Lean Six

Sigma
Yellow Belt Training &
Certification

Faculty: MAT

Ground Rules
No Phones (Penalty for Phone ring = ??)
No Late comings (Penalty for Late comer
= ??)
No Cross Talk
No Whispering during the presentation
Respect one another
Speak one by one
Lots of Questions
No Question is Stupid
No Criticism

I will Learn attitude

Meet & Greet

Scope of the Training

1. SIX SIGMA FUNDAMENTALS
1.1
1.2
1.3
1.4
1.5
1.6
1.7

Evolution of Quality
Six Sigma Foundations and Principles
Lean Foundations and Principles
Integration of Lean & Six Sigma
Six Sigma Roles and Responsibilities
Leadership Responsibilities
Team Basics
1.7.1
Types of teams
1.7.2
Team Roles
1.7.3
Stages of development
1.7.4
Idea Generation & Decision-making
1.7.4.1 Team idea generation tools
1.7.4.2 Team consensus building tools
1.7.5
Communication methods

1.8 Linking Projects to Organizations Goals

1.9 Quality Tools and Six Sigma Metrics
1.9.1
1.9.2

Quality tools
Six Sigma metrics

1.9 Linking Projects to Organizational Goals

Scope of the Training

(Continued.)
2. DEFINE

2.1 Project Identification

2.1.1
2.1.2
2.1.3
2.1.4

Voice of the customer

Project selection
Stakeholder analysis
Process inputs and outputs

2.2 Project Management (PM) Basics

2.2.1
2.2.2
2.2.3
2.2.4
2.2.5

Project charter
Communication plan
Project planning
Project management tools
Phase reviews

3. MEASURE
3.1 Data Characteristics
3.1.1
3.1.2

Types of Data
Measurement Scales

3.2 Basic Statistics

3.3 Process Characteristics
3.2.1
3.2.2

Process Flow Metrics

Process Measurement Tools

Scope of the Training

(Continued.)
3. MEASURE

(Continued)

3.4 Data Collection

3.4.1 Data Collection Plans
3.4.2 Data Collection Techniques
3.5 Measurement System Analysis (MSA)
3.5.1 MSA terms
3.5.2 Gauge repeatability and reproducibility (GR&R)

4. ANALYZE
4.1 Process Analysis Tools
4.1.1
4.1.2

Lean tools
Failure mode and effect analysis (FMEA)

4.2 Root Cause Analysis

4.3 Data Analysis
4.3.1
4.3.2

Basic distribution types

Common and special cause variation

4.4 Correlation and Regression

Scope of the Training

(Continued.)
5. IMPROVE
5.1
5.2
5.3
5.4
5.5

Design of Experiment
Waste Elimination
Plan-do-check-act (PDCA) cycle
Cost-benefit analysis
Implementing Improved Process

6. CONTROL
6.1 Control plan
6.2 Control charts
6.3 Sustaining improvements

7. DESIGN FOR SIX SIGMA

8. LEAN SIX SIGMA PROJECT MANAGEMENT AT EFERT
9. SIX SIGMA PORTAL

6 Sigma is the most important

initiative GE has ever undertaken
J.F. Welch,
Former CEO & Chairman, GE

1.SIX SIGMA FUNDAMENTALS

What is Quality?

What is Quality?

Dimensions of Quality
Your experience of good quality
Performance
Aesthetics
Special features: convenience, superior
technology etc.
Safety
Reliability
Durability
After Sales Service

How Old is Quality?

Evolution of Quality

Evolution of Quality
Management
1. 1910s QUALITY INSPECTION
2. 1924s QUALITY CONTROL
3. 1950s QUALITY ASSURANCE
4. 1980s TOTAL QUALITY MANAGEMENT

Six Sigma Foundations and Principles

Six Sigma is a highly disciplined process that focuses on

developing & delivering near perfect products & services
consistently.

Its a management strategy to use statistical tools and

project work to achieve breakthrough profitability and
quantum gains in quality.

Sigma is a statistical term that refers to the standard

deviation of a process about its mean.

In a normally distributed process 99.73% of the

measurements will fall with in 3 Sigma & 99.99932%
will fall with 4.5 Sigma.
Motorola noted that may operations, such as complex
assemblies, tend to shift 1.5 Sigma over time.

Mikel Harry (The main architect of six sigma) describes six

sigma as;

Six Sigma Foundations and Principles

Six Sigma is a quality improvement methodology with the
ideal outcome of reaching zero defects. It can be considered
the next evolution of total quality management.
In the late 1980s Motorola began implementing the Six Sigma
methodology under CEO Bob Galvin, and the company
became a quality leader in industry.
General Electric followed shortly after and achieved similar
successes
Six Sigma primarily functions in three different ways: as a
metric, management system, and methodology;
o As a metric, Six Sigma is a scale of a companys quality
level; for an organization to have a Six Sigma level of
quality, the company must only have 3.4 defects per one
million opportunities (DPMO) or less
o As a management system, Six Sigma pulls the concepts
of Six Sigma into a corporate business strategy.

Six Sigma Foundations and Principles

(Continued)

The Business successes that can result from six sigma

initiatives include;

Cost Reductions
Market Share Growth
Defect Reductions
Culture Changes
Productivity Improvements
Customer Relations Improvement
Product & Services Improvement
Cycle Time Reductions

Few examples of breakthrough achievements;

Motorola credits the Six Sigma initiative for savings of
nearly 1 Billion $ over three years.
AlliedSignal (now Honeywell) reported an estimated $1.5
billion in savings in 1997
GE has invested a billion dollars with a return of $1.75
billion in 1998 and an accumulated savings of $2.5 billion for

Six Sigma Foundations and Principles

(Continued)

Mikel Harry proposes that the entire six sigma breakthrough

strategy should consist of the following eight elements:
R Recognize the true states of your business.
D Define what plans must be in place to realize
improvement of each
state.
M Measure the business systems that support the plans.
A Analyze the gaps in system performance benchmarks.
I
Improve system elements to achieve performance goals.
C Control system-level characteristics that are critical to
value.
S Standardize the systems that prove to be best-in-class.
I
Integrate best-in-class systems into the strategic planning
framework.

Six Sigma Foundations and Principles

(Continued)

Organizations that follow a six sigma improvement process

for several years find that some operations achieve greater
than six sigma quality. When operations reach six sigma
quality, defects become so rare that when they do occur,
they receive the full attention necessary to determine and
correct the root cause. As a result, key operations frequently
end up realizing better than six sigma quality.
SIGMA
LEVEL
6 Sigma
5 Sigma
4 Sigma
3 Sigma
2 Sigma
1 Sigma

PPM
3.4 ppm
233 ppm
6,210 ppm
66,810
ppm
308,770
ppm
697,762
ppm

Six Sigma Foundations and Principles

(Continued)

Companies that have embraced six sigma include:

Motorola

AlliedSignal

General Electric Black & Decker

DuPont

Dow Chemical

Polaroid

Federal Express

Kodak

Boeing

Sony

Johnson & Johnson

Toshiba

Navistar

Lean Foundations and Principles

Lean techniques are, in their most basic form, the systematic
identification and elimination of waste.
The touted benefits of lean production systems include lower
production costs, fewer personnel, quicker product
development, higher quality, higher profitability, and greater
system flexibility.
Generally, five areas drive the lean producer: cost, quality,
delivery, safety, and morale. Just as mass production is
recognized as the production system of the 20th century,
lean production is viewed as the production system of the
21st century.
Lean is about Eliminating Waste i.e. taking time out of the
processes and creating better optimized flow.

Lean Foundations and Principles

The techniques for analyzing systems, identifying and
reducing waste and focusing on the customer are applicable
in any system, and in any industry.
Any implementation of lean techniques will be different,
depending on various factors such as industry, internal
culture, and internal business considerations. The tools used
to implement lean operations, and the order in which one
combines them, are highly dependent on whether a company
is a discrete manufacturer, continuous producer, or provider
of a service.
A systematic approach to identifying and eliminating waste
(non-value added) activities through continuous improvement
by flowing the product at the pull of the customer in pursuit
of perfection.
Taiichi Ohno said, All we are trying to do is shorten the time

Lean Foundations and Principles

Examples of waste;
Overproduction
Inventory
Repairs/Rejects
Motion
Transportation
Processing
Waiting

Lean vs. Six Sigma

TOPIC

SIX SIGMA

Improvement

Reduce Variation

Reduce Waste

Justification

Six Sigma (3.4 DPMO)

Speed (Velocity)

Main Savings

Cost of Poor Quality

Operating Costs

Learning Curve

Long

Short

Project Selection

Various Approaches

Value Stream Mapping

Project Length

2 6 Months

1 Week 3 Months

Driver

Data

Demand

Complexity

High

Moderate

Methodology/Forma DMAIC
t

LEAN

KAIZEN

Lean vs. Six Sigma Utilization

When Lean is best utilized;
BUSINESS PROBLEMS
There seems to be a lot of waste
There is a need to minimize inventories
and redundancies
There is a need to improve work flows
There is a need to speed up processes
There are human mistakes

WHAT LEAN DOES

Eliminates wastes
Increases speeds
Minimize inventories
Simplify processes
Improve workflows
Mistake proof processes

When Six Sigma is best utilized;

BUSINESS PROBLEMS
There are quality issues
There is excessive variation
There are complex problems
There are challenging root cause
identifications
There are numerous technical
considerations

WHAT SIX SIGMA DOES

Minimize variation
Apply scientific problem
solving
Utilize robust project
charting
Focus on quality issues
Employ technical
methodologies

Integration of Lean & Six Sigma

Both six sigma and lean focus heavily on satisfying customers.

Six sigma makes customers the primary driver for action in a "war on
variation" and identifies opportunities that promise a large, fairly
immediate, financial reward.

Lean considers customer inputs and conducts a "war on waste.

Both six sigma and lean empower people to create process stability
and a culture of continuous improvement.

Many problem identification and problem solving techniques are

commonly used with both lean and six sigma methodologies. These
include brainstorming, cause-and-effect diagrams, 5 "whys", Pareto
analysis, 8-Ds, FMEAs, and others.

Should six sigma and lean coexist in any organization?

Answer to this question is self-evident: Yes. He feels that lean

approaches should precede and coexist with the application of six
sigma methods.

Lean provides stability and repeatability in many basic processes.

Integration of Lean & Six Sigma

If the only tool in your bag is a hammer, then all

problems start to look like a nail.
So its better to have a tool kit with a broader set of tools,
principles, and ways of thinking
DEFINE

MEASURE

ANALYZE

IMPROVE

CONTROL

Value Stream
Mapping

Prioritization
Matrices

Regression
Analysis

Design of
Experiment

Statistical
Process
Control

Charter
Problem
Statement

MSA Studies

5 - Whys

Kaizen Events

Visual Controls

Voice of the
Customer

Capability
Studies

Cause & Effect

Diagrams

Theory of
Constraints

Control Plans

Communicatio
n Plans

Video Tapping

Root Cause
Analysis

Pull Systems

Total
Productive
Maintenance

CTQ Issues

Time Studies

ANOVA

Set-Up Time
Reduction

Standard Work

Business
Results

SIPOC

Multi-Variable
Analysis

5S

Procedures &
Work

Integration of Lean & Six Sigma

Six Sigma Roles and Responsibilities

Black Belts
Six Sigma Black Belts are most effective in full-time process
improvement positions.
Six Sigma Black Belts are individuals who have studied and
demonstrated skill in implementation of the principles,
practices, and techniques of Six Sigma for maximum cost
reduction and profit improvement.
Black Belts are encouraged to mentor Green Belt and Black
Belt candidates.
Master Black Belts
Six Sigma Master Black Belts are typically in full time process
improvement positions.
They are, first and foremost, teachers who mentor Black Belts
and review their projects.
Selection criteria for Master Black Belts includes both
quantitative skills and the ability to teach and mentor.

Six Sigma Roles and Responsibilities

Green Belts
Six Sigma Green Belts are not usually in full-time process
improvement positions.
Green Belt refers to an individual who has mastered the basic
skills and may be Black Belts-in-training.
Green Belts must demonstrate proficiency with the core
statistical tools by using them for positive financial impact and
customer benefits on a few projects.
Green Belts operate under the supervision and guidance of a
Black Belt or Master Black Belt.
Executive Sponsors
Executive sponsorship is a key element in an effective Black
Belt program.
Executive leadership sets the direction and priorities for the
organization.
Executives typically receive training that includes a Six Sigma
program overview, examples of successful deployment and

Six Sigma Roles and Responsibilities

Champions
Six Sigma Champions are typically upper level managers that
control and allocate resources to promote process
improvements and Black Belt development.
Champions are trained in the core concepts of Six Sigma and
deployment strategies used by their organizations. Six Sigma
Champions lead the implementation of the Six Sigma Program.
Process Owners
Key processes should have a process owner.
A Process Owner coordinates process improvement activities
and monitors progress on a regular basis.
Process owners work with Black Belts to improve the processes
for which they are responsible.
Process owners should have basic training in the core statistical
tools but will typically only gain proficiency with those
techniques used to improve their individual processes.

Six Sigma Roles and Responsibilities

Six Sigma Structure
FUNCTIONS
Executive Direction

STRUCTURE OPTIONS

Six Sigma Management

Six Sigma Steering Committee

Quality Council
Executive Steering Committee
Six Sigma Manager
Six Sigma Director
Master Black Belt

Process Owner

Champion
Sponsor

Sponsor

Process Owner
Champion

Coach

Master Black Belt

Black Belt

Team Leader

Trained Supervisor/facilitator
Black Belt
Green Belt

Team Member

Associate with Team Training

Associate with Process Knowledge
Green Belt

Leadership Responsibilities
Management Support
Effective Six Sigma programs do not happen accidently.
Careful planning and implementation are required to ensure
that proper resources are available and applied to the right
problems.
Key resources may include, people trained in problem solving
tools, measurement equipment, analysis tools and capital
resources.
Senior Management Sponsorship Training
Training

Master Black Belt Master Black Belt Training

Management Executive Training
Black Belt Black Belt Training
Supervisors Overview Training
Green Belts Green Belt Training
Everyone Six Sigma Basics Training

Team Basics
Types of teams
TEAM TYPE

STRUCTURE

BEST APPLICATION

Process
Improvement
Teams

8-10 members from a

single/multi
departments

Work on quality or productivity issues

Focus on process flow and product
issues

Quality Teams

8-10 members from a

single department

Area of focus are quality topics and

to improve overall departmental
performance

Project Teams

Can have a broad or

specific member
selection. May be all
or part from
management

Works on specific projects mostly

related to execution.
Typical project management applies.

Generally 8-10
members with black
belt or MBB support

Six Sigma Teams

Cross-Functional
Teams

8-12 members from

different areas,
departments or
discipline

Works on specific process or

customer based projects of
importance
Usually disbands on completion of
project
Knowledgeable people are carefully
selected
Tends to deal more with policies,
practices and operations

Team Roles
The Team Member Role:
Each team member is responsible for:
Participating in training to become an effective team member
Attending team meetings, as required
Completing assignments between meetings
Participating actively during meetings by contributing
information and ideas
Encouraging active participation by other team members
Benefitting from the experience, expertise, and perspectives of
others
Applying the steps of the improvement process

Team Roles
The Team Leader Role:

Some teams have both leaders and facilitators

As a general rule, the team leader focuses on the team product (the
results) and the facilitator is most concerned with the team process.
Within the six sigma framework, the team leader is normally trained
both as a facilitator and black belt
Provide direction and suggest assignments
Act as a communication hub and as a liaison with management
Handle administrative details like meeting sites and scheduling
Ensure that individual needs and expectations are considered
Recommends meeting agendas and conduct meetings
Assess group progress to plan, evaluate and initiate action
Take the steps necessary to ensure success
Possess an ability to encourage participation
Be genuinely concerned about people
Be encouraging and supportive
Be accepting and tolerant of mistakes
Work with, not over participants
Stick to the task at hand
Be a good listener

Team Roles
The Team Facilitator Role:
Facilitators are useful in assisting a group in the following ways:

Identifying members of the group that need training or skill building

Avoiding team impasses before the task is completed
Providing feedback on group effectiveness
Summarizing points made by the group
Balancing group member activity so each member is able to provide
inputs
Helping to secure resources that the team needs
Providing an outside neutral perspective
Clarifying points of view on issues
Keeping the team on track with the process
Helping with interpersonal difficulties that may arise
Focusing on progress
Assessing the change process
Assessing cultural barriers (attitudes, personalities)
Assessing how well groups are accomplishing their purpose
Asking for feelings on sensitive issues
Helping the leader to do his/her job more easily
Coaching the leader and participants

Team Roles
The Recorder Role:
The Timekeeper Role:
The Process Owner Role:
In some organizations, process owners may be six sigma champions or
sponsors. This middle / upper level manager should:
Facilitators are useful in assisting a group in the following ways:

Be comfortable with the team's capabilities

Believe in the team's objectives
Support team members with resources and information
Share information with the team
Understand the team's mission
Participate in project reviews
Believe that personal goals are aligned with the team's goals
Be knowledgeable of six sigma core elements

Team Roles
The Steering Committee* Role:
In some organizations, process owners may be six sigma champions or
sponsors. This middle / upper level manager should:
The steering committee is usually composed of upper management.:

Setting goals: Top management identifies opportunities,

improvement needs and sets strategic goals for the organization.
Identifying projects: The steering committee selects few major
Improvement projects critical to meeting quality and other goals.
Selecting teams: Once a major project has been identified, the
steering committee appoints a team to see the project through the
remaining steps of the improvement process.
Other Steering Committee responsibilities may include:
Providing six sigma training to black belts and green belts
Reviewing team progress
Approving revisions of the project mission
Identifying/helping with team-related problems
Communicating project results throughout the organization
Monitoring progress: The steering committee is generally responsible
for keeping the improvement process on track, evaluating progress,
and making mid-course corrections to improve the effectiveness of the

1.5.2 Stages of development

TEAM
STAGES

BEHAVIOURS

FEELINGS

HOW TO IMPROVE

FORMING

Lack of task focus

Difficulty in defining
problems
Uneven participation
Resistance to team
building

Excitement, anticipation &

pride
Shaky alliance to the team
Suspicion, fear and anxiety
Roles & responsibilities are
unclear

Take time to become

acquainted
Establish mission, goals &
team ground rules
Encourage equal
participation
Train member on team
concepts

STORMIN
G

Problem solving is
superficial
Petty arguing, hidden
agendas
Decisions dont come
easily

Resistance is seen
Individual attitudes vary
widely
Anger and jealousy abound

Define team roles

Follow a problem solving
format
Deal openly with conflicts
Work to expose hidden
agendas
Focus on team goals

NORMING

Attitudes improve
Conflicts are dealt with
Trust & commitment
grow
Some goals are
achieved
Leader receives respect

Comfort with giving

feedback
Comfort with receiving
feedback
Sense of cohesion and
spirit
Environment getting
friendlier

Evaluate team
performance
Periodic summaries of
progress
Create ties outside of the
team

PERFORMI Work through problems Self improvement is noted Promote openness

ADJOURNING:
At the
end
of the project
the team
disbands similar
to project
Managed
group
process
Acceptance
of weakness
Permit more
self direction
NG
Creativity
Informality
teams, task forces
and&Adhoc
teams Appreciation of strengths Establish new goals

Idea Generation & Decision-making

Team idea generation tools
Brainstorming
It is an intentionally uninhibited technique for generating creative
ideas when the best solution is not obvious.
It is also used for generating ideas in Cause & Effect/Fishbone
diagram as well

Generate a large number of ideas: Dont inhibit anyone, quantity of

ideas is important
Free-wheeling is encouraged: Even a half-cooked idea can provoke
thoughts from others

Dont criticize: During the session do not criticize or rate the ideas.
Encourage everyone to participate: Give everyone an opportunity to
speak.
Record all the ideas: Record without editing
Let ideas incubate: Give ample time for idea generation
Select and appropriate meeting place: A comfortable, casual & right
sized place enhances the effectiveness brainstorming activity
Group size: 4 10 is ideal.

Team idea generation tools

Nominal Group Technique
The nominal group technique (NGT) brings people together to
solve problems but prevents peer pressures from influencing the
generation of ideas. To conduct a
NGT problem solving meeting:
1. A facilitator or moderator leads the discussion
2. A group of five to nine individuals are assembled for idea
generation
3. A problem is presented
4. Before any discussion is held, all members create ideas silently
and individually onto a sheet of paper
5. The facilitator then requests and records an idea from each
member in sequence until ideas are exhausted
6. No discussion is allowed at this point
7. After the exhaustion of ideas, evaluation of ideas is permitted.
Hitchhiking on the ideas of others is encouraged.
8. Voting for the best solution idea is then conducted

Team consensus building tools

Multi-Voting
Multi-voting is a popular way to select the most popular or
potentially most important items from a previously generated list.
Often there are too many items for a team to work on at a single
time. Multi-voting is useful to narrow the field to a few items
worthy of immediate attention and consists of the following steps:
1.
2.
3.
4.

Generate and number a list of items

Combine similar items if the group agrees
If necessary, renumber the list
Allow members to choose several items that they feel are most
important
5. Members may make their initial choices silently and then the
votes are then tallied
6. To reduce the list, eliminate those items with the fewest votes

Team consensus building tools

Voting
Voting is similar to Multi-voting approach except that only one
vote in permitted.
Voting can result in a majority/unanimous decisions.
In some cases voting can lead to conflict, so, multi-voting is
preferable in such scenarios

Team consensus building tools

Effort/Impact Matrix
One of the most viable methods of deciding on an acceptable
course of action is by determining and comparing the impact of
that action with the effort (or expense) to accomplish it.
The only difficulty with this approach is getting the objective
data to complete the matrix or getting the concerned parties to
subjectively agree on the appropriate classification.
an important long term
G A top priority. It should be
objective. Need a champion to
re given immediate attention.
keep it active.
I
(Priority
Item-1)
at
(Priority Item-2)
m
p
This is low hanging fruit. It
A low priority. It should be
a Li
should be done when
shelved until all other options
tt
ct
convenient
are completed
le
(Priority Item-3)
(Priority Item-4)

Little

Great

Communication methods
What to communicate

The projects performance and current status

Any requests for any change in resources
Items that may impact any other teams or departments
Any significant shifts in project direction
Any pertinent stakeholder information
Any requests for assistance (internal or external)

How to communicate
The projects performance and current status
Any requests for any change in resources

Cost of Poor Quality

The costs of poor quality are costs that occur when a product or
service does not meet customer standards
if a company did not produce any defective products (100% perfect
quality) these costs would not exist
An example of this is a fast-food drive-through that gives a customer
the wrong order
o If a customer ordered a double cheeseburger, small fries, and diet
soda and they are given a chicken sandwich, no fries, and a
Normal Soda
o what costs (or potential costs) does the fast-food restaurant incur
as a result of this error (defective or incorrect end product)?
o Assume that the customer arrives home, discovers the incorrect
error, and very unhappily returns to the restaurant.
o Several costs are obvious, such as the cost of the incorrect food
that cannot be resold (raw material, packaging, and end products),
the employees time to make new food (the correct order), and the
managers time to speak with the dissatisfied customer in some
situations.
o Other costs are hidden and not fully apparent, such as the
additional space and resources that the restaurant must keep on

Cost of Poor Quality

Continued example..
o Next there are hidden costs associated with preventing errors in
the future; the manager may decide that another employee must
double-check each order before it leaves through the drivethrough.
o Now, extra work hours or a new hire is required to prevent errors.
o Other costs have a much deeper impact and are not immediately
visible
o The customer with the incorrect order may have lost faith in the
restaurant and no longer choose to buy food there and buy from a
competitor instead

A marketing research company in South Carolina, United States,

reports that for every customer who bothers to complain, 26 other
customers will remain silent to the company.
The average wronged customer will tell 816 people about it and
91% of unhappy customers will not willingly do business with the
company again
This is alarming because one unsatisfied customer can now have a
negative impact 16 times greater by sharing their negative experience
with others.

Cost of Poor Quality

There are four categories of costs.
Prevention costs: The costs of activities specifically designed
to prevent poor quality in products or services.
Appraisal costs: The costs associated with measuring,
evaluating, or auditing products or services to ensure
conformance to quality standards and performance
requirements.
Failure costs: The costs resulting from products or services
not conforming to requirements or customer/user needs-that is,
the costs resulting from poor quality. Failure costs are divided
into internal and external failure cost categories:
o Internal failure costs: Failure costs which occur prior to
delivery or shipment of the product, or the furnishing of a
service, to the customer.
o External failure costs: Failure costs which occur after
shipment of the product, or during or after furnishing a
service, to the customer.

Cost of Poor Quality

Cost of Poor Quality

Prevention Cost

Applicant screening

Personnel reviews

Capability studies

Pilot projects

Controlled storage

Planning

Design reviews

Procedure reviews

Education (Quality or

Procedure writing

SPC)

Prototype testing

Equipment maintenance

Quality design

Equipment repair

Safety reviews

Field testing

Surveys

Fixture design and

Time and motion

fabrication

studies

Forecasting

Training

Housekeeping

Vendor evaluation

Job descriptions

Vendor surveys

Market analysis

Cost of Poor Quality

Appraisal Costs

Audits

Laboratory testing

Document checking

Other expense reviews

Drawing checking

Personnel testing

Equipment calibration

Procedure checking

Final inspection

Prototype inspection

In-process inspection

Receiving inspection

Inspection and test

Shipping Inspection

Inspection and test

Test equipment

reporting

maintenance

Cost of Poor Quality

Internal Failure Costs

Accidents*

Accounting error
corrections

Design changes

Employee turnover

Engineering changes

Equipment downtime*

Excess interest expense*

Excess inventory*

Excess material
handling*

Excess travel expense

Failure reviews

Late time cards

Obsolescence

Overpayments*

Premium freight

Redesign

Re-inspection

Repair and
retesting

Retyping letters

Rework

Scrap

Sorting

Cost of Poor Quality

External Failure Costs

Bad debts*

Customer complaint visits

Customer dissatisfaction*

Engineering change
notices

Equipment downtime*

Excess installation costs

Excess interest expense*

Excess inventory*

Excess material handling*

Excess travel expense

Failure reviews

Field service training

costs

Liability suits

Liability*

Overpayments*

Penalties*

Premium freight

Price concessions*

Pricing errors*

Recalls*

Redesign

Re-inspection

Repair costs

Restocking costs

Retesting

Returns

Rework

Scrap

Sorting

Cost of Poor Quality

Quality Cost Improvement Sequence

Define the company quality goals and objectives

Translate the quality goals into quality requirements
Estimate capabilities of current processes, machines, systems, etc.
Develop realistic programs and projects consistent with the company
goals
Determine the resource requirements for approved programs and
projects
Set up quality cost categories of prevention, appraisal, and failure to
accumulate costs
Make arrangements to collect and present quality costs
Analyze the cost data for improvement
Utilize the Pareto principle to isolate specific vital areas for
investigation

Cost of Poor Quality

Linking your Projects to Organizational Goals
The single most important factor in selecting a potential six sigma
project for implementation is determining its value for the organization.
Following criteria can be used for selection of projects;

Project is tied to business priorities

Project has the support of Executive and Champions
Results are quantifiable
Problem is significant
Organization understands importance of project

Link with Organizational Goals

Develop
Departmen
t KPIs

Understand basics
of
6 Sigma and Lean

Use Tools and

Techniques

Process
Efficiency Lean

Green Belt
01 per
departmen
t

To evaluate and
Improve processes