IBM-09: Six Sigma Tools and Techniques

Define PhaseDr. A. Ramesh

Department of Management Studies

Indian Institute of Technology Roorkee, Roorkee 247 667

Why Six Sigma ?

Reducing Variance is the Essence of Six Sigma

Six Sigma helps in achieving Break through

improvement

Roles and Responsibilities:

Part time role Leads GB projects Six Sigma tools

practitioner

Team member in GB / BB projects

Project specific knowledge

Full time role Lead high impact projects Trains & coaches Project Teams

Mentor Black Belts Six Sigma deployment

across org.

Owns process Implements solutions

Leads change Sponsors project Chair tollgate

reviews

Champion

Six Sigma Council

Establish Six SigmaOrganization

Approve resourcesrequired

Tracks deploymenteffectiveness

Process Owners

Yellow Belts

Green Belts

Black Belts

Master Black Belts

Summary:

A methodology that extends and strengthens quality and productivity efforts

A proven breakthrough contributor to the bottom line A detailed roadmap to process improvement A methodology that our people can and should be using to do their jobs Six Sigma = WIN, WIN, WIN

Why Project selection is important?

Selection of right projects is one of the key factors in successful six sigma deployment

By selecting right projects, Projects would be aligned with business objectives Projects would get complete buy-in from stake holders Business benefits could be maximized as available six sigma resources are

utilized in high impact initiatives

Enough support can be received for removing road blocks for the project

Hence project selection should be based on the two foundationcornerstones: Total customer satisfaction Maximization of ROI

Common pitfalls in Project selection :

Success of the six sigma projects is at stake in following cases:

Projects based on personal priorities

Projects with very wide scope

Projects on solving problems for which causes are already known

Projects for solving pure human discipline related issues

Project Grid:

Reactive Proactive Excellence

Recovery Best in Class Preventive

Penalty Avoidance Incentive Gains Collaborative

Cost Reduction Cost Optimization Futuristic

Undertaken for survival ofthe business

Initiated for : Improving key client

metric target when notmet

Improving Very lowefficiency performance

Undertaken for Pullthrough revenue

Initiated for : Improving performance on

Key client metric tobenchmark levels

Optimizing efficiencyperformance

Showcaseable for futurebusiness / serviceexcellence

Initiated for : Establishing effective

processes at upstreamphases of business peoplelifecycle

Value addition to clients inpartnership mode

Identification of Project Opportunities

Project Prioritization

Project Validatio

n

Business OutcomesOperational OutcomesVoice of Stakeholders

Effort Impact AnalysisKano Model

FIPS Analysis

Project Selection Process:

Identification Method Voice of Stakeholders:

Prioritization Method : Kano Model

Satisfier : Customer satisfaction is directly

proportional to how fully functional is the product/service.

Satisfaction directly related product / service features

Dissatisfier : Absolutely Important for the customers Hidden / Implied Needs of the customer Less satisfied when the product or serviceis less functional, but is not more satisfied when the product is more functional.

Delighters : Customer is more satisfied when the

product or service is more functional but not less satisfied when the product or service is less functional..

Kano Model - Example: Transport arrangement for employee pickupand drop

Dissatisfier: Pickup at the agreed point Safe drive / Safe arrival Accuracy in dropping the right person in the right place

Satisfier: Seat comfort Driver is quite friendly On-Time start On-Time arrival

Delighters: A/C facility in the cab Music / Video movies Special attention / services while pickup drop

Kano Model - Example: Call Flow Process

Dissatifier: Greeting the customer Acknowledging the customer issue Expectation setting Meeting callback commitments

Satisfier: Understanding the customer issue Correct Resolution Responding to customers within 3 rings [Meeting Service level] Empathizing First Contact Resolution

Delighters: Customer education Rebate Coupons / Concession / Discount Freebies

Prioritization Method 2 : Effort Impact Analysis

Project prioritization is bedone in the following order:

1. High Impact & Low Effort2. High Impact & High Effort3. Low Impact & Low Effort

Validation method : FIPS Analysis

Feasibility Project scope should be appropriate (Not too broad (or) too complex)

Solving world hunger problem

Boiling the ocean

Feasibility of deploying resources for the project need to be ensured Make sure the project is controllable

Impact The impact (financial / non-financial) should be significant and aligned

with strategic objectives and goals

Creates WOW from the customers point of view

Impact on all stake holders (Positive / Negative) need to be acceptable Huge consequence if not resolved immediately

Validation method : FIPS Analysis

Potential for Improvement Opportunity for improvement should be adequate which is judged by

comparing benchmarks with current performance

Will the project present a significant challenge or opportunity ?

Avoid six sigma methodology for projects which require marginal increase in performance

Simple process rigor would help achieve this

Support within the organization Level of support that could be expected from each stake holder group

should be determined

Strong sponsor is the key for success of the project

Possibility of addressing potential lack of support need to be high Choose a project that is non controversial

Exercise on FIPS Analysis:

Example 1: Reducing over all annualized attrition from 100% to 50% globallywithin 2 months

Example 2: Improving Internal Quality Score from 89.22 to 90% within next 3months.

Please identify the project which would go thru FIPS Analysis

D AM I C Define Phase

Process Steps in Define Phase:

Objective:

To ensure common understanding on the purpose, scope and goal for the project .

Tools:

1. Team Charter

Define 1:Develop Team Charter

Define 2:Define Process Map

DEFINE STEPOVERVIEW

Objective:

To identify all relevant elements of the process the team is going to improve .

Tools:

1. SIPOC

D AM I C Define Phase

Team Charter: Helps the team to have common understanding of the business problem

Sets expectation for the team on what is to be achieved

Gives authority for the project team to execute the project

Methodology: Team charter has to be prepared jointly by the project leader and

champion

Team shall have following inputs for preparing team charter Performance data related to the business problem for minimum of

three months

Financial / non-financial implications on customer / organization dueto the business problem

D AM I C Define Phase

Team Charter: Helps the team to have common understanding of the business problem

Sets expectation for the team on what is to be achieved

Gives authority for the project team to execute the project

Methodology: Team charter has to be prepared jointly by the project leader and

champion

Team shall have following inputs for preparing team charter Performance data related to the business problem for minimum of

three months

Financial / non-financial implications on customer / organization dueto the business problem

D AM I C Define Phase

Elements of a Team Charter: Business Case

Explanation of why to do the project Problem Statements

Description of the problem in clear, concise, measurable terms Goal Statement

Measurable performance target to be achieved Project Scope

Includes Process boundaries, available resources Operational definition of project CTQ

Operational definition of the performance metric Milestones

Key steps and date to achieve goal Roles

People, expectation, responsibilities

D AM I C Define Phase

Elements of a Charter Business Case

Existing status of CTQ and the associated Financial impact

Following needs to be verified while building a Business Case:

Is the project worth doing ? Why?

Is it important to do it now ? Why?

What are the consequences of NOT doing the projects?

What activities have higher or equal priority?

How does it fit with our business initiatives and target?

D AM I C Define Phase

Business Case Example:

Project:

To Improve Customer Experience (CE) score

Business Case:

X provides support to one of the worlds largest PC manufacturer.

The Clients Contract has three KPIs : a) Quality b) Service and c) Efficiency

Service and Efficiency targets have been met consistently, however theCustomer Experience Score was trending at 61.32% for the quarter May-Jul07 as against the target of 72%. The call volume offered by the client hasbeen reduced by 30% for not meeting the CE target which has resulted in ahuge revenue loss for X. The total contribution loss in Product line A for notmeeting the CE Score target is US $ 0.418 Million per annum

D AM I C Define Phase

Elements of a Charter Problem Statement

What is wrong or not meeting our customers needs? Describes Painexperienced by the customer

When and where does the problem occur?

How big is the problem?

Whats the impact of the problem for the customer?

D AM I C Define Phase

Elements of a Charter Goal Statement

Defines what improvement the team is seeking to accomplish,i.e., end state vision.

Tends to start broadly eventually should include measurable target orspecification limit and completion date

Must not assign blame, presume cause, or prescribe solution

Should follow SMART approach (Specific ,Measurable, Attainable, Relevant& Time bound)

Has four parts Starts with a verb (e.g., reduce, eliminate, control, increase) Focus of project (e.g., cycle time, accuracy) Target (e.g., by 50%, by 75%) Deadline

D AM I C Define Phase

Problem and Goal Statement Example:

Project:

To Improve CE score

Problem Statement:

The Current CE score is trending at 61.35%, 62.13% & 60.47% for the periodfrom May-08 to July-08 in Product Line A. This results in end userdissatisfaction and revenue loss as volume allocation is based on theachievement of CE score target.

Goal Statement:

To improve the Customer Experience Score from the current baseline of61.32% to 72% by end September 2008

D AM I C Define Phase

Elements of a Charter Project Scope:

What process will the team focus on?

What are the boundaries of the process we are to improve?

Start point? Stop point?

What (if anything) is out of bounds for the team?

Project Scope Example:

In Scope: Desktop support, India Chennai

Out of Scope: Other geographies and all other Queues

D AM I C Define Phase

Elements of a Charter Operational definition of CTQ:Operational definition is a precise description that tells how to get a value forthe characteristic (CTQ) you are trying to measure. It includes WhatSomething Is and How to Measure It

Elements of a Charter Defect definition:Anything that does not meet the requirements of the Customers.

Example:Operational Definition (Y): The Survey response from customers withrating scale of 1 to 9, where 1 is 'Extremely Dissatisfied' and 9 is 'ExtremelySatisfied' graded through email. (Top three boxes [7,8 and 9] are consideredas positive response)

CE Score = Total no. of responses with top 3 box [.i.e., 7, 8, 9] / Total no. ofresponses received

Defect Definition (Y): Any Survey fetching a rating from 1 to 6

D AM I C Define Phase

Elements of a Charter Milestones, Resources

Resources:

Who are the team members? What are the roles of the Team Members, Leader (Black/Green Belt/Yellow

Belt) and the team coach (Black Belt or Master Black Belt)?

Are the right members chosen for the team? Functionally? Hierarchically?

Milestones:

A detailed project plan with key steps and target completion dates

Tied to phases of DMAIC process, with defined tollgate reviews

Aggressive (dont miss window of opportunity)

Realistic (dont force yourselves into band-aid solution)

D AM I C Define Phase

Team Charter Template:

Business Case Goal Statement

Problem Statement Project Scope

D AM I C Define Phase

Team Charter Template (Contd.):

Operational Definition Defect Definition

Resources Tollgate ReviewProject Lead (GB/BB): Project Coach (BB/MBB): Project Champion: Team Members:

Phases Planned Date

Sign Off Date

DefineMeasureAnalyzeImproveControl

D AM I C Define Phase

Exercise

Prepare Team charter for the following scenario:

Type of Program : Customer Support

KPI Metric : Refund% (% of calls in which refund is made)

Target :

D AM I C Define Phase

Process Steps in Define Phase:

Objective:

To ensure common understanding on the purpose, scope and goal for the project .

Tools:

1. Team Charter

Define 1:Develop Team Charter

Define 2:Define Process Map

DEFINE STEPOVERVIEW

Objective:

To identify all relevant elements of the process the team is going to improve .

Tools:

1. SIPOC

D AM I C Define Phase

High Level Process Map:

Used to identify all relevant elements of a process improvementproject before work begins

Helps to define a complex project that may not be well scoped. Helps the project team to learn together and come to consensus

about current make-up of the process

Helps to identify places in the processes for potentialimprovement

D AM I C Define Phase

Definition of a Process:

A collection of activities that takes one or more inputs and transforms theminto outputs that are of value to the customer

Application:

To give a pictorial representation of the high level process

To identify the Suppliers and customers (stake holders)

Supplier(s)

The Business Process

Inputs

Customer(s)

Outputs

D AM I C Define Phase

High Level Process Mapping

Measures

PS I O CSuppliers Inputs Process Outputs Customers

CTQs CTQs

Measures

ProcessMap

D AM I C Define Phase

Process Elements

Supplier: The provider of inputs to your process

Input: Materials, resources or data required to execute your process

Process: A collection of activities that takes one or more kinds of input andcreates output that is of value to the customer

Output: The products or services that result from the process

Customer: The recipient of the process output may be internal or external

CTQs: Critical-to-quality characteristics; A specific attribute or quality of theoutput that is a key requirement for customer satisfaction

Boundary: The limits of a particular process, that define the start and stoppoints of the process

D AM I C Define Phase

High Level Process Mapping Example

D AM I C Define Phase

Summary of Define Phase:

Initial project charter

Project Y

Project business case

Project goal

Project scope

Project team members and stakeholders

High level Process Map