Professional Documents
Culture Documents
Advisory Services
Six Sigma
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 1
entity. All rights reserved.
What is Six Sigma?
Sigma is a letter in
the Greek alphabet
A practical application of statistical
Tool tools to help measure, analyze,
improve, and control the processes
A commitment to customers
Commitment to offer the highest quality,
reduced cost products
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 2
entity. All rights reserved.
Multiple meanings of Sigma
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 3
entity. All rights reserved.
Evolution of Six Sigma-Motorola
In 1980,
Motorola -Survival faced survival
problem with fierce Japanese
competition
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 6
entity. All rights reserved.
Six Sigma
2015 KPMG, an Indian Registered 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.
Six Sigma
Six Sigma
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with GO HEADER & FOOTER TO EDIT THIS TEXT 5/19/2015 8
KPMG International Cooperative ('KPMG International'), a Swiss entity. All rights reserved.
Six Sigma - Its significance
A statistical
Help gauge adequacy of product, process and services
measurement
A business
Good quality can help reduces cost
Strategy
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 9
entity. All rights reserved.
Six Sigma - Its significance
20,000 lost articles of mail/ hour Seven articles lost per hour
Unsafe drinking water for almost 15 One unsafe minute every seven
minutes each day months
Two short or long landings at most One short or long landing every five
major airports each day years
200,000 wrong drug prescriptions
each year 68 wrong prescriptions per year
No electricity for almost seven hours One hour without electricity every 34
each month years
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 10
entity. All rights reserved.
The paradigm shift
Speed Quality
+
Cost Changing paradigm
Speed
+
Quality Cost
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 11
entity. All rights reserved.
Quality v/s cost
25 25
Traditional view Japanese view
20 20
15 15
Cost
10 10
5 5
0 0
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
Quality
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 12
entity. All rights reserved.
Sigma and PPM are correlated
2 308000
3 66800
4 6210
5 230
6 3.4
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 13
entity. All rights reserved.
The driving need for Six Sigma
100000
10000
1000 Our
Process
100
10
1
2 3 4 5 6 7
Sigma scale of measures
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 14
entity. All rights reserved.
Why Six Sigma?
20
Percent of 15
sales
10
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 15
entity. All rights reserved.
Work on low hanging fruits first
5s
Bulk of fruits process characterization
4s
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 16
entity. All rights reserved.
Six sigma team roles and responsibilities
A resource pool
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 17
entity. All rights reserved.
Six Sigma
Deming on processes
Six Sigma
is applied on pain problem areas of
the organisation for improvements
DMAIC
For existing process
DMADV
For new process
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 19
entity. All rights reserved.
DMAIC Vs. DMADV
Define
project
scope
Does
Process
exist?
Measure Measure
Analyse Analyse
DMADV
DMAIC
(DFSS)
Design Improve
Verify Control
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 20
entity. All rights reserved.
DMAIC methodology
Define
Selection of performance characteristics critical in meeting customer
requirements
Measure
Creation and validation of a measurement system
Analyse
Identification of sources of variation from the performance objectives
Improve
Discovery of process relationships and establishment of new procedures
Control
Monitoring of implemented improvements to maintain gains and help ensure
corrective actions are taken when necessary
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 21
entity. All rights reserved.
DMAIC methodology
Define
Initiate, scope and plan the project
Measure
Understand customer needs and specify the CTQs
Analyse
Develop design concepts and high-level design
Design
Develop detailed design and control/test plan
Verify
Test design and implement full-scale processes
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 22
entity. All rights reserved.
For each producr or process CTQ
Define, measure, analyse, improve and control
Y = F (X)
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 23
entity. All rights reserved.
Define
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 24
entity. All rights reserved.
DMAIC Methodology
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 25
entity. All rights reserved.
What is to be defined?
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 26
entity. All rights reserved.
Six Sigma
Team charter
Acharter is a
document that provides
purpose and goals for an
improvement team
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with GO HEADER & FOOTER TO EDIT THIS TEXT 5/19/2015 27
KPMG International Cooperative ('KPMG International'), a Swiss entity. All rights reserved.
Five major elements of a charter
Problem and
Roles goal
statements
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 28
entity. All rights reserved.
Write the problem statement
Problem definition
What is the problem?
Undesirable effect
Gap between the desired and actual
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 29
entity. All rights reserved.
The business case
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 30
entity. All rights reserved.
Six Sigma
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with GO HEADER & FOOTER TO EDIT THIS TEXT 5/19/2015 31
KPMG International Cooperative ('KPMG International'), a Swiss entity. All rights reserved.
The problem statement
Checklist of pitfalls
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 32
entity. All rights reserved.
The problem statement
Project objective
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 33
entity. All rights reserved.
Drivers of project selection
Bigger Ys
Project Y
Key project metric defined
X1 X2 X3 From the customer perspective
Any parameters that influence the Y
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 34
entity. All rights reserved.
Prioritization of Six Sigma projects
Decreased cost
Reduced rework
Increased labor efficiency
Reduced operating expenses (fixed and variable costs)
Reduced plant and equipment depreciation or lease expense
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 35
entity. All rights reserved.
Gather VOC
Translate to needs
Identify customer Gather verbatim VOC
statement and develop
segments that need to and determine service
a CTQ - project Y metric
be targeted quality issue
output characteristic
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 36
entity. All rights reserved.
Gather VOC
Translate to needs
Identify customer Gather verbatim VOC
statement and develop
segments that need to and determine service
a CTQ - project Y metric
be targeted quality issue
output characteristic
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 37
entity. All rights reserved.
Affinity diagram
Low interest rate Easy application Will come to my facility Knowledgeable reps Knows about my
finances
Available outside
Variable terms Easy access to capital Professional
normal business hours Knows about my
business
All charges clearly Quick decision Available when I need Friendly
stated to talk Makes finance
Can apply over phone Make me feel suggestions
Pay back when I want Responsive to my calls comfortable
Know status of loan Cares about my
No prepayment Talk to one person Patient during process business
during application
penalties/ charges
Know status of loan Has access to experts
Pre-approved credit
(post-approval)
Provides answers to
Preference if bank questions
customer
Calls if problems arise
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 38
entity. All rights reserved.
Translating VOC into CTQs
VOC C T Qs
Translate to needs
Identify customer Gather verbatim VOC
statement and develop a
segments that need to and determine service
CTQ - project Y metric
be targeted quality issue
output characteristic
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 39
entity. All rights reserved.
Example: Translating VOC to CTQs
Quick response
Specific
User friendly forms
needs
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 40
entity. All rights reserved.
Identify Must bes affecting CTQs
Shareholders and
customers
Business process
Compliance
effectiveness
Project
Employees
CTQ Cost and competitors
Controllership
Integrity of
and Business
Communications
Strategy
Internal
upstream/downstream
Customers
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 41
entity. All rights reserved.
Elements of a project charter
Start with a verb (e.g., reduce, eliminate, control, increase) Who are the key resources ?
Focus of project (cycle time, accuracy, etc.) What will be the roles of BBs/
Target (by 50 per cent, by 75 per cent) GBs/Sponsor/MBBs
Deadline
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 42
entity. All rights reserved.
Project scope
What will happen to our regular jobs while we are doing the project?
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 43
entity. All rights reserved.
Sample project charter
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 44
entity. All rights reserved.
Sample project charter
CTQ: Accuracy
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 45
entity. All rights reserved.
Prioritising CTQs Kano model
Satisfaction
Delighters +
One-dimensional
Innovation
Competitive priority
Free upgrades
Individual movies and games Seat comfort
Special staff attention/services Quality of refreshments
Computer plug-ins (power Friendliness of staff
sources) Baggage speed On-time
arrival
Dysfunctional Functional
Must be
Critical priority
Dissatisfaction
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 46
entity. All rights reserved.
Prioritising CTQs Kano model
Kano model/theory:
The Kano theory helps prioritise teams improvement efforts after needs and CTQs have been established.
The team should refrain from translating CTQs to the Kano model but rather have customer VOC verify
where the need/CTQ should feature using the model
For some customer needs, customer satisfaction is proportional to the extent to which the product or
service is fully functional
The horizontal axis indicates how fully functional a product/service is; and the vertical axis indicates
customer satisfaction
It is to be expected over a period of product life cycle that (the product) could shift from being a delighter to
a one dimensional to a must - be (e.g., invention of TV)
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 47
entity. All rights reserved.
In frame/out frame - Project scoping tool
Draw a large square picture frame on a flip chart (or use tape on a wall) and use this
metaphor to help the team identify what falls inside the picture of their project and what falls
out. This may be in terms of scope, goals, and roles
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 48
entity. All rights reserved.
G.R.P.I
G.R.P.I. checklist - This tool is based on a simple model for team formation. It
challenges the team to consider four critical and interrelated aspects of teamwork:
Goals, roles, processes and interpersonal relationships.
It is invaluable in helping a group become a team.
Interpersonal
Are the relationships on our team working well so far? How is our level of openness, 1 2 3 4 5
trust, and acceptance?
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 49
entity. All rights reserved.
G.R.P.I
Uses: An excellent organising tool for newly-formed teams or for teams that have
been underway for a while, but who have never taken time to look at their teamwork.
Ideally, this tool should be used at one of the first team meetings. It can and should
be updated as the project unfolds.
Steps:
Distribute copies of the check list to all team members prior to a team meeting. Invite team members
to add details/examples on each of the four dimensions of the check list. Ask each team member to
bring his/her completed checklist to the team meeting.
At the team meeting discuss and resolve issues related to the check list.
Share certain aspects with champion/functional leader if appropriate.
Option: When there is considerable disagreement or tension within the team environment, team
members can choose to complete the questionnaire individually and turn it in to a neutral party who
will collate the data and give it back to the team in an aggregate fashion (thus protecting the
anonymity of individual team members).
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 50
entity. All rights reserved.
G.R.P.I
Expanded version of the tool: Useful when a more detailed look at team elements is
required.
How would you rate the degree to which your team presently has clarity, agreement and
effectiveness on the following GRPI-related elements?
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 51
entity. All rights reserved.
G.R.P.I
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 52
entity. All rights reserved.
Great project
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 53
entity. All rights reserved.
Project selection
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 54
entity. All rights reserved.
Process definition and elements
A collection of activities that takes one or more inputs and transforms them into
outputs that are of value to the customer
Inputs Outputs
Supplier(s) Customer(s)
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 55
entity. All rights reserved.
Process mapping and benefits
CTQs CTQs
S I P O C
Suppliers Inputs Process Outputs Customers
Measures Measures
Process map
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 56
entity. All rights reserved.
Process mapping and benefits
Process: A collection of activities that takes one or more kinds of input and creates output
that is of value to the customer
CTQs: Critical to quality characteristics; a specific attribute or quality of the output that is a
key requirement for customer satisfaction
Boundary: The limits of a particular process, that define the start and stop points of the
process
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 57
entity. All rights reserved.
Levels of process mapping
Subprocesses
(Level 2)
Exports Imports
Subprocesses
(Level 3)
Microprocesses
(Level 4 and Below)
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 58
entity. All rights reserved.
Process mapping guidelines
Process STOP
Suppliers Inputs Outputs Customers CTQs
Define business process to be reviewed name it agree on beginning and end of process bound it.
Refer to CTQ work to identify primary outputs, the customers who receive them, and the customers CTQs
All steps should begin with a verb Do not discuss process steps in detail
Use brainstorming and affinity techniques to identify critical inputs which affect the quality of the process
Validate to be sure the map represents the situation as it really is today (the as is map) not how you think it is,
or how it should be
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 59
entity. All rights reserved.
Define deliverables
Review Six Sigma Quality project tracking database for similar projects
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 60
entity. All rights reserved.
Six Sigma
Create the
project charter
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with GO HEADER & FOOTER TO EDIT THIS TEXT 5/19/2015 61
KPMG International Cooperative ('KPMG International'), a Swiss entity. All rights reserved.
Measure
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 62
entity. All rights reserved.
Select project Y
Example:
Employer
Big Ys of choice
Process CTQs/
VOC CTQs Retention rate
process metrics
Project CTQ/
Attrition %
project Ys
Essential to validate the linkage between project CTQ, process CTQs and big Ys
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 63
entity. All rights reserved.
Select project Y
The foundation of the measure phase as the name suggests lies in the data
collection plan keeping the target of the project, processes and business in
mind
The above steps have an inherent linkage in the sense that it would enable
us to cross check if our project CTQ is aligned to the process output
characteristic
The process output characteristic can than be rolled up into process and
business metric
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 64
entity. All rights reserved.
Cause and effect diagram
Method
Printer problem Linked deals not getting
Changes made in
Bank Profile with released on time
operational data Machine
Printing not clear wrong Swift IDs
Forced priority of deals
Handwriting
Write the To many deals held
not legible
effect here Full document not Correction of errors with the same person
scanned in previous deal Changes in Bill
delays current deal category
by Spoke
Why do we have
late processing
Lack of typing skill
Awaiting memo replies Creation of
(clarifications) bank ID,
Fear of committing errors
Customer ID
To many amendments Availability of IMEX for
long hours Alternations of errors
Learning curve making in previous steps
Bunching of documents
Institutions not clear
Complicated deals
Lack of training programme Measurement
Absenteeism
Late scanning and receipt for new recruits
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 65
entity. All rights reserved.
Cause and effect diagram
Statistics > quality tools > cause-and-effect Menu pull-down sequence in minitab
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 66
entity. All rights reserved.
Control impact matrix
strategy Just Do it
Impact
Low High
In our control
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 67
entity. All rights reserved.
Understanding measures
Measure: Any element relating to the process under study which is operationally definable
and quantifiable. Measures can be understood better by classifying them in the following
ways:
Classification
of measures
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 68
entity. All rights reserved.
Based on SIPOC
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 69
entity. All rights reserved.
Based on SIPOC
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 70
entity. All rights reserved.
Based on focus
Effectiveness Efficiency
The degree to which customer CTQs are met and The amount of resources allocated in meeting
exceeded and exceeding customer CTQs
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 71
entity. All rights reserved.
Based on statistics
Discrete Continuous
Classified into one Rankings or Ratings Counted discretely Measured on a continuous scale
of two categories
Is this group ready to Classification of the group into Number of people Actual distance traveled by
travel 100 km daily to categories based on distance each who have come late today each in this group measured
Example
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 72
entity. All rights reserved.
Exercise Type of data
4. Number of blemishes per square yard of cloth, where pieces of cloth may be of variable size
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 73
entity. All rights reserved.
Based on statistics
Points to remember:
It is possible to convert continuous data to
discrete, however visa-versa is not
possible
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 74
entity. All rights reserved.
Control impact matrix
Classify all the causes that the group arrives at in the brainstorming session for the control and impact
matrix
Use your teams process knowledge and business experience to list possible Xs in a control/impact
matrix, then use process data to verify or disprove placement of the Xs
Prioritization steps
Using the control/impact matrix shown above, examine each X in light of two questions:
What is the impact of this X on our process?
With your team, place each X in the appropriate box on the matrix
The validated matrix is a guide used to addressing the Xs. Begin with the high impact/in our control
category
Out of our control Xs may require special solutions and CAP (change accelerating process) tools for
successful sustainable solutions
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 75
entity. All rights reserved.
Must be for measures
The cost benefit ratio for the data collection should be justifiable
A clear operational definition of the measure has been agreed upon by all
stakeholders
The measure and subsequent data collection should enable analysis, evaluations
and actions
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 76
entity. All rights reserved.
Data collection plan
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 77
entity. All rights reserved.
Data collection plan
Data collection occurs multiple times throughout DMAIC. The data collection plan
described here can be used as the guide for data collection. This help us ensure that
we collect useful, accurate data that is needed to answer our process questions
It is important to be clear about the data collection goals to ensure the right data is
collected. If your data is in the wrong form or format, you may not be able to use it in
your analysis
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 78
entity. All rights reserved.
Template - Data collection plan
A format of an excel spread sheet that can be used for data collection plans for our projects.
The sample data collection plan above is for the project CTQ, in this example, number of
rejections.
However one should remember that based on C-E diagram and the SIPOC all those Xs
which the team feels to have a influence over the Y should also be included in the data
collection plan.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 79
entity. All rights reserved.
Sampling
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 80
entity. All rights reserved.
Six Sigma
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with GO HEADER & FOOTER TO EDIT THIS TEXT 5/19/2015 81
KPMG International Cooperative ('KPMG International'), a Swiss entity. All rights reserved.
Sampling
The Six Sigma team would always face a question How much data do we need to have a
valid sample? Though an important part of data collection is to obtain a sample of
reasonable size, it is one of many questions to be addressed during the planning and
development of a data collection strategy. Sample size is just one aspect of a valid data
collection activity
The validity of the data is impacted by many things: For example, operational definitions,
data collection procedures and recording
What are the key considerations for either a process or population situation?
What is the approach to sampling (e.g., random, systematic, etc.) and approximately how
many to sample?
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 82
entity. All rights reserved.
Sampling
When to sample?
Collecting all the data is impractical
High cost implications due to population
study
Time availability
Data collection can be a destructive
process (crash testing of cars)
When measuring a high-volume process
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 83
entity. All rights reserved.
Types of sampling
Types of sampling
All items in the population have an equal chance of The groups knowledge and opinions are used to
getting selected identify items from the population
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 84
entity. All rights reserved.
Approaches for sampling
Assess the stability of the population over time Make probability statements about the
Are the shifts, trends, or cycles occurring? population from the sample
Do I take a special or common cause variation I have 95 per cent confidence that the mean
approach to process improvement? of the population for turn around time is
between 1.5 and 2.5 seconds
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 85
entity. All rights reserved.
Approaches for sampling
Approaches
for sampling
Process Population
Measurement of AC room While studying the arrival Survey across our Average cycle time for LC
temperature. Collect one rate of documents as Organisation to know lissuance process of
data point every one hour for dispatched by the customer. What percentage of our different countries. Each
the entire day. The entire day is split up into employees have visited the country is a strata (segment).
quadrants, rational being the intranet in last seven days. Collect random data from
arrival rate of documents is Select employees from each strata
similar within each quadrant Population at random
and different between And collect data.
quadrants
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 86
entity. All rights reserved.
Approaches for sampling
Systematic sampling is typically used in process sampling situations when data is collected real time
during process operation. Unlike population sampling, a frequency for sampling must be selected
Systematic sampling involves taking samples according to some systematic rule e.G., Every fourth
unit, the first five units every hour, etc. One danger of using systematic sampling is that the systematic
rule may match some underlying structure and bias the sample
For example, the manager of a billing center is using systematic sampling to monitor processing
rates. At random times around each hour five consecutive bills are selected and the processing time
measured
Like random samples, stratified random samples are used in population sampling situations, when
reviewing historical or batch data
Stratified random sampling is used when the population has different groups (strata) and we need to
help ensure that those groups are fairly represented in the sample. In stratified random sampling,
independent samples are drawn from each group. The size of each sample is proportional to the
relative size of the group
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 87
entity. All rights reserved.
Rational subgrouping
The process
12noon to 12.20pm 12.45pm to 1pm 1.20pm to 1.45pm Sample
Subgroup of
samples
Points to remember
Monitor process frequently enough to catch it in various phases of operation
Processes working on lower turn around time need a higher frequency and vise versa
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 88
entity. All rights reserved.
Rational subgrouping
Rational subgrouping is the process of putting measurements into meaningful groups to better
understand the important sources of variation
Rational sub grouping is typically used in process sampling situations when data is collected
real time during process operations. It involves grouping measurements produced under similar
conditions, sometimes called short-term variation. This type of grouping assists in understanding
the sources of variation between subgroups, sometimes called long-term variation
Minimise the chance of special causes in variation in the subgroup, and maximise the chance
for special causes between subgroups
Sub grouping over time is the most common approach; sub grouping can be done by other
suspected sources of variation (e.g., Location, customer, supplier, etc.)
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 89
entity. All rights reserved.
Sampling bias
Sampling bias
Bias occurs when systematic differences are introduced into the sample as a
result of the selection process
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 90
entity. All rights reserved.
Determining the Sample Size
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 91
entity. All rights reserved.
Sample size for continuous data
Zc
Is defined as the Z value at c level of confidence
For example a 95 per cent level of confidence is taken for which Z value is 1.96
2
Target value
The Six Sigma team can thus infer that the mean for the population lies within m with 95 per
cent confidence - For service industry purposes we will use 95 per cent confidence Interval
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 92
entity. All rights reserved.
Sample size for discrete data
p
Is the estimate of the proportion defective for the population
The measured
value can lie
between these
What do we infer?? limits
The six sigma team can thus infer that the population proportion defective lies between p
with 95 per cent confidence
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 93
entity. All rights reserved.
Measurement System Analysis (MSA)
Total variance
Apparent process measurement
variation = variation + variation
Double challenge:
Help reduce variation in both processes!
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 94
entity. All rights reserved.
Terms of MSA
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 95
entity. All rights reserved.
Examples of ANOVA
Four different machines are used to produce milk An agricultural scientist uses fertilizers supplied by
pouches of 1000ml dz h by city dairy. Before these three different manufactures to study the yields. The
pouches are dispatched for local distribution, the yields (mt per acre per year) from different plots of
quality assurance manager selects four samples of 100 similar characteristics are as follows. Test whether
pouches from each of the machines and determines the yields differ significantly when fertilizers from
the no. of pouches that does not meet the different manufactures are applied
specifications under the weights and measures act.
The results are tabulated as follows:
Machine Fertilizer
Observation I II III
A B C D
1 55 73 70
7 6 8 10 2 75 87 72
3 73 84 75
6 8 9 11
4 77 57 80
9 10 11 12 5 78 65 83
6 85 60
5 4 6 7
7 92
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 96
entity. All rights reserved.
Example of ANOVA
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 97
entity. All rights reserved.
Example of ANOVA
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 98
entity. All rights reserved.
Example of ANOVA
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 99
entity. All rights reserved.
Example of ANOVA
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 100
entity. All rights reserved.
Example of ANOVA
Per cent contribution (or gage R&R standard deviation): GR&R variance should be small
compared to part-to-part variance
Effective Resolution 50 per cent, or more, of Xbar chart outside control limitsimplies part
variation exceeds measurement system variation
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 101
entity. All rights reserved.
Example Attribute agreement analysis
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 102
entity. All rights reserved.
Example Attribute agreement analysis
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 103
entity. All rights reserved.
Example Attribute agreement analysis
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 104
entity. All rights reserved.
Example Attribute agreement analysis
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 105
entity. All rights reserved.
Example Attribute agreement analysis
Kappa
If kappa = 1, then there is perfect agreement. If kappa = 0, then agreement is the same as would be
expected by chance. The higher the value of kappa, the stronger the agreement between rating and
standard. Negative values occur when agreement is weaker than expected by chance, but this rarely
happens. Depending on the application, kappa less than 0.7 indicates the measurement system needs
improvement. Kappa values above 0.9 are considered excellent.
Kendall's
Use the p-values to choose between two opposing hypotheses, based on your sample data:
H0: There is no association among multiple ratings made by an appraiser
The p-value provides the likelihood of obtaining your sample, with its particular Kendall's coefficient of
concordance, if the null hypothesis (H0) is true. If the p-value is less than or equal to a predetermined
level of significance (a-level), then you reject the null hypothesis and claim support for the alternative
hypothesis.
Alternate hypothesis is good here as you are trying to judge if the match is due to chance or significant
match
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 106
entity. All rights reserved.
Example Attribute agreement analysis
When your classifications are ordinal (ratings made on a scale), in addition to kappa
statistics, use Kendall's coefficient of concordance.
When your classifications are ordinal and you have a known standard for each trial, in
addition to kappa statistics, use Kendall's correlation coefficient.
Kappa statistics represent absolute agreement among ratings. Kappa statistics treat all
misclassifications equally.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 107
entity. All rights reserved.
Six Sigma
Minitab session on
measurement
system analysis
8%
12%
INPUT ERROR
Pie chart 30 UCL=30.00
0 LCL=3.68E-04
Subgroup 0 10 20 30
20
UCL=18.43
R=5.640
0 LCL=0
Bar chart
Histogram
Continuous data
Frequency
Measurement
Run chart
I and MR Chart for C1
Measurement Time
30 UCL=30.00
Individual Value
20
x
Mean=15
10
Frequency diagram
0 LCL=3.68E-04
Subgroup 0 10 20 30
20
UCL=18.43
Moving Range
10
Box plot
R=5.640
0 LCL=0
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 109
entity. All rights reserved.
Characteristics of data
Characteristics of data
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 110
entity. All rights reserved.
Central tendency
Consider the time taken for people to withdraw cash (including queue time)
from two different ATM counters. Which counter is better !!
Counter 1 Counter 2
10 10 Median is not affected by Mean
the presence of extreme values
12 12 The arithmetic average
13 13 Can get skewed with extreme
9 9 observations
8 8 The deviations are measure as
7 7 distance from the mean
8 8
10 100
14 14 x
Mean 10.11 20.11
Median (the middle
Median 10 10
data point)
The positioning of the data set
Mode helps determine median
Mode is the data point which occurs Takes into account all values
the most often but does not get skewed
Mode is extensively used in the case
of discrete data which are ordered
categories
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 111
entity. All rights reserved.
Dispersion
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 112
entity. All rights reserved.
Normal curve
A normal curve originates from a histogram. A histogram is a frequency distribution chart showing
the number of times a given value of the parameter we are trying to measuring occurs.
45 50 55 Menu pull-down
Processing Cycle Time sequence
in minitab
Stat > basic statistics > display descriptive statistics > graphs
Minitab software can be used to display a histogram, a histogram with a normal curve and other
graphical summary to be learnt later.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 113
entity. All rights reserved.
Normal curve
34.13% 34.13%
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 114
entity. All rights reserved.
Normal plot
.999
.99
Percentage of data
.95
getting covered under
the curve
Probability
.80
.50
.20
.05 P-value
.01 determines
.001 the normality
of the data
24.8 25.8 26.8 27.8 28.8 29.8 30.8 31.8 32.8 33.8
C1
Average: 29.9371 Anderson-Darling Normality Test
StDev: 1.72224 A-Squared: 0.366
N: 90 P-Value: 0.427 Menu pull-down
sequence in minitab
Stat > basic statistics >normality test
Generates a normal probability plot and performs a hypothesis test to examine whether or not the
observations follow a normal distribution.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 115
entity. All rights reserved.
Normal probability plot
Frequency
5
10
4
Percent
3
2
1
0 0
12 13 14 15 16 17 18 0 10 20 30 40 50 60 70 80 90
80
Percent
4 4
Percent
80 70
70 60
60 50
3 50
3 40
40 30
30
20
2 20
2 10
10
5
5
1
1
1 1
0
7 9 11 13 15 17 19 21 23 0 10 20 30 0 7 9 11 13 15 17 19 21 23 0 10 20 30
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 116
entity. All rights reserved.
Types of Distribution
The shape of the distribution depicted by the data can be studied with the
help of a histogram or more precisely with normal probability plot
Frequency
5
Frequency
4 10
3
2
1
0
0
12 13 14 15 16 17 18 19 0 10 20 30 40 50 60 70 80 90
Bimodal distribution
6
5
4
Frequency
3
2
1
0
7 9 11 13 15 17 19 21 23
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 117
entity. All rights reserved.
Quartile value
Q1 Q3
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 118
entity. All rights reserved.
Stability factor
The stability factor is interpreted such that the closer SF is to 1, the less variation
there is in the process. The further SF is from 1, the more variation there exists in the
process
Q1 Q3
Q1 Q3
Q1 More Q1 Less
Q3 <1 Variation Q3 1 Variation
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 119
entity. All rights reserved.
Box plot
*
* Outlier
*
Highest Value
Lowest value
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 120
entity. All rights reserved.
Box plot
Box plots are graphical summaries of the patterns of variation in sets of data
The horizontal lines at the top and bottom of the plot represent the highest and lowest
values. The horizontal line in the middle of the solid box represents the median, and the
solid box represents the middle 50 per cent of the data, with 25 per cent of the data on
the top side of the box and 25 per cent of the data on the bottom side of the box
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 121
entity. All rights reserved.
Descriptive statistics
Descriptive Statistics
Variable: Processing Cycle
Time
Anderson-Darling Normality T est
A-Squared: 0.836
P-Value: 0.030
Mean 50.4118
StDev 2.2972
Variance 5.27718
Skewness 0.424275
Kurtosis 0.339406
45 47 49 51 53 55 57 N 100
Minimum 44.7533
1st Quartile 48.9910
Median 50.0208
3rd Quartile 51.8229
95% Confidence Interval for Mu Maximum 56.5353
95% Confidence Interval for Mu
49.9560 50.8676
49.8 50.3 50.8 95% Confidence Interval for Sigma
2.0170 2.6686
95% Confidence Interval for Median
95% Confidence Interval for Median
49.6825 50.5014
Descriptive statistics can be run on minitab. The result will be shown as above. One would be able to get
information on normality of the data, visual display of data (normal curve), box plot, outliers, mean,
median, standard deviation, quartile values.
Stat > sasic statistics > display descriptive statistics
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 122
entity. All rights reserved.
Run chart
Median
Time
A tool used to depict the behaviour of the process under investigation over a period of time
A run is defined as a single point or a series of sequential points where no point is on the
other side of the median.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 123
entity. All rights reserved.
Patterns observed in run charts
Trend Cycle/oscillation
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 124
entity. All rights reserved.
Run chart
In Minitab:
Choose data
Choose menu Choose quality Choose run are arranged
option stat tools chart as single
column
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 125
entity. All rights reserved.
Run chart
Output
Run Chart for man-hours
Horizontal line
indicates the media of
the sample data plotted
Number of runs about median: 10.0000 Number of runs about median: 18.0000
Expected number of runs: 16.0000 Expected number of runs: 19.6667
P-Value are here Longest run about media:
Approx P-Value for Clustering:
10.0000
0.0129
Longest run up or down:
Approx P-Value for Trends:
6.0000
0.2283
P-Value are here
Approx P-Value for Mixtures: 0.9871 Approx P-Value for Oscillation: 0.7717
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 126
entity. All rights reserved.
Six Sigma
Minitab exercises
on graphical
analysis
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 128
entity. All rights reserved.
Analyse
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 129
entity. All rights reserved.
Rolled throughput Yield
Final Yield (FY) Yield at the end of the process excluding scrap
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 130
entity. All rights reserved.
Rolled throughput yield
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 131
entity. All rights reserved.
Rolled throughput yield
Scrap
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 132
entity. All rights reserved.
Rolled throughput yield
Hidden factory
9 0 units 80 units
FTY 90 per cent FTY 88.9 per cent FTY 87.5 per cent FTY 70 per cent
TPY 80 per cent TPY 77.8 per cent TPY 75.0 per cent
X X = 46.7 per cent
RTY .80 RTY .778 RTY .75
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 133
entity. All rights reserved.
Sigma calculation
6 99.99966% 3.4
4 99.9770% 230
3 99.3790% 6,210
3 93.320% 66,800
2 69.20% 308,000
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 134
entity. All rights reserved.
Common terms
Concept Definition
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 135
entity. All rights reserved.
Sigma calculation
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 136
entity. All rights reserved.
Abridged sigma table
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 137
entity. All rights reserved.
How to improve the process performance
Or
Is the problem around the variations??
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 138
entity. All rights reserved.
The statistical problem
Target Target
Shift the process mean (technology case) Reduce process variation (control case)
The process variation is well under control The process is capable of performing around the
mean target of the process
The problem lies with the centering or the mean
target of the process output However the variation is beyond acceptable limits
Indicates a need for a look at the technology The technology is supportive but the control
being used for the process mechanisms are not very effective
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 139
entity. All rights reserved.
Process capability
Also enables the six sigma team to determine the percent of the product/service not meeting the customer requirement
to enable root cause Analysis
A stable process can be represented by a measure of its variation - six standard deviations Comparing six standard
deviations of the process variations to customer specifications derives Process Capability
Cp : Process capability
While Cp looks at the spread of variation it does not look at how well the process is centered to the target value
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 140
entity. All rights reserved.
Process capability
-3 -2 -1 +1 +2 +3
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 141
entity. All rights reserved.
Other indices
The indices of Cpl and Cpu (for single sided specification limits)
or
and Cpk (for two sided specification limits) measure
- Process variation with respect to specifications
- Location of the process average
Cpk is considered a measure of process capability and is taken as the smaller of either Cpl or Cpu can
then be estimated
Cpk = min (Cpl , Cpu )
Last but not the least Minitab helps us do all of it
Target a Cp greater than 1 and a Cpk as equal to 1 (both sides equal)
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 142
entity. All rights reserved.
Segmentation and stratification
Segmentation
A process used to divide a large group of data into smaller, logical categories for analysis. Segmentation
is commonly used by us in our day to day business to understand and interpret information
Example: Segmentation of customers based on the cities
Stratification
A process which uses summary metrics (central tendency, dispersion) to make the decision about when
to separate different processes for continued analysis
Unlike segmentation, stratification involves the uses data rather than just information. Values of the
central tendency and dispersion are used to stratify the given data set.
Example : Stratification of the customers based on the business volumes they provide us
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 143
entity. All rights reserved.
Segmentation tools
Pie charts
PERCENTAGE
Can be used to represent the per cent
break up or the absolute numbers
12%
8% INPUT ERROR
OMISSION Use excel to develop the graph
PROCEDURE
18% 62% OTHERS
Further break up of each slice is also
possible
Bar charts
160 Various combinations and patterns of the
140
120
bar chart make it the most widely used
No. of errors
100
80
Errors
commited
tool
60
Not updated
40
20
Can depict process performance in
0 various pockets as against the targets
rks
email
onship
)
)
r
ethnic
dob
hg
de
hp
fax
tel (o
tel (h
page
zip co
add c
Rema
Error fields
comparative effects of factors
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 144
entity. All rights reserved.
Pareto chart
April 1 June 30
200 100
Number of units investigated: 8,000
180 *f = frequency
90
Cumulative Summation Line
160 80
f* of D+B+F (Cum Sum line)
140 f* of D+B 70
Cumulative percentage
120
60
Frequency
f* of D
100
50
LEGEND
80
40 A: Typographical errors
B: Incomplete info
60 C: Sign not verified
30
D: Illegible
40 E: Process understanding
20
F: Poor scan quality
20
10
0 D B F A C E Other
Type of defect
Approximately 80 per cent of defects from defects D+B+F.
80 per cent of the effect on Y is caused by 20 per cent of the factors (X).
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 145
entity. All rights reserved.
Pareto chart
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 146
entity. All rights reserved.
Pareto chart
Parrot chart can be used in the define phase to narrow-down the scope of the project
and focus on key-factors if historical data available
Pareto chart be used the measure and analyse phase to analysing the data gathered
to identify which are the 20 per cent root-causes which cause 80 per cent of the effect
Pareto chart should not be used in series repeatedly on the same set of causes as this
will reduce the focus area to 80 per cent of 80 per cent of 80 per cent.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 147
entity. All rights reserved.
Process mapping
Points to Remember:
People who work on the process know it the best. Involve people who know (focus on)
the as Is process
Decide, clarify and agree upon process boundaries
Use group activities like brainstorming
Use verb - noun format (e.g., Prepare contract not contracting)
Do not aim at the person taking care of the activity
Respect the boundaries
Do not start problem solving
Validate and refine before analysing
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 148
entity. All rights reserved.
Process mapping
Earlier in define, you developed a high-level or SIPOC process map. By looking at a process from a
big picture perspective, you evaluated customer needs and supplier inputs, and determined initial
measurement objectives
Now, you will look in more detail at the sub processes defined in the SIPOC map. Sub process
maps provide specifics on the process flow that you can then analyse using several useful
techniques. Choose what to sub process map by determining which of the major steps in the
SIPOC have the biggest impact on the output (Ys). The block (or blocks) selected is the one on
which you create a sub process map using it to understand how and why it impacts the output
If the output is a time measure, which of the blocks consumes the largest portion of total time, or
which one has the most variation or delays?
If the output is a cost measure, which of the blocks adds the most cost?
If the output is a function measure, which block has the most errors or problems?
Like working with a puzzle, you begin to assemble the pieces of an area on which it makes sense to
focus our efforts
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 149
entity. All rights reserved.
Subprocess mapping
Core Process
Business processes
SIPOC S C
Suppliers (ext.) Customers
(int.) Customer
service
department.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 150
entity. All rights reserved.
Subprocess mapping
Here are some guidelines on building a sub process map. These are not absolute but they should
help you avoid some of the pitfalls of process mapping:
Focus on As is To find out why problems are occurring in a process, you need to concentrate
on how its working now
Clarify boundaries If youre working from a well-done high level map, this should be easy. If
not, you will need to clarify start and stop points
Brainstorm Steps It is usually much easier to identify the steps before you try to build the map
Starting each step description with a verb (e.g., collate orders; review credit data) helps you
focus on action in the process
Who does the step is best left in parentheses (or left out) you want to avoid equating a person
with the process step
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 151
entity. All rights reserved.
Examples: Subprocess mapping
Invitation task
completed
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 152
entity. All rights reserved.
MUDA
Muda means waste, where waste is any activity that does not add value. Reducing or eliminating
muda is, of course, one of the fundamental objectives of any quality-oriented person.
Defects
Overproduction
Inventories
Unnecessary processing
Unnecessary movement of people
Unnecessary transport of goods
Waiting
Designing goods and services that done meet customers needs
Muda is one of the '3Ms': muda, or waste, mura, meaning irregular, uneven or inconsistent, and
muri, meaning unreasonable or excessive strain.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 153
entity. All rights reserved.
Type of waste
Overproduction Producing more than the customer demands. Producing before the customer
needs it
Space Storage for inventory, parts awaiting disposition, parts awaiting rework and scrap
storage. Excessively wide aisles. Other wasted space
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 154
entity. All rights reserved.
Work value analysis
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 155
entity. All rights reserved.
Work value analysis
Value-enabling work is just a different type of non value-added work. While this terminology can be
difficult, it does attest the perspective: If the customer is not willing to pay for it, it must be non
value-added by definition.
Value-enabling may be tasks and steps that are still needed given todays condition. Consider what
it would be like if things were perfect.
Clues to non value-added work symptoms:
To get work done, you need multiple approvals
Your policies address only control issue
Res are things in your process that are done more than one time (REdo, REcall, REissue)
REs usually cause you to loop back to an earlier point in your process
REs consume time, add to the complexity, and use additional resources and costs the
organizations more in terms of $$smoney
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 156
entity. All rights reserved.
Cycle time analysis
Experts say that a 66 per cent of the time spent in a process can be targeted for reduction which is
usually
spent in activities like:
Movement
Storage
Waiting time etc
We can by a simple cycle time analysis select and target such potential areas/activities
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 157
entity. All rights reserved.
Cycle Time Constituents
Process
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Total % Total % Steps
step
Time
1 120 15 120 3 180 7 1 120 5 10 15 90 15 120 2 120 5 8 957 100 %
taken
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 158
entity. All rights reserved.
Process flow analysis
% %
Process Step 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Total
Total Steps
Value-Added 48 5%
Nonvalue-Added
18.80
Internal Failure 180 %
External Failure
Control/
Inspection 8 0.80%
72.10
- Delay 690 %
- Prep/ set-up
- Move 30 3.10%
- Value-Enabling 1 0.10%
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 159
entity. All rights reserved.
Process flow analysis
Cycle time
The total time from the point in which a customer requests a good or service until the good or service is
delivered to the customer. Cycle time includes process time and delay time
Process time
The total time that a unit of work is having something done to it other than time due to delays or waiting. It
includes the time taken for value-added steps, internal failure, external failure, control, inspection,
preparation/set-up, and move
Delay time
Total time in which a unit of work is waiting to have something done to it
Linking value analysis with cycle time analysis creates a compelling business case for change
Displaying this information on process maps emphasises focus areas for improvement and begins building
data for quantify the opportunity
Tips/Traps
Do not get stuck on deciding if a step is value-added or nonvalue-added
Allow team to discuss it
Consensus with two thirds majority vote
Push team to make process map a true as is.
The ratio for an average as is map is 20 per cent value-added, 80 per cent nonvalue-added
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 160
entity. All rights reserved.
Hypothesis testing
What kind of differences are we trying to detect with the help of Hypothesis Testing?
Continuous data:
Differences in averages
Differences in variation
Differences in distribution hape of values
Discrete data:
Differences in proportions
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 161
entity. All rights reserved.
Types of hypothesis testing
ANOVA
Chi-Square Test
There are different types of the hypothesis tests. The type of the test depends on statistical
definition (discrete or continuous) of Xs and Y
Each of these have a differential statistical treatment
However the interpretation of results are common.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 162
entity. All rights reserved.
Hypothesis testing
ANOVA
The simplest type of problem that is studied with the help of the analysis of variance is one in which a single factor
is under consideration and this factor possesses several categories of levels, which could have a possible effect
on a variable of interest. Example, suppose an office manager is interested in knowing which of the four brands of
typewriters has to be purchased for the office. The hypothesis tested is that all brands of the typewriters yield the
same result.
Regression
The regression analysis is basically useful for two primary purposes:
It can be used to predict the value of one variable when the value (s) of other related variable(s) is (are) known;
and
It can be used to examine whether there is a relationship between two or more variables and it can further
describe the strength of that relationship.
Some examples
Dependent variable Dependent variable
Score on recruitment test Performance on job
R & D expenditure Profitability of the firm
Period of experience of the operator Number of defects in a production run
Number of sales representatives Total number of units sold
Expenditure on advertising Total volume of sales
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 163
entity. All rights reserved.
Hypothesis testing
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 164
entity. All rights reserved.
Selection criteria
Are
Xs No
discrete? Regression topics
Yes
Are you
No
comparing to 2 Sample t-test
a standard?
Yes
1 Sample t-test
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 165
entity. All rights reserved.
Minitab directions
While you can assume that the variation in the two groups is equal, its usually more appropriate to
leave the assume equal variances box unchecked
Statistics>ANOVA
In Minitab, there are two ways to compare several groups:
If you have all the response data in one column and the group identity labels in another column,
choose the one-way option
If you have each group in its own column, choose the one-way (unstacked) option
Statistics>tables>chi-square test
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 166
entity. All rights reserved.
T-test: An example
A t-test is used when we wish to compare the average performance of two groups.
Alternate Hypothesis that the means are not equal or when there is a difference between the two
population means
m1 = m2
When you dont have a clear preference: ess than or greater than
m1 < m2 or m1 > m2
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 167
entity. All rights reserved.
One sample t test
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 168
entity. All rights reserved.
Homogeneity of Variance
Output:
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 169
entity. All rights reserved.
Homogeneity of Variance
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 170
entity. All rights reserved.
Homogeneity of variance
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 171
entity. All rights reserved.
Two sample t test
Perform a Choose
homogeneity Choose sample in
of variance test Choose menu basic Choose two
one column
(see option statistics sample t
(data must be
instructions) satistics
stacked)
Under
samples,
choose column
which contains
measurement
data
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 172
entity. All rights reserved.
Two sample t test
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 173
entity. All rights reserved.
ANNOVA
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 174
entity. All rights reserved.
Chi square test An example
A process was producing 106 non defectives and 376 defectives per day. After improvement it was
performing at a level of 503 non defectives and 0 defectives. Do the two processes differ significantly?
Defectives
Thus the two processes are proved to be significantly different from each other on performing a Chi
square test on the values for the before and after the change scenarios
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 175
entity. All rights reserved.
Chi square
If p-value is less that.05, accept Ha. It indicates that a statistically significant changes
has occurred
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 176
entity. All rights reserved.
Chi square
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 177
entity. All rights reserved.
Chi square
Under columns
containing the data,
Choose menu
Choose Choose Chi enter the columns
option Hit ok
tables square Test which contain the
statistics
defect/non defect
information
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 178
entity. All rights reserved.
Chi square
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 179
entity. All rights reserved.
Types of hypothesis testing
Kruskal-Wallis
When the data is not normal, above mentioned tests will be used.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 180
entity. All rights reserved.
Hypothesis testing
Run test
It is used to test the sample for
randomness.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 181
entity. All rights reserved.
Correlation and regression
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 182
entity. All rights reserved.
Correlation and regression
A correlation problem arises when the six sigma team discusses whether there is
any relationship between a pair of variables
A scatter diagram is a graphical tool for exploring the relationship between predictor variables (Xs)
and the response variable (Ys) (i.e., causes and the effect). The equation under consideration
stands at Y = f(x)
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 183
entity. All rights reserved.
Scatter Ddiagram
40
Cycle Time (Days) (Y)
35
30
25
20
15
10
5
1K 2K 3K 4K 5K 6K 7K 8K 9K 10K
Amount to be sanctioned (X)
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 184
entity. All rights reserved.
Some scenarios
1 3 5
2 4 6
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 185
entity. All rights reserved.
Some scenarios
Interpretation Of Patterns:
Positive relationship: X increases/Y increases
Graphs 1 and 2 as X increases, Y increases
Graph 1 Strong, positive relationship between X and Y. Not much scatter. Points form a line with a positive
slope
Graph 2 Weaker, positive relationship between X and Y. Scatter is wider. Points still form a line with a
positive slope
Non-linear relationship The relationship between X and Y is complex and cannot be summarised with a
straight line
Graph 6 Inverted U. This is not a linear relationship
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 186
entity. All rights reserved.
Word of caution
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 187
entity. All rights reserved.
Regression
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 188
entity. All rights reserved.
Regression
Y = mX + C
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 189
entity. All rights reserved.
Improving the processes can be complex
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 190
entity. All rights reserved.
Six Sigma
Complete the
project till
choosing
hypothesis and
Minitab session
GO HEADER & FOOTER TO EDIT THISInternational'),
TEXT 5/19/2015 191
5/19/2015 191191
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG a Swiss
entity. All rights reserved.
Quantify the opportunity
WHAT: Quantifying the opportunity is all about the six sigma team visiting the
benefits to be accrued from the project. The index at this point of time would comprise of
both hard and soft gains (with a $ figure attached to hard gains) however no cost factors
are involved at this time
WHY: To provide the financial rationale of continuing the project, and to gauge the
allowable spending on the specific solution (s) that will be identified in improve. It is a key
milestone to be covered before the analyse tollgate
WHEN: Usually after the verification of the vital few root causes
Quantify the opportunity Cost/benefit analysis
Done in the analyse phase Done in the improve stage
It is not for a specific solution Calculated for a specific solution
Considers only gross numbers Talks about net gains
Covers the entire process as the scope Scope: A portion of the process
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 192
entity. All rights reserved.
Improve
Deliverables: Solution design , developed solution tested on a small scale, cost benefit analysis
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 193
entity. All rights reserved.
Improve: Steps
Generate ideas
Filter
Error proofing/FMEA
Test the
new idea
Pilot
Justify
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 194
entity. All rights reserved.
TRIZ Theory of inventive problem solving
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 195
entity. All rights reserved.
TRIZ Key concepts
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 196
entity. All rights reserved.
TRIZ Key concepts
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 197
entity. All rights reserved.
TRIZ Key concepts
A) Divide an object into independent parts A) Use harmful factors to achieve a positive effect
Divide an organization into different product centers Recast an attack on you as an attack on a problem
Use a work breakdown structure for a large project Collect information to understand the harm, then
formulate a positive action to remove it
Franchise objects
Making a fuss over customers who have experienced
Strength/weakness/opportunity/threat (SWOT) a problem with your goods or services
analysis
Sectional furniture B) Eliminate the primary harmful action by adding it
to another harmful action to resolve the problem
B) Make an object easy to dissemble Eliminate the fear of change by introducing fear of
Flexible pensions competition
Use of temporary workers on short-term projects Put a problem person on an assignment in another
area where he/she can do well and not be a problem
Modular furniture/offices in the original group
C) Increase the degree of fragmentation
Empowerment segmentation of decision making
Distance learning
Virtual offices/remote working
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 198
entity. All rights reserved.
Brainstorming Techniques
Structured brainstorming
Smooth flow of ideas
Everyone has an opportunity to express
opinions
Efficient process in terms of idea
generation
Less creative in approach
Unstructured brainstorming
Smooth
Random flow of ideas
All opinions may not be captured
Lesser number of ideas generated
Effective process for creative ideas
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 199
entity. All rights reserved.
Brainstorming techniques
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 200
entity. All rights reserved.
Brainstorming principles
Prevent biases
Allow free flow of ideas
(group/function/subject)
Create heterogeneous
Manage time
groups
Focus on critical Xs
Scribe all details
and CTQs
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 201
entity. All rights reserved.
Channeling/anti solution
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 202
entity. All rights reserved.
Analogy/brain writing
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 203
entity. All rights reserved.
Analogy/brain writing
Channeling: This form of brainstorming entails channeling of thoughts of the participants similar
to the discussion in fishbone diagram. The discussion revolves on specific stream/section of
solution. E.g while discussion on methods to improve the sales of soaps, potential solutions can
be channeled into: Improvements related to the packaging, fragrance, cutting of costs or
distribution system for the product
Antisolution: Here the objective of the team is reversed to exactly the opposite of what is to be
determined. E.g. In an effort to improve the training programme, the team can debate about the
ways in which the training programme can be worsened. The solutions are opposite of what is
determined during the discussion
Brain writing: Written ideas are exchanged in this process. Each person who receives a written
idea tries to expand on it or adds a totally new idea to it. The pieces of paper are rotated and a
collections of ideas or solutions are then debated and prioritised. This is used when the team
members are unknown to each other
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 204
entity. All rights reserved.
Solution selection
H
Benefits
L H
Effort
Solutions for further discussions
Total score:
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 205
entity. All rights reserved.
Solution selection
Pay-off matrix: After the possible solutions are generated, they can be assigned to different
quadrants of the pay off matrix. The ideas which are low on benefits, are rejected. The discussion
is then focussed on the high effort/high benefits and these are rationalised for implementation.
Some of the solutions in this quadrant are so prohibitively expensive that they can be eliminated
without further analysis. Caution needs to be maintained when eliminating potential solutions from
this quadrant
Screening against Must be criteria: Company policies, local laws and social considerations are
extremely important before proceeding further on any solution. Finally, the extent to which the
customer ctqs of the project are satisfied is a key consideration for selection (use kano model to
evaluate expected extent of satisfaction generated)
N/3 voting: The key consideration in this form is that all rejected solutions should be justified
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 206
entity. All rights reserved.
Criteria based matrix
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 207
entity. All rights reserved.
Error proofing
Warns operators before the xs move to the outside limit so that the preventive
action can be taken
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 208
entity. All rights reserved.
FMEA
Definition: Failure mode and effects analysis is a tool to identify the relevant
importance of possible failure of the process/solution and establish clear
mitigation strategy associated with the risks
Principle of FMEA
Impact of any failure on a process is not only severity of the failure but also the
frequency of occurrence and the ability of the control mechanism to detect the
failure
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 209
entity. All rights reserved.
FMEA
Objective:
Addressing rational concerns that have significant affect on the performance of the
proposed solution
To evolve a consensus on the recommended corrective actions and procedures to follow.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 210
entity. All rights reserved.
FMEA Worksheet
S O D R
Actions Target Actions
Resp. E C E P
recommended date taken
V C T N
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 211
entity. All rights reserved.
Calculating RPN
Severity scale
Bad
Rating Criteria A failure could:
10 Injure a customer or employee
9 Be illegal
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 212
entity. All rights reserved.
Calculating RPN
Occurrence scale
Bad
Rating Time period Probability
10 More than once per day > 30%
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 213
entity. All rights reserved.
Calculating RPN
Detection Sscale
Bad
Rating Definition
10 Defect caused by failure is not detectable
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 214
entity. All rights reserved.
Testing for solutions
Modeling-physical models
Simulation- computer models
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 215
entity. All rights reserved.
Testing essentials
Create A data collection plan and Monitor Activities For data Consistency and
stability
Verify that the process has improved-process capability, hypothesis testing for
evaluating statistical significance of the old and the improved process
Ensure
Why collect data? What to collect? How to collect? consistency
and stability
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 216
entity. All rights reserved.
Justify solution
Prepare net financial gains and supplement with intangible gains and
obtain business and finance leader approvals before proceeding
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 217
entity. All rights reserved.
CBA
Hard Gains
Cost Heads Vendor In House Training
Trainer Cost 250,000 0 Soft gains
T and L 30,000 0
Q Team Support 4,444 11,111
Facilities 20,000 20,000
Equipment 1,000 1,000
Stationary and Manuals 15,000 10,000 Trainings customised
GB Examination 50,000 2,222 to the need of the
Total Cost 370,444 44,333
employees
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 218
entity. All rights reserved.
Control
2 Implement solution
Stakeholder analysis
Implementation elements
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 219
entity. All rights reserved.
Why control?
Improvements
Process control
No process control
Time
To hold the gains of the DMAIC project there by help ensuring that the
efforts of the project team are not written off
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 220
entity. All rights reserved.
Why control?
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 221
entity. All rights reserved.
What to control?
Process measures
Monitoring
points
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 222
entity. All rights reserved.
Process management system
Key measures
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 223
entity. All rights reserved.
Process management system
The plan for doing the work Checking the work The response to special causes
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 224
entity. All rights reserved.
Documentation
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 225
entity. All rights reserved.
SPC
Control charts
Monitor changes in the Xs and
detect changes that are due to
special causes
Used when the Xs cannot be
mistake proofed or need to be
controlled for inherent variations
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 226
entity. All rights reserved.
Control charts
Com m on
U p p e r C o n tro l L im it
C a u s e /R a n d o m V a ria tio n
Value/Measurement Axis
60 00
3 .0 S L = 5 58 7
50 00
40 00
X= 4 19 8 A v e ra g e
30 00
-3.0 S L= 28 10
20 00 1
S u bg ro up 0 10 20 30 40
W eek 1 0 /2 2 /0 0 1 2 /3 1 /0 0 3 /1 1 /0 1 5 /2 0 /0 1
S p e c ia l C a u s e L o w e r C o n tro l L im it
V a ria tio n T im e /S e q u e n c e A x is
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 227
entity. All rights reserved.
Interpretation of variation
Mistake 1
Focus on systematic
True variation type
Tampering
Common process change
causes (increases variation)
Special
Mistake 2 Investigate special
causes
Under-reacting causes for possible
(missed prevention) quick-fixes
Low High
In Our Control
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 228
entity. All rights reserved.
Selecting control charts
Type of data?
Discrete
Continuous
Type of discrete data?
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 229
entity. All rights reserved.
Six Sigma
Q and A
A team from marketing is tracking response rates (yes, no) on telemarketing calls. Each day they
randomly sample 100 responses from their outgoing calls. The number of positive responses is plotted on
the chart.
The technical support area is monitoring average response time on help requests. Each hour five calls
are sampled.
A team is monitoring the number of applications received each day with incomplete fields. All applications
are being audited. Each day 200-250 applications are received.
A team is monitoring the cycle time for the underwriters loan decisions. The data comes in slowly; that is,
one loan is completed daily.
A team is tracking the number of fields left blank on an application. Each day a sample of 100 applications
is audited.
Another team is doing the same thing as the team in example 5 (counting the number of fields left blank
on an application), only they are looking at all the applications that come in daily. Each day 50-100
applications are turned in.
The team is tracking the number of abandoned calls to a customer call center in a shift. Each shift takes
from 200-400 calls.
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 231
entity. All rights reserved.
Types of control charts
C-Chart
p-Chart
Rejected Items based different Sample sizes Rejected Items based on constant Sample Size
30 1
3.0SL=0.3324
0.3
Proportion Defective
Number Defectives
20 3.0SL=20.90
0.2
P=0.1685
NP=12.00
0.1 10
-3.0SL=0.004728 -3.0SL=3.101
0.0
0
0 10 20 0 10 20
Sample Number Sample Number
u-Chart
Defects reported on 100 sq. m of Artificial Leather Artificial Leather
8 0.08
3.0SL=7.677
Number of Defects Reported
3.0SL=0.07520
Number of Defect/sq. m
7 0.07
6 0.06
5 0.05
4 0.04
3 0.03
C=2.725 U=0.02705
2 0.02
1 0.01
0 -3.0SL=0.00E+00 0.00 -3.0SL=0.00E+00
0 10 20 30 40 0 10 20 30 40
Sample Number Sample Number
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 232
entity. All rights reserved.
Types of control charts
-3.0SL=862.8
850 1 1
950 Subgroup 0 10 20 30 40 50
X=936.9
1
100
3.0SL=90.96
Moving Range
-3.0SL=862.8 50
850 1 1
R=27.84
0 10 20 30 40 50 0 -3.0SL=0.00E+00
Bags received during the day
Xbar/R Chart for size of steel Xbar/S Chart for size of a steel
rod(requirement 600+/-3mm) Rod(Specification 600+-3mm)
Means of subgroups of
collected samples
1 602 1 1
603 1 3.0SL=601.9
Subgroupl Mean
3.0SL=602.4
602 601
601 X=600.2
600
600 X=600.2
599 599
-3.0SL=598.6
598 -3.0SL=598.1 598
Subgroup 0 10 20 Subgroup 0 10 20
9 3 3.0SL=2.909
Range within individual
subgroups of samples
8 3.0SL=7.866
Subgroup Standard
7
6 2
Deviation
5 S=1.695
4 R=3.720
3 1
2
1 -3.0SL=0.4808
0 -3.0SL=0.00E+00 0
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 233
entity. All rights reserved.
Examples
Ex1: You work at an automobile engine assembly plant. One of the parts, a camshaft, must be 600 mm
+2 mm long to meet engineering specifications. There has been a chronic problem with camshaft length
being out of specification, which causes poor-fitting assemblies, resulting in high scrap and rework rates.
Your supervisor wants to run control chart to monitor this characteristic, so for a month, you collect a total
of 100 observations (20 samples of 5 camshafts each) from all the camshafts used at the plant, and 100
observations from each of your suppliers
Ex2: You are conducting a study on the blood glucose levels of nine patients who are on strict diets and
exercise routines. To monitor the mean and standard deviation of the blood glucose levels of your
patients, create a control chart. You take a blood glucose reading every day for each patient for 20 days
Ex3: As the distribution manager at a limestone quarry, you want to monitor the weight
(in pounds) and variation in the 45 batches of limestone that are shipped weekly to an important client.
Each batch should weigh approximately 930 pounds
Ex4: Suppose you work in a plant that manufactures picture tubes for televisions. For each lot, you pull
some of the tubes and do a visual inspection. If a tube has scratches on the inside, you reject it. If a lot
has too many rejects, you do a 100 per cent inspection on that lot
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 234
entity. All rights reserved.
Examples
Ex5: You work in a toy manufacturing company and your job is to inspect the number of defective bicycle
tires. You inspect 200 samples in each lot and then decide to create a control chart to monitor the number
of defectives. To make the chart easier to present at the next staff meeting, you decide to split the chart
by every 10 inspection lots
Ex6: Suppose you work for a linen manufacturer. Each 100 square yards of fabric can contain a certain
number of blemishes before it is rejected. For quality purposes, you want to track the number of
blemishes per 100 square yards over a period of several days, to see if your process is behaving
predictably
Ex7: As production manager of a toy manufacturing company, you want to monitor the number of defects
per unit of motorized toy cars. You inspect 20 units of toys and create a control chart to examine the
number of defects in each unit of toys
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 235
entity. All rights reserved.
Implementation
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 236
entity. All rights reserved.
Implementation strategy
32-Port
Patch Panel
Workgroup
Hub
SW-Wing, 4th-Flr.
Cardiology Nurse Station
Workgroup
Hub
SE-Wing, 8th-Flr.
OB/GYN Nurse Station
Workgroup
Hub
NW-Wing, Bsmt. Computer Room SE-Wing, Gnd.-Flr.
ER Nurse Station
TITLE DESCRIPTION
SCALE NTS DATE 12/15/96
A Visio sample drawing file showing the application of shapes from various
Sample Logical Diagram Network Equipment stencils in constructing a logical network diagram. REVISED
DRAWN
BY JL
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 237
entity. All rights reserved.
Acceptance strategy
60 70
Customers X
Associates
380
90 X
50 50 Mid
Management
X
20 20
40 30
SLT X
Quality
HR Finance Operations Unit 1 Unit 2 SWAT
Team
X
Unit 3 Unit 4 Unit 5 Unit 6 Unit 7
Identify Cause of
Issue/Concern Strategy Examples Ranking
Wins resistance
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 238
entity. All rights reserved.
Acceptance Strategy
Key constituents map: This tool is used for mapping out the size of the
stakeholder team that would be affected by the change that is going to be
implemented. The tool helps the team identify what should be the right
composition of the implementation team (proportional to the key constituents map
sections). It also helps determine (based on size) the stakeholder that needs to be
addressed first
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 239
entity. All rights reserved.
Implement solution
32-Port
Patch Panel
Workgroup
Hub
SW-Wing, 4th-Flr.
Cardiology Nurse Station
Workgroup
Hub
SE-Wing, 8th-Flr.
OB/GYN Nurse Station
Workgroup
Hub
NW-Wing, Bsmt. Computer Room SE-Wing, Gnd.-Flr.
ER Nurse Station
TITLE DESCRIPTION SCALE NTS DATE 12/15/96
A Visio sample drawing file showing the application of shapes from various
Sample Logical Diagram Network Equipment stencils in constructing a logical network diagram. REVISED
DRAWN
BY JL
Stakeholder 1 Data
Demonstrate
Stakeholder 2
Demand
+
Stakeholder 3
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 240
entity. All rights reserved.
Six Sigma
Summary
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss 242
entity. All rights reserved.
Six Sigma
Introduction to
Quality Function
Deployment (QFD)
2015 KPMG, an Indian Registered 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.
The KPMG name, logo and "cutting through complexity" are registered trademarks or
trademarks of KPMG International Cooperative ("KPMG International").