TQMBH14-5 - Session 04

Total Quality Management – TQMBH14-5

Session 04 Six Sigma (Case + Improve &

Control) + COPQ + 7 Basic QC Tools

Dipankar Bose - XLRI

Case Discussion on Six Sigma


Six Sigma DMAIC

(Improve & Control)


DMAIC Phase 4 – Improve

Evaluate alternative remedies

If necessary – Design of experiments

Design a remedy

Consider customer need

To anticipate failures and shortcomings, and prevent

them with

Failure Mode & Effects Analysis (FMEA)

Process Decision Program Chart (PDPC)

Prove effectiveness of the remedy

Primary evaluation through simulation

Final evaluation under real-world condition

Deal with resistance to change

Transfer the remedy to operations


DMAIC Phase 4 – Improve – Tools

Design of experiments Will be discussed later

Response Surface Methodology (RSM)

Creative thinking, Benchmarking

Lean event, Poka-yoke Will be discussed later

Pugh matrix, criteria selection matrix, payoff matrix

Process mapping

Process FMEA Will be discussed later

Stakeholder analysis

Change management

Project management

Simulation


DMAIC Phase 5 – Control

Design controls and document the improved process

Document the project as a whole (not just the new

process)

Validate the measurement system – again

Determine final process capability

Implement and monitor improved process


DMAIC Phase 5 – Control – Tools

Will be discussed later

Self-control analysis

Process control map

Poka-yoke

5S

SPC

SOP

Change management


Failure Factors

Top management participation is missing

Champion is not interested in a particular six sigma

project

Impatience of Management/ Employees

Selection of wrong persons for the black belt’s role

Resistance to change – not handled adequately


Strengths of Six Sigma

Top down initiation of a serious quality journey

Not a book-keeping exercise

Hierarchy of expertise and execution (Champ, BB, GB)

Structured deployment of tools (DMAIC)

Customer focus

In contrast to inward-looking standardization

Clear performance metric

Sigma levels/ DPMO

Fact-based decisions

Not procedure or judgment based

Application of statistics

Analytical, not will power


Strengths of Six Sigma – Continued

Engineering as well as service applications

Extending the horizon of statistical thinking

Recognized time effects in process analysis

Explicit provisions for short/long-term variations

Result oriented

Project by project Three to six months project

duration makes progress tangible

Business oriented

Achievements often required to be expressed in

financial terms

Good timing

Statistical software packages had become widely

available


Limitations of Six Sigma

Relies on the measurable

With a tendency to avoid the unquantifiable in project

selection

Attention paid to repetitive output

With lack of methodology for innovative or irregular

outcomes

Focused on error prevention

Gains from creativity or imagination (?)

Built upon unrealistic (?) mathematical statistics

Such as normal distribution and 1.5 sigma shifts

Mostly concerned with basic CTQ

Lack of attention to unexpected or ‘Attractive’ CTQ as

in the Kano quality model (?)


Limitations of Six Sigma – Continued

Studies only current, static CTQ

With little reference to varied customer expectations or

lifestyles

Not anticipative of technological/social/business

changes

Usually based on one CTQ

Single rather than multiple or balanced CTQ in a given

project

Less emphasis on self-learning or future knowledge

acquisition in personnel training


Limitations of Six Sigma – Continued

Unsuitable for creative or interpretive work

Architectural design/ Artistic performance

Not a means to promote intellect/ creativity/ passion/

enterprise or self-renewal

Emphasizes priorities of the organization (versus growth of

people) Not considers

Talent development or continuous learning on the part

of Black Belts and Green Belts

Personnel mechanically classified in terms of terminal

qualifications

Tends to be preoccupied with internal objectives

With no reference to social mission or responsibility


Design For Six Sigma (DFSS) – Various

Implementation Models

DMADV – Define, Measure, Analyze, Design, Validate

DMADOV – Define, Measure, Analyze, Design, Optimize,

Verify

DMEDI – Define, Measure, Explore, Develop, Implement

DCCDI – Define, Customer, Concept, Design, Implement

DDOV – Define, Design, Optimize, Validate

ICOV – Identify, Characterize, Optimize, Validate

I2DOV – Invention and Innovation, Develop, Optimize,

Verify

DMADIC – Define, Measure, Analyze, Design, Implement,

Control

PIDOV – Plan, Identify, Design, Optimize, Validate


Cost of Poor Quality (COPQ)


Why Measure Cost of Poor Quality?

Improves communication between

Upper management and middle management

Identifies

Major opportunities for cost reduction

Opportunities for reducing customer dissatisfaction

Associated threats to product salability

Provides measure for evaluating progress in quality

initiatives

Spotlights obstacles to improvements

Helps to develop strategic quality plan

Consistent with overall goals of the organization


Types

External failure costs

Internal failure costs

Appraisal costs

Prevention costs

Hidden quality costs

Controversy over optimal COPQ level

Optimal COPQ

Preventive COPQ

Cost

Investment

Combined

Time/Effort


Design Steps and Associated Costs of

Quality

Design process review before prototype

Qualification test on prototype

Design FMEA

Field trial

Trials at customer end

Correction in product design during

full scale production

Anomalies in design

Inaccurate/incomplete

design provided

Design change for reducing

scrap/rework

Unplanned production and support man-hours wasted due to wrong design

Environment &

Reliability testing

Spare parts inspection


Purchasing Steps and Associated Costs

of Quality

Sending teams for supplier capability review and rating

Purchase order review

Preparation of Acceptance sampling plan and development of review instruments

Execution of Acceptance sampling plan

Calibration and maintenance of test equipment

Qualification testing of supplier products

Inspection done at supplier end Inspection for products directly sent

to customer from the supplier

Cost of failure of incoming inspection rejects not charged on supplier


Incoming Inspection Rejects Not

Charged on Supplier

Costs of disposing, sorting, handling, transporting

Costs of replacement

Costs of corrective action at supplier’s end

Cost of rework that cannot be done through supplier due

to urgency in production


Production Steps and Associated Costs

of Quality

Process capability study and SPC planning

Cost of designing and developing special measurement

instrument to be used in SPC

Procurement of better production equipment

Planning and coordinating operator training program (e.g.

Kaizen, SPC etc.)

Execution of planned inspection (cost of items destroyed

during inspection e.g. life testing, load testing etc.)/audits

Execution of SPC (includes cost required to bring back the

process within control)



of Quality – Continued

Inspection/tests conducted during set up before actual run

Costs related to special lab test

Measurement and testing equipment cost (depreciation,

calibration and maintenance)

Costs of attaining various standards

Costs related to product review, corrective action

Disposition of non-conforming product

Rework/repair identified during production stage (does

not include design change cases)



of Quality – Continued

Documentation related to rework, reject, re-inspection and

retest

Extra operations for better result

Scrap cost

Price difference between grade and off-grade materials

Machine stoppage, resetting for rework

Non value added operations


External Failure Costs

Responding and resolving customer complaints

Investigating quality problems

Recalling products

Warranty claims

Liability claims

Penalties for not conforming to rules/contracts


Hidden Costs

Sales opportunity loss

Loss of customer goodwill

Costs included in standards

Extra indirect costs due to defects/errors

Scraps/errors not reported

Cost of poor quality within supplier company

And many more


Other Costs

Prevention cost in marketing

Prevention cost in administration

Appraisal cost in support department quality evaluation

Appraisal cost in final inspection data review


Example – Costs of Service Quality for

Bank

Failure costs Detection costs Prevention costs

External failure: Process control Quality planningLoss of future business Peer review Training programNegative word-of-mouth Supervision Quality auditsLiability insurance Customer comment card Data acquisition and analysisLegal judgments Inspection Recruitment and selectionInterest penalties Supplier evaluation

Internal failure:Scrapped forms Rework

Recovery:Expedite disruptionLabor and materials


Example – FedEx Service Quality

Indicator

No. of damaged packages

No. of lost packages

Missed pickups

Aircraft delays

Reopened complaints (complaints not solved first time)

Wrong day late deliveries

Right day wrong delivery

Abandoned calls

Invoice adjustment requests

Missing proof of deliveries

TQMBH14-5 - Session 04

Documents

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