Lean Six Sigma PDF

LEAN SIX SIGMA
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COURSE DESIGN COMMITTEE
Chief Academic Officer Content Reviewer

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School for Continuing Education School for Continuing Education
Specialization : Production Management,
Total Quality Management, Project
Management, Materials Management
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Assistant Professor, NMIMS Global Assistant Professor, NMIMS Global
Access - School for Continuing Education Access - School for Continuing Education
Specialization: Information Technology Specialization: Operations Management
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Author: Sandip Das

Reviewed By: Pradip Burman Ray
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Copyright:
2018 Publisher
ISBN:
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C O N T E N T S
CHAPTER NO. CHAPTER NAME PAGE NO.
1 Introduction to Lean Six Sigma 1
2 Implementing Six Sigma 27
3 Basic Statistical Concepts for Six Sigma 51
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4 Six Sigma Tools and Techniques 77
5 The Define Phase 103

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6 The Measure Phase 131
7 Analyse Phase 163

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8 The Improve/Design Phase 201

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9 Control/Verify Phase 215
10 Case Studies 229

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L EAN S I X S I G M A
curriculum
Introduction to Lean Six Sigma: Introduction, Definition, Principles of lean thinking, How to
achieve overall reduction, Concept of value and waste, Types of wastes, Lean vs. mass production,
What is Six Sigma process? Six Sigma: concept and history, Six Sigma metrics, Why do organisa-
tions use Six Sigma?
Implementing Six Sigma: Timetable, Infrastructure, Integrating Six Sigma and related initiatives,
Deployment to the supply chain.
Basic Statistical Concepts for Six Sigma: Probability and probability distribution- Binomial, Pois-
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son and Normal, Sigma levels, DPO and DPMO; Process capability and Sigma level; Throughput
yield and Sigma level.
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Six Sigma Tools and Techniques: DMAIC and DMADV models, Six Sigma teams.
The Define Phase: Project charters, Project decomposition, Deliverables- critical to quality met-
rics, Process maps, Project scheduling.
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The Measure Phase: Flowcharts and SIPOC, Process baseline estimates, Principles of statistical
process control, Control charts, Repeatability and reproducibility
Analyse Phase: Analysing the source of variation- cause effect diagrams, Boxplots, Chi-Square,
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Student’s T, and F distributions, Designed experiments- One factor ANOVA, Two-way ANOVA,
Logistic regression, and Non-parametric methods.
The Improve/Design Phase: Lean techniques for optimising flow, Risk assessment- FMEA, Design
for Six Sigma (DFSS), Design of experiments.
Control/Verify Phase: Validating the new product or process design, Business process control
planning, Process audits.

C hapter
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INTRODUCTION TO LEAN SIX SIGMA
CONTENTS
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1.1 Introduction
1.2 Concept and History of Six Sigma
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Self Assessment Questions
Activity
1.3 Six Sigma Process
Activity
1.4 Six Sigma Metrics
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Activity
1.5 Why Organisations Need Six Sigma
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Activity
1.6 Concept of Lean Six Sigma
1.6.1 Principles of Lean Thinking
1.6.2 How to Achieve Overall Reduction
Activity
1.7 Concept of Value and Waste
1.7.1 Types of Wastes
Activity
1.8 Lean vs. Mass Production
Activity
1.9 Summary
1.10 Descriptive Questions
1.11 Answers and Hints
1.12 Suggested Readings & References

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Introductory Caselet
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HOW GENPACT USES SIX SIGMA METHODOLOGY FOR

A COMPETITIVE EDGE
Lean is a methodology with an objective to offer maximum value

to customer with the least wastage. The principles of lean, if prac-
tised, help in improving efficiency and productivity of an organi-
sation. When combined with Six Sigma synergistically, lean helps
to remove waste and focus on a defect-free product delivery. Lean
and Six Sigma principles can be applied to both the manufactur-
ing sector and the service sector.
The Six Sigma revolution was started by GE under Jack Welch.

Genpact, earlier known as GE Capital International Services, was
among the pioneer service providers in the world which imple-
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mented this methodology across their business processes. Today,
Genpact also helps industries across the world achieve quality
improvement and cost optimisation by Six Sigma implementa-
tion. The following are two examples of the companies whom
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Genpact helped achieve cost optimisation by deploying the Six
Sigma methodology:
A giant pharmacy company with a customer base of nearly 65
million was helped in improvising its processes to eliminate
non-value adding activities and gain about 30% increase in
productivity. The total return on investment in this case was
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around US$400M.
A multinational financial services client of Genpact was helped
to make process improvements to maximise productivity. The
cost savings in this case were nearly 15%, affecting the compa-
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ny’s bottom line by US$11M.
Today Genpact has implemented the Lean Six Sigma methodol-

ogy in all of its verticals such as operations, human resources, fi-
nance, accounting, etc.
The company boasts of nearly 14,300 Six Sigma and 37,000+ em-
ployees trained in Lean who are located around the world. These
employees help their clients achieve business excellence through
this methodology.
The flagship methodology of the company is Smart Enterprise Pro-

cesses (SEPSM) which has been built from the business expertise
gained from over 200 million transactions spanning over almost
15 years of Six Sigma implementation projects. The framework
undertakes data analysis at a granular level to yield intelligent di-
agnostics and it also has the capability to create cross-functional
benchmarks.

INTRODUCTION TO LEAN SIX SIGMA 3
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Genpact supported a multinational aerospace manufacturer in

implementing digital and smarter processes and analytics tech-
niques. Following the implementation, the aerospace manufac-
turer recorded a considerable increase in the visibility of its in-
ventory and a 48% reduction in waste by eliminating the need for
accumulating raw material inventory.
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learning objectives
After studying this chapter, you will be able to:

>> Explain the concept and history of Six Sigma
>> Describe the Six Sigma process
>> Relate the Six Sigma metrics
>> Summarise why organisations need Six Sigma
>> Define Lean Six Sigma
>> Outline the concept of value and waste
>> Compare lean production and mass production
1.1 INTRODUCTION
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Nowadays, most organisations intend to adopt Six Sigma or Lean Six
Sigma methodologies for quality control and improvement. For organ-
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isations to be able to apply Six Sigma, their managers must under-
stand the basic concepts related to the Six Sigma and Lean Six Sig-
ma methodologies. It means that the management of an organisation
must be aware of the principles, practices and use of Six Sigma and
Lean.
Managers must be aware of the Six Sigma process to be able to lead

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change management activities and understand the basics of the DMA-

IC (Define, Measure, Analyse, Improve and Control) process for prob-
lem solving. While Six Sigma focuses on the statistical management of
a process, another complementary methodology called Lean focuses
on the elimination of waste from a process to make it cost effective and
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efficient.
In this chapter, you will study the basics of the Six Sigma methodolo-
gy, concept and history of Six Sigma, concept of value and waste along
with the concepts of lean production and mass production. You will
also study some important metrics of Six Sigma and how they affect
a process. Irrespective of whether an organisation is engaged in man-
ufacturing or service, every organisation needs cost optimisation. In
this chapter, you will also study why organisations need Six Sigma.
The last section of the chapter will describe the major differences be-
tween the mass and lean production systems.
1.2 CONCEPT AND HISTORY OF SIX SIGMA

Six Sigma is a quality methodology that is used for problem solving in
business organisations. Use of this methodology aids an organisation
in enhancing its operational functions. Six Sigma is defined in various
ways as stated below:

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A quality methodology that focuses on the number of defects and

limits the defects in a product or service to a count of 3.4 Defects
Per Million Opportunities (DPMO).
A quality methodology that aids an organisation in achieving a
rate of improvement of 70 per cent or more.
A methodology that is data-driven, used for problem solving. It
comprises the following steps Define, Measure, Analyse, Improve
and Control (DMAIC).
In a nutshell, the Six Sigma (6σ) methodology is a set of tools and
techniques that are used to improve various business processes.
We mentioned that Six Sigma aims at process improvement which is

made possible by identification, mitigation and elimination of reasons
underlying defects in a process. Further, the Six Sigma methodolo-
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gy also aims at minimising the extent of variability in the process-
es of manufacturing and service. Six Sigma employs a multitude of
methods, which are categorised as empirical methods and statistical
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methods. Adoption of the Six Sigma methodology creates a resource
base of Six Sigma experts within an organisation. A typical Six Sigma
project in an organisation is implemented in a pre-defined sequence
of steps with some specified expected outcomes such as reduction in
Turnaround Time (TAT), and reduction in costs, wastage, customer
dissatisfaction and losses.
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The term Six Sigma has its roots in the terminology related to statis-
tical modelling of manufacturing processes, which is used in statisti-
cal quality control to evaluate process capability. Sigma rating in the
manufacturing process indicates its maturity and describes its yield,
or in other words, the percentage of units produced without defects.
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In a Six Sigma-compliant process, it is expected that 99.99966% of all

the opportunities to perform a specific activity would be statistically
free of defects. In other words, only 3.4 or fewer defects would oc-
cur per million opportunities (DPMO). In simple words, it indicates
the ability of any process to produce a very high percentage of output
complying with the given specifications.
However, Six Sigma’s main objective may not always be improving all
processes necessarily to the 3.4 DPMO level. To start with, organisa-
tions need to determine an appropriate sigma level to be achieved for
each of their important processes to which they would apply the Six
Sigma methodology. To achieve the greatest effect and results from
the Six Sigma exercise, the management must identify the priority ar-
eas for its application. Six Sigma is based on the following principles:
Itis of vital importance to make continuous and sustained efforts
so as to obtain process results that are not only stable but also
predictable.

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The processes of both manufacturing and business companies are

such that the principles of DMAIC can be applied to them.
A top-down approach and commitment from senior level manage-
ment is as important as the commitment from other employees to
be able to achieve sustainable quality improvement.
Some features that differentiate Six Sigma from other quality im-
provement initiatives are:
Six Sigma projects focus on obtaining quantified and measured re-
sults. These results may be operational and/or financial in nature.
Need for a top-down approach and sustained support by senior
leadership.
Decision making is based on statistical analysis and inferences are
based on sound data, not merely on anecdotal evidences or guess
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work.
The Six Sigma methodology is developed over a long period of time.

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Let us go through a brief history of Six Sigma development.
Carl Friedrich Gauss (1777-1855) introduced the concept of the normal

curve which forms an important component of Six Sigma measure-
ments. Normal curves are also called Gaussian curves. The develop-
ment of the principles of underlying statistical quality control may be
attributed to Walter Andrew Shewhart and Edward Deming. In the
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1920s, Walter Shewhart demonstrated that a process needs correction

at a point where the mean of the process is at a distance of three sigma
(standard deviations). Shewhart, who is often referred to as the father
of Statistical Process Control (SPC), was an American physicist, engi-
neer and statistician. He joined the Western Electric Company in 1918
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after earning Ph.D. in Physics from the University of California Berk-

ley. While working on a project to help engineers at Bell Telephone
avoid defects in transmission equipment, Shewhart identified the
main reason of defects occurrence as the variation in one or more un-
derlying processes. He further demonstrated using control charts that
there were two main causes of variation, namely “special cause” and
“chance cause”. He demonstrated that variations could be reduced if
the process was kept under control.
Edwards Deming did Ph.D. in Mathematics and Physics from Yale-

met Shewhart at Bell Telephone Laboratories in the late 1920s, where
Shewart was his mentor. Deming, inspired by his mentor’s work, took
his ideas forward in 1939 by publishing a series of Shewhart’s lectures
into a book “Statistical Method from the Viewpoint of Quality Con-
trol”. This book facilitated the spread of concepts of statistical process
control and control charts.
Formally, the concept of Six Sigma was first developed by engineers

Bill Smith & Mikel J Harry while working at Motorola in 1986. Bill

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Smith is often referred to as the “Father of Six Sigma”. He was an

alumnus of the US Naval Academy and the University of Minnesota,
School of Management. His career spanned almost 35 years in engi-
neering and quality assurance.
In the 1980s, Smith was working at GE. During that time, he recom-
mended to the then CEO of Motorola, Bob Galvin, that the company
should focus on the defects caused by process variation. He was of the
opinion that the number of defects could be decreased substantially
by controlling process variation, which also help in reducing waste
and increasing savings and customer satisfaction. Galvin on Smith’s
recommendation initiated a long-term quality program, called “The
Six Sigma Quality Program”. It was a corporate program that set Six
Sigma as the desired capability level to achieve the standard of 3.4
defects per million opportunities (DPMO). This standard was applied
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across all processes in the organisation including products, services
and administration. It is well-known that Motorola was able to achieve
savings of several billion dollars by following the Six Sigma method-
ology. On June 11, 1991 Six Sigma was registered as US Service Mark
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1,647,704.
Many other global companies followed in the footsteps of Motorola

after its successful introduction of Six Sigma system. Inspired by Mo-
torola’s success, the CEO of Allied Signal, Larry Bossidy, announced
the company’s plan to implement the Six Sigma system. Soon after,
the Chairman and CEO of General Electric (GE), Jack Welch, too an-
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nounced the company’s plan to adopt this new quality management

system. In 1995, Six Sigma became the central quality strategy of GE.
By the late 1990s, nearly two-thirds of Fortune 500 organisations had

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piloted the Six Sigma initiative with the objective of reducing costs
and improving product quality. Today many leading global companies
use the Six Sigma methodology for their quality management and im-
provement activities. Some of them are the Bank of America, Chev-
ron, Honeywell, Intel, Samsung Group, Toshiba and Vodafone.
Recent years have seen some modifications in the Six Sigma method-
ology affected by some practitioners. They have used the Six Sigma
idea in conjunction with the lean manufacturing methodology giving
rise to a new quality improvement methodology called Lean Six Sig-
ma. The Lean Six Sigma methodology combines the benefits of lean
manufacturing and Six Sigma. Lean manufacturing aims at address-
ing process flow and waste issues, whereas Six Sigma concentrates on
reducing process variation.
Many leading companies across the world use this quality method-
ology to achieve operational and business excellence. Some compa-
nies which use Lean Six Sigma are Accenture, GE, Genpact, IBM and
Verizon.

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In 2011, the first ISO Standard ‘ISO 13053:2011, Six Sigma perfor-
mance-improvement methodology’ was published by the Internation-
al Organisation. This standard defines the Six Sigma process.
self assessment Questions
1. Six Sigma is a quality methodology that focuses on the number

of defects and limits the defects in a product or service to a
count of Defects Per Million Opportunities (DPMO).
2. Who is considered to be the father of Six Sigma?
a. Bill Smith
b. Edwards Deming
c. Carl Friedrich Gauss
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Activity
Explore the websites of companies that practise Six Sigma and

make a brief report on how Six Sigma has benefitted these compa-
nies.
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1.3 SIX SIGMA PROCESS

The term Six Sigma methodology represents the basic assumption or
concept that no product will fail to meet specifications if the process
mean is at least Six Sigma away from the nearest specification limit.
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Process capability studies measure the number of standard deviations

that occur between the process mean and the nearest specification
limit in units of sigma. Standard deviation is represented by the Greek
letter σ (sigma). An increase in the process deviation or movement of
the process mean away from the tolerance limit leads to the possibility
of a lesser number of standard deviations between the process mean
and the nearest specification limit. This results in the reduction in the
sigma number and an increased likelihood of items outlying the limits
of specification. The calculation of sigma levels for a process data does
not depend on the data normalcy; therefore, there is no need to trans-
form non-normal data into normal data.
There are two methodologies using which an organisation can im-

plement the Six Sigma methodology. They are DMAIC and DMADV
methodologies. Among the two, the former is the most common one.
Usually, the DMAIC Six Sigma process consists of five phases as
shown in Figure 1.1:

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Define
Control Measure
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Improve IM Analyse
Figure 1.1: DMAIC Six Sigma Process
Let us briefly study various phases of the DMAIC Six Sigma process
as follows:
1. Define: It is the first phase of the Six Sigma implementation.
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Here, the project manager and his team create a roadmap for Six
Sigma implementation, which is known as the Project Charter.
It gives a high level view of the project and is a step to document
the voice of the customer. Major activities carried out under this
phase include:
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A problem statement is documented to define the problem.

A goal statement is documented to define the goals of the
project.
Process maps are created and documented to define the cur-
rent and future state of processes.
Requirements and definitions of customers are documented.
Scope of the project is determined and documented.
Tentative timelines of different activities are documented.
2. Measure: In this phase, project stakeholders begin the data
collection exercise with the following goals:
Identify the current state or project start point. This sets the
process baseline.
Make preliminary efforts to identify immediately visible root
causes of the stated problems.

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Some important activities under this phase include:

Establishing the process base line.
Identifying immediate root causes of the problems.
Creating a data collection plan.
Piloting a data sample to ensure reliability.
Modifying the Project Charter if required.
3. Analyse: Once the data is collected as defined in the Measure

phase, it is analysed by project experts. In the data analysis
phase, processes are observed and the maximum possible root
causes of process variation and waste are identified.
Close observation of processes
Visual data display using techniques such as fish and bone
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diagram, box plot diagrams, etc.
Potential root cause identification by methods such as inter-
views, brainstorming, etc.
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Validation of root causes
Modification of the Project Charter (if required)
4. Improve: Once the problem, its root causes and possible solutions
are documented, a structured plan to implement proposed
solutions is developed.
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Identifying and proposing possible solutions using methods
such as brainstorming
Selecting and documenting all the feasible solutions
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Creating solution-wise process maps

Identifying the most feasible solution
Launching the solution(s)
Documenting and measuring the improvement
5. Control: Once the proposed solution has been implemented and

accepted, a roadmap is created for sustaining improvements.
Process improvement ownership, infrastructure and related
documents are then handed over to process owners and their
teams.
Finding innovative means to continually improve processes
using the principles of Six Sigma.
Validating management and control of processes.
Replicating improved processes in as many functions of the
organisation as possible.
Sharing the gains of the new process with the other depart-
ments.

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3. Calculation of Sigma levels for a process data depends on the

data normalcy.(True/False)
4. _____ is the first step of the Six Sigma process.
Activity
List at least three problems in your organisation’s processes that

you would like to improve using Six Sigma. Develop a problem
statement for these.
1.4 SIX SIGMA METRICS
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Six Sigma identifies some critical metrics that are important for busi-
ness sustainability and operational excellence. These metrics are
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Critical to Quality (CTQ) Metrics
Critical to Schedule (CTS) Metrics

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Critical to Cost (CTC) Metrics
Overall Equipment Effectiveness

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Figure 1.2: Six Sigma Metrics

Critical to Quality (CTQ) metrics: The performance of a process
or operation can be measured in multiple ways. One such measure
is the yield and it is generally supplemented with some other met-
rics that aid in performance measurement, such as the through-
put yield, and for a process that comprises many steps, the rolled
throughput yield. These supplementary measures are helpful in
comparing processes to prioritise for improvement. However, the
finer details that may be needed for process improvement are
generally not available with these metrics. The process capability
index which has been widely and traditionally used provides the
smaller details that are routinely required to bring about process
improvement. The CTQ metric makes use of a statistical control
chart which is compulsory for making the process metric stable
and under statistical control. An important function of the statis-
tical control chart is that it is used as an analytical tool for process
improvement due to its ability to distinguish between the variation

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arising out of natural causes or inherent causes and that arising

due to environmental changes in a process. It is important to dis-
tinguish between the causes of variation because the interventions
required to handle the special causes of variation are not the same
as the interventions required to manage the inherent causes of
variation.
Critical to Schedule (CTS) metrics: Critical to schedule metrics
are generally concerned with process completion timelines [such
as cycle time or Turnaround Time (TAT)], scheduling efficiencies,
efficiencies related to the scheduling of tasks, equipment, efficien-
cy of process cycle, process velocity, etc.
Critical to Cost (CTC) metrics: As you know, Six Sigma is a meth-
odology that measures the performance of a process using metrics
that are critical to both quality and schedule. However, how per-
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fect a process may be, if it is not cost effective, it may not serve the
intended purpose. Hence, Six Sigma also takes into consideration
those metrics that are critical to cost. In a process, costs that are
associated with process issues are inclusive of the impact of losses
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arising due to hidden factory and customer related issues like lo-
gistic delays or communication gaps.
Overall Equipment Effectiveness (OEE) metric: OEE is a mea-
sure of equipment effectiveness that is estimated by calculating
the product (by multiplication) of the availability of the equipment,
the quality of the good (product) produced on the equipment and
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the performance of the equipment as compared to the theoretical

maximum capacity. OEE is a good tool for comparing and prioritis-
ing processes for improvement.
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5. The ____________ makes use of a statistical control chart.

6. Efficiency of Process Cycle is critical to cost metric.(True/False)
Activity
Assume that you work in an organisation. Randomly select any one

process of your organisation and identify a few six sigma metrics
that can be used for them.
1.5 WHY ORGANISATIONS NEED SIX SIGMA

There are a number of advantages that the Six Sigma implementation
bring to an organisation. Some major advantages of Six Sigma are as
follows:
Increased customer retention and loyalty: A business can sustain
market competition only when it is able to gain new customers

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and retain its old customers. Sometimes the success of the com-
pany is also evaluated on the basis of its customer base. It is com-
mon knowledge that customers can only be retained if they are
satisfied. Most of the time customers do not return to a seller or
a business entity if they experience shortcomings in the product,
service or behaviour of the frontline employees. Many a time com-
panies remain unaware about the fact that they have lost business
because of a dissatisfied customer in the absence of a proper feed-
back mechanism. By implementing Six Sigma, an organisation
can mitigate the risk of having customer dissatisfaction. Under
Six Sigma, staff members are trained better for an efficient han-
dling of customers. In addition, there are fewer defective products
produced. Organisations can benefit if they carry out studies that
collate the voice of the customer. This helps them understand the
attributes of products or services that are critical for customer sat-
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isfaction.
Strategic planning: The Six Sigma methodology, when imple-
mented, has the potential to facilitate achievement of the organi-
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sation’s strategic vision. An organisation can identify its strengths
and weaknesses using SWOT analysis. After the organisation has
carried out the SWOT analysis, managers can clearly focus on ar-
eas of improvement, minimising the threats and taking advantag-
es of the available opportunities. As an example, if the strategy
of an organisation is to become a market leader on the basis the
competitive cost of its product, then the organisation can make
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use of the Six Sigma methodology to improvise internal processes,

increase yields, eliminate waste that arises out of non-value add-
ing activities and achieve agreements from suppliers at the lowest
cost. Irrespective of the strategy of the company, Six Sigma can be
instrumental in achieving a competitive edge in the market.
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Better time management: Implementation of the Six Sigma meth-

odology within the organisation reduces wasted efforts on poor
quality and rework. Resource conservation gives an opportunity
to the employees for a gainful re-employment and they are able to
manage their time effectively, which leads to business efficiency
and more productive employees. In the Six Sigma methodology,
employees are asked to take charge of their workplace goals that
are Specific, Measurable, Achievable, Realistic and Time Bound
(SMART). Three key elements – learning, performance and fulfil-
ment – are the focus of this intervention. As an example of learn-
ing, an employee may be asked to make note of the times he/she
has to leave a task midway to attend to something else, and out
of these incidences how many could be managed without his/her
attention. Similarly, with respect to performance, the employees
may be asked to mention how the organisation is supporting them
reach their goals. On the basis of their answers, the employees may
be asked to create an action plan for themselves. The outcome of
this exercise may be more efficient and satisfied employees with a
better work-life balance.

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Reduced cycle time: In organisations, many a time projects get

extended beyond their planned deadlines due to recurrent chang-
es in the project scope or in the policies of the management. An
organisation can make use of the Six Sigma methodology to create
a team of experienced employees representing all the functional
departments and levels. The team so created has the ownership to
identify and manage the root causes of delay. Further they may be
entrusted to brainstorm on the possible solutions for the identified
root causes. This kind of intervention aids organisations in adher-
ing to their scheduled timelines and project scopes, thus helping in
achieving shorter cycle times.
Motivated workforce: Performance of employees plays a major
role in the organisational ability to achieve its objective of profit-
ability. A poor performance is detrimental to achieving the objec-
tive. To be able to give in their best, employees need motivation. It
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is common knowledge that organisations which have programs for
employee engagement demonstrate increased productivity. Prob-
lem solving tools and techniques of Six Sigma aid in employee de-
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velopment and help create an environment conducive for employ-
ee motivation.
7. Six Sigma implementation helps in improved logistics

management. (True/False)
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8. Six Sigma helps in strategic planning by a __________analysis.
Activity
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Assume that you work for an IT-organisation, ABC. Make a list of

SMART goals for yourself.
1.6 CONCEPT OF LEAN SIX SIGMA

In this section, you will study about a modified Six Sigma methodolo-
gy known as Lean Six Sigma.
Lean originated with Henry Ford’s Model T assembly line. In this

manufacturing process, vehicles were moved towards assemblers in-
stead of the conventional method of assemblers moving towards ve-
hicles. This technique facilitated a greater volume of output from the
manufacturing activity by employing workers with relatively lower
skills thus increasing profitability.
In the decade of 1950-60, Toyota took Lean to the next level. In this
development, Ford’s mass production assembly line was adapted to
a leaner automobile production process, which encompassed small
work groups and employed workers with multi-functional skills along

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with the application of the Just-in-Time (JIT) methodology that helped

in better customisation with fewer defects. Lean works on the prin-
ciple to do more with less where less can mean less human effort or
less number of equipment or less time required, etc. Some common
benefits of lean are:
Reduced Turnaround Time (TAT)
Increased productivity and output
Lower inventory needs, cost and wastage
Reduced waste in all activities
Increased employee engagement
Improved employee and customer satisfaction
Lean and Six Sigma are complementary management concepts, and
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the concept of Lean Six Sigma combines the benefits of both the Lean
and Six Sigma methodologies. Lean is a concept that identifies and
aims to reduce or even eliminate different kinds of wastes in organisa-
tional activities. There are eight kinds of wastes also known as muda.
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These wastes are classified as shown in Figure 1.3:
Defects
Overproduction
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Unnecessary Transportation
Prolonged Waiting
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Excessive Inventory
Unnecessary Motion
Over processing
Skills
Figure 1.3: Eight Types of Waste (Muda)
Lean Six Sigma aims at obtaining a seamless flow of a process by fill-

ing the gaps between consecutive process steps. In a nutshell, the ob-
jective of lean is to expose various causes of process variation while
Six Sigma focuses on the reduction of process variability which en-
ables a continuous cycle of improvement.
The Lean Six Sigma methodology is also implemented using the DMA-
IC process similar to that of Six Sigma. The DMAIC toolkit of Lean Six
Sigma consists of all the tools that are used in Lean and Six Sigma.

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1.6.1 PRINCIPLES OF LEAN THINKING
Lean thinking is a book written by James J. Womack and Daniel T.

Jones in the 1990s. This book talks about the lean manufacturing sys-
tem based on the Toyota Production System. According to Womack
and Jones, there are five principles of Lean Six Sigma as follows:
1. Identify value: The first principle of Lean Six Sigma
implementation is to define what is meant by value. This is done
by customers because they are the ones who need to define what
product or service means what kind of value for them.
2. Understand the value stream and create a value stream map:
Under this principle, the project team needs to identify and
map all the end-to-end actions, processes and functions that are
required for converting inputs into outputs and for eliminating
S
waste. The activity of creating a map at this stage is called Value
Stream Mapping (VSM). The process map contains information
regarding time, quality, inventory and resources such as number
of people, space and distance travelled.
IM
note
A Value Stream Map is a special type of flowchart that uses symbols

(language of Lean) to depict and improve the flow of inventory and
information.
M
3. Create flow: After all wastes have been eliminated, the remaining
value-creating steps must flow. Alternatively, we can say that
creating a flow involves the successive completion of targeted
activities and tasks along the value stream so that the movement
N
of a product from design to launch and order to delivery takes

place seamlessly without any unwarranted stoppages.
4. Establish pull: The customer’s pull for value-based items
cascades to the lowest levels of suppliers which results in the
organisation employing Just-in-Time systems. It is a bidirectional
movement of production and delivery related instructions which
move from downstream to upstream activities. A product is said
to be ‘pulled’ within the various steps of processes at a rate at
which it is demanded by the customer. An absence of a need/
demand by the customer in the downstream system signals an
upstream supplier to not produce anything till the customer
gives a signal.
5. Seek perfection: It is the state of elimination of all waste in the
value stream. After eliminating wastes, the project teams need
to ensure continuous process of improvement in order to attain
perfection.

n o t e s
1.6.2 HOW TO ACHIEVE OVERALL REDUCTION
One of the important strategies for Lean Six Sigma implementation

is a technique called Setup Reduction. Setup reduction is utilised for
level load balancing which is a strategy for lean deployment. The time
lapse for change between the first good item of the new order and the
last item of the previous order is called setup time. Setup reduction
activity includes four sub-activities as shown in Figure 1.4:
Preparation Replacement Location Adjustment
S
Figure 1.4: Sub-activities of the Setup Reduction Activity
IM
The four activities of setup reduction activity– Preparation, Replace-
ment, Location and Adjustment – are acronymised as PRLA. Setup
activities can either be external or internal. The type of activity, exter-
nal or internal, should be noted at the time of analysis. Internal setup
activities are those which require the process to be shut down at the
time of setup. Thus at the setup time for internal setup activities, no
M
orders can be run. On the contrary, external setup activities are those
in which the process can be carried out even when the setup is hap-
pening. External activities are considered offline.
If internal activities can be converted into external activities, the total

N
setup time can be reduced and it is known as incredible reduction. The

total setup time can be reduced by adopting the following approaches:
Categorise all setup activities into internal or external: Internal
setups are done when the process is inactive while external setups
can be carried out even when the process is operating.
Convert internal activities into external steps (wherever possi-
ble): Setup time can be decreased by reducing the non-operation-
al time of the process which is related to the number and time
of internal steps. Hence, the person/team who is conducting the
VSM activity should convert as many internal steps into external
steps as possible. For example, if a customer’s room in a hotel can
be prepared while the payment is being processed at the counter,
the total cycle time of the customer’s settling down gets reduced
comfortably.
Focus on reducing time for the remaining internal steps: After
converting internal setup activities into external setup activities,

18 LEAN SIX SIGMA
n o t e s
there still remain certain internal setup activities that need to

be carried out while the process is operational. Efforts should be
concentrated to reduce the time needed for completion of such of
these activities which can potentially lead to delay in the overall
process. For example, if a hotel has a policy that the customer lug-
gage cannot be moved unless he/she makes the payment, the hotel
should try to reduce the time it takes to take payments.
Eliminate adjustments: Process improvement is a vital aspect of
Six Sigma and it involves making adjustments in order to fix is-
sues and effect waste reduction to optimise costs. Corrective ac-
tion needs to be carried out on detection of a problem so as to
avoid unnecessary delays in production and fault recurrence of
the. Effective process control can be used to eliminate the need for
adjustments.
S
Let us now discuss the four sub-activities under the setup activity.
Preparation: This sub-activity is further broken down into
sub-sub-activities that are associated with obtaining or storing of
IM
tools and aids that may be necessary to carry out a process. For
example, continuing with our earlier example of hotel payment,
switching on the Internet to receive credit card payment, retriev-
ing the room tariff list, and starting up software for room allocation
are all sub-sub-activities that are necessary part of the preparation
sub-activity to carry out room allocation and shifting process in a
M
hotel. Preparation time can be reduced by some of the following

methods:
Departments can be further segmented into work cells which
helps reduce the time required for moving the finished product
to the next step in the process.
N
Frequently used tools and equipment should be stored in the

immediate vicinity of the place of work.
Create a culture of always ready to go. Operational software
and operating instructions, reference material should be im-
mediately accessible.
Replacement: A replacement sub-activity includes sub-sub-activi-
ties that are related to the addition or removal of items or tools that
are used in the process. Continuing with the example given above,
some tools that may be used and replaced in the billing process at
the hotel counter can be loading paper in the copy machine, credit
card machine, etc.
Location: Tasks and sub-sub-activities under location sub-activity
are related with positioning or placement during setup. Examples
include setting the phone line on the billing desk, computer on
the desk, etc. The time associated with location activities can be
reduced by mistake proofing the process, i.e. the use of Poka Yoke.

n o t e s
Adjustment: Adjustment sub-activity includes sub-sub-activities

that are carried out to ensure correct process settings. If there is
a process control in place, adjustment time can be effectively low-
ered. Robust design methods help in improving repeatability of
the process and thus help in adjustment time reduction.
9. Lean originated with __________________.

10. Switching on the Internet to receive credit card payment is an
example of:
a. Preparation
b. Replacement
S
c. Location
d. Adjustment
IM
Activity
Assuming that you work in an R&D organisation, identify any one

process in your organisation and make a list of preparation activi-
ties related to that process.
M
1.7 CONCEPT OF VALUE AND WASTE

Two essential concepts of Lean Six Sigma, value and waste, are also
essential parts of the Lean philosophy. Before the principles of Lean
N
are incorporated in an organisation’s way of working, it must begin by

defining the value of the product or service it offers from the custom-
er’s perspective. The customer’s need and voice is represented by the
value of a product or service. Value is meaningful when a product or
service meets the customer’s needs at a specific price and at a specific
time.
A very common problem faced by organisations relates to defining

value. Organisations usually focus on their ability to deliver value in-
stead of concentrating on what their customers really want.
note
Value and waste are two opposite concepts. Value is a positive thing,
whereas waste is a negative thing. Usually, adding value to a prod-
uct/service results in profitability, whereas wastage of any type re-
sults in the loss to the organisation.

20 LEAN SIX SIGMA
n o t e s
There are three types of value additions or concepts related to value

as follows:
Value added: Whenever there is any additional activity for which
the customer is willing to pay, and when performed, it changes
either the form, fit or function of a product or service, or it helps
in converting an input into output, this activity is considered to be
value addition to the product/service.
Business Value Added (BVA): It is also known as Type I NVA.
This activity when performed adds no significant value for cus-
tomers, but it is important for business processes. Some common
examples of Type I NVA are quality checks and assurance activi-
ties, biomedical waste management in hospitals, etc.
Non Value Added (NVA): It is also known as Type II NVA. This
activity is considered unnecessary because it offers no value for
S
internal customers or external customers. Activities of this type
can be eliminated from the process.
Every organisation should ideally undertake an analysis of all its ac-

IM
tivities to categorise them as either a waste or value added. Such an
analysis is presented graphically in the form of a map, known as Value
Stream Analysis or Value Stream Mapping (VSM).
In 1985, Michael Porter, in his book Competitive Advantage defined

value stream as a chain of activities that a firm operating in a specific
industry performs in order to deliver a valuable product or service for
M
the market. In other words, it is the series of activities that are carried
out from the point of ordering to the point of delivery of a product or
service to make the product/service valuable. Identification and doc-
umentation of each and every step in the value stream is important to
determine process owners and stakeholders before it can be effective-
N
ly challenged for improvement and perfection.
The process of VSM has been discussed in an earlier section.
1.7.1 TYPES OF WASTES
Any step or activity in a process that is unnecessary and is not required

to complete the process successfully is called waste or a non-value add-
ing activity (NVA). On removal of wasteful activities, the value adding
steps remain, which help the organisation in saving resources and ef-
ficiently delivering a satisfactory product or service to the customer.
There are generally eight types of wastes in any kind of lean organi-
sation that include:
Defects: Any product or service that does not conform to the re-
quired specification is unusable and requires additional resources
for correction.
Over-processing: When activities that are not necessary in the
production of a functional product or service are carried out, it is
said to be over-processing.

n o t e s
Excess inventory: Stock of goods that is not being utilised in pro-

duction or is not anticipated to be used for long.
Excess motion: Unnecessary movement of people, resources or
information owing to discrepancies in the layout of shop floors
workspace, ergonomic issues or displacements.
Unutilised talent: Employees who are not deployed as per their
talent and skills.
Overproduction: The quantity of product produced which ex-
ceeds demand or requirement.
Transportation: Unnecessary transportation from one location
to another of items/raw materials/tools/equipment or information
that is not needed to perform the process.
Waiting: Lag period between the current step and the earlier step
S
to complete the process.

IM
11. Business value added (BVA) is Type NVA.
12. Type II NVA is a non-value added activity. (True/False)
13. Stock of excess goods that is being utilised in production is a
waste.(True/False)
M
14. Which of the following is not a waste:

a. Defects
b. Excess Motion
c. Utilised Talent
N
d. Over production
15. The quantity of product produced which exceeds demand or
requirement is called.
Activity
Assume that you work in an organisation that provides soft services

to other organisations. Identify a particular process in your organ-
isation and break it down into smaller activities to identify NVA,
BVA and VA activities.
1.8 LEAN vs. MASS PRODUCTION

Mass production is a type of manufacturing methodology under which
products are manufactured on a mass scale. Lean production, on the

22 LEAN SIX SIGMA
n o t e s
other hand, is a manufacturing process where production of goods or

services is determined on the basis of current trends.
Some differences between lean and mass production are:

The focus of mass production is to churn out manufactured goods
in bulk lots. On the other hand, lean production focuses on pro-
ducing goods in smaller batches according to the demand inputs
from customers.
In mass production, goods are produced in bulk but not all of
them are sold immediately. Therefore, the company is required to
keep them stocked in its warehouses, from where they are sent
to market intermediaries or distributors who in turn supply them
to retailers. On the other hand, there is a minimal requirement of
stockpiling in lean production. The company opting for lean pro-
S
duction generally supplies directly to the customer. However, still
a market intermediary may be required as a contact point between
the company and the customer.
IM
Mass production is planned on the basis of a multitude of complex
factors including the product price in the market, competition, in-
ventory levels, distribution time, etc. Due to these factors, mass
production needs to be carried out strategically at the enterprise
level. Lean production is simple and easy because the number
of units to be manufactured is derived on the basis of market de-
mand. Production schedules are simple and easy to plan in lean
M
production.
In mass production, due to a considerable time lag between the
manufacture and sale of goods, the manufacturing cycle and the
sales cycle are separate issues. But in lean production, the manu-
N
facturing cycle and the sales cycle are heavily interdependent as

there is a direct relationship between demand and production.
Mass production is a “push” type of process, i.e. finished products
get pushed to the market. In contrast, lean production is a “pull”
process, i.e. customers take charge of the process and pull the prod-
uct based on their demand. Thus, we can say that mass production
is supply-oriented, whereas lean production is demand-oriented.
In mass production, a huge volume of waste is generated, whereas
minimal waste is produced in a lean production process.
16. The focus of lean production is to churn out manufactured

goods in bulk lots. (True/False)
17. The F mass production facilities are equipped with heavy
machinery. (True/False)

n o t e s
Activity
Using the Internet, list down the names of five organisations each
that carry out mass and lean production.
1.9 SUMMARY
Six Sigma is a quality methodology that is used for problem solv-
ing in business organisations. Use of this methodology aids organ-
isations in enhancement of their operational functions.
A typical Six Sigma project in an organisation is implemented in
a pre-defined sequence of steps with some specified expected out-
comes like: reduction in Turnaround Time (TAT), and reduction in
costs, wastage, customer dissatisfaction and losses.
S
Six Sigma projects focus on obtaining quantified and measured
results. These results may be operational and/or financial nature.
The Six Sigma concept was first developed by engineers Bill
IM
Smith & Mikel J Harry while working at Motorola in 1986. It was
a corporate program that set Six Sigma to the desired capability
level to achieve the standard of 3.4 Defects Per Million Opportuni-
ties (DPMO). Bill Smith is often referred to as the “Father of Six
Sigma”.
The term Six Sigma process represents the basic assumption or
M
concept that no product will fail to meet specifications if the pro-

cess mean is at least Six Sigma away from the nearest specification
limit.
In general, the process of Six Sigma implementation consists of
N
five phases namely, Define, Measure, Analyse, Improve and Con-

trol (DMAIC).
Six Sigma identifies some critical metrics that are important for
business sustainability and operational excellence. These include
Critical to Quality (CTQ) metrics, Critical to Schedule (CTS) met-
rics, Critical to Cost (CTC) metrics, Overall Equipment Effective-
ness, etc.
Problem solving tools and techniques of Six Sigma aid in employ-
ee development and help create a conducive environment for em-
ployee motivation.
Lean works on the principle to do more with less where less can
be less amount of human effort, less number of equipment, less
required time, etc.
One of the important strategies for Lean Six Sigma implementa-
tion is a technique called Setup Reduction that is utilised for level
load balancing. The time lapse for change between the first good
item of the new order and the last item of the previous order is
called setup time.

24 LEAN SIX SIGMA
n o t e s
Value is meaningful when a product or service meets the custom-

er’s needs at a specific price and at a specific time.
Any step or activity in a process that is unnecessary and is not
compulsory to complete the process successfully is called waste
or a non-value adding activity (NVA). On removal of wasteful ac-
tivities, value adding steps remain, which help save resources and
help the organisation to efficiently deliver a satisfactory product or
service to the customer.
Mass production is a kind of manufacturing process where the
manufacture of the products takes place on a mass scale. Lean
production on the other hand is a manufacturing process where
production of goods or services is determined on the basis of cur-
rent trends.
S
key words
External setup activities: Activities in which a process can be

carried out even when the setup is happening.
IM
Internal setup activities: Activities that require a process to be
shut down at the time of setup.
Level load balancing: An activity related to balancing the
throughput rates of activities within a process.
Overall Equipment Effectiveness (OEE): A metric that gives
M
out the impact of the process in terms of scheduling and quality

concerns in a summarised way.
Preparation: A set of sub-activities associated with obtaining
or storage of tools and aids that may be necessary to carry out
N
a process.
Six Sigma: A quality methodology used for problem solving in
business organisations.
1.10 DESCRIPTIVE QUESTIONS

1. Describe the history of origin of the Six Sigma methodology.
2. What are the phases of the DMAIC Six Sigma methodology.
Explain in detail.
3. Write a short note on Six Sigma metrics.
4. List the benefits of Six Sigma for an organisation.
5. Explain the concept of Lean and the principles of Lean Six
Sigma.
6. Describe how an organisation can achieve overall reduction.
7. What are different types of waste in lean?

n o t e s
1.11 ANSWERS AND HINTS
ANSWERS FOR SELF ASSESSMENT QUESTIONS
Topic Q. No. Answers

Concept and History of Six 1. 3.4
Sigma
2. Bill Smith
Six Sigma Process 3. False
4. Define phase
Six Sigma Metrics 5. Process Capability Index
6. False
S
Why Organisations Need 7. True
Six Sigma
8. SWOT
IM
Concept of Lean Six Sig- 9. Henry Ford’s Model T assembly
ma line
10. a. Preparation
Concept of Value and 11. I
Waste
12. True
M
13. False
14. c. Utilized talent
15. Over-production
N
Lean vs. Mass Production 16. False

17. True
HINTS FOR DESCRIPTIVE QUESTIONS

1. Formally, the concept of Six Sigma was first developed by
engineers Bill Smith & Mikel J Harry while working at Motorola
in 1986. Refer to Section 1.2 Concept and History of Six Sigma.
2. Six Sigma is a problem-solving methodology. In general, the
process of six sigma implementation consists of five phases.
Refer to Section 1.3 Six Sigma Process.
3. Six Sigma identifies some critical metrics that are important
for business sustainability and operational excellence. These
include Critical to Quality (CTQ) metrics, Critical to Schedule
(CTS) metrics, Critical to Cost (CTC) metrics, Overall Operational
Effectiveness, etc. Refer to Section 1.4 Six Sigma Metrics.

26 LEAN SIX SIGMA
n o t e s
4. There are a number of advantages that a Six Sigma

implementation yields for an organisation. For example, effect
on customer retention and loyalty. Refer to Section 1.5 Why
organisations need Six Sigma.
5. Lean Six Sigma is a complementary management concept that
combines the benefits of Lean and Six Sigma methodologies.
Refer to Section 1.6 Concept of Lean Six Sigma.
6. One of the important strategies for Lean Six Sigma
implementation is a technique called Setup Reduction that is
utilised for level load balancing. Refer to Section 1.6 Concept of
Lean Six Sigma.
7. Any step or activity in a process that is unnecessary and is
not required to complete the process successfully is called
waste or a Non-Value Adding (NVA) activity. On removal of
S
wasteful activities, the value adding steps remain, which help
save resources and help the organisation efficiently deliver a
satisfactory product or service to the customer. Refer to Section
IM 1.7 Concept of Value and Waste.
1.12 SUGGESTED READINGS & REFERENCES
SUGGESTED READINGS
M
Gygi, C., Williams, B. and Gustafson, T. (2006). Six Sigma. Work-

book For Dummies. Hoboken: John Wiley & Sons.
Brussee, W. (n.d.). Statistics for Six Sigma Made Easy!
George, M. (2004). Lean Six Sigma for Service. New York [u.a.]: Mc-
N
Graw-Hill.
Eckes, G. (2001). The Six Sigma Revolution. New York [etc.]: John
Wiley.
E-REFERENCES
Lean Six Sigma Metrics | Six Sigma Performance Metrics. (2017).
Qualityamerica.com. Retrieved 10 July 2017, from http://quali-
tyamerica.com/LSS-Knowledge-Center/leansixsigma/lean_six_
sigma_metrics.php
iSixSigma: Six Sigma Resources for Six Sigma Quality. (2017). Isix-
sigma.com. Retrieved 10 July 2017, from https://www.isixsigma.
com/
Open Source Six Sigma. (2017). Opensourcesixsigma.com. Re-
trieved 10 July 2017, from https://www.opensourcesixsigma.com/

C hapter
2
IMPLEMENTING SIX SIGMA
CONTENTS
S
2.1 Introduction
2.2 Timetable
IM
Activity
2.3 Infrastructure
Activity
2.4 Integrating Six Sigma and Related Initiatives
M

Activity
2.5 Deployment to the Supply Chain
N
Activity
2.6 Summary

28 LEAN SIX SIGMA
n o t e s
SIX SIGMA METHODOLOGY, THE NEW STANDARD

TO SUCCESS
Standard Corporation is a company controlled and managed by

UTi Worldwide Inc. UTi acquired Standard Corporation in 2002.
Standard Corporation is a third-party logistics provider head-
quartered in Greenville, South Carolina. The company is report-
ed to have saved an average of more than $1 million consecutively
for two years using the Six Sigma methodology.
Standard Corporation began its quest for Six Sigma five years
ago, when it embarked on a quality journey with an aim to achieve
perfection in its core processes.
S
Before the Six Sigma implementation began, Standard Corpora-
tion sponsored its two officers – a senior vice president of cus-
tomer solutions and a senior Six Sigma Champion –to attend a
Six Sigma training conducted by Motorola to understand the
IM
basics of the Six Sigma methodology and its implementation ap-
proach. The company also invited a Six Sigma trainer to their
office premises at a Quality Council meeting to orient the senior
management about Six Sigma.
Convinced about reaping the benefits of the Six Sigma methodol-

ogy, the management decided to implement it in the organisation.
M
The process began with an intensive training session conducted

for the senior management, executives, operations managers,
process improvement managers and representatives from the hu-
man resource department. The basic purpose of this activity was
N
to gain the buy-in and commitment of the senior management.
TAKING THE FIRST STEP
Though Six Sigma implementation began with the conduct of ini-

tial training, the organisation implemented full-fledged Six Sig-
ma in all its operations after three years. In the implementation,
the initial step was to evaluate the core processes and carry out
some pilot projects. The management wanted to ensure that the
identified pilot projects were aligned with the organisation’s core
processes as well as with its strategic goals and objectives.
According to a senior executive of the company, the underlying

aim of adopting the quality improvement methodology was to im-
prove customer relations. It was also agreed that the VOC will be
considered as the main selection criterion for projects.
The initial training attended by the senior managers proved to be

quite important because it helped them identify pilot projects and

IMPLEMENTING SIX SIGMA 29
n o t e s
deploy teams to work on them. An important pilot project aimed

at eliminating shipment errors at a facility that was operated by
the organisation for a manufacturer of aftermarket auto parts and
OEM systems and equipment.
It was observed that there had been an error of at least one ship-
ment per month ever since the operations at this facility began.
This was considered an unacceptable performance for the man-
ufacture’s automobile customers. The team that was deployed
for problem solving began with the creation of a project charter,
problem and goal statement, key objectives, listing of the desig-
nated team members and important milestones.
GREEN BELT HOLDS THE SPADE
S
Once the team started working through the project charter and
collecting preliminary data, inventory inaccuracy emerged to be
the root cause of all the problems. Inventory inaccuracy of fin-
IM
ished goods at that stage of the project was 4%, while that of the
component goods was 6%.
A green belt holder was associated with the project and he played
an important role in the Measure and Analyse phases of the Six
Sigma project. To determine the sources of problems and the
areas that require improvements, he used Six Sigma tools such
M
as process mapping, fishbone diagrams, run charts and control

charts.
Once adequate information was available after analysis, the team

moved to the Improve phase of the project. The team used a mul-
N
tipronged approach to bring process improvement that included

bringing improvement in the cycle counting process, training of
the managers and the team at the site, and the process redesign.
Further, the team addressed a communication gap between the
manufacturer’s and the company’s offices. It was found that this
communication gap led to a delay in carrying out some inventory
adjustments.
Working with this multipronged approach, the Six Sigma team

over six months succeeded in reducing the inventory inaccuracy
to 0.01% for both finished goods and component goods. As a re-
sult, shipping errors were eliminated completely.
Standard Corporation so far is reported to have completed 13

projects using Six Sigma approach with 14 more at different stag-
es of implementation. Majority of the projects have been complet-
ed successfully.

30 LEAN SIX SIGMA
n o t e s
According to one senior executive of the company, after the com-

pletion of Define and Measure phases of a project, sometimes it
is realised that finding solution to a problem is difficult, or the
problem does not exist at all, or what is perceived to be a prob-
lem is not actually a problem. And, there are also cases when the
solution to a problem is quite simple and there is no need to go
through the entire Six Sigma process to solve that problem.
While implementing the Six Sigma methodology, Standard Cor-

poration realised that having a customers’ representative as a
member in a Six Sigma project team is a key component for mak-
ing the project a success. The reason is the customers’ representa-
tive would most likely have a vested interest in the project results
and can make things happen from the perspective of a customer.
S
Therefore, the changes brought about with the participation of
the customers’ representative are more successful and are imple-
mented faster.
IM
Standard Corporation is now trying to create an organisation-wide
Six Sigma culture rather than merely implementing Six Sigma in
separate projects. Six Sigma is a methodology with an organised
approach to engage a large number of people in the problem solv-
ing process, which makes it an extremely powerful tool. There is
a huge opportunity for companies to work with their customers
to drive costs out and improve their services using the Six Sigma
M
methodology.
N

n o t e s
learning objectives

>> Explain the importance of managing a timetable in Six Sig-
ma projects
>> Outline the infrastructure elements required for a Six Sigma
implementation project
>> Explain how Six Sigma projects are integrated with similar
quality initiatives in an organisation
>> Summarise how Six Sigma deployment benefits the supply
chain
2.1 INTRODUCTION
S
The previous chapter discussed the basics of the Six Sigma methodol-
ogy. You also studied the concept and history of Six Sigma. The chap-
IM
ter discussed that in organisations that deploy the Six Sigma meth-
odology, managers must also be aware of the Six Sigma methodology
and processes to be able to lead change management activities.
For achieving the required goals, all quality improvement interven-

tions need to be given a direction. This statement also holds true for
the Six Sigma methodology and leadership. First of all, it is extreme-
M
ly important to have a timetable set in the process of Six Sigma as

it influences the overall project direction. A structured deployment
strategy is used for this purpose. Organisations that wish to adopt the
Six Sigma methodology must understand what this methodology in-
N
volves. It is necessary for an organisation to provide the necessary Six

Sigma training and certification to its employees or hire Six Sigma
consultants, if required. The training programme for various certifica-
tions are based on the statistical methods and theories used to deter-
mine the gaps in the business processes in order to fix them.
This chapter will introduce you to the hierarchy of experts and pro-
fessionals within the Six Sigma program. The different levels of Six
Sigma certifications are denoted by belt colours. For ensuring a suc-
cessful Six Sigma implementation, the organisation needs to make
available the required infrastructure which at a broad level includes
Six Sigma champions, Master Black Belts and Black Belts along with
Six Sigma tools
Quality improvement can be carried out using various methodologies.

Integrating other quality improvement methodologies with Six Sigma
can bring better results. The last section of this chapter elaborates the
benefits of using the Six Sigma methodology in supply chains.

32 LEAN SIX SIGMA
n o t e s
2.2 TIMETABLE
Six Sigma techniques started developing in the early 1900s and since
then there has been a lot of development in the concept of Six Sigma
along with its related tools and techniques. Based on the knowledge
of Six Sigma, it can be said that certain activities and systems are re-
quired for implementing Six Sigma successfully. They are described
as follows:
Leadership: The initiative for adopting the Six Sigma Quality Sys-
tem should come from the primary leadership of the organisation.
It means that the top management has to lead the Six Sigma ini-
tiative and communicate the same to all employees and executives
at all levels of the organisation. The management should commu-
nicate their vision in a clear and consistent manner. It also needs
S
to ensure that the goals of the Six Sigma initiative are aligned with
the overall goals of the organisation. Implementing the Six Sig-
ma initiative also requires creation of new departments and des-
ignations, and modifying the reward, recognition, incentive and
IM
compensation systems. The organisation kick-starts the Six Sig-
ma initiative by training its personnel in the philosophy (concept),
principles and tools and techniques related to Six Sigma deploy-
ment.
Infrastructure: Having been trained on the concept and tools of
Six Sigma, it is the responsibility of the top management to ar-
M
range for the development of infrastructure that is necessary for

Six Sigma implementation. The Six Sigma infrastructure includes
organisational surroundings, equipment, conditions and factors
that influence the actions and behaviour of the Six Sigma team.
N
Communication and awareness: Along with developing the infra-

structure for Six Sigma, steps are taken to develop a change-capa-
ble environment in the organisation. A change-capable environ-
ment supports innovation and creativity. The management starts
a DMAIC project that is aimed at gaining the buy-in of the organi-
sational members and focusing on the change initiative.
Stakeholder feedback systems: Customers, suppliers and em-
ployees constitute three stakeholder groups and it is important to
establish an effective communication and feedback mechanism for
them. Methods to obtain and evaluate the inputs of the owner, em-
ployees, customers and suppliers are developed.
Process feedback systems: The project team develops a frame-
work for continuous improvement along with a system for mon-
itoring the progress and success of the processes involved in the
project. The Six Sigma metrics are used to achieve the organisa-
tion’s strategic goals.

n o t e s
Project selection: An organisation may have a variety of projects

out of which it can select only a few for Six Sigma implementation.
Projects are selected by the top-level management of the organisa-
tion based on a set of criteria which usually include the expected
return from the project as an important measure. Six Sigma proj-
ects are usually implemented to improve business processes which
make the use of human resources who possess process knowledge
of various levels of the organisation.
Project deployment: In an organisation, Six Sigma projects are
led by Six Sigma Black Belt holders or Green Belt holders with
some inputs from Black Belt holders.
The timeline (phases) of a Six Sigma project deployment and their

related activities are as follows:
S
1. Initial planning for Six Sigma: The planning phase of Six Sigma
deployment includes activities such as identifying the Six Sigma
leader, drafting the Six Sigma plan and getting it approved and
identifying core team members,
IM
2. Alignment: Alignment includes activities such as establishing
the project’s executive council, hiring consultants, issuing the
Six Sigma policy, detailed planning, knowledge discovery and
determining the readiness for taking up the Six Sigma project
by conducting a readiness survey.
3. Program development–I: The first stage in program
M
development includes customising and adopting a Black Belt

training, developing a Black Belt retention program, training
Black Belt holders, reviewing the documentation procedures of
the project, and training the leaders.
N
4. Program development–II: The second stage in program

development includes establishing criteria for project validation,
continuing the BB program, starting the Six Sigma practice.
5. Implementation: The implementation phase includes activities
such as certifying Black Belt holders and issuing Six Sigma
certifications, training green belts, training the trainers and
establishing an issue management process document.
6. Implementation and maturity: This phase involves training
employees, a second batch of Black Belts, Green Belts, and
identifying more projects.
If an organisation adopts the above mentioned deployment strategy, it

is expected to improve its quality performance 10 times within 2 years
of the deployment. For example, if an organisation is having an error
rate of 67000 errors per million opportunities (3 Sigma level), its error
rate will be reduced to 6700 errors per million opportunities in two
years (-4 Sigma level). Figure 2.1 presents a chart showing the number

34 LEAN SIX SIGMA
n o t e s
of years it would take for an organisation to reach different levels of

Sigma (process quality) assuming 10 times improvement each year:
5
4.8
4.6
No of Years
4.4
4.2
4
3.8
3.6
3.4
3.2
3
3 3.25 3.5 3.75 4 4.25 4.5 4.75 5
Sigma Level
S
Figure 2.1: Time Period Required to Achieve Different Sigma Levels
in an Organisation
IM
As shown in Figure 2.1, an organisation that is currently at These
Sigma level would be able to reach the Six Sigma level in a period of
approximately 5-7 years after the initial deployment. Given the de-
ployment timeline that you studied earlier in this section, the time for
reaching the Six Sigma level would be approximately 7 years. How-
ever, some results shall begin to be seen right from the first year of
M
deployment. Here, it is relevant to mention that even when an organi-

sation has achieved the Six Sigma level, some of its processes may still
be operating at poor Sigma levels. This shows the error-prone nature
of the DPMO metric, especially when it has to be interpreted across
the entire organisation. The expectations of customers keep changing
N
from time to time depending on their experiences. Figure 2.2 presents

a chart published by General Electric to demonstrate the benefits de-
rived by it as a result of Six Sigma implementation:
$2,500 $2,500
$2,000 $2,000
Benefits (Millions)
Costs (Millions)
$1,500 $1,500
Benefits
$1,000 $1,000
$500 $500
Costs
$0 $0
1996 1997 1998 1999
Figure 2.2: Benefits Derived by GE as a Result of Six Sigma

Implementation
Source: (Pyzdek & Keller, 2010)

n o t e s
As is evident in Figure 2.2, GE made sufficient savings in the first year

due to which it was able to cover its expenses that occurred that year.
From the second year onwards, savings exceeded costs and a consis-
tent improvement was seen in the benefit-to-cost ratio as costs were
levelled out. Academic research has demonstrated that the results of
organisations that have successfully implemented the Total Quality
Management (TQM) program were comparable with the results of GE.
The annual savings achieved by an organisation also depend on the
initial level of quality and organisational commitment for resources.
Traditionally, the Six Sigma human resource ratio to the overall work-
force is quite low. In organisations that have reached a certain level of
Six Sigma maturity (such as General Electric, Johnson & Johnson, Al-
liedSignal, etc.), approximately one per cent of the workforce consists
of Black Belt employees. For every 10 Black Belts there is usually one
Master Black Belt (or one MBB per 1,000 employees).
S
Usually, a Black Belt in association with different project teams com-
pletes five to seven projects per year. Usually, Black Belts (BBs) or
Green Belts (GBs) lead Six Sigma projects. However, GBs unlike BBs
IM
and MBBs are not engaged full time in a Six Sigma program. GBs
generally spend between 5-10% of their time in the Six Sigma project
work. Even though the savings per project are variable and usually
differ from one organisation to another, the average savings fall in the
range of $150,000 to $243,000. Some organisations have reported sav-
ings as high as $700,000 per project just after starting their Six Sigma
M
programs. However, larger projects usually take longer. A Black Belt

in the organisation has the potential to add approximately $1 million
per year to an organisation’s bottom line by completing five to seven
projects per year.
N
The resource requirement and estimated savings for an organisation

having 1000 employees is mentioned below:
Master Black Belts: 1
Black Belts: 10
Projects: five to seven per Black Belt, i.e. 50 to 70 per MBB
Estimated saving: $9 million to $14.6 million which is approxi-
mately $14,580 saving per employee.
Any organisation can calculate the savings in a similar way. An or-

ganisation at the three Sigma level has the potential to save 25% of its
revenue. There may be multiple potential projects available within a
typical organisation. It is easy to comprehend that Six Sigma savings
in contrast to the traditional cost cutting methodologies affect only
the non-value-added costs. As a result, they contribute directly to the
bottom line of the company.

36 LEAN SIX SIGMA
n o t e s
1. An organisation at the level of three Sigma has the potential to

save nearly 25% of its revenue. (True/False)
2. If an organisation deploys the Six Sigma strategy, it is expected
that they will be able to improve their quality performance by
10 times within ______ years of the deployment.
Activity
In a process that involves you taking a courier by flight from your

office in Connaught Place, Delhi to Mr Agarwal’s house in Colaba,
Mumbai, make a list of all possible activities and draw a network
diagram. Highlight the critical path with the timetable.
S
2.3 INFRASTRUCTURE
IM
It is important for an organisation to prepare itself for implementing
Six Sigma. Preparation includes the establishment of proper infra-
structure. A Six Sigma project usually includes infrastructural ele-
ments shown in Figure 2.3:
M
zz Core team
Staffing zz Master Black Belt
requirements zz Black Belt
zz Green Belt
zz Yellow Belt
N
Support zz MAIC discipline

programs zz Incentive system
Figure 2.3: Elements of Six Sigma Infrastructure
Let us now understand the composition and role of each infrastruc-

tural element as follows:
Core team: The core project team is central to Six Sigma imple-
mentation. This team is responsible for defining and reviewing the
progress of a Six Sigma project. The team acts as an executive
leader, with the primary objective of clearing roadblocks (if any)
for project teams.

n o t e s
Master black belt: Master Black Belt (MBB) holders fulfil the re-
sponsibility of providing technical guidance and coaching to Six
Sigma teams. The project MBB is considered to be a repository
of knowledge of all quality tools for the project team. 1:1000 is the
usual ratio of MBB to employees and it is adopted as an industry
standard.
Black belt: An employee/consultant with a certification in Black
Belt (BB) is considered to be the controller of the project. 10 (or
20):1000 is the usual ratio of BB to employees and it is adopted as
an industry standard.
Green belt: A Black Belt is supported by a team of Green Belt
(GB) holders. A project team generally has 3 to 5 GBs to support
one BB. As an industry standard, the ratio of GB to employees is
300:1000.
S
Yellow belt: The remaining employees of the project form the Yel-
low Belt (YB) group. The role of this group is primarily to act as a
source of information and provide support to the Six Sigma team.
IM
YB holders form a resource pool for Green Belt holders.
MAIC discipline: The MAIC discipline program establishes the
protocols to facilitate communication within the organisation.
Incentive system: The incentive system within the Six Sigma
project helps in facilitation of results and outcomes.
M
The roles and responsibilities of the personnel engaged in Six Sigma

projects and their training requirements are discussed as follows:
Core team: In a Six Sigma project, the core team functions as a
spearhead that cuts across barriers within the organisation. The
N
team provides a roadmap to achieve the organisation’s strategic

goals. Six Sigma projects are usually implemented using a top-
down approach. The core team is constituted by engaging repre-
sentatives from the top management. The main objective of this
team is to identify projects that can yield maximum financial gains.
Such projects usually arise from the strategic plans of an organi-
sation. The core team also performs the intermittent review of a
project. For the benefit of all, it is generally recommended that the
organisational leadership should undergo a training program to
understand the approach of the Six Sigma methodology. The Six
Sigma course for organisational leadership can be based on four
major modules, namely the overview and implementation meth-
odology of a Six Sigma project; process improvement and activ-
ity-focused knowledge; introduction of descriptive statistics and
success factors for Six Sigma; and approach to implementation.
Master Black Belt (MBB): This group forms the technical lead
of the Six Sigma project in an organisation. MBBs steer the proj-
ect technically, function as in-house technical experts and create a

38 LEAN SIX SIGMA
n o t e s
self-sustaining training culture within the organisation. The roles

and responsibilities of a MBB are as follows:
Coaching and project support
Preparing and delivering the Six Sigma training within the or-
ganisation
Providing project selection decision support
Engaging with project champions
Identifying and establishing best practices
For MBBs, it is recommended that they undergo at least two one-

week MBB training sessions that focus on advanced lessons on ad-
vanced quality, statistical thinking and related topics. MBB train-
ing can also cover a revision and critique of BB training.
Black belt: Black Belts function as change agents for rolling out
S
the Six Sigma improvement projects and methodology adoption.
Their roles and responsibilities are as follows:
Act as technical leaders for process improvement projects that
are critical and of a high strategic value.
IM
Achieve proficiency in understanding and use of advanced
quality tools and statistics.
Implement techniques of measurement, analysis, improve-
ment and control (MAIC).
It is recommended that Black Belt training programs should be
M
spread over a period of four months, comprising four weekly mod-

ules. Revision of application concepts should also be carried out in
between workshops with a person-to-person coaching of applica-
tion of techniques to their respective projects.
N
Green belt: This group is made of the Subject Matter Experts

(SMEs) of respective processes. Green Belts also function as
change agents within their teams. The roles and responsibilities of
a GB holder are as follows:
Provide leads for process improvement projects.
Provide support for process improvement projects that are
critical and are of high strategic value.
Drive continuous process improvement efforts.
It is recommended that Green Belt training sessions should be at
least two weeks long and include subjects and topics of relevance
from the four-week BB training.
Yellow belt: YB holders constitute the remaining population of the
Six Sigma project team. They are at the grassroots of the Six Sig-
ma process. They provide support to the Six Sigma project team
in data collection and are the key source of information on issues
that require investigation. It is recommended that YB employees
should be provided a training of at least three days with focus on
application of the basic statistical concepts of problem solving.

n o t e s
Master deployment plan: Before starting the implementation of

a Six Sigma project, it is advisable to prepare a roadmap often
known as the Master Deployment Plan. The plan can be prepared
and divided into four phases, namely Measure, Analyse, Improve
and Control phases, acronymised as MAIC. These phases are de-
scribed as follows:
Measure phase: The role of the top management does not end
just by initiating the Six Sigma project in the organisation. In
fact, throughout the project life cycle, management support is
a critical success factor in the Six Sigma project. Just after ini-
tiating the Six Sigma process, the organisation should under-
take activities to develop commitment to and create awareness
about the necessity of quality improvement. It is at this point
that the organisation starts designing and deploying the re-
quired infrastructure. Some important aspects of the Measure
S
phase are:
99 Establish leadership, involvement and commitment of
the management: To ensure the success of the Six Sigma
IM
effort, the top management should allocate all the resourc-
es necessary for the project apart from providing their
commitment for project implementation. The management
commitment should continue till the project is completed.
The top management must also allocate a management
champion to lead the project. Further, the top management
must communicate to the entire organisation that the per-
M
son appointed as the management champion has been giv-

en the authority and responsibility of the entire Six Sigma
project and all project members must provide all the possi-
ble support to him/her.
N
99 Create the six sigma core team: The top management

needs to create a core project team headed by the manage-
ment champion. The core team is entrusted with the task of
planning, developing, executing and managing Six Sigma
implementation.
99 On-board external quality consultants when required:
Organisations that do not have internal Six Sigma SMEs
may seek assistance from experienced outside consultants
for Six Sigma implementation. These consultants usually
coach the core team and provide necessary training to all
Six Sigma project participants related to system deploy-
ment, project management and utilisation of quality tools.
99 Provide Six Sigma deployment training: It is highly rec-
ommended that the representatives of the top management
and the core team members should get familiarised with
the Six Sigma methodology and its advantages. The core
team should also attend the training sessions related to the
development, deployment and management of six Sigma
projects.

40 LEAN SIX SIGMA
n o t e s
99 Schedule periodic top management reviews: During the

preliminary stages of the Six Sigma project, the top man-
agement should review the project frequently. At later stag-
es, the project team should keep the top management in-
formed about the project progress. It should also reiterate
its commitment to the Six Sigma project effort and spread
it to the remaining organisation.
Analyse phase: The Analysis phase focuses on identifying gaps
between the current process performance and business objec-
tives. It is important to convert these gaps into continuous im-
provement projects and establish a system for supporting the
implementation of these projects. Some important aspects of
the Analysis phase are as follows:
99 Define business goals on the basis of organisation’s stra-
tegic plans: It is vital that the core team is well-versed with
S
the purpose of the organisation, its hierarchical structure
and the process flows. It should also be familiar with the or-
ganisation’s interface with other organisations and primary
customers. The core team shall evaluate and incorporate
IM
all relevant corporate policies and procedures within the
Six Sigma Quality Management System (QMS). The core
team also needs to define short-term and long-term busi-
ness goals.
99 Evaluate existing processes performance: The core team
should identify major processes that add value to products/
M
services supplied to end-customers subsequently. A high-lev-

el gap analysis is carried out by the core team and the results
of this gap analysis are reviewed by the top management.
99 Identify Six Sigma improvement projects: On the basis of
high-level gap analysis, the core team and the management
N
decide the scope and objectives of Six Sigma improvement

projects. Improvement projects may be related to process
management, human resource development, training sys-
tems, customer management, vendor management, quality
tools, and so on.
99 Define key performance indicators for all the Six Sigma
projects: On the basis of gap analysis, all key performance
measures must be incorporated into the organisational in-
formation system. Whenever possible, the information sys-
tem of the organisation should be updated to include the
status of individual Six Sigma projects along with the status
of the overall Six Sigma implementation in the organisation.
99 Create a reward and recognition system: It is important
for the top management of the organisation to design and
implement new reward and recognition systems to moti-
vate employees and keep them engaged in the overall Six
Sigma implementation plan.
99 Form a quality service team: The core team needs to cre-
ate a Quality Service Team which helps in implementing

n o t e s
the Six Sigma plan. The Quality Service Team provides

training and consulting services to the Six Sigma project
teams related to the use of quality tools.
Improve phase: At this stage, the core team needs to create Six
Sigma teams for improving projects and subsequently provide
relevant Six Sigma training to all team members. As the proj-
ects progresses, the management should review and monitor
the status of each project periodically.
99 Form Six Sigma project teams: The core team shall iden-
tify and form as many Six Sigma project teams as required.
Each individual Six Sigma project team has the responsi-
bility of successfully executing the projects and achieving
the stated goals.
99 Plan and deliver Six Sigma implementation training to
S
project teams: The core team develops a training plan after
analysing the training needs of all team members. The core
team also has the responsibility of hiring a Six Sigma con-
sultant or a master trainer who would provide the required
IM
training to all project members. Such training should ideal-
ly focus on providing the Six Sigma overview, MAIC disci-
pline and the use of quality tools.
99 Project implementation: The current processes should be
evaluated by the project team and the activities described
in Figure 2.4 should be carried out.
M
Carry out a system

Select and describe the analysis to identify gaps
Evaluate the existing
critical between the current
systems
processes/products process performance and
N
the desired performance
Measure improvements to
Control the new system in
assess the level of
order to prevent the
customer expectations
previous problems from
that have been met/not
recurring
met.
Figure 2.4: Activities Carried Out Under

Project Implementation
99 Monitor and review each project’s status: A communi-

cation system between project teams and the core team
should be devised so that they can keep the core team up-
dated about the activities being carried out by each Six
Sigma project team. The core team should review activi-
ties periodically and provide its inputs or suggestions on an
on-going basis. The core team also provides the necessary
direction and support to the project teams.

42 LEAN SIX SIGMA
n o t e s
Control phase: In this phase, the core team needs to evaluate

and assess the success level of each project which is measured
by assessing project gains after improving processes. Here, it
is also important to continuously adjust strategic plans of the
business and also restart the implementation cycle.
99 Audit of project outcomes: After the project completion,
the results and reports are audited by the core team and
the senior management is assured that the outcomes of the
project are as expected.
99 Maintain the improved systems: The new or improved pro-
cesses and systems must be made the new normal by making
the necessary changes in the policies, procedures, operating
instructions and other related management systems.
99 Recognise and reward the team members: On the basis
S
of project performance, all team members should be given
appropriate incentives and recognition.
99 Incorporate continuous improvement mechanism: Re-
IM vise the organisation’s strategic plan and related action
plans as per the project performance. Derive new Six Sig-
ma projects on the basis of the revised strategic plan.
3. The Black Belt certified team members usually support data

M
collection in Six Sigma projects.(True/False)

4. For an organisation with 5000 employees, at least how many
Master Black Belt certified project members will be required?
a. 1 b. 3
N
c. 5 d. 7
Black Belt certified project members will be required?
a. 5-10 b. 500-100
c. 50-100 d. 500-1000
Green belt certified project members will be required?
a. 1500 b. 150
c. 100 d. 1000
7. The_____________ discipline program establishes the protocols
to facilitate communication within the organisation.
Activity
Research the Internet and make a list of topics generally covered

under different Six Sigma belts – MBB, BB, GB and YB.

n o t e s
INTEGRATING SIX SIGMA AND

2.4
RELATED INITIATIVES
A company that undertakes quality management may have multiple
programs being implemented currently or those that have been imple-
mented in the past. These programs are run simultaneously to derive
the benefits of different methodologies and organisational objectives.
Some of these are:
TQM
Lean manufacturing/Lean service

Kaizen
Business Process Reengineering (BPR)
S
Theory of Constraints (TOC)
Variation reduction
It may not be a good idea to add Six Sigma simply into the current mix
IM
of quality improvement programs as it would lead to confusion among
teams associated with these programs. There may be situations of
conflict over the area of responsibility, shared resources and authority.
When multiple strategies are implemented, leaders should carefully
deliberate how best to integrate the overlapping activities to achieve
optimum results. In such situations, a concept that offers the required
M
guidance to integrate the different but related efforts successfully can

be used. One such approach that can be used to integrate the related
initiatives is Process Excellence.
Process Excellence (PE) consists of making continuous improvements

N
in activities that are focused on defining stakeholder values and classi-

fying activities as value adding or non-value adding activities. In these
methodologies, a process is evaluated based on its ability to create val-
ue effectively and efficiently. Effectiveness is defined as the ability to
deliver a product that conforms to customer requirements. The char-
acteristics on the basis of which a product is evaluated include quality,
price, usefulness, delivery, timeliness, etc. Efficiency is defined as the
ability to achieve the objective with minimum resources, and this is an
organisation-focused process characteristic. Processes that are effec-
tive and efficient usually achieve excellence.
Process Excellence is defined as a set of activities that are specifically

executed to bring in excellence. Process excellence is change-orient-
ed and cross-functional as it is applied to multiple vertical channels
of the organisation. PE includes Six Sigma along with other quality
initiatives such as TQM, Kaizen, BPR, etc. When the integration of
different quality methodologies or systems is complete, each system
usually contributes positively to an organisation, leading to a better
managed quality system.

44 LEAN SIX SIGMA
n o t e s
Some benefits of integrating different quality systems are as follows:

Enforcement of process and business ownership: The integra-
tion of Six Sigma with methodologies such as Business Process
Management can speed up process implementation even in the
absence of a team. Integration facilitates more control over busi-
ness that gets intensified by monitoring and later on reporting of
the predictive metrics of the process performance.
Agility and speed: Benefits can increase substantially when two
initiatives for agility and speed are operated together. For exam-
ple, a supplier who has a shorter delivery time has a competitive
edge over its competitors. The Six Sigma method can be used to
create the value stream map that indicates the metrics and focus
points which are instrumental in reducing total lead time. A busi-
ness process management (BPM) automation initiative on the oth-
S
er hand aims to deploy controls and processes throughout key ar-
eas, which include activities such as waiting order approvals and
signatures. Automated controls in the BPM can collate all the data
for process performance in real time.
IM
Superior approach to problem solving: The focus of Six Sigma
methodology is to find solutions to narrow and highly specif-
ic problems. This methodology helps to obtain reliable data that
would be required to eliminate all wasted work efficiently. This
microscopic approach sometimes hides the big picture. In such a
case, business process management helps to create a framework
M
to support integration of two techniques and allows problem solv-

ing methods to be seen from a wider view.
Better returns: It is observed that organisations, which deploy a
quality methodology like Six Sigma or BPM, reap higher profits in
N
comparison to those organisations which do not. Additionally; it is

relevant to mention that the organisations which integrate quality
management systems like BPM and Six Sigma are able to achieve
better and long lasting results.
There is no doubt that the approach of each quality initiative may be

different but the focus of these two quality initiatives is the same, i.e.
process optimisation and increased efficiency. Initiatives when com-
bined aid in elimination of waste, quality improvement and better
control.
8. __________is defined as the ability to deliver a product that

conforms to customer requirements.
9. __________ is defined as the ability to achieve the objective
with minimum of resources.
10. Process excellence is___________ as it is applied to multiple
vertical channels of the organisation and is also_________.

n o t e s
Activity
Carry out an online research and enlist at least five organisations

each that follow Kaizen and Six Sigma. Also list out five organisa-
tions that use a combination of Six Sigma and Kaizen strategies.
2.5 DEPLOYMENT TO THE SUPPLY CHAIN

Organisations all over the world are adopting Six Sigma in supply
chains because it helps in the elimination of wasteful activities and de-
creases variance in their supply chain activities. The Six Sigma meth-
odology helps increase efficiency in several ways as described below:
Reducing the order fulfilment time: Application of Six Sigma to
an organisation’s order fulfilment system helps in identifying those
S
areas which have high waste and process variance. After identify-
ing all inefficiencies in the order fulfilment process, this process
can be improved by reducing paperwork, introducing automating
IM
processes such as picking, shipping planning and shipment verifi-
cation. The DMAIC cycle can be used to improve and enhance the
existing order fulfilment process, and the DMADV methodology
can be used to create a new process.
Creating a responsive supply chain process: The changing needs
of customers are the drivers of change for an organisation’s supply
M
chain processes too. The supply chain processes should be respon-

sive enough to adapt to customers’ changing needs.
Reducing errors: Lean Six Sigma, an improved version of Six Sig-
ma can be applied to supply chains having high error rate. One
N
such lean technique is the Poka-Yoke technique or mistake proof-

ing of procedures by preventing the human error by ensuring
that a user completes the assigned tasks correctly. For example,
a software-enabled drill may be programmed to drill a particular
number of holes and an alarm would be generated if the required
number of holes has not been drilled.
Another lean technique called the 5S lean principle can be used
for reducing errors in the supply chain. This technique helps in
the reduction of errors by eliminating wastes that can cause er-
rors. The 5S method stands for Sorting, Setting, Shining, Stan-
dardising and Sustaining.
Optimisation of the order fulfilment process: An order fulfilment
process is considered to be precise when the orders are delivered
on time with complete and accurate documentation and with no
damage caused during delivery. Six Sigma helps in improving the
order fulfilment process by identifying problems in the system
such as an out-dated planning process, inefficient execution, etc.

46 LEAN SIX SIGMA
n o t e s
Waste reduction: The Lean Six Sigma methodology helps in elim-

inating non-value adding processing or waste. Lean focuses on the
management of the following sources of waste:
Over-production: Accumulating high levels of inventory of fi-
nal products and/ or of parts on the basis of speculation results
in high inventory costs.
Transportation: Unnecessary movement of raw materials, fin-
ished products or the work-in-progress materials leads to an
increase in production costs and cycle time.
Non-value added processing: A poor production facility lay-
out may lead to additional work that does not add value to the
product or service. Lean Six Sigma can be used to simplify
production leading to efficient functioning of the supply chain.
Consequently, an efficient supply chain would provide a com-
S
petitive edge to an organisation and also help in increasing its
revenue.
IM
11. Six Sigma implementation helps in improving logistics

management. (True/False)
12. Six Sigma helps in mistake proofing with the help of
the________ technique.
M
13. Name two sources of waste.
Activity
N
Study the operational procedures used by a courier delivery organ-

isation. List out all the possible interventions that can be applied by
the organisation for mistake proofing its supply chain.
2.6 SUMMARY
If an organisation adopts a Six Sigma strategy, it is expected to
improve its quality performance 10 times within 2 years of imple-
menting the strategy.
Traditionally, the Six Sigma human resource ratio to the overall
workforce is quite low. In organisations that have reached a cer-
tain level of Six Sigma maturity (such as General Electric, Johnson
& Johnson, AlliedSignal, etc.) approximately one per cent of the
workforce consists of Black Belt employees. For every 10 Black
Belts, there is usually one Master Black Belt (or one MBB per
1,000 employees).

n o t e s
Usually,a Black Belt in association with different project teams

completes five to seven projects per year. Often, Black Belts (BBs)
or Green Belts (GBs) lead Six Sigma projects. However, GBs unlike
BBs and MBBs are not engaged full time in a Six Sigma project.
Any Six Sigma project usually includes two major infrastructural
elements: staffing requirements and support programs. Staffing
requirements include Core Team, Master Black Belt, Black Belt,
Green Belt and Yellow Belt. Support programs include MAIC Dis-
cipline and Incentive Systems.
The core project team is central to Six Sigma implementation.
This team is responsible for defining and reviewing the progress of
a Six Sigma project. The team acts as an executive leader, with the
primary objective of clearing roadblocks (if any) for project teams.
A company that undertakes quality management may have mul-
S
tiple programs being implemented currently or those that have
been implemented in the past. These programs are run simultane-
ously to derive the benefits of different methodologies and organ-
IM
isational objectives.
There is no doubt that the approach of each quality initiative may
be different but the focus of the Six Sigma and other quality initia-
tives is the same, i.e. process optimisation and increased efficiency.
These initiatives when combined aid in elimination of waste, qual-
ity improvement and better control.
M
key words
Core team: The central node of a Six Sigma project.

N
Master deployment plan: A roadmap prepared before imple-

menting a Six Sigma project.
Reengineering: A practice of rethinking and redesigning the
way work is done to better support an organisation’s mission
and reduce costs.
TQM: An organisation-wide effort to make climate in which
an organisation continuously improve its ability to deliver
high-quality products and services to customers.

1. List deployment activities and timelines of a Six Sigma project.
2. What is the role of MBB and BB in the Six Sigma project of an
organisation?
3. Write a short note on the Measure phase of the Master Deployment
Plan in Six Sigma.

48 LEAN SIX SIGMA
n o t e s
4. Describe Process Excellence. How does the integration of quality

initiatives benefit an organisation?
5. Describe how the supply chain of an organisation benefits from
Six Sigma implementation.

Timetable 1. True
2. Two
Infrastructure 3. False
S
4. c. 5
5. c. 50-100
6. a. 1500
IM
7. MAIC
Integrating Six Sigma and 8. Effectiveness
Related Initiatives
9. Efficiency
10. cross-functional, change-oriented
M
Deployment to the Supply 11. True

Chain
12. Poka-Yoke
13. Overproduction, Transportation
N

1. Deployment phases in a Six Sigma project include Initial
Planning for Six Sigma, Alignment, Program Development, and
Implementation and Maturity. Refer to Section 2.2 Timetable.
2. Master Black Belt (MBB) holders fulfil the responsibility of
providing technical guidance and coaching to the Six Sigma
teams. An employee/consultant with a certification in Black Belt
(BB) is considered to be the controller of the project. Refer to
Section 2.3 Infrastructure.
3. Management support throughout the project life cycle is a
critical success factor in a Six Sigma project. Just after initiating
a Six Sigma process, the organisation should undertake
activities to develop commitment to and create awareness about
the necessity of quality improvement. It is at this stage that
the organisation starts designing and deploying the required
infrastructure. Refer to Section 2.3 Infrastructure.

n o t e s
4. Process Excellence (PE) consists of making continuous

improvements in activities that are focused on defining
stakeholder values and classifying activities as value adding or
non-value adding activities. In these methodologies, a process
is evaluated based on its ability to create value effectively and
efficiently. Refer to Section 2.4 Integrating Six Sigma and
Related Initiatives.
5. Organisations all over the world are adopting Six Sigma in supply
chains because it helps in elimination of wasteful activities and
decreases variance in their supply chain activities. Refer to
Section 2.5 Deployment to the Supply Chain.
S
SUGGESTED READINGS
Gygi, C., Williams, B. and Gustafson, T. (2006). Six Sigma. Work-
book For Dummies. Hoboken: John Wiley & Sons.
IM
Brussee, W. (n.d.). Statistics for Six Sigma Made Easy!
George, M. (2004). Lean Six Sigma for Service. New York [u.a.]: Mc-
Graw-Hill.
Eckes, G. (2001). The Six Sigma Revolution. New York [etc.]: John
Wiley.
M
E-REFERENCES
Qualityamerica.com. Retrieved 10 July 2017, from http://quali-
N
tyamerica.com/LSS-Knowledge-Center/leansixsigma/lean_six_
sigma_metrics.php
iSixSigma: Six Sigma Resources for Six Sigma Quality. (2017).
Isixsigma.com. Retrieved 10 July 2017, from https://www.isixsig-
ma.com/

N
M
IM
S
C hapter
3
BASIC STATISTICAL CONCEPTS FOR SIX SIGMA
CONTENTS
S
3.1 Introduction
3.2 Probability and Probability Distribution
IM
3.2.1 Binomial Distribution
3.2.2 Poisson Distribution
3.2.3 Normal Distribution
Activity
3.3 Sigma Levels
M
3.3.1 Defects per Opportunity (DPO)

3.3.2 Defects per Million Opportunities (DPMO)
3.3.3 Process Capability and Sigma Level
3.3.4 Throughput Yield and Sigma Level
N

Activity
3.4 Summary

52 Lean Six Sigma
n o t e s
IMPLEMENTATION OF SIX SIGMA AT SCHWING

STETTER INDIA
Incorporated in June 1998 and a front-runner in the Indian con-

struction equipment industry, Schwing Stetter India Private Lim-
ited (a 100% subsidiary of Schwing Stetter GmbH, Germany) re-
ceived its Six Sigma compliance certification a few years ago. This
certification covered all key business processes of Schwing Stet-
ter India. The Six Sigma initiatives of the company were rolled
out in 2005. The company is an 850-million Euro German concrete
machinery manufacturer. Infrastructure developers and cement
companies are its major customers. The manufacturing units of
the company are spread in over 11 countries including Germany,
Austria, USA, Brazil, Russia, China, Ostrava and India. It also has
S
sales and service centres and representations in more than 145
countries across the world.
As stated by a key management official of Schwing Stetter India,

IM
the company’s certification is an evidence of its focus on customer
satisfaction that is considered to be the foremost factor responsi-
ble for the success of any business.
For Schwing Stetter India, the customer focus meant consistently

high quality in services, increase in the reliability of its business
systems, better and more efficient risk management practices and
M
enhanced capabilities of business continuity planning. The com-

pany officials hoped that the certification would turn out to be a
great help in earning the trust and confidence of customers as it
serves as an assurance for them that the company’s product was
in consonance with high standards of quality, security, and per-
N
formance. A Six Sigma certificate also meant that the company

made sustained efforts to achieve operational goals. This certifi-
cation was seen as a beginning of an effort to consistently meet
and exceed (wherever possible) customer expectations.
With their six sigma implementation, the company’s executives

identified the deliverables that would cover all business process-
es within the project scope and created a framework on the CTQ
(Critical-to-Quality) parameters related to all the expected deliv-
erables. Many statistical tools and techniques were carefully se-
lected and used to achieve innovative and breakthrough process
improvements. Lean practices were implemented to augment the
results achieved from the application of Six Sigma methodology.
Six Sigma is a quality improvement methodology that helps or-

ganisations achieve structured results in the form of products or
services that have negligible defect rates. The defect rate is mea-
sured as a Six Sigma metric called Defects Per Million Opportu-
nity (DPMO) and Defects Per Opportunity (DPO). Six Sigma finds

BASIC STATISTICAL CONCEPTS FOR SIX SIGMA 53
n o t e s
applicability in all aspects and processes of a business including

design, production, management, service delivery and customer
services and satisfaction. Successful Six Sigma implementation
depends on flawless execution of key processes thereby creating
high standards that rival companies need to achieve. It is an in-
dustry-wide known fact that customers value products and busi-
ness services that are highly predictable. Six Sigma is a method-
ology that delivers continuous improvements with proven results.
S
IM
M
N

54 Lean Six Sigma
n o t e s
learning objectives

>> Explain the concept of probability and probability
distribution
>> Compare Binomial and poisson distributions
>> Discuss the concept of normal distribution
>> Explain the concept of sigma levels
>> Determine metrics such as defects per opportunity, defects
per million opportunities, process capability and throughput
yield
3.1 INTRODUCTION
S
In the previous chapter, you studied the implementation of Six Sigma.
You also studied the kind of infrastructure required for deploying the
IM
Six Sigma methodology throughout a supply chain.
In this chapter, you will study some basic mathematical and statisti-
cal concepts that are used extensively in the Six Sigma methodolo-
gy and form its very basis. Inferential statistical analysis is based on
the concept of probability distribution. In this chapter, you shall study
various probability distributions including discrete and continuous
M
probability distributions. A discrete probability distribution is used

in a case where the sampling space is discrete but it is not countable.
In contrast, a continuous probability distribution is used in a continu-
ous sample space. In this chapter, you will study two types of discrete
probability distributions – Binomial and Poisson distributions. You
N
will also study the normal distribution which is a continuous probabil-

ity distribution.
In the Six Sigma methodology, there are various Six Sigma metrics
which help managers measure the quality of products. These metrics
hold a critical place in process improvement initiatives when applied
to the manufacturing of defect-free products. These metrics include
the Sigma level, defects per opportunity, defects per million opportu-
nities, process capability and throughput yield.
PROBABILITY AND PROBABILITY

3.2
DISTRIBUTION
Probabilities arise whenever individual data points are sampled from
a set of data or a population in an experiment. This happens because
different events or trials or sometimes even repetitions of the same
experiment may result in different outcomes.

n o t e s
The probability of an event happening is the frequency or the propor-

tion of times that an event is likely to occur in a given large set of trials
in an experiment. In other words, probability is the frequency of an
event that is long run and relative.
Formally, probability is defined as a number that is assigned to each

and every data point or member in a sample space. Probability is de-
noted by P (). The probability function is a rule of correspondence
which associates every event A in the sample space S with a number
P (A) such that 0 ≤ P (A) ≤ 1.
In case of an impossible event, the probability is 0. And, the proba-

bility of an event, which is certain, is 1. Therefore, a range of possible
probabilities is: 0 ≤ P (A) ≤1.
Regarding the probability of occurrence of any event, it must be re-
S
membered that:
All elementary events are likely to occur equally.
Events are generally denoted by Roman letters like A, B, etc.
IM
Probability of an event happening is denoted as P (A).
When all probabilities for all distinct events are added, the sum is al-
ways 1. Let us understand the concept of probability with an experi-
ment of drawing out one card from a deck of standard fifty two playing
cards. While experimenting with a deck of cards, the following points
M
must be kept in mind:

In this case, the sample space denoted by S is the complete set of
all the outcomes that are distinct. In this case, S = 52.
N
An elementary event or a sample point here shall be a single card

from a subset of the sample space. For example, an ace of spades.
An event or a class of events. In a set of cards, a class of events
could be a suit; for example, the hearts, spades, etc. Alternatively,
it can also be the colour of cards, i.e. red or black, or the number
on the card, i.e., ace, two, three, etc.
Therefore, the probability of pulling out an ace from a deck of 52
The Number of aces 4
cards will be = = = 0.0769.
the Total number of cards 52
A few more terms that are used frequently in probability are described
as follows:
Joint event: An event that is likely to occur when two or more
events are considered at a time. For example, if event A = Tail on
a two rupee coin and event B = Tail on a one rupee coin. The joint
event in this case is tails on both the coins.
Intersection (A ∩ B) = It means that events A and B occur at the
same time.

56 Lean Six Sigma
n o t e s
Union: (A ∪ B) = In this kind of event, the following possibilities

can happen.
Only A occurs
Only B occurs
Both A and B occur
A ∪ B can be represented using a Venn diagram as follows:
S
Complement: It is the situation that an event did not occur, i.e. A ≡
IMnot A. For example, if A = black card, then A = red card.
Mutually exclusive events: These are events that cannot occur at
the same time as such events have no elementary events in com-
mon. For example, if A = Head and B = Tail. When a coin is tossed,
both A and B can’t occur simultaneously. In case of mutually exclu-
sive events A and B, P (A or B) = P (A ∪ B) = P (A) + P (B).
M
Let us now look at some examples.
Example: Suppose Event A = one of the cards with the number value
between 2 and 10, Event B = one of the cards with the number value
J, Q, K, and Event C = one of the cards with ace value. Then probabil-
N
ities of the happening of these events:
P (A) = (9*4)/52 = 36/52 = 0.6923
P (B) = (3*4)/52 = 12/52 = 0.2308
P (C(ace)) = (1*4)/52 = 4/52 = 0.0769
P (A) + P (B) + P(C) = 0.6923+0.2308+0.0769 = 1
P (A ∪ B) = P (A) + P (B) = 0.6923 + 0.2308 = (36/52) + (12/52) =

(48/52) = 0.9231
Various rules and concepts of probability addition are as follows:

Rule 1: In case of two mutually exclusive events A and B, where
there is no overlap, the probability that either one event or both
the events will occur is given by:
P (A or B) = P (A ∪ B) = P (A) + P (B)

n o t e s
Rule 2: For any two events, A & B, the probability that either one
event or both the events will occur is given by:
P (A or B) = P (A ∪ B) = P (A) + P (B) − P (A ∩ B)
Conditional Probability: It refers to the probability of the occur-
rence of an event A given that event B has already occurred. It is
represented as:
P (A|B) = P (A ∩ B) P (B) = P (A, B) P (B)
note
A|B is read as ‘A is conditional upon B’s occurrence’.

Probability distributions: A statement of a function that associ-

ates every element of a set of mutually exclusive and exhaustive
S
events with its probability is known as a probability distribution.
In a case where X represents a function which associates a real
number with every elementary event in a sample space repre-
IM
sented by S, then X is known as a random variable on the sample
space S.
Random Variable: A random variable is defined as any variable
whose value is determined by the outcome of an experiment that
is random in nature. When a random variable can acquire only a
finite number of values, it is known as a discrete random vari-
M
able. In contrast, a random variable that acquires infinite number

of values is known as a continuous random variable.
Probability Distribution: According to Hayes, any statement of a
function associating each of a set of mutually exclusive and exhaus-
N
tive events with its probability is a probability distribution.
Let us now discuss in detail the concept of distribution functions.
For a discrete variable, the probability distribution is a table or a for-

mula that lists all possible values which can be taken up by the dis-
crete variable along with the probabilities of that value.
For a continuous variable X, function f (X) is called the Probability

Density Function (PDF) where the total area under the curve bounded
by the x-axis equal to 1. i.e.
∞
∫ f ( x) dx = 1
−∞
The probability that X lies between a and b is defined by the area un-
der the curve between two ordinates x = a and x = b.
∞
∫ f ( x) dx= P ( a ≤ X ≤ b)
−∞

58 Lean Six Sigma
n o t e s
The area under a curve between two points can be determined by

carrying out a definite integral between the two points. Thus, to deter-
mine the area under the curve: y = f (x) between x = a, x = b, integrate
y = f(x) between the limits of a, b. Areas under x-axis will be negative
and areas above the x-axis will be positive.
3.2.1 BINOMIAL DISTRIBUTION
Binomial distribution is based on the concept of the Bernoulli trial. A

Bernoulli trial is an experiment where only two outcomes are possi-
ble. A random variable X shall have a Bernoulli (P) distribution if:
 1 with probability p
X = 
1− p
 with probability
0
Where 0 ≤ p ≤ 1.
S
Value X = 1 is often labelled a success and value X = 0 is termed a
failure.
IM
Binomial distribution is generally used to determine the probability of
observing a required number (x) of successes in an experiment with N
number of trials. The probability of success in a single trial is denoted
by p. An assumption is made that binomial distribution p is fixed for
all trials. The formula for the binomial probability mass function is as
follows:
M
 n x
P ( x; p; n )   ( p) (1 − p)
n− x
= for x= 0, 1, 2,………, n
 x
 n n!
Where   =
 x  x ! ( n − x )!
N
The plot of the binomial PDF for four values of p, i.e. 0.1, 0.25, 0.50,
0.75 and n = 100 is shown in Figure 3.1:
Binomial PDF Binomial PDF
(P = 0.1, N = 100) (P = 0.25, N = 100)
Probability Mass
Probability Mass
0.2 0.1
0.15 0.075
0.1 0.05
0.05 0.025
0 0
0 20 40 60 80 100 0 20 40 60 80 100
x x
Binomial PDF Binomial PDF
(P = 0.50, N = 100) (P = 0.75, N = 100)
Probability Mass
Probability Mass
0.08 0.1
0.07
0.06 0.075
0.05
0.04 0.05
0.03
0.02 0.025
0.01
0 0
0 20 40 60 80 100 0 20 40 60 80 100
x x
Figure 3.1: Binomial PDF for p = 0.1, 0.25, 0.50, 0.75 and n = 100
Source: http://www.itl.nist.gov/div898/handbook/eda/section3/eda366i.htm

n o t e s
3.2.2 POISSON DISTRIBUTION
Poisson distribution was formulated by French mathematician Simon

Denis Poisson. A Poisson random variable is the number of successes
resulting from a Poisson experiment. Poisson distribution is the prob-
ability distribution of a random variable that results from a Poisson
experiment. A Poisson experiment is a statistical experiment with the
following attributes:
Outcomes of the experiment are classified as successes or failures.
The average number of successes in a particular area is denoted

by μ and it is known.
The probability of success in an event is proportional to the size of
the region.
The probability of success in an event in an extremely small region
S
is almost zero.
A specified region could take many forms such as length, area, vol-
ume, period of time, etc.
IM
The following notations are used frequently in a Poisson distribution:
e: It is a constant that is approximately equal to 2.71828. In fact, e
is the base of the natural logarithm system.
μ:It is the average number of successes occurring in a specified
region.
M
x: It is the exact number of successes occurring in a specified re-

gion.
P (x; μ): It is the Poisson probability of exact x successes occurring
in a Poisson experiment. Here the mean number of successes is μ.
N
The formula used to calculate the Poisson probability, once the aver-
age number of successes (μ) in a specified region is available, is given
as follows:
(e− µ ) ( µ x )
P ( x; µ ) =
x!
As mentioned earlier, here x is the actual number of successes result-

ing from the experiment and e is approximately equal to 2.71828. A
Poisson distribution has the following characteristics:
The distribution mean is = μ.
The variance is also = μ.
Consider the following illustration.
Illustration: Suhana motor showroom sells an average number of 2

cars per day. Determine the probability of selling exactly three cars
tomorrow.

60 Lean Six Sigma
n o t e s
Solution: The above question is an example of the Poisson experi-

ment. We have the following information:
μ = 2, the average number of two cars are sold per day.
x = 3, the probability of selling three cars tomorrow.
e = 2.71828; e is a constant equal to approximately 2.71828.
Let us now put these values in the Poisson formula as follows:
(e− µ ) ( µ x )
P ( x; µ ) =
x!
P (3; 2) =
(2.71828 ) 2
( )
−2 3
3!
S
(0.13534 ) 8
( )
P (3; 2) =
6
IM
P (3; 2) = 0.18
Therefore, the probability of selling 3 cars tomorrow is 0.18.
3.2.3 NORMAL DISTRIBUTION
A normal equation describes a family of continuous probability distri-

M
butions. It is used to present the real-valued random variables whose

distributions are not known. The formula used in a normal distribu-
tion is as follows:
N
−(x− µ )
2
 1 
= ( x) 
Y f=  *e
2σ 2
 σ 2π 
Here, μ is the mean of a normal distribution, x is a normal random vari-

able, σ is the standard deviation of normal distribution, π = 3.14159,
and e = 2.71828.
A normal distribution can be represented graphically and the two fac-

tors that affect the graph are the mean and the standard deviation.
The location of the centre of the graph is determined by the mean
of the distribution, and the width and height of the graph are deter-
mined by the standard deviation. The curve of the normal distribution
is wide and short in the case of a large standard deviation. However, in
the case of a small standard deviation, the normal distribution curve is
narrow and tall. The curve of a normal distribution is bell shaped and
all normal distributions look symmetric. This is shown in Figure 3.2:

n o t e s
Figure 3.2: Normal Distribution Curves
In Figure 3.2, observe that the image on the left is shorter and wider as
compared to the narrow and tall curve on the right. This is so because
the curve on the right has a smaller standard deviation.
Let us discuss the relationship between probability and the normal

curve. The continuous probability distribution nature of the normal
distribution has multiple implications on probability. The characteris-
S
tics of the curve are as follows:
The total area under the normal curve is 1.
Mean, mode and median are all equal.
IM
The normal curve is symmetric around the mean, μ.
All normal curves are symmetric about the mean μ, have a point of
inflection at μ ± σ and are bell-shaped.
For all values of x, all normal curves are positive. That is, f (x) > 0
for all x.
M
The limit of f (x) as x approaches infinity is 0 and the limit of f (x)

as x approaches negative infinity is also 0. This is represented as
follows:
N
lim f ( x ) = 0 and xlim f ( x) = 0

x →∞ →−∞

The maximum height of any normal curve is at x = µ.
The shape of a normal curve is dependent on its mean, i.e. μ and
its standard deviation σ.
Consider Figure 3.3 as follows:
Figure 3.3: Normal Curve and α

62 Lean Six Sigma
n o t e s
With respect to Figure 3.3, the following points hold true:

The area under the normal curve bound by α and plus infinity, that
is, the non-shaded area gives the probability of X being greater
than α.
The area under the normal curve bounded by α and minus infin-
ity, that is, the shaded area in the figure gives the probability of X
being less than α.
Apart from the characteristics mentioned earlier, every normal curve

(irrespective of the mean or standard deviation) conforms to the 68-95-
99.7 rule. It is a rule that is used in normal distributions to remember
the percentage values that lie within a range of two, four and six stan-
dard deviations around the mean. The precise values related to the
rule are 68.27%, 95.45% and 99.73%. According to this rule:
S
68% of the area under the normal curve falls within two standard-
deviations of the mean (x ± 1𝜎).
About 95% of the area under the normal curve falls within four-
IM
standard deviations of the mean (x ± 2𝜎).
About 99.7% of the area under the normal curve falls within six-
standard deviations of the mean (x ± 3𝜎.
A standard normal distribution has a mean of 1 and a standard devia-

tion of 1. A standard normal distribution along with the 68-95-99.7 rule
M
is depicted in Figure 3.4:
One standard
deviation
N
68% of data
95% of data
99.7% of data
–3 –2 –1 0 1 2 3
Figure 3.4: A Standard Normal Distribution and the 68-95-99.7 Rule
1. Probability is the of an event that is long-run and relative.

2. A number that is assigned to each and every data point or
member in a sample space is called __________.
3. In case of an event which is impossible, the probability is 1; on
the other hand, an event which is certain, the probability is 0.
(True/False)

n o t e s
4. When all probabilities for all distinct events are added, the
sum is always:
a. 10
b. 5
c. 1
d. 50
5. Union (A ∩ B) is an event when A and B occur at the same
time. (True/False)
6. Getting a head or tail on tossing a coin is an example of which
kind of event:
a. Complement
b. Union
S
c. Mutually exclusive
d. Intersection
IM
7. The probability of event A given that event B has already
occurred is known as __________.
8. When a random variable can acquire only a finite number of
values, it is known as a continuous random variable. (True/
False)
M
9. A binomial distribution is based on the concept of a trial.

10. The curve of a normal distribution is _______ shaped.
Activity
N
Collect a data of the ages of 30 people and arrange it in an ascending

order. Determine the mean and standard deviation of this data set.
3.3 SIGMA LEVELS

The Sigma level is a statistical metric that is used for measuring the
number of errors or defects in a process. The Sigma level indicates
how the process varies from being perfect. This measurement is based
on the Defects Per Million Opportunities (DPMO) parameter.
The Sigma level measures the process efficiency in a long term that
also includes a potential 1.5 Sigma shift. This shift generally occurs
over long periods of time. The 1.5 Sigma shift is considered to be an
industry-wide standard estimate for measuring the Sigma levels of
processes. This standard was originally devised by Motorola and later
on it was adopted throughout industries.

64 Lean Six Sigma
n o t e s
The characteristics of the Sigma level are as follows:

The Sigma level is determined during the first phase of the DMA-
IC process, i.e. the Measure phase.
The Sigma level measurements can also be used throughout the
DMAIC process.
The Sigma level can be used for comparing the overall perfor-
mance of an organisation against the overall performance of other
organisations.
The Sigma level can be used for comparing the performance of a
particular process of an organisation against the performance of
the organisation’s other processes.
The Sigma level can be used to determine the baseline perfor-
mance of an organisation or a specific process prior to making in-
S
terventions for improvement actions.
The Sigma level can be used to analyse the impact of improvement
interventions on the performance of a process.
IM
The Sigma level can be calculated using the following steps:
1. Determine the total count of units produced.
2. Measure the number of defect opportunities per unit.
3. Count the number of defects.
M
4. Determine the DPMO with the formula:

(# Defects) x (1,000,000)
DPMO =
(# Defect Opportunites / unit ) x (# Units)
N
5. The process Sigma can be calculated from the DPMO Sigma

Conversion Table available freely.
Illustration: A soap manufacturing unit is observed to have 52 oppor-

tunities for producing a defective unit. In a quality assurance audit
of 1000 randomly selected samples, a total of 975 defects were found.
What is the Sigma level of the soap manufacturing process?
Solution: Here,
Units 1000
Opportunities/Unit 52
Defects 975
(975)(1,000,000)
DPMO =
(52)( 1000)
DPMO = 18,750

n o t e s
Therefore, the Sigma level corresponding to DPMO 18750 is 3.6.
Sigma Level = 3.6
3.3.1 DEFECTS PER OPPORTUNITY (DPO)
A metric routinely used in Six Sigma is Defects Per Opportunity (DPO).

The total number of defects, which are possible in a sample, is deter-
mined using the DPO metric which is calculated by the following formula:
Number of defects
DPO =
( Number of units × Number of Opportunities)
The number of characteristics of a product, which are used to test
units in a sample, is the number of opportunities. For example, a piece
of cloth may be measured in three units including the length, width
S
and weight. In this case, the number of opportunities is 3. Assume that
the total number of defects is 20 and the total number of units is 200;
in this case, DPO = 20 / (200 *3) = 0.03 or 3 %
IM
The value 0.03 shows that each of 3 opportunities length, width and
weight has an average of 0.03 or 3 % defects in each unit. DPO is an
indication of the probability of a process to produce units free from
defects.
3.3.2 DEFECTS PER MILLION OPPORTUNITIES (DPMO)

M
The DPO metric is used to calculate another Six Sigma metric called
Defects Per Million Opportunities (DPMO) which indicates how many
defects can a sample possibly have per million of opportunities.
DPMO=DPO*1000000
N
Continuing our earlier illustration, DPMO would be = 0.03 * 1000000

= 30,000
DPMO 30,000 indicates that the business process is estimated to have

30,000 defects per million opportunities.
The Defects Per Million Opportunities (DPMO) metric is useful in as-

sessing the performance of an organisation in terms of the quality of
its products and/or services. The DPMO value is important in deter-
mining the process effectiveness.
A product that fails to meet the expectations of a customer due to some

shortcomings in its product features is said to have a defect. Most of
the time, defects get identified before the product is launched in the
market. However, in some instances, defective products may reach the
customer who may then either return them or lodge a complaint with
the producer organisation. On the basis of the number of complaints
registered and the defective products identified, the organisation can
then compare the available options for the production and choose the

66 Lean Six Sigma
n o t e s
best possible option that seems to produce the least number of de-
fects. Redesigning the process to have the least number of variations
may also be considered by the organisation. For correcting a defective
process the root cause analysis should be carried out to determine all
possible causes of defect and classifying defects as per their frequen-
cy and likelihood of occurrence. The defects that occur rarely can be
overlooked to save resources and time. The more frequently occur-
ring defects need to be analysed and the production process should
be corrected accordingly.
Assume that P represents the number of deviations that arise during

the manufacturing process. If this P is divided by the total number of
units produced, we will obtain defects per unit. In this case, the total
number of units that are free of defects will give the yield. The Poisson
distribution ratio in this case would give the probability of getting any
S
number of deviations from good results. A reference table called the Z
table can be made use of to make such calculations. Once DPO is ob-
tained, DPMO can be determined that would indicate how perfect the
process of production is. DPMO is obtained by multiplying DPO with
IM
1,000,000. The percentage of defects and yield forms important infor-
mation. One can also draw conclusions from the yield and the Sigma
conversion table once the DPMO percentage is known. A value more
than 3.4 defects per million opportunities is not a Six Sigma level of
perfection. This information is useful in the measure stage of the Six
Sigma process as it helps take decisions on what kind of adjustments
M
and alterations in the process will be required or those that may be

unnecessary.
note
N
Yield = Output / Input
Example: In a random sample of 500 parts, 100 parts have critical

errors. In this case,
Yield = 400 / 500 = 0.8 or 80%
Further, it also aids in controlling costs in the production process by

bringing down the reasons of poor quality and repetition of tasks that
are needed to produce a product as per customer expectations. How-
ever, one drawback of the Six Sigma DPMO determination is that this
metric may be of great utility for large-scale production organisations
but for organisations with smaller amounts of production, it may not
be of much use.
3.3.3 PROCESS CAPABILITY AND SIGMA LEVEL
Quality and improvement initiatives in an organisation are largely de-

pendent on two important methodologies, namely Process Capability

n o t e s
Analysis (PCA) and Six Sigma. In the process of manufacturing, qual-

ity and process improvement, PCA emerges as a basic technique that
is applied to achieve higher levels of customer satisfaction by bringing
improvements in products, processes and services. Process Capability
Indices (PCIs) are the measures of process capability and the numeric
values that represent the PCA. Four most common measures of pro-
cess capability are Cp, Cpk (Cpl, Cpu), and Cpm.
Cp is a process capability measure for the overall capability of the pro-

cess. It is calculated as the ratio of the difference between the specifi-
cation limits to the observed process variation. If Cp is greater than or
equal to 1, it indicates a capable process and a value of Cp less than 1
indicates that the process is variable.
Cpu and Cpl are measures to determine whether or not the process
variability is symmetric or not. It is calculated using distance between
S
the process mean and the upper specification limit (Cpu) or the lower
specification limit (Cpl).
IM
Cpk is the process capability related to both dispersion and centered-
ness. It is calculated as the minimum of Cpu and Cpl. If only one spec-
ification limit is provided, the Cpk value is calculated unilaterally.
The Cpm is a process capability index relating to capability sigma and

the difference between the process mean and the target value.
M
The Six Sigma methodology helps an organisation reduce process

variation and facilitates augmentation of the organisational process
capability.
PCA is defined as the proportion of the spread of the actual process to

N
the process spread that is allowed. This process spread is measured by

six process standard deviation units. In a process capability study, the
number of standard deviations that exist between the process mean
and the nearest specification limits is stated in sigma units, similar to
the Six Sigma methodology. The capability of a process to perform as
per specifications is expressed by the sigma quality level. A process is
a combined use of methods and input resources such as equipment,
materials and people that work in harmony to produce a measurable
output. There are inherent statistical variabilities in every process
that may be determined, analysed and reduced to a certain extent us-
ing statistical techniques and methods. Organisations should always
consider the extent and the source of variability and make efforts to
improve quality to decrease the variance in their production process-
es as much as possible. The extent of variability is inversely propor-
tional to quality and customer satisfaction. Thus, the critical-to-qual-
ity characteristics (CTQs) variability is a representation of the output
uniformity. A large amount of variability indicates a large number of
product non-conformances.

68 Lean Six Sigma
n o t e s
Process capability reflects the uniformity of a process. Variability in

a process can arise in two forms. One is the inherent variability in a
CTQ at a given time, and the second is the variability that arises in
a CTQ over a period of time. It is important to remember that PCA
measures CTQs, i.e. the functional parameters of a product and not
the process itself.
Process capability draws a comparison between the output of an

in-control state process to the limits specified by the PCIs. In other
words, a process that is determined to be capable has most measure-
ments within specification limits. In case of a direct process observa-
tion or a true process capability study, it is possible to draw inferences
about process stability over a period of time by directly monitoring
and also controlling the data collection methodology and understand-
ing the time sequence of the data.
S
In the absence of a direct observation of the process, the study is called
product characterisation study where only sample units of the prod-
uct are known. According to Montgomery (2009), in a product charac-
IM
terization study, distribution of the product quality characteristic or the
fraction that conforms to specifications, which is referred to as process
yield, can only be estimated, notably information about the stability or
dynamic behaviour of the process cannot be given.
There may be many statistical techniques involved in a PCA through-

out the product cycle. Mostly PCA is made use of in development ac-
M
tivities that take place prior to the manufacturing process, to quantify

process variability. PCA is used to analyse this process variability with
the specifications. PCA also helps in reducing or eliminating process
variability. PCA has nowadays become widely adopted as the measure
N
of performance. PCA is generally determined from a sample of data

obtained from a process and it helps in determining DPMO, capabili-
ty indices and sigma quality level at which the process operates. It is
usual to incorporate the Six Sigma spread in the distribution of quali-
ty characteristics of a product to measure the process capability.
For a process with a quality characteristic having a normal distribu-

tion with a process mean µ and the process standard deviation σ, the
Lower Natural Tolerance Limit is LNTL = µ – 3σ, and the Upper Nat-
ural Tolerance Limit is UNTL = µ+ 3σ.
A point to be noted here is that the natural tolerance limits of a process

shall include 99.73% of the variable, and the remaining 0.27% of the
process output shall be located outside the natural tolerance limits.
For carrying out PCA, following statistical techniques can be used:

Histograms: A histogram is a graphical display of frequencies in
statistics. A histogram is one of the seven basic tools of quality
assessment and also finds great use in determining the process
capability. It is a great tool for visualising process performance.

n o t e s
It is possible to use histograms for immediately determining the

reason for the poor performance of a process. It is generally as-
sumed that quality characteristics are likely to have a normal dis-
tribution, thus a histogram with information on the sample mean
and sample standard deviation can be of a great value to obtain
information about the process capability. A normality assumption
in such cases can be made by the visual appearance of the histo-
gram. In case of a skewed histogram, the estimate of the process
capability may be inaccurate. There are also some disadvantages
of using histograms. Division of the range of a variable into classes
is a fundamental necessity. But a histogram may not be of much
use for small samples as it may require a fairly large number of
observations that are moderately stable. A histogram is shown in
Figure 3.5 as follows:
S
120
100
80
IM
Frequency
60
40
20
M
0
0 20 40 60 80 100
Figure 3.5: A Histogram

Probability plots: A probability plot can also be used to evaluate
N
and determine the parameters of a distribution, such as the shape,

median, i.e., centre, and variability, i.e. the spread. In case of prob-
ability plots, division of the range of variables into class intervals
may be unnecessary. An important advantage of probability plots
is that they can be used for relatively smaller samples. However,
the characteristics and quality of the data affect the inferences
drawn on process capability. A disadvantage of probability plots is
that they are not objective procedures even though normal prob-
ability plots are very useful in process capability studies. The fat
pencil test is used in cases where a normal probability plot is used,
to test the adequacy of the normality assumption.
Once a data is plotted against a theoretical normal distribution,
the points so plotted should form an approximate straight line. If
the data points are not placed in a straight line, it is considered
a deviation from normality. In this way, the fat pencil test is per-
formed.
Design of Experiments (DOE): Critical parameters associated
with a process can be determined using a DOE. For an enhanced

70 Lean Six Sigma
n o t e s
capability and performance of a process, optimal settings of pa-

rameters are required which may be determined by a DOE. The
controllable input variables in a process can be varied and the ef-
fects of these process variables on the output or response can be
analysed by a DOE. It also helps managers isolate the influential
process variables and determine the levels of these variables to op-
timise process performance. One of the important uses of DOE is
to identify and estimate the sources of variability in a process. The
tool has been widely adopted in the manufacturing industry even
for the resolution of more general problems rather than merely
estimating the process capability.
Control charts: This is a useful tool for establishing a baseline for
the process capability or process performance. An important use
of a control chart is as a monitoring device that can demonstrate
the effects of changes in a process on the process performance.
S
The principle function of a control chart is to determine whether
a manufacturing or business process is under statistical control
or not. This chart also demonstrates systematic patterns in pro-
IM
cess output. Further, a control chart is used before using PCIs as
at this time the process needs to be in a state of statistical control.
If a process seems to be in a state of statistical control in a con-
trol chart, it can be used with a reasonable degree of surety and
predict the future performance of the process. However, if a con-
trol chart indicates that the process under observation is not in
statistical control, the source of variation can be determined from
M
the pattern revealed by the control chart. And it can then be elim-
inated to achieve process control. Most importantly, the control
chart helps separate the signal (real problem) from noise (natu-
ral process variability). This feature is the key to effective process
N
control and improvement. Control charts should be considered as

a primary technique of PCA where both variables and attributes
control charts can be used. Figure 3.6 presents a control chart.
Xbar–R Chart of Supp2

Sample Mean
602 UCL = 602, 474
600 X = 600.23
598 LCL = 597.986

1 3 5 7 9 11 13 15 17 19
Sample
UCL = 8.225
Sample Range
8
6
4 R = 3.890
2
0 LCL = 0
1 3 5 7 9 11 13 15 17 19
Sample
Figure 3.6: A Sample Control Chart

n o t e s
3.3.4 THROUGHPUT YIELD AND SIGMA LEVEL
Throughput yield is also a Six Sigma metric that is used routinely.

This metric indicates the process ability to produce units or products
that are free of any defects. Throughput Yield (Yt) is calculated by us-
ing the Defects per Unit (DPU). The classic Yield metric considers
only the number of defective units in contrast to the Throughput Yield
that takes into consideration the total number of defects occurring on
those units. Further, the classic yield metric takes into account only
the defects that get passed to a customer leaving out the reworked
defects which in fact are a source of internal waste.
Throughput Yield holds an important place in the Six Sigma study

because it measures the efficiency of a process. An important advan-
tage of this metric is that it is a universal standard metric. It finds ap-
plicability in processes of any nature thereby enabling comparison of
S
different processes on a level ground.
Throughput Yield helps in determining the inherent ability of a pro-

IM
cess to meet the stated specifications. Alternately, it determines the
ability of a process to produce units without defects. The calculation
of Yield leads the way to the calculation of Throughput Yield. Yield is
determined by the ratio of the number of units that are acceptable and
the number of units that enter the production process.
No of units acceptable
Yield =
M
Total number of units produced
As can be seen in the formula, the number of acceptable units throws

no light on how many units were reworked upon. Thus, it is not a true
measure.
N
Therefore, another metric, First Pass Yield, was introduced.
No of units acceptable in the first attempt excluding rework

First pass yield =
Total noumber of units produced
However, even this metric lacked perfection. As you can see, both
the above metrics use defective units as their basis for measurement.
However, there are chances of more than one defect occurring in a sin-
gle defective unit. Unless this inherent drawback is eliminated, Yield
or First Pass Yield cannot be considered a true measure of efficiency
of the product.
Throughput Yield calculation is based on the number of defects and

uses DPU (defects per unit) for its calculation. DPU is calculated by
using the following formula:
Total number of defects
DPU =
Total number of units produced

72 Lean Six Sigma
n o t e s
and
Throughput yield =e–DPU
Thus, Throughput Yield can be used effectively to measure the suc-

cess rate of a process.
There can be multiple sub-processes that exist together to deliver the

final product. These processes may be placed consecutively one after
the other in a row or may even operate side by side to deliver output to
a common single process. A concept called Rolled Throughput Yield
(RTY) is used to determine the overall Throughput Yield.
There is a slight difference in the formula for calculating Rolled

Throughput Yield (RTY) of a parallel process and a serial process.
RTY for a serial process is determined by first measuring the TPY
S
of all sub-processes and then multiplying these TPYs.
RTYn = TPY1 × TPY2 × TPY3 …….. × TPYn
IM
RTY for a parallel process is calculated as the minimum value of
all the individual processes operating parallel to each other.
RTYn = min (TPY1, TPY2, TPY3…….., TPYn)
11. The Sigma level measures the process efficiency in a long

M
term that also includes a potential sigma shift.

12. DPMO is given by the formula:
?
DPMO =
( / unit ) x ( # Units)
N
#
D efect
Opportunites

13. The number of characteristics of a product that are used to
test units in a sample is the number of .
14. The Six Sigma metric Defects Per Million Opportunities
(DPMO) is useful in assessing the performance of a business
or organisation in terms of its quality of products and/or
services. (True/False)
15. DPMO determination is of great utility for organisations that
carry out a small production. (True/False)
16. Some of the frequently used PCIs are:

a.
Cp b.
Cpk (Cpl, Cpu)
c. Cpm d. All of the above
17. PCA is defined as the proportion of the spread of the process
to the process spread that is allowed.

n o t e s
18. Process capability reflects the uniformity of the process.

(True/False)
19. Mostly, PCA is made use of in development activities that take
place after the manufacturing process.
20. Critical parameters associated with a process can be

determined using a:
a. Design of experiment
b. Probability plot
c. Histogram
d. Control chart
Activity
S
Create a database of the ages of 30 people around you belonging to
your class, workplace, relatives or neighbours and prepare a histo-
gram for the same.
IM
3.4 SUMMARY
Probability of an event happening is the frequency or proportion
of times that the event is likely to occur in a given large set of trials
in an experiment. In other words, probability is the frequency of
M
an event that is long-run and relative.

A random variable is defined as any variable whose value is deter-
mined by the outcome of an experiment that is random in nature.
When a random variable can acquire only a finite number of val-
N
ues, it is known as a discrete random variable. In contrast, a ran-

dom variable that acquires an infinite number of values is known
as a continuous random variable.
A binomial distribution is based on the concept of the Bernoulli
trial.
Poisson random variable is the number of successes resulting from
a Poisson experiment. Poisson distribution is the probability dis-
tribution of a random variable that results from a Poisson experi-
ment.
A normal equation describes a family of continuous probability
distributions.
The Sigma level measures the process efficiency in a long term
that also includes a potential 1.5 sigma shift. This shift generally
occurs over long periods of time. The 1.5 Sigma shift is considered
to be an industry-wide standard estimate for measuring the Sig-
ma levels of processes. The Six Sigma metric Defects Per Million

74 Lean Six Sigma
n o t e s
Opportunities (DPMO) is useful in assessing the performance of a

business or organisation in terms of the quality of its products and/
or services.
Quality and improvement initiatives in an organisation are largely
dependent on two important methodologies, namely Process Ca-
pability Analysis (PCA) and Six Sigma. Process Capability Indices
(PCIs) are the numeric values that represent PCA. In practice, Cp,
Cpk (Cpl, Cpu), Cpm are some of the frequently used PCIs.
For PCA, the following techniques can be used: Design of Experi-
ment; Probability plot; histogram; and control chart.
Throughput Yield calculation is based on the number of defects
and uses DPU (Defects Per Unit) for its calculation.
S
key words
Continuous Data: A quantitative data that can take any value

between the given minimum and maximum values.
IM
Discrete data: A data that can take only a number of values
from a given set.
Parameter: A measure concerning a population (e.g. popula-
tion mean).
Population: An entire set of possible observations in which an
experimenter is interested.
M
Sample: A subset of the population from which data is actually

collected.
Statistic: A measure concerning a sample (e.g. sample mean).
N

1. Describe the rules of probability addition.
2. Write a short note on binomial distribution.
3. What is normal distribution? Briefly describe a normal curve.
4. Describe a sigma level and steps to determine the Sigma level.
5. Discuss DPMO. What is the method to calculate it and what is its
significance?
6. Describe in brief the techniques that can be used for a PCA.
7. Explain in detail the concept of Poisson distribution.
8. What have you understood from the concept of Throughput
Yield?

n o t e s

Probability and probability 1. Frequency
distribution
2. Probability
3. False
4. c. 1
5. False
6. c. Mutually exclusive
7. Conditional probability
S
8. False
9. Bernoulli
10. bell
IM
Sigma levels 11 1.5
12 (#Defects)×(1,000,000)
13 Opportunities
14 True
15 False
M
16 d. All of the above

17 Actual
18 True
19 False
N
20 a. Design of Experiment

1. Rule 1: In case of two mutually exclusive events A and B, where
there is no overlap, the probability that either one event or both
events will occur is given by P (A or B) = P (A ∪ B) = P (A) + P (B).
Refer to Section 3.2 Probability and Probability Distribution.
2. A binomial distribution is based on the concept of the Bernoulli
trial. A Bernoulli trial is an experiment where only two outcomes
are possible. Refer to Section 3.2 Probability and Probability
Distribution.
3. The normal distribution can be graphically represented using
two factors – mean and standard deviation. Refer to Section 3.2
Probability and Probability Distribution.
4. The Six Sigma level is a Six Sigma metric that is used for
measuring the rate of error of a process. This measurement is
based on DPMO ((Defects Per Million Opportunities) metric.
Refer to Section 3.3 Sigma Levels.

76 Lean Six Sigma
n o t e s
5. The Six Sigma metric Defects Per Million Opportunities

(DPMO) is useful in assessing the performance of a business
or organisation in terms of the quality of its products and/or
services. Refer to Section 3.3 Sigma Levels.
6. A histogram is a graphical display of frequencies in statistics. A
histogram is one of the important and seven basic tools of quality
assessment and also finds great use in determining the process
capability. Refer to Section 3.3 Sigma Levels.
7. Poisson distribution is a probability distribution of a random
variable that results from a Poisson experiment. Notations used
in a Poisson distribution include: e, μ, x, and P (x; μ). Refer to
Section 3.2 Probability and Probability Distribution.
8. Throughput Yield is also a Six Sigma metric that is used routinely.
This metric indicates the process ability to produce units or
S
products that are free of any defects. The metric Throughput
Yield (Yt) is calculated by using the Defects Per Unit (DPU).
Refer to Section 3.3 Sigma Levels.
IM
SUGGESTED READINGS
Bellman, R., & Zadeh, L. (1970). Decision-making in a fuzzy envi-
ronment. Providence: the Institute.
M
Evans, J., & Lindsay, W. (2002). The management and control of

quality. Cincinnati, Ohio: South-Western.
E-REFERENCES
N

Qualityamerica.com. Retrieved 21 September 2017, from http://
qualityamerica.com/LSS-Knowledge-Center/leansixsigma/lean_
six_sigma_metrics.php
iSixSigma: Six Sigma Resources for Six Sigma Quality. (2017).
Isixsigma.com. Retrieved 10 July 2017, from https://www.isixsig-
ma.com/

C hapter
4
SIX SIGMA TOOLS AND TECHNIQUES
CONTENTS
S
4.1 Introduction
4.2 Six Sigma Methodologies
IM
4.2.1 DMAIC
4.2.2 DMADV
Activity
4.3 Six Sigma Teams
M
Activity
4.4 Summary
N

78 Lean Six Sigma
n o t e s
WINNING FORMULA, ‘THE SIX SIGMA TEAM’
A large service organisation decided to implement some improve-

ment initiatives in the process it followed to manage and support
its clients. The organisation created a team to work on this proj-
ect. The team members were selected from different departments
of the organisation. Mr. Lalit was appointed the Team Leader
(TL) for this project. He was called from the organisation’s Delhi
office and had over 15 years of project management experience,
specifically in process improvement projects.
Other important team members included were:

Leena with nearly ten years’ of varied experience on differ-
ent projects and was a scheduling and budget control expert
S
based at the organisation’s Delhi office.
Sumeet with five years of experience of working on different
projects as an individual contributor. He had expertise in pro-
IM
gramming and was an experienced database developer based
at the organisation’s Delhi office.
Sudhanshu, an expert in stakeholder analysis, earned value
management and problem solving with over eight years of ex-
perience of working on various projects. He was based in the
Mumbai office of the organisation.
M
Arushi, an individual contributor, had over two years’ expe-

rience of working on various projects. She was based in the
Mumbai office of the organisation.
Shivangi, an expert in database development and Earned Val-
N
ue Management (EVM) with nearly seven years of experience

of working on projects involving process improvement. She
was based in the Delhi office of the organisation.
Of these five team members, Lalit had previously worked on proj-

ects with Sumeet and Sudhanshu. Sudhanshu had also worked
with Arushi. No one else had worked with other members of the
newly formed team. A very tight deadline was given to Lalit to get
this project completed.
Even though the team members were to interact in the virtual

world for the project work, Lalit decided to conduct an initial
kick–off meeting where all team members met face to face. The
meeting was organised at the company’s head office in Delhi
where the team members spent two days knowing each other and
also learning about the project.

SIX SIGMA TOOLS AND TECHNIQUES 79
n o t e s
The various stages in team development were as follows:
1.
The kick-off meeting and the forming stage of team
development
The face-to-face team meeting took place in Delhi with the follow-
ing agenda:
Introducing all the team members to one another
Conducting the team building exercise
Sharing the details of the project
Discussing the roles and responsibilities of team members
and the norms of working in a team.
Discussing the practical details of the SharePoint which is a
S
web-based, collaborative platform that integrates with Mic-
rosoft Office. Using SharePoint, the members of a team can
perform activities such as share ideas, store project documen-
IM
tation, brainstorm, etc.
It was obvious at the kick-off meeting that the team members

were excited to meet each other even though many of them had
not worked together as a team previously. The members were of
the opinion that everyone would bring value to the project. How-
ever, at this stage all the members were also trying to gain hold of
M
key positions in the team, as discussions regarding various desig-

nations and associated roles and responsibilities were being held.
After a lot of deliberation and discussion, a consensus was arrived
at regarding the tasks at hand and who would be responsible for
N
what. Lalit believed that the success of the kick-off meeting indi-
cated that members were comfortable with each other.
2. Beginning of the project work and the storming stage
Post the kick-off meeting, the members reported back to their re-
spective offices to work on the project. The team began its inter-
action through SharePoint and the project started on a good note.
However, after some time, differences of opinions started devel-
oping among the team members regarding various issues related
to the project work.
For example, a schedule for the project was created and posted
by Leena on the basis of her discussions with Sudhanshu and
Shivangi. But Arushi and Sumeet felt left out from the schedule
preparation exercise. They thought their opinions were not con-
sidered due to their relatively less experience. They challenged
Leena’s schedule, saying the timelines were too stringent and
impractical. At the same time, an argument broke out between
Sumeet and Shivangi over the database design and development

80 Lean Six Sigma
n o t e s
leadership for the project. According to Sumeet, he took up this

project to play an important role and hone his skills and advance
his career, even though he agreed that Shivangi had a few more
years of experience in database development than him. Surpris-
ingly, Sudhanshu seemed to be disconnected from the team, keep-
ing the other members in the dark about his work progress. He
did not post any updates of his work on SharePoint.
In the beginning, Lalit assumed that the team members would

work out their differences amicably. However, when things start-
ed getting out of control, he realised from his past experience of
managing project teams that it was time for him to take control
and guide the team through the phase of unrest. For this, he called
a virtual meeting of the team members. At the meeting, the roles
and responsibilities of each member were reiterated and aligned
S
with the goals and objectives of the project. As the team couldn’t
reach a consensus on certain issues, Lalit took some decisions. It
was decided that Shivangi would play the role of lead in the da-
IM
tabase development design component and Sumeet would work
closely with her to hone his skills. Leena’s schedule was reviewed.
Lalit also heard the concerns of Arushi and Sumeet, making ad-
justments wherever required. Sudhanshu was reminded that he
needs to work closely with the others to maintain team harmony
and cohesion.
M
During the virtual meeting session, Lalit referred back to the

ground rules the team had set in their initial kick-off meeting and
he worked with the team to ensure that there was a plan in place
for how decisions would be made in the team and who had the
N
responsibility for making decisions.
In the following few weeks, Lalit observed that there was a sig-
nificant drop in the problems and issues in the project and when
they did happen, the team members resolved it on their own with-
out his intervention. Still, Lalit monitored the project and held
virtual meetings at regular intervals to ensure that the team was
moving in the right direction. As the relationship among the team
members improved, significant progress and improvement was
observed in the project.
3. Normalisation of the project activities and the norming stage
After nearly three months of project beginning, the team mem-

bers started working together. There was a cohesive teamwork
among the group that could be seen and observed. There were
hardly any arguments that were not resolved within the team.
The members were more supportive and there was collaborative
decision making, problem solving and information sharing.

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The team members even helped each other grow and enhance
their skills. Shivangi worked closely with Sumeet and taught him
many database design functionalities and skills leading to his de-
velopment. Sumeet was also able to take the lead in some aspects
of the project. Overall, a very friendly atmosphere was visible in
the team.
4. Performing stage
After going through a lot of turbulence, the team achieved success

and was considered a high performing team. The team members
worked effectively as a group. The members were supportive to-
wards each other and made decisions collectively. They engaged
in effective brainstorming to solve problems. They were highly
motivated to fulfil the team’s objective. The team was able to work
S
out and resolve internal conflicts on their own without depending
on the Team Leader to interfere and make decisions for them.
The junior team members – Arushi and Sumeet – were helped by
IM
the other members to enhance their skills and have also taken on
leadership roles for some components of the project.
Lalit himself kept track of the project progress and encouraged

and praised the team for their hard work. Every important mile-
stone was celebrated, and when necessary Lalit acted as a link
between the team and the top management to facilitate high-level
M
decision-making.
The project went on smoothly as per the pre-decided budget and

timelines. All project members were happy.
N
The project ended in success and the stakeholders were pleased

with the improvement in the way the organisation managed and
supported its clients.
The team met again at the Delhi office to discuss and learn from
the project. They documented all the best practices and discussed
success factors and areas of improvement.
Every team, irrespective of the nature of the project it is work-

ing on, generally undergoes the stages of team development ex-
plained in the preceding example. The team leader has a huge
responsibility to sail the team smoothly through these stages and
help create an environment where the team members can work
as effectively as possible towards a common goal.

82 Lean Six Sigma
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learning objectives

>> Define the commonly used Six Sigma methodologies
>> Explain the DMAIC project management methodology
>> Explain the DMADV project management methodology
>> Explain the meaning of a Six Sigma team
>> Explain the stages of team formation
>> Explain the requirements and criteria for selecting a Six
Sigma team
4.1 INTRODUCTION
S
In the previous chapter, you studied the basic statistical concepts used
in Six Sigma methodology. You also studied various distributions and
tools and techniques of Six Sigma. Every aspect of business needs to
IM
be visualised as process based. If there is a problem with a process,
then obviously there is a search for a methodology to fix it. Such prob-
lems can often be addressed with a DMAIC or DMADV (also referred
to as DFSS) methodology.
Once an organisation decides to undertake a process improvement

project, it defines the project scope. Then project managers need to
M
identify those employees who would work on the project. For, they
need people who would seek inputs from others to determine the root
cause of the problem, design solutions and implement them. Having
the right people to work with has its own rewards. Selecting wrong em-
N
ployees may lead the project to failure. In this chapter, you will study
about some important Six Sigma Methodologies such as DMADV and
DMAIC. In addition, the importance, members and the role of Six Sig-
ma Teams will also be discussed.
4.2 SIX SIGMA METHODOLOGIES

There are two methodologies which Six Sigma projects routinely
follow. These methodologies are based on the Plan–Do–Check–Act
(PDCA) Cycle. The PDCA cycle was created by Edward Deming. Each
methodology is composed of five phases. The two methodologies are
acronymised as DMADV and DMAIC. The DMAIC project method-
ology is used for projects through which an organisation intends to
improvise its existing processes. In contrast, the DMADV methodolo-
gy is used by an organisation when it intends to create a new product
or process design. Let us now discuss these two methodologies in the
next sections.

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4.2.1 DMAIC
The acronym DMAIC stands for Define, Measure, Analyse, Improve

and Control. The DMAIC methodology is widely used across multiple
industries and various lines of business to improve the effectiveness
and efficiency of organisational processes. The DMAIC methodology
is a powerful tool that can lead an organisation to set and follow higher
and stronger performance standards. When used skilfully, this meth-
odology helps in resource streamlining and clarifying business goals.
The five phases of the DMAIC methodology are described as follows:

1. Define phase: This is the first phase of the DMAIC methodology.
It focuses on a clear articulation of what the business problem is
and a statement of project goals. The Define phase clearly lists
all details of potential resources, and the scope and limitations
S
of the project at hand. A high-level project timeline is also
constructed in the Define phase. A business document known
as Project Charter contains this information. In this phase,
managers are generally urged to write down what they know of
IM
current processes and seek clarifications on facts, if any. Setting
objectives and forming the project team are also carried out in
this phase. Various activities carried out in the Define phase are
as follows:
Defining the problem (Problem statement).
M
Documenting the Voice of the Customer (VOC).

Defining the Critical to Quality (CTQ) metrics that would de-
termine the critical process outputs.
Establishing and outlining the borders of the project.
N
Eliciting stakeholder agreement on the parameters that will

define the project.
Preparing the project scope and budget in alignment with
the project goals.
note
A team that is appointed to carry out the project using any of

the Six Sigma methodology is called Six Sigma team.

2. Measure phase: The main objective of this phase is to lay down
objective baselines for current processes that would form the
basis for project improvement. In this phase, the baseline data
is collected and performance baselines are established. The
baselines of this stage are compared with performance metrics
at the end of the project (in the Analyse phase) to make an
objective evaluation of the improvements resulted from the
project. The Six Sigma team, in consultation with the process
owners, decides parameters on which measurements have to

84 Lean Six Sigma
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be made. It is generally recommended that teams should invest

adequate time and effort to assess the suitability of the proposed
measurement systems. A good data collection plan is considered
to be the most important aspect of the DMAIC process. Various
activities carried out in the Measure phase are as follows:
Concentrating on data collection relevant to project scope.
Collecting reliable baseline data for making comparisons
against future results.
Mapping interrelated business processes to outline areas of
possible performance enhancements.
3. Analyse phase: The primary objective of this phase is to
determine, validate and select the root cause of the problem for
elimination. Root cause analysis is a tool that aids in determining
S
a large number of potential root causes also known as process
inputs, X. A fishbone diagram is a tool for root cause analysis.
Using the fishbone diagram, Six Sigma professionals can
determine the top four-five root causes by using techniques such
IM
as multi–voting or other consensus tools to validate the outcomes
(established root causes). For substantiation, a data collection
modality is planned and data collection is carried out that helps
to establish contribution proportions for each identified root
cause to the project metric, Y (process problem in measurable
terms). The process is repeated for identification of all valid root
M
causes. The Six Sigma methodology often makes use of complex

analysis tools. Some activities that are carried out routinely in
the Analyse phase are as follows:
Identifying the potential causes of the problem.
N
Prioritising the root causes which form the key process in-
puts to be included in the Improve phase.
Determining the impact of process inputs (Xs) on process
outputs (Ys) by data analysis. Here, Six Sigma profession-
als try to demonstrate the magnitude of contribution of each
root cause (X) to the project metric (Y). In addition, statistical
tests are carried out using P–values. The test results are also
accompanied by some other tools such as Pareto charts, his-
tograms and line plots.
Identifying the root cause of business inefficiencies. Some-
times analytic reports also include detailed process maps
that demonstrate the site of root causes in the process and
the reason for occurrence. This activity helps to identify the
root cause of business inefficiencies.
Identifying those areas in the process where maximum ben-
efit can be achieved by the implementation of quality im-
provement initiatives.

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4. Improve phase: The main objective of this phase is to determine,

identify, trial test and implement a solution to the problem at
hand. The solution may be implemented either in part or in
entirety depending on the situation. In this phase, Six Sigma
professionals try to identify creative solutions that may be used
to eliminate the root causes so as to fix and prevent process
problems from recurring. There are many tools and techniques
for this purpose, some of them being simple techniques such as
brainstorming, random word, six thinking hats, etc. Sometimes
complex analysis tools such as Design of Experiments (DOE)
can also be used. Whatever may be the technique used, the
focus remains on obvious solutions. Some other objectives of the
Improve phase are:
Identifying the easiest and simplest solutions.
S
Validating
the proposed solutions using tools such as the
Plan-Do-Check-Act (PDCA) cycle.
Identifying risks that are avoidable (based on the outcomes
IM
of the PDCA cycle) and can be associated with improvement
initiatives by using tools such as the Failure Mode and Effect
Analysis (FMEA).
Preparing and proposing a detailed implementation plan.
Deploying process improvement initiatives.
M
Undertaking pilot improvement activities and once success-

ful they can be implemented organisation-wide.
The Six Sigma team and process owners together devise
methods that are used to overcome process deficiencies
identified during the Analysis phase.
N
Recognising improvement activities that need to be contin-

ued including activities such as feedback analysis and stake-
holder participation.
5. Control phase: The main objective of this phase is to sustain
improvements made during the earlier phase of Six Sigma.
Improvements made during the previous stage are monitored
regularly to ensure sustainable and continued growth. This
phase also includes creation of a control plan and updating
records as and when required.
A control chart is a useful tool during the control phase. The
Six Sigma team uses it frequently to evaluate how stable are
improvements over time. A control chart serves two purposes as
follows:
Actsas a guide to be used for continued monitoring of the
improvised process.
Acts as a response plan for each measure being monitored in
the case of process destabilisation.

86 Lean Six Sigma
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The most important objective of the Control phase is to develop

metrics that help leaders monitor and document continued suc-
cess of the project. Some important considerations in Six Sigma
are:
Six Sigma is an adaptive and continuous methodology.
Flexibilityof this methodology allows adjustments to be
made and to incorporate new changes (if required) after
completion of the initial DMAIC project cycle.
An optional but highly recommended step in the Six Sigma method-

ology is replicating processes and acknowledging the project team.
Successful pilot processes should be considered for organisation-wide
replication. In addition, inter-departmental knowledge transfer should
be carried out. An acknowledgement of the team efforts goes a long
S
way in increasing the morale of the team members. It not only helps
in maximising the effectiveness of the DMAIC cycle but also helps in
creating a buy-in for future improvement initiatives.
IM
Sometimes, organisations require an extra (optional) phase in addi-
tion to the DMAIC cycle phases discussed above. This phase is called
the Recognise phase with which the DMAIC cycle begins. This phase
focuses on recognising the right problem that needs to be addressed.
With the inclusion of this phase, the DMAIC methodology is renamed
as the RDMAIC methodology. Table 4.1 presents a list of tools and
techniques commonly used in various phases of the DMAIC cycle. You
M
will study about these tools in the forthcoming chapters.
TABLE 4.1: TOOLS AND TECHNIQUES USED

IN THE DMAIC CYCLE
N
Phase Tools and Techniques Used

Define Customer’s voice, also known as Voice of Customer (VOC)
Project charter
Value stream mapping
Measure Business process mapping using flowcharts
Pareto chart
Process capability tools
Analyse Failure Mode and Effects Analysis (FMEA)
Multivariate chart
Root cause analysis
Improve Design of Experiments (DOE)
Kaizen
Control 5S
Control plan
Poke-yoke
Statistical process control

n o t e s
note
DMAIC helps in solving existing process problems and eliminating

the defects and associated variations. It is important to understand
the effect of manufacturing variations on product reliability; there-
fore, reliability engineering and Six Sigma quality are related con-
cepts.
4.2.2 DMADV
The second project methodology used in Six Sigma projects is the

DMADV methodology. It is also known as the Design For Six Sigma
(DFSS) methodology. Let us briefly discuss the phases of DMADV:
Define: This phase focuses on defining goals in alignment with the
S
demands of the customer and the strategy of the organisation.
Measure: This phase aims at the identification and measurement
of CTQs, measurement of process capabilities and risk identifica-
IM
tion and measurement.
Analyse: This phase aims at development and design of alterna-
tives.
Design: In this phase, the focus is on determination of the best
suitable and improved alternative on the basis of the analysis car-
ried out in the earlier phase.
M
Verify: This stage consists of a validation of the design, conducting

pilot runs, implementation of processes and handing over the im-
provements to process owners.
N
DFSS is a business process management methodology under the

broader category of traditional Six Sigma. Multiple industries make
use of this methodology including engineering, electronics, finance,
waste management and marketing. DFSS makes use of statistical tools
such as linear regression, and facilitates empirical research. Contrary
to the prerequisite of an already existing and functioning process
for implementing the DMAIC methodology, the DFSS methodology
works on the principle of determination of the needs of customers and
the business, and converting them into product characteristics. DFSS
is relevant to relatively simpler systems. The methodology is used in
product and process design unlike the other Six Sigma methodologies
that are used for process improvement. The most important aspect
of any Six Sigma methodology is measurement. In conventional Six
Sigma methodology, measurements are done for an existing process,
whereas DFSS targets gaining a deep insight into customer needs
that can be translated into internal measures or a design to satisfy
customer needs. Apart from DFSS, DMADV is also known as Iden-
tify, Design, Optimise, and Verify (IDOV). DFSS/DMADV /IDOV are

88 Lean Six Sigma
n o t e s
focused on creation of new processes or augmentation or replacement

of an inadequate existing process with an improved one.
The objective of DFSS is to mitigate problems in the service or man-

ufacturing process with the use of advanced techniques. It also helps
the organisation gather an understanding of the customer needs and
convert them into the engineering system parameters for enhanced
product and service effectiveness and superior customer and stake-
holder experience. High customer satisfaction means an increased
market share. DFSS also includes tools that help to predict and sim-
ulate the entire process of the product manufacture. Therefore, it can
be said that DFSS has a close association with operations research
and the workflow balancing methodology. DFSS is considered a de-
sign methodology that uses tools such as:
Axiomatic Design: Axiomatic design is a DFSS tool based on sys-
S
tems design methodology. Using axiomatic design, the customer
needs are transformed into functional requirements, design pa-
rameters, and process variables.
IM
Design for X (DFX): It is also known as Design for Excellence.
DFX is a general term used in system engineering. It is used to
attain different design objectives. In DFX, X can be replaced with
any value such as DFA (Design for Assembly), DFC (Design for
Cost), DFL (Design for Logistics), DFM (Design for Manufactur-
ability), DFR (Design for Reliability) and DFS (Design for Service-
M
ability).
Design of Experiments (DOE): It is a DFSS method used to ascer-
tain the relation between factors affecting a process and the output
of a process. It can be said that the DOE is used to find cause and
effect relationships. Using this information, process inputs can be
N
managed to optimise the outputs.

Quality function deployment (QFD): It is a method used to trans-
form the VOC into engineering characteristics of a product.
Response Surface Methodology for a single or multiple response
optimisation: Response Surface Methodology (RSM) is a DFSS
tool that helps in building empirical models based on a collection
of mathematical and statistical techniques. It also used DOE to op-
timise a response (output variable) that is influenced by one or
more independent input variables.
Robustification: It is also called as robust design. It was developed
by Genichi Taguchi. This method helps in assessing the impact of
variation on the product/process. Both product and process expe-
rience variation which can be controllable or uncontrollable. Ro-
bustification involves studying and analysing the variations and
then optimising the product/process design so as to minimise the
impact of uncontrollable variation on the final product/process.

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Taguchi methods: These are quality control methods and accord-

ing to these methods, design is more important than the manufac-
turing process in quality control. It tries to eliminate variances in
production before they can occur.
Tolerance design: It is used as a quality design technique as it
seeks to minimise the dispersion while at the same time meeting a
design target.
TRIZ (Teoriya Resheniya Izobretatelskikh Zadach): In simple
terms, it can be described as a way of lateral thinking. TRIZ is
based on two principles. According to first principle, the current
problem or a problem similar to the one at hand has been solved
before and the problem can be solved creativity if the previously
devised solution is found and adapted accordingly.
Sometimes the DMAIC methodology also makes use of these tools but
S
the DFSS methodology uses these tools more or less uniquely in order
to analyse the new or unique processes or products.
IM
1. The Define phase focuses on a clear articulation of what the

business problem is and a statement of the project goals.
(True/False)
2. Which of the following is not an activity of the Define phase of
M
DMAIC?
a. Collecting reliable baseline data for making comparison
b. Documenting the Voice of Customer (VOC) and defining
the Critical to Quality (CTQ) metrics.
N
c. Establishing and outlining the borders of the project.

d. Stakeholder agreement on the parameters that will define
the project
3. The main objective of the _________ phase is to lay down
objective baselines for the current processes that would form
the basis for improvement.
4. A good data collection plan is often considered to be the most
important aspect of the DMAIC process. (True/False)
5. Which of the following is incorrect about the Measure phase?
a. Focusing on data collection relevant to the project scope.
b. Collecting reliable baseline data for making comparison
c. Mapping of interrelated business processes to outline the
areas of possible performance enhancement.
d. Prioritisation of the root causes which form the key process
inputs.

90 Lean Six Sigma
n o t e s
6. The primary objective of the _________phase is to determine,

validate and select the root cause for elimination.
7. The main objective of the _________ phase is to determine,
identify, trial test and implement a solution for the problem at
hand.
8. DOE is used in the
a. Define phase
b. Measure phase
c. Improve phase
d. Control phase
9. A helps the team evaluate how stable the improvements over
time are.
S
10. The Recognise phase focuses on recognising the right problem
that needs to be addressed thus giving rise to the RDMAIC
methodology. (True/False)
IM
11. The DMAIC methodology is used in product or process
design unlike the DFSS methodology that is used for process
improvement. (True/False)
Activity
M
Assume that you work in a BPO office. Identify a process in your

organisation that needs some improvement. Create a broad outline
for using the DMAIC methodology for the process improvement.
N
4.3 SIX SIGMA TEAMS

A team is defined as a group of people who possess complementary
skills. The team members come together to achieve a common goal.
They often have similar performance goals and approach. The team
members are accountable to each other and the entire organisation.
Various characteristics of a successful team can be summarised as fol-
lows:
The efforts of the team are directed towards the achievement of a
common goal.
Team members empower each other; in this way, all the members
become empowered.
Leveraging the expertise of all team members
Open communication
Resource adequacy

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Strong leadership
Leveraging the diversity within the team
The following considerations can help in the creation of a successful

team:
Focus on problems that need resolution. These problems include
the problems that have a potential to influence business outcomes,
the problems that are challenging and the problems that can be
solved with available resources.
Engaging the right team members which may include those who
have adequate knowledge of the process that is to be improved.
Use of scientific techniques such as Six Sigma for process im-
provement initiatives
S
Actions based on evidence based methodologies
Some fundamental principles of team selection are as follows:

The
IM
team selection activity must be focused on problem resolu-
tion. The skill set and knowledge of the identified team members
should be in alignment with the project needs.
The selected team members should be well-versed with the pro-
cess that needs improvement. There should be an adequate num-
ber of SMEs (subject matter experts) on board.
M
Sufficiency of the skills matrix including technical, interpersonal,

practical and analytical skills. It is necessary to have a team with
diverse skills.
The size of the team is an important factor to consider as the num-
N
ber of team members should neither be very small nor very large.
Inputs from project champions must be included.
The process of team development consists of four stages described in

Figure 4.1:
Forming
Storming
Norming
Performing
Figure 4.1: Stages in Team Formation

92 Lean Six Sigma
n o t e s
Let us discuss activities and characteristics of each stage as follows:

1. Forming stage: In the forming stage, the team is formally
announced and all team members are introduced to one another.
In this stage, the team members usually have the feeling of being
individual contributors and sentences in their conversation
usually begin with “I”. For example, I am, I feel, I want…. etc.
Some evidence of an effort to define the task at hand and decide
how it will be done is seen in this stage. The team members may
collectively seek to decide as to what kind of information should
be gathered. There may be some attempt at abstract discussion
of concepts and issues at hand. Sometimes certain members may
also display impatience with these discussions. This stage may
also witness discussion of symptoms or problems that may not
be truly relevant to the task at hand.
S
2. Storming stage: In this stage, the team and ideas are organised. At
this stage, there may be some impatience in some team members
about the lack of progress. Restlessness and arguments over the
actions that the team should take can also be seen. A feeling of
IM
impatience about individual roles, rules and team leadership is
present. Some evidence of resistance to the task and discomfort
with project concepts may also be seen. Sometimes the members
also display fluctuations in their attitude about the team and
there could be signs of a lack of confidence about the project’s
chance of success.
M
3. Norming stage: In this stage of team formation, the members

begin to help each other and their mutual criticism slows down. An
amicable environment sets in. There is evidence of membership
acceptance, constructive engagement and communication
N
and acceptance of criticism. The members start focusing on

questions like “Who can be approached for help? Are mistakes
acceptable?, etc. By this stage, the team members become pally
and start trusting each other. A sense of cohesion within the
team and a feeling of working towards a common goal develop.
In short, it can be said that in the norming stage, communication
among the team increases and a set of team rules is developed.
4. Performing stage: This is the stage in which “I” gets replaced
by “We” in the team members’ talks, and the team members’
questions now revolve around the task at hand. They feel
comfortable and the team atmosphere becomes non-threatening
due to increased and open communication within the team.
Performance optimisation becomes visible due to team
collaboration. A constructive self-change becomes evident. Team
members now become attached to each other and a lot of work
gets done.
A Six Sigma project team usually comprises the following people:
Project Sponsor

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Project Champion
Master Black Belt
Black Belts
Green Belts
Yellow Belts
Each member of the Six Sigma project team has a different set of skills
and experience. Also, each member is assigned specific roles and job
descriptions depending on his/her skills, training and experience. One
of the foremost and important step in the successful management of
the Six Sigma project team is to establish the roles and responsibil-
ities of project team members. The project team is managed by the
top management of the organisation because appropriate resources
and access to company information can only be provided by the top
S
management.
The choice of Six Sigma project team members can be made in two
ways:
IM
The team selection in-charge can identify organisational employ-
ees and get them trained and certified in the Six Sigma method-
ology.
Outside consultants can be hired. These consultants provide train-
ing to organisation’s employees. In this way, a combination of in-
M
ternal and external Six Sigma people can get the process rolling
much more quickly.
Hiring Six Sigma consultants from outside is a cost-effective and swift

solution as it can make a big difference to the project success when
N
the organisation is just starting out. However, having Six Sigma-certi-

fied and trained employees on the organisation’s payrolls has its own
benefits in the long run due to the availability of these employees for
taking care of any process or quality issue all the time. An appropri-
ate training in the Six Sigma methodology may be the only neces-
sary consideration for lower level employees of the organisation. But
the MBBs (Master Black Belts) and the BBs (Black Belts) have to be
carefully selected and must be made to undergo further extensive
training in the domain of Six Sigma methodology. They must also re-
main abreast with the updates in the industry as well on the project
methodology. In addition, these employees should have interpersonal
skills of being change agents to ensure enthusiastic participation by
all those involved in the process improvement initiatives.
Involvement of the upper management in hiring the Six Sigma team is

important as they need to invest their time in making the team mem-
bers understand the organisation’s goals that would eventually help
them achieve good results. The successful implementation of a Six
Sigma project depends on a carefully selected project team. A project

94 Lean Six Sigma
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manager should have an understanding of the roles, selection param-

eters and team development to ensure a successful project execution.
Answers to questions such as “While selecting a football team, what

parameters should be used for player selection?”, “What are the pa-
rameters for the selection of a dance team?”, etc. may seem to be sim-
ple. Similarly, it would be much easier if the parameters to choose the
members of a process improvement team were the objective. Howev-
er, the different tiers of the Six Sigma belts can sometimes actually
complicate things. Creeping in of too much politics and management
control can destabilise a team’s harmony.
Some standard rules that can help maintain coordination and cohe-
sion among the members of a Six Sigma team are:
Flexibility: The team composition in a Six Sigma project changes
S
over time and it might be different by the time the project reaches
the improvement stage. Even though the core team might remain
intact and continue with the same composition till the end of the
project, changes may take in the project team depending upon the
IM
specific team needs.
Categorisation of the team members: The project team members
are generally categorised as regular, resource and ad-hoc mem-
bers. Regular members routinely participate in all project activi-
ties including meetings, demonstrations, addresses, etc. Resource
members may attend meetings, addresses, etc. at the discretion of
M
the project leader. Resource members are those employees who

are the source of information or act as resource coaches. For exam-
ple, a representative of the finance department may be a resource
member and be present in meetings where the financial impact of
N
some activity needs to be discussed. Sometimes teams require as-

sistance of experts in a specific area. Members who act as advisory
experts are ad hoc members.
Right talent for right need: In its composition, a process improve-
ment team may also include members such as process owners,
process Subject Matter Experts (SMEs), budget and accounting
representatives, engineering representatives wherever applicable
and an external stakeholder or customer whenever possible. This
helps create a buy-in from those people who can otherwise act as a
source of resistance if left out from the project activities.
Identifying common grounds: The project team should be cre-
ated with the purpose of building common identities. Business
and organisational expectations should be clearly spelt out to each
team member as well as the expected constraints and project lim-
itations.
Creating a culture of mutual respect: While it is easy to estab-
lish objective rules for the working of a team, leaders often face

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many subjective challenges. For example, how should a team lead-

er handle a team member who tries to sabotage the work of the
team? The answer to this challenge is not usually the removal of
the member. Most of the time, creating an environment where
members maintain respect for each other and help resolve any
interpersonal problems is the appropriate solution. Appreciation
of others’ efforts and consideration of their needs helps create an
environment of trust, fosters positive behaviour and increases mu-
tual respect. Team cohesion increases with mutual respect among
its members. A lack of mutual respect also may lead to team stag-
nation and disintegration. The environment of a team is similar
to that of a society in a microscopic form. Teams whose members
have mutual respect have better chances of becoming successful
as compared to the ones where no such relationship exists be-
tween the members. There must be acceptance and appreciation
S
of diversity within the team.
Effective leadership: Another important aspect of contributing to
the successful implementation of a Six sigma project is efficient
IM
leadership. Team leaders need to have excellent interpersonal
skills to tactfully handle team members with differing opinions
or handling a dominating team member while ensuring that none
of the team members get a feeling of indignity. A team leader is
expected to not only supervise but also manage the team mem-
bers. An individual who is assigned to be the leader of a process
improvement project needs to have exceptionally high leadership
M
and interpersonal qualities. It may be important to differentiate

between a leader and a supervisor because a supervisor is able to
manage people only by virtue of the authority delegated to him/her
by senior management. On the contrary, a leader manages people
N
by virtue of his/her ability to influence and gain willingness of the

team members. A supervisory approach that creates an environ-
ment of command and control in team management may some-
times prove to be a hindrance to the project success.
Individual behaviour patterns: Sometimes negative individual
traits adversely affect project outcomes. For example, a team mem-
ber views the project only as a source of earning brownie points
in performance appraisal. Expecting such people to contribute to
team building may not be right as they are concerned only about
themselves. Often such members engage in meaningless activities
and arguments that in no way contribute to team’ success. Some
team members may just try to always remain on the seemingly
correct side and in everyone’s good books. The members with this
kind of “card player” mentality are usually ineffective team mem-
bers. They usually side with those members who seem to be win-
ning, and it is unusual for them to express their real opinions. This
may often lead to a biased outcome and tilting of results in case
of activities that require multi-voting, scoring matrices and brain-

96 Lean Six Sigma
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storming. Some members may behave as if they are representing

their bosses, an attitude that may prove to be a hindrance. Such
people usually follow orders and merely express the views of their
bosses without expressing their own opinions. The opinion of a
boss is considered to be valuable as long as it is not subversive,
especially in Six Sigma projects.
Conflict management: An important team function is to deal with
conflicts which are neither avoidable nor undesirable. Due to di-
versity of opinions, conflicts are bound to arise but they should be
accepted as something normal. The team leader should be pre-
pared to intervene when a conflict takes a turn that is destructive
or personal. However, managing conflicts may not always be the
sole responsibility of the team leader; other members should also
contribute. Establishing some rules and norms to be followed in
the initial stages of the project helps the team remain focused on
S
the end objective.
A conflict that becomes a problem needs to be taken offline with the

IM
concerned person by taking actions such as opting for a break; chang-
ing the subject or both if the conflict arises during a meeting. In a
situation like this, it helps the leader isolate the conflict from the other
team members. The differing parties should then agree to disagree
or devise a plan to address their differences at a later time and date.
One more rule that can be set is to obtain a consensus from all team
members to arrive at a team-oriented perspective in case of conflict.
M
Here what holds importance is that the opinion is not of an individual

but that of the team and in most cases, something that is good for the
team is also good for the individual members.
Ground rules for dealing with conflicts arising outside of meetings

N
should also be established in the initial stages of team formation. Per-

sistent conflicts even outside meetings can negatively influence the
efforts of the team just like the conflicts during meetings. Weakening
of the team’s efforts in the favour of individual goals happens when a
member undermines either the work of other members or the team
itself, especially with people outside the team. As far as possible, team
conflicts should be managed within the team itself unless the situation
becomes so unmanageable that outside help is required.
Conflict management also has a lot to do with respect. Teams become

ineffective when members do not respect each other. Removing a
team member from the team is usually unwarranted and an unde-
sirable action. The team leader undertakes this action only as a last
resort. For a smooth functioning of the team, it is expected from every
individual member of the team to stay focused on the team objectives
and avoid getting involved in political conflicts. A focused team has
the best chance of gaining success.

n o t e s
12. A team is defined as a group of people who possess

complementary skills. (True/False)
13. Which of the following is incorrect about characteristics of a
successful team?
a. Empowering each member of the team
b. Leveraging the expertise of the team members
c. Open communication
d. Unaffected by the adequacy of resources
14. A successful team focuses on the problems that have a
potential to influence business outcomes. (True/false)
S
15. Which of the following is incorrect about the principles of
team selection?
a. The skill set and knowledge of the identified team members
IM
should be in alignment with the project needs.
b. It is necessary to have a team without diversity in its
members’ skills.
c. Information technology finds a huge usability in projects
like Six Sigma.
M
d. The value of inputs from project champions can never be

undermined.
16. In the ______ stage, usually the team members have the feeling
of being individual contributors, and sentences beginning
N
with “I” are used often in their conversation.

17. Which of the following is incorrect about the Storming stage:
a. There may be some evidence of impatience in some
members of the team.
b. Restlessness and arguments over the actions that the
team should take may also be seen. There is a feeling
of impatience about individual roles, rules and team
leadership.
c. This stage may also witness a discussion of symptoms or
problems that may not be truly relevant to the task at hand.
d. Sometimes members also display fluctuations in their
attitude about the team and there could be signs of a lack
of confidence about the project’s chance of success.
18. In the performing stage, members begin to help each other.
(True/False)

98 Lean Six Sigma
n o t e s
19. It is considered to be a cost-effective solution to hire Six Sigma

consultants from outside as it can make a big difference to
project success when the organisation is just starting out.
(True/False
20. The members who act as advisory experts constitute the _____
category of members.
21. Conflicts are avoidable and undesirable. (True/False)
Activity
Assume that you are the project leader of a Six Sigma project. Cre-
ate a list of few rules that you would lay down for your team to abide
by to avoid any situations of conflict.
S
4.4 SUMMARY
There are two methodologies which the Six Sigma projects rou-
IM
tinely follow. These methodologies are based on the Plan–Do–
Check–Act (PDCA) Cycle. Each methodology is composed of five
phases. The two methodologies are acronymised as DMADV and
DMAIC.
The Define phase clearly spells out the details of potential resourc-
es and the scope and limitations of the project. A business docu-
M
ment known as the project charter contains this information. In

this phase, managers are generally urged to write down what they
know of the current process and seek clarifications on facts if any.
Setting objectives and formation of the project teams is also car-
N
ried out in this phase.

The main objective of the Measure phase is to lay down objective
baselines for the current processes that would form the basis for
further improvement. In this phase, the baseline data is collected
and performance baselines are established.
The primary objective of the Analyse phase is to determine, vali-
date and select the root cause of the problem for elimination.
The main objective of the Improve phase is to determine, identify,
trial test and implement a solution to the problem at hand. The
solution may be implemented either in part or in entirety depend-
ing on the situation.
The main objective of the Control phase is to sustain improvement
made in the earlier phases of Six Sigma. The improvements made
during previous stages are monitored so as to ensure sustainable
and continued improvements.
The DFSS methodology works on the principle of determination
of the needs of customers and the business and converting them

n o t e s
into product characteristics. This methodology is used in product

or process design.
A team is defined as a group of people who possess complementa-
ry skills. The team members come together to achieve a common
purpose and often have similar performance goals and approach.
A Six Sigma team is generally comprised of Project Sponsor, Proj-
ect Champion, Master Black Belt, Black Belts, Green Belts and
Yellow Belts.
Each member of the Six Sigma project team is assigned specific
role and job descriptions depending on their level and extent of
training.
key words
S
Black Belts: Agents of change for the roll-out of a Six Sigma
improvement project.
Core team: The core team in a Six Sigma project functions as a
IM
spearhead that cuts across all barriers (to the implementation of
Six sigma) within the organisation.
Green Belts: Subject Matter Experts of the respective process-
es. Green Belts also function as in-team change agents.
Master Black Belts: The technical and proficiency helm of a
Six Sigma project in an organisation.
M
Yellow Belts: Remaining population of the project team forms

Yellow Belts.
N

1. Write a short note on the DMAIC cycle.
2. Explain in brief various stages of the DMAIC cycle.
3. List and explain tools used in the various phases of the DMAIC
cycle of Six Sigma.
4. What is the DMADV methodology? Explain in brief various
stages of this methodology.
5. Describe in brief the DFSS methodology.
6. Define team and write a short note on its characteristics.
7. List the fundamentals of team selection.
8. Briefly describe the stages of team formation.
9. Write a short note on conflict management in a team environment.

100 Lean Six Sigma
n o t e s

Six Sigma Method- 1. True
ologies
2. a. Collecting a reliable baseline data for
making comparison against future
results.
3. Measure
4. True
5. d. Prioritisation of the root causes
which form the key process inputs
S
6. Analyse
7. Improve
8. c. Improve phase
IM
9. Control chart
10. True
11. False
Six Sigma Teams 12. True
13. d. Unaffected by the adequacy of re-
M
sources
14 False
15 b. It is necessary to have a team without
diversity in its members’ skills.
N
16 Forming
17 c. This stage may also witness discus-
sion of symptoms or problems that
may not be truly relevant to the task
at hand
18 False
19 True
20 Ad-hoc
21 False

1. There are two methodologies which Six Sigma projects routinely
follow. Each methodology consists of five phases. The two
methodologies are acronymised as DMADV and DMAIC. Refer
to Section 4.2 Six Sigma Methodologies.
2. Define is the first step of the DMAIC methodology. It focuses
on a clear articulation of what the business problem is and a

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statement of the project goals. Refer to Section 4.2 Six Sigma

Methodologies.
3. Tools used in various phases of the DMAIC cycle are: Customer’s
voice, also known as Voice of Customer (VOC), Project Charter,
Value Stream Mapping, etc. Refer to Section 4.2 Six Sigma
Methodologies.
4. Another methodology used in Six Sigma projects is the DMADV
methodology, also known as Design for Six Sigma (DFSS). Refer
to Section 4.2 Six Sigma Methodologies.
5. The DFSS methodology works on the principle of determination
of the needs of customers and the business and converting them
into product characteristics. Refer to Section 4.2 Six Sigma
Methodologies.
S
6. A team is defined as a group of people who possess complementary
skills. Refer to Section 4.3 Six Sigma Teams.
7. The activity of team selection must be focused on problem
IM
resolution. Refer to Section 4.3 Six Sigma Teams.
8. The team development process consists of the following phases:
forming, storming, norming and performing. Refer to Section 4.3
Six Sigma Teams.
9. An important team function is to deal with conflicts which are
neither avoidable nor undesirable. Due to diversity of opinions,
M
conflicts are bound to arise but they should be accepted as

something normal. Refer to Section 4.3 Six Sigma Teams.

N
SUGGESTED READINGS
Chowdhury, S. (2007). Design for Six Sigma. New York: Kaplan
Publishing.
Bertels, T. (2003). Rath & Strong’s Six Sigma Leadership Handbook.
Hoboken, N.J.: J. Wiley.
E-REFERENCES
Lean Six Sigma Metrics | Six Sigma Performance Metrics.
(2017). Qualityamerica.com. Retrieved 10 July 2017, from http://
qualityamerica.com/LSS-Knowledge-Center/leansixsigma/lean_
six_sigma_metrics.php
Six Sigma Project Team. (2017). Sixsigmadigest.com. Retrieved 21
September 2017, from http://www.sixsigmadigest.com/six-sigma-
project-team.shtml

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M
IM
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C hapter
5
THE DEFINE PHASE
CONTENTS
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5.1 Introduction
5.2 Project Charters
IM
Activity
5.3 Project Decomposition
Activity
5.4 Deliverables—Critical to Quality Metrics
M

Activity
5.5 Process Maps
N
Activity
5.6 Project Scheduling
Activity
5.7 Summary

104 Lean Six Sigma
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BRIDGING GAPS WITH PROJECT SCHEDULING
An infrastructure development organisation, IDC, which is wholly

owned by the municipal corporation of a large city, was assigned
the responsibility of constructing a railway bridge at the city’s en-
trance.
Santiago Calatrava, a renowned architect, designed the 4,500-ton,

380-metre railway bridge that was constructed at cost of $65 mil-
lion. The bridge was constructed with steel and concrete. It con-
sisted 66 – 150-metre-long cables that are suspended from a pylon
that stands 119-metre high.
In the bridge construction, the major challenge was posed was

to acquire two main construction materials – concrete and steel.
S
Two distinct schedules of two different and independent subcon-
tractors, a steel construction company and a concrete company,
were combined together to create a project schedule for bridge
IM
construction. The final project schedule consisted of nearly 1500
tasks.
The corporation hired a project management consultant to anal-

yse the project schedule who helped to understand critical parts
and requirements of the project. At the beginning of the project,
the project manager assigned a super critical status to the steel
M
aspects of the project, not giving much importance to concrete

aspects. A detailed report by the consultant also stated that the
steel aspects were critical to the project schedule. But an analysis
revealed that there were only nine days of float available for some
concrete-related tasks that existed in the critical paths but were
N
not obvious. This revelation led the project manager to make sig-
nificant changes in the project schedule that included alteration
in concrete components and changes in priorities. As a result, a
new improved schedule was developed.
However, an in-depth analysis of the revised schedule by the proj-

ect management consultants revealed that the though steel held a
critical place but the most critical concrete tasks now had a float
of eight weeks, i.e. of two months instead of the earlier float of less
than two weeks.
The report of in-depth schedule analysis provided a detailed man-

agement insight which helped uncover hidden risks in this proj-
ect. A high-level process map would not have given the project
manager an opportunity to test the accuracy of his assumption
about the critical aspects of the project mentioned in the proj-
ect schedule. The detailed analysis helped the project manager

THE DEFINE PHASE 105
n o t e s
pinpoint the criticality of many concrete-related tasks and take

appropriate action to address this criticality to ensure the success
of the project.
S
IM
M
N

106 Lean Six Sigma
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learning objectives

>> Define and explain the components of a Project Charter
>> Explain project decomposition
>> Define and summarise project deliverables and Critical to
Quality (CTQ) metrics
>> Summarise process mapping and create process maps
>> Define and explain project scheduling
5.1 INTRODUCTION
The previous chapter discussed the tools and techniques used in the
S
Six Sigma methodology. You also studied the DMAIC methodology
in detail. This chapter shall focus on the Define phase of the DMAIC
methodology.
IM
The Define phase is the stage where a project team begins to gain
an understanding of the Six Sigma methodology. The fundamentals
which form the basis of this phase are project activity definition, de-
cisions on the primary strategy to be adopted, problem solving and
assignment of roles and responsibilities.
M
The Define phase is set off with the preparation of the project charter
which is an official document and outlines the details of the process
improvement project. Even though it is created in the beginning of
the Define phase, it can be periodically reviewed, refined and revised
throughout the project whenever required.
N
The elements of a Project Charter can vary from project to project but
they generally revolve around business case, goal statement, problem
statement, scope, team members and timelines.
Critical to Quality (CTQ) trees are tools that help managers to convert
broad customer requirements into specific, actionable and measur-
able performance parameters. These parameters can then be used to
deliver high quality products and services. A section in this chapter is
also devoted to project deliverables and CTQ trees.
In this chapter, you will study about project decomposition which is a

major step in the planning process. Decomposing a project is essen-
tially planning the critical elements of the project activities by creat-
ing an activity-based hierarchy.
In the last sections of the chapter, you will study about the process
mapping tool that helps in creating a pictorial representation of the
process and project scheduling that helps managers create an activity
time-table.

n o t e s
5.2 PROJECT CHARTERS

Project Charter is a simple yet highly useful tool used in the Six Sig-
ma methodology. Managers are generally advised not to overlook this
tool as it is one of the main tools that find use in the Define phase of
the Six Sigma methodology. The Define phase is officially considered
to be complete when all the fields in the Project Charter have been
precisely filled up.
A Project Charter also known as Project Definition or Project State-

ment is an official document in Six Sigma that lays down the scope
statement of the project. This document also contains the objectives of
the project and details about project participants. The document de-
lineates the roles and responsibilities of the team members, identifies
the main stakeholders of the project and determines the project man-
S
ager’s roles and authorities related to the project. It is also a reference
document for future as it contains the Terms of Reference.
Characteristics of a good Project Charter are as follows:

IM
Reflects the gist of the project
Provides an understanding of the project to all stakeholders.
Functions as a contract between three parties, i.e. the project spon-
sor, key stakeholders and the project team.
M
The inability to fill in all the details in the Project Charter properly
may be an indication of a possible rethink on the project or may point
to the necessity of more data collection to justify the starting of the
project. Different companies may have their own design template for
the Project Charter. Two vital details that a Project Charter must in-
N
corporate are the project scope and project objectives.
Project scope must be prepared before the start of the Six Sigma
project. Besides other essential details, project scope must also state
clearly the start and end points of the project. A project whose scope
is ill–defined in the Define phase often ends up in failure. Too wide a
project scope can also lead to the project failure because project own-
ers may wrongly believe that they will be in a position to solve all big
problems of the company with a single same project. Therefore, it is
recommended to keep the project scope as tight as possible. However,
a scope that is too narrow also does not contribute to project success.
The objectives of the project define the expected outcomes that are
desired to be optimised by the project. A project may have a single
or multiple objectives. The Project Charter should list all objectives.
Project objectives should be measurable, and if not, a measurement
system should be designed in the project’s measure phase. An organ-
isation cannot measure its improvement if it is unable to measure the
output or the changes that result from improvement measures.

108 Lean Six Sigma
n o t e s
The Project Charter should contain the baseline, entitlement and tar-
get for each objective. Baseline is defined as the current measurement
of an output. Baseline reflects the current process behaviour. Man-
agers should define a target that should specify the measurement of
the output at the end of the project. The project should have Specific,
Measurable, Attainable, Relevant and Time-bound (SMART) goals.
The Six Sigma Project Charter should not be allowed to remain rig-
id. This is so because the information process and assumptions may
change with the progress of the project.
As stated earlier, creating the Project Charter is the first step of the Six
Sigma methodology, which is done in the define stage of the DMAIC
process and is critical for the success of project. Some important com-
ponents of the Project Charter are as follows:
S
Title of the project: The Project Charter serves as a source of ref-
erence for managers in future. Hence, it is important to give the
project such a title that is descriptive of its basic intent. This will
help the concerned people quickly reference a project by search-
IM
ing it based on keywords and phrases. For example, if the claim
files management is targeted to be improved in a project, the proj-
ect may be titled as claim file cycle time or claim file variation re-
duction.
Project Black Belt/Green Belt: Black Belt and the Green Belt
individuals lead a project. Early identification of project leaders
M
(Black belt and Green belt holders) is important because the or-
ganisation’s management needs to be familiar with the project
leader. The management must know whom to call when any addi-
tional information is required.
N
Mentor/Master Black Belt: A Master Black Belt functions as an

adviser who can be approached for problem resolution as and
when required during the entire course of the project. It is import-
ant that this resource be identified as a helping hand in the early
stages of the project itself.
Expected project start date: Setting project timelines helps the
project team steer the resources at its command in the right direc-
tion. The project start date is essentially the date on which project
activities are officially launched.
Expected project end date: Generally, the mentor (Master Black
Belt) or the project leader advises on the expected date of project
completion depending on the project’s complexity. It is anticipated
that the project leader and the team shall be given adequate time
to be able to complete the project within the given business cir-
cumstances, work requirement, holidays and leave schedules, etc.
In many projects, a set of general guidelines is established regard-
ing how long the project should take.

n o t e s
Cost of poor quality: Quantifying the cost of quality of the process

output may not always be an easy task. Poor outcomes such as
scrap, excess hours spent by employees performing manual and
redundant activities, fines levied for violations of product require-
ments, etc. – all need to be quantified. Quantification of waste gives
an estimate of savings that can be made after implementation of
the Six Sigma project and also help take decisions as to whether it
is a project on which the organisation must focus.
Business importance of the process: A business is run through
a collection of processes. Thus, it is important to assess the effect
of process improvements on the business. For example, if an or-
ganisation (a hospital) intends to improve its patient discharge
process, it could identify how its current process compares with
that of the other hospitals and how it is an important aspect of the
organisation.
S
Identification of process issues: Once the importance of a process
to the business is established, its fragmentation can be discussed.
Continuing with the hospital example, suppose there is no online
IM
communication between departments like pharmacy, pantry, etc.
from where clearance is required before the discharge of a patient.
As a result, patients do not get their discharge bills instantly which
leads to frustration. Also, manual processes lead to errors.
Process start and end points: Though it may be an ideal situation
to cover as many aspects of a process as possible in the project, it
M
may not be practically feasible to do it. Hence it is important that

the project leadership determines the project start and end points.
Project goals: The goals of the project must be documented in the
beginning. The goals are the expectations from the project. Proj-
N
ect leaders may establish objectives such as reduction in the Turn

Around Time (TAT) by 50%, elimination of defects or reduction of
defects by 95%, etc.
Measures of a process: Measures to determine the effectiveness
of the project should also be defined in the Project Charter. Exam-
ples of these measures could be the dollar value per item or TAT
in days.
Team Members: Members who shall be holding important roles in
the team need to be identified. While the remaining team can be
identified at later stages, three important people who will hold the
following designations must be identified:
Project Sponsor
Project Leader
Subject Matter Experts (In case of cross-functional project
teams, all team members may not be aware of each other’s po-
sitions and skill sets. Hence, SMEs should be identified and
documented at this stage.)

110 Lean Six Sigma
n o t e s
Project timeframe: After identifying the project start and end

dates, it is also important to document important milestones that
are expected to be achieved. These are best identified by project
mentors and MBBs owing to their relevant past experience.
1. A Project Charter, also known as the project definition or

project statement, is an official document in a Six Sigma that
lays down the___________ of the project.
2. The Project Charter functions as a contract between three
parties, i.e. the project sponsor, key stakeholders and the
project team. (True/False)
3. Two vital details that a project must incorporate are _________
S
and project objectives.
Activity
IM
Assume that you have been appointed as the Six Sigma mentor for a
project. Prepare a Project Charter for your project. You may choose
any project at your discretion provided it is a Six Sigma project.
5.3 PROJECT DECOMPOSITION

M
Whenever there is a large and complex project at hand, it is advisable

to break the project into smaller projects which can be further broken
down into work activities and tasks. This type of breaking down of
bigger work into smaller and manageable components is called de-
N
composition.
Decomposition is a process of moving from project objectives to tasks.

Decomposition of a project also results into a clear description of the
project scope. Project decomposition entails a chronological break-
down of the project work into smaller components. This breakdown
is done on the basis of the function and role performed by each ele-
ment in the project. One of the main objectives of decomposition is to
classify different work items and creating a bigger view of the project
management process.
During decomposition, key elements/activities/work of the project are

planned by creating an activity-based hierarchy. There can be multi-
ple levels in such a hierarchy. The resulting hierarchy is called Work
Breakdown Structure (WBS). WBS is a preferred method of project
decomposition. It can be used in a majority of projects but it finds spe-
cial use in engineering and construction projects which are tradition-
ally known to have an activity-based hierarchy of work. The project
starts with phases and activities and is broken down into tasks and
activities as shown in Figure 5.1:

n o t e s
Tasks and
Milestones Deliverables
Activities
Phases and and
Stages Procedures
Figure 5.1: Project Breakdown Structure
Phases are broken down into activities which are broken down into
milestones. Finally, milestones are broken down into tasks. Thus,
phases, activities, milestones, and tasks are the major elements of the
S
project management process. The project team must manage these
four things throughout the project.
IM
WBS is the most preferred method of project decomposition. Howev-
er, there are many other options as well. One of the easiest ways to de-
compose a project is the visual display of different steps starting from
the largest till the smallest. This approach is known as the top-down
approach. The top-down approach to decompose a project is applied
using the following steps:
M
Step One: Identification of project deliverables

Before starting the process of project decomposition, the project
team must identify the project deliverables or milestones. The en-
tire project is broken down into smaller works or tasks called work
N
packages, and each task is broken down into deliverables.

Step Two: Handle one deliverable at a time
Traditionally, the decomposition exercise during the initial stage
of the project is done with the use of pencil and paper (manually).
Experts believe that the traditional method of using pencil and pa-
per creates the least amount of frustration. Using a separate piece
of paper for each deliverable is the best and least confusing meth-
ods. The individual paper offers ample space for making a rough
draft. Each paper should be designated with the deliverable name.
Step Three: Dealing with each deliverable individually
Managers can avoid confusion by dealing individually with every
deliverable. The process would involve selecting the first deliver-
able and keeping the piece of paper in front. The first question
that is asked at this stage is: “What would be the first step required
to achieve the deliverable?” For example, if you were to throw a
lunch party at your home, deliverables would include the identifi-
cation of guests, sending invitations to them and serving food to all
the guests.

112 Lean Six Sigma
n o t e s
Step Four: Know your stop point

Project activities may go on and on. A project deliverable can con-
sidered to be broken down sufficiently when the expected dura-
tion and cost can be accurately determined, and everyone has clar-
ity on what needs to be done exactly in every step. This process
can be repeated for all deliverables till the time all the deliverables
have been decomposed to the extent that one can sufficiently esti-
mate the duration and cost.
Step Five: Duration estimation and work packaging
Once the deliverables are broken down using paper and pen, the
paper would appear like a filled-up box. After this, these boxes
need to be organised into work packages that essentially contain
action items that are related in some way and that will be assigned
to resources for completion. Estimation of the amount of time that
S
will be required by every task needs to be carried out before this
activity. After this, all tasks can be grouped together as per the re-
source requirement. According to Joseph Phillips, author of PMP
IM
Project Management Professional Study Guide, a package should
be neither less than a work worth eight hours nor more than work
worth eighty hours.
Step Six: Estimate task costs
Lastly, the cost of each task needs to be estimated. Once this is
done, the project manager can accurately estimate the project
M
budget. This step holds its own importance because certain tasks
have costs that are dependent on time while others may have some
resource requirements that have attached costs. Once the task es-
timation exercise is complete, decomposed deliverables can be ar-
N
ranged in the WBS.
WBS makes it easy for a Six Sigma leader to visualise tasks with gran-
ularity. Advantages of project decomposition and clearly identified
work packages are:
Accurate time and cost estimates
Clarity of the scope
Effective risk identification and containment
Improved control during project execution
Efficient and accurate planning
Accurate visualisation of the impact of any change in scope
Cost estimates are used for reference in future projects
Functions as a useful reference tool for WBS for future projects

n o t e s
Even though decomposition is beneficial for a project, there are some

challenges and disadvantages of project decomposition as well. These
are discussed as follows:
Getting too microscopic details: There is no doubt that detailing
helps managers bring efficiency in the project. However, there is
a flip side to going overboard about this. Deeper details than what
is required do not offer any additional benefits; instead, they may
lead to wastage of time and resources. Hence, it is important to
determine the right amount of details that need to be included.
Some questions that managers can ask to determine the degree of
decomposition include:
Is the quantity of work packages small enough for the team to
be able to determine cost, time and schedule?
Are project leaders and teams satisfied with the amount of de-
S
tailing available?
Is assigning a resource to a small work package possible?
IM
Assurance of team’s comfort level: WBS is an activity that cannot
be carried out without the involvement of the team. Managers need
to have strong facilitation skills to ensure maximum participation
from team members and that they remained focused. Discomfort
among team members related to sharing of ideas may sometimes
lead to a loss of important information.
M
Considering WBS as a schedule: WBS functions as an import-

ant tool because it is a source of detailed information that meets
project goals and objectives. WBS should not be seen as a plan or
schedule. It is a visual representation of the project and can be
shared with stakeholders for the same purpose. Investing time in
N
creating WBS decreases the possibility of missing work compo-

nents during project execution.
4. Decomposition is a process of moving from project tasks to

objectives. (True/False)
5. Creation of the ________ is a preferred method of project
decomposition.
6. For a beginner, the ________ is the easiest way to decompose a
project.
a. top-down approach b. bottom-up approach
c. vertical approach d. linear approach

114 Lean Six Sigma
n o t e s
Activity
Assume that you are the Six Sigma certified Project Manager of a
software development project. Develop a Work Breakdown Struc-
ture for this project.
DELIVERABLES–CRITICAL TO QUALITY
5.4
METRICS
Commonly, deliverables are assumed to be the results of a project.
However, this is not true because deliverables are just not limited to
the actual results of a project; they also function as a tool to plan, man-
age and execute projects.
S
Deliverables are broadly divided into two types, namely project deliv-
erables and process deliverables. Even though these two types have
their own specific purpose within the project, they need to be consid-
ered simultaneously and one type cannot be given more importance
IM
than the other.
Unlike day–to–day organisational operations, projects are initiated by

the organisation’s management in order to achieve specific and need-
based outcomes. The purpose of the project and the need to under-
take the project should be determined and expressed. This should be
done no matter whether the project outcome is a product, a process,
M
a plan, a policy or any other outcome. Once the outcome gets defined,
it becomes a deliverable. You have read earlier that a deliverable is a
tool for project planning, management and execution. Many process
deliverables may together produce the expected timely and quality
N
project deliverables. In short, a project deliverable is the final destina-

tion and the process deliverable can be considered as the roadmap to
arrive at the final destination.
As mentioned earlier, deliverables of the project should be identified

in the beginning itself. These deliverables get further evolved and re-
fined as the project progresses. A decision tree tool is used to execute
the process of defining deliverables.
For project and process deliverables, a series of questions used to

identify and define deliverables forms the decision tree. For the iden-
tification of project deliverables, the following considerations must
taken into account:
Identifying the form, nature and function of the deliverable under
consideration.
Determining the importance of the deliverable for the overall proj-
ect.

n o t e s
What is the methodology to produce the deliverable? Does the or-

ganisation have the required capabilities?
Have the cost and the feasibility of the cost been determined?
What are the timelines to complete or acquire deliverables?
Assessing the availability of alternatives and pros and cons of all
options.
For the identification of process deliverables, the following consider-

ations are taken into account:
What kinds of deliverables are required for project completion?
What will be the deliverable completion timelines?
What deliverable formats need to be used?
S
What should be the responsibility matrix for planning, production
and implementation of deliverables?
What is the acceptance and approval matrix?
IM
What will be the updating and maintenance methodology?
It is important to define deliverables because defined deliverables

leave no room for predicting the actual results. While developing new
products and services, it is important to incorporate quality as it leads
to customer satisfaction and also helps the company to stand out from
its competitors. However, defining quality may be a challenge because
M
sometimes the factors that may be important to customers may be

easily overlooked. Thus, the Voice of Customer (VOC) gets defined by
a CTQ deliverable.
N
One of the important tools that can be used in defining CTQ delivera-
bles is the Critical to Quality (CTQ) tree. This tree helps managers to
establish the drivers of quality from the customer’s perspective. This
tree helps in the decomposition of broader customer requirements
into quantifiable elements. Customer requirements usually include
internal as well as external characteristics. Characteristics may in-
clude limits and factors that are related in any way to the product or
service.
As an example, a feedback from an organisation’s customers that it

needs to improve its customer service is too broad to be converted
into an action. In such cases, the project team can use the CTQ tree
to break down a broad goal in order to identify specific, measurable
requirements that the organisation can use in performance improve-
ment. CTQ trees were originally developed as part of Six Sigma but
they are now used in many areas. A CTQ tree is shown in Figure 5.2:

116 Lean Six Sigma
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Requirement 1
Driver1 Requirement 1
Requirement 1
Requirement 1
Need Driver1 Requirement 1
Requirement 1
Requirement 1
S
Driver1 Requirement 1
Requirement 1
IM
Figure 5.2: A CTQ Tree
A CTQ tree can be used by adopting the following steps.

Step 1: Critical need identification
First and foremost, the CTQ tree is used to determine the critical
M

needs of customers because the fulfilment of these needs would
make the customer happy. For example, assume that a retail ap-
parel store is being launched. A critical need for this store might
be “should accept returns if required”. The best option is to de-
N
scribe the needs in broad terms. In this way, missing out of import-
ant aspects in the next steps can be avoided. If there is a constraint
in directly asking customers about their needs, managers can do
brainstorming sessions with the team members who come in di-
rect contact with customers such as sales and customer service
teams.
Step 2: Determine the quality drivers
Once critical needs are determined, quality drivers need to be
identified. Quality drivers are parameters that customers use to
evaluate a product’s quality. For example, if the need is “should
accept returns if required”, a quality driver may be “no deductions
in the refund amount.” This phase of quality driver determination
should not be rushed through because it is important to determine
quality drivers as comprehensively as possible. Yet again, the cus-
tomer service and sales teams should be roped in if customers
can’t be approached. Some special tools such as the Kano analysis
and the Philip Kotler’s Five product levels are found to be useful
here.

n o t e s
Kano model was developed by Professor Noriaki Kano in 1980s. It

is a theory of product development and customer satisfaction. Ac-
cording to Kano model, customer preferences can be divided into
five categories namely must-be quality, one-dimensional quality,
attractive quality, indifferent quality and reverse quality. Under
the Kano model, these are the drivers of customer satisfaction.
Philip Kotler has also defined five product levels related to the
quality drivers. These five product levels include: core product,
generic product, expected product, augmented product and po-
tential product.
Step 3: Determine measurable performance requirements
After identifying quality drivers, it’s time to identify measurable
parameters of performance that need to be satisfied by each qual-
ity driver for giving a delightful experience to customers. In the
S
absence of any measurable parameters, it may not be possible
to evaluate performance and quality of a product or service. The
ability of a business to deliver quality products is dependent on
IM
many variables such as the availability of enough resources or the
required technology. An individual CTQ tree should be developed
for each critical need. This would yield a comprehensive list of re-
quirements that can be used to produce a product that gives cus-
tomer delight.
In the earlier example of the retail apparel store, after identify-
M
ing the Voice of Customer (VOC), one critical need identified may
include delightful customer service. Here, a CTQ tree can be cre-
ated to prepare a list of measurable performance requirements.
Figure 5.3 presents an example of a CTQ tree:
N
Performance measure
Drivers
95% customer
satisfaction
satisfaction
Waiting time Call pick up time < 20
secs
>90% refund and

purchase processing < 2
mins
Customer greeted <30

seconds post store entry
Delightful
Staff behaviour
customer Customer facing staff
service interact with the
customers with a smile-
100%
80% customer
satisfaction with refund
Policy on refund policy
Figure 5.3: A Sample CTQ Tree

118 Lean Six Sigma
n o t e s
7. Deliverables is another name for the results of a project. (True/

False)
8. The two types of deliverables are ____________ and
__________________ deliverables.
9. Which of the following options is incorrect with respect to the
following statement: “The deliverable definition fulfils the
following objectives.”
a. Deliverable specification in terms of development,
production and acquisition.
b. Ascertaining alignment of the deliverable with only the
known functional requirements is necessary.
S
c. Realistic establishment of expectations of stakeholders.
d. Acquiring stakeholders’ acceptance and consent.
IM
Activity
Identify a new business idea that you would like to pursue. Create
a WBS and CTQ tree for this new project.
5.5 PROCESS MAPS

M
Process mapping is one of the basic quality tools used in the Six Sig-
ma methodology. Process mapping is not only a planning tool but also
a management tool. It enables a visual depiction of the process. The
map created at the end of process mapping is a process map. A series
N
of events that result into an end-product can be seen in a process map.

Various terms are synonymous to process map. These include busi-
ness flow diagram, flowchart, functional flowchart, functional process
chart, process chart, process flow diagram, process flowchart, process
model, workflow diagram, etc. Process maps help to understand pro-
cesses and improve process efficiency. Using process maps, we can
show resources involved in a process and also reveal areas where a
process should be improved. Process maps can be used in any kind of
business or organisation.
One objective of process mapping is improvement in efficiency within

organisations. Some other objectives of process mapping are as fol-
lows:
Provides better insights into a process to the management and
other stakeholders.
Helps the project teams bring process improvement by brain-
storming ideas, an increased opportunity for communication and
for carrying out process documentation.

n o t e s
Helpsthe project teams in identifying the bottlenecks such as re-

dundancy, repetition and delays.
Eases up the process of defining process boundaries, ownership,
and responsibilities.
Helps in determining the measures of process effectiveness.
Another important purpose of process mapping is to offer better un-

derstanding of a process to all stakeholders. With process mapping, it
becomes easier to highlight areas of waste and streamline work pro-
cesses. It becomes possible to visually communicate important pro-
cess details eliminating the need to write extensive directions.
Benefits of using process mapping tool are listed as follows:

Acquiring process understanding
S
Identifying scope for process improvement
Displaying all process steps
Enhancing
IM
interpersonal communication between team members
Documenting the process steps
Aiding in project planning
Help in problem solving and decision making
Identifying problems and proposing possible solutions
M
Symbols used in process mapping are easy to remember and fol-

low
Easier to visualise the end-to end-process
N
There are different types of process maps as follows:

Activityprocess map: It includes activities that are value-adding
and non-value adding.
Detailed process map: This map includes a lot of detailing around
process steps.
Document maps: This map documents process inputs and out-
puts.
High-level process map: It’s a bird’s eye-view of a process that
includes elements such as Supplier, Input, Process, Output, and
Customer (SIPOC).
Rendered process map: This map is a representative of the exist-
ing state and the future state of a process indicating the process
improvement areas.
Swim lane map: The sub-process responsibilities are separated
out in this type of map.

120 Lean Six Sigma
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Value-added chain diagram: A simplified representation using

unconnected boxes.
Value stream map: It is a process analysis and improvement tech-
nique in lean management.
Process maps are created with the help of certain symbols. A process
map contains elements such as actions carried out or required, steps
of activities, decision points, functions, inputs and outputs, people and
resources, process measurements and required time, etc. For each el-
ement, there is a unique symbol by which it is represented in a pro-
cess map. The unique symbol assigned to each process element might
be an arrow, box, circle, diamond, oval or a rectangle, etc. However,
the international standard for drawing process maps is the Unified
Modelling Language (UML). Some commonly used process map sym-
bols are shown in Table 5.1:
S
TABLE 5.1: PROCESS MAP SYMBOLS
Symbol Function
IM
ELEMENT SYMBOLS
Process
Predefined process
Alternate process
M
Delay
Preparation
N
Manual operation
BRANCHING AND CONTROL OF FLOW SYMBOLS

Flow Line
Terminator
Decision
Connector
Off-Page Connector
Merge

n o t e s
Symbol Function
Extract
Or
Summing Junction
INPUT AND OUTPUT SYMBOLS

Data
Document
S
Multi-Document
IM
Display
Manual Input
M
Card
Punched Tape
N
FILE AND INFORMATION STORAGE SYMBOLS

Stored Data
Database
Direct Access Storage
Internal Storage

122 Lean Six Sigma
n o t e s
Symbol Function
Sequential Access Storage
DATA PROCESSING SYMBOLS

Collate
Sort
Process mapping is used in many areas of business including business

process redesign, documentation, reengineering, quality improve-
S
ment, simulation, training, information technology, work measure-
ment, process analysis, operational process design, process integra-
tion, business process improvement, etc. Manufacturing and service
industry regulations necessitate documentation. Some industry stan-
IM
dards such as ISO 9000 or ISO 9001 require process documentation.
Process mapping plays an important role in fulfilling these require-
ments.
Commercially available software have made process mapping easy.

Commonly used application software programs such as Microsoft
M
Word, PowerPoint or Excel too have process mapping capabilities.

Many other programs can be customised for including the process
mapping feature. Knowledge about how to map a process helps man-
agers in building strong communication and understanding among
team members. Steps involved in process mapping are as follows:
N
Step 1: Problem identification
In this step, the process that requires visualisation is selected and the
name of the process is used as the document title.
Step 2: Process activity brainstorming
In this step, all activities needed for the process are identified. Also,
the granularity needed in breaking down the project is determined.
Also, the responsibilities and activity timings are identified.
Step 3: Identify process boundaries
In this step, the process start and end dates are specified.
Step 4: Sequencing of the steps
The general flow of the process may be displayed or the action or de-
cision details may be mentioned depending on the requirements of
the project.

n o t e s
Step 5: Start preparing the process map using basic symbols
In this step, all the elements in the process flow are represented by
their respective symbols. Commonly used symbols have already been
described in Table 5.1.
Step 6: Process map finalisation
Team members, workers, process owners, supervisors, suppliers,

customers, etc. are the stakeholders who should be approached for a
consensus on the final process map. The process map should have all
relevant information such as title, date, etc. for easy future reference.
It is amply clear that process maps are capable of providing valuable

insights into the strategy that a business or an organisation can adopt
to improve its processes. Visual presentation of the process informa-
S
tion through a process map helps in better understanding and collab-
oration between teams working on any project.

IM
10. An important purpose of process mapping is to offer a better
understanding of a process to all concerned stakeholders.
(True/False)
11. Process maps are generally used to ___________ the process
steps.
M
12. The international standard for drawing process maps is the

___________
N
Activity
Imagine yourself to be a Six Sigma project leader in a hospital.

Draw a process map for the process of a patient admission in the
hospital at the point of registration till occupying the bed.
5.6 PROJECT SCHEDULING

Irrespective of the size and scope of a project, project schedule has a
bearing on the outcomes of the project. Project schedule is a manage-
ment tool that determines the timing of each activity and also defines
the sequence in which activities need to be carried out.
Scheduling, though very important, is not an exact process and needs

to be carried out on the basis of project estimates. It involves some
guess work for predicting future events. Due to the inherent uncer-
tainty in the process of scheduling, it becomes important for managers
to review the Project Schedule regularly. It is perfectly normal to re-
vise the Project Schedule as the project progresses. The schedule may

124 Lean Six Sigma
n o t e s
need revision as changes become apparent with the project progress,

such as generation of newer risks or elimination of the older ones.
Project schedule serves the following purposes:
Acts as a basis for managers to monitor and control project activ-
ities.
Helps managers in decision making regarding resource allocation
during the project.
Helps in identification of excess resources, thus reassigning them
optimally.
Helps evaluate the impact of delays on the project.
Functions as a tool to track project progress.
A variety of tools can be utilised for creation of Project Schedule.
S
Some of them may be as simple as the process of action planning for
small projects. There are also complex tools used for Project Schedule
creation such as Gantt Charts and Network Analysis for larger and
more complex projects.
IM
Let us now study some important tools required for developing a Proj-
ect Schedule:
Project and personnel calendars: It is important for managers to
understand their organisation’s shifts, working days, availability
of resource, etc.
M
Project scope description: This includes start and end dates of

the project, major assumptions made during project planning, any
identified constraints or restrictions, etc. Stakeholder expecta-
tions are also important because they help in determining project
N
milestones.
Risks involved in the project: Risk identification is important as it
ensures that ample time is available to deal with risks.
Activity list and resource requirements: Managers should have
an understanding of the capabilities of the available resources and
experience level. List of company holidays and scheduled leaves of
staff are also an important component.
Scheduling tools: Some tools and techniques are used for combin-
ing the scheduling inputs in order to develop the project schedule.
In schedule network analysis, project activities are represented
in a graphical form. It also depicts the time required to complete
these activities along with the sequence in which they must be
done. This depiction is done using tools such as Critical path, Gantt
chart and PERT chart. Project management software supports the
creation of charts and associated networks. Critical Path Analysis
is a process of visualising the activities that need to be completed
and determining the best or the critical path that needs to be taken

n o t e s
so as to complete the project in the least possible time. The earli-

est and latest possible start and finish times for project activities
are determined by this method. Interdependencies among various
activities are also determined to create a schedule of critical activ-
ities and dates. The total duration of a project can be shortened by
using schedule control tool. This tool helps in decreasing the time
allotted for certain activities. Two methods can be used for sched-
ule compression. They are: crashing and fast tracking. In case of
crashing, the number of resources allocated to an activity is in-
creased and that helps in reducing the time required to complete
the activity. The time saved helps offset the added resource costs is
the assumption made here. Fast tracking involves rearrangement
of activities that allow activities to be carried out parallel to each
other. Here, independent activities that were earlier done one after
another now can be undertaken simultaneously. However, the risk
S
of missing out things or failure to address changes is integral to
this approach.
Once the basic Project Schedule has been prepared, it should be re-
IM
viewed to ensure alignment between resources and estimated time-
lines. Some tools to achieve this objective are as follows:
‘What if’ analysis: In this technique, all possible scenarios and op-
tions of the project are documented and a comparison is drawn
between all of them. Sometimes managers use simulations to cre-
ate life-like situations and observe the effects of their assumptions
M
– whether they are harmful or good. These could include timely

availability of resources, which could impact other project areas.
Depending on the extent of risk, the most suitable option can be
selected.
N
Resource levelling: The sequence of activities is rearranged in cer-

tain situations so as to address a constraint arising from resource
unavailability and achieve a resource vs. demand balance at all
times. Timing of activities can be rescheduled to make maximum
resource available for critical activities.
Critical chain method (CCM): Activities are planned keeping in
mind their latest possible start and finish dates. This leads to avail-
ability of extra time in between activities. This time can be used to
manage exigencies. CCM is adopted under ‘finite’ resources. Un-
der ‘infinite’ resources, it becomes CPM (Critical Path Method).
Also, for each task that feeds into the critical chain, a buffer called
as feeding buffer is created.
Once an initial schedule has been reviewed and the required correc-
tions carried out, it is highly recommended that it is reviewed by oth-
er stakeholders including process owners. It is important to include
other stakeholders for their insights and inputs which are likely to be

126 Lean Six Sigma
n o t e s
particularly accurate and relevant. The various steps involved in proj-

ect scheduling are shown in Figure 5.4:
Break down
Clarify sequence
List the activities into
and determine
Activities manageable
dependencies
tasks
Estimate start
Summarise
point, duration Define
main activity
and completion milestones
scheduling
of activities
Define Team wise
S
IM expertise task allocation
Figure 5.4: Steps Involved in Project Scheduling
13. Crashing is the rearrangement of activities that allows

activities to be carried out parallel to each other. (True/False)
M
14. Which of the following is not a recommended input for project

scheduling?
a. Project and personnel calendars
b. Project scope description
N
c. Gantt chart of activities

d. Activity list and resource requirements
Activity
Imagine yourself to be a Six Sigma project leader in a hospital. Pre-

pare a schedule for all activities starting with patient admission till
the patient occupies the bed.
5.7 SUMMARY
Project charter is a simple yet highly useful tool used in the Six
Sigma methodology. Managers are generally advised not to over-
look this tool as it is one of the main tools that find use in the Define
phase of the Six Sigma methodology. Project Charter also known
as Project Definition or Project Statement is an official document
in Six Sigma that lays down the scope statement of the project.

n o t e s
This document also contains the objectives of the project and the
details of the project participants.
Whenever there is a large and complex project at hand, it is advis-
able to break the project into smaller projects which can be further
broken down into work activities and tasks. This type of breaking
down of bigger work into smaller and manageable components is
called as decomposition.
Creation of a Work Breakdown Structure (WBS) is a preferred
method of project decomposition. It may be used in a majority
of projects and finds special use in engineering and construction
projects which are traditionally known to have an activity-based
hierarchy of work.
WBS is the most preferred method of decomposing projects. How-
ever, there are many other options as well. One of the easiest ways
S
to decompose a project is visual display of different steps, start-
ing from the largest and moving to the smallest. This approach is
known as the top-down approach.
IM
The Work Breakdown Structure (WBS) makes it easy for a Six Sig-
ma leader to visualise the tasks with deeper granularity.
Deliverables are broadly divided into two types, namely project
deliverables and process deliverables.
Defining quality may be a challenge as sometimes it can easily
M
overlook the factors that may be important to customers. Thus,

the Voice of Customer (VOC) gets defined by a CTQ deliverable.
One of the important tools that can be used in defining CTQs is the
Critical to Quality (CTQ) tree. This tree helps managers establish
N
the drivers of quality from the customer’s perspective.

One of the basic quality tools used in the Six Sigma methodology
is process mapping which is not only a planning tool but also a
management tool. It enables a visual depiction of the process. The
series of events that culminate into an end product can be seen in
a process map.
One major objective of process mapping is the improvement in ef-
ficiency within organisations.
Whatever be the size and scope of a project, an important element
which has a bearing on the project outcomes is Project Schedule.
Project Schedule is a management tool that determines the timing
of each activity and also defines the sequence in which the activi-
ties need to be carried out.
Scheduling is not an exact process and needs to be carried out on
the basis of one’s estimation. It also involves some guess work for
predicting future events. Due to the inherent uncertainty of the
scheduling process, it becomes important for managers to review
the schedule regularly.

128 Lean Six Sigma
n o t e s
key words
Brainstorming: A method of shared problem solving in which

all members of a group spontaneously contribute ideas.
Gantt chart: A chart that depicts progress in relation to time, of-
ten used in planning and tracking a project. This chart is named
after Henry Laurence Gantt (1861-1919), American engineer.
Project scope: It is the part of project planning that involves
determining and documenting a list of specific project goals, de-
liverables, tasks and deadlines.
Project sponsor: The person that is ultimately responsible for
the project within an organisation. Sometimes this role is held
by the project manager but ideally it is held by someone in se-
S
nior management.
Unified Modelling Language (UML): A general-purpose, de-
velopmental modelling language in the field of software engi-
neering which is intended to provide a standard way to visualise
IM
the design of a system.

1. What is a project charter? Describe major project charter areas.
M
2. What is project decomposition? Enumerate and explain the steps

in the traditional pencil paper approach.
3. List the advantages, disadvantages and challenges of project
decomposition with the WBS method.
N
4. Define a deliverable. What are the types of deliverables? Write a

note on CTQ trees.
5. Write a detailed note on process mapping.
6. What is project scheduling? Write a note on the inputs and tools
for process scheduling.

Project Charters 1. Scope statement
2. True
3. Project scope
Project decomposition 4. False

n o t e s

5. Work breakdown structure (WBS)
6. a. The top-down approach

Deliverables- critical to 7. False
quality metrics
8. Project; Process
9. b. Ascertain alignment of the
deliverable with only the known
functional requirements is nec-
essary.
Process Maps 10. True
11. Graphically display the process
S
steps
12. Unified Modelling Language or
UML.
IM
Project Scheduling 13. False
14 c. Gantt chart of activities

1. Project Charter is a simple yet highly useful tool used in the
M
Six Sigma methodology. Project Charter also known as Project

Definition or Project Statement is an official document in Six
Sigma that lays down the scope statement of the project. Refer
to Section 5.2 Project Charters.
N
2. Whenever there is a large and complex project at hand, it is

advisable to break the project into smaller projects which can
be further broken down into work activities and tasks. This type
of breaking down of bigger work into smaller and manageable
components is called decomposition. Decomposition is the
process of moving from project objectives to tasks. Refer to
Section 5.3 Project Decomposition.
3. The Work Breakdown Structure (WBS) makes it easy for a Six
Sigma leader to visualise the tasks with deeper granularity.
Advantages of project decomposition include calculating
accurate time and cost estimates. Refer to Section 5.3 Project
Decomposition.
4. Deliverables are broadly divided into two types, namely project
deliverables and process deliverables. Even though these two
types have their own specific purpose within the project they
need to be considered simultaneously, and one type cannot
be given more importance than the other. Refer to Section 5.4
Deliverables –Critical to Quality Metrics.

130 Lean Six Sigma
n o t e s
5. One of the basic quality tools used in the Six Sigma methodology
is process mapping which is not only a planning tool but also a
management tool. Process mapping enables the visual depiction
of a process. The series of events that culminate into an end
product can be seen in a process map. Refer to Section 5.5
Process Maps.
6. The main input required for scheduling is project and personnel
calendars which are important for managers to understand their
organisation’s shifts, working days, availability of resource. Refer
to Section 5.6 Project Scheduling.
SUGGESTED READINGS
S
Ferraro,J. (2012). Project management for non-project managers.
New York: AMACOM.
Jeff Furman. (2015). The Project Management Answer Book; 2nd
IM
Edition. Management Concepts, Inc.
E-REFERENCES
trieved 18 September 2017, from http://www.opensourcesixsigma.
com/Default.asp
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ProjectManagement and Programme Management - The FREE

ePMbook by Simon Wallace. (2017). Epmbook.com. Retrieved 18
September 2017, from http://www.epmbook.com/
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C hapter
6
THE MEASURE PHASE
CONTENTS
S
6.1 Introduction
6.2 Flowcharts and SIPOC
IM
6.2.1 Flowchart
6.2.2 Sipoc
Activity
6.3 Process Baseline Estimates
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Activity
6.4 Principles of Statistical Process Control (SPC)
6.4.1 Central Limit Theorem (Clt)
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Activity
6.5 Control Charts
Activity
6.6 Repeatability and Reproducibility
Activity
6.7 Summary

132 LEAN SIX SIGMA
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MEASUREMENT SYSTEM ANALYSIS (MSA) AT CFL LTD.
CFL Ltd. is a subsidiary of a national power producing organisa-

tion, and is the main producer of optic fibres. It produces various
types of cables that can handle low, medium and high voltages.
CFL aims to venture into global market as well as become the
leading producer and distributor of cables domestically. CFL can
fulfil its ambitions by ensuring that its cables are of high quality
and meet all the quality requirements. This is necessary to supply
good quality cables to customers.
Before accepting a given production lot, its products are checked

for quality by randomly selecting a fixed number of products from
the lot. This is the process of acceptance sampling. After checking
S
the products for quality adherence and defects, the sampling re-
sults are used to decide whether the entire production lot should
be accepted and sold to customers or not. The results are also
used to see whether the management needs to make any adjust-
IM
ments in the production system or processes.
Determining the sample size for checking products’ quality re-

quires statistical calculations. However, many organisations use
the rule of 1:20 (5%) to determine the sample size. According to
this rule, 1 sample should be taken for every 20 products pro-
duced.
M
CFL has defined a set of standards or specifications for each cable

type. The maximum and minimum values are defined for each
specification. Specifications of cables include thickness, diameter,
N
breaking load, etc. Therefore, at the time of acceptance sampling

and checking, the quality team needs to check all these specifica-
tions for each product in the sample. CFL selects about 5-6 cables
randomly from a set of 100 products and tests these samples for
their diameter and thickness. The thickness of wire is measured
using a caliper.
Figure: A Digital Caliper

Source: https://www.wpiinc.com/products/laboratory-supplies/501601-digital-caliper/
Specification of each sample is checked and if its value lies within

the allowed limits, the sample passes the inspection. The mea-
surements of each specification for each sample are recorded in a

THE MEASURE PHASE 133
n o t e s
check sheet. Now, the quality team counts the number of samples
which do not adhere to the specifications. If the number of such
samples is more than two, the quality team flags a requirement
for improvement in the manufacturing process/department. A
sample check sheet is shown below:
Measurement of Samples
S. Specifica- Unit S1 S2 S3 S4 S5 Mini- Aver- Minimum and
No. tion De- mum age Maximum
scription Specification
1. Thickness mm Min: 0.5 mm
Max: 0.7 mm
+2. Diameter mm Min: 27 mm
Max: 30 mm
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3. Breaking N 2800 N
load
IM
CFL included three quality variables (specifications) in the sheet
and five measurements for each variable. The sheet also mentions
the allowable specification values so that the quality team can de-
cide whether to allow the sale of the entire production or not. This
is the primary objective of conducting acceptance sampling. How-
ever, there is a secondary benefit also. The data so collected is an-
alysed for production planning, monitoring and for Measurement
M
System Analysis.
The quality department of an organisation keeps an overview on

the quality control techniques being used. The quality department
of CFL is satisfied with the current quality control implementa-
N
tion. However, the only problem faced by CFL is that it requires

setting new specifications every time the organisation gets new
customers. This is a time consuming process as a lot of tests are
required to be done to produce a cable as per new specifications.
CFL is in the process of planning new quality control techniques
and tools which would, expectedly, solve the current problems
of its quality department. The new techniques and tools would
also increase the efficiency and effectiveness in ensuring that the
products meet the given customer requirements.
Source: http://cdn.intechopen.com/pdfs/14857/intech-quality_control_implementation_
in_manufacturing_companies_motivating_factors_and_challenges.pdf

134 LEAN SIX SIGMA
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learning objectives

>> Explain how the SIPOC method and flowcharts can be used
for defining processes under the Measure phase of the DMA-
IC methodology
>> Explain the importance of establishing a process baseline
>> Describe the Principles of Statistical Process Control (SPC)
>> Explain and illustrate the concept and types of control charts
>> Describe the concept of Measurement Systems Analysis, Re-
peatability and Reproducibility
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6.1 INTRODUCTION
In the previous chapter, you studied the first phase of the DMAIC/
DMADV project methodology. Define is the first phase of DMAIC. The
IM
primary work in this phase is to define and develop a project char-
ter. The project charter in turn defines different project aspects such
as project goals, customer and business requirements, project cost,
project schedule, project scope, project deliverables, etc. After the De-
fine phase, the project team moves to the next phase, i.e. the Measure
phase.
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The current chapter discusses the second (Measure) phase of the

DMAIC/DMADV project methodology in detail. This chapter starts
with a discussion on the Measure phase activities. One of the critical
activities of this phase is defining the metrics and the measurement
N
system that can be used to measure the performance of the Critical to

Quality (CTQ) parameters.
Major activities performed in the Measure phase include defining var-

ious processes, such as establishing a process baseline, evaluating the
measurement system, converting the Voice of Customer (VoC) into
CTQ parameters and defining metrics and the measurement plan.
The very first activity of the Measure phase in which all the process-
es are defined can be concluded by using tools and techniques such
as flowcharts, process maps and the SIPOC diagram. Flowcharts and
SIPOC are explained in detail in this chapter.
In the context of project management, a baseline is defined as a (ideal)

state by which something is measured or compared. Therefore, a pro-
cess baseline is a type of baseline that defines the ideal values of vari-
ous metrics or parameters related to a project. A process baseline can
be defined using Statistical Process Control Charts. There are various
types of control charts that are constructed using the measurement
data. Statistics such as mean, range, standard deviation and variance
are used to develop control charts.

n o t e s
Control charts are prepared using the data collected by the project
team. However, before collecting data through the defined measure-
ment system, it is quintessential to evaluate or analyse the level of
accuracy of the measurement system. This activity is termed as Mea-
surement System Analysis (MSA).
In this chapter, you will study the concepts of the Measure phase, pro-
cess baseline, principles of the Statistical Process Control (SPC), con-
trol charts and the Measurement Systems Analysis (MSA).
6.2 FLOWCHARTS AND SIPOC

As stated earlier, the second phase of the DMAIC/DMADV project
methodology is the measure phase. As the name of this phase sug-
gests, certain parameters are measured in this phase. However, in
S
most projects, there are hardly any metrics or measurement systems
at this stage. Therefore, the goal of the Measure phase is to identify
and define metrics and measurement system. The measurement sys-
IM
tem should be able to capture the performance of the parameters that
are Critical to Quality (CTQ).
In the Measure phase of DMADV, customer’s needs are quantified and

translated into quality specifications or quality parameters. In con-
trast, the Measure phase of DMAIC involves measuring the current
performance level of a particular process.
M
In the case of DMAIC’s measure phase, the project team needs to take
actual measurements of the metrics as against the baseline; whereas,
in the case of DMADV’s measure phase, the project team’s work is re-
stricted to defining metrics, developing the measurement system and
N
planning how to obtain measurements after the new design comes

into operations.
The goal of the Measure phase is to identify and define appropriate

metrics and a measurement system that will capture the performance
of CTQ (Critical to Quality) parameters.
To achieve these objectives, the following activities are performed:

Defining processes: Clearly defined processes are essential so that
the project team can decide which process they need to consider.
Establishing the process baseline: The project team needs to
quantify the current operating results to ensure that the business
needs are fulfilled.
Evaluating the measurement system: The data used to draw cer-
tain conclusions must be validated so that it leads to only mean-
ingful results.
Converting the Voice of Customer (VoC) into CTQs: In the de-
fine phase, the customer requirements are collected in the form of

136 LEAN SIX SIGMA
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VoC. The VoC is used to identify the CTQ metrics. Here, CTQ not
only means metrics Critical to Quality but it also means Critical to
Process, Critical to Safety, Critical to Cost, and Critical to Delivery.
Defining metrics: The project team needs to convert CTQs into
metrics. The team defines a reliable means of measuring the pro-
cess, relative to the project deliverables. The metrics must be set
up in a metric or measurement system. The metrics defined by the
project team must be SMART, i.e., they should be Specific, Mea-
surable, Achievable, Realistic and Time-bound.
Defining a measurement plan: A measurement plan is created
using which the CTQ metrics are measured. Usually, a measure-
ment plan is devised as a table containing answers for the ques-
tions such as What, Who, When, How, etc. A sample measurement
plan is shown in Figure 6.1 as follows:
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IM
M
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Figure 6.1: A Sample Measurement Plan

Source: http://www.whatissixsigma.net/six-sigma-dmadv-measure-phase/
The importance of measurement (and the measure phase) can be

understood from a quote of H. James Harrington. According to Har-
rington, Measurement is the first step that leads to control and eventual-
ly to improvement. If you can’t measure something, you can’t understand
it. If you can’t understand it, you can’t control it. If you can’t control it,
you can’t improve it.
From Harrington’s quote, we can conclude that quality begins with

measurement and that when certain aspects of a project quality are
quantified, only then they can be measured leading to improvement.
We have already stated that process definition is one of the first activi-
ties carried out in the measure phase. A well-defined process consists
of a number of repeatable tasks carried out in a predetermined order.
The tasks must be carried out in a specific order because a process P
consisting of certain tasks in a particular order (say tasks A, B and C
in order A, B and C) would no longer remain process P if the order of

n o t e s
the tasks were to be changed (say, tasks A, B and C in order C, B and

A). In such cases, process A may become process B. Sometimes, oper-
ational workers working in the project may change or customise the
processes without the consent of or without informing the concerned
parties. Then the products produced as a result of modified processes
may be better than or worse than what was actually planned and may
or may not meet the customer requirements.
In the Measure phase, it is necessary to understand the actual process

for which the inputs of the operational workers are necessary. In the
Improve phase, a desired process for receiving inputs from multiple
stakeholders is developed and documented.
A process can be defined by using tools such as flowcharts, process

maps and SIPOC. Quite often, these tools are used collectively. We will
discuss flowcharts and SIPOC in detail.
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6.2.1 FLOWCHART
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A flowchart is a graphical tool that depicts the flow of processes and
highlights all the process complexities. In a flowchart, there are two
types of tasks: process tasks and decision tasks. While creating a flow-
chart, process tasks are represented using rectangles, whereas deci-
sion tasks are represented using diamond shapes. Usually, all the de-
cision tasks have two outcomes (say, Yes and No). Therefore, if there
is any decision point that has more than two outcomes, the decision
M
should be constructed as a series of decisions wherein each decision

point has only two outcomes. This is shown in Figure 6.2:
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Process Task 1
Process Task 2
Process Task 3
Yes No
Decision Point 1
Process Task 4 Process Task 5
Decision Point 2
Yes
No
Process Task 6
Figure 6.2: A Sample Decision Point

138 LEAN SIX SIGMA
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In Figure 6.2, note that the secondary paths from one decision point
may jump back to a previous process task or to a later process task. It
must be noted that the process endpoints or the decision paths may
also divert to another process flowchart. This is shown in Figure 6.3:
Customer Sales Warehouse Customer Service
Place Order
No
Order
complete?
Yes
S
Send order to No
Item in Refund and
warehouse to
stock? write custmer
fulfill
IM Yes
Ship item to
Receive item
customer
Figure 6.3: A Flowchart Linking Various Processes

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Source: https://www.edrawsoft.com/Cross-Functional-Flowcharts.php
In the Measure phase, flowcharts are used to document the current

state of a process. However, in the Analyse phase, flowcharts are used
to highlight and detect all the process complexities such as an exces-
N
sive number of decision points. Such complexities may lead to defects

and/or delays in the entire project.
While drawing flowcharts, the project team may also use different co-
lours and shapes to mean different things. For example, delays can be
shown using red colour and the points where the measurements are
taken can be shown by ovals or green colour.
6.2.2 SIPOC
SIPOC is the acronym for Suppliers, Inputs, Process, Outputs and

Customers. This is also a graphical tool that is used to present the en-
tire flow of processes in a project from start till end. A sample SIPOC
diagram is shown in Figure 6.4:

n o t e s
SIPOC example: sending an invoice

Suppliers Inputs Process Outputs Customers
Accounts Dept Payment system Invoice Customer
Sales end of month Updated payment Sales
Contracts report system
Customer contracts Accounts
Stationary Updated customer
information
suppliers contract on system
Post office Invoice pro forma Send a Debtor list update
Customer contact client Updated sales data
information
Tax rules
invoice
Address labels
Paper
Stamps and
envelopes
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identify the Check the Print invoice
Write
customer to customer and address Post invoice
invoice
be invoiced contract label
IM
Figure 6.4: A Sample SIPOC Diagram
Sometimes, SIPOC diagrams are also called high level process maps
because they do not present much information. All the information is
contained in a brief manner. A SIPOC diagram shows the entire pro-
cess at a high level in a limited number of steps. For creating a SIPOC
map, the project team needs to identify the processes, the inputs re-
M
quired for the concerned processes, the outputs of the processes and
who consumes the outputs. Here, the final consumer can state wheth-
er the output is satisfactory or not.
To improve a particular part of the project, the project team can en-
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gauge in flowcharting or mapping till the part of the project where

the improvement is required is identified. To do so, the project team
needs to find answers to certain questions as follows:
For whom (stakeholder) the process primarily exists?
Does the process add any value?
What are the inputs and outputs of the process?
Who provides the inputs?
Who owns the process?
What resources are required in this process?
What are the various sub-processes (if any) under the process?
What are the steps that help create value?
All these questions are arranged in a standard format known as

SIPOC. The process of constructing the SIPOC diagram starts when

140 LEAN SIX SIGMA
n o t e s
the project team brings together the people, who know about the pro-
cess, for a brainstorming session. Before the brainstorming session
starts, the definition and objective of the process needs to be agreed
upon. For example, ‘Reducing the downtime of machine ABC’ can be
one definition of a particular process. After this, the project team posts
five charts labelled as Suppliers, Inputs, Process, Outputs and Cus-
tomers. Now the SIPOC diagram can be constructed by going through
the following points:
1. Create a high-level process map.
2. Identify and create a primary list of all the possible outputs of the
process using brainstorming.
3. Identify and create a primary list of all the customers who will
receive the outputs using brainstorming.
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4. Identify and create a primary list of all the inputs required to
create the given outputs using brainstorming.
5. Identify and create a primary list of all the suppliers of the inputs
IM using brainstorming.
6. Evaluate and analyse all the lists that have been created. Analyse,
combine, move and rephrase the items in all the lists to create a
SIPOC diagram.
7. Hold a meeting with the project sponsor and the process owner
and make the changes as required.
M
An example of the SIPOC diagram created for a lunch delivery is pre-

sented in Figure 6.5:
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Supplier Input Process Output Customer

Patrons Lunch Lunch Lunch
Grocery/ order order patron
Vendor/ Food delivered
Farmer/ ingedients
Distributor Raw food
paper Spices
goods
manufact
urer
Take Order
Customer Prepare Package Deliver/Pickup
and deliver to
calls/arrives order order order
kitchen
Figure 6.5:A SIPOC Diagram for a Lunch Delivery
After the SIPOC diagram has been fully constructed, it is again re-
viewed in the Analyse phase of the DMAIC/DMADV project method-
ology to remove the non-value adding outputs, inputs or tasks.

n o t e s
1. The goal of the Measure phase is to identify and define metrics

and the__________.
2. In the Measure phase of DMADV, customer’s needs are
quantified and translated into__________.
3. In the Measure phase of DMAIC, the project team’s work is
restricted to defining metrics and developing the measurement
system. (True/False)
4. List two major activities of the Measure phase.
5. A well-defined process consists of a number of _______ tasks
to be carried out in a pre-determined order.
6. Name any two tools using which a process can be defined.
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Activity
IM
Create a sample flowchart for the overall development of a software
project. Also explain the various processes and decision tasks.
6.3 PROCESS BASELINE ESTIMATES

One of the major objectives of the Measure stage is to establish a pro-
M
cess baseline. A process baseline is a reference framework which pro-

vides a quantifiable measure of the process performance before any
efforts are made to improve the process.
While creating the project baseline, it is important to define and mea-

N
sure certain process metrics that are related to project deliverables.

These metrics are used to measure the process performance. Howev-
er, all the metrics must be evaluated for validity and accuracy.
Sometimes the process baseline is also defined as ‘What were things

like before the project started?’. It is essential to create a process base-
line for the following reasons:
Although the business case prepared by the project team during
the initial phase of the project is sufficient to describe whether or
not the project is worth consideration, the project baseline may
further aid the project management in taking this decision.
The project baseline helps the project team in identifying CTQ
and other metrics. The project team usually studies the trend or
the history of the metrics. The study data can sufficiently reveal
whether the strategy followed by the team earlier was erroneous,
in which case, alternative strategies can be considered.
The initial data collected before the project has started can be
compared with the metrics after the project has been completed,

142 LEAN SIX SIGMA
n o t e s
and the project team can measure the amount of savings or im-
provements.
The project baseline acts as a reference point for managers who
want to demonstrate that benefits have accrued as a result of their
process improvement efforts. If there is no project baseline, proj-
ect managers cannot present the evidence of sustainable improve-
ments.
Assume that a manager has been given the task of improving the que-
ry resolution time of a call centre. Now, the manager studies the entire
process of how customers’ enquiries are directed in the call centre and
how the employees usually solve these queries. The manager finds
out certain serious anomalies in the query resolution process and
makes certain changes that help rectify the anomalies. He observes
that there is a considerable improvement in the query resolution time
S
and it has been reduced by over a minute. But, where is the empir-
ical data to support the manager’s claim? The answer is that there
is no data. Therefore, in such cases, when the appraisals, pay raise
IM
and certifications of managers are at stake, the most important thing
for them is to be able to prove that their efforts have yielded results.
In the call centre example, the manager should ideally measure the
process baseline estimate (measure) in the form of query resolution
time before any changes are made to the system. After the manager
has overhauled the process, he should again measure the query res-
olution time. Now, the difference in the query resolution time (before
M
and after the changes are introduced) can reveal whether or not the
manager succeeded at what he wanted to do.
Assume that the query resolution time before and after the improve-
ment was five minutes and four minutes, respectively. It means the
N
manager was successful in improving the given metric. If the query

resolution time increased to seven minutes after the improvement ef-
forts, then it means that the manager was not successful. On the con-
trary, his improvement efforts yielded a negative result.
To define the process baseline, Statistical Process Control (SPC)

Charts are used in the Measure phase of DMAIC/DMADV project
methodology. SPC charts can be used to judge whether or not the pro-
cess is statistically stable. If the process is stable, the process capa-
bility and Six Sigma estimates can be used to quantify the process
performance against the requirements or baseline.
Some processes are not statistically stable. For such processes, if the
special causes of variation are identified, they can be removed and a
stable baseline can be established. However, if the causes of variation
are not identified, then the information at hand can be used in the
Analysis phase. In the Analysis phase, the causes of the instability are
investigated using controlled design experiments. It is important to
have a statistically stable baseline, which depends upon the validity of
the measurement system.

n o t e s
It is essential to verify the measurement system before taking the

baseline measurements. This verification is done using a control
chart. First, control charts are applied to process baselines and there-
after they are applied for the validation of the measurement system.
The principles of SPC are discussed in the next section.
7. While creating a project baseline, it is important to define and

measure certain process metrics, as these are used to measure
process performance. (True/False)
8. The ________ acts as a reference point for managers who want
to demonstrate that benefits have accrued as a result of their
process improvement efforts.
S
9. When a process is not statistically stable and the causes of
variation cannot be identified, then the baseline information
can be used in the Analysis phase where the causes of
IM
instability are investigated using ____________.
Activity
Select any project at random. Prepare a process baseline for any

process in this project.
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PRINCIPLES OF STATISTICAL PROCESS

6.4
CONTROL (SPC)
N
Some important principles of SPC are as follows:

All the measurable phenomena are statistical distributions.
An observed set of data constitutes a sample of the effects of un-
known common causes.
Even after the special causes of variation have been removed, the
process still exhibits some amount of variability.
Alldistributions have three properties, namely location, spread
and shape.
Location refers to the typical value of a distribution that is present-
ed in the form of mean.
Spread refers to the difference by which small values differ from
large values. A spread can be measured using standard deviation
and variance.
Shape of the distribution develops as a result of peakedness, sym-
metry, etc. The final shape of the distribution may be bell-shaped,
rectangular, etc.
Applicability of the Central Limit Theorem.

144 LEAN SIX SIGMA
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6.4.1 CENTRAL LIMIT THEOREM (CLT)
According to the Central Limit Theorem (CLT), the distribution of the

sum (or average) of a large number of independent, identically distribut-
ed variables will be approximately normal, regardless of the underlying
distribution.
In other words, we can say that irrespective of the shape of the distri-
bution of individual populations, the distribution of the average val-
ues of samples drawn from the populations would tend to be normally
distributed with increase in the sample size.
The average of the different samples drawn from the entire popula-
tion is equal to the average of the entire population. Also, the standard
deviation of the different samples drawn from the entire population is
equal to the standard deviation of the entire population divided by the
S
square root of the sample size.
In 1931, Shewhart demonstrated that even if the entire population (or

universe) is non-normal, and small samples are drawn from the uni-
IM
verse, they would result in normal distribution.
CLT is useful in SPC because we can use the averages of small sam-
ples to evaluate any process using the normal distribution. CLT forms
the basis of SPC charts or the Shewhart charts. Shewhart charts are
also called process behaviour charts.
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Shewhart did some seminal work in the field of control charts in 1931.
In his works, he defined control in the following way: A phenomenon
will be said to be controlled when, through the use of past experience, we
can predict, at least within limits, how the phenomenon may be expected
N
to vary in the future. Here it is understood that prediction within limits

means that we can state, at least approximately, the probability that the
observed phenomenon will fall within the given limits.
It must be noted that control does not mean absence of variation.

Rather, it means that the variation in the process can be predict-
ed. It means that a controlled process does not necessarily mean a
well-managed process. Nor does an out of control process indicate an
ill-managed process.
Any unknown cause of variation is referred to as chance cause or com-

mon cause. If we have a process that contains a large number of chance
causes, and the influence of such chance causes is very small, then we
have a system that is largely under control, and the variation would
be predictable within the limits. For such causes, Shewhart used the
term chance cause, whereas Deming used the term common cause.
There are some processes that are affected by risks which cannot be
attributed to causes occurring in large numbers. There can be a vari-
ation that is caused by a source that is not part of a constant system.

n o t e s
For such causes, Shewhart used the term assignable causes, whereas
Deming used the term special causes.
The project team needs to carefully detect and categorise the varia-
tions that occur as a result of common causes and special causes using
statistical tools. The project team uses the Statistical Process Control,
i.e. the analytical statistical method, to identify the special causes of
variation in a process.
Now that you are aware of the two types of causes of variation, name-
ly common causes and special causes, it is important to state an ex-
tremely important principle of the Statistical Process Control. This
principle states that the process variation that is generated as a result
of common causes should be left to chance; whereas, the process vari-
ation attributed to special causes should be analysed to identify and
eliminate special causes.
S
When we say that common cause variations should be left to chance,
we do not mean that these variations and their causes should be ig-
IM
nored. It simply means that the project team should work towards
finding long-term process improvements to address common cause
variations. Control charts are also used to determine and differentiate
between common and special variations. In a control chart, the proj-
ect team specifies the upper and lower control limits. The variations
that lie between these limits are said to be common cause variations
and are left to chance. On the other hand, if there are variations that
M
are marked on a control chart and fall beyond either of the control
limits, these are called special variations. Special variations must be
analysed to eliminate their root causes.
It is worth mentioning that all the processes where variations occur

N
and remain within the boundaries of the control limits are called un-
der control processes or Statistically Controlled Processes. On the
contrary, processes whose variations occur beyond the boundaries of
the control limits are called Out of Control Processes.
In a control chart, control limits are marked only after calculating

them (control limits) using statistical methods. Usually, control lim-
its are set at the mean of the distribution ± thrice the value of sigma,
where sigma represents the standard deviation of the process distri-
bution. The limits are represented as x + 3σ.
The project team usually estimates the process baseline using the pro-
cess capability analysis.
10. According to the _____, irrespective of the shape of distribution

of individual populations, the distribution of the average
values of samples drawn from the populations would tend to
be normally distributed with increase in the sample size.

146 LEAN SIX SIGMA
n o t e s
Activity
The statistical process control can be done by using various tools

and techniques. We have already discussed control charts in this
chapter. Write a note on the following process control tools:
1. Histograms
2. Check sheets
3. Pareto charts
4. Cause and effect diagrams
5. Defect concentration diagrams
6. Scatter diagrams/plots
7. Probability plot
S
6.5 CONTROL CHARTS
You have already studied that variances in a process can be found us-
ing the process behaviour charts or control charts. While constructing
IM
or developing a control chart from the given measurement data, the
project team uses statistics such as mean, range, standard deviation
and variance. All these statistics can be plotted over a control chart,
and the chart should be analysed to see whether there are any data
points that fall outside the boundaries of control limits. If there are
any such values, it means that the process is Out of Control, and one
or more special causes of variations are present. In such a case, the
M
project team needs to immediately investigate the cause of variation

and eliminate it.
One important category of control charts is the averages and ranges

control charts. An averages chart is a type of control chart that is used
N
to evaluate the central tendency of a process over time. A careful anal-

ysis of an averages chart can reveal whether a special cause of varia-
tion has caused the central tendency of this process to change over the
time period under consideration.
A ranges chart is a type of control chart that is used to evaluate the dis-
persion or spread of a process over time. A careful analysis of a ranges
chart can reveal whether a special cause of variation has caused the
process distribution to become more or less consistent.
The averages and ranges charts are applicable for continuous data
such as weight, size, response time, etc. In the preceding text, we men-
tioned that a control chart is prepared by plotting the mean of vari-
ous subgroups or small populations out of the entire population (uni-
verse). These small subgroups or small populations are also termed
as rational subgroups. Therefore, we can say that rational subgroups
are the basis of control charts. The average and range of each rational
subgroup are calculated separately, and they are plotted over a con-
trol chart. The statistics (average/range) of each subgroup are com-

n o t e s
pared with the control limits, and the pattern of variations among the
subgroups is analysed.
The averages and ranges control charts use the following equations:
Sum of Subgroup Average Measurements
X=
Subgroup Size
R = Largest measurement in the group – Smallest measurement in the group
Sum of Subgroup Range Measurements
R=
Subgroup Size
Control limits in both the averages and ranges control charts are set
at plus minus three standard deviations from the central line of the
chart. It means that control limits in an averages control chart are set
at plus minus three standard deviations from the overall average of
S
all the subgroups ( X ± 3σ ). Similarly, control limits in a ranges control
chart are set at plus minus three standard deviations from the average
range ( R ± 3σ ).
IM
For making calculations easy, constants are used in the control limit
equations. The values of control chart constants for an averages con-
trol chart with 25 or less subgroups are shown in Figure 6.6:
Chart for Averages

M
Factors for Control Limits

Observations in
Sample, n A A2 A3
2 2.121 1.880 2.659
3 1.732 1.023 1.954
4 1.500 0.729 1.628
5 1.342 0.577 1.427
N
6 1.225 0.483 1.287

7 1.134 0.419 1.182
8 1.061 0.373 1.099
9 1.000 0.337 1.032
10 0.949 0.308 0.975
11 0.905 0.285 0.927
12 0.866 0.266 0.886
13 0.832 0.249 0.850
14 0.802 0.235 0.817
15 0.775 0.223 0.789
16 0.750 0.212 0.763
17 0.728 0.203 0.739
18 0.707 0.194 0.718
19 0.688 0.187 0.698
20 0.671 0.180 0.680
21 0.655 0.173 0.663
22 0.640 0.167 0.647
23 0.626 0.162 0.633
24 0.612 0.157 0.619
25 0.600 0.153 0.606
Figure 6.6: Control Chart Constants for Averages Control Chart with
25 or less Subgroups

148 LEAN SIX SIGMA
n o t e s
The values of control chart constants for a ranges control chart with
25 or less subgroups are shown in Figure 6.7:
S
IM
Figure 6.7: Control Chart Constants for Ranges Control Chart with
25 or less Subgroups
Now, let us see how these constants are derived.
Control limits for a ranges control chart are derived using the follow-
M
ing equations:
Sum of Subgroup Range Measurements
R=
Number of Subgroups
N
LCL=D3 R
UCL=D4 R
Control limits for an averages control chart using R are derived using
the following equations:
Sum of Subgroup Averages
X=
Number of Subgroups
LCL=X − A 2 R
UCL=X + A 2 R
Let us understand the averages and ranges control charts with help
of an example. The data that contains 25 subgroups having 5 observa-
tions each is presented in Table 6.1:

n o t e s
TABLE 6.1: PROCESS DATA FOR

R AND S CONTROL CHARTS
Observation 1
Observation 2
Observation 3
Observation 4
Observation 5
s (rounded off
to two digits)
R
95 99 93 93 85 93 14 5.1
90 81 89 83 92 87 11 4.74
90 83 83 91 92 87.8 9 4.44
85 100 88 97 99 93.8 15 6.83
85 83 91 80 93 86.4 13 5.46
S
83 91 83 96 97 90 14 6.78
88 81 95 93 83 88 14 6.08
85 100 85 83 93 89.2 17 7.16
100 80 85 83 81
IM
85.8 20 8.17
83 83 95 87 95 88.6 12 6.07
83 99 89 99 84 90.8 16 7.82
97 85 86 83 89 88 14 5.48
94 97 88 94 94 93.4 9 3.29
88 93 91 99 91 92.4 11 4.1
M
94 97 81 96 97 93 16 6.82
82 91 92 93 91 89.8 11 4.44
97 82 80 83 95 87.4 17 7.96
94 89 93 96 90 92.4 7 2.88
N
90 97 92 83 93 91 14 5.15
93 93 85 98 98 93.4 13 5.32
93 80 93 84 88 87.6 13 5.68
88 81 88 93 88 87.6 12 4.28
93 97 86 88 90 90.8 11 4.32
90 85 97 91 80 88.6 17 6.43
82 95 98 91 83 89.8 16 7.12
Sum of = Sum of R Sum of s
2245.6 = 336 =141.92
The ranges control chart limits can be calculated as:

Sum of Subgroup Range Measurements 336
R= = = 13.44
Number of Subgroups 25
LCL=D3=
R 13.44 =
×0 0
UCL=D4 R = 13.44 × 2.114 = 28.41

150 LEAN SIX SIGMA
n o t e s
Let us now plot the ranges control chart as shown in Figure 6.8:
Ranges Control Chart

30
25
20
15 Range
10 LCL
UCL
5
0 Subgroup 1
Subgroup 2
Subgroup 3
Subgroup 4
Subgroup 5
Subgroup 6
Subgroup 7
Subgroup 8
Subgroup 9
Subgroup 10
Subgroup 11
Subgroup 12
Subgroup 13
Subgroup 14
Subgroup 15
Subgroup 16
Subgroup 17
Subgroup 18
Subgroup 19
Subgroup 20
Subgroup 21
Subgroup 22
Subgroup 23
Subgroup 24
Subgroup 25
S
Figure 6.8: The Ranges Control Chart
IM
The averages control chart limits can be calculated using range as
follows:
Sum of Subgroup Averages 2245.6
X= = = 89.82
Number of Subgroups 25
M
LCL=X − A 2 R = 89.82 − 0.577 × 13.44 = 89.82 − 7.75 = 82.07
UCL=X + A 2 R = 89.82 + 0.577 × 13.44 = 89.82 + 7.75 = 97.57
Let us now plot the averages control chart as shown in Figure 6.9:
N
Average Control Chart

100
95
90
85 Range
80 LCL
UCL
75
70
Subgroup 1
Subgroup 2
Subgroup 3
Subgroup 4
Subgroup 5
Subgroup 6
Subgroup 7
Subgroup 8
Subgroup 9
Subgroup 10
Subgroup 11
Subgroup 12
Subgroup 13
Subgroup 14
Subgroup 15
Subgroup 16
Subgroup 17
Subgroup 18
Subgroup 19
Subgroup 20
Subgroup 21
Subgroup 22
Subgroup 23
Subgroup 24
Subgroup 25
Figure 6.9: The Averages Control Chart

n o t e s
An overview of Figures 6.8 and 6.9 reveals that the given process is in
statistical control. Therefore, we can predict the limits of variability
for this process.
Now, let us see how we can create control charts for standard devia-
tion.
For subgroup sizes of more than 2, the project team should ideally use
standard deviation control charts instead of ranges control charts be-
cause with the increase in the size of subgroup, the inefficiency of the
range statistic also increases.
For creating the averages and standard deviation control charts, the
project team uses the following subgroup equations:
Sum of Subgroup Measurements
X=
S
Subgroup Size
2
∑
n
(X i − X)
σs = i =1
IM
n −1
Standard deviation, σ, is calculated using the average of the subgroup.

Refer to Table 6.1 for the values of standard deviation.
Let us now see how we can calculate the control limit equations for
the averages and sigma charts. The control limits in an averages con-
M
trol chart are set at plus and minus three standard deviations from
the average of the chart. Similarly, the control limits in a sigma con-
trol chart are plus minus three standard deviations of sigma from the
average sigma.
N
For making calculation easy, constants are used in the control limit
equations. The values of control chart constants for a sigma control
chart with 25 or less subgroups are shown in Table 6.2:
TABLE 6.2: CONTROL CHART CONSTANTS FOR A SIGMA

CONTROL CHART WITH 25 OR LESS SUBGROUPS
Chart for Sigma
Sample size B3 B4
2 0 3.267
3 0 2.568
4 0 2.266
5 0 2.089
6 0.030 1.970
7 0.118 1.882
8 0.185 1.815
9 0.239 1.761
10 0.284 1.716

152 LEAN SIX SIGMA
n o t e s
Chart for Sigma

Sample size B3 B4
12 0.354 1.646
13 0.382 1.618
14 0.406 1.594
15 0.428 1.572
16 0.448 1.552
17 0.466 1.534
18 0.482 1.518
19 0.497 1.503
20 0.510 1.490
21 0.523 1.477
22 0.534 1.466
S
23 0.545 1.455
24 0.555 1.445
25 0.565 1.435
IM
Control Limit Equations for Sigma Charts Based On s
Sum of Sub group Sigmas
ss =
Numb er of Sub groups
LCL=B3 ss
M
UCL=B4 ss
Control Limit Equations for Averages Charts Based On s

N
Sum of Sub group Averages

X=
Numb er of Sub groups
LCL=X − A 3 ss
UCL=X + A 3 ss
Let us create the average and sigma control charts for the data given
in our previous example using s .
Sigma control chart:

141.92
= ss = 5.68
25
LCL=0 × 5.68 = 0
UCL=2.089 × 5.68 =
11.86

n o t e s
Let us now plot the sigma control chart as shown in Figure 6.10:
Sigma Control Chart

14
12
10
8
6 Sigma
4 LCL
UCL
2
0
Subgroup 1
Subgroup 2
Subgroup 3
Subgroup 4
Subgroup 5
Subgroup 6
Subgroup 7
Subgroup 8
Subgroup 9
Subgroup 10
Subgroup 11
Subgroup 12
Subgroup 13
Subgroup 14
Subgroup 15
Subgroup 16
Subgroup 17
Subgroup 18
Subgroup 19
Subgroup 20
Subgroup 21
Subgroup 22
Subgroup 23
Subgroup 24
Subgroup 25
S
Figure 6.10: The Sigma Control Chart
IM
Average control chart:
2245.6
= X = 89.82
25
LCL=89.82 − (1.427 × 5.68) =89.82 − 8.11 =

81.71
M
UCL=89.82 + (1.427 × 5.68) = 89.82 + 8.11 = 97.93
Let us now plot the averages control chart as shown in Figure 6.11:
N
Averages Control Chart

100
95
90
85
80 LCL
UCL
75
70
Subgroup 1
Subgroup 2
Subgroup 3
Subgroup 4
Subgroup 5
Subgroup 6
Subgroup 7
Subgroup 8
Subgroup 9
Subgroup 10
Subgroup 11
Subgroup 12
Subgroup 13
Subgroup 14
Subgroup 15
Subgroup 16
Subgroup 17
Subgroup 18
Subgroup 19
Subgroup 20
Subgroup 21
Subgroup 22
Subgroup 23
Subgroup 24
Subgroup 25
Figure 6.11: The Averages Control Chart
An overview of Figures 6.10 and 6.11 reveals that the given process is
in statistical control.

154 LEAN SIX SIGMA
n o t e s
11. List any three statistics used while constructing the control
chart.
12. Which control chart would you use if you have to evaluate the
dispersion or spread of a process over time?
Activity
Prepare a detailed note on Univariate and Multivariate control

charts. Also state the category under which Shewhart’s X, R and S
control charts fall.
REPEATABILITY AND
S
6.6
REPRODUCIBILITY
In the initial sections of this chapter, you studied that defining and
IM
evaluating a measurement system is one of the most important activ-
ities of the Measure phase. Before the project team starts collecting
data for the Measure phase activities using the defined measurement
system, it is quintessential to evaluate or analyse the level of accuracy
of the measurement system. This is called Measurement System Anal-
ysis (MSA).
M
The accuracy of statistical methods depends on the accuracy of the

data which in turn depends on the accuracy of the measurement in-
strument or method used to collect data. If data is collected using a
defective measurement instrument/method, it can lead to inclusion
N
of significant measurement error in the data. Therefore, conclusions

made using such defective data are often inaccurate and misleading
which may lead to false signals on control charts. In such cases, an
effective process may be misunderstood as an incapable process.
When the source of variation lies in the measurement system, the proj-
ect team may require a significant amount of time and effort in fixing
and controlling the process. The two important types of measurement
errors are systematic errors and random errors. Systematic errors
occur when the measuring instrument is not calibrated properly. Ran-
dom errors occur due to factors such as operator variation, instrument
variation, environmental changes and time to time variation.
The total variability that is included during the measurement can

be attributed to two factors, namely variability due to the part of the
product being measured and the variability attributed to the measure-
ment or gauge.
Therefore,
=σ2 σ Pr
2
oduct + σ Measurement
2
Total

n o t e s
Where,
σTotal
2
is the total variability
σ Product
2
is the variability due to product/part
σ Measurement
2
is the variability due to measurement or gauge
Measurement System Analysis (MSA) is also called Gauge Repeatabil-

ity and Reproducibility abbreviated as Gauge R&R or simply R&R.
The objective of MSA is to determine the part of variation in data re-
sulting from variation in the measurement system. Certain statistical
methods are used to separate the two components of the total variabil-
ity and to determine the gauge capability.
S
Before continuing our discussion on MSA, it is important to define a
few terms as follows:
Gauge: Gauge are devices or instruments of predefined dimen-
IM
sions. These are used to check whether a product meets the stated
expectations or not.
Bias: Bias is the difference between the average value of the mea-
surements and the true value/reference value of the part.
Resolution: Resolution of a measurement refers to the number of
digits of precision needed in the measured value.
M
A measurement system can be evaluated and the measurement errors

can be assessed if the project team knows what the properties of a
good measurement system are. Therefore, let us first learn about the
N
properties of a good measurement system. They are:

Accuracy/Bias: Accuracy refers to the difference between the av-
erage of measurements made on a part (observed value) and the
true value/reference value/master value of that part. The bias tells
the project team how well is the given measurement as compared
to the reference value. If the true value is unknown, it can be cal-
culated by averaging several measurements with the most accu-
rate measuring equipment available.
Therefore,
Accuracy = X m −X .
note
The effect of bias can be limited by using calibration.

Precision: Precision means that the measurements done repeat-

edly yield consistent results. In other words, precision can be de-

156 LEAN SIX SIGMA
n o t e s
fined as the degree to which repeated measurements tend to agree

with each other.
The concept of accuracy and precision can be presented visually in

Figure 6.12:
Accurate and Precise Precise ... but

not Accurate
S
IM
Accurate, but Neither Accurate
not Precise nor Precise
M
Figure 6.12: Accuracy and Precision
Measurement errors are estimated using accuracy and precision.

The different components of accuracy and precision are shown in
N
Figure 6.13:
Accuracy Precision
Linearity Repeatability
Stability Reproducibility
Figure 6.13: Components of Accuracy and Precision

n o t e s
Let us study about these components in detail.

Linearity: Linearity tells the project team how accurate are the
measurements throughout the expected range of measurements.
Linearity is also defined as the measure of the consistency of bias
over the range of the measurement device. For example, when the
blood sugar level of a person is between 0 and 250, a glucometer
shows a deviation of ± 2.5%. However, the same glucometer shows
a deviation of ±4% when the blood glucose levels are more than
250. Therefore, the bias here is non-linear.
Stability: Stability refers to the capacity of a measurement sys-
tem to produce same/consistent values over a period of time when
measuring samples. Stability means absence of variation attribut-
able to special causes in a control chart. However, common cause
variation can still be present.
S
Repeatability: A process is said to be repeatable when the same
appraiser can measure the same part or sample a number of times
with the same measuring device and get the same value every time.
IM
Reproducibility: A process is said to be reproducible when dif-
ferent appraisers can measure the same part or sample a number
of times with the same measuring device and get the same value
every time.
note
M
Bias, linearity and R&R study are carried out for the short-term
performance of the measurement system. On the contrary, stability
study is carried out for the long-term performance of the measure-
ment system.
N
The characteristics of a capable measurement system are as follows:

Statistical stability
Variabilityof the measurement system must be smaller than the
process variability.
Variability of the measurement system must be smaller than the
specification limits (tolerance).
Low resolution
There has been a rapid development in automation technology that

affects automotive manufacturing processes. Manufacturing process-
es are usually massive and efficient. In view of these developments,
automotive companies and suppliers demand measurement systems
with accurate and automated measuring instruments. A lot of prob-
lems (including financial losses) can accrue if these organisations use
problematic instruments that are inaccurate and unstable. Therefore,
it is required that these organisations use an effective MSA.

158 LEAN SIX SIGMA
n o t e s
13. The accuracy of statistical methods depends on the accuracy

of the data. (True/False)
14. List two types of measurement errors.
Activity
Prepare a case study on the application of Gage R&R tests.
6.7 SUMMARY
Measure is the second phase of DMAIC/DMADV process. The
goal of the Measure phase is to identify and define metrics and the
S
measurement system.
Activities performed in the Measure phase are defining process-
es, establishing the process baseline, evaluating the measurement
IM
system, converting the Voice of Customer (VoC) into CTQ parame-
ters, defining metrics, and defining a measurement plan.
A well-defined process consists of a number of repeatable tasks
carried out in a predetermined order. The tasks must be carried
out in a specific order. A process can be defined using tools such as
flowcharts, process maps and SIPOC.
M
In a flowchart, there are two types of tasks: process tasks and deci-
sion tasks. While creating a flowchart, process tasks are represent-
ed using rectangles, whereas decision tasks are represented using
diamond shapes.
N
SIPOC is the acronym for Suppliers, Inputs, Process, Outputs and

Customers. This is also a graphical tool that is used to present the
entire flow of processes in a project from start till end.
The process of constructing the SIPOC diagram starts when the
project team brings together the people who know about the pro-
cess for a brainstorming session.
A process baseline is a reference framework which provides a
quantifiable measure of the process performance before any im-
provement efforts are made to the process.
To define the process baseline, Statistical Process Control (SPC)
Charts are used in the Measure phase of the DMAIC/DMADV pro-
cess.
SPC charts can be used to judge whether or not the process is
statistically stable. If the process is stable, the process capability
and six sigma estimates can be used to quantify the process per-
formance against the requirements or baseline.

n o t e s
Itis essential to verify the measurement system before taking the

baseline measurements. This verification is done using a control
chart. First, control charts are applied to process baselines and
thereafter they are applied for the validation of the measurement
system.
StatisticalProcess Control (SPC) tools are based on certain prin-
ciples, such as all the measurable phenomena are statistical distri-
butions, all the distributions have three properties, etc.
While constructing or developing a control chart from the given
measurement data, the project team uses statistics such as mean,
range, standard deviation and variance. All these statistics can be
plotted over a control chart and the chart should be analysed to
see whether there are any data points that fall outside the bound-
aries of control limits.
S
Averages, ranges and sigma control charts are three most import-
ant types of control charts.
Before the project team starts collecting data for the Measure
IM
phase activities using the defined measurement system, it is quint-
essential to evaluate or analyse the level of accuracy of the mea-
surement system. This is called Measurement System Analysis
(MSA).
key words
M
Gauge: Gauge is a verb that usually refers to an activity of es-

timating or measuring. However, it can also be used as a noun
as in the case of Standard Gauge, Slip Gauge, Go/No-Go Gauge
etc. Earlier, gauge was spelled and written as gage.
N
High level process: A process that is described at an overview

level without going into details is called as a high level process.
This description provides an overview of the processes and ob-
jectives that are central to the organisation.
Process capability: The ability of a statistically stable process
to produce the outputs that are within the specified limits using
capability indices.
Process variability: The inherent or the random instability in a
process. This can be measured using standard deviation.
Statistical stability (of a process): A process is said to be statis-
tically stable when all the given data points plotted on a control
chart fall between the given control limits.

1 Explain the activities carried out during the Measure phase of
the project using the DMAIC/DMADV methodology.

160 LEAN SIX SIGMA
n o t e s
2. Describe how flowcharts and SIPOC diagrams are used for

defining processes.
3. Describe the usefulness of the process baseline.
4. Explain the concept of Central Limit Theorem and how it is
applicable to control charts.
5. What are control charts? Explain the three major types of control
charts.
6. Explain the concept of Measurement System Analysis (MSA)
with special reference to the concepts of repeatability and
reproducibility.
S

IM
Flowcharts and SIPOC 1. Measurement system
2. Quality specifications
3. False
4. Establishing process base-
line, evaluating the measure-
ment system
M
5. Repeatable
6. Flowchart, process map
Process Baseline Estimates 7. True
8. Project baseline
N
9. Controlled design experi-

ments
Principles of Statistical Process 10. Central Limit Theorem
Control (SPC) (CLT)
Control Charts 11. Mean, range, standard devia-
tion
12. Ranges control chart
Repeatability and Reproducibil- 13. True
ity
14. Systematic errors, random
errors

1 Activities carried out during the Measure phase of a project
using the DMAIC/DMADV methodology are defining processes,
establishing the process baseline, evaluating the measurement
system, converting the Voice of Customer (VoC) into CTQs, and

n o t e s
defining metrics and the measurement plan. Refer to Section 6.2

Flowcharts and SIPOC.
2. A flowchart is a graphical tool that depicts the flow of processes
and highlights all the process complexities. SIPOC is also a
graphical tool that is used to present the entire flow of processes
in a project from start till end. Refer to Section 6.2 Flowcharts
and SIPOC.
3. A process baseline is a reference framework which provides a
quantifiable measure of the process performance before any
improvement efforts are made to the process. Refer to Section
6.3 Process Baseline Estimates.
4. According to the Central Limit Theorem (CLT), the distribution
of the average values of samples drawn from populations
would tend to be normally distributed as the sample size grows
S
irrespective of the shape of distribution of individual populations.
Refer to Section 6.4 Principles of Statistical Process Control
(SPC).
IM
5. Control chart is a type of process control tool. Variances in
a process can be found using the process behaviour charts or
control charts. Refer to Section 6.5 Control Charts.
6. Before the project team starts collecting data for the Measure
phase activities using the defined measurement system, it is
quintessential to evaluate or analyse the level of accuracy of
M
the measurement system. This is called Measurement System

Analysis (MSA). Refer to Section 6.6 Repeatability and
Reproducibility.
N
SUGGESTED READINGS
Pyzdek, T., & Keller, P. (2010). Six Sigma Handbook (3rd ed.). New
York, USA: McGraw-Hill Professional Publishing.
E-REFERENCES
Gauge R&R | iSixSigma. (2017). Isixsigma.com. Retrieved 15 July
2017, from https://www.isixsigma.com/dictionary/gage-rr/
(2017). Retrieved from http://www.realleansixsigmaquality.com/
lss/wp-content/uploads/2014/06/Chapter7-Sample-Volume-1_2014.
pdf

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M
IM
S
C hapter
7
ANALYSE PHASE
CONTENTS
S
7.1 Introduction
7.2 Analysing the Source of Variation
IM
7.2.1 Cause and Effect Diagrams
7.2.2 Box Plots
7.2.3 Chi-Square
7.2.4 Student’s T
7.2.5 F-Distribution
M
Activity
7.3 Designed Experiments
7.3.1 One-Way ANOVA
7.3.2 Two-Way ANOVA
N
7.3.3 Logistic Regression

7.3.4 Non-parametric Methods
Activity
7.4 Summary

164 Lean Six Sigma
n o t e s
ROOT CAUSE ANALYSIS PROJECT SAVED CLIPPER

WINDPOWER $1 MILLION
Clipper Windpower is headquartered in Carpinteria, CA. This

company deals in wind energy technology, wind turbine manufac-
turing, and wind project development. It has presence in United
States, Denmark and the United Kingdom. It employs about 850
people. Clipper has ISO 9001-certified manufacturing and assem-
bly facility. It started its operations in 2006.
S
IM
The 3-blade wind turbines installed at a height of 262 feet by the
company can turn a steady breeze into clean and renewable elec-
tricity sufficient for 750 homes for 24- full hours. Each turbine has
M
an installed anemometer which is a device used to measure speed

and force. During rough weather periods, the breeze turns into
ice, rain, snow and/or fog. During such weather conditions the
anemometers attached to turbines can freeze leading to costly
N
downtime.
After starting its operations in 2006, Clippers turbines were hit

hard due to chilly rains and fog due to which anemometers failed.
In the absence of anemometers, it becomes difficult to decide the
direction in which the turbine blades should be rotated to harness
maximum electricity. To address this problem, Clipper installed
additional anemometers but these too began to freeze; thus, the
problems worsened and the turbine availability decreased.
With each passing day, more number of anemometers were be-

ing affected. To solve this problem, Clipper initiated a Root Cause
Analysis (RCA). RCA is a part of DMAIC problem solving process
as shown in the given Figure.

ANALYSE PHASE 165
n o t e s
Figure 1— Clipper Windpower’s Six Sigma DMAIC problem-solving approach

Define the Measure the Analyze the Improve the Control the
problem process process process process
Develop clear project Understand and Find the root causes of Develop, select, and Ensure the solutions are
based on a real problem baseline the current the problem and implement the best embedded, the process
that is relevant to the performance of the understand/quantify solutions with has robust controls,
customer and that will process through a set their effect on process controlled risks. and the project has
provide significant of relevant and robust performance (finding a clear closure.
benefits to the business. measures (KPIs). the critical Xs).
Remediation Tollgate Review:

Projects that require potential
fleet remediation require a
project review to gain a
Key Metric: consensus that a fleet
RCA kickoff to root cause(s) identified and approved. remediation is required and
Goal is five weeks or less. a budget has been approved.
Root Cause Tollgate Approval: Closeout Tollgate Review:

>/= 7 weeks The end of the analyze phase Successful projects need clear and
is a review point. A project visible closure, the key elements of
review is required to assess which should include documenting
6 weeks the root cause identification, lessons learned, transfer of the process
to gain a consensus that the back to business as usual, and effective
root cause has been identified, controls. A project review is required
</= 5 weeks and to commit any additional to gain a consensus that the project is
Checkpoints resources required for its success. ready to close.
S
with implementing a long-lasting solution. To evaluate potential Defining the Problem
RCA projects, Mike Trueg, manager of field quality assurance/
Figure: Clipper Windpower’s Six-Sigma
Soon after the initialDMAIC Problem
weather-related failures,
continuous improvement at Clipper’s Cedar Rapids plant, uses the companySolv-
began
ing Approach
collecting data each time inclement weather took a turbine offline.
a matrix that measures the impact of safety, quality, and turbine
This early data collection led to the charter of the RCA project.
availability. “For this project the scoring met the criteria because
of the big impact on turbine availability,” explained Trueg, an
Clippers DMAIC approach starts with identification of the problem
ASQ Senior member.
IM
Figure 2—RCA project team members
and ending with implementing
An RCA project was chartered to address the weather-related long-lasting solutions. Clipper had
Stakeholder Area Represented Number of Team Members
Quality assurance 2
appointed
anemometer issues. The Mike Trueg
project objective was to as the
identify Manager, Field Quality Assurance
the root Fleet services
Electrical engineering
3
2
cause of the anemometer failures that was leading to downtime
and Continuous
and decreasing Improvement.
turbine availability. A project team was tasked with He made decisions whether or not Anemometer supplier
Operations
2
1
to take
creating upplanRCA
an action projects
and implementing corrective after
actions by thoroughly evaluating them. Mike Vendor recovery
Procurement
1
1
the start of the next winter season.
decided to take up this particular RCA project because the prob-
Following the DMAIC Approach Figure 3—Clipper’s DMAIC-based RCA project steps
able impact on safety, quality and turbine availability. Therefore,
M
Define the problem • Define and document problem or gap.
an RCA project was initiated to find out the root causes of weather
in concrete,
Selecting team members for this RCA project was somewhat measurable terms. • Collect data to understand magnitude of failure.
challenging, recalls Ellen Sennett, who served as the project’s • Gather data on current situation.
related
co-leader. “Weanemometer
started with people who had issues. The objective of this RCA project was
experience with
Measure: Quantify
the problem and
perceived aspects
• Develop SIPOC and fishbone diagram.
• Filter fishbone items through cause and effects matrix.
to find the root causes of anemometer failures that were followed
electrical issues since that seemed to be the problem,” said
Sennett, an employee of Clipper for two years. In all, seven
of the root cause. • Analyze top items through FMEA.
Analyze data to • Develop data collection plan for top priorities from FMEA.
by turbine
stakeholder areas weredowntime. Clipper
represented on the improvement team,had
as also created a project team that
determine the root
cause of the defect.
• Develop test plan.
• Confirm root cause with test data.
shown in the table in Figure 2. Not all team members partici-
was given the responsibility of formulating action plan and imple-
N
Improve: Identify • Evaluate design improvements through validation testing.

pated during every stage of the project; for example, the vendor and implement the • Identify corrective action.
menting
representatives camecorrective
onboard once the actions for all the root causes.
root cause was identified. proposed solution. • Develop implementation plan.
Control: Confirm • Ensure 100% inspection at vendor.
The team worked through the steps as outlined in Figure 3. improvement gains • Mistake proof (poka yoke) wiring.
To capture the root causes of anemometer failures, the project through monitoring. • Update installation instructions and training.
team members started collecting data each time the turbine went
down.
ASQ www.asq.org Page 2 of 4
Clipper implemented the following DMAIC based RCA steps as
shown in the following table:
TABLE: DMAIC BASED RCA STEPS

Define the problem in zz Define and document problem or gap.
concrete, measurable zz Collect data to understand magnitude of
terms. failure.
Measure: Quantify the zz Gather data on current situation.
problem and perceived zz Develop SIPOC and fishbone diagram.
aspects of the root cause. zz Filter fishbone items through cause and ef-
fects matrix.
zz Analyze top items through FMEA.

166 Lean Six Sigma
n o t e s
TABLE: DMAIC BASED RCA STEPS

Analyze data to deter- zz Develop data collection plan for top priori-
mine the root cause of ties from FMEA.
the defect. zz Develop test plan.
zz Confirm root cause with test data.
Improve: Identify and zz Evaluate design improvements through val-
implement the proposed idation testing.
solution. zz Identify corrective action.
zz Develop implementation plan.
Control: Confirm im- zz Ensure 100% inspection at vendor.
provement gains through zz Mistake proof (poka yoke) wiring.
monitoring. zz Update installation instructions and train-
ing.
S
During the measure phase, weather condition data was collected
and it revealed that winter conditions, precipitation and tempera-
ture fell within anemometers’ supplier’s specifications. Project
IM
team developed the SIPOC diagram toquantify the problem and
the related aspects of root cause. In addition, a fishbone diagram
was also constructed to list all the possible root causes of equip-
ment failure. After this, the project team members used potential
causes from fishbone diagram and entered into cause and effect
matrix to shortlist the most probable causes. Using cause and ef-
fect matrix, the team was able to shortlist nine causes for conduct-
M
ing a Failure Mode and Effects Analysis (FMEA).
After data collection and analysis, the team concluded that the
supplier’s design of heating circuit of anemometer was not in con-
formance to the one that was advertised. Due to this, the heating
N
circuit did not heat sufficiently causing turbine failures.
RCA data was shown to the supplier and he agreed that there
were indeed certain problems with his products. He agreed with-
out much resistance because his company’s representative was
involved in the project from the early stages of the RCA project.
After all the root causes were found, the team devised better and
improved versions of the anemometers. After conducting several
validation tests, they devised a plan to replace all the 405 ane-
mometers with the newly designed versions by March 2010.
Source: http://asq.org/2010/04/six-sigma/wind-power-company-gets-to-root-of-icy-issue.
pdf

ANALYSE PHASE 167
n o t e s
learning objectives

>> Explain how the sources of variation are identified and an-
alysed in the Analysis phase of Define, Measure, Analyse,
Improve and Control (DMAIC) process
>> Illustrate the concept and use of cause and effect diagrams
and box plots
>> Describe the Chi-Square, Student’s-T and F-distributions
>> Explain the concept of Designed Experiments
>> Describe one-way ANOVA, two-way ANOVA and the logistic
regression methods
>> List out the important non-parametric tests used in the
S
Analysis phase of DMAIC
7.1 INTRODUCTION
IM
In the previous chapters, you studied about the activities that are car-
ried out in the Define and the Measure phases of DMAIC. You stud-
ied that in the Define phase, the project team focuses on defining the
problem and its impact on the customers and the organisation. Fur-
ther, you observed that the Measure phase focuses on data collection
to validate if what is thought of as a problem is actually a problem. Af-
M
ter these two phases, the project moves into the Analyse phase. In this
phase, the project team carries out the Source Cause or Root Cause
Analysis to identify the root causes of the problems experienced by
the customers, the organisation and the employees.
N
In the Analyse phase of DMAIC, the project team identifies problems

in the production process that may cause defects in a product. The
project team identifies the process problems by using various tools.
The tools also help in determining whether or not the given problems
are the root causes of product defects. Tools such as cause and effect
diagrams and process mapping are used for identifying causes where-
as tests such as Logistic Regression, Analysis of Variance (ANOVA),
Chi-Square, etc. are used for finding the root causes.
In this chapter, you will study how to analyse the source of variation
using tools such as cause and effect diagrams, box plots, Chi-Square,
Student’s-T, and F-Distributions. Designed experiments such as one-
way ANOVA, two-way ANOVA, logistic regression and non-paramet-
ric methods can also be used.
7.2 ANALYSING THE SOURCE OF VARIATION

Before we discuss the Analyse phase of the DMAIC (and DMADV)
project management methodology, it is necessary to have an overview

168 Lean Six Sigma
n o t e s
of the activities and steps involved in these phases. Let us revisit the
activities involved in the first three phases of DMAIC as follows:
I. Define Phase
a. Validation of business opportunity and identifying CTQ (Critical
To Quality) parameters. This activity further includes capturing
the Voice of Customer (VOC), translating the VOC into Ys and
selecting the key Ys for the project. Lastly, this step also involves
initiating a project charter for each Y.
b. Creating a business case, defining problem and goal statements,
scoping of the project, setting project milestones and creating a
resource plan.
II. Measure Phase
S
a. Creating the SIPOC and flowchart.
b. Identifying all the possible Ys of the project along with the data
collection strategy. This activity includes collecting data related
IMto the performance and stability of the Ys.
c. The measurement system of Y is validated by studying and
reviewing it. The review is done using the R&R test.
d. Determining the process capability of Y. Here, the baseline
performance is compared with the set targets and the targets are
revised if required.
M
III. Analyse Phase

a. In this phase, all the vital Xs of the project are identified. All the
Xs are statistically validated. X represents a potential cause of
N
variation. The major activities involved in statistical analysis of

the project Xs are as follows:
i. Creating a detailed business process map
ii. Analysing the process map and identifying the sources of
variation
iii. Determining and listing all the Xs (potential causes of
variation)
iv. Prioritising the Xs
v. Collecting data on Xs
vi. Quantifying the relationship between the causes of variation
and the CTQ parameters as [Y = f(x)]
vii. Identifying vital Xs from the potential Xs
viii. Validating the vital Xs
In the Define phase of the DMAIC project process, the Voice of Cus-
tomer is translated into a set of key Critical to Quality (CTQ) param-
eters (designated as Y). The data regarding the performance and sta-

ANALYSE PHASE 169
n o t e s
bility of the CTQ parameters is collected in the Measure phase. In

addition, the measurement system for each Y is studied and evaluated
using R&R, and if the variation is high, the measurement system is
improved upon. The process capability for Y is also evaluated. After
these two phases, the project moves to the Analyse phase.
In the Analyse phase, a detailed process map is created which is ana-

lysed to identify the sources of variation and defects. In other words,
this phase is aimed at determining the causes of process problems and
inefficiencies. After the map preparation, the potential causes of vari-
ation (Xs) are identified. Then, the data regarding Xs is collected and
prioritised. The data collected in the Measure phase is analysed to un-
derstand and investigate the cause-and-effect relationship for defects
and variations. The relationship between Y and X is quantified as Y =
f (X) [which means that a CTQ parameter is a function of the cause of
S
variation]. In this phase, all the vital Xs are also identified and validat-
ed from amongst all the potential Xs. The Analyse phase ensures that
all the factors related to the project have been analysed. In this phase,
analysis is conducted using statistical analysis. The steps involved in
IM
the Analyse phase are represented in Figure 7.1:
Business Statistical Statistical Business

Problem Problem Solution Solution
M
Figure 7.1: The Analyse Phase of the DMAIC Process
In the Analyse phase, a business problem, such as faulty processes,

is considered and the problem is modelled in the form of a statistical
problem. The statistical problem is solved using statistical tools and
N
the results are translated to develop a business solution.
A thorough analysis of the statistical control charts prepared during

the Measure phase helps in identifying the types of variations in the
process which could be a common cause variation that is inherent in
the process itself. Alternatively, the variation could be a special cause
variation that occurs under specific conditions. The response to each
type of variation differs.
The Six Sigma team can possibly brainstorm and list the sources of
process variation using the cause and effect diagram. After all the po-
tential causes have been listed, they must be analysed further using
advanced statistical tools such as designed experiments to identify
their level of significance in the process variation. The project team
can also use basic statistical methods that include the use of confi-
dence intervals and hypothesis testing to compare two samples or a
sample with its desired properties. In addition, the project team may
also use designed experiments, ANOVA analysis, and logistic regres-

170 Lean Six Sigma
n o t e s
sion analysis. Let us study some of these statistical techniques in the

following sections.
7.2.1 CAUSE AND EFFECT DIAGRAMS
Cause and effect diagrams are also called Fishbone diagrams and Ishi-
kawa diagrams. These diagrams were developed by Dr. Kaoru Ishika-
wa. These diagrams are used by a project team to organise and graph-
ically display all the knowledge it has related to a particular problem.
These diagrams can also be used to graphically display all the possible
causes of a given quality problem because there can be several possi-
ble causes for any given problem. Figure 7.2 presents a template for
drawing a cause and effect or Fishbone diagram:
S
Category 1 Category 2
Sub-Cause 1
Cause 1
IM
Sub-Cause 2
Effect/Problem
Category 3 Category 4
M
Figure 7.2: A Fishbone Diagram Template

N
Figure 7.3 presents an example of a Fishbone diagram:
People Materials Management
Commitment
Hiring Costs
Orientation Inspection Customer needs
Responsibility Specifications Leadership
Training Vendors Quality Policy Quality
Capability Devices Controlled Problems
Design Calibration Quality impact
Maintenance Standards uncontrolled
Equipment Measurement Environment
Figure 7.3: A Sample Fishbone Diagram for Quality Problems
An ideal Fishbone diagram contains a lot of sub-causes or small bones.

If the diagram has a very limited number of causes and sub-causes, it

ANALYSE PHASE 171
n o t e s
means that the project team’s understanding of the problem is very

limited and is superficial. It may also indicate that the team that creat-
ed the Fishbone diagram needs to consult someone else who might be
more closely associated with the problem.
Different types of Fishbone diagrams are described as follows:

Simple Fishbone diagram: The Fishbone diagram shown in Fig-
ure 7.2 is a template for preparing a Fishbone diagram. This is the
simplest representation of a cause and effect diagram.
4S Fishbone diagram: This diagram is used in the service industry.
A 4S Fishbone diagram organises all the potential causes into four
common categories, namely suppliers, systems, surroundings, and
skills; hence the name 4S Fishbone diagram.
8P Fishbone diagram: This diagram is also used in the service
S
industry. This diagram organises all the potential causes into eight
common categories, namely procedures, policies, place, product,
people, processes, price, and promotion; hence, the name 8P Fish-
bone diagram.
IM
Man Machines Materials Fishbone diagram: This diagram is
commonly used in the manufacturing industry. This diagram or-
ganises all the potential causes into the following categories: man,
materials, machine, methods, measurements, environment, man-
agement/money and maintenance.
M
Design of Experiments Fishbone diagram: This diagram organ-

ises all the potential causes into the following categories: control-
lable, uncontrollable, held-constant, and blockable nuisance. This
type of Fishbone diagram allows structured brainstorming about
the potential factors for a response variable. Identification of these
N
factors helps in designing an experiment.

Others: There are other types of Fishbone diagrams also. They
include dispersion analysis Fishbone diagram, production process
class Fishbone diagram, cause enumeration Fishbone diagram,
etc.
note
In statistics, there are two types of variables, namely explanatory

variable (for example, number of years of job experience) and re-
sponse variable (salary package). Association between these two
variables can be identified using analysis.
Now that you are aware of the concept of the Fishbone diagram, you
must understand what a CEDAC is. Cause And Effect Diagram with
Addition of Cards (CEDAC) is a variant of the cause and effect di-
agram. It was developed by Dr. Ryuji Fukuda of Japan. In CEDAC,
cards are distributed to anyone who is associated with the process and

172 Lean Six Sigma
n o t e s
they write their ideas on these cards outside the meeting room. Most
of the times, these cards provide much more information than provid-
ed by the usual cause and effect diagram. In CEDAC, the diagram is
prepared by placing the cards in place of the bones.
7.2.2 BOX PLOTS
A box plot is a statistical tool that displays summary statistics for a set
of distributions. It is a plot created using the 25th, 50th and 75th percen-
tiles. Figure 7.4 presents a box plot:
Smallest observed Largest observed

value that is not an value that is not an
outlier outlier
S
th th th
25 50 75
IM
Percentile Percentile Percentile
(Median)
This whisker This line This line This line This whisker
shows the shows the shows the shows the shows the
lowest value lower quartile median upper hightest value
quartile
M
The width of the box

shows the
N
interquartile range
Figure 7.4: A Box Plot

Source: http://www.bbc.co.uk/bitesize/standard/maths_ii/relationships/boxplots/revision/1/
Note that a box plot is used to display information about the range, the
median and the quartiles for a set of observations that are represented
alongside a number line.
The 25th percentile is the lower boundary of the box whereas the 75th
percentile is the upper boundary of the box. The 50th percentile is the
median of the overall data set. The 25th percentile is the median of the
observations below the overall median, and the 75th percentile is the
median of the observations above the overall median. Note that the
vertical line inside the box is the median. The box length is represent-
ed by the interquartile range which is the difference between the 75th
and 25th percentiles.
In Figure 7.4, note that the values more than 1.5 box-lengths below
the 25th percentile and the values more than 1.5 box-lengths above the

ANALYSE PHASE 173
n o t e s
75th percentile are called outliers and are represented by small circles.
Similarly, the values more than 3 box-lengths below the 25th percentile
and the values more than 3 box-lengths above the 75th percentile are
called extremes and are represented by asterisks.
Lines are drawn on either end of the box from the 25th and 75th per-
centile till the respective extreme value. This line is named as whisker,
and such a plot is also called the box and whisker plot.
The box plot can be studied to reveal important information regarding

the observation values. The median value can be used to determine
the central tendency or the location. The length of the box or the in-
terquartile range can be used to determine the spread or the variabil-
ity of the observations. If the median of the values does not lie in the
middle of the box, the examiner can conclude that the observations
used to draw the plot are skewed. If the median is closer to the 25th
S
percentile, it is negatively skewed, and if the median is closer to the
75th percentile, it is positively skewed.
IM
It must be noted that here we have represented the box plot horizon-
tally. However, it can also be represented vertically as shown in the
box plot example in Figure 7.5:
Boxplot of flight speed sorted by median

8
M
7
6
5
N
4
B6 AS UA US YV F9 FL CO EV OO DL WN XE MD AA
Figure 7.5: A Box Plot showing the Flight Speed of different Aircraft
Source: https://renkun.me/pipeR-tutorial/Examples/dplyr.html
One of the most striking features of box plots is that they are also used
for comparing the distribution of various groups of observations. The
range, median, central tendency and variability of all groups of obser-
vations can be observed easily in box plot.
In the previous chapter, you studied that averages and ranges control
charts and distributions are used in the Measure phase of the DMAIC
process. There are three distributions, namely Chi-Square, Student’s
T and F-distribution that are used to test hypotheses, construct con-
fidence intervals, and compute control limits. These are used in the
Analyse phase. Chi-Square, Student’s T and F Distributions are all
based on normal population distributions. We will study these distri-
butions in the next sections.

174 Lean Six Sigma
n o t e s
7.2.3 CHI-SQUARE
The majority of the Six Sigma characteristics have normal or approx-

imately normal distributions. Certain instances of sample distribution
have shown that distributions appear in form of a Chi-Square distri-
bution. Chi-Square is represented as χ2. A reference table is created
for the Chi-Square distribution using abscissa values for selected or-
dinates of the cumulative distribution.
The Chi-Square distribution varies with the quantity ʋ (Upsilon),

where ʋ represents a value sample size minus one (n−1). The Chi-
Square distribution varies as ʋ varies. The probability distribution
function for χ2 is as follows:
2
e −χ ( χ 2 )(υ −2)/2
/2
f (χ 2 ) =
υ − 2 
S
2υ /2  !
 2 
Let us draw the distribution for χ2 function with n = 5 or ʋ = 4.

IM
2
e −χ ( χ 2 )(4 −2)/2
/2
f (χ 2 ) =
4−2
24/2  !
 2 
− χ 2 /2
f (χ 2
)=
( 2.718 ) (χ 2 )
M
4 ( 0)!

− χ 2 /2
f (χ 2
)=
( 2.718 ) (χ 2 )
4
N
Check the value of the Chi-Square distribution function for different

values of χ2.
(=
2.718 ) (0)
0
0; f ( χ )
For χ2 ==
2
0
4
( 2.718 ) =
−1/2
(1) 1 1 1
2 (χ )
For χ = 1; f=
2
= = = 0.151
4 4 × 2.718 4 ×1.648 6.592
( 2.718 ) =
−2/2
(2) 1 1
For χ2 = 2; f=
(χ 2 ) = = 0.183
4 2 × 2.718 5.436
( 2.718 ) =
−4/2
(4) 1
For χ2 = 4; f=
(χ 2 ) = 0.210
4 4.743

ANALYSE PHASE 175
n o t e s
( 2.718 )=
−8/2
(8) 2
2 f (χ )
For χ = 8; =
2
= 0.0889
4 22.496
( 2.718 )
−10/2
(10) 2.5
2 f (χ )
For χ = 10; =
2
= = 0.0168
4 148.33
Let us draw the distribution using these values as drawn in Figure 7.6:
f(2)
0.25
0.2
0.15
2
f(x )
0.1
S
0.05
0
0 2 4 6 8 10 12
IM
Figure 7.6: The Chi-Square distribution for ʋ = 4
and Different Values of χ 2
7.2.4 STUDENT’S-T
M
Student’s T-distribution is also called T-statistic and it was developed

by W.S. Gosset whose assumed name was Student. Therefore, this dis-
tribution is also called Student’s-T distribution. T-test is used when
the sample size is less than 30. T-distributions are flat and wide. If the
sample size is greater than 30, the project team should use the Z-dis-
N
tribution. T-statistic is also used when the standard deviation of the

population is unknown. With increase in the sample size, the peak-
edness (tallness) of the distribution increases and it moves towards a
normal distribution. Figure 7.7 depicts the shape of curves for T- and
Z- distributions:
Z distribution
(standard normal)
t-distribution
(n close to 30)
t-distribution
(n smaller than 30)
Figure 7.7: Shapes of Z- and T-Distributions

Source: http://ci.columbia.edu/ci/premba_test/c0331/s7/s7_4.html

176 Lean Six Sigma
n o t e s
It must be noted that both T- and Z-distributions are symmetrical

and bell-shaped. Both distributions have a mean of zero. T-statistic
is used for finding confidence intervals for the population mean. It is
also used to test hypotheses about population means (based on sam-
ple data), regression coefficients and various other statistics used in
quality engineering.
The T-test is a hypothesis test that is used to determine if there is ac-

tually a difference between the standard and the mean of a particular
data set or it just appears to be so due to random chance. For example,
T-Statistic can be used to test whether a supplier who promised an av-
erage fill rate of 100 pieces is adhering to the promised supply or not.
Gosset carried out some small-scale experiments and wanted to quan-

tify their results. This motivated him to develop T-statistic. T-statistic
is a ratio that has been developed by tabulating its probability inte-
S
gral. The formula for deriving one-sample T-statistic is:
X −µ
t=
IM
s / n
Here, X = Sample mean

µ = Population mean
s = Sample standard deviation/Population standard deviation

M
n = Sample size
T-statistic is based on the assumption that the population is normally

distributed with mean µ and variance σ2.
N
The formula for a two-sample T-test is as follows:

X 1 −X 2
t=
S 12 S 22
−
n1 n2

Here, X 1 = Mean of the first sample
X 2 = Mean of the second sample
S1 = Standard deviation of the first sample
S2 = Standard deviation of the second sample
n1 = Sample size of the first data set
n2 = Sample size of the second data set

ANALYSE PHASE 177
n o t e s
7.2.5 F-DISTRIBUTIONS
In the preceding section, you saw that the T-test is used to compare a
sample mean with a standard or acceptable value or to compare two
sample means. F-statistic is used to compare two standard deviations
or variances.
Assume that there are two random samples (data sets) that are drawn
from a normally distributed population. The standard deviation of
these samples is s1 and s2, respectively. The sample size of the data
sets may or may not be different. Here, the F-statistic is calculated as:
s2
F = 12
s 2
Illustration: Two machines A and B produce outputs through stable
S
processes. An executive tested 61 and 30 samples from each machine’s
output. He found that the variance of machine A’s output is 11 where-
as that of machine B is 5. Test the hypothesis that both the variances
are equal.
IM
Solution:
s 12 11
F= = 2
= 2.2
s 2 5
M
Now, we will check the value of the F-statistic using the F-distribution
table for the degree of freedom of the numerator and denominator.
Degree of freedom of the numerator = Sample size – 1 = 61 – 1 = 60

N
Degree of freedom of the denominator = Sample size – 1 = 30 – 1 = 29
Value of F-statistic = F (60, 29) = 2.23
Compare this value with the calculated value. It shows that the vari-
ances calculated by the executive are almost correct.
1. __________ variation is inherent in the process itself.

2. A _______ can also be used to graphically display all the
possible causes of a given quality problem because there can
be several possible causes for any given problem.
3. If a cause and effect diagram has a large number of causes and
sub-causes, it means that the project team’s understanding of
the problem is very limited and is superficial. (True/False)
4. In a 4S Fishbone diagram, 4S stand for suppliers, systems,
_______and skills.

178 Lean Six Sigma
n o t e s
5. A box plot is used to display information about the range,

the median and the ______ for a set of observations that are
represented alongside a number line.
6. The interquartile range is the difference between the 75th and
25th percentiles in a box plot. (True/False)
7. Complete the following Chi-Square probability distribution
function:
2
e −χ ( χ 2 )(υ −2)/2
/2
f (χ ) =
2
υ − 2 
?  !
 2 
8. If the sample size is greater than 30, the ______ test should be
used.
S
9. F-statistic is used to compare two means. (True/False)
IM Activity
Create a Fishbone diagram for the problems being faced by a hos-

pital. You need to first define the various major categories of prob-
lems and then define their various causes and sub-causes.
7.3 DESIGNED EXPERIMENTS

M
On execution, processes are prone to variation. The sources of vari-

ation may vary. To control the sources of variation, a robust process
design needs to be formulated and implemented. Thus, we have the-
N
concept of the Design of Experiments (DOE).
Design of Experiments (DOE), experimental design and designed ex-

periments – all these terms are related to a statistical method. DOE is a
statistical method that is used to determine the relationship (causeand
effect relation) between a process’s inputs and output(s). Theanalysis
of such a relationship helps in managing the process inputs with the
aim of optimising the outputs. In other words, the DOE is a systematic
method used to determine the relationship between factors which can
affect processes and their outputs. Therefore, it becomes essential to
determine the cause and effect relationship among factors that go into
processes and the output generated by the process. By knowing the
factors and the degree of their influence on the process, the process
output can be optimised by controlling input parameters. The factors
which are influencing the process can take the form of controllable or
uncontrollable factors. The DOE widely uses statistical and mathe-
matical techniques.

ANALYSE PHASE 179
n o t e s
To understand the DOE, let us consider an example. Assume that a

person wants to assess the impact of increase in rail fares on a long-
distance journey on ridership. When the rail fare is increased by 10%,
it is observed that many passengers preferred to travel by other al-
ternative modes of transportation such as air as the difference in the
air fare and rail fare is minimal. This indicates that travel time is of
essence when prices are almost equal. This is one-factor approach as
only one factor, i.e. fare is being changed. If there is an increase in
rail fares along with giving passengers a complimentary gift which
offsets the price increase, then there is hardly any decrease in rail
passengers. This is two-factor approach as two factors fares and gifts
are being changed/added. Thus, by controlling input parameters, one
can control the process outputs.
In the DOE for processes, we call the process inputs as process vari-
S
ables or factors, and the process outputs are called response variables.
To understand the concept of DOE and its application w.r.t. Six Sigma,
a person needs to be well versed with certain statistical methods and
experimentation concepts. Some important terms used in the DOE
IM
are as follows:
Controllable input factors: These are those process variables that
can be modified in an experiment or process.
Uncontrollable input factors: These are those process variables
that cannot be modified in an experiment or process. These factors
M
must be analysed for their impact on the response variables.

Responses: These refer to the responses or outcomes of the exper-
iment.
Hypothesis testing: A hypothesis is a preconceived idea or an edu-
N
cated guess about the nature of a population that is represented by

a random sample drawn from the population or about its related
parameters. A hypothesis must be testable, either by experiment
or by observation. Under hypothesis testing, two hypotheses, viz.
null hypothesis and the alternate hypothesis, are created. The hy-
pothesis to be tested is the null hypothesis.
Blocking: The experiments conducted using the same equipment
and environmental conditions help in avoiding unwanted vari-
ations in the input or the experiment. This technique is called
blocking.
Replication: The people who carry out the same experiment more
than once usually do it by maintaining consistency in terms of pro-
cess variables used. This activity is called replication of the experi-
ment. This helps in reducing random errors in the process.
The DOE process starts with setting the objectives of the given exper-
iment along with defining all the process variables. Before carrying
out the actual experiment, an experimental design is laid out. The ex-

180 Lean Six Sigma
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perimental design is a detailed plan which describes what would be

done during an experiment and how. If the experiment is designed
carefully, it is possible to extract and analyse a lot of information and
data from it.
Experiments done using an experimental design are called designed

experiments. A designed experiment can also be referred to as an ex-
periment where one or more factors or the independent process vari-
ables are manipulated according to a predetermined plan. The pro-
cess variables are manipulated because the researcher believes that
these variables have an effect on the experimental outcome or the re-
sponse variables.
Designed experiments are used extensively for quality improvement.

In the previous section, you studied about the Chi-Square, T- and
F-tests. These tests are comparisons between a sample and the re-
S
quirements or between two samples. In contrast to these tests, DOE
uses the ANOVA (Analysis of Variance) techniques. In the ANOVA
test, the variation observed in the output or response is partitioned
IM
among all the possible causes of variations.
Let us first study certain differences between the traditional methods

to analyse the sources of variation and the statistically designed ex-
periments.
In the traditional methods, one factor is varied at one time (keeping

M
all other variables constant) and its impact on the results or outputs
is observed. This helps in establishing a cause and effect relationship
between the process variables and the response variables. There are
some problems with this traditional method. First, it is not always pos-
sible to hold all the variables constant while varying only one. Second,
N
there is no method using which we can determine the effect of the

joint interaction of two or more process variables on the process out-
put. And lastly, there is no way in which experimental errors such as
measurement errors can be accounted for.
In contrast to the traditional methods, in the statistically designed ex-

periments, two or more process variables are varied simultaneously
and multiple measurements are taken while maintaining similar ex-
perimental conditions. The statistically designed experiment is better
than the traditional method because of its benefits. First, the inter-
action of two or more variables can be analysed for their impact on
the response variables. Second, if the experiment is designed careful-
ly, one single observation can be used to draw multiple conclusions
which would eventually help in reducing the cost of conducting exper-
iments. Lastly, the experimental errors can be quantified.
Data that is collected from the observations of designed experiments

can be analysed to establish the effect of two or more independent
process variables or a combination of these variables on the value of

ANALYSE PHASE 181
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the response variables. A good experimental design always defines

the kind of treatment to be applied to those variables that have not
been identified (explicitly) as independent variables. Such variables
are called extraneous variables.
The response variables (responses), also called dependent variables,

are those variables that are investigated in an experiment. There are
two more types of variables namely controllable variables and uncon-
trollable variables. Controllable variables are also called primary vari-
ables and uncontrollable variables are also called background vari-
ables. Background variables can be handled by blocking.
While designing an experiment, the designer must remember that

good experiments do not happen by themselves. They require careful
planning which depends on factors such as carefully defining:
S
The purpose and objectives of the experiment and how the exper-
iment would help in achieving those objectives
The physical restrictions related to the process of taking measure-
ments
IM
The restrictions as a result of limitations of time, money, material,
and human resources
Important points that must be contained in an experimental design

document are as follows:
M
Statement of objectives
Experimental treatments to be applied
Size and time-frame of the experiment
N
Analysis methods to be used
note
A person who carries out an experiment is called an experimenter,

researcher or analyst.
A Six Sigma analyst specifically has interests in areas such as repli-

cation and randomisation. Experimenters usually collect two or more
observations while maintaining the same set of conditions and values
such as environment, process variable values, constants, etc. The ex-
perimenter then compares all the observations. If all the observations
are same, it means that there is no experimental error and the exper-
iment is replicable. Using replication, the experimenter can estimate
the experimental error. In case, the experimenter finds that there are
variations when all the experimental conditions are held constant, it
shows that the cause of variation is something other than the process
variables because process variables were held constant. It is possible
to measure the experimental error using control charts and without

182 Lean Six Sigma
n o t e s
actually replicating the experiment if the process has been under sta-
tistical control for a fairly sufficient period of time. Randomisation is
also a technique that helps in eliminating bias from the experiment.
Under randomisation, all the factors that are not specifically con-
trolled should be randomised.
Exhibit
Types of research design
It is possible to carry out a research using various types of research

designs. These designs are used in business and management for
various research works. They are listed as follows:
Descriptive research design: This includes case-studies, natu-
ralistic observation, surveys, etc.
S
Correlational research design: This includes case-control
study, observational study, etc.
Semi-experimental: This includes field experiment, quasi-ex-
IM
periment, etc.
Experimental research design: This includes experiment with
random assignment, etc.
Review: This includes literature review, systematic review, etc.
Meta-analytic research design: This includes meta-analysis.
M
An experimental design primarily depends on the objectives of an ex-

periment. Various types of experimental designs are as follows:
Fixed-effects model: In this type of experimental design, all the
N
possible factors/factor levels are studied and evaluated. For ex-

ample, if an experimenter has to study the impact of a fertilizer
on three varieties of wheat, then he would analyse and compare
the yield of all the three varieties. If the fixed effects experimental
model is used, it is not possible to make inferences outside of the
data set.
Random-effects model: In this type of experimental design, the
experimenter studies and evaluates some of the factors/factor lev-
els. The factors that are chosen for evaluation represent all the
possible values of the entire population. For example, an experi-
menter may need to study the impact of a fertilizer on about 100
varieties of a crop, then using the random-effects model, he tests
only 10 varieties. If the random effects experimental model is used,
it is possible to make inferences about the entire population be-
cause the population is normally distributed and the sample that
is drawn for study is considered representative of the entire pop-
ulation. .

ANALYSE PHASE 183
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Mixed-effects model: This experimental design has both fixed

and random effects.
Completely randomised design: In a completely randomised de-
sign experiment, the experimenter selects one primary factor and
a few different factor levels. The experimenter then compares
all the response values at different factor levels. The term ran-
domised means that the run sequence of these different factor lev-
els is determined randomly. For example, if an experimenter has
one primary factor and he needs to test n different factor levels,
then there can be n! ways to order the experiment trials. Table 7.1
presents an example of the test sequence number for five different
factor levels:
TABLE 7.1: TEST SEQUENCE NUMBERS FOR FIVE FACTOR

LEVELS
S
Factor Level Test Sequence Numbers
1 4, 6
2 2, 8
IM
3 1, 10
4 5, 9
5 3, 7
Randomised Complete Block (RCB) Design: In every experi-
ment, there are one or more primary factors of interest, and there
M
are various factors that are of no use, and they create difficulties
in the experiment. Such factors are termed nuisance factors. Nui-
sance factors are not of any primary concern but they affect the
measured value. The experimenter needs to decide which nui-
sance factors should be controlled and which should not be. An ex-
N
perimental error attributable to nuisance factors can be controlled

by the technique of blocking. In the RCB design, the experimenter
aims at creating homogeneous blocks (according to some criteri-
on) where the nuisance factors are held constant and the primary
factor(s) of interest are allowed to vary. The blocks under this de-
sign are filled sequentially; however, the order within each block
is filled randomly. Using the RCB design, the experimenter can
assess the responses at varying factor levels.
Latin Square Designs: A Latin square is an ‘n×n’ table filled with
n different symbols in such a way that each symbol occurs exactly
once in each row and exactly once in each column. This experi-
ment design is used to control random variations of two factors.
This experiment is designed in a form of matrix having equal num-
ber of rows and columns. This helps in testing each combination
of row and column multiple numbers of times. Table 2 shows the
values of a Latin Square:

184 Lean Six Sigma
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TABLE 7.2: A LATIN SQUARE

a B C
c B A
b A C
A Latin Square experiment design can be used to control the ran-

dom variation of two factors. The two factors are arranged in a ma-
trix which helps in testing all the possible combinations of the two
factors multiple times. The effect of random and nuisance factors can
be reduced using this experimental design. In this design, treatments
are assigned to rows and columns randomly and each treatment is
assigned per row per column. This experimental design has equal
numbers of rows, columns and treatments. This design is useful when
the experimenter wants to control the variation in two different direc-
tions. Two conditions essential for Latin Square design are:
S
(i) Equal number of rows, columns and treatments
(ii) No interaction between the row and column factors
IM
7.3.1 ONE-WAY ANOVA
The ANOVA test is a statistical technique to determine whether the

results of an experiment are significant or not. The test helps in decid-
ing whether to reject or accept the null hypothesis. It is used when the
experimenter wants to compare three or more groups. There are two
M
variations of the ANOVA test viz. one-way ANOVA and two-way ANO-
VA. The one-way ANOVA test is based on one independent variable
(IV) with two or more levels, and the two-way ANOVA test is based on
two IVs with multiple levels.
N
The one-way ANOVA test can be used to test whether the mean of each
of the three or more groups is same or is significantly different from
each other. If the mean is significantly different in the given groups, it
can be said that the IV has an impact on the dependent variable. The
number of groups and levels for each Independent Variable (IV) can
be different.
The one-way ANOVA test compares the means of two or more unre-
lated groups using the F-distribution. The null hypothesis states that
the two means are equal and a significant result means that the two
means are not equal.
The one-way ANOVA test is used in cases where a large group gets
split into small groups for completing different tasks. These groups
are created randomly. In contrast, in the two-way ANOVA test, a large
group is broken down into smaller groups on the basis of an attribute
they possess.

ANALYSE PHASE 185
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A major drawback of the one-way ANOVA is that it will tell you if the
given groups are different but it will not tell what groups are differ-
ent. If the test returns a significant F-statistic value, the experimenter
may have to run some ad-hoc test such as the Least Significant Differ-
ence test. This test would help in finding exactly which groups had a
difference among means. For example, an experimenter (say, an HR
practitioner) wants to study the impact of the age of an employee and
the level of occupational stress. Here, age is the only primary factor
that is divided into three levels, say less than 35, 35 – 55 and 56 and
above. Here, the experimenter would like to know if all the age groups
have the same level of occupational stress or not. If the F-statistic is
not significant, it would imply that the level of occupational stress is
not related to the employee age. On the other hand, if the F-statistic is
found to be significant, it would mean that there is a relation between
the employee age and his/her level of stress.
S
ANOVA and regression analysis tests are commonly used statistical
methods that are available in most of the high-end spreadsheets such
as MS Excel. Let us see how the one-way ANOVA test can be done
IM
using MS Excel.
An experimenter wants to compare the effectiveness of a new pain

relief ointment (N) with the effectiveness of two other brands (P and
Q). The null hypothesis here is that the new ointment N is as effective
as P and Q ointments. The effectiveness data collected by the experi-
menter is as shown in Table 7.3:
M
TABLE 7.3: EFFECTIVENESS DATA

Ointment Effectiveness Ointment Effectiveness Ointment Effectiveness
P 85 Q 84 N 88
N
P 94 Q 94 N 82
P 83 Q 100 N 85
P 82 Q 91 N 95
P 98 Q 86 N 86
P 84 Q 96 N 83
P 85 Q 93 N 98
P 89 Q 90 N 93
P 93 Q 89 N 97
P 90 Q 87 N 81
N 99
N 84
N 96
N 89
N 87

186 Lean Six Sigma
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We ran the one-way ANOVA test in Excel and found the results as
S
Figure 7.8: Results of One-way ANOVA Test in Excel
The entire process of the one-way ANOVA is described in the follow-

IM
ing points:
1. State the hypothesis clearly. Null hypothesis (H0) states that all
the means are equal, whereas the alternative hypothesis (Ha)
states that at least two means are different.
2. Select the level of significance denoted by α. In most cases, α
is set at 0.05 as a standard because it indicates only 5% risk of
M
the experimenter concluding that there is a difference between

means when actually there is no difference.
3. Compute the F-statistic as the ratio of the mean square between
groups to the mean square within group.
N
4. Calculate the F-crit value by checking up the F-distribution table

for α = 0.05 corresponding to degrees of freedom for ‘between
groups’ and the degrees of freedom for ‘within group’.
5. If the F-statistic computed by the experimenter is greater than
F-statistic at 1 – α (F > F1 – α), reject the null hypothesis and
accept the alternative hypothesis. If F ≯ F1 – α, do not reject the
null hypothesis.
In Figure 7.8, note that the test results show that the mean of the
groups varies from 88.3 to 91. Also, note that the P-value of the result
is 0.569132, which is greater than 0.05 (0.569132 > 0. 05). Here, F =
0.5736 and F1 – α= 3.2945; therefore, F > F1 – α. It means that the null
hypothesis of equal means is rejected and we conclude that ointments
P and Q do not produce similar results.
Sometimes, it may be required to calculate and find the ANOVA re-

sults manually. For this purpose, we will show how we can carry out
manual one-way ANOVA calculations. A, B, and C are three factor
levels. We start off as shown in Table 7.4:

ANALYSE PHASE 187
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TABLE 7.4: RAW DATA FOR ONE-WAY ANOVA MANUAL

CALCULATION
A B C Total
3 4 9
1 3 7
3 5 8
2 5 11
Number of Observations (N) 4 4 4
Total sum of observations 9 17 35 61
Sum of Squares 23 75 315 413
Total sum of squares =

(Sum of sum of all the observations)
2
Sum of all the sum of squares –
S
Total number of observations
( 61 )
2
3721
Total sum of squares = 413 – = 413 – = 413 – 310.08
12
IM 12
=102.9167
92 172 352 612

Sum of squares of each factor level = + + −
4 4 4 12
= 20.25 + 72.25 + 306.25 − 310.0833 =

88.9167
M
Error sum of squares = Total sum of squares − Sum of squares of

each factor level = 102.9167 – 88.9167= 14
Now, these values are placed in the ANOVA table and all the other
N
values can be found easily as shown in Figure 7.9:
Figure 7.9: One-way ANOVA Example

188 Lean Six Sigma
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7.3.2 TWO-WAY ANOVA
A two-way ANOVA test is the one that has two IVs or factors. The two-
way ANOVA test is based on the following assumptions:
Populations from which the samples were drawn are normally dis-
tributed.
Samples are independent.
Variances of the populations are equal.
Same sample sizes
In the two-way ANOVA test, there are three sets of hypotheses (three
null hypotheses and three alternate hypotheses). The three null hy-
potheses are as follows:
S
The population means of the first factor are equal.
The population means of the second factor are equal.
There is no interaction between the two factors.
IM
The IVs affect the dependent variable and each factor has two or more
levels. The degree of freedom for each factor is one less than the num-
ber of level. The treatment groups are formed after considering all the
possible combinations of the two factors. For example, there are three
levels in the first factor and four levels in the second factor. It means
that there will be 3 × 4 = 12 treatment groups.
M
After the ANOVA test has been done, the experimenter can perform
further analysis on the factors that contribute to the data set’s vari-
ability.
N
Let us understand the two-way ANOVA test with the help of an exam-
ple.
An experimenter wants to develop a chemical for removing tough

stains. So far, he has developed three types of chemicals (1st factor,
3 levels), and he mixes the chemical with water at three different
temperatures (2nd factor, 3 levels). Therefore, there are 9 treatment
groups. After carrying out various experiments, the level of cleanli-
ness is quantified by visual inspection and quantifying the percentage
of the stains that have been removed.
The experimental raw data is presented in Table 7.5:
TABLE 7.5: EXPERIMENTAL RAW DATA

Chemical 1 Chemical 2 Chemical 3
Cold Water 10 12 8
Warm Water 8 9 7
Hot Water 10 9 8

ANALYSE PHASE 189
n o t e s
We will run the two-way ANOVA test in Excel and derive the result as
S
Figure 7.10: Two-way ANOVA Example
There are two variants of the two-way ANOVA: one without replica-
IM
tion and one with replication. The two-way ANOVA test without rep-
lication can be done when the experimenter wants to double test the
same group. However, if the experimenter is investigating two factors
that might interact with one another, then the experimenter obtains
more than one result for each combination of treatments and in such
cases, the two-way ANOVA with replication is used.
M
7.3.3 LOGISTIC REGRESSION
Logistic regression is a statistical method to investigate the relation-

ship between a response variable and one or more IVs. Independent
N
variables are also called predictors. When response variables are con-
tinuous, we use linear regression and when response variables are
categorical, we use logistic regression techniques.
In logistic regression, we define a variable X which is the cause of a

response. X can be continuous or categorical. Y is an event of interest
and it is categorical. There can be many X’s but only one response
variable.
There are three different types of logistic regressions based on the

type of response variable being analysed. They are:
1. Binary logistic regression: When there are two response
categories along with two levels, we use binary logistic regression.
Two response categories may be Go/no-go, pass/fail, buy/doesn’t
buy, yes/no, recovers/dies, male/female, etc.
2. Ordinal logistic regression: When there are three or more
response categories along with natural ordering of levels, we
use ordinal logistic regression. Response categories may be
dissatisfied/neutral/satisfied, none/mild/severe, fine/medium/
coarse, etc.

190 Lean Six Sigma
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3. Nominal logistic regression: When there are three or more

response categories along with no natural ordering of levels,
we use nominal logistic regression. Response categories may be
black/white/Hispanic, black hair/brown hair/blonde hair, sunny/
rainy/cloudy, etc.
Let us now discuss the three types of logistic regressions.
BINARY LOGISTIC REGRESSION
Before discussing Logistic Regression in detail, we need to under-

stand the concept of Odd ratio. Odd ratio is the ratio of the probability
of success of an event to the probability of failure of the event. Mathe-
matically, it is represented as:
Prob ab ility of success of an event
S
Odd ratio =
Prob ab ility of failure of an event
The calculation of odd ratio and log (odd ratio) for different probabil-
IM
ities of success and failure, denoted by S and F, is shown in Table 7.6:
TABLE 7.6: CALCULATION OF ODD RATIO AND LOG (ODD

RATIO)
S F Odd Ratio Log (Odd Ratio)
0 1 0.000
M
0.01 0.99 0.010 -4.59512

0.03 0.97 0.031 -3.4761
0.05 0.95 0.053 -2.94444
0.07 0.93 0.075 -2.58669
N
0.09 0.91 0.099 -2.31363

0.11 0.89 0.124 -2.09074
0.13 0.87 0.149 -1.90096
0.15 0.85 0.176 -1.7346
0.17 0.83 0.205 -1.58563
0.19 0.81 0.235 -1.45001
0.21 0.79 0.266 -1.32493
0.23 0.77 0.299 -1.20831
0.25 0.75 0.333 -1.09861
0.27 0.73 0.370 -0.99462
0.29 0.71 0.408 -0.89538
0.31 0.69 0.449 -0.80012
0.33 0.67 0.493 -0.70819

ANALYSE PHASE 191
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0.35 0.65 0.538 -0.61904
0.37 0.63 0.587 -0.53222
0.39 0.61 0.639 -0.44731
0.41 0.59 0.695 -0.36397
0.43 0.57 0.754 -0.28185
0.45 0.55 0.818 -0.20067
0.47 0.53 0.887 -0.12014
0.5 0.5 1.000 0
0.51 0.49 1.041 0.040005
S
0.53 0.47 1.128 0.120144
0.55 0.45 1.222 0.200671
0.57 0.43 1.326 0.281851
IM
0.59 0.41 1.439 0.363965
0.61 0.39 1.564 0.447312
0.63 0.37 1.703 0.532217
0.65 0.35 1.857 0.619039
M
0.67 0.33 2.030 0.708185
0.69 0.31 2.226 0.800119
0.71 0.29 2.448 0.895384

N
0.73 0.27 2.704 0.994623
0.75 0.25 3.000 1.098612
0.77 0.23 3.348 1.208311
0.79 0.21 3.762 1.324925
0.81 0.19 4.263 1.45001
0.83 0.17 4.882 1.585627
0.85 0.15 5.667 1.734601
0.87 0.13 6.692 1.900959
0.89 0.11 8.091 2.090741
0.91 0.09 10.111 2.313635
0.93 0.07 13.286 2.586689

192 Lean Six Sigma
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0.95 0.05 19.000 2.944439
0.97 0.03 32.333 3.476099
0.99 0.01 99.000 4.59512
1 0
As we observe in Table 7.6, for the probability of success less than 0.5,
odd ratio is less than 1 and log (odd ratio) is negative. Similarly, for the
probability of success more than 0.5, odd ratio is more than 1 and log
(odd ratio) is positive.
The logit model or the logistic regression model is represented math-

ematically as:
S
α + β x + β x + ............+ β x
e 11 22 n n
P (x ) = α + β1 x1 + β 2 x2 + ............+ β n xn
1+ e
IM
The linear regression analysis can be used to model only straight-line
functions; whereas, the logit model can help in modelling a wide va-
riety of curve shapes. The logit curves for α held constant at 0 and for
varying values of β are shown in Figure 7.11:
M
P(x) = exp(0 + βx)/(1 + exp(0 + βx))

The loglt
1
β = –3 β=2 β=1
0.9
β = –0.5 β = 0.3
0.8
0.7
N
0.6
P(x)
0.5
0.4
0.3
0.2
0.1
0
–10 –8 –6 –4 –2 0 2 4 6 8
X
Figure 7.11: Logit Curves for α = 0 and different values of β
It must be noted that changing the value of α would result in shifting

the logit curves left or right. In logistic regression, the odds of some
event of interest happening are evaluated against the odds of it not
happening. This is done using odds ratio as discussed.
Many statistical analyses used in Six Sigma use probabilities; how-

ever, logistic regression uses odds. Assume that a product was being
manufactured using an old process which was improved and a new
process was created. The floor manager and all the employees were

ANALYSE PHASE 193
n o t e s
interviewed and were asked to name the better process. The results of
the interview are shown in Table 7.7:
TABLE 7.7: RESULTS OF THE INTERVIEW CONDUCTED ON

FLOOR MANAGER AND ALL THE EMPLOYEES
Improvement No Improvement
Old process 60 130
New process 25 45
Odds of improvement with old process = 60/130 = 0.4615
Odds of improvement with new process = 25/45 = 0.5555
Odd ratio = 0.8307 = 83%
From odd ratio, it can be estimated that the odds of employees find-
S
ing improvement with the new process are 17% less than with the old
process.
7.3.4 NON-PARAMETRIC METHODS

IM
Till now, we have studied methods, such as T-test, Z-test, F-test, and
ANOVA. All these tests are based on a number of assumptions. Among
these assumptions, the primary assumption is of a specific type of dis-
tribution for the population. Non-parametric statistical methods are
not assumption-free; however, they do not assume anything regarding
M
the type of distribution of the population. The number and nature of

assumptions for non-parametric methods is quite less than that for
parametric tests. ANOVA tests are based on the assumption that sam-
ples are drawn from normal distributions and have equal variances.
N
Non-parametric tests only have one assumption that the samples come
from identical continuous distributions. Parametric tests are valid for
the data measured using interval or ratio scales, whereas non-para-
metric tests are valid for the frequency or count data measured using
nominal or ordinal scales. It must be noted that the ratio and inter-
val data can be transformed into the nominal and ordinal data form
but not vice-versa. Therefore, we can use non-parametric analysis in
place of parametric analysis but not vice-versa.
The data collected for management studies and Six Sigma manage-
ment are mostly ordinal or nominal in nature. Six Sigma data collect-
ed may include product and process ratings, employee and customer
surveys, etc.
Having stated all these benefits of non-parametric tests over paramet-

ric tests, a question arises that ‘Why do we not use only non-para-
metric tests in place of parametric tests?’. The answer is that when
and wherever assumptions hold true, parametric tests prove more
efficient than non-parametric tests. It means that the probability of
rejecting the null hypothesis when it is false is greater in case of para-
metric tests than in non-parametric tests.

194 Lean Six Sigma
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Non-parametric tests carry out the comparisons using median values

instead of mean values and ranks instead of measurements. They also
use signs of difference instead of measured differences.
Some important non-parametric tests are 1-sample sign, 1-sample

Wilcoxon, Mann-Whitney, Kruskal-Wallis, Moods Median test, Fried-
man test, Run tests, Pairwise averages, Pairwise differences, Pairwise
slopes, Levene’s test, Hazard plots, etc.
Considering the wide range of complex tests covered under non-para-

metric tests, it is not possible to cover any of these here.
If any of the following conditions are met, the experimenter should

use non-parametric tests:
When the data is measured either on a nominal or an ordinal scale.
S
Assumptions required for parametric tests are not being met.
Shape and nature of the distribution is unknown.
Sample size is small.
IM
Measurements contain outliers and extremes which make the use
of median more appropriate than the use of mean.
We can use parametric tests if the following two conditions are met:
When data is collected using an interval or ratio scale of measure-
M
ment.
When all the assumptions required for conducting a parametric
test are met.
N
10. In the DOE for processes, the process outputs are called
___________.
11. A hypothesis must be testable, either by experiment or by
observation. (True/False)
12. In the ANOVA test, the variation observed in the output or
response is partitioned among all the possible _________.
13. Controllable variables are also called ___________.
14. In a one-way ANOVA test, the means of two unrelated groups
are compared using the F-test. A _________ result means that
the two means are not equal.
Activity
Prepare a case study on the use of Logistic Regression Analysis.

ANALYSE PHASE 195
n o t e s
7.4 SUMMARY
In the define phase of DMAIC project process, the voice of custom-
er is translated into a set of key Critical to Quality (CTQ) parame-
ters (designated as Y).
The data regarding the performance and stability of CTQ parame-
ters is collected in the Measure phase.
In the Analyse phase, a detailed process map is created which is
analysed to identify the sources of variation and defects. The po-
tential causes of variation (X’s) are identified. Thereafter, data re-
garding X’s is collected and prioritised.
Under the Analyse phase, a business problem, such as faulty pro-
cesses, is considered and the problem is modelled in the form of
a statistical problem. The statistical problem is solved using sta-
S
tistical tools and the results are translated to develop a business
solution.
The Six Sigma team can list the sources of process variation using
IM
the cause and effect diagram.
After all the potential causes have been listed, they must be an-
alysed further using advanced statistical tools such as designed
experiments.
Cause and effect diagrams are also called Fishbone diagrams and
M
Ishikawa diagrams. These diagrams were developed by Dr. Kaoru

Ishikawa. The cause and effect diagram is a tool used by project
teams to organise and graphically display all the knowledge a par-
ticular project group has related to a particular problem. An ideal
Fishbone diagram contains a lot of sub-causes or small bones.
N
A box plot is a statistical tool that displays summary statistics for a

set of distributions.
The Chi-Square distribution varies with the quantity ʋ (Upsilon),
where ʋ represents a value sample size minus one (n−1). The Chi-
Square distribution varies as the ʋ varies. The probability distribu-
tion function for χ2 is as follows:
2
e −χ ( χ 2 )(υ −2)/2
/2
f (χ ) =
2
υ − 2 
2υ /2  !
 2 
T-test is used when the sample size is less than 30. T-distributions
are flat and wide. T-Statistic is also used when the standard devia-
tion of the population is unknown.
The T-test is a hypothesis test that is used to determine if there is
actually a difference between the standard and the mean of a par-
ticular data set or it just appears to be so due to random chance.

196 Lean Six Sigma
n o t e s
F-statistic is used to compare two standard deviations or

variances.
The DOE is a statistical method that is used by project people to
determine the relationship (cause and effect relation) between a
process’s inputs and its outputs.
Experimental design is a detailed plan which describes what
would be done during an experiment and how. If the experiment
is designed carefully, it is possible to extract and analyse a lot of
information and data from the experiment.
Under statistically designed experiments, two or more process
variables are varied simultaneously and multiple measurements
are taken while maintaining similar experimental conditions.
Various types of experimental designs are fixed-effects model, ran-
S
dom-effects model, mixed-effects model, completely randomised
design, randomised complete block (RCB) design and latin square
designs.
IM
The one-way ANOVA test is based on one independent variable
(IV) with two or more levels and the two-way ANOVA test is based
on two IVs with multiple levels.
The one-way ANOVA test can be used to test whether the mean of
each of the three or more groups is same or is significantly differ-
ent from each other.
M
The two-way ANOVA test has two IVs or factors.

IVs affect the dependent variable and each factor has two or more
levels. The degree of freedom for each factor is one less than the
number of level.
N
Treatment groups are formed after considering all the possible

combinations of the two factors.
There are two variants of the two-way ANOVA—one without rep-
lication and one with replication.
Logistic regression is a statistical method to investigate the rela-
tionship between a response variable and one or more IVs. When
response variables are continuous, we use linear regression and
when response variables are categorical, we use logistic regression
techniques.
There are three different types of logistic regressions, namely bi-
nary logistic regression, ordinal logistic regression and nominal
logistic regression.
Methods such as T-test, Z-test, F-test, and ANOVA are based on
a number of assumptions primary among which is the assump-
tion of a specific type of distribution for the population. However,
non-parametric statistical methods do not assume anything re-
garding the type of distribution of the population.

ANALYSE PHASE 197
n o t e s
Non-parametric tests only have one assumption that the samples

come from identical continuous distributions.
key words
Degree of freedom: Mathematically, the degree of freedom is

calculated as sample size minus one. It can be defined as the
number of observations that are free to vary while estimating
statistical parameters.
Experimental error: Experimental error is the difference be-
tween the measured value and the true value. Alternatively, it
can also be defined as the difference between two measured
values.
Experimenter: Generally, an experimenter is an individual who
S
tries and develops new ideas or methods or the one who per-
forms a scientific procedure to discover or invent something.
An experimenter, in case of Six Sigma projects, is the one who
carries out various statistical analysis activities or tests.
IM
Linear regression: It is a modelling technique that establishes
a relationship between a dependent variable and one or more
independent variables.
Meta-analysis: When the data from various studies is collected
and analysed, it is called meta-analysis.
M
Nuisance factors: These are the factors that have some effect
on the response but are not required by the experimenter.
Predictor: It is another name for independent variables.
Ratio scale: Ratio scale is a type of interval scale where the dis-
N
tances are measured with respect to a rational zero.

1. What are cause and effect diagrams? How are they used in
identification of sources of variation?
2. Explain in detail the relevance of box plots in Six Sigma.
3. Describe Chi-Square, F- and T- distributions.
4. What are designed experiments? Illustrate the use of the one-
way ANOVA test.
5. Describe the concept of logistic regression.
6. What are non-parametric tests and what are the conditions
under which an experimenter uses these tests?

198 Lean Six Sigma
n o t e s

Analysing the Source of Variation 1. Common cause
2. Cause and effect diagram
3. False
4. Surroundings
5. Quartiles
6. True
7. υ /2
? =2
S
8. Z-
9. False
Designed Experiments 10. Response variables
IM 11. True
12. Causes of variations
13. Primary variables
14. Significant

M
1. Cause and effect diagrams are also called Fishbone diagrams.

These diagrams are used by project teams to organise and
graphically display all the knowledge a particular project
group has related to a particular problem. Refer to Section 7.2
N
Analysing the Source of Variation.

2. A box plot is a statistical tool that displays summary statistics for
a set of distributions. A box plot is used to display information
about the range, the median and the quartiles for a set of
observations that are represented alongside a number line. Refer
to Section 7.2 Analysing the Source of Variation.
3. Chi-Square distribution varies with the quantity ʋ (Upsilon),
where ʋ represents a value sample size minus one (n−1). Chi-
square distribution varies as the ʋ varies. T-test is used when
the sample size is less than 30. T-distributions are flat and
wide. F-statistic is used to compare two standard deviations
or variances. Refer to Section 7.2 Analysing the Source of
Variation.
4. Experiments done using an experimental design are called
designed experiments. The DOE uses ANOVA (Analysis of
Variation) techniques. In the ANOVA test, the variation observed
in the output or response is partitioned among all the possible
causes of variations. Refer to Section 7.3 Designed Experiments.

ANALYSE PHASE 199
n o t e s
5. Logistic regression is a statistical method to investigate the

relationship between a response variable and one or more IVs.
Independent variables are also called predictors. When response
variables are categorical, we use logistic regression techniques.
Refer to Section 7.3 Designed Experiments.
6. Non-parametric tests only have one assumption that samples
come from identical continuous distributions. Parametric tests
are valid for data measured using interval or ratio scales. Non-
parametric tests carry out the comparisons using median values
instead of mean values and ranks instead of measurements.
Refer to Section 7.3 Designed Experiments.
S
SUGGESTED READINGS
Pyzdek, T., & Keller, P. (2010). Six Sigma Handbook (3rd ed.). New
York, USA: McGraw-Hill Professional Publishing.
IM
Barker, T., & Milivojevich, A. Quality by experimental design (4th
ed.). Boca Raton, Florida: CRC Press.
E-REFERENCES
F Statistic: Definition and How to find it. (2017). Statistics How
To. Retrieved 10 August 2017, from http://www.statisticshowto.
M
com/f-statistic/
(2017).Retrieved 10 August 2017, from http://oak.ucc.nau.edu/
rh232/courses/EPS625/Handouts/One-Way%20ANOVA/Hand%20
Calculation%20of%20ANOVA.pdf
N
http://epsilon.uprrp.edu/aniel/Lectures/ANOVAinexcel.pdf. (2017).
Retrieved from http://epsilon.uprrp.edu/aniel/Lectures/ANOVAin-
excel.pdf

N
M
IM
S
C hapter
8
THE IMPROVE/DESIGN PHASE
CONTENTS
S
8.1 Introduction
8.2 Lean Techniques for Optimising Flow
IM
Activity
8.3 Risk Assessment
8.3.1 Failure Modes and Effects Analysis (FMEA)
Activity
M
8.4 Design for Six Sigma (DFSS)

Activity
8.5 Summary
N


202 Lean Six Sigma
n o t e s
FUJITSU CONSULTING
Fujitsu is a consulting organisation which provides various con-

sultancy services to customers. A diverse array of consultancy
services provided by Fujitsu includes management consultancy,
information technology consultancy, financial consultancy and
process optimisation consultancy. Due to the market demand, Fu-
jitsu is trying to expand the bouquet of its consultancy services by
including the Internet of Things (IOT) and Data Analytics (DA).
To expand its business operations, Fujitsu decided to implement

the Six Sigma programme. The need for Six Sigma arose because
while providing consultancy services, Fujitsu employees were in-
variably using the data which was generated by several processes
of organisational operations. The only constraint that they fore-
S
saw was how data analytics is being used in their industry. Hence,
they decided to conduct activities such as FMEA and DOE.
IM
The IT division of Fujitsu is technically well-equipped to handle
and process all the data by deployment of Hadoop technology.
However, it was the interpretation of the data which proved to be
a real challenge and which possessed a risk to Fujitsu. They de-
signed a risk assessment plan and also conducted FMEA.
Finally, they came out with a solution. They decided to provide

M
training (by external Six Sigma professionals) to three of their

employees who in turn will train other staff members. They con-
ducted DOE activities to determine the output of the training pro-
cess. Fujitsu’s decision proved to be a boon and they embarked on
the journey to expand their business domain.
N

THE IMPROVE/DESIGN PHASE 203
n o t e s
learning objectives

>> Explain the use of lean techniques Describe the concept of
risk and risk assessment.
>> Define Design for Six Sigma
>> Describe the concept of Design of Experiments
8.1 INTRODUCTION
In the previous chapter, you studied the Analyse phase of the DMA-
IC cycle. In the Analyse phase, sources of variation are identified us-
ing techniques such as the cause and effect diagram, Chi-Square test,
S
Student’s T–test, etc.
After the analyse phase of DMAIC is over, the project team focuses on
the improve phase. In the improve phase, the focus of the project team
IM
is to improve processes. The first activity involved in process improve-
ments is process optimisation. Also, associated risks must be assessed
using methods such as the Failure Mode and Effect Analysis (FMEA).
In this chapter, you will study lean techniques for process optimis-
ation, risk assessment, Design for Six Sigma (DFSS) and Design of
Experiments (DOE).
M
LEAN TECHNIQUES FOR OPTIMISING

8.2
FLOW
N
Six Sigma projects add value to business processes and generate val-
ue for customers. In each stage of a Six Sigma project, the objective
is to reduce process defects. Processes are the driving force in Six
Sigma projects. Along with processes, comes into picture the concept
of value addition and defects. Defect, in simple terms, means a de-
viation from specified requirements. Hence, any entity which is in
non-conformance with processes results in defects. Since the aim of a
Six Sigma project is to reduce defects, processes must be continuously
optimised to produce lesser number of defects at different stages of
project execution. Therefore, the concept of lean techniques is used
for optimising the flow of value generation .
An example of value flow is the people who wait in a queue to be ser-

viced at a restaurant or a service utility such as Metro Rail. In these
examples, optimising value flow means finding ways to bring value
addition for the people standing in a queue or waiting at restaurant
tables to be served a meal which is to be delivered via a queue-based
system. In these cases, processes which are not adding any value for
customers require a relook. For example, the customer may be served
with light snacks and is waiting for the main course meal. This process

204 Lean Six Sigma
n o t e s
of serving light snack may be lean as it is not adding value for the cus-
tomer, as he may be consuming food (snacks) which he has not been
ordered or alternatively the cost of serving snack turns out to be too
high in terms of the long waiting or serving time for the main course
food. The process of optimising flow aims at preventing and eliminat-
ing stoppages and unnecessary wastages from the value chain.
The process to provide product or service to a customer begins to flow

once the customer places an order and ends when the customer re-
ceives his complete order. During the intermediary stages, value addi-
tions are taken into consideration and the requirements stated by the
customer are addressed in as specific a manner as possible. This shifts
the focus to the process for reducing defects.
Some mechanisms which are adopted for optimising flow are as fol-
lows:
S
5S tool: This is the most important tool which is deployed to elim-
inate process wastage. The 5S stands for:
IM Sort: This technique deals with the process of ensuring that
only what is necessary is being executed. In other words, this
means eliminating unnecessary steps in a process.
Set in order: This technique involves ensuring that things
which are required during the process execution are placed
earlier in order so that they can be retrieved easily. Medical
M
stores serve as an good example of the use of this technique.

Medical stores keep in front those medicines which are com-
monly demanded. Also, they are put in a sorted order.
Shine: This technique is designed to optimise the value addi-
N
tion process. In essence, this technique involves maintaining

neatness and cleanliness at the workplace so as to improve ef-
ficiency. Clean working conditions aid in the improvement of
productivity by removing the clutter from the workplace.
Standardised clean–up: This involves the process of determin-
ing, implementing and maintaining a clean environment that
really works. In other words, a process may have a clean envi-
ronment but if it does not work then it will not add value to the
process.
Sustain: This involves the formulation of habits that ensure
that the workplace remains neat, tidy and clean so as to im-
prove the efficiency and productivity of the processes and the
workforce.
Constraint management: A constraint is a limitation or a hin-
drance in the process execution phase. Every process operates
under certain constraints. Also, every constraint consumes or re-
quires some resources so as to remove the bottlenecks which arise
from the constraint. Thus, constraint management itself becomes

n o t e s
an activity which needs to be accounted for. The following are the

points of consideration pertaining to constraint management:
Each constraint must have necessary resources to keep run-
ning.
Every unit or the resource provided to the constraint is of ac-
ceptable quality level.
Every unit or the resource produced by the constraint is of ac-
ceptable quality level.
Constraint is operated in the most efficient manner possible.
Level loading mechanism implementation: It involves a process
of generating a stable, smooth schedule that is responsive to mar-
ket dynamics. The goal of the level loading mechanism is to make
the same quantity of an item every day. In this way, process opti-
S
misation is achieved to some extent. Level loading is done by using
Takt time which is calculated as:
Daily Work Time
Takt Time = Daily Quantity Needed
IM
To create a level-loaded schedule, list part name, part number, dai-
ly quantity needed, and Takt time for each part. After this, sort
the list by the quantity needed and Takt Time. This results in a
level-loaded schedule.
M
Pull system mechanism: In this type of production mechanism,

items are produced when needed. The production process is re-
quired to deliver the product fast. This is in sharp contrast to the
push system of production wherein the focus is to develop the
product and then hope that the buyer may buy it. Through the
N
pull system mechanism, the producer is able to deliver the product

as per customer requirements and thus able to eliminate the non–
value addition activities in the supply chain management process.
An example of the pull systems mechanism is the weekly vegetable
market wherein the fresh stock of vegetables attracts buyers.
Implementation of flexible processes: Flexible processes involve
the use of lightweight & manoeuvrable tools, and fixtures and
equipment. They help in improving safety, quality, productivity
and ergonomics. Flexible processes can be compared to a hybrid
combination of pull and level loading mechanisms. An example of
flexible processes includes bakery shops which can quickly make
any bakery items such as cakes as per customer requirements.
Reducing the lot size mechanism: By reducing the lot size, the
producer is able to control the excessive quantity produced by a
process, which is not required by customers. In addition, larger
lot sizes pose other problems such as feedback delays, excessive
inventory, obsolete inventory, etc.

206 Lean Six Sigma
n o t e s
1. Six Sigma projects add _____ to business processes.

2. A constraint is a limitation or a hindrance in the process
execution phase. (True/False)
3. Flexible processes involve use of lightweight & manoeuvrable
tools and ________.
4. Takt Time = Daily Work Time/?
5. 5S is a method to eliminate the processes-based working.
(True/False)
Activity
S
Apart from the methods you have already studied in the preceding
texts, identify at least three more techniques which can be deployed
in Six Sigma project to eliminate the waste in various processes.
IM
List and elaborate your findings.
8.3 RISK ASSESSMENT

In the previous section, you studied methods for eliminating waste. In
other words, you covered issues related to those aspects of a process
M
which were not producing any value. To eliminate waste, processes

are modified to bring the relevant change in the process execution
methodology. However, implementing a change is not an easy task be-
cause there is an inherent risk which arises due to the implementation
of a change in a process.
N
Before furthering our discussion, let us try to understand what a risk

is. In simple words, risk refers to a future event which may or may not
happen. But when a risk becomes a reality, it inflicts damage in sev-
eral ways. Hence, it is required to be planned and accounted for so as
to mitigate the damages that arise due to its occurrence. For example,
the risk pertaining to the launch of a satellite is quite high because if
the satellite fails to place itself in the required orbit then there would
be major losses in terms of money, cost, effort, etc.
Every process has its own unique risks. For example, there can be risk
in terms of requirements gathering, inadequate design construction,
implementation failure, etc. All these risks are required to be identi-
fied in a systematic manner so that the required planning to mitigate
the effects of losses incurred can be undertaken. When it comes to the
process of risk management, various mathematical techniques such
as probability distribution are applied. Probability distribution deals
with the likelihood of the occurrence of a risk.

n o t e s
8.3.1 FAILURE MODES AND EFFECTS ANALYSIS (FMEA)
As discussed above, risks are inherent in processes and hence are re-
quired to be identified using a systematic procedure. One technique
for identifying risks is the Failure Modes and Effect Analysis (FMEA)
which is commonly deployed in Six Sigma projects.
The FMEA is a proactive tool that is designed and implemented to

prevent the failure of various components of the system which are
affected by processes under execution. An example of the FMEA ex-
ecution is found in the offices of multi–national corporations. As soon
as a visitor reaches the premises of an MNC office, he/she is required
to enter one’s details in a visitor’s register. This step is used to prevent
an unauthorised person from entering the premises. Apart from tak-
ing this pro-active step, the guard, stationed at office entrance gate
calls up the person (MNC employee) whom the visitor wants to meet,
S
and confirms the identity of the visitor. Only when the guard gets an
affirmative response from the MNC employee, the visitor is allowed to
enter the building. Also, the visitor is given a visitor’s card which he/
IM
she is required to wear during his stay in the MNC office, and return
the card to the security staff at the time of leaving.
The FMEA is a proactive approach that deals with various compo-

nents of the system. Using FMEA, the project team can delineate all
possible failures, their effect on the system, likelihood of occurrence
of failure and the probability that the failures will go undetected. With
M
the help of the FMEA, the Cost to Quality or CTQ is determined as

it relates to classification of various characteristics and other critical
variables which form an input to quality parameters that must be ad-
dressed through risk determination and its prevention. The FMEA
N
helps in risks assessment using a systematic approach. Let us study

the systematic approach for applying the FMEA.
The system that is to be assessed for risk is determined. This is the

most important step in the FMEA analysis process. Without this step,
the entire exercise would be futile. An example in this case would
be conducting the FMEA for the visitors’ entry system into an office
premises or on the students’ admission process in a reputed college.
After the system identification, various components that comprise the
system and its interfaces are identified. For example, the visitors’ en-
try system in the office premises comprises components and interfac-
es such as the guard at the main gate, visitor’s register, entrance to the
main building, issue of the visitor’s card, etc. It is at these components
and interfaces that the risk of failing to prevent the unauthorised per-
sons’ entry into the premises occurs.
Once the system components have been identified, they are analysed
thoroughly in terms of functions they perform and the failure points
where risks may materialise. For example, the guard after making an
entry in the visitor’s register may forget to issue the visitor card. This

208 Lean Six Sigma
n o t e s
is a failure of the system component or the process associated with the

issue of visitor’s card. In order to deal with this issue, a checklist may
be constructed and displayed at appropriate vantage points which will
be used by every guard before he allows the person to move to the
main building.
The failure of a system component is given a rating based on defined

quality parameters. This rating may be in terms of numbers or in qual-
itative terms such as high, low, moderate, etc. These rating parame-
ters are constructed or developed on the basis of the quality require-
ments of the Six Sigma project. The failure ratings are documented so
as to leave no space for ambiguity. For example, the likelihood of the
guard’s failure to provide the visitor a display card may have very low
rating as the visitor’s details have already been verified entered into
the visitor’s register.
S
Along with the rating of risk, the likelihood of risk realisation, i.e. the
probability of the risk occurrence is also determined. For example,
the probability of the above event, i.e. not issuing the visitor’s card is
IM
very less. Further, the process of allocating probability is dependent
on several factors such as the experience of the person (allocating the
probability), the impact on the business, etc. All the criteria for allo-
cating probability to a risk are documented in the Six Sigma Charter.
Also, these criteria are modified according to market dynamics and
the level of risk associated with a business.
M
Based on these parameters, appropriate corrective and preventive

measures are drafted and implemented. Preventive measures are con-
tinuously modified to address market dynamics. For example, correc-
tive and preventive actions may include the construction of a checklist
N
displayed at vantage locations. The guard must see this list every time
a visitor reports at the main gate. In addition, this checklist must be
modified from time to time.
There are three elements of risk namely, severity, probability and de-
tectability. Severity describes the effect of the failure mode. Probabili-
ty describes the probability or likelihood of the occurrence of a failure
mode. Detectability describes the possibility of detecting the causes of
a failure mode before the effects of failure are felt.
For all three risk elements, a score is assigned subjectively. The great-
er the problem, the greater the score is assigned to it. Each failure
mode is assigned three different scores (for severity, probability and
detectability) which are multiplied to derive an aggregate score called
Risk Priority Number (RPN). All aggregate scores are compared and
the worst failure modes are addressed first. The processes or areas
that have the highest RPN should be given the highest priority for
corrective actions.

n o t e s
Figure 8.1 presents the steps involved in the FMEA:
Actions + Check
Risk priority number (RPN) =

SEV*OCCUR*DETEC Step 1: Detect a
failure mode
Failure Mode &

Effect Analysis
Step 4: Detection Step 2: Severity
number (DETEC) number (SEV)
Step 3: Probability
number (OCCUR)
S
Figure 8.1: Steps involved in the FMEA

IM
6. Risk is __________ in every process.
7. Risk is assessed to __________ the losses to be caused by a risk.
8. The FMEA is designed to prevent the impact of risk. (True/
False)
9. Assessment of risk is carried out in every process. (True/False)
M
10. Risk are often associated with businesses. (True/False)
Activity
N
Identify the types of risks which can occur in a Six Sigma project
and conduct the FMEA for them. Prepare a report on your findings.
8.4 DESIGN FOR SIX SIGMA (DFSS)

The Design for Six Sigma is a method designed to manage processes
involved in achieving certain business objectives. Though related to
the traditional Six Sigma approach, the DFSS is quite different from
it. The DFSS is widely used by several management executives in do-
mains such as finance, engineering, marketing, etc. The DFSS uses
several statistical and mathematical techniques such as empirical
analysis, interpolation, extrapolation, etc. to determine the needs of
a business and to translate these needs into products. In other words,
the DFSS is used to determine the needs of both the customer and the
business so that they can be translated into products which the cus-
tomer really wants. There is a basic difference between the DFSS and
Six Sigma. Six Sigma begins where the DFSS ends. That is, once cus-

210 Lean Six Sigma
n o t e s
tomer needs (in terms of the product or its functionalities) have been
determined, the Six Sigma approach continues for construction of the
product. Six Sigma is based on the existing DFSS, i.e. the processes
involved in product development whereas the DFSS is based on mar-
ket conditions and customer requirements. Both these methodologies
are highly focused on metrics or the measurement programme which
drives processes.
Common approaches to the DFSS include DMADV and IDOV. DMADV

stands for Define, Measure, Analyse, Design and Verify. IDOV stands
for Identify, Design, Optimise and Verify.
11. DFSS is related to improvisation of business processes (True/

False)
S
12. List any one approach to the DFSS.

13. DFSS uses statistical and mathematical techniques to
IM determine the needs of a business and to translate these needs
into _______.
14. What does the ‘O’ in IDOV stand for?
Activity
M
Prepare a case study on the Design for Six Sigma.
8.5 SUMMARY
N
Processes are the drivers of a Six Sigma project.

Allthe processes must be identified, developed, implemented and
measured.
The measurements must be evaluated for optimising the process
flow.
Process flow involves value addition at different stages of process
execution.
The process or the stage, where the value addition is not commen-
surate with the objective of the business, is either modified or re-
moved from the project.
The main aim of a Six Sigma project is to reduce defects in pro-
cesses.
There are various means and mechanisms that are used to elimi-
nate or reduce wastages in a process.

n o t e s
Every process has some inherent risks and these risks must be
identified and appropriate measures considered to reduce the ef-
fects of risks. This process is known as the Failure Mode Effect
Analysis (FMEA).
The Design for Six Sigma is a method designed to manage pro-
cesses involved in achieving certain business objectives. It uses
tools such as extrapolation, probability distribution, etc.
key words
Business Process: A single process out of a series of processes

that are conducted in a business organisation to achieve busi-
ness objectives.
Control: An activity concerned with the deployment of certain
S
measures to bring a process under control.
Design for Six Sigma (DFSS): An activity undertaken by or-
ganisations that are in the process of deploying Six Sigma in
their projects.
IM
Procedure: A documented structure which depicts the details
such as roles and responsibilities required for generating the
output of a process. It is a detailed and self-explanatory docu-
ment.
M

1. What is lean management?
2. What are the various techniques involved in the optimisation of
flow?
N
3. What is a risk? Explain how the risk is taken care off in the Six
Sigma project?
4. What is the FMEA? Explain the techniques used in the FMEA.
5. What is the Design for Six Sigma?
6. Explain the 5S tool for optimising flow.

Lean Techniques for Optimis- 1. Value
ing Flow
2. True
3. Fixtures & equipment

212 Lean Six Sigma
n o t e s

4. Daily Quantity Needed
5. False
Risk Assessment 6. Inherent
7. Mitigate
8. True
9. True
10. True
Design for Six Sigma (DFSS) 11. False
12. DMADV
13. Products
14. Optimise
S
1. By reducing the lot size the producer is able to control the
excessive quantity produced by a process but not required
IM
by customers. Refer to Section 8.2 Lean Technologies for
Optimising Flow.
2. Several techniques are used for flow optimisation. Some of them
are 5S, pull systems mechanism, etc. Refer to Section 8.2 Lean
Technologies for Optimising Flow.
M
3. A risk is an event which may or may not happen but it has the
potential to inflict damage when it occurs. It is a future event.
Refer to Section 8.3 Risk Assessment.
4. The FMEA stands for Failure Mode and Effect Analysis. It is
N
a technique used to identify the causes of potential failures in

system components. Refer to Section 8.3 Risk Assessment.
5. The DFSS is used to determine the needs of both the customer
and the business so that they can be translated the products
which the customer really wants. Refer to Section 8.4 Design for
Six Sigma (DFSS).
6. 5S is the most important tool which is deployed to eliminate
process wastage. 5S includes Sort, Set in order, Shine,
Standardised clean-up and Sustain. Refer to Section 8.2 Lean
Technologies for Optimising Flow.
SUGGESTED READINGS
Pyzdek, T., & Keller, P. (2010). Six Sigma Handbook (3rd Edition).
New York, USA: McGraw-Hill Professional Publishing.

n o t e s
E-REFERENCES
(2017).
Retrieved 19 September 2017, from http://www.six-sig-
ma-material.com/Control.htm
Six Sigma DMAIC – Control Phase. (2017). Whatissixsigma.net. Re-
trieved 19 September 2017, from http://www.whatissixsigma.net/
six-sigma-dmaic-improve-phase
S
IM
M
N

N
M
IM
S
C hapter
9
CONTROL/VERIFY PHASE
CONTENTS
S
9.1 Introduction
9.2 Validating the New Product or Process Design
IM
Activity
9.3 Business Process Control Planning
Activity
9.4 Process Audits
M

Activity
9.5 Summary
N


216 Lean Six Sigma
n o t e s
SIX SIGMA PROJECT AT BIRLA SOFT
Birla Soft is an IT company which recently completed a Six Sig-

ma Project successfully. The organisation executed the project
entirely on its own. This was Birla Soft’s first Six Sigma project
as earlier it was executing projects based on/in compliance with
CMMI standards and Tick IT certification.
As part of its business objectives and for improving its business

processes, the organisation had trained several of its employees in
Six Sigma and provided Six Sigma Certification. The employees
were subjected to intense and thorough training and they knew
what was expected of them when the project went into execution
mode.
S
While executing the first Six Sigma of Birla Soft, its Six Sig-
ma-certified employees were required to conduct verification
and validation activities apart from conducting various process
IM
audits. These verification and validation activities formed the set
of core activities; therefore, process audits and validation were
given top priority.
The project manager wanted to ensure that the project activities

were conducted earnestly. Therefore, the designated Six Sigma
Champion was consulted at each stage of the project to reduce
M
defects. This helped improve the bottom-line of the project. Fi-

nally, the combined efforts of the Six Sigma Champion and the
project manager ensured that the project was finished along with
cost savings.
N

CONTROL/VERIFY PHASE 217
n o t e s
learning objectives

>> Explain the concept of controlling, verifying and validating
a new product
>> Describe the concept and importance of process audits
>> Discuss the importance of business processes
9.1 INTRODUCTION
In the previous chapter, you studied the Improve phase of the DMAIC
approach. You also learnt the lean techniques for optimising process
flow, risk assessment, the Design for Six Sigma (DFSS) and the De-
S
sign of Experiments (DoE).
All project activities must be identified, implemented, measured, veri-

fied, controlled and validated. Verification and validation are required
IM
because if a process is not verified and validated at the defined stages,
then in spite of having sound and adequate controls in place, the pro-
cess will fail to deliver the required output.
In this chapter, you will study verification and validation concepts.

The later sections of this chapter will describe the concepts of busi-
ness processes control planning and process audits.
M
VALIDATING THE NEW PRODUCT OR

9.2
PROCESS DESIGN
N
Before we discuss the concept of validating the new product or pro-

cess design, we must understand the differences between the terms
verification and validation. The term verification refers to the process
of determining whether a process or product is designed to serve its
intended purpose. Here, the intended purpose refers to the purpose
for which the product or process was originally developed/designed.
The product that is developed must meet the requirements stated by
the customer. Similarly, a process must produce the intended output.
Verification is an activity using which the project team can establish
whether the product or process is producing the intended output. In
other words, the verification activity in a Six Sigma project is designed
to ensure that the process is producing the correct output when it is
being executed.
For example, a process of determining the Voice of Customer (VOC)

must ensure that the VOC is captured by clearly identifying stake-
holders. The term validation refers to an activity of checking whether
the product specifications capture the customer’s needs. Verification
and validation activities are executed at several levels of a Six Sigma
project.

218 Lean Six Sigma
n o t e s
Figure 9.1 presents a pictorial representation of verification and vali-

dation activities in a Six Sigma project:
System (element) Final

Verify Requirements Validation Verify
Definition Outputs used as (industrial
reference environs)
Validate outputs
Architectural
Verify Design Integration Verify
Outputs used as
reference
Validate outputs
Product
Verify System element Operational Verify
requirements Outputs used as Validation
S
reference (operational
inviront)
Validate outputs
IM Product
System element Verify
Verify Outputs used as Verification
detailed design
reference
Validate outputs System element

Implementation
System element level

M
Figure 9.1: Verification and Validation at Different Levels of a Six

Sigma Project
Source: http://sebokwiki.org/wiki/System_Validation
Some of the basic differences between verification and validation are

N
shown in Table 9.1 as follows:
Table 9.1: Differences between verification and

validation
S. No. Verification Validation
1. Verification is conducted to Validation is conducted to
determine whether a product ensure that the requirements
or process is as per its stated of the customer are met, i.e. the
specifications. core functionality of a product
or process is provided.
2. Verification is conducted so Validation is conducted to en-
that the solution (product) can sure that the correct solution in
be built correctly based on the the form of product or process
product or process specifica- is being provided.
tions.
3. Verification is done by the Validation is done by the stake-
project team members. holders who are actually going
to use the product or the pro-
cess output.

n o t e s
S. No. Verification Validation

4. Verification is done through- Validation is conducted after the
out the Six Sigma project. product or the process has been
developed.
5. Verification is a static activity, Validation is a dynamic activity.
i.e. it does not involve data in- It involves entering data into
put. It is conducted by means the system and verifying if the
of inspection, reviews and output is correct or not.
audits.
1. _____________ is an activity using which the project team can

establish whether the product or process is producing the
intended output.
S
2. _________ is conducted to ensure that the core functionality of
the product or process is provided.
3. Verification is conducted after the product or the process has
IM
been developed. (True / False)
4. Verification and validation activities are executed at several
levels of a Six Sigma project. (True / False)
Activity
M
List and explain a few techniques used in validation activities in a

new product and process design.
BUSINESS PROCESS CONTROL

N
9.3
PLANNING
After thoroughly verifying and validating, project deliverables are
handed over to the client for final acceptance testing of the product.
Once the customer has given the final sign-off and accepted the de-
liverables, the project is said to be complete in every aspect from the
customer’s side. However, it is still not complete from developer’s side
(the company which executed the Six Sigma project). The developer
has to ensure that the gains made by it are permanent.
The term business process refers to a set of activities that are exe-
cuted in the organisation to achieve one or more business objectives.
For example, an IT organisation that develops customised software
has a business objective of generating profit of 30% from international
projects and 25% profit from domestic projects. In order to achieve
this business objective, the organisation carries out several processes
such as filing tenders, bidding process for bagging the contract for
software development, processes for contract development and exe-
cution, processes for developing the software to be delivered to the

220 Lean Six Sigma
n o t e s
client in accordance with its requirements. Further, there are sever-

al business processes at different levels of an organisation and each
business process is required to be controlled. In the absence of control
mechanisms, the business objectives may not be met. Hence arises the
need for exercising control in business processes.
In order to exercise controls in business processes, they are required

to be planned. Some of the control mechanisms (activities) that are
used during Six Sigma project execution are discussed below:
Conducting knowledge sharing sessions at the end of client sign-
off is an important activity for implementing controls in various
phases of business processes. Knowledge sharing sessions are or-
ganised so that the experiences and learning received by the proj-
ect team during the execution of previous project will benefit the
organisation in subsequent projects.
S
Revisiting and revising the existing policies of the organisation.
All existing policies of the organisation which do not add value to
a project must be revised.
IM
Modification of various processes, such as production or marketing
processes involved in a project may also help in controlling a project.
Modification of a process may include the development of new pro-
cesses for new technologies and methodologies driving the industry.
Planning for new standards and methodologies for execution of
M
several new projects and revisiting their implementation in the

on-going projects.
Revisiting quality standards and auditing controls at organisation-
al and project levels. This is one of the most important criteria for
N
controlling business processes. Quality standards are formulat-

ed so that the products manufactured using these standards are
able to compete with similar products. Quality standards must be
planned and incorporated in execution processes.
Planning for technology migration and providing training for the
same. This is another important aspect of the business process
control mechanism. Planning must be done after a thorough fea-
sibility analysis of the new technology for the respective business
domain, the return on investment and the competitive advantage
that the organisation may gain by adopting the new technology.
Implementing the metrics programme in several business process-
es. The metrics programme deals with aspects related to identifi-
cation of key controls to be deployed in several business processes.
Figure 9.2 presents some tools to conduct business process improve-

ments:

n o t e s
Define
Improve
Define CTQ
Determine Current Verify Effects of Key
State Analyze inputs with DOE's
Determine Optimum
Measure Settings
Evaluate Existing
Determine Key Input/ Control Plan
Output Variables Using statistical
Perform MSA methods to determine Control
Calculate initial potential key inputs Update Control Plan
process capabilities
Prioritize key input Verify Improvements
variables
Figure 9.2: Tools used for Business Process Improvements

Source: https://www.slideshare.net/MichaelLigayo/business-process-improvement-special-re-
S
port-presentation

IM
5. The term business process refers to a set of activities that are
executed in the organisation to achieve one or more business
objectives. (True / False)
6. Conducting ____________ sessions at the end of the client
sign–off is an important activity for implementing controls.
M
7. _____ of an organisation that fail to add value in a project must

be revised.
8. _________ are formulated so that the products manufactured
using these standards are able to compete with similar
products.
N
9. Modification of a process may help in controlling a project.

(True / False)
Activity
List various activities involved in planning business process con-

trols.
9.4 PROCESS AUDITS

In order to ensure that an organisation is able to carry out its opera-
tions, organisational tasks or activities must be executed on the basis
of a system approach. In other words, business activities of an organ-
isation must be conducted using a systems-dependent approach as
opposed to person-dependent approach. For example, the IT industry
is highly dynamic and requires resources to work in its ever-chang-

222 Lean Six Sigma
n o t e s
ing environment. Therefore, IT projects require a systems-based ap-

proach. A systems-based approach is primarily dependent on process-
es and formal documentation.
This section deals with processes and the audit of processes. Let us
first define what is meant by a process and an audit.
A process refers to a series of activities involved in converting an in-

put into an output. For example, to develop software, the customer
requirements form the initial inputs and these requirements are con-
verted into the Voice of Customer. In order to execute a process, there
must be a clearly documented procedure that specifies how a par-
ticular work must be done to convert an input into an output. Every
process is based on the ETVX model wherein E stands for Entry, T
stands for Task, V stands for Verification, and X stands for Exit. Entry
signifies the stage when the process becomes applicable; task signi-
S
fies what tasks are required to be completed by means of procedures;
verification signifies determining whether the activities of the process
have been checked and exit signifies the end of the process.
IM
An audit refers to the process of determining the objective compliance
of a process in converting an input into an output. An audit is always
conducted on the basis of a documented process that defines the pro-
cedure for conducting an audit. It is a formal process.
Some points considered while conducting a project audit are:

M
Each audit that is to be conducted in a Six Sigma project is planned

using an audit schedule. Audit schedule is determined on the basis
of the stage of the project or on the basis of the project timeline.
The number and nature of audits are dependent on the duration
N
and nature of the project.

Every audit plan and schedule takes into consideration the proj-
ect scope. This means that the limits of a project are taken into
consideration while preparing its audit schedule. An audit sched-
ule also takes into consideration the stage at which the project is.
For example, if a project has just taken off and is at the stage of
requirements documentation and preparing the VOC, the scope
of auditing includes only the Voice of Customer. Also, audit can
be functional or non-functional. For example, the audit of require-
ments gathering is functional, whereas quality audit, HR audit, IT
audit, etc. are non-functional audits.
Every audit plan and its schedule take into consideration the rel-
evant and applicable process directly or indirectly involved in the
scope of the audit schedule. For example, the audit of require-
ments gathering and VOC must include examination of records
pertaining to client meetings, implementation of corrective and
preventive actions, etc.

n o t e s
Every audit must be conducted by trained auditors. Usually, audi-

tors are Green Belt certified or may have undergone some other
auditing courses.
During process audits, auditors make use of several tools such as
checklists, forms, templates, procedures, several logs of the previ-
ous management review meetings, etc. Auditors are also required
to verify the objective evidence. If a project uses metrics, auditors
are required to validate these metrics.
Process auditors must ensure that they understand their scope,
their duty and the roles and responsibilities as auditors. In addi-
tion, they must be aware of the decisions taken in the previous
process audits.
Auditors must document their findings and present the same in a
proper format to the organisation’s management.
S
Findings of the auditors are compiled and the positive and negative
findings are discussed. Thereafter, recommendations are made for
improving various processes executed by the organisation.
IM
An audit can be an internal audit or an external audit. An exter-
nal audit is the audit that is performed by an external agency. For
example, the audit done for ISO certification or CMMI assessment
is an external audit, whereas an internal audit is the one which is
carried out by persons who are working within the organisation.
As a rule, internal auditors are not required to audit their own
M
project or their own domain. They must be external to the domain

whose audit they are required to conduct.
The steps involved in a process audit are shown in Figure 9.3:

N
People Process Technology
6. 1.
Deliver Results Co-Develop
and Insights Expetations
5. 2.
Execute Internal Develop
Project Audit Risk
Audit Services Model &
Program Universe
4. 3.
Design Project Develop
Audit Program Audit Plan
Figure 9.3: Steps of An Audit Process

Source: https://www.indiamart.com/mr-pandey-company/

224 Lean Six Sigma
n o t e s
10. Business activities of an organisation must be conducted

using a _____ dependent approach.

11. A systems-based approach is primarily dependent on
processes and formal _________.
12. Every process is based on the ETVX model where X stands
for ___________.
13. An _______ refers to the process of determining the objective
compliance of a process in converting an input into an output.
14. List any two tools used during the process audits.
S
Activity
Make a list of process audits that can be used in a car manufactur-

ing organisation. Explain at least three such audits.
IM
9.5 SUMMARY
Verification and validation activities are an important component
of a Six Sigma project.
Verification is an activity using which the project team can estab-
M
lish whether the product or process is producing the intended out-

put.
Validation refers to an activity of checking whether product speci-
fications capture the customer’s needs.
N
Verification and validation activities are executed at several levels

of a Six Sigma project.
Verification is done by the project team members.
Validation is done by the stakeholders who are actually going to
use the product or the process output.
Verification is a static activity, i.e. it does not involve data input. It
is conducted by means of inspection, reviews and audits.
Validation is a dynamic activity. It involves entering the data into
the system and verifying whether the output is correct or not.
Business processes are controlled by means of process audits
which include tools such as checklists, forms, etc.
Revisiting the quality standards and auditing controls at the or-
ganisational and project levels is one of the most important criteria
for controlling business processes.
A process refers to a series of activities involved in converting an
input into an output.

n o t e s
An audit refers to the process of determining the objective compli-

ance of a process in converting an input into an output.
key words
Audit: Examination activities to determine compliance of a pro-

cess as per the documented procedure.
Business process: A series of activities that are conducted by an
organisation to achieve its business objectives.
Control: The deployment of certain measures to ensure that the
process stays under control.
Validation: A process of ensuring that the requirements of cus-
tomers are met, i.e. the core functionality of the product or pro-
cess is provided.
S
Verification: A process of determining that specifications are
being met by the product or the process.
IM
1. Describe verification and validation.
2. List and explain the differences between verification and
validation?
M
3. What is meant by a business process?

4. Explain control mechanisms that are commonly used to control
processes?
5. What are process audits?
N
6. What are the points that must be considered during the conduct
of a project?

Validating the New Product or 1. Verification
Process Design
2. True
3. True
4. True
Business Process Control Plan- 5. True
ning
6. Knowledge-sharing
7. Policies

226 Lean Six Sigma
n o t e s

8. Quality standards
9. True
Process Audits 10. Processes
11. Documentation
12. Exit
13. Audit
14. Forms

1. The term verification refers to the process of determining
whether a process or product is designed to serve its intended
purpose. Validation refers to an activity of checking whether
S
product specifications capture the customer’s needs. Refer to
Section 9.2 Validating the New Product or Process Design.
2. Verification is conducted so that the solution (product) can
IM
be built correctly based on product or process specifications.
Validation is conducted to ensure that the correct solution in the
form of product or process is being provided. Refer to Section 9.2
Validating the New Product or Process Design.
3. The term business process refers to a set of activities that are
executed in the organisation to achieve one or more business
M
objectives. Refer to Section 9.3 Business Process Control

Planning.
4. Some control mechanisms (activities) that are used to control
processes are conducting knowledge sharing sessions, revisiting
N
and revising the existing policies, etc. Refer to Section 9.3

Business Process Control Planning.
5. A process audit refers to the activities involved in determining
the objective compliance of a process in converting an input into
an output. Refer to Section 9.4 Process Audits.
6. Points that must be considered during the conduct of a project
are: every audit plan and schedule takes into the consideration
the scope of the project; every audit must be conducted by
trained auditors; etc. Refer to Section 9.4 Process Audits.
SUGGESTED READINGS
Pyzdek, T., & Keller, P. (2010). Six Sigma Handbook (3rd Edition).
New York, USA: McGraw-Hill Professional Publishing.

n o t e s
E-REFERENCES
(2017).
Retrieved 20 September 2017, from http://www.six-sig-
ma-material.com/Control.htm
Six Sigma DMAIC – Control Phase. (2017). Whatissixsigma.net.
Retrieved 20 September 2017, from http://www.whatissixsigma.
net/six-sigma-dmaic-control-phase
S
IM
M
N

N
M
IM
S
C
10
hapter
CASE STUDIES
S
CONTENTS
Case Study 1 Sunraysia Solar Alliance’s Increased Efficiency

with Lean Six Sigma
IM
Case Study 2 Inventory Optimisation
Case Study 3 Laminex Distribution Centre uses Kaizen
Case Study 4 The Case of High Yield Variation
Case Study 5 Diagnosing and Improving Operational Efficiency with Dmaic
Case Study 6 Ford Drives through its Six Sigma Journey
Case Study 7 Achieving and Sustaining Improvement in Cardiac Medication
M
Case Study 8 Streamlining Processes and Reduction in

Cycle Time of an Aerospace Manufacturer
Case Study 9 Ibm Uses Six Sigma to Drive Behaviour Change
Case Study 10 3M’s Pollution Prevention Strategy Using Six Sigma
N
Case Study 11 Managing Pain at Lds Hospital With Six Sigma

Case Study 12 Bringing a Data Driven Cultural Change at an
Doctors Hospital of Augusta

230 Lean Six Sigma
Case study 1
n o t e s
Sunraysia Solar Alliance’s Increased Efficiency

with Lean Six Sigma
This Case Study discusses how the application of Lean Six Sigma
helped Sunraysia’s Solar Alliance in increasing its efficiency. It is
with respect to Chapter 1 of the book.
Solar Systems (now, Silex Solar Systems) is a solar energy equip-
ment supplier based in Australia. ABI Group is a engineering and
construction and lend lease infrastructure company. A few years
back, Solar Systems and ABI group entered into an alliance called
as Sunraysia Solar Alliance.
S
IM
Source: http://www.belectric.com/10-belectri/88-pressebereich-press-center/
M
Sunraysia Solar Alliance was created in order to undertake a

project for the design, construction and commissioning of a 2MW
solar plant in Victoria. The solar plant had to be fitted with 40 dish
systems involving Concentrating Photovoltaic (CPV) technology.
This project was highly complex and multidisciplinary in nature;
N
therefore, the project team decided to rope in a consultant Vative,

for providing the necessary advice and lean technical support for
carrying out technical support.
The project activity started off by observing and recording the
assembling and disassembling of a single dish several times over
a period of four days. Cameras were used to record the time taken
for each construction activity.
The project team used the recorded data to analyse ABI Group’s
construction method and benchmarked them against the accept-
ed lean techniques. On the basis of their analysis, team recom-
mended certain changes in some of the processes to reduce wast-
age in piling, mechanical and commissioning works.
As part of project, 40 dishes were constructed in 4 rows each con-
taining 10 dishes. The first row was taken as the baseline and ref-
erence for constructing the other three rows. As a result, there
was an improvement in the productivity gains in labour hours.
In the construction of second row, there was an improvement of

Case study 1: Sunraysia Solar Alliance’s Increased
Efficiency with Lean Six Sigma 231
Case study 1
n o t e s
10% over row 1. Similarly, there was improvement of 9% and 17%

respectively in case of third and fourth rows.
Apart from benchmarking, various other process improvements
were suggested and implemented as part of the lean initiative.
Some of them are as follows:
Standardising materials handling process.
Entire lot of material required for construction was stacked in
a dedicated assembly/work area.
All the material that is required for assembling the customised
A-frames were presented in a particular sequence.
Barricaded area is reserved for cranes and forklifts.
Allthe assembly activities were standardised and each staff
S
member was made responsible for one or more specific as-
sembly task.
Time required to move from one task to another task was re-
IM
duced leading to increase in repeatability.
Tasks which could be run in parallel were identified and made
to run parallel instead of running them sequentially leading to
reduced construction time.
Itwas observed that there were issues with the dish building
foundation and manual tilting. For this, hydraulic lift to tilt the
M
dish with minimum manual interference was installed.

Dish frame material was changed so that the weight of the
dish could be decreased. This helped in decreasing the num-
ber of labours and the effort required in lifting these dishes.
N
As a result of all these lean construction methodology, 36% cumu-

lative improvement was achieved. All the process improvements
were then classified and recorded into standards, manuals and
instructions so that they can be used as reference while carrying
out a bigger and highly ambitious 100MW project.
questions
1. Why was the alliance between Sunraysia and ABI created?

(Hint: Alliance between Sunraysia and ABI was created
so as to take up and complete the design, construction and
commissioning of a 2MW solar plant in Victoria.)
2. Why did the project team record the assembling and
disassembling of a single dish several times over a period
of four days?
(Hint: Project team analysed the recordings in order to

recommended certain changes in some of the processes to
reduce wastage in piling, mechanical and commissioning works.)

232 Lean Six Sigma
Case study 2
n o t e s
INVENTORY OPTIMISATION
This Case Study discusses how a oil and drilling company used
Lean Six Sigma methodology to achieve operational efficiency. It is
S
Source: http://www.gdi.com.qa
Gulf Drilling International Limited (GDI) is an onshore and off-

IM
shore oil and gas drilling company. It was established in May 2004
in Qatar. The company was established as a joint venture between
Qatar’s National Oil Corporation, the Qatar Petroleum (QP), and
Japan Drilling Co. Ltd. (JDC).
QP acquired 25% of the shares of JDC in July 2007. As a result, 70%

of the ownership of GDI went to QP. In February 2008, all shares
M
of QP were transferred to Gulf International Services (GIS). As a

result, QP became a public shareholding company by May 2008.
The company is now listed in the Doha Securities Market.
GIS took over the remaining shares of JDC in GDI in May 2014. It
N
is now a 100% Qatar owned company.
GDI has witnessed a high paced growth in the last twelve years
of its inception. The rig fleet of GDI today stands at 21 number of
assets with a workforce of 1500 employees. The current fleet of
GDI is composed of ten offshore jack-up drilling rigs, eight land
rigs, two lift boats and one accommodation jack-up.
GDI has also made huge investments in infrastructure to support

the drilling operations of the company.
The company is considered a world class drilling company and a

market leader in the domestic market of Qatar with its operation-
al focus on providing safe, efficient and cost effective drilling ser-
vices, along with lifeboats and jack-up accommodation services.

Case study 2: INVENTORY OPTIMISATION 233
Case study 2
n o t e s
Source: https://goo.gl/images/42KY33
GDI is a part of the GCC (Gulf Cooperation Council) region and

it provides drilling services by utilising offshore equipment units
S
and drill ships. For business and customers’ satisfaction it is im-
portant for a drilling company to have high availability of the rig
fleet, prompt drilling services and equipment should be made
IM
available under all circumstances. High specifications to ensure
successful exploration and drilling for oil and gas are also perti-
nent. The company has a long term strategic vision; as a result
of which decisions to enhance the company processes have been
undertaken.
GDI faced issues with its inventory management practices; with

M
excess and obsolete inventory creating a negative effect on the

overall efficiency of the supply chain management process caus-
ing negative financial and managerial consequences. It was ob-
served that there was a complete lack of inventory and there was
N
no clarity on the amount of inventory available in any of the rigs

or storage areas. It was also realised that there was no sound doc-
umentation and control of the inventory processes.
There was an urgent need to redesign the inventory management

process to obtain optimisation. So, a team was assigned the re-
sponsibility of analysing the gaps and process improvements in
the chain of supplies.
The first and the foremost step taken towards implementation of

the Six Sigma Methodology to the supply chain process was to
design a long term strategic roadmap and timetable. The purpose
behind this timetable was to reach the objective of efficient supply
chain system within the stipulated time. The team adopted the
DMAIC approach. In its Define phase, the team needed to devel-
op the lacking inventory management systems and controls and
enhance inventory’s visibility and accuracy. A tool called SIPOC
was used for the identification of the key variables which affected
the supply chain inventory process.

234 Lean Six Sigma
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n o t e s
The team created a list of all the internal and external suppliers/
vendors of the company.
In addition, in this stage the project team determined and defined

the project charter with the timeline, the goal statement, the ob-
jectives and the financial opportunities.
The project team undertook face to face interviews with the pro-
duction manager and surveys were also conducted. The outcomes
of the survey revealed that there has been a change in the earlier
supply chain management process that was known as the back
flush accounting. As per this technique, costing activity is delayed
till the time the goods are finished. Once that is done, the stan-
dard costs are flushed backwards via the system to assign costs
to products.
S
In the measure phase, the project team carried out the assessment
of the project. This assessment revealed that the activity of cycle
counting was not being performed in the current process. This
IM
indicated that the inventory management systems and controls
were neither adequately designed nor followed. Induced time and
long cycles of storage and movement of raw materials caused de-
lays. DPMO was used to calculate such defects. In the analysis
phase, the method to be applied in the supply chain was selected.
The various processes were effectively mapped using a standard
M
industrial engineering approach. Deficiencies arising from the

gap analysis were recorded during the analysis phase.
The deficiencies identified in the gap analysis were addressed

in the improvement phase. This led to a bigger inventory, better
N
visibility, better control, an efficient order and requisitioning. In

addition, cycle counting also improved.
The new inventory management process was rolled out in 2012.

This witnessed an increased inventory visibility and improved cy-
cle counting up to 50% over the last two years.
The company also undertook supplier relationship management

as a part of the Six Sigma Program which encouraged the sup-
pliers to make efforts to improve their delivery performance and
customer services and also improve communication with the
company.
This project reiterates the usefulness of Six Sigma Methodology

in solving problems of supply chain and the oil and gas industry.
In addition, this case demonstrates usefulness of Six Sigma in re-
ducing inventory and lead time. Lastly, this project had put an
overall impact and improvement of on-time delivery performance
and customer services.

Case study 2: INVENTORY OPTIMISATION 235
Case study 2
n o t e s
Source: https://goo.gl/images/UWxMun
S
questions
1. Why did GDI implement Six Sigma?

IM
(Hint: The Company faced certain issues with its inventory
management practices with excess and obsolete inventory
creating negative impact on the overall efficiency of the
supply chain management process.)
2. Discuss the approach adopted by GDI to implement
M
process improvement initiatives for their supply chain

process.
(Hint: The first and the foremost step taken towards
implementation of the Six Sigma Methodology to
N
the supply chain process were to design a long term

strategic roadmap and timetable. The purpose behind
this timetable was to reach the objective of an efficient
supply chain system within the stipulated time. The team
followed the DMAIC approach).

236 Lean Six Sigma
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n o t e s
LAMINEX DISTRIBUTION CENTRE USES KAIZEN
This Case Study discusses how a building industry supplier success-

fully implemented Six Sigma Kaizen methodology in its distribution
centre. It is with respect to Chapter 2 of the book.
Source: http://www.thelaminexgroup.com.au
Laminex Group is based in Western Australia and has a building

products division which is a premier supplier of building industry
in Western Australia. The Distribution Centre (DC) of the compa-
S
ny measuring nearly 26,000 m2 is located in Bibra Lake area. The
building product division operates from this DC and services the
customer network of the Perth metropolitan area. The building
IM
products division operations are limited only to WA and it encom-
passes those groups of products that were acquired with the Cul-
lity Timbers business by Laminex Group.
The Laminex Group Trade Essentials is the brand under which

these products are now merchandised. The Laminex product
range is diverse and is primarily designed to function as a com-
M
prehensive solution for all building project stages.
Order fulfilment efficiency at the Bibra Lake warehouse was real-

ised to be a critical area of improvement. This was determined af-
ter carrying out a strategic review of business operations. Laminex
N
consequently established a business objective to increase the effi-

ciency and safety of the DC that would finally help them achieve
company’s benchmark.
A consultancy Supply Chain Services (SCSA) was engaged by

Laminex to conduct an operational review. This review targeted
at the enhancement of the Bibra Lake warehouse operations, spe-
cifically the order fulfilment activity. The scope of the contract
also included determining ways to help Laminex optimise the
layout of the warehouse as well as optimisation of workflows and
operational procedures of Laminex. SCSA and the Laminex’s in-
ternal project team collaborated for conducting the project.
The history of the Bibra Lake DC is eight years old. It was first
occupied by a company, Cullity Timbers. The company primarily
used this DC as a retail outlet. No significant upgradation were
carried out in the DC that could have helped the company meet
its progressive business objectives. The housing industry of WA
has witnessed a boom in the previous few years. The existing fa-

Case study 3: LAMINEX DISTRIBUTION CENTRE USES KAIZEN 237
Case study 3
n o t e s
cility design witnessed many difficulties in handling the increased

throughput volume. As a result, it could be seen cracking under
the consequently increased demand for storage space, more so in
the dispatch area. A great need of some lateral thinking was felt
owing to such a fundamental shift in the requirements and cus-
tomer expectations from the Bibra Lake DC.
SCSA took into consideration, the lean distribution philosophy

to resolve these business problems. The consultant conducted a
thorough study of the existing DC operations in the spirit of ‘Gen-
chi Genbutsu’ which is a Japanese phrase meaning ‘Go and See’.
The consultant conducted a thorough study of the existing DC
operations in the spirit of “Genchi Genbutsu”. The results of the
study were analysed and SCSA made 20 recommendations that
would help in the enhancement of DC’s performance. These rec-
S
ommendations were divided into anticipated gains as quick, me-
dium and long term. The final recommendations were presented
to the project team. The Laminex management decided to imple-
IM
ment the said recommendations. Among all recommendations, it
was decided that Kaizen should be implemented for the physical
enhancement of the dispatch area of the Bibra DC.
The dispatch area was located in the yard and it literally strug-
gled for storage space across the facility. As a result, the area had
outgrown its original boundaries. Before the solution was imple-
M
mented, the dispatch bays witnessed mixed deliveries. The ready

packed orders would be seen scattered around the yard and the
only solution to the space crunch was to go up. As a part of the
Kaizen improvement, the vacant overhead space in the yard was
N
made use of. This was made possible by using specialised outdoor
cantilever racking. This racking was specially engineered to Bi-
bra Lake DC. A cantilever rack is used as a storage system made
up of vertical columns and bracing the base and arms. The unique
feature of this design is that there is a support at one end only and
there is no external structure on the other end. A cantilever rack
has proven to be extremely successful for unit loads that are long.
Long unit loads such as timber are found in plumbing yards.
A detailed and rigorous tender process that was carried out for
this purpose reduced the capital expenditure by 25%. Finally, a
racking company was identified and the solution was adopted.
The implementation phase was carried out under SCSA site su-
pervision. System acceptance processes were conducted at the
completion of the installation.
The operations of the newly modified dispatch area were rolled-

out successfully. During the first three months after commission-
ing of new dispatch area, some change management challenges

238 Lean Six Sigma
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n o t e s
cropped up. Apart from these challenges, there was a high satis-
faction level across Laminex’s operational staff.
The solution implemented by Laminex was categorised as Lean

Six Sigma “8S” method. As a result, the following benefits were
derived:
Sorting: Pickers are issued picking lists that have designated
dispatch bays. The packed orders were stored in each of the
dispatch bays as per customer or delivery routes.
Straightening: Clear markings are made on the dispatch area
that makes it clearly visible and noticeable to all operators.
The storage of deliveries is done in one identified place as per
the sorting principle. The deliveries are also clearly labelled
and readily placed in an efficient work flow to be loaded to
S
dispatch vehicles. This methodology helps in the reduction of
loading time reduced and better utilisation of trucks.
Shining: A tidy and organised working environment is creat-
IM
ed by the new racking system. Managers can clearly visualise
the physical layout. Cleanliness is maintained as part of the
daily routine.
Standardising: A consistent system can be seen in the config-
ured racking. A capacity and size standardisation is brought
in all the bays in the dispatch area. The company now uses
M
standard material handling equipment around the dispatch

area.
Sustaining: Standard operating procedures implemented by
the DC’s management team and some improvements to the
N
process ensure sustainability and further utilisation of the sys-

tem.
Safety: By virtue of the nature of the layout structure of the
new system promotes a safer environment in this heavy traffic
area is promoted. Travel and interchange limitations around
the racking system is now more evident to the operators. DC
management team launched a comprehensive safety pro-
gram too. The area was also line marked in consonance with
Laminex’s control zone marking requirements.
Security: The security level in the dispatch area is leveraged
by the new system. The Laminex operators can clearly visual-
ise the deliveries stored in the racking system but they are not
accessible to truck drivers.
Satisfaction: A level of satisfaction can now be observed
among the Laminex employees. The operational team is now
fully engaged with the new storage system. The DC staff is

Case study 3: LAMINEX DISTRIBUTION CENTRE USES KAIZEN 239
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n o t e s
highly motivated and satisfied after having witnessed the ef-

forts put in by the management to not only improve the work-
place but also provide a better and safer working environment.
questions
1. Why did Laminex undertake the Six Sigma Kaizen

improvement project at its Bibra Lake DC?
(Hint: Laminex realised that order fulfilment efficiency
of the Bibra Lake DC was a critical area that needed
improvement.)
2. List and describe a few benefits derived by Laminex after
implementing Six Sigma Kaizen improvement process.
S
(Hint: It was observed that there was a high satisfaction
level across the operational team of Laminex, better and
safe working environment.)
IM
M
N

240 Lean Six Sigma
Case study 4
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THE CASE OF HIGH YIELD VARIATION
The Case Study discusses how a company used Lean Methodology

to achieve operational efficiency and reduce its yield variation. It is
S
Source: https://rablononline.wordpress.com
IM
The case study pertains to an organisation which is a global busi-
ness house. The company is based out of North India with more
than thirty years of operational experience. The company is a
renowned traditional organisation and manufactures high value
drug intermediates by using advanced technology.
The company was facing problems of inconsistency in the quality

M
of its products. As a result the number of customer complaints was

rising. Not only the customer complaints, but also the company
was facing a problem internally of high variations in the yield that
was leading to various performance issues, such as high number
N
of missed on-time deliveries. Such issues were further affecting

the company’s profitability owing to high costs and poor quality.
To deal with quality related issues, the company hired experts

who conducted a review of the available data which focused on
the current performance of the manufacturing unit in reference
to a single type of product. Discussions were carried out with the
process owners, supervisors and line managers to determine the
relevant process parameters.
The consolidated data analysis and the inputs noted from inter-
views reflected that there was a weak process control and this was
the root cause of unexpected and unwarranted high variations,
both in the parameters of the products and the process. The fol-
lowing shortcomings were listed:
A lack of understanding about the relationship between the
desired product characteristics and the process parameters.

Case study 4: THE CASE OF HIGH YIELD VARIATION 241
Case study 4
n o t e s
The company lacked a culture of Standard Operating Proce-

dure (SOP) driven processes.
There seemed to be irregularities in assigning accountability
and responsibility for the identification and abnormalities.
To overcome the problems, the expert consultants advised the

formation of a Cross-functional team. This team was trained on a
Lean concept called Daily Work Management or DWM. DWM is
a Japanese concept that aims at managing process’ stability. The
objective of DWM is to maintain a constant state of stability and
consistency within the process with minimum number of unex-
pected situations. The methodology also aims that the operations
should be executed smoothly without much fire fighting for rou-
tine activities.
S
The experts team further determined the key inputs and process
parameters. These were then prioritised by using the methodol-
ogy of Failure Mode and Effects Analysis (FMEA) and were then
IM
developed into a quality table. Moreover, a simple tool of respon-
sibility matrix was prepared where the individuals were assigned
parameter monitoring responsibilities. The research and devel-
opment team of the organisation was roped in to assist the opti-
misation and standardisation of specifications for all these param-
eters.
M
For example, if there were three parameters that could play the
most critical role in ensuring consistency for a critical product
characteristic based on the data analysis and results from the
FMEA and quality tables, then the team would determine the pro-
N
cess control for the identified parameters.
Once the initial pilot was successful, the team rolled out the DWM
and the Process Control System gradually across the plant. There
were some initial hiccups in this roll out but the team implement-
ed sound change management practices. It was then observed that
people started enjoying their involvement in the improvement ac-
tivities. During the course of this new change, if the expert team
recorded any identifiable abnormalities in the process and the
product parameters, the data was then analysed and appropriate
corrective actions were recommended and implemented.
Any special causes of variation were identified using the control

charts. The team also defined guidelines that could address the
actions to avoid repeated abnormalities. Employees were then
trained on these guidelines to ensure consistency.

242 Lean Six Sigma
Case study 4
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Within four months of implementing these changes, the following

quantitative and qualitative improvements were reported:
A reduction in variation by 50% in all the product parameters.
A process capability of 1.33 was achieved for nearly 80% of

product characteristics. At the beginning of the project, this
level was 20%.
The yield variation of the targeted product was reduced from
1.4 to 0.5.
Stabilisation of the process parameters was reported.
The number of complaints per month was brought down by
90%.
The operator and supervisor level employees seemed more
S
confident and displayed a sense of achievement.
The company celebrated this achievement and decided to roll out

IM
similar initiatives across all facilities. A detailed roll out plan for
horizontal deployment was prepared by the expert team.
Let us now see the major points of this case.
Customers
A thirty year old company
M
Manufacturing operations of drug intermediaries
Identified Problem
Marked variations in the stated product parameters
N
Marked variations in the stated process parameters

Drop in the company’s profitability
High number of customer complaints
Implemented Solution
DWM across the process
Identification of critical parameters with FMEA, Quality ta-
bles
Monitoring of key process parameters
Implementation of Control charts
Guidelines on the actions to be taken to check abnormalities
Outcomes
Reduction in process and yield variation by 50%
Sense of achievement

Case study 4: THE CASE OF HIGH YIELD VARIATION 243
Case study 4
n o t e s
questions
1. Discuss the problems faced by the company.

(Hint: The company was facing problems of inconsistency
in the quality of its products. As a consequence the
number of customer complaints was rising.)
2. Discuss the approach, the company followed to
implement process improvement initiatives for their
manufacturing operations and the outcomes.
(Hint: To overcome the problems faced, the expert
consultants advised formation of a Cross-functional team.
This team was trained on a Lean concept called Daily
Work Management (DWM), a Japanese concept that aims
S
at managing process stability.)
IM
M
N

244 Lean Six Sigma
Case study 5
n o t e s
DIAGNOSING AND IMPROVING OPERATIONAL

EFFICIENCY WITH DMAIC
This Case Study discusses how a diagnostic centre used Six Sigma
DMAIC methodology to achieve operational efficiency. It is with re-
spect to Chapter 4 of the book.
S
IM
Source: http://www.aldrich-assoc.com/wp-content/gallery/diagnostic_imaging/
wenatchee_041.jpg
In the field of medical sciences, X-rays were discovered in 1895

and ever since, diagnostic imaging techniques have been making
remarkable progress. The use of X-rays for diagnosing and thus
aiding medical therapy became an integral part of the diagnostic
M
medical practices within a year of its discovery.
The period that witnessed a monumental change in the ways

medicine was practiced using basic modalities like X-rays to high
end therapeutic radioactive isotopes in nuclear medicine, and
N
imaging modalities like Ultrasound, Computerised Tomography

(CT), Magnetic Resonance Imaging (MRI), molecular imaging us-
ing Positron Emission Tomography scanning (PET), Picture Ar-
chival Communication Systems (PACS), Radiology Information
System(RIS), and Digital Mammography.
These advancement in imaging techniques helps not in the early

diagnosis of diseases, but also during the course of the treatment
to support medical professionals resulting in better medical out-
comes. Readily available technology also creates a higher demand
from consumers which leads to an additional resource require-
ment including more number of trained professionals. Unfor-
tunately, the widening gap between demand and availability of
additional qualified resources creates a pressure on the existing
system. Although the medical industry has evolved considerably
from technological point of view, the process and workflows have
unfortunately not been able to keep pace with the advancements
to harness the potential of high end technological systems.

Case study 5: DIAGNOSING AND IMPROVING OPERATIONAL EFFICIENCY WITH DMAIC 245
Case study 5
n o t e s
OPTIMISING TECHNOLOGY THROUGH PROCESS

IMPROVEMENT
The imaging technology today is not only high speed, but also
possesses highly superior image quality. However, inefficiencies
of workflow disallow the organisation to realise the benefits of
technology which affects the patients too.
Despite the availability of advanced investigation modalities,

many organisations still struggle with slow turnaround time of
reports and a backlog of patients waiting for appointments. In-
efficiency, lower capacity and productivity are the root causes of
multiple problems for diagnostic imaging services which include:
Bottlenecks of emergency services
S
Delayed diagnosis and treatment
Dissatisfaction among patients, referring consultants and the
other staff
IM
Outpatient business loss
Prolongation in length of stay
Revenue leakages
Therefore, to achieve performance optimisation, medical services

should not only depend on leading edge technologies; rather there
M
should be an alignment of technology with processes and people

who are the main modes of safe and cost effective care delivery.
An effective approach that has a proven potential to be effective in
such cases is the implementation of Process Improvement Strate-
N
gies such as Lean and Six Sigma as per cultural specificities.
When applied to diagnostic imaging, the Six Sigma approach fo-

cuses on the following aspects of operations:
Resource optimisation including time, human effort and
equipment
Service delivery improvements for patients and the other
stakeholders
Cost reduction and revenue enhancement
The DMAIC methodology of Six Sigma, when applied to opera-

tions helps in elimination of the steps that do not add value to the
operations. These steps are generally known to cause delays. The
methodology also helps in identification of the root causes for ser-
vice defects and variability. DMAIC also helps the process owners
in elimination of the process inefficiencies and redundancies that
can undermine the organisation’s efforts, if undetected.

246 Lean Six Sigma
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The financial benefits that an organisation can secure by improv-

ing operational efficiency are sometimes significant.
The data given below from a diagnostic centre indicates the im-
pact of adding one patient per machine per day by the process of
improvisation:
Addition- **Impact Change in Vol-

Modality al Cases/ on Reve- ume %
Annum nue in $
3 CT scanners 750 150000 3.3
1 MRI Machines 250 100000 5.5
Interventional Radiol- 250 250000 10
ogy
S
3 Mammography Ma- 750 45000 5
chines
3Ultrasonography Ma- 750 75000 6.6
chines
IM
**the revenue calculation was made by this centre on the basis of average reim-
bursements from Medicare patients
In a medical service provider like a hospital or Diagnostic Imag-

ing Centre that decides to implement Six Sigma, a project team is
selected and the members undergo training based on the Six Sig-
ma methodology. Sometimes, the organisations hire outside con-
M
sultants or process improvement experts. Having an end to end

view of the entire operational process plays a significant role in
maximising the benefits. The operational process covered should
include service quality, cycle, and cost as well as market char-
N
acteristics. Organisational assets, resources, equipment, staff,

scheduling practices and logistics need to be revisited to assess
their impact on the productivity of the departments.
Source: http://scanclear.com/wp-content/uploads/2017/05/
mri-imaging-center-michigan.jpg

Case study 5
n o t e s
USING THE SIX SIGMA METHODOLOGY
Once the general concerns are defined, the project teams identify
the projects that need attention on priority, as per the size of the
department. An important initial step of the process is “Scoping”.
It is generally observed that handling more than three simultane-
ous projects within the same department may lead to unmanage-
able organisation and loss of team effort. Projects that are careful-
ly selected depending on the initial findings and are in alignment
with the goals of the organisation are likely to produce better and
positive results in terms of quality, productivity improvement and
financial gains.
In the project Define and Measure phase, clear identification of

the critical elements and gathering the opinions and feedback of
S
the patients is very important.
Once this is done, Key Performance Indicators (KPIs) are deter-

mined. KPI’s include the number of investigations; average inves-
IM
tigation time and space utilisation for all the modalities; customer
satisfaction levels, staff numbers to help the team determine the
baseline operational performance levels that includes ratio of ex-
pense per staff and metrics related to revenue and operational
quality metrics.
M
An outline of the existing procedures within the department can

be created by process mapping and sub-process mapping using
the selected indicators for the identified modalities.
In the Analysis phase, the most critical drivers that are likely to
N
have a noticeable impact on the process being observed are de-

termined by the project team. On several occasions, the analysis
helps to unearth the underlying issues in the imaging centres like
morning start-up time being slow, conflicts between scheduling
appointments and physicians’ availability. Sometimes, the infor-
mation may demonstrate the problems arising due to a high fre-
quency of no shows that is likely to consume and block capacity.
Fluctuations in utilisation of resources during the day may rise

because of the bottlenecks, created in the system or unpredicted
variability in the arrival patterns of the patients. Once the anal-
ysis is carried out, the outcomes are used by the project team to
prepare a “plan of action” with recommendations on opportuni-
ties for performance improvement in alignment with the strate-
gic objectives of the organisation.The Improve phase begins once
the opportunities for improvement are undertaken as actionable.
This phase is often considered to be one of the most difficult and
challenging, yet the most gratifying part. Implementation of pro-
cess changes addresses many long standing issues paving way for

248 Lean Six Sigma
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n o t e s
better processes. Such changes ultimately lead to an overall im-

provement in the operational effectiveness of the diagnostic imag-
ing services departments.
The beginning of the Control phase is marked by stabilisation

of the process changes implemented during the improve phase.
The importance of monitoring the performance improvement
that results during this phase cannot be understated. This phase
holds the most critical keys to long-term success. Sustaining the
changes in the control phase is the differentiating element of Six
Sigma. Control tools like “dashboards” or “balanced scorecards”
are used during this stage to monitor the key indicators and to
ascertain the project stability. The wins of the project need to be
“institutionalised” and the success should be celebrated.
S
EXAMPLES OF SIX SIGMA APPLICATIONS IN DIAGNOSTIC
IMAGING
A. Carle Clinic in Illinois wanted to improve turnaround time
IM
for CT scan investigations in order to improve capacity and
patients’ satisfaction scores.
M
N
Source: https://med.illinois.edu
Solutions:
Carle Clinic made use of the Six Sigma Methodology
to identify the most important factors that affected the
scheduling process for the investigations. The following
changes were implemented:
Prior administration of contrast solution to ensure pa-
tients’ preparation at the time of the scan.
Patient’s preparation for CT scans was carried out sepa-
rately in the MRI IV start room.
Technical availability was expanded by making improve-
ments in the file, chart and the requisition rooms.

Case study 5
n o t e s
Outcomes:
Improved efficiency led to an increase in the CT scan
capacity by six more scans per day.
Decrease in the variability led to a better process pre-
dictability.
The staff and patients’ satisfaction levels were reported
to be enhanced.
A financial impact of approximately $390,000 annually
was reported.
B. Citizens Baptist Medical Centre in Alabama adopted the Six
Sigma to achieve a Cycle Time of less than 15 minutes from
S
the process of ‘one patient out to next patient in’.
IM
M
Source: http://www.annistonstar.com
Changes implemented and Solutions proposed:

N
Optimisation of resource capacity and utilisation of the

staff
Improvement in service levels
Improvisation of the marketing plan to capture market
share
Radiology technicians in the CT department to multi-
task and help in transportation
Inter-servicerotation of technicians within CT and
X-ray modalities
Review of protocols
Extension of duty hours of technicians twice per week
Outcomes:
On an annual basis, added 260 more CT slots.
On an annual basis, added 780 more US slots.

250 Lean Six Sigma
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SUCCESS FACTORS
Six Sigma and related tools can help organisations achieve pro-
cess improvements. By making workflow adjustments, a measur-
able impact on the cost and the quality of services can be achieved.
When ancillary areas such as marketing and specialised train-
ing for technologists are addressed, a diagnostic imaging centre
is able to gain a competitive edge and thereby captures higher
market share. Such initiatives have the potential to accelerate the
centre’s Return on Investment (ROI) for capital equipment like
MRI machines, X-ray, and CT scanners.
Diagnostic imaging centres like any other healthcare providers

should also recognise and respond to the newer needs of the cus-
tomers and the healthcare industry. An aging population and in-
S
creased demand for services are the drivers of the fast growth of
the healthcare industry and diagnostics services. As a result, the
ability of healthcare organisations to provide efficient services is
IM
getting strained. Insurance companies and regulators also have
their requirements which can present certain challenges for the
providers and the market competition forever increases. Diag-
nostic imaging centres and facilities need to adopt strategies to
increase their efficiency and cost effectiveness to survive in this
scenario.
M
Installation of high end equipment and information technology

is not the only solution for achieving optimal efficiency, adequate
levels of service quality, customer satisfaction and financial suc-
cess in the diagnostic imaging industry. The need to adopt an
approach towards performance-improvement which shall in-
N
clude both technical and cultural shifts is required to realise the

sustainable and significant results. Some recommendations for
achieving Six Sigma levels of excellence in the diagnostic imaging
field include:
Customer expectations should be prior and the organisation
should develop a plan to meet them.
Project selection and scoping should be given adequate con-
sideration.
Management and staff should have a clear understanding of
current operations and the future direction.
Key metrics and success indicators should be identified and
worked on.
Post implementation, the control phase should be given ade-
quate attention.

Case study 5
n o t e s
questions
1. Discuss the significance of implementing Six Sigma in

the diagnostic imaging industry.
(Hint: The imaging technology today is not only of
high speed but also possesses highly superior image
quality. However, inefficiencies of workflow disallow the
organisations to realise the benefits of technology which
in turn effects the patients. Despite the availability of
advanced investigation modalities, many organisations
still struggle with the issues of slow turnaround
time of reports and a backlog of patients waiting for
appointments.)
S
2. Describe the success factors and some additional
recommendations for the successful implementation of
Six Sigma in the diagnostic imaging services.
IM
(Hint: Six Sigma and related tools can help organisations
achieve process improvements. By making workflow
adjustments a measurable impact on cost and quality of
services can be achieved.)
M
N

252 Lean Six Sigma
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n o t e s
FORD DRIVES THROUGH ITS SIX SIGMA JOURNEY
This Case Study discusses how the Ford Motor Company used Six
Sigma to transform its processes and achieve success using Six Sig-
ma Methodology. It is with respect to Chapter 5 of the book.
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Source: http://www.allcarbrandslist.com
IM
Ford Motor Company is one of the most successful organisations of
the world. It is a leading automobiles manufacturer. The company
is known for its innovative and dynamic approach to manufactur-
ing. It is named after its founder Henry Ford. Manufacturing con-
cepts such as standardisation, assembly lines were pioneered and
employed by Henry Ford. Such concepts of standardisation and
assembly lines are known by the term “Fordism”. Henry Ford was
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also famous for paying his employees living wages. A living wage
meant that the employees were allowed to purchase the products
they manufactured and included products such as Ford’s famous
Model T.
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Ford was a great visionary and a tactful businessman. He realised

that it was necessary to break down complex tasks into simpler
steps and procedures. This could be done by using interchange-
able parts and specialised tools. The assembly line of Ford was a
revolutionary achievement in the field of manufacturing. Henry
Ford’s always strived for continuous improvement. Ford had a
penchant to view established modes, break them into their core
components and, then rebuild them. Ford’s ideas had many ad-
vantages that included decrease in the costs incurred on produc-
tion, radical simplification of the complex labour processed and
requirement of a smaller workforce.
The need for Six Sigma in Ford
Ford is famous for its high quality. One of the goals of Ford is,
“Quality is Job 1”, because of which it had pledged to incorporate
in its culture, the utilisation of innovative products and usage of
Total Quality Management to accomplish its goals. Even though

Case study 6: FORD DRIVES THROUGH ITS SIX SIGMA JOURNEY 253
Case study 6
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JD Power and Associates ranked Ford as one of the leading high

quality automakers long before, Ford has come a long way in the
last few decades.
Behind Ford’s Six Sigma initiative, there are four core factors:
Cost reduction: The older production process at Ford was
reasonably expensive. Six Sigma implementation helped it to
eliminate redundant activities and eliminate resources that
didn’t bring any value thus saving costs.
Improvement in Quality: Even though Ford was and is still
known for its quality products and processes, at some occa-
sions its processes too had defects. For many companies, a
quality level of 99% might have been an acceptable norm but
it’s surprising to know that even this high quality level allows
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surprisingly large amounts of defects and sometimes defects
are as high as 20,000 instances of defect per million products.
Six Sigma Methodology considers a quality level of 99.99966%
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or more as the ideal. The number of defects per million is just
seven in this quality levels. Ford achieved a huge level of suc-
cess in its quality improvement using Six Sigma.
Customer satisfaction rates: A critical success factor for any
company is to satisfy the demands of its customers. Quality
issues and customers’ satisfaction link to one another. Multi-
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ple instances of defects are likely to get cumulated and might

result in defective products, which inevitably lead to the cus-
tomers’ dissatisfaction. To avoid such situations, Ford decided
to implement Six Sigma and streamline their processes to fi-
nally help improve production issues and ensure happier cus-
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tomers.
Lowering the impact of Solvent Consumption on the envi-
ronment: Six Sigma is inherently a green and environment
friendly philosophy. Ford made a great use of this aspect to
incorporate some important changes in the organisation’s en-
vironmental commitments and awareness. Consumption of vi-
tal resources at Ford was proved to be not only expensive, but
also detrimental to the environment.
As a result, the company decided to commit to a Green Work
Culture with Six Sigma. Consequentially, the company could
manage reduction in costs, improved quality and higher levels
of customers’ satisfaction.
Ford’s Six Sigma approach
In the late 90s, Ford Motor Company implemented a Six Sigma

strategy with a goal to become a leading and a full-fledged con-

254 Lean Six Sigma
Case study 6
n o t e s
sumer products company and not merely be known as an Automo-

biles manufacturer for the first time. The company also aspired to
improve the quality of its products and achieve higher customers’
satisfaction rates. This approach of Ford towards achieving its
goals was termed as “Consumer Driven Six Sigma”. Ford was the
first automobile manufacturer in world’s history that implement-
ed Six Sigma methodology in a big way to its business operations.
The biggest challenge that Ford faced at the time of implemen-

tation was the then existing 20,000 plus opportunities for defects
in relations with respect to its business of manufacturing cars.
Even though the company had a strong history of superior quali-
ty control and innovation, some defects inevitably occurred. This
self-actualisation and revelation helped the company achieve
substantial improvements using Six Sigma. The main objective
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of the company was to reduce their defect level to an extent of a
single defect per 14.8 vehicles which they did manage to achieve
successfully. This also helped in achieving Ford’s goal of a high
IM
level of customer satisfaction.
Despite the company’s reputation, it faced several obstacles in its

journey of Six Sigma implementation. Some of those obstacles
were:
Lack of required commitment: Just like many other cases,
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Six Sigma at Ford was viewed with scepticism by many em-

ployees that included even the top level and members of se-
nior management. This resulted in a lack of commitment right
from the beginning. This eventually proved to be a cause of
major concern for Ford’s Six Sigma implementation program.
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Furthermore, the company faced time constraints that made it

really difficult to make 350 of its top leaders to undergo weeks
of training.
Resource constraints: In addition to the lack of commitment
from many top level employees, the company faced a diffi-
cult time training the employees because it required time and
money resources. In addition, the lack of commitment led to
loss of productivity.
Data requirements: Since Ford was new to the Six Sigma
Method, it was not well-equipped to follow through its Six
Sigma initiative. Six Sigma depends on vast amounts of data.
For Ford, it meant creation and implementation of new mea-
surement systems to fulfil Six Sigma’s requirements so that it
could provide substantial benefit to the organisation.

Case study 6: FORD DRIVES THROUGH ITS SIX SIGMA JOURNEY 255
Case study 6
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The Success of Six Sigma at Ford
Despite the challenges faced by Ford during the implementation

of Six Sigma, it was able to eliminate the costs of more than $2.19
billion on the wastages that the organisation created earlier over a
period of fifteen years. The company solved its problems of wast-
age by applying techniques of Lean Six Sigma that included a Da-
ta-driven Problem Solving Technique which devise solutions to
wastage issues. The company also witnessed staggering impacts
on its operations. With its consumers’ driven Six Sigma approach,
the company managed to save over a billion dollars worldwide.
It further helped the organisation in successfully completing ap-
proximately 10,000 improvement projects since the early 2000s.
Ford managed to increase its customers’ satisfaction percentage
almost by five points. Six sigma helped Ford in getting rid of some
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of its deep rooted problems that included issues such as sub-opti-
mal productivity, poor resources utilisation, low customers’ satis-
faction and the problem of causing environmental hazards.
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questions
1. Discuss why Ford wanted to implement Six Sigma even

though it was renowned for its quality policies.
(Hint: Behind Ford’s Six Sigma initiative there were
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four core factors, including cost reduction and quality

improvement.)
2. Discuss the constraints faced by Ford in its Six
Sigma initiative and the benefits it achieved after its
implementation.
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(Hint: Ford was the first automobiles manufacturer in

the history of the world which implemented Six Sigma
Methodology in its business operations.)

256 Lean Six Sigma
Case study 7
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ACHIEVING AND SUSTAINING IMPROVEMENT IN

CARDIAC MEDICATION
This Case Study discusses how a leading hospital used Six Sigma
DMAIC methodology to achieve operational efficiency. It is with re-
Approximately 22% Americans suffer from one or the other type

of cardiovascular disease which usually includes strokes, high
blood pressure levels, Acute Myocardial Infarction (AMI), Cardio-
megaly, Congestive Heart Failure (CHF), arrhythmia, atrial fibril-
lation, etc. As the population of America is aging, the number of
cardiac patients is slowly increasing. Therefore, healthcare pro-
fessionals and service providers such as hospitals are focussing
on providing quality cardiovascular care.
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Some healthcare providers have successfully applied Six Sigma
to achieve better process control.
IM
Virtua Health is a community health system that includes four
hospitals, two long-term care facilities, two home health agencies,
two free-standing surgical centres, ambulatory care, Camden, fit-
ness centre, 7200 employees, 1700 physicians, 7000 deliveries and
$600 million in revenues.
Virtua Health wanted to improve business and clinical process-

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es to support its “Star” culture. Virtua’s improvement program

included Six Sigma, Lean, Change Acceleration Process (CAP),
work-out and leadership development.
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In 2000, Virtua Health was formed through a merger of two health

systems. Management decided to use Six Sigma for improving
business and clinical processes to support its “Star culture”. In
2001, Virtua Health started examining the means that can be im-
plemented as quality measures to ensure consistency and align-
ment with the goals of the Centre for Medicare and Medicaid Ser-
vices (CMS).
The examination revealed that the CHF and AMI patients re-
quired better administration and documentation. For this, Cardi-
ac Program of Excellence (POE) was launched by Virtua in 2002.
POE aimed at coordinating high-quality care, incorporating ad-
vanced technologies, adopting best practice standards, etc.
As a part of study, conventional methods were used to treat the

patients in the first quarter of the year. However, data revealed
that there was no real improvement in treatment of the cardiac
patients. Therefore, the management of Virtua decided to imple-
ment a Six Sigma programme.

Case study 7: ACHIEVING AND SUSTAINING IMPROVEMENT IN CARDIAC MEDICATION 257
Case study 7
n o t e s
Virtua Health’s Star culture can be represented as follows:
Systems and Structures

for Supporting the STAR Excellent
Service
Resource Clinical Quality
Stewardship and Patient
ues Outstanding
d Val lues Patient Safety
a n Va Experience
on ness
ssi i
Mi Bus y nd
'
Ne
w teg Grou
tra
S e th
Caring Best
ak e in anc
e Culture People
'St rm p and ms
Th
e rfo
Pe ershi yste
ad tS
Le emen
n a g
Ma
Figure: Virtua’s Star culture
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At the start of the Six Sigma project, the project team was con-
stituted. The team consisted of representatives from all the dis-
IM
ciplines. The team started meeting on a weekly basis to develop
objectives and establish key metrics. During the initial meetings,
team discussed data availability and validity and developed the
following project description:
Increase quality of patient care by use/non-use and appropriate doc-

umentation of aspirin, beta-blockers, and ACE (angiotensin-con-
M
verting enzyme) inhibitors in CHF or AMI patients to achieve or

exceed Virtua benchmark goals.The goal of the project was to meet
the standards established by the Joint Commission on Accredita-
tion of Healthcare Organisations.
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Project team established that if all the regulatory standards are

adopted, evidence-based practice through education is used, doc-
umentation and compliance is maintained and the quality of pa-
tient care is enhanced, the outcomes of the treatment for AMI/
CHF patients can be improved.
Next, the project team examined the chart review process as part
of its measure phase activities. In this way, the team could assess
the reliability of data.
The management compared their review report with the reports

of Quality Research Analysts (QRAs). For review, gauge R&R was
used, differences were reconciled and an accurate measurement
system that met CMS standards was developed.
Since there were major differences between the two reports, team
conducted a work-out session with the QRAs and the manage-
ment people. The aim of the process was to create a detailed drill-
down of process flow, establish standard operating procedures for

258 Lean Six Sigma
Case study 7
n o t e s
reviewing CHF/AMI patient charts. The team also developed a

plan to communicate the new procedures to the nursing and med-
ical staffs.
For CHF and AMI, the process indicators were defined along with
the DPMO levels. Here, defect meant failure to properly adminis-
ter the medicine.
Baseline data showed a presence of defect rates of 4% and 10.2%

for AMI and CHF patients respectively. Therefore, the team want-
ed to achieve a zero-defect rate. Initially, the team focussed on
administering a beta-blocker to AMI patients within 24 hours of
admission. It was also prescribed that an ACE inhibitor should be
administered at time of discharge.
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This step was initiated with 100% chart review and a plan to fur-
ther educate the nursing staff, case management, quality teams
and physicians.
IM
Activities carried out as part of the Six Sigma project were as fol-
lows:
In the Analyse phase, the Six Sigma team began meeting biweek-
ly. The focus of these meetings was data analysis and improving
the data collection process. Here, the team created process maps.
They also identified drivers of variation. Additional details about
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the project team’s activities during the Analyse phase are as fol-
lows:
TABLE: TEAM ACTIVITIES IN THE ANALYSE PHASE

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Issue Conclusion Solution Who

Concurrent Need to coordi- Met with Certified Team mem-
reviews of nate efforts of Case Managers bers specific
AMI and CHF case manage- (CCMs) to educate to campus,
patients ment, quality on core indicators Slaterbeck,
and nursing Elberfeld
in reviewing
charts
Ongoing in- Have team Identified key areas Team mem-
formation of members de- (physician loung- bers specific
core indicators velop a story- es, cardiac specif- to campus
needed for board template ic units, nursing
medical staff with pathways specific areas), and
and nursing and indicators posted storyboards
staff to be available that are the same
at key areas throughout the
throughout the system
facility

Case study 7
n o t e s
Issue Conclusion Solution Who

Cardiac POE Coordinate Cardiac POE di- Mullin,
needs real-time with informa- rector, AVP and Slaterbeck,
access to clini- tion services Black Belt provided Rodin
cal care advi- (IS) accessibili- access to system so
sor to review ty to system they can review and
data provide feedback to
case management
Who is going Nursing, case Case management Case man-
to perform the management takes the lead on agement
task of daily and quality are chart reviews for and quality
chart reviews all reviewing patients with AMI, directors,
concurrent charts; need to CHF and related CCMs
with care? coordinate ef- diagnosis; support
forts in regard from quality and
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to the indica- nursing
tors
Communi- Need one If nursing and/or Case man-
cation with point person to
IM
case management agement,
physicians per communicate has direct contact QRAs, Sing-
need for docu- directly with with physician, they er, Spagnu-
mentation physicians in a give necessary feed- olo, Fox
timely manner back
Coordination Need to assign CCMs coordinate CCMs,
of ongoing point people with nursing and QRAs, Mul-
M
chart reviews, within the fa- quality; all paper- lin, Elber-
documentation cility to ensure work forwarded to feld
completion and that activities Black Belt and VP
data collection are being (Quality).
completed and
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coordinated
In the Improve phase, using the chart reviews, the project team
established that majority (46) of the 48 defects involving physi-
cians could be attributed to documentation issues. The team car-
ried out another session to pilot test the best practices, coordinat-
ed leadership and nursing and case management.
Team also developed the following Root Cause Analysis:
TABLE: ROOT CAUSE ANALYSIS

Factor Root Cause Proposed Solutions
Mobile Intensive Medics unable to Sponsor to work with am-
Care Unit (MICU) complete; short- bulatory quality director
run sheets not ened documen- to have MICU run sheets
available on pa- tation not part of completed and submitted
tient charts permanent chart concurrent with care

260 Lean Six Sigma
Case study 7
n o t e s
Factor Root Cause Proposed Solutions

Inconsistent IS integration with Work order placed with IS
availability of canopy system; ini- with actual cases to re-
patient census tial information in- search and advise on proper
with diagnosis for put by ICD9 code, input process
nursing and case not description
management
Physician com- Inconsistent fol- Directive from medical
pliance in com- low-through staff leadership to complete
pleting discharge discharge instructions;
instructions two-week trial by health
information management
department to tag all charts
without discharge instruc-
tions
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Consistent prac- Need for Champi- Appointment of nurse
tice of multi-dis- on at each campus leader within each facility
ciplinary care of to lead initiatives to coordinate activities of
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patients across of the POE cardiac POE at local level
Virtua
In the Control phase, the team took steps to ensure sustained

and long-term results. To ensure efficient time distribution, team
developed a flow chart. Team also prepared monthly statistical
reports. Team developed a process that would be followed for
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regular physician-to-physician correspondence. In addition, a

monthly dashboard was also created. This dashboard was used to
view cardiac program’s tracking Champion at the local site so that
he/she could be consulted with along with regular follow up with
individual physicians.
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Before the project was closed officially, Failure Mode and Effect
Analysis was conducted. This was done in order to mitigate any
opportunities for failure within the new processes. The team for-
mulated a new form using which the right information could be
collected at the right time.
At the end of project, the Six Sigma project team was successful
in identifying the actual reasons for failure in administering and
documenting the cardiac medication.
The project team devised and deployed various improvement

strategies such as physician and staff education, stocking aspirin
on each hospital floor and shortening the form that paramedics
complete, etc.
Virtua’s health system exceeded both internal and external

benchmarks. It was observed that the performance improvement
that was achieved after instituting the changes continued and was

Case study 7
n o t e s
maintained in the long-run. The table below summarises project

results and benefits:
Table: PROJECT RESULTS AND BENEFITS

Improvement Y (Process Quality Benefit
Results) Benefit
MICU run sheets Increased compli- Compliance with peer
are on patient charts ance for aspirin review organisation indi-
within 24 hours of given within 24 cators for aspirin given
admission hours within 24 hours of ad-
mission and Department
of Health regulations for
transfer of patient care
Physician completion Compliance and Quality of care docu-
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of written discharge proper documen- mented
instructions specific to tation of care for
medications for cardi- discharge medi-
ac patients cation indicators
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Standard operating Increased compli- Coordination of care for
procedures by nursing ance in care and the cardiac patient by
and case management documentation the multi-disciplinary
in chart review, stickie for all indicators team
reminders for physi-
cians and availability
of discharge instruc-
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tions
Consistent education Increased compli- Nursing staff’s increased
of nursing per cardiac ance for medica- knowledge base of cardi-
medication indicators tions given within ac medications for AMI
time frames and CHF patients
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Accurate daily census Increased compli- Timeliness of care im-

with diagnosis availa- ance in care and proved
ble through OAS gold documentation
and canopy for all indicators
Appointment of a Sustained im- Sustained results main-
process owner at each provement in all tained and reported to
hospital to coordinate indicators CMS and the public;
care with directives appropriate recognition
from cardiac POE and reporting of quality
of care
Source: https://www.isixsigma.com/new-to-six-sigma/dmaic/achieving-and-sustaining-im-
provement-cardiac-medication/

262 Lean Six Sigma
Case study 7
n o t e s
questions
1. Discuss the need of Six Sigma at Virtua.

(Hint: Cardiac Program of Excellence (POE) was launched
(implemented using Six Sigma) by Virtua in 2002. POE
aimed at coordinating high-quality care, incorporating
advanced technologies, adopting best practice standards,
etc.)
2. Discuss the success factors and some additional
recommendations for successful Six Sigma
implementation in Healthcare service providers.
(Hint: Six Sigma and related tools can help organisations
achieve process improvement. By making workflow
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adjustments, a sizable impact on cost and quality of
services can be achieved.)
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Case study 8
n o t e s
STREAMLINING PROCESSES AND REDUCTION IN

CYCLE TIME OF AN AEROSPACE MANUFACTURER
This Case Study discusses how an aerospace manufacturer makes

Six Sigma process work for its process improvement. It is with re-
S
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Source: https://offshoregroup.com
The primary objective with which Six Sigma best practices were
devised was to eliminate defects in processes. The concept was
developed by Motorola to carry out process improvements within
the company. It is firmly believed that improved processes lead to
increased revenues. As per established reports, General Electric
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was able to increase its revenues by $300 million after it adopt-

ed Six Sigma principles. Such successful implementation of Six
Sigma by various organisations are a primary reason why compa-
nies invest in Six Sigma implementation and certifications. It is a
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chosen methodology by many companies in order to improve the

company’s process efficiency, productivity and profitability.
AM is a small organisation manufacturing parts for aerospace in-

dustry. It wanted to reduce its manufacturing costs. Thus, it de-
cided to implement Six Sigma methodology that would help to
not only improve processes but also reduce the machining cycle
time. Using Six Sigma, AM was able to reduce manufacturing
costs within the organisation.
AM began its Six Sigma journey by the identification of key proj-

ect engineers within the organisation who underwent Six Sigma
training to obtain their Six Sigma certifications. A team was then
organised by the Six Sigma black belt team members. This team
would help facilitate the process. The team comprised represen-
tation from management and machine operators.
The Six Sigma DMAIC process was implemented by a team of

Six Sigma Green Belt and Yellow Belt trained members. Activi-

264 Lean Six Sigma
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n o t e s
ties conducted by AM during the various phases of DMAIC are as

follows:
1. Define phase: In this stage, the team determined that the
cycle time was 1400 seconds. One of the primary objectives
of the Six Sigma team was to reduce this cycle time by 50%.
A minimum of three Sigma levels were targeted. During
the define phase, certain risk factors were also found by the
team. These factors included reduction in overtime, faster
business pace and less time available for inspection.
Process champions made use of a process map. This map
was completed so that there was a common understanding
of the current state of the company’s processes among team
members. This process map was also helpful in implementing
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the plan.
2. Measure phase: During this phase, the team defined key
metrics. An analysis of the collected data was carried out to
IM determine stability during this phase.
3. Analysis phase: A statistical analysis was carried out to
determine the causes for long cycle times. From the data, the
team identified areas of improvement. It was observed that
in some instances, up to 40% improvement could be carried
out.
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4. Improvement phase: In this stage, the team identified and

proposed solutions. Lean concepts were used to generate
potential solutions. The solutions were prioritised and
presented to the management. Some selected solutions were
implemented using pilot programmes. After a predefined
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period of time, the results of the pilot programmes were

measured. It was determined that the process was stable
and the sigma value of this pilot process exceeded five. It
was also determined that it was possible to carry out this
process with a 20 per cent reduction in process steps.
5. Control phase: Once the pilot solution was determined to be
stable, a new process map and training plan was developed
and implemented. The team identified potential problems
in the environment, methods and human factors. Control
plans were developed and put in place in order to manage
the risks.
After the implementation of the Six Sigma methodology at AM,

it was determined that there was 47% improvement in the cycle
time in addition to 80% reduction in variation.

Case study 8: STREAMLINING PROCESSES AND REDUCTION IN
CYCLE TIME OF AN AEROSPACE MANUFACTURER 265
Case study 8
n o t e s
questions
1. Describe why AM adopted the Six Sigma methodology.

(Hint: AM’s company’s management wanted to reduce
overall costs of manufacturing.)
2. What was project team’s primary objective for
implementing Six Sigma?
(Hint: One of the primary objectives of the Six Sigma
team was to reduce the cycle time by 50%.)
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IM
M
N

266 Lean Six Sigma
Case study 9
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IBM USES SIX SIGMA TO DRIVE BEHAVIOUR CHANGE
This Case Study discusses how IBM used Six Sigma to bring about
behavioural changes within their sales teams for effective inventory
management. It is with respect to Chapter 7 of the book.
In organisations and industries, a significant amount of cash flow

may get blocked on inventory. Technology products undergo rap-
id deterioration and obsolescence. Also, stocked machines and
equipment lose their worth as they age. Quality practitioners at
IBM were assigned to combat these kinds of losses in value. These
practitioners conducted a Six Sigma project to help the company
reduce its hardware inventory in the warehouse. At the end of the
project, the key learning was that patterns and behaviours can be
S
changed by implementing and maintaining a system of measure-
ment.
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Source: https://www.ibm.com
The issue of inventory at IBM

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At IBM, it is a general practice that the sales personnel informs

the customer fulfilment team whenever there is a deal closure or
anticipation of a deal closure. It is done in order that they may
place the order for the required product in the deal on their be-
half. On receipt of the order, production plant carries out the steps
to fulfil the given orders and then ships the product to the country
from where the order was received. The product then gets stored
in ordering country’s warehouse till the time it is shipped to the
end customer. The process map for this is shown as follows:
Shipping to
Loading of Manufacturing customer's Delivery to
the order plant country customer
warehouse
Figure: IBM Product Supply Chain
Since the customer fulfilment department carries out inventory

management functions; the customer fulfilment team initiated a

Case study 9: IBM USES SIX SIGMA TO DRIVE BEHAVIOUR CHANGE 267
Case study 9
n o t e s
black belt project to investigate and analyse the issues related to

inventory management.
Root Cause Analysis of the Problem
Inventory may stay in the warehouse for a variety of reasons.

However, most of these reasons may not be under the direct con-
trol of the customer fulfilment team. Some of these factors may
be:
Delays in delivery dates from the customer end.
Disparity in the actual date of deal closure and the date antic-
ipated by the sales person.
A machine may be brought by a salesperson into the country
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early to ensure immediate supply.
Changes in the configuration requirements of a customer thus
rendering the existing machine in the warehouse non-usable.
IM
Inventory stocking by a salesperson with the expectation of
sale to another potential customer.
The customer fulfilment team here in this process is merely an

execution arm relying on the decisions of the sales team for in-
ventory management of that location. As it can be seen, many of
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the root causes for an unduly high inventory can be attributed to

the sales team. The Black Belt project leaders hence completed a
deep dive on the behaviour patterns of the sales team personnel
and the impact of such kind of behaviours on the inventory. One
vital root cause identified by the Six Sigma team was a lack of
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motivation amongst the sales staff in making any effort towards

lowering the inventory of a country’s warehouse.
The relationship between the behaviour pattern and attitude of

sales staff and its impact on inventory are described as follows:
Apprehension of losing supply order or missing the set deliv-
ery date post deal closure in case hardware isn’t ordered be-
forehand
Being over optimistic about deal closures
Lack of awareness about inventory carrying costs
Lack of motivation in making any effort towards lowering the
inventory
Lack of familiarity with customer fulfilment processes
Prioritisation of sales over inventory management

268 Lean Six Sigma
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Before this root cause analysis was carried out, the customer ful-
filment team seemingly had regular meetings with both the fi-
nance as well as the sales teams to review the inventory status. It
was also disclosed that during these meetings, discussions were
made as to how should the existing inventory in the warehouse
be managed. These discussions served as a planning base for the
following month. However, when the black belts carried out the
data analysis, it was observed that there was a large amount of
inventory that was not managed as per the plan. As a result, there
was still unused inventory remaining in the warehouse at the end
of the month.
On the basis of their analysis, the Black Belt team developed the
following improvement plan:
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Obtain consensus on importance: The sales managers, Chief
Financial Officer (CFO) and customer fulfilment teams re-
alised the importance of lowering inventory and came to
an agreement on the financial impact of lowering inventory
IM
during the review meeting. A key role was played by the CFO
who was highly concerned about the financial impact of the
inventory carrying costs on the organisation.
When implementing a solution, it is really important that all
key stakeholders share the same vision and objective. In the
case of IBM, even though the customer fulfilment team did
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not have any direct influence over the sales team, the CFO’s
authority was leveraged to get the commitment from the sales
manager. Once a high level management commitment is ob-
tained, the rest of the plan can be carried out with relative
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ease.
Maintain records: The commitment records of the sales team
were decided to be maintained by the customer fulfilment
team for inventory management. The CFO directed that the
sales team should make efforts to either ensure the delivery
of products to customers within 30 days or if undelivered, the
products should be returned to the plant for reutilisation. This
would prevent the sales team from stocking inventory for long
in the ordering country.
To ensure that the sales team was serious about their commit-
ment towards customers, it was made mandatory that product
information was documented. Documentation made it possi-
ble to trace and review records at any point of time. The 30-
day window period for delivery discouraged the sales team to
bring machines into the country much earlier than the expect-
ed deal closure date. Therefore, any early arrival of a machine
required an explanation in the subsequent review.

Case study 9: IBM USES SIX SIGMA TO DRIVE BEHAVIOUR CHANGE 269
Case study 9
n o t e s
Rigorous follow-up: With the new norms in place, the custom-

er fulfilment team now closely follows up with the sales team
on execution of orders and sales throughout the month. As
a result of this effort the inventory management remains on
the priority list of sales team. A close working relationship be-
tween the sales team and the customer fulfilment team helps
create a better understanding of each other’s processes and
their effects on inventory. Further, cordial relationships usu-
ally result in effective communication and positive impact on
the business results in general.
Reporting metrics: As a protocol, now the customer fulfilment
team publishes a report on the quality of execution of the plan
at month end. The performance of each member of the sales
team is measured giving rise to benchmarks and future goals.
S
Data is an effective tool to convince and catch the manage-
ment’s attention effectively. The performance metrics report-
ed by the customer fulfilment team, make it easy for the se-
IM
nior management to see how well the inventory management
is carried out. Assigning individual responsibility to perfor-
mance measurement whether good or bad is the key to driv-
ing behavioural changes. Performance benchmarking helps in
creation of a competitive environment as people avoid being
labelled as a low performing employee during a review meet-
ing.
M
Prioritising low performance areas: The performance mea-

surement reports can help management in the prioritisation
of corrective actions with respect to low performing areas and
teams. This is considered to be an effective approach, since a
N
majority of the inventory is often stocked by a smaller section

of people.
Rewarding superior performance: Teams that outperform
need to be recognised and credit must be given to the team
that demonstrates the highest rate of execution. Such practic-
es encourage employees to keep up the good work and inspire
other employees. Recognition is a powerful tool that manag-
ers can use. It helps not only to maintain motivation but also
build relationships.
Prior to the application of Six Sigma, two countries had high-

est inventory management issues. First had a failure rate of 50%
while the other had 80% failure rate. However, after application of
Six Sigma, the failure rates dropped drastically below 20%
Lessons Learned
The Black Belts after the implementation of the Six Sigma proj-
ect concluded that some simple interventions can encourage pos-

270 Lean Six Sigma
Case study 9
n o t e s
itive human behavioural changes and bring significant business

results.
Improvement teams should consider these factors to make mea-

surements useful:
The proposed metrics should be aligned with business objec-
tives
The measurement system should be easy to understand
There should be a positive correlation between measurement
and people’s accountability
There needs to be a good management system around the new
measurement.
S
questions
1. Discuss the issue of inventory faced by IBM. Also discuss

the outcomes of root cause analysis carried out for this
IM
problem.
(Hint: Inventory issues faced by IBM according to the
root cause analysis are delays in the delivery dates from
the customer end; disparity in the actual date of deal
closure and the date anticipated by the sales person; etc.)
M
2. Discuss the solution implemented by IBM for the problem

of inventory.
(Hint: On the basis of root cause analysis, the Black Belt
team developed an improvement plan that laid stress on
N
obtaining consensus on importance of inventory problem

and on maintaining records.)

Case study 10
n o t e s
3M’S POLLUTION PREVENTION STRATEGY USING

SIX SIGMA
This Case Study discusses how 3M Company implemented Six Sig-

ma to achieve its objective of pollution containment. It is with re-
Source: https://www.3m.com
Based out of Maplewood, Minnesota, a suburb of St. Paul, and
S
formerly known as the Minnesota Mining and Manufacturing
Company, the 3M Company, is an American multinational con-
glomerate. With a worldwide employee base of nearly 88,000 and
IM
approximately $30 billion in annual sales, 3M produces more than
55,000 products. A range of its products include: abrasives, ad-
hesives, car-care products, dental products, electronic circuits,
electronic materials, healthcare software, laminates, medical
products, optical films, passive fire protection, personal protec-
tive equipment, etc.
M
3M has operations in more than 65 countries of which there are 29

international organisations that have manufacturing operations
and 35 organisations that have laboratories. 3M products can be
purchased through distributors, retailers, or directly from the on-
line portal of the company.
N
The best practices in Six Sigma are oriented to assist companies

in reducing the number of defects in business processes. A defect
may be defined as a shortcoming in a product as compared to the
laid down standards/expectations. Defect may refer to a defect in
the product or an undesirable event. Defects are often defined
by companies themselves. As an example, a high level of pollu-
tion may be considered as a defect by a company. An undesirable
event such as excessive release of pollutants should be eliminated
to make the process more efficient.
Under leadership of Bob Galvin, the concept of Six Sigma was

first established by Motorola. Very soon, many other companies
recognised the benefits of this methodology and it became wide-
ly accepted. The idea was popularised and perpetuated by Jack
Welch and General Electric.
Companies that adopt Six Sigma methodology engage in data an-

272 Lean Six Sigma
Case study 10
n o t e s
alytics and plan development in order to bring about change. 3M

is yet another example of how Six Sigma was successfully used in
a business.
One of the principle practices at 3M for sustainable development

was an effort to prevent pollution emission from organisational
processes. The company successfully achieved this objective by
implementing Six Sigma best practices. 3M has proven to be a
leader in corporate pollution prevention with the help of Six Sig-
ma. The company management believes that pollution should be
prevented through proactive measures and pollution needs to be
addressed at the source. It is not very helpful to address this grave
issue once it has already entered the environment. In its existence
for over 30 plus years, the company has been able to stop 2.6 mil-
lion pounds of pollutants from entering the environment. In addi-
S
tion, the company has also been able to save $1 billion.
The company began its Six Sigma implementation journey by en-

IM
rolling approximately 55,000 of its employees under the Six Sig-
ma training. These 55,000 employees earned various levels of Six
Sigma certification that included the Six Sigma black belt certifi-
cation, Six Sigma green belt certification or the Six Sigma yellow
belt certification. The company has been able to complete over
45,000 Lean Six Sigma projects with the help of its trained profes-
sional manpower.
M
To start with, 3M identified two employees to undergo Six Sig-

ma black belt training and master black belt trainings. The black
belts further coached the selected employees of the organisation.
Every team member had the mandate to undergo a minimum of
N
belt training. A Six Sigma green belt training session lasted for
two weeks for certification.
The Six Sigma projects at 3M typically focus on elimination or

reduction of waste, greenhouse gas emissions, air emissions and
minimal energy use. Within a few years of implementation, more
than 70 percent of the Pollution Prevention Pays (3P) projects in
the organisation were operated in alignment with the Six Sigma
methodology. The outcomes were favourable.
Six Sigma methodology was also used by the organisation to re-

duce volatile air emissions. When 3M started the six sigma jour-
ney, its goal was to achieve a reduction of 25% in the volatile air
emissions. However, the company was able to achieve an im-
pressive 61% reduction. The company also strived to reduce the
U.S. Environmental Protection Agency Toxic Release Inventory
(TRI) specifications. Here the company’s goal was to achieve a
reduction of 50% in toxic release. With the help of Six Sigma, the
company was able to bring about 64% reductions. Improvement

Case study 10: 3M’S POLLUTION PREVENTION STRATEGY USING SIX SIGMA 273
Case study 10
n o t e s
of energy efficiency capability was also an important objective of

3M. The company had set a target of 20% reduction but was able
to achieve 27% reduction. The projects undertaken were mostly
3P projects. The company initially aspired to double the number
from existing 194 to 400. However, once the Six Sigma methodol-
ogy was adopted across the organisation, the company reached a
score of 1262 successfully executed projects, achieving more than
double the goal.
questions
1. Discuss why 3M decided to implement Six Sigma

methodology and how it was implemented.
(Hint: One of the principle practices at 3M for sustainable
S
development was an effort to prevent pollution emission
from organisational processes. The company successfully
achieved this objective by implementing Six Sigma best
practices.)
IM
2. Discuss the outcomes achieved by 3M after the Six Sigma
implementation.
(Hint: Within a few years of implementation, more than
70% of the 3P projects in the organisation were operated
in alignment with the Six Sigma methodology.)
M
N

274 Lean Six Sigma
Case study 11
n o t e s
MANAGING PAIN AT LDS HOSPITAL WITH SIX SIGMA
This Case Study discusses how a hospital used Six Sigma DMADV
methodology to achieve operational efficiency in its pain manage-
ment initiatives. It is with respect to Chapter 9 of the book.
LDS Hospital is located in Salt Lake City, Utah, US. It is a 547-bed

hospital that specialises in tertiary care and trauma management.
The referral centre is a part of Intermountain Health Care (IHC).
Academically, the hospital has been affiliated with the Universi-
ty of Utah School of Medicine. Equipped with 31 emergency de-
partment beds, the hospital serves nearly 36,000 patients and its
administrative statistics include an admission rate of 19% and a
dropout rate of less than 1%. Over a period of time, many best
practices have been implemented at the LDS Hospital.
S
IM
M
Source: https://www.yelp.com/biz/intermountain-lds-hospital-salt-lake-city
Some of these practices include innovative services such as bed-

side registration, testing at point of care, advanced protocols for
triaging (assigning the level of urgency to wounds or illnesses of a
N
large number of patients so that the order of these treatments can

be decided) and real time radiology. In addition, the hospital also
has implemented a robust quality improvement program. This
led to a higher patient satisfaction index, decreased walk-away
rates and lesser Turns Around Times (TATs).
In spite of best practices in place, many a times the hospital staff

reported a problem in the Emergency Department (ED) in rela-
tion to the rapid treatment of painful conditions. With the rising
number of complaints from patients, the staff of the ED depart-
ment took an initiative to rectify this problem.
One the major reasons for patients seeking care in the ED of a

hospital was pain. Hence many studies that were carried out on
patient satisfaction, demonstrated a direct correlation between
patient satisfaction and pain relief. Studies further indicated that
an important variable that can contribute (either positively or neg-
atively) to patient satisfaction is the perceived waiting time. Thus,
it is evident that a timely management of adverse symptoms helps

Case study 11: MANAGING PAIN AT LDS HOSPITAL WITH SIX SIGMA 275
Case study 11
n o t e s
in avoiding situations where patients leave even before they have

been consulted by a doctor. In addition, the behaviour of health-
care providers is when they are given a feedback in form of qual-
ity improvement data. These two aspects were used in managing
the defects of LDS Hospital’s pain management.
LDS hospital introduced the Six Sigma project for pain reduction.
A quality improvement initiative was undertaken at LDS with an
objective to increase the rate of administering pain treatment and
reduction in the TAT for administration. The quality improve-
ment activities included the formation of a work team, a chart
audit and a Root Cause Analysis based on the findings of the chart
audit followed by the development of a new process and a subse-
quent audit. The work team used the DMADV (Define, Measure,
Analyse, Devise and Verify) Six Sigma methodology to resolve the
S
issue of pain management in the ED.
The ED of LDS routinely uses a version of the Visual Analogue

Scale (VAS) to evaluate a patient’s pain perception. This infor-
IM
mation is included in the nurses’ computerised charts. The VAS
defines moderate to severe pain as level 4 or higher. Using the
VAS criteria a search was done on the patient data and a random
sample of 100 was audited using a chart screening tool. The turn-
around time for pain management was defined as the time lapse
between triage and the point at which the patient gets the pain
M
medication administered or any other necessary intervention that

is documented in the nursing record. The rate of pain treatment
was defined as:
Rate of pain treatment =

N
Total number of patients administered with a pain intervention

Total number of patient encounters audited during the same interval of time
The chief complaint of the patient, pain score and the interven-
tion carried out were all recorded along with the documentation
of pain relief. Patient demographic data such as age and gender
was also included. Measures that the patient reported as comfort-
able were also defined and recorded in the audit too. These in-
cluded aids such as ice packs, warm blankets, splints or pillows
and positioning of patient.
The hospital’s physicians were familiarised with the findings of

the initial audit. Monthly staff meetings were conducted after
which the consultants started working on the development of pro-
tocols on the basis of chief complaints for painful conditions.
Educational modules on pain management in the ED were creat-

ed on which the nurses were trained. The teams established their

276 Lean Six Sigma
Case study 11
n o t e s
quality goals that would help in improving the TATs of medica-

tion management and the rate of administering pain medication.
Advanced triage protocols were also created by the work team.
This helped staff to begin pain management process by using
adjunctive treatments such as splints, ice, warm blankets, local
anaesthetics and non-narcotic medications. Redesigning of the
process was carried out using these aspects in mind.
The results of redesigning the process with advanced triage pro-

tocols are as shown in the following table:
TABLE: RESULTS OF REDESIGNING THE PROCESS

Before 1. Triaging 2. Registration 3. Evaluation 4. Treatment order 5. Initi-
of patient of patient by nurse post assessment ation of
by physician treatment.
S
After 1. Triaging of patient 2. Treatment
commences
A second chart audit was performed nearly six months after the
IM
completion of the training module and the initiation of the pain
management initiative. As in the earlier audit, yet again one hun-
dred charts were audited randomly. The sample selection used the
screening tool and the same criteria for moderate to severe pain.
Patient satisfaction surveys that were performed independently
but during the study period were incorporated into the final anal-
ysis of the study.
M
The outcomes of the two pain audits were compared and they
demonstrated the following results:
Populations in two audits had similar demographic profiles.
N
Two main chief complaints of patients in both the cases were

moderate to severe pain related to injuries and abdominal
pain.
Headaches, backaches and flank pain were also reported fre-
quently.
Before the intervention was carried out, the average time to
initiate pain management was 72 minutes. This average after
the redesign and administration of intervention reduced to 51
minutes.
In the first audit, nearly 36% of the patients were not admin-
istered any pain medicine. This number was reduced to only
11% in the second audit.
Impact of intervention on the patient satisfaction

scores

Case study 11: MANAGING PAIN AT LDS HOSPITAL WITH SIX SIGMA 277
Case study 11
n o t e s
Apart from audits, the quality team also carried out patient satis-
faction surveys performed before and after the pain management
education was initiated. It was observed that within two quarters
of the implementation, satisfaction scores rose from 3.26 to 4.18.
In addition, there was also an increase in the number of patients
who reported their pain control as “excellent”. This number rose
from 27.7 to 32.1%. On comparison, the results of two pain man-
agement audits were observed as shown in the table:
TABLE: COMPARATIVE RESULTS OF TWO PAIN MAN-
AGEMENT AUDITS
Top Complaints Audit 1 Audit 2
Injuries or fractures 23 25
Abdominal pain 14 23
S
Backache 8 7
Flank pain 4 5
Demographics
Female
IM 57 55
Male 43 45
TAT for medication
< 15 Mins. 13% 17%
< 30 Mins. (cum.) 31% 34%
< 1 Hour (cum.) 66% 73%
M
< 2 Hours (cum.) 76% 90%

> 2 Hours 24% 10%
Mean Time 72 Mins. 51 Mins
Sample size = 100
N
The initiative of the LDS team of ED that aimed at reduction in the

time taken to initiate the treatment of pain was executed success-
fully. The end objective of increasing the rate of administration of
pain therapies and decreasing the time of pain management were
fulfilled adequately which led to an increased patient satisfaction.
The DMADV Six Sigma approach was implemented as follows:

1. Define: The team identified that there was a rise in the
incidents of patient dissatisfaction which meant ineffective
pain management procedures.
2. Measure: An audit of medical charts was carried out using
a screening tool devised by the team. This was done to
determine the frequency of patient’s pain concerns and the
speed with which patients’ pain concerns were addressed.
3. Analyse: A work team was identified that would address
the problem. The team determined that there were many

278 Lean Six Sigma
Case study 11
n o t e s
processes carried out in the ED before a patient was

administered with any kind of pain treatment. Even though
they were seen as necessary, there was no intrinsic value
attached to feedback given by the patient regarding an
initial pain management audit.
4. Design: An educational initiative regarding pain
management techniques was started. The team sought ways
to decrease the time to control pain. This also led to a cultural
change within the department and fostered an attitude of
intolerance towards untreated. A new pain management
system was designed and implemented.
5. Verify: A second audit of pain management was conducted
after the implementation of the pain management system.
S
Owing to the new system, some tangible improvements were
witnessed in the ED. Time to control pain reduced from
72 minutes to 58 minutes. The incidents of untreated pain
reduced from 36% to 11%. In addition, the overall patient
IM
satisfaction scores also improved.
questions
1. Why did the LDS implement a Six Sigma project for pain
reduction in the emergency Department?
M
(Hint: A quality improvement initiative was undertaken at

LDS with an objective to increase the rate of administering
pain treatment and to reduce the TAT for administration.)
2. Compare the results of the two audits carried out at LDS
N
for pain management.

(Hint: The outcomes of the two pain audits demonstrated
that the populations in the two audits had similar
demographic profiles.)

Case study 12
n o t e s
BRINGING A DATA DRIVEN CULTURAL CHANGE AT AN

DOCTORS HOSPITAL OF AUGUSTA
This Case Study discusses how a leading hospital used Six Sigma
methodology to achieve operational efficiency and also bought about
a cultural change. It is with respect to Chapter 9 of the book.
Doctors Hospital of Augusta is a 354-bed hospital based in Au-

gusta, Georgia, USA. It offers a full range of medical and surgical
facilities. More than 1,450 nursing and medical professionals have
been employed by the hospital.
The hospital also offers speciality services through its centres for
digestive diseases, diabetes care, wound management, cardiopul-
monary health, sleep disorders, polysomnography, stroke care,
S
etc. In addition, the hospital is renowned for its internationally
acclaimed Joseph M. Still Burn Centre.
IM
M
N
Source: http://doctors-hospital.net/
Just like many healthcare providers, Doctors Hospital of Au-

gusta too has its share of struggle with multiple quality related
issues, constraints of resources and its ability to ensure accessi-
bility, availability and affordability of healthcare services for the
community. To overcome these challenges, the hospital decided
to implement Six Sigma methodology. This initiative enabled the
hospital to gradually win over its battles with the quality issues.
In 2014, the management of the hospital took a decision that they

wanted to launch a new initiative with an objective of performance
improvement across the organisation. Change management and
project based training of employees in Six Sigma methodology
were two main pillars of this initiative.
In May 2014, 16 employees were identified for imparting Green

Belt training. Various projects that were prioritised included out-
patient CT scan turnaround time, wound centre cycle time, Turn-

280 Lean Six Sigma
Case study 12
n o t e s
around Time (TAT) of the emergency based on the patient’s ex-

perience, accounts receivable billing quality of the wound centre,
TAT of operating room and TAT of MRI.
Hospital Corporation of America, parent organisation of Doctors

Hospital considered the improvement initiative at Doctors Hos-
pital as a pilot initiative. Hospital’s management team was quite
pleased with the progress and achievements made in the projects.
Before implementing the Six Sigma projects, it was necessary to

create a link between the Six Sigma and hospital’s strategic plans.
Every year, a strategic plan is created by the hospital. For 2014,

Six Sigma implementation and bringing about a cultural change
were the major thrust areas of the plan. A clear communication
S
plan to keep every stakeholder informed, ensuring the delivery
of adequate training and incorporating Six Sigma in the way of
working were some major components of the strategic project
plan.
IM
It was also felt that Six Sigma supported organisation’s strategic
plan in several ways as mentioned below:
Human resources: The training imparted to employees on
the basis of the projects helped human resource retention and
productivity that was a part of the HR strategy.
M
Growth and efficiency: The outpatient imaging and surgery

taskforce deployed at the division level of the hospital aims at
driving efficiency and strategic growth. Effective competition
with the standalone imaging centres by improvising the cus-
N
tomer’s experience was a very strong focus of the task force.

For this purpose, the management prioritised projects in CT
and MRI that specifically addressed TAT to reduce lengthy
waiting period, a major source of dissatisfaction for patients.
Another objective that was aimed at efficiency was to increase
capacity of the operating room by addressing the TAT of am-
bulatory surgery centres.
Performance of emergency department: Throughput time
management at the Emergency Department was yet another
strategy that targeted the improvement of emergency room
performance metrics.
Patient satisfaction: Every quarter, the hospital undertakes
measurement of customer satisfaction using a satisfaction
survey conducted through an independent company. One of
the strongest drivers of satisfaction in the outpatient test and
treatment areas is the wait time. It was evident that reducing
TAT of services within the CT, MRI and wound centre would
potentially improve satisfaction by shortening the wait time.

Case study 12: BRINGING A DATA DRIVEN CULTURAL CHANGE AT AN
DOCTORS HOSPITAL OF AUGUSTA 281
Case study 12
n o t e s
Teamwork and Solutions: Even though the organisation

identified specified projects and all efforts were directed to-
wards achieving measurable results in key areas, an import-
ant development was that there was now a greater proficien-
cy, collaboration and communication amongst the teams. The
organisation now used a common set of tools to address the
challenges faced by the staff on a day today basis across the
organisation.
Employees who underwent the Green Belt training appreciat-
ed the investment made by their organisation’s leadership in
promoting the initiative, providing training and recognising
their achievements.
Tangible and intangible outcomes: To ensure quality, to man-
S
age the bottom-line and to raise patient and staff satisfaction;
it is important that the organisation makes efforts to improve
processes and operate as efficiently as possible in all aspects
of patient care. A data driven approach also helps organisa-
IM
tions such as hospitals to fulfil their compliance obligations.
Joint Commission on Accreditation of Healthcare Organisations

(JCAHO) survey process necessitates that the healthcare provid-
ers should be able to demonstrate their performance improve-
ment initiatives. Use of statistical tools, data analytics and an ev-
idence-based approach gives an organisation the confidence that
M
it is on the correct track.
Today, most of the projects of the hospital are in the control phase
of Six Sigma implementation. Even though the hospital leader-
ship continues to fine-tune the processes and monitor the prog-
N
ress, the effort investment made by the organisation has already

paid off and measurable benefits have been realised by the organ-
isation.
The estimated quantitative and qualitative impact on departmen-

tal earnings by Six Sigma projects can be summarised as shown
in the following Table:
TABLE: IMPACT OF SIX SIGMA PROJECTS ON

DEPARTMENTAL EARNINGS
Project Process Potential impact
improvement achieved on departmental
revenue
TAT reduction in op- The department was able to 7%
erating room increase capacity by 75 cases/
month when it achieved a re-
duction in TAT from 38 minutes
to 24 minutes.

282 Lean Six Sigma
Case study 12
n o t e s
Project Process Potential impact

improvement achieved on departmental
revenue
Reduction in through- The department was able to 4%
put time from patient increase capacity by 20 cases/
to patient in MRI month by reducing the target
time from 50 minutes to 43 min-
utes. No shows were reduced
from 18% to 11%.
Reduction in number When more number of items 0.5%
of unscanned supplies underwent scanning, it led to an
improvement in charge cap-
turing, reduced pilferage and
decreased losses.
Decrease in TAT: OP The department was able to 7%
CT increase capacity by 105 cases/
S
month by reducing TAT from 55
minutes to 36 minutes.
Decrease in TAT: ER The department was able to 12%
increase capacity by 251 cases/
IM
month by reducing TAT from
125 minutes to 110 minutes.
Reduction in coding The department was able to
TAT: Unbilled out- reduce its TAT to code medical
standing amount records from 12 days to 5 days.
It was observed that the total
outpatient unbilled amount was
M
now the lowest since last 10

years.
Decrease in TAT: The project awaits finishing im- Awaited determi-
Wound Centre plementation of improvement nation
initiatives and re-measuring.
N
The above objectives were achieved by a Black Belt team work-

ing with the respective departments. Although the project teams
were able to meet their initial goals, the hospital aspires to im-
prove its numbers even more.
The organisation is gaining momentum with the results that have

been achieved so far. There are new ideas for new projects pour-
ing in. Five of the initial Green Belt trained employees now liaise
and coordinate all projects as the hospital enters its second phase
of the initiative. The entire process has been integrated into the
performance improvement committee to which all projects now
report. A majority of the members of the committee are from the
organisation’s JCAHO survey process. The hospital management
analysed the project information and the results of the analysis
revealed that a lot of progress had been made in the projects.
With the increase in requests for projects, the improvement com-

mittee continually prioritises projects. Its prime focus was to
make efforts to increase patient safety, clinical quality and patient

Case study 12: BRINGING A DATA DRIVEN CULTURAL CHANGE AT AN
DOCTORS HOSPITAL OF AUGUSTA 283
Case study 12
n o t e s
satisfaction. The leadership team is also establishing a process

that is expected to streamline how people make suggestions for
improvement.
New employees in their induction training are given an orienta-

tion on Six Sigma. The ability to clearly explain the purpose of
a process helps the organisation in building acceptance and en-
courages participation.
Commitment, hard work and dedication of the involved teams

combined with ongoing support of the leadership and commit-
ment are considered to be the key factors in making hospital’s
Six Sigma initiative a success. After the specific process im-
provement outcomes, the most important benefit that has been
achieved from this initiative is the ability to empower people with
S
new tools and techniques that are proven and help them solve
everyday problems. This approach led to the establishment of a
common foundation for bringing about a cultural change within
IM
the organisation. Now the teams gather, analyse and verify data to
make informed decisions instead of simply making assumptions
about underlying causes and issues. As a result, they are able to
table sustainable solutions.
questions
M
1. Discuss how Doctor’s Hospital created a link between Six

Sigma and its strategic plans.
(Hint: Every year, a strategic plan is created by the hospital.
For 2014, Six Sigma implementation and bringing about
N
cultural change were the major thrust areas of the plan.)

2. Discuss tangible and intangible benefits of Six Sigma
implementation at the hospital and its success factors.
(Hint: Reduction in coding TAT: Unbilled outstanding
amount; and decrease in TAT: wound centre.)

N
M
IM
S

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LEAN SIX SIGMA

Chief Academic Officer Content Reviewer

TOC Reviewer TOC Reviewer

Author: Sandip Das

NMIMS Global Access - School for Continuing Education

CHAPTER NO. CHAPTER NAME PAGE NO.

1 Introduction to Lean Six Sigma 1

2 Implementing Six Sigma 27

3 Basic Statistical Concepts for Six Sigma 51

5 The Define Phase 103

7 Analyse Phase 163

8 The Improve/Design Phase 201

9 Control/Verify Phase 215

10 Case Studies 229

NMIMS Global Access - School for Continuing Education

NMIMS Global Access - School for Continuing Education

Self Assessment Questions

NMIMS Global Access - School for Continuing Education

HOW GENPACT USES SIX SIGMA METHODOLOGY FOR

Lean is a methodology with an objective to offer maximum value

The Six Sigma revolution was started by GE under Jack Welch.

ny’s bottom line by US$11M.

Today Genpact has implemented the Lean Six Sigma methodol-

The flagship methodology of the company is Smart Enterprise Pro-

NMIMS Global Access - School for Continuing Education

Genpact supported a multinational aerospace manufacturer in

NMIMS Global Access - School for Continuing Education

After studying this chapter, you will be able to:

Managers must be aware of the Six Sigma process to be able to lead

change management activities and understand the basics of the DMA-

1.2 CONCEPT AND HISTORY OF SIX SIGMA

NMIMS Global Access - School for Continuing Education

 A quality methodology that focuses on the number of defects and

We mentioned that Six Sigma aims at process improvement which is

In a Six Sigma-compliant process, it is expected that 99.99966% of all

NMIMS Global Access - School for Continuing Education

 The processes of both manufacturing and business companies are

The Six Sigma methodology is developed over a long period of time.

Carl Friedrich Gauss (1777-1855) introduced the concept of the normal

1920s, Walter Shewhart demonstrated that a process needs correction

after earning Ph.D. in Physics from the University of California Berk-

Edwards Deming did Ph.D. in Mathematics and Physics from Yale-

Formally, the concept of Six Sigma was first developed by engineers

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Smith is often referred to as the “Father of Six Sigma”. He was an

Many other global companies followed in the footsteps of Motorola

nounced the company’s plan to adopt this new quality management

By the late 1990s, nearly two-thirds of Fortune 500 organisations had

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self assessment Questions

1. Six Sigma is a quality methodology that focuses on the number

Explore the websites of companies that practise Six Sigma and

1.3 SIX SIGMA PROCESS

Process capability studies measure the number of standard deviations

There are two methodologies using which an organisation can im-

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Figure 1.1: DMAIC Six Sigma Process

 A problem statement is documented to define the problem.

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Some important activities under this phase include:

3. Analyse: Once the data is collected as defined in the Measure

Some important activities under this phase include:

 Creating solution-wise process maps

A quality methodology that focuses on the number of defects and

The processes of both manufacturing and business companies are

A problem statement is documented to define the problem.

Creating solution-wise process maps

Better time management: Implementation of the Six Sigma meth-

Reduced cycle time: In organisations, many a time projects get

Frequently used tools and equipment should be stored in the

Adjustment: Adjustment sub-activity includes sub-sub-activities

Excess inventory: Stock of goods that is not being utilised in pro-