Chapter2

Lean six sigma 4 principles (according to Mckensey)

 Clear direction
 Enabling contributors
 Customer value
 Discover better ways

Successful lean cultures are more likely to be created from the top executive level down

Chapter3

Lean six sigma addresses 3 fundamental challenges:

 Minimization of delay, defects, waste and errors
 Minimization of output variation
 Establishment of monitoring and control system

Lean six sigma project should have 4 basic things

 Business case
 Charter
 Metrics
 Financial evaluation & Benefits

Ratio = Benefits/Cost

COPQ (Cost of poor quality)

CTQ (Critical to quality) – specification of product/service capability that is necessary to meet customer
requirements

Chapter4
DMAIC
Define the problem
Measure the data (Customer)
Analyze the root cause of problem
Improve the process
Control

Chapter5
SIPOC ( Supplier, Input, Process, Output, Customer)
SIPOC is consider important input in the define phase of the project.
Tools used in Lean
Value stream mapping - It identifies all major steps in process. It documents all processes and then try
to improve them. It is a high level and different from process map, which is more detailed level.

Chapter5
Seven type of wastes are:
 Transportation
 Inventory
 Motion – related to approval process
 Waiting
 Over processing
 Over production
 Defects

Chapter7
Strategic supplier provides key components. Commodity suppliers provide general components
Key characteristics of lean supply chain:
 Fewer vendor and staff
 Relationship with supplier
 Contract and prices
 Quality
 Inventory
 Production flexibility
 Communication & information flow

Chapter8
Lean product development, focus is on following:
 Treated as projects
 Emphasis on innovation and knowledge
 Focus on marketplace
 Less emphasis on manufacturing
Delay between the activities can be due to:
 Co-ordination
 Schedule
 Communication
 Knowledge transfer

Delay within activities cab be due to:

 Over design
 Knowledge access
 Search
 Wasted efforts
 Information clutter

Chapter10
The challenges of lean six sigma are:
 Problem finding – find real problem not only symptoms
 Process mean – manage process means
 Process variation – manage process variation

Chapter11 – six sigma tools

Process mean – average level of output that a process is capable of delivering
Sample mean – average of sample of items taken at that moment

Control chart has 3 measures: Target, UCL, LCL (These limits are for process mean and as long as sample
mean does not cross this limit, process is in control)
In some situation like customer satisfaction only LCL is needed but most of the situation, both control
limits are needed

A stable process is one, where all causes of variation is known.

Six sigma relies on 4 category of statistical tool

 Scatter plot
 line chart
 control chart
 problem finding tool

Scatter plot, line chart – used for monitoring process over time
Control chart is line chart with additional information (Target, UCL, and LCL)

Problem finding tools are:

 Histogram
 Pareto chart
 Fish bone diagram

Chapter12 – Histogram
Samples are arranged from highest to lowest
Chapter13 – Pareto chart
It is a variation of histogram
In pareto chart ‘Cumulative sum & percent is calculated’

Histogram displays the problem from highest to lowest contributor. Pareto chart shows by solving which
problems we can resolve majority of the issues.

Chapter14 – Fishbone diagram

Fishbone is also known as Ishikawa diagram
The head of the fish represents the problem for which the root cause needs to be discovered

Marketing fishbone diagram

4Ps (Product, Price, Place & Promotions) are good to start the analysis

Customer satisfaction fishbone diagram:

Product quality
Price
Customer call center

Chapter15
2 types of variation:
 Common cause variation
 Special cause variation – not predictable

Chapter16
The greater the variation in dataset, the greater is standard deviation

Two ways to measure variation: Range & Standard deviation

Chapter17
Normal distribution – Cluster near the middle and taper towards end. Also one side is mirror image of
other. It’s also called bell curve.
X-axis represents value we are studying and y-axis the likelihood of the occurrence.
In normal distribution, likelihood of value occurring above or mean is exactly 50%
Chapter18
Six sigma produces fewer than 3.4 defects per million
DPMO – Defects per million opportunities

Chapter19 - difficult
Population mean – U
Sample mean – X

Plot distribution of sample mean in histogram – Distribution of sample mean

The mean of sample of distribution mean will coincide with population mean
Central limit theorem – if sample size are large, distribution of sample mean take shape of normal
distribution

Standard error of the mean = sigma /sqrt (n):

sigma = standard deviation of the population, n = sample size

Standard deviation measures the error in the population, but the standard error the mean measures the
variation in the distribution the sample means

Chapter20
Alpha error: sample mean is plotted on chart but process mean falls outside UCL & LCL.
Beta error: If process mean has shifted, but sample mean still falls between UCL & LCL

An alpha error is detecting a process change that is not present while a beta error is failing a to detect a
process change that is present

Balancing cost: If UCL & LCL is too large then alpha error is less, but beta error is large and viceversa.

Alpha error is false alarm, but beta mean is process is actually shifted but not detected.

Chapter21
There are 2 types of data
 Continuous
 Discrete or attribute

The most common charts are:

 X-bar chart
 R-chart
 S-chart
 P-chart
Chapter22 – X-bar chart (continuous data)
X(--) is called grand mean

X – best estimate for process mean

A2 – constant
R – Average range of preliminary sample

Chapter23 – R-bar chart (continuous data and sample size less than 12)

R-chart can’t be used to monitor process mean

R-Charts are used to monitor process variation by plotting the range of items collected in a sample

The center line for an R chart is determined by taking several samples, determining the range for
each of the samples and then computing the average of these ranges.

Chapter24 – X-bar chart (continuous data, sample size 12 < n < 25)
In this case s-chart is based on standard deviation not the range
X is grand mean
S is standard deviation

Chapter25 – S chart (continuous data, sample size 12 < n < 25)

S-chart like x-bar chart monitor variation.
S-chart also used standard deviation

X-bar chart as well as s-chart, R-chart are considered to check if process is out of control. But first s-chart
and r-chart are plotted and if the process is out of control then it is considered out of control
irrespective of x-bar chart.

Chapter26 – x-bar chart (Large sample size)

This is non-shortcut method

Chapter27 – P chart (Large sample size discrete data)

P is proportion

Chapter28 – Customer expectation

UCL (Upper control Limt), LCL (Lower control limit)
USL (Upper specification limit), LSL (Lower specification limit) – customer expectation.

Effort should be done to have LCL/UCL lower than LSL/USL

Taguchi loss function:

As the variation of the process migrates farther and farther from the its target, the loses to the company
grows larger and larger.
Process capability: Measures, how close a process is running to its specification limit. The larger the
index the less likely the process will cross the USL & LSL

In general Cp of 1 or greater is expected

Chapter29 – Anticipating problems

Mode and effect analysis is why the problem has occurred?
Risk priority number (RPN) = Severity X Occurrence X Detection
S = Severity of effort on customer or service
O = Frequency with which the problem is likely to offer
D = difficulty with which the problem can be detected

Poka Yoke: Mistake proofing

FMEA – Failure mode and effective analysis

Chapter30 – Hypothesis
Hypothesis testing is used to determine if there is certain evidence in sample to prove that certain
condition is true for entire population

Parametric and non-parametric test

If sample size is large, parametric test is used. If sample size is small then non-parametric hypothesis
should be used. If sample size is large then according to central limit theorem, distribution of sample
mean will be normally distributed.

3 type of parametric test:

 One sample t-test
 Two sample t-test
 ANOVA (Analysis of variation)

Null hypothesis (Ho): The new population mean is less than target.
Alternative hypothesis (Hi): The new population mean is equal or greater than hypothesis

Critical p-value:
If critical p-value is more than the calculated p-value then null hypothesis can be rejected.