DMAIC – An Overview

Barry Murash MBBit

Nortel

2007

6 Sigma Evolution…Where did it come from…

> A continuation of the overall TQM (Total Quality Management) concept of “continual improvement” of a process originally introduced by the “Quality Guru’s” …Deming…Juran…Crosby…Taguchi.

> Conceptualized and formally introduced by Motorola in the mid 1980’s as a quality goal required because technology was becoming so complex that the traditional ideas about acceptable quality levels were inadequate.

> In 1989 Motorola announced a five-year goal – a defect rate of not more than 3.4 parts per million – or 6 Sigma on its key processes.

By the Numbers . . .

Fortune 500 companies doing Lean Six Sigma 100

Dollars returned compared to dollars invested 8:1

Benefits as a percent of revenue for top companies 5

• Sigma (“”) is a measure…

Six Sigma: Measure of Process Capability

* DPMO = Defects per million opportunities

…that focuses on the variation of the process output

Customer Expectation

Defective

Process Output(Variation)

6 Process output= 3.4 Defects per

Million OpportunitiesSIGMA DPMO * YIELD

1.0 691,462 30.8538%2.0 308,538 69.1462%3.0 66,807 93.3193%4.0 6,210 99.3790%5.0 233 99.9767%6.0 3.4 99.9997%

SIGMA DPMO * YIELD1.0 691,462 30.8538%2.0 308,538 69.1462%3.0 66,807 93.3193%4.0 6,210 99.3790%5.0 233 99.9767%6.0 3.4 99.9997%

1

2

3

4

5

6

Top-Level IndicatorsTop-Level Indicators

A Structured Framework

RevenueRevenue

ExpenseExpenseCash FlowCash Flow

SatisfactionSatisfaction

Quantify Quantify StrategyStrategy

RevenueRevenue

ExpenseExpenseCash FlowCash Flow

SatisfactionSatisfaction RevenueRevenue

ExpenseExpenseCash FlowCash Flow

SatisfactionSatisfaction

Quantify Quantify StrategyStrategy

Process Management Process Management Control SystemsControl Systems

Problem Solving Problem Solving (DMAIC)(DMAIC)

Process (Re) - Design Process (Re) - Design (DMADV)(DMADV)

1

2

3

4

5DEFINE

MEASURE

ANALYZE

IMPROVE

CONTROL

1

2

3

4

5DEFINE

MEASURE

ANALYZE

IMPROVE

CONTROL

1

2

3

4

5DEFINE

MEASURE

ANALYZE

DESIGN

VALIDATE

1

2

3

4

5DEFINE

MEASURE

ANALYZE

DESIGN

VALIDATE

To instill process discipline & fact-based decisions

ClosingClosingPerformancePerformance

GapsGaps

Aligning theAligning the OrganizationOrganization

Managing Managing ProcessesProcesses

Process Description: Process Customer: Customer Validated Requirem

Process FlowchartPosition

Step/Time

Complaint Handling

Service Rep ClaimsClaimsCustomer

Issu

eR

ecei

ved

Issu

eR

ecei

ved

Dat

a G

ath

erin

gD

isp

osi

tio

n

Major Account ResponsivenessIndicators Checking

Process

OutcomeResults

CheckingItem

Control

Specs/Target

What toCheck

Freq-uencyWhen to

CheckWho

Check

ANDAND

X1= Doc’nstds not met

X2= Issuemis-class

P3= Neg’n stds not met

Q1= W/O not to stds

XX11

XX22

XX33

Upstream measure1

OutcomeIndicator

Upstream measure2

Upstream measure3

YY11

VisionVision

DEFINEthe projectopportunityandboundaries

Define Measure Analyze Design Validate

MEASUREand prioritize customerrequirements(CTQs)

ANALYZEalternativehigh level processdesignagainst CTQs

DESIGN and optimize thedetailed process flowsupporting the high level design selected

VALIDATEthat the detailed design meets customer requirements and achievesperformance objectives

DEFINEthe projectboundaries

Define Measure Analyze Improve Control

MEASUREthe defects and wherethey occur in the process

ANALYZEwhy the defects occur and verify which reasons are root causes

IMPROVEperformance by implementing solutionsthat eliminate root cause(s)

CONTROL the process by monitoringperformance upstream to ensure the problems stay fixed

DEFINEthe projectboundaries

Define Measure Analyze Improve Control

MEASUREthe defects and wherethey occur in the process

ANALYZEwhy the defects occur and verify which reasons are root causes

IMPROVEperformance by implementing solutionsthat eliminate root cause(s)

CONTROL the process by monitoringperformance upstream to ensure the problems stay fixed

Tell us what’s important

- Focus -

Tell us what’s not working

- Measure -

Helps us fix the problem

- Improve -

DMAIC – An Iterative approach

Define Measure Analyze Improve Control

• Team Charter• Process Mapping• Defining CTQs• SIPOC

• Measure process Performance• Measure CTQs• Determine baseline sigma level

• Identify & Quantify root causes• Use various statistical and analytical tools, identify low hanging fruit

Select, design & Implement solution

• Institutionalize Improvements• Implement ongoingControls• Standardize process

DEFINE at a GlanceDEFINE at a Glance

Identify Business Opportunity/Gap ($)

Identify Customer’s Critical To Quality (CTQ) Attributes

Map High Level Processes and Set Boundaries

• Select measures that link

process performance to

problem area related to CTQ

• Shows need for

improvement

Develop Preliminary Problem Statement

Select Resources (% Time) and

Charter Project

Prepare Communication & Project Plans

Identify Outcome Indicators

To define the customer, their CTQs, the team charter, and map the core business process

Assess Financial $ Impact (COQ)

MEASURE at a GlanceMEASURE at a Glance

To measure the process performance

Calculate Performance

Stratify Data

Plot Defect Data Over Time

Develop Data Collection Plan

Create Detailed Process Map

Customer Customer

Identify Value Added & Non-Value Added Steps

Assess Process Performance

Set Process Performance / $

Improvement Goal

DevelopFinal Problem

Statement

Collect Data

Scatter Plots

Y

X

Contingency TableSub Cause

Yes No

Present

NotPresent

Def

ect

55

55

Made the Sale

Did Not Make the Sale

Time With Customer

(in minutes)

5 10 15 20 25 30 3 5 40 45 50 55 60 >60

5 10 15 20 25 30 3 5 40 45 50 55 60 >60

Made the Sale

Did Not Make the Sale

5 10 15 20 25 30 3 5 40 45 50 55 60 >60

5 10 15 20 25 30 3 5 40 45 50 55 60 >60

Time With Customer(in minutes)

5 10 15 20 25 30 3 5 40 45 50 55 60 >605 10 15 20 25 30 3 5 40 45 50 55 60 >60

5 10 15 20 25 30 3 5 40 45 50 55 60 >605 10 15 20 25 30 3 5 40 45 50 55 60 >60

Stratified Frequency Plots

RootCause

1

RootCause

2

SubCause

Sub SubCause

SubCause

Sub Sub Cause

Sub Sub SubCause

SubCause

SubCause

Sub CauseSub Sub Cause

Sub Sub Cause

Cause and Effect

Diagram

Brainstorm and Organize Potential Causes

Verify Potential Causes with Data

Confirm Root Causes

RootCause

1

RootCause

2

SubCause

Sub SubCause

SubCause

Sub Sub Cause

Sub Sub SubCause

SubCause

SubCause

Sub CauseSub Sub Cause

Sub Sub Cause

Cause and Effect

Diagram

Final Problem

Statement

Final Problem

Statement

ANALYZE at a GlanceANALYZE at a Glance

To analyze the data and the process map to determine root causes and opportunities for improvement

Solution Selection Matrix

Identify and Select

Solutions

Conduct Cost/Benefit Analysis

FMEA

Item or Process

Step

Potential Failure Mode

Potential Effect (s) of Failure

Potential Cause(s)

Current Controls R

PN Recommended

Action

Responsibility and

Target Date Action Taken

Sev

erity

Occ

urre

nce

Det

ectio

n

RP

N

“After”

Sev

erity

Occ

urre

nce

Det

ectio

n

Total Risk Priority Number = “After” Risk Priority Number =

Develop Action Plan For Full Implementation

Conduct Risk Analysis

Develop Pilot Plan

ID Task Name1 Recruitment

2 Training

3 Communication

4 Data Collection

5 Conduct

6 Evaluation

F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T WOct 8, '00 Oct 15, '00 Oct 22, '00 Oct 29, '00 Nov 5, '00 Nov 12, '00

ID Task Name1 Recruitment

2 Training

3 Communication

4 Data Collection

5 Conduct

6 Evaluation

F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T WOct 8, '00 Oct 15, '00 Oct 22, '00 Oct 29, '00 Nov 5, '00

ID Task Name1 Recruitment

2 Training

3 Communication

4 Data Collection

5 Conduct

6 Evaluation

F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T WOct 8, '00 Oct 15, '00 Oct 22, '00 Oct 29, '00 Nov 5, '00 Nov 12, '00

Updated Pareto Chart

Before After

Quantify Pilot Results

Update Outcome Indicators

Before After

IMPROVE changes

implemented

}Improvement

Good

Time

DEFINE

Before After Good

Time

Before After

IMPROVE changes

implemented

Time

} Improvement

3.2 3.6

Cost/Benefit Analysis

Approval from Finance

Cost

Benefit

Solution (s) / Specific Task (s) ____________________________

Problem Statement ________________________________________:

Task / Project Who Due Date Status

Gantt Chart

Cost

ActionProblem

Root Causes

Solutions

Effect

ivene

ssEas

e to

Imple

men

t

Total

Score

Specific Tasks

1.3

A1 A2 A3 A4

} Improvement

A2 A1 A3 A4

3.1

50%

25%

75%

100%

50%

25%

75%

100%

IMPROVE at a GlanceIMPROVE at a Glance

To generate, select, and implement improvements

Develop and Document Standard Practices

Train Personnel

TrainingCurriculum

TrainingManual

Build theProcess Management Control System

Fully Implement Solutions and PMCS

Close Project and Celebrate

StandardPractice

Fill to here

Warn ing

Sy s tem

Replicate Projects at Other

Locations

Cost/Benefit Analysis

Approval from Finance

Verify Cost/Benefit

“X” Upstream IndicatorsUCL

LCL

UCL

LCL

“Y” Outcome Indicators

Good

CONTROL at a GlanceCONTROL at a Glance

To institutionalize the improvement and implement ongoing monitoring