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SIX SIGMA FAST TRACK COURSE MAY 2008 Six Sigma Explained Six Sigma is the popular name of a management system that uses data and systematic approaches to continually improve the quality of business processes and consistently achieve performance excellence. Simply stated, Six Sigma is a way for you to do things better, faster, and for less cost. The term "Six Sigma" was originally coined by General Electric and literally refers to a statistical condition is which a process achieves a failure rate of less than 6 standard deviations (the symbol for standard deviation is the Greek litter sigma), or 3.4 parts per million. In this regard, achieving Six Sigma performance ideally means reducing undesirable issues to a rate of less than 3.4 per million transactions. In reality however, few business processes require true six sigma error levels and the term "Six Sigma" has adopted a more general definition of "continually working toward making business processes as efficient as possible." Although Six Sigma is a relatively modern term, it borrows heavily from earlier management philosophies such as Business Process Management, Total Quality Management, and others. If you have any experience with these techniques, you will probably find much of Six Sigma familiar. The Five Major Areas Of Six Sigma When Six Sigma is taught, it is generally broken down into five groups of related topics. Since we are moving quickly, rather than covering each of the five areas in depth we will instead provide a brief overview of each area and spend one page highlighting their purpose and components. Let's begin by introducing each topic area: Analytical Tools Analytical tools are a collection of charts and graphs that help people understand and communicate data. Some of these charts will be familiar to you while others, such as a control chart, will probably be new. These tools are used when data must be organized, displayed, or communicated to others in the Six Sigma process. Decision-Making Tools Decision-making tools are a collection of tools and techniques that help people make logical, fact-based decisions based on data. These tools are used to prioritize options and make the mathematically "best" decision based on the data available to the team. By making the best decisions, a team has the highest possible probability of success. Process Management Process management is a step-by-step procedure that helps organizations understand what they do, find better ways to do it, and ensure that improvements remain effective. This technique is frequently used organization-wide to get a handle on what needs to be improved and to ensure that improvement efforts are, and remain, effective. DMAIC Problem Solving Process DMAIC is a formal problem solving methodology for correcting an undesirable process outcome performance and ensuring that corrective measures maintain acceptable performance. When an organization encounters a problem, or when a business process is not meeting its performance targets, the DMAIC process can be utilized to systematically reduce or eliminate the problem. Leadership / Strategic Planning General leadership and strategic planning topics are often discussed as part of traditional Six Sigma training. These include areas such as team dynamics, managing improvement teams, and establishing clear linkages between Six Sigma efforts and organizational objectives. How We Will Discuss Six Sigma In This Course Now that you have a general idea of the topics provided in a Six Sigma course, we'll spend the remainder of this course two ways. First, we must quickly cover some simple concepts and terminology that are used in Six Sigma. You need to learn some of the basics or it will be difficult to understand DMAIC. Once that is finished we will dive right into practical Six Sigma by walking, step-by-step, through the DMAIC problem solving process. DMAIC is a good tool for teaching Six Sigma. As you learn each step in the DMAIC process, you will see how many of the analytical and decision tools are applied, and you will view an example DMAIC "story" to see exactly what the outcome of the structured problem solving process looks like. Once you have a basic familiarity of the tools, techniques, and a "structured process," you will have the minimum skills you need to begin applying DMAIC, Process Management, or any other Six Sigma concept. Working through this process will also demystify Six Sigma and show you why it works so well. Now, before we jump into DMAIC, let's take a look at each of five Six Sigma topic areas along with an index of links to each of their specific tools, techniques, and concepts. Key Point ets FasTrack Summary 1 of 1:- - What is the name of the management system that uses data and systematic approaches to continually improve the quality of business processes and consistently achieve performance excellence?- Answer: Six Sigma What Are The Analytical Tools? Below you will find a very brief overview of the major concepts introduced in the full Electronic Training Solution (ets) Analytical Tools course. We will encounter many of these tools and techniques as they are applied throughout his course. You are encouraged to skim the list below and see if any of these concepts are unfamiliar to you. If so, please take a moment to click on the item and read a short description of it. Analytical Tools Are A Common Language For Data (Excerpted from the ets Analytical Tools course) Analytical Tools are a common language of charts and graphs that are used to communicate information throughout your organization. Each chart and graph conveys different information, but the purpose of each is to help you and others better understand data. During the course, you were introduced to some general concepts. Click on any of these topics to return to the appropriate page in the course: • The Need For Source Blocks • Populations and Samples • Attribute Data vs. Variables Data You also learned the purpose, application, and construction methods for the following analytical tools. Click on any of these topics to return to the appropriate page in the course: • • Checksheets or Electronic Spreadsheets A Checksheet is a tool used to collect data. • Bar Charts A Bar Chart is a "summary" graph used to compare the amount of an item with other items. • Line Graphs A Line Graph is a "trend" graph that displays process outputs or outcomes sequenced by time or by occurrence. • Pie Charts A Pie Chart is a "summary" graph that shows highlights data items' relationships to their whole data set. • Pareto Charts A Pareto Chart is a "summary" analysis tool that is used to rank data groups. • Cause and Effect Diagrams A Cause and Effect Diagram is an analytical tool used to determine qualitative relationships between a problem and the reasons or factors that are possibly causing it. • Scatter Diagrams The Scatter Diagram is an analytical tool that determines whether or not a relationship exists between two linked or paired data sets. • Histograms A Histogram is an analytical tool that displays how a group of data is distributed from lowest to highest. • Control Charts A Control Chart is a data analysis tool that helps you to monitor the stability of a process output. What are Source Blocks? Maintaining Accountability Just as you sign your name to a report, you should let others know that you are the source of any analytical tool you create. Source blocks are small packages of information that are attached to analytical tools so that readers know when the data was generated, where the source data was taken from, and who they can contact if they have questions about the tool. Many times analytical tools, such as charts and graphs, are reused or included in presentations, marketing packages etc. Providing a source block ensures that even if your tool is taken out of context, a reader can clearly determine the timeliness of your data and contact the author if questions arise. By requiring clear documentation of authors and dates, source blocks help maintain accountability for analysis tools and encourage you to produce accurate work. They also prevent others from misinterpreting your data or using outdated information. The Typical Source Block Source block formatting is the same for all data analysis tools. You should know what information goes into a source block and the standard way they are constructed. Each source block looks like a small table and should contain, at a minimum, the following information: When: This is the date when the data was collected, not when the tool was created or revised. This value may be an exact date, a quarter, or even an event. If you are unsure about what to put here, ask yourself what information that a reader would require to find the exact information you used in creating your chart. Where: This is the physical source of the data. The "Where" entry should provide enough guidance so that any employee could locate the exact data used for this particular tool. Make sure to specify exact locations, such as file paths or document numbers, if they are available. Who: The "Who" entry lists all employees that created the tool. It is provided as a reference so that coworkers may identify the authors of the tool in case they have questions, corrections, or additions. Figures 1 and 2 show example source blocks. Note the level of detail provided in each section of the source block and the variation of the two styles. Locating data in a small company is dramatically different compared to a multinational conglomerate. Make sure you provide enough information for your organization. Data Source Information When: First Quarter, 2003 YTD Where: Doc #11354-1 Human Resource Funding, P 19-27 Who: K. Abrahams x3386, C. Fenwick x1914 Figure 1: A Typical Source Block from a Large Organization Data Source Information When: October 3, 2003 Where: Accountant Report (From J. Peterson) Who: Karen in Human Resources Figure 2: A Typical Source Block from a Small Organization Source blocks should be attached to every data management tool you produce. In fact, it is a good practice to attach the source block prior to completing the tool to ensure your chart will be accurately represented if someone pulls your chart off the printer or your desk while you are at lunch. Source blocks may be placed in any convenient location on your tool, but generally they are kept in the lower right hand corner for consistency. Sample vs. Population What is the difference between a Sample and a Population? You can collect information from ALL of the relevant things (every employee) or you can sample a smaller sub-group of relevant things and use their results to represent the entire group (20% of the employees). When you collect data from everything in your relevant data set, this is called a "population" of data. Populations are denoted by a capital "N." For example, if you have 450 employees and you asked each one of them which flavor of ice cream they prefer, you have conducted a population analysis where N = 450. Gathering population data is also called performing a "census" of your data. When you collect data from a representative portion of your entire relevant data set, this is called a "sample" of data. Samples are denoted by a lowercase "n." If you instead only asked 100 of your 450 employees which ice cream flavor they prefer, you would have conducted a sample analysis where n = 100. Gathering population data is also called performing a "sample" of your data. What makes data "relevant?" If you are performing a study of employee satisfaction in your organization, your population would include every single employee. This makes sense, since every employee has a relevant stake in the company's overall satisfaction. Consider, however, an employee satisfaction study of only your Human Resources department. In this case, only HR employees' data would be relevant. You may have 450 total employees, but if only 30 of them work in HR, then your population size for the relevant data set is only 30. When determining whether or not you are performing population or sample analysis, you must first decide who your relevant population is. In the first case, the entire organization is relevant. In the second case, only the HR employees are relevant. Why should I discriminate between "n" and "N?" Because in the case of a population analysis, "N," you have 100% of the relevant data. This means that, assuming no one made any mistakes in your data collection, you have almost complete certainty that your data accurately reflects your relevant population. When you perform a sample analysis, "n," the accuracy of your results is dependent on how representative the sample ("n") relevant characteristics are to the population ("N"). In other words, how well the sample resembles the population. Logically, if you only ask 5 people out of 5,000 you will have much less accurate data than if you ask 500 out of 5,000. Types of Data Attribute Data vs. Variables Data Before we look at control charts in depth, it is important to establish an understanding of the difference between the two types of data that control charts display. This is important because the two major categories of control charts only work with their appropriate type of data. Make sure you completely understand this section before proceeding. Attribute Data Attribute data is any form of data that can be counted as individual events or items. Attribute data points will always be a whole number or count of some type of data that can only exist in two states. A good way to remember this is to think of a light switch. A switch is either on or off, it is never partially on or partially off. If you checked a light switch at noon every day for a month, you could count how many times the switch was on. This would be a set of attribute data. Some examples of attribute data sets are shown below. • • Number of repeat offenders (Did they repeat? If so, then count them.) • Quantity of defective units (Were the units acceptable? If not, then count them.) • Project days on time (Is the project on time today? If not, then count it.) • Sick children (Is the child sick? If so, count him/her.) • Employee performance issues (Is there an issue? If so, record an issue event.) Variables Data Variables data is any form of data that is measured in more than two states. In other words, anytime your data value can be represented in more than a "count it or don't count it" fashion, you are dealing with variables data. Consider the following examples of variables data. The examples provided are similar to the attribute data examples above, but these have been modified to clearly illustrate the difference in the two types of data. • • Severity of repeat offense: 1 to 10. (How bad was it?) • Total cost of defective unit replacement. (What is the dollar amount?) • How far behind is the project? (How many days is it behind?) • How high is the child's temperature? (What is the thermometer measurement?) • How urgent is the issue: 1 to 5. (How urgent is it?) Other more typical variable data sets include: • • Time (days, months, weeks, hours, etc.) • Cost (dollars, cents, etc.) [...]... Key Point ets FasTrack Summary 3 of 8: If you wanted to show summary data and compare one item with other items from the same group, what graph would you use? Answer:Bar Chart Key Point ets FasTrack Summary 4 of 8: If you wanted to show trend data and display process outputs or outcomes sequenced by time or by occurrence, what graph would you use? Answer: Line Graph Key Point ets FasTrack Summary 5... Point ets FasTrack Summary 6 of 8:If you wanted to summarize and rank data groups, what graph would you use? Answer: Pareto Chart Key Point ets FasTrack Summary 7 of 8:If you had to determine qualitative relationships between a problem and all the reasons that are possibly causing it, what analytical tool would be the best to use? Answer: Cause and Effect (Fish Bone) Diagram Key Point ets FasTrack Summary... outcomes The consensus and data-based approach to the decision making tools shown in this course help teams stay focused on logical solutions and back outcomes that are most likely to succeed Remember that these tools are all required skills in formal problem solving, DMAIC, six sigma and process management methods In those courses, you will learn how to apply these tools in a logical sequence to achieve dramatic... Tools course We will encounter many of these tools and techniques as they are applied throughout this course You are encouraged to skim the list below and see if any of these concepts are unfamiliar to you If so, please take a moment to click on the item and read a short description of it Decision-Making Tools Produce Decisions Based On Consensus, Fact (Excerpted from the ets Decision Making Tools course) ...• • • Height, weight, length, etc Pressure or any measurement value! Key Point ets FasTrack Summary 1 of 8: A collection of charts and graphs that help people understand and communicate data are called? – Answer: Analytical Tools Checksheets What is a Checksheet? A checksheet is a form... used since most checksheets are completed by hand, and groups of five are easy to count In today's work, checksheets are often created using electronic spreadsheets (i.e Microsoft Excel®) Key Point ets FasTrack Summary 2 of 8: The tool used to collect data is called – Answer: Check Sheet Bar Charts What is a Bar Chart? A bar chart is a "summary" graph used to compare the amount of an item with other items... processes A problem statement is a concise, specific statement of a problem that is to be solved – particularly in the context of formal decision-making, process management, or improvement programs (six sigma) A good problem statement specifies precisely the problem to be addressed It has been said, "a problem well stated, is a problem half solved." Clear definition of the problem help focus the team... greatly reduces this effect Action Plans What Is An Action Plan? An action plan is a technique that contains the "Who, What, When and How" of a course of action (countermeasure) In the context of management, action plans are often used for improvement or project tracking When well constructed, an action plan serves as the overall blueprint of how your process resources are allocated, and how each member... Remember that standardization and effective communication are important when providing information to decision makers! Figure 1: A Barrier and Aids Analysis The general course of action is listed on the "countermeasure" line The specific course of action, or "Practical Method," line gives a description of how this countermeasure is specifically proposed to be implemented Note that for every countermeasure,... histograms are so valuable and how to read them Control Charts What Is A Control Chart? A Control Chart is a data Analysis Tool that helps you to monitor the stability of a process output Whenever you are tracking information that produces continuing data and you seek stability for your process, a Control Chart provides you with an effective method of determining where to investigate process outputs for . SIX SIGMA FAST TRACK COURSE MAY 2008 Six Sigma Explained Six Sigma is the popular name of a management. Discuss Six Sigma In This Course Now that you have a general idea of the topics provided in a Six Sigma course, we'll spend the remainder of this course