C USTOMER & C OMPETITIVE I NTELLIGENCE FOR P RODUCT, P ROCESS, S YSTEMS & E NTERPRISE E XCELLENCE

1. D ESIGN FOR SIX SIGMA CUSTOMER&COMPETITIVEINTELLIGENCE FOR PRODUCT, PROCESS, SYSTEMS & ENTERPRISE EXCELLENCE DEPARTMENT OFSTATISTICS REDGEMAN@UIDAHO.EDU OFFICE: +1-208-885-4410 DR. RICK EDGEMAN, PROFESSOR& CHAIR– SIX SIGMA BLACK BELT

2. S S IX IGMA a highly structured strategy for acquiring, assessing, and applying customer, competitor, and enterprise intelligence for the purposes of product, system or enterprise innovation and design. DEPARTMENT OFSTATISTICS

3. Design for Six Sigma Applications of Six Sigma that focus on the design or redesign of products and services and their enabling processes so that from the beginning customer needs and expectations are fulfilled are known asDesign for Six Sigma or DFSS. The aim of DFSS is to create designs that are resource efficient, capable of exceptionally high yields, and are robust to process variations. This aim produces a recasting of DMAIC that can be characterized as: Define-Measure-Analyze-Design-Verify (DMADV) or as Invention-Innovation-Design-Optimize-Verify (I2DOV) or as CDOV

4. Six Sigma from the GE Perspective: Six Sigma is a highly disciplined process that helps a company focus on developing and delivering near-perfect products and services. Why “sigma”? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many “defects” you have in a process, you can systematically determine how to eliminate those and approach “zero defects”. Six Sigma has changed the DNA at GE – it is the way that GE works – in everything that GE does and in every product GE designs. “What is Six Sigma? The Roadmap to Customer Improvement” www.ge.com/sixsigma/makingcustomers.html

5. Design for Six Sigma at GE: DFSS is changing GE. With it GE can build on all of its capabilities and take all of its product and process designs to a new level of world-class performance and quality. The essence of DFSS is predicting design quality up front and driving quality measurement and predictability improvement during the early design phases- a much more effective and less expensive way to get to Six Sigma quality than trying to fix problems further down the road. What We Do. GE Corporate Research and Development Formerly posted at: www.crd.ge.com/whatwedo/sixsigma.html

6. Another View of Design for Six Sigma: • DFSS is the change in the product design organization from a deterministic to a • probabilistic culture. Our people were trained to incorporate statistical • analysis of failure modes, both in products and processes. Then they began • to incorporate design changes that modify and eliminate design features • with a probability of failure within a predefined range of operating • environments and conditions. The design organization changed from a • “factor-of-safety” mentality to one in which there was a quantitative assessment • of design risk. Four elements of design are most critical to the effort: • Design for producibility (design for manufacturing and assembly); • Design for Reliability; • Design for Performance (technical requirements); and • Design for Maintainability. • “Design for Six Sigma: 15 Lessons Learned”, Quality Progress, Vol. 35, No. 1, pp. 33-42, January 2002.

7. Voice of the Customer Analyze Improve Measure Define Control Institutionalization TheDMAICModel

8. Definethe problem and customer requirements. Measure defect rates and Document the process in its current incarnation. Analyze process data and Determine the capability of the process. Improve the process and remove defect causes. Control process performance and ensure that defects do not recur. Define Control Measure Improve Analyze SixSigmaInnovation & theDMAICAlgorithm

9. Team Charter & Project Scoping: Of similar importance & structure as in DMAIC

10. Team Charter Table of Contents 1. EXECUTIVE SUMMARY …………………………………………………3 2. PROJECT OBJECTIVES…………………………………………………3 3. PROJECT SCOPE ……………………………………………………..…3 4. BUSINESS CASE …………………………………………………………3 5. PROJECT ORGANIZATION ……………………………………………3 6. SCHEDULES……………………………………………………………….4 7. COMMUNICATION PLAN ……………………………………………...4 8. PROJECT CONTROL PROCEDURES ……………………...…………4 9. PROJECT ASSUMPTIONS ……………………………..………………4 10. CONFLICT RESOLUTION………………………………………………. 5

11. Project Scope • On what process will the team focus on? • What are the boundaries of the process we are to improve? Start point? Stop point? • What resources are available to the team? • What (if anything) is out-of-bounds for the team? • Under what (if any) constraints must the team work? • What is the time commitment expected of team members? • What are the advantages to each team member for the time commitment?

12. SMART • Problem&GoalStatementsShouldbe: • Specific • Measurable • Attainable • Relevant • Time-Bound

13. Eight Steps for Establishing Project Boundaries • Identify the customer • Who receives the process output? • (May be an internal or external customer) • Define customer’s expectations and needs • Ask the customer • Think like the customer • Rank or prioritize the expectations • Clearly specify your deliverables tied to those expectations • What are the process outputs? (Tangible and intangible deliverables) • Rank or prioritize the deliverables • Rank your confidence in meeting each deliverable • Identify CTQ’s for those deliverables • What are the specific, measurable attributes that are most critical in the deliverables? • Select those attributes that have the greatest impact on customer satisfaction.

14. Eight Steps for Establishing Project Boundaries • Map your process • Map the process at it works today (as is). • Map the informal processes, even if there is no formal, uniform process in use. • Determine where in the process the CTQ’s can be most seriously affected • Use a detailed flowchart • Estimate which steps contain the most variability • Evaluate which CTQ’s have the greatest opportunity for improvement • Consider available resources • Compare variation in the processes with the various CTQ’s • Emphasize process steps which are under the control of the team conducting the project • Define the project to improve the CTQ’s you have selected • Define the defect to be attacked

15. The SIPOC Model Process Steps Inputs Outputs Suppliers Customers Inform Loop

16. Six Sigma COPIS Model Process Steps Outputs Inputs Suppliers Customers How does Six Sigma Work? The Voice of the Customer(VOC) is aggressively sought and rigorously evaluated and used to determine needed outputs and hence the optimal process configuration needed to yield those outputs and their necessary inputs for which the best suppliers are identified and allied with. From Concept to Market: the Voice of the Customer

17. D F ESIGN OR S S IX IGMA DFSS LESSONSLEARNED & LEADERSHIP DEPARTMENT OFSTATISTICS REDGEMAN@UIDAHO.EDU OFFICE: +1-208-885-4410 DR. RICK EDGEMAN, PROFESSOR& CHAIR– SIX SIGMA BLACK BELT

18. Design for Six Sigma at GE: DFSS is changing GE. With it GE can build on all of its capabilities and take all of its product and process designs to a new level of world-class performance and quality. The essence of DFSS is predicting design quality up front and driving quality measurement and predictability improvement during the early design phases- a much more effective and less expensive way to get to Six Sigma quality than trying to fix problems further down the road. What We Do. GE Corporate Research and Development Formerly posted at: www.crd.ge.com/whatwedo/sixsigma.html

19. Design for Six Sigma Define-Measure-Analyze-Design-Verify (DMADV) Definecustomer requirements and goals for the process, product or service. Measureand match performance to customer requirements. Analyzeand assess the design for the process, product or service. Designand implement the array of new processes required for the new process,product or service. Verifyresults and maintain performance.

20. Improvement–Focuses on high priority problems in business processes. This uses the DMAIC methodology: Define, Measure, Analyze, Improve, and Control. • Design–Design For Six Sigma (DFSS) addresses new or fundamentally poor processes. The methodology is called the DMADOV model: Define, Measure, Analyze, Design, Optimize, and Verify. • Business Process Management –aids in definition and management of operations and activities in terms of core and enabling processes. The resulting process management systems provide a foundation of process definition and baseline data for all process design and improvement activities.

27. DFSS as a Growth Strategy: Lesson 1 Achieving world-class performance through any set of tools takes careful preparation and a commitment to the foundational change efforts required for world-class capability.

28. DFSS as a Growth Strategy: Lesson 2 DFSS grows into program profits in direct proportion to the size of the initial investment. The more the initial investment to eliminate (adverse) design issues, the greater the life cycle profits that will be realized.

29. DFSS as a Growth Strategy: Lesson 3 A structured compensations system that substantially rewards leadership cooperation and co-ownership for successfully implementing cross-functional DFSS projects significantly improves the bottom line. Note: the corporate example that produced the most impressive results was a firm where DFSS involvement was directly linked to management rewards. This firm REQUIRED senior management to spend 30% of its time on DFSS activity.

30. DFSS as a Growth Strategy: Lesson 4 Leaders, especially middle managers, need to be selected, prepared and trained much earlier in the process to achieve desired levels of commitment.

31. DFSS as a Growth Strategy: Lesson 5 DFSS should be regarded as a part of doing business and represent of part of reinvesting a portion of the profits into the business to produce even greater profits in the long run. If DFSS is to be the driving force, the heart and soul of a business, then adequate dollars, time and resources must be incorporated into the annual budget to ensure the company’s success. Success is rarely the result of unplanned, fortuitous accident.

32. DFSS as a Means of Serving Customers: Lesson 1 Continual customer feedback and ideas are essential to achieve a partnership with the customer. In an age where competition for customers is relentless, companies that make the customer a partner in the DFSS activity and maintain that partnering throughout the product life cycle have a customer for the product life cycle.

33. DFSS as a Means of Serving Customers: Lesson 2 A DFSS must be inclusive, and a conscious effort must be made to embed it in the fabric of the entire organization. All employees must understand how it works and why it benefits the customer, the business and themselves.

34. Product-Process Fusion Through DFSS: Lesson 1 Drive product and process compatibility across the entire value chain and product life cycle.

35. Product-Process Fusion Through DFSS: Lesson 2 The value chain of your customer includes everything incorporated into the final product. Substantial elements often come from suppliers and subcontractors. If they are not integrated into the DFSS activity, then the final product is sub-optimized.

36. Product-Process Fusion Through DFSS: Lesson 3 Six Sigma activity to reduce variability in the factory is a losing process if the new designs cause new variability. DFSS is intended to reduce the introduction of new variability and achieve process stability and uniform quality faster.

37. Product-Process Fusion Through DFSS: Lesson 4 Metrics must tell the story of the organization’s performance ANDmust be discussed regularly among the staff in each area.

38. Product-Process Fusion Through DFSS: Lesson 5 DFSS can have applicability in diverse industries – some that are nontraditional such as pharmaceuticals, if the design and production is integrated and balanced.

39. The DFSS Engineering Organization: Lesson 1 Design organizations are struggling with the loss of domain knowledge and lack of experience and skills among the DFSS teams themselves. This slows the movement to probabilistic design approaches as there seems to be little time to meet schedules and conduct thorough analysis using statistical tools.

40. The DFSS Engineering Organization: Lesson 2 Enlarging the responsibility of design engineering to follow the product from start to finish creates ownership that changes the approach to product design. It accelerates the incorporation of lessons learned outside the design studio.

41. The DFSS Engineering Organization: Lesson 3 The trend toward engineering efficiency in which organizations assign engineers from pools to cover assignments has made engineers a commodity at just the point in time when the loss of domain knowledge makes the need for longevity in an organization essential.

42. The People of Six Sigma

43. Six Sigma Champions • Create the vision of Six Sigma for the company. • Define the path to implement Six Sigma across the organization. • Develop a comprehensive training plan for implementing the Breakthrough Strategy. • Carefully select high-impact projects. • Support development of “statistical thinking”. • Ask Black Belts many questions to ensure that they are properly focused. • Realize the gains by supporting Six Sigma projects through allocation of resources and removal of roadblocks. • Hold the ground by implementing Black Belt recommendations. • Make sure that project opportunities are acted upon by the organization’s leadership and the finance department. • Recognize people for their efforts.

44. Master Black Belts • Understand the big business picture. • Partner with the Champions. • Get certified as Master Black Belts. • Develop and deliver training to various levels of the organization. • Assist in the identification of projects. • Coach and support Black Belts in project work. • Participate in project reviews to offer technical expertise. • Help train and certify Black Belts. • Take on leadership of major programs. • Facilitate sharing of best practices across the corporation.

45. Black Belts • Act as Breakthrough Strategy experts and be Breakthrough Strategy enthusiasts. • Stimulate Champion thinking. • Identify the barriers. • Lead and direct teams in project execution. • Report progress to appropriate leadership levels. • Solicit help from Champions when needed. • Influence without direct authority. • Determine the most effective tools to apply. • Prepare a detailed project assessment during the Measurement phase. • Get input from knowledgeable operators, first-line supervisors, and team leaders. • Teach and coach Breakthrough Strategy methods and tools. • Manage project risk. • Ensure that the results are sustained.

46. Black Belt Activities MENTORS: Cultivates a network of Six Sigma individuals at the local organization or site. TEACH: Provides formal training of local personnel in new strategies and tools. COACH: Provides one-on-one support to local personnel. TRANSFER: Passes on new strategies and tools in the form of training, workshops, case studies, and local symposia. DISCOVER: Finds application opportunities for Six Sigma strategies and tools, both internal and external (e.g. suppliers and customers). IDENTIFY: Highlights / surfaces business opportunities through partnerships with other organizations. INFLUENCE: Sells the organization on the use of Six Sigma strategies and tools.

47. Green Belts • Function as Green Belts on a part-time basis, while performing their regular duties. • Participate on Black Belt project teams in the context of their existing responsibilities. • Learn the Six Sigma methodology as it applies to a particular project. • Continue to learn and practice the Six Sigma methods and tools after project completion.

48. Corporate Six Sigma Leadership

49. Six Sigma and General Electric • General Electric CEO, Jack Welch, describes Six Sigma as “the most important initiative GE has ever undertaken.” GE’s operating income, a critical measure of business efficiency and profitability, hovered around 10% for decades. In 1995 Welch mandated that each GE operation from credit card services to aircraft engine plants to NBC-TV work toward achieving Six Sigma. GE was averaging about 3.5 when it introduced the program. • With Six Sigma embedding itself deeper into GE’s processes, they achieved the previously “impossible” operating margin of 16.7% in 1998 – up from 13.6% in 1995. • In dollar amounts, Six Sigma delivered more than $300 million to GE’s 1997 operating income and more than $600 million in 1998.

50. Six Sigma and Raytheon • Former AlliedSignal executive Daniel P. Burnham, who became Raytheon’s CEO in 1998, has made Six Sigma a cornerstone of the company’s strategic plan. • By pursuing Six Sigma quality levels throughout the company, Raytheon to improved its cost of doing business by more than $1 billion annually by 2001.