1. Six Sigma Quality Engineering
Week 3
Chapters 4 (Define Phase)

2. Chapter 4 Outline Six Sigma Project Team Six Sigma Team Charter
Project Management
Structure of the Define Phase
Define Metrics
Problem Statement Exercise
SIOPC Analysis
Voice of the Customer Analysis
Class Exercise

3. Six Sigma Project Team The team must:
Understand the organizational context for process improvement projects
Know the basic elements of the team charter and review any questions you have about the charter for your own project
Understand the basics of estimating the business impact of a project and be able to relate them to your own project
Be able to identify key players and stakeholders and incorporate them into the communication plan for your own project

4. Six Sigma Team Charter
A team charter is an agreement between management and the team about what is expected.
The charter:
A project charter is a form that has key information about your project. It is used to:
Better define your project
Define what is Critical to Quality (CTQ’s) to the Customer
Write a business case (links project to business goals)
Write a problem and goal statement
Scope a project
State the problem or opportunity
Establish the project goal(s)
Identify criteria for success
List assumptions, risks and obstacles
Communicate the above
Obtain management support

5. Six Sigma Project Charter Example
Process
Process in which opportunity exists
Project Description
Project’s purpose and scope
Project Scope
Define the part of the process that will be investigated
Objectives
Define the baseline, goal & target
Business Case
Define the improvement in business performance anticipated and when
Team Members
Who are the full time team members
Expected Customer Benefits
Who is the final customer?
What benefit will they see and what are their most critical requirements?

6. Six Sigma Project Charter Example
Schedule
Give the key milestones/dates
Define completion date
Measure completion date
Analyze completion date
Improve completion date
Control completion date
Support required
Support needed for any special capabilities

7. Project Management Problem Statement  Objectives  Measures
Should focus the team on a process deficiency
Communicate the significance to others
Objectives
Should address the problem statement
Quantify performance improvement
Measures
Primary Metric(s)
Used to measure success
Consistent with problem statement and objectives
Secondary Metric(s)
Tracks potential negative consequences

8. Project Management Project Problem Statement
A problem is the unsatisfactory result of a job or process
So what? What is the impact on the ‘customer’?
What problem or gap are you addressing?
What impact will closing the gap have on the customer?
How will you know things are better?
It should not include theories about solutions
Remember 5W’s + H to help give more focus
What are the symptoms? What happens when the problem appears?
Where do symptoms appear? Where don’t they appear?
When do symptoms appear? Where don’t they appear?
Who is involved? Who isn’t?

9. Project Management Project Problem Statements A poor problem statement
Product returns are too high and will be reduced by analyzing first and second level pareto charts
A better problem statement
Product returns are 5% of sales resulting in a business unit negative profit impact of $5M and reduced market share of 10%

10. Project Management Project Objectives
Should address the problem statement
Quantify performance improvement
Should also identify timing
Needs to be Measurable, Actionable and Realistic
Quality / Quantity / Time / Cost
A poor objective
Reduce product returns by implementing performance measures and objectives
A better objective
Reduce product returns of product line abc from 5% to 2.5% by the year end, to reduce overall returns by 1% and saving $1M

11. Project Management Measures
Should be consistent with the problem statement and objectives
Primary Metric(s) - used to measure success
Needs to include 3 series, plotted as a function of time:
Baseline performance (average over past 12 months)
Actual performance
Objective / target performance
Secondary Metric(s) - drives the right behaviour
Tracks potential negative consequences
More than one may be required

12. Structure of the Define Phase

13. Define Completion Checklist
By the end of Define, you should be able to describe for your Champion:
What key process is involved (including its Suppliers, Inputs, Outputs, and Customers)
What about the process output is important to customers
What customers currently think of the process and its output
Why this project is important to your organization and what business goals the project must achieve to be considered successful
Who the players are on the project (sponsors, advisors, team leader, team members)
What limitations (budget, time, resources) have been placed on this project

14. Six Sigma Problem Statements
A problem statement has the form:
“WHAT is wrong
WHERE it happened
WHEN it occurred
TO WHAT EXTENT and
I KNOW THAT BECAUSE…”
A problem statement:
Does not include causes of the deficiency.
Does not include likely actions or solutions.
Is clear and concise and specific.
A good problem statement is essential to a good start.

15. What is Wrong and Where Does it Happen?
A good problem statement will clearly define WHAT is wrong. Examples:
“Customers are not satisfied with my product…”
“Yields are suffering…”
“Reliability is insufficient…”
A good problem statement will clearly define WHERE the problem occurs. Examples:
“Customers in the Midwest Region are not satisfied with my ordering service…”
“Equipment availability for Urgent Care is poor…”
“Document correctness is insufficient in Billing…”

16. When Was This Seen?
A good problem statement will clearly explain WHEN the problem occurred.
“Customers in the Midwest Region are not satisfied with my ordering service. Starting in January…”
“Equipment availability for Urgent Care is poor. Since the consolidation of services…”
“Document correctness is insufficient in Billing after the introduction of flexi-forms”

17. How Widespread is the Problem?
A good problem statement will clearly explain the EXTENT of the problem.
“Customers in the Midwest Region are not satisfied with my ordering service. Starting in January, complaints have increased 15%…”
“Equipment availability for Urgent Care is poor. Since the consolidation of services, delays caused by lack of availability have increased by 40%…”
“Document correctness is insufficient in Billing after the introduction of flexi-forms. Errors have increased 28%…”

18. What is the Standard?
A good problem statement will clearly explain HOW I KNOW there is a problem. Examples:
“Customers in the Midwest Region are not satisfied with my ordering service. Starting in January, complaints have increased 15% at a time when complaint rates from other regions have remained static”
“Equipment availability for Urgent Care is poor. Since the consolidation of services, delays caused by lack of availability have increased by 40% when the patient traffic has increased by only 5%”
“Document correctness is insufficient in Billing after the introduction of flexi-forms. Errors have increased by 28% when the goal of the project was to reduce errors by 90%”

19. Primary Metric
Primary Metric (used to measure process performance)
The gage used to measure your success
It must be consistent with the problem statement. It is used to track progress towards your goals and objectives.
It is usually reported as a time series graph of:
Baseline data – averaged over a year, if available
Target performance – goal or objective
Actual (current) performance
Examples:
Rolled throughput yield (RTY) [versus FTY]
Process Sigma Level or Ppk
Defects per unit (DPU) [versus Proportion Defective]
The Primary metric is the focus of the project objective statement.
It is directly influenced by the behavior of the process defined by the project scope, and is the primary measure of your success.
The primary metric reflects the “Y” (i.e. Y=f(x)) of the process to be improved.
The primary metric(s) should focus on specific aspects of the process, correlate directly to process performance, and be controllable by the project team.
Generally, primary metrics fall into three categories: defect or error rates, cycle time, or usage/consumption rates.
It is the metric that will be tracked by the Process Owner after the project is in realization.
It must reflect the original problem and the results of the changes made during the project.
The primary metric is the metric to be tied to the financial goals of the project.
The Primary Metric is how the success of your project will be measured

20. Sample Primary Metric Product Returns Return $ As % Sales $ 7% 6% 5%0% 1% 2% 3% 4% 5% 6% 7%
Aug-99
Sep-99
Oct-99
Nov-99
Dec-99
Jan-00
Feb-00
Mar-00
Apr-00
May-00
Jun-00
Jul-00
Aug-00
Sep-00
Oct-00
Nov-00
Dec-00
Return $ As % Sales $
Baseline
Actual
Objective

21. Secondary Metrics Secondary Metrics: Examples:
Measurements of key input/output features, cycle time, or process resource usage that may improve as a result of meeting objectives using the primary metric
Can be “Drivers” or “Riders” – i.e. Vital X’s impacting the project (Primary Metric) or “Good Consequential Metrics”
Examples:
Primary Metric : Cycle Time
Secondary Metric : Reduced backorders
Primary Metric : Defects per Unit
Secondary Metric : Available Floor Space

22. Sample Secondary Metric
Pct of Orders Shipped within 24 hours
90%
91%
92%
93%
94%
95%
96%
97%
98%
99%
100%
Aug-99
Sep-99
Oct-99
Nov-99
Dec-99
Jan-00
Feb-00
Mar-00
Apr-00
May-00
Jun-00
Jul-00
Aug-00
Sep-00
Oct-00
Nov-00
Dec-00

23. Problem Statements – Exercise
Break out into your groups. Using the guidelines of this module, each group will rewrite these problems statements to make them better:
The complaint rate for our customer service group is too high, probably due to all of the new people in the department.
Food Services order errors are too high. They must be reduced.
Reduce measurement errors by cleaning the instruments more often.
Consumable use is increasing too fast. Reduce consumable cost.
Long term rolled throughput yield for Accounts Payable billing this year is 83% versus a past RTY of 95%.
Long wait time for phone service. It takes customers about 30 minutes to get an order completed.

24. What is a SIPOC? S U P L I E R C T O M Outputs Inputs Process
A high-level map of your process that includes:
Approximately 4-7 process steps
Inputs that feed the process
The Suppliers (sources) of those Inputs
Outputs that result from the process
The Customers (recipients) of those Outputs
Keep it simple, and think carefully about the scope

25. Why Create a SIPOC Map? SIPOC helps your team to:
Define process boundaries (starting and ending points)
Identify data collection opportunities
Clarify who are the true customers of the process
To avoid “scope creep.”
To identify likely sources of performance problems
To expose fundamental issues early in the project that could change the direction of the team

26. When to Create a SIPOC In the Early Stage of Any Project!
Labor
Material
Ideas
Information
Environment
Process
Physical products
Documents
Services
Decisions
All work can and should be considered as a process

27. Questions to Help with SIPOC
From the Input/Supplier End:
What items or information gets worked on?
Where do the items or information come from?
What effect do the inputs have on the process and on the outcome?
How does this process start?
From the Middle – Inside the Process:
What major steps happen to convert inputs into outputs?
What people or resources perform those steps?
From the Output/Customer End:
Why does this process exist?
What products, services or outcomes does this process produce?
How does this process end?
Who uses the outputs or experiences the results from this process?
Who provides funding or staffing for the process activities, and who cares about the quality of outcome?

28. SIPOC - Process Development Example

29. SIPOC Workshop Instructions:
Prepare a SIPOC for the process of baking your cake. Use the guidelines on the following page.
Be prepared to share your work with the class.
15 minutes to prepare + 2 presentations (5 minutes each)
Suppliers
Inputs
Process
Outputs
Customers
lass
Settings
Start
Stop

30. How to Create a SIPOC Map
Name the process
Identify, name, and order the major process steps (approximately 4-7 steps)
Clarify the boundaries of the process – where it starts and where it stops
List key outputs and customers
List key inputs and suppliers

31. SIPOC– a Foundation for Next Steps
The list of Customers from your SIPOC are the starting point for the Voice of the Customer (step 3)
The major process steps (macro map) from your SIPOC are the overview for later detailed process mapping
The Inputs, Process Steps, and Outputs on your SIPOC generates ideas for what can and should be measured, which feeds the Data Collection Plan in the Measure phase
The SIPOC contains clues about potential root causes that drive performance.

32. Voice of Customer
Understand why the Voice of the Customer (VOC) is critical
Know how to create a plan for gathering VOC data
Know both reactive and proactive ways to gather VOC information
Know how to analyze data through the use of affinity diagrams and Kano diagrams
Be able to use a CTQ tree diagram to identify customer requirements and set specifications for them

33. What Is the Voice of the Customer?
The term Voice of the Customer (VOC) is used to describe customers’ needs in a process improvement effort and their perceptions of your product or service.

34. Why VOC Is Critical VOC data helps an organization and a project to:
Decide what products and services to offer
Identify critical features and specifications for those products, process outputs and services
Decide where to focus improvement efforts
Get a baseline measure of customer satisfaction to measure improvement against
Identify key drivers of customer satisfaction
The purpose of VOC activities is to identify the key business drivers of customer satisfaction.
It is only through understanding the customer that you can effectively design, deliver and improve products and services.
Understanding the VOC will be necessary in order to focus the improvement project properly and to develop the right measures.

35. Why Collect VOC Data Customer requirements change constantly
Specifications tend to focus on technical data only

36. VOC Process Outcomes A list of customers and customer segments
1. Identify customers and determine what you need to know
2. Collect and analyze reactive system data then fill gaps with proactive approaches
3. Analyze data to generate a key list of customer needs in their language
4. Translate the customer language into CTQs
5. Set specifications for CTQs
Outcomes
A list of customers and customer segments
Identification of relevant reactive and proactive sources of data
Verbal or numerical data that identify customer needs
Defined Critical to Quality requirements (CTQ)
Specifications for each CTQ
Based on Rath & Strong

37. VOC Step 1: Identify Customers & Determine What You Need to Know
1. Identify customers and determine what you need to know
2. Collect and analyze reactive system data then fill gaps with proactive approaches
3. Analyze data to generate a key list of customer needs in their language
4. Translate the customer language into CTQs
5. Set specifications for CTQs
Goal
Identify your customers
Decide what you need to know about their needs
Decide when and how you will get this information

38. Who Are Your Customers?
What are the outputs of your process? Who are the customers of that output?
Are there particular groups of customers whose needs are especially important to your organization and project success? S U P L I E R C T O M
Outputs
Inputs
Process
AB-588.2

39. Common Customer Segments
Customer status: Former Customers, Current Customers, Customers of Competitors, Substitute Customers
Where they are in the “customer chain”
Internal user  Distributor End user
Geography
Industry, Division or Department
Demographics
Sometimes a special effort must be made to ensure the needs of all customers are considered. Segmentation can help you ensure that small but important customer segments are represented in your analysis, and help you identify important differences that could affect the purpose or focus of the improvement effort.
For example, to see if the needs of high-volume customers differ from those of low-volume customers, analyze the data for the two groups separately
Sometimes different methods will be required to get information on different customer segments. For example, you may be able to use customer surveys to understand current customers, but may instead want to interview former or potential customers in order to get a clearer idea of their precise issues.
Substitute Customers are those who use a competing solution to meet a need that could be met with your process, product or service (for example, Greyhound and Trailways bus riders are substitute customers for the airlines).

40. Do You Have Customer Segments?
If your customers seem to have similar needs across the board, you don’t necessarily have to divide them into segments
If you suspect that different groups will have significantly different needs, and that these differences will influence how you structure your process, product, or service, then it will be worthwhile to think in terms of segments

41. Deciding the What and Why
Revisit your charter—what is the purpose of your project?
How does your purpose relate to customer needs?
What do you need to know about the needs of the customers you’ve identified to make sure your project’s purpose stays on track?

42. Sample Questions For all customers, you should ask questions such as:
1. What is important to you about our process/product/service? (Ask them to rank each of these needs in order of importance.)
2. What do you think of as a defect?
3. How are we performing on the areas you consider important?
4. What do you like about our product/service?
5. What can we improve about our process/product/service? What can we do to make your job easier?
6. What specific recommendations would you make to us?

43. VOC Step 2: Collect and Analyze Reactive and Proactive Data
1. Identify customers and determine what you need to know
2. Collect and analyze reactive system data then fill gaps with proactive approaches
3. Analyze data to generate a key list of customer needs in their language
4. Translate the customer language into CTQs
5. Set specifications for CTQs
Reactive systems
Information comes to you whether you take action or not
Proactive systems
You need to put effort into gathering the information

44. Typical Reactive Systems
Customer complaints (phone or written)
Problem or service hot lines
Technical support calls
Customer service calls
Claims, credits, contested payments
Sales reporting
Product return information
Warranty claims
Web page activity
Reactive systems generally gather data on:
Current and former customer issues or problems
Current and former customers’ unmet needs
Current and former customers’ interest in particular products, process outputs or services
Reactive systems:
Most businesses & processes have repeated daily contact with their customers during which customers share their opinions about what is important to them.
Generally this contact information is used to solve customers’ immediate needs.
It is important to explore this often underused source of information before attempting to gather new information. Much more can be learned about improving existing processes, products and services if extra effort is put into categorizing and analyzing the data from these sources, and reviewing them periodically to identify patterns, trends and other opportunities.
Feedback from customers is easily lost. Extra effort must be made to preserve as much of this information as possible.

45. Proactive VOC Systems Interviews Focus groups Surveys Comment cards
Data gathering during sales visits or calls
Direct customer observation
Market research, market monitoring
Benchmarking
Quality scorecards
Proactive Systems
Proactive systems are those in which you initiate contact with customers, as for example face-to-face interviews or customer visits.
Face-to-face interaction with customers can provide a wealth of data and knowledge that is unobtainable by other means, for example how they use the product or the process output.
If you have to design and initiate targeted customer contact to gather information specifically related to your project, look for ways to integrate your effort with ongoing customer contact in your organization.
For example, request that process owners, customer service or marketing staff ask additional questions during regular contact with customers, or see if customers will allow you to observe their workplace during a scheduled visit.

46. VOC Plan: Final Touches
The last step to finishing your data collection is to decide specifically how you will obtain the information, within what time frame the data gathering should take place, and how you will record the data

47. VOC Step 3: Analyzing Customer Data
Goal is to generate a list of key customer needs in their language.
It is helpful to summarize this information in a meaningful way.
1. Identify customers and determine what you need to know
2. Collect and analyze reactive system data then fill gaps with proactive approaches
3. Analyze data to generate a key list of customer needs in their language
4. Translate the customer language into CTQs
5. Set specifications for CTQs

48. Questions? Comments?