Quality Management and 6 Sigma-Sessions1-6

Quality Management and Six Sigma
Ravi Shankar Denduluri

If you can’t explain it
simply, you don’t
understand it well
enough.
Albert Einstein

Ravi Shankar Denduluri raviden@gmail.com
Business Performance - Enabler +91 98455 94252
Profile Summary
• An accomplished professional having 20+ years of experience in Business Excellence, Process Re-
engineering, Operations Management, Quality Management Systems, Service Delivery and Program
Management across diverse industries
• Strategic thinker, have expertise in solution designing and implementing systems and processes to
streamline existing processes to achieve organizational objectives.
• Adept in assessment of processes to ensure readiness for Robotics/ Automation, with process
simplification and standardisation before implementing Robotics/ Automation solutions
• Developed ‘Process Improvement’ champions with effective training and mentoring
Hewlett Packard
Larsen & Toubro General Electric Accenture ANZ Banking group
Enterprise
Sep’97 - Jun’00 Jul’00 - Jun’05 Jun’05 – Dec’06 Jan’07 – Dec’13 Jan’14 - Jun’18
Rules of Engagement
• Learn through Discussion

• No Question is ‘Silly’… Whoever asks is Brave!
• Only ONE discussion at a time
• Relate to working environment

Definition of Quality – Let’s hear from few experts!
Joseph Juran
Quality, according to Juran, means that a product meets customer needs leading to customer
satisfaction, and quality also means all of the activities in which a business engages in, to
ensure that the product meets customer needs
W. Edwards Deming
Good Quality means a predictable degree of uniformity and dependability with a quality
standard suited to the customer
Quality = Meeting Customer Requirements in a Consistent Manner

Definition
Meeting the specifications Fit to use

Quality Value for Money
The process of dealing with activities and / or

Management people
Collection of components or elements that are

System organised for a common purpose

What is the ONE question that every
Business Leader looks to answer ?

Improvement
Improvements can be: What

Change the performance for better results
• Product design
• Product / Service quality Why Where When
To realise the Areas which NOW !!
business are impacting What is relevant
• Marketing strategy benefits / the today may not
goals performance be so tomorrow
• Cost Management negatively OR

to get better
against
• People skills competition
• Process performance How

Lean Six Sigma or any other improvement
• Tools and Systems (incl. IT) methods that suits the business

Consequence of not improving?

Lean Six Sigma
What is Lean?
Receive Fulfil the

Customer order Customer order
This time should be as less as possible… in

other words, this should be ‘Lean’
Tools that will enable your
process to be Lean
5S Waste Reduction (7 types of waste) Kanban

Value Stream Mapping Poka-Yoke (Mistake proof)

What is Six Sigma?
Statistical answer Improvement answer
• Minimise the variation in the process • Structured methodology that will

– Variation impacts Consistency enable in addressing root causes of
and Predictability the problem
• 6 ‘standard deviations’ can fit • Provides tool kit in solving business
between the average value and the problems across all stages: DMAIC
specification limit of the measure

How Good is Six Sigma!!
99% Good (3.8 Sigma) 99.99966% Good (6 Sigma)
• 20,000 lost articles of mail per hour • 7 lost articles of mail per hour
• Unsafe drinking water for almost 15 • Unsafe drinking water for 1 minute
minutes every day every 7 months
• 5,000 incorrect surgical operations • 1.7 incorrect surgical operations per

per week week
• 10,200 passengers with misplaced • 6 passengers with misplaced

baggage every month baggage every month
• 200,000 wrong drug prescriptions • 68 wrong drug prescriptions each

each year year

Lean + Six Sigma !
Lean Six Sigma

• Removes Waste • Reduces Variation
• Removes Non-value added • Data based approach
process steps • Improves Quality
• Improves Quality • Optimizes process steps
• Focus is on the Customer
Speed + Accuracy
Improved Customer Experience at Optimum Cost with Motivated Employees

Roles and Responsibilities
Project • Sign off on Business problem to work on

Sponsor • Business benefits and timeline to realise
• Assign team members
• Help resolve issues that project team is facing
• Have a regular review mechanism for progress check
Project • Single point of contact to drive project actions towards the goal
Lead • Team members reach out for guidance
• Consult MBB / BB for methodology support
• Timely escalation to project sponsor or any other stakeholders on issues faced
Project • This includes Subject Matter Expert (SME) from the process that need to be improved
Team

Introduction to DMAIC
DMAIC
Clearly define what needs to be improved; Team members and

Define timeline; Articulate the potential benefits Business will realise
Validate measurement system; Baseline the current state; Define

Measure measure of success
Analyse Identify ALL factors contributing – Highlight key causes
Improve Probable solution addressing key causes; Validate with pilot
Operationalize the solution; Demonstrate the benefits realised;

Control Controls to sustain

Define Phase
A problem well defined is half problem solved
Define Phase : Objectives DMAIC
Identify Project requirements
Develop Team Charter
Define High Level Process Map

Define Phase : Steps DMAIC
Identify Project Develop Team Define High Level

Requirements Charter Process Map
• Identify the Customers who represent the major part of the Business
• VoC can be in the form of a survey or interaction with a structure. Method of interaction can be: in-
person meeting, telephone or online survey… combination of different methods can be done too
• VoC to Business Requirements: Consolidate the inputs from the Customers – Align with the
Business goals / strategies. Do you need to review / change the Business goals ?
• Business requirements can lead to several project opportunities. Identify the project requirement
that is intended to focus here. If a different project requirement comes up as a priority, then change
the project !!

Identify Project Requirements Voice of Customer should typically capture

the following information
• What are the key characteristics / features customers
expect from Product / Service
• ‘Must have’ and ‘Nice to have’ functionalities… get a sense
of what will ‘WOW’ the customers!!
• How is the responsiveness to customer requests / queries
• How are we delivering to the commitment to customer –
Plan vs Actual : What is the difference
• Comparison against competition

Identify Project Requirements Voice of Customer – Methods of capturing
Method Key Actions / steps Pros Cons

Survey • Design a survey to • Information collection can be • Time consuming, if the number
capture the information regulated towards the specific of customers are high
for the specific purpose objective
Meeting • Meet Key customers • This is the only 2-way • This is very difficult if number of
individually or in a group interaction, and Customer will customers are high (time
understand the purpose better consuming and resources)
Customer • Regular feedback • This is effective, if the purpose is • This is limited to the customers
Feedback received from Customers to address a specific issue who have responded
Industry • Reports published by • This is effective when the • Need to align the information
Reports research organisations customers are diverse providers and the customers of
• Research based information – organisation
becomes key source for new
innovation

Identify Project Requirements
Kano Model
• Every product / service features can be

classified in to three categories: Must have,
Nice to have and Delighters
• With time, customer expectations shift from
Delighters to Nice to have to Must have
• Business that constantly adds to Delighters
and Nice to have remains competitive

Identify Project Requirements Must Have Nice to Have Delighters
Kano Model
Activity After 5 / 10 years
• Take an example of a product or service

Must Have Nice to Have Delighters
and identify how the customer
expectations / features have changed
over a period of time

Identify Project Requirements
Hoshin Kanri X Matrix Hoshin Kanri X Matrix

Organisation: Function:
Here we can demonstrate the
Functional / Improvement priority 10
linkage from Organisation Functional / Improvement priority 9
strategy / goals to functional Functional / Improvement priority 8

goals and priorities. Functional / Improvement priority 6
This shows the impact that any Functional / Improvement priority 2
initiative has on organisational Key Improvement
Performance measure 1
goals priorities
Functional objective 5
Annual /
Functional Measures
objectives to improve
Name 10
Name 1
Name 2
Name 3
Name 4
Name 5
Name 6
Name 7
Name 8
Name 9
Organisation goals
Goal 1 Resources
Goal 2
Goal 3 l Primary responsibility
Goal 4  Secondary responsibility
Goal 5


• Business Challenge statement: Make it as specific and as detail as possible at this stage
• ‘In-scope’ and ‘Out of Scope’: to define boundaries and setting expectations with the
stakeholders
• “Goal Statement”: Where do we intend to reach. Apply SMART (Specific Measurable Attainable
Realistic Time-bound) principle
• Cross functional team who will work towards achieving the goal of the project. Clear Roles and
Responsibilities to be defined and communicated to all the team members. Define RACI matrix
• Strong Business Case is key, in projecting the benefits that the business will potentially realise
(this is just an estimate!). Accuracy of this depends on the quantum and quality of information
captured on: time, resources, $ investment, Return on Investment (RoI)

Illustration of a typical
Project Charter
template.
Typical contents of the

charter…. Add any
additional information
to make it effective

Problem Statement - Illustration

Poor illustration
Our Customers are angry with us and late in paying their bills
What
Better illustration When
In the last 6 months, 20% of our repeat customers (not first-timers), are over 60 days late in
paying our invoices. The current rate of late payment is up from 10% in 2015 and represents
30% of our outstanding receivables. This negatively affects our operating cash flow
Magnitude Impact or consequence

RACI Matrix Develop Team Charter
Responsible Who will complete the action / task
Accountable Ownership in ensuring the action is completed (Timeline and

Quality of action)
Consult Whose opinions / inputs are taken in to account
Inform Who are informed on the progress / status of actions
Deliverables / Actions Function 1 Function 2 Function 3 Function 4

RACI mapping to
be done for every
action against
relevant functions


• Document the high level process map (existing): This should be End-End process
• Demonstrate the impact of this process to the VoC captured. This will further substantiate the
Business case defined
• List ALL the stakeholders and functions, who will be impacted by this project – Highlight the ‘Key
Stakeholders’
• Identify Project sponsors – whose responsibility is to take decisions and provide sign-off at every
milestone of the project
• Review the Business Case with the Project sponsor for sign-off. This is critical for the project to
proceed with the next steps

Define High Level Process
SIPOC (Supplier Input Process Output Customer) Map
Business Thought process

Customer Output Process Input Supplier
Process Flow
Who is receiving the What are the Outputs? ALL the Process steps What are the Inputs? Who is sending the
output ? Output requirements – performed to generate Input requirements – inputs
aligned with Customer the required output aligned with Customer
requirements requirements
Tools & Systems used
This will highlight the variance between the This will highlight the variance between the
‘Expectation of the Customer’ and the ‘Process ‘Expectation of Process’ and the ‘Input
Output’ requirements’
Consolidated gap analysis will be the basis for identifying

opportunities for improvement and Road-map
SIPOC (Supplier Input Process Output Customer) Map
Template to capture the information
Supplier Input Process Output Customer

(Input requirements) (Output requirements)

Map
Project Decomposition
Breaking a complex or large project in to smaller projects and actions,
which can be managed effectively
Action / Task 1.1
Small Project 1 Action / Task 1.2
Action / Task 1.3
Action / Task 2.1
Action / Task 2.2
Large Project
Small Project 2 Action / Task 2.3
Action / Task 2.4
Action / Task 2.5
Action / Task 3.1
Small Project 3
Action / Task 3.2
Map
Work Breakdown Structures (WBS)

Breakdown of a Process or a Project work to its lowest level, which is a point of action.
And, we can demonstrate the relationship end-to-end, and the impact the actions can have

Map
Critical to Quality (CTQ)
Factors that impact the outcome of the Process or Project
Project Process
• Identify CTQs that defines the • Identify CTQs that measures the
success of the project performance of the Process –
• Define the measures / metrics aligned with Organisational
for the CTQs – with Target goals
• Project benefits will be based on • Define the measures / metrics
these CTQ performance for the CTQs – with Target
• Review functional performance

Define Phase : Outcomes DMAIC

• Capture Voice of Customer (VoC)

• Linkage of VoC to Business Goals to Project requirements
• Prepare a Business Case / Project Charter
• Stakeholders mapping : RACI matrix
• High Level Process Map
• Project Sponsor sign-off on the project

Measure Phase
You can not Manage what you can not Measure
Measure Phase : Objectives DMAIC
Identify Performance measures to be

improved
Measurement System Analysis
Define Performance Standards

Measure Phase : Steps DMAIC
Identify Performance
Measurement System Define Performance
measures to be
Analysis standards
improved
• From the Business case, identify the Business Performance measure(s) that will be
impacted by this project. This will define the ‘Measures of Success’ for the project
• Check if these measures are consistently measured, reported and reviewed

Measures to be improved Metrics Definition
Right title of the metric is important to convey what is being measured. Short and
Title Simple!
Benefits of measuring, monitoring and reporting. Where and How this metric is /
Purpose will be used
Operational Explain in Business language about this metric. Who owns this metric. How will it
Definition be captured and calculated. Target to achieve. Data source (application / system)
Governance Define: Target Audience, Reporting frequency and the Review forum

Measures to be improved Metrics Definition - Example
In a Customer order fulfilment process, lead time to complete the order is 5 days, performance
measure of % compliance need to be measured and reported on a weekly basis
Title % Orders fulfilled
This will track the performance of the order fulfilment process on a weekly basis against
Purpose the target. Analyze the causes for the orders missing the target and initiate actions
No. of orders that the order fulfilment team need to complete and confirm to the
Operational customer. This should be completed within 5 days of receipt of the order by the order
fulfilment team.
Definition = No of orders completed within 5 days / Total number of order fulfilled
Target = 95%
This will be tracked on a daily basis and compiled on a weekly basis to report to the
Governance Order Fulfilment team and Sales Team,

Measures to be improved Types of Data
A. Quantitative Data
Data that can be measured objectively
There are two types of quantitative data
Measures that can be divided in to Length = 35.256mm

Continuous finer levels Weight = 58.654 Kg
Measures can take only finite number

Number of people = 45
Discrete of points that can be represented by
Number of defects = 10
non-negative integers

Measures to be improved Types of Data
B. Qualitative Data
Data deals with characteristics that can not be easily objectively
There are three types of quantitative data
There are only two mutually exclusive
Binary categories
True-False; Accept-Reject
Data is assigned to individual Segregate and Count:

Nominal categories that do not have a natural - Mobile phones as per brand;
order - Students choosing electives
Survey responses (Strongly Agree,

Measurement variables have defined
Ordinal categories
Agree, Neutral, Disagree, Strongly
Disagree)
measures to be
Analysis standards
improved
Check if the measurement system measures the data accurately and consistently
Measurement system comprises of:
 Data Source: Data should always be taken from the primary source rather than secondary
source
 People skill: if the data measure has manual intervention, a well defined process is required
and the output should be compared across different people for consistency
 Tools / System: If the data is measured with the use of any tools or application (software),
validation of the settings or rules defined in the system need to be done. Define a method to
check this output before operationalisation
 External factors: Identify ALL probable external / environment factors that can influence the
measurement. Quantify the impact it can have with certain stated assumptions. Controls to prevent
or detect these factors for better quality data output
Measurement System
Analysis
Gage R&R statistical tool is used to confirm the accuracy of the Measurement System
σ2Process Variation
σ2Measurement =
σ2Repeatability + σ2Reproducibility
σ2Total =
σ2Process Variation + σ2Measurement

Measurement System
Analysis
σ2Measurement = σ2Repeatability + σ2Reproducibility

measurement equipment /
the skill of the person
Variation contributed by…. tools / software application /
performing the measurement
environment factors
• Constant environment
factors • Consistency in people skills
Minimise the variation by… • Calibration of Equipment / • Regular calibration of the
Tools (Ensure proper knowledge and
working condition) understanding
• Track updates to software

Measurement System
Analysis
Measurement Errors
1. Resolution / Discrimination 2. Accuracy / Bias
Ability to measure at the lowest level of units Shift in the average of the measures against the
“True Value”

Measurement System
Analysis
Measurement Errors
3. Linearity 4. Stability / Consistency
Measure of the consistency of Bias over the Capacity of the measurement system to
range of the measurement device produce the same values over time when
measuring the same sample

Measurement System
Analysis
Accuracy vs Precision
Accuracy is the measure of closeness to Precision is the measure of consistency
the target Precision = Predictable performance

Measurement System
Analysis
Number of Distinct Categories (NDC)

This value represents the number of groups the measurement tool can distinguish from
the data itself
NDC < 2 System cannot distinguish; REJECT

NDC = 2 Data can be divided in to two groups, say High and Low
NDC = 3 Data can be divided in to three groups, say High, Medium and
Low
NDC > 5 Acceptable Measurement System

Measurement System
Analysis
If measurement System is not meeting the requirements

• Define and Implement a good Measurement System
• Capture the data with the new measurement system
• Baseline the existing performance
• Review the Project Charter, for any changes to the Goal and Potential
Business Benefits

measures to be
Analysis standards
improved
• Capture the existing performance levels for the measures of success

• Validate if the Targets are aligned to the Business Goals / expectation
• If there are no targets defined, defining it will be a critical action before
proceeding further
• Methods to define Target : Industry benchmark, Aligning with VoC,
Aligning with Business expectation

Define Performance
standards
Process Capability Index

Process Capability is the ability of the process that it can achieve, when it
performs to its full potential
This will ensure we set realistic targets and the outcome we can expect
from an improvement initiative
Index will enable in comparing the performance level across diverse

processes or activities

Define Performance
standards

Process Capability – Few examples to relate to
• How fast can a human run ?
• What is the maximum mileage a bike can give ?
• How precisely can a lathe machine prepare a part, diameter of 55.155mm ?
• What is the volume of work that order processing team can handle ?
• What is the revenue M/s ABC Ltd, can generate in this year ?

Define Performance
standards

Index – Few examples to relate to
• Share market index (Sensex, Nifty, NYSE, Dow Jones,…)
• GDP (Gross Domestic Product)
Process Capability Index commonly used in projects

• Six sigma level (Z-value)
• DPMO (Defects Per Million Opportunities)

Define Performance
standards
Causes of Variation
• Variation in the process performance due to unknown random cause
Common Cause • Contributed by the design of the product / process
Variation • Data points within the process control limits
• Variation in the process performance due to known causes or

Special Cause external factors
Variation • Data points beyond the process control limits

Define Performance
standards
Defect, Defective and Opportunity
Term Definition Example – Mobile Phone
Non conformance to a specific Cracked glass, SIM card not

Defect customer requirement detected
Defective Bad quality product / service Bad quality mobile handset
Every possible defect that can Glass quality, SIM connectivity,

Opportunity occur in a product / service photo clarity, voice clarity,….

Define Performance
standards
DPU, DPO and DPMO
A product has 15 potential opportunities. 200 units have been manufactured and 5 units
have been found to have errors. In total there are 10 defects across these 5 units
Defects 10 Defects per Defects 10

Defects per
Opportunity
Unit (DPU)
Units 200 (DPO) Total Opportunities (15 X 200)
0.05 0.0033
Defect per Million

3,333
Opportunity (DPMO)
Defectives 5
DPMO = DPO X 1,000,000
Define Performance
standards
DPU, DPO and DPMO
Translating the DPU & DPO in to % measure
Defects per Unit (DPU) 0.05 Defects per

Opportunity (DPO)
0.0033
Defect % 5% Defect % 0.3%

Quality % 95%
Quality % 99.7%
Internal Process
Customer Focussed
Focussed

Define Performance
standards
Z-value
• Z-value is a way to transform any normal distribution in to standard normal distribution.
• Standard normal distribution has a mean of 0 and a standard deviation of 1.
• This transformation allows us to compare two entirely different processes on a common scale – in
terms of standard deviation units
Z - value DPMO
2 308,537
3 66,807
4 6,210
5 233
6 3.4
Define Performance
standards
How do you calculate Z-value

• Short term capability • Long term capability • Shift in the capability
Zst • Containing only common Zlt • Containing common and over a period of time
(Z short cause variation (Z long special cause variation Zshift • Zlt is found to reduce by
term) term) 1.5 over Zst
In Z-table, look up the Z- This Z-value is “Zlt”

Calculate DPO
value for the DPO value (Z – Long term)
We generally report Zst

Zst = Zlt + 1.5
(1.5 = Z shift )
Define Performance
standards
Throughput Yield
This measures the ability of the process in producing defect free output – when it is a
single step process
Rolled Throughput Yield (RTY)

This measures the ability of the process in producing defect free output at the final stage –
when it is a multi step process

Define Performance
Calculation of Yield standards
100 95 85 75
Process Step 1 Process Step 2 Process Step 3
5 10 10
95 85 75
Throughput
100 95 85
Yield 95% 89% 88%
75
100 RTY can also be calculated as
Rolled Throughput Yield (RTY)
Product of Yield at every stage
75%
Define Performance
standards
Takt Time
Rate at which the finished product needs to be completed in order to
meet the customer demand
Available time for production 480

=2
Required units for the same duration of time (Customer demand) 240
Example:
• Customer demand for a product is 240 units per day Every 2 mins one product
• Production unit works for 8 hours in a day need to be ready for delivery

Define Performance
standards
Benchmarking
It is the process of comparing the performance results against the Best-in-
Class
Approach
• Identify the process or metric
• Interact with companies delivering best results OR access Industry reports
• Review the Goal statement with this data point

Measure Phase : Outcomes DMAIC
measures to be
Analysis standards
improved
• Project performance measures linking to Measure of Success

• Check for the accuracy and effectiveness of the measurement system
• Calculate existing performance standards to baseline
• Sign-off from the Project team and the Sponsor on:
 Measurement system analysis outcomes
 Baseline performance level – as this will be the basis for quantifying
improvement at the end of project

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Quality Management and Six Sigma

Ravi Shankar Denduluri

Ravi Shankar Denduluri

Ravi Shankar Denduluri raviden@gmail.com

Business Performance - Enabler +91 98455 94252

• Learn through Discussion

Ravi Shankar Denduluri

Quality = Meeting Customer Requirements in a Consistent Manner

Meeting the specifications Fit to use

The process of dealing with activities and / or

Collection of components or elements that are

Ravi Shankar Denduluri

Ravi Shankar Denduluri

Improvements can be: What

• Cost Management negatively OR

• Process performance How

Ravi Shankar Denduluri

Ravi Shankar Denduluri

Receive Fulfil the

This time should be as less as possible… in

5S Waste Reduction (7 types of waste) Kanban

Ravi Shankar Denduluri

Statistical answer Improvement answer

• Minimise the variation in the process • Structured methodology that will

Ravi Shankar Denduluri

99% Good (3.8 Sigma) 99.99966% Good (6 Sigma)

• 5,000 incorrect surgical operations • 1.7 incorrect surgical operations per

• 10,200 passengers with misplaced • 6 passengers with misplaced

• 200,000 wrong drug prescriptions • 68 wrong drug prescriptions each

Ravi Shankar Denduluri

Lean Six Sigma

Ravi Shankar Denduluri

Project • Sign off on Business problem to work on

Ravi Shankar Denduluri

Clearly define what needs to be improved; Team members and

Validate measurement system; Baseline the current state; Define

Analyse Identify ALL factors contributing – Highlight key causes

Improve Probable solution addressing key causes; Validate with pilot

Operationalize the solution; Demonstrate the benefits realised;

Ravi Shankar Denduluri

Identify Project requirements

Develop Team Charter

Define High Level Process Map

Ravi Shankar Denduluri

Identify Project Develop Team Define High Level

Ravi Shankar Denduluri

Identify Project Requirements Voice of Customer should typically capture

Ravi Shankar Denduluri

Identify Project Requirements Voice of Customer – Methods of capturing

Method Key Actions / steps Pros Cons

Ravi Shankar Denduluri

Identify Project Requirements

• Every product / service features can be

Ravi Shankar Denduluri

Identify Project Requirements Must Have Nice to Have Delighters

Activity After 5 / 10 years

• Take an example of a product or service

Ravi Shankar Denduluri

Identify Project Requirements

Hoshin Kanri X Matrix Hoshin Kanri X Matrix

strategy / goals to functional Functional / Improvement priority 8

Ravi Shankar Denduluri

Identify Project Develop Team Define High Level

Ravi Shankar Denduluri