Six Sigma DMAIC Process - Introduction to Define Phase,

LEAN SIX SIGMA PART…. 12 MARATHON STUDY

‘’In my last article, we learned Six Sigma vs Business Process Re-engineering (BPR) – A Comparison”

Please read along as we attain another height in PART..12..

We progress by understanding Six Sigma DMAIC Process – An Introduction to a Defined Phase

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Six Sigma DMAIC Process - Introduction to Define Phase,

The Phase of Six Sigma DMAIC Process consists of following activities:

Step 1: Validating Business Opportunity and Project CTQ (Critical To Quality) Identification.

???????? Capturing Voice of Customer (VOC).

???????? Translating VOC into Y’s.

???????? Selecting key Y(s) for the project.

???????? Initiate Project Charter for each “Y”.

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Step 2: Project Storyboarding and Team Charting.

???????? Create a business case.

???????? Problem and Goal Statement.

???????? Scoping the Project.

???????? Project Milestone.

???????? Resource Plan – Roles and Responsibility.

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Step 3: SIPOC and As-Is Process Mapping.

Six Sigma DMAIC Process - Define Phase

Six Sigma DMAIC Process - Introduction to Measure Phase

Measure Phase of Six Sigma DMAIC Process consists of following activities:

Step? 4:? Identify Possible? Project??? Y's?? and Data Collection Strategy.

???????? Collect data on performance of y.

???????? Collect data on y for stability.

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Step 5: Validate Measurement System.

???????? Study the Measurement System of y.

???????? Review R&R (Repeatability & Reproducibility) to validate the Measurement system.

???????? Improve R&R if variation is high.

Step 6: Determine Process Capability.

???????? Evaluate the capability of y (Calculate present Z value for y).

???????? Review Baseline Performance with set target and revise Targets if required.

???????? Update project charter and obtain Management approval.

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Six Sigma DMAIC Process - Introduction to Analyze Phase

Analyze Phase of Six Sigma DMAIC Process consists of following activities:

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Step? 7:??Identify?Vital? Project???X’s? and? statistically validate them.

???????? Develop a Detailed business process map.

???????? Analyze the process map to identify variation sources.

???????? Determine the x’s (the potential causes).

???????? Prioritize and collect data on x’s.

???????? Quantify the relationship [Y = f(x)]

???????? Identify the vital x’s from the potential x’s.

???????? Validate the vital x’s.

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Six Sigma DMAIC Process - Analyze Phase

Six Sigma DMAIC Process - Introduction to Improve Phase

Improve Phase of Six Sigma DMAIC Process consists of following activities:

Step 8: Generate Potential Solution and Assess their Failure Mode.

???????? Develop “Feasible solutions’ to improve y.

???????? Determine operating limits of X’s.

???????? Analyze cost-benefits aspects of the feasible solutions.

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Step 9: Validate Pilot Solution(s).

???????? Develop a pilot plan to validate selected solution.

???????? Conduct pilot run to confirm the performance results of y with set targets [New Z value].

???????? Study the influence of solution on the other measures (y’s) and on overall measure (Y).

???????? Evaluate financial gains.

???????? Finalize the modified process flow.

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Step 10: Process Control and Risk Analysis.

Develop risk mitigation plan and Process Control Systems.

Develop roll out plan and Implement solution.

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Six Sigma DMAIC Process - Improve Phase

Develop feasibility solutions to improve performance of Y and implement selected solutions are two key actionables of Improve Phase.

Six Sigma DMAIC Process - Introduction to Control Phase

Control Phase of Six Sigma DMAIC Process consists of following activities:

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Step? 11 :?? Execute? control??Plan? and?? Finalize Documentation.

???????? Monitor post implementation process performance to ensure expected improvement in project y has occurred.

???????? Ensure ongoing process monitoring system is in place.

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Step 12: Communicate to Business Results and sign off to close the Six Sigma Project.

Six Sigma DMAIC Process - A Real World Example

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Six Sigma DMAIC Process - Define Phase - Capturing Voice of Customer (VOC)

What is Voice of Customer?

Voice of Customer is the customer’s voice, expectations, preferences, comments, of a product or service in discussion. It is the statement made by the customer on a particular product or service.

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Customer Identification:

Customer is the one who buys or uses your products/ services and he/she is the one who receives the process output. We broadly classify customers into two categories:

??? Internal Customers: Internal Customers are the ones who are internal to the organization. They are Management, Employee(s) or Any Functional Department in your organization.

??? External Customers: External Customers are not a part of the organization. They are either the ones who use our product(s) or service(s) or have vested interest in the organization. For e.g. Clients, End- Customers, Shareholders, among others.

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Customer Needs and Requirements:

Need is a desire or an expectation of a customer from a given product or service. Customers may have many stated needs which are often vague and generally are “wants” from a product/service.

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For example Customer requires an Air-Conditioner for its use in his/her bed-room. The real need of the customer is cool temperature in the bedroom. Similarly, the real want from the Air-Conditioner is it has to be quite, cost- effective and maintenance free. When the customer states his/her requirements, we will often get to hear that the need is “Cool Temperature, Less Noise (quite), Cost Effective and Free of Maintenance”. However, “Cool Temperature” is the need and the rest are just wants. It is important for the project team to understand the stated needs of the customer and separate them from wants.

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The main reason that we separate needs and wants are: Needs are important critical features and Wants are expectations of the product or service over and beyond the needs. If the product/service is not able to fulfill “Wants” of the customer, the customer may only be highly displeased / dissatisfied. However, if the product/ service is not able to fulfill “Needs” of the customer, he/ she will not use the product/service and there is a high likelihood that he/she will switch to competitors product/service. Organizations reputation may also be at stake if “Needs” are not met.

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Requirement is an attribute of the product or service which fulfils the needs of a customer. Customer defines these requirements and are the “musts” of a product or service.

For example in the above example of an air-conditioner, customer’s requirement is “Cool Temperature” and the rest are “Good to Have” features. Customer will not buy the Air-Conditioner if all of “Good to Have” features are present but the “Requirement(s)” are not fulfilled. However, customer may buy the product/service if the “Requirement” is fulfilled and “Good to Have” features are present or not present.

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Translating Voices to Needs:

Voice of Customer (VOC) methodology can be used to capture the customer needs – both current (stated needs) and latent (unstated needs). VOC methodology helps capture the needs of customer through stated verbatim comments (customer voices). It helps translate verbatim comments (customer voices) into customer needs to product/service output characteristics (customer requirements).

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Distinct Categories of VOC:

At an organisational level we broadly classify VOC into four distinct categories (AICP):

???????? Voice of Associate: The feedback that we get from our Employees

???????? Voice of Investor: The feedback that we get from our Management and Shareholders

???????? Voice of Customer: The feedback that we get from our Clients and End-customers

???????? Voice of Process: The feedback that we get from measuring our CTPs (Critical To Process) and CTQs (Critical To Quality)

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Six Sigma - Voice of AICP (Associate, Customer, Investor and Process)

Voice of Customer (VOC) Methods:

???????? Surveys: Surveys are a designed set of questionnaire which is sent out to potential or existing customers. Surveys are cost effective, however, have very low response rate.

???????? Interviews: Interviews are individual meetings with potential or existing customers where a set of questions are asked and answers are discussed to understand customer voices. Interviews can tackle Complex Issues, however, requires Trained Resources.

???????? Focus Group: A group of people are called together in one conference room and a discussion is held on specific topics that need to be addressed. These focus groups are excellent for identifying the CTQ (Critical to Quality), however, are difficult to generalize.

???????? Suggestions: Client/Customer/Employee feedback is received and treated as suggestion to improve products or services. Suggestions provide good improvement opportunities, however, does not look at the overall process.

???????? Observations: During the course of the process, individuals can have observations and can provide feedback to the process which does act as a Voice of Customer.

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Below is a sample of Voice of Customer that is translated into a Requirement:

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Six Sigma - Translating Voice of Customer into Requirements

Six Sigma DMAIC Process - Define Phase - KANO Analysis

KANO Analysis is about prioritizing customer requirements once they are established. Requirements are prioritized as:

???????? Basic Requirements

???????? Performance Requirements

???????? Delighter Requirements

???????? Indifferent Requirements

???????? Reverse Requirements

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Six Sigma - KANO Analysis

Let’s look at each of these Requirements in detail:

Basic Requirements:

Basic Requirements are “must-be’s”. They are the most important needs of customers. They are required and expected to be there. These are the needs the customer assumes will be met. When these requirements are unfulfilled, the customer is greatly dissatisfied and when fulfilled, the customer is neutral (i.e., they do not produce additional satisfaction).

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Performance Requirements:

A direct positive correlation exists between satisfaction levels and the degree of presence of these performance requirements. The more performance requirement elements needs are met, the better it is for the product or service.

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Indifferent Requirements:

Indifferent elements are needs that result in neither satisfaction nor dissatisfaction whether they are present / met or not.

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Reverse Requirements:

Reverse elements are needs that result in: 1) Dissatisfaction when they are fulfilled and Satisfaction even when they are not fulfilled. They may indicate that the perception of that question in the marketplace is the opposite of the perception of the survey's creator.

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Delighter Requirements:

Delighter Requirements are “attracters”. Their presence in a product/process is unexpected and fulfill the latent needs of a customer. They lead to great satisfaction if found present. When delighters are absent, the customer is still neutral (& not dissatisfied).

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Below is an example of a KANO Analysis for a Software Application.

Six Sigma - KANO Analysis Example for a Software Application

Six Sigma DMAIC Process - Define Phase - CTQ Drilldown Tree

CTQ (Critical to Quality) drilldown tree is a tool that can be used to effectively convert customer’s needs and requirements to measurable product/ service characteristics, to establish linkage between Project “Y” & Business “Y” and to bound the project or to make the project manageable.

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Below is an example of CTQ Drilldown Tree and their associated measurements for two different processes:

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Six Sigma - CTQ (Critical to Quality) Drilldown Tree for Data Entry Application

Six Sigma - CTQ (Critical to Quality) Drilldown Tree for Pizza Delivery Process

Six Sigma DMAIC Process - Define Phase - Six Sigma Project Charter

Project Charter is a document that provides a framework and objective for a Six Sigma Process Improvement and/or Problem-solving project

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Six Sigma Project Charter

Business Case:

Business case helps to understand how the project is linked with the overall business objectives. Business case explains why there is a need for the organization to undertake the project and how it will support organizational objectives.

The business case should be able to answer the following questions:

???????? Why is the project worth doing? Justify the resources necessary to engage in the project.

???????? Why is it important to customers?

???????? Why is it important to the business?

???????? Why is it important to employees?

???????? Why is it important to do it now?

???????? What are the consequences of not doing the project now?

???????? How does it fit with the operational initiatives and targets?

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Business Case Example:

“By reducing the average transaction length, the queue would be able to enhance the Speed of Resolution and assist the end-users in fastest possible manner. This will not only help in achieving client targets but also increase end-user satisfaction score by offering lesser turn- around time.”

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Problem Statement:

Problem statement should quantitatively describe the pain in the current process

???????? What is the pain ?

???????? Where is it hurting?

???????? When – is it current? How long it has been?

???????? What is the extent of the pain?

What a Problem Statement should not do is Assign a Cause or Blame and Include a Solution.

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Problem Statement Example:

“In the last 3 months (when), 12% of our customers are late, by over 45 days in paying their bills (what) . This represents 20% (magnitude) of our outstanding receivables & negatively affects our operating cash flow (consequence) .”

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Goal Statement:

Defines the improvement the team is seeking to accomplish. It starts with a verb. It Should not presume a cause or include a solution. It has a deadline. It is actionable and sets the focus. It should be SMART (Specific, Measurable, Attainable, Relevant and Time Bound).

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Goal Statement Example: To reduce the percentage of late payments to 15% in next 3 months, and give tangible savings of 500KUSD/ year.

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Project Scope:

Project Scope helps us to understand the start and end point for the process and also gives an insight on project constraints and dimensions. It’s an attempt to define what will be covered in the project deliverables. Scoping sharpens the focus of the project team & sets the expectations right. There are two types of scoping:

???????? Longitudinal Scoping

???????? Lateral Scoping

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Absence of proper scoping may result in the team losing interest in the project. Project becomes difficult to implement. Even after implementation, the desired benefits are not seen. Team focuses on trivial pain areas, and missing out the real ones. Process selected is too broad to handle.

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Longitudinal Scoping: Longitudinal scoping is done on the length of the process

e.g. – From the receipt of PO till the delivery at the distributor's go-down

e.g. – From the time of customer reporting the complaint till final satisfaction confirmation

Mostly the ‘start’ & ‘end’ points are fixed. A macro as-is process map must be prepared to facilitate longitudinal scoping.

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Lateral Scoping is done on the breadth of the process

e.g. – All despatches from North & South regions

e.g. – Calls received during general shift

By using Longitudinal and Lateral Scoping methods, we know what all kinds of units the process will cover, in what situations the process is valid, what are the qualifiers for the transactions, what functional domains does the process cover and in what geographical areas the process is valid.

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Scoping Example:

Longitudinal Scope: The time when the Sourcing team receives the resume of a referral or the time when a candidate walks in to organization premises for an interview and joins the organization.

Lateral Scope: Candidates interviewed till Senior Manager level across the organization, all locations.

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Project Milestones:

Project milestone in a charter specifies timelines for completion of each phases with signed tollgates. It is a preliminary, high level project plan with dates, which is tied to phases of DMAIC process. It should be aggressive (don’t miss “Window of Opportunity”) yet should be realistic (don’t force yourselves into “Band- aid” solution). The project milestones to further include a detailed project plan (Gantt chart) along with a documented communication plan.

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Specification Limits:

A specification is a customer-defined tolerance for the output unit characteristics. There may be two-sided specifications – Upper Specification Limit (USL) and Lower Specification Limit (LSL). Any data point above the USL and below LSL is termed as defect. Specifications form the basis of any defect measurement exercise on continuous data.

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Six Sigma Process Specification Limits

Specification limits should follow the RUMBA acronym. RUMBA stands for Reasonable, Understandable, Measurable, Believable and Attainable.

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Reasonable: The specification based on a realistic assessment of customer’s actual needs. We need to check if the specification relate directly to the performance of the characteristic.

Understandable: The specification is clearly stated and defined so that no one can misinterpret it.

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Measurable: We should be able to measure the characteristic’s performance against the specification. If not, a lot of debate will ensue between you and your customer as to whether the specification has been met.

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Believable: We should have bought into the specification setting. That is, we and our teams should strive to meet the specifications.

Attainable or Achievable: We should be able to reach the level and range of the specification.

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Resources and Team Roles:

Ultimately executive leadership team together with Six Sigma Deployment Leader and Six Sigma Champion need to ensure that a trained Six Sigma Team and associated hardware and software resources are in place to successfully implement the Six Sigma project and deliver great results and customer value!

?Stay close for part ,,,,14,,,,,

Next, we shall study Six Sigma DMAIC Process - Define Phase - Change Acceleration Process (CAP).

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