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ptg6842824

Treasure Chest

of Six Sigma

Growth Methods,

Tools, and Best

Practices

A Desk Reference Book for

Innovation and Growth

Lynne Hambleton

PRENTICE HALL

UPPER SADDLE RIVER, NJ •BOSTON•INDIANAPOLIS •SAN FRANCISCO NEW YORK •TORONTO•MONTREAL•LONDON•MUNICH•PARIS •MADRID CAPETOWN •SYDNEY•TOKYO •SINGAPORE•MEXICO CITY

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ptg6842824 for errors or omissions. No liability is assumed for incidental or consequential

damages in connection with or arising out of the use of the information or pro-grams contained herein.

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Library of Congress Cataloging-in-Publication Data:

Hambleton, Lynne.

Treasure chest of six sigma growth methods, tools & best practices : a desk reference book for innovation and growth / Lynne Hambleton.

p. cm.

Includes bibliographical references and index.

ISBN 978-0-13-230021-6 (pbk. : alk. paper) 1. Six sigma (Quality control standard) 2. Strategic planning. 3. Business planning. 4. Management. I. Title.

HD62.15.H354 2008 658.4’013—dc22

2007016916 Copyright © 2008 Pearson Education, Inc.

All rights reserved. Printed in the United States of America. This publication is protected by copyright, and permission must be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or like-wise. For information regarding permissions, write to:

Pearson Education, Inc. Rights and Contracts Department One Lake Street

Upper Saddle River, NJ 07458 Trademarks

All terms mentioned in this book that are known to be trademarks or service marks have been appropriately capitalized. Prentice Hall publishing cannot attest to the accuracy of this information. Portions of the input and output contained in this publication/book are printed with permission of Minitab Inc. Minitab™ and the Minitab logo® are registered trademarks of Minitab Inc. Minitab QUALITY COMPANION™ and the QUAL-ITY COMPANION logo™are registered trademarks of Minitab Inc. Included in this book are Crystal Ball™ screen captures courtesy of Decisioneering, Inc. Use of a term in this book should not be regarded as affecting the validity of any trademark or service mark.

10-Digit ISBN 0-132-30021-4 13-Digit ISBN 978-0-132-30021-6

Text printed in the United States on recycled paper at R.R. Donneley & Sons in Crawfordsville, Indiana. First printing, July 2007

Editor in Chief Karen Gettman Acquisitions Editor Bernard Goodwin Editorial Assistant Michelle Housley Development Editor George E. Nedeff Marketing Manager Curt Johnson Publicist Andrea Bledsoe Cover Designer Louisa Adair Managing Editor Gina Kanouse Copy Editor Language Logistics, LLC Graphic Artist Laura Robbins Senior Indexer Cheryl Lenser Compositor Eric S. Miller Manufacturing Buyer Dan Uhrig

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I dedicate this book first and foremost to my loving husband, Bill, and our

two wonderful sons, Corbin and Garrett. I also dedicate this book to Skip

and Kathy Creveling, whose friendship and support are invaluable gifts;

and to Janet Nelson, a fellow consultant and CSSBB, who is courageously

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Preface ...xv

Introduction Different Methods for Different Purposes...1

Part I

Six Sigma Methodology Overview: Choosing the Right

Approach to Address the Requirements

Section 1 Define-Measure-Analyze-Improve-Control (DMAIC)....13

Section 2 Lean and Lean Six Sigma ...29

Section 3 Design for Six Sigma (DFSS) ...45

Section 4 Six Sigma for Marketing (SSFM) ...67

Part II

Six Sigma Tools and Techniques: Choosing the Right

Tool to Answer the Right Question at the Right Time

The Six Sigma Encyclopedia of Business Tools and Techniques ...115

Summary Tool Matrix ...115

A Activity Network Diagram (AND) - 7M Tool . . . 127

Affinity Diagram - 7M Tool...136

Analysis of Variance (ANOVA)...142

Arrow Diagram...159

B Benchmarking ...160

Box Plots—Graphical Tool ...165

Brainstorming Technique ...168

C Capability Analysis ...173

Cause-and-Effect Diagram - 7QC Tool ...173

Cause-and-Effect Prioritization Matrix ...188

Cause and Prevention Diagram ...198

Checklists - 7QC Tool...204

Conjoint Analysis ...207

Control Charts - 7QC Tool...217

Cost/Benefit Analysis...238

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Critical Path Method (CPM) ...242

Critical-to-Quality (CTQ) ...242

D Data Collection Matrix...248

Design of Experiment (DOE) ...250

Dotplot ...280

F Failure Modes and Effects Analysis (FMEA)...287

5-Whys ...305

Fault Tree Analysis (FTA) ...309

Fishbone Diagram - 7QC Tool ...316

Flowchart - 7QC Tool ...316

G Gantt Chart...317

GOSPA (Goals, Objectives, Strategies, Plans and Actions)...320

Graphical Methods...323

H Histogram - 7QC Tool ...330

House of Quality (HOQ) ...335

Hypothesis Testing ...335

I Interrelationship Diagram - 7M Tool ...369

K KJ Analysis ...375

M Market Perceived Quality Profile (MPQP) ...390

Matrix Diagrams - 7M Tool ...399

Measurement System Analysis (MSA)...412

Monte Carlo Simulation ...431

Multi-vari Chart...439

N Normal Probability Plot ...444

P Pareto Chart - 7QC Tool...445

PERT (Program Evaluation and Review Technique) Chart ....453

Poka-Yoke ...462

Porter’s 5 Forces ...464

Prioritization Matrices - 7M Tool ...470

Process Capability Analysis ...486

Process Decision Program Charts (PDPC) - 7M Tool ...515

Process Map (or Flowchart) - 7QC Tool ...522

Pugh Concept Evaluation and Selection...534

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ptg6842824 R RACI Matrix (Responsible, Accountable, Consulted,

Informed)...554

Real-Win-Worth (RWW) Analysis...560

Regression Analysis ...571

Risk Mitigation Plan...601

Rolled Throughput Yield...610

Run Chart - 7QC Tool...611

S 7M - Seven Management Tool ...615

7QC - Seven Quality Control Tool...616

Sampling ...618

Scatter Diagram - 7QC Tool ...640

Scorecards ...653

SIPOC (Supplier-Input-Process-Output-Customer)...663

SMART Problem & Goal Statements for a Project Charter ...665

Solution Selection Matrix ...672

Stakeholder Analysis ...681

Statistical Tools...684

Stratification - 7QC Tool ...697

SWOT (Strengths-Weaknesses-Opportunities-Threats)...699

T Tree Diagram - 7M Tool ...712

TRIZ...715

V Value Stream Analysis ...727

Voice of Customer Gathering Techniques...737

W Work Breakdown Structure (WBS) ...753

Y Y = f (X) ...758

Part III

Best Practices Articles

The Anatomy of Quality Loss in a Product ...763

The Anatomy of Variations in Product Performance ...777

Benchmarking—Avoid Arrogance and Lethargy ...789

Building Strength via Communities of Practice and Project Management...799

Complex Organizational Change Through Discovery-based Learning ...827

Lean Six Sigma for Fast Track Commercialization High Risk-High Reward, Rapid Commercialization: PROCEED WITH CAUTION! ...835

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Listening to the Customer First-Hand; Engineers Too ... 851

The Practice of Designing Relationships...873

A Process for Product Development...887

Selecting Project Portfolios using Monte Carlo Simulation and Optimization ...921

Part IV

Appendixes

Appendix A Statistical Distribution Tables...939

Appendix B Glossary...951

Appendix C References ...979

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Acknowledgments

Thank you to my friends and professional colleagues who contributed to this book. They took precious time out of their hectic schedules to share the wisdom they have gained through their business experiences. Some contributed inadvertently by brainstorming concepts with me, namely Dan Rose, Joe Szostek, and Chris Tsai. Thank you to the peer reviewers for reading the early drafts to test for understanding. This invaluable manuscript input came from colleagues such as Eric Maass and Scott Wise. Other colleagues authored Best Practices articles, featured in Part III (listed alphabetically):

Thank you to Donna Burnette and David Hutchens, for agreeing to share some of their professional insights on the critical components of learning that have earned them firm national recognition. Their article on discover-based learning programs adds an invaluable per-spective on how best to digest and utilize new knowledge and skills. This approach transforms otherwise dry, dense content into a fun and memorable experience.

Thank you to Mike Cook, whose witty, provocative article on the

importance of collaboration and designing relationships adds color and

refreshing change of pace to this book and reminds us of the impor-tant human element involved in the work.

Thank you to Clyde (“Skip”) Creveling for not only sharing his creativity and thought-leadership in writing an article on how to “fast track” a prod-uct development process, but also his unending professional support and guidance.

Thank you to both Larry Goldman and Karl Luce for sharing best prac-ticesexperienceon project selection and the portfolio management process using Monte Carlo simulation and optimization techniques. Their insights help give a competitive advantage to any reader.

Thank you to Bill Jewett for his sage and practical approach to writing not one, but four articles. His depth and breadth of experience as a practi-tioner, manager, and consultant were shared in two articles about robust

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design—specifically on quality loss and on performance variation. In addi-tion, the best practices of collecting and leveraging the Voice of the Cus-tomer article, as well as a benchmark product commercialization process article round out an engineering snapshot of product development for a non-technical business person.

Thank you to Sy Zivan, one of the benchmarking pioneers in the 1980s from Xerox Corporation, for sharing his knowledge on the best

practices of the benchmarking process. His article reflects his latest

thinking on how benchmarking has evolved over the years. Thank you to each of these professionals and any others I inadvertently have missed mentioning for adding your unique and invaluable perspec-tives, all of which enhanced this book.

Thank you to my family and friends who put up with me during the writing process. Those who wove a supportive, energizing network around me include L. Berkowitz, K. Creveling, D. Croessmann, L. Judson, L. Markt, M. McCandless, and especially my husband, W. Magee.

Most importantly, thank you also to the professionals at Prentice Hall for their support and hard work to make this book a reality—Heather Fox, publicist; Bernard Goodwin, editor; Michelle Housley, editorial assistant; and George Nedeff, development editor (listed alphabetically).

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About the Author

Lynne Hambletonis a business consultant with special focus on strategy development and execution and change management to improve opera-tional processes and expand commercial opportunities. She has held sev-eral management positions in Xerox Corporation where she worked for almost 25 years. She also has worked in education, healthcare, and energy public sectors and start-ups. Hambleton’s experience spans general man-agement, marketing, field operations, strategic planning, alliance devel-opment, and sales/channel management. She also has served as an adjunct professor of strategic planning at Rochester Institute of Technol-ogy’s School of Business.

Ms. Hambleton received a Master’s degree in Business Administration, with an emphasis in industrial marketing; a Master’s degree in Adult & Higher Education/Organizational Development; and a Bachelor of Sci-ence degree in psychophysiology, all from University of North Carolina— Chapel Hill. Ms. Hambleton is also an active PMI-certified Project

Management Professional (PMP) (1998); a Master Black Belt; and Certi-fied Six Sigma Black Belt (CSSBB) from Villanova University (2006). Hambleton’s additional publications include Six Sigma for Marketing

Processes, An Overview for Marketing Executives, Leaders, and Managers

(co-authors C.M. Creveling and B. McCarthy), Prentice Hall, 2006; the chap-ter titled, “Supporting a Metamorphosis through Communities of

Practice,” in Leading Knowledge Management and Learning, by Dede Bonner, 2000; and the article, “How Does a Company the Size of Xerox Design a Curriculum in Project Management for the Entire Organization?” printed in In Search of Excellence in Project Management, Volume 2, by Harold Kerzner, 1999. Ms. Hambleton lives in Rochester, New York, and can be reached best via email at [email protected] or visiting www.mageemanagement.com.

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Preface

The Treasure Chest is part of Prentice-Hall’s Six Sigma for Innovation and

Growth Series. This book serves as a consolidated “how to” reference book

of Lean Six Sigma, covers growth and innovation tools, provides an overview of methods and the tools to which they align, and offers an overview of additional best practices used to manage a successful Six Sigma growth initiative. The Treasure Chest of Six Sigma Growth Methods,

Tools, and Best Practices guides you in selecting the right tool to answer the right question at the right time. The right question drives the requirement or

need to be addressed—regardless whether the requirement comes from your customer or a business need. Understanding the overall objective, or requirement, helps determine which Six Sigma methodology to use. The

right time dictates what else you know given where you are in your

approach. Understanding whether you are in the planning, designing, implementing, or maintaining phases of an overall process determines which process step, thereby the context of the question being asked. Finally, the right tool should be the last question asked, as it is based on first knowing what is required and at what point you are in the process.

The Treasure Chest is a desk-reference book for people interested in growth, operations excellence, and business-process improvement. This book speaks to the general business practitioner, business analyst, man-ager, and leader, regardless of the business context. It is for profit or non-profit enterprises; large or small firms; whether in headquarters-function, plant, or field location, regardless of functional discipline.

The book covers a range of applications from strategic planning aspects of business (offering portfolio renewal) to presenting development and launch preparation, from post-launch operations management to offering discontinuance. Whether contributing a new design (product and/or service), proposing a new process, evaluating a portfolio of offerings, or managing a current portfolio of offerings, this book compiles the

resources that help drive growth proactively and presents them in a quick-reference format for easy navigation. This book takes the hassle out of researching the methodology and tools so you can immediately begin to find solutions for your discipline.

The Treasure Chest speaks primarily to business people who need practical “hands-on” guidance and answers to the following questions:

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ptg6842824 1. How do you select the appropriate tool based on the business need

(or question being asked) and the required deliverables? 2. How do you use the tool, what inputs or data are required, and

what comprises a step-by-step procedure for each tool or technique? 3. How do you analyze the tool’s output and decide on the next course

of action?

This book was specifically written for general business disciplines, such as marketing, strategic planning, pricing, finance, customer administra-tion, sales, services, support, maintenance, and parts and supplies distri-bution. This book also is targeted to the technical engineering and research community searching for candidate tools that support commu-nication, project management, risk mitigation planning, and change management requirements.

Common Language

Communication presents a challenge when a collaborative team speaks a different language, different filter, different perspective, different interpre-tation. Successful innovation and growth rely on the integration and collab-oration of multiple disciplines, often represented in a cross-functional team. Such teams may be comprised of internal, functionally distinct profession-als or any combination of external partners, clients, and sometimes even competition. Regardless if the goal requires creating something from scratch or fine-tuning the management of current offerings, the combina-tion of multiple disciplines, capabilities, and perspectives greatly enhance the end results of this work. However, this collaborative work requires a common language to understand and integrate the diversity.

The methods and tools presented in this book assist with interpretation of different perspectives and provide a common platform, foundation, and language from which multiple views can work in harmony. Interestingly,

each discipline has its own unique language, different thought-processes, and/or different tools that characterizes its work. Sometimes, perhaps with minor

adaptations, a tool considered commonplace by one discipline can be viewed as an “a-ha” eureka discovery to a second group when properly applied. Tools commonly used by marketing groups can excite a technical team if introduced at the appropriate time. For example, a communication summary tool or prioritization tool may be overlooked because it is a “soft tool,” but it actually can fit perfectly when communicating “big picture” thinking. Similarly, if the time is right, marketing teams enjoy the rigor of techniques from the technical counterparts to provide a fresh perspective.

Treasure Chest embraces tools used by both the technical and

non-techni-cal communities and describes when and how to use them. It contains the business tools and methods for innovation and growth to facilitate best practices sharing and a “common language” across multi-disciplined teams. It also integrates some key technical tools appropriate for general business use (or understanding).

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I n t r o d u c t i o n

Different Methods for Different

Purposes

The Evolution of Six Sigma

Six Sigma (or “Lean Six Sigma,” as some refer to it) evolved into a rich set of different standardized methods, tools, and best practices. Six Sigma started as a problem-solving approach to reduce variation in a product and manufacturing environment. That application has expanded to process improvement and other areas of the business, including product or process redesign, research, and technology design, offering portfolio renewal, product development, and post-launch operations management. Six Sigma application stretches beyond the manufacturing enterprises into the services industry and non-profit organizations. Regardless of the application, businesses search for simplicity without jeopardizing the need for robust data. Six Sigma offers a set of methods and tools from which to choose. Six Sigma methods build from a common core founda-tion yet allow flexibility to adapt to changing environment needs. Part of the flexibility stems from a plethora of candidate tools available, depend-ing on the situation. The tool library ranges from rigorous statistical and quantitative tools to “soft” qualitative ones. The purpose of this book is to help in selecting the most appropriate method and the most appropriate tool within the suite of available candidate tools.

Common Approach to Leverage Everyone’s Contribution,

Regardless of Business Model

A method establishes the foundation for how work gets accomplished. It defines the who, what, when, where, why, and how of a process; wherein a process describes a series of logically sequenced tasks to complete work. It answers the questions such as, “what gets done;” “who does the work;”

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ptg6842824 “when the work starts and stops;” “where the work is done;” “why the

work is being done;” and “how the work is to be completed.” A well-deployed method orchestrates and integrates the people working in a process in an efficient and effective (streamlined) set of activities. It organizes the work as defined by a set of customer requirements. The work produces the agreed-to deliverables according to their “acceptance” criteria. A well-constructed method defines a set of tasks that circumvent redundancies and gaps. Activities done beyond the prescribed work to produce the required deliverables arguably could be called unnecessary or a “waste.” A method defines which tool best supports a task and will produce the desired results, providing a common language of terms and tools and a common way of working for those involved in the process.

Overview of Six Sigma Method

The methods used in Six Sigma (including Lean Six Sigma) contain sev-eral common principles, such as data-driven decision-making and project management fundamentals. Part I, “Six Sigma Methodology Overview— Choosing the Right Approach to Address the Requirements,” uses these principles to organize its content.

Tool-Task-Deliverables Linkage

Six Sigma methods represent a structured thought process that starts with thoroughly understanding the requirements (or key business questions) before proceeding. The requirements, in turn, define the deliverables to be produced and the tasks needed to produce those deliverables and, last, the supporting tools to be used to complete the tasks and produce the deliverables. This structure is often called the Tools-Tasks-Deliverables com-bination to indicate the interdependencies. The Tools-Tasks-Deliverables linkage is executed in “reverse” or from right-to-left, starting with Deliv-erables. Hence, a tool is selected only after the requirements, deliverables, and tasks are well understood to ensure that the appropriate tool is used for a given task and to avoid the “rut” of treating everything as if it were a nail when the only tool you use is a hammer. The various Six Sigma methods suggest a variety of applicable tools to choose from, but rarely does a given project require the utilization of every tool. No tool fits every situation. Determining which tool fits best depends on the situation. Thus, tool selection is done only after the requirements, resulting deliver-ables, and tasks are completely understood. [Part II of this book provides not only an inventory of potential tools, but also information on how to apply and interpret results to help you in tool selection.] Remember: Use the right tool at the right time to help ask and answer the right ques-tions.

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ptg6842824 Result-metrics

The result-metrics focus is a distinguishing principle of Six Sigma meth-ods. These fact-based metrics determine whether (internal or external) customer requirements are achieved. Performance typically is evaluated via a statistical metric of the process or offering (e.g. product, services, or information).

High-level process and performance metrics define what critical-to-quality is and encompass the critical parameters necessary to meet requirements. Eventually, these metrics should be translated into a lan-guage that is “meaningful” to a process worker involved in providing either the inputs or process deliverables (outputs). Depending on the requirements, the result-metrics may be “hard” or “soft” measurements— quantitative or qualitative; continuous or attribute data. A good litmus test for translated critical-to-quality metrics is whether a “new hire” understands clearly what is expected of him/her to meet requirements with no “fuzzy” or nebulous evaluation of what characterizes “good” or “poor” performance.

Process-centric

Another principle employs a process-centric view. Understanding how inputs to a process are integrated and how value is added to a product, information, or services offering is as important as what is being added. Understanding the combination of what and how inputs and other key variables come together to produce the final outputs (or deliverables) enables a more accurate forecast of whether customer requirements (or targets) will be satisfied. Prior “results” alone are poor predictors of future outcomes, and without knowledge of the process, any forecast is blinded; any successful forecast would be by chance. Because business prefers accurate forecasts of performance, a process-centric view becomes an integral ingredient.

Adaptive and Iterative

Methods used in Six Sigma are adaptive and iterative. Adaptive implies the fact that it can be tailored to a variety of situations and business contexts. Moreover, any given Six Sigma method can be integrated with another process or methodology as an underpinning to identify, gather, analyze, and report on critical parameters in a proactive or reactive manner. For example, if your firm has an existing standard product development process or customer account selling approach, Six Sigma can supplement it and make it more robust. The adaptive nature of these methods also speaks to the wide array of industries and situations in which they can be applied. The breadth of industries includes military, government, auto-motive, aerospace, high-tech, manufacturing, office products, financial

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ptg6842824 services, e-commerce, logistics and supply chain, healthcare, and

pharma-ceutical industries. Within companies, multiple disciplines have

embraced Lean Six Sigma: manufacturing, engineering, finance, adminis-tration, customer operations, maintenance, services deployment, and marketing and sales. The approach can even be applied to personal and social situations. Of the Top 100 companies in the 2005 Fortune 500 list, 70 of them have been in the top 100 for five or more years. Interestingly, of those 70 companies, 63% of them publicly acknowledge implementing Six Sigma to some degree. Through further analysis, we have found that these same 44 Six Sigma users also reported 49% higher profits (com-pounded annually) on average than their peers.

The iterative nature of the Six Sigma methods stems from the fact that more information on a variable or potential root cause gets revealed as the project progresses. Hence, one path of inquiry based on one assump-tion may prove to be a dead-end or altered, as more data on the current state becomes known. Although Six Sigma methods use a project-struc-ture with phase-gates, a fundamental principle across the various approaches encourages informed updates to prior step deliverables, as appropriate, and promotes proper communication. Use the best informa-tion available at the time but continue to ask quesinforma-tions and keep an open mind. Six Sigma projects involve a discovery process wherein an individ-ual serves as a “sleuth,” investigating, exploring, hypothesizing, and test-ing assumptions.

Data-driven Decision-making

Given the uncertain nature of projects, when seeking facts that answer key business questions, revisions to earlier project work reflect the evolving discovery of fact-based results. For example, a business operations review may focus on a set of key metrics to manage a process. If a chronically missed target evokes a Six Sigma project, an interim project deliverable could identify that some of the metrics associated with the key variables driving the desired business outcomes are missing, hence the “dashboard” requirements become refined to reflect the vital few parameters, com-prised of both leading and lagging metrics. Next, the project could focus on establishing baseline data for the “new” critical metrics to re-evaluate performance and better understand any cause-and-effect relationship(s).

Project-based Methods

As previously referenced, Six Sigma methods tend to use a project structure. A project structure has a distinct beginning and end to the work performed. The requirements phase determines the boundaries of this definitive time-frame. A project team, with defined roles, forms only for the duration of the project’s timeframe. A project structure adds the rigor of requiring

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ptg6842824 meeting with the project and key stakeholders) before exiting a given

phase-gate or step and starting another one. Project structure borrows heavily from the project management discipline and its nine knowledge areas to manage the lifecycle of the project: scope, time, budget/cost, risk, quality, communications, human resources, procurement, and integration.

The project context of Six Sigma methods incorporates a rather short-term perspective (averaging a three, six, or twelve-month project scope). A project may involve an improvement or enhancement to something [often focused on reducing defects, minimizing variance from a target, or improving velocity (speed)], clean-sheet innovation, or design and cre-ation (such as product or services development or portfolio assessment). The technical community (for example, engineering or manufacturing) has embraced a category of Six Sigma methods called Design for Six Sigma (DFSS). A newly emerging field is Six Sigma for Marketing (SSFM). SSFM may be a misnomer, because the various methods apply to the remaining (“non-engineering”) business disciplines, such as marketing, sales, strategic planning, services, and customer operations. Examples of project-based methods include

• DMAIC (Define-Measure-Analyze-Improve-Control, and its variants DMAIIC (with “II” representing Improve-Innovate) and Lean Six Sigma)

• Lean (and its variants PDCA Do-Check-Act) / PDSA (Plan-Do-Study-Act) and Lean Six Sigma)

• DFSS category with DMADV (Define-Measure-Analyze-Design-Verify), CDOV (Concept-Design-Optimize-Verify) (and their variants DMEDI (Define-Measure-Explore-Develop-Implement), PIDOV (Plan-Identify-Design-Optimize-Validate), ICOV (Identify-Characterize-Optimize-Verify), and IIDOV (Invent-Innovate-Develop-Optimize-Verify))

• SSFM category with UAPL (Understand-Analyze-Plan-Launch) and (sometimes) IDEA (Identify-Define-Evaluate-Activate)

Operational-based Methods

Managing an ongoing operation, however, is emerging as a new applica-tion area. Hence, the applicaapplica-tion of the Six Sigma method and tools to an operational process may last for years, rather than months as with a short-term project. The objective of operational-based Six Sigma is to manage or sustain an improvement of a launched product and/or serv-ices offering, for example, or to adapt and respond to environmental changes. This operational focus of Six Sigma is being applied to business areas such as customer operations (for sales, services, support, adminis-tration, financing, and related business disciplines) and strategic

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ptg6842824 planning (for offerings portfolio management). Some might argue that

portfolio management can be handled as a project defined by an annual planning cycle, but others view it as an ongoing area.

Nonetheless, Six Sigma discipline has added a competitive advantage to those firms that have begun to apply its method and tools to this process area. The operations-based methods currently fall within the SSFM (Six Sigma for Marketing) category with LMAD (Launch-Manage-Adapt-Discontinue, for customer operations) and sometimes IDEA (Identify-Define-Evaluate-Activate, for strategic planning), which can be considered operational given that the management and revitalization process of a firm’s offerings portfolio is cyclical and can span multiple years.

How Do the Various Six Sigma Methods Fit Together?

In summary, this Introduction overviews the major Six Sigma approaches being used currently. Each Six Sigma method has a valid purpose in today’s business world, the selection of which approach best fits a need depends on the key business question being asked at the time. They all fit together and inform one another. The integrated view is as follows:

An enterprise’s strategic platform defines its business and offerings, so typically a process flow starts with the business strategy process of port-folio definition and renewal (IDEA — Identify-Define-Evaluate-Activate).

From there, funding gets earmarked for research, tactical, and opera-tional activities. Research and Technical Development (R&TD) efforts are funded to develop forward-looking capabilities that eventually feed product development and commercialization. The approach used to guide Research’s activities is called I2DOV

(Invent-Innovate-Develop-Optimize-Verify).

The specific offering’s design, development, and commercialization efforts split into two branches: 1) the technical team that uses CDOV (Concept-Design-Optimize-Verify) to guide its activities and 2) the mar-keting and business areas that use the UAPL (Understand-Analyze-Plan-Launch) approach.

Finally, the operational and supporting infrastructure and business areas of a post-launch customer value chain environment use the LMAD (Launch-Manage-Adapt-Discontinue) approach to guide and direct their activities.

If any of these areas of an enterprise encounter a trouble spot in an existing process or offering, the Lean Six Sigma DMAIC (Define-Measure-Analyze-Improve-Control) method and any of its variants (that is,

DMAIIC (Define-Measure-Analyze-Improve-Innovate-Control), DMADV Analyze-Design-Verify), DMEDI (Define-Measure-Explore-Develop-Implement)) focus on the problem and its root cause-and-effect to determine the best correction.

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ptg6842824 Figure 1 depicts how each method integrates with one another.

Right Tool at the Right Time 7

I-D-E-A

I2-D-O-V

U-A-P-L C-D-O-V

L-M-A-D

Marketing, Selling and Customer Value Chain

Production Engineering and

Manufacturing Tactical Offering

Commercialization Processes

Marketing and Business

Techinical

Strategic Research and Technology Development Process

D-M-A-I-C

Lean Six Sigma Problem-solving Process

Operational Post-Launch Process Strategic Offering Portfolio

Renewal Process Unique Focus on Proactive Growth

Unique Focus on Reactive Cost Control and Variation Reduction

Figure 1:Integrated Portfolio of Six Sigma Methods

The various Six Sigma approaches have their appropriate applications. Moreover, their candidate tools and methods sometimes overlap or feature tool variants of another’s, as they all build from the core Six Sigma

fundamentals.

Right Tool at the Right Time

Part II of this book explores how to select the most appropriate tool to answer

the right question at the right time. It organizes the tools in alphabetical

order and, using an encyclopedia-style article format, describes what question each tool tries to answer and how to use the tool.

Take a closer look at the structure of the various Six Sigma (or Lean Six Sigma) methods to understand their similarities and differences and when best to apply each of them. Start with Part I to understand the various methods and their structure, requirements, deliverables, and list of candi-date tools. Afterward examine Part II, the heart of this book, to decide which of the candidate tools might be appropriate for your project. Part II is structured as a desk reference that inventories the different tools and techniques. Each tool “article” describes the main purpose of the tool, how best to use it, how to interpret the results of the tool, and any variations on how to apply the tool or technique. Most importantly, Part I lists the candi-date tools aligned with particular requirements and task-deliverable

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ptg6842824 combinations, but Part II identifies in more detail which key question each

tool tries to answer. Remember—an effective Six Sigma practitioner scruti-nizes the candidate tool set and selects the right tool, at the right time, to answer the right question.

Special Note

Throughout this book, the word “product” references to a generic company “offering” and represents both a tangible product as well as a services offering. This book discusses technology-based products frequently because of marketing’s interdependency with the technical community. In parallel, R&D, design and production/services support engineering should be using growth and problem prevention-oriented forms of Six Sigma in their phases and gate processes. The Six Sigma approach serves as a common language between the marketing and technical disciplines. The term “solutions” usually involves both tech-nology and services; thus, “product” and “services” encompass the scope of a given solution. Regardless of the offering, the Six Sigma approach we are outlining is the same and can be applied to either a tangible product or a services offering.

In addition, the term “Six Sigma” refers to the generic field or disci-pline and encompasses the many different approaches. People may dis-tinguish Six Sigma (SS), Lean Six Sigma (LSS), Design for Six Sigma (DFSS) and Six Sigma for Marketing (SSFM) from one another. However, this book uses “Six Sigma” categorically unless otherwise noted.

What this Book Covers

The Treasure Chest is organized into three parts: 1) Six Sigma methodology, 2) tools and techniques, and 3) best practices applicable to Six Sigma deploy-ment. The book uses an encyclopedia-like format made up of over 60 topics. Part I Six Sigma Methodology Overview—Choosing the Right

Approach to Address the Requirements

This segment of the book presents an overview the various Six Sigma approaches and describes the purpose of each. With the knowledge of the different methods, this book connects the requirements of a method to the appropriate candidate tools and techniques. This Part serves as the foun-dation for selecting the right tool for a given purpose.

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ptg6842824 It discusses the various technical, business and marketing Six Sigma

methods, including DMAIC, Lean Six Sigma, Design for Six Sigma (DFSS), and Six Sigma for Marketing (SSFM). Within each approach, a general description, common applications, and key requirements provide an overview of its structure and purpose. In addition, the key require-ments determine each method’s unique tools-tasks-deliverables combina-tion. The Method Section provides the foundation for comparing and contrasting the different approaches. Once a method is selected, it estab-lishes a team’s common language, regardless of whether or not people are part of a hetero- or homogeneous team. The method defines the require-ments for its work activities. It sets expectations, describes required deliv-erables and their due dates, and identifies who does what when. A common method is the single most critical unifying theme for a team’s work. If it is well understood and followed by each team member, then collaboration, coordination, and communication can occur fluidly. Part II Six Sigma Encyclopedia of Business Tools and Techniques— Choosing the Right Tool to Answer the Right Question at the Right Time This Part features an in-depth look at a robust library of tools, organized in alphabetical order for easy reference. By design, it represents the bulk of this book, with an exhaustive review of the Growth and Lean Six Sigma tools and techniques. Each tool (tangible item) or technique (for example, brainstorming) features a “how to” description explaining how to utilize the tool and interpret typical outcomes. Each description identi-fies the deliverable the tool or technique supports. Part II features the fol-lowing topics for each of the 60+ tools included in this book:

• The question the tool helps to answer

• Any alternative names or variants associated with the tool

• When best to use the tool or technique

• A brief description and useful real-world examples

• How to implement the tool for your application

• How to analyze and apply its output

• Helpful hints and tips that encourage you to think outside of the box

• Supporting candidate tools that link to the featured tool, depending on the question needing to be answered, by providing either input to or using the output from this featured tool

Part II begins with a useful summary table of tools organized by the type of question it helps to answer. The Treasure Chest organizes the candidate tools and techniques alphabetically for easy reference. The encyclopedia includes an array of soft tools and techniques, graphical methods, and statistical tools. The statistical tool descriptions leverage some of the appropriate software

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ptg6842824 tools such as MINITAB, Minitab’s new Quality Champion, Decisioneering

Crystal Ball, Visio, and other Microsoft applications, such as Excel. Part III Best Practices Articles

This portion of the book contains a series of articles written by well-reputed professionals that complements and extends beyond the world of Six Sigma to provide that competitive advantage in growth and operational excellence. It features a collection of technical and humanistic topics ranging from the latest thinking on benchmarking strategy to determining and offering the best portfolio. Articles describe how best to accelerate the development of an offering, how to ensure design robustness, and how to govern projects. Part III includes a discussion on best practices to introduce, deploy, and sustain a major culture change, such as deploying Six Sigma thinking, by featuring a set of articles to support a change initiative including communities of prac-tice and project management; simulation approach to training of new skills, knowledge, and attitudes; and designing collaborative work relationships.

A final note, the “Six Sigma for Marketing” (or SSFM) terminology in the marketplace may mislead prospective practitioners wishing to use Six Sigma to drive innovation and growth. While the primary application of SSFM involves processes typically associated with marketing, the respective work often encompasses additional functional disciplines within a company. Depending on the size of the firm and its business model, the professionals involved in 1) portfolio renewal, 2) offering development and commercializa-tion preparacommercializa-tion, and finally 3) post-launch operacommercializa-tions management through-out an offering’s lifecycle reach beyond just marketing. General business professionals involved in these three processes also represent disciplines such as strategic planning, pricing, finance, customer administration, customer service and support, professional services, and logistics and supply chain. In fact, the third process involving post-launch operations spans the entire cus-tomer value chain. Hence, when this book references “SSFM,” it follows the marketplace terminology of the emerging Six Sigma focus. In the context of SSFM, the identification of “marketing” (and sometimes sales) distinguishes the new Six Sigma application as different from the classic variation reduc-tion, problem-solving, and cost cutting approach, and as different from the technical DFSS (Design for Six Sigma). However, the Treasure Chest intends the reference to marketing as a “loose” association and prefers the broader refer-ence of “general business” to better articulate its broader scope and applicabil-ity. This book works nicely as a sequel to the Six Sigma for Marketing Processes, co-authored by CM Creveling, L. Hambleton, and B. McCarthy.

Part IV Appendixes

The Appendixes contain a set of references such as charts and statistical tables for hypothesis testing, a glossary, and a list of references.

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ptg6842824

P a r t

I

Six Sigma Methodology

Overview: Choosing the Right

Approach to Address the

Requirements

Section 1 Define-Measure-Analyze-Improve-Control (DMAIC) Section 2 Lean and Lean Six Sigma

Section 3 Design for Six Sigma (DFSS) Section 4 Six Sigma for Marketing (SSFM)

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1

Define-Measure-Analyze-Improve-Control (DMAIC)

Six Sigma’s most common and well-known methodology is its problem-solving DMAIC approach. This section overviews the methodology and its high-level requirements, given that the requirements define the appropriate deliverables, which dictate the tasks and the tool selection to aid in the task. This section also outlines the DMAIC standard toolset, through the understanding of the tool-task-deliverables linkage, to facilitate appropriate selection of a tool when refer-encing the “how to” tool articles in Part 2 of this book.

What Is the Main Objective of this Approach?

The DMAIC (Define-Measure-Analyze-Improve-Control) is the classic Six Sigma problem-solving process. Traditionally, the approach is to be applied to a problem with an existing, steady-state process or product and/or service offering. Variation is the enemy—variation from customer speci-fications in either a product or process is the primary problem.

Variation can take on many forms. DMAIC resolves issues of defects or failures, deviation from a target, excess cost or time, and deterioration. Six Sigma reduces variation within and across the value-adding steps in a process. DMAIC identifies key requirements, deliverables, tasks, and standard tools for a project team to utilize when tackling a problem.

Brief Description of DMAIC Applications

This classic or traditional Six Sigma methodology was designed to solve a problematic process or product and/or service offering to regain control. It addresses improvements in productivity (how many), financial (how much money), quality (how well) and time (how fast)—PFQT. Originally costs dominated the financial aspects, but lately project focus has shifted

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ptg6842824 to revenues and growth. The 5-step DMAIC [pronounced “duh-MAY-ick”]

method often is called the process improvement methodology.

The classic strategy reduces process variance (in total, across the activ-ities and within-step) to bring it back on target—the customer specifica-tion or requirement. Knowing that Six Sigma resolves more issues than just cycle time, Figure 1-1 highlights its impact on cycle time by contrast-ing a problematic process versus its post-Six Sigma improved state.

Problematic Process

Step 1 Step 2 Step 3 Step 4

Process After Six Sigma

Step 1 Step 2 Step 3 Step 4

Cycle Time

Figure 1-1:Six Sigma’s Impact on Cycle Time

The DMAIC approach is designed to allow for flexibility and iterative-work, if necessary. As more is learned through the 5-step process,

assumptions or hypotheses as to the root cause of the problem may be disproved, requiring the project team to revisit them and modify or to explore alternative possibilities. For example, root cause to a sales force effectiveness issue may have been hypothesized as a sales training prob-lem in a specific geographic region. Rather than jumping to conclusions without facts by implementing a new sales training program, the Six Sigma project team wisely decides to gather facts about the problem first. After some investigation and analysis, the team discovers that the root cause points to an issue with sales management direction, not lack of sales representatives’ knowledge and skills. If the project team acted upon the original assumption, time and money would have been wasted on developing a mismatched solution that would have produced poor results; the team’s hard work would have gone to waste. Instead, the team did a mid-course correction based on facts, adjusted its hypothesis, and developed a solution directly aimed at the true root cause—hence favorable results ensued.

DMAIC builds on three fundamental principles:

• Results-focused; driven by data, facts, and metrics.

• Work is project-based (short-term in nature, with length depending on scope and complexity) and project-structured, versus an ongoing process.

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ptg6842824

Inherent combination of tools-tasks-deliverables linkage that varies by step in the method.

The DMAIC methodology uses a process-step structure. Steps generally are sequential; however, some activities from various steps may occur concurrently or may be iterative. Deliverables for a given step must be completed prior to formal gate review approval. Step Reviews do occur sequentially. The DMAIC five steps are

Step 1. DEFINE the problem and scope the work effort of the project team.The description of the problem should include the pain felt by the customer and/or business as well as how long the issue has existed. Hence, identify the customer(s), the project goals, and timeframe for completion.

The appropriate types of problems have unlimited scope and scale, from employee problems to issues with the production process or advertising. Regardless of the type of problem, it should be systemic—part of an existing, steady-state process wherein the problem is not a one-time event, but has caused pain for a couple of cycles.

Step 2. MEASURE the current process or performance. Identify what data is available and from what source. Develop a plan to gather it. Gather the data and summarize it, telling a story to describe the problem. This usually involves utilization of graphical tools. Step 3. ANALYZE the current performance to isolate the problem.

Through analysis (both statistical and qualitatively), begin to for-mulate and test hypotheses about the root cause of the problem. Step 4. IMPROVE the problem by selecting a solution. Based on the

identified root cause(s) in the prior step, directly address the cause with an improvement. Brainstorm potential solutions, pri-oritize them based on customer requirements, make a selection, and test to see if the solution resolves the problem.

Step 5. CONTROL the improved process or product performance to ensure the target(s) are met.Once the solution has resolved the problem, the improvements must be standardized and sustained over time. The standard-operating-procedures may require revi-sion, and a control plan should be put in place to monitor ongo-ing performance. The project team transitions the standardized improvements and sustaining control plan to the process players and closes out the project.

A DMAIC project typically runs for a relatively short duration (three to nine months), versus product development projects (using UAPL or DFSS) and operational line management (using LMAD), which can run

Brief De scription of DMAIC Applications 15

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ptg6842824 years. Given the relatively shorter duration to other types of Six Sigma

methodologies, we distinguish the DMAIC as having five steps, rather than phases.

The DMAIC method is primarily based on the application of statistical process control, quality tools, and process capability analysis; it is not a product development methodology. It can be used to help redesign a process—any process, given that the redesign fixes the initial process problem. To be implemented, the method requires four components:

A measurement system (a gauge) of the process or product/service offering in trouble.

Standard toolsetthat supports tasks to produce deliverables (including statistical, graphical, and qualitative tools and techniques).

An ability to define an adjustment factor(s) to correct the process or product/service offering back on target.

A control schemeto maintain the improvement or correction over time by implementing a control plan with a monitoring system to audit the response performance against statistical control limits and defined action plans if needed.

What Key Overall Requirements Define this Approach?

Requirements come from the customer and the business, depending on the problem scenario. The (internal and external) customer requirements get translated into what is critical-to-quality (CTQ). These CTQs define the criteria to evaluate what good looks like—how well the project scope and deliverables meet requirements. Hence, the project team must meet the requirements of a phase before declaring completion and closing it out.

The DMAIC method was designed and structured to answer the fol-lowing overall business questions:

• What does the customer define as the problem?

(Secondarily, is the problem sustained over time, is it chronic, or is it a one-time occurrence?)

• What characterizes the current problem (e.g., process and perform-ance metrics), and how has it changed over time?

(Secondarily, is the process in control, and does it have a good meas-urement system? Is the process capable of producing the customer requirements?)

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ptg6842824

• What are the root causes, and what improvement actions correct them to meet customer requirements again?

(Secondarily, is the process capable of producing the customer requirements?)

• What controls should be implemented to sustain this improvement, including a warning system, action plan, and communication plan needed in case requirements fail to be met?

(Secondarily, can the improvements be sustained over time?)

What Requirement Determines the Key Activities in this

Approach?

The preceding key business questions determine the DMAIC architecture. Figure 1-2 depicts a high-level process flow of the DMAIC method

through its five steps.

What Requirement Determine s the Key Activitie s in this Approach? 17

DM

AIC

Define

Close Project No

Measure Analyze Improve Control

In Control? Good measurement system? Remove Measurement System variation Yes No No Yes Process Capable? Close Project Process Capable? Sustained Improvement? Yes Yes Close Project No Yes Yes No No Remove Known Special Causes Problem over-time?

Figure 1-2: High-Level DMAIC Process Flow

Table 1-1 shows the linkage between the high-level business require-ments and the five-step DMAIC method.

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ptg6842824

Table 1-1: DMAIC Requirements-Step Linkage

Requirements Resulting High Level Task (Step)

What does the customer 1. DEFINE

define as the problem? • Describe in the words of the external or

internal customer—Voice of Customer (VOC).

• Define the boundary conditions set forth

by the business, including regulatory environment—Voice of Business (VOB).

• Understand the current process. What has

happened over time, examine process control charts to identify incidents of common and special cause variation— Voice of the Process (VOP).

What characterizes the 2. MEASURE

current problem (that is, • Measure the problem; describe it with

process and performance facts, data, and performance metrics.

metrics), and how has it Determine if the process in control and if

changed over-time? the measurement system is accurate.

• Considered iterative until metrics are

gathered over time.

What are the root causes? 3. ANALYZE

Determine if the process capable of pro-ducing the customer requirements. If not, consider it iterative until root causes are identified and verified with facts and data.

What improvement actions 4. IMPROVE

correct the root causes to Determing if the process is capable of

meet customer require- producing the customer requirements.

ments again? If not, consider it iterative until

improve-ments are identified and verified with facts, data, and performance metrics.

What controls should be 5. CONTROL

implemented to sustain this • Demonstrate how the improvements

improvement, including a and/or changes can be sustained.

warning system, action plan, • Manage Risks

and communication plan needed in case require-ments fail to be met?

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ptg6842824 Figure 1-3 provides a DMAIC icon that reinforces both the overall flow

of a method and the purpose of each step and respective interrelationships. It summarizes the five-step DMAIC process and its notable iterative nature. Throughout the remainder of this text, Figure 1-3 will symbolize the

DMAIC approach and indicate a particular step within it if appropriate.

What Tools Are Aligned to Each Step of the Proce ss? 19

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AIC

Define Measure Analyze Improve Control

Figure 1-3: DMAIC Icon

What Tools Are Aligned to Each Step of the Process?

Given the preceding High Level Task Step(s), the following series of tables summarize the subsequent tool-task-deliverables combination associated with each individual step within the five-step approach.

The detail behind how to use each tool can be found in Part II, “Six Sigma Encyclopedia of Business Tools and Techniques: Choosing the Right Tool to Answer the Right Question at the Right Time.”

Table 1-2:Define Tools-Tasks-Deliverables

Step 1: DEFINE What does the customer

define as the problem?

Deliverables Tasks Candidate Tools and Techniques

Project Charter Approved Identify Problem • SMART

(contract with the statement/Opportunity • Project Charter Form

Sponsor regarding and Goal statement. containing: Problem

problem, project scope, Statement (As-Is),

project goal(s), key Desired State (To Be),

deliverables, timeframe, and the Business Reasons

and budget) • Big “Y” over time

Define Measure Analyze Improve Control

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ptg6842824

Table 1-2:Continued

Deliverables Tasks Candidate Tools and Techniques

High-level Process Develop High-level • Process Map

Map Constructed Process Map • RACI Matrix

Critical Parameters Gather VOC and • VOC/VOB Gathering

Hypothesized Business techniques

Requirements • Current process control

charts (VOP)

• Stakeholder Analysis

• CTQ

Project Charter Develop Communi- Communication Plan

Published and cation Plan template

Communicated

High-Level Project Finalize Project • Project Charter Form

Plan Defined and Charter • High-level Process

Approved Map

• SIPOC

• Project RACI Matrix

Table 1-3:Measure Tools-Tasks-Deliverables

Step 2: MEASURE What characterizes the

current problem, and how has it changed over time?

Deliverables Tasks Candidate Tools and Techniques

Data Collected • Identify Sources • Y = f(X); Big “Y” and

of Data little “Ys”

• Collect Baseline • Data Gathering Plan

Data from existing template

process • Control Charts

• Determine current • Statistical Sampling

Process Performance; • Graphical Methods

is it in control? • QFD (Quality Function

• Remove any known Deployment)

special causes; verify if process is in control

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ptg6842824

Deliverables Tasks Candidate Tools and Techniques

Process Map Defined Develop Detailed • Detailed Process Map

In-depth With Current Process Map • RACI Matrix, revised

Measures

Current Measurement • Validate measure- • Measurement System

System Capability ments and Analysis (MSA)

Evaluated collection system • Process Capability

• Is the process Analysis

capable of meeting requirements?

Project Charter and • Revise Problem and • Project Charter; its plan

Plan updated, as Goal statements as and milestones

necessary needed • Project RACI Matrix

• Update Project

Plan, as needed

Table 1-4:Analyze Tools-Tasks-Deliverables

Step 3: ANALYZE What are the root causes

of the current problem?

Deliverables Tasks Candidate Tools and Techniques

Data Analyzed •Validate gaps in • Y = f(X); Big “Y”; little

requirements vs. “Ys” and the “Xs”

current metrics • Critical Gap/Step

•Establish Y=f(X) Analysis

•Quantify Opportunity • Pareto Charts

to close gaps • Statistical Analysis:

Normal Distribution, Variation

• Correlation and

Regression

What Tools Are Aligned to Each Step of the Proce ss? 21

DM

AIC

Define Measure Analyze Improve Control

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ptg6842824

Table 1-4:Continued

Deliverables Tasks Candidate Tools and Techniques

Process Analyzed •Develop Detailed • Detailed Process Map

Process Map (inputs, outputs,

met-•Establish Y=f(X) rics, process step

•Quantify Opportunity owners)

to close gaps • RACI Matrix, revised

• Process Mapping of Critical Parameters • Y = f(X) • Pareto Charts • Process Capability Analysis

Root Cause Analyzed •Conduct Root • Brainstorming

Cause Analysis Technique

•Prioritize Root • Cause and Effect

Causes Diagrams

•Quantify Oppor- • Five Whys

tunity to close gaps • Affinity Diagram (KJ)

• Hypothesis Testing of

key causes and/or critical parameters (vital few Xs) • Inferential statistics (Correlation and Regression) • DOE • FMEA

Project Charter and •Revise Problem and • Project Charter;

Plan updated, as Goal statements as its plan and milestones

necessary needed • Project RACI Matrix

•Update Project Plan,

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ptg6842824

Table 1-5:Improve Tools-Tasks-Deliverables

Step 4: IMPROVE

What improvement actions correct the root causes to meet customer requirements again?

Deliverables Tasks Candidate Tools and Techniques

Potential Solution Develop Potential • Brainstorming

Generated Improvements or Technique

solutions for root • Positive Deviance

causes • TRIZ

Potential Solution •Develop Evaluation • Basic DOE

Evaluated Criteria • Pilots/Tests

•Measure results • FMEA

•Evaluate improve- • Cost/Benefit Analysis

ments meet targets

•Evaluate for Risk

Solution Selected Select and Implement • Pugh Concept

improved process and Evaluation

metrics • Solution Selection

matrix

• Force Field diagram

• QFD

• Measurement System

Analysis (MSA)

• Process Capability

Analysis

Improved Path Develop Detailed • Detailed Process Map

Forward Implemented Future Process Map • RACI Matrix, future

of improvement • Procedure manual

(standard operating procedure)

• Implementation and

Transition Plan

Project Charter and •Revise Problem and • Project Charter; its plan

Plan updated, as Goal statements as and milestones

necessary needed • Project RACI Matrix

•Update Project Plan,

as needed

What Tools Are Aligned to Each Step of the Proce ss? 23

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ptg6842824

Table 1-6:Control Tools-Tasks-Deliverables

Step 5: CONTROL

What controls should be implemented to sustain this improvement?

Deliverables Tasks Candidate Tools and Techniques

Control Plan Defined •Document New • Control Plan Design

Measurement • Control Charts (SPC)

Process • FMEA/Risk Analysis

•Define control plan • Communication Plan

• Stakeholders Analysis

Improvements/ Validate metrics and • Measurement System

Innovation Implemented collection systems Analysis (MSA)

• Process Capability

Analysis

• Cost/Benefit Analysis

Training Conducted Train • Training/Transition plan

Process Documented Document recommend- • Process Map

ation or improvement • RACI

summary and highlight • Procedure manuals

changes from As-Is to Improved

Tracking System Establish Tracking • Scorecard or Dashboard

Deployed Procedure • Data Mining (MINITAB

graphical data analysis)

Lessons Learned •Revise Problem and • Project Charter; its plan

Documented and Goal statements to and milestones

Project Closed reflect actual • Project RACI Matrix

•Update Project Plan • New SIPOC

to reflect actual

•Record lessons

learned and file along with final project documentation

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ptg6842824

What Are Some of the Key Concept s that Characterize this Approach?

What Are Some of the Key Concepts that Characterize

this Approach?

There are some key characteristics that distinguish DMAIC from other Six Sigma methods. The following overview wraps up the DMAIC highlights and introduces some of its variants.

How Is the Problem Defined?

The problem statement in a Project Charter typically speaks to defects or variance from a target over time with an existing, steady state, process, or product. (The charter is part of a standard Six Sigma toolset used to docu-ment the project scope. See Also“SMART,” in Part II, p. 665) Typically, the customer should determine the target; however, at times the business, industry standard, or regulatory agency may set it. Time-based problem statements indicate the problem may be chronic (has persisted for a period of time), which helps create a case for change (versus a one-time occurrence) to incite interest in and resources to tackle the issue.

Common metrics include DPMO (Defects per Million Opportunities (or units)), PPM (Parts per Million), Mean Time between Failures (MTBF), Cost, Percent Variance, or Errors.

What Is Commonly Measured?

Typically, three key items are measured:

Output (or Outcome)—The end result of the process (or product) requiring improvement

Process—The workflow (of activities and items) that produces the output

Inputs—The raw materials and information used by the process to produce the output

The relationship of these three key items often is described as an equa-tion: Y = f(x), which reads, “Y is a function of X.” The “Y” refers to the out-put(s); the “X” refers to the key measures from the process variables (inputs and/or the process itself). See Also“Y=f(x),” in Part II, p. 758.

The DMAIC project goal is to identify the critical (or vital few) Xs—the

root cause of the problem—and select their optimal level(s) to best drive

the desired improvement in the output performance (sometimes called the “Big Y”). This language sounds foreign to many people not comfort-able with mathematically-structured sentences; however, it is readily used in most Six Sigma texts. A simpler articulation is the goal of a DMAIC project is to improve PFQT—Productivity (how many), Financial (how much money), Quality (how well), and Time (how fast).

25

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ptg6842824 Are There any DMAIC Variations?

There are two prevalent variations to the traditional DMAIC method. Both build on the DMAIC fundamentals but add new dimensions to extend its applications. The first is DMAIIC, wherein innovation is added for situations where a simple improvement modification is inadequate and a new design may be required. (Note that in the technical, engineer-ing arena that an innovation adaptation typically aligns with the

DMADV method. DMADV distinguishes itself from DMAIIC by not only its often unique environment scenario, but also it usually calls for a requirement of building a new process (or product design) from scratch at the start of the project; whereas, DMAIIC often is unaware of the redesign requirement until much later into the project lifecycle. See Also “DFSS,” in Section 3, p. 45) The second is Lean Six Sigma, which adds concepts of velocity, value-add, and flow to the DMAIC concepts.

1. DMAIIC—Adding an “I” for Innovation—Many organizations have found that improving a current process or product may not be enough to deliver the desired results, and at times innovation is needed. Since the project teams have just completed the Define-Mea-sure-Analyze stages of the process and are in the midst of Improve, rather than starting over from scratch, project teams have found that the work done to this point is a good foundation for innovation work. Hence, some companies have built on the DMAIC framework already in-place and added a second “I” for innovation to keep the project team progressing. Therefore, the variation is Define-Measure-Analyze-Improve/Innovate-Control.

Figure 1-4 shows the DMAIIC flow diagram and depicts how the Inno-vate tasks integrate into the classic DMAIC model.

2. Lean Six Sigma—Adding Lean Concepts—By incorporating lean concepts into DMAIC, the project adds a dimension of velocity (i.e. improved cycle time), value-add, and flow to what Six Sigma already offers.

Both concepts share similar views on customer-focus, process-centric work, and appropriate tools. Lean simply adds a deeper set of tools to eliminate waste between process steps handoffs. Often DMAIC pro-vides a project the big picture view (what the customer values balanced by business values) and process stabilization and capability—while Lean introduces speed and flow concepts at a more detailed level. The Define-Measure-Analyze-Improve-Control structure still holds true for Lean Six Sigma projects. See Also“Lean and Lean Six Sigma,” Section 2, p. 29, for more details on Lean.

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