2 - Define - Six Sigma Fundamentals

Process Maps
Process Map
Start Step A Step B Step C Step D Finish
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OSSS LSS Green Belt v11.0 XL - Define Phase 1 © Open Source Six Sigma, LLC
Process Map Symbols
Standard symbols for Process Mapping:

(available in Microsoft Office™, Visio™, iGrafx™ , SigmaFlow™ and other products)
A RECTANGLE indicates an A PARALLELAGRAM shows

activity. Statements within the that there are data
rectangle should begin with a
verb
A DIAMOND signifies a decision An ELLIPSE shows the start

point. Only two paths emerge from a and end of the process
decision point: No and Yes
An ARROW shows the A CIRCLE WITH A LETTER

connection and direction of
1 OR NUMBER INSIDE
symbolizes the continuation of a
flow
flowchart to another page
Do you know your Customer?
Knowing your customer is more than just a handshake. It is necessary to

clearly understand their needs. In Six Sigma we call this “understanding
the CTQ ’s” or critical to customer characteristics.
Voice Of the Customer Critical to Customer

Characteristics
What is a Customer?
There are different types of customers which dictate how we interact with
them in the process. In order to identify customer and supplier requirements
we must first define who the customers are:
External
– Direct: those who receive the output of your services, they generally
are the source of your revenue
– Indirect: those who do not receive or pay for the output of your
services but have a vested interest in what you do (government
agencies)
Internal
– Those within your organization who
receive the output of your work.
What is a CTQ?
• Critical to Quality (CTQ ’s) are measures that we use to capture VOC
properly. (also referred to in some literature as CTC’s – Critical to
Customer)
• CTQ ’s can be vague and difficult to define.
– The customer may identify a requirement that is difficult to measure directly so
it will be necessary to break down what is meant by the customer into
identifiable and measurable terms
Product: Service:
• Performance • Competence
• Features • Reliability
• Conformance • Accuracy
• Timeliness • Timeliness
• Reliability • Responsiveness
• Serviceability • Access
• Durability • Courtesy
• Aesthetics • Communication
• Reputation • Credibility
• Completeness • Security
• Understanding
Cost of Poor Quality (COPQ)
• COPQ stands for Cost of Poor Quality
• As a Six Sigma Belt, one of your tasks will be to estimate COPQ for your
process
• Through your process exploration and project definition work you will
develop a refined estimate of the COPQ in your project
• This project COPQ represents the financial opportunity of your team’s

improvement effort (VOB)
• Calculating COPQ is iterative and will change as you learn more about the
process
The Essence of COPQ
• COPQ helps us understand the financial impact of problems created by

defects.
• COPQ is a symptom, not a defect

– Projects fix defects with the intent of improving symptoms.
• The concepts of traditional Quality Cost are the foundation for COPQ.
– External, Internal, Prevention, Appraisal
• A significant portion of COPQ from any defect comes from effects that are
difficult to quantify and must be estimated.
COPQ - Categories
Internal COPQ Prevention

• Quality Control • Error Proofing Devices
Department • Supplier Certification
• Inspection • Design for Six Sigma
• Quarantined Inventory • Etc…
• Etc…
External COPQ Detection

• Warranty • Supplier Audits
• Customer Complaint Related • Sorting Incoming Parts
Travel • Repaired Material
• Customer Charge Back Costs • Etc…
• Etc…
COPQ - Iceberg
Inspection
Warranty Recode
Rework
Rejects
Visible Costs
Engineering change orders Lost sales
Time value of money (less obvious) Late delivery

Expediting costs
More Set-ups
Excess inventory
Working Capital allocations

Long cycle times
Excessive Material
Orders/Planning
Hidden Costs Lost Customer Loyalty
COPQ and Lean
Seven Elements of Waste *

 Correction
 Processing
 Conveyance
 Motion
 Waiting
 Overproduction
 Inventory
*Womack, J. P., & Jones, D. T. (1996). Lean

Thinking. New York, NY: Simon & Schuster
COPQ – Hard and Soft Savings
While hard savings are always more desirable because they are
easier to quantify, it is also necessary to think about soft savings.
COPQ – Hard Savings COPQ – Soft Savings
• Labor Savings • Gaining Lost Sales

• Cycle Time Improvements • Missed Opportunities
• Scrap Reductions • Customer Loyalty
• Hidden Factory Costs • Strategic Savings
• Inventory Carrying Cost • Preventing Regulatory Fines
The Basic Six Sigma Metrics
In any process improvement endeavor, the ultimate objective is to make

the process:
• Better: DPU, DPMO, (there are others, but they derive from these basic
three)
• Faster: Cycle Time
• Cheaper: COPQ
IfIfyou
youmake
makethe
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betterby
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eliminatingdefects
defectsyou
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willmake
makeititfaster.
faster.
IfIfyou
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makethe
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faster,you
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willhave
havetotoeliminate
eliminatedefects
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beas
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fastas
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be.
IfIfyou
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The
Themetrics
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2 - Define - Six Sigma Fundamentals

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Process Maps

Start Step A Step B Step C Step D Finish

Standard symbols for Process Mapping:

A RECTANGLE indicates an A PARALLELAGRAM shows

A DIAMOND signifies a decision An ELLIPSE shows the start

An ARROW shows the A CIRCLE WITH A LETTER

Knowing your customer is more than just a handshake. It is necessary to

Voice Of the Customer Critical to Customer

• COPQ stands for Cost of Poor Quality

• This project COPQ represents the financial opportunity of your team’s

• COPQ helps us understand the financial impact of problems created by

• COPQ is a symptom, not a defect

Internal COPQ Prevention

External COPQ Detection

Engineering change orders Lost sales

Time value of money (less obvious) Late delivery

Working Capital allocations

Seven Elements of Waste *

*Womack, J. P., & Jones, D. T. (1996). Lean

COPQ – Hard Savings COPQ – Soft Savings

• Labor Savings • Gaining Lost Sales

In any process improvement endeavor, the ultimate objective is to make

• Faster: Cycle Time

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