McGraw-Hill/Irwin ©2011 The McGraw-Hill Companies, All Rights Reserved

Six-Sigma Quality

Chapter 9

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Learning Objectives

Understand total quality management. Describe how quality is measured and

be aware of the different dimensions of quality.

Explain the define, measure, analyze, improve, and control (DMAIC) quality improvement process.

Understand what ISO certification means.

Explain Benchmarking

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Key Six Sigma Concepts

Critical to quality: attributes most important to the customer

Defect: failing to deliver what customer wants Process capability: what your process can

deliver Variation: what customer sees and feels Stable operations: ensuring consistent,

predictable processes to improve what the customer sees and feels

Design for six-sigma: designing to meet customer needs and process capability

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Total Quality Management (TQM)

Total quality management: managing the entire organization so that it excels on all dimensions of products and services that are important to the customer

Two fundamental operational goals: Careful design of the product or service Ensuring that the organization’s systems can

consistently produce the designLO 1LO 1

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Total Quality Management (TQM)

The TQM culture follows the Deming approach: Cultural environment for SPC Training employees in the TQM concept Problem solving Design of experiments

TQM is customer (external/internal) driven

TQM is company-wide not QC departments only

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Culture of TQM

Participative management: Create proper cultural environment Promote team concepts Change of attitude (management and labor) Company versus individual goals Have a long-term focus

TQM is based on an integrated whole All departments All functions All people in the company

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TQM Concepts

Interest mostly due to: Consumer interest in quality—more for their

money Foreign competition The trade deficit

The goal is customer satisfaction

TQM integrates all function/processes in the company

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Malcolm Baldridge National Quality Award

Established in 1987 by Department of Commerce—national standard for quality

Goal is to help companies review and structure their quality programs—enable them compete

Has requirement that suppliers demonstrate they are measuring and documenting their quality practices

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The Quality Gurus Compared

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The Quality Gurus Compared Continued

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Quality Specifications and Quality Costs

Design quality: inherent value of the product in the marketplace

Conformance quality: degree to which the product or service design specifications are met

Quality at the source: the person who does the work takes responsibility for making sure it meets specifications

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The Dimensions of Design Quality

Performance: primary product or service characteristics

Features: added touches, bells and whistles, secondary characteristics

Reliability/durability: consistency of performance over time

Serviceability: ease of repair

Aesthetics: sensory characteristics

Perceived quality: past performance and reputationLO 2LO 2

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Cost of Quality

Basic cost assumptions Failures are caused Prevention is cheaper Performance can be measured

Cost of quality Appraisal cost

Inspection & testing of purchased materials Inspection & testing of products

Prevention cost Training of employees in quality Quality planning activities

Internal failure cost Costs of scrap and rework Costs of analyzing failures

External failure cost Costs of warrantees Costs of liabilities

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Six-Sigma Quality

Six-sigma is a philosophy and methods used to eliminate defects

Seeks to reduce variation in the processes

One metric is defects per million opportunities (DPMO)

000,000,1units ofNumber unit per error for iesopportunit ofNumber

defects ofNumber DPMO

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Six-Sigma Methodology

Uses many of the same statistical tools as other quality movements Used in a systematic project-oriented fashion

through define, measure, analyze, improve, and control (DMAIC) cycle More detailed version of Deming PDCA cycle

Continuous improvement: seeks continual improvement in all aspects of operations Also uses scientific method

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Six Sigma Quality

1 Sigma = = 317,400/Million Rejects

2 Sigma == 45,400/Million Rejects

3 Sigma == 2,700/Million Rejects (Normal)

6 Sigma = 99.99966% Accepted.= 4 ppm ~ process std deviation no more than 1/12 of

totalallowable spread

Strategy for Achieving 6-Sigma: Robust Design Variability Reduction

20.1200.1280.11

40.1200.1260.11

60.1200.1280.11 3 Or 99.73%Or 99.73%

1 Or 68.3%Or 68.3%

2 Or 95.5%Or 95.5%

ozX 12 oz2.0

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Six Sigma Quality

Reduced Variation

Reduced Variation

High Variation

High Variation

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DMAIC Methodology

Define Identify customers and their priorities Identify a project Identify critical-to-quality characteristics

Measure Determine how to measure the process Identify key internal processes

Analyze Determine most likely causes of defects Understand why key defects are generated

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DMAIC Methodology Continued

Improve Identify means to remove causes of defects Confirm the key variables Identify the maximum acceptance ranges Modify process to stay within acceptable

range

Control Determine how to maintain improvements Put tools in place to track key variables

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DMAIC Example

Suppose we are the maker of a 16 oz brand of cereal. Consumer Reports has just published an article that shows that we frequently have less than 16 ounces of cereal in a box.

What should we do?

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Step 1 - Define

What is the critical-to-quality (CTQ) characteristic?

The CTQ (critical-to-quality) characteristic in this case is the weight of the cereal in the box. Other CTQs could be: Number of broken flakes/scoop Raisins per scoop Time to sogginess

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2 - Measure

How would we measure to evaluate the extent of the problem?

What are acceptable limits on this measure?

Assume the government says we must be within ± 5 percent of the weight advertised on the box

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2 – Measure (continued)

Then, Upper Tolerance Limit = 16 + .05(16) = 16.8 ounces

Lower Tolerance Limit = 16 – .05(16) = 15.2 ounces

We buy 1,000 boxes of cereal and find that they weigh an average of 15.875 ounces with a standard deviation of 0.529 ounces

What percentage of boxes are outside the tolerance limits?

80.1620.15 X

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Upper Tolerance = 16.8

Lower Tolerance = 15.2

ProcessMean = 15.875Std. Dev. =0.529

What percentage of boxes are defective (i.e. less than 15.2 oz)?

From Appendix G, page 765, approximately 10%, of the boxes have less than 15.2 oz of cereal in them!

2 – Measure (continued)

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Step 3 - Analyze

How can we improve the capability of our cereal box filling process?

Decrease Variation

Center Process

Increase Specifications

Maintain machines

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Step 4 – Improve

How good is good enough? Better equipment

Trained employees

“Six Sigma” and beyond

6 minimum from process center to nearest specification

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Step 5 – Control

Statistical Process Control (SPC) Use data from the actual process

Estimate distributions

Look at capability - is good quality possible

Statistically monitor the process over time

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Analytical Tools for Six Sigma and Continuous Improvement

Flowcharts

Run charts

Pareto charts

Checksheets

Cause-and-effect diagrams

Opportunity flow diagrams

Control chartsLO 2LO 2

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Example: Flowchart

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Example: Run Chart

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Example: Pareto Chart

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Example: Checksheet

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Example: Cause-and-Effect Diagram

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Cause-and-Effect Chart for Flight Departure Delay (Fishbone Chart)

Equipment

Procedure

Material

Other

Aircraft late to gateLate arrivalGate occupiedMechanical failures

Late pushback tugWeather

Air traffic

Late food serviceLate fuelLate baggage to aircraft

Gate agents cannot process passengers quickly enoughToo few agents

Agents undertrainedAgents undermotivatedAgents arrive at gate lateLate cabin cleaners

Late or unavailable cockpit crewsLate or unavailable cabin crews

Poor announcement of departures

Weight and balance sheet late

Delayed checkin procedureConfused seat selection

Passengers bypass checkin counterChecking oversize baggage

Issuance of boarding pass

Acceptance of late passengers

Cutoff too close to departure timeDesire to protect late passengers

Desire to help company’s incomePoor gate locations

DelayedFlight

Departure

Personnel

Courtesy: Fitzsimmons & Fitzsimmons: Service Management, 6th Ed., McGraw-Hill, 2008.

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Example: Opportunity Flow Diagram

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Example: Control Chart

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Other Six Sigma Tools

Failure mode and effect analysis (DMEA): a structured approach to identify, estimate, prioritize, and evaluate risk of possible failures at each stage in the process

Design of experiments (DOE): a statistical test to determine cause-and-effect relationships between process variables and output

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Six Sigma Roles and Responsibilities

Executive leaders must champion the process of improvement

Corporation-wide training in Six Sigma concepts and tools

Setting stretch objectives for improvement

Continuous reinforcement and rewards

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Green BeltsChampion

Black BeltsMaster

Black Belt

Project MemberExecutive

Full time Train and coach Black/Green

Belts Statistical problem solving

experts

Devote 50%-100% of time to Black Belt activities

Facilitate/practice problem solving Train and coach Green Belts/project

teams

Part-time Help Black Belts

Part-time Project-specific

Own vision, direction, integration, results

Lead change

Project owner Implement solutions Black Belt managers

Understand vision

Apply concepts

Six Sigma Organization:Roles & Responsibilities

All Employees

Courtesy: Fitzsimmons & Fitzsimmons: Service Management, 6th Ed., McGraw-Hill, 2008.

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Six-Sigma In Practice

100 Rounds of Golf a Year

2 < 6 missed putts per round

3 1 missed putt per round

4 1 missed putt every 9th round

5 1 missed putt in 2.33 years

6 1 missed putt in 163 years

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The Shingo System: Fail-Safe Design

Shingo’s argument: SQC methods do not prevent defects Defects arise when people make errors Defects can be prevented by providing

workers with feedback on errors Successive check Self-check Source inspection

Poka-Yoke includes: Checklists Special tooling that prevents workers from

making errorsLO 3LO 3

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ISO 9000 and ISO 14000

Series of standards agreed upon by the International Organization for Standardization (ISO) Adopted in 1987 More than 160 countries

A prerequisite for global competition? ISO 9000 an international reference for

quality—”document what you do and do as you documented”

ISO 14000 is primarily concerned with environmental management

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ISO 9000 Series

Standards: 9001: Model for Quality Assurance in Design, Production

Installation, and Servicing 9002: Model for Quality Assurance in Production and

Installation 9003: Model for Quality Assurance in Final Inspection and

Test

Guidelines: 9000: Quality Management and Quality Assurance

Standards: Guidelines for Selection and Use 9004: Quality Management and Quality Systems

Elements—Guidelines

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Three Forms of ISO Certification

First party: A firm audits itself against ISO 9000 standards

Second party: A customer audits its supplier

Third party: A "qualified" national or international standards or certifying agency serves as auditor

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More About ISO 9000

They are not award programs

They just provide criteria for measuring quality systems

They are quite flexible

Applies to all industries

It is a worldwide standard

Offers opportunity for global competition

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External Benchmarking Steps

Identify those processes needing improvement

Identify a firm that is the world leader in performing the process

Contact the managers of that company and make a personal visit to interview managers and workers

Analyze dataLO 4LO 4

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Steps to Benchmarking

Align benchmark goals to organizational goals

Develop methods of measuring performance

Undertake benchmark improvement activities

Measure performance

Repeat the process and continue to improve

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Benefits of Benchmarking

Cultural change Allows firm to set realistic goals Engenders cultural change: compare oneself

Performance improvement Forces firm to define and identify gaps Provides way for improvement

Human resource benefits Recognizes the importance of people Provides for training and make them part of

problem-solving process

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Pitfalls of Benchmarking

It is not a panacea Will not work if the culture is lacking Could be counterproductive

Potential pitfalls Failure to involve/empower employees Failure to define/understand own process first Failure to take action on results Failure to set realistic goals