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BITS PilaniPilani Campus Suhas A Chougule
Statistical Quality
Control (SQC)MBA ZG531/QM ZG531
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BITS PilaniPilani Campus
Lecture-2
The DMAIC Process
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What will we coer to!ay"
•What is Si# Sig$a%
• &$'ortance o goo! 'roect selection
•What is *MA&C%
•*o & re$e$+er what & hear!%
3
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What will we coer to!ay"
•What is Si# Sig$a%
• &$'ortance o goo! 'roect selection
•What is *MA&C%
•*o & re$e$+er what & hear!%
4
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What is Si# Sig$a%
• ,ro+le$-soling $etho!
• *ata-!rien a''roach to continuous i$'roe$ent• .n!erstan! critical in'uts control out'ut
• 0ow goo! can we +e%2
• Co$$on language
• Set o tools to tacle change
• &n other wor!s444
• An approach to sustainable continuous improvement that: - Moves us toward the goal of being a world-class company by
improving the uality and consistency of our processes - !ses statistical tools for significant process capability improvement"
#
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Si# Sig$a &s""
• *ata !rien a''roach to 'rocess i$'roe$ent
• Changing the way 3Msoles it 'ro+le$s
• Maing a !ierence withour results
• Maing a !ierence withour custo$ers
• A''lie! to our to'
,riorities
Si# Sig$a is 6ot"4
• A• A Se'arate &nitiatie
• A re'lace$ent orco$$on sense
• A 'assing 7a!• Se'arate or a!!itionalWor
Si# Sig$a Clari8cation
Magic $and
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9eys to Si# Sig$a Success
• .n!erstan!ing o +usiness strategy
• &!enti8cation o critical +usiness issues
• :inage o 'roects to resolution o issues
• Clear e#'ectations or results• ;ight 'eo'le
• ;ight tools
• Measura+le 'rogress (Metrics)
• Manage or sustaina+le results
%
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<es= +ut What &s Si# Sig$a%,utt *ierently
6 1/163 Years
5 1/2.33 Years
4 1/9 ou!"s
3 1/ou!"
1 12/ou!"
2 6/ou!"
M#sse" PuttsS#$%a &e'e&
&f you were to play '((rounds of golf per year
and played at
$hat)s your *igma level+
,
< + t Wh t & Si Si %
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<es= +ut What &s Si# Sig$a%,ractical Meaning
• & >>? was goo! enough= there woul! +e"• @= :ost Articles o Mail / r
• @ Short-:ong Air'lane :an!ings / *ay
• @= Wrong *rug ,rescri'tions / <ear
• r= woul! you rather hae >>4>>>? "• D :ost Articles o Mail / r
• 1 Short-:ong Air'lane :an!ing eery 5 <ears
• E Wrong *rug ,rescri'tions / <ear
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What !oes 0Si# Sig$a2 Mean%
• Fhe ter$ 0Si# Sig$a2 relates to nu$+er o !eects in a'rocess
.hat would be "//0 non-defective units 1wouldn)t
0 be good enough+
3.4 "e(ect#'e ca!s (or
e'er) million
*ro"uce" +ou&" ,e a
S# S#$%a &e'e&
*rocess
'(
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Another Way to :oo at &t"
• &n a Si# Sig$a 'rocess= s'rea! o custo$ers'eci8cations are twice as big as what 'rocess isca'a+le o
''('((-(,(%(/(#(4(3(
'#
'(
#
(
Process
2 r e u e n c y
LSL SL
I 0 0 L 1 2 2 M
I 0 0 L 1 2 2 M
''
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*issecting ,rocess Ca'a+ility
LSL SL
De(ects
Process Ca*a,#&#t)
ar#at#o! #!
Custo%er
eu#re%e!ts
Poor
Process
Ca*a,#&#t)
ar#at#o! #!
Su**&#er
I!a,#&#t) to
Measure
Correct&)
'
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What will we coer to!ay"
•What is Si# Sig$a%
• &$'ortance o goo! 'roect selection
•What is *MA&C%
•*o & re$e$+er what & hear!%
'3
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So ow !o & &!entiy a ,roect Fhat Maes Sense or Me%Begin +y asing yoursel these Huestions14 What is the $ost i$'ortant thing on which & a$ woring%
Where is 'ain%
@4 Which o these things are critical to our +usiness achieing ourstrategic goals%
34 What as'ect= i change!= woul! allow $e to co$'lete $yo+ectie in less ti$e= with a +etter result= an! $ae $y lieeasier%
I4 What 'rocess contains this !eect% &s the 'rocess itsel!eectie%
Most importantly: Project should be alignedwith both Business-unit goals andcorporate level metrics
'4
G tti , t ; !
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Getting ,roects ;ea!y orChartering
• o''er ,rocesses
• Fo' *own
• Business Strategy
• Botto$ .'
• ,rocess ,ain
• Both
• ow !o you select to' 'roects%
Management buy-in &clear prioritization
Everyone is involved &
projects are better sized
Pain Needs to Affect Business
'#
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When is Si# Sig$a .se!%
• When%• ae a 'ro+le$ ('rocess isnJt woring eectiely or
eKciently)
• ArenJt sure o actions nee!e! to i$'roe
• Can $easure the i$'roe$ent we want• L#a$'les o 'roect goals%
• ;e!uce errors ($istaes= clai$s= $aterial waste)
• &$'roe Huality (to a s'eci8cation)
• ;e!uce ti$e (lea!-ti$e)
• &$'roe 'ro!uctiity (s'ee!= lost ti$e= waste! eort)• &$'roe conor$ance to a target
• &ncrease ca'acity= $aret share (growth)
• ;e!uce inentory (cash ow)
'/
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What will we coer to!ay"
•What is Si# Sig$a%
• &$'ortance o goo! 'roect selection
•What is *MA&C%
•*o & re$e$+er what & hear!%
'%
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*MA&C
Measure to"a)s rea&#t)
A!a&)e the s#tuat#o!
I%*ro'e the *rocess
Co!tro& *rocess
De(#!e the $oa&
',
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*MA&C A''roach
• Clear 'ur'ose N goal
• Co$$on un!erstan!ing assure!
• Syste$atic a''roach +ase! on consensus O !ata
• All iews consi!ere! with consensus on ey issues• Fea$ a''roach ensures +uy-in
• Measure$ents ensure success
• 6o $easura+le i$'roe$ent go +ac an! thin
again• Fea$ har$ony P eeryone eHually inole!
• &$'roe! 'eror$ance ($oney) !e$onstrate!
• L$'hasis on control 'reents sli'-+ac
'
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*MA&C &$'roe Fools ;oa!$a'Stu") the Y
Pro7ect Y
MSA
I!#t#a&Ca*a,#&#t)
Mu&t#-ar#
The 8s
Process
Ma*
C
:MA
Measura,&e Y
0e!erate; #"e!t#()
a!" re"uce the 8s
Se'era&
%easura,&e
sus*ect 8s
Pro'e! Y<(=8
Pro'e!
Cr#t#ca& 8s
Mo!#tor
the Y
Co!tro&
the 8s
D; P#&ot;
I%*&e%e!t
:#!a&
Ca*a,#&#t)
Co!tro&
P&a!
De(#!e Measure A!a&)e I%*ro'e Co!tro&
I%*ro'e
Per(or%a!ce o(
the Y throu$h
o*t#%##!$ 8s
(
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9ey Fer$s
• Y’s
• ,rocess out'ut aria+les or custo$er reHuire$ents• Associate! with 'rocess 'eror$ance or !eect$easures
• L#a$'les % Lines-on-Time, % ales by tore,!umber rolls produced on line
• X’s
• ,rocess in'ut aria+les
• Associate! with sources o ariation• L#a$'les Mar"eting programs, shel#placement o# product, type o# product,chemical mi$ture, manu#acturing line
y f x x xk = ( , ,..., )1 2
!nderstand the 5)s - control the 6)s
'
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*MA&C
Measure to"a)s rea&#t)
A!a&)e the s#tuat#o!
I%*ro'e the *rocess
Co!tro& *rocess
De(#!e the $oa& a!" "e(ect
De(#!e the $oa& a!" "e(ect
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*e8ne the Goal
•S 'eci8c
•M easura+le
•A
chiea+le
•; eleant
• F i$e-+oun!
De(#!e the $oa& a!" "e(ect
Project Charter
3
De(#!e the $oa& a!" "e(ect
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*e8ne the Goal
Gra'hical Ai!s use! in the !e8neste'• S&,C !iagra$
•,rocess Ma'
•,rocess ow chart
De(#!e the $oa& a!" "e(ect
4
Specific
De(#!e the $oa& a!" "e(ect
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*e8ne P ,roect CharterGetting to Work Example
7educe cost of poor uality from 40 to '0 by ((/"
88 9rowth 88 Productivity Cost 88 Cash
.;<
Primary goal: &mprove on time arrival to wor= from , minutes late
to # minutes late"
>ntitlement: Arriving to wor= ( minutes late"
Counter-balance: <o not have a foul mood while going to wor="
<elays in getting to wor=
Specific
Time-bound
Achievable
De(#!e the $oa& a!" "e(ect
elevant
Measurable
8
Bus#!ess
Cr#t#ca& Y
Cor*orate Y
De(ect/Pa#!
Pro7ect Y
:#!a!c#a& Be!e(#t
#
Specific
De(#!e the $oa& a!" "e(ect
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*e8ne P ,roect CharterPut in Your Project Example Here
.o reduce ?ogistics cost from #"'0 to 4"30 to sales by ((#
88 9rowth 88 Productivity Cost 88 Cash
@4((( per year in reduced ;edford shipping costs
@4((( per year in P*P over-shipments and P&A)s"
Primary goal: .o reduce P*P split-carton order-lines from B to y
by <ec '% ((4
>ntitlement: o split-carton orders
*econdary goals: .o reduce warehouse activity domestic freight
Dfewer orders and material losses Dover-shipments E P&A)sCounter-balance: Maintain P*P monthly sales
$e allow P*P customers to order less than carton uantities"
.his increases ;edford costs
8
SpecificMeasurable
Achievable
Time-bound
Bus#!ess
Cr#t#ca& Y
Cor*orate Y
De(ect/Pa#!
Pro7ect Y
:#!a!c#a& Be!e(#t
elevant
De(#!e the $oa& a!" "e(ect
/
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2>
Short ,rea?
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*MA&C
A!a&)e the s#tuat#o!
Measure to"a)s rea&#t)
I%*ro'e the *rocess
Co!tro& *rocess
De(#!e the $oa& a!" "e(ect
,
h
Measure to"a)s rea&#t)
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Measure ,hase
Answers the Huestions"
• What are the in'uts an! out'uts% ('rocess $a')= an!
9,&R= 9,R
• What are the $ost critical in'uts% (cause N eects$atri#)
• ow goo! are the $easure$ent tools N syste$s%($easure$ent syste$s analysis)
• ow goo! is the 'rocess initially= +eore anything ischange!% ('rocess ca'a+ility)
Measure to"a) s rea&#t)
Measure to"a)s rea&#t)
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Measure ,hase P ,rocess Ma'ow *o We Mae ne% :ist the ste's in your 'rocess
Process Ste*
Process Ste*
Process Ste*
Measure to"a) s rea&#t)
* t e p s s h o u l d b e
c h a n g e s
o f
s t a t e1 F >
7 ; * G
3(
Measure ,hase ,rocess Ma' Measure to"a)s rea&#t)
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Measure ,hase P ,rocess Ma'ow *o We Mae ne% :ist ey out'uts ateach ste'
Process Ste*
Process Ste*
Process Ste*
ut*uts
Measure to"a) s rea&#t)
ut*uts
shou&" ,e
%easura,ð#!$s@
S
3'
M ,h , M
Measure to"a)s rea&#t)
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Measure ,hase P ,rocess Ma'ow *o We Mae ne% :ist ey in'uts at eachste'
Process Ste*
Process Ste*
Process Ste*
ut*utsI!*uts
Measure to"a) s rea&#t)
I!*uts shou&"
,e th#!$s@.
S
3
M ,h , MMeasure to"a)s rea&#t)
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Measure ,hase P ,rocess Ma'Your Turn!
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nputs
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• 7oo!= coee
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Measure P Cause N Lects Matri#ow !o We Mae ne%
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Measure Cause N Lects Matri#ow !o We Mae ne%
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Measure Cause N Lect Matri#Your Turn!
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Analye
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Analye P 7MLAGetting to Work " Your Turn!
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Analye P 7MLAGetting to Work Example
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Analye
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44
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AnalyeGetting to Work
• ow oten is there no gas in the gas tan%
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AnalyeGetting to Work " #oxplots
4/
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AnalyeGetting to Work " $otplots
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AnalyeGetting to Work " %itte& 'ine Plot
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*MA&C
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&$'roe P Rali!ate &!eas
• Mae changes on a 'ilot scale
• Measure the !ierence
• Con8r$ youJe !iscoere! the ey issue(s)
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• Measure eect on your 'roect <
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&$'roe P Rali!ate &!eas
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&$'roe -Rali!ate &!eas
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&$'roe P ,ossi+le Fools
• Uust *o &t (,otential Quic it)• What it is &$'le$entation o low ris i!eas• When to use nly when riss are e#tre$ely low
• Business ,rocess ;e!esign • What it is .se o a!!itional tools to co$'letely oerhaul the
'rocess P signi8cantly changing how wor is !one• When to use When current 'rocess is so +a!ly +roen or
awe! that only solution is to create a new 'rocess
• :ean 0&$'roe2 Fools• What it is Set o tools to i$'roe 'rocess ow or eli$inate
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#3
&$'roe P ,ossi+le Fools (cont )I%*ro'e the *rocess
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&$'roe P ,ossi+le Fools (cont4)
• Si$ulation• What it is 7or$al $o!eling with sotware• When to use When canJt aor! to run e#'eri$ent or 'ilot
stu!y an! !ata is aaila+le
• ,ilot Stu!y
• What it is S$all scale i$'le$entation o 'ro'ose! solution• When to use & riss (ti$e= cost= co$'le#ity= 'otential
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• *esign o L#'eri$ents (*L)• What it is Statistically structure! 'lan or changing TJs an!
$easuring i$'act on <Js• When to use• Multi'le solution o'tions e#ist• ;is in i$'le$enting on a s$all scale• Can $easure i$'act o TJs on < in a reasona+le ti$e ra$e
#4
&$'roe P :ean Fools
I%*ro'e the *rocess
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&$'roe :ean Fools
• :ean is continuous eli$ination o non-alue a!!e!wor (Mu!a or waste)4
• :ean ,ri$ary ,rinci'les• 7low P 'rocess runs as continuously as 'ossi+le with
little or no inentory +etween 'rocess ste's• ,ull P ;ate o each ste' is !eter$ine! +y nee!s o
succee!ing ste'Possible ?ean .ools !sed <uring &mprove Phase
• a&ue Strea% Ma**#!$
• Kust #! T#%e
• Sta!"ar"#at#o!
• TPM• Mater#a& :&o+
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• 5Ss =Sort; Stra#$hte!; Sh#!e;Sta!"ar"#e; Susta#!H
• K#"o?a
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• Ea!,a!
• Su*er%ar?ets
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• Co!t#!uous I%*ro'e%e!t• Ta?t T#%e Assess%e!t
• Po?a Yo?e
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##
&$'roe P Measure LectG i k
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'Getting to Work
Time
P e r f o r m a n c
e
GOOD
BAD
#/
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*MA&C
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Control ,hase
• &ntro!uce controls to $aintain i$'roe$ent
• 7ocus on things youJe change!• What shoul! +e $onitore! an! how ($etrics)
• Who shoul! !o it (co$$it$ent)
• When / how oten• Fraining
• Action 'lan i 'eror$ance alls +ac
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• Sustain the gains
#,
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Getting to Work " Your Turn!
#
Control ,lanG tti t W k
Co!tro& *rocess
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Getting to Work
/(
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*MA&C
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So What is 0Si# Sig$a%2
• &tJs a 'hiloso'hy
• &tJs an initiatie
• &tJs a $etho!ology
• &tJs a toolit
/
*ummary of ?ecture-
*ummary of ?ecture
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$e can use
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*ummary of ?ecture-
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*MA&C ,rocess• Purpose
• &!entiy= Huantiy an! eli$inate sources (cri$inals) oariation an! !eects (cri$es)
• &$'roe an! sustain 'eror$ance with well e#ecute! control
'lans (loc Ve$ u' an! throw away the ey)• Goals
• Achiee +reathroughs in custo$er satisaction= growth= cost /'ro!uctiity= an! cash / woring ca'ital
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9ey Fer$s
• <Js• ,rocess out'ut aria+les or custo$er reHuire$ents
• Associate! with 'rocess 'eror$ance/!eect $easures
• TJs• ,rocess in'ut aria+les
• Associate! with the sources o ariation
Cr#%eG !acce*ta,&e 'ar#at#o! #! Y
y f x x xk = ( , ,..., )1 2
!nderstand the 5)s - control the 6)s
Cr#%#!a&sG 8s that cause 'ar#at#o! #! Y
/#
*ummary of ?ecture-
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'nd o#Lecture -(