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New product development process May 25, 2008

Posted by Coolguy in Design for Six Sigma.
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Six Sigma advocates a 5 stage process for new product development. The complete NPD process includes the following stages:

  1. Concept Study. This is done to uncover unknowns about the market and technology.
  2. Feasibility investigations are done to determine the limitations of the concept.
  3. Development of new product includes specifications, needs of customer, study of target markets etc.
  4. Maintenance activities following delivery.
  5. Continous learning through status reports and evaluation.

Formula for creating winning products May 25, 2008

Posted by Coolguy in Design for Six Sigma.
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According to a old (1993) study, new products account for 40% of sales and 46% of profits. For every 7 to 11  new product ideas, only 1 becomes a successful product according to a study.

Here are some of the factors for creating winning products.

  • Unique, superior product. Product should have value for customer
  • Strong market orientation. Understanding for customers needs and wants.
  • Predevelopment work. Up front activities like market analysis, technical assessment are vital before development starts.
  • Good product definition. Product and project should be completely defined before development begi
  • Quality of execution through out the development process.
  • Team effort including research & development, marketing, sales and operations.
  • Proper project selection to provide adequate resources for good projects. Poor projects must be killed.
  • Good product launch ensures success.
  • Top management leadership plays a vital role in product development process. They must provide strategy, resources and leadership.
  • Speed to market.
  • Strong, established new product process to screen new products
  • Attractive market makes it easier to have a successful project

Metrics Management May 12, 2008

Posted by Coolguy in Service Delivery, Six Sigma.
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Benchmarking and analysis of KPI’s against best practices is critical to the success of any internal service delivery organization. Almost every other organization has some sort of KPI’s of some sort in place to measure and monitor performance. Metrics management is also key skills to successful Solution Delivery role.

Six Sigma advocates three levels of metrics: business level metrics, operations level metrics and process metrics. Some of the metrics Six Sigma suggests are here.

Business Level Metrics

These metrics are typically financial and operational summaries for shareholders and management. Balanced scorecards is widely used for business level metrics. IT can be viewed either as a cost center or a profit center in companies. Based on this financial management for solution delivery is responsible for:

  • Estimating costs of projects accurately working with vendors, where necessary
  • Costs of providing services and undertaking projects fall withing approved budgets
  • Tracking expenses against allocated budgets
  • Helping Senior Management understand the total cost of completing an initiative
  • Plan IT costs for maintaining and improving ongoing services
  • Charge back IT investments to business units, where applicable

Operations Level Metrics

These relate to cost, time and resource to produce products and maintain services. Examples specific to IT include:

  • Resource utilization metrics
  • SLA Metrics
  • Capacity Metrics
  • Availably Metrics
  • Service Continuity Metrics

Process Metrics

These are detailed metrics form process level. Examples include

  • Agility in responding to a change
  • Reduce total released defects, Total Containment Effectiveness (TCE)
  • Fix defects closer to origin, Phase Containment Effectiveness (PCE)
  • Compare implementations within company, Function Point Defects per KLOC
  • Benchmark with other companies, Six Sigma that tracks Defects per Million Opportunities (DPMO)

Six Sigma Introduction and Goals May 11, 2008

Posted by Coolguy in Six Sigma goals.
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I will attempt to introduce Six Sigma and various training programs available to get trained on Six Sigma with a series of simple Q&A’s. Refer to my post for additional information on Six Sigma certification

What is Six Sigma ?

Six Sigma is a highly disciplined process that focusses on producing and delivering near perfect products and services. Its a business improvement approach that seeks to find and eliminate causes of mistakes or defects in business processes.

Six Sigma measures defects in million ‘opportunities’ and assigns ‘levels’. There are six such levels. An organizations is said to be at 6 sigma level if it has 3.4 defects per million opportunities. This is the highest level an organization can attain. Average American company is at 4 sigma level. That is equivalent to 6,210 defects per million opportunities.

The six sigma steps for many organizations are described as DMAIC:

Define: Select responses/processes to be improved

Measure: Gather data to measure the process/response

Analyze: Identify the root causes for defects

Improve: Eliminate the cause

Control: Monitor the process/response to sustain improvements

Who developed it?

Motorola developed Six Sigma in 1987. Dr Mikel Harry is credited with the development of Six Sigma in Motorola.

Does Six Sigma really work ?

Short answer is; yes it does !!. Here are some reported facts on how Six Sigma made a difference in big corporations:

  • Six Sigma is believed to have saved Morotola $940 million over 3 years.
  • HoneyWell reported a estimated saving of $1.75 billion in year 1997
  • GE reported a saving of $1.75 billion in 1998 and a accumulated savings of $2.5 billion in 1998.

Why does Six Sigma work ?

  • Typically short project times (6-9) months
  • It forces Senior Management involvement
  • Clear definition of success and its measurement
  • Defined processes for training individuals. (Green belts, black belts etc)

Who is using Six Sigma ? (Just to name a few..)

  • Morotola (Not surprisingly)
  • GE
  • Sony
  • Toshiba
  • Johnson and Johnson

Does getting trained in Six Sigma make sense ?

An average black/green belt will save a company about $175k, if there are around 5 to 6 projects per year. In big corp’s there is about one black belt per 100 employees. So plenty of opportunities there..

Which level of training is right for me ?

Everyone- Orientation Training

Green belt candidates – Green belt training

Supervisors – Overview

Black Belt candidates – Black belt training

Management – Executive training

Master black belts – Master black belt training

Senior management – Sponsorship training

When is it a good time to implement a improvement program like Six Sigma ?

When times are good and when times are bad. When times are bad, focus is on survival. At the same time its important to realize that a company cannot loose money because of poor quality, especially at bad times. When times are good, resources are typically dedicated to take advantage of the opportunity.Improvement projects are typically last on list.However customers are not likely to to repeat business with a company known for quality issues.

When is a company ready for Six Sigma ?

If performance of a company is low, its better to concentrate on basics. Apply cost management techniques and engage with customer. When the performance is OK, set goals and monitor them. Simplify processes. When performance is high, benchmark with other firms, develop and communicate strategic plans and strive to continously improve.

What does Six Sigma measure ?

Six Sigma advocates a holistic view on metrics. After the metrics are established, project teams must work to implementing them.

What should be a first project to implement Six Sigma ?

  • Should be simple but not trivial
  • Should last around 3-4 months
  • Reasonable time and resource constraints
  • Problem should be clearly defined
  • Problem should be measurable

Six Sigma Certification May 11, 2008

Posted by Coolguy in Six Sigma.
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I recently successfully completed my Six Sigma green belt certification (CSSGB) administered by ASQ. While I did blog about some of the tools and techniques of Six Sigma in the past, I decided to do more to help out any one aspiring to be a Six Sigma green belt. This and a next few posts are my attempts to provide a comprehensive overview to anyone attempting the Six Sigma Green belt exam or to anyone just simply trying to learn more about basics of Six Sigma.

The test is divided into 10 modules. Following are the topics in the exam with the % weight for the topic in exam.

  1. Six sigma goals 5%
  2. Lean and DFSS 10%
  3. Define – Teams & Customer 10%
  4. Define – Tools, Projects and Results 15%
  5. Measure – Data & Process Analysis 12%
  6. Measure – Probability 10%
  7. Measure – Capability & Measurement 8%
  8. Analyze – 15%
  9. Improvement Techniques – 7%
  10. Control – 8%

(As I blog about these topics, I will edit this post to add the links)

CSSGB Primer is a must have reference to attempt this exam. This is the only book/material I reviewed to prepare for the exam in addition attending a course at my local community college.

I swear by mindmapping technique. I used mind maps successfully to prepare for my PRINCE2 certifications.

I repeated the technique for this certification too and here is the mindmap I created.

CSSGB Mindmap April 21, 2008

Posted by Coolguy in Six Sigma.
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Here is a good mindmap I created while preparing for my Six Sigma Green belt certification. This map was created using Mindomo.

CSSGB Mindmap

Descriptive Statistics October 7, 2007

Posted by Coolguy in Six Sigma Measure Phase.
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Types are

  • Central tendency
  • Dispersion
  • Probability Density
  • Frequency Distribution
  • Cumulative Distribution

Central Tendency:

Measures the central value of a collection of data.

Three measures are mean,mode and median.

  1. Mean: Sum of all divided by number of data points
  2. Mode: Most frequently occurring number in the data set
  3. Median: Middle value when data is arranges in ascending order or descending order

Measures of dispersion

Uses to describe the spread or dispersion.

Four measures are range, variance standard deviation & COV

  1. Range: Difference between largest and smallest values
  2. Variance
  3. Standard Deviation
  4. Coefficient of Variation

Probabilty Density

Describes behavior of random variable.

Data Analysis October 7, 2007

Posted by Coolguy in Six Sigma Measure Phase.
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Types of data:

  1. Attribute data : Integers, discrete, less complex skill levels, less storage, less desirable
    • E.g:Defects, scratches etc
  2. Variable data: Real numbers, continuous, more complex skill levels, more storage, more desirable
    • E.g: Inches, PSI, Total scratch length etc
  3. Locational data

Measurement scales (In increasing scale of desirability) :

  • Nominal : No ordering possible
  • Ordinal: Data is arranged in order but meaningless order
  • Interval: Data is in order and differences can be found. But no starting or end points.
  • Ratio: Has starting and end point.

Data collection methods

  • Automatic
  • Manual

Data coding:

  • Add, Subtract, Multiply coding
  • Coding by substitution
  • Coding by truncation

Relational Matrices October 7, 2007

Posted by Coolguy in Six Sigma.
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This tool can aid with the prioritisation of key process input variables.

  • Key process output variables are listed horizontally
  • Key process input variables are listed vertically.
  • For each output variable, assign a priority number
  • Within the matrix a number is entered for the effect that each input variable has on the output variable
  • Multiply the process output priority by effect value
  • Sum the results from above step

This shows which of the input variables have greatest effect on output variables.

SIPOC October 7, 2007

Posted by Coolguy in Six Sigma.
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It enables all team members to view the process in the same light.

Advantages are:

  1. Display of cross-functional activities in a single, simple diagram
  2. Big picture perspective with scope to add details
  3. Framework applicable to either large organizations or smaller processes

Steps for creating a SIPOC:

  1. Create a process map
  2. List outputs of process
  3. List customers of outputs
  4. List inputs of process
  5. List suppliers of process