Six Sigma is a statistical tool for process improvement. This is a step-by-step systematic approach to solve the problems and we know it by DMAIC methodology also. In Six Sigma we convert real life problems into statistical problems. After converting we use statistical tools to find the statistical solutions for that problem. Afterwards, these statistical solutions are transformed into real life solution and implemented to solve the problem. The first step in DMAIC or a Six Sigma project is the Define Phase. This article is all about the Define phase and describes it comprehensively.
Table of Contents
What is Six Sigma?
When we talk about six sigma, it means our process efficiency is 99.99966%. In other words, we can say there will be only 3.4 defects generation per 1000000 opportunities. Therefore, our process sigma level is directly related with product quality and product cost. Below matrix gives us a clear picture sigma level and cost of quality for our product manufacturing.
So, you can see it is evident being better is cheaper for any company. Now we will dive into step-by-step process to understand the DMAIC methodology. DMAIC is the short form of Define, Measure, Analyse, Improve and Control phases. First, let us talk about Define phase.
Define Phase
Define is the first and very important phase for any improvement project. This is the foundation of any successful project. You should understand a project will be successful or fail mostly depends on this phase.
The objective of this step is to recognise and understand the need of our stakeholders. Whether this project is important or not for them. Your stakeholders can be external or internal. External stakeholders are such as suppliers, customers, local administration, pollution control body, society, shareholders, etc. When we talk about internal stakeholders, it means those who are directly concerned with your project. They can be like, your manager, business head, plant manager, site head, etc.
Various activities in this phase are as below:
Identification of Project CTQ’s
CTQ is the abbreviation for Critical to Quality. For a project this is a characteristic of a product or a service that satisfies a customer requirement or process requirement. In a project there can be more than one CTQs. You can think various examples for CTQs in a business such as cost of product, numbers of customer complaints, employee attrition rate, % sales growth per year, etc.
Therefore, we can see the CTQ is the VOC (voice of customer) or VOB (voice of business), which is the pain area or need of a customer or a business. Let’s understand the CTQ identification exercise with an example VOC for Product Variable Cost reduction by 10%, which the need of your customer.
CTQ Identification for Product VC Reduction
Here we have taken a hypothetical product case, in which we are using two raw materials Chemical A & B. Other than this we are using Steam and Power as utilities. Moreover, other overhead cost includes like packaging cost, logistics cost and employee cost. This we can see in below figure.
In above exercise we can see there are total 7 nos of CTQs, which leads to the customers need through drivers. Therefore, if we address these CTQs then our customer or stakeholder will be satisfied.
Project ‘Y’
Now, these 7 CTQs will lead us to Project ‘Y’. This is the actual project on which we will work to improve the project CTQs. In our example these are as in below table:
So here we got seven projects, in reality it is not possible to take up all the projects simultaneously. Because every project needs resources which are limited such as man, machine and money. Therefore, it is necessary to prioritise your projects. It means you must take up high impact projects first and subsequently you can work upon other projects as well.
To prioritize the projects, we can use Pareto analysis of Prioritization Matrix. Here we will use Pareto Analysis, it says our 80% of benefits comes from 20% of work. We will make Pareto chart for our all CTQs based on their contribution in the product variable cost.
Pareto Chart
This is a statistical tool developed by Vifredo Pareto in 1896 and used for decision making. This is also known as 80:20 rule also. In our example contribution of various CTQs are in below table.
You can prepare Pareto chart in excel first put the contribution cost in descending order. And, add one more column showing cumulative contribution.
From above you can see if you focus on first 2 CTQs, that will address over 70% total variable cost of the product. Therefore, working on these two CTQs related projects will lead you towards major impact on product cost reduction.
Project Baselining
After freezing the CTQs and the Project ‘Ys’, you should collect the data for Project ‘Y’. In our case this is consumption norm of chemical ‘A’ and ‘B’. It is better we collect data for one year of consistent plant operation. Because in a year you can see the impact of seasonal change also. After collection of one year of data for the norms, just draw a Run Chart. This chart will give us the behaviour of our process over the year. In case there are any shutdown or breakdown we can see it in run chart. Remove these data points and estimate the mean as a baseline for your project.
When data are not normal then we should consider median as the baseline of our project. Because in that case mean will not give us a realistic representation of the operating process.
SIPOC (Supplier Input Process Output Customer)
In Lean Six Sigma we use SIPOC to identify the relationship between response (outputs) and independent variables (inputs) or in other words Y = f(X). Here, we try to recognize the suppliers which provides inputs to the process and customers who uses outputs from the process. You need to prepare a SIPOC for your project in the define phase of the six sigma project.
Let us consider the example for reducing steam consumption norm for a distillation column. For this below can be a typical SIPOC Diagram:
Benefits of SIPOC are mainly two, first it gives us understanding of the process from highest level. And, second it helps us to draw the scope of the project.
Project Charter
We need to understand this clearly that any Six Sigma project is a team work. Basis of six sigma is to develop cultural change in the organization for continuous improvement with sustenance. A Project Charter is a written document and which is an agreement between management and project team, about the project scope of work and goal. This project can be a new plant project, existing plant de-bottlenecking, process improvement initiative, plant maintenance work, new product development or plant digital transformation campaign, etc.
Below is the typical format of a project charter and this a very important deliverable of Define phase of six sigma project. It is very important to get signoff this project charter from all the stake holders named in this document.
Stakeholder Analysis
Whoever is affected directly or indirectly by the business operation are considered its stakeholders. These can be like, suppliers, customers, company management, its employees, families of employees, people living in vicinity, government, financers, shareholders, etc.
The stakeholder support is very critical for the success of any business. During the project cycle we need support from many stakeholders at various levels. So, it is necessary for you to carryout stakeholder analysis to understand and evaluate their support requirement. Subsequently you need to prepare a strategy to getting their support for the overall success of the project. When we talk about overall success it means working with man & machine both at the same time.
For this purpose, you can use RACI Matrix, which stands for Responsible, Accountable, Consulted & Informed. Example of RACI Matrix for a Six Sigma project can be as below:
In a Six Sigma project we need a cross functional team as we may need different functional inputs to solve the problem. A Six Sigma team is formed to include respective domain knowledge experts, as we need this expertise to find out the solution. For example, if we are looking to reduce steam consumption norm in distillation column, we need to include a Chemical Engineer (from Process Design Department). Similarly for procurement lead time reduction we require purchase manager in our team. For recruitment time reduction project, we need Human Resource Manager as a team member.
Communication Strategy
A proper communication plan is very important for the overall success of the project and it is must to prepare a communication strategy in define phase of six sigma project itself. This will eliminate the confusions & surprises during project. A good communication plan includes following things:
- Who will communicate?
- What to communicate?
- When & at what frequency communication will be done?
- It is important to mention the reason of communication.
- Who will be the recipient of the communication and what will be the mode of communication? Like written, verbal or meeting.
Conclusion
So, end of the define phase we should have performed following things typically:
- We have conducted first meeting with the project team and discussed about the goal of the project. Team members and their roles are clear with timebound deliverables.
- High level project schedule is ready with measure Milestones.
- Cost benefit analysis of the project is completed.
- Data collection is completed for the project CTQ with Run chart preparation. Project baseline is frozen.
- Project charter is ready and signed off with all the stakeholders.
- Stakeholder analysis is done and a communication plant is ready with us.
Once Define phase is completed, we are ready to move towards the next phase of our Six Sigma project which Measure phase.
Thanks for reading…