The Six Sigma is an approach to business process improvement and performance management which encompasses a statistical and method-driven process. In order to effectively deploy the process in your organization, it is necessary to identify the basic elements that drive the Six Sigma methodology. Knowledge of the Six Sigma fundamentals is the first step toward a successful Six Sigma implementation. Before applying any business strategy in an organization, you must identify the goals and benefits of the strategy. You must also recognize the need for such a business strategy in the organization.
Surviving in a business world that is full of competition is crucial to any organization. Six Sigma provides the means to handle declining product prices in the market, which helps any organization compete with the best companies in business. It targets zero defects by setting a common performance goal for the entire organization. Six Sigma helps an organization achieve increased profitability and quality improvement rates, ahead of any of its competitors. Reduced scrap-related costs, rework, improved yield, and increased customer satisfaction are identified in companies striving to achieve Six Sigma.
A Six Sigma initiative differs from other quality improvement methodologies because it ensures that the costs involved in implementation are offset by the gains received from improvements.
The primary goal of Six Sigma is to implement a measurement-based strategy in an organization that concentrates on process improvement and reducing variation. In addition to this, the other important goals of Six Sigma include:
In a Continuous improvement journey, improvement projects are nothing but the lifeline. In this series of articles, we covered on the Need for Project Selection and the Criteria for project. Now we’ll answer the big question – Where can I get my projects from? Essentially various sources of the project!
Customers Interactions: “Customers” are the biggest source for improvement projects. Classically, negative customer sentiments are good places to start. Your customers are unhappy, so it’s time to fix the issue. Mixed or ambiguous sentiments are also relevant places to start.
·Customer Complaints:If your organization has a list of customer complaints, then that is an apt place to commence. Complaints are not only sore for your customers, but for you too. Such complaints may cover a vast product or service attributes such as product or service quality, delivery time, responsiveness, people issues, pricing or areas of monetary impact including warranty claims,process & policy issues.
· Repeat Complaints: You can go one step further and target repeat complaints instead. Repetitive complaints from the same customer with the same tagging indicates high priority area for improvement.
·Enquiries & Requests: Few organizations target the need of customers to call or contact the organization and, reduce them. It might not be a complaint, instead just an enquiry or request. In other words, interactions with the organization that can be avoided. Looking at enquiries and requests serve as a proactive means to identify future problem areas.
·VoC Program output: If your organization conducts structured VoC surveys, then the outputs of such mechanism can be a good source of Continuous Improvement or Lean Six Sigma projects
·Customer Experience (CX) Dipstick: Customer Experience is usually hidden and not so obvious as customer feedback. Structured and unstructured mechanisms can be deployed to understand the customer experience. For example, many organizations now use mystery shopping to unearth issues in customer experience. Observation or Listening posts are also a good way to identify how customer experience can be improved.
First Time Right (FTR): If you closely have a look at your company’s process, you will find that there are many internal defects (work-in-progress) occurring, such as rework, repairs & in-process rejections. Such defects are silent killers because they drain organization’s efficiency and effectiveness silently. If your organization is measuring FTR, then its improvement can be an ideal project. More evolved organizations use RTY (Rolled Throughput Yield) as a metric which is also a good place to demonstrate Continuous Improvement.
However, most organizations have a simpler measure of success for quality – Defect Rate (% Defective). While there’s nothing wrong with this metric, is a bit holistic and hence factors leading to inefficiencies escape unnoticed with this metric. Nonetheless, it is good starting point for Continuous Improvement projects.
Reliability Data/Warranty data: Field failures are sometimes grave. It can cost you a lot and, the overall cost of ownership for customers might increase esp if the warranty is denied or the product is under breakdown. In broader terms, the principle of warranty is to institute accountability in the event of an untimely failure of an item or the inability of the item to perform its intended function. Experts consider reliability data analysis as a quality measure over time. This reliability analysis is done to analyze whether your product will survive for the time defined by the company in the normal conditions. Improving the reliability of a product can work both ways – organizations can lower its operational cost and provide longer warranty and customers would experience break down less often.
Process Performance Data: If your organization has a well-defined and structured reporting mechanism for process performance metrics, such as a dashboard or scorecard, then it would be a very good source to identify opportunities for continuous improvement projects. As leadership teams are consumers of such reports, such opportunities can easily gain sponsorship as well.
Competitive Benchmarking: Benchmarking is a continuous process of comparing your firm’s or company’s practice to those of the competitors or say most successful competitors. In certain cases, you might not be doing well. For example, having control over the delivery time to the customers. Then this can be taken as a project for improvement in our company. So, to generalize, competitive benchmarking results can also be a good source for Continuous Improvement projects.
Business Plans/Strategies: Gap between strategic plan and reality can be the cause of concern for leadership. Sometimes such problems may be because of supporting processes. They can hinder new business plans or strategies. Such process improvement opportunities are also a good source for projects, provided they are scoped well with well-defined objectives & goals.
Employee Feedback: While customers don’t see your process but only experience its outcomes, employees have an end to end visibility. They experience problems as customers and can associate inward aspects of such poor experience. Many organizations, pilot their products with employees, because employees are pseudo customers. If you can establish a structured process through which employees are encouraged to share their experience and enable them to take up such opportunities as Continuous Improvement or Lean Six Sigma projects, there’s nothing like it.
All the above can serve as a good source for Continuous Improvement or Lean Six Sigma projects.
If you are new to Lean Six Sigma then Y=f(X) is one amongst many jargons that you will have to familiarize yourself.
The objective of Lean Six Sigma philosophy and DMAIC improvement methodology is to identify the root causes to any problem and control/manage them so that the problem can be alleviated.
Six Sigma is process oriented approach which considers every task as a process. Even the simplest of the tasks, such as performing your morning workout or getting ready to office is considered as a process. The implication of such a view point is to identify what is the output of that process, its desired level of performance and what inputs are needed to produce the desired results.
Y is usually used to denote the Output and X for the inputs.
Y is also known as dependent variable as it is dependent on the Xs. Usually Y represents the symptoms or the effect of any problem.
On the other hand, X is known as independent variable as it is not dependent on Y or any other X. Usually Xs represents the problem itself or the cause.
As you will agree that any process will have at least one output but most likely to have several inputs. As managers, we all are expected to deliver results and achieve a new level of performance of the process such as Service Levels, Production Levels, Quality Levels, etc., or sustain the current level of performance.
In order to achieve this objective, we focus our efforts on the output performance measure. However a smart process manager will focus on identifying Xs that impact the output performance measure in order to achieve the desired level of performance.
How does one identify the input performance measures or Xs?
Six Sigma DMAIC methodology aims to identify the inputs(Xs) that have significant impact on output (Y). After that the strength and nature of the relationship between Y and Xs are also established.
Six Sigma uses a variety of qualitative and quantitative tools & techniques listed below to identify the statistical validation of the inputs (or root causes), their strength and nature of relationship with Y:
What does f in Y= f(X) mean?
‘f’ represents the nature and strength of the relationship that exists between Y and X. On one hand, this equation can be used for a generic interpretation that symbolizes the fact that Y is impacted by X and nature of relationship can be quantified. On the other hand, such a mathematical expression can be created provided we have sufficient data using the above mentioned analytical tools such as regression and other hypothesis tests.
The mathematical expression that we obtain is nothing but an equation such as:
TAT = 13.3 – 7.4*Waiting Time + 1.8*No. of Counters – 24*Time to Approve
Once such an equation is established, it can be easily used to proactively identify the Y for various values of X. Thus Y= f(X) is the basis for predictive modeling. All the newer analytical concepts such as Big Data, etc are based on this foundation principles.
In the measure phase of a Lean Six Sigma Project, the team brainstorms to identify all possible causes or reasons for the occurrence of the problem. Thus, there is a direct linkage between a project charter and this deliverable. Fish-bone diagram is a structured brainstorming method used to carry out this activity. Fish-bone diagram is also called as Ishikawa or Cause & Effect diagram. After completing this brainstorming, the team applies the 5-why technique to further explore the underlying causes for all the reasons identified in the fish-bone diagram. At the end of these two activities, the team has an exhaustive list of possible causes for the problem. Usually there are around 50~100 possible causes for the problem. It is the responsibility of Six Sigma Green Belt to facilitate these activities.
As a next step, using their process knowledge and experience, the team has to agree on few causes; which potentially cause the problem. There are several methods to do this, but the most popular method is the use of Cause & Effect Matrix (C-E Matrix). Potential Causes are suspects that are causing the problem. However, before acting on them, the team needs to gather data or facts to validate them.
Data Collection plays a very important role in all Six Sigma projects. But before collecting data, the team has to assess if the measurement system (measuring instrument, appraiser & environment in which measurement happens) is accurate and precise. Hence the team has to perform Measurement System Analysis (MSA) – aka Gage R&R. Once the team ascertains that the measurement is good, then a data collection plan is prepared. Data Collection Plan (DCP) includes the measures whose data needs to be collected, how much data to collect, data source, and who will collect the data, etc. While the entire team can participate in this activity, Six Sigma Green Belt has to take a lead role, as this will involve technical concepts of Gage R&R covered in the training program.
Unlike conventional data collection; in Lean Six Sigma projects, data is collected on both the CTQ and the potential causes identified in a Cause & Effect Matrix. Due to the quantum of data involved in most businesses, it isn’t practically viable to collect data of the entire population. Hence the team has to resort to statistical sampling methods.
As a next step, data collection is executed. From time-to-time a Six Sigma project team needs to validate the data collected. Sometimes, the data collectors need to be trained and retrained. Once the data collection is complete, it is ready for a process capability assessment. Usually many projects get delayed because of poor data quality or delay in collecting sufficient data. When a Six Sigma Green Belt takes special care, this activity can get completed on time.
Process Capability is the ability of the process to deliver as per customer requirement. There are various process capability indices, but in Lean Six Sigma projects, sigma capability is the most popular measure. This exercise gives an accurate report on the current process performance. As these indices are covered in the training program, Six Sigma Green Belt has to take a lead role in conducting this study. The output of Process Capability study can be used to validate the process objectives and anticipated benefits in the charter. If needed, the Lean Six Sigma project charter can be revisited.
On completion of the above deliverable, and a formal Measure Phase tollgate review, the team is ready to move into Analyze phase. Next>>>
Project Charter is an important document that summarizes the purpose, current scenario & goal, measures of success (CTQ), project’s scope, quantitative & indicative project benefits, and team members. This is the most important document, as it creates a term of reference for this entire Lean Six Sigma project. In order to prepare the project charter, several meetings and preparatory steps may be needed. In some cases, gathering the Voice of Customer (VOC) may be required to even understand the problem.
Project Scoping determines exactly how the project will contribute to overall business, whether the efforts will be diverted to maximum impact area, team composition, financial resources required, etc. In Six Sigma, a tool called ‘In-Frame Out-Frame’ is used to decide on the scope.
Six Sigma Green Belt should closely work with the Project Sponsor to complete the Project Charter.
CTQ refers to Critical to Quality metric. This is a measure of success for the project. Usually, there is only one CTQ for DMAIC projects. It can either be a measure of efficiency or effectiveness. However, it is a key performance indicator for Voice of Customer or Voice of Business. Further, it should be measurable. Usually, its indicative or accurate current performance is reported in the project charter.
The above two deliverable run parallel, and they are of significant importance because they mark the formal kick-off of the project, team member induction, Lean Six Sigma training (if not included earlier).
In order to understand the end-to-end process; a detailed process document is created by the team. However, in case such documentation already exists, then it becomes easy for the project team members to revisit it.
Six Sigma Green Belt can involve all her team members in this activity. Two best ways of mapping a process are to interview all the parties involved in the process or to conduct a work-out session with all parties. Latter requires good facilitation skills.
Once the process maps have been created, the team can use them to identify the bottlenecks, challenges, issues, inputs & outputs, delays, etc. Essentially, it can be used to decide which part of the process is important, and needs to be introspected.
On completion of the above deliverable, a formal define tollgate review is conducted. Then the project moves to Measure Phase. Next >>>