2 Define Phase six sigma

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

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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

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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

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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

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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

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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?

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Business Case – Example:
Project:
To Improve Customer Experience (CE) score

Business Case:
X provides support to one of the world’s largest PC manufacturer.
The Client’s Contract has three KPI’s : 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 MayJul’07 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

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Elements of a Charter – Problem Statement
 What is wrong or not meeting our customer’s needs? Describes “Pain”
experienced by the customer
 When and where does the problem occur?
 How big is the problem?
 What’s the impact of the problem for the customer?

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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

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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

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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

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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

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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 (don’t miss “window of opportunity”)
 Realistic (don’t force yourselves into “band-aid” solution)

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Team Charter Template:
Business Case

Goal Statement

Problem Statement

Project Scope

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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

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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

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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

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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

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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)

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High Level Process Mapping
CTQs

CTQs

S

I

P

O

C

Suppliers

Inputs

Process

Outputs

Customers

Measures

Measures

Process
Map

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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



CTQ’s: 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

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High Level Process Mapping – Example

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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