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Welcome To LSSGB Competency Development Program by KPMG
Welcome To LSSGB Competency Development Program by KPMG
Development Program
By
KPMG
Introduction to Six Sigma
• Evolution of six sigma
• Six Sigma was introduced by Bill Smith in year 1986 - Motorola
• Quality Inspection -
• ISO – 1947
• JUSE – Japanese Union of Scientists and Engineers
• 1979 – Bob Gelvin
• MBNQA – 1988
• 1995 – GE – Jack Welch
Counting the f’s
Read the passage given below, individually and considering that every occurrence of the alphabet “f”
is a defect, report out the number of f’s mentioned in the passage.
D - Define D - Define
M - Measure
M - Measure A - Analyze
A - Analyze D - Design
I - Improve V – Verify
Current Defects
Customer feed back
Processing time • Customer
Employee feedback • Process Parameters
Bottlenecks in the process • Top management Target
Punctuality
Costs
Tracking current deviations
Technology developments
Benchmarking
Define Phase
• Objective: To identify opportunities for improvement and to define
the problem
Step 1: To identify opportunities for improvement Feedbacks VOC – Voice of
Internal Customer Complaints Customer
Customer - External Customer Surveys
Process Performance – KPI’s – Key Performance indicators Focused group
Management Target discussions
CTQ – Critical to
Quality
Define:
Objective: Identify and define the problem
Sources: Channels:
You take too long to sanction a loan N – Name of metric - loan processing time
U – Unit of measurement - hr
T – Target- 24 hrs
You always serve cold pizza
N – Temperature of pizza
U – UOM – degree Celsius
T - 70
Analyze the VOC
• What are the different categories of VOC
• Prioritize the VOC categories
1) Affinity Diagram
2) Kano Model
Affinity Diagram
• Record each VOC on a post it note in bold letters
• Without talking sort the ideas simultaneously as a team into 5 –10 related groupings For each
grouping create summary or header cards using consensuses
• Draw the final affinity diagram connecting all finalized header cards with their grouping
Affinity Diagram – An Example
Personal
Flexible product Easy process Availability Advice/consulting
interface
Knows about my
Low interest rate Easy application Will come to my facility Knowledgeable reps
finances
Dysfunctional - + Functional
Must Be
-
Dissatisfaction
Step #2 – Creation of Project Charter
• Business Case – Linkage of the project to organizational objective, benefits to
the organization.
• Problem Statement – 1) What is the Pain, 2) What is the Impact of Pain, 3)
Since when is the pain (Data Period)
CTQ
Milestones UOMPlanned StartCurrent
Actual
Level
Start Target
Planned
Level end TimeAcp
• Goal Statement - SMART Date Date date da
Define
• Scope of the project CST days 4 2 30days
Measure
In Scope: Health Insurance Analyze
Improve Insurance, Fire etc
Out of Scope: Motor Insurance, Transit
Control
• Milestones
• Team Details
Sponsor Signoff:
CTQ UOM Current Level Target Level Time period
Project Charter
CST days 4 2 30days
• Project charter is a one page document which provides complete information about the project
• Business Case – How the project is linking with the organizational objectives
• Problem Statement – 1. Pain
2. Impact of the Pain
3. Data period for pain – since when is the pain
Based on the data from 1st Jan 2020 to 31st March 2020, its observed that the Claim
Settlement Time 4 days, which is on a higher side as compared to industry standard
of 2 days, this high claim settlement time is resulting in loss of revenue by 20%.
• Goal Statement
SMART – Specific, measurable, achievable, realistic and timebound
Scope of a project:
In Scope: Medical(Health insurance) Claims
Milestones Planned Start Actual Start Planned end Actual end
• Scope of the project
Date Date date date
• Milestones Out of Scope: Marine, motor etc
• Team Details Define
Measure
Analyze
Team Details
• Sponsor – CXO or a Director level person
• Champion - Toll Gate Review:
• Black Belt
• Green Belt(Leader)
• Team Members
• SME’s – Subject Matter Experts
Step #3 - Process Mapping
• Gemba Walk – process walkthrough
• Creation of Process Map
1) High Level Process Mapping – SIPOC – Supplier Input Process Output Customer
2) Activity (Sub Process) level process Mapping – Flow chart, Top down charting
and functional deployment chart(Swim lane Chart)
SIPOC – TMT Steel Rod Making
Invitation task
completed
© 2018 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
25
“AS-IS” Process Mapping: Cross Functional
Template
Customer
Sales
Planning
Procurement
Operations
Logistics
2 days
3 days
Y(Dependent Parameter) = F(X) (Independent parameters which influence Y)
CTQ (Productivity, CSAT, Defects, Cycle time) Causes
KPOV - Key Process output variable ; KPIV – Key process input variables
Lag Indicator Lead Indicators
Measure Phase
• Objective: Validate the Measurement System and Collect the Data
Data
Continuous data is a
type of data which we Discrete data is a
measure Continuous Data Discrete Data type of data which
we count
Basic Statistics
𝜎 −5
−6 4 𝜎−3
𝜎− 𝜎 -2
-1
´𝑥 +1
+2
+
+
+
+
Normal Distribution:
It is a symmetric type of data distribution – Symmetric above
Measures of central tendency – Mean, Median and Mode
Is a bell shaped curve
It ranges from – Infinity to + Infinity
Variations are represented in terms of Standard deviation
Step 1:Data collection plan
Parameters Operational Type of Type of Sample Reportin Resp of Data Source
Definition Data Sampling size g data Collecti
estimati Frequen collecti on
on cy on period
CTQ(Productivi C/D Population Daily Ram Process
ty, defect rate, data /ERP
CT etc) considered
Sham
SHAFT S–
Vernier
Operational definition is the standard R – screw
gauge
guideline which tells about when, Sh -
where, how to collect the data
Sampling
(IIIII)
(IIIII)
1) Random Sampling: Take the samples in
random order, in random sampling every unit
in the population has equal probability to get
selected as sample
2) Systematic Sampling: sampling is done on
the basis of a set order
Population 3) Stratified Sampling: Stratified random sampling
Stratified systematic sampling
Auto 9:00 – 5
Infra
Customer 10:00 – 5
Sample Customer
Population s 11:00 – 5
12:00 - 5
Sample is representative unit of the
population
Defense
Conditions for sampling
customer
1) Population size is large
2) Time required for data
collection is high 4) Cluster Sampling/Rational Subgrouping/Sub
3) Cost of data collection Group:
100 data points
Individual Sampling
Sub Group Sampling
1-1
1) 9:00 – (IIIII)
2 -1
2) 10:00– (IIIII)
3 -1
3) 11:00 – (IIIII)
4-1
4) 12:00
5 -1
5
6
20
100 - 1
S, N - 1) Margin of Error
2) Population standard deviation – std.dev. Of the historic
data
3) Confidence level – 95%
S = Z^2sigma^2/E^2
Formulas for sample size estimation
2
2 2 N= 1.96 P(1-P)
Zc 1.96 E
N= n=
E E
Where:
Where:
n = minimum sample size
n = minimum sample size
P = estimation of the proportion of the population or process which is defective
= estimate of standard deviation of the population
• Select an operator and get measured all 10 parts in the random order
provided by you
• Repeat Step #4 with other 2 operators
• Repeat Step #4 and Step #5 either 2 or 3 times
Analysis of GRR study output – Acceptance
criteria
Study Variation (SV%) % Contribution Acceptable Criteria
Number of Distinct
Categories Less than 5 Not Acceptable
Analysis of GRR study output
• Total GRR
Sl.No. Agreements
1 Within Appraiser Agreement
2 Appraiser to Standard Agreement
3 Appraiser to Appraiser Agreement
s
Scale of Six Sigma
Sigma level -
Discrete Data: 3
1) DPMO Method
2) RTY Method 2
Continuous Data: 1
Process Capability Method
DPMO – Defects per million
Pay
opportunities Date
Amt in Words
Amt in figures
Signature
Question: A restaurant serves 1000 meals a day, out of which 100 were served
late and 50 were served cold, Each late serving and cold serving is considered
as a defect, then calculate DPMO
RTY Method – Rolled Throughput Yield
RTY = 70%
90/100 80/90 70/80
100
80 70
90
P1 P2 P3 I Good - 100
Yield = Output/Input
Y = 100%
Process Capability Method
Process Capability: Ability of the stable process to meet customer
requirement
LSL LCL UCL
Effect – High PR to PO
lead time, low
productivity, high
defects
4P
Measurement Machine
Material People
Policy
Procedure
Product
Filters
1) Controllable/un controllable
2) Direct Solutions
1) Pareto Analysis
2) Control Impact Matrix
Pareto Analysis
C – Freq
A - 45
B - 32
C - 24
D - 16
E–8
Wilfred Pareto
Pareto Analysis works on 80:20 principle
Cum. Fre.
Freq. of occ %
A B C D
Control Impact Matrix
Control – Control on the cause
Impact – Impact of the cause on the process
C–L C–H
HIGH
I-H I-H
Impact
C–H
C–L
I-L
LOW
I-L
LOW HIGH
Control
Step #3 – Data Door Approach – Validating the relationship
between probable causes(X) and the CTQ(Y)
• Data Analysis Methods
Type 2 Error(Beta Error) (10%): Probability of accepting null hyp, when it is false
Confidence level = 1 – Alpha
= 1 - 0.05
= 0.95 = 95%
X X
Y
X
Correlation Analysis
Correlation coefficient (r)
-1 to +1
Y(CTQ) X1
X2
X3
CTQ = A1*X1+A2*X2
Regression analysis gives 3 insights:
1) Out of identified causes, which of the causes are
influencing my output
2) How much percentage of variation in output is
answered due to the significant causes
3) Prediction model – by using this model you can predict
output at desired levels of input
Process Door Analysis
Lean is a continuous improvement methodology which focuses on minimizing
or eliminating the waste from the process
Value Adding Activities: The activities for which your customer is willing to pay
for
Non Value Adding Activates: The activities which consume resources but still do
not add any value to the system
Order Dispatch
P1 P2 P3
Process (P)
C/T
Create Flow
Flow is movement of material or service from supplier end to customer end.
• Continuous Flow
P1 P2 P3
P2_
#4 Establish Pull
Material Flow
KANBAN – Card, Bill
KANBAN – Card Bill Customer
Board
Supplier Board
Information FlowNo. of Units.
No. of Units.
Specification
Specification
Delivery Date
Delivery Date
– Card Bill
ard Raw Material Production Unit Sales and Marketing
Units.
cation
y Date
Material Flow
Information Flow
Improve
Objective: To identify solutions and implement the same.
• Identification of solutions
• Mistake Proofing of solutions Y(CTQ) X1
• Risk Proofing of Solutions X2
X3
• Trial Implementation of solutions X4
Brainstorming Design of
Experiments(DOE)
Brainstorming
RPN = Severity
X
0 Occu rrence
X
ection
Det
0
Trial(Pilot) Implementation
• Simulation models of process
• Fix certain number of runs
Full Scale Implementation Plan
Solutions Responsibility Timeline Status
Kaizen: Small
Solution 1(Kaizen 1) Team A
improvements which we
Solution 2(Kaizen 2) Team B do in our own work area
Solution 3 Team C
Stakeholder Analysis
• To identify the stakeholders getting involved or affected
• To identify possible support required from the stakeholders
• To identify possible resistances from stakeholders
5S
• It is a cont. improvement methodology which focuses on
standardizing, organizing and managing the workplace.
• Sort – necessary and un necessary items Red Tagged
Area
• Set in order – Every item has its own place
• Shine – Clean, you clean the workplace on regular interval
• Standardize – standardize the practice of first 3 S
• Sustain – Regular 5S Audits – Areas to improve and area’s doing good
Control Phase
Objective: Monitor and control the process
Control Charts:
Xbar+3s
UCL – Upper control limit
3s
X Bar
CL
3s
1 2 3
Normal distribution = (0.68)^15.
= (0.32)^8