DFSS, Pre-define and Define (DMAIC) Tutorial

2.1 Welcome

Hello and welcome to the Lean Six Sigma Black Belt program offered by Simplilearn. We will be dealing with Section number two, DFSS: Pre-Define and Define (DMAIC (pronounced as “d- mack”)), in this session.

2.2 Agenda

Let us now look into the agenda of the section. This section namely, DFSS: Pre-Define and Define (DMAIC (pronounced as “d-mack”)), is divided into three lessons. In the first lesson, we will understand what Design for Six Sigma (also known as DFSS (pronounced as D-F-S-S)) is, and how it differs from DMAIC. In the next lesson, we will discuss pre-define activities and finally, in the third lesson, we will understand define. Let us start off by looking into the first lesson, DFSS – Design for Six Sigma and DMAIC versus DFSS.

2.3 DFSS Pre Define and Define(DMAIC)

In this lesson, we will cover DFSS (pronounced as D-F-S-S) or Design for Six Sigma, and also provide a comparison between DMAIC and DFSS.

2.5 Agenda

We will begin this lesson by understanding design for Six Sigma or DFSS (pronounced as D-F-S-S). Then we will move on to look into the DFSS (pronounced as D-F-S-S) approach to problem solving, followed by DMAIC (pronounced as “d-mack”) approach to problem solving. After that, we will do a comparison between DMAIC and DFSS approaches. No methodology is complete without tools; so next, we will look into the details of several DFSS tools that are available, and then toll gate review will be discussed. We will then move on to understand benchmarking, MSA, and VOC. We will continue with the agenda in the next slide.

2.6 Agenda(Contd.)

In this section, we will compare the needs and requirements. We will also understand KJ diagram, quality function deployment, Kano model, HOQ (pronounced as H-O-Q), and AHP (pronounced as A-H-P). Finally, we will discuss Pugh matrix for concept selection, sample Pugh matrix, Monte Carlo simulation, and design for X. Now let us begin with design for Six Sigma in the next slide.

2.7 Design for Six Sigma(DFSS)

What is Design for Six Sigma? The Design for Six Sigma or DFSS (pronounced as D-F-S-S) approach helps us to systematically determine the needs of the customers and business, and provide a framework to drive those needs into the product, process, or service solution. Traditional Six Sigma DMAIC (pronounced as “d-mack”) methodology seeks continuous improvement of a process that already exists. DFSS on the other hand helps in getting the process right, the first time itself. Design for Six Sigma (also called as DFSS) changes the perspective of the user on the way he or she thinks about creating the new process. The aim is to create the process considering the “end” in mind. It always strives to optimally build the efficiencies of Six Sigma methodology with a measurably high process-sigma into the process, before implementation. Implementation of DFSS provides confidence that the business has made active effort to understand the customer needs while planning and creating the product or service, rather than reacting to customer complaint and issues. Business Design for Six Sigma offers two approaches under its umbrella namely DMADV (pronounced as "d-mad-vee”) (Define, Measure, Analyze, Design, & Validate) and IDOV (pronounced as I-D-O-V) (Identify, Design, Optimize, & Validate). In the following lesson, we will understand the DFSS approach to problem solving.

2.8 DFSS Approach to Problem Solving

What is the DFSS Approach? Typically the DMADV (pronounced as "d-mad-vee”) approach is used for implementing Six Sigma projects in DFSS. The stages are explained below: In the first stage, which is the Define phase, the customers’ requirements are defined. In Measure which is the second stage, the customer requirements are measured. Analyze or the third stage refers to the different ways to meet the customer requirements and forecasting possible variability. In the fourth stage, design, the integration of the key findings of analyzing to build a product or service happens. In the final stage or the validate stage, the product or service is test run to understand the real time performance of the process or product. The complexity of these stages means a DFSS project on an average runs much longer than a DMAIC project. Let us look into DMAIC approach to problem solving, in the next slide.

2.9 DMAIC Approach to Problem Solving

DMAIC process starts with the Define phase in which we define the problem. This is a critical phase because if we do not do this right, we might get on a wrong track solving something else and not the root-cause of the problem in hand. Next is the Measure phase, in which current performance of the system is assessed and problem is measured. Once we have the data about the process and problem, the next step is to analyze the variations in the process. This will help understand the root-causes that lead to issues in product and services. The next phase is to pilot improvements. In this phase, the process is improved to solve the problems. In the end, there is the control phase, which ensures that the process is controlled and we can sustain the improvements. In the next slide, we will discuss the difference between DMAIC and DFSS.

2.10 DMAIC versus DFSS

How is DFSS different from DMAIC? Let us first understand the differences. If we look into both approaches conceptually, we find that DMAIC is an approach to improve existing processes while DFSS is an approach to create new products or processes. Another difference is that, while DMAIC focuses on one or two CTQs (That is: Critical to Quality) provided by the customer and aims to improve the performance of those CTQs, DFSS focuses on delivering a product or a service that meets all the CTQ metrics. Benchmarking is another difference. Though it is not an integral concept to most DMAIC efforts, benchmarking plays a crucial role in DFSS projects. While there are some major differences between these two approaches there are several similarities also. The first one is the interchangeable use of some tools between DFSS and DMAIC approach. Next similarity is that, both DFSS and DMAIC strive for Six Sigma levels of performance. And last but not least, both are built on Six Sigma philosophy.

2.11 DFSS Tools

Mentioned in this slide are the different DFSS tools, which will be explained in due course of this training. The tools are: Toll gate review; Benchmarking; MSA (Measurement system analysis); VOC (Voice of the customer); Needs versus requirements; KJ Diagram (developed by Kawakita Jiro); QFD (Quality function deployment); Kano (pronounced as kah-no) model; HOQ (house of quality); AHP (analytic hierarchy process); Pugh matrix for concept selection; Monte Carlo simulation; and Design for X.

2.12 Toll Gate Review

In this slide, we will discuss what toll gate review is, and its context in a Six Sigma project. In toll gate review, the project status is reviewed at the end of every phase by the senior management, Six Sigma team, and the technical staff. It is used to understand if the project has made adequate progress, and if the product or the service is on target to meet what the customer wants. As per the review, each stage must have a list of deliverables set out. During the course of the stage, the deliverables are attempted to be met; and in the ensuing stage review, the deliverables are reviewed. Apart from these, toll gate reviews also allow the team to eliminate obstacles in the way of the project completion.

2.13 Benchmarking

In this slide, we will understand benchmarking. Benchmarking is the process of identifying industry's best performance or best practices from another industry, and comparing them with their own business processes and performance metrics. These are then fixed as part of the standard operating procedure of the company. There are three types of benchmarking – Internal, competitive, and functional. They are explained below. In internal benchmarking, we can identify the best practices in a business. Competitive benchmarking allows us to research on the products or services of the competitors. Functional benchmarking will let us identify and study organizations that are considered ideal in the function. Let us now discuss the limitations of benchmarking. What worked at other companies may or may not work in our company; therefore, evaluate and confirm the feasibility of the solution before implementing it. Benchmarking can also kill creativity.

2.14 MSA

Let us now learn what MSA is. MSA stands for measurement system analysis. It is analysis and validation of the measurement system. Measurement system analysis helps in achieving higher accuracy of measurements and minimizes the risk of flawed data. As one can imagine, flawed data could lead to flawed analysis and further flawed inference. Getting this done in the beginning of the Six Sigma project is very important. MSA involves six factors – repeatability, reproducibility, stability, linearity, bias, and discrimination. As per automotive industry action group (also known as AIAG (pronounced as A-I-A-G)), the guideline based on measurement error percent is as follows: If the measurement error is under 10percent, measurement system is acceptable. If the measurement error is between 10 percent and 30 percent; measurement system is acceptable, but with conditions. In the case of measurement error greater than 30 percent, measurement system needs correction. Detailed process to conduct MSA for different data types is explained in Section 3 with relevance to DMAIC approach along with the necessary tools. In the next slide we will be dealing with VOC.

2.15 VOC

Now, let us discuss VOC (pronounced as V-O-C). VOC stands for voice of customer. VOC is basically used to capture the stated or unstated needs or requirements from the internal and external customers. Within any organization, there will be multiple customer voices: the procuring unit, the user, and the supporting maintenance unit. Within those units, there may also be multiple customer voices. The project team must consider these diverse voices while developing designs. Focus groups and customer surveys are popular techniques used for collecting voice of customer, and in understanding their needs. This will help in getting the information directly from people to whom it matters. One of the first things a Black Belt must know on the receipt of VOC comments, whether in DFSS or DMAIC project, is that these comments may be raw and need to be categorized and analyzed systematically. This is important to note because the Black Belt may often assume that the VOC comment can be taken as it is. VOC is sometimes also referred to as VOTC (Voice of the Customer.)

2.16 Needs Vs Requirements

In the last couple of slides we have discussed a lot about identifying customer needs and requirements. In this slide, we will understand in detail, the differences between needs and requirements. Requirements are explicit statements stated by the customer. The customer may have certain view of the things, and based on that comes up with stated requirements. It sometimes may not reflect the true needs of that customer or other customers. Often it is observed that requirements that are written by somebody in isolation and interpreted by somebody else. There is a chance of misinterpretation here, which may lead to misunderstanding and mistakes. These requirements are explicitly stated by the customers and sometimes may not reflect the true needs. That brings us to the next topic, which is needs. Needs are something that the consumer actually wants but is unable to state or specify in words, in the requirements. Also, whatever is mentioned in the requirements might be incomplete. Needs are implicit requirements that need to be understood by the supplier while delivering what the customer wants. For example, the customer might provide an explicit requirement of “Coffee”. There are several implicit needs in this one word requirement, like temperature, milk, sugar, etc. As we can see, there is a lot of possibility for misunderstanding or assumption related mistakes here. The customer might need cold coffee or hot coffee, without milk, or no sugar, etc. That is the reason why it is very important to understand the difference between needs and requirements. In short, while capturing voice of the customer, we need to ensure that we capture not just the explicitly stated requirements by the customer, but the accurate implicit needs as well. In the next slide, let us look into KJ diagram.

2.17 KJ Diagram

KJ Diagram is one of the most used tools in any Six Sigma DMAIC Black Belt project. The affinity diagram was developed by Kawakita Jiro to help in discovering meaningful groups of ideas within a raw list. It was named after him as KJ Diagram or KJ Analysis. KJ Diagram sorts out disparate items from multiple sources into few essential statements that can be used to pictorially represent affinity between items. KJ Diagram or Affinity Diagram should be used by the Black Belt immediately after he collects the customer requirements from the VOC comments. For example, there can be multiple reasons for getting late, like oversleeping, late arrival of bus, chatting with friends, arrival of guests at home, etc. With the help of KJ Diagram we can sort these out under the headings: Sleeping habits, guests, meeting friends, etc.

2.18 Quality Function Deployment(QFD)

Now let us understand what quality function deployment or house of quality (HOQ) pronounced as H-O-Q)) is. QFD is a systematic approach for transitioning customer needs to design requirements. It shows the competitive strengths of our product versus competitors’ products in the same niche. QFD will also show the possible weaknesses in the product in terms of adhering to the customer’s need (in DMAIC and DFSS projects). QFD was first developed by Professors Shigero Mizuno and Yoji Akao. The first step in QFD is, doing a thorough understanding of VOC and KANO model (which will be explained briefly in the next slide).QFD can be extended to house of quality (also known as HOQ) to get a better understanding of process and customer needs. They are covered in detail in the DMAIC approach and are also a part of the toolkit.

2.19 Kano Model

Let us now discuss the popular KANO Model. KANO model assesses levels of customer satisfaction by ranking them on three parameters namely, basic needs, performance needs, and delighters. Basic needs, also known as unspoken requirements, are requirements which people take for granted and hence are called unspoken requirements. Performance needs are spoken expectations or stated requirements. This is something that is explicitly asked by people; usually more is better. That is the reason it is called spoken expectations or stated requirements. Delighters are also known as unspoken excitement attributes. These are attributes that are not asked for but will make anyone delighted by its presence. Every product will have its own set of expectations from a customer. For example, if we wish to buy a car we would expect windows, brakes, gears, and tires to be provided. These are basic needs features. We typically would not give these as explicit requirements, but would expect a car to have it. Now let us discuss performance needs, by taking the example of car. We will look into mileage, which comes under performance needs or expectations. If the manufacturer doesn’t give the quality, we get dissatisfied. If he does, we get satisfied. These set of features are typically used to compare one product with another product, and sometimes are the factors to influence decision of the customer for purchasing it. Let us understand the third parameter, i.e., unspoken excitement attributes, considering the same example. Won’t car lock alarm sound exciting to any customer? It would. Especially, if it is something that is not asked for and still when we get it we will become delighted. That doesn’t mean that if car alarms are not provided, we would be dissatisfied. There are many such items that are typically not known to the customer and when the customer gets it, they will be delighted. We will continue with Kano model in the next slide as well.

2.20 Kano Model(Contd.)

According to the model, the basic requirements of a product must be met in order that the product is successful. Also, the performance requirements should be prioritized based on what the customer wants, and should be delivered in order to stay in competition and keep the customer. The exciting requirements should be factored into the product as part of a breakthrough strategy differentiating it from other competitors and ways to attract new customers. It is important to note that the requirements should be sought proactively and not reactively. That means we should speak to the customer and gauge his needs and not wait for the customers to come and tell us what they want.

2.21 Kano Model(Contd.)

In this slide, we will see a graphical representation of the Kano model. The X-axis runs from left to right representing not implemented to fully implemented. The Y-axis runs from bottom to top representing dissatisfied customer to satisfied customer. The first curve-line we should look at is the green coloured curve-line. This represents basic needs of the customer. It starts in the left-bottom section and move towards "neutral satisfaction", as it is fully implemented. That means, if all the basic needs are successfully implemented, the customer will also move from dissatisfied to neutral. Please note that it may not be able to get higher than this. Next, we will notice the blue colour diagonal line from left-bottom going towards right-top. This line represents performance needs. When the blue colour line is in "not implemented" part, there will be dissatisfied customers; and as the line moves towards fully implemented, we get satisfied customers. And finally the delighters, it is represented in maroon curve-line on the top. Though something extra can excite or delight the customer, he is satisfied even if it is not fully implemented. And, the satisfaction level increases as these features get implemented.

2.22 HOQ

Now let us understand what HOQ is. HOQ stands for house of quality, and in simple words it is an extension of the quality function deployment. Creating a house of quality (also known as HOQ) will help the team to organize their thinking in a structure and presentable way. This allows them to reach towards a common consensus on the prime customer needs. The HOQ ensures all CTQs of customers are mapped, identified, and translated to the organization. It also acts as a tool for planning and organizing CTQs at all steps of design and development. The HOQ is an L-Shaped matrix that allows the team to quantitatively analyze the relationship between customer needs and service features. Let us continue with HOQ in the next slide as well.

2.23 HOQ(Contd.)

While building or updating the House of Quality (HOQ), four phases are to be focused on. We will now discuss each phase one by one. Phase 1 is product planning. This is the phase where the customer needs are translated to prioritized top company metrics or measures. All the features of a product cannot have equal weightage. Doing this, helps in identifying key features that the customer needs, and prioritize them accordingly. Phase 2 is part planning. Here, all the design requirements generated in the phase 1 of product planning are translated to part characteristics. The output of this is Part Plan in the HOQ. Phase 3 is process planning. Once all the part characteristics are identified map them to process design and plan. Production planning is the fourth phase. Now since everything is in place, take the process characteristics and move it to production and process requirements. Please refer to the HOQ template that has been provided in the Black Belt toolkit.

2.24 HOQ(Contd.)

In this slide, we will see a snapshot of the HOQ template. We can find the HOQ templates ready to use. Locate the file name HOQ template in the toolkit.

2.25 AHP

Let us learn what AHP is in this slide. AHP stands for analytic hierarchy process. It is a structured technique based on mathematics and psychology for organizing and making complex decisions, by large and cross functional groups. All the information available for the improvement project related to the product performance, service quality, process data, etc., is decomposed into a hierarchy of alternatives and criteria. This gives a good pictorial view and insight into the data. This information is then synthesized to determine relative ranking of alternatives that help people in decision making. With this technique, we will be able to compare both qualitative and quantitative information using informed judgments to derive weights and priorities. Now let us look into the process for using AHP. First step is to model the problem as a hierarchy that has the goal and alternatives. In the next step, establish priorities. Synthesizing judgments to establish overall priorities in hierarchy is the third step. In the fourth step, check consistency of judgments. In the fifth step, arrive at a final decision based on the process. AHP is a useful tool to arrive at an informed decision, when there are multiple concepts that need to be narrowed down using the data and information available from the process and product.

2.26 AHP(Contd.)

In this slide, we will see a pictorial representation of the Analytic Hierarchy Process. Here is an example to understand AHP in detail. Let us take a scenario, where we need to select a Leader. The criteria for selecting the leader are many – in any selection process all criteria cannot have the same weightage. So, in the yellow boxes, we see each of the criteria with the weightage, which collectively sums up to 1.0. There are three alternatives for the leadership namely, Tom, Dick, and Harry. And when all the criteria are applied to each of the alternative candidate, it will help get a weightage for each alternative candidate. These are represented in pink colour. This helps in choosing the leader using the information that is available, and applying the set of weightage as needed.

2.27 Pugh Matrix for Concept Selection

In this slide, we will learn about Pugh Matrix for concept selection. This is a very important tool that is used in almost all DFSS implementations. Pugh matrix is a method for selecting a concept amongst multiple concepts by using a scoring matrix, and is used in almost all DFSS implementations. It is closely tied to the QFD and is in the form of a prioritization matrix. Options are scored relatively as better than, worse than, or neutral. Score 1 is given for a solution better than the current solution. Score 0 is given if the solution is the same in effectiveness, and score a negative 1 if the solution is worse than the current solution. This method is effective only when we have multiple solution alternatives, and is necessary to choose one for our project deployment. Pugh Matrix for concept selection tool has been provided as part of the toolkit. Refer to the tool and facilitator for guiding through the steps shown in the next slide to know how this tool is used.

2.28 Pugh Matrix for Concept Selection(Contd.)

In this slide, we will understand how to update the Pugh matrix. The process is as follows: First, choose or develop the criteria for comparison. Then, select the alternatives or new solutions to be compared with. In the third step, generate scores for each solution; better solutions are to be scored as positive 1, neutral solutions as 0, and worse solutions as negative 1. In the fourth process, compute the final score based on the scoring done. It is always important to ensure the presence of a Process Expert in updating the Pugh matrix for selecting concepts. The Black Belt’s responsibility is to ensure the Process Expert’s attendance.

2.29 Sample Pugh Matrix

In this slide, we will see a sample Pugh matrix updated for use. Here is a sample Pugh matrix. The first column lists down all the criteria for comparison. The second column is an optional column to provide priority of each of the criteria. Here, higher the number means higher priority. Next column is baseline, if we continue the current system; the Pugh score will be “0” for each criterion, as we are not making any change to the system. The next 2 columns are for alternative solution, one column for scores for new system if chosen; and the next column is an alternative if we choose to enhance old system. Pugh score of 9 means it will improve the system significantly, 3 would be when the updated or new system will be noticeably better than the existing system. Negative 9 would be to represent if the new or updated system is going to have negative impact compared to the current system. So, negative nine in “time to implement” means the new system will take significant time to implement new system. Since enhancing the existing system will have moderate negative impact, it has been assigned the value negative three. At the end, once we have values for each of the criteria, sum up all these values and get the final Pugh value. The higher the score, the better is the alternative.

2.30 Monte Carlo Simulation

Let us learn about Monte Carlo simulation in this slide. Monte Carlo simulation is a computer simulation technique that allows people to factor in risk in qualitative decision making. For any choice of action, it provides a list of possible outcomes along with the probabilities of their occurrence. This information helps in decision making. The simulation also shows extreme events, i.e., events that have maximum probability (an example would be sun during summer, snow during winter etc.) and least probability (example would be earthquake) to occur, and also the events that lie right in the middle of a typical probability distribution. Here output values are sampled randomly from input probability distributions. It is important for a Black Belt to understand how Monte Carlo Simulations work. Monte Carlo Simulations and its analysis should be done under the guidance of the Master Black Belt.

2.31 Design for X

Let us learn about design for X in this slide. Design for X, also known as DfX (pronounced as D-F-X), is a summary of a wide collection of specific design guidelines. Each design addresses a particular characteristic of a product by which the customer may be affected. Design for X can come and help in any phase of the product cycle. During each phase of typical product cycle, "Design for X" addresses the issues in the following ways. In development phase, one can use design for test and design for safety. During production phase, design to cost, design to standards, etc., can be referred. In the utilization phase, design for ergonomics and design for aesthetics is needed to help. And finally during disposal phase, we will have to take into consideration design for environment.

2.32 Summary

Let us summarize key learning points about DFSS, in this slide.In this lesson, we have learnt what DFSS is, and how it is different from DMAIC. We also understood the similarities between DMAIC and DFSS. Various steps in a typical DFSS cycle were also discussed. We also learnt about some tools that are used concurrently in DFSS and DMAIC. Please note that a DMAIC Black Belt should know how a DFSS approach works. He needs to learn the approach of DFSS by going in details of DFSS Black Belt. With that we come to the end of Lesson 1 of this section. Let us start with lesson 2, titled Pre- define activities, in the next slide.

2.33 Lesson 2 Pre Define Activities

In this lesson we will learn about the activities that are to be done before getting into define phase. These are called Pre-Define Activities.

2.34 Agenda

In this lesson we will learn about: Pre-requisites of a Six Sigma Project; Qualifications of a Six Sigma project; Cornerstones of a Six Sigma project; Six Sigma Deployment Cycle Plan; 10 Point Ongoing Project Evaluation; Project Prioritization Matrix; Enterprise Wide versus LOB (pronounced as L-O-B) View; and Enterprise Wide – Roles and Responsibilities. We will also look into Net Present Value, Internal Rate of Return, and an example including both. Please note that Pre-define is not the name of a phase or a stage. In a classical DMAIC (pronounced as d-mack) approach, Define is the first phase. Before starting the Define phase there are some activities that are to be done. Those activities are mentioned in the Predefine activities lesson. We will discuss prerequisites of a Six Sigma project in the next slide.

2.35 Prerequisites of a Six Sigma Project

The prerequisites help a Black Belt answer if this could be a possible Six Sigma project. Often, it is the Project Champion who sets up the case of the project, and is not technically aware of which approach needs to be used. Before beginning a six sigma project, the black belt needs to answer the following list of questions: First question is, are there issues in the process or product or service quality? The next question would be – Is there a chronic problem that keeps surfacing? The third question is, whether it is possible to measure magnitude of the problem? Does this problem impact the customer satisfaction? This is the fourth question. And the final question would be if this issue has any impact on financial profits, mainly negative impact? If all 5 questions have been answered yes the Black Belt can move on to the qualifications. If one of the questions is answered no, this is not a Six Sigma project.

2.36 Qualifications of a Six Sigma Project

In this slide, we will discuss the necessary qualifications of a Six Sigma project. After determining a project to be a possible Six Sigma project, the Black Belt needs to be sure that the project could be a Six Sigma project. It is for which he or she studies the qualifications. The Black belt has to assess the following: First, he needs to check if there is gap between ideal and actual outcome from the process? Next, he needs to check if the root cause of the problem is already known? And lastly, he needs to see if the solution to the problem is apparent? Now check the assessment. Question number one has to be answered in yes, and question numbers 2 and 3 in no. If the answers are matching with these, then the qualifications are met, and the project can be called as a certain Six Sigma project. In the next slide, we will discuss ccornerstones of a Six Sigma project.

2.37 Cornerstones of a Six Sigma Project

The Six Sigma team starts the project only after completing the pre-requisites and qualifications check successfully. Not all projects can be qualified as Six Sigma projects. To call a project a Six Sigma project, we need to answer the following questions: Did the team understand variations during the project? Did the team understand process capability? Did the team measure defects? And did the team implement DMAIC approach? If all the questions are answered yes, go to the next step, checking if the following 4-step approach to problem solving can be applied to the problem. First, can we document the practical problem? Next, is it possible to convert the practical problem to statistical problem? After that, can a statistical solution for the problem be found? And last, is it possible to convert the statistical solution back to the practical solution and resolve it? After all these checks are satisfied, the project will be called a Six Sigma project. In the next slide, we will be discussing Six Sigma Deployment Cycle Plan.

2.38 Six Sigma Deployment Cycle Plan

Here are the details of the activity to be taken up in each quarter by the Sponsor. In quarter 1, the first thing to do is to identify a Six Sigma leader, somebody who can take the responsibility and accountability to draft and approve a Six Sigma plan and identify core team members to work on it. In quarter 2, Black Belt training has to be planned and tailored, train Black Belts, train leadership, and prepare necessary documents. After that in quarter 3, work on establishing processes around project validation criteria, identify the right candidates for Master Black Belts, and then commence on establishing the Six Sigma practices. In quarter 4, start working on certifying Black Belts, issue Six Sigma practices, and start training Green Belts from the organization. And then in quarter 5, prepare detailed roadmap on how the Six Sigma project is going to happen in the organization, continue to train Green Belts, and train Second Wave Black Belts. This quarter wise deployment cycle is the outline of all major activities intended to happen in a Six Sigma deployment cycle, in a company. A rigorous 5 to 6 quarter deployment plan needs to be designed, even before the official DMAIC project starts. This is to ensure that the Six Sigma deployment is not a short run deployment. In the next slide, we will discuss the 10 point ongoing project evaluation.

2.39 10 Point Ongoing Project Evaluation

Projects need to be evaluated consistently as they move across phases by the right set of stakeholders. In this slide, we present the 10-point on-going project evaluation criteria. The 10 points that are needed to evaluate projects are as follows: First is link to strategic initiatives; Second is application of Six Sigma tools; Third is active sponsor engagement; Fourth is active engagement of the team; Fifth is organizational awareness of the project; Project delivery on results is the sixth; On time completion is the seventh; Eighth is successful transition to project owner; ninth is improvement sustained over time; and the last point is the replication of results. Each of these metrics can be scored on low to high. Use the project evaluation check list provided in the toolkit.

2.40 Project Prioritization Matrix

In this slide, we will be discussing project prioritization matrix. When multiple potential projects are there to choose from, it becomes difficult to decide which one to work on. There are several factors that can be taken into consideration. To make the process more data-driven, it is necessary to prioritize them, for which project prioritization matrix is created and used. This matrix will help us show the possible financial savings out of a project and anticipated time or effort to be spent on the project. This tool provided with the toolkit needs to be updated with the help of the finance team. The projects that have the maximum revenue impact on least effort spent will be the ones most likely to get approved, and should get approved.

2.41 Project Prioritization Matrix(Contd.)

The diagram is visual representation of the Project Prioritization matrix. On the horizontal x-axis there is effort and cost of undertaking the project. And the vertical y-axis represents the potential financial savings from the project. The items plotted on the graph are the projects (Project names are A to Z and A1 to D1). Once all the projects are plotted, it becomes easy to compare between projects on both cost and savings perspective. For example, comparing projects in the chart P, N, R, and U, we can notice that the financial savings from these projects are in similar range, but the effort and cost factor is very high. It becomes obvious that project "P" would be a potential candidate from the list. Similarly, from projects L, C1, J, & X, Project L is more likely to get selected as the cost factor for all of these are same; and project "L" gives the highest financial savings. We can plot a simple scatter diagram of revenue savings versus effort spent to know which project needs to be prioritized.

2.42 Enterprise Wide versus LOB View

In this slide, we will learn more about enterprise wide versus LOB Wide view for Black Belt projects. One of the key responsibilities of a Black Belt is to implement enterprise wide projects. A Green Belt can hope to implement a LOB which stands for line of business project, while a Black Belt will have to implement only enterprise wide projects. Implementing a project across multiple departments needs a great amount of coordination amongst all departments, and least possible friction. These projects implemented across multiple departments should also be able to bring in cost savings or profit increase of more than $200,000, annually. As part of strategy deployment plan, the roles and responsibilities of each designation of the team member must be sorted out, and clearly communicated to them in advance. Brief list of roles and key responsibilities is provided in the next slide.

2.43 Enterprise Wide Roles and Responsibilities

In an enterprise wide deployment project, it is extremely important for the roles and responsibilities to be well defined. This slide talks about various roles handled by different people in a Six Sigma setup. Let us start with the Six Sigma council, which has the leadership role. Its main responsibility is to suggest high impact projects which will further be scrutinized and accepted by the Six Sigma team. It also approves project selection strategy. The core team in a Six Sigma project will typically comprise Green Belts who are often considered as part time change agents, and their core responsibility is to ensure all Black Belt activities like training, events, Black Belt meetings, etc., are facilitated and completed. The role of Master Black Belt is of an enterprise Six Sigma expert. His primary responsibility is to provide Basic Black Belt training and mentoring to the teams. The Black Belt is considered as a Six Sigma Technical Expert with his main responsibility being leading business improvement projects where Six Sigma approach is necessary.

2.44 NPV(Net Present Value)

In this slide, we will learn about Net Present Value also known as NPV. NPV is a financial measure often used in Pre-define activities as well as illustrating the possible financial benefits of a project. Now let us understand more about NPV or Net Present Value.Net Present Value is the difference between present value (PV) of cash inflows and the present value of cash outflows. As a result, it can be positive, negative, or zero. The primary reason to use Net Present Value calculation is because cost and benefits fluctuate over a period of time, and all the benefits do not normally come to an organization as a lump sum amount. Using NPV helps getting the right value of cost and benefit. In Microsoft Excel, we can calculate NPV with the help of function = NPV() ( N-P-V open bracket, select values and close bracket). This tool is used to show the return on investment to the management, and is often used as a very important Pre-define tool. In the Pre-define stage, the Black Belt needs to show the possible ROI on a project before getting the sign off for the project.

2.45 Internal Rate of Return(IRR)

In this slide, we will learn how to calculate internal rate of return for calculating cost benefit analysis of a Six Sigma project. The internal rate of return (also called as IRR) is a rate of return used in capital budgeting to measure and compare the profitability of investments. This could be an investment for a development project or an improvement project. The IRR of an investment is the discount rate at which the net present value of costs (negative cash flows) of the investment equals the net present value of the benefits (positive cash flows) of the investment. This is commonly used to evaluate the desirability of investments or projects. The higher a project's IRR, the more desirable it is to undertake the project. The decision can thus be made based on the true return of investment.

2.46 NPV and IRR An Example

Let us now understand NPV (pronounced as N-P-V) and IRR (pronounced as I-R-R) with the help of an example. There is a project that will cost $7,000 this year and $1,500 next year, to implement. Next year, a benefit of $500 is seen and the year after that 5,000. Then in the third year $10,000 benefit is expected, and $15,000 benefit each in the last two years. The management wants to see a rate of return of 10% over a five year period. We will find out if we can meet that with these figures. Below is the table that can be created in Excel to show these figures and calculate the NPV. The workings of this example are shown in the excel sheet. The NPV value is obtained by typing the below mentioned formula in an excel sheet. The formula is “is equal to NPV open bracket 10% comma and then select the range of net benefits close bracket.” Press enter. We will explain this example more in the next slide.

2.47 NPV and IRR An Example(Contd.)

From the excel sheet, we find that the NPV is approximately USD 21000 as ROI for the management. The management will look at this number closely and grant an approval for the project based on other conditions like current cash flows and so on. The NPV calculation sheet is provided as part of the toolkit titled Net Present Value. Another cost benefit metric is internal rate of return (also called as IRR). In the NPV calculation tool, we will find IRR calculated to 63%. This is then compared to the annual discount rate which management is expecting (in this example, management is expecting 10%). This gives a good insight into how much return are we getting against the investment over a period of time. If IRR is greater than the discount rate the likelihood of the management to give a go-ahead to the project is high. Please note, both NPV and IRR as financial measures need not be used, as one of them will be able to tell if the project is indeed beneficial or not. These cost benefit calculations can also be done during the Define stage. We will discuss the summary of this lesson in the next slide.

2.48 Summary

We started the lesson discussing the prerequisites of a Six Sigma project and then, the qualifications of a Six Sigma project. We also looked into the cornerstones of a Six Sigma project; and understood the 4 step approach of problem solving. Business feasibility of a Six Sigma project was also dealt with. Further, we discussed enterprise wide versus LOB view, in this lesson. Deployment cycle and cost benefit analysis were also discussed. Now, let us start with Lesson 3. This is about the Define Stage, the first official stage in a classical DMAIC approach. Before we start off with the first stage of a Six Sigma project, we have to take care of all the activities done in the Pre-define stage.

2.49 Lesson 3 Define

In this lesson, we will learn about the first phase of Six Sigma called "Define". This is the foundation of any Six Sigma project.

2.50 Agenda

Let us begin with looking into the agenda of this lesson. We will start with the key objectives, then Voice of Customer (also called as VOC), Voice of Business (VOB), and Voice of Process (VOP). We will then look into a scenario understanding VOC, VOB, and VOP. We will then review the Kano model, after which, we will do an assignment. Then, we will look into translation to Project Y, and understand Quality Function Deployment in detail. We will also look into building a Process Map. The agenda will be continued in the next slide.

2.51 Define Key Objectives

Let us discuss the key objectives for the define phase. Identify the key project outputs (also called as Project Y) from the customer needs, and build project charter. Then, define the scope of the project, identify objectives, and schedule for the project. Then, define the top level process and its stakeholders. Now, select team members that would work on the project and obtain sponsor authorization to proceed with the project. Assemble and train the team on Six Sigma. In due course of this lesson, we will learn some tools that will allow us to accomplish these objectives.

2.52 Voice of Customer

Let us understand what Voice Of Customer is. Voice of Customer focuses on capturing customer needs and experience with current product and services to understand all aspects of the product and services from the customer perspective.Understanding the customer’s opinion about the current product or a process is extremely vital for the Six Sigma team. This often helps the Black Belt in identifying the opportunity for improvement. The tools that can be used to gauge, what the customer feels are focus groups, surveys, and interviews. For example, the customer of a phone service a company provides has been complaining of 3 major issues prioritized with the help of a Pareto Chart. The issues are: He is always on Hold; he gets invoices irregularly; and the delivery of the products is not timely at all.

2.53 Voice of Business

In this slide we will know what Voice of Business is. Voice of Business is derived from financial information and data. It captures company's core values and vision. This helps people ensure all the projects are in line with company's values and vision. Understanding and dissecting the financials and market scope helps the business to identify projects that will allow them to move towards the organizational goals. Voice of business is one of the first tools to be used in a Six Sigma project often, before employing the voice of customer tools. Using voice of business helps in identifying revenue growth areas, and linking them to the voice of customer helps in identifying the exact project opportunity.

2.54 Voice of Process

Finally, do you want to know what Voice of Process is? The Voice of Business and Voice of Customer feed into the Voice of Process. The relevancy of the process to the business and customer needs are studied in detail in the Voice of Process section. Processes are categorized to high value and low value processes from the perspective of the product provided to the customer. The objectives of using VOP (Voice of Process) are mentioned below. It correlates the customer’s voice to the voice of the process and sees how well the process is shaping up currently to deliver the customer’s needs. Also, analysts can review and identify poorly performing processes and explore the opportunity for taking some of them for potential projects.

2.55 VOC VOB and VOP

We will discuss the relation between all the three voices, in this slide. Let us look into a scenario. Let that be an improvement project for a call center. We know that all the three voices described in the previous three slides are different. Here are examples of what Voice of Customer, Business, and Process would look like. An example of a VOC comment would be “I am always put on Hold”. A voice of business comment will be something like, “We are not taking enough calls”. And finally a voice of process comment will be, “Our average handle time per call is high”. The block diagram shows the relation between voice of process, voice of business, and voice of customer. In summary, the voice of process provides insight into its voice of business which concurs with the voice of customer.

2.56 Kano Model

In this slide, we will understand the importance of Kano Model.Once comments from the customers, business, and process are obtained, the Black Belt should map the KANO model to the quality characteristics. Kano model helps in categorizing the features to basic features, performance features, and delighters (or exciting) features. We can understand this with the help of this example. Take a scenario where a customer is looking to purchase a car. He / She would look for certain features and characteristics. Let us see how they are getting categorized. The first feature is car should look good. This is a basic feature needed. It should resist dents is the next feature. This could be called performance feature. The third feature is that it is able to protect lights. This would excite the customer and delight them. Finally, it should be inexpensive. This is the basic need for the customer.

2.57 Assignment

Let us now look into an assignment. This is an assignment for this Black Belt Training module. Here is what we will do in this assignment. Firstly, we will map the top 5 customer needs from the service or product of our company. Then, assign them random frequencies indicating that they are customer complaints. Now, we will correlate the customer complaints to a business loss or Loss in customer satisfaction. Customer satisfaction should be quantified by the number of customers reduced. After that, assign them basic performance and exciting quality features. As the last step, prioritize the complaints either by cost benefit analysis metrics or Pareto charts. In the next slide, we will look into the translation to Project Y.

2.58 Translation to Project Y

Once the Voice of Customer, Voice of Business, and Voice of Process comments are obtained and details finalized, it is the Black Belt’s responsibility to identify the Project Y. While identifying Project Y, it is necessary to prioritize all the points that are captured through VOC, VOB, and VOP. This can be done with the help of a tool provided, “prioritizing cust. req.”, as part of the toolkit. We can see the table representing the complaints by each customer around their experience with the car.Use the tool provided to write the customer VOC and map them to prioritize scores. The table representing the complaints by each customer around their experience with the car is given on the slide.

2.59 Quality Function Deployment

Let us now learn what Quality Function Deployment is. Quality function deployment is a DFSS tool, which is used in DMAIC approaches at times. A Black Belt should be well conversant with the use of QFD Matrix. The QFD Matrix is a structured matrix consisting of the sections mentioned below. First is customer needs, which is found in the leftmost section in a QFD template. This is nothing but the needs of the customers. Then it is the technical features, which is the top horizontal section in a QFD template. Here technical features will be provided. Next, is the interrelationship matrix. It is the matrix between needs and features. Then is Benchmarking room, which is given in the extreme right in the QFD template. In this section, the company is benchmarked with competitors on customer needs. The last section is testing room. Every technical feature is assigned a target to be tested on here. The QFD tool is provided with the toolkit. The QFD is updated with a sample case.

2.60 Quality Function Deployment(Contd.)

In this slide we will learn how to update the QFD. First, document all the customer needs from the translation worksheet under Column B of the QFD template. Second, weights are assigned to each of the customer needs depending on how the customer prioritizes their needs based on importance. Third, assign their respective KANO metric. Fourth, list out all the service features. Fifth, correlate between service features and customer needs. Sixth, benchmark only if needed. Present each technical feature with their target. Seventh, highlight the top 3 scores from Row 41. These are the prioritized service features. We will look into an example in the next slide.

2.61 Quality Function Deployment An Example

A sample QFD has been updated for reference in the toolkit. The case here is a chocolate cookie which our company’s customer buys from the shop. The customer needs are Good texture, generous portions, low price, and good taste. The QFD has been updated with technical requirements and their weights. 9 stands for strong correlation, 3 stands for moderate, and 1 stands for weak correlation.

2.62 Process Map

Here we will learn about the process map. Process mapping is a technique to map the process in a step by step fashion. It can be used for both current process and to-be process. It is the visual pictorial representation of the end-to-end process that helps the user gain better understanding of how things work or will work. It helps to identify non-value-added activities and waste in any process. This information can eventually be used to remove or eliminate the same from the process. Standard flow chart techniques can be used to create process map. Swimlane diagram is a type of process map that can be used to represent the process through various departments.

2.63 Y Baseline Performance

Let us now try to identify how to prepare the baseline performance for our Project Y. Please note we may not actually prepare a baseline in the Define stage itself. Sometimes this can get postponed to the Measure stage. Anyways, in the define stage it is important to know the Project Y, which correlates to customer requirements. The VOC to Y tool in the toolkit will help us freeze on the potential Project Y. In our case, with the help of the example provided in the toolkit, we ended up with three possible Project Ys namely, Availability, Invoicing Cycle Time, and Delivery Cycle Time. Collating details captured using the Voice of Customer, Voice of Business, and Voice of Process comments, it was found that availability was indeed the key issue reported by the customer, working on which the business could gain immensely.

2.64 Y Baseline Performance(Contd.)

So why did we choose availability as the Project Y. Let us discuss that in this slide. Availability of someone being able to talk to the customer directly impacts customer satisfaction. In the last 6 months from customer surveys, it was found that out of a total clientele of 1000, 100 customers left the company’s services. The average loss per customer was billed at $1000. This data was prepared with the help of the Finance Department. Next, due to poor availability our company was attending to 200 calls less in a day which further resulted in a daily loss of $1000 as the customers used to pay the company $5 per call. Over 6 months, the company lost $120000. This data was prepared with the help of the Finance Department. Thus, purely from a financial sense, choosing Availability as project Y for our case is imperative.

2.65 SIPOC

Let us now discuss the SIPOC (pronounced as one word) map. SIPOC stands for Supplier, Input, Process, Output, and Customer. SIPOC map is a broad level map which also helps us to scope the project. This map is prepared by the Green Belts. All Green Belts from different curriculums are trained to update a SIPOC map. The Black Belt’s responsibility is to look at the SIPOC Map for correctness and also help the team identify the scope of the project. For example, in our case the Availability issue has been mapped to the process of handling only calls related to after sales queries. Any new sales calls will not qualify to be a part of treatment of our project. This is called project boundary or project scope.

2.66 Project Charter

What is a Project Charter? Let us understand that in this slide. Project Charter is the main starting document for any Six Sigma project. It is the statement of the objective of the project, project scope, and goals. It provide list of all the participants of the project, outlines key roles and responsibilities (Covered in the roles and responsibilities matrix in the next slide) for the project team. The project charter also presents an insight into the key schedule milestones and deliverables for the project. Project charter document is typically used as the following. A business proposal for Authorization of the project by Project Champion; A primary sales document for the Leadership team to review and provide guidance; Focus point for the project and the team; and Project Charter is the main starting document for Six Sigma Toll Gate Review meeting. Project charter should be used proactively by the Project Leader (Black Belt or Green Belt). It should be kept updated on regular basis (weekly) with updated status and progress.

2.67 The Problem Statement and the Goal Statement

In this slide, we will learn how to write the problem and the goal statement.Drafting the problem statement should be one of the key activities in the Define Phase, most importantly because the Problem statement is the foundation of any improvement project. If we are not clear on Problem, the improvement project may not yield the right value. One should work with all the teams involved to formulate the problem statement, and review it to make it as accurate as possible. Company incurring some loss is an example of a poor problem statement. Here is an example of a good problem statement. The company has been incurring a loss of $150,000 over the last 6 months due to non-availability of staff, resulting in per call loss and client attrition due to the dissatisfaction. Now let us understand the goal statement. Six Sigma project for improving availability of staff will help reduce customer turnaround time and handle more calls, resulting in revenue increase of $100,000 within 6 months from the start of the project. In the next slide we will look into RACI (pronounce as R-A-C-I)) matrix.

2.68 RACI Matrix

RACI (pronounce as R-A-C-I) is a common project management tool, it stands for "responsible, accountable, consulted, and informed" RACI Matrix is a project management tool, which helps in identifying most appropriate people for the work and allocating roles and responsibilities for each of the task. This helps ensure people are on the same page and avoids confusion. This matrix is used as a formal document for assigning the roles and responsibilities for each individual associated with the project. RACI Matrix tool is provided as part of the toolkit. A sample snapshot of the RACI matrix can be seen on the slide.

2.69 Business Metrics

Let us understand business metrics. Business metrics for Six Sigma projects is one of the important points any Six Sigma project aims to work for. Performance of the business metrics could either be reduced or increased resulting in an increase in the financial savings, which is the key objective of implementing any Six Sigma project. Monitoring process capability indices is a good way of showing business results. If the process capability index value increases the business performance increases. Process capability is detailed in section iii. Another way of monitoring business performance is to check defects per million opportunities levels (also called as DPMO (pronounced as D-P-M-O). If a product or service has certain opportunities of defects, all of those are considered and then actual defect rate is calculated and equated to DPMO. Please note that DPMO can be calculated for one or more CTQ characteristics. This will be continued in few more slides.

2.70 Business Metrics(Contd.)

While using multiple characteristics to calculate DPMO, it should not be directly used as it is. This is because not all defects are the same, and some of the defects might not be severe from customer perspective. Categorizing defects might be helpful, based on severity and assessment if it impacts the product. In such a scenario, the process analyst must seek to calculate defective items rather than defects. RTY, or rolled throughput yield is obtained by multiplying the first pass yields of all individual processes working in series mode. This is another business performance metrics used to represent probability of the process to produce zero defects output. If any items are reworked on, it should be excluded from the RTY calculation. The Black Belt in consultation with the Master Black Belt, process champion, and the Six Sigma team choose the right set of business metrics that are relevant and representative for the Six Sigma project.

2.71 Project Deliverables

The Black Belt needs to understand the category their project deliverables belong to. We will look into it, in this slide. Popularly these deliverables belong to critical to quality, critical to cost, and critical to schedule. For a Six Sigma project, the project goals should be either of cost, quality, or schedule. If the goals are not one of these, we might have to revisit and ensure it falls into one of these. Now let us see what these deliverables are. First is CTQ. This is the critical to quality characteristic of a product and aims towards the quality needs of a customer. Second is CTC, which is the critical to cost characteristic of a product and aims towards the cost needs of a customer. The final one is CTS. This is the critical to schedule characteristic of a product and aims towards the schedule needs of a customer. Once the Six Sigma team gets its list of requirements from the customer, it has to map them to CTQ, CTC, and CTS. This helps them identify the right set of targets and work towards it.

2.72 Project Scheduling

Project scheduling is an important responsibility among the roles of a Black Belt. In this slide, we will understand what project scheduling is. The Black Belt should be able to schedule a project, understanding the complexity of the project that has been scoped. Below mentioned are typical of a Six Sigma DMAIC Black Belt enterprise wide initiative: Predefine – 15 days; Define – 45 days; Measure – 60 days; Analyze – 30 days; Improve – 30 days; Control – 90 days; and Then a typical enterprise wide Black Belt initiative would last for 270 to 300 days, i.e., approximately 9 to 10 months. A Black Belt can use Gantt charts to schedule his projects. A Gantt chart template has been provided with the Toolkit, which can be used by the Black Belt.

2.73 Team Selection

Now let us look into the team selection. A Black Belt is responsible for selecting the team members who would participate in their project. In normal circumstances this selection would happen cross functionally, that is, across various functions in an organization. On finalizing the project charter and the Sponsor, the Black Belt should conduct a meeting with manager of functional groups informing them of the initiation of the project. Goal of this meeting is to allow managers of functional units to appoint one person from their team for participation in the project. Six Sigma project team should have one team member each from every stakeholder group. These team members may or may not be Six Sigma certified. Permissible team size is 5 to 7 with representation from each stakeholder group. All project team members are to be apprised of the project objective and the business case.

2.74 Define Roles and Responsibilities

In this slide, we will look at a tabular snapshot of the roles and responsibilities of various roles in the define stage. In the charting project, set of activities that the Black Belt identifies are the identification of the area of improvement, sponsor identification, and savings estimation for the project. Together with the Sponsor, the Black Belt also drafts the Project charter and reviews the project with the sponsor. In the define phase of the project, the Sponsor and the Black Belt together select the team. The project charter is completed by the Green Belts and the Black Belts. The team is trained by the Black Belts and the Green Belts. Review of the existing process is done by the Green Belt, Black Belt, and Process Owner. The objectives are defined, and project plan is set by the Six Sigma team. Finally, the objectives are presented to the management by the Green Belt.

2.75 Define Tools Summary

The tools mentioned below must be used in chronological order in a typical define phase of a DMAIC implementation. They are VOC, VOB, and VOP; KANO (pronounced as kah-no) model; QFD only if needed; translation to Y worksheet; SIPOC; project charter and problem statement; RACI (pronounced as R-A-C-I) matrix; and Gantt charts.

2.76 Lesson 3 Summary

As we have come to the end of this lesson let us do a quick recap. We understood Voice of Customer, Voice of Business, and Voice of Process. Then, we understood the Kano model on how the customer expectations regarding basic features, performance features, and delighters are identified. Following that, we understood how to translate customer needs to Project Y. We then discussed the quality function deployment tool and how to build it. Also, we looked into the baseline performance of project Y, and understood why availability was chosen as project Y. Then, we covered process map using SIPOC, which stands for Supplier, Inputs, Process, Output, and Customer. After that, we discussed how to build a Project Charter for the project. Then we covered the RACI Matrix, a common project management tool, that is used to identify people who are "Responsible, Accountable, Consulted, and Informed" for the project. After that, we covered business metrics aspects of the project and Project Scheduling. Finally, we looked into the roles and responsibilities, and tools summary. It is quiz time. Go through the quiz section to check the understanding of this section better. In the next section we will understand Measures.

  • Disclaimer
  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

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