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Introduction
      to


SIX SIGMA
Main Topics

 What is Six Sigma, an overview
                                   <Process>

 need for SS, historical perspective
 The

 Philosophies; Deming, Juran & Ishikawa


 Knowledge based management;


 Basic tools & techniques to obtain knowledge


 Advanced tools and techniques to obtain

   knowledge
                                                     2
                                                 .
What is Six Sigma; an overview

Six sigma is a statistically – based process improvement methodology that
aims to reduce defects to a rate of 3.4 defects per million defect opportunities
by identifying and eliminating causes of variation in business processes. In
defining defects, Six Sigma focuses on developing a very clear
understanding of customer requirements and is therefore very customer
focused.

The Six Sigma methodology is based on a concept called DMAIC: Define,
Measure, Analyze, Improve, and Control. The main core of Six Sigma
methodology is the application of statistical and other analytical tools in the
context of a well disciplined, easy to follow methodology.

 D Define       Define the project goals & customer (internal &
                external) deliverables
 M Measure Measure the process to determine current performance
 A Analyze      Analyze & determine the root cause(s) of the defects
 I Improve Improve the process by eliminating defects
                                                                            3
 C Control      Control future process performance
                                                                         < Menu >
What is Six Sigma; an overview


Six Sigma is mainly focused on following
two perspectives;


Quality perspective is focused to achieve an output of interest
from a process must produce no more than 3.4 defects per million
opportunities, where an opportunity is defined as a chance for
nonconformance, or not meeting the required specifications.


Business results perspective is focused that waste generally called
Cost of Poor Quality (COPQ) must be reduced in order to improve
net profit margins 20 to 40 % or more.



                                                                      4
                                                                 < Menu >
The Need for SS; historical perspective

Six sigma was developed by Motorola as a way to improve their quality in
the mid-1980s, and became well known after GE’s Jack Welch made it a
central focus of his business strategy in 1995. About 500 companies have
started Six Sigma initiatives. It is the culmination of many years of work by
some of the best minds in business and management.


Over the last several years, many industries and specific companies like
Boeing, IBM, General Dynamics, Johnson & Johnson etc have had severe
problems. As consequences of these problems, the companies had either to
layoff or trim thousands of their workers / employees.


If we are to move forward, there needs to be sufficient emphasis on
improved product and service quality. Quality improvement should be a
critical part of any business strategy that is designed to generate maximum
return on investment, ROI. If quality improvement is synonymous with
better, faster and lower cost products and services, how can you not get
return on investment?
                                                                            5
                                                                         < Menu >
The Need for SS; historical perspective

The study points out that Six Sigma quality efforts have shown significant
achievements / improvements for;

 reducing in-process defect levels

 reducing wastes or COPQ

 reducing the cost of manufacturing

 increasing production / yield %

 increasing stockholders’ share value




 << Crestex Achievements >>
                                                                             6
                                                                        < Menu >
Philosophies; selected quality gurus

Deming’s Fourteen Points:

1.   Create a consistency of purpose toward the improvement of product and

     service. Consistently aim at improving the design of your products.

2.   Adopt a new philosophy of rejecting defective products, poor
     workmanship and inattentive service.

3.   Do not depend on mass inspection because it is usually too late, too costly
     and ineffective.

4.   Do not award business on price tag alone, but consider quality as well.

5.   Consistently improve the system of production and service. Involve
     workers in this process, but also use statistical experts who can separate
     special causes of poor quality from common ones.

6.   Institute modern training methods.
                                                                               7
7.   Institute modern methods of supervision.
                                                                           < Menu >
Philosophies; selected quality gurus
Deming’s Fourteen Points:


8.   Drive out fear. Great economic loss is usually associated with fear, when
     workers are afraid to ask the questions or to take a position.
9.   Breakdown barriers among the functional areas. Teamwork.
10   Eliminate numerical goals, targets and slogans for your workforce. Setting
     the goals for other people without providing a plan on how to reach it is
     often counterproductive.
11   Eliminate work standards and numerical quotas.
12   Remove barriers that discourage the hourly workers from doing their job.
13   Institute a vigorous program from training and education. Education in
     simple, but powerful, statistical techniques should be required by all
     employees.
     Knowledge based management is a an extension of the work by Juran,
     Demings and Ishikawa with a focus on the “HOWs”                    8
                                                                         < Menu >
Philosophies; selected quality gurus
The Juran Philosophy
Like Deming, Joseph M. Juran spent a good bit of time in Japan during the
early 1950’s. Juran developed his philosophy and approach over many years
and in 1979, he founded the Juran institute.

Juran’s 10 steps
7. Build awareness of the need and opportunity for improvement.
9. Set goals for improvement.
11. Organize to reach the goals (have a plan and an organizational structure).
13. Provide training.
15. Carry out projects to solve problems,
17. Report progress.
19. Give recognition
21. Communicate results.
23. Keep score.
25. Maintain momentum by making annual improvement part of the regular
                                                                           9
   system and process of the organization.
                                                                        < Menu >
Philosophies; selected quality gurus
The IshiKawa Philosophy
What must top management do?
1. Study quality improvement ahead of anyone else in your company and
   understand the issues involved.
3. Establish the policies towards promoting quality improvement efforts-what
   the general attitudes will be.
5. Specify the priorities for implementing quality improvement and the short
   and long term goals.
7. Assume a leadership role in making quality improvement happen
9. Provide a means for educating the people
11. Check to see if quality improvement is implemented as planned
13. Make clear the responsibility of top management
15. Establish a system or cross functional management
17. Drive home the notion that the outputs from your process are inputs to
   your customers
                                                                         10
19. Provide leadership towards making a “breakthrough”                 < Menu >
Knowledge based management (KBM)

   Introduction

   Questions managers need to answer,

   Questions managers need to ask.

   Modern quality improvement paradigm,




                                            11
                                           < Menu >
Knowledge based management (KBM)

Knowledge based management is an extension of the works of Deming,
Juran, and Ishikawa.


Continuous learning leads to knowledge of customer
requirements, products, and processes.

Which Steps have you taken?
                                                   Job Security
                                        Long term Success
                       Return on Investment (improved bottom Line)

                  Quality Improvement (Better, Faster, Lower cost)

        Knowledge
Knowledge Based Management Means, “TAKING THE RIGHT STEPS”           12
                                                           < Back > < Menu >
Knowledge based management (KBM)
Questions managers need to answer

1. What is your product or service and who are your customers?

3. What perception do your customers have of your product or service? How
   do you know?
5. Do you know quality issues are important for your company? Which ones?

7. What is the company’s current share of the total market? Can quality
   improvement initiative assist you in increasing the market share and/or
   increasing profits? How?
9. Are you actively pursuing quality improvement in your areas of
   responsibility? How?
11. How many hours have you scheduled that are devoted to the quality issue.

13. How often do you get feedback from the people you manage? What kind of
   feedback that is it? What do you do with that feedback?
15. What are the right quality-oriented questions managers need to ask their
   people. What methods and tools can be used to answer them?             13
                                                             < Back > < Menu >
Knowledge based management (KBM)
Questions managers need to answer:

1. Are your people trained to use the best quality improvement tools? What
   is your ROI from training?

3. Do you have standard procedure for documenting quality improvement
   efforts? What is it?

5. What barrier your people face when trying to do quality improvement
   efforts? What are you doing to remove them

7. What matrices are you evaluated on, that relate to quality issues? Are you
   held accountable for these matrices? What are the specific improvement
   goals for these matrices?

9. How much waste does your company has? What in $ terms is the
   company’s Cost of poor quality (COPQ). How much of the total waste is
   your area responsible for.

11. One year from now what evidence will you have to show that you made a
   difference.                                                           14
                                                             < Back > < Menu >
Knowledge based management (KBM)
Questions managers need to ask:
1. What processes (activities) are you responsible for? Who is the owner of
   those process? Who are the team members? How well does the team
   work together?

3. Which processes have the highest priority for improvement? How did you
   come to this conclusion? Where is the data that supports this conclusion?

   For those processes to be improved,

7. How is the process performed?

9. What are your process performance measures? Why? How accurate and
   precise is your measurement system?

11. What are the customer-driven specifications for all of your performance
   measures? How good or bad is the current performance? Show me the
   data. What are the improvement goals for the process?

13. What are all the sources of variability in the process? Show me what they
                                                                          15
   are?                                                       < Back > < Menu >
Knowledge based management (KBM)
Questions managers need to ask:

1. Are any of the sources of variability supplier dependent? If so, what are they,
   who is the supplier, and what is being done about it?
3. What are the key variables that affect the average and variation of the
   measures of performance? How do you know this? Show me the data.
5. What are the relationships between the measures of performance and the
   key input variables? Do any key variables interact? How do you know for
   sure? Show me the data.
7. What setting for the key variables will optimize the measures of
   performance? How do you know this? Show me the data.
9. For the optimal settings of the key variables, what kind of variability exists in
   the performance measures? How do you know? Show me the data.
11. How much improvement has the process shown in the past six months? How
   do you know this? Show me the data.
13. How much time and/or money have your efforts saved or generated for the
   company? How did you document all of your efforts? Show me the data.
                                                                      16
                                                                  < Back > < Menu >
Knowledge based management (KBM)
Modern quality improvement paradigm:
Around the world all types of organizations have wrestled with how to make their
products, services, and associated process performance better, faster, and at
lower cost. The problem in our organizations is how to make it happen. Past
attempts focused on reorganizing or chasing the “fad of the month.” The height
of frustration comes with mandated or regulated supplier quality improvement
requirements like ISO 9001, QS 9000, D1-9000, FDA’s process validation, and
Quality Systems (QSR) etc. Many other industries have similar requirements or
use the Malcolm Baldrige criteria for self evaluation. The puzzle appears to be
getting more complicated and can cause people to give up in frustration.
This paradigm of letting regulations drive quality improvement is like the old
saying, “ We have put the cart before the horse!
A Modern Quality Improvement Paradigm




                                                                                 17
                                                                   < Back > < Menu >
Knowledge based management (KBM)

KBM Paradigm for Quality Improvement

The knowledge Based Management (KBM) paradigm has the cart and
horse hitched together in a way that will get us safely and efficiently
down the road to success.




                                                                          18
                                                               < Back > < Menu >
Knowledge based management (KBM)
A Modern Quality Improvement Paradigm



                          SUCCESS




                                                  19
                                        < Back > < Menu >
Basic tools & techniques to
     obtain knowledge
    Process flow diagram (Flow Chart)
    Cause and Effect Diagram
    Affinity Diagram
   Benchmarking
    Common Sense
    Failure Mode and Effect Analysis (FMEA)
    Input-Process-Output (IPO) Diagram
    Quality Function Deployment
    Nominal Group Technique
    Pareto Chart
    Scatter diagram
    Run Chart
    Histogram
    Measures of Central Tendency
    Measures of dispersion
    Process Capability Measurements
    Control Chart
                                                20
    Design of Experiment (DOE)
                                               < Menu >
Basic tools & techniques to
obtain knowledge

Process Flow Diagram
Is a visual representation of all the major steps and decision points in a
process. It helps us understand the process better, identify critical or
problem areas, and identify where improvement can be made. < Example >

Cause and Effect Diagram with CNX
Is a graphical representation of the relationship between a given response
and the factors that influence this response. It helps us to identify, display,
and examine possible causes of any observed condition. Other names are;
Ishikawa, fishbone, tree, and river diagram. < Example >

Affinity Diagram
Is a technique used to cluster related items into a more general group. It
helps us to organize verbal information into a visual pattern. Unlike the cause
and Effect diagram where we move from the general categories to the more
specific, an affinity diagram starts with specific ideas and helps us work
toward broader categories, each of which contains several of the more 21
specific ideas. <Example>                                        < Back > < Menu >
Basic tools & techniques to
obtain knowledge
Benchmarking
Benchmarking involves gathering information on “best” practices. It helps to
provide us with knowledge of the following:
   who the industry leaders are,
   how we are doing compared to industry leaders, and
   what our priorities are for process improvement.

Common Sense
It may be defined as “good judgment” or “critical thinking” but actually it is a
combination of certain traits that someone with common sense should
demonstrate. < Example >

Failure Mode and Effect Analysis (FMEA)
Is a procedure used to identify and assess risks associated with potential
product or process failure modes. FMEA is generally accomplished early in
the design phase of a new product or process or when design changes occur.
                                                                            22
< Example >                                                     < Back > < Menu >
Basic tools & techniques to
obtain knowledge



Input-Process-Output (IPO diagram)
Is a visual representation of a process or activity. It lists input variables and out
put characteristics. It helps us in defining a process and recognizing the
relationships between input variables and responses. < Example >

Quality Function Deployment (QFD)
Is a systematic process used to integrate customer requirements into every
aspect of the design and delivery of the products and services. It helps us to
provide a structure for identifying those design characteristics that contribute
most (and least) to customer requirements.




                                                                              23
                                                                  < Back > < Menu >
Basic tools & techniques to
obtain knowledge

Nominal Group Technique

Is a structured method used to generate and rank order a list of ideas. It
helps to prioritize a list of items. < Example >


Pareto Chart

Is a bar chart for non-numerical categories that rank orders the bars from
highest to lowest. It is based on “Pareto Principle” that says that 80% of
the effects are due to 20 % of the causes. It helps us to identify the “Heavy
hitters”. <Example>


Scatter Diagram

Is a graphical display of a set of points or ordered pairs. It helps us to
visually study the relationship between two variables. <Example>             24
                                                                 < Back > < Menu >
Basic tools & techniques to
obtain knowledge

Run Chart

Is a graphical tool that turns data into information. It helps us to show
changes in a process measure overtime. Variation in the data as well as
trends and shifts in the process measure are easily seen. < Example >

Histogram

A histogram is a bar chart for numerical variables. It gives pictorial
representation of how the data are distributed. It helps us for visualizing
the central tendency and variability of a data set.

Measures of central tendency

The two most common measures of central tendency are Mean and
Median. < Example >
                                                                              25
                                                                < Back > < Menu >
Basic tools & techniques to
obtain knowledge

Measures of dispersion

The three common measures of dispersion are the Range, the Variance,
and the standard deviation. < Example >


Process capability measurements

Are used to describe the capability of a process. There are three matrices
that are used for this purpose, and most are calculated under the
assumption that the critical measurements are normally distributed. The
metrics dpm, Cp, and Cpk, all give a numerical value that indicates how
well the process is doing with respect to these specification limits.

< Example >

                                                                             26
                                                              < Back > < Menu >
Advanced tools & techniques
    to obtain knowledge

   Statistical Process Control (SPC)

   Design of Experiments (DOE)




                                         27
                                        < Menu >
Advanced tools & techniques
to obtain knowledge

Control Chart

A control chart is just a run chart which includes statistically generated
upper and lower control limits. Control limits are not specification limits or
objectives, but are reflections of the natural variability of the process.
Several types of control charts have been developed to analyze variables
and attribute data. However, all control charts have the same basic
purpose:


    to provide evidence of whether a process has been operating
    in a state of statistical control and to signal the presence of
    special causes of variation so that corrective action can be
    taken.

< Example >

                                                                             28
                                                                 < Back > < Menu >
Advanced tools & techniques
to obtain knowledge


Design of experiments, DOE

To understand DOE, we must have a good understanding of the term
process. In a general sense, a process is an activity based upon some
combination of inputs (factors), such as people, material, equipment,
policies, methods, and environment, which are used together to generate
outputs (responses) related to a product, service, or task. < Example >

In conducting a design of experiment, we will purposefully make changes to
the inputs (or factors) in order to observe corresponding changes in the
outputs (or responses). The information gained from DOE helps us to
improve performance characteristics, to reduce costs and time associated
with product development, design and production, and to optimize the
process.


                                                                          29
                                                            < Back > < Menu >
The Need for SS; historical perspective

Achievements / improvements through Crestex Six Sigma quality efforts;

Achievement                       Target saving     To date saving
 S6 Yield Incrs 1%               $   95,675        $   68,441
 Stores Inv Rdctn 15%            $ 3,00,000        $ 1,60,000
 PG Oprtng Cst Rdctn             $   50,000        $    4,753
 Spare Parts Inv Rdctn 20%       $   50,000        $   29,649
 H Tx Yield Incrs 1%             $ 1,20,000        $   80,385
 Proc Fab Rejtn Rdctn 1%         $ 2,52,632        $   92,233
 Lm Eff Incrs 1%

 Lightng Cst Rdctn 10.7%         $   50,000        $   19,000


  Total                           $   9,18,307      $   4,54,461
                                                                         30
                                                            < Back > < Menu >
General Diagram of a Process


INPUTS                                OUTPUTS


People
Material              PROCESS         Perform a service
Equipment



                    A Blending of
Policies          Inputs to Achieve   Produce a product
Procedures           the Desired
Methods                Outputs
Environment                           Complete a task



                                                          31
                                                        < Menu >
Billing Process Diagram




INPUTS                               OUTPUTS


Data entry method
                                     Time to complete a bill
                           Billing
Amount of              Process
personnel training

Method for obtaining                 Number of errors/bills
bill information



                                                                32
                                                               < Menu >
Machining Process Diagram




INPUTS                          OUTPUTS


Drill feedrate
                                Inner diameter (I.D.)
Drill speed         Machining
                      Process
Material hardness

                                Outer diameter (O.D.)
Type of coolant


                                                         33
                                                        < Menu >
Maintaining Profits in highly competitive Environments

                 Total product or service price to customers


     Profits     Profits                   Budget constraints and
                                           competition drive a
                                           lowered price
     Total       Waste
     Cost to     (COPQ)
     Produce                                       Profit           Profit
     or          Theoretical
                 Costs
     Provide     i.e,                              Waste            COPQ
                 Cost of                           (COPQ)
                 Doing the                                          Theoretical
                 right things                                       Costs
                                                   Theoretical
                 right the
                 first time                        Costs
0
        a             b                c                d                e
                                                                                  34
                                                                             < Menu >
Thanks for
 attention!


               35
              < Menu >

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Six sigma

  • 1. Introduction to SIX SIGMA
  • 2. Main Topics What is Six Sigma, an overview  <Process>  need for SS, historical perspective The Philosophies; Deming, Juran & Ishikawa  Knowledge based management;  Basic tools & techniques to obtain knowledge  Advanced tools and techniques to obtain  knowledge 2 .
  • 3. What is Six Sigma; an overview Six sigma is a statistically – based process improvement methodology that aims to reduce defects to a rate of 3.4 defects per million defect opportunities by identifying and eliminating causes of variation in business processes. In defining defects, Six Sigma focuses on developing a very clear understanding of customer requirements and is therefore very customer focused. The Six Sigma methodology is based on a concept called DMAIC: Define, Measure, Analyze, Improve, and Control. The main core of Six Sigma methodology is the application of statistical and other analytical tools in the context of a well disciplined, easy to follow methodology. D Define Define the project goals & customer (internal & external) deliverables M Measure Measure the process to determine current performance A Analyze Analyze & determine the root cause(s) of the defects I Improve Improve the process by eliminating defects 3 C Control Control future process performance < Menu >
  • 4. What is Six Sigma; an overview Six Sigma is mainly focused on following two perspectives; Quality perspective is focused to achieve an output of interest from a process must produce no more than 3.4 defects per million opportunities, where an opportunity is defined as a chance for nonconformance, or not meeting the required specifications. Business results perspective is focused that waste generally called Cost of Poor Quality (COPQ) must be reduced in order to improve net profit margins 20 to 40 % or more. 4 < Menu >
  • 5. The Need for SS; historical perspective Six sigma was developed by Motorola as a way to improve their quality in the mid-1980s, and became well known after GE’s Jack Welch made it a central focus of his business strategy in 1995. About 500 companies have started Six Sigma initiatives. It is the culmination of many years of work by some of the best minds in business and management. Over the last several years, many industries and specific companies like Boeing, IBM, General Dynamics, Johnson & Johnson etc have had severe problems. As consequences of these problems, the companies had either to layoff or trim thousands of their workers / employees. If we are to move forward, there needs to be sufficient emphasis on improved product and service quality. Quality improvement should be a critical part of any business strategy that is designed to generate maximum return on investment, ROI. If quality improvement is synonymous with better, faster and lower cost products and services, how can you not get return on investment? 5 < Menu >
  • 6. The Need for SS; historical perspective The study points out that Six Sigma quality efforts have shown significant achievements / improvements for;  reducing in-process defect levels  reducing wastes or COPQ  reducing the cost of manufacturing  increasing production / yield %  increasing stockholders’ share value << Crestex Achievements >> 6 < Menu >
  • 7. Philosophies; selected quality gurus Deming’s Fourteen Points: 1. Create a consistency of purpose toward the improvement of product and service. Consistently aim at improving the design of your products. 2. Adopt a new philosophy of rejecting defective products, poor workmanship and inattentive service. 3. Do not depend on mass inspection because it is usually too late, too costly and ineffective. 4. Do not award business on price tag alone, but consider quality as well. 5. Consistently improve the system of production and service. Involve workers in this process, but also use statistical experts who can separate special causes of poor quality from common ones. 6. Institute modern training methods. 7 7. Institute modern methods of supervision. < Menu >
  • 8. Philosophies; selected quality gurus Deming’s Fourteen Points: 8. Drive out fear. Great economic loss is usually associated with fear, when workers are afraid to ask the questions or to take a position. 9. Breakdown barriers among the functional areas. Teamwork. 10 Eliminate numerical goals, targets and slogans for your workforce. Setting the goals for other people without providing a plan on how to reach it is often counterproductive. 11 Eliminate work standards and numerical quotas. 12 Remove barriers that discourage the hourly workers from doing their job. 13 Institute a vigorous program from training and education. Education in simple, but powerful, statistical techniques should be required by all employees. Knowledge based management is a an extension of the work by Juran, Demings and Ishikawa with a focus on the “HOWs” 8 < Menu >
  • 9. Philosophies; selected quality gurus The Juran Philosophy Like Deming, Joseph M. Juran spent a good bit of time in Japan during the early 1950’s. Juran developed his philosophy and approach over many years and in 1979, he founded the Juran institute. Juran’s 10 steps 7. Build awareness of the need and opportunity for improvement. 9. Set goals for improvement. 11. Organize to reach the goals (have a plan and an organizational structure). 13. Provide training. 15. Carry out projects to solve problems, 17. Report progress. 19. Give recognition 21. Communicate results. 23. Keep score. 25. Maintain momentum by making annual improvement part of the regular 9 system and process of the organization. < Menu >
  • 10. Philosophies; selected quality gurus The IshiKawa Philosophy What must top management do? 1. Study quality improvement ahead of anyone else in your company and understand the issues involved. 3. Establish the policies towards promoting quality improvement efforts-what the general attitudes will be. 5. Specify the priorities for implementing quality improvement and the short and long term goals. 7. Assume a leadership role in making quality improvement happen 9. Provide a means for educating the people 11. Check to see if quality improvement is implemented as planned 13. Make clear the responsibility of top management 15. Establish a system or cross functional management 17. Drive home the notion that the outputs from your process are inputs to your customers 10 19. Provide leadership towards making a “breakthrough” < Menu >
  • 11. Knowledge based management (KBM)  Introduction  Questions managers need to answer,  Questions managers need to ask.  Modern quality improvement paradigm, 11 < Menu >
  • 12. Knowledge based management (KBM) Knowledge based management is an extension of the works of Deming, Juran, and Ishikawa. Continuous learning leads to knowledge of customer requirements, products, and processes. Which Steps have you taken? Job Security Long term Success Return on Investment (improved bottom Line) Quality Improvement (Better, Faster, Lower cost) Knowledge Knowledge Based Management Means, “TAKING THE RIGHT STEPS” 12 < Back > < Menu >
  • 13. Knowledge based management (KBM) Questions managers need to answer 1. What is your product or service and who are your customers? 3. What perception do your customers have of your product or service? How do you know? 5. Do you know quality issues are important for your company? Which ones? 7. What is the company’s current share of the total market? Can quality improvement initiative assist you in increasing the market share and/or increasing profits? How? 9. Are you actively pursuing quality improvement in your areas of responsibility? How? 11. How many hours have you scheduled that are devoted to the quality issue. 13. How often do you get feedback from the people you manage? What kind of feedback that is it? What do you do with that feedback? 15. What are the right quality-oriented questions managers need to ask their people. What methods and tools can be used to answer them? 13 < Back > < Menu >
  • 14. Knowledge based management (KBM) Questions managers need to answer: 1. Are your people trained to use the best quality improvement tools? What is your ROI from training? 3. Do you have standard procedure for documenting quality improvement efforts? What is it? 5. What barrier your people face when trying to do quality improvement efforts? What are you doing to remove them 7. What matrices are you evaluated on, that relate to quality issues? Are you held accountable for these matrices? What are the specific improvement goals for these matrices? 9. How much waste does your company has? What in $ terms is the company’s Cost of poor quality (COPQ). How much of the total waste is your area responsible for. 11. One year from now what evidence will you have to show that you made a difference. 14 < Back > < Menu >
  • 15. Knowledge based management (KBM) Questions managers need to ask: 1. What processes (activities) are you responsible for? Who is the owner of those process? Who are the team members? How well does the team work together? 3. Which processes have the highest priority for improvement? How did you come to this conclusion? Where is the data that supports this conclusion? For those processes to be improved, 7. How is the process performed? 9. What are your process performance measures? Why? How accurate and precise is your measurement system? 11. What are the customer-driven specifications for all of your performance measures? How good or bad is the current performance? Show me the data. What are the improvement goals for the process? 13. What are all the sources of variability in the process? Show me what they 15 are? < Back > < Menu >
  • 16. Knowledge based management (KBM) Questions managers need to ask: 1. Are any of the sources of variability supplier dependent? If so, what are they, who is the supplier, and what is being done about it? 3. What are the key variables that affect the average and variation of the measures of performance? How do you know this? Show me the data. 5. What are the relationships between the measures of performance and the key input variables? Do any key variables interact? How do you know for sure? Show me the data. 7. What setting for the key variables will optimize the measures of performance? How do you know this? Show me the data. 9. For the optimal settings of the key variables, what kind of variability exists in the performance measures? How do you know? Show me the data. 11. How much improvement has the process shown in the past six months? How do you know this? Show me the data. 13. How much time and/or money have your efforts saved or generated for the company? How did you document all of your efforts? Show me the data. 16 < Back > < Menu >
  • 17. Knowledge based management (KBM) Modern quality improvement paradigm: Around the world all types of organizations have wrestled with how to make their products, services, and associated process performance better, faster, and at lower cost. The problem in our organizations is how to make it happen. Past attempts focused on reorganizing or chasing the “fad of the month.” The height of frustration comes with mandated or regulated supplier quality improvement requirements like ISO 9001, QS 9000, D1-9000, FDA’s process validation, and Quality Systems (QSR) etc. Many other industries have similar requirements or use the Malcolm Baldrige criteria for self evaluation. The puzzle appears to be getting more complicated and can cause people to give up in frustration. This paradigm of letting regulations drive quality improvement is like the old saying, “ We have put the cart before the horse! A Modern Quality Improvement Paradigm 17 < Back > < Menu >
  • 18. Knowledge based management (KBM) KBM Paradigm for Quality Improvement The knowledge Based Management (KBM) paradigm has the cart and horse hitched together in a way that will get us safely and efficiently down the road to success. 18 < Back > < Menu >
  • 19. Knowledge based management (KBM) A Modern Quality Improvement Paradigm SUCCESS 19 < Back > < Menu >
  • 20. Basic tools & techniques to obtain knowledge  Process flow diagram (Flow Chart)  Cause and Effect Diagram  Affinity Diagram  Benchmarking  Common Sense  Failure Mode and Effect Analysis (FMEA)  Input-Process-Output (IPO) Diagram  Quality Function Deployment  Nominal Group Technique  Pareto Chart  Scatter diagram  Run Chart  Histogram  Measures of Central Tendency  Measures of dispersion  Process Capability Measurements  Control Chart 20  Design of Experiment (DOE) < Menu >
  • 21. Basic tools & techniques to obtain knowledge Process Flow Diagram Is a visual representation of all the major steps and decision points in a process. It helps us understand the process better, identify critical or problem areas, and identify where improvement can be made. < Example > Cause and Effect Diagram with CNX Is a graphical representation of the relationship between a given response and the factors that influence this response. It helps us to identify, display, and examine possible causes of any observed condition. Other names are; Ishikawa, fishbone, tree, and river diagram. < Example > Affinity Diagram Is a technique used to cluster related items into a more general group. It helps us to organize verbal information into a visual pattern. Unlike the cause and Effect diagram where we move from the general categories to the more specific, an affinity diagram starts with specific ideas and helps us work toward broader categories, each of which contains several of the more 21 specific ideas. <Example> < Back > < Menu >
  • 22. Basic tools & techniques to obtain knowledge Benchmarking Benchmarking involves gathering information on “best” practices. It helps to provide us with knowledge of the following:  who the industry leaders are,  how we are doing compared to industry leaders, and  what our priorities are for process improvement. Common Sense It may be defined as “good judgment” or “critical thinking” but actually it is a combination of certain traits that someone with common sense should demonstrate. < Example > Failure Mode and Effect Analysis (FMEA) Is a procedure used to identify and assess risks associated with potential product or process failure modes. FMEA is generally accomplished early in the design phase of a new product or process or when design changes occur. 22 < Example > < Back > < Menu >
  • 23. Basic tools & techniques to obtain knowledge Input-Process-Output (IPO diagram) Is a visual representation of a process or activity. It lists input variables and out put characteristics. It helps us in defining a process and recognizing the relationships between input variables and responses. < Example > Quality Function Deployment (QFD) Is a systematic process used to integrate customer requirements into every aspect of the design and delivery of the products and services. It helps us to provide a structure for identifying those design characteristics that contribute most (and least) to customer requirements. 23 < Back > < Menu >
  • 24. Basic tools & techniques to obtain knowledge Nominal Group Technique Is a structured method used to generate and rank order a list of ideas. It helps to prioritize a list of items. < Example > Pareto Chart Is a bar chart for non-numerical categories that rank orders the bars from highest to lowest. It is based on “Pareto Principle” that says that 80% of the effects are due to 20 % of the causes. It helps us to identify the “Heavy hitters”. <Example> Scatter Diagram Is a graphical display of a set of points or ordered pairs. It helps us to visually study the relationship between two variables. <Example> 24 < Back > < Menu >
  • 25. Basic tools & techniques to obtain knowledge Run Chart Is a graphical tool that turns data into information. It helps us to show changes in a process measure overtime. Variation in the data as well as trends and shifts in the process measure are easily seen. < Example > Histogram A histogram is a bar chart for numerical variables. It gives pictorial representation of how the data are distributed. It helps us for visualizing the central tendency and variability of a data set. Measures of central tendency The two most common measures of central tendency are Mean and Median. < Example > 25 < Back > < Menu >
  • 26. Basic tools & techniques to obtain knowledge Measures of dispersion The three common measures of dispersion are the Range, the Variance, and the standard deviation. < Example > Process capability measurements Are used to describe the capability of a process. There are three matrices that are used for this purpose, and most are calculated under the assumption that the critical measurements are normally distributed. The metrics dpm, Cp, and Cpk, all give a numerical value that indicates how well the process is doing with respect to these specification limits. < Example > 26 < Back > < Menu >
  • 27. Advanced tools & techniques to obtain knowledge  Statistical Process Control (SPC)  Design of Experiments (DOE) 27 < Menu >
  • 28. Advanced tools & techniques to obtain knowledge Control Chart A control chart is just a run chart which includes statistically generated upper and lower control limits. Control limits are not specification limits or objectives, but are reflections of the natural variability of the process. Several types of control charts have been developed to analyze variables and attribute data. However, all control charts have the same basic purpose: to provide evidence of whether a process has been operating in a state of statistical control and to signal the presence of special causes of variation so that corrective action can be taken. < Example > 28 < Back > < Menu >
  • 29. Advanced tools & techniques to obtain knowledge Design of experiments, DOE To understand DOE, we must have a good understanding of the term process. In a general sense, a process is an activity based upon some combination of inputs (factors), such as people, material, equipment, policies, methods, and environment, which are used together to generate outputs (responses) related to a product, service, or task. < Example > In conducting a design of experiment, we will purposefully make changes to the inputs (or factors) in order to observe corresponding changes in the outputs (or responses). The information gained from DOE helps us to improve performance characteristics, to reduce costs and time associated with product development, design and production, and to optimize the process. 29 < Back > < Menu >
  • 30. The Need for SS; historical perspective Achievements / improvements through Crestex Six Sigma quality efforts; Achievement Target saving To date saving  S6 Yield Incrs 1% $ 95,675 $ 68,441  Stores Inv Rdctn 15% $ 3,00,000 $ 1,60,000  PG Oprtng Cst Rdctn $ 50,000 $ 4,753  Spare Parts Inv Rdctn 20% $ 50,000 $ 29,649  H Tx Yield Incrs 1% $ 1,20,000 $ 80,385  Proc Fab Rejtn Rdctn 1% $ 2,52,632 $ 92,233  Lm Eff Incrs 1%  Lightng Cst Rdctn 10.7% $ 50,000 $ 19,000 Total $ 9,18,307 $ 4,54,461 30 < Back > < Menu >
  • 31. General Diagram of a Process INPUTS OUTPUTS People Material PROCESS Perform a service Equipment A Blending of Policies Inputs to Achieve Produce a product Procedures the Desired Methods Outputs Environment Complete a task 31 < Menu >
  • 32. Billing Process Diagram INPUTS OUTPUTS Data entry method Time to complete a bill Billing Amount of Process personnel training Method for obtaining Number of errors/bills bill information 32 < Menu >
  • 33. Machining Process Diagram INPUTS OUTPUTS Drill feedrate Inner diameter (I.D.) Drill speed Machining Process Material hardness Outer diameter (O.D.) Type of coolant 33 < Menu >
  • 34. Maintaining Profits in highly competitive Environments Total product or service price to customers Profits Profits Budget constraints and competition drive a lowered price Total Waste Cost to (COPQ) Produce Profit Profit or Theoretical Costs Provide i.e, Waste COPQ Cost of (COPQ) Doing the Theoretical right things Costs Theoretical right the first time Costs 0 a b c d e 34 < Menu >
  • 35. Thanks for attention! 35 < Menu >