Quality Management, Process Capability and Six Sigma MGMT 511

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Quality Management, Process Capability and Six
SigmaMGMT 511
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Quality Management

• Quality Planning
• Quality Control
• Quality Improvement
• Think of the process of designing, making, and
  improving a product
• The product and process are designed planning
• The product is manufactured control
• The product and process are enhanced
  improvement Juran

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Quality Management

• Quality Planning ?
• Quality Control
• Quality Improvement
• Juran

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Quality Planning

• Identify customers and their needs
• Develop product or service that responds to
  those needs
• Develop a process that is able to produce the
  product or deliver the service
• Juran

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Customer Value Proposition

• Quality
• Price
• Availability
• Selection
• Functionality
• Service
• Brand Kaplan and Norton

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Two Components of Quality

• Product or service dimensions
• Free from deficiencies
• We consider a product high quality if it has
  features that the customers value, and
• The product or service does not have deficiencies
  from the stated specifications
• Juran

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Product Dimensions

• Performance
• Features
• Reliability
• Durability
• Ease of Use
• Serviceability
• Esthetics
• Reputation Gryna

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Service Dimensions

• Accuracy
• Timeliness
• Completeness
• Friendliness and courtesy
• Anticipating customer needs
• Knowledge of server
• Appearance of facility and personnel
• Reputation Gryna

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Two Components of Quality

• Product or service dimensions
• Free from deficiencies ?
• Juran

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Free from Deficiencies

• Product
• Free of defects and errors on delivery and during
  use
• All processes free of rework loops, redundancy
  and waste
• Service
• Free of errors during service transaction
• All processes free of rework loops, redundancy
  and waste Gryna

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Quality Management

• Quality Planning
• Quality Control ?
• Quality Improvement
• Juran

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Quality Control

• Choose the control objects
• Establish measurement
• Measure actual performance
• Compare to standards
• Take action on the difference
• Gryna

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Quality Control

• Statistical Process Control or SQC
• Even if a process is in control, it may not be
  as capable as it could be
• For example, the defect rate could be high, and
  this may be acceptable, but it may cost too much
• Which leads us to Gryna

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Quality Management

• Quality Planning
• Quality Control
• Quality Improvement ?
• Juran

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Quality Improvement Types

• Continuous
• Incremental improvement small steps
• If done continually, major improvements occur
  over the long run
• Breakthrough
• Major improvement at one time
• Can allow leap-frog of competitors

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Quality Improvement

• 1930s and 40s - Quality Control (QC)
• Post-WW II - Total Quality (TQ) and Toyota
  Production system (TPS)
• Total Quality Control (TQC)
• Total Quality Management (TQM) 1980s and
  90s
• 6 Sigma 1985 to present
• Now emerging Lean Six Sigma

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W. Edwards Deming

• Major source of poor quality is variation
• Quality improvement is the responsibility of
  management
• All employees should be trained in use of
  problem solving tools and statistical techniques.

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W. Edwards Deming

• Invited to Japan after WWII to assist in
  reconstruction of industry
• Emphasized quality and variation reduction
• The rest is history!
• Deming Prize introduced in Japan in 1951

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Total Quality Management (TQM)

• Better to produce right the first time rather
  than inspect quality in.
• Quality at the source responsibility shifted
  from quality control department to workers.

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Five Steps in TQM

• Determine what customers want.
• Develop products and services.
• Develop production system.
• Monitor the system.
• Include customers and suppliers.

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6 Sigma

• Utilizes tools and techniques that span the
  range of all of quality management
• Systematic improvement process
• Project and team driven
• Training
• Certification Green Belt, Black Belt, Master
  Black Belt

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What is 6 Sigma?

• A statistical measure standard deviation - s
• A measure of process capability
• A method of quality improvement
• A method to design quality in recent known
  as DFSS Design for Six Sigma

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Six Sigma Defined

• a comprehensive and flexible system for
  achieving, sustaining, and maximizing business
  success.
• driven by understanding of customer needs,
  use of facts, data, and statistical analysis,
  and attention to managing, improving and
  reinventing business processes.
• The Six Sigma Way Pande, et al., p. xi

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History of Six Sigma

• Developed by Bill Smith, an engineer at Motorola
  in 1985 as a way to standardize the way defects
  were recorded.
• By 1990, Motorola University was instructing
  throughout Motorola and to outside companies.
• Motorola insisted suppliers use the six sigma
  program.
• Claims 16 billion in savings from 1986 to 2001.

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History of Six Sigma continued

• Generation I variation reduction 1980s
• Generation II cost reduction 1990s
• Generation III customer focus now

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Companies using 6 sigma

• Motorola
• GE
• Texas Instruments
• Bank of America
• Citibank
• Boeing
• Home Depot
• and many more

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GE

• 1997 6000 projects, 320 million in savings.
• 1998 - 750 million in savings
• 1999 1.5 billion in savings
• 1996 to 1999 claimed a total of 4.5 billion
  in savings 1.2 of revenue

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Citibank

• Reduced credit processing time by 50
• Reduced cycle times of processing statements
  from 28 days to 15 days

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Bank of America

• Started using six sigma in 2001
• Claimed 2 billion in benefits by 2003
• Many key customer processes near or at the 6
  sigma level.
• Customer delight indicators up 25
• Deposit processing improved by 47

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Standard Deviation s

• Normal probability distribution
• Measure of dispersion of the data
• Calculations

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Measure of Process Capability

• Capability is the measure of how well the
  process performs
• Upper and lower specification limits USL and
  LSL
• Product is good within USL and LSL
• Product is defective if outside the USL or LSL
• The sigma level will be calculated using defects
  outside the USL and LSL

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6 Sigma Levels and Defects

• Assumes a 1.5 Z shift.

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A Method of Quality Improvement

• Customer focus
• Data and fact driven
• Process focus, management and improvement
• Proactive
• Boundary-less collaboration
• Drive for perfection, tolerate failure

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Key Concepts of Six Sigma

• Critical to Quality Attributes most important
  to customers.
• Defect Failing to deliver what the customer
  wants.
• Process capability What the process can
  deliver.
• Variation What the customer sees and feels.
• Stable operations Ensuring consistent,
  predictable processes to improve what the
  customer sees and feels.
• GE

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5 Step Process - DMAIC

• Define the process and what customers require
• Measure the defects and the process
• Analyze the data and discover causes of defects
• Improve the process to remove causes of defects
• Control the process to prevent loss of the
  improvements

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Design for Six Sigma - DFSS

• Designing a new process
• Or a major redesign of an existing process
• 5 step process DMADV
• Define
• Measure
• Analyze
• Design
• Verify

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Statistical Basis of Six Sigma

• Example
• LSL 55, USL 295, µ 175, s 20
• Find Z units to USL and LSL then DPMO
• The mean can shift up to 1.5 s
• Now find Z units to USL and LSL then DPMO

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Process Capability

• Location of the process mean
• Natural variability inherent in the process.
• Stability of the process.
• Products design requirements

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Calculating Process Capability

• Process capability index Cp
• One sided capability index Cpk
• min (Cpu , Cpl )
• Examples

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Calculating Sigma Levels

• Variables any value
• Discrete (Attributes)
• Good/defective (customer does not want)
• Count of defects (attribute that does not conform)

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Variable Measures

• Normal Distribution
• USL and LSL
• Use Normal table to find defects
• Allow up to a 1.5 s shift of the mean from
  center of USL to LSL
• Determine Z units USL to LSL 2 sigma level
• Find the Defects Per Million Opportunities (DPMO)

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Improving the Process

• To reach desired sigma capability level, change
  the spec limits! Or
• Reduce variation
• Calculate the USL and LSL
• Calculate the std dev, sigma, to reach the
  desired sigma capability level.

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Discrete

• DPU total defects per unit
• DPU total number of defects divided by total
  number of units sampled
• DPMO defects per million opportunities
• Opportunities per unit number of different
  possible defects
• DPMO DPU x 1,000,000 divided by opportunities
  per unit
• DPMO total defects x 1,000,000 divided by
  total units divided by opportunities per unit
• Use table to find Sigma capability level

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Calculation Examples

• Statistical basis of six sigma
• Process capability
• Sigma level variable measure
• Improve the process
• Sigma level discrete measure
• Improve the process

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Some Good Information Sources

• www.isixsigma.com
• www.sixsigmazone.com
• www.asq.org
• www.asq.org/learn-about-quality/six-sigma/overvie
  w/overview.html
• www.qualitydigest.com

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Lumber Inventory
Wood is trash
Move lumber to sawing 5 min
7 2nd Inspection, 15 min
Transport 5 min.
No Rework at 4, 5 or 6
Accept?
1 Sawing 10 min.
4 Assembly of subsections 15 min.
6 Assembly of subsections 15 min.
5 Assembly of subsections 15 min.
Yes
Transport, 5 min.
Transport to sanding 5 min.
Transport, 5 min.
8 Final Assembly Touch-up 40 min..  
Rework
Yes
Where to rework?
Accept?
No
Rework
2 Hand finish, 5 min.
3 1st Inspection 5 min.
Transport 5 min.
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Gantt Chart
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Flow Diagram