INSEAD Library

Includes bibliographical references and index

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The Six Sigma Handbook A Complete Guide for Green Belts, Black Belts, and Managers at All Levels Contents Preface ...................................................................................................................... xi Part I Six Sigma Implementation and Management 1 Building the Responsive Six Sigma Organization .................................................. 3 What Is Six Sigma? ................................................................................................... 3 Why Six Sigma? ............................................................................................ 4 The Six Sigma Philosophy ............................................................................ 5 The Change Imperative ................................................................................. 11 Implementing Six Sigma ........................................................................................... 13 Timetable ....................................................................................................... 14 Infrastructure.................................................................................................. 16 Integrating Six Sigma and Related Initiatives ............................................... 32 Deployment to the Supply Chain .................................................................. 34 Communications and Awareness .................................................................. 36 2 Recognizing Opportunity .......................................................................................... 43 Becoming a Customer and Market-Driven Enterprise ............................................. 44 Elements of the Transformed Organization .................................................. 46 Strategies for Communicating with Customers and Employees ...................................................................... 48 Survey Development Case Study .................................................................. 52 Calculating the Value of Customer Retention .............................................. 58 Customer Expectations, Priorities, Needs, and "Voice" ........................................... 60 Quality Function Deployment ....................................................................... 61 The Six Sigma Process Enterprise ............................................................................ 65 The Source of Conflict .................................................................................. 67 A Resolution to the Conflict .......................................................................... 67 Six Sigma and the Process Enterprise ........................................................... 70 Linking Six Sigma Projects to Strategies ................................................................. 71 The Strategy Deployment Matrix .................................................................. 71 Deploying Differentiators to Operations ....................................................... 74 Deploying Operations Plans to Projects ........................................................ 75 Interpretation ................................................................................................. 76 Linking Customer Demands to Budgets ....................................................... 77 Structured Decision-Making ......................................................................... 77 3 Data-Driven Management ......................................................................................... 87 Attributes of Good Metrics ...................................................................................... 87 The Balanced Scorecard .......................................................................................... 89 Measuring Causes and Effects ..................................................................... 90 Customer Perspective ................................................................................... 92 Internal Process Perspective ......................................................................... 94 Innovation and Learning Perspective ........................................................... 95 Financial Perspective .................................................................................... 95 Cost of Poor Quality ................................................................................................ 97 Cost of Quality Examples ............................................................................. 99 Strategy Deployment Plan ....................................................................................... 102 Dashboard Design .................................................................................................... 105 Information Systems Requirements ......................................................................... 107 Integrating Six Sigma with Other Information Systems Technologies ............................................................................ 108 Data Warehousing ........................................................................................ 108 OLAP ............................................................................................................ 110 Data Mining .................................................................................................. 110 OLAP, Data Mining, and Six Sigma ............................................................ 112 Benchmarking .......................................................................................................... 112 The Benchmarking Process .......................................................................... 112 Getting Started with Benchmarking ............................................................. 113 Why Benchmarking Efforts Fail .................................................................. 114 The Benefits of Benchmarking .................................................................... 116 Some Dangers of Benchmarking .................................................................. 116 4 Maximizing Resources ............................................................................................... 117 Choosing the Right Projects .................................................................................... 117 Types of Projects .......................................................................................... 117 Analyzing Project Candidates ...................................................................... 118 Using Pareto Analysis to Identify Six Sigma Project Candidates ................................................................ 125 Throughput-Based Project Selection ............................................................ 127 Ongoing Management Support ................................................................................ 133 Internal Roadblocks ...................................................................................... 133 External Roadblocks ..................................................................................... 134 Individual Barriers to Change ...................................................................... 134 Ineffective Management Support Strategies ................................................ 135 Effective Management Support Strategies ................................................... 136 Cross-Functional Collaboration ................................................................... 136 Tracking Six Sigma Project Results ........................................................................ 137 Financial Results Validation ........................................................................ 138 Team Performance Evaluation ..................................................................... 139 Team Recognition and Reward .................................................................... 141 Lessons-Learned Capture and Replication .................................................. 143 PART lI Six Sigma Tools and Techniques 5 Project Management Using DMAIC and DMADV .............................................. 147 DMAIC and DMADV Deployment Models ......................................................... 147 Project Reporting ....................................................................................... 152 Project Budgets .......................................................................................... 153 Project Records .......................................................................................... 154 Six Sigma Teams ................................................................................................... 155 Team Membership ..................................................................................... 155 Team Dynamics Management, Including Conflict Resolution ................................................................................ 156 Stages in Group Development ................................................................... 157 Member Roles and Responsibilities ........................................................... 157 Management's Role .................................................................................... 158 Facilitation Techniques .............................................................................. 160 6 The Define Phase ..................................................................................................... 165 Project Charters ..................................................................................................... 165 Project Decomposition .......................................................................................... 167 Work Breakdown Structures ...................................................................... 167 Pareto Analysis 167 Deliverables ............................................................................................................ 169 Critical to Quality Metrics ......................................................................... 170 Critical to Schedule Metrics ...................................................................... 179 Critical to Cost Metrics .............................................................................. 180 Project Scheduling .................................................................................................. 186 Gantt Charts ............................................................................................... 186 PERT-CPM ................................................................................................ 188 Control and Prevention of Schedule Slippage ........................................... 191 Cost Considerations in Project Scheduling ................................................ 192 Top-Level Process Definition ................................................................................. 194 Process Maps ............................................................................................. 194 Assembling the Team ............................................................................................. 195 7 The Measure Phase .................................................................................................. 197 Process Definition ................................................................................................... 197 Flowcharts .................................................................................................. 198 SIPOC ........................................................................................................ 198 Metric Definition .................................................................................................... 201 Measurement Scales .................................................................................. 203 Discrete and Continuous Data ................................................................... 205 Process Baseline Estimates ..................................................................................... 206 Enumerative and Analytic Studies ............................................................. 207 Principles of Statistical Process Control .................................................... 209 Estimating Process Baselines Using Process Capability Analysis ............................................................................................. 213 8 Process Behavior Charts ........................................................................................ 215 Control Charts for Variables Data ......................................................................... 215 Averages and Ranges Control Charts ....................................................... 215 Averages and Standard Deviation (Sigma) Control Charts ....................................................................................... 217 Control Charts for Individual Measurements (X Charts) ......................... 221 Control Charts for Attributes Data ......................................................................... 224 Control Charts for Proportion Defective (p Charts) ................................. 224 Control Charts for Count of Defectives (np Charts) ................................. 227 Control Charts for Average Occurrences-Per-Unit (u Charts) .......................................................... 229 Control Charts for Counts of Occurrences-Per-Unit (c Charts) .......................................................... 232 Control Chart Selection .......................................................................................... 233 Rational Subgroup Sampling .................................................................... 235 Control Chart Interpretation ................................................................................... 236 Run Tests ................................................................................................... 241 Tampering Effects and Diagnosis ............................................................. 242 Short Run Statistical Process Control Techniques ................................................ 244 Variables Data ........................................................................................... 245 Attribute SPC for Small and Short Runs .................................................. 255 Summary of Short-Run SPC ..................................................................... 261 SPC Techniques for Automated Manufacturing .................................................... 261 Problems with Traditional SPC Techniques ............................................. 262 Special and Common Cause Charts .......................................................... 262 EWMA Common Cause Charts ................................................................ 263 EWMA Control Charts versus Individuals Charts .................................... 269 Distributions ........................................................................................................... 271 Methods of Enumeration ........................................................................... 271 Frequency and Cumulative Distributions ................................................. 273 Sampling Distributions .............................................................................. 274 Binomial Distribution ................................................................................ 274 Poisson Distribution .................................................................................. 275 Hypergeometric Distribution .................................................................... 277 Normal Distribution .................................................................................. 278 Exponential Distribution ........................................................................... 282 9 Measurement Systems Evaluation ........................................................................ 289 Definitions ............................................................................................................ 289 Measurement System Discrimination ................................................................... 291 Stability ................................................................................................................. 293 Bias ....................................................................................................................... 295 Repeatability ......................................................................................................... 295 Reproducibility ..................................................................................................... 298 Part-to-Part Variation ........................................................................................... 300 Example of Measurement System Analysis Summary ......................................... 301 Gage RandR Analysis Using Minitab .......................................................... 302 Linearity ................................................................................................................. 306 Linearity Analysis Using Minitab .............................................................. 308 Attribute Measurement Error Analysis .................................................................. 310 Operational Definitions .............................................................................. 311 How to Conduct Attribute Inspection Studies ........................................... 312 Example of Attribute Inspection Error Analysis ........................................ 312 Minitab Attribute Gage RandR Example ...................................................... 316 10 Analyze Phase .......................................................................................................... 321 Value Stream Analysis ........................................................................................... 321 Value Stream Mapping ............................................................................... 323 Spaghetti Charts ......................................................................................... 326 Analyzing the Sources of Variation ....................................................................... 326 Cause and Effect Diagrams ........................................................................ 327 Boxplots ...................................................................................................... 328 Statistical Inference .................................................................................... 331 Chi-Square, Student's T, and F Distributions ............................................ 332 Point and Interval Estimation ..................................................................... 336 Hypothesis Testing ..................................................................................... 339 Resampling (Bootstrapping) ...................................................................... 341 Regression and Correlation Analysis ..................................................................... 342 Linear Models ............................................................................................ 344 Least-Squares Fit ........................................................................................ 346 Correlation Analysis ................................................................................... 351 Designed Experiments ........................................................................................... 352 Terminology ............................................................................................... 353 Design Characteristics ................................................................................ 354 Types of Design ......................................................................................... 355 One-Factor ANOVA .................................................................................. 356 Two-Way ANOVA with No Replicates ..................................................... 359 Two-Way ANOVA with Replicates .......................................................... 360 Full and Fractional Factorial ...................................................................... 361 Power and Sample Size .............................................................................. 369 Testing Common Assumptions .................................................................. 369 Analysis of Categorical Data ................................................................................. 376 Making Comparisons Using Chi-Square Tests ................................................................................. 376 Logistic Regression .................................................................................... 378 Binary Logistic Regression ........................................................................ 380 Ordinal Logistic Regression ....................................................................... 383 Nominal Logistic Regression ..................................................................... 385 Non-Parametric Methods ....................................................................................... 389 11 The Improve/Design Phase ..................................................................................... 393 Using Customer Demands to Make Design and Improvement Decisions ................................................................................. 393 Category Importance Weights ................................................................... 394 Lean Techniques for Optimizing Flow .................................................................. 400 Tools to Help Improve Flow ...................................................................... 400 Using Empirical Model Building to Optimize ....................................................... 402 Phase 0: Getting Your Bearings ................................................................. 403 Phase I: The Screening Experiment ........................................................... 404 Phase II: Steepest Ascent (Descent) .......................................................... 408 Phase III: The Factorial Experiment .......................................................... 408 Phase IV: The Composite Design .............................................................. 411 Phase V: Robust Product and Process Design ........................................... 415 Data Mining, Artificial Neural Networks, and Virtual Process Mapping ............................................................................................... 419 Example of Neural Net Models ................................................................. 420 Optimization Using Simulation ............................................................................. 420 Predicting CTQ Performance ..................................................................... 423 Simulation Tools ........................................................................................ 426 Random Number Generators ..................................................................... 427 Model Development ................................................................................... 431 Virtual Doe Using Simulation Software .................................................... 438 Risk Assessment Tools .......................................................................................... 443 Design Review ........................................................................................... 443 Fault-Tree Analysis .................................................................................... 443 Safety Analysis ........................................................................................... 444 Failure Mode and Effect Analysis ............................................................. 447 Defining New Performance Standards Using Statistical Tolerancing ....................................................................................... 450 Assumptions of Formula ............................................................................ 453 Tolerance Intervals ..................................................................................... 454 12 Control/Verify Phase ............................................................................................... 455 Validating the New Process or Product Design .................................................... 455 Business Process Control Planning ....................................................................... 455 Maintaining Gains ...................................................................................... 456 Tools and Techniques Useful for Control Planning ................................... 457 Preparing the Process Control Plan ........................................................... 458 Process Control Planning for Short and Small Runs ................................. 460 Process Audits ............................................................................................ 462 Selecting Process Control Elements .......................................................... 462 Other Elements of the Process Control Plan .............................................. 465 Appendices Al Glossary of Basic Statistical Terms ....................................................................... 469 A2 Area Under the Standard Normal Curve ............................................................. 475 A3 Critical Values of the t-Distribution ..................................................................... 479 A4 Chi-Square Distribution ........................................................................................ 481 A5 F Distribution (x = 1%) ................................................................................................... 483 A6 F Distribution (x = 5%) ........................................................................................... 485 A7 Poisson Probability Sums ....................................................................................... 487 A8 Tolerance Interval Factors ..................................................................................... 491 A9 Control Chart Constants ........................................................................................ 495 A10 Control Chart Equations ....................................................................................... 497 All Table of d2* Values ................................................................................................... 499 Al2 Factors for Short Run Control Charts for Individuals, x-bar, and R Charts .............................................................................................. 501 A13 Sample Customer Survey ....................................................................................... 503 A14 Process x Levels and Equivalent PPM Quality Levels ........................................... 505 A15 Black Belt Effectiveness Certification ..................................................................... 507 [COMPANY] Black Belt Skill Set Certification Process ..................................... 507 Introduction ............................................................................................... 507 Process ....................................................................................................... 507 [COMPANY] Black Belt Effectiveness Certification Criteria ............................ 508 [COMPANY] Black Belt Certification Board ...................................................... 509 Effectiveness Questionnaire ................................................................................. 509 [COMPANY] Black Belt Notebook and Oral Review ......................................... 510 A16 Green Belt Effectiveness Certification .................................................................... 519 Green Belt Skill Set Certification Process ............................................................ 519 Introduction ............................................................................................... 519 Green Belt Effectiveness Certification Criteria .................................................... 520 Green Belt Certification Board ................................................................. 521 Effectiveness Questionnaire ...................................................................... 521 Scoring Guidelines .................................................................................... 521 Green Belt Notebook ................................................................................. 522 A17 AHP Using Microsoft ExcelTM ........................................................................................................................................ 531 Example ..................................................................................................... 531 References ............................................................................................................. 533 Index ...................................................................................................................... 537