Total Quality Management TQMBH14-5
Session 04 Six Sigma (Case + Improve &
Control) + COPQ + 7 Basic QC Tools
Case Discussion on Six Sigma
Dipankar Bose - XLRI
Six Sigma DMAIC
(Improve & Control)
Dipankar Bose - XLRI
DMAIC Phase 4 Improve
Evaluate alternative remedies
If necessary Design of experiments
Design a remedy
Consider customer need
To anticipate failures and shortcomings, and prevent
them with
Failure Mode & Effects Analysis (FMEA)
Process Decision Program Chart (PDPC)
Prove effectiveness of the remedy
Primary evaluation through simulation
Final evaluation under real-world condition
Deal with resistance to change
Transfer the remedy to operations
Dipankar Bose - XLRI
DMAIC Phase 4 Improve Tools
Design of experiments Will be discussed later
Response Surface Methodology (RSM)
Creative thinking, Benchmarking
Lean event, Poka-yoke Will be discussed later
Pugh matrix, criteria selection matrix, payoff matrix
Process mapping
Process FMEA Will be discussed later
Stakeholder analysis
Change management
Project management
Simulation
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DMAIC Phase 5 Control
Design controls and document the improved process
Document the project as a whole (not just the new
process)
Validate the measurement system again
Determine final process capability
Implement and monitor improved process
Dipankar Bose - XLRI
DMAIC Phase 5 Control Tools
Will be discussed later
Self-control analysis
Process control map
Poka-yoke
5S
SPC
SOP
Change management
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Failure Factors
Top management participation is missing
Champion is not interested in a particular six sigma
project
Impatience of Management/ Employees
Selection of wrong persons for the black belts role
Resistance to change not handled adequately
Dipankar Bose - XLRI
Strengths of Six Sigma
Top down initiation of a serious quality journey
Not a book-keeping exercise
Hierarchy of expertise and execution (Champ, BB, GB)
Structured deployment of tools (DMAIC)
Customer focus
In contrast to inward-looking standardization
Clear performance metric
Sigma levels/ DPMO
Fact-based decisions
Not procedure or judgment based
Application of statistics
Analytical, not will power
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Strengths of Six Sigma Continued
Engineering as well as service applications
Extending the horizon of statistical thinking
Recognized time effects in process analysis
Explicit provisions for short/long-term variations
Result oriented
Project by project Three to six months project
duration makes progress tangible
Business oriented
Achievements often required to be expressed in
financial terms
Good timing
Statistical software packages had become widely
available
Dipankar Bose - XLRI
Limitations of Six Sigma
Relies on the measurable
With a tendency to avoid the unquantifiable in project
selection
Attention paid to repetitive output
With lack of methodology for innovative or irregular
outcomes
Focused on error prevention
Gains from creativity or imagination (?)
Built upon unrealistic (?) mathematical statistics
Such as normal distribution and 1.5 sigma shifts
Mostly concerned with basic CTQ
Lack of attention to unexpected or Attractive CTQ as
in the Kano quality model (?)
Dipankar Bose - XLRI
Limitations of Six Sigma Continued
Studies only current, static CTQ
With little reference to varied customer expectations or
lifestyles
Not anticipative of technological/social/business
changes
Usually based on one CTQ
Single rather than multiple or balanced CTQ in a given
project
Less emphasis on self-learning or future knowledge
acquisition in personnel training
Dipankar Bose - XLRI
Limitations of Six Sigma Continued
Unsuitable for creative or interpretive work
Architectural design/ Artistic performance
Not a means to promote intellect/ creativity/ passion/
enterprise or self-renewal
Emphasizes priorities of the organization (versus growth of
people) Not considers
Talent development or continuous learning on the part
of Black Belts and Green Belts
Personnel mechanically classified in terms of terminal
qualifications
Tends to be preoccupied with internal objectives
With no reference to social mission or responsibility
Dipankar Bose - XLRI
Design For Six Sigma (DFSS) Various
Implementation Models
DMADV Define, Measure, Analyze, Design, Validate
DMADOV Define, Measure, Analyze, Design, Optimize,
Verify
DMEDI Define, Measure, Explore, Develop, Implement
DCCDI Define, Customer, Concept, Design, Implement
DDOV Define, Design, Optimize, Validate
ICOV Identify, Characterize, Optimize, Validate
I2DOV Invention and Innovation, Develop, Optimize,
Verify
DMADIC Define, Measure, Analyze, Design, Implement,
Control
PIDOV Plan, Identify, Design, Optimize, Validate
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Cost of Poor Quality (COPQ)
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Why Measure Cost of Poor Quality?
Improves communication between
Upper management and middle management
Identifies
Major opportunities for cost reduction
Opportunities for reducing customer dissatisfaction
Associated threats to product salability
Provides measure for evaluating progress in quality
initiatives
Spotlights obstacles to improvements
Helps to develop strategic quality plan
Consistent with overall goals of the organization
Dipankar Bose - XLRI
Types
External failure costs
Internal failure costs
Appraisal costs
Prevention costs
Hidden quality costs
Cost
Investment
Combined
Time/Effort
Controversy over optimal COPQ level
Optimal COPQ
Preventive COPQ
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Design Steps and Associated Costs of
Quality
Design process review before prototype
Qualification test on prototype
Design FMEA
Trials at customer end
Anomalies in design
Environment &
Reliability testing
Field trial
Spare parts inspection
Correction in product design during
full scale production
Inaccurate/incomplete
design provided
Design change for reducing
scrap/rework
Unplanned production and support man-hours wasted due to wrong design
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Purchasing Steps and Associated Costs
of Quality
Sending teams for supplier capability review and rating
Purchase order review
Preparation of Acceptance sampling plan and development of review instruments
Execution of Acceptance sampling plan
Calibration and maintenance of test equipment
Qualification testing of supplier products
Inspection done at supplier end
Inspection for products directly sent
to customer from the supplier
Cost of failure of incoming inspection rejects not charged on supplier
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Incoming Inspection Rejects Not
Charged on Supplier
Costs of disposing, sorting, handling, transporting
Costs of replacement
Costs of corrective action at suppliers end
Cost of rework that cannot be done through supplier due
to urgency in production
Dipankar Bose - XLRI
Production Steps and Associated Costs
of Quality
Process capability study and SPC planning
Cost of designing and developing special measurement
instrument to be used in SPC
Procurement of better production equipment
Planning and coordinating operator training program (e.g.
Kaizen, SPC etc.)
Execution of planned inspection (cost of items destroyed
during inspection e.g. life testing, load testing etc.)/audits
Execution of SPC (includes cost required to bring back the
process within control)
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Production Steps and Associated Costs
of Quality Continued
Inspection/tests conducted during set up before actual run
Costs related to special lab test
Measurement and testing equipment cost (depreciation,
calibration and maintenance)
Costs of attaining various standards
Costs related to product review, corrective action
Disposition of non-conforming product
Rework/repair identified during production stage (does
not include design change cases)
Dipankar Bose - XLRI
Production Steps and Associated Costs
of Quality Continued
Documentation related to rework, reject, re-inspection and
retest
Extra operations for better result
Scrap cost
Price difference between grade and off-grade materials
Machine stoppage, resetting for rework
Non value added operations
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External Failure Costs
Responding and resolving customer complaints
Investigating quality problems
Recalling products
Warranty claims
Liability claims
Penalties for not conforming to rules/contracts
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Hidden Costs
Sales opportunity loss
Loss of customer goodwill
Costs included in standards
Extra indirect costs due to defects/errors
Scraps/errors not reported
Cost of poor quality within supplier company
And many more
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Other Costs
Prevention cost in marketing
Prevention cost in administration
Appraisal cost in support department quality evaluation
Appraisal cost in final inspection data review
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Example Costs of Service Quality for
Bank
Failure costs
External failure:
Loss of future business
Negative word-of-mouth
Liability insurance
Legal judgments
Interest penalties
Detection costs
Process control
Peer review
Supervision
Customer comment card
Inspection
Prevention costs
Quality planning
Training program
Quality audits
Data acquisition and analysis
Recruitment and selection
Supplier evaluation
Internal failure:
Scrapped forms
Rework
Recovery:
Expedite disruption
Labor and materials
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Example FedEx Service Quality
Indicator
No. of damaged packages
No. of lost packages
Missed pickups
Aircraft delays
Reopened complaints (complaints not solved first time)
Wrong day late deliveries
Right day wrong delivery
Abandoned calls
Invoice adjustment requests
Missing proof of deliveries
Dipankar Bose - XLRI
