IBM-09: Six Sigma Tools and Techniques

Define Phase
Dr. A. Ramesh
Department of Management Studies
Indian Institute of Technology Roorkee, Roorkee 247 667

Why Six Sigma ?

Six Sigma helps in

achieving Break through
improvement

Reducing Variance is the Essence of Six Sigma

Roles and Responsibilities:

Owns process
Implements solutions

Process
Owners

Yellow
Belts

Team member in GB
/ BB projects
Project specific
knowledge

Six Sigma
Council
Green
Belts

Establish Six Sigma

Organization
Approve resources
required
Tracks deployment
effectiveness

Champion

Leads change
Sponsors project
Chair tollgate
reviews

Master
Black
Belts

Mentor Black Belts

Six Sigma deployment
across org.

Part time role

Leads GB projects
Six Sigma tools
practitioner

Black
Belts

Full time role

Lead high impact projects
Trains & coaches Project Teams

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

Why Project selection is important?

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

By selecting right projects,

Projects would be aligned with business objectives

Projects would get complete buy-in from stake holders

Business benefits could be maximized as available six sigma resources are

utilized in high impact initiatives

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

Hence project selection should be based on the two foundation

cornerstones:

Total customer satisfaction

Maximization of ROI

Common pitfalls in Project selection :

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

Projects based on personal priorities

Projects with very wide scope

Projects on solving problems for which causes are already known

Projects for solving pure human discipline related issues

Project Grid:
Reactive

Proactive

Excellence

Recovery

Best in Class

Preventive

Penalty Avoidance

Incentive Gains

Collaborative

Cost Reduction

Cost Optimization

Futuristic

Undertaken for survival of

the business

Undertaken
for
through revenue

Initiated for :

Initiated for :

Improving
key
client
metric target when not
met
Improving
Very
low
efficiency performance

Pull

Improving performance on
Key
client
metric
to
benchmark levels
Optimizing
efficiency
performance

Showcaseable for future

business
/
service
excellence
Initiated for :

Establishing
effective
processes
at upstream
phases of business people
lifecycle
Value addition to clients in
partnership mode

Project Selection Process:

Identification of Project
Opportunities

Project
Prioritization

Project
Validatio
n

Business Outcomes
Operational Outcomes
Voice of Stakeholders

Effort Impact Analysis

Kano Model

FIPS Analysis

Identification Method Voice of Stakeholders:

Prioritization Method : Kano Model

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

Satisfier :
Customer satisfaction is directly
proportional to how fully functional is
the product/service.
Satisfaction directly related product /
service features

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

Kano Model - Example: Transport arrangement for employee pickup

and drop

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

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

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

Kano Model - Example: Call Flow Process

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

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

Delighters:
Customer education
Rebate Coupons / Concession / Discount
Freebies

Prioritization Method 2 : Effort Impact Analysis

Project prioritization is be
done in the following order:
1. High Impact & Low Effort
2. High Impact & High Effort
3. Low Impact & Low Effort

Validation method : FIPS Analysis

Feasibility

Project scope should be appropriate (Not too broad (or) too complex)
Solving world hunger problem
Boiling the ocean

Feasibility of deploying resources for the project need to be ensured

Make sure the project is controllable

Impact

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

with strategic objectives and goals
Creates WOW from the customers point of view

Impact on all stake holders (Positive / Negative) need to be acceptable

Huge consequence if not resolved immediately

Validation method : FIPS Analysis

Potential for Improvement

Opportunity for improvement should be adequate which is judged by

comparing benchmarks with current performance
Will the project present a significant challenge or opportunity ?

Avoid six sigma methodology for projects which require marginal

increase in performance
Simple process rigor would help achieve this

Support within the organization

Level of support that could be expected from each stake holder group
should be determined
Strong sponsor is the key for success of the project

Possibility of addressing potential lack of support need to be high

Choose a project that is non controversial

Exercise on FIPS Analysis:

Example 1: Reducing over all annualized attrition from 100% to 50% globally
within 2 months
Example 2: Improving Internal Quality Score from 89.22 to 90% within next 3
months.

Please identify the project which would go thru FIPS Analysis

Define Phase

Process Steps in Define Phase:

DEFINE STEP
OVERVIEW
Define 1:
Develop Team Charter

Define 2:
Define Process Map

Objective:

Objective:

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

To identify all relevant elements

of the process the team is going
to improve
.

Tools:

Tools:

1. Team Charter

1. SIPOC

Define Phase

Team Charter:
Helps the team to have common understanding of the business problem
Sets expectation for the team on what is to be achieved
Gives authority for the project team to execute the project

Methodology:
Team charter has to be prepared jointly by the project leader and
champion
Team shall have following inputs for preparing team charter

Performance data related to the business problem for minimum of

three months

Financial / non-financial implications on customer / organization due

to the business problem

Define Phase

Team Charter:
Helps the team to have common understanding of the business problem
Sets expectation for the team on what is to be achieved
Gives authority for the project team to execute the project

Methodology:
Team charter has to be prepared jointly by the project leader and
champion
Team shall have following inputs for preparing team charter

Performance data related to the business problem for minimum of

three months

Financial / non-financial implications on customer / organization due

to the business problem

Define Phase

Elements of a Team Charter:

Business Case

Explanation of why to do the project

Problem Statements

Description of the problem in clear, concise, measurable terms

Goal Statement

Measurable performance target to be achieved

Project Scope

Includes Process boundaries, available resources

Operational definition of project CTQ

Operational definition of the performance metric

Milestones

Key steps and date to achieve goal

Roles

People, expectation, responsibilities

Define Phase

Elements of a Charter Business Case

Existing status of CTQ and the associated Financial impact
Following needs to be verified while building a Business Case:

Is the project worth doing ? Why?

Is it important to do it now ? Why?

What are the consequences of NOT doing the projects?

What activities have higher or equal priority?

How does it fit with our business initiatives and target?

Define Phase

Business Case Example:

Project:
To Improve Customer Experience (CE) score

Business Case:
X provides support to one of the worlds largest PC manufacturer.
The Clients Contract has three KPIs : a) Quality b) Service and c) Efficiency
Service and Efficiency targets have been met consistently, however the
Customer Experience Score was trending at 61.32% for the quarter MayJul07 as against the target of 72%. The call volume offered by the client has
been reduced by 30% for not meeting the CE target which has resulted in a
huge revenue loss for X. The total contribution loss in Product line A for not
meeting the CE Score target is US $ 0.418 Million per annum

Define Phase

Elements of a Charter Problem Statement

What is wrong or not meeting our customers needs? Describes Pain
experienced by the customer
When and where does the problem occur?
How big is the problem?
Whats the impact of the problem for the customer?

Define Phase

Elements of a Charter Goal Statement

Defines what improvement
i.e., end state vision.

the

team

is

seeking

to

accomplish,

Tends to start broadly eventually should include measurable target or

specification limit and completion date
Must not assign blame, presume cause, or prescribe solution
Should follow SMART approach (Specific ,Measurable, Attainable, Relevant
& Time bound)
Has four parts

Starts with a verb (e.g., reduce, eliminate, control, increase)

Focus of project (e.g., cycle time, accuracy)

Target (e.g., by 50%, by 75%)

Deadline

Define Phase

Problem and Goal Statement Example:

Project:
To Improve CE score
Problem Statement:
The Current CE score is trending at 61.35%, 62.13% & 60.47% for the period
from May-08 to July-08 in Product Line A. This results in end user
dissatisfaction and revenue loss as volume allocation is based on the
achievement of CE score target.
Goal Statement:
To improve the Customer Experience Score from the current baseline of
61.32% to 72% by end September 2008

Define Phase

Elements of a Charter Project Scope:

What process will the team focus on?
What are the boundaries of the process we are to improve?
Start point? Stop point?
What (if anything) is out of bounds for the team?

Project Scope Example:

In Scope: Desktop support, India Chennai
Out of Scope: Other geographies and all other Queues

Define Phase

Elements of a Charter Operational definition of CTQ:

Operational definition is a precise description that tells how to get a value for
the characteristic (CTQ) you are trying to measure. It includes What
Something Is and How to Measure It

Elements of a Charter Defect definition:

Anything that does not meet the requirements of the Customers.

Example:
Operational Definition (Y): The Survey response from customers with
rating scale of 1 to 9, where 1 is 'Extremely Dissatisfied' and 9 is 'Extremely
Satisfied' graded through email. (Top three boxes [7,8 and 9] are considered
as positive response)
CE Score = Total no. of responses with top 3 box [.i.e., 7, 8, 9] / Total no. of
responses received
Defect Definition (Y): Any Survey fetching a rating from 1 to 6

Define Phase

Elements of a Charter Milestones, Resources

Resources:
Who are the team members?
What are the roles of the Team Members, Leader (Black/Green Belt/Yellow
Belt) and the team coach (Black Belt or Master Black Belt)?
Are the right members chosen for the team? Functionally? Hierarchically?

Milestones:
A detailed project plan with key steps and target completion dates
Tied to phases of DMAIC process, with defined tollgate reviews
Aggressive (dont miss window of opportunity)
Realistic (dont force yourselves into band-aid solution)

Define Phase

Team Charter Template:

Business Case

Goal Statement

Problem Statement

Project Scope

Define Phase

Team Charter Template (Contd.):

Operational Definition

Defect Definition

Resources

Tollgate Review

Project Lead (GB/BB):

Project Coach (BB/MBB):
Project Champion:
Team Members:

Phases
Define
Measure
Analyze
Improve
Control

Planned
Date

Sign Off
Date

Define Phase

Exercise
Prepare Team charter for the following scenario:

Type of Program

: Customer Support

KPI Metric

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

Target

: <=15%

Current Trend

: 24.22%, 22.63%, 23.38%, 24.88%, 23.46%, 23.24%

Assume project benefits (Financial and Non Financial)

Make assumptions where data is not given

Define Phase

Process Steps in Define Phase:

DEFINE STEP
OVERVIEW
Define 1:
Develop Team Charter

Define 2:
Define Process Map

Objective:

Objective:

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

To identify all relevant elements

of the process the team is going
to improve
.

Tools:

Tools:

1. Team Charter

1. SIPOC

Define Phase

High Level Process Map:

Used to identify all relevant elements of a process improvement
project before work begins
Helps to define a complex project that may not be well scoped.
Helps the project team to learn together and come to consensus
about current make-up of the process
Helps to identify
improvement

places

in

the

processes

for

potential

Define Phase

Definition of a Process:
A collection of activities that takes one or more inputs and transforms them
into outputs that are of value to the customer

Outputs

Inputs

Customer(s)

Supplier(s)
The Business Process

Application:
To give a pictorial representation of the high level process
To identify the Suppliers and customers (stake holders)

Define Phase

High Level Process Mapping

CTQs

CTQs

Suppliers

Inputs

Process

Outputs

Customers

Measures

Measures

Process
Map

Define Phase

Process Elements

Supplier: The provider of inputs to your process

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

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

Output: The products or services that result from the process

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

CTQs: Critical-to-quality characteristics; A specific attribute or quality of the

output that is a key requirement for customer satisfaction

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

Define Phase

High Level Process Mapping Example

Define Phase

Summary of Define Phase:

Initial project charter
Project Y
Project business case
Project goal
Project scope
Project team members and stakeholders
High level Process Map