LSSGB Lesson2 Define

Lean Six Sigma Green Belt
Lesson 2Define
Copyright 2014, Simplilearn, All rights reserved.
Objectives
After completing
this lesson, you will
be able to:
Explain various components of project selection
Describe customer data collection methods
List various means of project documentation
Discuss risk analysis and management
Describe project management and planning tools
Explain the concepts used in evaluation of project performance
Describe the deliverables of Lean Six Sigma project
Define
Topic 1Project Identification
Project Selection
The five steps for selecting a project are as follows:
Identify
organizational need
Organization needs
projects to improve
and develop its
functional areas and
to serve and meet
customer needs.
Identify the
projects
Identify projects
that are aligned
with the
organizational need.
Evaluate the
projects
Evaluate the project
in the following
areas:
Net present
value
Cost benefit ratio
Internal ROR
Opportunity cost
Payback period
Select the right

project
The project which
meets the
organizational
requirement is
selected and
initiated.
Review the
project
Project will be
reviewed to ensure
alignment to the
organizational
goals.
Process Elements
A business process has five elements: Supplier, Input, Process, Output, and Customer (SIPOC).
Supplier:
A person or
organization
providing
resources to
the process
concerned
Input:
Information,
material, or
services
provided by
the supplier
Process:
Set of steps
which
transforms
the inputs
into output
Output:
Final product
or service,
outcome of
the process
Customer:
A person,
process, or
organization
which uses
the output
SIPOutput Interaction
One or more changes in Supplier, Input, or the Process actions (SIP) will result in a change in the
process output.
If SIPs are stable, the output will be stable.
Relations between SIPs and output provide a method to define possible cause-effect relationships.
These relationships can be termed as closed-loop business systems.
Supplier
Input
Process
Output
SIPOCExample
SIPOC form for a call center:
Suppliers
Telecom industry
IT industry
Inputs
Process
Output
Opening call
Phone connection
Problem solution
Computer or
Customer verification
system
Head set
Probing customer
Server or dialer
CSR or TSR
Resolution
Customer
User (existing
customer)
New customer
Closing
Owners and Stakeholders

The following image represents where the process owner and stakeholders are placed in the
organizational hierarchy:
Process Owner:
Responsible for the performance
and execution of the process.
Stakeholder:
People who are affected by
the organizations actions.
Stockholders
Customers
Suppliers
Management
Employees
Society
8
Identify Customer
Customers are the most important part of any business. A customer is someone who:
decides to purchase;
pays;
consumes; and
gets affected by a particular product or service.
It is essential to identify and understand the customer requirements so the products or services can
be designed according to these requirements.
There are two types of customersinternal and external.
Internal Customers
An internal customer is anyone within the business system who is affected by the product or the
service while it is being developed.
Importance of an internal customer
Needs of an internal customer
Necessary tools, training, and specific instructions

Provision of company newsletters, projects,
storyboards, etc.
Awards and recognition
Activities directly impact final customer

Activities affect the next process in the system
Affects the quality of the end product
The satisfaction levels of the internal customers can be improved in various ways: increased internal
communication through company newsletters, awards, recognition, constant trainings, and competitive
environment.
10
External Customers
External customers are not a part of any organization; however, they are impacted by it. They are the
source of revenue for any business system and are therefore extremely important.
There are three types of external customers:

Intermediate customers
They purchase a particular

product or service, modify or
assemble, repack, and resell
the product or service to an
end user.
End users
They purchase a particular

product or service for their
personal use.
Affected parties
They do not purchase the

product or service.
However, they are impacted
by it.
11
Building a Business Case

A Business Case is needed to provide details to the management and team members on the
business values to be achieved by conducting a project.
Explore the improvements and opportunities while documenting a business case along with the
high level view on what business output is anticipated and by when.
A business case must capture the following:
Business outcome;
Effort needed;
Set of resources and their availability; and
Timeline.
12
Building a Business CaseDetails

The tangible benefits from the Lean Six Sigma project needs to be articulated using following factors:
Amount of cost reduction,
Ways to reduce turnaround time,
Focus on quality by reduction in defects, and
Ways to achieve customer satisfaction.
The business case is presented to stakeholder with the following details:
Executive summary brief
Strategic linkage
13
Financial Evaluation and Benefits Capture

The potential financial benefits from the Six Sigma project are captured by looking at the cost and
both hard and soft savings.
Soft Savings
Hard Savings
Actual reductions in money being spent, such as:
Intangible benefits such as:
Reduced budgets,
Increase in customer satisfaction,
Fewer employees,
Employee morale,
Additional revenue opportunities,
Brand uplift and repeat customer.
Effort reduction,
Rework and scrap reduction, and
Also includes the benefits arising from:
Reduction in work force.
Less inventory and reduced testing,
Lower cycle times and improved yields,
Lower rework rates and reduced scrap.
14
Financial Evaluation and Benefits CaptureSample

The given excel sheet is used to capture monthly costs and benefits to get a full picture of the cost
involved and the benefits realized.
This row captures all the cost that is incurred
month over month.
Criteria/Factors
M1
M2
M3
M4
In this row, calculate the net value (Benefits

Cost for every month).
M5
M6
M7
M8
M9
M10
M11
M12
Total
Cost
Benefits
Net (Monthly)
Cumulative
This row captures the benefits expected to be

realized.
In this row, capture the monthly data and add

the data to get a cumulative view of benefits
up to that month.
15
Positive Effects of Project on Customers

The most important aspect of any process improvement project is the customers. Following are the
positive impacts of the project on both types of customers:
Effects on external customer
Effects on internal customer
High level of motivation
High level of job satisfaction
Undertake additional roles and responsibilities
Focus on delivering their responsibilities
Improved team bonding
Solution to problems
Better product
Requirements are effectively met
Improved customer service
Customer satisfaction
16
Define
Topic 2Voice of the Customer
Collect Customer Data

Collecting data from customers is very essential as it helps one consider the levels at which these
customers impact the business. Customer data or feedback is collected from internal and external
customers. Collecting customer data helps:
to fill the gaps and improve the various business processes in the organization;
to define a good quality product as perceived by the customer;
to identify qualities that make the competitors product or service better; and
to identify factors that provide a competitive edge to the product or service.
Popular and common methods are surveys conducted through questionnaires, focus groups, individual
interviews with the customers, and direct feedback from customers through call center data, emails, and
feedback forms.
18
Questionnaire
Questionnaires can be given in the form of a survey. It is a method of deriving feedback from
individuals though structured questions, either personally or over emails, telephone, etc.
Following are the steps in the process:
Scope of the survey
Initially plan the

scope of the
survey. Make a list
of all the points
that need to be
covered.
Define the
survey group
Plan the
participants
required for the
survey.
Pick a
methodology
Depending on the
time, budget, and
demography of
the participants,
decide on a survey
methodology.
Develop a
questionnaire
Develop a brief,
professional, and
neat
questionnaire to
encourage
effective
participation.
Compilation
Scan the
questionnaires
and develop a
report.
19
Advantages and Disadvantages of Questionnaire

Some advantages and disadvantages of questionnaires are listed below:
Advantages
Low-cost approach
Phone response rate: 7090%
Faster results
Analysis of mail questionnaires requires few
trained resources
Disadvantages
Incomplete results and unanswered questions

leading to a lack of clarity
Mail response rate: 2030%
During phone surveys, the interviewer may
influence the interviewee
20
Telephone Survey vs. Web Survey

The popular methods of survey are the telephone survey and web survey.
Telephone Survey
This is used for general survey and when sample
size consists of generic population.
It is expensive and is conducted in limited time.
Clarification of some answers is possible.
Open-ended questions can be asked.
More respondents respond.
There might not be enough audio-video support,
so the data quality can be low.
Compilation & analysis of data consumes time.
Web Survey
This is used when survey is targeted at a specific
set of people and when the sample size is easily
accessible through the Internet.
It is low cost and respondents get enough time.
Clarifications for answers are not possible.
Open-ended questions cannot be asked.
Less respondents respond.
Audio and video support is possible, so the data
quality is better.
It simplifies the compilation & data analysis of
data collected.
21
Focus Group
Focus group is generally a small group of three to twelve individuals who assemble for one or two
hours to explore specific topics and questions.

Preparatory stage
Identify scope of
focus group
Analyze the
problem that
needs to be
addressed
Session
Planning stage
Finalize session
venue and time
Arrange a means
for transcription
Advertise session
details
Arrange for
refreshments
Facilitate
introductions
State the agenda
and transcription
factor involved
Record the
session
Retreat to an
observatory
Compilation
Study
transcription
material
Make notes
22
Advantages and Disadvantages of Focus Group

Some advantages and disadvantages of focus group are listed below:
Advantages
Group interaction generates information

Provides in-depth responses
Addresses complex questions or qualitative data
Excellent for getting critical-to-quality definitions
Disadvantages
Learning is subjective and cannot be generalized

Data collected is qualitative rather than
quantitative
Generates anecdotes and incidents experienced
by the individuals in the group
23
Interview
Interview is a technique of questioning and probing an individual to gather information. It is informal
and encourages the interviewees to voice their opinion. Even though quite common for collecting
customer feedback, individual interviews can be time consuming.

Introduction and
greetings
Start the session with

a friendly greeting.
Understand
interviewees
background,
interests, and
knowledge level.
Compilation
Gather feedback
Avoid taking notes.

Display complete
attention to what the
participant has to
say.
Gather information
at all levels.
After the session,

make a list of the
points discussed, the
ideas that cropped
up, suggestions, etc.
24
Advantages and Disadvantages of Interview

Some advantages and disadvantages of the interview technique are listed below:
Advantages
Can tackle complex questions and cover a wide

range of information
Allows use of visual aids
Good choice when individuals dont respond
willingly and/or accurately by phone/mail
Disadvantages
Time consuming
Requires a trained and experienced interviewer
25
Importance and Urgency of Various Inputs

The table shows the importance and urgency of different kinds of input.
Criteria / Factors
Respondents availability
Lead data
Cost involved
Time consumption (organization perspective)
Availability of time from customer (for the survey)
Response rate of the customer
Judging the quality of data
Clarification
Visualizing feature
Compiling & analyzing data
Resource requirement
Preparation time
Accessibility to customer
TOTAL
Weightage
Telephone
Survey
Web
Survey
Interview
12
6
20
5
5
15
10
3
2
2
10
5
5
100
8
8
3
5
3
7
1
7
0
3
1
7
8
471
8
8
9
10
10
5
6
0
10
10
10
1
8
744
6
9
1
1
4
8
10
10
10
3
1
9
4
522
26
Customer Complaints
There are pros and cons for gathering information from customer complaints.
Advantages
Availability of specific feedback directly from the

customer
An easy option to respond appropriately to every
customer
Disadvantages
Feedback in this method does not provide an

adequate sample size
May lead to process changes based on one or two
inputs from the customer
27
Product Complaint vs. Expedited Service Request

Product complaints and expedited service requests can act as inputs to the company for improving
their process.
Product Complaint
This arises when customer is dissatisfied.

Product is not meeting customer specification.
Product has to be improved.
Customer needs for product are not completely
identified.
Expedited Service Request
This arises when customer is in a hurry.

Service timelines are not meeting customer
requirements. Service has to be improved.
Customer timings need to be recalculated.
28
Importance and Urgency of Various Inputs

The table shows the importance and urgency of different kinds of input.
Factors
Weightage
Product complaint
Identifying customer need

Cost involved
Time consumption (orgn. perspective)
Probing the customer
Availability of time from customer
Response rate of the customer
Clarification from customer
Retaining customer
Compiling & analyzing data
Resource requirement
Handling customer
TOTAL
15
15
2
10
10
10
8
10
2
8
10
100
8
4
3
1
1
1
1
1
4
1
1
260
Expedited service
request
9
8
9
10
10
6
6
10
10
2
10
817
29
Key Elements of Data Collection Tools

Data collection tools will be selected based on the type of data to be collected. The key elements that
make these tools effective are as follows:
Data is directly collected from the primary source, reducing the scope for miscommunication or
loss of information.
Data is highly reliable as it is collected exclusively for the stated purpose.
Data is captured after understanding the organizational purpose, making data relevant.
Data is collected instantaneously when there is a requirement, making it up-to-date and valid.
Customer requirement is accurately defined with the data.
The tools help to get enough information about customer requirement through which the process for
improving or creating the product or service that the customer requires can be developed.
30
Review of Collected Data

Collected data must be reviewed to eliminate vagueness, ambiguity, and any unintended bias.
Customer feedback sheet before review
Name:
Gender: Male/Female
Occupation: Student/Professional
Were sales executive supportive? Yes/No
Was the product delivered on assured time?
Yes/No
Please rate overall experience between
1 and 10 (1 lowest and 10 highest)
Customer feedback sheet after review

Name:
Gender: Male/Female
Occupation: Student/Professional/others (please specify)
Rate sales executives on the below areas: (10 high1 low)
o Politeness
o Ability to understand & identify problem
o Quick reply to queries
o Overall
Was the product delivered on assured time? Yes/No
Please rate overall experience between 1 and 10 (1 lowest
and 10 highest)
31
Voice of Customer
The Voice of Customer (VOC) is a technique to organize, analyze, and profile the customers
requirements.
Following is an example for customer requirements while purchasing an air conditioner:
Who is the
Customer?
Household
Member
What the
customer
said (VOC)
What the customer meant

What is the
need?
When is the
need felt?
Where is the
need felt?
AC should be
silent
Sound sleep
At Night
In the
bedroom
To remain fresh
next morning
Uses a ceiling fan that

makes a lot of noise
AC should be
efficient
Good
cooling
At Night
In the
bedroom
It gets very hot

in May-June
Uses a ceiling fan that is

not so effective in
summer
AC should be
economic
Affordability
N/A
N/A
Limited Finance
N/A
Why is the
need felt?
How is the situation

handled now?
32
Importance of Translating Customer Requirements

Customer requirement is the data collected from customers that gives information on what they need
or want from a process.
Customer requirements are often high-level, vague, and non-specific.
Customer requirements when translated into critical process requirements that are specific and
measurable are called Critical To Quality (CTQ) factors.
A fully developed CTQ has four major elements:
output characteristic;
Y metric;
target; and
specification or tolerance limits.
33
Critical to Quality
Critical to Quality factors are quality parameters set by the organization relating to the customers
needs. CTQ tree is a diagram-based tool that helps develop and deliver quality products and services.
Identify Critical Needs
Identify the critical needs that

the product has to meet.
Define the product
requirements in broad terms.
Ask the customers directly or
brainstorm on their needs
with people in direct contact
with customers.
Identify Quality Drivers
Identify the specific quality

drivers that must be in place
to meet the needs.
Identify all of the drivers that
are important to the
customers.
Understand the factors that
are important to the
customers.
Identify Performance
Requirements
Identify the minimum
performance requirements.
Satisfy the requirements for
each quality driver to provide a
quality product.
Remember the things that may
affect your ability to deliver
these.
34
Quality Function Deployment

Quality Function Deployment (QFD) is a process to understand the customers needs and translate
them into a set of design and manufacturing requirements, while motivating businesses to focus on
its customers.
It helps companies to design and build more competitive products in less time and lesser costs.
It also helps you understand the following:
Customer
requirements
Organizations
strengths &
weaknesses
Areas where
most of the
work is to
be done
Where the
focus should
be
35
Phases of QFD
Quality function deployment involves four phases. The output of a phase is the input of the next
phase.
Customer
Requirements
Key Parts
Characteristics
Input
Output
Product Planning
Product Design
Input
Output
Input
Output
Process Planning
Process Control
Technical
Requirements
Key Process
Operations
Input
Output
Establishing process control plans, maintenance
plans, and training plans to control operations
36
Structure of QFD
Quality function deployment or House of Quality (HOQ) comprises six steps:
37
Step 1Customer Requirements

The first part of the HOQ matrix is Customer Requirements.
This is a documented version of the customers
requirements for a product.
Customer requirements box is known as WHATS.
Inputs are collected through direct conversation with the

customers.
List of customer inputs must be structured before it enters
HOQ.
The organization can also collect customer requirements

by brainstorming with people who work with customers
directly.
38
Customer RequirementsImportance Weightage

Customer requirements prioritization measures for each customer requirement are gathered from the
questionnaire and AHP.
High priority requirements are rated 1 and low priority requirements are rated 0.
For every requirement, calculate the sum of customers who voted it as high priority.
Calculate the percentage of these customers.

Customer Requirements
Customers
1
Sum
% Sum
Lasts a long time
18.2%
Inexpensive
36.3%
Protects hood
27.3%
Doesnt rust
18.2%
11
100%
Totals
39
Step 2Planning Matrix

The second part of the HOQ matrix is Planning Matrix.
This provides a measure of customer satisfaction with the
existing products.
It is used to rate the industry competitors on each of the

customer requirements or WHATS.
It helps the organization to get an overview of their

performance when compared with industry competitors.
5-scale rating is used.
40
Step 3Technical Requirements

The third part of the HOQ matrix is Technical Requirements.
It is also known as Engineering Characteristics or Voice of
the Company.
This section describes products in terms of the company.
QFD team identifies all the measurable characteristics of

the product which are related to customer requirements.
It helps to identify the minimum performance
requirements that the organization must satisfy for each

WHATS.
Organizational factors that affect the ability to deliver the

desired high quality product need to be listed.
41
Step 4Inter-Relationships Matrix

The fourth part of the HOQ matrix is Inter-Relationships
Matrix.
This section forms the main body in the HOQ matrix.
This section translates customer requirements into

technical characteristics of the product.
The QFD team identifies the significance of these interrelationships.
The level of inter-relationship is weighted on a scale.
Each level is assigned a score that is agreed by the QFD

team.
42
Step 5Roof
The fifth part of the HOQ matrix is Roof.
This speaks about the impact of HOWs on WHATSs.
This identifies where the technical requirements of the

product support or obstruct each other.
QFD team considers the pairing of the technical

requirements to form this matrix.
If improving one requirement leads to deterioration
trade-offs existMinus symbol is entered.
If improving one requirement leads to improvement of

the technical requirementTick or Plus symbol is
entered.
43
Step 6Targets
This summarizes the conclusions drawn from the data from
the entire matrix and team discussions.
Technical Priorities: Each inter-relationship weighting is

multiplied by overall weighting from the planning matrix.
Competitive Benchmarks: These show the relative

technical position of the existing product and identify the
target levels of performance to be achieved in a new
product.
Targets: This is a final output of HOQ matrix and is a set

of engineering target values to be met by the new
product design.
44
Post-HOQ Matrix
The output of the first HOQ matrix can be the first stage of the first QFD phase.
45
Define
Topic 3Project Management Basics
Problem Statement
The first step of project initiation is defining the problem
statement.
A problem statement should:
be a clear and concise description of the problem;
identify and specify the observed gap in performance

by setting the current baseline and measuring the gap
Gap
Required State
Actual State
against customer needs; and
be quantifiable with metrics.
The problem statement cannot contain solutions or causes for the problem.
47
Project Charter
A project charter is a written document that defines a teams mission, scope of operation, objectives,
time frame, and consequences for the project. It is a formal approval from the senior management to
start the project. A project charter includes:
measurable objectives to be achieved from the project;
organizational and operation boundaries of the project; and
top management support and commitment.

Write
A Green Belt writes
the problem
statement and project
charter.
Review
The project charter is
reviewed by a Black
Belt.
Approve
The Black Belt is
responsible to get the
Champions approval
for the project charter.
48
Project Charter Sections

Some of the major sections of a project charter are as follows:
Project name and description

Business need (problem statement)
Project managers name
Project purpose or justification, including ROI
Stakeholder requirements
Broad timelines
Major deliverables
Constraints and assumptions
Summary budget
49
Project Plan
A project plan is the final approved document which is used to manage and control the various
processes within a project and ensure seamless project execution. The project manager uses the
project charter as an input to create a detailed project plan.

Some of the major sections of a project charter are as follows:
Project management approach and scope statement

Work breakdown structure (WBS)
Cost estimates and schedule
Performance baselines and major milestones
Key or required staff
Open or pending decisions
Key risks
50
Deliverables of a Lean Six Sigma Project

According to the Lean Six Sigma project plan:
The deliverables must be documented at all the phases of the project;
They are planned and documented in the define phase and are reviewed by the management;
The deliverables are then tracked and delivered by project team, within the stipulated time along
with the relevant information;
The project team reviews the project status with the management at the end of each phase; and
On the basis of the review, the feedback and guidance are provided by the leadership team.
51
Deliverables of a Lean Six Sigma ProjectDetails

The high level deliverables expected of the Lean Six Sigma project phases are as follows:
Measure
phase
Define phase
Form the Crossfunctional team

Document the
project charter
(along with SIPOC,
VOC, CTQs,
benefits, and
timeline)
Identify the key

measures
Collect and plot the
data
Identify the process
variation in the data
Analyze the
measurement
system
Baseline the
process sigma level
Analyze phase
Analyze the data

and processes
Perform correlation
and causation
analysis
Quantify the
process gaps and
sources of variance
Identify the
opportunities for
improvement
Improve phase
The team reviews of

the data collected
occurs
Perform FMEA to
design the solution
and plan for
improvements
Control phase
Standardize the
processes across
the organization.
Develop the control
charts
Implement
monitoring plans
for the project
Establish the
response plan
Transfer ownership
Close the project
52
Pareto Chart
Pareto chart, also known as eighty-twenty rule or vital few,
trivial many, is a histogram depicting the frequency of
occurrence of events.
It plots all the causes for defects in a product or service.
Values are represented in descending order by bars.
Cumulative total is represented by the line.
80% of the effects come from 20% of the causes.
80/20
Thus, Pareto chart narrows the scope of the project, or

problem solving, by identifying the major causes affecting
quality.
53
Pareto ChartsExample
A hotel receives plenty of complaints from its customers and the hotel manager wishes to identify the
key areas of complaints.
Cause
Number
Percentage
Cumulative
Cleaning
35
54.69%
54.69%
Check-in
19
29.69%
84.38%
Pool timings
6.25%
90.63%
Minibar
4.69%
95.31%
Room
service
3.13%
98.44%
Other
1.56%
100.00%
Total
64
100.00%
54
Risk
Risk is an uncertain event or consequence that will probably occur during a project.
Risk impacts at least one of the four main project objectives (time, cost, quality, and scope).
Risk can be positive and enhance the success of the project as well as negative and pose a threat
to a projects success.
Terms used in risk analysis and management:
Risk probability: The likelihood that a risk will occur is called risk probability. To assess any risk is to
assess the probability and impact of the risk.
Issue: Issue is the occurrence of a risk.
Risk consequences: Risk consequences are the effects on project objectives if there is an
occurrence of a risk or issue.

55
Risk Analysis and Management

Risk analysis and management is crucial to the success of a project.
Risk analysis is a five-step process:
Identify risk
Potential risks are
identified using
qualitative
techniques like
interview,
brainstorming,
and check sheets.
Evaluate risk
Identified
potential risks are
evaluated using
the quantitative
methods under 3
criteria
occurrence,
severity, and
detection.
Prioritize and
prevent
Identified risks are
prioritized based
on their RPN
number. Counter
or prevention
measures for the
risk are
brainstormed.
Implement
The identified
counter measures
are implemented.
Monitor and
control
The whole project
will be monitored
and controlled so
that the risk and
its impact are
under control.
56
Elements of Risk Analysis

Some elements of risk analysis are as follows:
Elements
Description
Qualitative method
Interviews, check lists, and brainstormingused to identify potential risks.
Quantitative
method
Used to evaluate the cost, time, and probabilistic combination of individual uncertainties.
Feasibility
The study of the project risk.
Potential impact
Determining the impact of potential risks on a project.
RPN
RPN of a failure is the product of its probability of occurrence, severity, and detectability.
Avoiding risk
If the potential impact is huge, then avoiding the risk is the best option.
Mitigating risk
The loss from mitigating a risk is much less than loss from temporarily avoiding the risk.
Accepting risk
If a risk cannot be avoided or mitigated, then it has to be accepted. The risk will be accepted if
it doesnt greatly impact the cost, time, and product objective.
57
Benefits of Risk Analysis

Benefits of risk analysis are as follows:
Identified risk can be mitigated, transferred, or accepted.
When risk is identified in a task, slack time is provided as a buffer. Thus identifying risks helps in
setting up actual timeline for a project.
Identifying risks helps in setting realistic expectations from the project by communicating the risk
probability and consequence to stakeholders.
Contingency plans can be developed for identified risk. The project team is then well prepared to
work on the issue, thereby reducing the impact of the risk.
58
Risk Assessment Matrix

The potential risks of a project are assessed using the risk assessment matrix.
59
Six Sigma Team and their Responsibilities

The following roles assist the smooth execution of a Six Sigma project:
Roles
Responsibility
Executive sponsor
Source or conduit for project resources, usually the recipients of the benefits the project will produce
Process owners
Work with the Black Belts to improve their respective process, provide functional expertise
Champions
Upper level managers that control and allocate resources to promote process improvements
Master Black Belt
Consultant who offers expertise in the use of Six Sigma tools and methodologies to team leaders
Black Belts
Leaders of individual Six Sigma projects, a mentor to Green Belts by educating them in Six Sigma tools
Green Belts
Lead project teams working in their areas of expertise
Executive
Manages and leads the team to ensure smooth working of tasks, has the power to execute decisions
Coach
Trains, mentors, teaches, and guides the team when required
Facilitator
Acts as a guide and helps the team to understand their common objective
Sponsor
Supports the event or the project by providing all the required resources
Team member
Contributes to the performance of the team and actively participates to fulfil project objectives
60
Project Closure
Every project requires closure because without a formal closure process, project teams can fail to
recognize the end, and then the project can drag on, sometimes at great expense.
Project closure ensures the following:
Outcomes match the stated goals of the project.
Customers and stakeholders are happy with the results.
Critical knowledge is captured.
The team feels a sense of completion.
Project resources are released for new projects.
61
Goals of Project Closure Report

The project closure report is created to accomplish the following goals:
62
Affinity Diagram
The affinity diagram method is employed by an
Sticky paper
Pay is too
low
individual or a team to solve unfamiliar problems
and when the consensus of the group is necessary.
Workers
unkind
Hours are
too long
Each member writes down ideas and opinions on
Lighting
is poor
Air is
Stuffy
Uncomfortable
room
sticky notes. Each note can have a single idea.
All the sticky notes are pasted on a table or wall.
All the sticky papers are arranged according to
categories or thought patterns.
Each category is named with a header card

capturing the central idea of that category.
Dont like
the people
Cant live
on wage
Too
Repetitive
Work is not a
challenge
Poor
Compensation
Poor Work
Environment
Poor
Relationships
Lack of
Motivation
Pay is too
low
Lighting
is poor
Dont like
the people
Work is not a
challenge
Hours are
too long
Uncomfortable
room
Workers
unkind
Too
Repetitive
Cant live
on wage
Air is
Stuffy
Header
Cards
A boundary is drawn around them.
63
Interrelationship Diagram
The interrelationship diagram is a technique
developed to illustrate the relationship
between ideas in more complex situations.
have a single idea.
Inadequate
Training Time
No Standard
TQM
Method
Lack of Knowledge of
Quality Improvement
All the sticky notes are pasted on a table
or wall.
Lack of
Focus
Lack of Quality
Strategy
Each member writes down ideas and

opinions on sticky notes. Each note can
Customer Focus
A cause-effect arrangement of cards is
Confusion of
Committees without
organization
Responsibility
Not clear
Lack of
Communication of
information
Lack of TQM
Commitment by
top managers
constructed by drawing an arrow between

the causes and the effects of the cause.
64
Tree Diagram
The tree diagram is a systematic approach
to outline and identify the tasks and
Espresso temperature
Hot but not too hot
methods needed to solve a problem to
Driver 1
Note: The objective is noted on a card

and placed on the far left side of the
board.
Three different solutions are furnished
Steamed milk temperature
Req A2
reach a predefined goal.
Req A1
Fitness of grind of the coffee beans

Delighted with cappuccino
Need
Strong coffee flavor
Driver 2
Req B1
Amount of ground coffee
Req B2
Correct amount
of sweetness
Driver 3
Type of sweetener
Req C1
Amount of sweetener
Req C2
to achieve the goal.
Solutions to each issue are provided.
65
Define
Topic 4Management and Planning Tools
Matrix Diagram
Matrix diagrams show the relationship between objectives and methods, results and causes, tasks
and people, etc. They:
provide information about the relationship;
help determine the strength of relationships between a grid of rows and columns;
provide importance of task and method elements of the subject; and
help in organizing a large amount of inter-process related activities.
67
Types of Matrices
The following are five types of matrix diagrams:
L Type Matrix
Compares one list against another, with one set of elements on the x-axis and
another along the y-axis
T Type Matrix
X Type Matrix
Compares four lists, each against two other lists, in pairs, with two sets of elements
on both the x and the y axes
Y Type Matrix
C Type Matrix
Compares one list against the two others, in pairs, with two sets of elements on the
y-axis which are split by a set of elements on the x-axis
Compares three lists, each against the other in pairs, two L type matrices joined at
the y axis
Compares three lists against one another, a combination of two L type matrices
joined in the y axis in a three dimensional space
68
Defect per Unit

Defect per unit (DPU) is the average number of defects per unit of a product.
Defect per Unit (DPU) =
Q
A
Total number of defects

Total number of units
Calculate DPU for the matrix shown below.

Defects per unit
Units
70
20
Defect per Unit (DPU) =
1 20 +2 5 +3 4 +5(1)
70+20+5+4+1
47
100
= 0.47
69
Throughput Yield
Throughput Yield (TPY) is the number of acceptable pieces at the end of a process divided by the
number of starting pieces, excluding scrap and rework. TPY is used to measure a single process only.
If DPU is known, TPY can be calculated using the following formula:

Throughput Yield (TPY) = eDPU
Defect per Unit DPU = log e (TPY)
70
Rolled Throughput Yield

Rolled Throughput Yield (RTY) is the probability of the entire process producing zero defects. It is
important as a metric when a process has excessive rework.
Total Defects per Unit (TDPU) is defined for a set of processes. RTY is calculated using the following
formula when the Total Defects per Unit (TDPU) is known:
Rolled Throughput Yield (RTY) = eTDPU
Total Defects per Unit (TDPU) = log e (RTY)
RTY is the product of each processs First Pass Yield (FPY) when the defectives are known. FPY is
the number of products which pass without any rework over total number of units.
First Pass Yield (FPY) =
Total number of units Number of Defectives units Total number of quality products
=
Rolled Throughput Yield RTY = FPY1 FPY2 FPY3 FPYn
71
FPY and RTYExample
A company has three processes: A, B, and C. Given below is the data.

Process
Input parts from the supplier
Process A
Process B
Process C
100
90
85
Input parts that passed inspection

85
80
85
Reworked parts
5
5
0
The output from process C is sent to the customer. Calculate the FPY and RTY.
Total number of quality products

85
=
= 0.850
100
Total number of quality products 80
First Pass Yield for Process B =
=
= 0.889
90
Total number of quality products
First Pass Yield for Process C =
=1
Rolled Throughput Yield (RTY) = FPY1 FPY2 FPY3
Rolled Throughput Yield RTY = 0.850 0.889 1 = 0.75
Rolled Throughput Yield RTY = 75%
First Pass Yield for Process A =
72
Define
Topic 5Business Results for Projects
Defect per Million Opportunities

Defect per Million Opportunities (DPMO), or Non-Conformities per Million Opportunities (NPMO), is a
measure of process performance. It standardizes the number of defects at the opportunity level and
allows comparison of the processes with different complexities.

Defect per Million Opportunities (DPMO) = Total number of opportunities 106

Where, Total number of opportunities = Units * Number of opportunities per unit
There are 5 units with 5 defect opportunities each. The total number of defects are 8. Calculate DPMO.
Total number of opportunities = Units * Number of opportunities per unit = 5 * 5 = 25 total opportunities
Defect per Million Opportunities (DPMO) = Total number of opportunities 106 = 25 106 = 320,000
74
Cost of Quality
Cost of Quality (COQ) is the cost incurred by a process because it cannot consistently make a perfect
product.
The four types of COQ are as follows:

Preventive Cost
Cost incurred in
preventing a failure
Example: Training and
improvement programs
Appraisal Cost
Cost incurred to test a
product for quality
conformance
Example: Testing,
audits, and inspection
Internal Failure Cost
External Failure Cost
Cost associated with

defects identified
before a product
reaches the customer
Cost associated with

defects after a product
reaches the customer
Example: Rework and

scrap
Example: Warranty,
returned products, or
lost reputation
75
Quiz
QUIZ
1
a.
Which of the following is an incorrect description of QFD?
QFD converts customer requirements into design specification.
b. QFD is an iterative process.

c.
QFD is similar to project management.
d.
QFD identifies risk areas.
77
QUIZ
1
a.
Which of the following is an incorrect description of QFD?
QFD converts customer requirements into design specification.
b. QFD is an iterative process.

c.
QFD is similar to project management.
d.
QFD identifies risk areas.
Answer: c.
Explanation: QFD focuses on identifying the voice of the customer, whereas Project
management focuses on implementation.
78
QUIZ
2
a.
What is Rolled Throughput Yield?
The number of products which pass without any rework
b. The probability of the entire process producing zero defects

c.
A measure of process performance
d.
The number of acceptable pieces at the end of a process
79
QUIZ
2
a.
What is Rolled Throughput Yield?
The number of products which pass without any rework
b. The probability of the entire process producing zero defects

c.
A measure of process performance
d.
The number of acceptable pieces at the end of a process
Answer: b.
Explanation: Rolled Throughput Yield is the probability of the entire process producing zero
defects.
80
QUIZ
3
a.
Identification of external customer is important because:
It ensures a smooth product recall.
b. It helps identify customer requirements.

c.
It ensures higher profit.
d.
It eliminates futile advertisements.
81
QUIZ
3
a.
Identification of external customer is important because:
It ensures a smooth product recall.
b. It helps identify customer requirements.

c.
It ensures higher profit.
d.
It eliminates futile advertisements.
Answer: b.
Explanation: A company will be successful only if it meets the needs of the customers better
than the competitors. Hence we need to identify the customers to gather their
requirements.
82
QUIZ
4
a.
Which of the following are not stakeholders?
Owners or stockholders
b. Potential suppliers
c.
Potential competitors
d.
Contract workers
83
QUIZ
4
a.
Which of the following are not stakeholders?
Owners or stockholders
b. Potential suppliers
c.
Potential competitors
d.
Contract workers
Answer: c.
Explanation: The relevant stakeholders in any project are the stockholders, management,
employees, suppliers, and customers.
84
QUIZ
5
a.
What is the main difference between risk analysis and risk management?
There is minimal difference between risk analysis and risk management.
b. Risk analysis includes risk handling while risk management includes risk monitoring.
c.
Risk analysis refers to tools and risk management deals with consent.
d.
Risk analysis evaluates risks, while risk management is a more inclusive process.
85
QUIZ
5
a.
What is the main difference between risk analysis and risk management?
There is minimal difference between risk analysis and risk management.
b. Risk analysis includes risk handling while risk management includes risk monitoring.
c.
Risk analysis refers to tools and risk management deals with consent.
d.
Risk analysis evaluates risks, while risk management is a more inclusive process.
Answer: d.
Explanation: Risk management is a complete process, while risk analysis is more specific
and deals with evaluation of complex risks.
86
QUIZ
6
a.
Which Matrix diagram illustrates relationships in three planes?
L type
b. T type
c.
X type
d.
C type
87
QUIZ
6
a.
Which Matrix diagram illustrates relationships in three planes?
L type
b. T type
c.
X type
d.
C type
Answer: d.
Explanation: C type Matrix diagram illustrates relationships in three planes. L type, T type,
and X type are drawn on two planes.
88
QUIZ
7
a.
Which of the following is not a Cost of Quality?
Preventive cost
b. Opportunity cost
c.
Internal failure cost
d.
External failure cost
89
QUIZ
7
a.
Which of the following is not a Cost of Quality?
Preventive cost
b. Opportunity cost
c.
Internal failure cost
d.
External failure cost
Answer: b.
Explanation: There are four types of Cost of Quality: preventive cost, appraisal cost, internal
failure cost, and external failure cost.
90
QUIZ
8
a.
The tangible benefits from the Lean Six Sigma project needs to be articulated in the
following terms, except:
Cost Reduction
b. Reduce Turnaround Time

c.
Defects Reduction
d.
Six Sigma Certification
91
QUIZ
8
a.
The tangible benefits from the Lean Six Sigma project needs to be articulated in the
following terms, except:
Cost Reduction
b. Reduce Turnaround Time

c.
Defects Reduction
d.
Six Sigma Certification
Answer: d.
Explanation: The tangible benefits of Lean Six Sigma includes cost reduction, reducing
turnaround time, and reducing defects. Six Sigma Certification is not a tangible process
improvement.
92
QUIZ
9
a.
Financial evaluation of the Lean Six Sigma project will include all of the following,
except:
Cost Reduction and/or Avoidance
b. New customers acquired

c.
Reduction in rework and scrap
d.
Effort reduction
93
QUIZ
9
a.
Financial evaluation of the Lean Six Sigma project will include all of the following,
except:
Cost Reduction and/or Avoidance
b. New customers acquired

c.
Reduction in rework and scrap
d.
Effort reduction
Answer: b.
Explanation: While performing financial evaluation, the focus is on the cost reduction
and/or avoidance and the benefits due to the reduction in the effort and rework and scrap.
The new customers acquisition cannot be directly attributed in the financial evaluation.
94
QUIZ
10
a.
Which of the following is not a part of hard savings?
Reduced budgets
b. Fewer employees
c.
Additional revenue opportunities
d.
Employee morale
95
QUIZ
10
a.
Which of the following is not a part of hard savings?
Reduced budgets
b. Fewer employees
c.
Additional revenue opportunities
d.
Employee morale
Answer: d.
Explanation: Hard savings include reduced budgets, fewer employees, and additional
revenue opportunities. Employee morale is a part of soft savings.
96
QUIZ
11
a.
Who are the people affected by the organizations actions?
Stakeholders
b. Process owners
c.
Suppliers
d.
Management
97
QUIZ
11
a.
Who are the people affected by the organizations actions?
Stakeholders
b. Process owners
c.
Suppliers
d.
Management
Answer: a.
Explanation: Stakeholders are the people who are affected by the organizations actions.
98
QUIZ
12
a.
Data collection tools will be selected on what basis?
Customers
b. Products
c.
Type of data
d.
Suppliers
99
QUIZ
12
a.
Data collection tools will be selected on what basis?
Customers
b. Products
c.
Type of data
d.
Suppliers
Answer: c.
Explanation: Data collection tools will be selected based on the type of data to be collected.
100
QUIZ
13
a.
What is the first step of project initiation?
Defining the problem statement
b. Creating QFD structure

c.
Translating customer requirements
d.
Preparing project closure report
101
QUIZ
13
a.
What is the first step of project initiation?
Defining the problem statement
b. Creating QFD structure

c.
Translating customer requirements
d.
Preparing project closure report
Answer: a.
Explanation: The first step of project initiation is defining the problem statement.
102
QUIZ
14
a.
Which of the following defines the number of defects observed in one unit?
DPU
b. DPMO
c.
RTY
d.
FPY
103
QUIZ
14
a.
Which of the following defines the number of defects observed in one unit?
DPU
b. DPMO
c.
RTY
d.
FPY
Answer: a.
Explanation: DPU is an important business measure because it defines the number of
defects observed in one unit.
104
QUIZ
15
a.
Which of the following standardizes the number of defects at the opportunity level and
allows comparison of the processes with different complexities?
DPU
b. DPMO
c.
RTY
d.
FPY
105
QUIZ
15
a.
Which of the following standardizes the number of defects at the opportunity level and
allows comparison of the processes with different complexities?
DPU
b. DPMO
c.
RTY
d.
FPY
Answer: b.
Explanation: DPMO standardizes the number of defects at the opportunity level and allows
comparison of the processes with different complexities.
106
Summary
Here is a quick
recap of what we
have learned in this
lesson:
Project selection includes identifying organizational need, identifying the projects, and
evaluation of the projects.
SIPOC is a macro-level map drawn in the define phase.
Quality Function Deployment (QFD) is a process to ensure that the customers wants and
needs are heard and translated into technical characteristics.
A business case highlights the problem area and opportunity along with the expected
business outcomes.
Financial evaluation helps in evaluating and documenting a project from end to end,
from both cost and benefits perspective.
107
Summary (contd.)
Here is a quick
recap of what we
have learned in this
lesson:
Risk analysis includes identification, evaluation, prioritization and prevention of risk,

implementation, and monitoring and controlling of risk.
Cost of Quality (COQ) is the cost incurred by a process because it cannot consistently
make a perfect product.
Rolled Throughput Yield (RTY) is the probability of an entire process producing zero
defects.
Defect per Million Opportunities (DPMO), or Non-Conformities per Million Opportunities

(NPMO), is a measure of process performance.
Deliverables are expected from a Lean Six Sigma project at every phase, and they help us
document the expectations and keep the project on track.
108
THANK YOU


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Lean Six Sigma Green Belt

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Explain various components of project selection

Describe customer data collection methods

List various means of project documentation

Discuss risk analysis and management

Describe project management and planning tools

Explain the concepts used in evaluation of project performance

Describe the deliverables of Lean Six Sigma project

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Select the right

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If SIPs are stable, the output will be stable.

These relationships can be termed as closed-loop business systems.

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Owners and Stakeholders

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gets affected by a particular product or service.

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Importance of an internal customer

Needs of an internal customer

Necessary tools, training, and specific instructions

Activities directly impact final customer

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There are three types of external customers:

They purchase a particular

They purchase a particular

They do not purchase the

Building a Business Case

A business case must capture the following:

Set of resources and their availability; and

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Building a Business CaseDetails

Amount of cost reduction,

Ways to reduce turnaround time,

Focus on quality by reduction in defects, and

Ways to achieve customer satisfaction.

The business case is presented to stakeholder with the following details:

Executive summary brief

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Financial Evaluation and Benefits Capture

Intangible benefits such as:

Increase in customer satisfaction,

Additional revenue opportunities,

Brand uplift and repeat customer.

Rework and scrap reduction, and

Also includes the benefits arising from:

Reduction in work force.

Less inventory and reduced testing,

Lower cycle times and improved yields,

Lower rework rates and reduced scrap.

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Financial Evaluation and Benefits CaptureSample

In this row, calculate the net value (Benefits

This row captures the benefits expected to be

In this row, capture the monthly data and add

Positive Effects of Project on Customers

Effects on internal customer

High level of motivation

High level of job satisfaction