
is observed ne times, the probability of E is approximately:
P(E) = ne / N
483
Basic Probability Concepts – Simple & Compound Events
l  An event that cannot be decomposed is a simple event (E)

l  Compound events are formed by a composition of two or more events.
l  The two most important probability theorems related to compound events
are the additive and multiplicative
484
Basic Probability Concepts – Compound Events
For the following examples, EA = A and EB = B
Composition - consists of two possibilities -- a union or intersection

l  Union of A and B. (A c B) - If A and B are two events in a sample space
(S), the union of A and B (A c B) contains all sample points in event A or B

or both
l  Intersection of A and B. (A 1 B) - If A and B are two events in a sample
space (S), the intersection of A and B (A 1 B) is composed of all sample

points that are in both A and B
485
Basic Probability Concepts – Event Relationships
The three relationships in finding the probability of an event are

complementary, conditional and mutually exclusive
Complement of an event A is all sample points in the sample space (S), but
not in A; therefor the complement of A is 1-PA
Conditional probability of event A given that B has occurred is:
486
Basic Probability Concepts – Event Relationships
Conditional probability (cont'd)
l  Two events A and B are said to be independent if either:

P(A|B) = P(A) or P(B|A) = P(B)
l  Otherwise, the events are said to be dependent
l  Mutually Exclusive - if event A contains no sample points in common with

event B, then they are mutually exclusive
487
Basic Probability Concepts – Testing for Event Relationships
Are events A and B, mutually exclusive, complementary, independent or

dependent?
l  If events A and B contain two or more sample points in common, then they
are not mutually exclusive

l  If event B does not contain all the points in S that are not in event A, then
they are not complementary
488
Additive Law
l  If two events are not mutually exclusive:
P (A c B) = P(A) + P(B) - P (A 1 B)
l  If the two events are mutually exclusive, the additive law reduces to:
P (A c B) = P(A) + P(B) also P (A + B) = P(A) + P(B)
Note that P (A c B) is shown in some texts as P (A + B) and is read as the

probability of A or B.
489
Multiplicative Law
l  If events A and B are dependent, then the probability of A influences the
probability of B occurring
l  This is known as conditional probability and the sample space is reduced
P (A 1 B) = P(A) x P(B|A) and also P (A 1 B) = P(B) x P(A|B)
l  If events A and B are independent:

P (A 1 B) = P(A) x P(B)
490
Expected Value
l  Equals the sum of the values of each outcomes multiplied by the probability
of each outcome relative to all the other possibilities

l  E represents the expected value operator and V represents the variance
operator:
If x is a random variable and c is a constant, then:

l 
E(c) = c E(x) = µ E(cx) = cE(x) = c

V(c) = 0 V(x) = o 2 V(cx) = c2V(x) = c2o2
491
Basic Probability Concepts – Permutations
l  An ordered arrangement of n distinct objects

l  The number of ways to order n distinct objects taken r at a time is
designated by the symbol Pn,, though some texts use P(n,r) and nPr
Counting Rule for Permutations:
Note: 0! = 1, Pnn = n!,
492
Basic Probability Concepts – Combinations
l  The number of distinct combinations of n distinct objects taken r at a time

l  It is denoted by the symbol Cn, though some texts use nCr, C(n,r) and (nr)
Counting Rule for Combinations:
Note: 0! = 1, Cnn = 1, Cn0 = 1
493
Normal Distributions
A continuation of the discussion on normal distribution from module 11
l 
What makes a distribution normal?

l 
l  Only random error is present

l  Process free of assignable cause
l  Process free of drifts and shifts
494
The Normal Curve is a smooth, symmetrical, bell-shaped curve,
generated by the density function
495
Each combination of Mean and Standard Deviation generates a unique
Normal Curve:
Standard Normal Distribution
Has a µ = 0, and σ = 1
l 
l Data from any Normal Distribution can be made to

fit the standard Normal by converting raw scores
to standard scores
l Z-scores measure how many Standard Deviations from the Mean a
particular data-value lies
496
Empirical Rule
l  68.27% of the values lie within one standard deviation of the mean
l  95.45% of the values lie within two standard deviations of the mean
l  99.73% of the values lie within three standard deviations of the mean
497
Binomial Distributions
Binomial distributions are useful when the units in a population exist in only
l 
two states.
A binomial distribution only applies when trials are independent and the
l 
number of samples in the population is fixed.

In a binomial distribution, the distributional parameter is the average
l 
proportion
This value is assumed or calculated by dividing the number of sample items
l 
that meet the condition by the total number of items in the sample
498
Binomial Distribution vs. Normal Distribution
499
Poisson
Poisson distribution can guess the number of times a particular condition will
l 
occur for a given process or population; such as non-conforming units

The distinguishing feature of the Poisson distribution is its appropriateness
l 
for situations in which the targeted condition may occur more than once in
each unit
The Poisson distribution accurately estimates the number of events in each
l 
sample unit
The trials be should be independent, and the data should be composed of
l 
positive whole numbers.

The distributional parameter is the average number of instances per unit
l 
500
Poisson Distribution Plot
© Wikipedia
The horizontal axis is the index k, the number of occurrences. The CDF is
discontinuous at the integers of k and flat everywhere else because a variable that is
Poisson distributed can only take on integer values
501
Poisson Distribution Formula

A discrete random variable X is said to have a Poisson distribution with
parameter λ > 0, if, for k = 0, 1, 2, …, the probability mass function of X is
given by:
where
e is Euler's number (e = 2.71828...)
k! is the factorial of k
The positive real number λ is equal to the expected value of X and also to its
variance
502
Student’s t
It is used to express confidence intervals for a set of data and to statistically
l 
compare the results of different experiments

The t test is also valuable to compare two different sets of data to determine
l 
if they are ‘the same’ or ‘different

Similar to Standard normal distribution
l 
Larger spread about zero due to increased variability due to using a sample
l 
rather than the population

Uses a critical values under the t distribution table
l 
503
Student’s t
Assumptions
Population is normal although this assumption can be relaxed if sample size
l 
is “large”
Random sample was drawn from the population of interest
l 
As the sample size increases (degrees of freedom increases) the t

l 
distribution approaches the standard normal distribution

If the absolute value of the test statistic is greater than the critical value ,
l 
then we reject the null hypothesis
504
t distribution
standard normal distribution
Module 10 505
Student’s t Distribution Critical Value
The critical value t∗ with probability p lying to its right is found by looking up
on a t Distribution Critical Values Table
506
Student’s t Distribution Critical Values Table (1-tailed)

Use the row corresponding to df and the column corresponding to p
Better yet use Excel's TINV() though double the probability as it generates 2-
tailed results
507
F Distribution
This test can be used to either,
l 
l  Test the equality of population variances

l  Test the equality of population means in ANOVA
l  Tests for regression models (slopes relating one continuous
variable to another
There is a different F distribution for every possible pair of degrees of
l 
freedom
There are two sample variances involved and two sets of degrees of
l 
freedom
The expected value of any F distribution is 1 if the null hypothesis is true
l 
508
F Distribution Formula
Let
l  be the variance of the first sample and be the variance of the
second sample. The two samples need not have the same sample size.
F is the F distribution.
l 
509
F Distribution Curve
510
Hypergeometric Distribution
l  Applies when the sample (n) is a relatively large proportion of the
population (n >0.1N)
l  Sampling is done without replacement
l  The formula and curve are below:
511
Hypergeometric Distribution
l  Where p(x,N,n,m) is the probability of exactly x successes in a sample of n
drawn from a population of N containing m successes. The hypergeometric
probability density function is:
l  The mean and the variance are:
512
Bivariate Distribution
l  It is the joint distribution of two variables
l  Bivariate distributions may be discrete or continuous
l  There may be either a total independence of the two independent variables,
or a covariance between them

l  The bivariate normal density with the correlation coefficient, D, is:
513
Bivariate Normal Distribution Surface Graph
514
Exponential Distribution
l  It is used to model items with a constant failure rate, and is closely
related to the Poisson distribution
l  If the random variable x is exponentially distributed, then the reciprocal of x,
y = 1/x follows a Poisson distribution.
l  Likewise, if x is Poisson distributed, then y = 1/x is exponentially
distributed
l  The exponential probability density function is:
515
Exponential Distribution Graph
The variance of the exponential distribution is equal to

the mean squared:
516
Exponential Distribution
l  The exponential distribution is characterized by its hazard function
which is constant
l  Which means that the probability of survival for a time interval is dependent
ONLY on the length of the interval, and not on the time of the start of the
interval
517
Lognormal Distribution
l  The most common transformation is made by taking the natural logarithm,
but any base logarithm, such as base 10 or base 2 may be used for a
Lognormal
l  The lognormal probability density function is:
l  µ is the location parameter or log mean

l  σ is the scale (or shape) parameter or standard deviation of
natural logarithms of the individual values
518
Lognormal Distribution Graph
The lognormal distribution mean and variance are:
519
Weibull Distribution
l  The Weibull distribution is widely used for reliability and statistical
applications
l  The two and three parameter Weibull are the common versions
l  The difference is the three parameter Weibull distribution has a location
parameter when there is a non-zero time to first failure

l  The three parameter Weibull probability density function is:
β is the shape parameter, θ is the scale parameter

δ is the location parameter
520
Weibull Distribution
l  The three parameter Weibull probability density function may also be
expressed as:
β is the shape parameter, η is the scale parameter

Υ is the location parameter
521
Weibull Distribution Effect of Shape Parameter Graph
522
Weibull Distribution Effect of Scale Parameter Graph
523
End Module 12
l  Probability Basic Concepts
l  Statistical Distributions
524
Module 13 – Measure Phase – Process Capability
Outline
1. Process Capability Indices
2. Process Performance Indices
3. General Process Capability Studies
4. Process Capability for Attributes Data
5. Process Capability for Non-Normal Data
6. Process Performance vs. Specification
7. Short-Term and Long-Term Capability
8. Measure Phase Summary and Questions
526
Process Capability (Cp, Cpk) Index

l Quantifies the ability of a process to meet the expectations of
customers and other stakeholders

l Key to decision-making related to design for manufacture is the
understanding of not only the requirements of the process, but also

what the process is able to achieve (process capability)
l Cp is the possible, Cpk is the reality
527
Process Capability Index

l  Usually converted into a standard deviation or DPMO
l  In the Measure phase, process capability indices can create a
baseline estimate for a controlled process

l  In the Improve stage, a process capability index can confirm process
improvement
l  In the control stage, these indices are used to monitor processes to
confirm they remain in a state of statistical control

l  Given the above, process capability indices must only be created
after a state of statistical control is established
528
Process Capability Index Creation

l First use a control chart to determine the stability of the process.
Proceed only if the process is in a state of statistical control

l The first calculation we need to make is the process potential. This is
denoted Cp
l Cp compares the process spread to the width of the tolerances. If the
tolerances are wider than the process spread then potentially the
process can achieve what is being asked of it
l The tolerances are denoted UTL (Upper spec) and LTL (Lower spec)
529
Process Capability Index Creation

l Cp in itself is insufficient as it would not, for example distinguish
between processes that have the same spread and Cp also takes no
account of setting
l Cpk addresses these issues by taking account of setting and the
likelihood of producing non-conforming product for the process

l Cp and Cpk together compare the distance from the process centre to
either tolerance against the distance from the process centre to the top
or bottom of the process
l We take the worst case in order to establish the overall Cpk
OR Whichever is lower
530
Process Capability Index Interpretation

l Cpk's best achievable value is to equal Cp
l This will occur when the process is equidistant from the two limits (i.e.
the process is exactly on target)

l It is not possible for Cpk to exceed Cp
l It is perfectly possible for Cpk to take a negative value if the centre of
the process is outside one of the tolerances
531

l  A Cpk of 1 indicates that the process is operating at a minimum level
of capability (i.e. at least one end of the process is bang up against a

tolerance)
l  In a Six Sigma process, the Cpk equals 2.0
l  A Cpk of less than one, the process is referred to as incapable
l  Ideally the higher the Cp the better
l  In a process qualified as a Six Sigma process, the the Cp is => 2
l  If the value of Cp (the ratio of tolerance to process variation) is 1,
then tolerance and process variation are equal

l  If the value of Cp is less than one, then the allowable variation is less
than the process variation, which means that the normal amount of
variation could be too much
532

l When Cpk is used, it is possible to obtain information about the
process variation and location and their relation to the requirements

l The aim should always be for Cp = Cpk (i.e. properly centered)
l By using the properties of the normal distribution it is possible to
predict percentages out of tolerance for any given capability value

provided that the process is:
l Stable
l Normally distributed
l Properly centered (Cp = Cpk)
Note: Due to its composite nature it is less helpful in showing what has
to change
533
Process Capability Improvement

l The approach to improving process capability is essentially about
reducing common cause variation

l This will mean action on the process relating to things such as
operator training,machine maintenance, fixturing etc
534
Process Performance (Pp, Ppk) Index

l Pp is the possible, Ppk is the reality
l A process performance index determines whether a particular batch of
materials will be satisfactory to customers.

l Its scope is limited to a single batch, which distinguishes it from the process
capability index
l Used to create process baseline estimates for uncontrolled processes
l Sample must be large in order to assess any variations in the batch
l Use when statistical process controls are not possible; because the process
lacks statistical control or because there is insufficient data
535
Process Performance (Pp, Ppk) Index Formula
536
Process Performance (Pp, Ppk) Index Interpretation
l Cannot be used to predict future performance

l Using capability indices generally is better, when a process is in statistical
control
l If the process performance indices have values less than 1, then tolerance
(variation that can be allowed) is less than the variation in the sample.
l  If the value is 1, then the variation in the sample is exactly the same as the
tolerance.
l The best result is to have process performance index values of greater than
1, indicating that the sample variation is less than the allowable variation
537
Process capability studies

•  Intended to be regular estimations of a process’s ability to meet its
requirements or specifications
•  In other words we are measuring process performance vs.process
specifications
•  Can be conducted on both Discrete and Continuous Data.
•  Most meaningful when conducted on stable, predictable processes
•  Commonly reported as Sigma Level which is optimal (short term)
performance.
538

•  Intended to be regular estimations of a process’s ability to meet its
requirements
•  Can be conducted on both Discrete and Continuous Data.
•  Most meaningful when conducted on stable, predictable processes
•  Commonly reported as Sigma Level which is optimal (short term)
performance.
•  Require a thorough understanding of the following:
–  Customer’s or business’s specification limits
–  Nature of long-term vs. short-term data
–  Mean and Standard Deviation of the process
–  Assessment of the Normality of the data (Continuous Data only)
–  Procedure for determining Sigma level
539

Questions to consider:
l  What is the source of the specifications?
l  Customer requirements (VOC)
l  Business requirements (target, benchmark)
l  Compliance requirements (regulations)
l  Design requirements (blueprint, system)
l  Are they current? Likely to change?
l  Are they understood and agreed upon?
l  Operational definitions

l  Deployed to the work force
540
Process capability for attributes data

l  For the binomial distribution there are two possible outcomes
l  One is interested in the proportion of items with a certain characteristic,
such as pass or fail

l  The items with the characteristic of interest are called defectives
l  Sample size can be a constant size, or can vary from sample to sample
l  % Defective is calculated
l  PPM is the % Defective x 1,000,000
541

l  Process Z is a capability index calculated from the %Defectives
l  It is based on standard normal distribution (mean = 0, variance = 1), and
the normal approximation to the binomial distribution

l  Must confirm assumption that n*p >= 5 & n(1-p) >= 5 where
l  P = %Defectives & n = number of samples
l  Value of Z determined assuming % Defectives is the area under a standard
normal curve to the right of that value

l  The higher the Z the better
542

l  The Poisson distribution is used if there are multiple defects per item
l  Typically one is interested in the rate of defects per item
l  Poisson Distribution assumptions:
l  Events occur one at a time
l  Probability of an event in a specific time period is independent of the
event in a previous time period

l  Mean DPU is calculated as the number of defects divided by the total
number of items in the samples

l  Min DPU is the smallest DPU from the sampled data
l  Max DPU is the largest DPU from the sampled data
543
Process capability for non-normal data

l Many real-world processes with continuous data do not follow a normal
distribution
l  Common examples include:
l  Process lead time
l  Machine efficiency
l  Contamination levels
l Determining the process capability for Non- Normal Data requires a 2-step
process:
1. Determine the distribution
2. Perform a Non-Normal Capability Analysis
544
Process capability for non-normal data

l Pp & Ppk are the capability measures for Non-Normal
l These measures are determined based on the normal Six Sigma distribution
spread: 0.13th percentile, 50th percentile, 99.87th percentile

l  Pp is the ratio of the the allowable spread from the specifications (USL –
LSL) to the measured process spread (X99.87% - X0.13%)

l Ppk incorporates the centering of the process, using the median where
X50% = median
l PPM is determined as with a normal distribution, except the cumulative
density function is for the selected non-normal distribution
545
Sigma Levels and Defects Per Million Opportunities (DPMO)

l Six Sigma uses the DPMO level of a process to generate a Sigma
level for the process

l It uses the standard normal distribution as its measurement system
l A Sigma level compares the variation in process performance to the
acceptable levels set by the customer

l The higher the Sigma level the better. Six Sigma performance of 3.4
DPMO
WARNING: The normal distribution and DPMO will not apply if special
causes are dominant within the process
546

l Note that theoretically Six Sigma applied to a normal distribution is
actually 0.002 DPMO

l However Sigma levels are calculated using an inbuilt 1.5 σ shift for the
process average
l This allows for the natural propensity of processes to drift
l The DPMO are calculated first and then translated into a Sigma value
via a conversion table (see next slide)

l Formula for DPMO where Number of Units is n, Number of Defects is
d, Number of Defect Opportunities is o
547
Sigma Level Conversion Table
548
First Pass Yield (YFP )

l  A YFP is the fraction of units produced by a sub-process without a defect
l  First Pass Yield will be used to calculate process sigmas
–  Calculate as follows:
l  For a given sub-process: the defect opportunities (o ) are defined (based
on customer needs & requirements), a given number of units (n ) are
chosen, and the total number of defects (d ) are counted
l  For discrete attributes, the number of opportunities where a “Pass/Fail”
judgment was made is counted as d, for continuous attributes; the number
of opportunities where the specification limit(s) were exceeded is counted
as d
549
Normalized Yield (Ynorm )

l  A Y norm is the fraction is a “rolled-up” weighted average of the sub-
process First Pass Yields for an end-to-end process
l  This measure permits comparisons across different business processes
and across processes of varying complexity
l  A “rolled-up” process sigma can be calculated from Normalized Yield
(convert the yield value to a percentage and use the table on slide 6
l  To calculate; use o, n, and d. As well I = the number of subprocesses
550
Rolled Throughput Yield (Y RTP or RTY)
Is the probability of a “unit” going through all the processes without a defect
l 
Is the product multiplying the First-Pass Yields of each sub-process

l 
Generally used for internal monitoring of business processes and for

l 
prioritizing improvement projects

Best measure of the effectiveness and efficiency of business processes
l 
DO NOT convert to a sigma value as it results in a negative sigma

l 
551
Short-term vs. Long-Term Capability and Sigma Shift
l The capability of a process has two distinct but interrelated dimensions.

l First, there is short-term capability, or simply Z.st.
l Second, we have the dimension long-term capability, or just Z.lt.
l Finally, there is the contrast Z.shift = Z.st – Z.lt
552
• Z.st assesses the ability of a process to repeat (or otherwise replicate) any
given performance condition, at any arbitrary moment in time
• The formula is Z.st = |SL – T| / S.st,

Where SL is the specification limit, T is the nominal specification and S.st is
the short-term standard deviation
• The short-term standard deviation is S.st = sqrt[SS.w / g(n – 1)]

Where SS.w is the sums-of-squares due to variation occurring within
subgroups, g is the number of subgroups, and n is the number of
observations within a subgroup
553
• Z.lt, is intended to show how well the process can replicate a given
performance condition over many cycles of the process
• In its purest form, Z.lt is intended to capture and “pool” all of the observed
instantaneous effects as well as the longitudinal influences
554
The formula is Z.lt = |SL – M| / S.lt,

Where SL is the specification limit, M is the mean (average) and S.lt is the
long-term standard deviation
The long-term standard deviation is given as S.lt = sqrt[SS.t / (ng – 1)],

Where SS.t is the total sums-of-squares
In this context, SS.t captures two sources of variation – errors that occur
within subgroups (SS.w) as well as those that are created between
subgroups (SS.b). Given the absence of covariance, we are able to compute
the quantity SS.t = SS.b + SS.w
555

Sigma Shift
l Processes usually do not perform as well in the long term as they do in the
short term.
l Thus the number of sigmas that will fit between the process mean and the
nearest specification limit will likely drop over time.

l To account for this real-life increase in process variation over time, an
empirically-based 1.5 sigma shift is introduced into the calculations

l So a process that fits 6 sigma between the process mean and the nearest
specification limit in a short-term study will in the long term fit only 4.5 sigma
l Therefor the 3.4 DPMO of a six sigma process in fact corresponds to 4.5
sigma, namely 6 sigma minus the 1.5-sigma shift introduced to account for
long-term variation
556
End Module 13

l  Process Capability Indices
l  Process Performance Indices
l  General Process Capability Studies
l  Process Capability for Attributes Data
l  Process Capability for Non-Normal Data
l  Process Performance vs. Specification
l  Short-Term and Long-Term Capability
Now we will Summarize Measure Phase
557
Module 13 - Measure Phase – Summary
l  Tie back all activities to the CTQ list
l  Validate that you CTQ operational definition is the same as the customer's
l  Detail out the process map
l  Define your defect, target performance and limits
l  Identify the data to be collected
l  Create a data collection plan
l  Make sure your have a reliable measurement systems in place
Module 13 - Measure Phase – Summary
Questions to ask at phase end
l  Which processes are we targeting?
l  Can we address the problem with a single project?
l  Our our measurements continuous and show us the true variation?
l  Will our measurements reflect the customer's view of a single transaction?
l  Where can our measurement fail or be manipulated?

Module 13 - Measure Phase – Questions
Question #1
The shape of a Normal Distribution is impacted primarily by:
A. Sample Error
B. Mean
C. Data Type
D. Variance
Answer #1
D. Variance
Question #2
The graphic below depicts a situation where the measurements are
A. Accurate
B. Precise
C. Accurate and Precise
D. Neither Accurate and Precise
Answer #2
B. Precise
Question #3
A major advantage of stem-and-leaf plots over the histogram, which groups

data in cells is______
A. The distribution pattern is clearer

B. That the raw data values are preserved
C. It is more accurate
D. Actually the histogram is more advantageous
Answer #3
B. That the raw data values are preserved

Module 14 – Analyze Phase – Measuring and Modeling
Relationships
Module 14 – Analyze Phase – Measuring and
Modeling Relationships
Outline
1. Analyze Phase Overview
2. Correlation
3. Linear Regression
4. Multi-Vari studies
567
Analyze Phase Overview
l  The team will focus on analyzing the sources of variation in the target
process
l  Based on the high-level problem, the tools to drill down with will be selected
l  This analysis may require the use of sophisticated statistical tools
l  The team will analyze the value stream. The value stream is the set of
activities that create value for the customer
l  The team will also identify the process drivers, which are the activities that
exert a significant influence on the results of processes
568
Pick the tools
l  Cycle Time Reduction
–  Value Stream Analysis

–  Velocity, Space & Movement, etc.
l  Variation Reduction
–  Hypothesis Testing
–  Correlation
569
Correlation
l Correlation analysis is the study of the strength of the linear relationships

among variables)
l Regression analysis is the modeling the relationship between one or more
independent variables and a dependent variable

l A regression problem considers the frequency distributions of one variable
when another is held fixed at each of several levels.

l A correlation problem considers the joint variation of two variables, neither of
which is restricted
l Correlation and regression analyses are designed to assist in studying cause
and effect
l We have already touched on the basics when we looked at scatterplots
570
Correlation
l When conducting regression and correlation analysis we can distinguish two

main types of variables:
l  Predictor variables or independent variables
l  Response variables or dependent variables.
l As a result of changes that are made, or take place in the predictor
variables, an effect is transmitted to the response variables

l We hope that a small number of predictor variables will ‘explain’ nearly all of
the variation in the response variables

l In practice, it can be difficult to draw a clear distinction between independent
and dependent variables; also both can be responding to an unknown

variable (e.g. ice cream sales and crime rates)
571
Correlation
l Also important to studying cause and effect is that of the data space of the
study
l The data space of a study refers to the region bounded by the range of the
independent variables under study

l Defining the data space can be quite difficult when large numbers of
independent variables are involved
572
Things to watch out for
l  Non-linear relationships will be missed so always create a scatter-plot

l  Be careful what you compare. Some x-y correlations make no sense. These
are termed chance or nonsense correlations
l  This can happen if we do not think through the problem and/of fail to
uncover a third variable
l  Is our Y really our X or vs versa
l  Relationships can be dynamic
573
Things to watch out for
And finally...
CORRELATION DOES NOT NECESSARY MEAN CAUSATION...
574
Correlation
l Autocorrelation charts, otherwise known as the autocorrelation function

(ACF), are used to determine the degree to which current data depends on
previously gathered data
l This is accomplished by automatically examining multiple observations of a
particular variable with an eye toward possible correlations over time

l They are similar to the scatter diagram, except the latter identifies
correlations between different characteristics
575
Correlation
Autocorrelation charts
l In the Measure Phase, these charts may be used to gather information about
processes, including their effects on baseline data
l In the Analyze stage, autocorrelation charts are used to investigate the
regression residuals, namely to test for independence

l Control stage, autocorrelation charts are used to develop a strategy that
takes into account a process' serial dependence
576
Creating Autocorrelation charts
l First step of the autocorrelation function is testing for autocorrelations

between each of the isolated observations
l Each step will be considered in relation to the steps immediately before and
after it. This consideration is called the lag 1 autocorrelation

l There also will be autocorrelations for distances. For example, the lag 3
autocorrelation will consider the relations between the first and fourth
observations, second and fifth observations, and so on
577
Creating Autocorrelation charts
l The general recommendation suggests testing for autocorrelations from lag

1 to lag n/4, where n is the total number of observations
l When used to detect non-randomness, it is usually only the first (lag 1) that
is of interest
l When used to identify an appropriate time series model, the autocorrelations
are usually plotted for many lags
578
Autocorrelation Function Formula
Given measurements, Y1, Y2, ..., YN at time X1, X2, ..., XN, the lag k
autocorrelation function is defined as
Although the time variable, X, is not used in the formula for autocorrelation,
the assumption is that the observations are equi-spaced
579
Autocorrelation Interpretation
l When interpreting an autocorrelation chart, one should be aware of

phenomena that might produce false correlation
l Sometimes autocorrelation will be significant only at adjacent data points,
where the lag is very low. To diminish this autocorrelation, one should
increase the time between data point collection
l Another source of false correlation emerges with sampling from several
different streams in a process. Sometimes large autocorrelations for smaller

lags can influence larger lags
580
Linear Regression
l  Regression analysis is a system for identifying when independent variables

are influenced by one or more dependent variables
l  In the Measure Phase, regression analysis is used to evaluate the degree
to which a measurement system is linear
l  In the Analyze Phase, regression analysis can be used to explore the
connections between metrics and process factors
l  In the improve stage, regression analysis is useful for confirming these
connections after improvements have been implemented
581
Linear Regression
l  A simple linear regression tries to orient data points around a single straight
line
l  In Six Sigma the formula expressed as this:
l  Where β0 is the estimation of the intercept and β1 is the regression line’s
slope. The values for intercept and slope typically are estimated according
to the method of least squares, in which the line is drawn with a minimal
squared distance to each data point.
l  The statistical equation for a simple linear regression includes the word
error as an acknowledgement that every set of data points will have some
inaccuracies
582
First-order model of multiple regression
l  If more than one factor influences a dependent variable multiple
regression must be used

l  Multiple regression takes into account the interactions between these
multiple factors
l  In a first-order model, the value of the dependent variable is based on the
influence of each factor by itself, as well as each possible combination of

two factors
l  Whatever error exists in the model is assumed to be the same for all
factors and combinations of factors
583
First-order model of multiple regression
l  A first-order multiple regression usually will produce an essentially straight
line over small regions, so it can be useful when only targeted data is
needed
l  Examined from a more distant perspective, the model will appear as a
linear regression for which the plane has been curved or twisted.
l  This flexing of the plane is caused by the influence of interacting factors
584
Example multiple regression plot
585
Higher-order models of multiple regression
l When more complex analysis is required for a process in which more than
one factor influences a dependent variable, a higher-order model of
multiple regression must be performed
l A higher-order multiple regression can include squares and cubes of the
values, which will produce a response surface with definable peaks and
valleys
l Is valuable only if exhaustive experiments already have been performed
on the main effects
586
Higher-order models of multiple regression
l  Useful for mapping smaller regions, in particular peaks, valleys, and
minimaxes (intersections between the minimum for one factor and the
maximum for another).
l  Also are good at defining the area that surrounds a stationary point
l  In Six Sigma, these models often are used to evaluate how current
operating parameters influence the response
587
Residuals analysis
l  Residuals are the differences between a response’s observed value and a
regression model’s predicted value for that response

l  A residuals analysis of a regression model will reveal any unusual patterns
that could suggest error in the model.

l  Statistical software programs will calculate a standardized residual such
that the variance is set to 1. This makes outliers more obvious
588
Residuals analysis
l  The most common technique of residuals analysis is the normality test, in
which the randomness of error is tested by creating a distribution of the

residuals
l  If the error truly is random, then the residuals should follow a normal
distribution with a mean of zero

l  Residuals also can be used on a scatter diagram to assess the
independence of a variable
589
Multi-Vari plots
l Are effective tools for assessing the variation within samples or within
particular parts.
l Multi-Vari plots can be used to analyze variation over time or between
different batches
l Primarily used to isolate the causes of variation and to obtain more
information about the interactions among factors

l Identifies possible X’s or families of variation. These families of variation can
hide within a subgroup, between subgroups or over time

l Helps screen X’s by visualizing three primary sources of variation. Later we
will perform Hypothesis Tests based on the findings
590
Multi-Vari plots
l The first step in constructing a Multi-Vari plot is determining the system for
gathering data.
l This data should then be placed on a plot, with each sample unit represented
by a different symbol.
l The length of each symbol will indicate the variation within the sample
l However, it will not indicate whether the process is unstable from a statistical
perspective
591
Multi-Vari plot example
© Minitab
592
Sources of Variation
Within Unit or Positional
–  Within piece variation related to the geometry of the part.
–  Variation across a single unit containing many individual parts such
as a wafer containing many computer processors.
–  Location in a batch process such as plating.
Between Unit or Cyclical

–  Variation among consecutive pieces.
–  Variation among groups of pieces.
•  Variation among consecutive batches.
Temporal or over Shift-to-Shift

–  Day-to-Day
–  Week-to-Week
Module 14 593
593
Conducting a Multi-Vari study

1. Ascertain the historical level of problem variation in the process
2. Define the study unit
3. Collect data from the process
4. Create the Multi-Vari plot by plotting the data in the positional, cyclical, and
temporal groups
5. Interpret the Multi-Vari plot by reviewing the magnitudes of each of the
categories of variation — positional, cyclical, and temporal
594
Factor Analysis
l  Used to identify underlying factors (dimensions), that explain the
correlations among a set of variables

l  Used to identify a smaller set of uncorrelated variables to replace the
original set of correlated variables

l  Each variable is expressed as a linear combination of factors
l  The factors are common factors plus a unique factor
595
Factor Analysis
l  The factor model is represented as:
Xi = Ai 1F1 + Ai 2F2 + Ai 3F3 + . . . + AimFm + ViUi
where
Xi = i th standardized variable
Aij = standardized mult reg coeff of var i on common factor j
Fj = common factor j
Vi = standardized reg coeff of var i on unique factor i
Ui = the unique factor for variable i
m = number of common factors
596
Factor Analysis
l  The first set of factor score coefficients (weights) are chosen so that the first
factor explains the largest amount of the total variance

l  Then a second set of weights can be selected, so that the second factor
explains most of the residual variance, subject to being uncorrelated with

the first factor
l  And so forth...
597
Factor Analysis
l  The common factors themselves can be expressed as linear combinations
of the observed variables
Fi = Wi1X1 + Wi2X2 + Wi3X3 + . . . + WikXk

Where
Fi = estimate of i th factor
Wi= weight or factor score coefficient
k = number of variables
598
Statistics Associated with Factor Analysis

l  Bartlett's test of sphericity is used to test the hypothesis that the variables
are uncorrelated in the population

l  A correlation matrix is a lower triangle matrix showing the simple
correlations, r, between all possible pairs of variables included in the

analysis. The diagonal elements are all 1
l  Communality is the proportion of variance explained by the common factors
l  Eigenvalue represents the total variance explained by each factor
l  A scree plot is a plot of the Eigenvalues against the number of factors in
order of extraction
599
MANOVA
l  An extension of ANOVA in which main effects and interactions are assessed
on a combination of dependent variable

l  Tests whether mean differences among groups on a combination of
dependent variables is likely to occur by chance

l  A new dependent variable is created that is a linear combination of the
individual dependent variables that maximizes the difference between

groups
l  In factorial designs a different linear combination of the dependent variables
is created for each main effect and interaction that maximizes the group
difference separately
-used to identify boundaries between groups of objects
600
MANOVA
l  Also when the independent variable have more than one level the
dependent variables can be recombined to maximize paired comparisons

l  In MANCOVA the linear combination of dependent variables is adjusted for
by one or more continuous covariates

l  A covariate is a variable that is related to the dependent variable, which you
can’t manipulate, but you want to removes its (their) relationship from the
dependent variable before assessing differences on the independent
variables
601
MANOVA basic requirements
l  2 or more dependent variables (I, R)
l  1 or more categorical independent variables (N, O)
l  For MANCOVA you also need 1 or more continuous covariates (I, R)

MANOVA advantages over ANOVA
l  By measuring multiple dependent variables you increase your chances for
finding a group difference
l  Multiple measures usually does not “cost” much more and you are more
likely to find a difference on at least one
l  Using multiple ANOVAs inflates type 1 error rates
602
Discriminant analysis
l  Similar to Regression, except that criterion (or dependent variable) is
categorical rather than continuous

Used to identify boundaries between groups of objects
l  What predictor variables are related to the criterion (dependent variable)
l  Predict values on the criterion variable when given new values on the
predictor variable
l  MANOVA and Discriminant analysis are mathematically identical but have a
different emphasis
l  Discriminant analysis is concerned with putting people into groups
(classification) and testing how well (or how poorly) subjects are classified
l  It is interested in how the groups are differentiated not just that they are
significantly different
603
l  Goal is to determine how continuous variables can be linearly combined to
best classify a subject into a group by finding a dimension(s) that groups

differ on and create classification functions
l  Predictors can be given higher priority in a hierarchical analysis giving us
essentially what would be a discriminate function analysis with covariates

l  Creates discriminate functions (like canonical correlations) and each is
assessed for significance.

l  Usually the first one or two discriminate functions are worth while and the
rest should be ignored

l  Each function is orthogonal to the previous and the number of dimensions
(discriminant functions) is equal to either the g - 1 or p, which ever is

smaller
604
l  You need more cases than predictors in the smallest group
l  Small sample may cause something called overfitting
l  If there are more dependent variables than cases in any cell the cell will
become singular and cannot be inverted

l  If only a few cases more than dependent variables equality of covariance
matrices is likely to be rejected

l  Multivariate normality – assumes that the means of the various dependent
variables in each cell and all linear combinations of them are normally
distributed
605
l  If there is at least 20 cases in the smallest cell the test is robust to violations
of multivariate normality even when there is unequal n.

l  If you have smaller unbalanced designs than the assumption is assessed
on the basis of judgment; usually OK if violation is caused by skewness and

not outliers
l  Absence of outliers – the test is very sensitive to outlying cases so
univariate and multivariate outliers need to be assessed in every group
606
Discriminant analysis assumptions
l  For the assumption that the variance/covariance matrix in each cell of the
design is sampled from the same population

l  When inference is the goal Discriminant analysis is robust to violations of
this assumption
l  When classification is the goal than the analysis is highly influenced by
violations of this assumption because subjects will tend to be classified into

groups with the largest dispersion (variance)
l  Assess impact by plotting the discriminant function scores for at least the
first two functions and comparing them to see if they are about the same
size and spread
l  If assumptionis violated transform the data, by using separate matrices
during classification, use quadratic Discriminant analysis, or use non-

parametric approaches for classification
607
Discriminant analysis assumptions
l  For the assumption of linear relationships between all predictors within each
group
l  Violation of this assumption will tend to reduce power and not increase
alpha
l  For the assumption of absence of Multicollinearity/Singularity in each cell of
the design you do not want redundant predictors because they won’t give
you anymore info on how to separate groups
608
Statistics Associated with Factor Analysis

l  Factor loadings are correlations between the variables and the factors
l  A factor matrix contains the factor loadings of all the variables on all the
factors
l  Factor scores are composite scores estimated for each respondent on the
derived factors
l  Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy is used to
examine the appropriateness of factor analysis. High values (between 0.5

and 1.0) indicate appropriateness. Values below 0.5 imply none
l  The percentage of variance is the percentage of the total variance attributed
to each factor
609
End
Exploratory Data Analysis
l 
Correlation
l 
Linear Regression
l 
Multi-Vari studies
l 
610
Module 15 – Analyze Phase – Hypothesis Testing
Outline
1. Terminology
2. Statistical vs. practical significance
3. Sample size
4. Point and interval estimates
5. Tests for means, variances, and proportions
6. Analysis of variance (ANOVA)
7. Goodness-of-fit (chi square) tests
8. Contingency tables
9. Non-parametric tests
612
Hypothesis Testing
l  Integrates the Voice of the Process (VOP) with the Voice of the Business
(VOB) to make data-based decisions to resolve problems
l  The VOP describes what the process is telling us. What it is capable of
achieving, whether it is under control and what significance to attach to
individual measurements
l  The VOB describes the stated and unstated requirements of the business
613
Hypothesis Testing
l  Can help avoid high costs of experimental efforts by using existing data
l  Can help establish a statistical difference between factors from different
distributions; such as from different shifts or suppliers
614
Basics of Hypothesis Testing
l Hypothesis testing establishes a degree of confidence and then compares a

sample statistic against a historical value or another sample statistic
l Useful for distinguishing the factors that contribute to variation in data.
l Primarily, this type of testing is used during designed experiments and
regression analysis
l In the improve stage, its primary function is comparing the averages of
improved processes with baseline estimates

l In order to perform hypothesis testing, the population must be assumed
constant and homogenous.

l Also, that samples are random and representative must be assumed
615
Test Statistic
l  To test a null hypothesis, a test calculation must be made from sample
information
l  This calculated value is called a test statistic and is compared to an
appropriate critical value, then a decision can then be made to reject or not
reject the null hypothesis
616
Parametric and Nonparametric Statistics
l  Parametric Statistics

l  Assumes a normal distribution
l  Interval/Ratio level data required
l  Nonparametric Statistics

l  No assumptions about the underlying distribution
l  Used when the data do not meet the assumption for a parametric test
617
One- and Two-Tailed Tests
l  One-tailed tests are used for asymmetric distributions that have a single tail,
such as the chi-squared test
l  Two-tailed tests are only applicable when there are two tails, such as in the
normal distribution, and where either direction can be significant
618
Type I errors.
l A type I error, also known as an error of the first kind, occurs when the null
hypothesis(H0) is true, but is rejected

l The rate of the type I error is called the size of the test and denoted by the
Greek letter α (alpha)

l It usually equals the significance level of a test
l In the case of a simple null hypothesis α is the probability of a type I error.
l If the null hypothesis is composite, α is the maximum (supremum) of the
possible probabilities of a type I error
619
Type II errors.
l A type II error, also known as an error of the second kind, occurs when the
null hypothesis is false, but erroneously fails to be rejected

l The rate of the type II error is denoted by the Greek letter β (beta) and
related to the power of a test (which equals 1−β)

l Hence it is also known as Beta Risk
620
Choosing a Statistical Procedure

One Independent Variable Two Independent Variables
Measurement Two Levels More than 2 Levels Factorial Designs
Scale of the
Dependent Two Two Multiple Multiple
Independent Dependent
Variable Independent Dependent Independent Dependent
Groups Groups
Groups Groups Groups Groups
Two-Factor
Repeated
Independent Dependent One-Way Two -Factor ANOVA
Interval or Ratio Measures
t-test t-test ANOVA ANOVA Repeated
ANOVA
Measures
Mann- Kruskal-
Ordinal Wilcoxon Friedman
Whitney U Wallis
Nominal Chi-Square Chi-Square Chi-Square
621
Steps in Hypothesis Testing
1. The first step in hypothesis testing is stating the null hypothesis, H0. In most
cases, the null hypothesis represents the value that the test aspires to prove
2. The next step in hypothesis testing is defining the alternative hypothesis
(H1). The alternative hypothesis should cover all of the area excluded from
the null hypothesis
3. The third step is either setting a value for p or selecting a significance level
(α)
622
Steps in Hypothesis Testing
4. The significance level is the chance of incorrectly rejecting a true hypothesis

in what is known as a Type 1 error
5. It is considered better to set a p value because this allows more freedom for
adjustment later in the experiment
6. Next, samples are collected and statistics are calculated.
7. The final step in hypothesis testing is drawing a conclusion
623
Hypothesis Testing Interpretation

If the calculated statistic is larger than the critical value of the test statistic for
the given level of significance, then the null hypothesis must be rejected
If the critical value of the test statistic is larger, then the null hypothesis is
accepted
Software programs such as Excel or Minitab can use the calculated p value to
indicate whether the obtained results are appropriate, assuming that the null
hypothesis is true
624
Hypothesis Testing Interpretation

l If the p value is small, then the chances of obtaining results similar to those
gathered during the experiment are so small that the null hypothesis should
be rejected
l If the null hypothesis is not rejected in that case, then the experiment is said
to have reached a weak conclusion, because the means may or may not be
equal
l When the null hypothesis is confirmed, however, the experiment is said to
have produced a strong conclusion
625
l  Two types of significant differences occur and must be well understood,
practical and statistical
l  Failure to tie these two differences together is one of the most common
errors in statistics
l  Practical Difference: The difference which results in an improvement of

practical or economic value to the company. Reflects the VOB
l  Statistical Difference: A difference or change to the process that probably

(with some defined degree of confidence) did not happen by chance.
Reflects the VOP
626
Practical and Statistical Significance

l  The practical difference to be achieved must match the statistical
difference.
l  Which can be either a change in the Mean or in the variance.
l  Detection of the difference is then accomplished using Hypothesis Testing
l  A Hypothesis Test converts the practical problem into a statistical problem.
l  Since small sample sizes are used to estimate population parameters, there
is always a chance of collecting a non-representative sample

l  Inferential statistics allows us to estimate the probability of getting a non-
representative sample
627
Robustness
l  When the obtained statistics are not affected by moderate deviations from
theoretical expectation, they are said to be robust
628
Sample size
l  The procedure for determining sample size is to determine the Type I and
l  Type II error desired and then to calculate the sample size necessary to
obtain the desired confidence level (Z)

l  The sample size (n) needed for hypothesis testing depends on:
l  The desired Type I and Type II risk
l  The minimum value to be detected between the population means
l  The variation in the characteristic being measured (S or σ)
629
Sample size equation

l  Basic for variable data with a normal distribution
l  The above formula works for Poisson data using C-bar for σ
l  For binomial data, use the following formula:
630
Point and interval estimates

Define and distinguish between confidence and prediction intervals. Define and
interpret the efficiency and bias of estimators. Calculate tolerance and confidence
intervals
631
Point and Interval estimates

l  The sample mean, the sample standard deviation, and the sample variance
are called point estimators as they are single values used to represent
population parameters
l  Interval estimation is an alternative to point estimation that gives us a better
idea of the magnitude of the sampling error

l  Confidence intervals can be either one-sided or two-sided
l  A one-sided or confidence interval places an upper or lower bound on the
value of a parameter with a specified level of confidence

l  A two-sided confidence interval places both upper and lower bounds
632
Tests for Means, Variances, and Proportions

Continuous Data – Large Samples
The confidence interval for the mean:
= the normal distribution value for a desired

confidence level
633

Continuous Data – Small Samples (<30)
The confidence interval for the mean using the t distribution
634
The confidence intervals for variance is based on the Chi-Square

distribution. The formula is:
635
The confidence intervals for proportion

For large sample sizes, with n(p) and n(1-p) greater than or equal to 4 or 5,
the normal distribution can be used to calculate a confidence interval
for proportion. The following formula is used:
= the appropriate confidence level from a Z table
636
Analysis of Variance (ANOVA)
An analysis of variance (ANOVA) is a table that depicts;

l 
l  The sum-of-squares variance that can be credited to a particular

source
l  The sum of the squares that can be credited to error
l  The total sum of squares from the data
This table includes F statistics related to the significance of the source
l 
relative to the error
637
l Analysis of variance is used to identify the origins of errors in measurement

l This analysis is useful especially for processes that damage or diminish the
resources involved, such that a repeatability and reproducibility (R & R) is not

possible
l It is also used to gather information about the statistical significance of a
regression models
l ANOVA is often used in this manner to pinpoint possible process drivers.
l Another use of ANOVA in the Analyze Phase is to identify differences
between data subsets in order to identify the causes of variation within a

process
638
l In ANOVA variation within each subgroup is compared to the variation found
between different subgroups.
l The variation within each subgroup is found by sampling from the subgroup
repeatedly.
l The variation between different subgroups is found by analyzing the
essential differences between the averages of each subgroup.

l ANOVA begins with the null hypothesis, that all subgroup averages are equal
639
l Then, the F statistic is used to compare the average variation between

subsets, known as the mean square treatment, with the sun of the squares of
the residuals, known as the mean square error
l An F test assumes that subsets have a normal distribution and equal
variance
l If the p value for the F test is less than 0.05, then the null hypothesis can be
rejected. This suggests that one or more of the subset averages is different
640
Example Analysis of Variance (ANOVA)
641
Chi Square
A goodness-of-fit tests used measure the validity of a statistical assessment
l  Chi-square analysis is primarily used to deal with categorical (frequency)
data
l  We measure the “goodness of fit” between our observed outcome and the
expected outcome for some variable

l  We see if observed frequencies of occurrence in each group are
significantly different from expected frequencies
l  Important point about the non-directional nature of the test, the chi-square
test by itself cannot speak to specific hypotheses about the way the
results would come out. Not useful for ordinal data because of this
642
Chi Square
l  Usually, the higher the chi-square statistic, the greater likelihood the
finding is significant, but you must look at the corresponding p-value to
determine significance
l  Many datasets encountered in Six Sigma have normal or approximately
l  normal distributions. It can be shown that in these instances the
distribution of sample variances has the form (except for a constant) of a
chi-square distribution
l  Chi square requires that there be 5 or more in each cell of a 2x2 table and
5 or more in 80% of cells in larger tables. No cells can have a zero count
643
Chi Square Formula
l  Where Chi Square is
644
Chi Square – Degree of Freedom (df)
l  The number of independent ways by which a dynamic system can move
without violating any constraint imposed on it, is called degree of freedom
l  The degree of freedom can be defined as the minimum number of
independent coordinates that can specify the position of the system
completely
645
Chi Square Table

l  Used to determine P value
l  The first row of numbers indicates probability.
l  For your degrees of freedom (df) read across that row until you find the
next smallest number.
l  Then go to the top and find the probability (P value)
646
Contingency tables
l  Two-way classification table containing original frequencies can be
analyzed in order to determine whether the two variables (classifications)

are independent or have significant association
l  Chi Square tests whether there is dependency relationship between the
two classifications
l  A contingency coefficient may be calculated If the Chi Square test shows
a significant dependency, the contingency coefficient shows the strength

of the correlation
647
Contingency tables
l  A measurement of the difference found between observed and expected

frequencies is supplied by the Chi Square test
l  Contingency tables are very similar to goodness-of-fit tests
l  Coefficient of Contingency is the degree of relationship, association or
dependence of the classifications in a contingency table
648
Nonparametric Tests
l Are occasionally used in place of traditional hypothesis tests for the equality
of two means
l These tests are more effective when the assumptions associated with
common statistical distributions cannot be met

l In the analyze stage, nonparametric tests are used to compare the means
from samples with different conditions

l In the improve stage, they are used to assess whether process averages
have been improved over baseline estimates after the implementation of

changes
l These tests do not require statistical normality or any other quality in order to
be valid
l One disadvantage of this form of testing is its requirement of a larger sample
size
649
Creating Nonparametric Tests
l For a nonparametric test on the equality of means, the null hypothesis H0

will be that population 1’s median is equal to population 2’s median.
l The alternative hypothesis H1, then, is that population 1’s median does not
equal population 2’s median

l Median is preferable to mean in these tests because it indicates central
tendency regardless of distribution

l The next step in the test involves declaring a significance level or p value.
After samples have been collected, the probability of Type II error can be
assessed
650
Interpreting Nonparametric Tests
l The null hypothesis is rejected if the calculated statistic is greater than the
critical value of the test statistic.
l If the calculated statistic does not exceed the critical value of the test
statistic, then the null hypothesis is accepted
651
Interpreting Nonparametric Tests
l The null hypothesis is rejected if the calculated statistic is greater than the
critical value of the test statistic.
l If the calculated statistic does not exceed the critical value of the test
statistic, then the null hypothesis is accepted
652
Kruskal-Wallis and Mood's Nonparametric Tests
l  The Kruskal-Wallis and Mood’s median tests are nonparametric estimation
methods
l  The Kruskal-Wallis test is similar to the Mann-Whitney, and it is used
instead of ANOVA
l  In a Kruskal-Wallis test, the null hypothesis asserts that all medians are
equal, and the alternative hypothesis asserts that the medians are not all
equal
653
Kruskal-Wallis & Mood's Median Nonparametric Tests
l  The Mood’s median test, meanwhile, is a chi-square test

l  Again, the null hypothesis asserts that all the population medians are equal,
and the alternative hypothesis asserts that the population medians are not
all equal
l  The Kruskal-Wallis and Mood’s median tests assume that the independent
random samples drawn from different populations have a continuous
distribution with the same shape
l  The Mood’s median test better handles outliers, while the Kruskal-Wallis is
more powerful when dealing with some distributions
654
Man-Whitney U Test
l  Nonparametric equivalent of the independent t test

l  The requirements are:
l  Two independent groups
l  Ordinal measurement of the dependent variable
l  The sampling distribution of U is known and is used to test hypotheses in
the same way as the t distribution
655
To Compute a Man-Whitney U Test
l  Rank the scores in both groups (together) from highest to lowest
l  Sum the ranks of the scores for each group
l  The sum of ranks for each group are used to make the statistical
comparison
l  Null Hypothesis - there is no difference in sum of ranks of the two groups
l  Alternative Hypothesis - there is a difference between the sum of ranks of
the two groups
656
End of Module 15
l  Terminology
l  Statistical vs. practical significance
l  Sample size
l  Point and interval estimates
l  Tests for means, variances, and proportions
l  Analysis of variance (ANOVA)
l  Goodness-of-fit (chi square) tests
l  Contingency tables
l  Non-parametric tests
657
Module 16 – FMEA and Additional Analysis Methods
Module 15 – Analyze Phase FMEA and Additional
Analysis Methods
Outline
1.  FMEA
2.  Gap analysis
3.  Root cause analysis
4.  Waste analysis
5.  Summary of Analyze Phase
659
Analysis Methods
FMEA
l Stands for Failure Mode and Effects Analysis
l Is used;
–  To evaluate a process or product to determine what might cause it to fail and
–  As well as determine the effects that failure could have
660
Analysis Methods
FMEA
l FMEA provides an excellent basis for classifying and identifying CTQs and other
critical failure and effects variables
l Objective of FMEA is to direct the available resources toward the most promising
opportunities
l An extremely unlikely failure, even it has serious consequences, may not be the best
place to concentrate preventative efforts
l Can be combined with decision analysis methods to help guide preventive action
planning
661
Analysis Methods
The following steps are used in performing an FMEA:
1. Define the system to be analyzed.
2. Construct process maps
3. Conduct SIPOC (supplier, input, process, output, customer) analysis for each
subprocess in the system
4. List the intended function of each step in the process or subprocess
5. For each process step, identify all potential item and interface failure modes and
define the effect on the immediate function or item, on the system, and on the mission
to be performed
6. Evaluate each failure mode in terms of the worst potential consequences which may
result and assign a severity classification category, or SEV
7. Determine the likelihood of occurrence of each failure mode and assign an
occurrence risk category, or OCC
662
Analysis Methods
8. Identify failure detection methods and assign a detectability risk category, or DET
9. Calculate the risk priority number (RPN) for the current system. RPN = SEV X OCC
X DET
10. Determine compensating provisions for each failure mode
11. Identify corrective design or other actions required to eliminate failure or control the
risk
12. Identify effects of corrective actions on other system attributes
13. Document the analysis and summarize the problems which could not be corrected
and identify the special controls which are necessary to reduce failure risk
663
Design for Six Sigma (DFSS)
Basic failure mode and effects analysis (FMEA)
FMEA severity, likelihood, detectability rating guidelines table
Rating 1
SEV -Customer won’t notice the effect or will consider it insignificant
OCC – Not Likely
DET - Nearly certain to detect before reaching the customer (p = 0)
Rating 2
SEV – Customer will notice the effect
OCC – Documented low failure rate
DET - Extremely low probability of reaching the customer without detection (0 <p <=
0.01)
1
Customer won’t notice the effect
Moduleor will
1 consider it insignificant 664
Not likely
Rating 3
SEV - Customer will become irritated at reduced performance
OCC – Undocumented low failure rate
DET – Low probability of reaching the customer without detection (0.01 <p <= 0.05)
Rating 4
SEV – Customer dissatisfaction due to reduced performance
OCC – Failures occur from time-to-time
DET - Likely to be detected before reaching the Customer (0.05 <p <=0.20)
1
Customer won’t notice the effect or will consider it insignificant
Not likely
Nearly certain to Module 1 665
detect before reaching
Rating 5
SEV - Customer’s productivity is reduced
OCC – Documented moderate failure rate
DET – Might be detected before reaching the Customer (0.20 <p ,=0.50)
Rating 6
SEV – Customer will complain. Repair or return likely. Increased internal
OCC – Undocumented moderate failure rate
DET - Unlikely to be detected before reaching the customer (0.50 <p
1
Customer won’t notice the effect or will consider it insignificant
Not likely
Nearly certain to Module 1 666
detect before reaching
Rating 7
SEV - Reduced customer loyalty. Internal operations adversely impacted
OCC –Documented high failure rate
DET – Highly unlikely to detect before reaching the customer (0.70 <p (0.20
<p ,=0.50)
Rating 8
SEV – Complete loss of customer goodwill. Internal operations disrupted
OCC – Undocumented high failure rate
DET - Undocumented high failure rate Poor chance of detection (0.90 <p <=0.95)
1
Customer won’t notice the effect
Moduleor will
1 consider it insignificant 667
Not likely
Rating 9
SEV - Customer or employee safety compromised. Regulatory compliance
questionable
OCC – Failures common
DET – Extremely poor chance of detection (0.95 <p <=0.99)
Rating 10
SEV – Catastrophic. Customer or employee endangered without warning. Violation
of law or regulation
OCC – Failures nearly always occur
DET - Nearly certain that failure won’t be detected ( p = 1)
Module 1 668
Analysis Methods
Risk Priority Numbers;
l A key to setting priorities; with larger RPNs having a higher priority
l Some organizations have set guidelines on what actions are to be taken based on
the RPN value
l The sum of the RPNs for all the potential failure modes is the overall RPN for the
process in question
l One can anticipate and compare the effects of proposed changes by calculating
hypothetical RPNs for different scenarios
l RPN is a measure for comparison within one given process only
l Relies heavily on engineering judgment
l Must be customized to fit the product or process that is being analyzed as well as
the particular needs and priorities of the organization
669
Analysis Methods
Design FMEA (DFMEA);
l Is used to uncover design risk; including possible failure,
degradation of performance and potential hazards
l Typically the first FMEA tool used in product development
l The primary objective is to uncover potential failures
associated with the product that could cause:
l  Product malfunctions
l  Shortened product life
l  Safety hazards while using the product
l Design-FMEAs should be used throughout the design process
from preliminary design until rollout into production
670
Analysis Methods
Process Failure Mode and Effects Analysis (PFMEA);
l  Used when a new product or process is being introduced as well as for determining
process controls
l  It can also play an important role in day to day improvement and problem solving
l  Used to uncover potential failures that can:
l  Impact product quality
l  Reduce process reliability
l  Cause customer dissatisfaction
l  Create safety or environmental hazards
l  Ideally should be conducted prior to start-up of a new process, but can also be
conducted on existing processes
671
Analysis Methods
Gap analysis
Analyze scenarios to identify performance gaps, and compare current and future
states using
predefined metrics.
672
Analysis Methods
Root Cause Analysis
l  Use cause and effect diagrams, relational matrices, and other problem-solving
tools to identify the true cause of a problem
l  Derivative of FMEA
l  It is not the initial response to the problem
l  Nor is it a restatement of the findings
l  Usually the root cause is a process, procedure or organizational failure
673
Analysis Methods
Root Cause Analysis

l Standard process for;
l  Identifying a problem

l  Containing and analyzing the problem
l  Defining the root cause
l  Defining and implementing the actions required to eliminate the root cause
l  Validating that the corrective action prevented recurrence of problem
l Features interdisciplinary involvement of those closest to and/or most knowledgeable
about the situation
674
Analysis Methods
The Root Cause is
l  The causal or contributing factors that, if corrected, would prevent recurrence of the
adverse effect, defect or problem in question
l  The “factor” that caused the effect, problem or defect that can be permanently
eliminated through process improvement
l  The factor that sets in motion the cause and effect chain that creates a problem
l  The “true” reason that contributed to the creation of a problem, defect or effect
Not finding the root cause can lead to costly band aids and rabbit holes
675
Analysis Methods
Why do Root Cause Analysis

l Prevent problems from recurring
l Reduce possible injury to personnel
l Reduce rework and scrap
l Increase competitiveness
l Promote happy customers and stockholders
l Ultimately, reduce cost and save money
676
Analysis Methods
Root Cause Analysis
The usual approach a low Sigma organizations take.
1. A problem hits
2. Fire fighting
3. Blame someone / CYA all-around
4. The problem hits again or some 'new' problem caused by the fire fighting
5. Return to step 2... rinse and repeat
The problem with the above is...

The initial response is usually the symptom, not the root cause of the problem. Then
there is the blame game...
677
Analysis Methods
Root Cause Analysis
The RCA approach.
1. Problem manifests
2. Problem identified
3. Containment of problem and process
4. Follow defined RCA process
5. Solution validated
6. Solution fully implemented
678
Analysis Methods
Root Cause Analysis
Ditch the blame game
l Most human errors are due to process errors e.g. Titanic sinking
l A sufficiently robust process can eliminate human errors
l  Placing blame does not correct a root cause situation

l  Is training appropriate and adequate?
l  Is documentation available, correct, and clear?
l  Are the right skillsets present?
679
Analysis Methods
Root Cause Analysis
Corrective Action
l Immediate
l Preventive – Process focused
l Preventive – System focused
680
Analysis Methods
Root Cause Analysis
When do you do RCA
Significant or consequential events

l 
l Repetitive human errors are occurring during a specific process

l Repetitive equipment failures associated with a specific process
l Performance is generally below desired standard
681
Analysis Methods
Root Cause Analysis
General Approach to RCA
l Assign the task to a team knowledgeable of the systems and processes involved; or
at the very least have access to SMEs
l Define the problem
l Collect and analyze facts and data
l Develop theories and possible causes - there may be multiple causes that are
interrelated
l Systematically reduce the possible theories and possible causes using the facts
682
Analysis Methods
Root Cause Analysis
General Approach to RCA
l Develop possible solutions
l Define and implement an action plan
l Monitor and assess results of the action plan for appropriateness and effectiveness
l Repeat analysis if problem persists- if it persists, did we get to the root cause...
Obviously not
683
Analysis Methods
Root Cause Analysis
Four Rules for RCA
1. Causal Statements must clearly show the "cause and effect" relationship
2. Negative descriptors are not used in causal statement
3. Each human error must have a preceding cause
4. Each procedural deviation must have a preceding cause
684
Analysis Methods
Root Cause Analysis
Common Errors
l Looking for a single cause- often 2 or 3 which contribute and may be interacting
l Ending analysis at a symptomatic cause
l Assigning as the cause of the problem the “why” event that preceded the real cause
685
Analysis Methods
Root Cause AnalysisTools
l The “5 Whys”
l Pareto Analysis (Vital Few, Trivial Many)
l Brainstorming
l Flow Charts / Process Mapping
l Cause and Effect Diagram
l FMEA
686
Analysis Methods
The “5 Whys” (aka Questioning the Void)
Ask “Why?” five times
l 
l  Stop when the corrective actions do not change
l  Stop when the answers become less important
l  Stop when the root cause condition is isolated
687
Analysis Methods
Cause and Effect Diagram
l AKA Fishbone Diagram or Ishikawa Diagram
l Identifies many possible causes for an effect or problem
l Excellent structured brainstorming tool
l Sorts ideas into useful categories.
688
Analysis Methods
Cause and Effect Diagram Example
689
Analysis Methods
Cause and Effect Diagram Creation
1. Agree on a problem statement (effect). Write it at the center right of the flipchart or
whiteboard. Draw a box around it and draw a horizontal arrow running to it.
2. Brainstorm the major categories of causes of the problem. If this is difficult use
generic headings such as:
l  Methods
l  Machines
l  People
l  Materials
l  Measurement
l  Environment
690
Analysis Methods
3. Write the categories of causes as branches from the main arrow.
4. Brainstorm all the possible causes of the problem. Ask: “Why does this happen?”
5. As each idea is given, the facilitator writes it as a branch from the appropriate
category.
6. Causes can be written in several places if they relate to several categories
7. Again ask “why does this happen?” about each cause. Write sub–causes branching
off the causes.
8. Continue to ask “Why?” and generate deeper levels of causes. Layers of branches
indicate causal relationships
9. When the group runs out of ideas, focus attention to places on the chart where ideas
are few
691
Analysis Methods
10. After completing the Cause-Effect Diagram, take the following actions:
l  Rank the ideas from the most likely to the least likely cause cause of the
problem or issue
l  Develop action plans for identifying the essential data, resources and tools
692
Analysis Methods
Corrective Action Plan
l Must verify the solution will eliminate the problem
l Verification before implementation whenever possible
l Define exactly
l What actions will be taken to eliminate the problem?
l Who is responsible?
l When will it be completed?
l Make certain customer is happy with actions
l Define how the effectiveness of the corrective action will be measured.
693
Analysis Methods
To be Credible a Root Cause Analysis must:
l 
l  Include participation by the leadership of the organization & those most
closely involved in the processes & systems
l  Be internally consistent.
694
Analysis Methods
Pareto analysis helps to identify the top 20% of causes that needs to be addressed to
resolve the 80% of the problems.
695
Analysis Methods
The result of a Pareto analysis is Pareto Chart
Module 4 696
Analysis Methods
Performing a Pareto analysis
1. Identify and List Problems
2. Identify the Root Cause of Each Problem
3. Score Problems
4. Group Problems Together By Root Cause
5. Add up the Scores for Each Group
697
Analysis Methods
Things to do when performing the analysis;
l Define the purpose of using the tool.
l Identify the most appropriate measurement parameters.
l Use check sheets to collect data for the likely major causes.
l Arrange the data in descending order of value and calculate % frequency and/or cost
and cumulative percent.

l Plot the cumulative percent through the top right side of the first bar.
l Carefully scrutinize the results. Has the exercise clarified the situation?
698
Analysis Methods
Things to watch out for when doing a Pareto analysis;
Misrepresentation of the data.
l 
Inappropriate measurements depicted

l 
Lack of understanding of how it should be applied to particular problems

l 
Knowing when and how to use Pareto Analysis

l 
Inaccurate plotting of cumulative percent data

l 
699
Analysis Methods
The cumilative Line;
l A Pareto chart with a steep cumulative line is better because in such a chart, the value
is concentrated in the left-most categories

A relatively flat cumulative bar is less helpful, because this arrangement indicates no
l 
problems as more important than the rest, or that it may have been subdivided too
much
In this case, regrouping into a few large categories may bring about a better result
l 
700
Analysis Methods
Fault Tree Analysis
l  Fault trees are diagrams used to trace symptoms to their root causes
l  Is a top-down approach as opposed to FMEA's bottom-up approach
l  FTA is a five-step process
1.  Define the undesired event to study

2.  Obtain an understanding of the system
3.  Construct the fault tree
4.  Evaluate the fault tree
5.  Resolvel the problems identified
701
Analysis Methods
Fault Tree Analysis
l  Basic Fault Tree Symbols
702
Analysis Methods
Fault Tree Analysis
l  Fault Tree Example
©Brighthubpm
703
Analysis Methods
Waste Elimination
l Waste is any activity that doesn’t add value, as defined by the customer, to the end
product or service
l Ask two questions:
1.  Is your customer willing to pay for this activity?

2.  Does this activity add value to a process that adds direct customer value?
l No to either means it's waste, though you still have to watch for more subtile forms of
waste; such as rework and inspection
l You will never get rid of all non-value-adding activities due the regulatory or
compliance activities
704
Analysis Methods
The 7 Wastes (Muda)
1. Overproduction
2. Waiting
3. Transporting
4. Overprocessing
5. Excess Inventory
6. Excess Motion
7. Defects
705
Analysis Methods
Waste #1: Overproduction
l  Making too much or too early
l  Usually because of working with oversize batches, long lead times, and poor
supplier relations or supplier quality
l  Overproduction leads to high levels of inventory
l  The aim should be to make only what is required when it is required by the customer
706
Analysis Methods
Waste #2: Waiting
l  Time wasted waiting for whatever is needed to proceed
l  Includes WIP waiting in your process queues
l  This disrupts flow and adversely impacts cycle time
707
Analysis Methods
Waste #3: Transportation
l  Movement of materials from one location to another adds zero value to the product
l  Can be a very high cost as one need people to operate it and equipment such as
trucks or fork trucks to undertake this expensive movement of materials
l  Also results in the waiting waste as one waits for the shipment to arrive
l  Internally, use spaghetti diagrams to map out the transportation of goods within your
facility
l  Try and source from suppliers as close as possible to your facilities
708
Analysis Methods
Waste #4: Overprocessing
l  Inappropriate techniques, oversize equipment, working to tolerances that are too
tight, performing processes that are not required by the customer and so forth
l  Impacts cycle times, contributes to waiting, excess motion, excess inventory, and
increases the risk of defects
709
Analysis Methods
Waste #5: Excess Inventory
l Every item in inventory ties up money, resources and space and until it is actually
sold the 'asset' value is not realized

l It also may be damaged or deteriorate during storage and could become obsolete if in
inventory long enough
710
Analysis Methods
Waste #6: Excess Motion
l Unnecessary motions are those movements of man or machine which are not as
small or as easy to achieve as possible

l Excessive travel between work stations, excessive machine movements from start
point to work start point

l Cost time and money, increases the risk of injury or machine wear and tear
711
Analysis Methods
Waste #7: Defects
l Quality errors that cause defects invariably cost far more than you expect. Every
defective item requires rework or replacement

l it wastes resources and materials
l it creates paperwork,
l it can lead to lost customers. Or even lawsuits and fines
712
Analysis Methods
Two other key concepts related to waste;
Muri (Unreasonableness)
l All the unreasonable work imposed on workers and machines because of poor
organization or short-sighted focus on costs

l It is pushing a person or a machine beyond its natural limit
l Bad working conditions
l Almost always a cause of multiple nonconforming conditions and defects
Mura (Inconsistency)
l Variation and inconsistency in quality and volume in both products and working
conditions
713
End of Module
1.  FMEA
2.  Gap analysis
3.  Root cause analysis
4.  Waste analysis
And Now we'll summarize the Analyze Phase
714
Analyze Phase – Summary
l  Develop graphical representations of data to detect pattern
l  Define and calculate a z score or DPMO
l  Identify a list of potential Xs
l  Do statistical testing on population differences
l  Analyze the value stream
l  Produce a short list of critical factors that need to be improved
Analyze Phase Summary &

Review Questions
Analyze Phase – Summary
Questions to ask at the end of the phase:
l  What is the current process's capability?
l  Is the process statistically stable?
l  Is the data discrete of continuous?
l  What does the distribution look like?
l  Have we been able to short-list the potential Xs?
l  What is the null hypothesis, and what is the alternate hypothesis?
l  Which one is in play?
l  Is the required improvements feasible?

Review Questions
Analyze Phase Review Questions
Question #1
After running some statistical tests, you found that the P-value was greater then 0.05
which indicated:
A. There is a difference or relationship with at least 95% confidence
B. There is no difference or relationship with at least 95% confidence
C. To reject the Null Hypothesis with a least 95% confidence
D. To change the Null Hypothesis

Review Questions
Answer #1
B. There is no difference or relationship with at least 95% confidence

Review Questions
Question #2
Which one of the following is not one of the 7 wastes?
A. Excess Inventory
B. Overprocessing
C. Defects
D. Redundant Systems

Review Questions
Answer #2
D. Redundant Systems
Question #3
A type I error, also known as an error of the first kind, occurs when the null
hypothesis(H0) is:
A. False, but accepted

B. True, but rejected
C. When normal distribution was assumed for non-normal data
D. None of the above
Answer #3
B. True, but rejected

Module 17 – Improve Phase – Design of Experiments (DOE)
Module 17 – Improve Phase – Improve Phase Overview
l  The first major objective of the Improve phase is to set the new process
operating conditions. These conditions are based on the experimentation
and analysis of the measure and analyze phases.
l  The next objective of the improve stage is to identify and address the failure
modes for the new processes
l  Assessing and predicting the benefits of the proposed solution also is
appropriate. Before making massive changes, the team should be able to
guess how positive the results of these solutions will be
l  The final objective of the improve stage is to implement and confirm
process improvements
724
Module 17 – Improve Phase – Design of Experiments
Terminology
Define basic DOE terms, e.g., independent and dependent variables, factors and
levels, response, treatment, error, nested
725
Design of Experiments Terminology
l  Experimental design: a structured investigation of whether a series of

factors, when varied, have an effect on the variable of interest (usually
referred to as the ‘Response Variable’ or ‘Quality Characteristic’)
l  Factorial design: a statistically designed experiment that involves varying
two or more variables simultaneously and obtaining multiple measurements

under the same experimental condition. It is an important method to
determine the effects of multiple variables on a response
726
l  Response variable: The variable being investigated, also called the
dependent variable, sometimes called simply response
l  Primary variables: The controllable variables believed most likely to have
an effect. These may be quantitative or qualitative

l  Background variables: Variables, identified by the designers of the
experiment, which may have an effect but either cannot or should not be
deliberately manipulated or held constant. They can contaminate primary
variable effects unless they are properly handled via blocks
727
l  Experimental error: The variation in data left over after all significant
sources of variability have been accounted for. It is is also a synonym for
residuals, the differences between observed values and values expected
based on the regression equation obtained from the analysis of the
experiment.
l  Interaction: A condition where the effect of one factor depends on the level
of another factor
728
l  Replication: The collection of more than one observation for the same set
of experimental conditions. Allows the experimenter to estimate experimental
error, since variation exists when all experimental conditions are held
constant, the cause must be something other than the variables being
controlled
l  Randomization: In order to eliminate bias from the experiment, variables
not specifically controlled as factors should be randomized
729
l Factors: are the main categories to explore when determining the cause
l A leve:l is basically one of the subdivisions that make up a factor
l A group is set of conditions that will make up that particular experiment
l Null outcome: is when the outcome of your experiment is the same
regardless of how the levels within your experiment were combined

l Main effect: is when there exists a consistent trend among the different
levels of a factor
l Interaction effect: is when there is an interaction between the factors
730
l Factors: are the main categories to explore when determining the cause
l A level is basically one of the subdivisions that make up a factor
l A group is set of conditions that will make up that particular experiment
l Null outcome: is when the outcome of your experiment is the same
regardless of how the levels within your experiment were combined

l Main effect: is when there exists a consistent trend among the different
levels of a factor
l Interaction effect: is when there is an interaction between the factors
731
l  Subsidiary factors: are factors that contribute to the response and are
controlled for the experiment, but are not controlled during the normal
iteration of the process. There are three types of subsidiary factor:
l  An external factor: exists outside the operating equipment
l  An internal factor exists within the equipment.
l  A unit-to-unit factor depends on variations between processed units
732
Factor Notation
l The notation used to denote factorial experiments conveys a lot of
information
l  When a design is denoted a 23 factorial, this identifies the number of
factors (3);
l  How many levels each factor has (2);
l  And how many experimental conditions there are in the design (23=8)
l  Factorial experiments can involve factors with different numbers of levels. A
243 design has five levels, four with two levels and one with three levels,
and has 16 X 3=48 experimental conditions
l This default is the Full Factorials design, which is seldom used
733
Design of Experiments Experimental designs
l Fixed-effects model: An experimental model where all possible factor

levels are studied. For example, if there are three different materials, all three
are included in the experiment
l Random-effects model: An experimental model where the levels of factors
evaluated by the experiment represent a sample of all possible levels.For

example, if we have three different materials but only use two materials in the
experiment
734
l Mixed model: An experimental model with both fixed and random effects
l Completely randomized design: An experimental plan where the order in
which the experiment is performed is completely random

l Randomized-block design: An experimental design is one where the
experimental observations are divided into ‘‘blocks’’ according to some

criterion. The blocks are filled sequentially, but the order within the block is
filled randomly
735
Design of Experiments Design Principals
The advantages of DOE are as follows:

l Interactions can be detected and measured
l Each value does the work of several values.
l A properly designed experiment allows you to use the same observation to
estimate several different effects; thereby reducing the number of

experiments
l it can be used to find both main effects (from each independent factor) and
interaction effects (when both factors must be used to explain the outcome)
l Experimental error is quantified
736
The Goals of Design of Experiments

l Problem solving
l  Eliminate defective products or services.

l  Reduce cycle time of handling transactional processes
l Optimizing
l  Mathematical model is desired to move the process response

l Robust design
l  Provide consistent process or product performance.

l  Desensitize the output response(s) to input variable changes
including NOISE variables.
l  Design processes knowing which input variables are difficult to
maintain
l Screening
l  Narrowing of the critical factors

737

l  Process variables include both factors and responses. The selection of
these variables should:

l  Include all important factors
l  Include all relevant responses

l  Avoid factor settings for impractical or impossible combinations
l  Avoid using responses that combine two or more process measurements
l  When choosing the range of settings for input factors avoid extreme
values
738

l  Design Guidelines
739
Design of Experiments Planning experiments

Plan and evaluate DOEs by determining the objective, selecting appropriate factors,
responses, and measurement methods, and choosing the appropriate design
740
Design of Experiments Planning Experiments
The Approach
1. Define the Experimental Goals
2. Select Response Variable (Quality Characteristic) – Usually the Critical Y
3. Choose factors, levels and ranges – Brainstorming & Cause and Effect
analysis can establish potential factors which may affect the Quality
Characteristic. Will need to change each factor at least once to observe the
difference it makes. Accordingly shall select 2 (or more) levels for the factor,
ensuring that the range is sufficient to have an effect, but not so large as to
move outside reasonable ranges
4. Select Experimental design
741
Design of Experiments Planning Experiments
5. Perform the Experiment

6. Analyze the outcomes
7. Draw conclusions and make recommendations
742
One-factor experiments
Design and conduct completely randomized, randomized block, and Latin square
designs, and
evaluate their results
743
One-factor experiments
l Randomized-block design: An experimental design is one where the

experimental observations are divided into ‘‘blocks’’ according to some
criterion
l The blocks are filled sequentially, but the order within the block is filled
randomly
l Each homogeneous group in the experiment contains exactly one
measurement on every treatment

744
Latin-square designs: Designs where each treatment appears once and

only once in each row and column.
A Latin-square plan is useful when it is necessary or desirable to allow for two

specific sources of non-homogeneity in the conditions affecting test results. !
for example, machines, positions, operators, runs, days. A third variable is
then associated with the other two in a prescribed fashion
The use of Latin squares is restricted by two conditions:

l  The number of rows, columns and treatments must all be the same
l  There must be no interactions between row and column factors
745
Two-level fractional factorial experiments

Design, analyze, and interpret these types of experiments, and describe how
confounding can
affect their use
746
Two-level fractional factorial experiments

Design, analyze, and interpret these types of experiments, and describe how
confounding can
affect their use
747
Fractional Factorials
l Consists of a carefully chosen subset (fraction) of the experimental runs of a
full factorial design

l The subset is chosen so to expose information about the most important
features of the problem studied, while using a fraction of the effort of a full
factorial design
l Notation is lk − p, where l is the number of levels of each factor
investigated, k is the number of factors investigated, and p describes the size

of the fraction of the full factorial used
l For example, a 25 − 2 design is 1/4 of a two level, five factor factorial design.
Rather than the 32 runs that would be required for the full 25 factorial
experiment, this experiment requires only eight runs
748
l The levels of a factor are commonly coded as +1 for the higher level, and −1
for the lower level. For a three-level factor, the intermediate value is coded
as 0
l The points in a two-level factorial experiment are often abbreviated with
strings of plus and minus signs

l The strings have as many symbols as factors, and their values dictate the
level of each factor: conventionally, for the first (or low) level, and for the
second (or high) level
749
l They can also be abbreviated by (1), a, b, and ab
l  Where the presence of a letter indicates that the specified factor is
at its high (or second) level
l  And the absence of a letter indicates that the specified factor is at
its low (or first) level
l  For example, "a" indicates that factor A is on its high setting, while
all other factors are at their low (or first) setting
l  (1) is used to indicate that all factors are at their lowest (or first)
values
750
l Teams typically rely on statistical reference books to supply the "standard"
fractional factorial designs, consisting of the principal fraction.

l The principal fraction is the set of treatment combinations for which the
generators evaluate to + under the treatment combination algebra

l The design restricts focus to the interactions between pairs of factors
751
l Use aliasing to overcome disadvantage of only using two factors
l In aliasing, interactions of more than two factors are represented as a single
new actor
l For instance, a factorial design with three factors will not consider the
interaction between factors 1, 2, and 3, but instead will create a new factor (4)
representative of this interaction
l The Problem with this approach is that the effects of factor 4 cannot be
estimated independent of the interactions of factors 1, 2, and 3. This is

referred to as confounded data
752
l A fractional factorial experiment is generated from a full factorial experiment
by choosing an alias structure.

l The alias structure determines which effects are confounded with each other.
l For example, the five factor 25 − 2 can be generated by using a full three
factor factorial experiment involving three factors (say A, B, and C) and then
choosing to confound the two remaining factors D and E with interactions
generated by D = A*B and E = A*C.
l These two expressions are called the generators of the design.
l So for example, when the experiment is run and the experimenter estimates
the effects for factor D, what is really being estimated is a combination of the
main effect of D and the two-factor interaction involving A and B.
753
l An important property of a fractional design is its resolution or ability to

separate main effects and low-order interactions from one another
l The most important fractional designs are those of resolution III, IV, and V:
Resolutions below III are not useful and resolutions above V are wasteful
754
Fractional Factorials Resolutions
l I: Not useful: an experiment of exactly one run only tests one level of a factor
and hence can't even distinguish between the high and low levels of that
factor. e.g. 21 − 1 with defining relation I = A
l II: Not useful: main effects are confounded with other main effects e.g. 22 − 1
with defining relation I = AB

l III: Estimate main effects, but these may be confounded with two-factor
interactions e.g. 23 − 1 with defining relation I = ABC
755
l IV: Estimate main effects unconfounded by two-factor interactions

Estimate two-factor interaction effects, but these may be confounded with
other two-factor interactions e.g. 24 − 1 with defining relation I = ABCD
l V: Estimate main effects unconfounded by three-factor (or less) interactions
Estimate two-factor interaction effects unconfounded by two-factor

interactions
Estimate three-factor interaction effects, but these may be confounded with
other two-factor interactions e.g. 25 − 1 with defining relation I = ABCDE
756
l NOTE: The resolution described is only used for regular designs

l Regular designs have run size that equal a power of two, and only full
aliasing is present.
l Non-regular designs are designs where run size is a multiple of 4; these
designs introduce partial aliasing, and generalized resolution is used as

design criteria instead of the resolution described previously
757
l In the analyze stage, fractional factorial designs are used to identify process
drivers and sources of variation
l In the improve stage, fractional factorial designs are used along with center
points to estimate the effects of curvature

l Fractional Factorial design is common
758
Full Factorials
l  A full factorial design contains all possible combinations of a set of factors
This is the most accurate design approach, but it is also the most costly in
experimental resources
l  In full factorial designs, you perform an experimental run at every
combination of the factor level
l  The sample size is the product of the numbers of levels of the factors
l  For example, a factorial experiment with a two-level factor, a three-level
factor, and a four-level factor has 2 x 3 x 4 = 24 runs.
759
Full Factorials
l  There is little scope for ambiguity when you are willing to try all
combinations of the factor settings
l  Factorial designs with only two-level factors have a sample size that is a
power of two (specifically 2f where f is the number of factors)
l  When there are three factors, the factorial design points are at the vertices
of a cube
l  For more factors, the design points are the vertices of a hypercube
l  Impractical with more than 5 factor
760
Design of Experiments
Response Surface Methods (RSM)

l AKA Response Surface Analysis
l Explores the relationships between several explanatory variables and one or

more response variables
l Uses a sequence of designed experiments to obtain the best response value
l Used only during the Improve Phase

l Used to map the response surface so the effects of varying certain factors
can be predicted
l Also used to find the operating conditions that produce the desired
specifications
761
Design of Experiments Factorials
Response Surface Methods (RSM)

l This model is only an approximation, but use it because the model is easy to
estimate and apply, even when little is known about the process
l RSM has an effective track-record of helping teams improve products and
services
762
Response Surface Methods Process

Typically has three phases, 0 through 2
l Phase 0 is considered a prerequisite phase. In this phase, the team uses
screening designs to create a critical set of significant factors. Then, a first-
order regression model is created
l In Phase 1, the team will use the steepest ascent methodology to define the
operating region at present and identify the direction of maximum response

l The first-order regression model created during phase 0 can be very useful
at this point, because its scale is great enough to ensure that the data points
are affected by first-order effects
763
Response Surface Methods Process Phase 1

l Phase 1 includes the application of steepest ascent methodology to a first-
order regression model

l Data points are collected along the steepest path beginning with the design
center, or the spot where (x1, x2) = (0, 0). This design center is the first test
condition
l The steepest ascent is determined by moving β1 coded units in the x1
direction for every β2 coded units in the x2 direction, where β1 and β2 are the
coefficients of the x1 and x2 terms, respectively
l If the changes are sufficiently small, then obtaining a good picture of the
response will be possible
764
Response Surface Methods Process Phase 1

l Given a specific change in uncoded units for x1, it will be possible to obtain
values for x2, β1, and β2

l It also is possible to determine the path of steepest ascent relative to the
physical limitations of the system, such as if either x1 or x2 cannot proceed

beyond a certain point
l The local maximum conditions are determined by looking for the point at
which the response begins to diminish

l Once the local maximum condition has been determined, another
experiment is run near this point to obtain a first-order model with

centerpoint(s)
765

l Phase 1: After a first-order model has been conducted near the maximum at
the end of phase 1, there should be several redundant runs to estimate lack
of fit
l When the lack of fit is insignificant, a new path of steepest ascent may be
found by adjusting the intervals, starting point, or direction

l If the lack of fit is significant and there is curvature, the point likely is close to
a maximum, minimum, or mini-max. At this juncture it now is time to begin

phase 2
766

l Phase 2 the application of ridge analysis and a second-order regression
model to locate the optimal conditions at stationary points in a small region.

l In response surface analysis, a stationary point is defined as anywhere that
the slope of the second-order response surface model is zero for each of the
factors
l Stationary points may be a maximum value, a minimum value, or a “mini-
max” value, which is the highest or lowest point in a saddle curve

l If the stationary point is significantly outside the data range, it may be used
only to obtain direction
767

Response Surface Methods Process Interpretation
l Generates charts that can be subjected to analysis of variance.
l The F statistic can be used to compare the sum of squares variation caused
by pure error with the sum of squares variation caused by curvature

l If the curvature is significant, the point likely is close to a local maximum,
minimum, or mini-max (that is, a stationary point)

l If the stationary point falls outside the experimental region, then new data
must be required so the region can be enlarged

l If this is impossible because the data point falls in a region that would be
impossible to reproduce, then constrained optimization should be applied to

the steepest ascent methodology
768

Response Surface Methods Process Interpretation
l If the stationary point is determined to be a mini-max, then constrained
optimization techniques must be applied to the steepest ascent methodology.

l The full results then can be analyzed after axial points are added to the
design at the new centerpoint

l These axial points are placed on the design at places where they will
achieve rotatable orthogonal design.

l Again, it is necessary to collect new data around the optimal point for the
purpose of verification
769

Phase 2 .
l The next step is to create response surface and contour plots for each two
factors.
l Then, identify the stationary point in the response surface and contour plots.
l Next, predict the response at the optimum using the second-order regression
model .
l Finally, verify the model by gathering new data in the region around the
optimum
770
DOE graphs and plots
Interaction plots
l Illustrate the interrelationships of three parameters. In most cases, these
parameters are two factors and one response
l Useful for evaluating the results of designed experiments and multiple
regression
l Typically, plot variables are placed on the x-axis, and the responses are
placed on the y-axis

l The distinct lines on the plot are defined by the levels of the interaction
variable
771
Interaction plots
l The distinct lines on the plot are defined by the levels of the interaction
variable
l If the plot variables exhibit no interaction, then the lines basically will be
parallel. That is, both plot variables will produce similar trends when
combined with the response variable.
l If the lines are not parallel, however, an interaction likely exists
772

Both main effects and no interaction
773
Both main effects with an interaction
774
Group main effect, an interaction, and no Condition effect
775

Group main effect , no Condition effect, and no interaction
776
Module 16 – Improve Phase –
Design of Experiments (DOE)
A crossover interaction and no main effects
Module 16 777

No main effects, no interaction
778

Cube
779
780

Contour plots
l Are composed of groups of curves
l Each of these curves is assigned a constant value according to a fitted
response
l The path of each of these curves relates to values that have been
separated at regular intervals

l Any additional factors are placed on the chart according to their mean
or some other value

l They are used in response surface analysis to estimate the maximum
and minimum responses associated with particular ranges of data
781

Contour plots
l If there are only first-order main effects, the contour plot will have
parallel lines separated from one another by equal distance.

l Whenever interactions occur between the responses, the contour lines
curve.
782
End of Module 17

l Improve Phase Overview
l Terminology
l Design principles
l Planning experiments
l One-factor experiments
l Two-level fractional factorial experiments
l Full factorial experiments
l Response Surface Methods
l DOE Graphs and Plots
783
Module 18 – Improve Phase – Lean Method
Module 18 – Improve Phase – Lean Methods
Outline
1. Waste elimination
2. Cycle-time reduction
3. Kaizen
4. Other Improvement Tools and Methods
785
Kanban
l Kanban is faster, more efficient, and saves significant money over most other
production models
l Reduces inventory, on average, by 25 to 75%
l The visually organized environment ensures all parts are easily found and
continually stocked
l The speed of moving from one task to another is significantly reduced by the
creation of clearly marked flow lanes, kanban cards, and clearly marked
labels
786
Kanban
production models
continually stocked
labels
787
Kanban
l Translates as card signal
l Signals the start of an event
l Use either a physical 'card' or electronic signal
l Pull system with the goal of reducing inventory by producing only what is
ordered, when its ordered, and only the quantity ordered

l Increased flexibility to meet customer demand
l At its core, it requires one to visualize the workflow and reduce WIP
l Bottlenecks become visible in realtime
788
Rules of Kanban
l The Parts Are Always Withdrawn From The Prior Process
l Produce Only What Is Necessary To Replenish The Quantity Withdrawn
l Never Pass on A Bad Part
l Level Load Production, Rapid Changeover, Small Lot Production, Zero
Defects
l Kanban Is Used To Fine Tune (Not Provide For Major Changes)
l The Process Must Be Capable Of Producing Good Parts (Rational And
Stable)
789
Rules of Kanban
l Need Efficient Methods Of Transportation, Shortest Routes Possible
l Disciplined Organization
l Nothing Is Made or Transported Without A Kanban.
l Kanban Cards Always Accompany the Parts Themselves.
l The Number of Kanbans Should Decrease over time
790
Types of Kanban
The two basic types of Kanban are:
l Production (P) Kanban A P-kanban, when received, authorizes the
workstation to produce a fixed amount of products

l The P-kanban is carried on the containers that are associated with it
l Transportation (T) Kanban A T-kanban authorizes the transportation of the
full container to the downstream workstation

l The T-kanban is also carried on the containers that are associated with the
transportation to move through the loop again
791
5S;
l An essential step required for Waste Elimination
l Foundational to Kaizen
l It is a valuable strategy for reducing cycle time that does not add value and
that is lost to movement, finding lost materials, and inefficiently using the
physical space
l May also be used to accelerate inventory processes and to diminish
accidents in the workplace

l Represents 5 disciplines for maintaining a visual workplace and a
standardized workplace
792
5S Stands for;
Sort – Red tag and remove unnecessary items and either store or dispose of
them properly
Straighten or Streamline - Arrange all necessary items in order so they can
be easily picked for use
Shine or Sweep - Clean and inspect the workplace completely
Standardize - Maintain high standards of workplace organization at all times.
Maintain everything according to its standard
Sustain - Keep in working order and perform regular audits
793
5S Things to do overall;
l Develop a map identifying the access ways and the “action” areas
l Perform any necessary realignment of walkways, isles, entrances
l Assign an “address” to each of the major action areas
l Mark off the Walkways, Aisles & entrances from the action areas
l Apply flow-direction arrows to aisles & walkways
l Perform any necessary realignment of action areas
l Mark-off the inventory locations
l Mark-off equipment/machine locations
l Mark-off storage locations( Cabinets,shelves,tables
l Color-code the floors and respective action
794
Sort Things to do;

l Start with a red tag campaign
l Tag everything that looks disorderly or unsafe
l Be ruthless
l If in doubt throw it out
l If still in doubt, send it to a “red tag area” for resolution
l You should be removing truckloads of items… be tough
795
Straighten & Streamline Things to do;

l Create a place for everything
l Determine what should be where
l Deal with the open red tags from the Sort step:
l Organize parts and material
l Resolve things you were afraid to throw out
l Write off or sell off obsolete materials
l Map and and mark clear lanes and paths
l Color code tool and material locations
796
Shine Things to do;

l Make the work area absolutely clean
l Clean everything (equipment, floors, walls…)
l Paint everything (equipment, floors, walls…)
l Look for problems…
l  Leaks?
l  Loose or missing items
l  Unsafe conditions
l  Causes of messes or problems…
l  Quality issues caused by dirt and clutter
797
Standardize Things to do;

l SOP to keep the area clean, safe and orderly?
l Agree on daily and weekly tasks
l Standardize our processes
l The devil is in the details and so should we
l Establish a visual management system for these tasks
l Shadow all tools
798
Sustain Things to do;

l Develop audit checklists
l Assign the audit role to someone outside the area
l Track the audit results
l Make 5S a daily habit... Being OCD is good
l Set the example
799
Are we finished yet? Have we:

l Removed unnecessary items
l Stored everything in a neat manner
l Cleaned the floors of debris, oil and dirt
l Updated and straightened the bulletin boards
l Ensured that access to emergency equipment is easy and highly visible
l Ensured that items on floors are in clearly marked areas
l Ensured that aisles are clear and kept free of material
l Boxes are stored in an neat, orderly fashion
800
Are we finished yet? Have we:
l Cleaned all machines, tools, and equipment
l Made sure that there is nothing on top of machines or cabinets
l Stored all documents and binders in a neat manner
l That all tools, jigs, and fixtures are labeled, shadowed, identified, and easy to
reach
l That all shelves, benches, desks are kept free of unused objects, including
files and documents
801
802
Standard Work
l Standard work is one of the most powerful but least used lean tool
l By documenting the current best practice, standard work forms the baseline
for Kaizen
l As the standard is improved, the new standard becomes the baseline for
further improvements
l Each step in the process should be defined and must be performed
repeatedly in the same manner

l Any variations in the process will most likely increase cycle time and cause
quality issues
803
Standard Work consists of three elements;
l Takt time, which is the rate at which products must be made in a process to
meet customer demand

l The precise work sequence in which an operator performs tasks within takt
time
l The standard inventory, called the Standard WIP (SWIP), including units in
machines, required to keep the process operating smoothly without incurring

excess inventory or WIP
804
Standard Work supports the lean system of continuously improving capacities
and efficiencies by defining 5 critical elements for each process:
1. The customer demand

2. The most efficient work routine (steps)
3. The cycle times required to complete work elements
4. All process quality checks required to minimize defects/errors
5. The exact amount of work in process required
805
Steps for Creating Standard Work;
1. Define the extent of the process for which you are creating standard work
2. Determine the appropriate standard work requirements
3. Gather the required information
4. Create the standard work documents
5. Train the supervisor on the standard work
6. Train the employees to do the standard work
7. Run the process and observe the results
8. Make adjustments and modifications to the standard work
806
Dos and Don't for Creating Standard Work;
DO:
l Keep standard work simple
l Make it accessible
l Include all info on one, easy-to-read document
l Create one standard work document for each part of the process
l Always look for ways to improve the process
DON'T
l Put standard work in a desk drawer
l Change processes without changing standard work
l Make standard work difficult to change
l Give up on standard work
807
Poka-Yoke - Error-Proofing ;
l Poka-yoke states that preventing errors is better than detecting them as
rework is a non-value-added activity

Processes must be rigorously analyzed and improved so the frequency and
l 
severity of mistakes is reduced

Options for error-proofing include; auto-correcting systems, auto-shutdown,
l 
jigs, digital counters, and warning systems
808
Cycle-time Reduction
Two process types:
1. Discrete
2. Continuous
Three main flow structures:

1. Convergent - several inputs feed one output
2. Divergent - several outputs derived from one input
3. Linear
809
Cycle-time Reduction
Key Concept is process throughput
l IN(t) = Arrival/Inflow rate of jobs at time t
l OUT(t) = Departure/Outflow rate of finished jobs at time t
l IN = Average inflow rate over time
l OUT = Average outflow rate over time
Stabilize first before tackling cycle time reduction

IN=OUT
810
Cycle Time
The difference between a job’s departure time and its arrival time = cycle
time. Also referred to as throughput time
Includes both value adding and non-value adding activity times
Processing time
Inspection time
Transportation time
Storage time
Waiting time
Cycle time is a powerful tool for identifying process improvement potential
811
Cycle Time
Little's Law
l CycleTime = WIP/Throughput
Must account for

l Rework
l Multiple paths
l Parallel activities
812
Reducing cycle times through process redesign
l Eliminate activities
l Reduce waiting and processing time
l Eliminate rework
l Perform activities in parallel
l Move processing time to activities not on the critical path
l Reduce setup times and enable batch size reduction
813
Batching
l A traditional method of reducing waste
l When work is batched a large number of essentially identical tasks are
gather and performed the same time

l When tasks are divided into batches, the time required to perform them
clearly is shorter
l However, batching creates delays at the beginning and end of the activity
l The team must wait for a number of tasks to arrive in the input queue before
beginning, creating unnecessary lag time

l Also the entire batch does not move on to the next step of the process until
every item has been subjected to the batched step

l This wait is one of the greatest contributors to lead time
814
Batching
l However, there are times when batching makes sense
l For example, if the set up time for the equipment is significant then
performing the activity in batches may be more efficient

l When the cost of moving materials is large is another instance when
batching makes sense
815
Six Sigma and Organizational Goals
Lean Principles - Value-Added and Non-Value-Added Activities
Flow-Pull-Perfection
l Goal is to create continuous flow through the organization rather than
improving limited areas of a process

Pull means that each activity in a process should receive only the necessary
l 
materials and resources when a subsequent activity is 'demanding' the

process be completed
Perfection is defined as the ultimate goal of continuous improvement. By
l 
eliminating waste and streamlining processes, an organization can approach

perfection
Module 1 816
Pull
l Increases throughput
l By pulling material in small lots, inventory cushions are removed, exposing
problems and emphasizing continual improvement

l Manufacturing cycle time is reduced
l Ideal situation is to have lot sizes of one pulled from one process to the next
l Lot sizes can be reduced by;
l  Improving material handling

l  Reducing setup times
l  Reducing setup costs
817
JIT Scheduling
l Process frequent small batches rather than a few large batches
l Make and move small lots so the level schedule is economical
l Because lead times are shorter, quality problems are exposed sooner
l Better quality means fewer buffers and allows simpler JIT systems to be
used
818
Continuous Flow
l Takt time represents customer demand rate
l Calculate the takt time = number ordered/time in shift
l Goal is to precisely synchronizes the cycle time to the takt time
819
Continuous Flow
l The creation, ordering, and provision of any good or any service can be
made to flow
l Think about ways to;
l  Line up all of the essential steps needed to get a job done
l  Obtain a steady, continuous flow
l  No wasted motions
l  No interruptions
l  No batches or queues
l Focus on the actual object or service
l Ignore traditional boundaries
820
Level Loading
l Its purpose is to regulate and moderate the flow of orders in a particular

process. Level loading typically is performed during the improve stage
l Can be used to reduce the need for inventory checks during a process
l Before it can be implemented, protocols must be standardized and
employees must be trained

l The intention is to eliminate wait time at the beginning of a given process
l Therefore, each completed unit should begin the next phase of the
production process immediately
821
Implementing Level Loading
l First step in level loading is to calculate the takt time

l The takt time is the demand divided by the amount of time available
l Takt time should be posted at the work station, and resources should be
aligned with it
l When variations in demand exist, needs for increased resources also will
exist
822
Setup Time
l  Setup time is the interval between the completion of the last item and the
beginning of the next item

l  Consists of four components:
l  Preparation - the set of tasks necessary to gather all of the materials and
people for the activity

l  Replacement - the set of tasks required to adjust and reconfigure
equipment before the next item can be processed
l  Location - the positioning or moving tasks that must be completed
between iterations of a process
l  Adjustment - the set of monitoring or fine-tuning tasks that must be
performed between iterations to ensure correct performance of a process
823
Setup Time
l  Preparation time is considered a non-value-added activity
l  Reduce preparation time by:
l  Staging supplies and equipment as close as possible to the workstation
l  Group employees in work cells so the entire operation can be completed
without moving the work-in-progress
l  Leave equipment on and ready to go even when not in use
824
Setup Time
l  Replacing and relocating equipment and resources prior to a process is
anon-value-added activity
l  Reduce replacement and relocating time by:
l  Standardizing setups
l  Simplifying the setup protocol
825
Setup Time
l  Adjustments prior to a process is a non-value-added activity
l  Reduce adjustment time by:
l  Establishing good process controls
l  Ensuring that the process components being targeted are on the critical
path is essential, otherwise you are wasting your time
826
SMED (Single Minute Exchange of Dies)
For many people, changing a single tire can easily take 15 minutes.
For a NASCAR pit crew, changing four tires takes less than 15 second
WHY IS THAT?
827
Some of the techniques used by NASCAR pit crews such as;

l  Performing as many steps as possible before the pit stop begins
l  Using a coordinated team to perform multiple steps in parallel
l  creating a standardized and highly optimized process
Are also used in SMED
828
l  Goal is rapid changeover from producing item or batch A, to item or batch B
l  Not just for shop floors
l  Don't take the single minute literally
l  Key is to cut-out wasted effort and activities as we as streamline the setup
process
l  Activities divided into two categories;
–  Internal – Those activities that can only be completed when the

machine or process in question is not running
–  External – Those activities that can be done while the machine or
process is running
829
l  Start by collecting two weeks of data in order to determine where productive
time is being lost. It may be that there are more critical areas to address
than setup time (SMED)
l  If changeover setup time constitutes 20% or more of the lost time, then
SMED is worth the effort

l  Set up a pilot
l  When possible convert Internal activities into External activities
l  Staging, reordering steps division of labor, etc.
l  Make the remaining internal activities flow. Optimize
l  Reordering steps, eliminating steps, etc.
l  Optimize scheduling
830
l Start by collecting two weeks of data in order to determine where productive
time is being lost. It may be that there are more critical areas to address than
setup time (SMED)
l If changeover setup time constitutes 20% or more of the lost time, then
SMED is worth the effort

l Set up a pilot
831
A good pilot is when;
l Changeover has significant room for improvement, but not overwhelming in
scope
l Has a large variation in changeover times
l Multiple weekly changeovers, so the changes can be quickly tested
l Buy in from the employees familiar with the equipment
l The machine is a constraint/bottleneck; thus improvements will bring
immediate benefits – do minimize downtime risk by building temporary stock

of its output
832
1. Record a baseline on the pilot machine
2. Identify each element of the changeover, and whether its internal (machine
needs to be off) or external (can be done if the machine is on)
3. Only observe
4. Separate external elements This can often cut set up times in half
5. Convert internal elements into external elements if at all possible – do think
outside the box. eg.
l  Prepare parts in advance, such as preheating
l  Use duplicate pre-aligned jigs and simply drop in the duplicate on
changeover
l  Modularize equipment
l  Modify equipment, such as adding a guard to enable safe cleaning
while running
833
6. Streamline remaining elements

l  Eliminate bolts
l  Eliminate adjustments
l  Eliminate motion
l  Eliminate waiting
l  Standardize hardware
l  Create parallel operations
834
Heijunka (Production Leveling)
l A central technique in the Toyota Production System

l A production system is level when intermediate products are produced at a
constant rate, enabling subsequent production to be both constant and

efficient
l By making processes level, all employees will act in harmony
l Minimizes the consequences of demand amplification in which small
fluctuations in productivity at the beginning of the line become large

fluctuations down the line
l One way to do this is to process small batches only
835
l  Allows each work station to make small adjustments required to keep
production smooth
l  If the demand from customers is steady, production leveling is fairly easy to
accomplish
l  However, when customer demand is subject to variation, one may opt to
use either the demand leveling or production leveling
l  In demand leveling, one tries to make customer orders more regular and
predictable. We will cover this in a little later
836
l  Approach from the perspective of either product or volume

l  Leveling by product means adjusting the product mix or sequence to
eliminate inefficiencies
l  This is often is accomplished by means of a heijunka box, a visual
scheduling tool that depicts the jobs lined up for production and the times at
which they will be completed
837
l  In leveling by volume demand is smoothed by manufacturing at the level of

long-term average demand rather than at the precise level dictated by
current orders
l  When this is done, the business must maintain enough inventory to cover
the difference between the average demand and the maximum possible
demand
l  Which means more inventory than required by product inventory
838
Demand Leveling
l  Goal is to make customer demand more regular and predictable

l  The first way to level demand is to adjust the ordering process
l  The second way to level demand is to evaluate ordering systems
l  The third way to level demand is to keep a supply of finished goods on
hand to accommodate spikes in the number of orders
839
Kaizen;
l Kaizen is a philosophy of continuous improvement
l Improvements are based on the insights and experiences of lower-level
employees, as opposed to the traditional executive-driven Western model

l Can be successful only with adequate training, defined operating practices,
and buy-in from all employees

l Constant communication exists
l Focus is small improvements, not breakthrough changes
l Driven from the bottom-up
l Based on the premise that the people who do the work know it best
840
Kaizen Goals;
l Enhance capacity
l Reduce waste
l Increase productivity
l Reduce inventory
l Improve flow - Flow-pull-perfection
841
Eight Rules of Kaizen
1. Discard conventional thinking concerning processes
2. Think of how we can do, not why we can't
3. Do not accept excuses
4. Question everything
5. Immediately correct mistakes
6. Seek root causes
7. Depend on the wisdom of 10 people, not the knowledge of 1
8. Do something now rather than seeking perfection later
842
Kaizen Blitz (aka Kaizen Event)
l Whereas Kaizen focuses on making small, evolutionary changes, a Kaizen
blitz focuses on making a rapid improvement in a manner of days (usually 5),

though planning can take longer
l Executed by a team assembled for the purpose
l Primary vehicle for change in organizations implementing Lean
843
Kaizen Blitz Team Composition
l Quality champion - sets the strategic direction, provides focus, assigns
resources, and defines accountability. Often a Master BB

l Sponsor - accountable for success of the kaizen blitz. Deals with
impediments to the team's efforts

l Kaizen facilitator - an expert in the kaizen methodology. Prepares, designs,
and facilitates the sessions

l Participants – provide SME knowledge and other skills
844
Kaizen Blitz Phases
1. Kick off – Project definition and any Kaizen blitz training needed
2. Problem identification – Create process map and initial data collection
3. Analyze Data
4. Develop solution(s) – Start implementing them
5. Present results and solutions
845
Kaizen Blitz Traps
l Lack of management support
l Superficial training (due to limited time), resulting in poor understanding of
Lean principles
l Lack of buy-in to proposed changes from those not involved in the event
l Insufficient data to arrive at robust analysis of root causes
l Lack of implementation during the event
l Delays in implementation after the event
l Lack of sustainability after the event
846
Kaizen Blitz Traps
l Has severe limitations when looking at extensive, complex, cross-functional
systems
l When the process/problem can’t be easily defined, or is associated with
multiple root causes, a Blitz is unlikely to be of much use

l Can be misused by organizations that want a quick-fix to deep-rooted
problems
However, if a Blitz is tightly defined and when there is clear scope to

implement changes quickly, it can lead to significant, measurable,
improvements
847
The Theory of constraints is an approach to improving processes by focusing

on their most problematic areas
l These areas are known as constraints
l Even the smoothest process has constraints
l Improvement efforts are devoted to improving performance by removing or
reducing constraints without sacrificing quality elsewhere

l Encourages businesses to improve continuously by diagnosing weaknesses
and addressing them

l Exploiting the constraint is when an organization develops effective
strategies for maximizing the potential of the constrained area

l It is a never-ending process as dealing with one constraint will result in
uncovering another
848
Measurement of constraints
l  As a process is only as good as its weakest link, a process must be viewed
as a collection of interlocking parts

l  The theory of constraints emphasizes three measures of system
performance: throughput, inventory (or investment), and operating expense

l  Throughput is calculated by subtracting the total variable costs of
production from the total sales revenue

l  Inventory is calculated as the total amount of money invested in items to be
sold
l  Operating expense is the amount of money required to transform inventory
into throughput
849
Measurement of constraints
l  The application of the theory of constraints consists of five basic steps:
identify, exploit, subordinate, elevate, and begin again

Identify the system’s constraint: is it internal or external?
Exploit - the constraint by making operational changes
Subordinate - all other operations to the implementation of the exploitation
Elevate - by seeking other ways to increase the capacity of the constraining
task. This step should break the constraint, if it was not broken already during
subordination
Begin again - by identifying the next constraint
850
Overall Equipment Effectiveness(OEE)
l OOE is measured as a percentage
l OOE = Availability * Performance * Quality
l Availability = % of scheduled production equipment is available for
production
l Performance = % number of parts produced out of best known production
rate
l Quality = % of good sellable parts out of total parts produced
l The six big losses help target the improvement efforts. They are:
–  Availability: Planned Downtime, Breakdowns

–  Performance:Minor Stops, Speed Loss
–  Quality:Production Rejects, Rejects on Startup
l 85% is considered world class
851
Overall Equipment Effectiveness(OEE)
l  While it is useful, it can breakdown
l  Performance and quality may not be independent of each other or of
availability and loading

l  The numbers can be fudged
l  OEE has properties of a geometric mean. As such it punishes variability
among its subcomponents

l  While it gives equal weighting to all three components, there are situations
where one, such as quality, should be given greater weight
852
End of Module 18
l  Waste elimination
l  Cycle-time reduction
l  Kaizen
l  Other Improvement Tools and Methods
853
Module 19 – Improve Phase – Implementation
Outline
1. Implementation
2. Improve Phase Summary
855
Picking a Solution
l  Generate a list of criteria that the solution must meet
l  Use MoSCoW to classify the criteria
l  Determine the scope for potential solutions
l  Determine what prior decisions need to be incorporated into the solution
l  Determine how will you manage customer expectations
856
Picking a Solution
l  Brainstorm
l  Use SCAMPER
l  Substitute
l  Combine
l  Adapt
l  Magnify
l  Put to other use
l  Eliminate
l  Reverse or Rearrange
857
Got a Solution
l  Do a FMEA
l  Decide if you will pilot or run a simulation
l  Run the pilot or simulation
l  Prepare an implementation plan
858
Implementation Plan
l Revisit the charter and review feedback from the pilot
l Include the task, dates, and responsible people/groups
l Account for Barriers to implementation
l  Identify forces favoring implementation

l  Identify forces opposing implementation
l Recognize implications and risks from failing to address barriers
l Finalize the design
l  Include large-scale training for the new processes

l  Fine-tune new process
859
Implementation Plan
l  Based on the To-Be process maps, VSMs, DOE results, etc.
l  Contains:
l  Costs
l  Expected difficulties
l  Schedules
l  Resources needed
l  Responsibilities
l  Plus any other information needed to implement the changes
860
Piloting
The advantages of piloting the proposed solution are:
l  Limit initial capital and other resource expenditures until solution proven
l  Assess true performance of the solutions in a controlled but “live”
environment
l  Identify additional improvements required
l  Identify implementation tips and trap
l  Garner early feedback on the solution
861
Piloting
Consider doing a pilot when:
l  The scope of the design is large
l  The new product or service could have significant unintended
consequences
l  Implementing the solution will be costly
l  The solutions would be difficult to reverse
862
Piloting
Things to consider:
l  How long to run the pilot
l  How many samples should be collected
l  Do you believe the new process will be stable
l  Have you evaluated the measurement system to be used
l  Have the design team present as much as possible during the pilot
863
Piloting
Things to consider:
Have you ensured that the full range of inputs and process conditions,
including expected variation in input and process variables, are tested
Have you defined the success conditions prior to piloting
Communicate, communicate, communicate...
864
After the pilot
Verify the Implementation Plan:

l  Was the schedule met?
l  Were the instructions clear?
l  Were they followed?
l  What additional information did people need?
l  What unexpected challenges were encountered?
865
After the pilot
Verify the pilot:

l  Did the pilot performance results meet the actual planned requirements
l  Did the pilot come together as per plan?
l  Did the design of the scorecards predict the actual capability of the overall
process and elements?

l  Perform a root cause analysis for any gaps identified
866
Simulations
l  Simulation is the application of models to predict future outcomes

l  Lots of good simulation software available
l  Monte Carlo Simulation:
l  Uses random numbers to measure the effects of uncertainty
l  Inputs are variable or uncertain X’s represented by probability
distributions (our assumptions)

l  Outputs are the responses/ Y’s (forecasts)
l  Use in Improve for operations decision analysis and optimization, process
or product design modeling and improvement
867
Simulations
l  Requires probabilistic inputs

l  Which means using ranges of values that have assigned likelihood for
occurrences of each given value
l  One sets the number of trials
l  Can conduct sensitivity analysis during the course of the simulation to
determine few critical factors (X’s) cause the predominance of variation in
the response variable of interest (Y)
l  Similar to Pareto Chart in interpretation but is not a Main Effects plot
868
Simulations
Sensitivity Analysis – using the results

l  Helps the team understand what’s driving defects
l  Generally identifies a few factors that have the strongest impact on forecast
variation
l  Shows where to focus the improvement efforts
l  After reducing the variation for these few critical X’s, rerun the simulation
and examine the effects on the Y
869
End of Module 19
l  Implementation
WE WILL NOW REVIEW THE IMPROVE PHASE
870
Improve Phase – Summary
l  Define the short-list of critical X's
l  Ensure that they are actually X's and that they are controllable
l  Select you improvement approach
l  Ensure you have necessary buy-in to implement the improvements
Improve Phase – Summary
Questions to ask at end of phase:
l  What critical X's did we uncover?
l  Have we missed anything?
l  Have our improvement initiatives resolved the problems?
l  Do we need any follow-up initiatives?

Improve Phase – Review Questions
Question #1
In DOE the variable of interest is called_______.
A. Critical X
B. Factorial Variable
C. Response Variable
D. None of the Above
Answer #1
C. Response Variable
Question #2
In DOE what sort of experimental design would you use if you had 5 factors?
A. Full Factorial
B. Fractional Factorial
C. MANOVA
D. Randomized Block Design
Question #3
Poke Yoke is_____?
A. Standard Work
B. A way to implement Pull
C. Error Proofing
D. A simulation tool
Answer #3
C. Error Proofing
Answer #3
D. Randomized Block Design

Module 20 – Control Phase – Statistical process control (SPC)
Module 20 – Control Phase – Statistical Process Control (SPC)
Outline
1. Objectives
2. Selection of Variables
3. Rational Subgrouping
4. Control Chart Selection
5. Control Chart Analysis
880
l  The primary objective of the Control phase is to ensure that the gains
obtained during Improve phase are maintained long after the project has
ended
l  To that end, it is necessary to standardize and document procedures, make
sure all employees are trained and communicate the project’s results
l  In addition, the project team needs to create a plan for ongoing monitoring
of the process and for reacting to any problems that arise
l  And finally close out the project
881
SPC Basics
l Statistically-based quality control method
l Goal is to ensures that the process operates at its full potential
l Make as much conforming product as possible with a minimum of waste
l Can be applied to any process where the conforming product output can be
measured
l Emphasis on early detection
882
SPC Basics
l Variability is inherent in every process
l Provides a statistical signal when assignable causes are present
l Detect and eliminate assignable causes of variation
l Natural variations in the production process are to be expected
l Output measures follow a probability distribution
l For any distribution there is a measure of central tendency and dispersion
883
SPC Basics
Implemented in 2 phases:
l The first phase is the initial establishment of the process
l The second phase is the regular production use of the process
Involves three main phases of activity:

l Understanding the process and the specification limits
l Eliminating assignable sources of variation, to stabilize the process
l Monitoring the ongoing production process, assisted by the use of control
charts
884
SPC Basics - Variation

l Assignable Variation
l  Variations that can be traced to a specific reason

l  The objective is to discover when assignable causes are present
and eliminate them
885
SPC Basics - Variation

l Common-cause variation - Natural and random variations
l Common-cause variation will influence each iteration of the process and
therefore will not be obvious on a control chart, so will be difficult to diagnose
l Special-cause variation - Unusual, unexpected, or sporadic variation

l On a control chart, special variation will be indicated by points that lie far
outside the normal range
886
l  The characteristics that need to be monitored and controlled will be listed
along the left side of the control chart
l  For each characteristic, there will be a:
l  Specification
l  measurement technique
l  Sample size
l  Sample frequency
l  Analytical tool
l  Reaction protocol
887
Recalculating Control Limits

l  At the end of the Improve phase you may need to calculate new process
control limits and use these new limits as triggers for corrective action
l  If the answer to the following questions is yes, then proceed with calculating
new control limits. Any noes indicates the process does not have sufficient
statistical control to do so
l  The questions are;
l  Is there a statistical difference between the baseline and the new
measurements?
l  Is the rationale for the implemented change(s) understood?
l  Are the new measurements expected to represent the future performance?
888
Control Charts
l A time-ordered plot of the process data
l The plot outlines the expected range of variation of the data
l Since the expected range is known, anything outside of that needs
investigation and correction

l Used to monitor your process Xs and/or your process Ys
l Use when;
l  Process has a tendency to go out of control
l  Process is particularly harmful and costly if it goes out of control
889
Control Charts
l  On a control chart, the specification is the objective range within which the
characteristic tolerably can fall
l  The control chart should indicate how the warblers will be measured and
how many measurements will be included in each sample
l  It should also indicate the frequency of sampling and the analytical tool to
be used to evaluate the sample
l  Finally it will will include the reaction rules for when a variable value falls
out of bounds
890
A process is in statistical control when;

l No sample points outside limits
l Most points near process average
l About equal number of points above and below centerline
l Points appear randomly distributed
891
Selection of Variables
l  Ideally, one process parameter is the most critical, and is indicative of
the process as a whole
l  Some specifications identify this as a critical to quality (CTQ) characteristic.
CTQ may also be identified as a key characteristic
l  Key process input variables (KPIVs) may be analyzed to determine the
degree of their effect on a process
l  Key process output variables (KPOVs) are candidates both for determining
process capability and process monitoring using control charting
892
Rational Subgrouping
l Is the process of organizing data into groups of items that were produced
under similar conditions in order to measure the variation between the

subgroups instead of between individual data points
l The organization of subgroups is generally established to sample a subset of
the population within relatively homogeneous conditions

l The subgrouping strategy directly determines the sensitivity, and therefore
the usefulness, of the control chart by bearing on the sampling plan for the
charts
l Without a rational subgrouping strategy, the control charts will not answer the
right questions related to identifying the source of variability of a process
893
Developing Rational Subgroupings

l Consider the data source(s) and select the constant. e.g. the constant may
be a machine, plant, shift, etc.

l Examine variability among the sources of data in order to define an
appropriate subgroup
l To do so, consider the following questions:
l  What subgrouping strategy would produce ranges reflecting the

highest within- sample variation?
l  What strategy would produce ranges having the lowest within-
sample variation?
894
Developing Rational Subgroupings

l Establish the subgroups and calculate the range of variability for each group
l The variation is within subgroups, not between them
l Note: If you are uncertain with the choice and fear you may have selected
the wrong sub-grouping strategy, calculate ranges for both strategies and
evaluate
l Use the understanding of how to group the data sources to move forward
and determine a sample frame for producing the desired control charts
895
Module 19 – Control Phase –
Statistical Process Control (SPC)
Control Charts
l There are two categories of SPC charts: Variable and Attribute;
l  Variable charts use continuous data

l  Sample size can be 2 to 10 parts
l  Attribute charts use discrete data, e.g. Pass/Fail
l  Sample size can be 50 to 100 parts
896
Control charts for Variables

l X-bar charts control the central tendency of the process, can be combined
with the R chart to form the X-bar – R chart or with s chart to form X-bar – s
chart
–  Use with 1 to 10 rational subgroupings with R chart
–  Use with over 10 rational subgroupings with s chart
l R-charts control the range of the subgroups changes over time
l s-charts control the standard deviation of the process
l XmR charts are the same as X-bar except that it uses the median instead of
the average as a measure of central tendency

l I-mR charts are a combination of XbarR and XmR Chart. Gives both "within"
group and "between" group variation
897
Control charts for Attributes
l P-charts tracks the proportion of defective units in in a sample

l C-charts tracks the number of defects in an item
l U charts depict the percentage of samples that have a particular condition in
situations where sample sizes may vary and each sample may have more
than one occurrence of the condition
l Np-charts measures the number of times a condition exists in each sample,
when the condition may occur only once and the sample size is consistent
898
X-bar chart formula
899
X-bar chart example
©Wikipedia
900
R-chart formula
901
R-chart example
©Wikipedia
902
s-chart formula
903
s-chart example
©Wikipedia
904
P-chart Formula
905
P-chart example
©Wikipedia
906
X-bar chart Implementation

l X-bar charts are useful when subgroups of more than two observations can
be measured
l The x-axis of the X-bar chart is time, so the chart serves as a chronological
model of the process, moving from left to right

l Of course, all data entered into an X-bar chart must be assigned a time, or
else special-cause variation may not be noticeable

l If the size of the subgroup is greater than ten, then a range chart should not
be used to monitor process variation, because it will do a poor job of

estimating process sigma
l If the subgroup sizes are 1, then individual-X/moving-range chart may be
used
907
C-chart Formula
908
C-chart example
©Wikipedia
909
U-chart formula
910
U-chart example
©Wikipedia
911
Np-chart formula
912
Np-chart example
©Wikipedia
913
I-mR chart formula
914
I-mR chart example
©Wikipedia
915
X-bar chart Interpretation

l Before interpreting the X-bar chart, one must first examine the range chart
l When the range chart is out of control, the control limits on the X-bar chart
will not be useful

l After any points outside statistical control have been removed, the X-bar
chart may be interpreted relative to control limits and run-test rules

l Any points on the X-bar chart outside statistical control must be eliminated
916
P-chart Interpretation
l All of the data points should lie between the upper and lower control limits. In
such a case, the process is said to be in statistical control

l As long as the data points remain within the control limits, any variation may
be attributed to common causes

l If all the data points are within the control limits, the process is said to be
within statistical control and future performance can be predicted

l However, if data points lie outside of the control limits, this must be blamed
on special causes of variation
917
C-chart Interpretation
l The measured event may occur more than once in each unit of the sample
l  For instance, a C chart may be used to track errors in a particular process,
with the knowledge that several errors might occur in a single iteration of the
process
l All of the data points should lie between the upper and lower control limits. In
such a case, the process is said to be in statistical control

l As long as the data points remain within the control limits, any variation may
be attributed to common causes

l If all the data points are within the control limits, the process is said to be
within statistical control and future performance can be predicted

l However, if data points lie outside of the control limits, this must be blamed
on special causes of variation
918
U-chart Interpretation
l The upper and lower control limits indicate the boundaries of expected
process behavior
l The variation of points that lie within the control limits is attributed to common
causes, while any points outside the statistical control must be attributed to
special causes
l If no special-cause variation exists, then the process is stable enough to be
predictable
919
Np-chart Interpretation
l Depicts a stable process when all of the data points lie between the upper
and lower control limits

l Any variation within these limits is due to common causes, but any variation
that results in data points outside the control limits must be attributed to
special causes
l Data points that lie outside the control limits must be explained
l Typically, an Np chart is succeeded by experimentation aimed at diagnosing
particular causes
920
I-mR chart Interpretation

l After it is completed, it should be searched for special-cause variation
l Any special causes of variation must be identified and removed
l The general strategy when interpreting individual-X and moving-range charts
is to find non-random behavior or trends in the data

l One can use Run Tests for this
l Once a process has been observed for a sufficient time and is found to be in
control, calculating the process capability relative to requirements is possible

l However, it is not possible to predict the capability of a process not in
statistical control
921
End of Module 20

l  Objectives
l  Selection of Variables

l  Rational Subgrouping
l  Control Chart Selection
l  Control Chart Analysis
922
Module 21 – Control Phase – Other Controls
Outline
1. Visual Factory
2. Total Productive Maintenance (TPM)
924
Visual Management uses;
l Floor and surface marking
l Shadow boxes
l Samples
l Visual indicators
l Obstacle height limits
l Lights and sounds
l Arrows, zones, stickers
l Scoreboards
l Labels and tags
925
Visual Factory
l Describes visual methods a manufacturing plant can use to communicate
information about a process to everyone who needs to understand it as they

work
l Use of visual tools will convey information in a clear, accurate, efficient, and
organized way to those who need to know it

l Overall goal is to make the control and management of a company as simple
as possible
l Visual Factory is implemented in two stages;
l  Determining what information needs to be communicated

l  How this information will be communicated
926
Visual Factory
l It prevents errors arising from miscommunication
l It increases comprehension, even when describing complex processes
l It makes employees feel more competent and reduces friction due to
misunderstanding about what is needed to be done

l It improves the way machines are used
l It decreases how long work stays in progress
KEY FACT: 83% OF THE INFORMATION WE ABSORB IS VISUAL
927
Visual Factory Implementation
l The current state must be compared to the future state goals in order to
determine what information is to be delivered

l The information required to get from one state to another is what must be
conveyed
l How the information is conveyed depends on the desired end result.
l The location and method of information delivery also depends on the
relevancy of the information
928
Visual Factory
Typically this data includes;
l Process metrics
l Work instructions
l General plant information
929
Visual Factory – Process Metrics
l The machine or operating unit will deliver real time metrics
l When there is instant information, adjustments can be made immediately to
a process
l A metric that communicates information through light is called an andon
(Japanese for lantern)

l Usually a central feature in a visual factory as it provides instant feedback on
the state of a process

l Gives the worker the ability to stop production when a defect is found, and
immediately call for assistance Indicates where the alert was generated, and
may also provide a description of the trouble
l One can have audio andons
930
Visual Factory – An example of an Andon
931
Visual Factory – Work instructions
l Graphics and photographs are preferred as they give clear instructions and
minimize errors in production

l The more accurate the graphic reflects the process, the higher the level of
communication
l Words and numbers can be interpreted in many ways because they are
constrained by rules of grammar or mathematical sequence and logic

l On the other hand, clear visual representation offers a literal description that
can be immediately understood

l Addresses ESL issues
932
Visual Factory – Example Work instructions
933
Visual Factory – General Plant Information

l Usually posted in a central location and stimulates two-way information
exchanges
l Visual information raises awareness, alerts about changes, posts warnings
about how to handle potentially dangerous manufacturing processes, and

motivates production
934
Visual Factory – Footprints

l Markings on the floor or work area outlining specifically where items should
be placed or a person should stand

l Avoids employees wasting time looking for things or pondering their next
move.
l The workplace becomes clean and better organized.
l Operation on the shop floor and office become easier and safer
935
Visual Factory – Creating Footprints

l A footprint is an outline of the items required at work areas indicating where
the items should be placed

l Mark from the floor up to workbenches etc
l Start with plastic tape to test out, then move to paint
l Color code and place legends that describe the coding
936
937
Reactive maintenance inherently wasteful and ineffective with following
disadvantages:
l No warning of failure
l Possible safety risk
l Unscheduled downtime of machinery
l Production loss or delay
l Possible secondary damage
l Real cost of reactive maintenance is more than the cost of maintenance
resources and spare parts
We need a better way!
938
Total Productive Maintenance (TPM)
l Both a philosophy and a set of tools
l Used to optimize the effectiveness of manufacturing equipment and tooling
l Starts with 5S and the Visual Factory
l Builds a comprehensive Downtime Database
l Predicts and prevents downtime
l The Operator is the first point of early warning and prevention
l Develops Professional Maintenance skills
939
Total Productive Maintenance (TPM) dramatically
l Reduces equipment breakdowns
l Minimizes idle time and minor stops
l Results in less quality defects
l Increases productivity
l Reduces staffing and cost
l Lowers inventory
l Reduces accidents
940
Total Productive Maintenance (TPM) goals
l To maximize overall equipment effectiveness through total employee
involvement
l To improve equipment reliability and maintainability which, in turn, will
improve quality and raise productivity

l To aim for maximum economy in equipment for its entire life
l To cultivate equipment-related expertise and skills among operators
l To create a vigorous and enthusiastic work environment
941
Six Big Losses TPM addresses;
1. Breakdown losses due to failures and repairs
2. Setup and adjustment losses
3. Idling and minor stoppage losses
4. Speed losses
5. Scrap and rework losses
6. Start-up losses
1 and 2 = availability loss

l 
3 and 4 = performance loss

l 
5 and 6 = quality loss

l 
942
Seven Steps of TPM
1. Initial Clean-up (5S & Visual Factory)
2. Identify and eliminate inherent faults
3. Set Initial Standards
4. General Inspection
5. Autonomous Inspection
6. Standardization
7. Autonomous Maintenance
943
Downtime Database
l Categorize at a minimum by Equipment, Tooling, and Change-Over
l Segmented bar graph for E-T-O lost time
l Subcategories for Equipment
l Subcategories for Tooling
l Subcategories for Other
944
Predict and Prevent Downtime
l Via preventative maintenance and monitoring
l Rate/hr vs. target or historical normal output (B/W)
l Downtime Database
l Maintenance history
l Statistical probability (frequency & duration)
945
Predict and Prevent Downtime
Physical prediction of impending failure
l Sound (bearing)
l Temperature (cooling water)
l Flash (core pins)
l Shot monitoring system
l SPC on part geometry
l Hydraulic pressure (ejector pins)
l Spindle loads (amps)
l Fluids / Lubrication analysis (milipore)
l Vibration Signature Analysis
946
Preventive Maintenance System
l History of downtime by major machine & tool
l Plan PM based on frequency of failure and magnitude of average lost time
l Have instructions, schedule/frequency & sign-off
l Done in window of opportunity when machine is down
l Use visual status (work completed / not completed)
947
Role of Operator as first point of prevention and early warning
l Provide operator awareness training
l Create OMP (Operator - Maintenance Partnership)
l Operator performs checks, problem solving, and improvements
948
OMP (Operator - Maintenance Partnership)
l Operator training in TPM
l Operator basic equip inspection & tooling checks
l Operator basic cleaning
l Operator lubrication check
l One point lessons (capture knowledge)
l TPM Board & TPM Tags (proactive operator involvement)
949
TPM Tags
l Problem communication tool to and from maintenance, tool room, and
production
l  Identify abnormal machine conditions
l  Status tracking system
l  Visual management tool (hang tags)
l TPM Tag used for recording problems & fix
l  Blue Tag-Operator or Maintenance to repair

l  Red Tag- Safety-related request (priority)
950
End of Module 21
l Visual Factory
Total Productive Maintenance (TPM)

l 
951
Module 22 – Control Phase – Maintain Controls & Sustain
Improvements
Improvements
Outline
1. Measurement system reanalysis
2. Control Plans
3. Lessons learned
4. Documentation
5. Training for Process Owners and Staff
6. Ongoing Evaluation
7. Control Phase Summary and Review Questions
953
Improvements
Measurement System Reanalysis
l  Reducing process variation may require a re-evaluation of the
measurement systems to ensure that they can accurately measure the new
tolerances and control limits
l  New quality system standards requires accurate estimates of
measurement uncertainty as well as the use of statistical technique for
analyzing test and calibration data
l  The Measurement Systems Analysis Reference Manual provides guidelines
for acceptance of gage repeatability and reproducibility (%R&R). These

were discussed in Module 10
954
Improvements
Measurement System Reanalysis
l  The expression of measurement uncertainty includes both a range and the
level of confidence at which the statement is made

l  Set the range and level of confidence appropriate for the process
l  Refer to Module 10 for more complete coverage of MSA
955
Improvements
l  A control plan is a summary of the detection and/or prevention strategies
used to control processes or materials
l  Includes information such as the specification related to each relevant
characteristic
l  Used to record the strategy that will be used to control the key process
variables
l  Usually compiled from the results of designed experiments and FMEA
l  The FMEA is important as it indicates the most important sources of failure
l  Short and sweet. One page is the usual length
956
Improvements
l  In order for the control plan and SPC to be successfully implemented,
proper training and documentation needs to be provide
l  The new processes have to be properly documented and SOPs put into
place and enforced
l  Response plans need to be put in place should the processes fall out of
statistical control
957
Improvements
Lessons Learned
l  The project report will summarize the final results of the project
l  It begins with the project charter
l  Summarizes the results from each DMAIC stage
l  Provides objective indications of whether the short- and long-term goals
were met
l  The conclusions should be supported with raw data and analysis; which
may be included in an appendix

l  Should outline the expenditures and the cost savings related to the project
l  Should outline the control plan
l  Finish off with recommendations and lessons learned for future projects
958
Improvements
Documentation
l  Key project documents such as process charters, process maps, customer
requirements, code books, tally sheets, and charts and graphs are updated
and archived for multiple purposes:
l  Input for the the creation of control plans and charts
l  Input for the creation of training materials, SOPs, and Job Aids
l  To capture lessons learned and aid in developing best practices
959
Improvements
Documentation
Control Phase document deliverables:

l  Control Plan
l  Control Charts
l  Job Instructions and Job Aids
l  Visual documentation
l  SOP documents
l  Run Books
l  Maintenance Procedures
l  And anything else needed to maintain the process improvements and
every-day operations
960
Improvements
Training for process owners and staff
l  Even with comprehensive documentation and control plans, employee

training is key for maintaining improvements
l  They not only need to learn the updated processes but also the most
important process factors and inputs in order to help put the new processes
in context
l  Should show the employee why the process changes will improve their
work
l  Training sessions should be pitched to the level of the audience
l  Refer back to the team training section in Module 4 for more info on training
961
Improvements
Ongoing evaluation
l  As has been discussed earlier, the Control Plan and Control Chart(s) are
key tools for the ongoing evaluation and monitoring of the new processes
put in place
l  Make sure they are used and not stuck in some drawer
l  Conduct regular Gemba walks to see if the new processes are being
followed
l  Remember you are not out to punish, though hold people accountable, but
to understand why the new process is being followed; inadequate training,
unclear instructions, process issues, etc...
962
Improvements
Ongoing evaluation
l  Track leading and lagging indicators

l  A leading indicator shows the trend before the defect occur
l  If a leading indicator trips, then the process will produce a defect outside
the lower control limit
l  A lagging indicator is an outlier that is already outside the upper or lower
control limit
l  Thus a lagging indicator flags that the defect has already occurred
963
Improvements
Ongoing evaluation
l  Sustainability is the goal

l  To ensure sustainability you need:
l  Ongoing frequent measurement and reporting
l  Positive reinforcement for high performance
l  Accountability for low performance
l  Strong leadership commitment and support
l  An early adopter/champion/change agent for each unit/department
involved
964
Improvements
Ongoing evaluation
How are we doing?

l  Excellent: Fully implemented, sustained to goal for greater than 12 months
l  Fair: Significant or partial implementation, sustained to goal for greater than
6 months
l  Poor: Some implementation occurred, but did not sustain to goal for greater
than 3 months
l  Abject Failure: No Implementation, and/or did not meet goal for at least 3
months following implementation or other sustainability issues
If it isn't excellent then RCA why.

965
Improvements
Ongoing evaluation
Sustainability Strategies
l  Make the process as intuitive as possible
l  The path of least resistance leads to the right action
l  Change should be from the bottom-up
l  Change should be gradual, beginning with the lowest levels of
implementation complexity and migrating to higher levels

l  Process performance data should be presented to the front line staff
members regularly (daily is preferred, reducing frequency as process

stabilizes)
l  Make sure successes are communicated to everyone
966
Improvements
Ongoing evaluation
Have we planned for sustainability?

l  Is the improvement based on a robust/reliable process?
l  Is the improvement driven by the people closest to the process(es)?
l  Have you conducted small incremental tests of change?
l  Have involved staff received regular (daily) feedback?
l  Have performance metrics been monitored?
l  Front line staff and supervisors recognized/praised for high performance
and held accountable for low performance?
Yes to all then it will be sustainable...

967
Improvements
”The work is not done un0l everyone is either following the
new system or in the process of improving the new system.”

968
End of Module 22

l  Measurement system reanalysis
l  Control Plans
l  Lessons learned
l  Documentation
l  Training for Process Owners and Staff
l  Ongoing Evaluation
Now we will summarize the Control Phase have a few Review Questions
969
Control Phase – Summary
l  Implement SPC and a Control
l  Verify that the process improvements have attained the goals.
l  Develop and implement the Visual Factory or TPM if relevant
l  Hand off the process to the process owners
l  Close off the project
Control Phase – Summary
Questions to ask at end of phase
l Did we validate the measurements?
l Did we meet the targets?
l What risks have been identified that could jeopardize your control strategy?
l Do we have sign-off on our changes?
l Has proper training and documentation been provided?
l What actions are still required to guarantee sustainability?

Control Phase – Review Questions
Question #1
A correctly executed SPC process includes which of the following:
A. Contacting the Black Belt if there is an out of control indication

B. Red alert signal when data point are outside 3 sigma limits
C Having an Out of Control Plan in place
D None of the above
Answer #1
C Having an Out of Control Plan in place

Question #2
Why should you do a Measurement System Reanalysis during the Control

phase?
A. SOP requires us to do so
B. To calibrate our Control Charts
C. Reducing process variation may require a re-evaluation of the
measurement systems
D. Don't need to do so as it is unnecessary
Answer #2
C Reducing process variation may require a re-evaluation of the

measurement systems
Question #3
What is an andon?
A. It is a nonparametric Test
B. It is a class of defect
C. It is a type of Control Chart
D. A light used to communicate status of a metric
Answer #3
D. A light used to communicate status of a metric

Module 23 - DFSS
Module 23 DFSS
1. Common DFSS methodologies
2. Design for X (DFX)
3. Robust Designs
979
Module 23 DFSS
DFSS
Stands for Design For Six Sigma
l  70 - 80% of all quality problems are design related
l  Emphasis on the manufacturing side alone will concentrate at the tail end (most
costly end) of the problem solving process
l  The goal of DFSS is to design a superior quality product that reflects the VOC
l  Use of tools focused on product design
980
Module 23 DFSS
DMADV is composed of the following steps;
Define – Define design goals that are consistent with customer demands and the
l 
enterprise strategy
Measure – Measure and identify CTQs (characteristics that are Critical To Quality),
l 
product capabilities, production process capability, and risks

Analyze – Analyze to develop and design alternatives
l 
Design – Design an improved alternative, best suited per analysis in the previous
l 
step
Verify – Verify the design, set up pilot runs, implement the production process and
l 
hand it over to the process owner(s)
981
Module 23 DFSS
IDOV is the methodology most commonly associated with design for Six Sigma, or
DFSS. IDOV stands for;
Identification- Identify the customer needs, create an effective business model, and
l 
establish the Six Sigma team

Design - Use critical-to-quality metrics to design the processes
l 
Optimization - Adjust the factors that impact the process quality until the optimum
l 
outputs are achieved

Validation – Validate the new process and make any necessary adjustments
l 
982
Module 23 DFSS
DMADOV (Define, Measure, Analyze, Design, Optimize, and Verify) is another DFSS
lifecycle
Define – Define design goals that are consistent with customer demands and the
enterprise strategy
Measure – Measure and identify CTQs (characteristics that are Critical To Quality),
product capabilities, production process capability, and risks
Analyze – Analyze to develop and design alternatives
Design – Design an improved alternative, best suited per analysis in the previous step
Optimize - Adjust the factors that impact the process quality until the optimum outputs
are achieved
Verify – Verify the design, set up pilot runs, implement the production process and
hand it over to the process owner(s)
983
Module 23 DFSS
DMADOV, IDOV and DMADV have the same objectives and are rigorous in nature;
their only real difference is the terminology.
Overall goals are to reduce delivery time and development costs, as well as to
l 
increase effectiveness and better satisfy customers

Emphasizes defect prevention rather than reduction
l 
More concerned with the creation of new, high-quality processes than with the
l 
incremental improvement of old processes

Is best used for new product and process development because it includes a design
l 
phase
Also useful when the standard DMAIC lifecycle has proven ineffective at bringing an
l 
existing process up to sufficient quality standards as due to the process needing an

extensive overhaul
984
Module 23 DFSS
To sum up which lifecycle to use
Use DFSS for 'greenfield' and for existing processes that require a substantial
l 
overhaul and redesign

Use DMAIC when incremental improvements to existing processes is all that is
l 
necessary
It is quite possible to start with DMAIC, realize that a substantive redesign is needed,
l 
then switch to using either DMADOV, IDOV or DMADV
985
Module 23 DFSS
Design for X (DFX)
Describe design constraints, including design for cost, design for manufacturability
(producibility), design for test, and design for maintainability
986
Module 23 DFSS
Design for X (DFX)
l  Design for X (DFX) is defined as a knowledge-based approach for designing
products to have as many desirable characteristics as possible

l  The desirable characteristics include: quality, reliability, serviceability,
l  safety, user friendliness, etc.
l  Bell Laboratories coined the term DFX to describe the process of designing a
product to meet the above characteristics
987
Module 23 DFSS
Design for X (DFX)
l  Design guidelines: Heuristics provide broad design rules and strategies
l  DFX analysis tools: Each DFX tool involves some analytical procedure t to
measures the effectiveness tool in question

l  Determine DFX tool structure: A technique may require other calculations
before the technique can be considered complete
l  Tool effectiveness and context: Each tool can be evaluated for usefulness
by the user based on accuracy of analysis, reliability characteristics and/or
integrity of the information generated
l  The focus of activity and the product development process: If the product
development process is understood by the design team will help determine when a
particular tool can be used
l  Mapping tool focus by level: Several levels of analysis may be involved with one
individual tool. The structure may dictate the feasibility of tool use
988
Module 23 DFSS
Design for X (DFX)
The Xs:
l  Function and performance
l  Safety
l  Quality
l  Reliability
l  Testability
l  Manufacturability
l  Assembly (Design for Assembly, DFA)
l  Environment (Design for the Environment, DFE)
l  Serviceability (Maintainability and Repairability)
l  Maintainability
l  User Friendliness, or Ergonomics
l  Appearance (Aesthetics)
l  Packaging
l  Features
l  Time to Market
989
Module 23 DFSS
Robust designs
l  Robust design processes can produce extremely reliable designs both during
manufacture and in use
l  Robust design uses the concept of parameter control to place the design in a
position where random “noise” does not cause failure
© Quality Council of Indiana
990
Module 23 DFSS
Robust designs
l  The concept is that a product or process is controlled by a number of factors to
produce the desired response

l  The Signal Factor is the signal used for the intended response.
l  The success of obtaining the response is dependent on Control Factors and Noise
Factors
l  Control Factors are those parameters that are controllable by the designer that
operate to produce a response when triggered by a signal

l  Control Factors are separated into those which add no cost and those that do add
cost
l  Factors that add cost are frequently associated with selection of the tolerance
of the components and are called Tolerance Factors
l  Factors that don’t add cost are simply Control Factors
991
Module 23 DFSS
Robust designs
l  Noise Factors are parameters or events that are not controllable by the designer
and are generally random

l  Noise factors have the ability to produce an error in the desired response. The
function of the designer is to select Control Factors so that the impact of Noise
Factors on the Response is minimized while maximizing the response to Signal
Factors
992
End Module 23
l  Common DFSS methodologies
l  Design for X (DFX)
l  Robust Designs
993
Module 24 Exam Review – Prep and Key Concepts
Exam Review 994

Exam Review and Key Concepts
Outline
1. Exam Tips
2. Key Six Sigma Concepts
995
l  150 Questions with 4 hours to complete
l  Pass is 80%
l  Open book
l  Your own notes are allowed, however the proctor will inspect your notes
and can reject them
l  No collections of questions and answers are allowed
l  Hand held calculators without an alphabetic keyboard are allowed. The
memory must be cleared
996
Exam Day
l Check your work

l Pace yourself and leave enough time to recheck your work
l Don't get hung up on one question – move on
l See if you can quickly narrow down to two possible answers
l Mine the question for clues
l Watch our for switchbacks and hedge phases
l Watch out for slang and directly quoted answers
l There is no penalty for a wrong answer, so guess if all else fails
KEEP BREATHING AND RELAX

l 
Exam Review 997

Exam Day
l Check your work

l Pace yourself and leave enough time to recheck your work
l Don't get hung up on one question – move on
l See if you can quickly narrow down to two possible answers
l Mine the question for clues
l Watch our for switchbacks and hedge phases
l Watch out for slang and directly quoted answers
l There is no penalty for a wrong answer, so guess if all else fails
KEEP BREATHING AND RELAX

l 
998
Exam Prep Tips

l  Review the Six Sigma Black Belt BOK to identify key subject areas
l  Buy a Six Sigma Black Belt Textbook – either the Quality Council of Indiana
CCSBB Primer or The Certified Six Sigma Black Belt Handbook by T.M.
Kubiak and Donald W. Benbow would be great
l  Create or join a study group with your peers or online
l  Your study schedule should review at least one chapter per week and leave
at several weeks before the exam for a combined content review.
l  Read each chapter and mark key concepts or questions to pose to your
peers
l  Carefully follow all the exam registration procedures .
999
Exam Tips
l Understand how to use and apply each tool or concept within each chapter
l Create hypothetical situations of where and when you could apply each tool,
or draw from previous experiences

l Read case studies
l After each chapter, summarize key takeaways and important topics.
Combine this list for all chapters into a master summary/cheat sheet
l Do the practice questions. They were mostly drawn from previous exams are
are very reflective of the types of questions you will encounter

l Use your wrong answers to focus your further studies
1000
Exam Prep Tips
l Create cheat sheets with formulas, key terms, tools, concepts, as well as
page number references
l Add tabs for each chapter, or each phase of DMAIC
l Know how your materials are organized and how to use them efficiently
l Practice solving the problems using the calculator you plan to use on the
exam day
1001
Exam Day
l Get a good night's sleep

l Don’t try to cram the night before the test
l Eat a well-balanced meal and stay hydrated
l Know the exact physical location of the testing site
l Give yourself plenty of time to get there
l Bring 2 current forms of ID to the testing center
l Bring plenty of pencils and your material
l A good strategy is to go through and answer all the questions you are
absolutely certain of
l Then work through the rest
l Think long thing wrong is often the case
l READ THE QUESTION
1002
Six Sigma In 1 slide
l A quality level of 3.4 DPMO
l Y=f(X) + ε: All outcomes and results (theY) are determined by inputs (theXs)
with some degree of uncertainty

l To improve results (the Y), you have to focus on the key inputs (the Critical
Xs), modify them, and control them

l Variation is everywhere
l Valid and relevant measurements and data are required foundations for
consistent improvement
l Only a critical few inputs have significant effect on the output
l Every decision and conclusion has risk (ε) which must me weighted against
the reward
l SIPOC: Supplier, Input, Process, Output, Customer
1003
DMAIC
Define – project charter, problem statement, scope, goals, resources,
financial, process maps
Measure – collect data, process maps, fishbone, Pareto, QFD, need
accuracy & precision
Analyze - root cause is verified, hypothesis testing (verify assumptions and
predictions regarding the relationship between process inputs and the CTQ
values)
Improve – brainstorming for ideas and solutions to problems identified in
Analyze phase
Control - project responsibilities transition from process improvement team to
operations team. Place control plan in place
1004
l  Define phase focuses on identifying and articulating a project’s important
characteristics, including identification of the goals, objectives, and scope of
the project
l  The team members and sponsors are identified, as well as the proposed
schedule for the project
l  The desired result of the project is defined
l  The team also identifies the stakeholders, the input/output structure, and
the functions involved.
1005
Measure Phase
l The team will focus on gathering the information necessary to complete the
project
First, the team will attempt to define each relevant process in great detail
l 
It will be necessary to develop a group of metrics appropriate to the

l 
processes
No metric is complete until accompanied by a measurement analysis system
l 
that identifies and quantifies any common errors in the metric

The final general objective of the measure phase is to estimate process
l 
baselines
1006
Analyze phase
l  The team will focus on analyzing the sources of variation in the target
process
l  Based on the high-level problem, the tools to drill down with will be selected
l  This analysis may require the use of sophisticated statistical tools
l  The team will analyze the value stream. The value stream is the set of
activities that create value for the customer

l  The team will also identify the process drivers, which are the activities that
exert a significant influence on the results of processes
1007
Improve phase
l  The first major objective of the Improve phase is to set the new process
operating conditions. These conditions are based on the experimentation

and analysis of the measure and analyze phases.
l  The next objective of the improve stage is to identify and address the failure
modes for the new processes

l  Assessing and predicting the benefits of the proposed solution also is
appropriate. Before making massive changes, the team should be able to

guess how positive the results of these solutions will be
l  The final objective of the improve stage is to implement and confirm
process improvements
1008
Control Phase Overview
Control Phase
l  The primary objective of the Control phase is to ensure that the gains
obtained during Improve phase are maintained long after the project has
ended
l  To that end, it is necessary to standardize and document procedures, make
sure all employees are trained and communicate the project’s results
l  In addition, the project team needs to create a plan for ongoing monitoring
of the process and for reacting to any problems that arise

l  And finally close out the project
1009
In order to both understand where an organization is and how it is
progressing, on needs quantifiable metrics to baseline and to track progress.
l  The selected metrics must map back to the organizational drivers and will
measure process and financial performance
l  These metrics must be relevant to the problem or goal in mind.
l  All roads lead back to the concept of the Cost of Quality
l  There are widely-used financial metrics as well as balanced scorecards
l  Six Sigma also provides us with a set of key metrics
1010
Establishing the Primary Metric:
l  The Primary Metric is a quantified measure of the defect or primary issue
l  Should be consistent with the problem statement and objectives
l  Links to the KPI or Key Business Measure
l  We can have only One Primary Metric. Recall the equation Y = f (X); well
once your defect is located then Y will be your defect. Your primary metric
will measure it
l  Serves as the indicator of project success
1011
Secondary Metrics:
l  Secondary Metrics measure potential changes that may occur as a result of
changes in the Primary Metric
l  Measures positive & negative consequences resulting from changes in the
process
l  Secondary Metric(s) drive the right behaviour
l  Can have multiple Secondary Metrics
l  Can be “Drivers” or “Riders” – i.e. Vital X’s impacting the project (Primary
Metric) or “Good Consequential Metrics”
1012
Key Metrics
Rolled Throughput Yield: Calculate the yield (number out of step/number
into step) of each step. Multiply these together
Defects Per Million Opportunities (DPMO): Number of defects divided by

number of opportunities multiplied by one million
1013
Critical-to-cost;
l Identifies areas of a process that significantly increase the expense
l Critical-to-cost metrics should include not only the typical cost of a task, but
also the increased cost of errors incurred in the performance of this task
l If a lag time exists in a process, the critical-to-cost metrics should include
the cost of keeping inventory and WIP
l The effects of errors on cost tend to multiply as the product moves farther
down the path
l The amount of money required to align a product or service with quality
baselines is known as the cost of quality
1014
Critical-to-schedule;
l Cycle time is the most common critical-to-schedule metric
l Cycle time is the duration required for the completion of a defined process
l Improvement of critical-to-schedule issues begins with distinguishing
between process steps that add value and process steps that do not add
value
l Use process efficiency and velocity numbers to assess value added relative
to cycle time
1015
l A common critical-to-quality metrics is yield, or the amount of completed
product divided by the amount of product that began the process
l The difference between perfection and reality is known as the scrap rate
l While useful, it does not indicate where in the process errors occurred
l Yield does not distinguish those pieces of scrap that can still be salvaged
l Yield is noted as a decimal, where 1 would equal 100%
l When multiple steps in a process are considered, Six Sigma teams use
rolled throughput yield, which measures the expected quality level after
several steps
1016
l A common critical-to-quality metrics is yield, or the amount of completed
product divided by the amount of product that began the process
l The difference between perfection and reality is known as the scrap rate
l While useful, it does not indicate where in the process errors occurred
l Yield does not distinguish those pieces of scrap that can still be salvaged
l Yield is noted as a decimal, where 1 would equal 100%
l When multiple steps in a process are considered, Six Sigma teams use
rolled throughput yield, which measures the expected quality level after
several steps
1017
Balanced Scorecard;
Many Six Sigma professionals advocate the use of balanced scorecard
metrics as a method for ensuring that the project meets both customer and
business needs.
The balanced scorecard approach includes;
l Financial and non-financial metrics,
l Lagging and leading measures
l Across the following four areas:
l  financial,
l  customer,
l  internal processes,
l  and employee learning and growth.
1018
The Hidden Factory
l  The hidden factory is the extra value-add output that would theoretically be
possible if the energy directed at creating waste were released and directed
instead at making good quality items
l  In 1977, the quality guru Armand Feigenbaum estimated the wasted effort
within the hidden factory might be 15% to 40% of total non-Six Sigma
company effort
l  The metric COPQ (cost of poor quality) is used to quantify the 'output' of the
hidden factory.
l  However, COPQ does not address loss of goodwill and loss of
competitiveness
1019
Hoshin Planning
l  A tool for strategic planning
l  The seven steps of the Hoshin planning model are;
1. Establish Organizational Vision

2. Develop Breakthrough Objectives
3. Develop Annual Objectives
4. Deploy Annual Objectives
5. Implement Annual Objectives
6. Monthly Review
7. Annual Review
The key tool for Hoshin planning is the X-Matrix, which is iteratively created
1020
Team Stages and Dynamics
l  There are four stages of team development; Forming, Storming, Norming,
and Performing
l  Some authors add the Adjourning stage when the team is disbanded
l  Knowledge of these stages and strategies for moving through these stages
help team members to promote more effective collaborative processes
1021
What Is the Voice of the Customer?
l  The term Voice of the Customer (VOC) is used to describe customers’
needs in a process improvement effort and their perceptions of your
product or service
Using the Voice of the Customer
l  Understand why the Voice of the Customer (VOC) is critical
l  Know how to create a plan for gathering VOC data
l  Know both reactive and proactive ways to gather VOC information
l  Know how to analyze data through the use of affinity diagrams and Kano
diagrams
l  Be able to use a CTQ tree diagram to identify customer requirements and
set specifications for them
1022
QFD (Quality function deployment)
l Method to transform user demands (VOC) into design quality, to deploy the
functions forming quality, and to deploy methods for achieving the design
quality into subsystems and component parts, and ultimately to specific
elements of the manufacturing process
l QFD Steps:
l  Understand Customer and Technical Requirements

l  Translate Technical Requirements to Critical to Quality
Characteristics (CTQs)
l  Build to those CTQs
1023
House of Quality
Exam Review 1024

KANO MODEL
(Of Quality/Features)
1025
Critical to X (CTx) is a general term that refers to methods used to optimize a
key measurable characteristic that is 'Critical To' the performance or customer
expectation
l  Critical to Quality
l  Critical to Cost
l  Critical to Delivery
l  Critical to Process
l  Critical to Safety
1026
l Six Sigma uses the DPMO level of a process to generate a Sigma
level for the process

l It uses the standard normal distribution as its measurement system
l A Sigma level compares the variation in process performance to the
acceptable levels set by the customer

l The higher the Sigma level the better. Six Sigma performance of 3.4
DPMO
WARNING: The normal distribution and DPMO will not apply if special
causes are dominant within the process
1027
Basic Statistics
l  Mean (average): add all numbers in the list together and divide by the
number of items in the list
l  Median (middle): order the numbers and take the number in the middle
l  Mode: The number listed most. The most frequently observed value.
l  Variance (average distance from the average squared)
l  Standard Deviation (average distance from the average)
l  Range: The difference from the largest to the smallest value in a set
l  Confidence Intervals: estimated range of values which includes the true
value with stated probability
1028
Attribute (Discrete) vs. Variable Data:
l  Discrete or Attribute data is considered the same thing. Discrete data is
any data not quantified on an infinitely divisible numerical scale. Discrete
data has boundaries and includes any number that must be an integer
l  Variable or Continuous data is any data on a continuous scale. Examples
include length, diameter, temperature, weight, time
1029
Normal Distribution
The normal distribution provides the basis for many statistical tools and
techniques.
•  A probability distribution where the most frequently occurring value is in
the middle and other probabilities tail off symmetrically in both
directions. This shape is sometimes called a bell-shaped curve
•  Curve theoretically does not reach zero; thus the sum of all finite areas
total less than 100%
•  Curve is symmetric on either side of the most frequently occurring value
•  The peak of the curve represents the center, or mean, of the process
•  For practical purposes, the area under the curve represents virtually
100% of the variation the process is capable of producing
1030
Statistical Error
l  Type 1, Alpha or α errors: also known as an "error of the first kind", an α
error, or a "false positive": the error of rejecting a null hypothesis when it is
actually true
l  Type 2, Beta or β errors: also known as an "error of the second kind", a
β error, or a "false negative": the error of failing to reject a null hypothesis
when it is in fact not true
Z-Value
l  A data point's position between the mean and another location (usually
mean) as measured by the number of standard deviations
l  A measure of process capability and corresponds to the process sigma
value that is reported
1031
Hypothesis Testing
l  Tells us if a statistical parameter (average, standard deviation, etc.) is
different from a value of interest
l  Hypothesis takes the form Ho: µ = a target or known value
l  Practical Difference: The difference which results in an improvement of

practical or economic value to the company. Reflects the VOB
l  Statistical Difference: A difference or change to the process that
probably (with some defined degree of confidence) did not happen by
chance. Reflects the VOP
1032
Multi-Vari plots
l Are effective tools for assessing the variation within samples or within
particular parts.
l Multi-Vari plots can be used to analyze variation over time or between
different batches
l Primarily used to isolate the causes of variation and to obtain more
information about the interactions among factors

l Identifies possible X’s or families of variation. These families of variation can
hide within a subgroup, between subgroups or over time

l Helps screen X’s by visualizing three primary sources of variation. Later we
will perform Hypothesis Tests based on the findings
1033
Correlation Co-efficient
l  Typically denoted by r) is a measure of the correlation between two
variables X and Y, giving a value between +1 and −1
l  A value of 1 implies that the relationship between X and Y is perfect, with
all data points lying on a line for which Y increases as X increases
l  A value of −1 implies that all data points lie on a line for which Y decreases
as X increases
l  A value of 0 implies that there is no linear relationship between the
variables
1034
l  States conditions under which the sum of a sufficiently large number of
independent random variables each with finite mean and variance, will be
approximately normally distributed
1035
Common Charts
l  Pareto Chart: A Pareto chart is a bar chart ordered from category with the
highest value to category with the lowest value
l  Also shows cumulative values in a line.
l  Commonly used to show which areas to focus on
1036
Common Charts
Box Plots: aka Box & Whisker diagrams, show distributions with:
l  The median
l  A box around the middle 50% of the range of values (interquartile)
l  Tails showing the bottom 25% of values, and the top 25% of values
1037
MSA (Measurement System Analysis): seeks to identify the components of
variation in the measurement. Common tools are ANOVA and Gage R+R
Goal is to measure the amount of variability induced in measurements that
comes from the measurement system itself and compares it to the total
variability observed to determine the viability of the measurement system
Key measures: Repeatability and Reproducibility, Precision, Linearity, and

Stability
1038
l  The degree to which a measurement can be compared to a known standard
l  In metrology every measurement is assumed as somewhat inaccurate
l  Therefor knowing exactly how inaccurate a measurement is likely to be is
crucial
l  A measurement system is considered traceable when these uncertainties
can be calculated and accounted for

l  A measurement is also considered traceable when it can be compared
effectively with measurements taken at different times and under different

conditions
1039
ANOVA
l  Used for hypothesis testing when comparing multiple groups.
l  Hypothesis takes the form Ho: µ1 = µ2 = µ3 = …
l  Tests whether the means of several groups are all equal, and therefore
generalizes Student's two-sample t-test to more than two groups
l  The observed variance is partitioned into components due to different
explanatory variables
1040
DOE Design Of Experiments
Uses statistical tools, such as ANOVA above and regression, to be able to
determine the importance of different factors with a minimal amount of
data. It is used when you have many different factors that may impact
results (i.e.: many x’s that impact Y in the classic Y=f(x) formula)
1041
Linear Regression
l  Linear regression attempts to use a straight line to determine a formula for
a variable (y) from one or more factors (Xs)
l  linear regression can be used to fit a predictive model to an observed data
set of y and X values
l  We quantify the strength of the relationship between y and the Xj, to assess
which Xj may have no relationship with y at all, and to identify which subsets
of the Xj contain redundant information about y
1042
Non-Normal Distribution
First determine if the data is normal. If it is not: consider how it will effect the
tools you plan to use; e.g. DOE, ANOVA and t-tests assume normality
1043
Variation
Common Cause - causes of variation that are inherent in a process over
time. They affect every outcome
l  Common cause variation inside control limits - do NOT adjust process
Special Cause - relatively large, unusual variation usually comes from

outside the process
1044
Sources of Variation
Within Unit or Positional
–  Within piece variation related to the geometry of the part.
–  Variation across a single unit containing many individual parts such
as a wafer containing many computer processors.
–  Location in a batch process such as plating.
Between Unit or Cyclical

–  Variation among consecutive pieces.
–  Variation among groups of pieces.
•  Variation among consecutive batches.
Temporal or over Shift-to-Shift

–  Day-to-Day
–  Week-to-Week
1045
Root Cause Analysis
l  Use cause and effect diagrams, 5 Whys, relational matrices, and other
problem-solving tools to identify the true cause of a problem
l  Derivative of FMEA
l  It is not the initial response to the problem
l  Nor is it a restatement of the findings
l  Usually the root cause is a process, procedure or organizational failure
1046
FMEA (Failure Mode and Effects Analysis):
l  Helps determine where to focus improvement efforts by analyzing severity
of failures, probability of occurrence of an error, and likelihood of detection
of an error
l  RPN (Risk Priority Number) is computed by multiplying Occurrence,
Severity, and Detectability together. The highest RPNs should be
addressed first
1047
Cause and Effect Diagram (Fishbone or Ishikawa)
l  Used to identify and organize potential root causes
l  Problem solving analysis done by brainstorming
l  Common categories - Measurement, Materials, People, Process,
Equipment, Environment
l  Have detailed problem statement at head of the fish - “effect”
1048
Design of Experiments
l  Experimental design: a structured investigation of whether a series of

factors, when varied, have an effect on the variable of interest (usually
referred to as the ‘Response Variable’ or ‘Quality Characteristic’)
l  Factorial design: a statistically designed experiment that involves varying
two or more variables simultaneously and obtaining multiple measurements

under the same experimental condition. It is an important method to
determine the effects of multiple variables on a response
1049
Control Charts
Attribute Data Control Charts
l  Attribute data - qualitative data that can be counted for recording and
analysis good/bad, yes/no
l  the average and dispersion are closely related; therefore, only one chart
needed
l  P-Chart – proportions percent defective with variable or constant sample
size
l  NP-chart– number of defects with constant sample size
l  C-Chart – count of defects with constant sample size
l  U-Chart – defects per unit with variable or constant sample size
1050
Control Charts
Variable Data Control Charts
l  Variable data – measured - two types (Discrete) count data and
(Continuous) data
l  X and MR
l  X-bar and Range
l  X-bar and S (standard deviation)
1051
Control Limits: are the ‘voice of the process’ and based on the standard
deviation and variability of the process
Control plan: the plan used to control the process. Itis used in the Control
phase & after project closure to ensure project improvements are sustained
l What needs to be captured is what is being measured; how it is used, what
sampling method is used, who owns the control chart, where it is located, and
what conditions constitute loss of control or improvement that require
corrective action
l Usually Cp, Cpk, Pp, and Ppk are measured as part of the control plan, and
in the process control charts
1052
Process Capability: Measures the capability of a process to meet customer
specifications
l The higher the Cp, Cpk, Pp, or Ppk, the better, as the less variance there is
in the process
Short-Term Capability indices (Cp Cpk): Uses short term process variation
to determine process capability. Use when no long-term data available
Long Term Capability indices (Pk Ppk):Uses long-term process standard

variation. Use when long-term data is available
1053
Lean Concepts
Value-Added vs. Non-Value-Added Activities;
l Value chain is a chain of activities that an organization performs in order to
deliver a valuable product or service to its customers

Value is defined by the customer, not by management
l 
A process is decomposed and each activity analyzed to see if it adds value

l 
or does not add value

Process is then improved and streamlined to reduce or eliminate non-value-
l 
added activities thus improving the value chain
1054
Exam
1054 Review
Lean Concepts
l  VSM Value Stream Mapping: is a tool used to understand a process and
how much value-added and non-value added time is spent on and
between each activity. The VSM will include a data box of key statistics
1055
Lean Concepts
l  TAKT Time: Rate of customer demand. Effective Working Time / Average
Customer Demand
l  Batch Size: Reducing batch sizes generally reduces cycle time and
improves throughput
l  Lead Time - The average time it takes for one unit to go through the
entire process including time waiting between sub-processes (aka
throughput time or turnaround time
1056
Lean Concept
The 7 Wastes (Muda)
1. Overproduction
2. Waiting
3. Transporting
4. Overprocessing
5. Excess Inventory
6. Excess Motion
7. Defects
1057
Lean Concepts
Kaizen
l Kaizen is a philosophy of continuous improvement
l Improvements are based on the insights and experiences of lower-level
employees, as opposed to the traditional executive-driven Western model

l Can be successful only with adequate training, defined operating practices,
and buy-in from all employees

l Constant communication exists
l Focus is small improvements, not breakthrough changes
l Driven from the bottom-up
l Based on the premise that the people who do the work know it best
1058
Lean Concepts
Kaizen Blitz (aka Kaizen Event)
l Whereas Kaizen focuses on making small, evolutionary changes, a Kaizen
blitz focuses on making a rapid improvement in a manner of days (usually 5),

though planning can take longer
l Executed by a team assembled for the purpose
l Primary vehicle for change in organizations implementing Lean
1059
Lean Concepts
Gemba Walk
l  Gemba is the Japanese term meaning "the real place." Also spelled Genba
l  Refers to the place where value is created
l  The problems become visible, and the best improvement ideas will come
from going to the Gemba
l  Gemba walks are not scripted or bound by what one wants to ask
l  Gemba walks denote the action of going to see the actual process,
understand the work, ask questions, and lear
1060
Lean Concept
Kanban
production models
continually stocked
labels
1061
Lean Concepts
l  Queue Time - The time between sub-processes that the item gets
moved or sits around waiting for someone to work on it (aka

Waiting and Transportation Time or Inventory/Transportation Time
l  Value Add Time - Time for those process steps that actually value
to the item (aka Value Creating Time)

l  Cycle Time (CT) - The average time between completed units
coming out the end of the process

l  Velocity - in Lean, is a metric that indicates the rate at which value
is added during a process phase
1062
1062
Setup Time
l Setup time is the interval between the completion of the last item and the
beginning of the next item. Consists of four components:

l  Preparation - the set of tasks necessary to gather all of the
materials and people for the activity
l  Replacement - the set of tasks required to adjust and reconfigure
equipment before the next item can be processed
l  Location - the positioning or moving tasks that must be completed
between iterations of a process
l  Adjustment - the set of monitoring or fine-tuning tasks that must
be performed between iterations to ensure correct performance of
a process
1063
Lean Concepts
SMED (Singe Minute Exchange of Dies): covers the techniques for
obtaining a changeover time of less than 10 minutes. Consists of 6 steps:
Observe the current changeover process
l  Identify internal and external activities
l  Convert activities from internal to external setup
l  Increase efficiency of the remaining internal activities
l  Optimize the Startup time
l  Increase efficiency of external activities
1064
Spaghetti Diagram;
l Used to track motion of a person, item, or activity related to a process via
continuous flow lines

l Identifies redundancies in the work flow and opportunities to expedite
process flow
l Also highlights major intersection points; these point are causes of delay
l Helps one see waste that would be otherwise overlooked.
l Like Value Stream maps, one can create current state and future state
diagrams
1065
Lean Concepts
Theory of Constraints: based on the premise that the goal achievement is
limited by at least one constraining process. Only by increasing flow
through the constraint can overall throughput be increased
1066
Lean Concepts
TPM (Total Productive Maintenance): a program for planning and achieving
minimal machine downtime: 7 Steps of TPM
l  Initial Clean-up (5S & Visual Factory)
l  Identify and eliminate inherent faults
l  Set Initial Standards
l  General Inspection
l  Autonomous Inspection
l  Standardization
l  Autonomous Maintenance
The metric used in Total Productive Maintenance environments is called OEE

or Overall Equipment Effectiveness
1067
Lean Concepts
5Ss
1.  Sort
2.  Straighten or Streamline
3.  Shine
4.  Standardize
5.  Sustain
1068
Lean Concepts
Visual Management uses;
l Floor and surface marking
l Shadow boxes
l Samples
l Visual indicators
l Obstacle height limits
l Lights and sounds
l Arrows, zones, stickers
l Scoreboards
l Labels and tags
1069
Lean Concepts
Visual Factory
l Describes visual methods a manufacturing plant can use to communicate
information about a process to everyone who needs to understand it as they

work
l Use of visual tools will convey information in a clear, accurate, efficient, and
organized way to those who need to know it

l Overall goal is to make the control and management of a company as simple
as possible
l Visual Factory is implemented in two stages;
l  Determining what information needs to be communicated

l  How this information will be communicated
1070
Lean Concepts
Standard Work
l Standard work is one of the most powerful but least used lean tool
l By documenting the current best practice, standard work forms the baseline
for Kaizen
l As the standard is improved, the new standard becomes the baseline for
further improvements
l Each step in the process should be defined and must be performed
repeatedly in the same manner

l Any variations in the process will most likely increase cycle time and cause
quality issues
1071
Lean Concepts
Poka-Yoke - Error-Proofing ;
l Poka-yoke states that preventing errors is better than detecting them as
rework is a non-value-added activity

Processes must be rigorously analyzed and improved so the frequency and
l 
severity of mistakes is reduced

Options for error-proofing include; auto-correcting systems, auto-shutdown,
l 
jigs, digital counters, and warning systems
1072
Lean Concepts
Pull
l Increases throughput
l By pulling material in small lots, inventory cushions are removed, exposing
problems and emphasizing continual improvement

l Manufacturing cycle time is reduced
l Ideal situation is to have lot sizes of one pulled from one process to the next
l Lot sizes can be reduced by;
l  Improving material handling

l  Reducing setup times
l  Reducing setup costs
1073
Lean Concepts
Continuous Flow
l The creation, ordering, and provision of any good or any service can be
made to flow
l Think about ways to;
l  Line up all of the essential steps needed to get a job done
l  Obtain a steady, continuous flow
l  No wasted motions
l  No interruptions
l  No batches or queues
l Focus on the actual object or service
l Ignore traditional boundaries
1074
Lean Concepts
Level Loading
l Its purpose is to regulate and moderate the flow of orders in a particular

process. Level loading typically is performed during the improve stage
l Can be used to reduce the need for inventory checks during a process
l Before it can be implemented, protocols must be standardized and
employees must be trained

l The intention is to eliminate wait time at the beginning of a given process
l Therefore, each completed unit should begin the next phase of the
production process immediately
1075
DFSS
Stands for Design For Six Sigma
l  70 - 80% of all quality problems are design related
l  Emphasis on the manufacturing side alone will concentrate at the tail end
(most costly end) of the problem solving process
l  The goal of DFSS is to design a superior quality product that reflects the
VOC
l  Use of tools focused on product design
1076
DMADOV, IDOV and DMADV have the same objectives and are rigorous in
nature; their only real difference is the terminology.
Overall goals are to reduce delivery time and development costs, as well as
l 
to increase effectiveness and better satisfy customers

Emphasizes defect prevention rather than reduction
l 
More concerned with the creation of new, high-quality processes than with
l 
the incremental improvement of old processes

Is best used for new product and process development because it includes a
l 
design phase
Also useful when the standard DMAIC lifecycle has proven ineffective at
l 
bringing an existing process up to sufficient quality standards as due to the

process needing an extensive overhaul
1077
Design for X (DFX)
l  Design for X (DFX) is defined as a knowledge-based approach for
designing products to have as many desirable characteristics as

possible
l  The desirable characteristics include: quality, reliability, serviceability,
l  safety, user friendliness, etc.
l  Bell Laboratories coined the term DFX to describe the process of designing
a product to meet the above characteristics
1078
Robust designs
Robust design processes can produce extremely reliable designs both
during manufacture and in use
Robust design uses the concept of parameter control to place the design in a
position where random “noise” does not cause failure
1079
Module 23 DFSS
Robust designs
l  Robust design processes can produce extremely reliable designs
both during manufacture and in use
l  Robust design uses the concept of parameter control to place the design in
a position where random “noise” does not cause failure
1080
Flash Cards
Improving _________ involves the use of data analysis
techniques or observation methods. In DMAIC project
methodology, improving _________ is an important
prerequisite for optimizing quality and productivity as
well as developing future processes.
1082
current processes
1083
_____ is derived from a Japanese term for continuous
improvement in manufacturing and business standards
and practices. _____ is comprised of five main
elements: teamwork, personal discipline, improved
morale, quality circles, and improvement suggestions.
The goal of _____ is to standardize and improve
manufacturing and business activities continuously
1084
Kaizen
1085
The 5 ____ method for exploring the root cause of a
business or manufacturing problem. It is based on the
understanding that by the fifth ___, major aspects of
the root cause of the problem will already be revealed.
1086
Whys. why
1087
A ______ diagram is a popular tool in Six Sigma and is
designed to visually display all the components of a
system. One can enter all information relating to the
inputs and outputs of the system. The _______diagram
also allows for a detailed description of the process as
well as information on the suppliers.
1088
SIPOC
1089
_______ is the most common method for making
accurate predictions about future outcomes. By using
data collected about two variables, ________ allows a
business manager to make a prediction about one
variable from another variable. In a ______, there is a
risk of an incomplete understanding of the relationship
between the slope (rate of change of one variable
against the other variable) and the random error term
(which takes into account the deviation of individual
data points from the mean of the data set)
1090
Regression analysis
1091
__________ is an analytical tool designed to map out
activities that are involved in business processes. The
goal of _________ is to determine the requirements of
each process in terms of people, products and
information.
1092
Business Process Mapping
1093
A __________ between two variables indicates that
when they are observed in paired instances, they follow
the same pattern in change. If one increases, the other
does as well and vice versa
1094
positive correlation
1095
____ is calculated using the following equation:
Severity X Occurrence X Detection. The goal of an ___
is to evaluate the risk of problems showing up during
product manufacturing or processes, and to prioritize
the best way to deal with these risks
1096
RPN
1097
The _______ hypothesis in a research study is the
opposite of the null hypothesis and challenges the
status quo.
1098
alternate
1099
In ______, the means of three samples are compared.
The null hypothesis states that all population means
are equal. Equal means indicate that there are no
variations due to experimental factor
1100
ANOVA
1101
________ is the second stage of team development
following ‘forming’. In this stage, team members jockey
for position and the conflict level is high.
1102
Storming
1103
________ sampling means that participants or items in
a sample are chosen out of the population according to
some known probability. These _______ can range
from simple to more complicated ways to choose
sample participants or items out of a population.
1104
Probability, probabilities
1105
Due to a number of factors including machine wear and
tear, the number of _____ that will fit between a
process mean and the desired specification limit will
decrease.
1106
sigmas
1107
In a capability study, a ______ capability index uses
both the _______variability which measures its
inherent instability, and specifications which measure
its activities.
1108
process
1109
__________ variation is the small, inherent causes of
variation such as human reaction times, equipment
age, and materials variation.
1110
Common cause
1111
A significant challenge is maintaining a high enough
focus on _________ tasks. When organizations spend
increasingly less time on these tasks, they face a
number of problems such as productivity declines.
Other problems include delays on delivery and possible
increases in defects
1112
value-added
1113
Processes that are deemed to be of acceptable quality
by Six Sigma process capability standards have fewer
than ____defects per million opportunities
1114
3.4
1115
Project teams can set ___ figures that compare against
existing benchmarks or those of external competitors.
1116
KPI
1117
The Theory of _______ postulates that companies will
face a number of core_______ that affect its optimum
performance or goal.
1118
constraints
1119
Design Failure Mode Effects Analysis or DFMEA is a
quality tool used by _______ and _________.
1120
product designers, manufacturers
1121
______ is a measure of central tendency that allows a
business researcher to compute the midway point of
the upper and lower 50% of data.
1122
Median
1123
_______ provide important statistical information. A
histogram is a graphical tool that captures statistical
_______ by displaying them as bars with heights
corresponding to the ________.
1124
frequency.
1125
_________ analysis is used to study the effect of two or
more independent (or explanatory) variables on the
dependent variable. A __________ model is comprised
of slopes of trend lines (corresponding to the
independent variables), random error terms, and an
intercept.
1126
Multiple regression
1127
In ______, accepting the null hypothesis means that
there are no significant differences between mean
values of two groups. Conversely, rejecting the null
hypothesis means that there is significant difference
between means values of two groups.
1128
ANOVA
1129
__________ is the most common measure of
dispersion and provides information about the
distribution of the data around the mean. When the
data values are close together and the bell-shaped
curve is steep, the __________ is expected to be
small. When the data values are widely dispersed and
the bell curve is relatively flat, that shows that you have
a fairly large ___________.
1130
Standard deviation
1131
______ contain the material, labor, utilities costs of
producing and repairing defective materials and goods.
They also include lost opportunities to collect revenues
and potential market shares that could be replaced by
competitors
1132
COPQ
1133
The _________ (a) is a statistical hypothesis test of the
probability of rejecting the null hypothesis when it is
true.
1134
significance level
1135
An effective _______ understands that a successful
brainstorming session is one where ideas flow freely
within an agreed upon structure, and all members are
encouraged to participate fully.
1136
facilitator
1137
A simple linear regression model contains three
components: ______, ______, and ______.
1138
intercept, slope, error term
1139
Process variation attempts to explain how those
variations come to pass. ________ and _______
variations are both implicated in the overall process
variation.
1140
Common cause, special cause
1141
A _________ is a visual decision making tool that can
prove useful across a number of business settings. The
main principle behind a ________ is the presentation
and comparison of a number of competing alternatives.
It also provides potential outcomes and their
probabilities
1142
decision tree
1143
____________ is used to study the effect of two or
more independent variables on the dependent variable.
1144
Multiple regression analysis
1145
_________ in measurement systems analysis is an
important test of how well measuring equipment can
consistently take readings.
1146
Precision
1147
A ____ is used to illustrate proportions while a ____ is
used when counting the number of nonconformities in
an area of opportunity.
1148
P-chart, C-chart
1149
Upper Specification Limit (USL) is the largest
specification value that can be obtained in a process
and still be acceptable to _______________.
1150
customer specifications.
1151
A process that fits 6 sigmas between a mean and its
nearest specification limit in the short term will
experience a ___ shift that will result in only ____
sigmas fitting
1152
1.5, 4.5
1153
______ design is a type of experimental design
whereby 2 or more ____ are studied, each with a
number of levels.
1154
Factorial, factors
1155
A __ of more than 2 implies that a specification spread
is significantly larger than a process spread. .
1156
Cp
1157
ANOVA’s ____ looks at the variation within groups and
between groups and examines whether there is a
statistically significant difference between the means of
the groups.
1158
F test
1159
___ is an application of statistical methodology such as
control charts and designed experiences to control
processes. ____ is designed to explore the causes of
variation in process outputs such as common and
special variations as well as ways to provide corrective
measures.
1160
SPC
1161
In order to calibrate an instrument, one must know the
____________ of both the instrument and the
standard. In most instances of calibration, the standard
can have a maximum of 25% of the __________ of the
instrument.
1162
measurement uncertainty
1163
In a Kano model, ______ is always on the y-axis and
________ is always on the x-axis. In other words,
increases in ______ are tied to increases in ______
1164
Satisfaction, quality
1165
The number of required runs in a factorial design is
calculated by raising the number of ____ to a power
equal to the number of factors.
1166
levels
1167
The Japanese term for inconsistency is ____
Eliminating ___ often requires a comprehensive
redesign of the process, for which reason many Six
Sigma programs have focused instead on reducing
____, which is wasteful or unproductive activity
1168
mura, muda
1169
A _________ should be used when the targeted
characteristic may appear more than once per unit. In
order for a ________ to be effective, the data should
consist of positive whole numbers, and the
experimental trials should be independent.
1170
Poisson distribution
1171
The intention of ______ is to make the flow of orders in
a process more regular and predictable. When
_______ is effective, fewer inventory checks and less
wait time should be required during the course
of a process.
1172
level loading
1173
The basic calculation for the number of
autocorrelations in an experiment is ___ 1 to ___
x/4, in which x is the number of observations
1174
lag
1175
If a dynamic process is to be measured, as is often the
case in Six Sigma, it is necessary to use ______
statistics
1176
analytical
1177
A _____ chart is used to identify the most important
and urgent problems in a process. It is based on the
____ principle, which is the idea that a process can be
improved dramatically through identifying the few key
problems
1178
Pareto
1179
The term for the degree to which an experimental
design allows all the indicated parameters to be
measured independently of one another is ________.
1180
orthogonality
1181

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Six Sigma Black Belt Certification

Module 0 – Certification Exam and Course Overview

The philosophy of Six Sigma:

Competitive Advantage is gained by meeting customer expectations

Strong alignment to organizational goals

customer will yield significant returns.

via data analysis and the application of specific variance-reduction

Xs) with some degree of uncertainty (ε)

Xs), modify them, and control them

mission is to find it and minimize it!

on the critical few

the context of the decision

Extolled the benefits of doing things right the first time

Four cardinal rules of quality management:

1. the performance standard should be set as zero defects;

times and quality

The philosophy of Lean focuses on three areas: transparency, velocity, and

processes. As well errors are spotted and rectified immediately

l The most important measure of velocity is the interval between a

customer’s order and the delivery of the good or service

to pay. The customer is the sole authority as to what constitutes value

Value-Added vs. Non-Value-Added Activities;

deliver a valuable product or service to its customers

A process is decomposed and each activity analyzed to see if it adds value

or does not add value

added activities thus improving the value chain

coverage of Lean over the years

variation issues that are Six Sigma's focus

l Problems are 'common'

l In complex situations

l Other approaches have failed

l Can be used for both manufacturing and service delivery

l Key to its success its the organization's commitment to process

l Capacity for learning and improvement

l Knowledge and skills

l Organizational Culture

l Mission elaborates on the vision

for the values practiced not the one's publicized by management

l Improvements will address both incremental and breakthrough

A suggested process for linking a Six Sigma/Lean initiative to the

Each initiative should have a focus, such as:

l A business system focus on performing an overall function, such as

l A stakeholder is a person, group, or external organization that has an

l A business must excel in at least one category perceived as important by

l Intermediate customers, such as retailers selling the product

l Anyone else impacted by the product or service

l However there also internal customers

There are four basic approaches to involving suppliers:

l The Process Owner is the manager of a process.

WHAT = Primary Responsibility

relationships away from traditional silos, in order to allow continual checking

person and being refined iteratively

ensure the development of appropriate targets and means of achieving

bottom-up, top-down, horizontal and multi-directional horizontal. This

l The application of the plan-do-check-act iterative approach to business

l A company-wide approach to the integration of projects into strategic

l Increased consensus and buy-in

l Cross-functional-management integration

e.g. taxation, regulation, and subsidies

population growth rate, age distribution, attitudes and emphasis on safety

incentives and the rate of change

Other strategic planning tools include;

In this module we covered

1.  the performance standard should be set as zero defects;

l  The most important measure of velocity is the interval between a

l  Problems are 'common'

l  In complex situations

l  Other approaches have failed

l  Can be used for both manufacturing and service delivery

l  Key to its success its the organization's commitment to process

l  Capacity for learning and improvement

l  Knowledge and skills

l  Organizational Culture

l  Mission elaborates on the vision

l  Improvements will address both incremental and breakthrough

l  A business system focus on performing an overall function, such as

l  A stakeholder is a person, group, or external organization that has an

l  A business must excel in at least one category perceived as important by

l  Intermediate customers, such as retailers selling the product

l  Anyone else impacted by the product or service

l  However there also internal customers

l  The Process Owner is the manager of a process.

l  The application of the plan-do-check-act iterative approach to business

l  A company-wide approach to the integration of projects into strategic

l  Increased consensus and buy-in

l  Cross-functional-management integration

l Relationships Among Business Systems and Processes

l Strategic Planning and Deployment for Initiatives

l  Study Six Sigma management

l  Deploy Six Sigma throughout the organization

l  Empower employees to follow and improve best practice methods

l  Identify the project on the organizational dashboard

l  Define & review project objective with project’s champion

l  Advocate – sees an need for change and finds a sponsor

l  Informal change agent

l  There are three goals for implementing change;

3. Grade the Stakeholders as Supporter, Neutral, or Blocker and as High or Low

4. Devise possible actions to get stakeholder support and reduce opposition

l One of the three formal channels

l Key aspect—subordinates react most effectively to those matters judged to be

l Example forms: job instructions, memos, policies, procedures, manuals, etc.

l  Flows from lower to higher levels

l  Most ineffective of the three channels

l  Employees need opportunities to be:

l  Example devices: suggestion boxes, group meetings, participative decision

l Flows from one level to an equal level

l Necessary for coordination of diverse organizational functions

l Most effective of the three channels

l Example devices: Internet, corporate intranets

l  Selecting the wrong channel for sending a message

l  Sending inconsistent cues between verbal and nonverbal

l  Differences across departments of needs and goals

l  Communications within organizations do not necessarily follow the formal

l  Management by wandering around

l  Rumor—unverified belief in general circulation

l  Process outputs are changed which impact customers

l Use standard benchmarking process

l  Product Performance Metrics

l  Performance on quality improvement is a metric used when a number of different

l Improvement of critical-to-schedule issues begins with distinguishing between