Six Sigma ASQ Book

Six Sigma Black Belt

Introduction
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Introduction: Home
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Course Introduction

Concept: Course Introduction
Welcome to the American Society for

Quality (ASQ) Six Sigma Black Belt
(SSBB) certification preparatory course.
This is the first step in your journey to Six
Sigma Black Belt certification.
This course will cover the following
topics:
Enterprise-wide deployment
Business process management
Project management
Define
Measure
Analyze
Improve
Control
Lean enterprise
Design for Six Sigma

Becoming an SSBB empowers you to
make a difference in your organization.
Six Sigmas focus on customer
satisfaction and operational excellence
brings a new level of business credibility
to your role as a quality expert. As a Black
Belt, you will be relied upon as one of the
leaders in your organizations quality
movement.
ASQ Overview

Concept: ASQ Overview
The American Society for Quality (ASQ) is the world's leading authority on quality.
With more than 100,000 individual and organizational members, this professional
association advances learning, quality improvement and knowledge exchange to
improve business results and create better workplaces and communities worldwide.
As champion of the quality movement, ASQ offers technologies, concepts, tools and
training to quality professionals, quality practitioners and everyday consumers,
encouraging all to Make Good Great.
ASQ is grateful for the contributions and dedication of subject matter experts who
provided their assistance in the development and design of this course.
This course is based on the ASQ Six Sigma Black Belt Body of Knowledge. To
download a copy of the Body of Knowledge, roll over Page Resources at the bottom
of this page.
Course Overview

Concept: Course Overview

Enterprise-Wide Deployment
Lesson Introduction
Six Sigma Black Belt | Enterprise-Wide Deployment

Introduction: Lesson Introduction
The nature of a Six Sigma project is enterprise-wide. Particularly for companies

beginning down the Six Sigma path, the investigation of which projects will be
deployed based on data analysis often leads to activities that will affect the entire
organization. To begin this journey, an enterprise-wide view will be established. To
better understand this view and deploy a project of this magnitude, the ASQ Body of
Knowledge provides the following topics:
Enterprise view
Understand the organizational value of Six Sigma and its philosophy, goals and
definition.
Understand and distinguish interrelationships between business systems and

processes.
Describe how process inputs, outputs and feedback of the system impact the
enterprise system as a whole.
Leadership
Understand leadership roles in the deployment of Six Sigma.
Understand the roles and responsibilities of Black Belts, Master Black Belts,
Green Belts, Champions, Executives and Process Owners.
Organizational goals and objectives
Understand key drivers for business.
Understand key metrics and scorecards.
Describe the project selection process including knowing when to use Six Sigma
improvement methodology as opposed to other problem-solving tools, and
confirm link back to organizational goals.
Document the objectives achieved and manage the lessons learned to identify
additional opportunities.
Organizational improvement and Six Sigma foundations history
Understand the origin of continuous improvement tools used in Six Sigma.
Lesson Overview

Introduction: Lesson Overview
The tools and objectives of the Enterprise-Wide Deployment lesson are illustrated
below.

Enterprise View
Learning Objectives
Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

Concept: Learning Objectives
At the end of this Enterprise-Wide Deployment topic, all learners will be able to:
understand the organizational value of Six Sigma, its philosophy, goals and
definition.
understand and distinguish interrelationships between business systems and

processes.
describe how process inputs, outputs and feedback of the system impact the
entire enterprise system as a whole.
Portions of this topic were taken from the ASQ Six Sigma Green Belt web-based
Certification Preparation Course.
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Why Use Six Sigma

Concept: Why Use Six Sigma
Depending on whom you ask, Six Sigma may be referred to as a philosophy, a

methodology or a tool. In Donald W. Benbow and T.M. Kubiak's The Certified Six
Sigma Black Belt Handbook, it is defined as "a fact-based, data-driven philosophy of
improvement that values defect prevention over defect detection."
The term Six Sigma is a measure of quality. Sigma () is a Greek letter used by
statisticians to show the variation in a process. For example, if a hospital process for
admitting a new patient is supposed to take five to ten minutes, a variation occurs not
only when it takes more or less time but also for each mistake that is made in
collecting the patient's information.
If the hospital is operating at 4 sigma (4), there may be as many as 6,000 problems
per million opportunities for a mistake. For example, if a patient admission form has
50 questions, for every 20,000 patients admitted there could be 6,000 errors in the
information.
In a Six Sigma (6) environment, the standard for variability is reduced to 3.4
problems per million opportunities. Moving from 6,000 data errors at 4 to just 3.4
data errors at 6 is real progress!
Imagine bringing this concept to life in your own home. The image below shows how
your home would be affected if the power company ran at 4 vs. 6:
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Philosophy and Goals

Concept: Philosophy and Goals
The philosophy of Six Sigma goes beyond

the reduction of errors in a single
department.
Six Sigma is a business initiative, not a
quality initiative.It is a way of doing
business that improves quality and
productivity, increases competitiveness
and reduces cost.There are three major
components to Six Sigma:
Culture of the organization
Improvement tools
Support systems for the tools

By controlling the amount of variation
beyond the upper and lower allowable
limits of a process, one minimizes the
frequency of out of control conditions. In
real terms, building Six Sigma into a way
of doing business can reduce errors,
identify and correct flaws in processes and
have a dramatic impact on the success of
the organization.
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Business Systems and Processes

Concept: Business Systems and Processes
Understanding the mindset of business is crucial to the success of any quality project.
In this topic you will gain an understanding of and distinguish interrelationships
between business systems and processes. Systems and processes and the
relationships that define them will be first discussed and then applied to business.
The American Heritage Dictionary defines system as a group of interacting,
interrelated, or interdependent elements forming a complex whole." The ASQ
Glossary defines system as "a group of interdependent processes and people that
together perform a common mission."
This latter definition highlights an important aspect of systems, namely that a system
operates in unity toward a unified purpose. Without a true understanding of a system's
purpose, elements and interdependencies, it is difficult to know what improvements
would truly benefit the system as a whole, rather than benefiting only one of its
elements at the possible expense of others.
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System Example

Concept: System Example
To understand a system, go no further than your computer. The personal computer

(PC) exemplifies a system by providing desired functionality to the user via its
monitor, keyboard, mouse, software, hard drive, processor and other peripherals. Each
of these PC components is an independent member of the PC system, and each
interrelated module works together in unity toward a purpose set by the user. Many
other systems exist in nature that allow an understanding of this interrelation concept.
In this example, the various elements mentioned would be considered subsystems of
the greater PC system, as seen from the perspective of the PC as a whole. If you were
to focus your attention on just the mouse, the PC subsystem could be considered a
system on its own, its elements being the left button, the right button, the navigation
wheel, the casing and the cord.
Knowledge check
What is another example of a system in nature?

What are its elements?
How could a PC be considered a subsystem?
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System Functions

Concept: System Functions
The American Heritage Dictionary defines function as the action for which a person
or thing is particularly fitted or employed. For a system is to fulfill its purpose, one or
more actions must occur. Thus, the functions of a system are those associated actions
that allow a system to work as a unit toward its stated purpose.
In the PC example, think about how multiple functions must work together to open an
email program. To oversimplify the functions, when a user drags the mouse, an
electronic signal must transmit the action of the mouse moving into a related motion
recognizable to the user. The monitor allows the user to see this motion and the
software and signal work together to display the cursor moving on the screen.
Working in harmony, the user drags the cursor over the program icon and
double-clicks the left mouse button. This transmits the instruction to the software:
open the email program.
To fully document this simple action across all subsystems within the PC would take
volumes if you went to the deepest levels. To diagram the opening email example:
Example
Concept
The Personal Computer
System
is made up of a monitor, keyboard, mouse, software and other hardware
Subsystems/Elements
which function together to allow the user to open email software
Unified Purpose
by executing the process of navigating and opening the program.
Process
The process will be discussed next.
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Processes

Concept: Processes
Process is defined by The American Heritage Dictionary as a series of actions,

changes, or functions bringing about a result.
For an experienced computer user, moving the mouse is a simple step, an action that is
commonplace. For an inexperienced user this could be a more complicated process
until he or she becomes acclimated to using the mouse. For a multidisciplined
engineer studying the mouse in order to create a new model and replicate its features
and functions, moving the mouse could be seen as a very complicated process.
Each process, as outlined above, will share the following elements that affect its
function:
inputs
process
outputs
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Applying a Systems View to Business

Concept: Applying a Systems View to Business
Now that the groundwork for the concepts has been established, how does this
translate into designing a quality project for a business?
Say, for example, that a business considers the following its core functions:
Sales
Marketing
Engineering
Production
Customer Service
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Functional Processes

Concept: Functional Processes
Each of these core functions has its own set of defined processes, which that particular
department uses to accomplish its goals.
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Support Functions

Concept: Support Functions
The business also has various functions that support the core functions. These include:
Human Resources
Finance
Information Technology (IT)
Warehousing
At this point, the analysis of the business system looks vertical. Individuals inside a
particular functional area have full view of their own process but have difficulty
seeing outside of these silos except when they intersect with another functional area.
For example, an intersection between functional areas occurs when a tracking system
managed by the Information Technology support function is used by the Warehousing
support function to deliver a product to a customer (internal or external). This limited
perspective is why it is crucial to understand the business processes that cut across
these functional process areas.
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Business Process View

Concept: Business Process View
A business process is a collection of related activities that produce something of value

to the organization, its stakeholders or its customers.
Examples of business processes throughout an organization can be defined as follows:
Quote-to-cash
Procure-to-pay
New product/service development
Order fulfillment
Becoming familiar with cross-functional business processes greatly increases

understanding of the interrelationships between the core functions and clarifies how a
quality project in one area of the company will affect other areas. To truly grasp the
system, however, we must consider another aspect of the business process: its purpose.
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Managing the Purpose

Concept: Managing the Purpose
No business process can be effective unless its purpose is properly communicated to

the rank-and-file. Executive leadership should drive management of the business
purpose, and impress upon all members of the organization the importance of
understanding and fulfilling that purpose. In addition, leadership must govern,
manage, adjust and reset the purpose based on customer needs and other factors.
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Process Impact on the Organization

Concept: Process Impact on the Organization
The Six Sigma methodology recognizes that there are many input, output and
feedback sources for an organization. Each output may have its own process
dependent on the input from other processes. All inputs and outputs of a particular
process should be measurable so that quality can be controlled.
Suppliers, Inputs, Process, Outputs and Customers (SIPOC) is a tool that can be used
to help identify these processes in an organization. Although this course will discuss
SIPOC in more detail later, it is important to know that improvements in one area may
create errors in another.
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Leadership
Learning Objectives
Six Sigma Black Belt | Enterprise-Wide Deployment | Leadership

understand leadership roles in the deployment of Six Sigma (e.g., resources,

organizational structure).
understand the roles and responsibilities of Black Belts, Master Black Belts,
Green Belts, Champions, Executives and Process Owners.
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Enterprise Leadership

Concept: Enterprise Leadership
Successfully implementing Six Sigma methodologies within an organization requires

the commitment of the company's top leadership. Six Sigma focuses on
cross-functional and enterprise-wide processes. Therefore, leadership and support
from the executive staff, specifically the CEO, is crucial. Without this support and
leadership, the Six Sigma initiative will fail.
An important leadership role within a Six Sigma project is the project Champion.
According to Kim H. Pries in Six Sigma for the Next Millennium, the Champion:
"
...is specifically tasked with the responsibility of planning the deployment of the Six
Sigma process...[and] must understand the following:
Skills required
Data needed
Financial requirements (budgeting)
Specific people tied to the skills
Locations (meeting rooms, plant floor, and so on)
Tools or equipment (projectors, computers, ancillary tools, and so on)

"
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Stakeholders

Concept: Stakeholders
In addition to their tactical qualifications, Champions and executive leadership must

have a firm grasp of the company's stakeholders. A stakeholder is anyone who has an
interest in the business. This broad group includes but is not limited to:
Investors
Customers
Vendors
Employees
Employees' families
Neighboring communities
Local, city and federal government

Each stakeholder has different interests based on the stakeholder's relationship to the
business. Identifying the overt and underlying interests of a stakeholder provides
guidance on how a particular Six Sigma may positively or adversely affect them.
Note: More detail on stakeholders may be found in the Business Process Management
lesson.
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Allocating Resources

Concept: Allocating Resources
Effective Six Sigma projects cannot happen without the appropriate decision makers
taking ownership of the project. The project Champion as well as the group(s) funding
the project must stay involved from the beginning and through completion. Working
with the project Champion, the company leadership must provide resources in the
form of personnel and funds to accomplish the project.
Staffing support
Once the project is defined and the appropriate types of roles and skill sets are
identified, specific personnel will be chosen to fulfill each role. During the selection
process, leadership may find that those resources most needed are often the busiest.
These resources cannot justify participation in the project unless its level of
importance is appropriately elevated. Depending on workload, other individuals may
be needed to backfill the work of someone dedicated to the Six Sigma project (Project
roles will be discussed in more detail later in the course.)
If Six Sigma is new to the organization, leadership must provide training in "the ways
of Six Sigma," since use of these processes will affect each team member's
performance on the project.
Other resources
In addition to staffing dedication, the Champion must coordinate acquisition of other
resources needed for the project, which could include:
Software
Hardware
Additional workspace (additional phone, Ethernet and wireless connectivity

support)
Additional meeting space
Meeting room supplies
Office supplies
The magnitude of these resource requirements will depend, of course, on the size and
length of the project.
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Six Sigma Roles and Responsibilities

Concept: Six Sigma Roles and Responsibilities
In Implementing Six Sigma, Forrest Breyfogle outlines the following roles and
responsibilities within a Six Sigma infrastructure:
Champion
Master Black Belt
Black Belt
Green Belt
Process Owner
Again, depending on the organization, there may not be an individual to fill every role.
In those cases, someone in another role must accept those responsibilities.
Roll over Page Resources and select Six Sigma Roles and Responsibilities to view a
chart of specific responsibilities per role.
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Six Sigma Hierarchy

Concept: Six Sigma Hierarchy
Historically, one of the unique features of a Six Sigma project is its associated
organizational structure. By announcing a structure with designated roles, the
company leadership and employees further declare their dedication to the project. In
practical terms, a well-defined structure strengthens accountability and increases the
project's chance of success.
An example of a Six Sigma hierarchy is shown below. Keep in mind that every
organization is different. Depending on the size of the organization or even the size of
the project, the roles shown below may not be filled in the same manner.
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Organizational Goals and Objectives
Learning Objectives
Six Sigma Black Belt | Enterprise-Wide Deployment | Organizational Goals and Objectives
understand key drivers for business, metrics and scorecards.
describe the project selection process including knowing when to use Six Sigma
improvement methodology (DMAIC) as opposed to other problem-solving tools
and confirm the link back to organizational goals.
describe the purpose and benefit of strategic risk analysis (e.g., strengths,
weaknesses, opportunities, threats (SWOT), scenario planning) including the risk
of optimizing elements in a project or process resulting in suboptimizing the
whole.
document the objectives achieved and manage the lessons learned to identify
additional opportunities.
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Key Business Drivers
Concept: Key Business Drivers
In his book Insights to Performance Excellence 2006, Mark Blazey defines key as
the major or most important elements or factors, those that are critical to achieving
the intended outcomethose that are most important to the organizations success.
They are the essential elements for pursuing or monitoring a desired outcome.
Defining the specific drivers of a particular business, then determining a performance
target for the resulting business objects, is key to continued success. These drivers are
determined by understanding the nature of the business at large, as well as the market
forces driving the business.
For example, the key business drivers for banks inside of grocery stores could include:
Existing store site population
Existing store site capability
Store expansion or plans to accommodate bank
New grocery store growth
Bank inclusion in new store plans
Performance feedback from existing sites

Each driver has a degree of influence on continued growth for this specific banking
business.
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Key Business Drivers
Concept: Key Business Drivers
Suppliers strive for performance on internal metrics (e.g., cycle time, cost or defects)
to meet customers increasing expectations on external metrics (e.g., delivery, price or
quality).
The following key drivers taken from the hospital example (used earlier in this lesson)
are common to most businesses and allow management to gather data for comparison
with competitors.
Profit - An advantageous gain or return; a benefit. Hospital system profitability
depends on managing costs down while increasing the efficiency and effectiveness of
billing insurance payers.
Market share - The proportion of industry sales of a good or service that is controlled
by a single company. Our hospital system controls less than 20% of the market and
that market share is decreasing due to a poor reputation for customer service.
Customer satisfaction - Meeting and/or exceeding customers' spoken or unspoken
needs and requirements as fast as possible with the lowest possible cost to the
customer (i.e., offering consistent performance, on-time delivery, lower costs, etc.).
Customers want the right prescriptions, shorter wait times in the various clinics and
emergency room, and improved accessibility to services.
Efficiency - A measure of desirability (i.e., improving availability, usability, features,
design, etc.). Customers in the hospital system do not want to spend time filling out
lengthy and repetitive forms. Patients do not want to lay on a gurney in a hallway after
surgery waiting for a room to become available.
Product differentiation - In marketing, product differentiation is the modification of
a product to make it more attractive to the target market. This involves differentiating
your product from competitors' products (i.e., creating robust designs, meeting
customer requirements, increasing process and material capabilities, etc.). For a
hospital system, the COO wants to find a way to distinguish the hospital's products
and services from its competitors. This could be done by building a reputation for
being focused on the patient, improving the availability of new advanced procedures
and improving access to care.
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Metrics Introduction
Concept: Metrics Introduction
Metrics are an integral part of an organization's strategic planning and deployment.

Metrics are numerical, and therefore quantifiable, measurements. They serve two
valuable purposes: 1) assisting with organizational goal setting and 2) evaluating
actual performance versus plan.
According to Kim Pries in Six Sigma for the Next Millennium, examples of business
metrics may include:
"
"
Return on investment (ROI)

Return on equity (ROE)
Return on assets (ROA)
Net present value (NPV)
Payback time
Internal rate of return (IRR)
Economic value-added (EVA)
Pries also asserts that each enterprise will define its own key metrics to indicate the
health of the business, however some metrics are more commonly used than others.
For example, "cost of goods sold" is a standard division of a balance sheet within the
Generally Accepted Accounting Practice (GAAP), and will therefore be found in the
key metrics toolbox of many businesses.
In general, "good" metrics will have the following characteristics:
Are customer centered
Measure performance across time
Provide direct information
Are linked with organizational goals
Are developed collaboratively by those who collect and use the data
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Metrics Classified
Concept: Metrics Classified
Metrics belong to one of two broad categories:
Customer-related and competitive performance metrics include:
Gains or losses of customers and market share

Survey results
Percent of competitive awards received per applications submitted
Recognition and ratings
Certifications by customers
Customer complaints
Benchmark results
Operational improvement and financial performance quality metrics

include:
Defect levels
Margin rates
Operating profit rates
Innovation rates
Time to market
Environmental or safety results
Cycle time
Lead time
Setup time
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Linking Projects to Organizational Goals
Concept: Linking Projects to Organizational Goals
Project Champions face many challenges when introducing a new project to an

organization. In situations where past projects fell short of their expected results, there
may be considerable skepticism within the organization toward "another improvement
project." This historical project baggage can result when these earlier project efforts
took place in isolation, the silo mentality mentioned earlier. While one functional area
may have been improved, not as many overall gains were achieved and sometimes
other functional areas were negatively affected. Each improvement may have focused
on a specific part of the business, and in the process ignored other departments.
To combat skepticism and encourage a belief in the process, Six Sigma projects use
metrics to make more comprehensive, company-wide improvements:
Improving product quality
Increasing service level
Reducing cost (overall)
Reducing cycle time (overall)

Projects of this scope demand a link to organizational goals. The cross-functional
business processes affected by these projects result in sweeping positive changes
across the organization. It is important to note that not every project should be a Six
Sigma project.
An organizational strategy drives the organization in the right direction and serves as a
basis for project selection. Many processes are available to develop and drive
organizational strategy, but for the purpose of this course, we will focus on two:
Balanced Scorecard
Malcolm Baldrige National Quality Award (MBNQA) 2006 Criteria for

Performance Excellence
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Balanced Scorecard
Concept: Balanced Scorecard
The balanced scorecard (BSC) is a strategic measurement and management system

that translates an organizations strategy into four perspectives:
1.
2.
3.
4.
Financial: To achieve financial success, How should we appear to our

shareholders?
Customer: To achieve our vision, How should we appear to our customers?
Internal business processes: To achieve shareholder and customer satisfaction,
What business processes must we excel at?
Learning and growth: To achieve our vision, How will we sustain our ability to
change and improve?
Robert Kaplan and David Norton created the BSC to move organizations away from
focusing solely on financial data and toward balancing consideration of financial data
with the creation of abilities and intangible assets required for long-term growth. To
achieve this balance, the BSC translates an organizations strategy into specific
measures in each category.
Note: Although BSC is not in the SSBB Body of Knowledge, it is a widely-accepted
approach to establishing an organizational strategy.
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Baldrige Award Criteria
Task: Baldrige Award Criteria
In his book Insights to Performance Excellence 2006, Blazey states the "requirements
for the Strategic Planning Category (MBNQA 2006 Criteria for Performance
Excellence) are intended to encourage strategic thinking and acting to develop a
basis for achieving and maintaining a competitive position. Click strategy
development and strategy deployment to learn about sample elements considered
during the Strategic Planning Category (MBNQA 2006 Criteria for Performance
Excellence).
Strategy Development
According to Blazey in Insights to Performance Excellence 2006,
"
sample elements considered during strategic planning include the following:
Customers: market requirements and evolving expectations and opportunities.
Competitive environment and capabilities relative to competitors: industry and

market.
Technologies and other innovations that might affect products and services, and
future business operations.
Internal strengths and weaknesses, including human resource capabilities and

need, resource availability, and operational capabilities and needs.
Financial, societal, ethical, regulatory, and other potential risks that may affect
business success.
Opportunities to redirect resources to higher-priority products, services, or

business areas.
Changes in economic conditions (local, national, or global) that might affect the
business.
Unique organizational factors such as supplier and supply chain, capabilities, and
needs.
Clear strategic objectives with timetables that help leaders determine where the
organization should be at given points in time so they can effectively monitor
progress.
"
Strategy Deployment
According to Blazey in Insights to Performance Excellence 2006,
"
sample elements considered during strategic deployment include the following:
Translate strategy into action plans and related human resource plans.
Align and deploy action-plan requirements, performance measures, and

resources, throughout the organization to ensure changes or improvements are
sustained.
Define measures for tracking progress on action plans and ensure actions are
aligned throughout the organization.
Project expected performance results, including assumptions of competitor

performance increases.
"
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Key Components
Concept: Key Components
Once the organizational strategy has been established, it is time to implement a

process system that aligns with the organization's strategic goals and objectives. All
levels, from strategic to tactical, must be involved to truly understand the system's
impact on the customer. A successful Six Sigma deployment depends on the project
evolving systematically. Roll over each component of Six Sigma deployment below to
learn more.
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Project Selection Checklist
Concept: Project Selection Checklist
Careful project selection is key to the success of the Six Sigma quality initiative. Each
industry and organization will have its own guidelines for deploying Six Sigma
methodology. One approach to the dissemination of the Six Sigma culture is quality
leaders (Master Black Belts, Black Belts, and the organizational leader) selecting
projects that have the greatest impact on organizational goals.
The following is an example of the type of criteria used to select Black Belt projects:
As discussed in the Business Process Management lesson, project selection criteria are
customer driven and align with the company's strategic goals and objectives. An
example of this customer driven goal would be to increase customer satisfaction
scores or decrease customer wait time.
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Strategic Risk Considerations
Concept: Strategic Risk Considerations
As discussed by Breyfogle in Implementing Six Sigma, differentiating between

strategic and tactical planning is crucial. Strategic planning leads to "doing the right
things"; while tactical planning leads to "doing things right." Strategic planning
typically refers to a timeframe of three to five years, while tactical planning is more
near-term in scope.
To understand what the "right things" are, the method of choice is strategic risk
assessment.
Breyfogle further asserts that "with this strategic risk analysis, organizations can
leverage the strength of the organization, improve any weakness, exploit opportunities
and minimize potential impact of threats. Through this risk assessment organizations
can then optimize their system as a whole."
Once strategic risks are identified and, when possible, quantified, they can be used to
determine the long-term strategic plan for the organization. The long-term plan is then
broken down into strategic goals and subgoals, from which annual goals are created.
Selection of projects may then be made based on each projects ability to meet these
annual goals.
When analyzing strategic risk, focus on the "big picture." A system should be thought
of as the set of processes that makes up an enterprise. According to The Certified Six
Sigma Black Belt Handbook by Benbow and Kubiak, when improvements are
proposed, it is important to take a systems approach. Consideration should be given
to the effect the proposed changes will have on other processes within the system and
by association on the enterprise itself. Operating a system at less than its best mode is
called suboptimization. Changes in a system may optimize individual processes but
suboptimize the system as a whole.
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Suboptimization Example
Concept: Suboptimization Example
When optimizing a system, remember that optimization is not just a local issue. Local
optimization may actually have a negative impact on global optimization. The
following is an example of local suboptimization.
Example
The training department at ABC Corporation decided to "go paperless" by emailing
course confirmations instead of sending a printed confirmation through interoffice
mail. This new process would allow the department to cut down on paper and printer
usage, as well as mail sorting time by the mail room staff. However, not all associates
at ABC Corporation have access to email. Therefore, there is still a need to print some
paper confirmations for those individuals. What the training department thought would
save time and resources actually created two processes from one. The trainer now
spends time looking up the name of each class participant in the company's global
email address book. If the class participant is in the email system, then he or she
receives an email confirmation. If a class participant does not have email, then a paper
copy of the confirmation is mailed. In this example, paper use, copy machine wear and
tear and mail room workload were reduced. However, an additional process was added
thus creating more administrative work for the training department staff, resulting in
time lost on other training projects. The net result is a waste of resources and an
adverse effect on profits.
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Scenario Planning and FMEA
Concept: Scenario Planning and FMEA
Risk assessment uses several tools. We will consider three: scenario planning, FMEA
and SWOT analysis.
Scenario planning
Pioneered by the Royal Dutch/Shell petroleum company and distribution network,
scenario planning involves constructing a scenario by drawing on current events,
demographic trends and other statistics to compose a "story" describing possible
sequences of events leading to a specific result (Kim Pries, Six Sigma for the Next
Millennium).
Pries states:
"
Typically, scenario planning groups will develop at least four scenarios:
Pessimistic
Moderate but pessimistic
Moderate but optimistic
Optimistic
"
Pries also notes that scenario planning serves "not so much to predict the future as to
open the minds of planners and executive management to options and opportunities in
the future." With scenario planning, risks that would otherwise never be considered
can be uncovered, assessed and anticipated. The military has used scenario planning
extensively.
Failure mode effects analysis (FMEA)

According to the ASQ Glossary, failure mode effects analysis (FMEA) is a procedure
that analyzes each potential failure point (or "mode") in every subitem of an item to
determine the failure point's effect on each subitem and on the required function of the
item itself. FMEA is used to determine high-risk process activities or product features
based on the effect of a failure and the likelihood that a failure could occur without
detection. In other words, FMEA is a systematic problem-prevention tool. Typically
used during the analyze phase of DMAIC to prioritize process activities or product
features prone to failure, FMEA can also be used during the improve phase of DMAIC
or design phase of DFSS to identify high-risk process activities or product features in
the proposed improvement.
Note: FMEA is discussed in more detail in the DFSS lesson.
44
SWOT
Concept: SWOT
The Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis provides a

framework to identify elements that help or hinder an organization. While the SWOT
is an effective tool to identify risk, remember that it does not quantify potential risks.
A SWOT analysis has internal and external components. Strengths and weaknesses are
considered part of an internal analysis of the organization, while opportunities and
threats are part of an external analysis of the environment in which the organization
operates. The external environment is essentially everything outside of an organization
that might affect the organization.
45
Strengths
Concept: Strengths
To identify organizational strengths, answer the question "What are the skills,
capabilities and core competencies that help an organization achieve its goals and
objectives?" In other words, "What is the organization really good at?"
Organizational strengths might be any of the following:
Leadership
Research and development efforts
Innovative product designs
Breakthrough technology
Teamwork
Product development
Product assembly
Distribution channels
One or more strengths can provide a competitive advantage and help an organization
differentiate itself in the marketplace. For example, if a company is exceptional at
research and development, the company might concentrate efforts and resources in
that area to build or strengthen a competitive advantage. Conversely, spreading
resources too thin across too many areas can weaken an organization's competitive
stance.
Every organization has distinct strengths. However, some organizations enter markets
they do not belong in, produce products or services for which they lack expertise, or
attempt to manage operations they do not understand. This does not mean an
organization should never venture into new areas, but the organization should have a
realistic understanding of what it will take to succeed.
46
Weaknesses
Concept: Weaknesses
Identifying organizational weaknesses answers the question "What skills, capabilities

and competencies are lacking that prevent the organization from fully achieving its
goals and objectives?" For example, an organization may discover that it has
insufficient customer listening posts to support the desired level of customer service.
Weaknesses are often considered opportunities for improvement. Any of the examples
of strengths previously listed could become weaknesses.
Given a deficiency, an organization generally has three choices:
Modify the goal and objective into something achievable
Invest the necessary capital to acquire the knowledge or skill required
Find another organization that has the expertise needed and outsource that
requirement or develop an alliance
It is common for organizations to readily identify strengths but struggle with
weaknesses. However, weaknesses must be identified and addressed before an
organization can plan for and achieve the performance levels necessary to meet its
goals and objectives.
47
Opportunities
Concept: Opportunities
Opportunities are generally described as those events and trends that help an
organization grow to new levels. Opportunities are everywhere and are seen through
changes in technology, government policy, and social patterns, to name a few. An
opportunity could be found in a major situation or key trend present in the firm's
business environment, or through identification of a previously overlooked market
segment, changes in competitive or regulatory circumstances, technological changes
or improved buyer-supplier relationships.
Other examples of opportunities include:
New technologies
New markets for products or services
A collaborative partnership
Reduced labor costs through offshore resources
Increased customer relations through CRM technology
Increased product awareness through marketing
48
Threats
Concept: Threats
Threats are barriers to an organization's growth that put the organization at a

competitive disadvantage. No one likes to think about threats, but they must be
addressed, even when they are external factors out of our control. It is vital to be
prepared to face threats, especially during turbulent times.
A threat is a major unfavorable situation in a firms environment. Threats are key
impediments to the firms current or desired position. The entrance of new
competitors, slow market growth, increased bargaining power of key buyers or
suppliers, technological changes and new or revised regulations could represent
threats to a firms success. Other examples might include:
Legal or regulatory issues
A new competitor
Changing demographics
A weakening economy
Tax increases
Introduction of new taxes
Dwindling workforce
49
Managing Lessons Learned
Concept: Managing Lessons Learned
A Six Sigma project generates a wealth of information. Establishing a process to

capture, document and share lessons learned infuses change in the organization.
In the Quality Progress article, Planning for Knowledge Management, William
Shockley discusses documenting for knowledge management purposes what an
organization learns from processes and projects. Shockley recommends asking and
documenting the answers to the following questions:
What went well?
What could have been done differently?
What could be improved?
What did we do that we should not have?
Did all our various departments interact efficiently and effectively?
Where were there gaps?
Where were there overlaps?
What can be done differently next time to make the situation easier for all parties
involved?
Documentation from lessons learned aids in continued improvement and identification
of additional opportunities by:
enabling others to learn how the project was planned, implemented, and
monitored.
helping resolve issues.
allowing resources to be tracked back to their work in the project.
creating an audit trail.
providing direction to revise or revive the project later.
50
Closed-Loop Assessment
Concept: Closed-Loop Assessment
Once lessons learned are documented, they should be integrated into a process that
ensures their implementation on future projects and within other parts of the
organization. One approach is through a closed-loop assessment, where this type
feedback enters into a process that will result in action. Consider the illustration
below:
In the context of this discussion, the terms above could be understood as follows:
Assessment: The results of the lessons learned, perhaps as a part of the project
final report.
Reporting: Delivery of the lessons learned to the appropriate group within the
organization. (e.g., the project steering committee).
Remediation: Actions taken by the group in response to the lessons learned.

These include corrective action and input for future projects.
Organizations should establish a project repository or database to maintain records of
projects completed and to provide a reference for future projects. Project repositories
help to translate improvements and lessons learned to other processes within the
organization.
51

Org. Improvement and Six Sigma Foundations History
Learning Objectives
Six Sigma Black Belt | Enterprise-Wide Deployment | Org. Improvement and Six Sigma Foundations History
At the end of this Enterprise-Wide Deployment topic, all learners will be able to
understand the origin of continuous improvement tools used in Six Sigma (e.g.,
Deming, Juran, Shewhart, Ishikawa, Taguchi).
Portions of this topic were taken from the ASQ Foundations in Quality Learning
Series: Certified Manager of Quality/Organizational Excellence.
53
History of Six Sigma
Concept: History of Six Sigma
The quality movement can trace its roots to medieval Europe, where, in the late 13th
century, craftsmen began organizing into unions called "guilds". Six Sigma's role as a
measurement standard has its ancestry in the 1800s introduction of Carl Frederick
Gauss' concept of the normal curve. The harbinger of Six Sigma's measurement
standard in product variation came about in the 1920's when Walter Shewhart showed
that three sigma from the mean is the point where a process requires correction.
1940s
1950s
1970s
1980s
1990s
2000s
The U.S. Military, dependent upon product quality and consistency to

support the war effort, becomes the primary proponent of quality.
Inspection and sampling techniques are implemented and improved
upon, and processes redesigned to increase production efficiency.
Statistical quality control is an emerging quality approach.
Following World War II, the quality revolution in Japan spurs the birth
of total quality in the United States. The Japanese welcome the input of
Americans Joseph M. Juran and W. Edwards Deming, and rather than
concentrating on inspection, focus on improving all organizational
processes at the worker level. Juran facilitates the move from statistical
quality control (SQC) to total quality control (TQC) in Japan.
Japans high quality products steadily steal market share from U.S.
industries. The U.S. response, emphasizing not only statistics but
approaches that embraced the entire organization, becomes known as
total quality management (TQM).
Six Sigma begins in 1986 as a statistically-based method to reduce
defects in production processes at Motorola Inc. By the late 80s, it
extends to critical business processes.
In 1991 Motorola certifies its first 'Black Belt' Six Sigma experts,
signifying the formalization of the accredited training of Six Sigma
methods. In the same year, Allied Signal becomes the second to adopt
Six Sigma, followed by GE in 1995.
New quality systems evolve from the foundations of Deming, Juran and
the early Japanese practitioners of quality. Quality moves beyond
manufacturing into service, healthcare, education and government
sectors.
Adapted from The History of Quality, by the American Society for Quality; and
Quality Assurance and Reliability in the Japanese Electronics Industry, World
Technology Evaluation Center.
We will now discuss these Quality Pioneers and their approaches in more detail.
54
Origins of Continuous Improvement
Concept: Origins of Continuous Improvement
Six Sigma contains a broad collection of concepts and tools used to discover
organizational defects and their remedies. Each of these tools was pioneered by one
person, who developed a particular facet of the quality effort, then tested and proved it
to be useful to the global community. In this topic, we will discuss seven of the men
behind the tools of Six Sigma and offer perspective on the tools any Black Belt will
encounter and likely put to use.
55
Philip B. Crosby
Concept: Philip B. Crosby
Philip B. Crosby (1926-2001) is

considered the business person of quality.
He was one of ITTs first vice presidents
of corporate quality, and gained
prominence in the quality field after
publishing Quality Is Free in 1979.
Subsequently, he founded Philip Crosby
Associates, a quality management
consulting firm, and the Quality College,
an institute that provides quality training
for top management.
One of Crosbys major contributions was
making quality meaningful and accessible
to American executives. He promoted
addressing quality problems through
existing management and organizational
structures rather than from a statistical
basis.
56
Crosby Four Absolutes
Task: Crosby Four Absolutes
In Crosby's quality philosophy, the four absolutes of quality management" are

designed to answer the following questions:
What is quality?
Quality has to be defined as conformance to requirements, not as "goodness."
Managements job is to establish the requirements, supply the wherewithal, and
encourage and help employees get the job done. The basis of this policy is
DIRFTDo It Right the First Time. Requirements for quality must be thoroughly
understood and accepted.
What system is needed to cause quality?
The system for causing quality is prevention, not appraisal.
The first step toward defect and error prevention is to understand the process
responsible for creating the product. When a defect occurs, discovery and elimination
are the top priorities. Prevention is a knowledge issue for quality-focused workers.
What performance standard should be used?
The performance standard must be zero defects, not thats close enough.
The only performance standard that makes sense for DIRFT is zero defects. Zero
defects must be a performance standard of everyone in the company, from top
management to line workers.
What measurement system is required?
The measurement of quality is the price of nonconformance, not indexes.
A dollar figure can be established for the cost of quality (COQ) by determining the
difference between the price of nonconformance (PONC) and the price of
conformance (POC). PONC is the expense of doing things the wrong way and can
account for 20% to 35% of revenues. POC is the expense of doing things
righttypically 3% to 4%. COQ is not a standard to be met. Managers should spend
time identifying where it occurs and address what makes it occur.
Source: Quality Without Tears, by Philip B. Crosby.
57
Crosby 14 Steps
Concept: Crosby 14 Steps
Crosby also offered a guide to the implementation process. These steps were
republished in ASQs Quality Progress (December 2005), adapted from Crosbys
Quality Is Free: The Art of Making Quality Certain. The steps are designed to help
individuals and organizations understand the long-term effort needed and to persevere
through the necessary change in order to receive the resultant benefits of quality
improvement.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Management commitment: Management must understand and then commit to

quality improvement. Then management must garner the commitment of each
individual to live a work life of conforming to requirements and/or have the
requirements updated to reflect true customer needs.
Quality improvement team: A quality team representing the entire company is
needed to enable and guide the improvement process decisively.
Quality measurement: Bring the entire company under the some form of
measurement. Measurement allows management to assess progress and
determine improvement targets.
Cost of quality evaluation: Organizations must identify the COQ in a formal
and objective manner and then feed the identified costs into the regular
management process.
Quality awareness: People need to know about the organizations quality policy,
managements commitment to quality and the costs of poor quality.
Corrective action: Corrective action is required to identify and eliminate
problems.
Establish an ad hoc committee for the zero defects program: Form a
subcommittee (from the original quality improvement team or other involved
employees) to understand zero defects conceptually and determine how to apply
the concepts specifically within the organization. Begin planning and working the
plan as the company moves toward Zero Defects Day (Step 9)
Supervisor training: Provide training to all levels of supervisors with the
expectation that they will understand the program well enough to teach it to their
employees.
Zero defects day: On "zero defects day," management makes a commitment to
quality in front of the entire organization and emphasizes that the entire
organization must abide by it.
Goal setting: While zero defects are the ultimate goal, individual groups should
identify interim goals that are made public to the rest of the organization.
Error cause removal: Organizations should ask employees to describe the
problems they have so that something can be done about them.
Recognition: Organizations should develop a recognition program for all
employees, from executives to line workers.
Quality councils: Quality professionals should come together periodically and
learn from each other.
Do it over again: By learning, watching, and participating, quality improvement
teams can find ways to continue the quality improvement process.
58
W. Edwards Deming
Concept: W. Edwards Deming
Dr. W. Edwards Deming (1900-1993) is widely credited with starting the modern
quality improvement movement. He introduced statistical methods to American
industry during World War II, but these were largely abandoned after the war. Later, in
the early 1950s, Deming introduced his statistical methods to the Japanese. The
Japanese embraced Deming and his quality philosophy, ultimately naming the
countrys quality prize after him.
According to Deming, good quality does not necessarily mean high quality. A
predictable degree of uniformity and dependability is suited to the market at low cost,
such that quality is whatever the customer needs and wants.
Demings quality management principles support a process-oriented approach to the
production of goods and services:
Teach process improvement as the path to increased quality and performance.
Acknowledge the workers expertise and involve them in continuous process

improvement (CPI).
Understand variation using statistical analysis.

Overall, Deming emphasized that the key to quality is in managements hands: 95% of
quality problems are due to the system, while only 5% are due to employees.
59
Deming and The 14 Points
Task: Deming and The 14 Points
The basis of Demings philosophy is a list of objectives he called the 14 points for
Management. These are requirements for a business whose management plans to
remain competitive, producing goods and services that will have a suitable market.
Points 1 through 5:
1. Create constancy of purpose.
Create constancy of purpose toward improvement of products and services with the
aim of becoming competitive, staying in business, and providing jobs.
2. Adopt the new philosophy.
We are in a new economic age. Western management must awaken to the challenge,
learn their responsibilities and take on leadership for change.
3. Cease dependence on inspection.
Eliminate the need for inspection on a mass basis by building quality into the product
from the beginning.
4. End the practice of awarding business on the basis of price tag.
Instead, minimize the total cost. Move toward a single supplier for any one item,
based on a long-term relationship of loyalty and trust.
5. Improve constantly and forever.
Make constant improvement part of the system of production and service, and you will
experience a constant decrease in costs.
Source: Out of the Crisis, by W. Edwards Deming.
60
Deming and The 14 Points Cont.
Task: Deming and The 14 Points Cont.
The basis of Demings philosophy is a list of objectives he called the 14 points.

These are requirements for a business whose management plans to remain competitive
producing goods and services that will have a suitable market.
Points 6 through 10:
6. Institute training.
Institute training on the job.
7. Institute leadership (see Point 12).
Institute leadership to help people and machines and gadgets do a better job.
Leadership in management is in need of an overhaul, not just the leadership of
production workers.
8. Drive out fear.
Eliminate fear, so everyone will work effectively for the company.
9. Break down barriers.
Break down barriers between departments. People in research, design, sales, and
production must work as a team to foresee problems of production and usage that may
be encountered with the product and service.
10. Eliminate slogans, exhortations, and targets for the workforce.
Eliminate slogans, exhortations, and targets for the workforce asking for zero defects
and new levels of productivity.
61
Deming and The 14 Points Cont.
Task: Deming and The 14 Points Cont.
The basis of Demings philosophy is a list of objectives he called the 14 points.

These are requirements for a business whose management plans to remain competitive
producing goods and services that will have a suitable market.
Points 11 through 14:
11. Eliminate work standards; eliminate management by objective.
Substitute leadership for work standards (quotas) on the factory floor.
Substitute leadership for management by objective. Eliminate management by
numbers, numerical goals.
12. Remove barriers that rob employees of the right to pride of workmanship.
Remove barriers that rob the hourly worker of the right to pride of workmanship. The
responsibility of supervisors must be changed from sheer numbers to quality.
Remove barriers that rob people in management and engineering of their right to pride
of workmanship. This means inter-alias, abolishment of the annual or merit rating,
management by objective or management by numbers.
13. Institute a vigorous program of education.
Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation.
The transformation is everybodys job.
62
Dr. Armand V. Feigenbaum
Concept: Dr. Armand V. Feigenbaum
Dr. Armand V. Feigenbaum (1920- ) is

generally credited with developing the
concept of total quality control during
the late 1940s while an employee of
General Electric. In the late 1960s, he
started his own company, the General
Systems Company, to provide consulting
services for quality management and
strategic planning. Feigenbaum placed
major emphasis on the need for total
quality control in order to achieve
productivity, market penetration, and
competitive advantage.
In his book Total Quality Control,
Feigenbaum defines total quality control
as an effective system for integrating the
quality-development,
quality-maintenance, and
quality-improvement efforts of the various
groups in an organization so as to enable
marketing, engineering, production, and
service at the most economical levels
which allow for full customer
satisfaction.
63
Feigenbaum Four Fundamentals
Concept: Feigenbaum Four Fundamentals
Feigenbaums quality philosophy emphasizes the need for everyone in the

organization to focus obsessively on serving the external and internal customers. To
this end, Total Quality Control provides Four management fundamentals of total
quality:
1.
2.
3.
4.
Make quality a full and equal partner, with innovation starting from the inception
of product development.
Emphasize getting high-quality product design and process matches upstream,
before manufacturing planning has frozen the alternatives.
Make full-service suppliers a quality partner at the beginning of design rather
than implementing a quality surveillance program later.
Make the acceleration of new product introduction a primary measure of the
effectiveness of a companys quality program.
64
Feigenbaum Ten Benchmarks
Task: Feigenbaum Ten Benchmarks
In addition to the "Four Fundamentals," Feigenbaum offers Ten benchmarks that are
key to implementing total quality control with success.
Benchmarks 1 through 5:
1. Quality is an organization-wide process
Quality is neither a specialist function, nor a department, nor an awareness or testing
program alone. It is a disciplined system of customer-connected work processes
implemented throughout the organization and integrated with suppliers. High quality
products are the result of high quality work processes. If you do not improve the
process, you cannot expect substantial improvement in results.
2. Quality is what the customer says it is.
Quality is not what a developer, manager or marketer says it is. If you want to find out
about your quality, ask your customer. No one can compress in a market research
statistic or defect rate the extent of buyer frustration or delight.
3. Quality and cost are a sum, not a difference.
Quality and cost are not adversaries. The quality costs of fixing failures are high
compared to quality costs required to properly prevent such defects. True quality
leaders are cost leaders, and commonly enjoy advantages of 10-20% for competitive
cost.
4. Quality requires both individual and teamwork zealotry.
Quality is everyone's job. Without a clear infrastructure that supports both the quality
work of individuals and the teamwork among individuals and departments, however,
quality is an orphaned responsibility. Too often quality improvement activities become
islands without bridges. All the left hands must work effectively with all the right
hands.
5. Quality is a way of managing.
Good management today means empowering the quality knowledge, skills and
attitudes of everyone in the organization to recognize that making quality right makes
everything else in the organization right. The belief that quality travels under some
exclusive national passport, or has some unique geographical or cultural identity, is a
myth.
65
Feigenbaum Ten Benchmarks cont.
Task: Feigenbaum Ten Benchmarks cont.
In addition to the "Four Fundamentals," Feigenbaum offers Ten benchmarks that are
key to implementing total quality control with success.
Benchmarks 6 through 10:
6. Quality and innovation are mutually dependent.
Quality requires product and process innovation, and the key to successful new
products is to make quality the partner of development from the beginning, not to use
it as a clean-up tool after problems surface. It is essential to fully include the customer
in all phases of development. Paper studies cannot do the job.
7. Quality is an ethic.
The pursuit of excellence with the understanding that what you are doing is right is the
strongest human emotional motivator in any organization and is the basic driver in true
quality leadership. Quality programs relying solely on cold metrics are never enough.
8. Quality requires continuous improvement.
Quality is a constantly upward-moving target, while continuous improvement is an
in-line, integral component of everyone's job responsibility. This requires more than
just "better-than-last-year" internal incremental improvement. The marketplace defines
world-class performance.
9. Quality is the most cost-effective, least capital-intensive route to productivity.
Some of the world's strongest organizations have blindsided their competition by
concentrating on eliminating their "hidden" plant or organization the part that exists
to find and fix mistakes and the associated waste. They have done this by changing
their productivity concept from "more" to "good" (a quality leadership concept),
creating the "more good quality productivity" concept.
10. Quality is implemented with a total system connected to both customers and
suppliers.
The relentless application of the systematic method that makes it possible for an
organization to manage its quality and associated costs makes quality leadership real
in an organization.
66
Feigenbaum Crucial Elements of Total Quality
Concept: Feigenbaum Crucial Elements of Total Quality
Feigenbaum also established nine elements of total quality that enable a total
customer focus (internal and external):
1.
2.
3.
4.
5.
6.
7.
8.
9.
Making quality leadership a business center point for revenue growth and
competitive strength.
Achieving complete customer quality satisfaction and driving buyer acceptance.
Developing effective supplier and other business quality partnerships.
Maximizing the effectiveness of quality data.
Accelerating sales and earnings growth through quality cost management.
Forming an integrated company quality systems network through customer,
producer and supplier relationships.
Encouraging the tools and resources to create individual quality improvement
emphasis.
Recognizing quality as an international business language.
Assuring quality leadership is a foundation for successful ethical behavior and
social contribution.
67
Dr. Kaoru Ishikawa
Concept: Dr. Kaoru Ishikawa
Dr. Kaoru Ishikawa (1915-1989),

considered the father of Japanese quality
control efforts, was involved with the
Japanese quality movement from its
inception. He was instrumental in making
the quality movement a nationwide
phenomenon through his educational
efforts and his work with the Union of
Japanese Scientists and Engineers.
Ishikawa states that quality control is the
practice of developing, designing,
producing and servicing a quality product
that is most economical, most useful and
always satisfactory to the consumer.
68
Ishikawa CWQC
Concept: Ishikawa CWQC
Ishikawa developed the concept of company-wide quality control (CWQC) to

distinguish the Japanese approach to total quality control from its Western counterpart.
As stated in the Quality Engineering Handbook, First Edition, the concept of CWQC
incorporates:
Participation by all members of the organization in quality control
Education and training in quality control
Quality control circle activities
Using advanced statistical methods and the 7M tools:
Affinity diagram
Interrelationship digraph
Tree diagram
Prioritization matrices
Matrix diagram
Process decision program (PDPC) chart
Activity network diagram
Nationwide quality control promotion activities
In addition to CWQC, Ishikawas philosophy also promotes many of the ideas that are
now associated with the quality movement, including:
Next operation as customer (i.e., internal departments serving one another as

customers rather than treating each other as enemies)
Elimination of sectionalism (i.e., getting rid of the its not our job mentality)
Worker training and empowerment
Pursuit of customer satisfaction
Humanistic management of workers
69
Dr. Joseph M. Juran
Concept: Dr. Joseph M. Juran
Along with Deming, Dr. Joseph M. Juran

(1904- ) is considered by many to be a
co-founder of the 20th-century quality
movement. His quality experience began
in 1924 with an inspection job and
evolved into a quality career of research,
lecturing, consulting, and writing that
spans more than 50 years. In that time,
and through his affiliation with the
American Management Association, he
has taught the course Managing for
Quality to over 100,000 people in more
than 40 countries.
Juran, like Deming, was instrumental in
working with the Japanese to introduce
quality concepts. In particular, he
championed quality control as a
management tool rather than a specialist's
technique.
70
Juran Achieving Customer Satisfaction
Concept: Juran Achieving Customer Satisfaction
In Juran's Quality Planning and Analysis for Enterprise Quality, 5E, Juran and Frank
M. Gryna state that quality is customer satisfaction, or simply fitness for use.
Customer satisfaction is achieved through two components: product features and
freedom from deficiencies.
Product features that meet the needs of customers and thereby provide product
satisfaction. This component refers to the quality of design. Overall, product features
have a major impact on sales income as they affect market share and premium price.
Examples of product features in both the manufacturing and service industries include:
Manufacturing industry
Performance
Reliability
Durability
Ease of use
Serviceability
Aesthetics
Availability of options
Reputation
Service industry
Accuracy
Timeliness
Completeness
Friendliness and courtesy
Anticipating customer needs
Knowledge of server
Aesthetics
Reputation
Source: Adapted from Juran's Quality Planning and Analysis for Enterprise Quality,
5E, by Joseph M. Juran and Frank M. Gryna
Freedom from deficiencies. This component refers to the quality of conformance.
Freedom from deficiencies has a major impact on costs through reduction in rejects,
rework, repairs, complaints, etc.
71
Juran Trilogy
Concept: Juran Trilogy
In Juran on Quality by Design, Juran asserts that managing for quality is done by use
of the same three managerial processes of planning, control, and improvement that are
used to manage finance. Thus,
Quality planning is analogous to financial planning and budgeting.
Quality control is analogous to financial control.
Quality improvement is analogous to cost reduction.

As mentioned, these three quality management processes have come to be known as
the Juran Trilogy. The Juran Trilogy is a system that top management can use to
institutionalize quality, just as they use systems for financial planning, control, and
improvement. The process requires patience and persistence. As Juran emphasizes,
incremental quality improvements must be made by the thousands, year after year.
A narrative overview of the Juran Trilogy follows on the next two pages.
Source: Adapted from Juran on Quality by Design, by Joseph M. Juran.
72
Juran Trilogy - Quality Planning and Control
Concept: Juran Trilogy - Quality Planning and Control
Quality planning is the activity of developing products and processes required to

meet customers needs. It involves the following universal steps:
1.
2.
3.
4.
5.
6.
Establish quality goals.

Identify the customers (i.e., those who will be affected by the efforts to meet the
goals).
Determine the customers needs.
Develop product features that respond to the customers needs.
Develop processes that are able to produce those product features.
Establish process controls and transfer the resulting plans to the operating forces.
Quality control refers to the process used to meet standards. The process is similar to
a feedback loop and involves the following universal steps:
1.
2.
3.
4.
5.
6.
7.
Choose the control subject (i.e., what needs to be regulated).

Choose a unit of measure.
Set a goal for the control subject.
Create a sensor that can measure the control subject in terms of the unit measure.
Measure actual performance.
Interpret the difference between actual performance and the goal.
Take action on the difference (if any).
73
Juran Trilogy - Quality Improvement
Concept: Juran Trilogy - Quality Improvement
The quality improvement process is the means of raising quality to unprecedented

levels (i.e., breakthroughs). The methodology consists of the following universal
steps:
1.
2.
3.
4.
Establish the infrastructure needed to secure annual quality improvement.

Identify the specific needs for improvement (i.e., the improvement projects).
For each project, establish a project team with clear responsibility for conducting
and concluding the project.
Provide the resources, motivation, and training needed by the teams to:
diagnose the causes.
stimulate establishment of remedies.
establish controls to hold the gains.
74
Walter A. Shewhart
Concept: Walter A. Shewhart
Walter Andrew Shewhart (1891-1967)

was a physicist, engineer and statistician
who is considered by many the father of
statistical quality control. While an
employee of Western Electric and Bell
Telephone Laboratories, Shewhart wrote,
lectured and consulted on the subject of
quality control. Most of Shewhart's
professional career was spent at Bell
Telephone Laboratories, where he served
in several capacities as a member of the
technical staff from 1925 until his
retirement in 1956.
While at Western Electric Company,
Shewhart developed control chart
techniques that helped to distinguish
between "assignable-cause" and
"chance-cause" variations. Shewhart
stressed that bringing a production process
into a state of "statistical control" is
necessary to predict future output and to
manage a process economically.
Shewharts charts were adopted by the
American Society for Testing and
Materials (ASTM) in 1933 and advocated
to improve production during World War
II in American War Standards Z1.1-1941,
Z1.2-1941 and Z1.3-1942.
Shewhart was ASQ's first honorary
member.
75
Walter A. Shewhart cont.
Concept: Walter A. Shewhart cont.
Control chart
The contribution for which Shewhart is most widely known is the control chart. Also
known as the "Shewhart chart" or "process-behavior chart," the control chart is a
statistical tool intended to assess the nature of variation in a process and to facilitate
forecasting and management. The control chart is one of the seven basic tools of
quality control discussed in the Control lesson of this course. The illustration below is
one example of a control chart:
PDCA cycle
Shewhart also gave us the Shewhart cycle (sometimes also attributed W. Edwards
Deming as the Deming cycle). In his book, Statistical Method from the Viewpoint of
Quality Control, Shewhart illustrates the continuous improvement cycle of Plan, Do,
Check, Act (PDCA), as seen here:
76
Dr. Genichi Taguchi
Concept: Dr. Genichi Taguchi
Dr. Genichi Taguchi (1924- ) is often

called the Father of Quality
Engineering. Following World War II,
Japan charged Taguchi with improving
R&D productivity and enhancing product
quality at its Electrical Communication
Laboratories (ECL). The Japanese
modeled ECL after the United States Bell
Laboratories in an effort to develop a
state-of-the-art communications system.
Harold Kerzner, author of Project
Management: A Systems Approach to
Planning, Scheduling, and Controlling,
writes that Taguchi noticed a great deal of
time and money being spent on
engineering experimentation and testing
during his tenure at ECL. In response,
Taguchi developed specific quality
engineering techniques to optimize the
process of engineering experimentation
and product design.
In the early 1980s, the American
companies Ford and Xerox adopted
Taguchis ideas as a way to improve
product quality.
77
Taguchi Quality Loss Function
Concept: Taguchi Quality Loss Function
Taguchi loss function, or "quality loss function," maintains that there is an

increasing loss (both for producers and for society at large), which is a function of the
deviation or variability from the ideal or target value of any design parameter. The
greater the deviation from the target, the greater is the loss. The concept of loss being
dependent on variation is well established in design theory, and at a systems level is
related to the benefits and costs associated with dependability.
Variability inevitably means waste of some kind, but operations managers also realize
that it is impossible to have zero variability. The common response has been to set not
only a target level for performance but also a range of tolerance about that target that
represents "acceptable" performance. Thus if performance falls anywhere within the
range, it is regarded as acceptable, while falling outside the range renders it
unacceptable.
The Taguchi methodology suggests that instead of this implied step function of
acceptability, a more realistic function is used based on the square of the deviation
from the ideal target, that is, that customers/users get significantly more dissatisfied as
performance varies from ideal).
Taguchi defines quality as the financial loss to society after an article is shipped a
departure from most customers perception that quality is positive or good. In this
case, quality is used in a negative sense to indicate the degree of unacceptable product.
As an example, consider a quality professional who reports a 3% quality level for a
certain material. The 3% represents a loss to society due to unsatisfactory
performance.
Note: The Improve lesson of this course provides more details on the Taguchi Quality
Loss Function.
78
Taguchi Three Basic Concepts
Concept: Taguchi Three Basic Concepts
While most statistical methods describe what has already happened, Taguchis
philosophy emphasizes statistical methods that help make things happen. His view of
product quality includes three basic concepts:
1.
2.
3.
Quality should be designed into a product, not inspected into it.

Quality is best achieved by minimizing deviations from a target. The more
robust the products, the less sensitive they are to variables that are either
ill-controlled or non-controllable.
The COQ should be measured as a function of deviation from the midpoint of the
specification or tolerance limits; any losses should be measured system-wide.
Overall, Taguchis philosophy is technical in nature. While it does not require

companies to undergo an internal revolution, it does provide concrete concepts to help
them improve products and procedures.
79
Lesson Summary

Summary: Lesson Summary
Enterprise View
As we think of how Six Sigma integrates into a business, we understand that Six
Sigma is a business initiative, not a quality initiative.It is a way of doing business that
improves quality and productivity, increases competitiveness and reduces cost.There
are three major components to Six Sigma:
Understanding the culture of the organization
Knowing how to use improvement tools
Understanding support systems for the tools

Building Six Sigma into a way of doing business can reduce errors, identify and
correct flaws in processes and have a dramatic impact on an organization's success.
Six Sigma allows for a cross-functional process focus (across departments) which
reduces the likelihood that a positive change in one department will have an
unanticipated negative impact on another department.
The Six Sigma methodology recognizes that there are many input, output and
feedback sources for an organization. Each output may have its own process that is
dependent on the input from other processes. All inputs and outputs of a particular
process should be measurable so that quality can be controlled.
Leadership
Successfully implementing Six Sigma projects within an organization requires the
commitment of top leadership and a well-defined team with well-defined roles. All
team members must be empowered to make the appropriate level of decisions and
should be given the necessary time away from their normal work duties to execute
their required tasks.
Organizational goals and objectives
Project goals and objectives should be demonstratively linked to the companys
overall mission. When selecting a Six Sigma project, use the appropriate analytical
tools to ensure the appropriate and best project is selected to maximize the companys
return on the investment.
Organizational improvement and Six Sigma foundations history
To build a tall building, the work begins with a strong foundation. Understanding the
roots of the tools and methods used within Six Sigma not only provides a perspective
on how these tools integrate into the workplace but also enables an appropriate
appreciation for the men who founded the principles.
80
Lesson Bibliography

Concept: Lesson Bibliography
American Society for Quality. ASQs Foundations in Quality Learning Series:

Certified Manager of Quality/Organizational Excellence. Milwaukee, WI: ASQ, 2005.
American Society for Quality. Six Sigma Green Belt Certification Preparation Course,
Version 1 (web-based course). Milwaukee, WI, 2006.
The American Heritage Dictionary of the English Language. 4th ed. Houghton
Mifflin Company, 2000.
Analyzing Business Systems, International Council on Archives, General Editor,
Michael Roper; Managing Editor, Laura Millar, International Records Management
Trust, London, UK, 1999.
Benbow, Donald W. and T.M. Kubiak.The Certified Six Sigma Black Belt Handbook.
Milwaukee, WI: ASQ Quality Press, 2005.
Blazey, Mark L. Insights to Performance Excellence 2006: An Inside Look at the 2006
Baldrige Award Criteria. Milwaukee, WI: ASQ Quality Press, 2006.
Breyfogle III, Forrest W. Implementing Six Sigma: Smarter Solutions Using
Statistical Methods. 2nd ed. Hoboken, NJ: John Wiley & Sons, Inc, 2003.
Crospy, Philip. "Crosby's 14 Steps To Improvement," Quality Progress Dec. 2005:
60-64.
Crosby, Philip. Quality without Tears. New York: McGraw-Hill, 1984.
Deming, W. Edwards. The New Economics for Industry, Government, Education. 2nd
ed. Cambridge, MA: MIT Press, 1993.
Deming, W. Edwards. Out of the Crisis. Cambridge, MA: MIT Press, 1986.
Feigenbaum, Armand V. Total Quality Control. 3rd ed. New York: McGraw-Hill, 1991.
Gryna, Frank M., Richard C.H. Chua, and Joseph A. DeFeo. Juran's Quality Planning
and Analysis for Enterprise Quality. 5thed. New York: McGraw-Hill, 2005.
Juran, Joseph M. Juran on Quality by Design. New York: The Free Press of the
McMillan Inc., 1992.
Kubiak, T. M., "Feigenbaum on Quality: Past, Present, and Future." Quality Progress.
November 2005: 57-62
Pries, Kim H.Six Sigma for the Next Millennium: A CSSBB Guidebook. Milwaukee,
WI: ASQ Quality Press, 2006.
Pyzdek, Thomas. Quality Engineering Handbook. 1st ed. Milwaukee, WI: ASQ
Quality Press, 1991.
Pyzdek, Thomas. The Six Sigma Handbook: A Complete Guide for Green Belts, Black
Belts, and Managers at All Levels, 2nded. New York: McGraw-Hill, 2003.
Shockley III, William. "Planning for Knowledge Management." Quality Progress.
March 2000: 57-62.
81
Lesson Bibliography

82

Business Process Management
Lesson Introduction
Six Sigma Black Belt | Business Process Management

Business Process Management (BPM) is a fundamental Six Sigma concept. Rather

than take an individual project-by-project approach to quality, Six Sigma requires that
systematic methods are used to understand, control and improve business process
results. The focus of efforts to improve quality are linked directly to business goals
and care is given to ensure consistency in approach. Six Sigma takes both a holistic
and project-specific focus. It is not one to the exclusion of the other. To better
understand this concept, the ASQ Body of Knowledge provides the following topics:
Process versus functional view
Understand process components and boundaries.
Identify process owners, internal and external customers and other stakeholders.
Understand the difference between managing projects and maximizing their

benefits to the business.
Establish key performance metrics and appropriate project documentation.

Voice of the customer (VOC)
Segment customers as applicable to a particular project.
Use various methods to collect customer feedback and understand the strengths
and weaknesses of each approach.
Use graphical, statistical and qualitative tools to understand customer feedback.
Translate customer feedback into strategic project focus and establishing key
project metrics that relate to the voice of the customer and yield process insights.
Business results
Calculate process performance metrics and understand how metrics propagate

upward and allocate downward.
Understand the importance of benchmarking.
Understand and present financial measures and other benefits of a project.
Understand and use basic financial models.
Describe, apply, evaluate and interpret cost of quality concepts.
84
Lesson Overview

The tools and objectives of the Business Process Management lesson are illustrated
below.
85

Process versus Functional View
Learning Objectives
Six Sigma Black Belt | Business Process Management | Process versus Functional View
At the end of this Business Process Management topic, all learners will be able to:
understand process components and boundaries.
identify process owners, internal and external customers and other stakeholders.
understand the difference between managing projects and maximizing their

benefits to the business.
establish key performance metrics and appropriate project documentation.
87
Introduction
Introduction: Introduction
An important concept in Six Sigma is business process management (BPM). BPM is

the ability to define and improve business processes to create added value for all
stakeholders. It requires the organization to focus on systemic approaches to
improving quality in processes rather than taking a disjointed approach with
competing methods, competing stakeholders and competing outcomes.
As seen below, traditional management structures create vertical silos. For example,
most manufacturing organizations have an operations group, a research and
development group, a human resources group, a marketing group, an information
technology group, a customer service group, a sales group, a finance group, and so on.
If a product process flows in and through several of these groups, then each group may
have very different ideas on defining the process, measuring it and improving it.
Similarly, W. Edwards Deming described the supplier process customer

framework by emphasizing the importance of the interdependence of these system
components. That, coupled with statistical methods and process feedback, can be used
to improve business processes.
The goal of BPM is to implement a systemic approach that overcomes the natural silo
mentality that builds in an organization.
88
Business Systems and Processes
Concept: Business Systems and Processes
A Six Sigma project revolves around analyzing and improving a company's processes.
This is why it is crucial to determine what a company's processes are, including where
those processes start and stop and what they contain. According to Benbow and
Kubiak in The Certified Six Sigma Black Belt Handbook:
"
A business system is designed to implement a process or, more commonly, a set of
processes. Business systems make certain that process inputs are in the right place at
the right time so that each step of the process has the resources it needs. Perhaps most
importantly, a business system must have as its goal the continual improvement of its
processes, products, and services.
The diagram below illustrates the relationship between systems, processes,
subprocesses, and steps. Each part of the system can be broken into a series of
processes, each of which may have subprocesses. The subprocesses may be further
broken into steps.
"
89
Process Components
Concept: Process Components
Processes can be defined as a series of events that produce an output. They contain
different elements, actions and steps. The objective of most business processes is to
add value to the product or service being created, which, in turn, will be sold to a
customer. Not every process adds value directly, but may be necessary for the business
to support other value-adding processes. In assessing the organizations existing
processes, those that are identified as not adding value or are not functioning
efficiently may be selected for process improvement efforts or for elimination.
Process components include everything it takes to get from "step A" to "step B,"
including inputs, process steps and outputs. It is important to identify specific process
steps in order to determine those that add value to the process. The measurements
captured for the inputs, process steps and outputs can be used to optimize (or
eliminate) the particular process measured. The items to be measured can be
controlled and changed.
At a minimum, a process contains the following elements:
Inputs: The people or organizations that provide the raw material or resources to
use in the process
Task or process steps: How raw materials and resources are transformed into a
product or service
Outputs: The people or organizations that receive the product or service produced
The diagram below illustrates an example of these elements.
90
Process Boundaries
Concept: Process Boundaries
As a variety of processes flow through an organization, there are points where one
process ends and another begins. Process boundaries are the beginning and end points
of a process. These boundaries are identified using flowcharts and process maps.
Given the complex nature of most modern business processes, defining process
boundaries is clearly important to the Six Sigma process.
The transition points between boundaries are especially important. They can often
represent a transition between people, departments or divisions. Any process is
susceptible to inefficiencies at these points. This transition issue makes it all the more
important to set clear boundaries for a process to be evaluated. The focus should be on
a project with clear boundaries and endpoints as you will learn in the Define lesson of
this course.
When setting boundaries for a process under evaluation, be cautious where the
boundary exists to avoid issues of transition (hand-offs) between departments or
organizational levels. Mitigating potential issues at the "hand-off" points is key, and
the following tools can help in the transition:
Control or action plans
Pilot or phased approach of implementing solutions
Training
91
Process Hand-Offs
Concept: Process Hand-Offs
A critical challenge to setting clear project boundaries is that many business processes
cut across multiple departments. An example of such a process is quote-to-cash,
shown below. The diagram depicts the process from one department to the next,
showing how each transition is a potential "leaking point. At any of these points, data
are lost, waste increases, delays occur, information disappears and the process
becomes less efficient.
It can be difficult from a people management perspective to work toward improving

efficiencies across departments. Department leaders bring their own agendas and
reward-based behavior to such meetings. In addition, this may be the first time two
particular leaders have been in a room together working toward the same goal.
Furthermore, by nature of the current processes, a naturally antagonistic relationship
may exist between the two departments.
Making this processes more efficient takes a great deal of cooperation and often major
change.
Cross functional area challenges include:
Stakeholders in various functional areas (they need to get "buy in" from different
people in the organization)
Team members in various functional areas (the project is not their main job
function)
Time commitment (team members may not have much time to spend on the
project due to other expectations)
Departments with different opinions on which process is most important to be

fixed may fight for their project and be unwilling to work on other projects
Departments unwilling to share information (processes) that would help a project
92
Introducing Owners and Stakeholders
Concept: Introducing Owners and Stakeholders
Effective Six Sigma projects cannot happen without the appropriate decision makers
taking ownership of the project. In addition to key resources "buying in" to the
change, these and other resources must be available to give an appropriate level of
input and make decisions. Often, the individuals who are needed are the busiest and
cannot find time to participate in the project unless the level of importance is
appropriately elevated. These individuals should be identified early on and informed
of their role in the project as soon as practical.
Who is a stakeholder?
A stakeholder is anyone who has an interest in the business. This broad group might
include:
Each stakeholder has a different interest based on their relationship to the business.
Similar to stakeholders in the business, there are project stakeholders those who
have an interest in the process at issue. Examples of this group are usually employees,
managers, department heads, customers, suppliers or vendors and process owners.
What is an owner?
Six Sigma narrows the definition of owner to a process owner, such as a member of
the management team within the organization responsible for a specific process. The
process owner leads the improvement effort for their area of responsibility by:
identifying all stakeholders within the process.
thoroughly understanding all the relevant process elements, process flows, and
process boundaries as well as associated measurements to enable process
improvement.
assigning team members or subject-matter experts (SMEs) from their respective

department to the project.
93
Defining Owners and Stakeholders
Task: Defining Owners and Stakeholders
To further illustrate the differences among the various types of stakeholders, click the
title of the stakeholder in the list below:
Primary Business Stakeholders
Investors
Owners or shareholders
Board of directors
Employee ownership groups

Process Owners
Principal stakeholder of the selected process
Typically a member of the management team
Project sponsor with vested interest in its success

Internal Customer Stakeholders
People or groups who are downstream from the selected process who receive
value from its outputs
Other people or groups within the organization who are affected by the process
outcomes
Those who serve external customers in some capacity

External Customer Stakeholders
Those who purchase the product or service produced by the process

Internal Supplier Stakeholders
People or groups who provide input to the selected process
Other people or groups affected in some way by the process and what supports
the process
External Supplier Stakeholder
Those who supply raw materials or resources used in the process

Other Project Stakeholders
Project team members who have a vested interest in the success of the project
Other employees or groups who are affected by the process, but not directly
involved in it
Senior management sponsors other than the process owner
Government agencies (in some circumstances)
94
Introduction to Project Management
Concept: Introduction to Project Management
Understanding project management basics is essential to successfully communicating

the many facets of this complex process. This subtopic will illustrate how project
management supports the objectives of BPM. Further details on Six Sigma project
management may be viewed in the lesson entitled "Project Management."
The foundation document that begins this process is the project charter. The
definition and scope of the project is established differently in a Six Sigma project
versus a traditional project. For example, a traditional project for IT solutions may be
to develop, design and implement an automated system access form. On the other
hand, a Six Sigma project may focus on very specific metrics such as reducing
down-time for new hires by 20%. Six Sigma project goals line up directly with
company strategic goals and objectives.
Sometimes, the Black Belt or Master Black Belt defines the scope of the project. In
other organizations, a process owner may define it. In still others, a strategic plan may
define the scope. The scope can always be expanded or clarified by the project team.
Regardless of how the scope is determined, the project charter documents the project
scope.
95
Project Manager Roles
Concept: Project Manager Roles
Black Belts play multiple roles when managing a Six Sigma project. They:
develop the project plan and other tools to manage the project.
manage the project team by assigning tasks and ensuring their execution.
communicate progress and results to project stakeholders.
facilitate the project through difficult periods and transitions.
manage the project focus in addition to managing the project execution.

The next lesson in this course, Project Management, outlines detailed information on
project management for Six Sigma projects. For the purposes of this introduction, we
will concentrate on the the difference between managing project execution and
managing project focus.
All projects require good management skills, but Six Sigma projects differ in that the
focus of the project is paramount. The results of the process improvement effort must
be connected to key and well-defined business results. While BPM is concerned with
focusing on the "right projects" and the "right processes" with the greatest
opportunities, project management is concerned with "doing things right." The
foremost role for the Six Sigma project manager is to ensure that the focus on business
results drives all decisions about the project.
96
Project Benefits
Concept: Project Benefits
The benefits realized from the project are often the starting point for selecting the
project itself. Projects may be selected for a variety of reasons, including:
Customer complaints
Product defects
Waste and cost reduction
Cycle time improvement
Work flow improvement
Supplier quality improvement
Customer service improvement
Error reduction
Sales improvement
The selection of the project should have anticipated benefits related to company
strategies and customer needs. The project goal states the benefits in clear and specific
language.The Project Management lesson provides further details about developing
problem statements and goal statements.
Example: Reduce production line defects to less than 1.5% for all products started on
the line by October 1, 2007.
Example: Reduce the exception processing steps contributing to inspection, rework
and overtime resulting in a 20% reduction in the cost per unit by 4th quarter 2006.
97
Introduction to Performance Metrics
Task: Introduction to Performance Metrics
Performance metrics fall into three categories: quality, time, and cost. These three
metrics work within a delicate balance. Improving quality might require an increase in
the time needed for production, which would also increase costs. Reducing the cycle
time might reduce costs, but it also might reduce quality. Reducing costs might also
reduce quality if source materials are less expensive because they are inferior in
quality. Click the terms below to learn more about performance metrics.
Quality
Fewer defects
Higher quality of material resources
Fewer warranty items or returns
Higher demand by customers for product or service
Customer survey scores increasing

Time
Cycle-time reductions
Response time in a call center
Time-to-market
Response time to customer inquiries
Time to complete special orders

Cost
Revenue realized due to increased sales of a product or service that, in turn, is

due to lowered price, reduced costs of production, volume improvement,
improved product quality, enhanced product features, better availability to the
customer, fewer defects and so on.
Cost reductions realized through fewer defects, less scrap, fewer returns, fewer
warranty items and so on.
98
Performance versus Project Metrics
Concept: Performance versus Project Metrics
Performance metrics are used to determine how effective or efficient a process is,
and to establish goals for the projects anticipated outcome. Performance metrics are
determined as the Six Sigma process is applied to a specific process, and they are
recorded in project documentation.
Examples of performance metrics include defects per unit (DPU), cost of poor
quality (COPQ) and cost of quality (COQ). Performance metrics describe the
success of the selected process.
Project metrics describe the success of the projects execution. Project metrics might
include:
Percent of tasks completed
Resource utilization
Timeliness of task completion or milestones reached
On budget
Project variances on budget, timeliness, or resource use

Primary project metrics will respond clearly and specifically to management questions
such as:
Are we on schedule using expected resources of people, equipment, facilities,

and other resources?
Are we on budget using expected resources of people, equipment, facilities, and

other resources?
Are we still expecting to yield the projected value/returns as described in the

charter?
99
Project Documentation
Task: Project Documentation
Different organizations will elect to use different types of project documentation as

demanded by the project. Click each term below to learn more about what project
documentation might include.
Project Charter
As mentioned previously, the project charter is the central piece of documentation in
the project management process. While project charters vary by organization, they
often include common elements such as team members, business need and project
description. More in-depth information on project charters may be viewed in the
Project Management lesson.
Status Reports
Written with a standardized format and formal tone, delivered periodically. Status
reports are specific to each organization.
Provide high-level information on projects
Where project stands in relation to plan
Report any risks or issues affecting the time, scope or cost of the project and
what is being done to address these issues
Request management intervention as needed
Tools used:
Milestone charts
Performance reports
Budget reports
Management Reviews
Meetings between the project leader and management providing updates to the
status of the project using a Gantt chart, status reports or performance reports.
Budget Reviews
Written with a standardized format and formal tone, delivered periodically.

Budget reviews are specific to each organization.
Evaluate actual resource and budget utilization
May involve budget revision

Customer Audits
Are formal reviews conducted by a certified quality auditor (quality audits have
their own Body of Knowledge, which is outside the scope of this course)
Play an active role in keeping the project on track to the stated goals
Should be updated as often as feasible for the project and the needs of the
customer
Note: In this context, customer is defined as the principal stakeholder or "owner of
the process" in a project.
Additional examples of data and fact-driven documentation are discussed in the
Project Management lesson.
100

Voice of the Customer
Learning Objectives
Six Sigma Black Belt | Business Process Management | Voice of the Customer
segment customers as applicable to a particular project.
list specific customers impacted by project within each segment.
show how a project impacts internal and external customers.
recognize the financial impact of customer loyalty.
use various methods to collect customer feedback (surveys, focus groups,

interviews and observation) and understand the strengths and weaknesses of each
approach.
recognize the key elements that make surveys, interviews and other feedback
tools effective.
review questions for integrity (bias, vagueness, etc.).
use graphical, statistical, and qualitative tools to understand customer feedback.
translate customer feedback into strategic project focus areas using quality
function deployment (QFD) or similar tools.
establish key project metrics that relate to the voice of the customer and yield
process insights.
102
Voice of the Customer
Concept: Voice of the Customer
Voice of the customer (VOC) is the term used to describe the stated and unstated
needs or requirements of the customer. These can be captured in a variety of ways:
direct discussion or interviews, surveys, focus groups, customer specifications,
observations, warranty data, field reports, complaint logs and so on.
Companies that effectively use VOC are proactive and innovative in capturing the
changing requirements of the customers over time. They have a defined process to
collect and analyze VOC to translate the data into specific requirements needed for a
product or service. The VOC is critical to help an organization:
decide what products and services to offer.
identify critical features and specifications for those products and services.
decide where to focus improvement efforts.
determine a baseline measurement of customer satisfaction to measure

improvement.
identify key drivers of customer satisfaction.

The following are typical outputs of the VOC process:
Identification of customer markets and customer segments
Identification of relevant reactive and proactive sources of data
Verbal or numerical data that identify customer needs
Defined critical-to-quality requirements (CTQs)
Specifications for each CTQ

The VOC is determined using four steps:
1.
2.
3.
4.
Identify the customer.

Collect customer data.
Analyze customer data.
Determine critical customer requirements.
The process of collecting and using VOC is continual because customer opinions and
attitudes change over time.
103
Step 1: Customer Identification
Concept: Step 1: Customer Identification
Customer identification is important for several reasons. A company that knows its
customers can:
tailor its products and services accordingly.
become a customer-focused or customer-driven company.
acquire customers more readily.
retain existing customers more easily.
target its marketing efforts.
understand what drives the success of the company.
understand the needs of the customers, who support the company by purchasing
its products and services.
Customers may be classified as internal or external. To ensure the greatest positive
impact to the business from the Six Sigma project, identifying the affected customers
and their needs is an important step.
104
Financial Impact of Customer Loyalty
Concept: Financial Impact of Customer Loyalty
Thomas Pyzdek, in The Six Sigma Handbook, succinctly states: Customers have
value. Quality management can directly affect customer satisfaction, share of spend
and market share, which is why many Six Sigma projects are chosen for their
positive impact on customers.
The book, Six Sigma for the Next Millennium provides the fundamental basis for
questions that should be addressed at the beginning of the improvement process:
Will this benefit external customers or only internal customers?
Is this change benefiting a high-value customer or low-value customer (is this a

customer we want to keep)?
How will change be communicated, both internally and externally?

In this process, it is important to identify how a change will impact a customer, both
internally and externally. Will a process change? Will product numbers or
documentation change? It is even possible that a customer may not want an
improvement because of its negative affect on one or more of their other products or
processes.
Evaluating customer value

Pyzdek further explains that to determine the value of customer retention, and to help
identify the customers most valuable to the firm, a company must evaluate the lifetime
of the customer relationship, not each transaction. While it can be easy at times for
management to perceive some transactions as a loss (e.g., returns, the cost of technical
support), those interactions can lead to increased satisfaction and sales, or the
converse. Therefore, the net cost and value to support the customer relationship should
be the focus of any evaluation.
Although net present value (NPV) analysis can vary by company, it commonly takes
into account:
Net profit per year
Customer retention rates
Desired return on assets

Extensive customer segmentation can make this analysis more insightful since
long-term customers tend to spend more and have fewer bad debts, and new customers
are often attracted by discounts. There are costs associated with attracting new
customers and retaining long-term customers, but generally the costs to retain are
lower than those to attract. The NPV of customers can be used to determine the cost of
attracting new customers and leverage customer satisfaction offers.
Roll over Page Resources and click Net Present Value to see detailed instructions on
calculating NPV.
105
Net Present Value
Six Sigma Black Belt | Business Process Management | Voice of the Customer | Financial Impact of Customer
Loyalty
Example: Net Present Value
Calculating NPV
Pyzdek gives the following calculation for NPV:
"
1.
2.
3.
4.
Determine a meaningful period of time over which to do the calculation (e.g., a

life insurer would track decades, whereas a diaper manufacturer would track only
a few years).
Calculate net profit (net cash flow) generated by customers each year. For the
first year, subtract the cost of attracting the pool of customers. Specific numbers,
such as profit per customer in year one, are more valuable because long-term
customers tend to spend more.
Chart the customer "life expectancy" using samples to fine out how much the
customer base erodes each year. Again, specific numbers are more valuable. In
retail banking, 26% of account holders defect in the first year, while in the ninth
year, the rate drops to 9%.
Pick a discount rate. If you want a 15% annual return on assets, use that.
Costs that should be considered when determining attraction and retention costs:
Advertising
Commissions
Account set up
Loyalty and customer satisfaction programs

Calculations
NPV1 = Profit / 1.15
NPV2 = (Year 2 profit x retention rate) / (1.15)2

Last year: NPVn = (Year n's adjusted profit) / (1.15)n
The sum of years 1 through n is how much your customer is worth. This is the
NPV of all the profits you can expect.
"
106
External Customer Types
Concept: External Customer Types
External customers fall into three general categories:

1.
2.
3.
Those who use the product or service. Customers in this category are sometimes
referred to as end users. A person who purchases a grocery item in a food store is
an end user, as is a consumer who purchases a software title.
Individuals who resell or repackage the product or service. Customers in this
category include distributors, wholesalers, and consulting firms.
Anyone affected by the product or service who does not currently use, resell or
repackage it. Customers who view advertising on television can be influenced by
a product but not actually purchase it. A company whose competition just
purchased a new complex software system is affected by that purchase. This
group also includes society in general, which is affected by positive and negative
attributes of a product, including:
increased traffic
real estate appreciation and depreciation and tax base fluctuations caused by
organization relocations
taxpayer cost to treat chemical dependencies or control crime
environmental impact of products and services.
107
Customer Segmentation
Concept: Customer Segmentation
A popular method of identifying external customers is called customer segmentation.

This method segments customers by characteristics such as geography, demographics
(gender, race, income, occupation), brand preference and buying behaviors.
Benefits of customer segmentation

After customer segmentation, some markets with specific customer types may be
deemed most desirable and will subsequently have marketing dollars applied to them.
The benefits of this segmentation approach include:
Multiple marketing programs
Targeted marketing programs with a greater percentage of hits
Effective use of marketing dollars
Effective identification of customers and customer needs
108
VOC and Kano Model
Task: VOC and Kano Model
VOC is also characterized by customers spoken and unspoken expectations, priorities

and needs, all of which determine customer satisfaction. The VOC drives quality in
both products and services. Dr. Noritaki Kano developed a model of the relationship
between customer satisfaction and three levels of quality. Click each quality attribute
to reveal the University of Cambridge/Royal College of Art definition and examples.
Common alternate names for each category are in parentheses.
Threshold Attributes (Basic)
Attributes that must be present in order for the product to be successful, can be viewed
as a 'price of entry.' However, the customer will remain neutral toward the product
even with improved execution of these aspects.
Bank teller will be able to cash a check
Nurses will be able to take a patient's temperature
Mechanic will be able to change a tire
Keyboards will have a space bar

Customers rarely mention this category, unless they have had a recent negative
experience, because it is assumed to be in place.
One-Dimensional Attributes (Performance, Linear, Expected, Desired, Satisfiers)

These characteristics are directly correlated to customer satisfaction. Increased
functionality or quality of execution will result in increased customer satisfaction.
Conversely, decreased functionality results in greater dissatisfaction. Product price is
often related to these attributes. Examples are:
The shortest waiting time possible in the bank drive-up window
The shortest waiting time possible for the nurse to answer the patient call button
The auto mechanic performing the services on the car as efficiently and
inexpensively as possible
Tech support being able to help with a problem as quickly and thoroughly as
possible
Customers give the most information on this category.
109
VOC and Kano Model
Task: VOC and Kano Model
Attractive Attributes (Delighters, Exciters)

Customers get great satisfaction from a feature - and are willing to pay a price
premium. However, satisfaction will not decrease (below neutral) if the product lacks
the feature. These features are often unexpected by customers and they can be difficult
to establish as needs up front. Sometimes called unknown or latent needs.
The drive-up bank teller greets you by name; remembers you from a previous
visit
The nurse brings you a book that you mentioned you enjoy
The mechanic cleans and vacuums the car making it better than when you
brought it in
The tech support individual emails you a $5 coupon to compensate for the issue
Customers rarely provide VOC on this category because they don't know to expect it.
Innovation is needed to provide this level of quality consistently.
110
Kano Model Analysis
Concept: Kano Model Analysis
Purpose
The Kano analysis tool prioritizes customer requirements based on their affect on
customer satisfaction. Although all requirements are important, they may not be
equally important to the customer. Kano defines customer satisfaction based on
threshold, one-dimensional and attractive attributes.
Features
Moving from left to right, fulfillment increases. Moving from bottom to top,
satisfaction increases. The three lines represent the three types of requirements.
Looking at the threshold line, when the basics are missing, satisfaction plummets.
With the one-dimensional attributes line, satisfaction increases as more "perks" are
added. With the attractive attributes line, satisfaction is static when delighters are
missing, but when they are added, satisfaction increases dramatically. Essentially, the
better or more innovative the execution, the higher the customer satisfaction.
As mentioned briefly before, VOC changes over time. As industries become more
innovative, features that were once "delighters" become "must haves." At one time an
FM radio in a car was a delighter that moved to "more is better" if it was higher
quality. Now it is a basic expectation. In the same manner, a car CD player was a
delighter and is now "more is better" (more features, with changer, and so on), while
accessories to integrate an MP3 player into the car stereo system are delighters.
Benefits
Gain a better understanding of the customer's desires

Increase customer satisfaction
111
Using the Kano Model
Concept: Using the Kano Model
Use When
Developing risk assessments about customer satisfaction

Identifying customer needs
Determining functional requirements
Analyzing competitive products
User Tips
1.
Ask customers two key questions about each attribute
Rate your satisfaction if the product has this attribute
Rate your satisfaction if the product lacks this attribute
2.
Ask customers to answer with one of the following responses:
Satisfied
Neutral (all products have this; this is normal)
Dissatisfied
Dont care
3.
Basic attributes generally receive the neutral response to Question 1 and the
dissatisfied response to Question 2. Excluding these attributes in the product
has the potential to severely affect the success of the product in the marketplace.
Eliminate/include attributes whose presence or absence leads to customer
dissatisfaction. This often requires a trade-off analysis against cost.
As customers rate attributes or functionality as important, ask the question, How
much extra would you be willing to pay for this attribute or more of this
attribute? This will help determine which excitement attributes would provide
the greatest returns on customer satisfaction.
4.
5.
The Kano model is often used in conjunction with quality functional deployment
(QFD, discussed in a later section) and prioritization matrices, which are discussed
next.
112
Step 2: Collecting Customer Data
Task: Step 2: Collecting Customer Data
Different data collection tools are available for determining the VOC. Tool selection
must consider the studys purpose and key decision factors, as well as match the
desired evaluation level and data type. Even with a sound decision on these points,
there can still be bias that will invalidate or skew the measurements.
Click each term to learn more.
Purpose
Identify urgent problems
Identify competitor's edge
Identify customer preferences
Determine the customer's desired level of quality
Determine customer needs
Measure customer satisfaction

Key Decision Factors
Credibility
Staff skills
Cost/budget
Time constraints
Level of evaluation desired

Levels of Evaluation
Knowledge
Behavior
Attitude
Opinion
Types of Data
Qualitative Data
Descriptive
Not quantifiable
Also called "discrete" data

Quantitative Data
Measured
Numerical
Also called "continuous" data
113
Tool Selection
Concept: Tool Selection
Four different levels of evaluation exist:

1.
2.
3.
4.
Knowledge What facts do we know about the customer?

Behavior How does the customer act given certain events?
Attitude How favorable or unfavorable is this customers disposition toward a
product or service?
Opinion What beliefs or conclusions are held by the customer?
Selecting the tool to match the desired level of evaluation (result) is one factor in
gaining reliable data. For instance, customer service records may provide information
about the number of complaints or service calls (knowledge) from a customer, but do
not provide information about the customers behaviors, attitudes or opinions.
114
Data Collection Tools
Concept: Data Collection Tools
Different data collection tools exist for listening to the VOC. Although each tool has
strengths and weaknesses, the selected tool should be appropriate and bias free.
115
Bias and Error - Data Collection
Concept: Bias and Error - Data Collection
Intentional or not, humans are prone to both bias and error. Culture, preconceived
ideas, and perception are a few of the factors affecting any form of human interaction.
Whether writing questions for a survey or leading a focus group discussion,
researchers must guard against bias that can influence results, and take care not to
make an error in judgment.
Study the chart below. It contains examples of bias and how well each of the data
collection tools compares to each form of bias.
The "minus signs" indicate that the negative criteria can be problematic when using
that tool. For instance, leading questions/wording are a source of error for interviews
and surveys, and are not a problem when using focus groups and observations.
116
Step 3: Analyze Customer Data
Task: Step 3: Analyze Customer Data
Customer data change over time because of the customer's attitude, situation, need,
and market niche. Many tools analyze customer data. However, selecting the most
appropriate tool optimizes the analysis. All of these tools will be discussed in greater
detail in the following lessons.
Click each tool for a brief description:
Histogram
According to The Quality Toolbox by Nancy R. Tague, "A frequency distribution
shows how often each different value in a data set occurs. A histogram is the most
commonly used graph to show frequency distributions."
Tague states that histograms are used:
"
When the data are numerical.

When you want to see the shape of the datas distribution, especially when
determining whether the output of a process is distributed approximately
normally.
When analyzing whether a process can meet the customers requirements.
When analyzing what the output from a suppliers process looks like.
When seeing whether a process change has occurred from one time period to
another.
When determining whether the outputs of two or more processes are different.
when you wish to communicate the distribution of data quickly and easily to
others.
"
Line Graphs
According to The Quality Toolbox by Nancy R. Tague, "A line graph is the simplest
kind of graph for showing how one variable, measured on the vertical y-axis, changes
as another variable, on the horizontal x-axis, increases. The data points are connected
with a line. The x-axis variable is called the dependent variable, because its value
depends on the value of the independent variable."
Tague states that line graphs are used:
"
"
When the pairs of data are numerical.

When you want to show how one variable changes with another, continuous
variable, usually time.
Only when each independent variable is paired with only one dependent variable.
117
Control Charts
According to The Quality Toolbox by Nancy R. Tague, "The control chart is a graph
used to study how a process changes over time. Data are plotted in time order. A
control chart always has a central line for the average, an upper line for the upper
control limit and a lower line for the lower control limit. These lines are determined
from historical data. By comparing current data to these lines, you can draw
conclusions about whether the process variation is consistent (in control) or is
unpredictable (out of control, affected by special causes of variation)."
Tague states that control charts are used:
"
When controlling ongoing processes by finding and correcting problems as they

occur.
When predicting the expected range of outcomes from a process.
When determining whether a process is stable (in statistical control).
When analyzing patterns of process variation from special causes (non-routine
events) or common causes (built into the process).
When determining whether your quality improvement project should aim to
prevent specific problems or to make fundamental changes to the process.
"
Pareto Analysis
According to The Quality Toolbox by Nancy R. Tague, "A Pareto chart is a bar graph.
The lengths of the bars represent frequency or cost (time or money), and are arranged
with longest bars on the left and the shortest to the right. In this way the chart visually
depicts which situations are more significant."
Tague states that Pareto charts are used:
"
"
When analyzing data about the frequency of problems or causes in a process.

When there are many problems or causes and you want to focus on the most
significant.
When analyzing broad causes by looking at their specific components.
When communicating with others about your data.
118
Affinity Diagram
According to The Quality Toolbox by Nancy R. Tague, "The affinity diagram
organizes a large number of ideas into their natural relationships. This method taps a
teams creativity and intuition. It was created in the 1960s by Japanese anthropologist
Jiro Kawakita."
Tague states that affinity diagrams are used:
"
"
When you are confronted with many facts or ideas in apparent chaos.
When issues seem too large and complex to grasp.
When group consensus is necessary.
119
Step 3 Cont.: Analyze Customer Data
Task: Step 3 Cont.: Analyze Customer Data
Click each tool for a brief description:

Nominal Group Technique
According to The Quality Toolbox by Nancy R. Tague, "Nominal group technique
(NGT) is a structured method for group brainstorming that encourages contributions
from everyone. "
Tague states that the nominal group technique is used:

"
"
When some group members are much more vocal than others.
When some group members think better in silence.
When there is concern about some members not participating.
When the group does not easily generate quantities of ideas.
When all or some group members are new to the team.
When the issue is controversial or there is heated conflict.
120
Matrix Diagrams
According to The Quality Toolbox by Nancy R. Tague, "The matrix diagram shows
the relationship between two, three or four groups of information. It also can give
information about the relationship, such as its strength, the roles played by various
individuals or measurements."
There are several different types of matrix diagrmas. An L-shaped matrix is shown
above. Tague states the following uses:
"
An L-shaped matrix relates two groups of items to each other (or one group to
itself).
A T-shaped matrix relates three groups of items: groups B and C are each related
to A. Groups B and C are not related to each other.
A Y-shaped matrix relates three groups of items. Each group is related to the
other two in a circular fashion.
A C-shaped matrix relates three groups of items all together simultaneously, in
3-D.
An X-shaped matrix relates four groups of items. Each group is related to two
others in a circular fashion.
A roof-shaped matrix relates one group of items to itself. It is usually used along
with an L- or T-shaped matrix.
"
121
Prioritization Matrix
A prioritization matrix is a decision making tool using a systematic process to
narrow choices. It is a variation of an L-shaped matrix (discussed in Matrix
Diagrams). A prioritization matrix allows raters to rank the options against
pre-determined scales, weights and criteria to determine order of importance.
Prioritization matrices are used:
When prioritizing the variables with the greatest significance.
When reaching consensus in small teams.
When comparing a few options to specific standards.
When narrowing a list of options to one choice.
When making decisions based on multiple criteria (best when used for six to
eight criteria).
When selecting one product, approach, supplier, option or problem.
122
Statistical Analysis
Quantitative customer data may also be analyzed using basic statistical analysis in
addition to using the other tools. Statistical evaluation quantifies and summarizes
information and provides a basis for CTQ. Basic statistical analysis might include:
Central tendency (mean, median, and mode)
Variance of data from an established norm
Correlation between various sets of data
123
Translating VOC to Organizational Goals
Concept: Translating VOC to Organizational Goals
In the preceding sections, the first three steps of the process to use VOC were
discussed.
1.
2.
3.
The customer was identified.

Customer data were collected.
Customer data were analyzed.
VOC data have little value until they are translated into action, where they can
increase quality, customer satisfaction and, ultimately, the bottom line.
124
Step 4: Determining Critical Customer Requirements
Concept: Step 4: Determining Critical Customer Requirements
By use of analysis, the VOC is categorized into key customer issues, which are
converted to critical customer requirements (CCRs) or specific, measurable targets.
In this way, customer feedback is prioritized and linked directly to internal processes
to create change.
There are several key components to incorporating CCRs into strategy:
Define how meeting customer requirements will be measured
Determine any impacts or interrelations of CCRs on one another
Translate customer's terms into product features
Identify ways to deliver on customer needs
125
Functional Requirements
Concept: Functional Requirements
Functional requirements (FRs) are the requirements the product or process must
possess to satisfy the CCRs. The FRs need to be understood early in the design
process in order to establish criteria for selecting a design based on the quality level
and development costs that enable the product to service in a competitive marketplace.
Along with establishing the FR early in the process, the FRs must be accurate and
informative, since misinformation about the FRs can delay the development cycle.
126
CTQ
Concept: CTQ
The next step is to translate the customer feedback into project goals and objectives,
for which a critical to (CT), matrix is often created.
The translation is accomplished by sorting the customers needs according to the
following characteristics:
Critical-to-quality (CTQ)
Critical-to-delivery (CTD)
Critical-to-cost (CTC)
The focus here will be on CTQ.
Benefits
Identifies focus areas

Increases customer satisfaction, product quality, and level of business success
Improves customer relations
May identify an area for innovation
Reduces cost of poor quality (COPQ) / cost of quality (COQ) (to be discussed
later)
Improves customer loyalty
127
CTQ Analysis
Concept: CTQ Analysis
There are essentially two steps to identifying CTQs.
Step 1: Understand customer and technical requirements.
Who are the customers? (Use VOC)

What is important to them? (Use VOC to translate into CCRs)
What are the technical requirements? (Use CCRs to determine
functional/technical requirements)
Step 2: Transfer technical requirements to CTQs.
What are the parts and characteristics?

What is critical?
By identifying the vital few qualities that outweigh the trivial many, a CT matrix can
show where to obtain the greatest impact.
128
Using CT Matrices
Concept: Using CT Matrices
Procedure
1.
2.
3.
4.
5.
Identify the customer.

Identify the customer's needs.
Identify the customer's basic requirements.
Breakdown the requirements into additional detail.
Validate the requirements with the customer.
Use When
Working through the Define phase.

Identifying methods for delivering customer needs.
Preparing for the QFD.
User Tips
Use an interrelationship diagram to evaluate relationships between customer

needs and CCRs.
Determine the relative importance of each CCR.
Coordinate with the use of the "House of Quality" matrix (to be discussed later).
Use a CT matrix to lead into the QFD.
129
Moving to QFD
Concept: Moving to QFD
QFD is a customer-driven planning tool for products and services that focuses on
translating customer requirements into technical requirements to deliver products and
services with features and capabilities that meet or exceed customer requirements.
QFD matrices a graphic representation often called a House of Quality are used
to display the results of the planning process. CCRs, FRs and CTQs are incorporated
directly into QFD matrices such as the House of Quality, which are used to determine
how the internal process will be affected.
The application of QFD and the use of its matrices will be discussed at length in the
DFSS lesson of the course.
130
Process Insights
Concept: Process Insights
As projects or improvements are identified, the result and its improvement and its
affect on customers and other stakeholders should constantly be considered. A few
important questions to ask include:
Is there any reason a customer may NOT want this improvement?
Is there a change in the product that will require action from the customer, and is
the customer prepared for this action (for example, new documentation, new part
numbers)?
Has the issue of CTQs of external customers been balanced with concerns about
cost, profit, and productivity from internal customers?
131

Business Results
Learning Objectives
Six Sigma Black Belt | Business Process Management | Business Results

calculate defects per unit (DPU), rolled throughput yield (RTY) and defects per
million opportunities (DPMO) sigma levels.
understand how metrics propagate upward and allocate downward.
compare and contrast capability, complexity and control.
manage the use of sigma performance measures (e.g., cost of poor quality
'COPQ', parts per million 'PPM', DPMO, DPU, RTY) to drive enterprise
decisions.
understand the importance of benchmarking.
understand and present financial measures and other benefits (soft and hard) of a
project.
understand and use basic financial models (e.g., net present value 'NPV', return
on investment 'ROI').
describe, apply, evaluate and interpret cost of quality concepts (COQ), including
quality cost categories, data collection and reporting.
Portions of this topic were taken from the ASQ Quality Process Analyst web-based
133
Introduction

Concept: Introduction
As discussed earlier in this lesson, metrics may be categorized into three levels:
1.
2.
3.
Business level metrics are normally financial measures that provide information
to shareholders and senior management regarding the organizations
performance.
Operations level metrics provide information related to the quality, time, and cost
of producing a product or providing a service. These metrics usually apply to
departments or larger groups with aggregated information.
Process level metrics provide information related to a specific process, its
efficiency and effectiveness, and the quality the process yields. This information
is typically related to only one process.
The use of these various metrics are discussed in this topic.
134
Process Performance Metrics

Concept: Process Performance Metrics
Process performance metrics establish the current situation of the process. When
identifying which process to study for a project, performance indices compare the
current status to the target. The project team then selects the process that delivers the
least quality to the customer, or the process with the highest cost or variation.
The upcoming modules will cover each of the following metrics in detail:
Defects per unit (DPU)
Parts per million (PPM)
Defects per million opportunities (DPMO)
First pass yield (FPY)
Rolled throughput yield (RTY)
Cost of poor quality (COPQ)
Tips
Link the metrics to the needs of the identified stakeholders: shareholders,

customers, and/or employees.
This initial reference allows one to compare future measures to initial measures
in order to gage improvement.
Metrics are used to drive project decisions, but on a larger scale, they are used to
make strategic management decisions.
135
Defects and Yield

Concept: Defects and Yield
A stable process is defined as one that does not contain any special cause variation
it only contains common cause variation. Common cause variation is that which is
normal to the process and doesn't change over time.
To understand the effect of the overall quality throughout the process, the cumulative
effect of throughput and defects through multiple steps must be known.
Consider the following questions about a three-process operation.
If each stage has 90% throughput, is the throughputfor the entire operation 90%?
If not, what is the overall throughput?
What is the yield?
Does the 10% lost for each stage have a monetary value?
These are questions that will be answered in this section.
136
Defects per Unit

Concept: Defects per Unit
Introduction
According to ASQ's Glossary and Tables for Statistical Quality Control, defects per
unit (DPU) is the measure of capability for discrete (attribute) data, and is found by
dividing the number of defects by the number of units:
DPU = Defects / Units
DPU refers to the average number of defects observed; it is a measurement of yield.
A defect is defined as the non-fulfillment of a requirement related to an intended or
specific use, such as:
A failure to meet a customer's requirement (characteristic or specification)
Any measured lack of performance needing improvement
Any dissatisfaction expressed by an internal or external customer
Anything prohibiting a service or a part from delivering its intended value to the
customer
A unit is defined as a quantity of product, material, or service forming a cohesive
entity of which a measurement or observation can be made. Examples include:
An assembly
A quantity of time
A process step
A definable service
A product
Benefits
DPU provides a common baseline (benchmark) for:
Describing the current situation in quantifiable terms
Evaluating processes for identifying improvement activities
Evaluating a process in an existing project
137
Using DPU

Concept: Using DPU
Use When
performing the Define phase, but also throughout the DMAIC process
gaining an understanding of the problem
generating a measurable statistic (number) for evaluating a process
Information Needed
A defined nonconformity or defect

A defined unit
Total number of non-conformances produced from the distribution being
measured
Total number of items in the distribution
Example
Olivia's Toy Manufacturers produces toy cars. The company plans to analyze the
finishing process and will start by measuring DPU. The finishing process involves
three steps:
Apply paint
Affix decals
Apply clear coat/varnish

A sample of 100 cars is used for the observation. DPU is measured for each step and
then calculated for the entire process:
Step 1 - Apply paint
Step 2 - Affix decals
Step 3 - Apply clear coat
Final
Units = 100
Units = 100
Units = 100
Defects = 2
Defects = 1
Defects = 1
DPU = 2 100 = .02
DPU = 1 100 = .01
DPU = 1 100 = .01
DPU = .02+.01+.01 = .04
138
DPU Tips

Concept: DPU Tips
User Tips
Once you obtain the DPU, follow with an analysis to understand the problem by
creating a Pareto chart or a DPU histogram
Before collecting data to determine DPU:
Define what a defect is
Define the unit of work
Check the capability of the measurement system (discussed in detail in the

Measure lesson of this course).
139
Parts per Million (PPM)

Concept: Parts per Million (PPM)
According to ASQ'sGlossary and Tables for Statistical Quality Control, parts per
million (PPM or ppm) is a measurement that is expressed by dividing the data set
into 1,000,000 or 106 equal groups. The equation is:
PPM = DPU x 1,000,000
The quoted defect rate of a 6 process is 3.4 parts per million (PPM or ppm), or 3.4
defects per million opportunities "although a normal distribution table will indicate the
probability of exceeding six standard deviations (i.e., z = 6) is two times in a billion
opportunities" according to Paul Keller in Six Sigma Demystified. Why the difference?
Keller describes, "When Motorola was developing the quality system that would
become Six Sigma, an engineer named Bill Smith, considered the father of Six Sigma,
noticed external failure rates were not well predicted by internal estimates. Instead,
external defect rates seemed to be consistently higher than expected. Smith reasoned
that a long-term shift of 1.5 in the process mean would explain the difference. In this
way Motorola defined the Six Sigma process as one which will achieve a long-term
error rate of 3.4 DPMO, which equates to 4.5 standard deviations from the average.
While that may seem arbitrary, it has become the industry standard for both product
and service industries."
140
PPM and Sigma Level

Concept: PPM and Sigma Level
The following image shows the sigma quality level associated with various services
(considering the 1.5 shift of the mean):
According to Keller's Six Sigma Demystified, "most companies operate in the three to
four sigma range, based on their published defect rates." Notice in the above image as
the sigma level increases, the parts per million rate decreases. The table below shows
the relationship between the sigma level and the defective ppm.
141
Defects per Million Opportunities (DPMO)

Concept: Defects per Million Opportunities (DPMO)
According to the Glossary and Tables for Statistical Quality Control, defects per
million opportunities (DPMO) is the measure of capability for discrete (attribute)
data or continuous data (which is the more common application). It is calculated by
dividing the number of defects by the opportunities for defects, and multiplying the
result by 1,000,000 (or 106). It allows comparison of different types of product to be,
in essence, an "apples to apples" comparison.
DPMO transforms observed process data into a recognized and agreed upon standard
representing the average number of defects a product, process, or service produces. As
a yield measurement, DPMO indicates the number of defects in a process observed
during a production of one million units.
DPMO = (Defects/Total Opportunities) x 1,000,000 OR
DPMO = DPO x 106
Benefits
Defines the current baseline performance

Provides a common measurement to use as a baseline in assessing a process'
ability to produce defect-free products
Provides data to help pick projects for future Six Sigma projects
142
Using DPMO

Concept: Using DPMO
Example A
Building upon the previous example for discrete data, calculate the DPMO. The
bulleted list below indicates the number of opportunities for a defect during each step
in the process:
Step 1 - Apply paint: two opportunities for defect
Step 2 - Affix decals: three opportunities for defect
Step 3 - Apply clear coat/varnish: five opportunities for defect

Step 1 - Apply paint
Step 2 - Affix decals
Step 3 - Apply clear coat
Units = 100
Units = 100
Units = 100
Defects = 2
Defects = 1
Defects = 1
Opportunities/unit = 2
DPMO = (Totaldefects / Totalopportunities)(1,000,000)

Totaldefects = 2 + 1 + 1 = 4
Totalopportunities = (Totalopportunities/unit)(Totalunits)
Totalopportunities/unit = 2 + 3 + 5 = 10
Totalunits = 100
Totalopportunities = (Totalopportunities/unit)(Totalunits) = (10)(100) = 1,000
DPMO = (4/1,000)(1,000,000) = 4,000
Example B
DPMO may be calculated for continuous data by multiplying the proportion defective
or "out of specification" by 1,000,000. While normal distributions are covered in detail
in the Probability Distributions section of the Measure lesson, an example of how to
find the DPMO for continuous data is shown below.
Consider the following scenario:
Wait time in a bank's teller line is expected to be no more than five minutes. On
average, the wait time for customers is three minutes with a standard deviation of one
minute. Based on this information, let's calculate the z value:
z value = (5 - 3)/1 = 2
From the normal table (which will be shown in the Measure lesson), you can estimate
that customers will be waiting longer that five minutes .02275 or 2.275% of the time.
To calculate to DPMO:
DPMO = .02275 x 1,000,000 = 22,750
To translate DPMO to a sigma level, an abbreviated sigma conversion table is shown
below. Based on these calculations, out of one million opportunities, you can estimate
that customers will be waiting longer than five minutes 22,750 times, thus a sigma
level of 3.5.
Sigma
DPMO
6.0
3.4
5.5
30
143
Using DPMO

Concept: Using DPMO
5.0
230
4.5
1,350
4.0
6,210
3.5
22,700
3.0
66,800
2.5
158,000
2.0
308,000
1.5
500,000
1.0
690,000
0.5
840,000
144
Introduction to Yield

Concept: Introduction to Yield
Yield is defined as the percentage of products that successfully complete the

production process. It is calculated by dividing the amount of product that finishes the
process by the amount of product that started the process. In essence, yield is the
output(s) divided by the input(s). Keep in mind that this does not mean that all
products are necessarily free of defects or did/did not require rework. It simply means
that the products completed the production process and are presumed to be good
enough to ship to the customer.
For example, if 1,000 units started production, and of these, 980 units successfully
completed production, then the yield is calculated as:
980/1000 = 98%
First pass yield (FPY) is the percentage of units that successfully complete a process
with no rework. This statistic only considers the initial input data and the final output.
FPY is typically used to express the process yield for an entire operation. In the case
of processes with many steps, it is calculated by multiplying the yield of each step in a
process.
Benefits
Provides a common measurement for evaluating a single process

Provides a benchmark for measuring process improvement projects
145
First Pass Yield

Concept: First Pass Yield
As mentioned previously, the FPY statistic does not consider rework; it only looks at
the number of units that successfully complete production. However, FPY does not
provide a completely accurate picture of the efficiency of a process and its ability to
produce an error-free product. Consider the following examples:
Process A: 4,000 units started and 3,800 completed; 200 defective units
Process B: 4,000 units started and 3,800 completed; 200 defective units were
scrapped and 600 additional units had one defect each that were successfully
reworked
Process C: 4,000 units started and 3,500 completed with no defects; 300 units
reworked with 420 defects (i.e., reworked 420 times); 200 units were scrapped
In each of the scenarios, the FPY is calculated as:
3800 / 4000 = .95 or 95%
The processes are very different; however, using the simple FPY statistic, you would
not be able to differentiate the three.
146
Rolled Throughput Yield

Concept: Rolled Throughput Yield
Rolled throughput yield (RTY or Yrt) is the probability that a single unit can pass
through a series of process steps free of defects. RTY is calculated as the overall
quality level after several steps in a process have been completed by multiplying the
throughput yield of each step within the process.
Calculating Rolled Throughput Yield

Apply the formula below. Note that rework is just that, rework. There is no distinction
made regarding the complexity or number of times a product or service is reworked.
RTY signals when a process or sub-process must be improved.
RTY = N (units entering process) (# of reworks + # in scrap) / N (units entering
process)
Example
Consider the following examples discussed earlier:
Process A: Of 4,000 units started and 3,800 completed, 200 defective units were
scrapped, each had a single defect.
RTY = (4,000 200 scrap)/4,000
= 3,800/4,000
= 0.95
Process B: Of 4,000 units started and 3,800 completed, 200 defective units were
scrapped, and 600 additional units had one defect each that were successfully
reworked.
RTY = (4,000 (200 scrap + 600 rework))/4,000
= (4,000-800)/4,000
= 3,200/4,000
= 0.80
Process C: Of 4000 units started and 3800 completed, 300 units reworked for
420 defects, 200 units scrapped for 580 defects.
RTY = (4,000 (200 scrap + 300 rework actions))/4,,000
= (4,000 500)/4,000
= 3,500/4,000
147
Rolled Throughput Yield

Concept: Rolled Throughput Yield
= 0.875
RTY A, B, and C = 0.95 x 0.80 x 0.875 = 0.665 or 66.5%.
148
Cost of Poor Quality (COPQ)-Cost of Quality (COQ)

Concept: Cost of Poor Quality (COPQ)-Cost of Quality (COQ)
Cost of poor quality (COPQ) are the costs associated with providing poor quality
products or services. Cost of quality (COQ) is the original term coined by Philip
Crosby referring to the cost of poor quality.
Whichever term is used, it is important to understand more than the cost of the process
improvement or quality department is involved. Quality-related costs should not be
viewed merely as expenses of an organizations process improvement or quality
department. Today, strong quality and price competition require that organizations
carefully manage all operations to constantly improve their quality and cost positions
in the marketplace.
Benefits
Provides a statistic to quantify potential savings by measuring the actual cost

associated with the poor quality of a product or service
Provides a baseline:
For assessing projected savings for a potential project
During the Define stage when constructing the project charter and during
project benefit impact tracking
For showing the anticipated dollar impact of the generated project

improvement
Identifies hidden costs incorporated into the standard operating expenses of an
organization
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COPQ - COQ Examples

Concept: COPQ - COQ Examples
Examples
Number of defects produced over a selected timeperiod, lot, or unit size

Cost of labor to rework material
Cost of extra material used in the reworking process (if any)
Cost of material that is now scrapped
Cost of the labor applied to the part up to detection
Cost of extra utilities to rework part
Cost of the utilities used in the process up to detection (if part was scrapped)
Cost of lost opportunity to process a new part when the rework part is using the
machine
Loss of sales/revenue (profit margin)
Potential loss of market share
Use When
performing the Define stage to state the baseline, goal, and entitlement.
developing the project charter.
tracking the benefits after closing a project to assure sustained benefits.
selecting future Six Sigma projects.
User Tips
If possible, collect current data to ensure an accurate measurement.

COPQ includes:
Labor cost
Rework cost
Disposition costs
Warranty cost
Material costs
Others invested in the unit up to the point of detecting the nonconformance
Lost opportunity cost due to the loss of resources used in rework
150
COPQ (COQ) Advantages and Disadvantages

Concept: COPQ (COQ) Advantages and Disadvantages
Advantages
Provides a snapshot of the

health of the organizations
quality
Monitors the long-term effect

of process changes
Increases the efficient

allocation of resources
Creates a culture of quality and

a continuous improvement
mindset
Engages senior management

and is useful for gaining
commitment to quality
improvement efforts
Disadvantages
The exact cause of movement in the data is

not always easy to pinpoint
Hidden costs in the organization may not

be reflected in the data
Data validity is often an issue debated

among managers, rather than a focus on
improving the processes
Monitoring the Cost of Quality (Cost of Poor Quality)
151
COPQ (COQ) Cost Category Overview

Concept: COPQ (COQ) Cost Category Overview
Prevention, appraisal and failure are the traditional cost categories many organizations
use to assess the effectiveness of their quality systems in financial terms. These
categories include the following:
1.
2.
3.
Investments in the prevention of defectives (non-conformances) to requirements

Appraisal of a product or service for conformance to requirements
Failure to meet requirements
These three categories represent the classic way in which COPQ/COQ is analyzed.
Total quality costs are the sum of prevention, appraisal, internal failure and external
failure costs. Total quality costs represent the difference between the actual cost of a
product or a service and what the reduced cost would be if there was no possibility of
substandard service, product failures or manufacturing defects.
152
COPQ (COQ) Cost Category Descriptions

Task: COPQ (COQ) Cost Category Descriptions
Click each "classic" category of cost below to learn more.

Prevention
Prevention costs are all the costs expended to reduce or preclude errors from being
made. Investments in this type of cost usually give the best return and include the
costs involved in helping the employee do the job right every time. This type of cost
can be viewed as an investment in the future; therefore, it is also considered a
cost-avoidance investment.
Prevention costs answer the question "What is the cost of doing it right the first time?"
Examples of prevention costs include:
Market research
Field trials
Customer surveys
Development and implementation of a quality data-collecting and data-reporting

system
Development of the process control plan
Job-related training
Quality-related education and training
Supplier surveys
Design specification reviews
Environmental impact planning
Quality improvement programs

Appraisal
Appraisal can be defined as testing, inspection and examination to assess whether
requirements for quality are being fulfilled.
Appraisal costs monitor ongoing quality. These costs are the results of evaluating
already-completed output and then auditing the process to measure conformance to
established criteria and procedures. Appraisal costs include all the costs expended to
determine whether an activity was done right every time.
Appraisal costs answer the question "Did you make or do it right? "Examples of
appraisal costs include:
Testing
Inspection
Maintenance and calibration of testing and inspection equipment
Safety checks
Reviews of completed designs
Reviews of testing and inspection data
Internal audits of operation systems
Quality product or process audits
153

Failure
Management has control over prevention and appraisal costs. Other quality costs an
organization incurs result from errors because all activities were not done right every
time. These include internal and external failure costs. Where prevention and
appraisal costs are considered to be investments, internal and external failure costs are
considered losses. Whether the failure cost is internal or external simply differentiates
where the problem surfaces.
Internal failure
Internal failure costs can be defined as those resulting from a product failure to meet
the quality requirements prior to delivery (e.g., re-performing a service, reprocessing,
rework, retest, scrap).
Internal failure costs are the costs incurred by the organization as a result of
noncompliance detected before a product or service is provided. It is the cost the
company incurs because not everyone did the job right every time the cost to redo a
defective product or correct an unsatisfactory service. Included are the costs incurred
from the time an item is shipped until it has been accepted by the final customer.
Additional examples of internal failure costs include:
Engineering changes
Costs resulting when additional inventory is required to support poor process

yields, potential scrap parts and rejected loss
Waste
Troubleshooting or failure analysis costs
Corrective action
Internal labor losses resulting from shutdowns, re-setups, line stoppages
Computer reruns
Document changes
Change orders due to errors
154

External failure
External failure can be defined as costs resulting from a product failing to meet the
quality requirements after delivery (e.g., product maintenance and repair, warranties
and returns, direct costs and allowances, product recall costs, liability costs).
External failure costs are associated with a product or service failing to meet quality
requirements after shipment or delivery to the external customer. These costs are
incurred by the organization producing the product or the service because the appraisal
process did not detect all the errors before the product or service was delivered to the
customer.
Additional examples of external failure costs include:
Costs of customer-rejected services or products
Complaint handling
Warranty costs
Training of repair and customer service personnel
Overhead costs required to maintain field service centers
Product upgrades or updates in the field
Customer goodwill
Missed sales
155
COPQ (COQ) Models

Concept: COPQ (COQ) Models
The most costly condition for an organization occurs when a customer finds defects in
a product or service. If the manufacturer or service provider had found the defects
through inspection, testing or checking, a less costly condition would have resulted.
Better yet, had the organization been focused on quality improvement and defect
prevention, defects and their resulting costs would have been minimized.
In the classic model of optimum quality costs, prevention and appraisal costs are
portrayed as rising asymptotically as defect-free levels are achievedas prevention
and appraisal costs increase, failure costs decrease until an optimum point is reached.
It was believed that for any process, there was a trade off between cost and the
resulting qualitythat there was a theoretical optimum where the benefits were less
than the cost. After this point, decreased failure costs did not offset further increases in
appraisal and prevention costs. But this model underestimated the cost of poor quality.
Recent successes in quality management programs supported by quality cost systems
recognize that the full costs of poor quality have resulted in revisions to the classic
model of optimum quality costs:
New technology has reduced inherent failure rates of materials and products.
Robotics and other forms of automation have reduced human error during
production.
Automated inspection and testing have reduced the human error of appraisal.
As with any enterprise-wide initiative, when launching a complete quality cost system,
support from top management proves critical to its success. The quality cost curve is
shown on the next page.
156
Quality Cost Curve

Concept: Quality Cost Curve
The revised model shows how these developments have resulted in the ability to
achieve perfection at finite costs. The illustration below shows both the classic and
revised models:
157
Why Benchmark

Concept: Why Benchmark
Benchmarking is the process of identifying best practices in organizations with

comparable processes or comparable customer issues for the purpose of determining
the current state and a desired future state. For example, customer satisfaction scores
for a hotel may be compared to those for a bank or hospital. There are several
important differentiating factors to consider:
Benchmarking is not just for acquiring competitive information for comparison.
Benchmarking involves setting objectives.
Just like Six Sigma, benchmarking should be considered a process that is ongoing
and becomes a way of doing business.
Benefits
Meet customer expectations more efficiently and effectively

Establish performance goals based on leaders in the industry
Identify best practices to gain market share and improve performance
Include as a critical component of a robust quality program in managing business
processes
158
What to Benchmark

Concept: What to Benchmark
When considering what to benchmark, bring together a team positioned to respond to

the following questions:
What can we benchmark (processes, methods, results, and so on)?
What are the most critical measures of success for the organization?
Revenue
Production levels
Marketing campaigns
Customer satisfaction
Maintaining cost levels
Of those areas, which are causing the most trouble?

What does the customer desire in the organizations marketplace?
In which direction is the industry moving and how is the organization positioned
to move in that direction?
What competitive pressures affect the organizations performance?
What product features are critical for customers?
What issues exist in the manufacturing process?
What issues exist for customer service?
What performance trends in the organization may signal problems ahead?
159
The Benchmarking Process

Concept: The Benchmarking Process
At a high level, the core process steps for a benchmarking program might be:
1.
2.
3.
4.
5.
6.
7.
8.
Identify what to benchmark.

Select organizations with comparable processes or comparable customer issues.
Determine data collection methods.
Analyze the data and findings.
Establish goals based on the data analysis.
Develop action plans to obtain the goals.
Implement the action plans.
Conduct ongoing evaluation and re-evaluation of goals and benchmarking data.
Companies must be meticulous when going through the benchmarking process. By no

means is benchmarking a "do-it-yourself" process. It is recommended that companies
enlist the help of an expert to do the job right and to help avoid the potential for legal
issues (e.g., conflicts of interest).
160
Project Financial Benefits

Concept: Project Financial Benefits
When determining whether a Six Sigma project has been successful, the bottom line is
often the factor that matters most. The key question is, How much value does the
organization realize as a direct result of this projects success?
The financial factors defined in this subtopic are:
Cost benefit analysis
Return on assets
Return on investment
Net present value
161
Financial Benefits

Concept: Financial Benefits
Just as there are costs associated with poor quality (see COPQ) there are also financial
benefits of implementing changes that result from successful Six Sigma projects.
These financial benefits may include:
Additional revenue from increased sales
Cost avoidance or mitigation
Faster return on investments
Lower production costs
Lower costs associated with customer service
Increased cash flow
Enhanced profitability of existing services or products
Increased revenue of existing sources
Increased value in organization stock or perceived value
162
Cost-Benefit Analysis

Concept: Cost-Benefit Analysis
To perform a cost-benefit analysis for the project, complete these steps:

Step 1: Identify the project benefits.
Quantify the expected financial benefits assuming the project reaches the goals
set for it.
Express the benefits in dollar amounts with specific time limits. For example, the
project should realize an increase in sales of $156,000 per year beginning year
two that should last for three years.
Step 2: Identify the project costs.
Limit the project costs to those dollars expended as a result of the project.
Step 3: Calculate whether benefits exceed costs..
Step 4: Determine whether the project should be implemented.
Even if the benefits do not exceed the costs, senior management may elect to
complete the project. For example, improving the customer satisfaction rating of
checking and savings account customers of bank is a benefit that may not exceed
the cost of a project, but could impact future consumer lending relationships. If
this is the case, determine what could be done to enhance the benefits and
minimize the project costs.
A cost-benefit analysis may also be initiated after a project has been completed to
determine whether the project should have been undertaken in the first place.
The results of a cost-benefit analysis may be any of the following:
The overall benefits and costs are compared to determine whether benefits
exceed costs on a straight dollar-for-dollar basis.
The benefits and costs are used within a ratio such as ROA or ROI (discussed on
the following pages). These ratios can express on a relative basis the expected
return for use of the assets or the investment in the project.
The information may also be used in a NPV equation if there is an issue with
benefits and costs being strung out over a longer period of time.
Considering hard dollars versus soft dollars

Hard dollars are those that allow companies to do the same amount of business with
fewer employees (cost savings) or handle more business without adding people (cost
avoidance). Soft dollars are those such as increased customer satisfaction, reduced
time to market, cost avoidance, lost profit avoidance, improved employee morale,
enhanced image for the organization, and other intangibles, that may result in
additional savings to the organization but are harder to quantify.
One should note that each organization may define hard and soft dollars differently.
Soft dollars are typically high and have potential for future value, while hard dollars
are low and may not even show a break-even relationship with the project costs.
Soft dollars are real but are harder to quantify and forecast, and they may be viewed
differently from company to company.
163
Return on Assets (ROA)

Concept: Return on Assets (ROA)
Return on assets (ROA) is sometimes used for Six Sigma projects to determine
whether the use of organization assets is warranted based on the return realized.
The formula for ROA is:
ROA = Net Income/Total Assets
When applied to a project:
Net income refers to expected earnings that result directly from the projects
results.
Total assets refer to the value of the assets applied to a project.
164
Return on Investment (ROI)

Concept: Return on Investment (ROI)
Return on investment (ROI) is also used for Six Sigma projects to determine whether
the investment in the project is warranted based on the return realized.
The formula for ROI is:
ROI = Net Income/Investment
When applied to a project:
Net income refers to expected earnings that result directly from the projects
results.
Investment refers to the value of the outlay made in the project.
165
Net Present Value (NPV)

Concept: Net Present Value (NPV)
A NPV allows the calculation of the current benefit of a project for each window of
time and over the total duration of the project for all time periods. If the project NPV
is positive, then the project is usually approved.
The NPV equation is:
Where:
n = number of time periods
t = time period
r = cost of capital for a time period
CFt = cash flow in time period t

Note the following regarding this equation:
CF0 is the cash flow in time period zero which is the same as the initial
investment.
Cash flow for a given time period is calculated by taking the cash flow for project
benefits (CFB,t ) in time period t and subtracting the cash flow for project costs (
CFC,t ) in the same time period.
i may be substituted for r; i represents the annual interest rate.
To convert an annual percentage rate of i to a rate r for a shorter time period with m
time periods per year, use the following equation:
166
NPV Example

Concept: NPV Example
Use the information presented in the case below to calculate the NPV for the project.
Then roll over Page Resources and click NPV Answer to view the solution.
A project is planned to update manufacturing equipment and refine the manufacturing
process in an automobile parts plant. The cost of capital is 9.5% APR.
Project benefits:
Decrease rework and scrap of $700 in month 3

Project costs:
Initial process redesign and training costs $400 in month 1.
Installing new equipment costs $840 in month 2.
A second round of training costs $100 in month 6.

A cash flow summary for this example:
Month:
Positive cash flow:
Negative cash flow:
0
$0
$0
1
$0
$400
2
$0
$840
Cash Flow Analysis

NPV equation:
Convert APR to monthly rate r for cost of capital:
167
3
$700
$0
4
$500
$0
5
$450
$0
6
$450
$100
NPV Answer
Six Sigma Black Belt | Business Process Management | Business Results | NPV Example
Example: NPV Answer
The APR of 9.5% is converted to a monthly rate:
The calculation for NPV is:
168
Other Benefits

Concept: Other Benefits
Although financial benefits weigh most heavily in the decision to proceed with a Six
Sigma project, other benefits also accrue to the organization and may be considered in
the decision-making process.
Other benefits to the organization from a successful process improvement project may
include:
improved market position relative to competitors.
improved ability to meet customer needs, especially enhanced service.
aligned organization behaviors with vision and values.
newly created market opportunities.
project infused spirit of continuous improvement.
improved employee morale.
improved overall productivity.
decreased cycle time.
increased simplicity.
169
Lesson Summary

Concept: Lesson Summary
Six Sigma focuses on using a systematic approach to addressing issues with quality. In
part, this is achieved through:
a thorough analysis of the business processes.
understanding who will be impacted by the Six Sigma project.
identifying all customers and deriving customer requirements from a variety of

data sources.
listening to the voice of the customer.
assessing the cost of quality.
determining whether the benefits of a project outweigh the costs associated with
its undertaking.
Rollover Page Resources to view a summary of the metrics and a comprehensive
matrix of the data analysis tools discussed in this lesson.
In the next lesson, the project management methodology for Six Sigma projects is
highlighted.
170
Data Analysis Tools
Six Sigma Black Belt | Business Process Management | Lesson Summary

Example: Data Analysis Tools
Data Analysis Tools

Tool
Description
Histograms
When to Use
According to The Quality Toolbox
by Nancy R. Tague, "A frequency
distribution shows how often each
different value in a set of data
occurs. A histogram is the most
commonly used graph to show
frequency distributions."
Line Graphs
Control Charts

by Nancy R. Tague, "A line
graph is the simplest kind of
graph for showing how one
variable, measured on the vertical
y-axis, changes as another
variable, on the horizontal x-axis,
increases. The data points are
connected with a line. The x-axis
variable is called the dependent
variable, because its value
depends on the value of the
independent variable."

by Nancy R. Tague, "The control
chart is a graph used to study
how a process changes over time.
Data are plotted in time order. A
control chart always has a central
line for the average, an upper line
for the upper control limit and a
lower line for the lower control
limit. These lines are determined
from historical data. By
comparing current data to these
lines, you can draw conclusions
about whether the process
variation is consistent (in control)
or is unpredictable (out of control,
171
When the data are

numerical.
When you want to see the
shape of the datas
distribution, especially when
determining whether the
output of a process is
distributed approximately
normally.
When analyzing whether a
process can meet the
customers requirements.
When analyzing what the
output from a suppliers
process looks like.
When seeing whether a
process change has occurred
from one time period to
another.
When determining whether
the outputs of two or more
processes are different.
when you wish to
communicate the
distribution of data quickly
and easily to others.
When the pairs of data are
numerical
When you want to show
how one variable changes
with another, continuous
variable, usually time.
Only when each independent
variable is paired with only
one dependent variable.
When controlling ongoing

processes by finding and
correcting problems as they
occur.
When predicting the
expected range of outcomes
from a process.
When determining whether a
process is stable (in
statistical control).
When analyzing patterns of
process variation from
special causes (non-routine
events) or common causes
(built into the process).
Data Analysis Tools

When determining whether

your quality improvement
project should aim to
prevent specific problems or
to make fundamental
changes to the process.

by Nancy R. Tague, "A Pareto
chart is a bar graph. The lengths
of the bars represent frequency or
cost (time or money), and are
arranged with longest bars on the
left and the shortest to the right.
In this way the chart visually
depicts which situations are more

significant."
When analyzing data about

the frequency of problems or
causes in a process.
When there are many
problems or causes and you
want to focus on the most
significant.
When analyzing broad
causes by looking at their
specific components.
When communicating with
others about your data.
affected by special causes of

variation)."
Pareto Analysis
Affinity Diagram

by Nancy R. Tague, "The affinity
diagram organizes a large
number of ideas into their natural
relationships. This method taps a
teams creativity and intuition. It
was created in the 1960s by
Japanese anthropologist Jiro
Kawakita."

by Nancy R. Tague, "Nominal
group technique (NGT) is a
structured method for group

brainstorming that encourages
contributions from everyone. "
Matrix Diagrams

by Nancy R. Tague, "The matrix
diagram shows the relationship
between two, three or four groups
of information. It also can give
information about the
relationship, such as its strength,
the roles played by various
individuals or measurements."
172
When you are confronted

with many facts or ideas in
apparent chaos
When issues seem too large
and complex to grasp
When group consensus is
necessary
When some group members
are much more vocal than
others.
When some group members
think better in silence.
When there is concern about
some members not
participating.
When the group does not
easily generate quantities of
ideas.
When all or some group
members are new to the
team.
When the issue is
controversial or there is
heated conflict.
An L-shaped matrix relates
two groups of items to each
other (or one group to itself).
A T-shaped matrix relates
three groups of items:
groups B and C are each
related to A. Groups B and C
are not related to each other.
A Y-shaped matrix relates
three groups of items. Each
group is related to the other
two in a circular fashion.
A C-shaped matrix relates
three groups of items all
Data Analysis Tools

Prioritization Matrix
A prioritization matrix is a
decision making tool using a
systematic process to narrow
choices. It is a variation of an
L-shaped matrix (discussed in
Matrix Diagrams). A
prioritization matrix allows raters
to rank the options against
pre-determined scales, weights
and criteria to determine order of
importance.
173
together simultaneously, in
3-D.
An X-shaped matrix relates
four groups of items. Each
group is related to two
others in a circular fashion.
A roof-shaped matrix relates
one group of items to itself.
It is usually used along with
an L- or T-shaped matrix.
When prioritizing the
variables with the greatest
significance.
When reaching consensus in
small teams.
When comparing a few
options to specific standards.
When narrowing a list of
options to one choice.
When making decisions
based on multiple criteria
(best when used for six to
eight criteria).
When selecting one product,
approach, supplier, option or
problem.
Metrics Summarized

Example: Metrics Summarized
Metric
Formula
Defects per Unit (DPU)
DPU = Defects / Units
Parts per Million (PPM)
PPM = DPU x 1,000,000
Defects per Million

Opportunities (DPMO)
DPMO = (Defects/Total
Opportunities) x
1,000,000 OR
DPMO = DPO x 106
Rolled Throughput Yield (RTY) RTY = N (units entering

process) (# of reworks +
# in scrap) / N (units
entering process)
Return on Assets (ROA)
ROA = Net Income/Total

Assets
Return on Investment (ROI)
ROI = Net
Income/Investment
Net Present Value (NPV)
174
Lesson Bibliography


Certified Quality Engineer. Milwaukee, WI: ASQ, 2000.
ASQ Statistics Division. Rudy Kittlitz, editor. Glossary and Tables for Statistical
Quality Control. 4th ed. Milwaukee, WI: ASQ Quality Press, 2005.
Benbow, Donald and T.M. Kubiak. The Certified Six Sigma Black Belt Handbook.
Breyfogle, Forrest W. III. Implementing Six Sigma: Smarter Solutions Using
Statistical Methods. 2nd ed. Hoboken, NJ: John Wiley and Sons, Inc., 2003.
Camp, Robert C. Benchmarking: The Search For Industry Best Practices That Lead to
Superior Performance. Milwaukee, WI: ASQ Quality Press, 1989.
Keller, Paul. Six Sigma Demystified. New York, NY: McGraw-Hill, 2005.
Belts, and Managers at All Levels, Revised and Expanded, 2nd ed. New York:
McGraw-Hill, 2003.
Tague, Nancy R. The Quality Toolbox. 2nd ed. Milwaukee, WI: ASQ Quality Press,
2005.
175

Project Management
Lesson Introduction
Six Sigma Black Belt | Project Management

Understanding project management basics is essential to successfully completing the

multiple phases of a potentially large and complex project. This topic covers the
fundamental tools needed to execute any successful project. To better understand this
concept, the ASQ Body of Knowledge provides the following topics:
Project charter and plan
Compare, select and explain elements of a project's charter and plan.
Plan the project using tools such as Gantt chart, program evaluation and review
technique (PERT) chart and planning trees.
Create data-driven and fact-driven project documentation using spreadsheets,

storyboards, phased reviews, management reviews and presentations to the
executive team.
Create and negotiate the charter, including objectives, scope, boundaries,

resources, project transition and project closure.
Team leadership
Know the elements of launching a team and why they are important: clear
purpose, goals, commitment, ground rules, roles and responsibilities of team
members, schedules, support from management and team empowerment.
Select team members who have appropriate skills sets (e.g., self-facilitation,
technical/subject-matter expertise) and create teams with appropriate numbers of
members and representation.
Facilitate the stages of team evolution, including forming, storming, norming,

performing, adjourning and recognition.
Team dynamics and performance
Recognize and apply the basic steps in team building: goals, roles and
responsibilities, introductions and both stated and hidden agendas.
Apply coaching, mentoring and facilitation techniques to guide a team and

overcome problems such as overbearing, dominant or reluctant participants, the
unquestioned acceptance of opinions as facts, group think, feuding, floundering,
the rush to accomplishment, attribution, discounts and "plops" and digressions
and tangents.
Measure team progress in relation to goals, objectives, and metrics that support
team success.
Define, select and apply team tools such as nominal group technique, force field
analysis, multivoting and conversion/diversion.
Change agent
Understand and apply techniques for facilitating or managing organizational

change through change agent methodologies.
Understand the inherent structures of an organization (e.g., its cultures and

constructs) that present basic barriers to improvement; select and apply
techniques to overcome them.
Define, select and apply tools such as consensus techniques, brainstorming,

effort/impact and interest-based bargaining to help conflicting parties (e.g.,
departments, groups, leaders, staff) recognize common goals and how to work
together to achieve them.
177
Lesson Introduction

Define, select and apply techniques that support and sustain team member
participation and commitment.
Use effective and appropriate communication techniques for different situations
to overcome organizational barriers to success.
Management and planning tools
Define, select and use affinity diagrams, interrelationship digraphs, tree diagrams,
prioritization matrices, matrix diagrams, process decision program (PDPC) charts
and activity network diagrams.
178
Lesson Overview

The tools and objectives of the Project Management lesson are illustrated below.
179

Project Management
Project Charter and Plan
Learning Objectives
Six Sigma Black Belt | Project Management | Project Charter and Plan
At the end of this Project Management topic, all learners will be able to:
compare, select and explain elements of a project's charter and plan.
plan the project using tools such as Gantt chart, program evaluation and review
technique (PERT) chart and planning trees.
create data-driven and fact-driven project documentation using spreadsheets,

storyboards, phased reviews, management reviews and presentations to the
executive team.
create and negotiate the charter, including objectives, scope, boundaries,

resources, project transition and project closure.
181
Project Charter
Concept: Project Charter
The project charter is a written commitment approved by management stating the

scope of authority for an improvement project. It is recognized by all parties involved
in the project. Once published, it provides powerful communication about the project
to the entire team. At the same time, a charter is a living document, constantly being
reviewed and updated to reflect the addition of relevant data as it becomes known.
Project Charter Purposes
Gives authority to act, gives permission to work

Summarizes the project itself and its goals, boundaries and deadlines
Provides a source for reference to determine which new requirements are covered
under the original agreement
Serves as a living document which continues to evolve as more requirements are
uncovered, but also provides a central source from which to manage these
changes
182
Project Charter Elements
Task: Project Charter Elements
Listed below are project charter elements. Click each term below to learn more. To
view the a charter template, roll over Page Resources and click Project Charter
Template. To view a completed charter, roll over Page Resources and click Project
Charter Example.
Business Case
The business case is a short summary of the strategic reasons for the project.
The justification for a business case would typically involve at least one of the
following:
Cost per unit
Quality or defect rate
Cycle time
Good business cases should:
Define one primary business metric.
Focus on a process rather that a cost account.
Quantify a financial impact.
Focus on the output (product/service) for the external customer.
Provide details regarding the baseline performance of the primary business

measure to ensurethat this is really a problem, not an exception.
Determine the gap between the baseline performance of the primary business
measure and the business objective.
Problem Statement
The problem statement will detail the issue that the project team wants to improve.
From the perspective of owners and relevant stakeholders, a major cause of project
failure is the lack of clarity in describing the problem. Develop the problem statement
as thoroughly as possible with the information you have. The problem statement is a
crucial part of the charter.
Problem cases include:
historical data
what areas of the business are affected
how long the problem has existed
any other symptoms of the problem

The project description, along with the entire charter, should be reviewed by and with
owners and appropriate stakeholders to ensure the right problem is being addressed
and the anticipated solution will fix the "real" problem.
Problem statements are discussed further in the Define lesson of this course.
Project Scope
The project scope is the specific aspect of the problem that will be addressed, and
serves to specify the boundaries of the project. The project scope is discussed further
in the Define lesson of this course along with tools that help determine the scope.
183
Project Charter Elements
Task: Project Charter Elements
Goal Statement
As discussed later in this lesson and in the Define lesson, the goal statement should
specifically outline what you hope to achieve at the end of the project.
Goals should:
Be carefully thought out and expressed.
Specify how completing the project will lead to improvements over the status
quo. You should be able to clearly describe the outcomes, deliverables and
benefits to stakeholders and customers.
Provide the criteria you need to evaluate the success of the project in terms of
time, costs, and resources.
Be reviewed by the core team, which must reach consensus before moving to the
next phase of the project.
Resources
In terms of the project charter, resources are the people required to complete the
project. In the Team Leadership topic of this lesson, you will read more about the
creation of teams and the roles and responsibilities of team members.
184
Work Breakdown Structure
Concept: Work Breakdown Structure
The work breakdown structure (WBS) is a hierarchical chart representing all the
activities that must be completed in order to finish the project. It may be completed as
a tree diagram or an outline. In essence, the WBS is like an organizational chart for a
project. The idea behind the WBS is to break larger tasks (or milestones) into
individual components. Typically, a work breakdown structure will include three
levels. However, for more complex projects, it may involve as many as five levels.
Procedure
1.
2.
3.
4.
5.
Gather input from the project team by using questionnaires, interviews, group
sessions and historical data.
Restate the project mission and objectives and confirm that they are correct.
Define the project in terms of major elements of work, or deliverables (level 1
categories).
Break each level 1 work element into detailed activities and milestones (levels 2,
3, etc.).
Identify an activity owner and deliverable for each activity at the lowest WBS
level.
185
Planning Tools
Concept: Planning Tools
In developing the project plan, the Six Sigma leader uses a variety of tools. In the next
section, we will explore and explain the following tools:
Gantt chart
Critical path analysis
PERT chart
186
Gantt Chart
Concept: Gantt Chart
The Gantt chart was developed by Henry Gantt in the 1910s. According to The Quality
Toolbox, Second Edition, Nancy Tague states, "A Gantt chart is a bar chart that
shows the tasks of a project, when each must take place, and how long each will take.
As the project progresses, bars are shaded to show which tasks have been completed."
The Gantt chart may also be known as a "milestones chart" or "project bar chart."
Benefits
Easy for people to understand

Helps all parties understand the project
Monitors the project's progress
Manages the dependencies between tasks
Displays the project schedule and status at a glance
Assesses the time needed to complete the project
Stimulates thinking among group members about accomplishing the goal
187
Gantt Chart Cont.
Concept: Gantt Chart Cont.
Procedure
In The Quality Toolbox, Second Edition, Tague suggests the following steps for
creating a Gantt chart:
1.
Identify the following tasks needed to complete the project:

a.
b.
c.
Key milestones (important check points)

Time required for each task
The sequence:
i. Tasks to be finished before the next task can begin
ii. Simultaneous tasks
iii. Tasks to be completed before each milestone
2.
3.
Draw a horizontal time axis along the top or bottom of a page, and then mark off
in an appropriate scale for the length of the tasks (days or weeks).
Down the left side of the page, write each project task and milestone in order:
a.
b.
For each event happening at a point in time, draw a diamond (unfilled)

under the time for that event.
For activities occurring over a period of time, draw a bar (unfilled) spanning
the appropriate times on the timeline:
i. Align the left end of the bar with the time the activity begins.
ii. Align the right end with the time the activity concludes.
iii. Ensure that every task of the project is on the chart.
4.
5.
As events and activities take place, shade the diamonds and bars to show
completion. For tasks in-progress, estimate the percentage of completion and
shade the appropriate amount.
Place a vertical marker to show the current date. When posting the chart on the
wall, a heavy dark string hung vertically across the chart with two thumbtacks is
an easy way to show the current time.
Use When
Tague states that Gantt charts are used when:
"
scheduling and monitoring tasks within a project.

communicating plans or status of a project.
the steps of the project or process, their process, their sequence, and their
duration are known.
"
User Tips
Tague also states:
188
Gantt Chart Cont.
Concept: Gantt Chart Cont.
"
Sometimes Gantt charts have additional columns for showing details, such as the
amount of time the tasks is expected to take, resources or skill level needed, or
person responsible.
Beware of identifying reviews or approvals as events unless they really will take
place at a specific time, such as a meeting. Reviews and approvals often can take
days or weeks.
It can be useful to indicate the critical points on the chart with bold or colored
outlines of the bars.
"
189
Critical Path Analysis
Concept: Critical Path Analysis
Developed by project managers in the 1950s, critical path analysis (CPA) is one of
several planning tools for demonstrating and viewing chronological tasks, identifying
possible timing risks, and establishing the least amount of time for the project/process.
CPA is also known as critical path method (CPM).
Benefits
Displays a graphical model of the project

Predicts the shortest time required to complete the project
Emphasizes activities critical to maintaining the schedule
Provides a timing reference point throughout the project
Identifies interrelationships between tasks
Three paths exist in the diagram above:
1-3-4-5-7 (8 weeks) (critical path; longest time)
1-3-5-7 (6 weeks)
1-2-6-7 (7 weeks)
190
Critical Path Analysis Cont.
Concept: Critical Path Analysis Cont.
Procedure
1.
2.
3.
4.
5.
6.
Use sticky notes to individually list all tasks in the project. Underneath each task,
draw a horizontal arrow pointing right.
Arrange the sticky notes in the appropriate sequence (from left to right).
Between each pair of tasks, draw circles to represent events and to mark the
beginning or end of a task.
Label all events, in sequence, with numbers. Label all tasks, in sequence, with
letters.
For each task, estimate the completion time. Write the time below the arrow for
each task.
Draw the critical path by highlighting the longest path from the beginning to the
end of the project.
Use When
Developing an optimal plan for the project

Identifying the most critical issues/processes that would affect the overall project
time
Identifying the longest path through the process causing the most risk to miss the
deadline (the critical path)
Determining fixed time targets
User Tips
All activities begin and end at circles (nodes: a stage of completion).

All activities with no predecessor branch from node 1.
All activities with no successor point to the last node (the highest number).
191
PERT Chart
Concept: PERT Chart
First developed by the Navy in the 1950s to manage complex projects, program
evaluation and review technique (PERT) charts are powerful tools for reducing the
time and cost for completing a project. PERT's planning technique accounts for
randomness in time requirements. PERT charts fall under the category of network
tools similar to the activity network diagram detailed later in this lesson under the
Management and Planning Tools topic.
Benefits
Provides a means of estimating the project completion time

Demonstrates the probability for completing the project ahead of schedule
Identifies start and end dates as well as critical path activities that affect
completion time
Organizes tasks in established timeframes
Acts as a decision-making tool
Identifies where and when parallel activities occur
Serves as an evaluation tool to determine the effect of changes
Key Terms
The following terms are important to keep in mind when using PERT charts:
Critical path refers to the sequence of tasks (path) that takes the longest time and
determines the projects completion date. Any delay of tasks on a critical path
will delay the project completion time.
Slack time refers to the time an activity can be delayed without delaying the
entire project. Tasks on the critical path have a zero slack time. Slack time is the
difference between the latest allowable date and the earliest expected date. It is
represented by the following nomenclature:
T/E = The earliest time (date) on which an event can be expected to occur
T/L = The latest time (date) on which an event can occur without extending
the completion date of the project
Slack time = T/L T/E
An event is the starting or ending point for a group of tasks.
192
PERT Chart
Concept: PERT Chart
Activity is the work required to proceed from one event or point in time to
another.
193
PERT Chart cont.
Concept: PERT Chart cont.
Procedure
1.
2.
3.
4.
5.
6.
7.
Use sticky notes to individually list all tasks in the project. Underneath each task,
draw a horizontal arrow pointing right.
Arrange the sticky notes in the appropriate sequence (from left to right).
Between each two tasks, draw circles to represent events, to mark the beginning
or end of a task.
Label all events, in sequence, with numbers. Label all tasks, in sequence, with
letters.
For each activity, make three estimates regarding time requirements: the shortest
possible time, the most likely time, and the longest time.
Determine the critical path.
Adjustments to the PERT Chart should be made to reflect any changes to the
project along the way.
Use When
Planning and controlling projects

Determining feasibility of meeting deadlines
Identifying possible bottlenecks in the project
Evaluating the effects of changes in the project requirements
Evaluating the effects of deviating from the schedule
Evaluating the effects of diverting resources from the project, or redirecting
additional resources to the project
Constructing a chart showing start and finish times for each activity as well as
relationships to other activities in the project
Identifying critical activities to be completed on time
Gathering information for improving the project schedule
User Tips
Use a Pareto analysis to identify those critical elements that are most likely to
lead to significant improvement in overall project completion time.
Although time estimates are subjective, they are very important.
Be sure to include documentation tasks because they can be time consuming.
PERT is a variation on critical path that is more skeptical of the time estimates.
To use the PERT chart, first estimate the following for each activity:
Shortest possible time each activity will take
Most likely length of time each activity will take
Longest time possible each activity will take

Calculate the time for each activity with the following formula:[(shortest time) +
(4 x likely time) + (longest time)]/ 6
194
PERT Chart Example - Table
Concept: PERT Chart Example - Table
Constructing a PERT network requires two inputs: events required to complete the
project and the sequence of these events. The network can be created when answers
are provided to the following three questions:
1. What job immediately precedes this job?
2. What job immediately follows this job?
3. What jobs can run concurrently?
The following table illustrates a sequence of events:
Activity
Event Title/Code
A-B
B-C
A: Contract signed
B: Long lead
procurement
C: Bill of materials
D: Manufacturing
schedules
E: Manufacturing
plans
F: Start-up activity
B-D
C-E
D-E
E-F
Immediate
Predecessors
A
Activity Time
(Weeks)
1
5
B
B
2
2
C and D
195
PERT Chart Example - Simplified PERT Chart
Concept: PERT Chart Example - Simplified PERT Chart
Data from the sequence-of-events table is then converted into a PERT network. The
following PERT network is based on the data presented in the table on the previous
page. The bold line represents the critical path, or the longest time span through the
total series of project events.
The critical path in in the above PERT chart tells management two things:
There is no slack time in any of the events on this path. Any slippage in the
schedule will cause a corresponding slippage in the end date of the program,
unless this slippage can be recovered on the critical path during any of the
downstream events.
Because events on this path are the most critical to the success of the project (in
terms of resource scheduling and allocation), management must examine these
events carefully if it seeks to improve overall performance on the project.
196
PERT Chart Example - PERT Chart with Slack Time
Concept: PERT Chart Example - PERT Chart with Slack Time
An adaptation of a PERT network with slack time appears in the Figure 1. The event
with slack time is D. On large, complex projects, PERT networks can subdivide events
into subevents, as shown in Figure 2.
Figure 1 PERT Network with Slack Time
Figure 2 PERT Chart Breakout by Subevent
197
Project documentation is an important part of measuring and ensuring the success of

any project. Several tools and processes for documentation exist. Regardless of the
tools or processes used, it is important that all information provided be accurate,
specific and detailed.
Status Reports
Status reports are written with a standardized format and formal tone, specific to each
organization. The report is delivered periodically to the members of the project team.
Status reports provide information, such as:
Where the project is in relation to the plan
Risks or issues affecting the time, scope or cost of the project
Action plan to address the risks or issues
Requests for management assistance or intervention

The status report may even include other documentation, such as:
Milestone charts
Performance reports
Budget reports
To see a sample, roll over Page Resources, and click Status Report.
Spreadsheets
Another way to monitor the project in terms of status, deadlines and budget is to use
spreadsheet applications such as MS Excel. Spreadsheets provide an excellent visual
representation of information when project management software, such as MS Project,
is not available.
Project Storyboards
Project storyboards are useful for depicting a sequence of events or explaining a
process to someone not familiar with a workflow or procedure. Storyboards are also
helpful when conveying project information involving changes that are more easily
explained in a visual manner than with words.
A common application for project storyboards is the use of before-and-after pictures.
Before-and-after-pictures are particularly helpful for facility or product redesign
projects.
Storyboards are frequently used when preparing a presentation to the executive team,
and allow the team to collect their thoughts in a way conducive to soliciting support
and obtaining buy-in from top management for a Six Sigma project.
To see a sample, roll over Page Resources, and click Project Storyboard.
198
Phased Reviews
Phased reviews are also called "milestone reviews" or "tollgates". Typically there are 5
reviews in a Six Sigma project corresponding to the 5 phases of the Six Sigma
DMAIC (Define-Measure-Analyze-Improve-Control) process, which will be
discussed in upcoming lessons. Phased reviews offer an opportunity for the project
team to assess the progress in relationship to the projects goals.They also allow the
project team to regroup and make any necessary changes or modifications to the
project.
Management Reviews
Management reviews are meetings between the project leader (typically the Black
Belt) and the management team. They allow the project leader to update management
on the status of the project in terms of financial progress.
In some organizations tollgates are both an opportunity to review the project with
senior management as well as an opportunity to update key stakeholders on the
projects overall progress (i.e., its current phase).
199
Charter Negotiation
Task: Charter Negotiation
The project charter is a written commitment approved by management stating the

scope of authority for an improvement project. It is a byproduct of negotiations that
have occurred based on relevant data and decisions made by the team, the Project
Manager or Black Belt, and the project sponsor or champion.
The charter elements were introduced earlier in this lesson and the following should
be considered when making charter negotiations.
Objectives
What is the purpose of the project?
What do we hope to accomplish?

Scope
What, specifically, is included in this project?
What is not included in this project?

Boundaries
What areas of the company are included?
What departments are involved?
What levels within each department are involved?

Resources
Who is available to work on the project?
How much of their time will be spent with project work?
What is the budget?
What software will be available?
Are special skills or certifications needed?

Project Transition (hand-off)
At the completion of the project,
What lessons have been learned?
What will we stop, start or continue for the next project?
Who will monitor the process from this point forward?

Project Closure
At the end of the project,
The Black Belt support draws to a close.
Successes are reviewed and compared with goals for process improvement and
financial benefits.
The team members should be rewarded and recognized for their efforts.
200
Assessment - Project Charter
Concept: Assessment - Project Charter
Read the following statements about project charters. Click True or False for each
item.
201
Project Charter Pyramid Game
Concept: Project Charter Pyramid Game
202

Project Management
Team Leadership
Learning Objectives
Six Sigma Black Belt | Project Management | Team Leadership

know the elements of launching a team and why they are important: clear
purpose, goals, commitment, ground rules, roles and responsibilities of team
members, schedules, support from management and team empowerment.
select team members who have appropriate skills sets (e.g., self-facilitation,
technical/subject-matter expertise), and create teams with appropriate numbers of
members and representation.
facilitate the stages of team evolution, including forming, storming, norming,

performing, adjourning and recognition.
Certification Preparation Course, the ASQ Foundations in Quality Learning Series:
Certified Quality Manager and the ASQ Foundations in Quality Learning Series:
Certified Quality Engineer.
204
Initiating Teams

Concept: Initiating Teams
A team is a group of individuals organized to work together to accomplish a specific

objective. Two or more people may be considered a team as long as they are mutually
accountable for the accomplishment of a specific purpose and specific performance
objectives. Teams pool their talents, skills, and knowledge for the good of the
organization. They become the components of a system, working toward the common
goal of quality and process improvement.
For a project team to be productive, it is important that the team members understand
what they are trying to accomplish and why. Clearly stated goals and a clear statement
of purpose will direct the team and will provide each team member a sense of purpose
and commitment.
The team purpose should:
be specific, not vague.
be directly related to the project charter.
not be defined by the team.
be communicated to team members at the beginning of the project.
205
Ground Rules

Task: Ground Rules
In the initial stages, team members need basic guidelines to add predictability to their
work environment and create a sense of safety around team interactions.Ground
rules are group norms regarding how meetings will be run, how team members will
interact, and what kind of behavior is acceptable. Each member is expected to respect
these rules during the projects duration.
Some areas to consider when establishing ground rules include:
Logistics
Regular meeting time and place
Procedure for notifying members of meetings
Responsibilities for taking notes, setting up the room, etc.

Attendance
Legitimate reasons for missing a meeting
Procedure for informing the team leader when a meeting will be missed
Procedure for providing updates to absent members

Promptness
Acceptable definition of on-time
Value of promptness
Ways to encourage promptness

Participation
Basic conversational courtesies (i.e., listening attentively)
Tolerable interruptions (i.e., phone calls, operational emergencies)
Confidentiality guidelines
Value of timely task completion
Voting protocol (i.e., an absent member votes with the majority)
206
Roles and Responsibilities

Concept: Roles and Responsibilities
It has been well documented that teams can outperform individuals. But simply
pulling a group together to work on a project does not result in an effective team. A
group becomes an effective team when members learn to work together, capitalizing
on their knowledge, skills, and a creativity borne of their diverse perspectives on
work.
Team members must fulfill their respective responsibilities. Provisions must be in
place to manage a variety of group dynamics related to team agendas, operational
guidelines, and how to best handle distractions and disruptive behavior.With such
guidelines in place, the stage is set for individuals to realize their part in the greater
whole.
Teams have key players who carry out specific duties and orchestrate team activities.
These fundamental roles emerge in teams:
A team sponsor (or champion) who fulfills a guidance role and supports the
teams activities, helps secure resources, and clears a path in the organization.
Generally an executive or manager in the organization.
A team leader, typically the Black Belt, who carries out the appropriate
leadership functions to help the team effectively accomplish its purpose.
Team members who participate and carry out agreed-to assignments.
A facilitator who is trained in working with groups and helps keep the team on
track.
Organizations may use different labels for these roles, and one individual may fulfill
multiple assignments. For example, the facilitator role may be carried out by the team
leader. However, the number of key players is not important as long as the work gets
done.
The following pages provide a closer look at each of these four key roles.
207
Team Sponsor or Champion

Task: Team Sponsor or Champion
Teams need the executive support and direction from top management to achieve their
best results. An individual executive or manager may fulfill the role of team sponsor
.
The sponsor generally has a stake in the outcomes of the project, has influence in the
organization, and may even select the team members and team leader.
A team sponsor does not serve as a member of the team. The team sponsor supports
the team, offering guidance as necessary and empowering the team to take actions and
accomplish results.
According to The Team Handbook, the following duties of a Sponsor or Champion
occur in three phases:
Before the project
Select the project
Prepare a mission statement
Identify goals
Develop the project charter
Determine needed resources
Select the team leader
Assign a quality advisor or coach
Select the team members

During the project
Orient the team
Meet regularly with the team
Develop and improves systems to enable change
Represent the team to others in the company
Eliminate obstacles to the teams progress

After the project
Oversees improvements made by the team (with the guidance and monitoring
from the process owner) and ensures the solutions are implemented and followed
Assume responsibility for communicating data and lessons learned from the team
for future improvements
208
Team Sponsor or Champion

Task: Team Sponsor or Champion
209
Team Leader

Concept: Team Leader
The team leader may be selected by the sponsor and can be a supervisor, manager, or
employee in the related project area.In a Six Sigma project, the team leader is the
Black Belt. Team leaders use their knowledge of the project to guide the team, yet they
do not dominate team meetings or force the group to self-determined conclusions.
The team leader:
Creates and maintains channels within the organization that allow the team to do
its work.
Facilitates communication between the team and the team sponsor.
Maintains all team records and meeting notes.
Sets the agenda and makes sure the team sticks to it.
Helps the team resolve any problems that may arise.
Leads/drives the implementation of team recommendations.

To carry out their responsibilities, team leaders need to be competent at leadership,
coaching and facilitation skills.
210
Team Members

Concept: Team Members
Teams generally have 5-8 members who are appointed by the sponsor or guidance
team in consultation with the team leader and facilitator. Depending on the nature of
the project or mission, the team may consist of cross-functional or even
cross-company employees.
Becoming part of a team is a big responsibility. Team members accept their positions
with the knowledge that they are to contribute fully to the projectsharing their
talents and abilities, participating actively in team meetings, and completing tasks to
the best of their abilities. If team members are appropriately selected based on their
skill set and current jobs, team membership can be an integral part of their job
responsibilities, rather than an added burden.
In general, team members are responsible for:
Preparing for team meetings.
Helping to adhere to the meeting schedule and ground rules.
Participating in team activities.
Completing assignments between meetings.

During team meetings, team members are responsible for:
Maintaining good body language and eye contact.
Avoiding judgment of others and suspending judgment of ideas.
Understanding what was said before responding.
Asking questions to get information and to ensure understanding.
Participating in team discussions.
Refraining from dominating team discussions.
211
Facilitator

Concept: Facilitator
Facilitators have special training in project management, group process, quality tools,
etc. They help team members work together to execute quality processes. The
facilitator, who is typically the Black Belt, can also be a consultant to the team helping
monitor team progress and making suggestions for process improvements.
The facilitator is primarily concerned with process and how decisions are made rather
than what decisions are made. As a result, the facilitator must have:
Skills in interpersonal communication, meeting conduct and group process.
Good understanding of quality tools and their use.
The ability to teach team members about necessary quality tools.

In addition, the facilitator can help the team leader:
Form groups
Build teams
Give feedback
Resolve conflicts
212
Team Empowerment and Management Support

Task: Team Empowerment and Management Support
Empowerment occurs when employees have the authority to make decisions and take
action in their work areas without prior approval. For example, an operator can stop a
production process if he or she detects a problem, and a customer service
representative can send out a replacement product if a customer reports a problem
with a defective one.
Employee empowerment involves shifting knowledge, responsibility and authority to
persons who actually operate business processes.
Empowerment takes on added importance in a team setting, where employees are
responsible for all work activity and performance results in their respective areas.
Click each of the topics below to learn more about the role that management can take
in empowering teams.
Establishing boundaries
Before a project begins, the sponsor/champion should clearly define the process or
problem that the team will study, identify the desired outcomes, and then give team
members the authority and responsibility to achieve them. Team members also need
to understand that empowerment requires respecting individual boundaries.
Providing resources and training
Management is responsible for providing the equipment, supplies, technical support,
personnel, and training required for a team to take meaningful action during a project.
Providing support/removing barriers
During the project, management can support the teams authority by promoting its
interests throughout the organization and helping team members overcome difficulties.
213
Selecting Team Members

Concept: Selecting Team Members
Selecting team members is typically a collaborative effort among the

Champion/Sponsor, Black Belt, and Process Owner to ensure the right combination of
process expertise, commitment and drive for improvement. Keep in mind
organizations may handle team selection differently.
According to The Team Handbook, the following should be considered when
forming a process improvement team:
Limit the team to five to eight members.
Team members should represent each area affected by the project and have a
detailed understanding of the target process/function.
Sometimes, team members can represent each stage of the process under study.
Choose those whose positions and opinions are respected by their peers.
Also consider each individuals:
Personal experience with the process
Interest in improvement methods and tools
Communication skills
Ability to think analytically
Dedication to servicing customers
Commitment to process improvement
Finally, remember to include support groups such as Human Resources,

Information Technology, and Marketing, whose buy-in you may eventually need.
Ensure the Finance group is involved, even if they are not among the core team
members.
214
Stages of Team Development

Concept: Stages of Team Development
As teams are formed, they typically go through a series of stages, from formation to
recognition. The first 4 stages forming, storming, norming and performing have
historically been used in management theory to describe team behavior. Over time a
fifth stage adjourning and recognition was added. These stages are both normal
and expected in a teams transformation to a productive performing unit. All are
necessary for the team to grow, to face up to challenges, tackle problems, find
solutions, plan work and deliver results.
The following pages will describe each of the following stages of team development:
Forming: startup
Storming: conflict
Norming: cohesion
Performing: focus
Adjourning and Recognition: work ends

As you learn about the different stages, keep in mind individuals, dyads, small groups,
and even entire teams move back and forth among the various stages. A Performing
team can slip back into major conflict (Storming) given a certain set of circumstances.
Team leaders must be aware of this possibility and offer guidance as needed at any
given stage.
215
Forming

Concept: Forming
The forming stage is synonymous with startup. During this period, team members
may not yet share a complete understanding of the groups mission. Emotions such as
excitement, anxiety and hope take center stage. The goal during the forming stage is
for team members to get to know one another and to become familiar with the teams
mission and process. To meet this end, creativity and innovation are essential and
mistakes are welcomed as signs of learning.
Team members feel:
eager with high expectations.
anxious about how they will fit in and what is expected of them.
dependent on authority to provide direction.

Primary issues:
Inclusion and trust
Willingness to involve others

Desire to be included in the teams processes
Desire to feel they can trust the team leader and other team members
Task accomplishment and morale:
Task accomplishment is low to moderate
Team energy focused on defining goals, tasks and strategies for accomplishment
Morale is high
216
Storming

Concept: Storming
Storming is the next stage of team development. At this point, team members may
recognize that tasks are different or far more difficult than they originally thought.
This situation may induce a general sense of resentment and irritation among team
members. Conflict may arise as members argue about next steps. Outside demands
and expectations for the teams performance create added pressure. Competition and
control take precedence over collaboration and teamwork.
Although it can be contentious, the storming stage is crucial to the growth of the
team. The goal of storming is for team members to develop an understanding for
other members interpersonal styles, to recognize the need for cohesion, and to
reestablish the teams focus.
Storming can also be detrimental to a team if individuals do not find ways to
overcome obstacles and work together to accomplish group goals. Conflict resolution
techniques, which are discussed later in this lesson, may be required to prevent injury
to the team.
Team members feel:
dissatisfied with dependency on authority.
angry and frustrated about goals and tasks.
negatively toward the formal team leader and other team members.
incompetent or confused.
competitive for power or control.

Primary issues:
Power and control
May not want to follow directions
May want to influence the direction of the team

Task accomplishment may be disrupted
Skill development increases as conflicts are addressed
Morale is low
217
Norming

Concept: Norming
Norming is considered a period of fine-tuning. Team members reconcile competing

loyalties and responsibilities and accept the team and its collective purpose. They
establish rapport and are able to express criticism constructively. The predominant
feelings are of acceptance and relief.
During norming, the main goal is for team members to come together and shift their
collective focus toward task completion.
Team members feel:
more satisfied as they learn to work together.
better as each team member gains appreciation for the others' differences.
self-confidence regarding task accomplishment.

Primary issues:
Affection and intimacy
Team members begin to open up to one another

Task accomplishment increases
Positive feelings among members increase along with team results
Morale is improving
218
Performing

Concept: Performing
At the performing stage, team members feel relationship cohesion and recognize that
individuals have differing talents. Relationship tension has subsided, and the team can
problem solve and begin to implement changes in a relatively predictable environment
as a competent, cohesive unit. The predominant feeling is a sense of pride and
accomplishment. For a performing team, the primary goal is more successful task
completions.
Team members feel:
excited and eager about team activities.
capable of collaboration.
highly confident.
able to recognize and support each other.
able to communicate freely.

Primary issues:
No major issues
Task accomplishment optimal
Morale is high
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Adjourning

Concept: Adjourning
As appropriate, teams need to disband when their work is accomplished. Adjourning

refers to breaking up the team when the job is done. Lessons learned should be
documented and successes should be recognized and celebrated. Adjourning is an
opportunity to express a willingness to work together again on future assignments.
Team members feel:
sad or a sense ofloss about separating from the team.
so uncomfortable that they may joke to deny feelings.
strong positive feelings about accomplishments.

Primary issues:
Loss and separation
Feelings of sadness, loss and separation
Tendency to become less productive

Task accomplishment decreases
Morale is stable or decreases
220
Recognition

Concept: Recognition
Recognition is a critical part of a project's success. Anyone who has been on a

significant company project has likely received the obligatory "project shirt", pen, or
paperweight, but are those gifts meaningful rewards?
Meaning
We recognize individuals or groups for a job well done and for the results they
achieve. But do we do that for them or for ourselves? Many rewards are given out of a
sincere appreciation for accomplishments, but if the person receiving the reward does
not feel "lifted up", the reward can fall flat. Many people when asked to stand up in
front of a group to be recognized are very uncomfortable with public recognition.
Such recognition as a reward may not match their individual needs.
The reward must match the person. Find out something specific that will truly make
each person in the group feel special. Then present "their reward" to them in the way
that feels comfortable to them.
In addition, make sure you provide the specific reason for their receiving the reward.
"For a good job" is much less effective than "You improved the morale of the
customer service department and saved the company $250,000 a year."
Value
A parent would not reward high school graduation for one child with a fast food
restaurant gift certificate and then bestow another child with a new car for obtaining a
B+ in math. The reward you present should align with the particular results achieved.
How has the achievement affected the bottom line? What was the effort involved?
Rewards that match the achievement will also help people to understand that bigger
rewards are based on bigger results, not any kind of favoritism.
221
Assessment - Team Stages

Concept: Assessment - Team Stages
Read each definition relating to team stages. Match the terms below to the
corresponding definitions by dragging each term to the appropriate box.
222

Project Management
Team Dynamics and Performance
Learning Objectives
Six Sigma Black Belt | Project Management | Team Dynamics and Performance
recognize and apply the basic steps in team building: goals, roles and
responsibilities, introductions and both stated and hidden agendas.
apply coaching, mentoring and facilitation techniques to guide a team and

overcome problems such as overbearing, dominant, or reluctant participants, the
unquestioned acceptance of opinions as facts, groupthink, feuding, floundering,
the rush to accomplishment, attribution, discounts and "plops" and digressions
and tangents.
measure team progress in relation to goals, objectives and metrics that support
team success.
define, select and apply team tools such as nominal group technique, force field
analysis, multivoting and conversion/diversion.
224
Team Building Techniques
Concept: Team Building Techniques
In a teams progression through the stages of development, team building provides a

framework for developing relationships and alliances among members. Project
managers who utilize team-building techniques during the early stages of team
formation and continue team-building sessions throughout a projects life cycle
achieve the following benefits:
The quality of information exchange is higher.
The level of trust among team members is increased.
The process for making decisions is more effective.
There is increased commitment to individual members and to the team.
The team is focused on problem solving.
The team can develop self-enforcing, self-correcting project controls.
The need for direct supervision and coaching is minimized.
The team can operate in a self-directed mode.

Some team building occurs naturally as team members work together on common
tasks. However, there are specific techniques that can be used to facilitate the process,
including:
Handling team introductions in the first meeting.
Agreeing on team objectives.
Identifying and assigning specific team roles.
Establishing norms and decision-making procedures.
225
Team Goals
Concept: Team Goals
Developing and agreeing upon team goals are key factors contributing to dynamic,
productive teams.
In the majority of situations, by the time a team convenes, the charter or purpose for
the teams formation will have been set. The team members must ultimately have a
shared vision of what will happen by the end of the project. In order to help team
members understand their purpose, the following should be discussed with them:
The nature of the problem
Why this assignment is important to the organization and its customers
How the team is connected to other organizational teams and departments,

customers, as well as the organizations mission, goals, and strategies
What boundaries and constraints exist (e.g., time limits or budget)
Start and end dates, key milestones
Key measures that will define success
The teams level of autonomy and authority in decision making

Once a team convenes, members should review and discuss their charter that is,
what they are trying to accomplish and why and how the teams purpose is aligned to
organizational strategies.
Goals (or objectives) are defined as quantitative statements of future expectations that
include a deadline for completion. Team objectives should be approached using the
following guidelines, collectively known as "SMART":
We will discuss SMART in more detail in the Define lesson.
226
Team Roles and Responsibilities
Task: Team Roles and Responsibilities
The roles of facilitator, timekeeper, note-taker and scribe should be assigned and can
be rotated among team members from meeting to meeting.
Facilitator
The facilitator, in many cases also the team leader, is the one who assumes overall
responsibility for keeping the meeting focused and tracking against the agenda. The
following activities are the responsibility of the facilitator:
Opening and closing the meeting
Facilitating discussion
Managing participation
Timekeeper
A timekeeper, as the name implies, keeps track of time. This individual alerts the
team when time allocations are almost up without policing the agenda or mandating
that the team move on.
Note-taker
The note-taker ensures that meeting minutes are recorded, distributed and/or posted.
The note-taker will record the following:
Key topics
Discussion points
Action items
Future agenda items

Scribe
A scribe captures and posts ideas on an easel chart or whiteboard during the meetings,
including those items that remain unresolved during a meeting and must be noted on
the parking lot.
227
Team Introductions
Concept: Team Introductions
Employees may arrive at the first meeting distracted, whether about their overloaded
schedule for the day, personal issues, or the meeting they just attended. In addition to
these distractions, team members may approach their initial meeting with anxiety
about working with one another. Managers can help address anxiety and ease
members into the meeting by conducting team introductions, or icebreakers, to
allow for spontaneous interaction and conversation. Several techniques, as identified
in The Team Handbook, are discussed below.
Ask team members to share basic information with the group, such as:
Name and job title.
What they like best about their work.
Recent successes in their work.
What they currently find most challenging in their job.
How they came to be on the team.

If the team members are comfortable, they may also want to share information about
their families or interests outside of work.
To view an exercise that can be used during team introductions, roll over Page
Resources and click Team Activity.
228
Team Activity
Six Sigma Black Belt | Project Management | Team Dynamics and Performance | Team Introductions
Example: Team Activity
Paired Introductions
Pair up team members who dont know each other well and have them get acquainted
by asking each other:
What is your name?
What is your job?
How long have you been at the organization?
What got you started here?
What do you like best about your job?
How did you become part of this team?
What is your favorite hobby?

It is helpful if these questions are posted on and easel in the front of the room. After
the paired introductions, ask partners to introduce each other to the rest of the team.
229
Stated and Hidden Agendas
Concept: Stated and Hidden Agendas
Within teams, there are two types of agendas: those that are stated and those that are
hidden.
Stated Agendas
A stated agenda is essential to an effective team meeting. It helps keep team
members on task by defining the meeting's purpose and identifying who will discuss
what and when.Ideally, a meeting agenda is prepared and distributed to all team
members before the meeting.
A good agenda typically includes the following elements:
Objective of the meeting
Allocations of time for each topic
Time on the agenda to review and revise the agenda
Agenda items listed in order
Action items to be discussed from the previous meeting
Time at the end of the meeting to evaluate the meeting and summarize action
items
Roll over Page Resources and click Agenda to see an example.
Hidden Agendas
Hidden agendas are much different than stated agendas.They typically represent
individual interests that may or may not complement the teams purpose and goals.
To help surface hidden agendas for the group discussion before project work begins,
managers may utilize certain discussion techniques.
To see two examples of discussion techniques that can be used to surface hidden
agendas, roll over Page Resources and click Technique Examples.
230
Technique Examples
Six Sigma Black Belt | Project Management | Team Dynamics and Performance | Stated and Hidden
Agendas
Example: Technique Examples
Hopes and Concerns
In this activity, team members begin by reflecting on their hopes for the team or
project as well as their concerns about the outcome. After individual reflection, paired
team members share their responses with one another and then with the rest of the
group as the team leader documents responses on an easel chart. Finally, the entire
group discusses what the team or organization can do to help prevent the negative
from happening and to help make the hopes come true.
What I want for myself out of this.
Once team members understand the purpose of the project, this technique helps to
explore what each individual would like to achieve above and beyond the team goals.
Team members begin by taking approximately five minutes to list personal goals for
their team participation such as learning new skills or getting to know other people in
the organization. Then, members share their lists with the group and either discuss
them or simply listen.
231
Team Facilitation Techniques
Concept: Team Facilitation Techniques
Even the most well-intentioned teams can slide into dysfunctional behaviors that
detract from team growth and performance. The table below outlines some
counter-productive behavioral traits along with recommended solutions.
Trait
Description
Possible Solution
Overbearin Team members attempt to use influence

g
based on position of authority in the
participant organization
Talk to the authority off-line; ask for

cooperation and patience
Dominant Participants who talk too much

participant
Structure meeting so that everyone is

encouraged to participate (i.e. have members
write down their opinions, and then discuss
them one by one)
Reluctant
Participants who rarely speak
participant
Practice gate keeping by asking John,

whats your view on this? or dividing tasks
into individual assignments and having all
report
Unquestion Participants who make opinions sound like

ed
facts
acceptance
of opinions
as facts
Ask the speaker to clarify whether this is an

opinion or fact and/or request supporting
data
Groupthink All or most of the participants coalesce in

support of what they believe to be the
consensus of the group but team members
may actually be pressured into agreement to
avoid conflict
Remain impartial. Serve as the Devils

Advocate.Break the team into small
groups.Have groups report their findings to
the team
Feuding
Request that these types of conflicts be

taken off-line. Reinforce ground rules
Conflict involving personal matters
Flounderin Difficulty in starting or ending an activity

g
Redirect team to the project plan and written

statement of purpose.
Rush to
Rushing to get to a solution before the
Remind the group that rushing can hurt the
accomplish problem-solving process is worked through quality of the teams work
ment
Attribution Resolving confusion or disagreement by
explaining another persons motivations to
act rather than the act itself
Discounts
Identify the attribution and encourage

further discussion; reaffirm the importance
of supporting data
Ignoring or ridiculing anothers values or

Provide training in active listening early in
not acknowledging a statement made during the project. Support the discounted person or
a meeting;the idea or statement just "plops" talk off-line with anyone who frequently
discounts or puts down another persons
statements
Digressions Meandering and unfocused conversations

and
tangents
232
Use written agenda with time estimates and

continually direct the conversation back on
track. Remind the team of its mission
Team Performance Evaluation
Concept: Team Performance Evaluation
When teams move from one project to the next without pause, they are missing
valuable opportunities for evaluation and improvement. Teams that move too quickly
on to their next project also miss their opportunity to celebrate successful outcomes
with recognition and rewards.
Team performance evaluations help members assess how effective their interactions
are with one another and how durable their solutions are when implemented in the
organization. The data from these evaluations and assessments can help the team's
processes improve further, thereby guaranteeing the team's continued success.
Team performance evaluations may be carried out by team members themselves or by
an outside party. The following pages describe several methods for performing team
evaluations.
233
Self-evaluation
Concept: Self-evaluation
A team is in a good position to self-evaluate if, at the beginning of a project, its

members establish objectives against which to measure their team's performance.
Performance objectives should relate to both tasks and behaviors.Some examples are
provided in the table below.
Task Objectives
Reduce costs
Decrease cycle time
Increase yields
Improve customer satisfaction
Improve process efficiency
Behavior Objectives
Communicate effectively
Keep team commitments
Make constructive comments
Participate in discussions
Come prepared to team meetings
The team objectives become the evaluation criteria. Measurement against goals and
objectives can be performed at the end of each team meeting or at the conclusion of
the project.
A common technique for assessing behavior is to compile a short list of questions
along with a rating scale and distribute it directly after a team meeting. Roll over
Page Resources and click Team Objective Evaluation to see an example. Another
technique, the Team Effectiveness Profile, is one in which team members assess their
effectiveness in four different areas:
Mission, planning and goal setting
Group roles
Group operating processes
Interpersonal relationships
Measurement against task criteria typically requires hard data", such as the number of
dollars saved or volume per unit increased. Figures from hard data are useful in
assessing progress during a project and measuring overall success after project
completion.
234
Team Objective Evaluation
Six Sigma Black Belt | Project Management | Team Dynamics and Performance | Self-evaluation
Example: Team Objective Evaluation
Team Objective Evaluation

Thank you for participating and being a key member on the project team! Your
feedback is valued and necessary for continuous improvement. Please rank the team's
performance by circling the appropriate number as it relates to the behavior objectives
established at the beginning of the project using the following point/value scale:
1 = Never
2 = Rarely
3 = Sometimes
4 = Usually
5 = Always
1. Team members communicated

effectively.
2. Team commitments were kept.
3. Team members made constructive

comments.
4. Team members participated in
discussions.
5. Team members were prepared for
meetings.
235
External Evaluation
Concept: External Evaluation
Even with well-defined evaluation criteria, any self-evaluation will be flawed by a

certain degree of subjectivity; consequently an external evaluation is preferable.
External evaluation lends an objective perspective to complement and supplement
team self-evaluations.External evaluations may be conducted by anyone outside the
teams immediate day-to-day activities, such as the team sponsor.
External evaluations are based on the same criteria as self-evaluation but may draw
upon a broader range of sources, such as internal and external customers, other teams
or stakeholders, suppliers or management.
Some organizations utilize evaluation data to assess team performance patterns across
an organization. For example, external evaluations may be used to calculate the
percentage of teams exhibiting exemplary behavior as defined by management.
Desired behaviors may include:
Providing adequate data to back up claims.
Displaying data graphically so that patterns are clear.
Drawing conclusions warranted by the data analysis.
Analyzing causes.
Trying solutions on a small scale before going into full implementation.

Evaluations of this sort of data could showcase team success throughout the
organization, especially at the highest management levels, where positive results
translate into continued support.
In addition to demonstrating exemplary behavior, evaluations can reveal potential
problem areas in team performance, such as difficulty in accessing necessary data,
poor meeting attendance, or high membership turnover. At the beginning of future
projects, team leaders/facilitators can use the evaluations to learn what not to do,
thereby reversing any damaging trends.
Finally, it is important to ensure that team evaluations are linked to job-related
performance evaluations even for team members who are not considered full-time.
Many team leaders/facilitators fail to follow-up on this critical aspect, but it is one of
the most effective ways to ensure that all team members are engaged and actively
supporting the project.
236
Team Tools
Concept: Team Tools
There are a variety of tools available to assist teams in making decisions, such as:
Nominal group technique
Force field analysis
Multivoting
Two types of thinking that go into each of these team tools are Diversion and
Conversion.
Diversion refers to those team activities that produce many different options. When a
team needs a number of fresh ideas, diversion techniques such as brainstorming could
be used to anticipate obstacles, or to recognize strengths, weaknesses, opportunities or
threats.
Conversion activities are used to narrow the list of options and prioritize them for
action. Examples are the nominal group technique and multivoting.
These tools are discussed on the following pages.
237
Concept: Nominal Group Technique
Nominal group technique is a consensus planning tool that helps prioritize issues and
encourages participation from the entire group. The illustration below shows an
example of nominal group technique using 4 items.
Procedure
1.
2.
3.
4.
5.
6.
7.
Participants are brought together for a discussion session led by a facilitator.

After the topic has been presented to session participants and they have had an
opportunity to ask questions or briefly discuss the scope of the topic, they are
asked to take a few minutes to think about and write down their responses.
The session facilitator will then ask each participant to read, and elaborate on,
one of their responses. These are noted on a flipchart.
Once everyone has given a response, participants will be asked for a second or
third response, until all of their answers have been noted on flipchart sheets
posted around the room.
Once duplications are eliminated, each response is assigned a letter or number.
Participants are then asked to choose up to 10 responses that they feel are the
most important and rank them according to their relative importance.
These rankings are collected from all participants, and then aggregated.
238
Force Field Analysis
Concept: Force Field Analysis
Force field analysis is a tool that can be used when a team is identifying causes of a
problem or is planning a change, such as the implementation of a solution.
Procedure
1.
2.
3.
4.
Write the desired change or problem at the top of easel. Draw a vertical line
underneath.
Brainstorm all the driving forces that support the change (or cause the problem to
occur). Write these on the left side of the line. Determine how strong each force
is. In the area between the words and the centerline, draw an arrow pointing to
the centerline. The arrows length can be used to represent the strength of each
particular driving force. An alternative to different arrow lengths would be to
assign a score (between 1 and 5) to each force.
Brainstorm all the restraining forces that hinder the change (or prevent the
problem from occurring). Write these on the right side of the line. Determine
how strong each force is. In the area between the words and the centerline, draw
an arrow pointing to the centerline. The arrows length can be used to represent
the strength of each particular restraining force. An alternative to different arrow
lengths would be to assign a score (between 1 and 5) to each force.
For a desired change, discuss various means to diminish or eliminate the
restraining force. For a problem, discuss various means to diminish or eliminate
the driving forces. Focus on the strongest forces.
Note: It is possible to have a one-to-many relationship between driving and restraining

forces. For example the driving force--control rising maintenance costs could have
two restraining forces--cost and disruption.
239
Multivoting
Concept: Multivoting
Multivoting is a tool used in Six Sigma to arrange, in order of importance, a list of

ideas, problems, common causes, and the like.
Multivoting allows team members to place votes on the topics most important to
them. Those items receiving the highest rankings from the group should get further
attention and consideration.
The graphic below displays a list of ideas for reducing absenteeism. The voting results
are also shown.
Procedure
1.
2.
3.
4.
5.
6.
Add together like items if possible to decrease redundancy.

Number or letter each item.
Decide how many votes each team member is allowed. Depending on the length
of the list, each member will receive 5 to 10 votes. Another option is to include
one-third of the total number of items (e.g., 24 items equals 8).
Ask team members to vote on the list of items. Each team member has a set
number of votes, and can spread them out any way they wish (i.e., if one wishes,
all votes could be placed for one single item).
Group and count the high scores from the voting activity.
If necessary, perform a second vote on only the highly scored items from the first
vote to further narrow the list.
240
Assessment - Facilitation Barriers
Concept: Assessment - Facilitation Barriers
Read each definition relating to facilitation barriers. Match the terms below to the
corresponding definition by dragging each term to the appropriate box.
241

Project Management
Change Agent
Learning Objectives
Six Sigma Black Belt | Project Management | Change Agent

understand and apply techniques for facilitating or managing organizational

change through change agent methodologies.
understand the inherent structures of an organization (e.g., cultures and

constructs) that present basic barriers to improvement; select and apply
techniques to overcome them.
define, select and apply tools such as consensus techniques, brainstorming,

effort/impact, interest-based bargaining to help conflicting parties (e.g.,
departments, groups, leaders, staff) recognize common goals and how to work
together to achieve them.
define, select and apply techniques that support and sustain team member
participation and commitment.
use effective and appropriate communication techniques for different situations to

overcome organizational barriers to success.
243
Managing Change

Concept: Managing Change
In todays competitive environment, change is constant. It is a reality for every

organization, from giant multinationals to the simplest enterprises. Change can range
from initiatives involving thousands of people worldwide, to one person suggesting a
minor improvement that influences a limited number of employees in a small
organization.
Change management is the practice of planning and directing changes in an
organization. Change management implies it is possible to introduce change
deliberately and steer its development, rather than allow change to occur naturally and
unpredictably.
In the field of quality, change management typically refers to processes used to
introduce and integrate new initiatives or systems into organizations. Within this
context, a change management effort involves transition planning, predicting and
overcoming sources of resistance, organization-wide training and facilitating cultural
change.
The following pages will present ideas on change management techniques, the roles of
management and change agents, pitfalls to avoid, and strategies for overcoming
organizational roadblocks and process barriers.
244
Change Agents

Concept: Change Agents
Whether an organization is facing a relatively minor change or planning for a major

change initiative, there is generally one individual who masterminds the
effort.Change agents fulfill this important role.
A change agent is an individual from inside or outside an organization who facilitates
change within that organization. A change agent may or may not be the initiator of the
change effort.
There are two types of change agents:
Internal change agents are employees within the organization who are
commissioned by management to facilitate the change process. The employees
may be at the operative, management or upper management level.
External change agents are people outside the organization who are hired to
help facilitate the process.
Recruiting the right person to support a change initiative is an important task. The
table below lists some advantages and disadvantages of internal and external change
agents.
Type
Internal
External
Advantages
Are a known quantity
Typically bring a sound

understanding of
organizational culture,
infrastructure and
operations to the change
process
Usually already have

rapport with key players
Can help equip people with

a new set of skills
Bring a natural objectivity

and political freedom to
the change process
Are able to more readily

challenge the status quo or
ask the tough questions
Disadvantages
May be hindered by a lack of

objectivity or accessibility to the
big picture
May be reluctant to engage certain

areas of the organization because of
existing working relationships (i.e.,
keeping friends safe)
Must be carefully screened to ensure

proper qualifications and the right fit
with the organization
Have limited organizational
knowledge
Must work diligently to build a
relationship with the client
organization and to understand its
operations and culture
Can take time to get up to speed
Change agents are not always deliberately commissioned. As with organizational

leaders, some employees may assume the role of change agent independently. In
addition, an organization may use change agent teams, in which both internal and
external agents collaborate to draw upon their respective strengths.
245
Roles and Techniques

Concept: Roles and Techniques
In The Change Agents Handbook, David Hutton describes the role of a change agent
in terms of the following categories:
Educate and work with upper management to
initiate and sustain the transformation
Support and advise other colleagues
Organize a quality assessment to measure

things like employee knowledge or resistance
to change
Propose and organize educational activities
(e.g., formal workshops, guest speakers,
off-site visits)
Orchestrate the development of the
improvement plan to meet organizational
goals
Ensure the integration of the improvement
plan into the business plan
Expedite the meeting schedule of upper
management
Play an active part in discussions and decision
making
Provide guidance to the team on technical
issues
Provide guidance on the selection of suitable
strategies and methods, subject matter experts
and other resources
Help monitor the status of projects in the early
stages
Act as a considerate and discreet advisor on
behavioral issues, relationships and personal
issues
Act as a coach where appropriate
Challenge the top management team if
commitment to change seems to waver
Manage specific projects
Act as a project manager or project sponsor

for specific initiatives (e.g., expediting a
customer satisfaction survey or deploying
training throughout the organization)
Develop and manage a support network
Identify, train, develop and support others

assigned to lead the change (in addition to top
management)
246
Organizational Roadblocks

Concept: Organizational Roadblocks
Barriers to organizational improvement or change, "roadblocks" are defined as

anything that blocks or filters the implementation or realization of continual
improvement. The most significant barriers are often inherent in an organizations
structure and culture.
Many improvement efforts flounder or fail because consideration was not given to
barriers to implementation. A critical part of any change initiative is:
identifying barriers.
evaluating their significance and risk.
planning how best to address them.

Force field analysis is a tool that can be used help overcome barriers when a team is
identifying causes of a problem, planning a change or implementing a solution. Note:
Force field analysis is discussed in the Team Dynamics and Performance section of
this lesson.
Structural and cultural barriers will be discussed in the upcoming pages of this section.
247
Structural Barriers

Concept: Structural Barriers
Both vertical and horizontal structures have the potential to introduce structural
barriers to change within an organization.
An organizations structure may foster a silo mentality, whereby each department
focuses on its own interests, procedures and people rather than on cooperating with
other groups to meet customer needs. The resulting structural isolation may increase
the efficiency of individual groups, but it ultimately detracts from the organizations
ability to meet customer commitments.
Horizontal structures may produce communication barriers between management
levels. For example, potentially negative information at one level may be distorted or
filtered before being passed to higher management. Conversely, management plans
may not be communicated to front-line employees.
While vertical and horizontal structures may exist, one of the most effective ways to
reduce the problems associated with potential barriers is to create a communication
plan. It is important that every area of the organization touched by the project be well
informed. The goal is to make sure each of the work areas understands why the project
is important, how it is progressing, what effect it will have on their department and
what their involvement might be. In essence, the goal is to answer the question, "What
does this mean to me?" The illustration below shows an example of a communication
plan.
As seen in the chart below, some elements to be addressed in a communication plan
include:
The audience
The message to be delivered (specific to each group)
How the message will be communicated
Frequency and timing of updates
Responsible person(s) or team(s)
Plan for receiving and utilizing feedback
248
Cultural Barriers

Concept: Cultural Barriers
The cultural barriers to organizational improvement are rooted in reactionary attitudes

and beliefs, such as mutual distrust and fear of change, along with strategic
shortcomings, such as managements failure to create a shared organizational vision.
A basic methodology for overcoming cultural barriers includes the following steps:
1.
2.
3.
4.
5.
6.
7.
8.
Establish a sense of urgency: Examine the market to identify crises, potential

crises and major opportunities. Then discuss them with the rest of the
organization.
Form a powerful guiding coalition: Assemble a group with enough power to
lead the change effort and encourage its members to operate as a team.
Create a vision or modify an existing vision: Create a vision to help direct the
change effort and develop strategies for achieving that vision.
Communicate the vision: Use every vehicle possible to communicate the new
vision and strategies, including a guiding coalition.
Empower others to adopt the vision: Remove systems or structures that
seriously undermine the vision. Encourage risk-taking and nontraditional ideas,
activities and actions.
Plan for and create short-term wins: Plan for visible performance
improvements and recognize and reward the employees involved.
Consolidate improvements and produce still more change: Use increased
credibility to continue changing systems, structures, and policies that do not fit
the vision. If necessary, reinvigorate the process with new projects, themes and
change agents. As needed, hire, promote and develop employees who can
implement the vision.
Institutionalize new approaches: Articulate the connections between new
behaviors and organizational success, while instilling the vision in the next
generation of organizational leaders.
249
Negotiation Techniques - Overview

Concept: Negotiation Techniques - Overview
Negotiation is a significant part of any group activity. Whenever there are multiple
people with multiple opinions and goals, there is strong potential for disagreement.
The key is to aim for a workable solution mutually acceptable to all parties that is, to
negotiate.
There are four primary approaches to negotiation:

Approach
Basic Assumption
Win/Win
You and I can work together to ensure we both benefit from the negotiation.
Win/Lose
Only one person will come out on top of this negotiation me.
Lose/Win
I've been set up to lose this negotiation, but Ill go down fighting.
Lose/Lose
Neither of us will benefit from negotiating, but Ill still put up a fight.
With the win/win approach, both sides enter negotiations seeking mutual interaction
and benefit. With the remaining three approaches, individuals compete for dominance
before negotiations even begin.
250
Positional Bargaining vs. Principled Negotiation

Concept: Positional Bargaining vs. Principled Negotiation
In positional bargaining, people approach negotiations with a win/lose, lose/win, or

lose/lose mentality. They lock themselves into predetermined positions and often lose
sight of the underlying problems to be resolved. As the name suggests, positional
bargaining simply focuses on a winning position.
Principled negotiation, on the other hand, is based on the win/win approach and the
following principles:
Separating the people from the problem
Focusing on interests, not positions
Understanding what both sides want to achieve
Inventing options for mutual gain
Insisting on objective criteria

Principled negotiation varies with the participants and issues involved, but there are
some basic techniques that help managers and leaders in the majority of situations.
Negotiation techniques
Set clear objectives for every

negotiation item.
Establish a broad range of acceptable
outcomes.
Be alert to the real intentions of the
other with respect to goals and
priorities.
Be well prepared with supporting
data.
Do not hurry.
Confer with your associates when
necessary.
Stay flexible in your position.
Save the hardest issues for last.

Respect the importance of face
saving for the other party.
Build a reputation for being fair but
firm.
Avoid panic; learn to control your
emotions.
Measure each move against your
objectives and understand how each
move relates to all others.
Remember, compromise is part of
negotiation.
Consider the impact of present
negotiations on future negotiations.
Responding to common negotiation challenges

Challenge
Recommendation
Handling goal conflict Find a common goal. In most organizations, it is rare that two people or
departments cannot find a goal that is acceptable to both.
Broaching a difficult
or sensitive subject
Rather than ignoring underlying problems or tension, bring obstacles into the
open at the beginning of negotiations and discuss them frankly.
Handling varying
ideas
Overcome the instinct to evaluate ideas instantly as right or wrong, perfect or

useless. Build on what is good in an idea and try to overcome its
shortcomings.
Dealing with varying

personalities and
beliefs
Focus on the objective, not on individual differences.
251
Conflict Resolution

Concept: Conflict Resolution
Given the variety of opinions and desires within an organization, conflict is a natural
part of the decision-making process. When two or more parties are in conflict, they
tend to believe what each wants is fundamentally incompatible with what the other
wants. From this belief stems a common misunderstanding: Conflict is inherently
negative. This is not necessarily the case.
A certain amount of conflict can trigger significant creativity and innovation. For
example, it's Saturday evening and you and your friends are planning a night out at the
movies. Imagine that, in an effort to avoid conflict, the group reluctantly agrees to
your movie selection. While you may enjoy yourself, your friends' satisfaction is
uncertain at best.
Now imagine that you and your friends embrace the conflict. You openly discuss other
people's desires to have dinner or a few drinks and ultimately decide on a cinema grill
where customers can eat and drink while watching the latest movies. In this scenario,
every member of the group finds a certain level of satisfaction with the evening's plan
rather than one person feeling perfectly satisfied while the others are dissatisfied.
Organizations increasingly view conflict as a vital, energizing force that unlocks the
creativity of an organization and allows it to innovate, change and grow. The key is to
proactively manage conflict when it arises.
Conflict resolution is the management of a disputed situation to arrive at a decision
satisfactory to all parties.
Conflict management is achieved through win/win collaborations. As you'll see in the
next section, the negotiation process most compatible with a win/win collaboration is
interest-based bargaining (IBB).
252
Interest-based Bargaining

Concept: Interest-based Bargaining
Interest-based bargaining (IBB) assumes that understanding why negotiating parties

feel the way they do helps reveal common interests and generate innovative options,
resulting in more durable solutions and mutual gain. Conceptually, IBB is similar to
the four-step method of principled negotiation in helping people deal with their
differences. IBB focuses on issues rather than personalities, the present and future
rather than the past, and interests underlying the issues, not just positions.
Principled negotiation steps
1. Tune in to the feeling behind the
other person's words.
2. Try to identify precisely what the
feeling is about.
3. Try to clarify exactly why the person
feels so strongly.
4. Paraphrase the speaker's thoughts to
check understanding.
Interest-based bargaining steps

1. Select and focus on the issue(s).
2. Identify interests behind the
positions.
3. Generate options to satisfy interests.
4. Generate options to satisfy interests.
5. Establish objective criteria to
evaluate options.
6. Apply the criteria to the options.
7. Reach consensus on an overall
solution.
To move toward a successful solution, use IBB, which incorporates the use of several
tools and techniques, including:
Brainstorming: removes some of the risk associated with suggesting new ideas.
Easel charts: allows participants to record and display ideas in a large, shared
format, providing a common focus and reducing misunderstandings.
Consensus decision-making: results in a solution all negotiators can live with.
Closure tools (such as multivoting): narrows options so a solution can be

selected.
Tools such as brainstorming and multivoting are useful not only in relation to IBB but
also in any conflict management situation.
253
Brainstorming

Concept: Brainstorming
Brainstorming provides a common method for teams to creatively and efficiently

generate a high volume of ideas in an environment free from criticism and judgment.
The basic brainstorming process includes the following steps:
1.
2.
3.
4.
5.
State the central brainstorming question or issue, determine agreement, and

record the issue for the team to see.
Ask each team member to give their ideas. No idea may be criticized.
As ideas are generated, record each idea for the group to see.
Continue steps 2 and 3 until all ideas are recorded.
Review the list of ideas for clarity and to discard any duplicates.
Brainstorming allows all group members to participate equally and to expand their
thinking about the problem's dimensions. Participation and expanded thinking in turn
broaden the spectrum of possible solutions.
254
Effort-Impact Technique

Concept: Effort-Impact Technique
The effort/impact technique is another conflict resolution and decision making tool.
It is used to prioritize proposed activities. Each activity is placed in one of four
categories, as seen in the following illustration:
255
Motivation Techniques

Concept: Motivation Techniques
People are the key to quality, but no two people are alike in their ability, motivation
and persistence to perform. Quality professionals can provide the systems, tools, and
methods for quality improvement, but all employees must get on board for a quality
improvement effort to be successful.
Motivation can be defined as an emotion or desire within a person causing that person
to act. Managers need to understand employee motivation and needs to build and
sustain employee enthusiasm. If different or opposing outlooks surface, management
must know how to help employees recognize common goals and work together to
achieve them.
To better understand employee motives, needs and goals, examine a few of the
landmark motivational theories and studies. Each of the studies and theories discussed
in this section presents a slightly different perspective of human needs and how they
collectively influence an employee's level, direction and persistence.
256
The Hawthorne Experiments

Concept: The Hawthorne Experiments
The roots of industrial motivational research in America date back to the period of
1924 to 1932. During this time, experiments were conducted at the Western Electric
Company Hawthorne plant in Cicero, a manufacturing division of AT&T.
Management and behavioral scientists collaborated during the experiments to study
the effects of various working conditions on productivity and quality. Environmental
lighting, the number of rest periods, the length of the workday and the time of day
were some of the variables examined.
The studies also included some unusual tactics, such as:
Conducting experiments with small groups of workers in simulated shop-floor

conditions (rather than the entire population).
Discussing changes in advance with study participants.
Encouraging workers (relay assemblers) to work at a comfortable pace.

Results of the Hawthorne experiments found that productivity increased and rejects
decreased as favorable conditions were introduced (e.g., better lighting and shorter
workdays). But interestingly, the quality and productivity gains were sustained even
after the workplace conditions returned to initial levels.
Thus a classic finding of the Hawthorne experiments is that relay assemblers
productivity increased under good conditions or poor. The studies concluded that
these gains were sustained regardless of the conditions because:
The individual workers needs were considered.
Workers were treated with dignity.

The Hawthorne experiments demonstrated the benefits of an improved human
relations atmosphere and management involvement in productivity and quality.
257
Abraham Maslow - Hierarchy of Needs

Concept: Abraham Maslow - Hierarchy of Needs
Abraham Maslows hierarchy of needs is one of the most widely cited theories of
human motivation. A pyramid configuration represents human needs, progressing
from the most basic physiological needs to a stage Maslow calls self-actualization.
Needs must be satisfied in order of priority, progressing from Stage One through Stage
Five. Physiological needs must be satisfied first, before the next level becomes
dominant.
As each level of need is satisfied, it loses its motivating power and the next higher
levels needs take precedence. The highest level, self-actualization, is an exception to
this process. This need is considered insatiable, so it continues to be a motivator.
Maslow believed that managers are responsible for creating a work environment in
which employees can perform at the highest level.
258
David McClelland - Acquired Needs Theory

Concept: David McClelland - Acquired Needs Theory
David McClelland and colleagues identified three underlying needs believed to be

important in understanding individual behavior.
Need for achievement: the desire to excel, solve problems and master complex
tasks
Need for affiliation: the desire for harmonious relationships with other people
Need for power: the desire to control and influence other people to achieve
individual goals or to achieve higher goals (for the greater good)
McClelland maintained that these needs are acquired over time, based on life
experiences. For every person, one of these needs tends to be more dominant than the
other two and thus has a greater effect on individual behavior.
Achievers prefer individual responsibilities and challenges. They also appreciate

feedback on their work and recognition of goal achievement.
Affiliation seekers are drawn to interpersonal relationships and opportunities for

communication. They tend to conform, shy away from standing out and seek
approval rather than recognition of goal achievement.
Power seekers want agreement and compliance. Attention, recognition and

approval from others are secondary.
McClellands theory is useful in linking individual needs to work tasks and
preferences. Additionally, success factors for various types of jobs can be identified
and individuals can strive to acquire them.
259
Communication

Concept: Communication
Communication is the exchange of thoughts, messages or information by speech,

signals or writing. It has been described as the glue that holds an organization
together. Ongoing, reliable communication is essential for organizations. Employees
throughout the organization need the skills to communicate effectively in meetings
and in one-on-one discussions.
There are, however, many barriers to effective communication, including:
Frame of reference: Different individuals can interpret the same communication

differently depending on previous experiences.
Selective listening: Individuals tend to block out new information especially if it

conflicts with existing beliefs.
Value judgments: Individuals assign an overall worth to a message prior to

receiving the entire message.
Source credibility: Individuals weigh the actions and words of the

communicator based on the amount of trust, confidence and faith they have in
that person.
Language and dialects: The same word may mean entirely different things to
different people.
Filtering: Information is manipulated so that the receiver perceives it as positive

(a common occurrence in upward communication).
Cultural differences: Different perspectives may lead to misperception and

miscommunication.
Questioning techniques and listening strategies are two powerful tools in overcoming
communication barriers.
260
Questioning Techniques

Concept: Questioning Techniques
When you have determined the kind of information desired, the next step is deciding
on the most appropriate questioning format. The questioning format can be either
open- or closed-ended, as described below:
Type
Open-ended questions
Closed-ended questions
Description
Ask for general

information.
Find out what a person

needs to know to begin
formulating solutions.
Begin with words like

how, why, or what.
Enhance
communication and in
the process:
Save time.
Reduce errors.
Involve others in
creating solutions
or innovations.
Strengthen
relationships by
demonstrating
interest in
resolving
concerns.
Provide opportunities
to meet and exceed
expectations.
Have two purposes: to

obtain specific
information and to
uncover needs.
Ask questions that can

generally be answered
with a yes, no or very
brief response.
Are a preferred format

for mail and
convenience surveys.
Examples
How can I help

you?
Why do you
feel this would
be the best
approach?
What seems to
be the source of
the problem?
Have you
experienced
this problem
before?
Is this a training
issue or a
management
issue?
Please list the
three factors
with the
greatest impact.
When considering a questioning technique, it is often more effective to begin with

open-ended questions to get a broad brush understanding and then switch to
closed-ended questions to target specific information. This approach helps develop
trust and reduce misgivings.
261
Listening Strategies

Concept: Listening Strategies
When you have asked a question, it is imperative that you listen carefully to the
answer. If the speaker gets the impression youre not listening, it can compromise
your credibility and cause your information source to become uncooperative.
Listening behaviors can be one of two types: passive or active.
Passive listening
Passive listening does not really qualify as listening. Although the listener appears to
be listening, in reality their attention is focused elsewhere.
Unfortunately, with so many distractions at home and work, passive listening seems
more the norm than active listening.As illustrated below, it takes concentration and
discipline to focus on someone elses communication needs. Here are typical barriers
to active listening:
Presuming: The listener assumes they know what the speaker will say next and
believes it is unnecessary to continue listening.
Distractions: The listeners environment or inner thoughts prevent them from

concentrating on the speakers message.
Rushing: The listener is in a hurry and does not want to take the time to listen to
the speaker.
Interrupting: The listener continually interrupts the speaker and will not let the
speaker continue with their line of thought.
Faking: The listener wants to maintain the outward appearance of listening and
holds eye contact to be polite, but they are not focused on the speakers message.
Planning ahead: The listener gets interested in something in the first part of the
message and stops listening to plan a response to that point.
Daydreaming: Weariness or preoccupation with other thoughts keep the listener

from hearing the speakers message.
262
Listening Strategies Cont.

Concept: Listening Strategies Cont.
Active Listening
Active listening means the listener is concentrating on the speakers message and
attempting to understand what the speaker has to say. This proves that the listener is
dedicated to understanding the speaker's needs. It also encourages the speaker to
examine their needs and explain their thoughts. Active listening has the following
outcomes:
Saves time: Rather than trying to collect information through trial and error, the
speaker can ask good questions, listen carefully to the response and get the
necessary information efficiently.
Reduces misunderstandings: Misunderstandings occur because there is a

breakdown somewhere in communication. Active listening enhances
communication and reduces misunderstandings.
Creates a climate of cooperation and trust: The speaker senses the listener's
genuine interest in the situation and trusts the listener to help.
Active listening is a powerful tool when used consistently. Following a few simple
guidelines will help you become a better listener and a more quality-focused
professional:
Strive to understand the speaker before offering input.
Avoid barriers to active listening.
Demonstrate listening with verbal clues and eye contact.
Verify understanding by paraphrasing, clarifying or summarizing.
263
Assessment - Negotiation Techniques

Concept: Assessment - Negotiation Techniques
Read the following statements about negotiation techniques. Click True or False for
each item.
264

Project Management
Management and Planning Tools
Learning Objectives
Six Sigma Black Belt | Project Management | Management and Planning Tools
At the end of this Project Management topic, all learners will be able to define, select
and use management planning tools such as:
affinity diagrams.
interrelationship digraphs.
tree diagrams.
prioritization matrices.
matrix diagrams.
process decision program (PDPC) charts.
activity network diagrams (AND).
266
Introduction
In the 1970s, a Japanese team developed new tools in response to changes in quality
technology. Known as "the 7M tools", these instruments are used by leading
organizations throughout the world to improve decision making, communication,
planning and implementation.
As with any methodology, a tool's name varies from organization to organization.
Some of these tools are new while others are refinements of predecessors. The 7M
tools are:
Affinity diagrams
Interrelationship digraphs
Tree diagrams
Matrix diagrams
Prioritization matrices
Process decision program (PDPC) charts
Activity network diagrams

While these tools help teams respond effectively to issues, do not expect to use all the
tools in all projects. In addition, although these tools may be used during the planning
stage of a Six Sigma project, it is recommended they be implemented whenever
needed throughout the entire DMAIC process.
Roll over Page Resources, click Flow of Management and Planning Tools to view a
"typical" flow of the 7M tools from The Memory Jogger Plus+ Featuring the Seven
Management and Planning Tools by Michael Brassard.
267
Affinity Diagrams
Concept: Affinity Diagrams
Developed by Dr. Kawakita Jiro in the 1960s to discover meaningful groups, the
affinity diagram clarifies data by categorizing a large number of ideas based on their
natural relationships.
Benefits
Is a good tool for organizing information into categories

Provides creative process and display
Links ideas
Adds structure to a complicated topic
Stimulates critical thinking
Helps organize unfamiliar ideas or problems
Helps in the Six Sigma problem definition phase to scope the project objective
The following example of an affinity diagram refers to the process of making coffee.
268
Affinity Diagrams Cont.
Concept: Affinity Diagrams Cont.
Procedure
1.
2.
3.
4.
State the problem (issue).

Brainstorm. Everyone records their ideas on sticky notes or cards.
Gather all notes.
Move notes into related ideas. Loners may exist.
If a topic fits into two groups, make an extra copy.
Look to see if small sets should belong in a larger group.
Look to see if a larger group needs to be subdivided with cards for each.
5.
Sort the brainstormed list. Move ideas from the brainstormed list into affinity sets
and create groups of related ideas.
Determine headings for each group and write the header.
6.
Use When
Confronting many disparate facts or ideas. Affinity diagrams are especially useful
for organizing qualitative comments, such as those collected during the Voice of
the Customer process
Attempting to grasp a large, complex issue
Refining brainstorm results into coherent outcomes
Seeking group consensus
User Tips
Affinity diagrams are not necessary when the problem is simple.
Avoid list:2
Do not place the notes in any order.
Do not determine categories or headings in advance.
Do not talk during the writing phase and the first sorting phase. (This is hard
for some people!)
Do not have more than eight people working on an affinity diagram.
Do list:1
Write clearly.
Wait until everyone is ready.
Allow plenty of time for initial idea development.
Use markers because regular pens are harder to read.
If possible, post the randomly arranged notes in a public place and allow
grouping to happen over several days.
_____
1 Tague, The Quality Toolbox, 99.
2 Ibid.
269
Interrelationship Digraphs
Concept: Interrelationship Digraphs
As one of the 7M tools identified by Dr. Shigeru Mizuno, interrelationship digraphs

show cause-and-effect relationships between factors, areas or processes. One item
connects to other items to illustrate the effect of each on the other.
Benefits
Displays a goal divided into different levels.

Maps interactions between ideas and factors.
Encourages team members to think in multiple directions.
Depicts a hierarchy of tasks and subtasks.
Creates an analysis of natural links.
Helps identify root causes.
270
Interrelationship Digraphs Cont.
Concept: Interrelationship Digraphs Cont.
Procedure
1.
2.
3.
4.
5.
Write a statement or issue to explore.

Brainstorm ideas about the issue (write each idea on a card or note).
Individually determine a relationship for each idea.
Draw arrows showing influences (from the idea to its causes and influences).
Analyze the diagram. Count the arrows to and from each idea.
a.
b.
c.
d.
e.
f.
Write the total counts at the bottom of each idea.

Key ideas are the ones with the most arrows.
Note which ideas have primarily outgoing (from) arrows. These are causes.
Note which ideas have primarily incoming (to) arrows. These are effects.
Be sure to check whether ideas with fewer arrows are also key ideas.
Draw bold lines around the key ideas.
Use When
Organizing related ideas.

Attempting to understand links between ideas and cause-and-effect relationships.
For example, a digraph can be useful when trying to identify the area of greatest
impact for improvement.1
Analyzing a complex issue for causes.2
Problem-solving a complex situation.
Linking intertwined causal relationships.
Determining a final solution.
Evaluating the relationship between ideas.
User Tips
Affinity diagrams arrange ideas into groups; interrelationship digraphs attempt to

define influences on each group.
Group titles should be brought from the affinity diagram to the interrelationship
digraph.
Directional arrows should be used to encourage critical thinking.
If in a large group, sticky notes or cards, a large paper surface, marking pens and
tape should be used.
A high number of outgoing arrows indicates a root cause, while a high number of
incoming arrows indicates outcomes or results.
The number of arrows is only an indicator, not an absolute rule.
Interrelationship digraphs can be used to supplement cause-and-effect or fishbone
diagrams.
_____
1 Tague, The Quality Toolbox, 444.
2 Ibid.
271
Tree Diagrams
Concept: Tree Diagrams
Resembling a trunk with branches, tree diagrams are ordered structures for
organizing information by importance and details. With the larger idea broken down
into smaller components, the idea is easier to understand.
Benefits
Provides a simple, highly effective method.

Promotes step-by-step thinking.
Graphically displays information.
Helps members find information easily.
Displays different levels of details.
Allows members to expand their thinking and see links between concepts.
Reveals the real level of complexity.
272
Tree Diagrams Cont.
Concept: Tree Diagrams Cont.
Procedure
The following list is derived from The Quality Toolbox by Nancy R. Tague:
1.
2.
3.
4.
5.
6.
7.
Develop a statement of the goal, project, plan or problem being studied.

Ask a question leading to the next level of detail.
If dealing with a goal, identify the needs and tasks necessary to accomplish the
goal.
If dealing with a problem, identify the causes of or reasons for the problem.
Brainstorm all possible answers.
Check to see if all items are necessary.
Make sure that the final list contains everything needed to accomplish the goal.
Use When*
Moving an idea from broad generalities to specific details

Developing an action plan to implement a solution
Analyzing processes in detail
Probing for the root cause of a problem
Evaluating implementation issues
Communicating information
Examining key issues after using an affinity diagram or interrelationship digraph
Serving as a problem-solving aid
Showing a goal and what is needed to accomplish it
User Tips
Before starting the tree, brainstorm.

Orient the tree from left to right.
Do not draw lines until the list of ideas is completed.
Use information from a previously created affinity diagram or fishbone diagram
to help complete the tree.
Use the tree to develop goals, objectives and action plans.
* The above list is derived from The Quality Toolbox by Nancy R. Tague.
273
Prioritization Matrices
Concept: Prioritization Matrices
A prioritization matrix is a decision making tool using a systematic process to

narrow choices. It is also one of the 7M tools for quality and a variation of an
L-shaped matrix (discussed in Matrix Diagrams). A prioritization matrix allows raters
to rank the options against pre-determined scales, weights and criteria to determine
order of importance. A prioritization matrix is also known as a decision grid, selection
matrix or grid, problem matrix, problem selection matrix, opportunity analysis,
solution matrix, criteria rating form or criteria-based matrix.
Benefits
Is simple to use.
Forces analyzing.
Displays information in a table format.
Connects multiple ideas and causes.
274
Prioritization Matrices Cont.
Concept: Prioritization Matrices Cont.
Procedure
1.
2.
3.
4.
5.
6.
7.
8.
Generate the criteria for making the decision.

Determine the weight of each criterion.
Create an L-shaped matrix (discussed next in the Matrix Diagrams section) and
list the choices by rows.
Label the matrix column headings with the criteria and their relative weights.
Have each member order the options according to each criterion.
Ask each member to multiply their ranking by the criterion weight.
For each option, have individuals add the option's score.
Have the team leader add up the individual scores into a group score.
Use When
Prioritizing the variables with the greatest significance.

Reaching consensus in small teams.
Comparing a few options to specific standards.
Narrowing a list of options to one choice.
Making decisions based on multiple criteria (best when used for six to eight
criteria).
Selecting one product, approach, supplier, option or problem.
User Tips
Utilize prioritization matrices after reducing the options to a manageable number.

Prioritization matrices can be applied in conjunction with a tree diagram.
The higher the weight, the more important the criterion.
The higher the total score, the more important the criterion.
275
Matrix Diagram
Concept: Matrix Diagram
By showing the relationship between two, three or four groups of information, matrix
diagrams can reveal intelligence about the relationship, such as its strength, the roles
played by various individuals or measurements.
Benefits
Is simple to use.
Arranges information in a table format for easy use and display.
Displays multiple connections and causes.
Forces analysis.
The following is an example of an L-shaped matrix. Additional types of matrix

diagrams are shown on the next page.
276
Matrix Diagram Cont.
Concept: Matrix Diagram Cont.
The illustration below provides a brief summary of when to use the different matrix
diagrams, as determined by the number of groups and the type of relationships. Click
See Example next to each diagram type to see an illustration and brief description of
each.
277
Matrix Diagram Cont.
Concept: Matrix Diagram Cont.
Procedure
1.
2.
3.
4.
5.
6.
Define the purpose of the diagram.

Identify what sets of elements need to be included to meet the objective of the
diagram.
Assemble the best team to connect all the elements of the matrix.
Select the matrix format.
Choose and define the relationship symbols.
Complete the diagram.
Use When
Exploring possible causes for a problem.

Identifying who needs to be involved in a project.
Prioritizing various problems.
Identifying and analyzing the presence and strength of relationships.
Explaining customer defects or complaints.
Combining two tree diagrams into a single matrix.
Selecting an option to pursue.
Comparing the results of implementing a new process to the customer's stated
needs.
User Tips
An L-shaped matrix is the most commonly used diagram.

Matrix diagrams are good for selecting numerical weighting from provided
options.
Prioritization matrices follow the L-shaped format.
Use matrix diagrams in conjunction with tree diagrams.
278
Process Decision Program Charts
Concept: Process Decision Program Charts
The process decision program chart (PDPC) is a diagram display for identifying
risks and countermeasures. You can use the PDPC to anticipate what might go wrong
and to develop countermeasures to offset those problems. The PDPC is therefore
useful in steering events toward your desired goals.
Benefits
Helps quantify alternatives.

Clarifies implications of alternatives.
279
Process Decision Program Charts Cont.
Concept: Process Decision Program Charts Cont.
Procedure
1.
2.
Determine the activity flow for the plan.

Construct a tree diagram by placing prerequisite activities in a time sequence:
Objective (first level)
Main activities (second level)
3.
4.
For each task, brainstorm what could go wrong (third level).

Review all potential problems and eliminate any that are improbable or those
with an insignificant consequence (fourth level).
For each remaining potential problem, brainstorm possible countermeasures for
either preventing the problem or applying a remedy after its occurrence (fifth
level, as clouds or jagged lines).
Discuss to decide the practicality of each countermeasure:
Criteria: cost, time required, ease of implementation, effectiveness
Mark impractical countermeasures with an X
Mark practical countermeasures with an O
5.
6.
Use When*
Implementing a complex plan or any new plan.

Exploring the possible contingencies.
A high price for failure exists.
Implementing a plan with a time constraint.
User Tips
Select team members close to the process or product.

Use sticky notes on a large surface when mapping the flow of activities.
Use a flip chart when brainstorming potential problems and countermeasures,
then create a final PDPC.
280
Activity Network Diagram
Concept: Activity Network Diagram
As introduced in the Planning Tools section of this lesson, activity network diagrams
show the required order of tasks in a project or process, their interconnectivity, the
best schedule for the entire project and any potential scheduling and resource
problems with their solutions.
Benefits
Displays:
Total amount of time needed to complete the project
Task sequence
Concurrent tasks
Critical tasks to monitor
Task dependencies
Aids in determining the critical path method (CPM)
In the example above, the shaded boxes with dotted lines represent tasks that may not
be required depending on the outcome of other tasks but still need to be planned. For
example, based on the results of the software testing, modifications of software may or
may not be required.
281
Activity Network Diagram Cont.
Concept: Activity Network Diagram Cont.
Procedure
1.
2.
3.
List all the necessary tasks in the project or process.

Determine the first task and place it on the left side.
Determine the correct sequence of the tasks:
Which tasks must happen before this one can begin?
Which tasks can be done at the same time as this one? (Place these cards
vertically above or below the first job card.)
Which tasks should happen immediately after this one? (Place the card to
the right of the first card.)
Note: It can be useful to create a table with four columns: prior task(s),
this task, simultaneous task(s), and following tasks.
4.
5.
Identify the next task and place the card to the right of the first card.
Determine the tasks that can be done at the same time as this task and place the
cards vertically above or below.
Repeat this procedure until all the cards are in sequence or parallel.
Diagram the network of tasks by arranging the cards in sequence on a large piece
of paper.
Time should flow from left to right and concurrent tasks should align
vertically.
Leave space between the cards.
6.
7.
8.
Between each task, draw circles for "events." An event marks the beginning or
end of a task. Thus, events are the nodes that separate tasks.
Use When*
Scheduling, assigning and monitoring tasks within a complex project or process.

A project schedule is critical, with serious consequences for completing the
project late or significant advantages of completing the project early.
You know the steps of the project or process, their sequence and how long each
step takes.
User Tips
Use sticky notes or cards on a large surface.

Draw extra events to separate tasks that stop and start with the same event.
282
Planning Tools Pyramid Game
Concept: Planning Tools Pyramid Game
283
Lesson Summary

Concept: Lesson Summary
Project management is a crucial part of the DMAIC process. Many tools, techniques
and concepts were introduced in this lesson. Although project planning is primarily the
focus at the beginning of the DMAIC process, the elements of the project management
discipline can be practiced to some extent in each of the phases to keep the project
moving. Proper planning and management is the foundation that will support the
project through to completion.
Project charter
The project charter is a written commitment approved by management, stating the
scope of authority for an improvement project. It is recognized by all parties involved
in the project. Once published, it provides powerful communication about the project
to the entire team. At the same time, a charter is a living document, constantly being
reviewed and updated to reflect additional relevant data as it becomes known.
Team leadership
Effective team leadership involves initiating teams and clearly defining purpose,
goals, ground rules, roles and responsibilities. Selecting the right people for the team
is also very important; make sure the team is composed of the right combination of
process expertise, commitment and motivation for improvement.
Team dynamics and performance
It is essential to understand team dynamics and performance. There are many
techniques for building and maintaining a strong, productive team. Being able to
facilitate valuable discussion is crucial. Providing the team with the tools to make
decisions is also important.
Change agent
A change agent is an individual from inside or outside an organization who facilitates
change within the organization. Change agents must be proactive by anticipating
roadblocks. They must prepare for such roadblocks by setting up proper
communication plans and helping the organization see why change is necessary.
Change agents must also be skilled in negotiation, conflict resolution and motivation
techniques to keep the team on track.
Management and planning tools
Selecting the appropriate management and planning tools during the planning process
and using them throughout the DMAIC process is also very important to ensure the
success of the Six Sigma project. Roll over Page Resources to view a comprehensive
matrix of the planning and estimation tools discussed in this lesson.
Again, keep in mind that project management is not only vital in the beginning of a
project but throughout the project life cycle as well.
284
Planning and Estimation Tools Matrix
Six Sigma Black Belt | Project Management | Lesson Summary

Example: Planning and Estimation Tools Matrix
Planning Tools
Tool
Gantt
Advantages
Disadvantages
Simple to understand
Easy to modify
The least complex means of
portraying progress (or lack

of it)
Easily expanded to identify
specific elements that are
either behind or ahead of
schedule
CPM
PERT
Interdependencies and
problem areas that might not
be obvious by other planning
methods are revealed
Project managers can
determine the probability of
meeting specified deadlines
through the development of
alternative plan
Project managers can
evaluate the effect of
changes in the program
A large amount of
sophisticated data can be
presented in a
well-organized diagram from
which the project team and
the customer can make joint
decisions
Determine where the
greatest effort should be
made for a project to stay on
schedule
Allows project managers to
determine the probability of
meeting specified deadlines
by development of
alternative plans
Evaluates the effect of
deviations in project
resources, performance
285
Provide only vague

descriptions of how projects
function or react as a system
Do not show
interdependencies of project
activities; therefore, they do
not represent a network of
activities
Cannot show the results of
either an early or a late start
in project activities;
therefore the project team
has no idea what the impact
of slippage in one element of
the project has on another or
how that slippage affects the
project completion date
Do not show any uncertainty
involved in the performance
of project activities; that is,
what is the longest, shortest,
or average time required to
complete the activity
These techniques are timeand labor-intensive
Even when using available
software packages, these
techniques can be
complicated to implement
These techniques are
expensive to set up and
maintain because there are
so many data requirements.
They may require and
consequently display more
detail than is necessary or
desirable.
The complexity adds to

project implementation
problems and increases
overall data requirements
Time- and labor-intensive
effort is required
Upper-level management
decision-making ability is
reduced
There exists a lack of
functional ownership in
estimates
Planning and Estimation Tools Matrix
Six Sigma Black Belt | Project Management | Lesson Summary

Example: Planning and Estimation Tools Matrix
Activity Network Diagram
expectations, and required

time
Allows data to be presented
in a well-organized diagram
from which both the
contractor and customer can
make joint decisions
There exists a lack of

historical data for time-cost
estimates
The assumption of unlimited
resources may be
inappropriate
There may exist the need for
too much detail
Allows users to transform a

complex planning task into a
simplified schedule for
fulfilling a plan or tracking
results
Useful when planning a
complex project or process
with interrelated tasks and
resources
The user must know the

steps of a project or process,
the sequence, and how long
each step takes
286
Lesson Bibliography

American Society for Quality. ASQ's Foundations in Quality Learning Series:

Benbow, Donald W. and T.M. Kubiak. The Certified Six Sigma Black Belt Handbook.
Brassard, Michael. The Memory Jogger Plus+: Featuring the Seven Management
and Planning Tools. rev. ed. Salem, NH: GOAL/QPC, 1996.
Hutton, David W. The Change Agents' Handbook. Milwaukee, WI: ASQ Quality
Press, 1994.
Scholtes, Peter R., Brian L. Joiner, and Barbara J. Streibel. The Team Handbook. 3rd
ed. Madison, WI: Oriel Incorporated, 2003.
Tague, Nancy R. The Quality Toolbox. 2nd ed. Milwaukee, WI: ASQ Quality Press,
2005.
287

Define
Lesson Introduction
Six Sigma Black Belt | Define

The purpose of the Define phase of the DMAIC methodology is to identify an

improvement project that is valuable enough to dedicate time, money, and resources to
accomplish. Once this phase is completed, the value has been established, the project
is defined and the resources can be allocated. Significant time and effort must be
placed on the Define phase. Teams have been known to fail, stall, or cycle back to
Define because they were not diligent in this phase. To better understand this concept,
the ASQ Body of Knowledge provides the following topics:
Project scope
Determine project definition/scope using Pareto charts and top-level (macro)

process maps.
Metrics
Establish primary and consequential metrics (e.g., quality, cycle time, cost).
Problem Statement
Develop a problem statement, including baseline and improvement goals.
289
Lesson Overview

The tools and objectives of the Define phase are illustrated below.
290

Define
Project Scope
Learning Objectives
Six Sigma Black Belt | Define | Project Scope

At the end of this Define topic, all learners will be able to determine project
definition/scope using Pareto charts and top-level (macro) process maps.
292
Introduction

As introduced in the Project Management lesson, the project scope defines the specific
aspects of the problem that will be addressed. Project scope is another component of
the project charter. To develop the project scope, various tools are used. This lesson
will concentrate on two of these tools: Pareto charts and process mapping. A third tool,
"in scope/out of scope" will also be demonstrated.
293
Pareto Charts

Concept: Pareto Charts
Created by Vilfredo Pareto, an Italian economist, Pareto charts graphically display

how different categories of failure contribute to an issue. Later popularized by Dr.
Joseph Juran, Pareto's principle and chart are used to depict the concepts of "the vital
few" and the "trivial many."
Concept
The Pareto principle states that 80% of the problems come from 20% of the causes
(the 80/20 rule). The Pareto chart visually depicts the most significant of these
situations:
80% of interruptions come from the same 20% of the people.
80% of staff problems come from 20% of the staff.
80% of a nurse's time is spent with 20% of the patients.
Features
Bar graphs display frequency or cost with bars arranged from high (longest) on
the left to low (shortest) on the right.
Line graphs display the cumulative percentage of individual issues from the
highest to the lowest.
Benefits
Focuses on the highest impact causes

Displays relative significance
Breaks the problem into identifiable components
294
Pareto Charts Cont.

Concept: Pareto Charts Cont.
Procedure
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Decide the categories, measurements and time period involved.

Note: Pareto categories must be unambiguous or mutually exclusive. An item can
only fit into one category or else the Pareto becomes invalid.
Collect the data.
Order the data (high to low).
Label the left vertical axis for the frequency or cost.
Plot and label the bars (tallest on the left, shortest on the right).
Label the right vertical axis as percentage.
Calculate the percentage for each category (the category total divided by the total
for all categories, multiplied by 100).
Calculate the cumulative percentage. Start with the highest, then add the second
bar's percentage (record), then the third (record), and so on.
Plot the first point (highest percentage).
Plot the appropriate cumulative percentage above each of the corresponding bars.
Continue the process for all bars.
Connect the dots to form a line graph.
Add a title, legend, and date.
Use When
Analyzing the causes or frequency of problems in a process.

Focusing on the most significant critical issue(s).
Prioritizing problems.
Analyzing the before and after impact of changes (by comparing before and after
Pareto charts).
Communicating data to others.
295
Pareto Charts Cont.

Concept: Pareto Charts Cont.
User Tips
Look for the point where the line's slope begins to flatten.
Factors under the steepest curve are the most important.
If the change in the slope is not clear, identify the factors making up at least 60%
of the problem.
If the bars are all similar sizes or when more than half of the categories are
needed to reach the necessary 60%, try breaking the categories down differently.
As previously covered, Pareto charts help identify the most critical issues to study. By
relying on the Pareto principle's guideline of 80% of the problems coming from 20%
of the causes, you will be able to differentiates the vital few from the trivial many.
Often it is more cost effective to take the biggest problem (largest Pareto bar) as a top
priority project and dissect it into smaller projects than it is to generate several projects
out of the lesser prioritized problems (smaller Pareto bars).
296
Nested Pareto Charts

Concept: Nested Pareto Charts
Once the initial Pareto chart has been completed, it is sometimes useful to create a
secondary or nested Pareto chart to further analyze the data that make up the top
categories.
As demonstrated by the chart above, the biggest complaints stem from quality
certificate errors. To analyze this further and narrow the project's scope, a nested (or
secondary) Pareto chart could be created. In this case, the specific types of quality
certificate errors would be gathered and charted as shown in the graphic below.
297
Nested Pareto Charts

Concept: Nested Pareto Charts
298
Weighted Pareto Charts

Concept: Weighted Pareto Charts
According to The Quality Toolbox, Second Edition by Nancy R. Tague, "In a weighted
Pareto chart, each category is assigned a weight, which lengthens or shortens the bars.
This reflects the relative importance or cost of each category."
Tague states that weighted Pareto charts are used when:
"
"
A Pareto analysis is appropriate

The categories do not result in equal cost or pain to the organization
There are more opportunities for one category to occur than another
Before creating a weighted Pareto chart, each category must be given a weight of
importance. Using the example from the previous page, it was determined that legal
issues are of greatest concern, therefore recall notification errors should be weighted
the highest. This category, along with the others, was given the appropriate weight
then multiplied by the number of occurrences to determine the final weighted value.
Type of Certificate Error
Weight
# of Occurrences
Weighted Value
Recall Notification Errors
10
Incorrect Product Number
Incorrect Model Number
Incorrect Warranty Expiration Date
Incorrect Customer Information
0.5
4.5
Once the weighted value have been calculated, use the procedures for creating a
Pareto chart as shown in the graphic below:
Roll over Page Resources for an opportunity to practice creating Pareto charts.
299
Pareto Chart Practice
Six Sigma Black Belt | Define | Project Scope | Weighted Pareto Charts
Example: Pareto Chart Practice
Materials Needed
graph paper
calculator
Description
RF Toys produces a toy dart gun. Concerned about the number of products returned to
various stores, the quality improvement specialist gathers the following data about
customer returns:
Gun won't cock
Missing pieces
Split dart
Tip off the dart
27
Trigger won't
release
Task
Draw a Pareto chart displaying this data. When completed, roll over Page Resources
at the bottom of the screen and click Pareto Answer to see if you are correct.
300
Pareto Answer
Six Sigma Black Belt | Define | Project Scope | Weighted Pareto Charts
Example: Pareto Answer
301
Top-Level Process Maps

Concept: Top-Level Process Maps
As you will learn in the Measure lesson, process maps display the separate steps of
any series of activities that produce an outcome. Steps are in sequential order and
include inputs and outputs, required decisions, people involved, time at each step and
other measurements. Detailed process maps are useful when analyzing potential
causes of problems and preparing action plans to improve existing processes or
develop new processes.
In contrast, the top-level process map (sometimes referred to as "the 30,000-foot
overview") shows only the major steps of the process. The top-level process map is
useful in scoping process improvement projects and establishing boundaries. Top-level
process maps are also referred to as a high-level flow chart or macro process map.
Benefits
Visually represents how the process works

Improves process understanding
Identifies process boundaries
Allows all team members to view the process in the same light
302
Top-Level Process Maps Cont.

Concept: Top-Level Process Maps Cont.
Procedure
1.
2.
3.
4.
Define (identify) the process.

List 6 to 8 major activities involved in the process.
Arrange activities in the proper sequence.
Draw arrows to show the flow.
Use When
Communicating or trying to understand the major steps in a process (the

"big-picture").
Preparing to draw a more detailed flowchart.
User Tips
If there are more than 8 steps, there is the danger of including too much detail for
a broad overview.
Decisions, delays and recycle loops are details usually not shown on a top-level
process map.
303
SIPOC

Concept: SIPOC
Often, project teams will complete a SIPOC (Suppliers, Inputs, Process, Outputs and
Customers) diagram in conjunction with a top-level process map. A SIPOC diagram
identifies the process activities, key inputs, outputs, customers and stakeholders. As
mentioned earlier, when mapping the process, only the 6 to 8 major steps should be
shown at this stage.
Here is an example of a SIPOC diagram:
304
In Scope - Out of Scope Tool

Concept: In Scope - Out of Scope Tool
Another tool that can be used to determine project scope is the in scope/out of scope
tool. Based on the outcome of other tools used, team members can brainstorm possible
ways to help narrow the scope.
Procedure
1.
2.
3.
4.
5.
Have team members brainstorm specific items to include or not include in the
overall project scope.
Have team members write the items on sticky notes.
Team members discuss the items and determine whether each is in or out of
scope.
Using a template, team members place sticky notes in appropriate categories.
Add the resulting in scope items to the project charter.
305

Define
Metrics
Learning Objectives
Six Sigma Black Belt | Define | Metrics

At the end of this Define topic, all learners will be able to establish primary and
consequential metrics (e.g., quality, cycle time, cost).
307
Primary and Consequential Metrics

Concept: Primary and Consequential Metrics
Once the top-level process map or SIPOC has been completed, the next step is to
determine the outputs or elements of the processes that are most important to the
customer and which would have the biggest impact if improved. At this stage, primary
and consequential metrics should be defined and later calculated within the Measure
phase.
Primary metrics, also called "process metrics," are the metrics Six Sigma
practitioners can most influence. Primary metrics are:
almost always the direct output characteristic of a process.
a measure of a process outcome, but not a financial goal or business objective.
frequently focused on quality, cycle time and cost.
derived from the project stakeholders, including internal customers, external

customers and suppliers.
Consequential metrics, also called "secondary metrics," can be either business or
process metrics, and are derived from or are a result of the primary metric.
In any given project, there may be one primary metric or multiple consequential
metrics for improving one process. Where there is one primary metric, secondary or
consequential metrics are needed to assure that improving the primary metric does not
degrade other critical metrics (e.g., reducing a primary metric of cost but at the
consequence of degrading secondary metrics of quality or cycle time).
308
Examples

Concept: Examples
Using the SIPOC diagram from earlier in the lesson, our primary metrics might
include:
accuracy of the order (quality).
timeliness of order processing (cycle time).
accuracy and timeliness of inventory database (quality and cycle time).
cost of reworking the order (cost).
cost of IT having to update database (cost).
cost of customer canceling order (cost).

Consequential metrics might include:
return on sales as represented by a change in the volume of customer orders.
overall number and level of customer complaints.
As metrics are defined, always look back to the Voice of the Customer (VOC)
determinations (discussed in the Business Process Management lesson) to ensure you
are selecting measurements that will have an impact on quality and are meaningful to
the customer.
309

Define
Problem Statement
Learning Objectives
Six Sigma Black Belt | Define | Problem Statement

At the end of this Define topic, all learners will be able to develop a problem
statement, including baseline and improvement goals.
311
Problem Statement

Concept: Problem Statement
A problem statement details the issue the project team wants to improve. The
problem statement should be specific and based on data that describes the issue's
current state. The problem statement should not include the proposed solution.
Purpose
Problem statements focus the team on a process deficiency, thus controlling the
scope of the project.
Problem statements also communicates the significance of the process deficiency
to others.
Poorly-Written Problem Statements
Well-Written Problem Statements
There are too many customer returns. The

housewares department return rate is 17%.
In 2005, the big ticket return rate was 17%,

representing $15 million in returns. This was 7%
higher than the target objective or goal for the
division.
There are too many incorrect customer invoices.

We must reduce incorrect invoices by 15%.
In the 4th quarter, 20% of all customer invoices

were incorrect. This was an increase of 5% from 3
rd quarter.
312
Problem Statement Practice

Concept: Problem Statement Practice
For each of the problem statements below, determine whether they are poorly-written
or well-written. Please select "good" for well-written statements, and "bad" for
poorly-written statements.
313
Goal Setting

Concept: Goal Setting
As first introduced in the Project Management lesson, the Goal statement should
specifically outline what you hope to achieve at the end of the project. Setting goals is
an important part of the Define stage that must be completed before moving on to the
Measure phase.
Goals should:
Be carefully thought out and expressed.
Specify how completing the project will lead to improvements over the status
quo. You should be able to clearly describe the outcomes, deliverables and
benefits to stakeholders and customers.
Provide the criteria you need to evaluate the success of the project in terms of
time, costs, and resources.
Be reviewed by the core team, which must reach consensus before moving to the
next phase of the project.
The acronym frequently used to assess whether a project's goals are "good" is
SMART: Specific, Measurable, Attainable, Relevant, Time-Bound. These concepts
are illustrated below:
Poorly-Written Goal
Well-Written Goal
Our goal is to reduce complaints by 50%.
Within the next six months, our goal is to reduce

customer complaints due to invoicing errors by
25% in order to meet customer satisfaction goals.
314
Goal Setting Practice

Concept: Goal Setting Practice
Use the SMART criteria to identify which element(s), if any, are missing from the
following goal statements. When complete, roll over Page Resources, and click
SMART Answers to view the missing SMART elements.
1.
2.
3.
4.
5.
6.
Reduce credit card resolution time by 75% in 2 weeks.

Improve the meeting room scheduling process.
Reduce failed installations by 30%.
Improve profitability.
Reduce late and early appliance deliveries within 6 months of the project kick off
date.
Decrease costs by end of year.
315
SMART Answers
Six Sigma Black Belt | Define | Problem Statement | Goal Setting Practice
Example: SMART Answers
Goal Setting Answers

1.
2.
3.
4.
5.
6.
Reduce credit card resolution time by 75% in 2 weeks. (not attainable)

Improve the meeting room scheduling process. (not relevant)
Reduce failed installs by 30% (not time bound)
Improve profitability. (not specific, not time bound, don't know if it's
attainable because we don't have enough info)
Reduce late and early appliance deliveries within 6 months of the project kick off
date. (not measurable, by what percent?)
Decrease costs by end of year. (not specific)
316
Define Review

Summary: Define Review
317
Lesson Summary

The purpose of the Define phase is to:
establish the specific Six Sigma project scope and boundaries.
define the specific business problem.
describe the business process needing improvement.
state the goals to be achieved.

As introduced in the Project Management lesson, these goals are largely accomplished
through the writing of the project charter. The charter contains the problem statement,
all team members' responsibilities and the scope of the project.
As you complete the Define phase, you will use tools such as Pareto charts, top-level
process mapping, SIPOC, and the in scope/out of scope tool. Additionally, you will
determine primary and consequential metrics, learn how to correctly define the
problem statement and create goals using the SMART elements.
The second phase of the DMAIC process is Measure. The Measure lesson will further
explain how to apply tools described in the Define phase, along with how to calculate
statistical measures.
318
Lesson Bibliography

Tague, Nancy R. The Quality Toolbox, 2nd ed. Milwaukee, WI: ASQ Quality Press,
2005.
319

Measure
Lesson Introduction
Six Sigma Black Belt | Measure

According to the ASQ Glossary, measure is the criteria, metric or means to which a
comparison is made with output. Measure is the phase that quantifies the levels of
quality desired and currently produced within the selected process. The Measure phase
is typically characterized by the development of a detailed process map that clearly
defines the interrelated work activities subject to the improvement effort. These work
activities are characterized by a set of specific inputs and value-added tasks that
comprise a procedure. To better understand this concept, the ASQ Body of Knowledge
provides the following topics:
Process analysis and documentation
Develop and review process maps, written procedures, work instructions and
flowcharts.
Identify process input variables and process output variables, and document their
relationships through cause and effect diagrams and relational matrices.
Probability and statistics
Distinguish between enumerative (descriptive) and analytical (inferential)

studies, and distinguish between a population parameter and a sample statistic.
Define the central limit theorem and understand its significance in the application
of inferential statistics for confidence intervals and control charts.
Describe and apply concepts such as independence, mutually exclusive,

multiplication rules, complementary probability and joint occurrence of events.
Collecting and summarizing data
Identify, define, classify and compare continuous (variables) and discrete

(attributes) data and recognize.opportunities to convert attributes data to variables
measures.
Define and apply nominal, ordinal, interval and ratio measurement scales.
Define and apply methods for collecting data such as check sheets, coding data
and automatic gauging.
Define and apply techniques for assuring data accuracy and integrity such as
random sampling, stratified sampling and sample homogeneity.
Define, compute and interpret measures of dispersion and central tendency, and
construct and interpret frequency distributions and cumulative frequency
distributions.
Depict relationships by constructing, applying and interpreting diagrams and

charts such as stem-and-leaf plots, box-and-whisker plots, run charts and scatter
diagrams. Depict distributions by constructing, applying and interpreting
diagrams such as histograms, normal probability plots and Weibull plots.
Properties and applications of probability distributions
Describe and apply the following distributions commonly used by Black Belts:
binomial, Poisson, normal, chi-square, Student's t and F distributions.
Recognize when and how to use the following, less frequently used distributions:
hypergeometric, bivariate, exponential, lognormal and Weibull.
Measurement systems
Describe and review measurement methods such as attribute screens, gauge

blocks, calipers, micrometers, optical comparators, tensile strength and titration.
321
Lesson Introduction

Calculate, analyze and interpret measurement system capability using

repeatability and reproducibility, measurement correlation, bias, linearity, percent
agreement, precision/tolerance (P/T), precision/total variation (P/TV), and use
both ANOVA and control chart methods for non-destructive, destructive and
attribute systems.
Understand traceability to calibration standards, measurement error, calibration
systems, control and integrity of standards and measurement devices.
Analyzing process capability
Identify, describe and apply the elements of designing and conducting process
capability studies, including identifying characteristics, identifying specifications
and tolerances, developing sampling plans, and verifying stability and normality.
Distinguish between natural process limits and specification limits, and calculate
process performance metrics such as percent defective.
Define, select and calculate Cp and Cpk, and assess process capability.
Define, select, and calculate Pp, Ppk, Cpm, and assess process performance.
Understand the assumptions and conventions appropriate when only short-term

data are collected and when only attributes data are available; understand the
changes in relationships that occur when long-term data are used; interpret
relationships between long-term and short-term capability as it relates to
technology and/or control problems.
Understand the cause of non-normal data and determine when it is appropriate to
transform.
Compute sigma level and understand its relationship to Ppk.
322
Lesson Overview

The tools and objectives of the Measure phase are illustrated below.
323

Measure
Process Analysis and Documentation
Learning Objectives
Six Sigma Black Belt | Measure | Process Analysis and Documentation

At the end of this Measure topic, all learners will be able to:
develop and review:
process maps.
written procedures.
work instructions.
flowcharts.
identify process input variables and process output variables.

document input and output relationships through cause-and-effect diagrams and
relational matrices.
325
Introduction to Documentation

Concept: Introduction to Documentation
One of the first steps in analyzing a process is to determine the current process. Start
by reviewing all supporting documentation and examining the various levels of
documentation available as part of process analysis.
The need for a quality documentation system spans a variety of applications such as
but not limited to:
Assurance of quality in products shipped to customers
Fulfillment of contractual and regulatory requirements
Adequate defense in liability cases
Benchmark data
Data to ensure that the organization is properly responsive to needed

improvements
Product performance data
Documentation of quality costs

Organizations need to approach the mass of quality data from a systems perspective. A
typical hierarchy of quality system documentation is shown below.
326
Process Analysis Using Documentation

Concept: Process Analysis Using Documentation
The project team should review documentation including any flowcharts, specs,
standards and guidelines that describe the process under consideration. Although
sometimes lacking specific details, flowcharts describe the process at a general level.
These flowcharts may conceptualize the entire operation and the individual steps
within the operation.
On the other hand, written procedures and task instructions provide step-by-step
details helpful in analyzing the process. Examining written documentation helps
clarify the current condition and may provide clues to possible quality issues.
To start process analysis using written documentation:
1.
2.
3.
4.
Obtain a copy of the written procedures, task instructions or flowcharts.

Study the written procedures.
Construct a basic process map to display the actions.
Use this information as you continue process analysis.
327
Process Map

Concept: Process Map
A process map uses a flowchart as a graphical means of depicting process structure,

visually defining the separate steps of any process. Steps are in sequential order and
typically include inputs and outputs, required decisions, the people involved, time at
each step, and/or measurements. The process map might document a combination of
looking at current operating procedures, analysis on these, and developing new
processes. And if available, they should be mapped to current document procedures.
The image below represents a simple process map.
328
Process Maps and Flowcharts

Concept: Process Maps and Flowcharts
Symbols are used to define certain types of steps in a flowchart: rectangles for most
steps and diamonds for decisions. Roll over the Page Resources link at the bottom of
the page for a list of flowchart symbols.
A sample process flowchart is shown below. Each symbol on the map can have
additional information added to it such as inputs and outputs. To see an example of the
inputs and outputs of a step in the process flowchart, roll over the step indicated in the
image below.
329
Flowchart Symbols
Six Sigma Black Belt | Measure | Process Analysis and Documentation | Process Maps and Flowcharts
Example: Flowchart Symbols
330
Benefits of a Process Map

Concept: Benefits of a Process Map
A well-developed process map yields several benefits:
Visually represents how the process works
Supports the identification of disconnects and non-value-added steps
Helps the team better understand the process
Enables the discovery of problems or miscommunications
Helps define the boundaries of the process
Identifies process inputs and outputs
Assists in recognition of process bottlenecks and opportunities for improvement

Process maps also serve functions in other phases of DMAIC:
Improve: Define and communicate the proposed changes to the process
Control: Document the revised process
331
Creating Process Maps

Concept: Creating Process Maps
Procedure
Materials needed: yellow sticky notes, notecards or flipchart paper; marking pens
1.
2.
3.
4.
5.
6.
Define (identify) the process.

Brainstorm the activities involved in the process.
Arrange the activities in proper sequence.
Determine inputs and outputs.
Identify time lags and non-value-added steps.
Once the sequence is agreed upon, draw arrows to show the flow.
Use When
Developing an understanding of the steps in a process.

Studying a process for improvement.
Communicating how the process works.
Documenting a process.
User Tips
Focus on identifying the process before worrying about correctly drawing the
process map.
Focus on those areas that appear complex with an excessive number of potential
decision points or delays.
Look for duplication, redundancy, complexity or too many handoffs in the
process.
Ask the following types of questions:
Why are we performing the task in this manner?
Does the current process deviate from the designed process? Why?
What are the value-added activities?
What are the non-value-added activities?
How much time, money or work hours are required for each task? These
may be the outputs (Ys) of the steps in the process.
332
Inputs and Outputs

Concept: Inputs and Outputs
Inputs (Xs) are causes (independent variables) that contribute to specific outputs (Ys)
or effects (dependent variables). Not only are inputs and outputs important to
sequential processes in an operation, they are also important to consider from a
supplier-to-customer perspective.
Do I know the external customer requirements for this process?
Do I know the internal customer requirements if they, in fact, exist?

If the process map is expanded beyond inputs-process-outputs, then the supplier and
customer perspectives can be added forming the acronym SIPOC. SIPOC (Suppliers,
Inputs, Process, Outputs, Customers) assists in capturing key links between suppliers,
inputs, the process, outputs and customers, as discussed in the Define lesson of this
course. Gathering measurable data from all parts of the chain allows an organization to
provide feedback for process improvement.
Roll over Page Resources and click SIPOC Diagram to view an example.
333
SIPOC Diagram
Six Sigma Black Belt | Measure | Process Analysis and Documentation | Inputs and Outputs
Example: SIPOC Diagram
Purpose
SIPOC (suppliers, inputs, process, outputs, customers) is a tool for identifying all
elements involved in a process improvement project.
Procedure
1.
2.
3.
4.
5.
Identify the steps.

Identify the outputs of the process.
Identify the customers who will receive the outputs of the process.
Identify the inputs needed by the process.
Identify the supplies of the required inputs.
334
Working with Inputs and Outputs

Concept: Working with Inputs and Outputs
All work is a process and everyone is someone's supplier and someone's

customer.
Once a process map has been defined with inputs (Xs) and outputs (Ys), be sure to:
1.
2.
identify all Xs and ensure that none were missed. A cause-and-effect diagram will
help identify what else needs to be included. This tool is covered later in this
lesson.
include all the Xs at this point in your project. Relational matrices, covered later
in this lesson, are tools we use to help identify which Xs are vital by numerical
assessment ranking.
Every process consists of inputs and outputs. All inputs and outputs have a measurable
value. Generally, inputs follow the "6 Ms": Methods, Machines, Manpower, Materials,
Measurement and Mother Nature.
Note: The "6 Ms" are discussed in more detail later in this lesson.
335
Cause-and-Effect Diagram

Concept: Cause-and-Effect Diagram
Created by Kaoru Ishikawa, cause-and-effect or fishbone diagrams are

problem-analysis tools for identifying, sorting and displaying as many causes as
possible for an effect or problem. To this end, a cause-and-effect diagram may be used
to identify additional inputs for a process. The fishbone diagram is sometimes referred
to as the Ishikawa diagram
Benefits
Sorts the ideas into useful categories.

Breaks down ideas into smaller chunks.
Shows the interaction between various causes.
Encourages group participation.
Helps identify areas to collect data for further study.
336
Using Cause-and-Effect Diagrams

Concept: Using Cause-and-Effect Diagrams
Choosing Categories
Categories will differ based on the project and the type of process or process step
under consideration. The categories shown below are starting points to initiate the
thinking process. Each team will develop its own categories based on the needs of the
project.
"6 Ms" used commonly in manufacturing:
Methods (process, documentation, and procedures)

Machines (equipment)
Manpower (people or management)
Materials
Measurement
Mother Nature (environment)
"The 5 Ps + E" used commonly in service industries:
Place
Process
Procedure
People
Policies
Environment
"The Right Stuff"
tools
materials
instructions
supervision
feedback
Procedure
1.
2.
3.
4.
5.
6.
7.
Develop a problem statement by identifying the effect or symptom.

Write the categories of causes as branches from the main arrow.
Identify the potential causes (inputs) using brainstorming techniques.
Continue to ask "Why?" for each cause and record each as a sub-cause that
branches off.
When the group runs out of ideas, focus attention on places on the chart where
ideas are fewer.
Return to each cause to prioritize the list.
After the completion of the diagram, begin to collect data to support the
hypothesized causes.
Use When
Process mapping, to identify additional inputs (or causes).

Organizing thoughts after a brainstorming session.
Identifying the root cause.
337
Using Cause-and-Effect Diagrams

Concept: Using Cause-and-Effect Diagrams
Determining additional areas for data collection.
User Tips
Before starting, gain consensus on the problem statement/effect.

Pursue each cause to its root cause.
Be specific.
The diagram organizes thoughts, not solutions.
The diagram does not rank items according to importance, however, the data
collection should start with the top three to five most likely root causes.
When process mapping, the head of the "fish" is the name of the process (if
looking at high level inputs) or of a step within the process (if looking at low
level inputs).
338
Relational Matrices

Concept: Relational Matrices
A relational matrix is a tool used to assess the effect of each input (X) against its
output (Y) in a process.
See also: xy matrix, process to product, cause/effect matrix, prioritization matrix
Benefits
The process helps team members to identify and agree upon outputs critical to the
product and/or customer.
Levels of importance are assigned to each output variable (using a numerical
rating).
The effect of each input (X) on each output (Y) is determined and assigned a
numerical value.
The relationship between inputs and outputs [Y=f(x)] is determined.
For process maps, the relative importance of inputs is determined.
Importance Scale
Association Scale
5 = High Importance
9 = Strong Relationship
4 = Above Average Importance
3 = Moderate Relationship
3 = Average Importance
1 = Weak Relationship
2 = Some Importance
0 = No Relationship
1 = Low Importance
Typical examples of scales
339
Creating Relational Matrices

Concept: Creating Relational Matrices
Procedure
1.
2.
3.
4.
5.
6.
7.
Review the process map. The group should consider involving the customer
when defining and rating the Ys.
List the output variables (Ys) along the horizontal axis.
Rate each output in terms of its overall importance. In this example, a scale of 1
(low importance) to 5 (high importance) is used. Other scales may also be used.
Identify potential inputs (Xs) that can impact the various outputs (Ys). List them
on the vertical axis. The Xs should come directly from the process map.
Rate the effect of each X on each Y. In the example below, a scale of 0 (no
relationship), 1 (weak relationship), 3 (moderate relationship) or 9 (strong
relationship) is used. The rating is based on how much effect that particular input
has on the quality of its corresponding output. Other scales may also be used.
The customer importance rating (Y) serves as a weighted response that is
multiplied by the association rating (X) for each relationship.
The weighted ratings are then added together to comprise a weighted total, the
importance score. This score is ranked from highest score to lowest, focusing on
the top three to five in the project. Use the results to analyze and align future
team activities, prioritizing where the team can begin its focus.
340

Measure
Probability and Statistics
Learning Objectives
Six Sigma Black Belt | Measure | Probability and Statistics

distinguish between enumerative (descriptive) and analytical (inferential) studies,

and between a population parameter and a sample statistic.
define the central limit theorem and understand its significance in the application
of inferential statistics for confidence intervals and control charts.
describe and apply concepts such as independence, mutually exclusive,

multiplication rules, complementary probability and joint occurrence of events.
Certification Preparation Course and the ASQ Foundations in Quality Learning
Series: Certified Quality Engineer.
342
Introduction to Enumerative and Analytical Studies

Concept: Introduction to Enumerative and Analytical Studies
Dr. W. Edwards Deming discussed the importance of the difference between

enumerative and analytic studies. In general, the basic difference is this:
Enumerative or descriptive studies describe data using math and graphs and
focus on the current situation.
Analytic or inferential studies use sample data to predict or estimate what a

population will do in the future.
It may be helpful to consider these two examples:
A tailor takes a measurement (waist, chest, inseam, etc.) from a customer who
purchases a new suit. The tailor is taking a measurement to obtain quantifiable
information an enumerative approach.
A doctor takes a measurement (temperature, blood pressure, heart beat, etc.) from
a patient who feels ill. The doctor is taking a measurement to obtain a causal
explanation for some observed phenomenon an analytic approach.
343
Enumerative (Descriptive) Studies

Concept: Enumerative (Descriptive) Studies
Use enumerative (descriptive) statistics to explain data, usually sample data:
Central tendency - median, mean and mode
Variation - range and variance
Graphs of data like histograms, box plots and dot plots

When these measures describe a population, they are referred to as parameters.
344
Analytic (Inferential) Studies

Concept: Analytic (Inferential) Studies
Use analytic (inferential) statistics to draw conclusions from a sample about a

population. Methods include:
Testing hypotheses to determine the differences in population means, medians or

variances between two or more groups of data and a standard
Calculating confidence intervals or prediction intervals
345
Population Parameters and Sample Statistics

Concept: Population Parameters and Sample Statistics
A statistic is a quantity derived from a sample of data that assists in forming an

opinion of a specified parameter of a target population. A sample is frequently used
because data on every member of a population is often impossible or too costly.
A population is an entire group of objects that have been made, or will be made,
containing a characteristic of interest. A population parameter is a constant or
coefficient that describes some characteristic of a target population. An example of a
population parameter is the mean or variance.
Frequently used symbols:
N = Population
n = Sample
= Population Mean
2 = Population Variance
X = Sample Mean
s2 = Sample Variance
346
Central Limit Theorem

Concept: Central Limit Theorem
According to Pyzdek,
"
The central limit theorem can be stated as follows:
Irrespective of the shape of the distribution of the population or universe, the
distribution of average values of samples drawn from that universe will tend toward a
norm distribution as the sample size grows without bound.
"
The central limit theorem is the theoretical foundation for many statistical
procedures. The theorem states that a plot of the sampled mean values from a
population tends to be normally distributed.
Key Points of the Central Limit Theorem and Six Sigma
Using 3 sigma control limits, the central limit theorem is the basis of the
prediction that, if the process has not changed, a sample mean falls outside the
control limits an average of only 0.27% of the time.
Most points on the chart tend to be near the average.

The curve's shape tends to be bell-shaped and the sides tend to be symmetrical.
The theorem allows the use of smaller sample averages to evaluate any process
because distributions of sample means tend to form a normal distribution.
The theorem appears when the process is in control (predictable).
The theorem leaves variations from common causes to chance (thus distributing
according to the central limit theorem).
The theorem identifies and removes variations from special causes.
347
Demonstrating Central Limit Theorem

Concept: Demonstrating Central Limit Theorem
The graphs below demonstrate the central limit theorem using dice-rolling
experiments. An "experiment" consists of rolling a certain number of dice and
graphing the results. This experiment is performed repeatedly, keeping track of the
number of times each outcome is observed. These outcomes are plotted in the form of
a histogram.
According to the central limit theorem, if the number of dice rolled is not too small,
the histogram's shape should resemble that of the "bell-shaped curve" when the
experiment is repeated many times.
348
Basic Probability Concepts

Task: Basic Probability Concepts
As mentioned earlier in this section, probability is the chance that something will
occur, and it is expressed as a decimal fraction or a percentage. Click each of the key
terms below to learn more.
Probability
The chance that something will occur is probability. It is expressed as a decimal
fraction or a percentage.
The probability of drawing an ace from a deck of 52 cards is:
4 (aces in the deck) / 52 = .0769
Probability then can be the number of successes divided by the total number of
possible occurrences.
Sample Space
The sample space is the set of possible outcomes of an experiment or the set of
conditions. The sample space is often denoted by the capital letter S. Sample space
outcomes are denoted using lower-case letters (a, b, c . . .) or the actual values if given.
Example: Using this notation, we can show an example of the events in a sample
space. An experiment run at random can result in one of the outcomes a, b, c, d, or e.
The sample space for this experiment is S = {a, b, c, d, e}.
Event
An event is a subset of a sample space. It is denoted by a capital letter such as A, B, C,
etc. Events have outcomes, which are denoted by lower-case letters (a, b, c . . .) or the
actual values if given.
Example: Lets continue with the above example, in which the experiment had a
sample space of S = {a, b, c, d, e}. Let A be the event in which either outcome c, d, or
e occurs. This event is given as A = {c, d, e}. Let B be the event in which either a or c
occurs. This event is given as B = {a, c}. Let C be the event in which either b, d, or e
occurs. This event is given as C = {b, d, e}.
Union
The union of two events is that event consisting of all outcomes contained in either of
the two events. The union is denoted by the symbol placed between the letters
indicating the two events.
Example. In our previous example, A = {c, d, e} and B = {a, c}. The event A union B
is denoted as A B = {a, c, d, e}. (Note that duplicated outcomes are written only
once.)
349
Basic Probability Concepts

Task: Basic Probability Concepts
Intersection
The intersection of two events is that event consisting of all outcomes that the two
events have in common. The intersection is denoted by the symbol placed between
the letters indicating the two events.
Example: If A = {c, d, e} and C = {b, d, e}, the event A intersect C is denoted as A
C = {d, e}.
The intersection of two events can also be referred to as the joint occurrence of
events.
Complement
The complement of an event is the set of outcomes in the sample space that are not in
the event itself. The complement is shown by the symbol ( ) placed after the letter
indicating the event.
Example: If S = {a, b, c, d, e} and A = {c, d, e}, the complement of A is A = {a, b}.
Mutually Exclusive
Mutually exclusive events have no outcomes in common. It should be noted that the
intersection of an event and its complement contains no outcomesit is the empty set,
. These events are mutually exclusive.
Example: If B = {a, c} and C = {b, d, e}, the event B intersect C is given by B C =
, and B and C are mutually exclusive.
350
Probability Examples

Concept: Probability Examples
The following example will summarize the use of the terms:
sample space
event
union
intersection
complement
mutually exclusive
Samples of semiconductors from two suppliers are classified for conformance to
specifications. The results from 50 samples are summarized in the table below:
Semiconductor Sample Results
Conforms
Yes
No
Supplier 1
28
Supplier 2
17
Let A be the event in which the sample is from Supplier 1. Let B denote the event in
which the sample conforms to specifications.
The number of samples in event A is 28 + 2 = 30, as shown below. There are 30 total
samples from Supplier 1 (regardless of whether they conform or not).
Semiconductor Sample Results, Event A
Conforms
Yes
No
Supplier 1
28
Supplier 2
17
The number of samples in event B is 28 + 17 = 45, as shown below. There are 45 total
samples that conform to specifications (regardless of supplier).
Semiconductor Sample Results, Event B
Conforms
Yes
No
Supplier 1
28
Supplier 2
17
The number of samples in event A is 17 + 3 = 20, as shown below. There are 20 total
samples that do not come from Supplier 1. You can interpret A as the event that a
sample comes from Supplier 2.
Semiconductor Sample Results, Event A
Conforms
Yes
No
Supplier 1
28
Supplier 2
17
351
Probability Examples

Concept: Probability Examples
The number of samples in the event A B is 17, as shown below. There are 17 total
samples that come from Supplier 2 (A) and conform to specifications (B). You can
interpret A B as the event that a sample comes from Supplier 2 and conforms to
specifications.
Semiconductor Sample Results, Event A B
Conforms
Yes
No
Supplier 1
28
Supplier 2
17
352
Equally Likely Outcomes

Concept: Equally Likely Outcomes
When a sample space consists of N possible outcomes, all equally likely to occur, then
the probability of each outcome is 1/N.
Example
Consider the sample space representing all the possible outcomes of rolling a fair die
(i.e., all outcomes are equally likely):
S = {1, 2, 3, 4, 5, 6}
Since there are six possible outcomes, all equally likely, each outcome has a
probability of 1/6 of occurring.
Let A be the event of getting a 3, 4, or 6 on one roll of the die:
A = {3, 4, 6}
The probability of event A occurring (that is, of getting a 3, 4, or 6) is:
P(A) = P(3) + P(4)
+ P(6)
= 1/6 + 1/6 + 1/6
= 3/6 or 1/2
The sample space, S, has a probability of 1 of occurring, as seen from:
P(S) = P(1) + P(2) + P(3) + P(4) + P(5) +
P(6)
= 1/6 + 1/6 + 1/6 + 1/6 + 1/6 + 1/6
=1
353
Probabilities for Independent Events

Concept: Probabilities for Independent Events
Events are independent if the occurrence of one event does not depend on the
occurrence or lack of occurrence of another (or preceding) event.
If two events, A and B, are independent of one another, then the probability of both
event A and event B occurring is:
P(A B) = P(A)P(B)
For more than two independent events, the independence rule can be extended:
P(ABC. . .) = P(A)P(B)P(C) . . .
This rule can also be referred to as the multiplication rule.
Example
Assume that the probability that a lab specimen contains high levels of contamination
is 0.15. Three samples are checked and are independent. The probability that all three
specimens contain high levels of contamination is:
P(ABC. . .) = P(A)P(B)P(C) . . .
= P(all contaminated) = P(1st cont.2nd cont.3rd
cont.)
= P(1st cont.)P(2nd cont.)P(3rd cont.)
= (0.15)(0.15)(0.15)
= 0.003375
354
Probabilities for Mutually Exclusive Events

Concept: Probabilities for Mutually Exclusive Events
Mutually exclusive events do not occur at the same time or in the same sample space
and do not have any outcomes in common. Given two mutually exclusive events, A
and B, the event AB = , and the probability of events A and B occurring is zero,
that is:
P(AB) = 0
Addition Rule
For events A and B, the probabilities of either or both of the events occurring is:
P(AB) = P(A) + P(B) P(AB)
Example
Let P(A) = 0.2, P(B) = 0.4, and P(AB) = 0.5. Then:
P(A) = 1 - P(A) = 1 - 0.2 = 0.8
P(AB) = P(A) + P(B) - P(AB) = 0.2 + 0.4 - 0.5 = 0.1
Events A and B are not independent. If events A and B were independent, then
P(AB) = P(A)P(B), and this is not the case:
0.5 (0.2)(0.4)
If the events are mutually exclusive, the term P(AB) drops out of the addition rule,
because A and B cannot occur at the same time. The addition rule becomes:
P(AB) = P(A) + P(B)
If more than two events are mutually exclusive, then the addition rule can be
extended:
P(ABC. . .) = P(A) + P(B) + P(C) + . . .
355
Conditional Probability

Concept: Conditional Probability
Conditional probability is the result of an event depending on the sample space or

another event.
The conditional probability of an event (the probability of event A occurring given
that event B has already occurred) can be found by the following relationship:
Example
Lets return to our example in which samples of semiconductors from two suppliers
are classified for conformance to specifications. The results from 50 samples are
summarized in the table below. Let A denote the event in which the sample does not
conform to specifications, and let B be the event in which the sample is from Supplier
1.
Semiconductor Sample Results
Conforms
Yes
No
Supplier 1
28
Supplier 2
17
The probability that the sample does not conform to specifications given that the
sample came from Supplier 1 is given by P(A|B). AB is the event in which the
sample does not conform to specifications and comes from Supplier 1. The number of
samples for this event is 2. Therefore, the probability of this event, P(AB), is 2/50.
(Remember that there are a total of 50 samples.)
B is the event in which the sample comes from Supplier 1. The number of samples for
this event is 30. Therefore, P(B) = 30/50.
Finally, the probability of interest can be found as:
This probability could also have been found directly from the table above. The total
number of samples from Supplier 1 was 28 + 2 = 30, and the number that are
nonconforming is 2. Therefore, the probability is 2/30 or 1/15.
356
Probability Problems

Concept: Probability Problems
Think about each of the following questions:
When flipping a coin, what is the chance of landing on heads?
When flipping the same coin a second time, what is the chance of landing on
heads?
When flipping the same coin a third time, what is the chance of landing on
heads?
On the other hand, before individually flipping 3 coins, what is the chance they
all will land on heads?
When flipping a coin, a 50-50 chance (0.5 probability) of landing on heads exists.
When flipping the coin a second, third or fourth time, the same 50-50 chance still
holds. Assuming each flip is without bias, the previous event does not influence any
following event.
What is the probability of flipping three heads in a row?

Answer: P(3H) = 1/2 x 1/2 x 1/2 = 1/8
Roll over Page Resources for additional problems and their subsequent answers.
357
Six Sigma Black Belt | Measure | Probability and Statistics | Probability Problems
Example: Probability Problems
1.
2.
3.
What is the probability of drawing three aces in a row from a deck of cards if the
cards are replaced and reshuffled after each draw?
Given one standard deck of 52 playing cards. What is the probability of drawing
a spade?
Given 2 people, what is the probability of Person 1 drawing a spade (without
replacing and reshuffling) and Person 2 drawing a spade from the same deck?
To check your answers, roll over Page Resources and click Probability Answers.
358
Probability Answers
Six Sigma Black Belt | Measure | Probability and Statistics | Probability Problems
Example: Probability Answers
Probability Answers
1.
2.
3.
P(3 aces replacement) 4/52 x 4/52 x 4/52 = .0004552 = .05%

Given one standard deck of 52 playing cards, the probability for Person 1
drawing a spade is 13 of 52 = 0.25 = 25%.
The probability of Person 1 drawing a spade is 13/52 or .25 and the probability of
Person 2 then drawing a spade from the same deck is 12/51 or .235. The
conditional probability of Person 2 drawing a spade after Person 1 draws a spade
is .25 x .235 = .0588.
359

Measure
Collecting and Summarizing Data
Learning Objectives
Six Sigma Black Belt | Measure | Collecting and Summarizing Data

identify, define, classify and compare continuous (variables) and discrete

(attributes) data and recognize opportunities to convert attributes data to variables
measures.
define and apply nominal, ordinal, interval and ratio measurement scales.
define and apply methods for collecting data such as check sheets, coding data
and automatic gauging.
define and apply techniques for assuring data accuracy and integrity such as
random sampling, stratified sampling and sample homogeneity.
define, compute and interpret measures of dispersion and central tendency and
construct and interpret frequency distributions and cumulative frequency
distributions.
depict relationships by constructing, applying and interpreting diagrams and

charts such as stem-and-leaf plots, box-and-whisker plots, run charts and scatter
diagrams.
depict distributions by constructing, applying and interpreting diagrams such as

histograms, normal probability plots and Weibull plots.
361
Need for Measurement

Concept: Need for Measurement
"Measure what is measurable, and make measurable what is not so." - Galileo Galilei
Why do we need metrics?
In order to improve a process, it must be measurable. Measurements must provide an
organization with information, knowledge and value. Frequently, organizations either
lack formal data collection methods or implement complicated data collection efforts
without understanding whether the data produced ties back to the organization's
strategic goals.
As Jack F. Welch, Jr., former G.E. Chairman and CEO, stated: "Too often we measure
everything and understand nothing." Individuals within an organization must see the
value in the metrics used and the data collected. Successful data collection and metrics
should exhibit:
Purpose
Validity
Accuracy
Reliability
Sensitivity
Along with the above-mentioned data and metrics, asking the question, "What do I
need to know?" is critical before implementing a data collection effort.
362
Attribute Data

Concept: Attribute Data
Data is information that is objective. There are two primary categories of data:
Attribute data
Variable or continuous data

Attribute data is also referred to as "discrete data." Discrete data are based on
counting things such as the number of statement processing errors, the number of loan
documentation errors or the number of customer call-back complaints. Discrete data
values can only be non-negative integers such as 1, 2, 3,... For that reason,
attribute/discrete data is also referred to as "count data." However, discrete data are
commonly expressed as a proportion or percent (e.g., percent of x, percent good,
percent bad).
Discrete data can typically answer such questions as:
How many defects occur on the production line?
How many trucks deliver to the docks each day?
How many waves hit the shoreline each hour?
363
Continuous Data

Concept: Continuous Data
Variable or continuous data are measured on a continuum or scale. Data values for
continuous data can be any real number: 2, 3.4691, -14.21, etc. Continuous data can be
recorded at many different points and are typically physical measurements (e.g.,
volume, length, size, width, time, temperature, cost, etc.).
In general, measured data are more powerful than attribute, or count data. The data are
normally more precise due to the existence of decimal places that indicate higher
levels of accuracy and specificity.
The following is an example of run chart tracking continuous data. In the example
provided, the run chart illustrates the fluctuation in temperature over time for a
hospital patient.
364
Attribute versus Continuous Data

Concept: Attribute versus Continuous Data
A manufacturer of sporting goods produces a line of "official" footballs. To be within

league specifications, the footballs must be at least 11.25 inches in length, but not
greater than 11.5 inches. If a quality control specialist measures the footballs as they
come off the production line and records whether the footballs pass or fail the
specifications, then the numerical data collected are attribute or discrete data.
However, if the quality control specialist records the length of each football coming
off the production line with some sort of measuring device, then the measurements
collected are variable or continuous data.
365
Converting Data Types

Concept: Converting Data Types
Continuous data, by their very nature, tend to be more precise; they often use decimal
places to be as precise as possible. However, it is sometimes desirable to convert
continuous data into discrete data. Continuous data contain more information than
discrete data. And while continuous data can be converted to discrete data, discrete
data cannot be converted to continuous data.
Instead of measuring how much deviation from a standard exists (as in our football
example with measuring the lengths of footballs for continuous data), we may choose
to convert that data to discrete data because discrete data can be easier or quicker to
use. We might, for example, categorize the various lengths into groups to generate a
histogram. How many footballs fall between 11.25 inches and 11.30 inches? How
many footballs fall between 11.31 inches and 11.35 inches? Converting variable data
to attribute data may assist in a quicker assessment, but the risk is that information will
be lost when the conversion is made.
366
Measurement Scales

Concept: Measurement Scales
Scales of Measurement are commonly divided into four types as this table indicates:
Data
Type
Meas
urem
ent
Princ
iple
Nominal
Discrete
Indicate the
presence or
absence of some
attribute qualitative rather
than quantitative
measure
Scale Gender,
Exa Ethnicity,
mple Pass/Fail
s
Arith Counting
metic
Oper
ation
s
Asso Mode
ciate
d
Stati
stics
Ordinal
Discrete
Interval
Continuous
Ratio
Continuous
Indicate the presence of an

attribute to a greater, lesser or
same degree as others higher numbers represent
higher values and scale points
are not necessarily equal
distance apart
Movie Ratings, Wine Tasting,
Horse Race Order of Finish
(without times)
Defined scale
with equal
distance
between two
points but no
absolute zero
point
Temperature
(degrees F),
Date on
Calendar
Addition/Subt
raction of
Values
Indicate the
relationship
between two
values and
have a defined
absolute zero
point
Temperature
(degrees K),
Age, Weight
Mean,
Standard
Deviation
Geometric
Mean
Greater than/less than
Median
Measurement Scales
367
Multiplication/
Division of
Values
Data Collection Methods

Concept: Data Collection Methods
Data collection for the project is based on three important questions:
What do we want to know?
From whom do we want to know it?
What will we do with the data?

To help insure the data are relevant to the problem statement and project objective,
consider these key factors when choosing a data collection method(s):
Length of time (per hour, day, shift, batch, etc.)
Type (cost, errors, ratings, etc.)
Source (reports, observations, surveys, etc.)
Cost (internally and externally)
Collector (team member, associate, subject matter expert, etc.)

Understanding how the data relates to the process parameters is the beginning of
data-based decision-making. There are many types of data collection methods
available to the Six Sigma Black Belt.In this lesson, we will concentrate on:
Check sheets
Coded data
Automatic gaging and other gaging

Check sheets and coded data could also be seen as a form of "gage" as well. The most
common of all measurements are ones taken with various types of non-automatic
gages for continuous and discrete data that are not automatic. For example, a person
physically makes a measurement, such as taking a temperature reading, taking a blood
pressure reading, timing an operation or running a chemical test.
368
Check Sheets

Concept: Check Sheets
A check sheet is a structured, prepared form for collecting and analyzing data. Check
sheets are usually comprised of a list or lists of items and some indication of how
often each item occurs. There are several types of check sheets, including the
following:
Confirmation check sheets focus on confirming whether all steps in a process

have been completed.
Process check sheets record the frequency of observations with a range of

measurement.
Defect check sheets record the observed frequency of defects.
Stratified check sheets record observed frequency of defects by defect type and
one other criterion.
Ishikawa (1985) estimated that between 80% and 90% of all workplace problems
could be identified using the simplest quality methods a check sheet and a
histogram.
Benefits
Easy to use
Provides a choice of observations
Good for determining frequency over time
The following is an example of a mutually exclusive stratified check sheet:
369
Using Check Sheets

Concept: Using Check Sheets
Procedure
1.
2.
3.
4.
5.
6.
7.
8.
Decide the event (problem) to be observed.

Develop operational definitions (descriptions or categories) for the observations.
Decide when the data will be collected and for how long.
Design the check sheet form to gather and organize the data.
Record by making check marks, Xs, tally marks or other similar symbols so that
data do not have to be recopied for analysis.
Label all spaces on the form.
Test the check sheet for a short trial period for appropriateness and ease of use.
Each time the targeted event or problem occurs, record the data on the check
sheet.
Use When
Collecting observable data.

Collection is managed by the same person or at the same location.
Collecting from a frequency or patterns of events, problems, defects, defect
location, defect causes, etc.
Collecting from a process.
User Tips
Carefully plan the sheet for easy use.

Be sure the observer knows what to observe.
Be sure the observer knows the definitions of categories used.
370
Coded Data

Concept: Coded Data
Use When
too many digits are listed into small blocks on a check sheet form.
errors increase when data-entry clerks try to read and enter large sequences of
digits from a single observation.
insensitivity of analytic results arise due to rounding of large sequence of digits.
attribute data such as yes, no, good or bad are collected and coded into numbers
such as 'yes = 1', 'no = 2', etc.
data quantity is not enough for a statistical significance in the sample size - data
sets can be grouped together and coded to have enough of a sample size.
Examples of Data Coding
Truncation coding: Measurements such as 1.0003, 1.0002, and 1.0009 in which

the digits 1.000 repeat in all observations can record the last digit expressed as
an integer (e.g. 3, 2, and 9 respectively).
Substitution coding: Product length is measured in sixteenths of an inch (1/16 of
one inch). All products length should be close to 24 7/16. A recorded
observation might use an integer that expresses the number of sixteenth
increments. So 24 7/16 is recorded as 7. 24 12/16 is recorded as 12.
Category coding: Use a code, like "S" for scratch, "D" for dent, W for warped,
etc. This method is used often for coding of discrete data on a form or for
collection/analysis of categories of data. Also, it is possible an item may have
multiple codings.
Adding/subtracting a constant or multiplying/dividing by a factor: Let X
represent raw data, XC a coded statistic, C as a constant, and f as a factor. The
chart below illustrates the mathematical model to use when coding and decoding
the data. Note that when decoding the data, the arithmetic mean must be
computed and the original mathematical operation is reversed. Also, for addition
and subtraction, note that the arithmetic mean of the raw data will be the same as
the arithmetic mean of the coded data.
Another common example of coding is the translation of a normally distributed

random variable into the standardized normal. The normal distribution will be
described in the Distribution section of this lesson.
371
Gauging - Automatic and Other

Concept: Gauging - Automatic and Other
Automatic gauging refers to a process that a computer or piece of equipment

performs when it has the ability to gather data without the necessity of human
intervention. An example of automatic gauging would be a computer that detects the
level of impurities in water and automatically records data levels for those impurities.
An electronic thermometer that records the temperature of a liquid and maintains that
data also uses automatic gauging. However, a regular thermometer that provides
access to data (a temperature) but does not record the data would not be an example of
using automatic gauging.
Automatic gauging includes such examples as:
Flow meters
Thermisters to monitor temperature (for use in chemical processes, soldering

baths, heat treatments, etc.)
Methods to measure thickness of material being processed in sheets like plastic,

cloth, paper or non-wovens (e.g., Kevlar, disposable hospital gowns)
Methods to measure thickness of material being processed in coils (e.g., coils of

steel, aluminum, or wire)
These automatic gauges actively monitor what is happening during the process and are
used to evaluate the product and to control or adjust theprocess.
Other types of gauges also exist to assist with measurement. Physical gauging for
measurement - for example, the use of calipers or micrometers - are very typical for
dimensional measurements. Stop watches are a type of gauge for measuring time
segments. Various forms of laboratory equipment are used to measure density, particle
size, pH, etc. Thermometers and thermisters are used to measure temperature by
hand on a sampling basis. Blood pressure cuffs that are used manually measure blood
pressure. Even a stethoscope measures the quantity per time segment of heartbeats.
These are all examples of gauges used everyday that are not automatic, but gather
important data.
372
Assuring Data Accuracy and Integrity

Concept: Assuring Data Accuracy and Integrity
Data integrity and accuracy both play an important role in understanding whether
the data collection process is yielding usable data.
Data integrity determines whether the information being measured truly

represents the desired attribute.
Data accuracy determines the degree to which individual or average

measurements agree with an accepted standard or reference value.
Examples of a lack of data integrity:
A shipping company wants an accurate time for each truck departure, but the
computer in which the times are logged is located inside the production facility,
minutes away and inconvenient for recording of accurate data. In this example,
we think we are getting good data on departure times but the process is inhibiting
the collection of data with good integrity.
A manufacturing company points to distributors' sales reports to obtain data

about growing customer demand for a new product line. In reality, various
distributors use different definitions for their sales reports. Some reports record
direct sales to customers at the point of sale, while other reports record sales to
large distribution centers that indicate the number of units in stock at warehouses.
Both numbers reflect sales but may yield very different information about
customer demands for a product. In this example, the data does not have integrity
since it does not measure what the manufacturing company needs to be
measuring.
Examples of a lack of data accuracy:
An electronic warehouse scale receives a short one night due to an electrical

thunderstorm. The weight data it yields subsequent to the electrical short does not
conform to the established standards for weights and measures.
An outdated gauge that measures the exhaust content from catalytic converters no
longer conforms to the standards of the Environmental Protection Agency for the
accuracy of its readings.
373
Sampling Strategies

Concept: Sampling Strategies
In an ideal situation, we can measure every item in a population. Since that is not
always possible, we use sampling to obtain a representative group of items to measure.
Sampling strategies include the following:
Samplin Definition
g
Strategy
Random Select sample units so that all units have the same probability of being selected. Every
unit (n) has an equal chance of being selected for the sample.
Systema Every nth record is selected from a list of the population. As long as the list does not
tic
contain any hidden order, this strategy is just as random as random sampling.
Exa
mple
s
Stratifie If the population has identifiable categories, or strata, that have a common
d
characteristic, random sampling is used to select a sufficient number of units from each
strata. Stratified sampling is often used to reduce sampling error.
Note: Random sampling may give each unit an equal chance at being selected, but it
can still be biased if it does not represent the population. Although "random" sampling
is used so the data will be representative, non-representative data can still be
collected, and other sampling strategies may be used instead.
A random number table is a tool that may be used to select sample data on a random
basis. Roll over Page Resources to view a random number table and instructions for
use.
374
Sample Homogeneity

Concept: Sample Homogeneity
Sample homogeneity occurs when the data chosen for a sample are similar or
maintain similar characteristics. Whereas stratified sampling ensures that data are
obtained from multiple strata of data within a population for the best possible results,
sample homogeneity looks at how alike the data are in a given sample. If data are
obtained from a variety of sources, such as several production streams or several
geographical areas (from different processes that may look the same but are different),
results will reflect these combined sources. The objective is to have data that are
homogeneous and reflect a single source to the degree possible. Otherwise, it will be
difficult to evaluate and determine the influence of the X, or input, of concern.
Data that are not homogeneous result in errors. For example, when production results
from a lab are inspected only at the end of the line or service, results are reviewed at a
national level and variation in all the sources of the product/service become part of the
results. To get to the root cause, drill down to the various sources. In other words, you
need to evaluate groups or sub-populations that can be analyzed by production line, by
geographic or economic group, or method of service delivery. You need to address
these sources of variation should be addressed at the source, not at the end of a
process.
Lack of homogeneity in data will mask the sources and make root cause analysis
difficult, if not impossible.
375
Central Tendencies

Concept: Central Tendencies
Central tendency is a measure that characterizes the central value of a collection of

data that tends to cluster somewhere between the high and low values in the data.
Central tendency refers to a variety of key measurements like mean (the most
common), median, and mode.
Mean
Gives the distribution's arithmetic

average (center)
Provides a reference point for

relating all other data points
Typically used with normal data

Median
The distribution's center point

(middle value)
An equal number of data points

occur on either side of the median
Useful when the data set has extreme

high or low values
Typically used with non-normal data

Mode
Represents the value with the highest

frequency of occurrence (the most
often repeated value)
Typically used with non-normal data
376
Central Tendency Challenge

Concept: Central Tendency Challenge
Exercise
For the following data sets, calculate the mean, median and mode. When you have
completed the exercise, roll over Page Resources and click Central Tendency
Answer to check your calculations.
Point
A
B
C
D
E
F
G
H
I
J
K
Data Set 1
3
3
6
7
4
7
5
5
4
6
5
Data Set 2
4
3
5
4
16
4
3
4
3
6
3
Data Sets
377
Data Set 3
10
1
7
1
10
6
1
8
1
1
9
Central Tendency Answer
Six Sigma Black Belt | Measure | Collecting and Summarizing Data | Central Tendency Challenge
Example: Central Tendency Answer
Answer:
Statistic
Data Set 1
Data Set 2
Data Set 3
Mean
5
5
5
Median
5
4
6
Mode
5
3 and 4 (Bimodal) 1
Notice that data set 2 has a bimodal distribution in which two values (3 and 4)
occur more frequently in the data set than the rest of the values.
378
Measures of Dispersion

Concept: Measures of Dispersion
Dispersion, also referred to as spread, is another important parameter used to describe

a data set. Review the table below to understand these measures.
379
Frequency Distributions

Concept: Frequency Distributions
A distribution is the amount of potential variation in the outputs of a process,

typically expressed by its shape, mean or variance. The shape is often thought of in
terms of how closely it resembles the well-known "bell curve" shape or whether it is
flatter or skewed to the right or left. The frequency distribution's centrality illustrates
the degree to which the data center on a specific value. The distribution also expresses
the amount of variation in range or variance from the center.
A frequency distribution groups data into certain categories, each category
representing a subset of the total range of the data population or sample. Frequency
distributions are most often displayed in a histogram (shown later in this topic). Data
are sometimes displayed in other ways such as dot-plots, or box plots also called
box-and-whisker plots or stem-and-leaf plots as part of analysis steps.
Size is shown on the horizontal axis (x-axis) and the frequency of each size is shown
on the vertical axis (y-axis) as a bar graph. The length of the bars is proportional to the
relative frequencies of the data falling into each category, and the width is the range of
the category.
Purpose
A frequency distribution graphically summarizes and displays the distribution

of a process data set.
380
Frequency Distributions Procedure

Concept: Frequency Distributions Procedure
As stated previously, the frequency distribution is most often represented by a

histogram. To develop a histogram, complete these steps:
Procedure
1.
Segment the range of the data into equal sized bars (also called bins, segments,
groups, categories or cells) with no overlaps.Looking at the example below, the
bars are: 0 - 1.1; 1.11 - 1.2; 1.21 - 1.3, etc. A general rule-of-thumb for
determining the number of bars in a histogram can be found in the following
table:
Number of Data
Points
50
100
150
200
2.
3.
Number of
Bars
7
8
9
10
11
12
13
14
Label the vertical axis Frequency (the number of counts for each bar), and label
the horizontal axis of the histogram with the range of the response variable.For
this example the horizontal axis is labeledQueue Time (Minutes).
Determine the number of data points that reside within each bar and construct the
histogram.
381
Frequency Distributions Procedure

Concept: Frequency Distributions Procedure
Use When
Ascertaining information about data (e.g., most common data point, distribution
type of the data, outliers).
382
Frequency Distribution Table

Concept: Frequency Distribution Table
Another way to display frequency data is to use a frequency distribution table.This

is a compact way of displaying a set of measurements compared to listing all the
numbers.
Purpose
Gives direct information about how many data points are at each value
Example
Temperature
43
44
45
46
47
48
49
50
51
Frequency
3
3
4
3
3
0
6
4
4
383
Cumulative Frequency Distribution

Concept: Cumulative Frequency Distribution
A cumulative frequency distribution is created from a frequency distribution by

adding an additional column to the table called 'Cumulative Frequency.' For each
value, the cumulative frequency for that value is the frequency up to and including the
frequency for that value.
Purpose
To show the number of data at or below a particular variable
Example
For data point 45, add the cumulative frequency for the previous data point 44 (6),
plus the frequency for data point 45 (4). This gives you a cumulative frequency of 10
for data point 45. Finally, notice that the cumulative frequency for the highest data
point 51 is 30, the same as the total of the frequency column.
Temperature
43
44
45
46
47
48
49
50
51
Frequency
3
3
4
3
3
0
6
4
4
N=
Cumulative Frequency
3
6
10
13
16
16
22
26
30
30
384
Graphical Methods

Concept: Graphical Methods
One of the most effective tools for the visual evaluation of data is a graph showing the
relationship between variables. In Six Sigma, graphical methods provide a visual
image of the data, and include stem-and-leaf plots, box-and-whisker plots, run charts,
scatter diagrams, histograms, normal probability plots and Weibull plots.
Graphical methods are used as a complement to numerical methods because graphs
are sometimes better suited than numerical methods for identifying patterns in the
data.
385
Stem-and-Leaf Plots

Concept: Stem-and-Leaf Plots
Designed by John Tukey (1977), a stem-and-leaf plot separates each number into a
stem (all numbers but the last digit) and a leaf (the last digit). As an example, for the
numbers 95, 99, 100 and 110, the stems are 9, 9, 10 and 11, while the leaves are 5, 9, 0
and 0.
Benefits
Easy and quick to construct

Shows shape and distribution
Visually compact
Convenient
Displays both variable and categorical data sets
Data may be read directly from the diagram. With a histogram the individual data
values may be lost as frequencies within a category
Example
The results of 24 students' spelling tests (with a best possible score of 50) are recorded
below:
8, 12, 16, 26, 28, 28, 29, 32, 34, 36, 38, 38, 39, 40, 42, 42, 44, 46, 46, 47, 47, 48, 48,
50
The stem-and-leaf-plot looks like this:
Stem
0
1
2
3
4
5
Leaf
8
26
6889
246889
0224667788
0
Spelling scores of 24 students
The stem-and-leaf plot reveals that most students scored in the interval between 40
and 49.
386
Using Stem-and-Leaf Plots

Concept: Using Stem-and-Leaf Plots
Procedure
1.
2.
3.
4.
Some find it helpful to first write (sort) the data in numerical (ranking) order.
Separate the numbers into stems and leaves.
Group the numbers with the same stems.
Prepare an appropriate title and legend for the plot.
Use When
Classifying data.
Organizing data as it is collected.
User Tips
All numbers should have similar structure such as all whole numbers, all with
one decimal, etc. (e.g., [10, 15, 18] or [2.5, 3.8, 6.7]).
To find the median, count to half the total number of leaves.
Use good judgment when determining what to do with outliers because they can
either be significant pieces of information or poor information due to an error or
misinformation.
Roll over Page Resources and click Stem-and-Leaf Activity to practice a

stem-and-leaf plot.
387
Stem-and-Leaf Activity
Six Sigma Black Belt | Measure | Collecting and Summarizing Data | Using Stem-and-Leaf Plots
Example: Stem-and-Leaf Activity
Offline Activity
Materials needed: pencil, paper
Scenario
Create a stem-and-leaf plot for the following situation and identify the median:
The collected data tracked the number of emails sent by company staff between
October 3 and November 11.
506, 511, 482, 494, 453, 499, 509, 547, 501, 474, 490, 483, 504, 517, 488, 497, 502,
512, 513, 507, 480, 474, 495, 509, 498, 479, 505, 492, 480, 504
When complete, roll over Page Resources and then click Stem-and-Leaf Answer to
see the correct response.
388
Stem-and-Leaf Answer
Six Sigma Black Belt | Measure | Collecting and Summarizing Data | Using Stem-and-Leaf Plots
Example: Stem-and-Leaf Answer
389
Box-and-Whisker Plots

Concept: Box-and-Whisker Plots
Credited to John Tukey (1977), box-and-whisker plots use five key data points to
graphically depict all data in the sample or population:
The upper and lower quartiles of the data form the ends of the box.
The median forms the centerline within the box.
The minimum and maximum data points serve as end points to lines that extend
from the box (the whiskers).
Outlier data are represented by asterisks or diamonds outside of the minimum or

maximum points.
The box-and-whisker plot is also called a box plot or a five-number summary.
Benefits
Shows outliers
Useful with a large number of data sets
Provides a graphic summary of a data set
Visually represents the center, the spread, and the overall range
Indicates whether the distribution is skewed and possible unusual observations
Explores data and draws informal conclusions when two or more variables are
present
390
Using Box-and-Whisker Plots

Concept: Using Box-and-Whisker Plots
Procedure
1.
2.
3.
4.
5.
6.
7.
8.
9.
Write the data in rank (numerical) order.

Calculate the median.
Identify the lower quartile (values below the median) and calculate the median
for that group.
Identify the upper quartile (values above the median) and calculate the median
for that group.
Calculate the interquartile range by subtracting the medians of the upper and
lower quartiles.
Plot the three medians, the lowest value and the highest value (the 5-points) to a
number line.
Draw a box through the points of the upper and lower quartiles.
Draw a vertical line through the box at the median point.
Draw the whiskers from each end of the box to the smallest and largest values.
Use When
Comparing two or more sets of data.

Determining significance of an apparent difference.
User Tips
Box-and-whisker plots are good in the early stages of data analysis.

A simple rule is that a whisker longer than three times the length of the box
probably indicates an outlier.
There are several ways to describe the distribution:
The 5-number summary
Using the mean and standard deviation to interpret the spread.
Best used with symmetrical data and no outliers or high skew.

Better measures of center and spread.
Notes about the semi-quartile range:
Rarely used to measure spread.
Less subject to fluctuation samples in highly skewed spreads.
391
Run Charts

Concept: Run Charts
A predecessor of control charts, a run chart displays how a process performs over
time. With data points plotted in chronological order and connected as a line graph,
run charts may detect special causes of variation. Since shifts have an assignable
special cause, run charts provide a signal that leads to the cause. Run charts are also
called trend charts (variations on a control chart, but without the limits)
Benefits
Recognizes problem trends or patterns

Displays sequential data
Serves as a visual aid in spotting patterns and abnormalities
Monitors and communicates process performance
Presents information around a middle value (centerline)
392
Using Run Charts

Concept: Using Run Charts
Procedure
1.
2.
3.
4.
5.
6.
7.
8.
List the collected data in the sequence in which it occurred.

Order the data (lowest to highest) and determine the range.
Calculate the median.
Construct the Y-axis and make the scale 1.5 to 2 times the range.
Construct the X-axis and make it 2 to 3 times as long as the Y-axis.
Draw a dotted line to illustrate the median.
Plot the points and connect them to form a line graph.
Label each axis with units and title the chart to identify the investigation.
Use When
Displaying performance/process data over time.

Displaying tabulations or lists of numbers.
User Tips
Trends that are observable on the run chart may or may not indicate variation that
is beyond normal limits.
If 25 or more points of data exist, then a run chart may be used to determine if a
special cause exists that is causing variation in the process.
In this situation, three types of data patterns may indicate variation due to special
causes:
Trend: Six or more data points moving in one direction indicate a special
cause is influencing the process; flat line segments do not count toward the
trend or to reverse it.
Shift: Eight or more points on one side of the centerline indicate a special
cause acting on the process.
Cycle: A repeated pattern that occurs eight or more times may also be an
indication of a special cause.
As a general guideline, statistical control requires a minimum of 100 observations
without one of the above patterns occurring.
393
Scatter Diagrams

Concept: Scatter Diagrams
Scatter diagrams graph pairs of continuous data, with one variable on each axis, to
examine the relationship between them. Scatter diagrams may show what happens to
one variable when the other variable changes. This is particularly true when one of the
two variables is independent and one is dependent. The dependent variable is normally
charted along the vertical (Y) axis and the independent variable along the horizontal
(X) axis.
If the relationship between the two variables is understood, then the dependent
variable may be controlled. The relationship between the two variables may illustrate:
Correlation: A correlation suggests there is a relationship between the two

variables. A correlation does not necessarily mean that a cause and effect
relationship exists. A third characteristic (or more) might be the cause of both the
variables behaving as they do. A correlation may be:
Positive: as one variable moves in one direction, the second variable moves
in the same direction.
Negative: as one variable moves in one direction, the second variable moves
in the opposite direction.
No correlation exists.
Scatter diagrams are also called scatter plots, X-Y graphs or correlation charts
Benefits
Enhances cause-effect relationships
394
Using Scatter Diagrams

Concept: Using Scatter Diagrams
Procedure
1.
2.
3.
4.
Collect pairs of data for both variables.

Draw a graph with the independent variable on the horizontal axis (x) and the
dependent variable on the vertical axis (y).
For each pair of data, plot a dot (or symbol) where the x-axis value intersects the
y-axis value. (If two dots fall together, put them side by side, touching, so that
you can see both.)
If correlated, "eyeball" a line of best fit.
Use When
Acting on a hunch that two variables are related.

Evaluating paired continuous data.
Attempting to identify potential root causes of a problem by relating two
variables.
Following a brainstorming session to create a fishbone diagram.
Testing for autocorrelation before developing a control chart.
User Tips
The more the data resemble a straight line, the stronger the relationship (see
examples, below).
The tighter the data points along the line, the stronger the relationship.
Direction of the line indicates whether the relationship is positive or

negative.
If the line was hard to draw or see, and if the points show no significant
clustering, there is probably no correlation.
Do not assume that a relationship means that one variable caused the other
because another factor may influence both measured factors.
To determine the degree of association between the two variables, calculate the
correlation coefficient.
Examples of Scatter Diagrams
395
Using Scatter Diagrams

Concept: Using Scatter Diagrams
396
Normal Probability Plots

Concept: Normal Probability Plots
Normality probability plots, also called normal test plots, are used to investigate
whether process data exhibit the standard normal bell curve or Gaussian distribution.
The plot is defined by two parameters: mean and variance. For normally distributed
data, the mean and median are very close and may be identical. The normal
probability plot shows whether or not the data are distributed as a standard normal
distribution. Normal distributions will follow a linear pattern. In other words, if the
data plot along a straight line, then the plot is normally distributed.
The following is an example of a normal probability plot:
397
Using Normal Probability Plots

Concept: Using Normal Probability Plots
Use When
predicting and making decisions based on the data distribution.

differentiating when it is equally likely that readings will fall above or below the
average.
testing the assumption of normality.
User Tips
Most of the data concentrate at, or near, the centerline.

The centerline divides the curve into two equal halves.
Fewer of the data points approach the minimum and maximum values.
398
Weibull Plots

Concept: Weibull Plots
Another form of plot is the Weibull plot. Weibull plots are often used to estimate the
cumulative probability that a given sample will fail under certain conditions. The data
can be used to determine a point at which a certain number of samples will fail. Once
known, this information can help design a process such that no part of the sample
approaches the stress limitations.
The Weibull plot has special scales designed so that the data points will be almost
linear if they follow a Weibull distribution. The Weibull distribution has three
parameters but can use only two if the third is assumed:
is the shape parameter
is the scale parameter
is the location parameter
Life Analysis Data

Weibull plots are used to chart data about the life of a product or process. This plot
helps determine the parameters for use with Weibull distributions. Product lifetimes
can be measured in hours, miles, or any other metric that describes the time-to-failure.
For complete data, the exact time-to-failure is known (e.g., the unit failed after
400 hours of operation).
For suspended or "right censored" data, the unit operates successfully for a
known period of time and could have continued for an additional period of time
that is not known.
For interval or "left censored" data, the time-to failure is known but only within a
certain range of time (e.g., the unit failed between 400 and 450 hours of
operation).
Weibull Plot Example
When a Weibull plot is graphed, it resembles the example of a Weibull distribution

seen below.
399
Weibull Plots

Concept: Weibull Plots
400

Measure
Properties and Applications of Prob. Distributions
Learning Objectives
Six Sigma Black Belt | Measure | Properties and Applications of Prob. Distributions
describe and apply the following distributions commonly used by black belts:
binomial, Poisson, normal, chi-square, Student's t and F distributions.
recognize when and how to use the following, less frequently used distributions:
hypergeometric, bivariate, exponential, lognormal and Weibull.
402
Introduction to Probability Distributions
Concept: Introduction to Probability Distributions
Fitting data to distributions (e.g., normal, binomial, or Poisson) is helpful for purposes
of prediction and decision-making. A probability distribution is a tool that may help
identify whether a value will occur within a given range. Distributions help to answer
questions such as:
What is the probability that x will occur?
What is the probability that a value that is lesser or greater than x will occur?
What is the probability that a value between x and y will occur?

According to the ASQ Glossary, "a distribution is the amount of variation in the
outputs of a process, typically expressed by its shape, average, or standard deviation.
A distribution's shape may often be described by symmetry, skewness, and kurtosis."
For distributions that are symmetrical, the mean provides a good description of
the central tendency of the data.
For distributions that are skewed, the median is usually a better indicator of
central tendency.
Standard deviation provides a measure of variation from the mean.
Skewness provides a measure of the location of the mode relative to the mean. If
the mode, which is the highest point of the distribution, is to the mean's left, then
the skewness is negative. If the mode is to the right, then skewness is positive. If
the distribution is perfectly symmetrical, then skewness is equal to zero.
Kurtosis measures the peakness or relative flatness of the distribution. If the

distribution has a higher and narrower peak, then the kurtosis is higher. If the
distributions peak is flatter and wider, then the kurtosis is lower.
403
Probability Distributions for Different Data Types
Concept: Probability Distributions for Different Data Types
A probability distribution is a mathematical formula relating the values of a

characteristic with their probability of occurrence in the population. Probability
distributions fall into two basic groups: those that address discrete (counting) data and
those that address continuous (variable) data.
Probability distributions for discrete data describe a finite set of possible

occurrences for the data in question. An example is rolling a die. The probability
distribution is discrete because the random variable representing the number of
possibilities can only be a 1, 2, 3, 4, 5 or 6.
Probability distributions for continuous data describe a continuum of possible

occurrences that is unbroken. For example, the distribution of body weight is a
random variable with an almost infinite number of possible data points.
404
Probability Density Functions
Concept: Probability Density Functions
Probability distributions for continuous variables use probability density functions

(also referred to as PDF), which are mathematical functions modeling the probability
density reflected in a histogram. Those distributions for discrete variables do not have
a probability density function. Instead, they have a probability mass function.
The probability density function models the probability density for continuous random
variables reflected in a histogram. As part of the equation, a probability density
function uses integrals the summation of area between two points. If a histogram
depicts the relative frequencies of a series of output ranges for a random variable, then
this histogram should resemble the shape of the probability density of the random
variable. For that reason, the shape that results from the probability density function is
sometimes described as the shape of the distribution.
For example, a real estate office managers survey reveals the following data for the
age of a rented house in a particular neighborhood.
Age of House (yrs) x axis
0-1.0
1.1-2.0
2.1-3.0
3.1-4.0
4.1-5.0
5.1-6.0
6.1+
Probability y axis
.20
.28
.20
.15
.10
.05
.02
These data are represented by a histogram that looks like the graph on the bottom left
of the page.
If points are plotted along the top of each vertical bar in the histogram, the histogram
suggests a curve similar to that seen in the graph on the right. The probability density
function would resemble the same shape. Using the example above, if the real estate
office manager wants to know the probability that a rental house is between 0 and 4
years of age, the PDF may be written in equation form for this problem:
P(0 x 4) = 0.20 + 0.28 + 0.20 + 0.15 = 0.83
This is true when f(x) is greater than or equal to zero for all values of x and the total
area under the graph is 1.
405
Probability Distribution Types
Concept: Probability Distribution Types
View an introduction to the more common probability distributions used by Six Sigma
Black Belts in the table below. Detailed information will be provided for each
distribution type later in the lesson.
Distribution Type
Binomial
Poisson
Normal
Chi-square
Student's t
Hypergeometric
Typical Application
Approximate
Distributions (if any)
Used in finite sampling
Can approximate the
problems when each
Poisson or Normal
observation has only one of distributions under certain
two possible outcomes,
conditions.
such as pass/fail.
Used for situations when an
attribute possibility is that
each sample can have
multiple defects or failures.
Characterized by the
traditional "bell-shaped"
curve, the normal
distribution is applied to
many situations with
continuous data that is
roughly symmetrical
around the mean.
Used in many situations
when an inference is drawn

on a single variance or
when testing for goodness
of fit or independence.
Examples of use of this
distribution include
determining the confidence
interval for the standard
deviation of a population or
comparing the frequency of
variables.
Used in many situations
when inferences are drawn

without a variance known
in the case of a single mean
or the comparison of two
means.
Used in situations when
inferences are drawn from

two variances such as
whether two population
variances are different in
magnitude.
This is the "true"
The binomial distribution
distribution. Used in a
approximates the
406
Probability Distribution Types
Concept: Probability Distribution Types
Bivariate
Exponential
Lognormal
Weibull
similar manner to the

binomial distribution except
that the sample size is
larger relative to the
population. This
distribution should be
considered whenever the
sample size is larger than
10% of the population. The
hypergeometric distribution
is the appropriate
probability model for
selecting a random sample
of n items from a
population without
replacement and is useful in
the design of
acceptance-sampling plans.
Created with the joint
frequency distributions of
modeled variables.
Used for instances of
examining the time between
failures.
Used when raw data is
skewed and the log of the
data follows a normal
distribution. This
distribution is often used
for understanding failure
rates or repair times.
Used when modeling
failure rates particularly
when the response of
interest is percent of
failures as a function of
usage (time).
Probability Distributions
407
hypergeometric
distribution.
Binomial Distribution
Concept: Binomial Distribution
Abinomial distribution is typically used to model discrete data (also referred to as

"attribute" or "counting" data) having only two possible outcomes (e.g., pass or fail,
yes or no).In a situation where there are exactly two mutually exclusive outcomes
(e.g., pass or fail) of a trial, the binomial distribution may be used to find the
proportion of defective units produced by a process.
The binomial distribution is best used when:
Population is large when N > 50
Sample size is small compared to the population, ideally when sample size (n) is
less than 10% of the population (N) also written as n < 0.1N
The necessary conditions for a random variable to follow the binomial distribution are
as follows:
There are a fixed number of observations, n.
The n observations are all independent. Choosing one item does not affect the
probability that another item will be chosen.
Each trial results in one of two possible outcomes, success or failure.
The probability of a success can be denoted by p; the probability of a failure can

be denoted by 1 - p.
The binomial probability distribution equation will show the probability of getting x
defectives in a sample of n units:
Where:
n = sample size
x = number of defectives or occurrences
p = probability or the proportion defective
1 p = probability of the defect not occurring

The binomial probability distribution may also be used as an approximation to the
hypergeometric distribution when the sample size is less than ten percent of the
population. Conversely, the hypergeometric distribution is preferred when the sample
size is greater than 10% of the population. Refer to the page on hypergeometric
distributions to learn more.
408
Binomial Distribution Individual Example
Concept: Binomial Distribution Individual Example
The binomial distribution could be used in situations such as these:
Determine the number of defective products when the product either passes or
fails a given test
Determine the proportion of people who respond positively to a survey when the
responses are either yes or no
Determine the number of errors on a form when the form is either completed
correctly or incorrectly
The appearance of a candy product is either acceptable or unacceptable when the

candy has an established appearance standard that is either acceptable or
unacceptable
Example
The Sweet Shoppe produces many types of candy.Traditionally, their Pecan Caramel
Delites have a 1% defect rate.If we test a sample of ten candy units from the process,
what is the probability that there will be 0 defective candies?
Using the information outlined above:
n = 10
x = 0 (n units taken x at a time)
p = .01
Placing these values in the binomial distribution equation, the correct answer of 90.4%
is the probability of having 0 defective candies.
409
Binomial Cumulative Distribution Example
Concept: Binomial Cumulative Distribution Example
Thebinomial cumulative distribution is the probability of exactly (x) or fewer

successes in (n) trials with a probability of success equal to (p) on each trial.
Example
A manufacturing process is performing at a 5% nonconforming rate. What is the
probability that less than two units will be nonconforming for the sample taken from
the lot received?
The necessary values in this case are:
n = 10
p = 0.05
x = 0, 1
P(X = x) =nCxpx(1 - p)n-x
Where:
P(X = x) = the format used to denote probability
X = number of trials in an experiment that are successes
nCx = the number of ways of getting (x) successes on (n) trials:
10C0
is the combination of 10 units taken 0 at a time
10C1
is the combination of 10 units taken 1 at a time
The probability of interest is given by p(x < 2) = p(x = 0) + p(x = 1):

P(X < 2) = P(X = 0) + P(X = 1) =10C0(0.05)0(1 - 0.05)10-0+10C1(0.05)1(1 - 0.05)10-1
= 1(1)(0.95)10 + 10(0.05)(0.95)9
= 0.5987 + 0.3151
= 0.9138
The probability of selecting less than two nonconforming units out of the 10 possible
is 0.9138.
410
Poisson Distribution
Concept: Poisson Distribution
The Poisson distribution is used to estimate the number of instances a condition of

interest occurs in a process or population. Most frequently, this distribution is used
when the condition may occur multiple times in one sample unit and you are interested
in knowing the number of individual characteristics found. For example:
A manufactured part has a number of critical attributes. These attributes are

measured in a random sampling of the production process. The number of
non-conforming conditions is recorded for each sample. The collective number of
failures from the sampling may be modeled using the Poisson distribution.
A company records the number and types of industrial accidents that occur at
various plant locations across North America. The Poisson distribution could be
used to help project the number of industrial accidents for the following year and
their probable locations.
An auto body shop tracks the number of dents, paint drips, scratches, pinholes,
etc. on a car. There might be any number or all of these characteristics on a single
car or a sample of (n) cars.
The necessary conditions for a random variable to follow a Poisson distribution are as
follows:
The probability that a count occurs in an interval is the same for all intervals.
Counts are independent of each other.

The Poisson distribution equation is:
Where:
f(x) = probability of x occurrences in the sample/interval
= mean number of counts in an interval (where > 0)
x = number of defects/counts in the sample/interval
e = a constant approximately equal to 2.71828
411
Poisson Distribution Examples
Concept: Poisson Distribution Examples
Example
The serious accident rate in a large manufacturing plant is 3 per month. What is the
probability in August there will be 1 serious accident at the plant?
For this example, = 3 and x = 1. The probability of interest is given as x = 1:
The probability that exactly 1 serious accident will occur in August is approximately
0.15.
Cumulative
Now let us determine the probability that there will be at most 1 serious accident in the
month of September at this large manufacturing plant. The probability of interest is:
The probability at most 1 serious accident will occur in September is approximately

0.2.
Note: Not all 'averages' of Poisson are whole numbers. For the above example, the
accident rate could have been 34 accidents in the past 12 months. In this case the
average is 2.83 accidents per month.
412
Poisson Approximation to the Binomial
Concept: Poisson Approximation to the Binomial
The Poisson distribution can also be used to approximate the binomial ifn 100 and
np < 10. As n gets larger, the Poisson distribution and the binomial distributions are
approximately equal, resulting in = np.
Example
In manufacturing automobiles, a company has been experiencing a defect
(nonconformity) rate of 7 per 100 autos. What is the probability of finding 5 or fewer
nonconforming autos in a sample of 100 autos taken from the next day's production?
This is a binomial problem, since there are two possible outcomes:
conformity/nonconformity. In this example, nonconformity is considered a "success"
because we are "successful" in observing an outcome of interest - in this case an auto
that does not conform to all requirements. The probability of a success is p = 7/100 =
0.07. The sample size of interest is n = 100. The probability of interest is p(x 5).
Either the binomial distribution or Poisson distribution may be used, since n 100
andnp< 10.
Using the Poisson distribution as an approximation to the binomial, the necessary
formulation is:
Note: A Poisson distribution table could have been used here to find the solution to
the example above.
Roll overPage Resources at the bottom of the screen and click Poisson Distribution
Table to view and/or print for use as a job-aid.
Note: In this example we are interested in the number of nonconforming products, not
number of defects causing the nonconforming product. A nonconforming auto is
defined as one that does not conform in every way, (i.e, it may have one or more
defects).
413
Normal Distributions
Concept: Normal Distributions
The most recognizable continuous distribution is the normal distribution:
According to the ASQ Glossary, the normal distribution charts a data set of which
most of the data points are concentrated around the average (mean) in a symmetrical
manner, thus forming a bell-shaped curve. The normal distributions shape is unique in
that the most frequently occurring value is in the middle of the range and other
probabilities tail off symmetrically in both directions.
The normal distribution is used for continuous (measurement) data that is symmetric
about the mean. The graph of the normal distribution depends on two factors - the
mean and the variance. When the variance is large, the curve is short and wide; when
the variance is small, the curve is tall and narrow.
Assume both graphs below have the same scale. The curve on the left is wider than the
curve on the right because the curve on the left has a larger variance.
414
Standard Normal Distribution
Concept: Standard Normal Distribution
A standard normal distribution (also referred to as a "Gaussian" or "standard bell"

curve) may be viewed in the chart below. Note that the population mean is zero and
that the population variance 2 equals one.
415
Normal Dist. Single Observation Example
Concept: Normal Dist. Single Observation Example
In the following equation, the random variable X follows a normal distribution with
mean and variance 2. The random variable Z can be computed as:
The random variable Z also follows a normal distribution but with mean = 0 and 2
= 1.
Example
The life of an automotive battery manufactured from a certain process is normally
distributed with mean life of = 800 days and a variance of 2 = 225. What is the
probability that a randomly selected battery will have a life of less than 760 days? Roll
over Page Resources at the bottom of the screen and click Z Table to find the Z value
for the corresponding calculation.
The probability that a randomly selected battery will have a life of less than 760 days
is 0.00379.
416
Normal Dist. Sample Mean Example
Concept: Normal Dist. Sample Mean Example
To find probabilities involving the sample average X, some information about the
distribution must be obtained.
If the random variable X follows a normal distribution with mean and variance 2,
then the sample mean X for a sample of size n also follows a normal distribution with
mean and with variance 2 / n.
The standard deviation, or "standard error of the mean," is:
If X for a sample of size n follows a normal distribution with mean and with
variance 2 / n, then the random variable Z can be computed as:
The random variable Z also follows a normal distribution with mean = 0 and 2 = 1.
If the population variance 2 is not given or known, use the sample variance s2 as an
estimate for 2.
Example
Returning to the example of automotive batteries with a mean life of = 800 days and
a variance of 2 = 225, what is the probability that a random sample of 9 batteries will
have an average life of less than 750 days? Roll over Page Resources at the bottom of
the screen and click Z Table to find the Z value for the corresponding calculation.
Note: A Z of -4.99 (calculated value = -10) or less on the Z Table will result in a
probability of 0.
The probability that the average life of 9 randomly sampled batteries will be less than
750 days is 0.
417
Chi-Square Distribution
Concept: Chi-Square Distribution
The chi-square (2 ) distribution is used when testing a population variance against a

known or assumed value of the population variance. It is skewed to the right (i.e., it
has a long tail toward the large values of the distribution).
The overall shape of the distribution will depend on the number of degrees of freedom
in a given problem. The degrees of freedom are 1 less than the sample size (i.e., if the
sample size is n, the degrees of freedom necessary for a particular problem are n - 1).
An example of a 2 distribution with 6 degrees of freedom is shown below.
There is a distribution curve for each degree of freedom, n 1, from 1 to 30 in most

probability tables.
418
Student t Distribution
Concept: Student t Distribution
The Student's t distribution was developed by W.S. Gosset (Student 1908) through
his work at the Guinness brewery. Since Guinness at that time did not allow its staff to
publish, Gosset used the pseudonym of Student.
The t distribution is commonly used to determine the confidence interval of the
population mean and confidence statistics when you are comparing the means of
sample populations.
To use the t distribution, we must know the degrees of freedom for the problem. The
degrees of freedom are 1 less than the sample size (i.e., if the sample size is n, the
degrees of freedom necessary for a particular problem are n - 1).
The students t distribution is a symmetrical continuous distribution. It is similar to the
normal distribution, but the extreme tail probabilities are larger than for the normal
distribution for sample sizes of less than 31. The shape and area of the t distribution
approach that of the normal distribution as the sample size increases. The t distribution
can be used whenever samples are drawn from populations possessing a normal,
bell-shaped distribution. There is a family of curves, one for each sample size from n =
2 to n = 31, in most tables given in standard statistics texts.
419
F Distribution
Concept: F Distribution
The F distribution (F-test) is a tool used for assessing the ratio of independent
variances (equality of variances). The F distribution is particularly important in the
Analysis of Variance (ANOVA) - a technique frequently used in the Design of
Experiments (DOE) to test for significant differences in variance within and between
test runs. ANOVA will be discussed along with examples in the Analyze lesson of this
course. The F-distribution is represented by:
Where:
s12 is the variance of the first sample (n1 - 1 degrees of freedom in the numerator)
s 2 is the variance of the second sample (n - 1 degrees of freedom in the

2
denominator)
Given two random samples drawn from a normal distribution.
The shape of the F distribution is non-symmetrical and will depend on the number of
degrees of freedom associated with s12 and s22 . The distribution for the ratio of
sample variances is skewed to the right (the large values).
420
Hypergeometric Distribution
Concept: Hypergeometric Distribution
The hypergeometric distribution is used when items are drawn from a population
without replacement. That is, the items are not returned to the population before the
next item is drawn out. The items must fall into one of two categories, such as
good/bad or conforming/nonconforming.
The hypergeometric distribution is similar in nature to the binomial distribution,
except the sample size is large compared to the population. The hypergeometric
distribution is appropriate whenever the sample size is greater than 10% of the
population (n > 0.1N).
The hypergeometric distribution determines the probability of exactly x number of
defects when n items are samples from a population of N items containing D defects.
The equation is:
Where:
x = number of nonconforming units in the sample (r is sometimes used here if

dealing with occurrences)
D = number of nonconforming units in the population
N = finite population size
n = sample size
421
Hypergeometric Distribution Example
Concept: Hypergeometric Distribution Example
A group of 12 cellular telephones is being shipped to a local retailer. While the phones
are much in demand, the manufacturer has been having some problems with phones
being shipped with the wrong type of battery. Because the phones are in demand, the
retailer agrees to accept the shipment of 12 phones, but only if the shipment has fewer
than 3 defective phones. Because time is of the essence, the manager decides to only
inspect 4 phones (meaning the manager should find 1 or fewer defective phones).
Checking the sample of 4, the manager finds one phone with the wrong battery.
Should the remainder of the shipment be rejected?
Given the information provided above:
N = population of 12
D = number of defectives allowed at 3
n = sample size of 4
x = number of defectives in the sample of n
f(x) = probability of getting x defectives in the sample

For this example, it is necessary to solve the equation for both probability of 0 and 1
since the shipment would be accepted if it also had no defectives.
f(1 or less) = f(0) + f(1) = .764 of accepting a bad quality shipment. For most
retailers, this risk level would be unacceptable.
422
Bivariate Distribution
Concept: Bivariate Distribution
When two variables are distributed jointly the resulting distribution is abivariate
distribution. Bivariate distributions may be used with either discrete or continuous
data. The variables may be completely independent or a covariance may exist between
them.
The bivariate normal distribution - a commonly used version of the bivariate
distribution - may be used when there are two random variables. This equation was
developed by Freund in 1962:
Where:
- < x <
- < y <
- < 1<
- < 2<
x > 0, x > 0
1 and 2 = the two population means
21 and 22 = the two variances
= correlation coefficient of the random variables
Typically, you will use a statistical software package for calculating bivariate
distribution are calculated using a statistical software package.
423
Exponential Distribution
Concept: Exponential Distribution
Exponential distributions are frequently used to analyze reliability, and are often
used to model items with a constant failure rate. The exponential distribution is closely
related to the Poisson distribution and used to determine the average time between
failures or average time between a number of occurrences. For example, if there is an
average of 0.50 failures per hour (discrete data - Poisson distribution), then the mean
time between failure (MTBF) is 1 / 0.50 = 2 hours (continuous data - exponential
distribution). If a random variable x is distributed exponentially, then its reciprocal y =
1/x follows a Poisson distribution. The opposite is also true. If x follows a Poisson
distribution, then the reciprocal y =1/x is exponentially distributed.
The exponential distribution equation is:
Where:
= the mean (also sometimes referred to as )
= failure rate which is the same as 1/
x = x-axis values
When this equation is integrated, it yields the following equation that gives the
cumulative probabilities without the need for a table:
424
Exponential Distribution Example
Concept: Exponential Distribution Example
A Florida electric company experiences an average of 500 electrical outages each year
due to storms and hurricanes. What is the probability that the weekend crews, who
work from 6:00 PM on Friday evening to 6:00 AM on Monday morning, will not
receive a call?
Data summary:
= 500 electrical outages each year
Since there are 365 days in each year and 24 hours per day, then there are 8760
hours each year.
The time between each outage is 8760/500 = 17.52 hours between each outage
The weekend shift works 60 hours (1800 Friday through 0600 Monday);
therefore x = 60.
Using the equation from the previous page:
The chance that the weekend crew will not get a call is 3.3%, since 96.7% of the time
a call will be received during the 60 hours.
425
Lognormal Distribution
Concept: Lognormal Distribution
The lognormal distribution can be used to model various situations such as response
time, time-to-failure data, and time-to-repair data. Lognormal distribution is a
skewed-right distribution (with most data in the left tail), and consists of the
distribution of the random variable whose logarithm follows the normal distribution.
The lognormal distribution assumes only positive values.
When the data follows a lognormal distribution, a transformation of data can be done
to make the data follow a normal distribution. Then probabilities can be found,
confidence intervals can be constructed, and tests of hypothesis can be conducted (all
of which depend on the assumption that the data follows a normal distribution).
The first column of the following table contains data that is lognormally distributed.
The second column contains the natural logarithm of the first column. The second
column is normally distributed.
X (original data
following a lognormal
distribution)
1.6423
0.2374
5.3658
1.2848
2.0202
1.3601
1.2172
0.7089
1.3868
35.0451
1.1417
4.4567
0.4446
1.3431
1.0166
ln(X) (natural logarithm

of the original data,
following a normal
distribution)
0.49610
-1.43817
1.68005
0.25063
0.70321
0.30759
0.19658
-0.34405
0.32699
3.55664
0.13247
1.49441
-0.81066
0.29497
0.01642
426
Lognormal Distribution Data Plots
Concept: Lognormal Distribution Data Plots
The data plotted in the histogram below follows a lognormal distribution. The
lognormal distribution is skewed, with most of the data in the left tail area and very
little data in the right tail area.
If the natural logarithm of each data point is taken and then plotted on the histogram,
the shape follows a normal distribution, as shown in the histogram below.
427
Lognormal Distribution Example
Concept: Lognormal Distribution Example
Using the logarithm of the data instead of the original data, we can now use the
normal distribution to find probabilities associated with the data.
X follows a lognormal distribution with the following mean and variance:
Given the following properties:
X is a random variable that could be any positive real number
Y = ln(X) (where ln is the natural logarithm)
Y follows a normal distribution with mean and variance 2

Y
Let Y = ln(X), where Y is normally distributed with mean Y = 7.5 and variance 2Y =
4. Thus, X has the following mean and variance:
The probability that X will be less than 13,000 is found using the relationship Y=ln(X).
Two transformations will occur in this example. The first is the change from
lognormal to normal and the second is from normal to standard normal. (Use this
transformation since Y is normally distributed and X is not; only then can the standard
normal distribution apply to find probabilities.) Using the standard normal distribution
discussed earlier, what is the probability that X is less than 13,000?
Roll over Page Resources at the bottom of the screen and click Z Table to find the Z
value for the corresponding calculation.
428
Lognormal Distribution Example
Concept: Lognormal Distribution Example
The probability that the lognormal random variable X could be less than 13,000 is
approximately 0.84.
429
Weibull Distribution
Concept: Weibull Distribution
TheWeibull distribution is a widely used distribution for understanding reliability

and is similar in appearance to the lognormal. For example, it can be used to measure
time to fail, time to repair, and material strength.
The shape and dispersion of the Weibull distribution depends on two parameters:
is the shape parameter.
is the scale parameter.

Both parameters are greater than zero.
In general, the probabilities from a Weibull distribution can be found from the
cumulative Weibull function:
Where:
X is a random variable
x is an actual observation
The shape parameter () provides the Weibull distribution with its flexibility.
If = 1, the Weibull distribution is identical to the exponential distribution and

used to describe the bathtub curve.
If = 2, the Weibull distribution is identical to the Rayleigh distribution (beyond

the scope of this course).
If 3 < < 4, then the Weibull distribution approximates a normal distribution.
430
Weibull Distribution Plot
Concept: Weibull Distribution Plot
As can be seen in the Weibull distribution chart below, the distribution can take on
many shapes and can be used to describe many types of data.
The shape parameter () defines the probability distribution function (PDF)

shape.
The scale parameter () describes the magnitude of the x-axis.
431
Weibull Distribution Example
Concept: Weibull Distribution Example
The length of the life of a particular type of battery is known to follow a Weibull
distribution with shape parameter = 2 and scale parameter = 4 (measured in
years). It is important to know the probability that a battery of this type lasts less than
the advertised lifetime of 2 years, P(X < 2). LetX represent the life of the battery.
What is the probability the battery will last less than 2 years?
There is approximately a 22% chance that the battery will last less than 2 years.
Cumulative Example
The time to failure in hours of an electrical circuit that is exposed to extremely high
temperatures has a Weibull distribution with shape parameter = 0.6 and scale
parameter = 2(measured in hours). It is important to find the probability that the
time to failure of the circuit is at least 4 hours,P(X 4). Let X represent the time to
failure. What is the probability the time to failure of the circuit is at least 4 hours?
The probability the circuit will fail after 4 hours is 0.21965.
432

Measure
Measurement Systems
Learning Objectives
Six Sigma Black Belt | Measure | Measurement Systems

describe and review measurement methods such as attribute screens, gauge

blocks, calipers, micrometers, optical comparators, tensile strength and titration.
calculate, analyze and interpret measurement system capability using

repeatability and reproducibility, measurement correlation, bias, linearity, percent
agreement, precision/tolerance (P/T) and precision/total variation (P/TV).
use both ANOVA and control chart methods for non-destructive, destructive and
attribute systems.
understand traceability to calibration standards, measurement error, calibration

systems, control and integrity of standards and measurement devices.
434
Introduction to Measurement Methods

Task: Introduction to Measurement Methods
One of the important parts of the Measure phase is gathering the data to be used in the
project. Fortunately, there are numerous measurement methods available to help
obtain useful data. Click the measurement method below to view a description of
each.
Attribute Screens
Attribute screens use two categories for determining data outcomes: acceptable or not
acceptable, go or no go, pass or fail. This screen is typically used when the percentage
of nonconforming material is high or not known. A screen should evaluate the
attributes that are most helpful in identifying major problems with a product or
process.
Gauge Blocks
Gauge blocks are used in manufacturing to set a length dimension for transfer or for
tool calibration. Sets of these blocks usually come in groups of eight to eighty-one.
Gauge blocks are accurate to within a few millionths of an inch.
435

Calipers
Calipers measure distance, depth, height, or length from either an inside or outside
perspective. Most calipers are tools that capture physical measurements and then
transfer them to a scale to determine the data.
Calipers come in several types: spring calipers, vernier calipers, dial calipers, and
digital calipers. Spring calipers named for the type of joint that connects the two
sides measure difficult to reach areas and are accurate to about a tenth of an inch. A
steel ruler is used for the transfer process of the measurement. Vernier calipers use a
vernier scale and are accurate to one thousandth of an inch. Vernier calipers are being
replaced by dial and digital calipers. Digital calipers, as the name implies, use an
electronic readout and are accurate to five thousandths of an inch.
Optical Comparators
An optical comparator compares a part to a form that represents the desired
dimensions. A beam of light is used to project a shadow of the object that is magnified
by a lens to determine whether the part fits within the tolerance levels established.
436

Micrometers
Micrometers, commonly referred to as "mics", are handheld measuring devices
consisting of a basic C frame with the measurement occurring between a fixed anvil
and a movable spindle. Micrometers are similar to calipers and have a finely threaded
screw with a head that displays how much the screw has been moved in or out during
use. Micrometers measure items using a combination of readings on a barrel and a
thimble with accuracy to one thousandth of an inch.
Tensile Strength
Tensile strength represents the ability of a piece of metal to withstand the stress of
being pulled apart. The metal part is load-tested with additional weight until the part
fails. Related tests include the following:
Shear test ability measures the resistance to a sliding type of action with parallel
forces.
Compression test ability measures the results of forces on the outside of the item
pushing towards each other.
Fatigue test ability measures the repeated cycles of an action designed to cause
eventual failure in the product or item.
437

Titration
Titration is a measurement method that examines the endpoint of a chemical reaction
and the quantity of a reactant in the titration flask. For example, a base liquid might be
added to an acid until the mixture becomes neutral. From this process, the level of acid
can be measured because the quantity of the base liquid that was added is known.
438
Measurement Systems Analysis

Concept: Measurement Systems Analysis
In order to ensure a measurement method is accurate and producing quality results, a

method must be defined to test the measurement process as well as ensure that the
process yields data that is statistically stable. Measurement Systems Analysis (MSA)
refers to the analysis of precision and accuracy measurement methods. MSA is an
experimental and mathematical method of determining how much the variation within
the measurement process contributes to overall process variability.
Three characteristics contribute to the effectiveness of a measurement method. These
three characteristics are:
Accuracy
Linearity: How does the size of the part affect the accuracy of the
measurement method?
Stability: How accurately does the measurement method perform over time?
Accuracy: Is there a difference between the observed average values and the
master value of choice?
Reproducibility
Repeatability
These three characteristics follow a hierarchical pattern. Repeatability serves as the

foundation that must be present in order to achieve reproducibility. Reproducibility
must be present before achieving accuracy.
Repeatability and reproducibility often come under the heading of precision. Precision
requires that the same measurement results are achieved for the condition of interest
with the selected measurement method.
A measurement method must first be repeatable. A user of the method must be able to
repeat the same results given multiple opportunities with the same conditions. The
method must then be reproducible. Several different users must be able to use it and
achieve the same measurement results. Finally, the measurement method must be
accurate. The results the method produces must hold up to an external standard or a
true value given the condition of interest.
439
Gauge R and R Studies

Concept: Gauge R and R Studies
Assuming that a gauge is determined to be accurate (that is, the measurements

generated by the gauge are the same as those of a recognized standard), the
measurements produced must be repeatable and reproducible. A study must be
conducted to understand how much variance (if any) observed in the process is due to
variation in the measurement system. Three methods are typically used for this
purpose:
The range method quantifies both repeatability and reproducibility together.
The average and range method determines the total variability and allows
repeatability and reproducibility to be separated.
The analysis of variance method (ANOVA) is the most accurate of the three
methods. In addition to determining repeatability and reproducibility, ANOVA
also looks at the interaction between those involved in looking at the
measurement method and the attributes/parts themselves.
440
Analysis of Variance Method (ANOVA)

Concept: Analysis of Variance Method (ANOVA)
ANOVA demonstrates how the total variation is partitioned using a procedure similar
to the following:
1.
2.
3.
4.
5.
6.
7.
Choose a small number of parts (usually ten or fewer) in a random manner.

Select a characteristic to be measured.
Number the parts to identify each part specifically.
Select a few technicians or inspectors - usually five or fewer
Require the technicians or inspectors to measure the parts using the same
measuring device.
Repeat step #5 to obtain two complete sets of data.
Conduct an ANOVA analysis beginning with the construction of an ANOVA
table.
441
ANOVA Table

Concept: ANOVA Table
Given two parts (numbered 1 and 2) and three inspectors (labeled A, B and C), an
ANOVA table is constructed.
ColSqs = squaring the sum of the column and dividing by the column n
RowSqs = squaring the sum of the row and dividing by the row n
Interaction cell square = squaring the cell total and dividing by the cell n
X = 24.5
N = 12
X2 = x12 + x22 + ... + xn2 = 52.25
Correction for the Mean

(CM)
Total SS (TSS)
(X)2 / N = (24.5)2 / 12 = 600.25/12 = 50.02
Inspector SS (ISS)
ColSqs2 - CM = 50.81 - 50.02 = 0.79
Part SS (PSS)
RowSqs2 - CM = 50.21 - 50.02 = 0.19
Interaction SS (InSS)
CellSqs2 - CM - ISS - PSS = 51.125 - 50.02 - .79 - .19 =

.125
TSS - ISS - PSS - InSS = 2.23 - .79 - .19 - .125 = 1.125
# of Inspectors - 1 = 2
Error SS (ESS)
Inspector Degree of
Freedom (DF)
Part DF
Interaction DF
Total DF
Error DF
X2 - CM = 52.25 - 50.02 = 2.23
# of parts - 1 = 1
Inspector DF * Part DF = 2
N - 1 = 11
Total DF - Inspector DF - Part DF - Interaction DF = 11 2-1-2=6
F = Effect MS / Error MS
Var Coef for Inspectors = 4; Parts = 6; Interaction = 2
MS = SS/DF
Var (variance) = (Effect
MS - Error MS) / Variance
Coefficient
SIGe = repeatability =
square root of Error MS
442
ANOVA Table

Concept: ANOVA Table
Equations for ANOVA Tables
With these values, build a summary ANOVA table to examine variation:

Source
Inspector
SS
.79
DF MS Fcal
2
.395 2.11
F(a)
3.68
Var
.052
Adj Var
.052
Part
.19
1.01
3.06
.0004
.0004
Interaction
.125 2
2.64
-.0625 0
Error
1.12 6
5
.062 0.33
5
.187
5
.1875
Total 11
DF
Totals: .2399
.19
SIGe =
.4330
.1875
%
21.
68
%
0.1
7%
0.0
%
78.
16
%
10
0.0
0%
ANOVA Table a = 0.05
Based on the table, the following can be determined:
Repeatability is the error variance and contributes 78.16% of the variation.
Reproducibility is the variation among inspectors and contributes 21.68% of the

variation.
The F ratio test is 2.11 for inspectors, compared to 3.68 at the 95% confidence
level - a difference cannot be deduced between inspectors.
No interaction exists - each inspector measures each part the same way.
Over 99% of variation is attributable to repeatability and inspector variance.
Process variation in this example accounts for less than 1% of the variation (.17%
to be exact).
Given this information, the measurement methods currently in use account for almost
all of the variations viewed in the process.
443
Measurement Correlation

Concept: Measurement Correlation
Measurement correlation is the comparison of the measurement values between two

or more measurement systems.
Measurement correlation may be made against a known standard. Both may have
variation, but comparing the variation of a measurement instrument to a known
standard may also identify issues with the measuring device that can be corrected.
Besides repeatability and reproducibility, other components whose combined effect
explains measurement correlation are:
Bias
Linearity
Precision/Tolerance (P/T)
444
Bias

Concept: Bias
Bias is often due to human error. Whether intentional or not, bias can cause inaccurate
or misleading results. In other words, bias causes a difference between the output of
the measurement method and the true value. Types of bias include:
Participants in a study tend to remember their assessments from prior trials, so

you should:
collect assessment sheets immediately after each trial.
change the order of the inputs, transactions or questions.
include an adequate waiting period after the initial trial to make

remembering details of the trial less likely.
Participants spend extra time when they know they are being evaluated, so give
specific time frames.
Another good example of bias occurs when equipment is set wrong. For example,
if the bathroom scale is set 15 pounds higher, a 150 pound person using the scale
will think they weigh 165 lbs.
If an instrument underestimates, the bias is negative. If an instrument overestimates,
the bias is positive. The equation for bias is:
Where:
n = the number of times the standard is measured
X = the ith measurement
T = the value of the standard
445
Linearity

Concept: Linearity
Linearity is the variation between a known standard across the low and high ends of
the gauge. The purpose of measurement linearity is to determine the reliability of a
measuring instrument by indicating any linearity error or change in the accuracy of the
measuring instrument.
Linearity is illustrated in the diagram below.
When measuring linearity, draw a line through the data points to view a slope (b). The
slope is a "best fit" line that runs through the data points. Linearity is equal to the
slope multiplied by the process variation Vp (tolerance or spread). Typically, the lower
the absolute value of the slope, the better the linearity.
446
Gauge Linearity Plot

Concept: Gauge Linearity Plot
The following image depicts gauge linearity.
If gauge linearity error is relatively high, causes might include the following:
The gauge is not being calibrated properly at both the lower and upper ends of its
operating range.
There are errors in the minimum or maximum master.
The gauge is worn.
The internal gauge has faulty design characteristics.
447
Precision-Tolerance

Concept: Precision-Tolerance
Precision/Tolerance (P/T) is the ratio between the estimated measurement error

(precision) and the tolerance of the characteristic being measured, where m is the
standard deviation of the measurement system.
Where:
m = measurement
The P/T ratio needs to be small to minimize the effect of measurement error. As the
P/T ratio becomes larger, the measurement method loses its ability to indicate a real
change in the process.
InIntroduction to Statistical Quality Control, author Douglas Montgomery provides
more specifics, Values of the estimated ratio [P/T] of 0.1, or less, often are taken to
imply adequate gauge capacity. This is based on the generally used rule that requires a
measurement device to be calibrated in units one-tenth as large as the accuracy
required in the final measurement. However, we should use caution in accepting this
general rule of thumb in all cases. A gauge must be sufficiently capable to measure
product accurately enough and precisely enough so that the analyst can make the
correct decision. This may not necessarily require that P/T be less than 0.1."
Forrest Breyfogle, in Implementing Six Sigma, utilizes illustrations of processes that
require less accuracy and which have P/T ratios < 0.3.
448
Precision-Total Variation

Concept: Precision-Total Variation
The formula for Precision/Total Variation (P/TV) is:

Where:
m is the standard deviation of the measurement system
2p is the part-to-part variation
Be sure to keep the P/TV ratio as small as possible to reduce the effect of
measurement variation. As either the P/T or P/TV ratios become larger, the
measurement method loses its ability to indicate a real change in the process.
The bottom line is this: When the current measurement method cannot detect
variations, then you must select a new measurement method with a smaller
measurement variation.
449
Control Chart Method

Concept: Control Chart Method
The Measurement Systems Analysis (MSA) Reference Manual (AIAG, 1998) outlines a
control chart model using averages and range to study variability in measurement
methods. This model requires two or three replications (r), by two or three appraisers (
k), on 10 parts (n). The range average is found using this formula:
This average range value is proportionate to the standard deviation of the process. The
average range provides another source of understanding the variation using a specific
measurement method.
450
Metrology

Concept: Metrology
Simply put, metrology is the science of measurement. Metrology encompasses certain

key elements:
The establishment of measurement standards that are precise and defined.
The use of measuring equipment to assess variability.
Regular calibration of equipment.
451
Measurement Error

Concept: Measurement Error
Measurement error is the degree to which the measuring instrument differs from a true
value. The formula for the error of an instrument is the following:
Measurement error may result from a number of factors, including:
Operator variation: This occurs when the same operator realizes variation when
using the same equipment with the same standards.
Operator to operator variation: This occurs when two or more operators realize
variation in results while using the same equipment with the same standards.
Equipment variation: The equipment exhibits erratic measurement results.
Process variation: This occurs when there are two or more methods for using
measurement equipment and those methods yield different results.
452
Calibration Systems

Concept: Calibration Systems
According to the ASQ Online Glossary, calibration is defined as "the comparison of a

measurement instrument or system of unverified accuracy to a measurement
instrument or system of known accuracy to detect any variation from the required
performance specification."
The purpose of calibration systems can be summarized as follows:
To ensure that products and services meet the tolerance range and quality
specifications. A well-maintained calibration system has a positive impact on the
quality of products and services offered to the customer
To ensure that measuring equipment is recalled from use when it is time to be

recalibrated. Periodic recalibration of measuring and test equipment is necessary
for measurement accuracy
To ensure that measuring equipment is removed from use when it is incapable of

performing its function with an agreed level of accuracy
There are two main objectives of a calibration system:
To reduce quality costs through the early detection of nonconforming products

and processes with the use of measuring equipment of known accuracy
To provide customers (when they request it) with an indication of a suppliers

calibration capabilities
According to the Quality Engineering Handbook, the aim of all calibration activities is
to determine that a measuring system's accuracy objectives are met.
453
When to Calibrate

Concept: When to Calibrate
Measuring equipment should be calibrated before initial use and periodically

recalibrated as often as necessary to maintain prescribed accuracies. When production
is continuous, a frequency (or interval) is usually established. When production is
sporadic, calibration is often done on a prior to use basis.
The recalibration interval will depend on variables such as historical information,
stability, purpose, extent of use, tendency to wear or drift, how critical the
measurement is, the cost of an inaccurate measurement, the environment in which it is
used, etc.
Determining calibration intervals is not an arbitrary process. First, the equipment is
given a thorough evaluation before being put into service, and a calibration frequency
is determined based on short-term results. The starting point is typically a tightened
calibration schedule based on the manufacturers recommendation and the application.
When no calibration history exists for a particular measuring device, a track record
may be established before deciding on a particular frequency of calibration. Pennella
offers the following steps as a suggestion. They would be most practical when applied
in a laboratory setting.
Calibrate before use for one week. If no adjustments are needed, go to the next
step.
Calibrate weekly for four weeks. If history is favorable, go to the next step.
Calibrate monthly for six months. If records show no out-of-tolerance conditions

result, go to the next step.
Calibrate every six months for one year. If records show no out-of-tolerance
conditions, calibrate the instrument once a year.
Revert to the previous step if an out-of-tolerance condition becomes evident.

Calibration intervals should not be adjusted haphazardly. Whenever intervals are to be
modified, statistical analysis of the historical data is recommended. Such analysis
often prevents unnecessary costs while helping to ensure the effectiveness of the
system.
454

Measure
Analyzing Process Capability
Learning Objectives
Six Sigma Black Belt | Measure | Analyzing Process Capability

identify, describe and apply the elements of designing and conducting process
capability studies, including identifying characteristics, identifying specifications
and tolerances, developing sampling plans and verifying stability and normality.
distinguish between natural process limits and specification limits and calculate
process performance metrics such as percent defective.
define, select and calculate Cp and Cpk, and assess process capability.
define, select and calculate Pp, Ppk, Cpm, and assess process performance.
understand the assumptions and conventions appropriate when only short-term

data are collected and when only attributes data are available.
understand the changes in relationships that occur when long-term data are used.
interpret relationships between long-term and short-term capability as it relates to
technology and/or control problems.
understand the cause of non-normal data and determine when it is appropriate to
transform.
compute sigma level and understand its relationship to Ppk.
456
Process Capability Studies

Concept: Process Capability Studies
A process capability study attempts to quantify whether a process can consistently

meet the standards set by internal or external customers. Since this study yields a
prediction, and predictions should be made from relatively stable processes, a process
capability study should only be used in a relatively controlled and stable process
environment.
Measuring capability can be challenging because it is, by definition, a point estimate.
Every process has unpredictable instability, which creates an inherent risk of estimate
errors. Since there is no confidence interval related for mean and standard deviation,
there is no confidence interval for capability, therefore risk cannot be quantified. The
user must accept the risk of variability related to instability.
Recall that variation in a process may be the result of a common cause or special
cause.
If the variation is due to a common cause, the output will still form a distribution
that is relatively stable as the variation is constant. In this case, a process
capability study may be completed (although subject to the always present risk
that variations change).
If the variation is a result of a special cause, then the output is not as stable and
not as predictable. In this case, a process capability study may have problems
with its accuracy.
Measurements 1 & 2 reflects two measurements of the same part of the process taken
at different times. Because of process stability, the measurements and capabilities
estimates will be similar.
Measurements 3 & 4 also reflects two measurements of the same part of the process
taken at different times. Because of the process instability, though, the measurements,
and thus the resulting capability estimates, will be drastically different.
457
Two Opinions - Process Capability Studies

Concept: Two Opinions - Process Capability Studies
There is some controversy about the definition and use of process capability studies.
Two broad opinions of probability capability studies include:
Opinion 1: Process capability describes the overall capability of the process

operating at its best. This approach does not address how well the process meets
customer specifications directly. The analysis is usually completed on a
short-term basis with a 1.5 sigma adjustment to compensate for drifts in
long-term variability.
Opinion 2: Process capability describes how well a process functions relative to

customer specifications. This approach takes a longer term view of variance and
short-term or long-term views are usually not considered separately.
The information presented in this topic provides general information that represents
common approaches to the issue of process capability studies.
458
Process Capability Study Procedure

Concept: Process Capability Study Procedure
Procedure
1.
2.
3.
4.
5.
6.
Select a process to study. This process should be critical to the organization and
can be selected using several techniques (e.g., a Pareto analysis or a
cause-and-effect diagram).
Verify or define the process parameters. The process and its parameters may have
been selected in the Define phase. Verify what the process entails, its boundaries,
and gain agreement on the processs definition. Many of these steps are
completed when developing a process map.
Conduct a measurement systems analysis to ensure that the measurement
methods produce sound data.
Select a process capability analysis method. Cpk, Cp, Ppk and Pp are presented and
calculated later in this sub-topic.
Obtain the data and conduct an analysis.
Develop an estimate of the process capability. This estimate can be compared to
the standards set by internal or external customers.
After completing a process capability study, address any special causes of variation
that can be isolated. If able, eliminate the special causes that are not desirable. In some
cases, a special cause of variation may be desirable if it produces a better product or
output. In that circumstance, if possible, attempt to make the special cause a common
cause to ensure the benefit is achieved equally on all output.
459
Identifying Characteristics

Concept: Identifying Characteristics
Characteristics selected to be part of a process capability study should meet certain

requirements:
The characteristic should be important relative to the quality of the product or

process. A process may have 15 characteristics, but only one or two should be
selected for inclusion in the process capability study.
The characteristics are Ys or outcomes to process steps that meet customer

requirements. The Ys are changed by changing the Xs or inputs.
The characteristics value should be adjustable.
The operating parameters that influence the characteristic should be able to

be determined and controlled.
Sometimes, the characteristic selected has a history of being the most difficult
item to control.
460
Specification Limits

Concept: Specification Limits
Specification limits are set by the customer, and result from either customer
requirements or industry standards. The amount of variance (process spread) the
customer is willing to accept sets the specification limits. A customer wants a supplier
to produce 12-inch rulers. Specifications call for an acceptable variation of +/- 0.03
inches on each side of the target (12.00 inches). The customer is saying acceptable
rulers will be from 11.97 to 12.03 inches.
If the process is not meeting the customer's specification limits, two choices exist to
correct the situation:
Change the process's behavior.
Change the customer's specification (requires customer approval).
Examples of Specification Limits

Specification limits are commonly found in:
Blueprints
Engineering drawings and specs
Industry standards
Self-imposed standards within a shop
Federally mandated standards (e.g., emissions controls)
461
Stability and Capability

Concept: Stability and Capability
Think of the interaction of stability and capability as a 2x2 matrix:
Capable: Yes
Capable: No
Stable: Yes
1
3
Stable: No
2
4
Stability and Capability

1.
2.
3.
4.
There is nothing further needed.

While the process is currently capable, stability may need to be improved to
assure continued capability.
Since the process is stable, but not capable, we can be reasonably sure the lack of
capability is reasonably correct. The process must be improved to become
capable.
The lack of stability makes it difficult to estimate the level of capability with any
certainty. First, we need to reduce variation and remove special causes of
variation to improve stability so we will have reasonable estimates of the
centering of the process. Following that, we may need to recenter the process
and/or further reduce process variation.
462
Drift and Process Capabilities

Concept: Drift and Process Capabilities
Drift, movement away from the target, is a sign of a changing process. After noticing
this signal of drift, identifying the cause of the drift must occur before corrective
action can be taken.
In the graphic, click DRIFT to demonstrate a drifting process and observe the
changing values.
463
Process Capability Indices

Concept: Process Capability Indices
The goal of performance metric indices is to establish a controlled process, and then
maintain that process over time. Numbered values are a shortcut method indicating the
quality level of a process in parts per million (ppm). Once the status of the process is
determined, the causes in variation (based on statistical significance) may be
identified. Courses of action might be to:
do nothing.
change the specifications (not very often).
center the process.
reduce the variation in the Six Sigma process spread.
accept the losses (not very often).
464
Process Limits

Concept: Process Limits
A stable process can be monitored to determine if changes that occur are due to factors
other than random variation. Such observation determines whether changes are
necessary and if any corrective actions are required.
Process limits are the voice of the process based on the variation of the products
produced. The supplier collects data over time to determine the variation in the units
against the customer's specification. These data points collected over time establish the
process curve.
Having a predictable process producing 100 percent conformances is the ideal state.
Day-to-day control charts help identify assignable causes to any variations that occur.
465
Graphing Process Capability

Concept: Graphing Process Capability
A process capability diagram displays both the voice of the process and the voice of
the customer.
To draw one of these diagrams:
1.
2.
Locate the mean of the distribution (X) and draw a normal curve that reflects the
upper and lower process limits (UPL, LPL) to the data.
Draw the customer specifications with the upper and lower limits for those
specifications as appropriate (USL, LSL). Note that a customer may only have a
lower limit or just an upper limit.
Example
Given: X = 12, = 1, Specifications 10 +/- 5
The process is off target (nominal) but within specifications.
466
Graphing Tips

Concept: Graphing Tips
Roll over Page Resources to display practice problems and to check your answers. Be
sure to label your diagrams as #1 and #2.
467
Practice Activities
Six Sigma Black Belt | Measure | Analyzing Process Capability | Graphing Tips
Example: Practice Activities
Materials needed: Graph paper, pencil, ruler

Directions: Create a process capability diagram for each of the situations (activities)
below. Be sure to include the mean (X), process results, lower process limit (LPL) = X
- 3, upper process limit (UPL) = X + 3 , customer target, lower specification limit
(LSL) and upper specification limit (USL). To check the your answers, roll over Page
Resources and click Graphing Answers.
Graphing Activity #1: X = 7, = 1, Specs = 10 +/-4
Graphing Activity #2:X = 10, = 0.5, Specs = 10 +/- 1
468
Graphing Answers
Six Sigma Black Belt | Measure | Analyzing Process Capability | Graphing Tips
Example: Graphing Answers
Practice Activity #1
Practice Activity #2
Given: X = 7, = 1, Specifications 10 +/-4
Given: X = 10, = 0.5, Specific
The process is off target and not within specifications.
Process is on target and outside
469
Introducing Process Capability Indices

Task: Introducing Process Capability Indices
Process capability indices (Cp and Cpk) and process performance indices (Pp, Ppk, and
Cpm) identify the current state of the process and provide statistical evidence for
comparing after-adjustment results to the starting point. Although these indices have a
common purpose, they differ in their approach.
According to Douglas C. Montgomery in Introduction to Statistical Quality Control,
an underlying assumption of the process capability ratios is that their usual
interpretation is based on a normal distribution of process output.
Click the name of the index at left to view information about it on the right.
Cp
Cp measures the ratio between the specification tolerance (USL-LSL) and process
spread.
A process that is normally distributed and is exactly mid-way between the
specification limits would yield a Cp of 1 if the spread is +/- 3 standard
deviations.
A generally accepted minimum value for Cp is 1.33 this differs by industry, but
the larger the number the better.
Limitations to this index include its requirements for both an upper and lower
specification and is used once the process is centered.
Cpk
Cpk measures the absolute distance of the mean to the nearest specification limit.
Generally speaking, a Cpk of at least 1 is required and over 1.33 is desired, but
this differs for industries.
Cpk takes into account the centering process, unlike Cp.
Together with Cp, Cpk provides a common measurement for assigning an initial
process capability to center on specification limits.
470
Introducing Process Capability Indices

Task: Introducing Process Capability Indices
Pp
Pp measures the ratio between the specification tolerance and process spread.
Pp helps to measure improvement over time (as do Cp and Cpk)
Pp signals where the process is in comparison to the customer's specifications (as
does Cp and Cpk)
Ppk
Ppk measures the absolute distance of the mean to the nearest specification limit.
Ppk provides an initial measurement to center on specification limits.
Ppk examines variation within and between subgroups.
Cpm
Cpm is also referred to as the Taguchi index.

This index is touted by some to be more accurate and reliable than the other
indices.
Cpm is based on the notion of reducing the variation from a target value (T).
T represents the target in this index, T receives more focus than the
specification limits.
Variation from the target T is expressed as process variability or 2and process
centering ( - T), where = process average.
Cpm provides a common measurement assigning an initial process capability to a
process for aligning the mean of the sample to the target.
Note: The use of these indices and equations varies by industry and author.
471
Using Cp

Concept: Using Cp
Use When
identifying the process's current state.

measuring the actual capability of a process to operate within customer defined
specification limits.
the data set is from a controlled, continuous process.
Information Needed
Standard deviation/Sigma (estimated from control charts or other process

information)
USL and LSL (specifications)
Normal probability distribution knowledge
472
Tips for Cp

Concept: Tips for Cp
User Tips
Cp only tells the amount of variation that is in the process.

Cp does not tell about the process's ability to align with the target (centered on the
customer requirement; this is Cpk's function).
Cp requires upper and lower spec limits.
For Cp - Think about firing a rifle at a target and 10 rounds are together in a 2
inch circle (very little variation).
Cp measures "can it fit" while Cpk measures "does it fit."
If Cp = Cpk, the process is centered.
Cp desired values vary by industry, but some general guidelines may include:
The higher, the better
If greater than 1.33, the process is generally considered capable
If between 1.00 and 1.33, the process may be capable but controls may be
necessary
If less than 1, the process is generally considered incapable

Data must be continuous and from a process that is under relative control or
stable.
473
Using Cpk

Concept: Using Cpk
Use When
you have a data set from a controlled, continuous process.

Cpk does tell about the process's ability to align with the target (centered on the
customer requirement).
Information Needed
Continuous data
Standard deviation/Sigma (estimated from a control chart or other process
information)
Customer specifications (USL and LSL)
Calculate the mean of the process and use this to calculate the distance from the
nearest spec (DNS)
Test for normality of the probability distribution
User Tips
If Cpk = Cp, the process is centered.

Generally speaking, the larger the value, the better.
Data must be continuous from a controlled or stable process.
Calculate Sigma from data collected from control charts or other process
information.
Calculate DNS.
Decide which spec is the process center nearest (USL or LSL).
DNS = Mean - LSL or the UPS - mean.
The lesser of the two values is used from the following equations.
474
Calculating Cp and Cpk

Concept: Calculating Cp and Cpk
To calculate Cp:
the tolerance band (USL - LSL) is divided by the process spread.
Example
X = 10, Sigma = 1, and Specifications = 10 +/- 4
Cp = (14 - 6) / 6(1)
Cp = 8 / 6
Cp = 1.33
To calculate Cpk:
subtract X value from the nearest spec limit, then divide the value by 3 sigma
Example
For USL:
Cpk = (14 - 10) / 3
Cpk = 4 / 3
Cpk = 1.33
For LSL:
Cpk = (10 - 6) / 3
Cpk = 4 / 3
Cpk = 1.33
When Cp = Cpk, the process is centered.
Using these examples as a model, calculate Cp and Cpk for each of the 2
previously-created process capability diagrams. To check your answer, roll over Page
Resources and click the appropriate example.
475
Calculation Answer #1
Six Sigma Black Belt | Measure | Analyzing Process Capability | Calculating Cp and Cpk
Example: Calculation Answer #1
To calculate Cp, the tolerance band (USL - LSL) is divided by the process spread.
Given: X = 7, Sigma = 1, and Specifications = 10 +/- 4
Cp = (14 - 6) / (10 - 4)
Cp = 8 / 6
Cp = 1.33
To calculate Cpk, subtract X value from the nearest spec limit, then divide the
value by 3 sigma
Given: X = 7, Sigma = 1, and Specifications = 10 +/- 4
Cpk = (7 - 6) / 3
Cpk = 1 / 3
Cpk = 0.33
476
Six Sigma Black Belt | Measure | Analyzing Process Capability | Calculating Cp and Cpk
To calculate Cpk, the tolerance band (USL - LSL) is divided by the process
spread.
Given: X = 10, Sigma = 0.5, and Specifications = 10 +/- 1
Cp = (11 - 9) / (11.5 - 8.5)
Cp = 2 / 3
Cp = 0.67
To calculate Cpk, subtract X value from the nearest spec limit, then divide the
value by 3 sigma
Given:X = 10, Sigma = 0.5, and Specifications = 10 +/- 1
Cpk = (11 - 10) / 1.5
Cpk = 1 / 1.5
Cpk = 0.67
Note: Process variations are too great when both Cp and Cpk are less than 1.
477
Cp Check

Concept: Cp Check
Arrange the 3 graphs from lowest Cp value to highest. Click and hold the graph and
then drag into the appropriate answer box.
478
Using Pp

Concept: Using Pp
Use When
the type of data collected is continuous.

the process is not in control (as shown by process control charts or other process
information).
Information Needed
Continuous data
Standard deviation/sigma (generated by using actual data, not estimated)
Upper and lower specification limits
User Tips
Pp tells the amount of variation, but not alignment to the target (that's Ppk).
Estimate sigma from data collected from control charts or other process
information.
To be in control, a process must only have common causes for each of the data
points (no data points existing beyond the UCL or LCL).
479
Sigma and Process Capability

Concept: Sigma and Process Capability
When means and variances wander over time, a standard deviation (symbolized by the
Greek letter ) is the most common way to describe how data in a sample varies from
its mean.
A Six Sigma goal is to have 99.99976% error-free work (reducing the defects to 3.4
per million). By computing sigma and relating to a process capability index such as P
pk, you can determine the number of nonconformances (or failure rate) produced by
the process.
To compute sigma (), use the following equation for a population:
Where:
N = number of items in the population
X is the mean of the population data
x is each data point

To use the equation:
For each value x, calculate the difference between X (the mean) and x
Calculate the squares of these differences
Find the average of the squared differences (by dividing by N) this equals the
variance 2
Compute the square root of the variance to obtain sigma
480
Using Ppk

Concept: Using Ppk
Use When
the type of data collected is continuous.

the process is not in control (as shown by process control charts or other process
information).
Information Needed
Continuous data
Sample size number
X and R-chart information
Standard deviation/Sigma (calculated by using actual data, not estimated)
USL and LSL
User Tips
Ppk tells alignment to the USL and LSL (not the amount of variation).
Calculate sigma from actual data.
481
Using Cpm

Concept: Using Cpm
Use When
the target is not the center or mean of the USL - LSL.

establishing an initial process capability during the Measure phase.
Information Needed
Value of the target

Continuous data
Sample size number
Standard deviation (sigma) calculated with actual data, not estimated
Where:
T = target value
= expected value
= standard deviation
User Tips
Cpm is computed from data when the target spec is NOT the mean of the
USL-LSL data.
The higher the Cpm value, the more likely the process will produce output
meetings the specs and the target.
482
Calculating Cpm

Concept: Calculating Cpm
To calculate Cpm:
divide Cp by the square root of the quantity1+(X-target)2divided by standard

deviation squared.
Example
Using this example as a model, calculate Cpm for each of the two previously created
process capability diagrams. To check your answer, roll over Page Resources and
click the appropriate example.
483
Six Sigma Black Belt | Measure | Analyzing Process Capability | Calculating Cpm
Given:X = 7, Sigma = 1, and Specifications = 10 +/- 4

Cp = (14 - 6) / (10 - 4)
Cp = 8 / 6
Cp = 1.33
Cpm = Cp / square root of 1 + (X - target)2 / standard deviation2
Cpm = 1.33 / square root of 1 + (7 - 10)2 / 12
Cpm = 1.33 / square root of 1 + 9 / 1
Cpm = 1.33 / 3.1623
Cpm = 0.421
484
Six Sigma Black Belt | Measure | Analyzing Process Capability | Calculating Cpm
Given:X = 10, Sigma = 0.5, and Specifications = 10 +/- 1

Cp = (11 - 9) / (11.5 - 8.5)
Cp = 2 / 3
Cp = 0.67
Cpm = Cp / square root of 1 + (X - target)2 / standard deviation2
Cpm = 0.67 / square root of 1 + (10 - 10)2 / 0.52
Cpm = 0.67 / square root of 1 / 1
Cpm = 0.67 / 1
Cpm = 0.67
485
Non-Normal Data Transformations

Concept: Non-Normal Data Transformations
In the real world, data does not always fit a normal distribution. Since the process
capability indices are based on normal distributions, a method is needed to transform
non-normal data. Such transformation is usually achieved with the help of logarithms.
While statistical software is helpful in making this data conversion, one example of an
equation used to transform non-normal data is the following Box-Cox power
transformation, where values of Y are transformed to the power of (lambda) (i.e., Y
). This relationship has the following characteristics:
= -2
Y transformed = 1/Y2
= -0.5
Y transformed = 1/Y
=0
Y transformed = ln (Y)
= 0.5
Y transformed = (Y)
=2
Y transformed = Y2
A logarithm is then selected to apply to the data using the following function:
Where:
x() = (x - 1) / where 0
x() - ln(x) where = 0
Where the mean of the transformed data is equal to:
486
Short-term Capability

Concept: Short-term Capability
Process capability may be examined as both short-term and long-term capability.

Short-term capability is measured over a very short time period since it focuses on
the machine's ability based on design and quality of construction.
By focusing on one machine with one operator during one shift, you will limit the
influence of other outside long-term factors, including:
operator
environmental conditions such as temperature and humidity
machine wear
different material lots

Thus, short-term capability can measure the machine's ability to produce parts with a
specific variability based on the customer's requirements.
Short-term capability uses a limited amount of data relative to a short time and the
number of pieces produced to remove the effects of long-term components. If the
machines are not capable of meeting the customer's requirements, changes may have a
limited impact on the machine's ability to produce acceptable parts.
Remember, though, that short-term capability only provides a snapshot of the
situation. Since short-term data does not contain any special cause variation (such as
that found in long-term data), short-term capability is typically rated higher.
487
Converting Process Capability to PPM

Concept: Converting Process Capability to PPM
Tables exist transposing different capability indexes into parts per million of
nonconformance. For example:
488
Lesson Summary

Measure is about measuring what is measurable - data - data to be identified,

collected, described, and displayed. Different types of data (variable and attribute)
undergo different analyses. As Phillip Crosby stated, "Quality measurement is
effective only when it is done in a manner that produces information that people can
understand and use."
A sound sampling technique assures data accuracy and integrity. Different probability
distributions as normal, Poisson, binomial, and chi-square describe the data that leads
the team down the hypothesis testing roadmap during Analyze. Tools such as
stem-and-leaf plots, box-and-whisker plots, run charts, scatter diagrams, Pareto charts,
histograms, and probability plots depict relationships between data.
Repeatability and reproducibility (Gauge R&R) correlations, linearity, percent
agreement, precision and tolerance are tools for measuring or assessing the capability
of the people involved in the process. By discovering if the people are consistently
performing up to the standards and expectations, these tools help pinpoint problem
areas and training issues.
Process capability studies link the voice of the customer to the voice of the process.
The customer sets the target and specification limits while the provider measures the
process's results and compares it to the customer's expectations. Process performance
indices such as Cp, Cpk, Pp, Ppk, and Cpm, are numerical values indicating where the
process lies in terms of targets, specifications, and sigma levels.
489
Lesson Bibliography


Statistical Methods. 2nd ed. Hoboken, NJ: John Wiley and Sons, Inc., 2003.
Galloway, Dianne. Mapping Work Processes. Milwaukee, WI: ASQ Quality Press,
1994.
Griffith, G.K. The Quality Technician's Handbook. 3rd ed. Englewood Cliffs, NJ:
Prentice Hall, 1996.
Keller, Paul.Six Sigma Demystified. New York, NY: McGraw-Hill, 2005.
Lowenthal, Jeffrey N. Defining and Analyzing a Business Process: A Six Sigma Pocket
Guide. Milwaukee, WI: ASQ Quality Press, 2003.
Montgomery, Douglas. Introduction to Statistical Quality Control. 5th ed. Hoboken,
NJ: John Wiley & Sons, Inc., 2005.
Smith, G.M.Statistical Process Control and Quality Improvement. Upper Saddle
River, NJ: Prentice-Hall, 2001.
490

Analyze
Lesson Introduction
Six Sigma Black Belt | Analyze

Once the Measure Phase has been completed, it is now time to move into the Analyze
phase and begin exploratory data analysis. The primary focus of analysis is to begin to
closely examine our output (Y) to understand the variables or inputs (Xs) and their
effects. The Black Belt's responsibility is to gather the Xs identified in the Measure
phase and perform analysis to narrow the Xs from possible to probable. To better
understand this concept, the ASQ Body of Knowledge provides the following topics:
Exploratory data analysis
Use multi-vari studies to interpret the difference between positional, cyclical and
temporal variation.
Design sampling plans to investigate the largest sources of variation.
Create and interpret multi-vari charts.
Calculate the regression equation.
Apply and interpret hypothesis tests for regression statistics.
Use the regression model for estimation and prediction, and analyze the
uncertainty in the estimate.
Calculate and interpret the correlation coefficient and its confidence interval.
Apply and interpret a hypothesis test for the correlation coefficient.
Understand the difference between correlation and causation.
Analyze residuals of the model.

Hypothesis testing
Define, compare and contrast statistical and practical significance.
Apply and interpret the significance level, power, type I and type II errors of
statistical tests.
Understand how to calculate sample size for any given hypothesis test.
Define and interpret the efficiency and bias of estimators.
Compute, interpret and draw conclusions from statistics such as standard error,
tolerance intervals and confidence intervals.
Understand the distinction between confidence intervals and prediction intervals.
Apply hypothesis tests for means, variances, and proportions and interpret the
results.
Define, determine applicability, apply and interpret paired-comparison parametric

hypothesis tests.
Define, determine applicability, apply and interpret chi-square tests.
Define, determine applicability, apply and interpret ANOVAs.
Define, determine applicability and construct a contingency table and use it to

determine statistical significance
Define, determine applicability and construct various non-parametric tests

including Mood's Median, Levene's test, Kruskal-Wallis and Mann-Whitney.
492
Lesson Overview

The tools and objectives of the Analyze phase are illustrated below.
493

Analyze
Exploratory Data Analysis
Learning Objectives
Six Sigma Black Belt | Analyze | Exploratory Data Analysis

At the end of this Analyze topic, all learners will be able to:
use multi-vari studies to interpret the difference between positional, cyclical and
temporal variation.
design sampling plans to investigate the largest sources of variation.
create and interpret multi-vari charts.
calculate the regression equation.
apply and interpret hypothesis tests for regression statistics.
use the regression model for estimation and prediction and analyze the
uncertainty in the estimate.
calculate and interpret the correlation coefficient and its confidence interval.
apply and interpret a hypothesis test for the correlation coefficient.
understand the difference between correlation and causation.
495
Multi-vari Studies

Concept: Multi-vari Studies
Data can be grouped in terms of sources of variation to help define the way
measurements are partitioned. These sources describe characteristics of populations,
and the following are common types that describe our everyday processes:
Classifications (by category)
Geography (of a distribution center or a plant)
Geometry (chapters of a book or locations within buildings)
People (tenure, job function or education)
Time (deadlines, cycle time or delivery time)

We can stratify the data to help us
understand the way our processes work by
categorizing the individual measurements.
This helps us understand the variation of
the components as it relates to the whole
process.
For example, errors are being tracked in a
process. The variation could be within a
subgroup (within a certain batch),
between subgroups (from one batch to
another batch) or over time (time of day,
day of week, shift or even season of the
year).
496
Multi-vari Charts

Concept: Multi-vari Charts
A Multi-vari chart is a tool that graphically displays patterns of variation and the
stability or consistency of a process. It is used to identify possible Xs or families of
variation in the preliminary stages of data analysis. Multi-vari charts categorize data as
positional (within a subgroup), cyclical (between subgroups) and temporal (over
time).
You can also detect differences in the inputs (Xs) by using two diagrams presented in
the Measure lesson of this course:
boxplots (e.g., box-and-whisker plots) when the (Y) is continuous and the (Xs)
are discrete
scatterplots (e.g., scatter diagrams) when the (Y) is continuous and the (Xs) are
also continuous
497
Boxplot Question

Question: Boxplot Question
Temporal VariationThe number of errors produced (Y) is plotted on the y axis,

and the shift (X) is the category plotted on the x axis. What can you tell from this
boxplot? After making your selection, click the Ready button to see if you are
correct.
A. No relationship
B. Median errors are highest for the 1st shift.
C. 1st shift and 3rd shift may be statistically different.
D. Median errors are lowest for the 3rd shift.
498
Scatterplot Question

Question: Scatterplot Question
Cyclical VariationThe number of errors produced (Y) is plotted on the y axis, and
the years of experience of operator (X) are plotted on the x axis. Is there a
relationship between the number of errors produced and years of operator
experience?
A. No relationship
B. Moderate linear relationship
C. Strong positive linear relationship
D. Strong negative linear relationship
499
Sources of Variation

Task: Sources of Variation
Multi-vari analysis is a tool that graphically displays variation in categories. Click

each category below to learn more.
Positional
See also: within-part variation
Within a subgroup or sample set: refers to variation of a characteristic on the same
product such as part thickness, data entry on a form, pages of a document, etc.
Cyclical
See also: part-to-part variation
Refers to variation between subgroups or from sample to sample. Some examples are
call center, sales region, processing center, staff member, etc.
500
Sources of Variation

Task: Sources of Variation
Temporal
Refers to variation in change over time, either as time on a clock/calendar or duration.
Some examples are season of the year, time of day, day of week, cycle time, shift, etc.
501
Design Types

Task: Design Types
The two most common designs of categorical variation are nested and crossed, with
nested being the most typical. Click each design type to learn more.
Nested
In this type of design, one source of variation is found within or nested in another
such as positional, cyclical and temporal. An example of nested design variation is
given below using a loan documentation package comparing all categories together:
Within subgroup or sample set (positional): gathering data about the specific
fields on a page of the form
Between subgroups or from sample to sample (cyclical): tracking data entry

errors produced by loan processing associates
Over time (temporal): tracking data entry errors produced by loan processing
associates by peak production times of the day
Crossed
In this type of design, the sources of variation can be manipulated independently,
placing it in distinct order to reveal patterns. This type of design helps to identify
interactions between the independent variables. An example of crossed design
variation using a loan documentation package is:
positional: comparing data entry fields on two different pages of the loan
documentation form.
cyclical: comparing data entry errors for two different loan processing centers.
temporal: comparing data entry errors for different days of the week.
502
Variation Question

Concept: Variation Question
Shown below are boxplots depicting positional, cyclical and temporal variations,
which are helpful in the preliminary data analysis to show early relationships and to
focus and prioritize time and effort. Match each variation term to its corresponding
graph by dragging the term to the box underneath the correct graph.
503
Multi-vari Sampling

Concept: Multi-vari Sampling
Multi-vari analysis uses sources of variation to stratify the data to begin to turn the
possible Xs into the probable Xs.Multi-vari analysis helps narrow the focus and
serves as a point where we begin to gather samples to determine if the probable Xs are
statistically significant.
A sampling plan is critical in investigating the largest sources of variation. Sampling
plans should be designed in such a way that the resulting data will contain a
representative sample of the parameters of interest.
Please review each step on the following page to learn more about sampling.
504
Multi-vari Sampling Steps

Task: Multi-vari Sampling Steps
Click each step below to learn more about multi-vari sampling.

1. Select the process and variables to analyze.
Reducing the return mail volume is a project of interest for process improvement.
Reducing the return mail volume by 50% will increase the through-put accuracy of
items mailed with correct addresses by the end of year 2006 and bring the company
into compliance with USPS discount requirements.
During the period between April and June 2006, the return mail volume for the
Consumer Lending Department was 12,929 items representing 31.4% of the total
return mail volume for the bank. Cost of poor quality (COPQ) elements have been
identified as manual handling, overtime, rework, labor, equipment utilization, and
postage totaling $125,693.00.
The project objective is to reduce the Consumer Lending Department return mail
items by 20% by the end of year 2006. The variables to be analyzed are:
Time
Day of the week: Does the day of the week make a difference?
Week of the month: Does the week of the month make a difference?
Classification
Product type: Does the product type make a difference, such as a lease, auto loan,
home equity loan, etc?
Geography
Physical location: Does the building location make a difference?
2. Select the sample size and duration.

The sample size required to be statistically significant with alpha = 0.05 and a target
power of 0.90 = 10.
3. Record observation information.
Based on the sample size necessary to achieve the desired level of significance, data
were tracked for one week using check sheets to be completed by mailroom staff to
track the respective variable information by shift.
505
Multi-vari Sampling Steps

Task: Multi-vari Sampling Steps
4. Plot the data points.

Create a boxplot for interpretation (shown in next step).
5. Analyze the graph for variation.
The variances of building A and B appear to be different.
6. Conduct further analysis.

Additional analysis on the buildings will be conducted to find out why the return mail
volumes are different.
7. Repeat multi-vari studies.
Improvements have been implemented and one month has passed. Shown below are
boxplots reflecting return mail volume for buildings A and B. Based on these graphs,
the variances of building A and B are roughly the same.
506
Multi-vari Studies Exercise

Concept: Multi-vari Studies Exercise
507
Regression and Correlation Introduction

Concept: Regression and Correlation Introduction
In Six Sigma projects where the input and output variables are both continuous and we
want to see if there is a relationship between the two variables, we use statistical tools
called regression and correlation.
508
Simple Linear Regression Introduction

Concept: Simple Linear Regression Introduction
Regression is the analysis of relationships between variables. In regression, the

relationships of the variables are expressed in the form of an equation.This allows for
the prediction of the dependent variable (Y) to one or more independent variables
(Xs).
Linear regression analysis addresses the dual tasks of finding the best-fit
relationships and testing for correlations in the data that indicate a linear relationship
between the variables. This analysis defines the Xs that drive the Y in the equation to
be controlled :
Y = f (X1, X2, ...Xn) + e
Simple Regression Equation
y = 0 + 1x
Linear Regression Definitions
Theindependent variable is the variable over which we have control.
Thedependent variable is the variable that results from the adjustment or change in
the independent variable.The dependent variable is often referred to as the response.
This change is usually done to improve the result.
Thecoefficients are those expressions in the equation that define the mathematical
relationship between the independent and dependent variables. For example,b0 andb1
are the coefficients in the following expression:
The hat symbol (^) is used to denote estimated and predicted values.
Two types of coefficients in simple linear regression are the intercept and the slope:
The intercept is the value ofywhenx is zero. It is denoted as the estimateb0.
The population parameter for the intercept is 0.

The slope is the amount of increase (or decrease) in y (rise) over a specific
increase inx (run). This is denoted as the estimateb1. The population parameter
for the slope is1.
Ho: b1= 0 (Coefficient

not significant)
A low p-level for this test, typically (< 0.05), means there is evidence to
believe that the slope of the line is not 0.
Ha: b1 0 (Coefficient
significant)
509
Simple Linear Regression Equation

Concept: Simple Linear Regression Equation
For the purpose of this course, the regression equation will be calculated starting with
the mathematical equation for a straight line:
y = b0 + b1 X , where b0 is the y intercept when X = 0 and b1 is the slope of the line.
We assume for any given value of X, the observed value of Y varies in a random
manner and possesses a normal probability distribution. This concept is depicted in the
following diagram:
510
Method of Least Squares

Concept: Method of Least Squares
The method of least squares is a statistical procedure to find the best-fit line that
minimizes the sum of squares of the deviations of the observed values of Y from those
predicted.This formalizes the scatter plot or fitted line plot procedure when plotting
(X) and (Y) data on a graph. After plotting the data, use a ruler to pass through the
majority of the points providing what is considered the best-fit line.The data are
evaluated against the line to see obvious deviations of the data from the line.
Least square estimator equations
511
Best-Fit Line Exercise

Concept: Best-Fit Line Exercise
512
Fitted Line Plot Exercise

Concept: Fitted Line Plot Exercise
A jewelry store wants to ascertain the relationship between the number of repairs and
the amount of time required to repair an item. A plot of this relationship is shown
below. Drag the "best-fit" term to the plot depicting the "best-fit" simple regression
line.
513
Simple Linear Regression Example

Concept: Simple Linear Regression Example
The customer change request process within the corporate account department is a
project of interest for process improvement.The department manager wants to find the
relationship between the number of change requests processed per month and the cost
per transaction.
Sum
Avg x, y
Change
Cost per
Requests (X) Transaction
(Y)
1
0.35
4
0.39
5
0.40
6
0.41
16
1.55
4
0.3875
X2
Y2
(X)(Y)
1
16
25
36
78
0.1225
0.1521
0.1600
0.1681
0.6027
0.35
1.56
2.00
2.46
6.37
What are the prediction equation and results?
514
Simple Linear Regression Calculation

Concept: Simple Linear Regression Calculation
Step 1: Perform the calculations
515
Simple Linear Regression Prediction Equation

Concept: Simple Linear Regression Prediction Equation
Step 2: Determine the prediction equation

We may now predict (y) for a given value of (x) using the equation for a straight line:
Step 3: Determine results
With the above equation, we can predict the cost per transaction based on the number
of customer change requests. If there are two customer change requests, the cost per
transaction is 0.3389 + (0.0121) (2) = 0.363 or approximately $0.36.
516
Uncertainty in the Estimate

Concept: Uncertainty in the Estimate
Uncertainty in the Estimate

The prediction quality of the regression equation estimates the standard deviation of
the error Se, given by the formula:
Looking at the simple regression example of the cost per transaction based on the
number of customer change requests:
Given =.05, the Z number for 0.95 (1-) is 1.96. Approximately 95% of the
population of the data points lie within 1.96(0.00656) = 0.013 of the regression line.
517
Simple Linear Regression Hypothesis Testing

Concept: Simple Linear Regression Hypothesis Testing
Hypothesis tests can be applied to determine whether the independent variable (x) is
useful as a predictor for the dependent variable (y). The following are the steps using
the cost per transaction example for hypothesis testing in simple regression:
Step 1: Determine if the conditions for the application of the test are met.
There is a population regression equation Y = 0 + 1 so that for a given value of

x, the prediction equation is
Given a particular value for x, the distribution of y-values is normal.

The distributions of y-values have equal standard deviations.
The y-values are independent.
Step 2: Establish hypotheses.

Ho: b1 = 0 (the equation is not useful as a predictor of y - cost per transaction)
Ha: b1 0 (the equation is useful as a predictor of y - cost per transaction)
Step 3: Decide on a value of alpha.
Let = 0.05.
518
Hypothesis Testing T-Values

Concept: Hypothesis Testing T-Values
Step 4: Find the critical t values.

Use the t table and find the critical values with +/- t/2 with n 2 df. Roll over Page
Resources at the bottom of the screen and click T-table. Look in the t0.025 column
under 2 df (4 samples 2). The critical values are 4.303 and -4.303.
Step 5: Calculate the value of the test statistic t.
The confidence interval formula is used to determine the test statistic t:
519
Hypothesis Testing Interpreting Results

Concept: Hypothesis Testing Interpreting Results
Step 6: Interpret the results.

If the test statistic is beyond one of the critical values:
greater than t/2 OR
less than -t/2
reject the null hypothesis; otherwise, do not reject.

tcalc > tcritical = 6.91 > 4.303; therefore, we reject the null hypothesis. At a significance
level of 0.05, the data support the conclusion that the prediction equation is useful for
predicting the cost per transaction for a given number of change requests.
520
Simple Linear Regression Question

Concept: Simple Linear Regression Question
The following is a simple linear regression problem for you to complete. When
finished, roll over Page Resources at the bottom of the screen and click Regression
Answer to see if you are correct.
A manager of a retail store wants to find the relationship between the number of boxes
shipped and the number of items damaged. A random sample of six shipments is
selected and the data have been recorded as follows:
Boxes Shipped (X)
Items Damaged (Y)
X2
Y2
(X)(Y)
18
324
36
23
529
23
41
1681
123
35
1225
35
27
729
27
39
1521
78
S 183
u
10
6009
20
322
A 30.5
v
g
1.7
What is the prediction equation?
521
Regression Answer
Six Sigma Black Belt | Analyze | Exploratory Data Analysis | Simple Linear Regression Question
Example: Regression Answer
We may now predict (y) for a

given value of (x) using the
equation for a straight line:
With the above equation, we can

predict the number of items that
are damaged based on the
number of boxes shipped. If
there are 30 boxes shipped, the
number of damaged items is
0.486 + (0.0398) (30) = 1.68.
522
Multi. Linear Regression Introduction

Concept: Multi. Linear Regression Introduction
Multiple linear regression expands on the simple linear regression model to allow for
more than one independent or predictor variable.
The general form for the equation is:
y = b0 + b1x + ... bn+ e
Where:
(b0,b1,b2 ) are the coefficients and are referred to as partial regression

coefficients.
The equation may be interpreted as the amount of change in y for each unit increase in
x (variable) when all other xs are held constant.
The hypotheses for multiple regression are:
Ho: b1 = b2 = ... = bn
Ha: b1 0 for at least one i
523
Coefficient of Determination

Concept: Coefficient of Determination
Coefficients are estimated by minimizing the sum of squares (SS) residuals. The
coefficients follow a t-distribution, which allows us to use t-tests to assess their
significance. The coefficient of determination, R2, or multiple regression
coefficient, is the proportion of variation in Y that can be explained by the regression
model and is the square of r. In multiple regression, R2adj (adjusted value) represents
the percent of explained variation when the model is adjusted for the number of terms
in it. Ideally, R2 should be equal to 1, indicating that all of the variation is explained
by the regression model.
0 R2 1
Related to the coefficient of determination is the correlation coefficient, which ranges
from -1 r 1and determines whether there is a positive or negative correlation in
the regression analysis, where r is the coefficient of correlation determined by sample
data and an estimate of (rho), the population parameter.
524
Coefficient of Determination Equation

Concept: Coefficient of Determination Equation
R2 Equation
R2= SSregression / SStotal = (SStotal SSerror) / SStotal = 1- [SSerror / SStotal]
Where SS = the sum of squares
R2adj Equation
R2adj = 1- [SSerror / (n p)] / [SStotal / (n -1)]
Where:
n = number of data points
p = number of terms in the model including the constant

Unlike R2, R2adj can become smaller when added terms provide little new information
and as the number of model terms gets closer to the total sample size. Ideally, R 2adj
should be maximized and as close to R2 as possible.
525
Multi. Linear Regression Example

Concept: Multi. Linear Regression Example
Software programs are normally used to calculate the partial regression coefficients
of multiple regression.For the purpose of this course, R2adj will be the focal point so
that a clear understanding of this value is evident in interpreting the results.
Example
The following is an example of multiple regression building upon the simple
regression model as seen previously using the data captured from a computer output
session window:
The manager of a commercial account department wants to find the relationship
between cost per transaction and a set of predictor variables believed to be related to
the cost. The terms are:
Y: Cost per transaction
X1: System issues
X2: Change requests

X3: Exception processing
526
Multi. Linear Regression Example Equation

Concept: Multi. Linear Regression Example Equation
Data from 29 runs are collected and shown in the table below:
Predictor
Coefficient
t Stat
P value
389.17
2.123
Standard
Error
66.09
1.214
Constant (Y)
X1 system
issues
X2 change
requests
X3 exception
processing
5.89
1.75
0.000
0.092
5.3185
0.9629
5.52
0.000
-24.132
1.869
-12.92
0.000
S=8.59782R2=87.4%R2 adj=85.9%
Theregressionequationis:
Y=389.17+2.123X1 (system issues)+5.3185 X2(change requests)-24.132 X3
exception processing
Results
Looking at R2adj, it would appear 85.9% of the variation in Y is explained by this
regression model. However, variable X1 (system issues), is not significant because the
p-value = 0.092 which is > 0.05.The following page displays the analysis of variance
multiple regression data table.
527
Multi. Linear Regression Example ANOVA

Concept: Multi. Linear Regression Example ANOVA
AnalysisofVariance Table Multiple Regression

Source
DF
(degrees of
freedom)
Regression 3
Residual 25
Error
Total
28
SS (sum of MS (mean F statistic P value

squares) square
error)
12833.9
4278.0
57.87
0.000
1848.1
73.9
14681.9
As seen in the previous page's data table, not all terms were significant (> 0.05).
Eliminate X1 (system issues) from the equation and refit the regression model using
three terms:
Constant (Y)
X2 change requests
X3 exception processing
528
Multi. Regression Example Model Refit

Concept: Multi. Regression Example Model Refit
Predictor
Coefficient
t stat
P value
483.67
4.7963
Standard
Error
39.57
0.9511
Constant Y
X2 change
requests
X3 exception
processing
12.22
5.04
0.000
0.000
-24.215
1.941
-12.48
0.000
S = 8.93207 R2 = 85.9% R2adj = 84.8%

The regression equation is now: Y = 483.67 + 4.7963 X2 (change requests) 24.215
X3 (exception processing)
Analysis of Variance
Source
DF (degrees SS (sum of
of freedom squares)
12607.6
2074.3
MS (mean F stat
square error
term)
6308.8
79.01
79.8
Regression
Residual
Error
Total
2
26
28
0.000
14681.9
529
P value
Multi. Linear Regression Example Results

Concept: Multi. Linear Regression Example Results
The value, R2adj, as seen in the data output table on the previous page adjusts the R2
coefficient by the number of terms in the regression model.
In this example, it would appear that 84.8% of the variation in Y is explained by
this regression model.
Shown below is the calculation of the R2adj equation using the data from the data
output table:
R2adj = 1- [SSerror / (n p)] / [SStotal / (n -1)]
= 1 [2074.3 / (29-3)] / 14681.9 / (29-1)] = 0.848
530
Regression User Tips

Task: Regression User Tips
Click each user tip below for helpful information about regression.
User Tip #1
Using the regression equation to predict a value of the dependent variable outside the
range of the independent variable is not recommended since you have no evidence that
the same linear relationship exists outside the observed range.
For example, think about the relationship between a persons height to age. Early on,
it would seem that as age increases so does height. Using that data to predict height
past the age of 16 would indicate that you would be 10 feet tall at some point!
User Tip #2
Many different relationships between Xs and Y can yield similar mathematical results.
Plot the data points by hand or by using a statistical software program before
interpreting any regression statistics. Linear regression is only appropriate for data that
can be plotted in an approximately straight line.
531
Simple Linear Correlation Introduction

Concept: Simple Linear Correlation Introduction
Correlation measures the linear association between two variables.

Correlation is important because it tells us if a relationship between variables exists.
As the inputs and outputs are reviewed during the process, we can determine which of
the inputs (Xs) have significant impact on the output (Y).Correlation is commonly
measured by the correlation coefficient r, and the formula is:
532
Correlation Coefficient

Concept: Correlation Coefficient
Correlation does not imply causation. Do not assume that a scatter plot pattern means
the two variables are related. It is likely that there is a correlation but possibly not
causation. The correlation tool does not establish causation. Relationships over a wider
range of data or a different portion of the range of data may exist. For example, there
is a strong association between increased income and age or seniority. Do not assume
that your income will increase because you are older or because you have more
experience or seniority.
Thecorrelation coefficient ranges from-1 r 1 and determines whether there is a

positive or negative correlation in the regression analysis, wherer is the correlation
coefficientand an estimate of (rho)the population parameter. A related value is the
coefficient of determination, denotedR2, discussed in the previous sub-topic, Simple
and Multiple Least-Squares Linear Regression. It is defined as the square of the
correlation coefficient and will satisfy the inequality:
0 R2 1
533
Correlation Key Points

Concept: Correlation Key Points
The following are key points about the correlation coefficient, r:

Description
Correlation coefficient range
Positive values
Perfect positive correlation
Negative values
Perfect negative correlation
Moderate correlation
Strong correlation
No linear correlation
Value
-1 r 1
+r occurs when the value of one variable
increases and the other variable increases
r = +1
-r occurs when the value of one variable
increases and the other variable decreases
r = -1
Typically when values of r range from 0.3 to
0.7
Typically when values of r range from 0.7 to 1
r=0
534
Correlation Testing Conditions

Concept: Correlation Testing Conditions
The following are conditions for correlation testing:
There is a population regression equation y = 0 + 1x so that for a given value of

x, the mean of the response variable y is 0 + 1x.
Given a particular value for x, the distribution of y-values is normal.
The distributions of y-values have equal standard deviations.
The y-values are independent.
535
Correlation Example Hypotheses

Concept: Correlation Example Hypotheses
The following lists the steps to calculate the correlation coefficient and the t-test
statistic:
The customer change request process within the corporate account department is a
project of interest for process improvement. From the data that have been collected,
the number of change requests processed per month seems to have a relationship to an
increased cost per transaction. Given = 0.05, is there a statistical correlation?
Step 1: Establish hypotheses.
Ho: = 0 or No correlation
Ha: 0 Correlation (two-tail test) (reject

values include both tails of the frequency
distribution)
In addition to 0, the alternative
hypothesis could be either of these:
< 0 for a left-tail test (reject values

are in the tail of the frequency
distribution less than the critical
value)
> 0 for a right-tail test (reject

values are in the tail of the frequency
distribution greater than the critical
value)
Step 2: Decide on a value of .
= 0.05 was given
536
Correlation Example Data Table

Concept: Correlation Example Data Table
Change Requests (X)
Cost per Transaction (Y)
X2
Y2
(X)(Y)
0.35
0.1225
0.35
0.39
16
0.1521
1.56
0.40
25
0.16
0.41
36
0.1681
2.46
S 16
u
1.55
78
0.6027
6.37
A 4
v
g
0.3875
537
Correlation Example Determining Results

Concept: Correlation Example Determining Results
Step 3: Perform the calculations.
538
Correlation Example Critical T-Values

Concept: Correlation Example Critical T-Values
Step 4: Determine r.
Since r = .99, there is a strong positive correlation between customer change requests
and cost per transaction.
Step 5: Find the critical t values.
Use the T - table and find the critical values:
t/2,2 and - t/2,2 for the two-tail test
- t,2 for the left-tail test

t,2 for the right-tail test
For this example, we will be using the two-tail test. Roll over Page Resources at the
bottom of the screen and click T-table. Look in the t-table using n 2 degrees of
freedom (4 -2 = 2 df) and the t0.025 column. The critical values are 4.303 and -4.303.
539
Correlation Example Calculated T-Values

Concept: Correlation Example Calculated T-Values
Step 6: Calculate the value of the

test statistic t.
For a correlation coefficient, the test
statistic is:
Step 7: Interpret the results.

Reject the null hypothesis if the test statistic is:
Less than - t/2,2 or greater than t/2,2 for
the two-tail test

Less than - t,2 for the left-tail test
Greater than t,2 for the right-tail test
tcalc > tcritical = 9.93 > 4.303, therefore we

reject the null hypothesis (Ha: 0). At a
significance level of 0.05, the data support the
conclusion that as the number of customer
change requests increases (predictor) so does
the cost per transaction (response).
540
Correlation Coefficient Confidence Interval

Concept: Correlation Coefficient Confidence Interval
According to ASQ's Glossary and Tables for Statistical Quality Control, "a confidence
interval is an estimate of the interval between two statistics that contains the true
value of the parameter with some probability."
For a moderately large sample size (n 25), the 100 (1 )% confidence interval on
is given by:
Where:
r is the estimate of the correlation coefficient.
ln is the natural logarithm of the quantity in parentheses behind it.
tanh(x)= (ex e-x)/(ex + e-x) (tanh stands for hyperbolic tangent function:
trigonometric mathematical functions related to a hyperbola rather than a

circle.Hyperbolic functions include the hyperbolic sine, hyperbolic cosine,
hyperbolic tangent, hyperbolic cotangent, hyperbolic secant, and hyperbolic
cosecant).
Z/2 is the multiple corresponding to a confidence level of 1 found from the
standard normal distribution.
Result
If 0 is contained in the confidence interval, then we conclude that the true correlation
coefficient is not significantly different from 0.
541
Correlation Confidence Interval Example

Concept: Correlation Confidence Interval Example
A random sample of n = 30 observations is made on the time to failure of an

electronic component and the temperature at which the component is used. The
correlation between the time to failure and the temperature is found to be r = 0.32.
We would like to construct the 95% confidence interval on the true correlation
coefficient () and determine if there is a significant correlation between time to
failure and temperature.
The necessary values for the 95% confidence interval are:
Z/2 = Z0.025 = 1.96
542
Correlation Confidence Interval Example Continued

Concept: Correlation Confidence Interval Example Continued
Using the values found above, we can find the left and right sides of the confidence
interval:
Therefore, we are 95% confident that the true correlation coefficient lies between
0.0456 and 0.6099. Since 0 is contained in the interval, we conclude that the
correlation between time to failure and temperature is not significantly different from
0, that is, there is no significant linear relationship between time to failure and
temperature.
543
Correlation Exercise

Concept: Correlation Exercise
544
Diagnostics

Concept: Diagnostics
Residuals
In the equations for simple (y = b0+ b1X + e) and multiple linear regression (y = b0 + b
1x + bn + e), residuals are described as the best estimate of the error term (e) and
are the difference between the predicted response variable for any given x and the
actual response:
Key assumptions of residuals in regression are:
Normally distributed with a mean of zero
Constant variance
Uncorrelated
545
Residuals

Concept: Residuals
As seen in the following graph, the line is drawn according to the method of least
squares. Residuals account for the unexplained in Y after the best-fit line is drawn.
Looking at the Y-axis, the residuals are the vertical distance of each individual point
from the line.
546
Residual e-value

Concept: Residual e-value
The prediction equation from the simple regression example shown previously in the
Simple and Multiple Least-Squares Linear Regression sub-topic was:
where x was the number of change requests predicting Y, the cost per transaction.
Change Requests
1
4
5
6
Cost per
Transaction
.35
.39
.40
.41
Predicted Cost per

Transaction
.351
.387
.399
.412
547
-0.001
0.003
0.001
-0.002
Residual e-value Data Plot

Concept: Residual e-value Data Plot
As you can see from the above image, the lack of data makes it impossible to reach a
conclusion about the plotting of the data. Let us take a look at the multiple regression
example where other Xs such as system issues and exception processing were also
analyzed in addition to change requests.
548
Residual Plots

Task: Residual Plots
Analysis of residuals is critical in determining if regression is valid. The multiple

regression example shows the relationship between cost per transaction and a set of
predictor variables. Click each type of residual plot below to see an example of the
plot and more information.
Normal probability plot
The normal probability plot of the residuals is used to help determine whether the
variables display a linear pattern consistent with a normal distribution showing points
approximately on a straight line. The normal distribution was discussed in the Measure
lesson of this course.
This normal probability plot shows an approximately linear pattern consistent with a
normal distribution. The two points in the upper-right corner of the plot may be
outliers (unnatural patterns).
Histogram
A histogram will help indicate if any outliers exist in the data so that they can be
eliminated from the data refitting the model.
This histogram indicates that outliers may exist in the data, shown by the two bars on
the far right side of the plot.
549
Residual Plots

Task: Residual Plots
Residuals versus the fitted values
The plot of residuals versus the fitted values (predictors) shows that the residuals get
smaller (closer to the reference line or 0) as the fitted values increase, which may
indicate that the residuals have a non-constant variance. Recognizable patterns reflect
a consistent variance and indicate that the model may not be valid. The error may not
be random if there is a series of increasing or decreasing points or a large number of
positive or negative residuals.
Residuals versus the order of the data
Residuals are plotted in the order that the data was collected and can be used to find
non-random error, especially of time-related effects. If a trend or pattern were evident,
it would indicate that there is a time order dependency in the data and that the model
might not be valid.
550
Multicollinearity Diagnostics

Task: Multicollinearity Diagnostics
Another type of diagnostic available to analyze residuals is the multicollinearity

diagnostic, which is used to test dependencies among the Xs. The validity of the
regression model depends on the assumption that the Xs are not strongly related. If
two or more Xs are correlated with each other that goes against the assumption and the
data are considered multicollinear. Click the multicollinearity detection methods
shown below to learn more.
Correlation coefficient
The correlation coefficient is a common method in detecting collinearity as previously

described in the Simple Linear Correlation sub-topic of this lesson.
VIF (Variance Inflation Factor)
The VIF measures the correlation between an X and other Xs in the regression.
VIF measures how much the variance of an estimated regression coefficient
increases if the predictors are correlated.
ri 2 is close to 1 if xi has a strong relationship with other Xs.
Typically, if the VIF calculation is greater than 10, the regression coefficients
may not be estimated adequately.
551
Diagnostic User Tips

Concept: Diagnostic User Tips
It is possible for many relationships between X and Y to have similar R2 or R2adj

results yet have dissimilar-looking regression plots. Always plot the data before
interpreting any regression statistics.
552
Measuring and Modeling Relationships Exercise

Concept: Measuring and Modeling Relationships Exercise
For each equation listed on the right, drag the corresponding equation name to the box
on the left.
553

Analyze
Hypothesis Testing
Learning Objectives
Six Sigma Black Belt | Analyze | Hypothesis Testing

At the end of this Analyze topic, all learners will be able to:
define, compare and contrast statistical and practical significance.
apply and interpret the significance level, power, type I and type II errors of
statistical tests.
understand how to calculate sample size for any given hypothesis test.
define and interpret the efficiency and bias of estimators.
compute, interpret and draw conclusions from statistics such as standard error,
tolerance intervals and confidence intervals.
understand the distinction between confidence intervals and prediction intervals.
apply hypothesis tests for means, variances and proportions, and interpret the
results.
define, determine applicability, apply and interpret paired-comparison parametric

hypothesis tests.
define, determine applicability, apply and interpret chi-square tests.
define, determine applicability, apply and interpret ANOVAs.
define, determine applicability and construct a contingency table, and use it to

determine statistical significance.
define, determine applicability and construct various non-parametric tests

including Mood's Median, Levene's test, Kruskal-Wallis and Mann-Whitney.
555
General Sequencing

Concept: General Sequencing
To achieve victory in a project, both practical and statistical improvements are

required.
556
Statistical vs. Practical Significance

Task: Statistical vs. Practical Significance
It is possible to find a difference to be statistically significant but not of practical

significance. Because of the limitations of cost, risk, timing, etc., you cannot
implement practical solutions for all statistically significant Xs. Click on each term
below to learn more.
Practical Significance
Practical significance is the amount of difference, change or improvement that will
add practical, economic or technical value to an organization.
Example - A 20% reduction in cycle time is a practical significance in a process
improvement project. This project objective/benefit exceeds the cost and risk of
implementation.
Statistical Significance
Statistical significance is the magnitude of difference or change required to distinguish
between a true difference, change or improvement and one that could have occurred
by chance. The larger the sample size, the more likely the observed difference is close
to the actual difference.
Example - A statistical difference of 0.25% at = 0.05 may exist between two
different sites of a large global corporation that manufacture the same product.
However, the cost savings accrued by eliminating the difference is not economically
justifiable.
557
Statistical vs. Practical Significance

Task: Statistical vs. Practical Significance
Determining Significance
Determining practical significance in a Six Sigma project is not the responsibility of
the Black Belt alone. You need to collaborate with others such as the project
Champion/Sponsor and finance manager to help determine the return on investment
(ROI) associated with the project objective.
558
Hypothesis Testing Introduction

Task: Hypothesis Testing Introduction
Statistical significance is determined by using hypothesis testing. Click each term

below to learn more.
Hypothesis Testing
A hypothesis is a theory about the relationships between variables. Statistical analysis
is used to determine if the observed differences between two or more samples are due
to random chance or to true differences in the samples.
Null Hypothesis
A null hypothesis assumes no difference exists between or among the parameters
being tested and is often the opposite of what is hoped to be proven through the
testing. The null hypothesis is typically represented by the symbol Ho.
Example:
Ho: 1 = 2
Alternate Hypothesis
Analternate hypothesis assumes that at least one difference exists between or among
the parameters being tested. This hypothesis is typically represented by the symbol Ha.
Examples:
Ha : 1 < 2
Ha : 1 > 2
Ha : 1 2
Phrasing
In hypothesis testing, the phrase to accept the null hypothesis is not typically
used.In statistical terms, the Six Sigma Black Belt can reject the null hypothesis,
thus accepting the alternate hypothesis, or fail to reject the null hypothesis.This
phrasing is similar to jury's stating that the defendant is not guilty, not that the
defendant is innocent.
559
Hypothesis Testing Steps Introduction

Concept: Hypothesis Testing Steps Introduction
The following list provides a typical step-by-step plan for performing hypothesis
testing:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Define the practical problem.

Define the practical objective.
Establish hypotheses to answer the practical objective.
Select the appropriate statistical test.
Define the alpha () risk.
Define the beta () risk.
Establish delta ().
Determine the sample size (n).
Collect the data.
Conduct the statistical tests.
Develop statistical conclusions.
Determine the practical conclusions.
In the following pages, each step will be described, including examples and
information about:
Significance level
Power
Type I and Type II errors
Sample size
560
Hypothesis Testing Steps 1 and 2

Concept: Hypothesis Testing Steps 1 and 2
Step 1: Define the practical problem.

From the Define and Measure phases, we have used tools such as the cause-and-effect
diagram, process mapping, matrix diagrams, FMEA and graphical data analysis to
identify potential Xs. Now you need statistical testing to determine significance:
Return mail volume is too high (Y = volume, X = division, X = product type, X =

ancillary endorsement).
Cost per unit is too high (Y = cost, X = system downtime, X = customer

requirement changes, X = exception processing).
Error rates are too high (Y = error rate, X = shift, X = product type, X = day of
week).
Step 2: Define the practical objective.
Define logical categorizations where differences might exist so that meaningful action
can be taken. Ask questions to determine what you want to prove (i.e., what questions
will the hypothesis test answer?):
Are there significant differences in return mail volume between division, product
types and ancillary endorsements?
Are there significant differences among the production shifts in variance of

system down time?
Do error rates vary by shift, product type and day of the week?
561
Hypothesis Testing Step 3

Concept: Hypothesis Testing Step 3
Step 3: Establish hypotheses to answer the practical objective.

The following is an example of hypotheses using a test of means where the mean of
each shift is equal against the alternative where they are not equal:
Null Hypothesis:
Ho: 1st shift = 2nd shift = 3rd shift

Alternate Hypothesis:
Ha: At least one mean is different
562

Step 4: Select the appropriate statistical test.

Based on the data that has been collected and the hypothesis test established to answer
the practical objective, refer to the Hypothesis Testing Road Map to select statistical
tests. The roadmap is a very important tool to use with each hypothesis test.Roll over
Page Resources at the bottom of the screen and click on Hypothesis Testing Road
Map to print out a take-away job-aid.
563
Hypothesis Testing Roadmap
Six Sigma Black Belt | Analyze | Hypothesis Testing | Hypothesis Testing Step 4
Example: Hypothesis Testing Roadmap
564
Hypothesis Testing Steps 5 and 6

Concept: Hypothesis Testing Steps 5 and 6
Step 5: Define the Alpha () Risk.

The Alpha Risk (i.e., Type II Error or
Producers Risk) is the probability of
rejecting the null hypothesis when it is
true (i.e., rejecting a good product when it
meets the acceptable quality level).
Typically, () = 0.05 or 5%.This means
there is a 95% (1-) probability you are
failing to reject the null hypothesis when
it is true (correct decision).For example,
the legal alpha risk is the risk an innocent
person could have been convicted of a
crime.
Step 6: Define the Beta () Risk.
The Beta Risk (i.e., Type II Error or
Consumers Risk) is the probability of
failing to reject the null hypothesis when
there is significant difference (i.e., a
product is passed on as meeting the
acceptable quality level when in fact the
product is bad). Typically, () = 0.10 or
10%. This means there is a 90% (1-)
probability you are rejecting the null when
it is false (correct decision). Also, the
power of the sampling plan is defined as
1- ; hence the smaller the , the larger
the power. For example, the legal beta risk
is the risk a guilty person could have been
found not guilty and been set free.
565

Step 7: Establish Delta ().

Delta () is the practical significant difference detected in the hypothesis test between:
proportion and a target.
Ha: p1 - p2 < or Ha: p1 - p2 > or Ha: p1 - p2
mean and a target.
Ho: - o =
Ha: p - po < or Ha: p - po > or Ha: p - po
two proportions.
Ho: p1 - p2 =
Ho: p - po =
Ha: - o < or Ha: - o > or Ha: - o
two means.
Ho: 1 - 2 =
Ha: 1 - 2 < or Ha: 1 - 2 > or Ha: 1 - 2
Example
The return mail volume reduction of 10% has been determined to be a practical
significance.
An error rate difference of 7% has been determined to be of practical
significance.
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Step 8: Determine the sample size (n).

Sample size depends on the statistical test, type of data and alpha and beta risks
.There are statistical software packages to calculate sample size.It is also possible to
manually calculate sample sizes using a sample size table. Roll over Page Resources
at the bottom of the screen and click Table to access a table to help you calculate
sample size.
Calculating sample size using /:
Where deltais the difference in the actual
process and the project target or objective
divided by the standard deviation.
Example
Historically, within the XYZ Company, the average cost of a transaction is $.40 with a
standard deviation of $.25.The goal of the project is to reduce the average cost to
$.30. Assuming the alpha risk of 5% and a beta risk of 10%, how many samples
would be needed?
Compute / = (.40-.30)/.25 = .4.
Look in the Two Sample Test Table for an alpha risk of 5% and a beta risk of
10%.
The sample size is 133.
567
Hypothesis Testing Step 8 cont.

Concept: Hypothesis Testing Step 8 cont.
Step 8 cont. Calculate sample size using n.

Usingthe formula on the left, where the
data is continuous and Z = 1.96 at a
confidence level of 95% (/2 = 0.025 Two
Tail Test), 2 is the standard deviation,
and E is the margin of error (the range of
values around the estimate that probably
contains the true value). This is also
known as the confidence interval.
Example
Historical information suggests that within mortgage loan documentation processing,
the standard deviation of the exceptions per day is 10. What is the minimum sample
size required at a 95% confidence level (Z=1.96) to confirm a significant shift of the
mean greater than 2 exceptions per day?
Compute n to find that 97 samples are
needed.
Sample size can also be calculated for
discrete data using the formula on the left
where p is the proportion defective.
User Tips
Increasing the sample size can reduce both the alpha and beta risk.
As the number of samples taken increases, the theoretical standard deviation of
the mean estimate decreases so we can reliably detect smaller and smaller
differences.
568
Hypothesis Testing Steps 9 - 10

Concept: Hypothesis Testing Steps 9 - 10
Step 9: Collect the data.
Data collection is based on the sampling plan and method.

Step 10: Conduct the statistical tests.
Use the Hypothesis Test Road Map to lead you in the right direction for the type
of data you have collected.
569

Step 11: Develop statistical conclusions.

According to Montgomery in Introduction to Statistical Quality Control, "the pvalue
is the smallest level of significance that would lead to rejection of the null hypothesis
(Ho)."
Typically, if = 0.05 and the p-value 0.05, then reject the null hypothesis and
conclude that there is a significant difference.
Typically, if = 0.05 and the p-value > 0.05, then fail to reject the null hypothesis
and conclude that there is not a significant difference.
Example
Ho: 1= 2 = 3
Ha: At least one mean is different
With = 0.05 and a computed p-value of 0.00, there is a significant difference

between mail endorsement classifications and return mail volume. Therefore, we
reject the null hypothesis.
Ho: 1 = 2 = 3
Ha: At least one i is different
With = 0.05 and a computed p-value of 0.12, there is not a significant

difference between shift and account processing errors. Therefore, we fail to
Statistical conclusions can be made by comparing the test statistic (calculated

value) to acritical value in a statistical table OR by using a statistical software
program to calculate the p-value:
The null hypothesis will be rejected if the absolute value of the test statistic is
greater than the critical value. For example:
Reject Ho if | tcalc | > tcritical /2, n-2
Do not reject Ho if | tcalc | < tcritical /2, n-2
If the test statistic (calculated value) = critical value, then it is often considered to
be a judgment call.
Example
Ho: = 0
Ha : 0
Account processing is not on target since tcalc > tcritical (4.74 > 2.262) therefore,
Ho: 1 = 2
Ha : 1 < 2
Since tcalc < tcritical, fail to reject the null hypothesis: -0.37 > -2.306, we cannot
570

Step 12: Determine the practical conclusions.

Restate the practical conclusion to reflect the impact in terms of cost, return on
investment, technical, etc. Remember, statistical significance does not imply practical
significance.
Example
Statistically the first quarter has the worst error rate and an increased missed
account rate of 9%.
Through analysis, it has been determined that distribution center G reflects a
decreased productivity rate compared to the other distribution centers. In addition
to low productivity, there is an increase in employee turnover of 20% for second
shift employees.
571
Concepts of Hypothesis Testing Exercise

Concept: Concepts of Hypothesis Testing Exercise
For each of the following statements, click either the True or False box:
572
Point and Interval Estimation

Concept: Point and Interval Estimation
As discussed in the Measure lesson, a population is the entire set (totality) of units,
quantity of material or observations under consideration. A population may be real and
finite, real and infinite or completely hypothetical. Characteristics describing a
population mean are called parameters. An example of a population is all registered
voters in the United States.
= Population Mean (Note: the mean of a population is never actually known.)
2 = Population variance
N = Number of values (population)
A sample is a group of objects actually measured in a statistical study.It is a subset of
the population of interest. Statistics based on samples are used as estimators of the
equivalent population parameters. An example of a sample is a survey of 100 voters.
X = Sample Mean
s2 = Sample variance
n = Number of values (sample)
On the following page, click Continue to see an example of how sample statistics are
used to make inferences about population parameters.
573
Inferences about Population Parameters

Concept: Inferences about Population Parameters
574
Bias

Concept: Bias
Bias is a difference between the sample and the population, caused by the sampling
method. There is uncertainty about the population anytime you sample; hence the
estimator is called unbiased if the average of all possible values is equal to the
parameter being estimated. For example, the following equation shows the bias that
changes a population variance to a sample variance:
Popul Sample
ation variance
varia
nce
N = size of the population
n = sample size
= population mean
X = the sample mean
Bias
(As n
appro
aches
N, the
bias
appro
aches
zero)
575
Unbiased Estimator

Concept: Unbiased Estimator
The sample mean is an unbiased estimator for the population mean as a result of the
Central Limit Theorem discussed earlier in the Measure Lesson of this course. The
estimator is unbiased if the expected value of the estimator equals the population
parameter. For example, the mean is an unbiased estimate because E(X) = . When a
known (finite) population is sampled many times, the calculated sample averages can
be different even though the population is stable. Click each sample mean to see to an
example:
576
Estimating Population Parameters

Task: Estimating Population Parameters
The differences in sample averages are a result of the nature of random sampling.
Given that these differences exist, the key is to estimate the true population parameter
with a known degree of certainty. Click each term below to learn more.
Confidence Intervals
According to ASQ's Glossary and Tables for Statistical Quality Control, "a confidence
interval is the estimate of the interval between two statistics that contains the true
value of the parameter with some probability. This probability is called the confidence
level of the estimate. Confidence intervals for the mean are independent of the
population distribution if the sample size is large. Confidence levels typically used are
90%, 95% and 99%. As n increases, the confidence intervals get tighter as the
endpoints converge on the true parameter. The interval either contains the parameter or
it does not."
If it does, the probability that the population parameter is in the interval is called
the confidence coefficient or confidence level = 1 alpha. For example, a 95%
confidence interval would have a 5% alpha risk.
If it does not, the parameter would be considered to be rejected. The alpha risk =
1 confidence interval and is the probability that the population parameter is
not in the interval.
Standard Error
According to the ASQ Glossary, standard error, abbreviated Se, is the standard
deviation of a sample statistic or estimator indicating the amount of error that will
occur when a sample mean is used to estimate the mean of a population. When dealing
with sample statistics, we either refer to standard deviation of the sample statistic or
to the standard error of the mean as shown by:
577
Estimating Population Parameters

Task: Estimating Population Parameters
Prediction Interval
The prediction interval is an interval based on the predicted value that is likely to
contain the values of future observations. The prediction interval will be wider than
the confidence interval because it contains bounds on individual observations rather
than a bound on the mean of a group of observations.
Where:
xp = value of the predictor variable
yp = calculated response variable using the regression equation

Se and Sxx have been defined previously
df = n - 2
Tolerance Interval
According to Six Sigma for the Next Millennium: A CSSBB Guidebook by Pries, a
tolerance interval is the stated coverage for a fixed proportion of the population
with a declared confidence. There are both one-sided and two-sided tolerance
intervals. The endpoints of a tolerance interval are generally referred to as tolerance
limits."
An application of tolerance intervals to manufacturing involves comparing
specification limits designated by the client with tolerance limits that cover a specified
proportion of the population.
578
Confidence Interval Conditions

Task: Confidence Interval Conditions
Click each condition below to see the corresponding confidence interval equation.
Large sample (n 30) when is known
Equation for the confidence interval of a mean () of a population:
Large sample (n 30) when is unknown

Equation for the confidence interval for a mean () of a population when is
unknown and replaced by s, an estimator of :
Small Sample (n 30)

Equation for the confidence interval for a mean () of a population:
Population Variance
Confidence interval equation:
Population Standard Deviation

Confidence interval equation:
579
Confidence Interval Large Sample

Concept: Confidence Interval Large Sample
Calculate the confidence interval for a large sample (n 30) when is unknown and
replaced by s, an estimator of .
Example
Problem and given values:
An estimate is needed for the average weight for a population of 1000 fastening snaps
received from a supplier. Rather than measuring all 1000 fastening snaps, the shift
manager decides to randomly select a sample of 50 for measurement. The average
weight of the sample is determined to be 0.34 ounces with a standard deviation of
0.004. Calculate the confidence interval for the mean with = 0.10.
The calculation is on the next page.
580
Confidence Interval Large Sample cont.

Concept: Confidence Interval Large Sample cont.
Calculation
Using the given information, the formulas for the endpoints of the confidence interval
are:
Therefore, we are 90% confident that the population mean is between 0.33907 and
0.34093.
581
Confidence Interval Small Sample

Concept: Confidence Interval Small Sample
Calculate the confidence interval for a small sample (n 30) for a mean () of a
population.
Example
Problem and Given Values
An auto parts manufacturer recently replaced a new machine that produces a part.
Historically, under a normal processing environment the diameter of this part is 1.50.
Now that a new machine is producing the part, the general manager wants to know if
the diameter has changed. A random sample of 20 parts reflects an average diameter
of 1.60 with a standard deviation of 0.009. Assume the diameters are normally
distributed and calculate a 95% confidence interval.
582
Confidence Interval Small Sample cont.

Concept: Confidence Interval Small Sample cont.
Calculation
Roll over Page Resources at the bottom of the screen and click T Distribution Table
to determine the critical value. With df = 19, looking at t.025 the critical value is 2.093.
Using the given information, the formulas for the endpoints of the confidence interval
are:
The 95% confidence interval is (1.5958, 1.6042). The data indicate that we can be
95% confident that the mean of the population of diameters is between 1.5958 and
1.6042. Since 1.50 is not in the interval, we are 95% confident that the mean has
changed.
583
Confidence Interval for Standard Deviation

Concept: Confidence Interval for Standard Deviation
Confidence interval equation for a standard deviation () of a population

The confidence interval for the standard deviation subscribes to a 2 distribution and is
graphically shown as follows:
The graph depicts /2 = 0.05:
1-/2 is the left confidence interval
/2 is the right confidence interval
584
Confidence Interval for Standard Deviation cont.

Concept: Confidence Interval for Standard Deviation cont.
Example
A new process has been established in the manufacturing of ink for print cartridges.
The manufacturer is interested in determining if the amount of variability in the
brilliance of the color has changed. Historically, the standard deviation has been 2.75.
A random sample of 25 ink receptacles was collected, and the standard deviation was
calculated to be 2.79. Assume the diameters are normally distributed and calculate a
90% confidence interval. What is your conclusion?
s = 2.75
n = 25
Roll over Page Resources and click Chi-square Distribution Table to determine the
critical value, where:
df = 24
2 and 2
.05
.95
585
Confidence Interval for Standard Deviation cont.

Concept: Confidence Interval for Standard Deviation cont.
Calculation
Degrees freedom (df) = 24

/ 2 = .05 and 1 / 2 = .95, (36.415) and (13.848)
Using the given information and formula, the calculated confidence intervals are:
Lower confidence limit = 2.233
Upper confidence limit = 3.620

The 90% confidence interval is (2.233, 3.620). The data indicate that we can be 90%
confident that the standard deviation of the population of ink receptacles is between
2.233 and 3.620. Since the historical standard deviation (2.75) is within the interval,
we conclude with 90% confidence that the standard deviation has not changed.
586
Tolerance Intervals

Concept: Tolerance Intervals
Example
A sample of n = 20 from a stable process produced the following results:
Roll over Page Resources at the bottom of the screen and click Tolerance Interval
Factors to determine the value of K.
We can estimate that the interval from 11.024 to 18.977 will contain 99% of the
population with a confidence of 95%.
587
Point and Interval Estimation Distinctions

Concept: Point and Interval Estimation Distinctions
Confidence, tolerance, and prediction intervals are all interrelated, yet each is
distinct as to point and interval estimations.
588
Point and Interval Estimation Exercise

Concept: Point and Interval Estimation Exercise
Below are five statements about point and interval estimation. Drag the three correct
statements on the left to the appropriate boxes on the right. Feedback will be given for
incorrect answers.
589
Tests for Means, Variances, and Proportions

Concept: Tests for Means, Variances, and Proportions
Hypothesis testing plays an important role in the Six Sigma methodology, as

discussed previously in this course.Once you have the data collected and manipulated,
you are ready to perform the tests that turn a practical problem into a statistical
problem. According to Montgomery in Introduction to Statistical Quality Control,
"The pvalue is the smallest level of significance that would lead to rejection of the
null hypothesis (Ho)." For statistical tests:
Choose appropriate risk, generally 0.05 (95% confidence level).

Verify correct sample size.
Typically, if = 0.05 and the p-value 0.05 (test value falling in the reject
region), then reject the Ho (Null) hypothesis.
Typically, if = 0.05 and the p-value > 0.05 (test value not in the reject region),
then fail to reject the Ho (Null) hypothesis.
The hypothesis test summary displays the test statistic, statistical tests, null and
alternate hypotheses for means, variances and proportions.Roll over Page Resources
and click Summary Chart to view and print for a take-away job-aid.
590
Summary Chart
Six Sigma Black Belt | Analyze | Hypothesis Testing | Tests for Means, Variances, and Proportions
Example: Summary Chart
591
Hypothesis Tests for Means

Concept: Hypothesis Tests for Means
Ho : A = B
H a : A B
Ho : A = Target or Historic Mean
Ha : A Target or Historic Mean
Ho : A = B = C
Ha : At least one is different
592
Tests for Means Introduction

Concept: Tests for Means Introduction
The statistical tests for means that a Black Belt would commonly use are:
One-sample Z-test: for population mean
Two-sample Z-test: for population mean
One-sample T-test: single mean (one sample versus historic mean or target value)
Two-sample T-test : multiple means (sample from each of the two categories)
ANOVA (Analysis of Variance) (sample from three or more categories)

An example ofthe One-sample Z-test for population mean, Two-sample Z-test for
population mean, One-sample T-test, and the Two-sample T-test will be shown in
this sub-topic. One-way ANOVA and Two-way ANOVA will be discussed later under
the specific sub-topic of ANOVA.
593
One-Sample Z-Test for Population Mean Introduction

Task: One-Sample Z-Test for Population Mean Introduction
The One-sample Z-test for population mean is used when a large sample (n 30) is
taken from a population and we want to compare the mean of the population to some
claimed value.This test assumes the population standard deviation is known or can be
reasonably estimated by the sample standard deviation and uses the Z distribution.
Click the information below to learn more.
Hypotheses
Null hypothesis
Ho: = 0
where0 is the claim value compared to the sample.
Alternative hypothesis may take one of these forms:
Ha: 0
Ha: < 0
Ha: > 0
Test Statistic
Where:
x is the sample mean.
can be estimated by s for the sample.
n is the sample size.

Critical Values/Reject Regions
For Alternate Hypothesis
Reject Ho if:
Ha: 0
z < -z /2 or z > z /2
Ha: < 0
z < -z
Ha: > 0
z > z
594
One-Sample Z-Test Example Steps 1 and 2

Concept: One-Sample Z-Test Example Steps 1 and 2
Example
A weight loss company is introducing a new marketing campaign and wishes to
include in the advertisement that the average weight loss of a participant is 5 pounds
per month. An associate from the marketing department randomly chooses 75
participant files and finds the sample has an average weight loss of 4.4 pounds per
month. Suppose the standard deviation of the population is 0.2. Is the claim of 5
pounds lost per month valid? The marketing department wants a 95% confidence level
in the claim.
Step 1: Establish the hypotheses.
Ho: = 5.0
Ha: < 5.0 (left-tail test)
Step 2: Calculate the test statistic.
595
One-Sample Z-Test Steps 3 and 4

Concept: One-Sample Z-Test Steps 3 and 4
Step 3: Determine critical value.
For a one-tail test, find the value that has an area of to its right. The negative of
this value is the critical value. The reject region is the area to the left of the
negative value.
Given a 95% confidence level, = 0.05. From the hypothesis test, a one-tail test is
used to find the area of in the Z-table (0.05). Roll over Page Resources at the
bottom of the screen and click Z-Table. The value has an area of to its right, 1.645.
The negative value,-1.645, is the critical value.
Step 4: Draw the statistical conclusion.
The calculated value of -25.98 (to the left of -1.645) is in the reject region (zcalc < -z),
so therefore reject the null hypothesis. At a 95% confidence level, the data does not
support the claim of an average weight loss of 5 pounds per participant. The marketing
campaign should not include this claim in the advertisement.
596
Two-Sample Z-Test for Population Mean

Task: Two-Sample Z-Test for Population Mean
The Two-sample Z-test for population mean is used after taking 2 large samples (n
30) from 2 different populations in order to compare them. This test uses the Z-table
and assumes knowing the population standard deviation, or estimated by using the
sample standard deviation. Click the information below to learn more.
Hypotheses
Null hypothesis:
Ho: 1= 2
Ha : 1 2
Ha : 1 < 2
Ha : 1 > 2
Test Statistic
Where:
x1 and x2 are the sample means.
s1 and s2 are the sample standard deviations.

n1 and n2 are the sample sizes.

For Alternative Hypothesis
Reject Ho if:
Ha : 1 2
z < -z/2 or z > z/2
Ha : 1 < 2
z < -z
Ha: 1> 2
z > z
Note: The steps in completing a Two-sample Z-test are the same as the One-sample
Z-test, but with the appropriate calculation for the test statistic.
597
One-Sample T-test Introduction

Task: One-Sample T-test Introduction
TheOne-sample T-test is used when a small sample (n < 30) is taken from a
population and you want to compare the mean of the population to some claimed
value.This test assumes the population standard deviation is unknown and uses the t
distribution. Click the information below to learn more.
Hypotheses
Null hypothesis
Ho: = 0
Where:
0 is the claim value compared to the sample.

Alternative hypothesis (may take one of these forms)
Ha: 0
Ha: < 0
Ha: > 0
Test Statistic
Where:
x is the sample mean.
s is the sample standard deviation.
n is the sample size.

Reject Ho if:
Ha: 0
t < -t /2 or t > t /2
Ha: < 0
t < -t
Ha: > 0
t > t
Where:
t values have n - 1 degrees of freedom.
598
One-Sample T-test Example Steps 1 and 2

Concept: One-Sample T-test Example Steps 1 and 2
Example
The Loan Reconciliation Department is reviewing the outstanding general ledger
items process to determine if it is on target.The mean balance on an outstanding
general ledger item is $5,500 (target value).A sample of 10 outstanding general ledger
items was reviewed, reflecting a mean item balance of $5,506 with a standard
deviation of $4. Is the process on target? The significance level = 0.05.
Ho: = 5,500
Ha: 5,500
599
One-Sample T-test Steps 3 and 4

Concept: One-Sample T-test Steps 3 and 4
Step 3: Determine the critical values.

Roll overPage Resources at the bottom of the screen and click T-test table to view
the table.The sample size was 10, so df is n -1 or 9. Look at the t.025 column (/2) and
9 df. The critical value is2.262.
Reject Ho if tcalc < -t /2 or tcalc > t /2otherwise, do not reject Ho.

Since tcalc > tcritical reject the null hypothesis: 4.74 > 2.262 the process is not on target.
600
Two-Sample T-test Introduction

Task: Two-Sample T-test Introduction
TheTwo-sample T-test is used when two small samples (n < 30) are taken from two
different populations and compared. There are two forms of this test: assumption of
equal variances and assumption of unequal variances. Click the information below to
learn more.
Hypotheses
For both assumptions of equal and unequal variances the hypotheses are:
Null hypothesis
Ho: 1 = 2
TheAlternate hypothesis may take one of the following forms:
Ha : 1 2
Ha : 1 < 2
Ha : 1 > 2
Test Statistic
Assumption of equal variances
Where pooled variance is:
Assumption of unequal variances
Where:
x1 and x2 are the sample means.
s1 and s2 are the sample standard deviations.

n1 and n2 are the sample sizes.

Reject Ho if:
Ha: 1 2
t < -t /2 or t > t /2
Ha: 1 < 2
t < -t
Ha: 1 > 2
t > t
601
Two-Sample T-test Introduction

Task: Two-Sample T-test Introduction
Degrees of Freedom
Assumption of equal variances
(n1 + n2) - 2
Assumption of unequal variances
602
Two-Sample T-test Example

Concept: Two-Sample T-test Example
Example
Two call centers (A and B) are being tested to see if customer wait time is statistically
the same.A sample of five wait times was taken from both call centers.The historic
mean is 7.5 seconds. Are the call centers the same? Assume = 0.05.
Call
Average
Center A
(sec)
Ind. Avg.
(Ind. -
10
7.2
2.8
7.84
7.2
-0.2
7.2
7.2
12
Call
Average
Center B
(sec)
Ind. Avg.
(Ind. -
8.2
0.8
0.64
0.04
11
8.2
2.8
7.84
-3.2
10.24
8.2
-6.2
38.443
-4.2
17.64
14
8.2
5.8
33.64
7.2
4.8
23.04
8.2
-3.2
10.24
Sum
58.8
Sum
90.8
Avg.)2
603
Avg.)2
Two-Sample T-test Steps 1 and 2

Concept: Two-Sample T-test Steps 1 and 2
Step 1: Establish the

hypotheses.
Ho: A = B
Ha : A B

In this example, the two populations with unknown
means and unknown variances are assumed to be
unequal.
604
Two-Sample T-test Steps 3 and 4

Concept: Two-Sample T-test Steps 3 and 4

Roll overPage Resources at the bottom of the screen and click T-test table to view
the table. In a two-sample t-test, degrees of freedom are calculated using the following
formula:
Note: The degrees of freedom should be rounded down to be conservative.

Look at the t.025 column (/2) and 7 d.f. and you will see the critical values are -2.365
and 2.365.
Reject Ho if tcalc < -t /2 or tcalc > t /2 otherwise, do not reject Ho.

Since tcalc >-t /2 fail to reject the null hypothesis: -0.37 > -2.365. There is not a
statistical difference between Call Center A and Call Center B.
605
Hypothesis Tests for Variances

Concept: Hypothesis Tests for Variances
Ho: 2After = 2Before
Ha: 2After 2Before
Ha: 2After > 2Before
Ha: 2After < 2Before
606
Tests for Variances Introduction

Concept: Tests for Variances Introduction
An example of the F-test Statistic will be shown in this sub-topic of the course.
Levene's Test Statistic will be discussed along with an example in the
non-parametric tests sub-topic of this lesson.
When comparing two populations' means using continuous data, you must first decide
if a statistical difference exists in the variances (homogeneity of variance test). The
normality of the data test is important because you need to know the type of
distribution to determine the type of variance test to use.
2 samples
Normal distribution F- test

Non-normal
distribution
2 or more samples More than 2

samples
Bartletts Test
Levenes Test
607
F-test Statistic Step 1

Concept: F-test Statistic Step 1
Example
Two check processing centers are being evaluated to see if there is a difference in
processing time.We want to know if the processing time variability is significantly
different at the two centers. Sample sizes from Center 1 and Center 2 were 10 and 9
respectively and have sample variances of S12 = 6.89 and S22 = 4.96. Given = 0.05,
are the population variances different at a 95% confidence level?
Ho: 21 = 22
Ha: 21 22
608
F-test Statistic Steps 2 - 4

Concept: F-test Statistic Steps 2 - 4

F distribution tables are entered using the degrees of freedom which are designated by
1 and 2 ("nu"), where:
1 = n1 - 1 = 10 - 1 = 9
2 = n2 - 1 = 9 - 1 = 8
Roll over Page Resources and click F-Distribution Table.
Look in the table and read across the table to find 1 = 9 degrees of freedom.
Read down the table to find 2 = 8 degrees of freedom. At the interaction of the
column and row, read the value 3.39, the right (upper) critical value given by:
Look in the table and read across the table to find 1 = 8 degrees of freedom.
Read down the table to find 2 = 9 degrees of freedom. At the interaction of the
column and row, read the value 3.23, the left (upper) critical value given by:

If Fcalc> Fcritical, then reject the null hypothesis, because the variances are different.
Since the calculated F value of 1.39 is between the critical values of 0.31 and 3.39, we
fail to reject the null hypothesis and cannot conclude that the population variances of
Center 1 and Center 2 are different at a 95% confidence level.
609
Hypothesis Tests for Proportions

Concept: Hypothesis Tests for Proportions
Ho: pMonday = pTuesday = pWednesday = pThursday = pFriday
Ha: At least one is different
Ho: pa = Target
Ha: pa Target
Ho: pa = pb
Ha : p a p b
Ha : p a > p b
Ha : p a < p b
Note: During the discussion of tests for proportions, the target will also be referred to
as "claim," "hypothesized p," and "historical value."
610
Tests for Proportions Introduction

Concept: Tests for Proportions Introduction
The statistical tests for proportion that a Black Belt would commonly use are:
One-proportion
Two-proportion
Chi-square
Examples ofthe One-proportion and Two-proportiontests and the steps to calculate
them will be shown in this sub-topic. The Chi-square test will be covered in the
contingency tables and goodness-of-fit Test sub-topics later in the course.
Situation
Summarized data from two or
more samples.
Sample proportion versus
historic proportion or target.
Sample proportion before
improvement actions versus
sample proportion after
improvement actions.
Statistical Test Used

Chi - square
1-Proportion test
2-Proportion test
611
One-Proportion Test Introduction

Task: One-Proportion Test Introduction
The One-proportion test is used when taking a sample from a population and the
number of units of interest is counted in the sample in order to compare the
populations mean to some claim. Click the information below to learn more.
Use When
np and n (1-p) are > 5, where n is the sample size and p is the proportion.
This assumption is necessary for making a normal approximation to the binomial
distribution where Z tables can be used.
For example, use the One-proportion test to check if there is a statistical difference
between:
Current fraction defective of a product to the historical fraction defective
Current percent of "yes" votes on a proposition to the percent in a prior election

Hypotheses
Null hypothesis
Ho: p = po
Where po is the claim value for comparing the sample.
Alternate hypothesis may take one of these forms:
Ha : p p o
Ha : p < p o
Ha : p > p o
Test Statistic
where p' = the proportion of units of interest in the sample.

For Alternative Hypothesis
Reject Ho if:
Ha : p p o
z < -z/2 or z > z/2
Ha : p < p o
z < -z/2
Ha : p > p o
z > z/2
612
One-Proportion Test Example Step 1

Concept: One-Proportion Test Example Step 1
Example
Product accuracy must be on target at 0.90, so use the one-proportion test to determine
if the current process is on target. A samplen of 500 products was taken and 400 were
accurate. Assume = 0.05.
Ho: p = Target
Ha: p < Target
613
One-Proportion Test Step 2

Concept: One-Proportion Test Step 2

Data was collected to calculate p (proportion of accuracy):
p = population proportion
n =sample size
x = number of items in the sample with the defined attribute
p' = sample proportion= x/n = 400/500 = 0.8
p0 = the hypothesized proportion
614
One-Proportion Test Steps 3 and 4

Concept: One-Proportion Test Steps 3 and 4
Step 3: Determine the critical value.

Using = 0.05, rollover Page Resources at the bottom of the screen and click
Normal Distribution Table. The test Z value is 1.645.
If Zcalc < -Z critical, reject the null hypothesis. Otherwise, do not reject the null
hypothesis.
Since Zcalc < -Z critical ,reject the null hypothesis: -7.5 < -1.645.
Accuracy is not on target at a goal of 90% (Ha: p < Target).
615
Two-Proportion Test Introduction

Task: Two-Proportion Test Introduction
The Two-proportion test is used to determine if a proportion from one sample is

statistically different than a proportion from another sample. In each sample, units of
interest are counted and a proportion is calculated relative to the total sample in order
to compare the proportions to each other. Click the information below to learn more.
Use When
np and n (1-p) are > 5 where n is the sample size and p is the proportion.
This assumption is necessary for making a normal approximation to the binomial
distribution where Z tables can be used.
For example, use the Two-proportion test to check if there is a statistical difference
between:
Proportion defective before and after a process improvement
Percent accuracy of form completion between 2 different office locations

Hypotheses
Null hypothesis
Ho: p1= p2
Where p1 and p2 are the proportions in the populations being compared.
Ha : p 1 p 2
Ha : p 1 < p 2
Ha : p 1 > p 2
616
Two-Proportion Test Introduction

Task: Two-Proportion Test Introduction
Test Statistic
p = pooled proportion
617
Two-Proportion Test Example Step 1

Concept: Two-Proportion Test Example Step 1
Example
Product accuracy must improve towards the target of 0.90.Process improvements
have been implemented, and the project manager wants to determine if these
improvements have increased accuracy. In the original sample (n) of 500, 400 were
accurate. Another sample was taken after the improvements were implemented and
220 out of 250 were deemed accurate.
Ho: p1 = p2
Ha : p 1 < p 2
618
Two-Proportion Test Step 2

Concept: Two-Proportion Test Step 2

Data was collected to calculate p (proportion of accuracy):
p1 and p2= population proportions
n1 and n2 = sample sizes

x1 and x2 = number of items in the samples with the defined attribute
p1 = x1/n1 = 400/500 = 0.8 (original sample)
p2 = x2/n2 = 220/250 = 0.88 (2ndsample)
619
Two-Proportion Test Steps 3 and 4

Concept: Two-Proportion Test Steps 3 and 4

Using = 0.05, rollover Page Resources at the bottom of the screen and click
Normal Distribution Table. The test Z value is 1.645.
If Z calc < -Z critical, reject the null hypothesis. Otherwise, do not reject the null
hypothesis.
Since -2.73 < -1.645, we reject the null hypothesis and conclude that the solutions
implemented have improved the accuracy of the process.
620
Paired-Comparison Tests Introduction

Concept: Paired-Comparison Tests Introduction
Paired-comparison t-tests are powerful ways to compare data sets by determining if

the means of the paired samples are equal. Making both measurements on each unit in
a sample allows testing on the paired differences.
An example of a paired comparison is two different types of hardness tests conducted
on the same sample.
Once paired, a test of significance attempts to determine if the observed difference
indicates whether the characteristics of the two groups are the same or different. A
paired comparison experiment is an effective way to reduce the natural variability that
exists among subjects and tests the null hypothesis that the average of the differences
between a series of paired observations is zero.
In this section, the paired t-test for two population means will be discussed along
with an example.
621
Paired-Comparison Tests Example

Concept: Paired-Comparison Tests Example
In this paired t-test for two population means example, each paired sample consists
of a member of one population and that members corresponding member in the other
population.
Example
A candy company will be using a new chocolate recipe, and the plant manager
suspects that the cycle time to produce chocolates will be impacted. She is claiming
that there will be a need for an increase in staff. Cycle time for a sample size of 10
chocolates was tracked for each type of recipe on a machine that produces the
chocolates made from both recipes. Does the data indicate that the new chocolate
recipe increases cycle time when = 0.05? Assume that the differences are normally
distributed.
Sample #
Old recipe (time in secs.)
New recipe (time in secs.)
Difference, d
1
7
7
0
2
6
6
0
622
3
8
7
1
4
9
8
1
5
5
5
0
6
5
5
0
7
5
6
-1
8
8
8
0
9
9
7
2
10
7
7
0
6.9
6.6
0.3
Paired-Comparison Tests Steps 1 and 2

Concept: Paired-Comparison Tests Steps 1 and 2

hypotheses.
D = 1 - 2 = 0
The established hypothesis

test is a:
Two-tail test when Ha
is a statement of does
not equal ( )
Ha : D 0
Left-tail test when Ha

has the < sign
Right-tail test when Ha

has the > sign
Ho: D = 0
623
Paired-Comparison Tests Steps 3 and 4

Concept: Paired-Comparison Tests Steps 3 and 4

Roll overPageResources and clickT-test table to find the critical value using
degrees freedom ofn -1. Since d.f. = 10 - 1 and = 0.05 with a two-tailed test, the
critical value is in the ninth row of the t.025 (2.262).
If t calc > t critical or tcalc < -t critical, reject the null hypothesis. Otherwise, do not
The calculated value of 1.152 is not in the reject region (1.152 < 2.262), so therefore
we fail to reject the null hypothesis. At a 95% confidence level, the data suggests that
the cycle time did not change using the new chocolate recipe, therefore refuting the
claim that additional staff is needed.
624
Equation Exercise

Concept: Equation Exercise
For each equation, definition, or hypothesis listed on the right, drag the corresponding
answer to the appropriate box on the left.
625
Goodness-of-Fit Test

Concept: Goodness-of-Fit Test
In the goodness-of-fit tests, one is comparing and observed (O) frequency distribution
to an expected (E) frequency distribution.
The relationship is statistically described by a hypothesis test:
Ho: Random variable is distributed as a specific distribution with given
parameters.
Ha: Random variable does not have the specific distribution with given
parameters.
The formula for calculating the chi-square test statistic for this one-tail test is:
A random sample of size n is taken from the population. The degrees of freedom for
this test is k m 1, where:
k = number of intervals or cells from the sample to form a frequency distribution
m = number of parameters estimated from the sample data
626
Goodness-of-Fit Test Step 1

Concept: Goodness-of-Fit Test Step 1
The following example is taken from Quality Engineering Statistics, by Robert A.

Dovich.
Example
Management believes that the time between machine breakdowns follows the
exponential distribution. We track a bank of identical machines for a number of hours
between breakdowns. Test the hypothesis that the distribution is exponential using a
95% ( = 0.05) level of confidence.
Ho: Distribution is exponential.
Ha: Distribution is not exponential.
627
Goodness-of-Fit Test Steps 2 and 3

Concept: Goodness-of-Fit Test Steps 2 and 3
Step 2: Determine lambda () from the observed frequencies.

The data are grouped in intervals of 100 hours in the following table:
Time Between Breakdowns (Interval)
Interval 0-100
>100-20 >200-30 >300-40 >400-50 >500-60 >600

0
0
0
0
0
180
63
53
33
18
6
Total
Number 325
678
of
Breakdo
wns
From a sample of 678, the average time to breakdown was estimated at 156.6 hours:
= 1/156.6 = 0.0064
Step 3: Calculate the expected values.
Interval
0 - 100
Probability
>100 -200
e-0.0064(100)-e-0.0064(200) =
0.2493
169.0
>200 - 300
e-0.0064(200)-e-0.0064(300) =
0.1314
89.1
>300 - 400
e-0.0064(300)-e-0.0064(400) =
0.0693
47.0
>400 - 500
e-0.0064(400)-e-0.0064(500) =
0.0365
24.7
>500 - 600
e-0.0064(500)-e-0.0064(600) =
0.0193
13.1
>600
e-0.0064(600) = 0.0215
= 1.0000
14.6
e0e-0.0064(100)
= 0.4727
Expected Value
320.5
678.0
628
Goodness-of-Fit Test Step 4

Concept: Goodness-of-Fit Test Step 4

Using the chi-square test statistic and the values from the previous data tables:
The degrees of freedom is computed as the number of intervals minus the number of
parameters estimated (which is 1, as the mean was estimated from the sample), minus
1:
df = 7 1 1 = 5
629
Goodness-of-Fit Test Steps 5 and 6

Concept: Goodness-of-Fit Test Steps 5 and 6

Rollover Page Resources at the bottom of the screen and click Chi-square
Distribution Table. Look for 5 (df) under the 20.05 column. The critical value is
11.070.
If 2
> 2 , then reject the null hypothesis.
calc
,df
Since 18.878 > 11.070, we reject the null hypothesis at a 0.05 significance level. The
time to breakdown for this equipment is not modeled by the exponential distribution
(Ha: Distribution is not exponential).
630
ANOVA Introduction

Task: ANOVA Introduction
Analysis of variance (ANOVA) is a technique to determine if there are statistically

significant differences among group means by analyzing group variances. An ANOVA
is an analysis technique that evaluates the importance of several factors of a set of data
by subdividing the variation into component parts. Click the information below to
learn more about ANOVA.
What does ANOVA test?
ANOVA tests to determine if the means are different, not which of the means are
different:
Ho: 1 = 2 = 3
Ha: At least one of the group means is different from the others.
Similarities to Regression
ANOVA is similar to regression in that it is used to investigate and model the
relationship between a response variable and one or more independent variables.
However, analysis of variance differs from regression in two ways:
The independent variables are qualitative (categorical).
No assumption is made about the nature of the relationship (i.e. the model does
not include coefficients for variables).
Relationship to the Two-sample t-test
ANOVA extends the Two-sample t-test for testing the equality of two population
means to a more general null hypothesis of comparing the equality of more than two
means, versus them not all being equal.
631
ANOVA Fundamental Terminology

Task: ANOVA Fundamental Terminology
In the ANOVA sub-topic, One-way and Two-way ANOVA will be discussed along
with a One-way ANOVA example. To learn more, click the terms below used in the
data table for the calculation of ANOVA:
Degrees of Freedom (df)
The number of independent conclusions that can be drawn from the data.
SSFactor
Measures the variation of each group mean to the overall mean across all groups.
SSError
Measures the variation of each observation within each factor level to the mean of the
level.
Mean Square Error (MSE)
SSError / df
MSE is also the variance.
F-test statistic
The ratio of the variance between treatments to the variance within treatments =
MS/MSE. If F is near 1, then the treatment means are no different (p-value is large).
P-value
According to Montgomery in Introduction to Statistical Quality Control, "the pvalue
is the smallest level of significance that would lead to rejection of the null hypothesis
(Ho)."
Typically, if = 0.05 and the p-value 0.05, then reject the null hypothesis and
conclude that there is a significant difference.
Typically, if = 0.05 and the p-value > 0.05, then fail to reject the null hypothesis
and conclude that there is not a significant difference.
632
One-Way ANOVA Fundamentals

Concept: One-Way ANOVA Fundamentals
ANOVA Terms
633
One-Way ANOVA Equations

Concept: One-Way ANOVA Equations
Roll over each description of the One-way ANOVA to see the equation.
634
One-Way ANOVA Assumptions and Example

Concept: One-Way ANOVA Assumptions and Example
One-way ANOVA is used to determine whether data from three or more populations
formed by treatment options from a single factor designed experiment indicate the
population means are different.
There are three basic underlying assumptions in using One-way ANOVA:
All samples are random samples from their respective populations and are
independent.
Distributions of outputs for all treatment levels follow the normal distribution.
Equal or homogeneity of variances.
Example
Three call centers (A, B, and C) are being tested to see if customer wait time is
statistically the same. A sample of five wait times was taken from each call center.Is
there a difference in any of the three call centers? Assume = 0.05.
635
One-Way ANOVA Example Steps 1 and 2

Concept: One-Way ANOVA Example Steps 1 and 2

Ho: 1 = 2 = 3
Ha: At least one of the group means is different from the others.
Calculate the average of each call center (group) and the average of the samples:
Call Center A
Call Center B
Call Center C
Time 1
17
28
16
Time 2
23
26
15
Time 3
18
24
17
Time 4
20
23
18
Time 5
19
26
21
Average
19.4
25.4
17.4
Overall Average
20.73
636
One-Way ANOVA Example Step 2 SS Factor

Concept: One-Way ANOVA Example Step 2 SS Factor
Step 2: Calculate SSFactor
The sum of squares is calculated by subtracting the average of each call center (group)
from the overall average, squaring the result, and adding up the results and
multiplying by the number of samples per call center (group):
Group
Group Average Overall Average
Difference
Difference2
Call Center A
19.4
20.73
-1.33
1.7689
Call Center B
25.4
20.73
4.67
21.8089
Call Center C
17.4
20.73
-3.33
11.0889
Sum of diff. squared
34.6667
Samples per group
SS group
34.67 X 5 = 173.4
637
One-Way ANOVA Example Step 2 SS Error

Concept: One-Way ANOVA Example Step 2 SS Error
Step 2: Calculate SSError
The error of the sum of squares is calculated by summing the squared differences
between each individual and its group mean and then adding the totals to get the sum
of squares for the error term:
Call Center A
Group Average
Difference
Difference2
SS (Sum of Squares)
17
19.4
-2.4
5.76
23
19.4
3.6
12.96
18
19.4
-1.4
1.96
20
19.4
0.6
0.36
19
19.4
-0.4
0.16
Total Call Center A
21.2
Call Center B
Group Average
Difference
Difference2
SS (Sum of Squares)
28
25.4
2.6
6.76
26
25.4
0.6
0.36
24
25.4
-1.4
1.96
23
25.4
-2.4
5.76
26
25.4
0.6
0.36
Total Call Center B
15.2
Call Center C
Group Average
Difference
Difference2
SS (Sum of Squares)
16
17.4
-1.4
1.96
15
17.4
-2.4
5.76
17
17.4
-0.4
0.16
18
17.4
0.6
0.36
21
17.4
3.6
12.96
Total Call Center C
21.2
Error Sum of Squares
57.6
638
One-Way ANOVA Example Step 2 SS Total

Concept: One-Way ANOVA Example Step 2 SS Total
Step 2: Calculate SSTotal
The total sum of squares is calculated by summing the squared difference of each
individual value as compared to the overall average of the data:
Call Center A
Overall Average
Difference
Difference2
SS (Sum of Squares)
17
20.73
-3.73
13.91
23
20.73
2.27
5.15
18
20.73
-2.73
7.45
20
20.73
-0.73
0.53
19
20.73
-1.73
2.99
Total Call Center A
30.03
Call Center B
Group Average
Difference
Difference2
SS (Sum of Squares)
28
20.73
7.27
52.85
26
20.73
5.27
27.77
24
20.73
3.27
10.69
23
20.73
2.27
5.15
26
20.73
5.27
27.77
Total Call Center B
124.23
Call Center C
Group Average
Difference
Difference2
SS (Sum of Squares)
16
20.73
-4.73
22.37
15
20.73
-5.73
32.83
17
20.73
-3.73
13.91
18
20.73
-2.73
7.45
21
20.73
0.27
0.07
Total Call Center C
76.63
Total Sum of Squares
231
639
One-Way ANOVA Example Step 2 Table

Concept: One-Way ANOVA Example Step 2 Table
Step 2: Calculate the ANOVA table.

Degrees of freedom (df) is calculated for the group, error, and total sum of squares:
df group/factor = Number of groups (Call Centers) 1 = 3 1 = 2
df error = (Number of data points 1) (Number of groups 1) = (15 1) (3

1) = 12
df total SS= Number of data points 1 = 15 1 = 14

Complete the ANOVA table to determine the F value. The SSFactor, SSError, SSTotal,
and df were all calculated previously. This information is transferred into the
following table:
Source
Group
Error
Total
SS
173.
4
57.6
231
df
2
Mean Square
173.4 / 2 = 86.7
F (calc)
86.7 / 4.8 = 18.06
12
14
57.6 / 12 = 4.8
The Mean Square is calculated by dividing the SS by df. F(calc) is determined by

dividing the group mean square by the error mean square.
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One-Way ANOVA Example Steps 3 and 4

Concept: One-Way ANOVA Example Steps 3 and 4

Fcritical is taken from the F distribution table. Roll over Page Resources at the bottom
of the screen and click F Distribution Table to locate the critical value. For this
example, when = 0.05 with df = 2 in the numerator and df = 12 in the denominator
the critical value is3.89.
If Fcalc < Fcritical fail to reject the null hypothesis.
If Fcalc > Fcritical, reject the null hypothesis.
Since Fcalc > Fcritical, we reject the null hypothesis: 18.06 > 3.89. This indicates at a
significance level of 0.05, that at least one of the call center average wait times is
different.
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Two-Way ANOVA Introduction

Task: Two-Way ANOVA Introduction
Two-way ANOVA performs an analysis of variance for testing the equality of

population means when classification of treatments is by two variables or factors.
Click the introductory information below to learn more about two-way ANOVA.
Assumptions
The populations from which the samples were obtained must be normally
distributed.
The samples must be independent.
The variances of the populations must be equal.
The groups must have the same sample size.

Use When
determining if two or more independent variables change the dependent variable.
determining if interactions between the factors change the dependent variable.

Advantages
For conducting a two-way ANOVA when it is appropriate rather than resorting to two
separate one-way ANOVAs:
Interactions can be investigated.
Resources can be used more efficiently.
Error variation is reduced by including a second factor, and estimating the

interaction.
Two-factor Design
Used in the analysis of two-factor design yielding three pieces of information:
Main effects of independent factor A on the dependent variable.
Main effects of independent factor B on the dependent variable.
Interaction between factor A and B determines if a joint influence of the two

independent variables on the dependent variable exists.
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Two-Way ANOVA Terminology

Task: Two-Way ANOVA Terminology
The following are terms used in the Two-way ANOVA models taken from the ASQ
Glossary and Tables for Statistical Quality Control, Fourth Edition, ASQ Statistics
Division. Click each term below to learn more.
Block
A collection of experimental units more homogeneous than the full set of experimental
units. Blocks are usually selected to allow for special causes, in addition to those
introduced as factors to be studied. These special causes may be avoidable within
blocks, thus providing a more homogeneous experimental subspace.
Blocking
The method of including blocks in an experiment in order to broaden the applicability
of the conclusions or to minimize the impact of selected assignable causes. The
randomization of the experiment is restricted and occurs within blocks.
Factor
A predictor variable that is varied with the intent of assessing its effect on a response
variable.
Factor Levels
A potential setting, value, or assignment of a factor or the value of the predictor
variable.
Predictor Variable
A variable that can contribute to the explanation of the outcome of an experiment.
Replicate
A single repetition of the experiment.
Treatment
The specific setting of factor levels for an experimental unit.
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Two-Way ANOVA Models

Task: Two-Way ANOVA Models
Many of the key concepts for two-way ANOVA are either identical or similar to those
of one-way ANOVA, but differ in the details of the ANOVA table. Calculations for the
two-way ANOVA table are almost always completed using a statistical software
program, but for the purpose of this course, only data tables and equations will be
shown. Click the terms below to learn more about the fixed effects model, single
replicate and the Fixed effects model with replication.
Single Replicate Overview
A single replicate at each combination of levels is reviewed, therefore:
n = 1 replicate
a = treatment levels (Each will be run the same number of times as there are
blocking levels.)
b = blocking levels (Each additional treatment level runs the same number of
times as there are treatment levels.) The second factor in ANOVA is generally
referred to as blocks.
Single Replicate Assumption
Absence of any interaction between the two factors or the main factor and blocking
factor.
Single Replicate Equations
Sum of squares of blocks
Where yi = sum of the ith row

Sum of Squares Error
SSE = TSS - SST - SSB
Single Replicate Data Table
Source
Treatments
Blocks
Error
Total
SS
SST
SSB
SSE
df
a-1
b-1
(a-1)
(b-1)
TSS N - 1
Mean Square
SST/(a-1)
SSB/(b-1)
SSE/(a-1) (b-1)
F (calc)
MST/MSE
MSB/MSE
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Replication Overview
If an interaction exists, each treatment combination experiment must be replicated
more than once to get an estimate of the interaction effect as well as the error,
therefore:
a = number of levels for factor A
b = number of levels for factor B
n = number of replicates
k = the kth replicate in row a, column b
y111 = the first replicate in row 1, column 1

y112 = the second replicate in row 1, column 1
y11n = the nth replicate in row 1, column 1
yabn = the nth replicate in row a, column b
Replication Model Design Table
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Replication Equations
Total Sum of Squares
Sum of Squares for factor A
Sum of Squares for factor B
Sum of Squares for the Interaction
Sum of Squares Error

SSE - TSS - SSxB - SSA - SSB
Replication Data Table

Source
A Treatments
B Treatments
Interaction
Error
Total
SS
SSA
SSB
SSA
xB
SSE
df
a-1
b -1
(a-1)
(b-1)
ab (n
1)
TSS abn - 1
Mean Square
SSA/(a -1)
SSB/(b -1)
SSAxB/(a -1) (b 1)
F (calc)
MSA/MSE
MSB/MSE
SSAxB/MSE
SSE/ab (n 1)
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ANOVA Exercise

Concept: ANOVA Exercise
Below are five statements about ANOVA. Drag the three correct statements on the left
to the boxes on the right. Feedback will be given for incorrect answers.
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Contingency Tables

Concept: Contingency Tables
Contingency tables are used to analyze data via a two-way classification involving
two factors with data that is usually attribute in nature such as frequency or counts.
This tool is used to test whether two sources of variation are statistically independent.
The test statistic used is the Chi-square statistic (2). When establishing hypotheses
using contingency tables be sure to remember that the goal is not looking for
differences, but testing dependency.
Example
A manager wants to determine if the distribution of defect type varies by the
non-overlapping shift (1st, 2nd, or 3rd) in which the product is produced. Is there a
relationship between shift and defect type at = 0.05?
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Contingency Tables Steps 1 and 2

Concept: Contingency Tables Steps 1 and 2
Ho: Shift and defect types are statistically independent.
Ha: Shift and defect types are not statistically independent.

Use the chi-square test statistic:
Where:
O = the ith observed value
Ei = the ith expected value

r = the number of rows in the
contingency table
c = the number of columns in the
contingency table
df = (r -1)(c-1)
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Contingency Tables Step 2 Calculation of Observed

Concept: Contingency Tables Step 2 Calculation of Observed
Step 2: Calculate the test statistic cont.

Calculate the row and column totals, then the row probabilities. Row probabilities =
the row total / sum of all rows.
1st
2nd
3rd
Total
Label
placement
defect
Wrapper
thickness
defect
Pigment
defect
Total
13
17
39
Probabilit
y from
Total
Column
.264
20
34
.230
29
22
24
75
.507
49
59
40
148
1.000
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Contingency Tables Step 2 Calculation of Expected

Concept: Contingency Tables Step 2 Calculation of Expected
Expected Values
The expected value is calculated by using the probability from the total column for
each row in the observed frequencies table multiplied by the shift column total. For
example, the 1st shift column total is 49 multiplied by .264 (probability from total
column) = 12.89.
1st
2nd
3rd
Label
placement
defect
Wrapper
thickness
defect
Pigment
defect
12.89
15.52
10.52
Probability
from Total
Column
.264
11.27
13.57
9.20
.230
24.84
29.91
20.28
.507
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Contingency Tables Step 2 Calc. Obs. and Exp. cont

Concept: Contingency Tables Step 2 Calc. Obs. and Exp. cont
(Observed Expected)2 / Expected Values

Calculate (Observed Expected)2 / Expected for each cell value. For example, the
expected value for label placement defects produced by 1st shift employees is (13
12.89)2 / 12.89 = 0.001.
Label placement defect

Wrapper thickness defect
Pigment defect
1st
0.001
1.618
0.697
2nd
0.141
3.047
2.092
= 0.001 + 0.141 + 0.220 +

1.618 + 3.047 + 0.526 + 0.697
+ 2.092 + 0.682 = 9.024
calculated value
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3rd
0.220
0.526
0.682
Contingency Tables Steps 3 and 4

Concept: Contingency Tables Steps 3 and 4

df = (rows 1)(columns -1) = (3 1) (3 1) = 4. Roll overPage Resources at the
bottom of the screen and click Chi-square Distribution Table. Look under 4 degrees
freedom in the 20.05column (critical value =9.488).
If 2
> 2
, then reject the null hypothesis.
calc
,4 critical
Since 9.024 < 9.488, we fail to reject the null hypothesis at = 0.05 (Ho: Shift and
defect types are statistically independent). The manager can conclude there is not a
difference between shift and defect type.
653
Contingency Tables Exercise

Concept: Contingency Tables Exercise
Below are five statements about contingency tables. Drag the three correct statements
on the left to the boxes on the right. Feedback will be given for incorrect answers.
654
Non-parametric Tests

Task: Non-parametric Tests
The term parametric implies that an underlying distribution is assumed for the
population, while non-parametric makes no assumptions regarding the population
distribution; hence often called distribution-free tests.Click the information below
to learn more about non-parametric tests.
Advantage of parametric testing
If the assumptions of parametric testing are met, the probability (power or 1 - ) of
rejecting the null when it is false (correct decision) is higher than is the power of a
corresponding non-parametric test with equal sample sizes.
Advantage of non-parametric testing
The test results are more robust against violation of the assumptions. Therefore, if
assumptions are violated for a test based upon a parametric model, the conclusions
based on parametric test significance levels (alpha risk) may be more misleading than
conclusions based upon non-parametric test significance levels.
When to use non-parametric tests
According to Nonparametric Statistics: An Introduction by Jean D. Gibbons:
"
Use non-parametric tests if any of the following conditions are true:
1.
2.
3.
4.
5.
6.
7.
8.
The data are counts or frequencies of different types of outcomes.

The data are measured on a nominal scale.
The data are measured on an ordinal scale.
The assumptions required for the validity of the corresponding parametric
procedure are not met or cannot be verified.
The shape of the distribution from which the sample is drawn is unknown.
The sample size is small.
The measurements are imprecise.
There are outliers in the data making the median more representative than the
mean.
And use non-parametric test when both of the following are true:
1.
2.
The data are collected and analyzed using an interval or ratio scale of
measurement.
All of the assumptions required for the validity of that parametric procedure can
be verified.
"
655
Non-parametric Statistical Tests

Concept: Non-parametric Statistical Tests
When data are non-normal, the following statistical tests are commonly used to
analyze data. Roll over the test name to learn more about each non-parametric
statistical test.
656
Non-parametric Hypothesis Testing

Concept: Non-parametric Hypothesis Testing
Road Map
The Hypothesis Testing Road Map was discussed earlier in this topic of the course
and includes non-parametric tests. Remember, the roadmap is a very important tool
that you will use with each hypothesis test.
Roll over Page Resources at the bottom of the screen and click Hypothesis Testing
Road Map to help discern which statistical tests are applicable for the data you are
testing.
657
Hypothesis Testing Roadmap
Six Sigma Black Belt | Analyze | Hypothesis Testing | Non-parametric Hypothesis Testing
Example: Hypothesis Testing Roadmap
658
Moods Median Test Statistic

Concept: Moods Median Test Statistic
The Mood's Median Test is used to determine whether there is sufficient evidence to
conclude that samples are drawn from populations with different medians. The test
statistic used is the chi-square test statistic:
A sample of a Mood's Median Test follows, along with the steps to perform it:
Example
A health food company has launched a new energy shake that has been in production
for 30 days. This shake is produced at three of the companies processing centers, and a
sample size of at least 10 has been collected. The volume in ounces is measured for
each container. Is the median volume per container the same for all three processing
centers at a 95% significance level?
659
Moods Median Test Step 1

Concept: Moods Median Test Step 1
Data Table
Cente
rA
16.2
16
16
16.1
15.9
15.8
16.2
16.1
16.3
15.7
16
n=
11
Cente
rB
16
15.8
15.8
15.5
16.5
16.4
16.3
15.7
16.1
16.3
n=
10
Cente
rC
15.8
15.9
16.5
16
16
16
16.2
16.1
15.9
16.4
16.3
16.2
n=
12
Step 1: Establish
the hypotheses.
Ha: At least one of
the populations has
a different median.
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Moods Median Test Step 2 Observed

Concept: Moods Median Test Step 2 Observed

1.
2.
Calculate the overall median of all of the 33 samples. The overall median of all
samples = 16.
Construct an observed values table showing the number of data points above the
overall median and another column showing the number below the overall
median data points. Half of the data points that are equal to the overall median
should be counted in the above column and half in the below column. Note:
The procedure for allocating values above and below the median may differ
depending on the resource material or statistical software program utilized.
Observed Values
Center A
Center B
Center C
Number Above
Overall Median
6.5
5.5
7.5
Number Below
Overall Median
4.5
4.5
4.5
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Moods Median Test Step 2 Expected

Concept: Moods Median Test Step 2 Expected

3. If the three sample populations have the same median, then each category should
have half of the data points in the above column and half in the below column.
Therefore, construct an expected values table entering half of the data points for each
category in the above median column and half in the below median column.
Expected Values
Center A
Center B
Center C
Number Above Overall

Median
5.5
5
6
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Number Below Overall

Median
5.5
5
6
Moods Median Test Step 2 Calc. Obs. and Exp.

Concept: Moods Median Test Step 2 Calc. Obs. and Exp.
where k = total number of

observed (expected) cells.
Column A
Column B
Column C
Column D
Column D/
Observed
Expected
O-E
(O-E)2
Column B
6.5
5.5
0.1818
5.5
0.5
0.25
0.0500
7.5
1.5
2.25
0.3750
4.5
5.5
-1
0.1818
4.5
-0.5
0.25
0.0500
4.5
-1.5
2.25
0.3750
1.2136
Note: When the observed or expected values in a given cell are < 5, cells are
combined to assure that the minimum cell value is at least 5.
663
Moods Median Test Steps 3 and 4

Concept: Moods Median Test Steps 3 and 4

Degrees of freedom (df) is k 1 where k is the number of processing centers (3 - 1 =
2). Roll over Page Resources at the bottom of the screen and click Chi-square
Distribution Table to locate the critical value.
Given degrees of freedom is k -1 = 2, and = 0.05,2critical = 5.991.
If 2
> 2
calc
, k-1 critical
Since 1.214 < 5.991, we fail to reject the null hypothesis. The median volume per
container is the same for all three processing centers at a 0.05 significance level.
664
Levenes Test

Concept: Levenes Test
Levene's Test
Used to compare two or more variances, Levene's Test is appropriate for continuous
data that may not be normally distributed, testing for homogeneity of variances across
a set of k samples. The Levene's test statistic shown in various forms is:
Rollover Page Resources and click Levene's Test Procedure to see a sample test,
along with the steps to conduct it. Click Levene's Test Data to see the sample data.
665
Kruskal-Wallis Test Statistic

Concept: Kruskal-Wallis Test Statistic
The Kruskal-Wallis Test is used to determine whether several populations have

different medians when the samples are independent and from populations with the
same shape. This test is the variance version of the Mann-Whitney U Test. The
significance statistic is H which is distributed as the 2 distribution. Using the 2
distribution table; where k = number of sample sets (2,k-1) , the test statistic is:
A sample Kruskal-Wallis Test follows, along with the steps to perform it:
Example
A random sample of the population of customer satisfaction scores from three
different bank branches was collected. With = 0.05 and assuming the populations
have the same shape, does the data support the statement that not all the medians are
equal?
666
Kruskal-Wallis Test Step 1

Concept: Kruskal-Wallis Test Step 1
Data Table
Branch
A
Branch
B
Branch
C
99
97
95
92
99
94
95
99
99
98
98
99
98
98
98
97
97
97
96
99
96
Step 1: Establish
the hypotheses.
Ha: At least one is

different (Not all
populations have
the same median.
667
Kruskal-Wallis Test Step 2 Calculation

Concept: Kruskal-Wallis Test Step 2 Calculation

1.
Build a tally table and assign ranks to each value starting with the lowest.If a
value occurs more than once, use the average of its ranks.
668
Kruskal-Wallis Test Step 2 Calculation cont.

Concept: Kruskal-Wallis Test Step 2 Calculation cont.

2.Transfer the ranks to the original data table and calculate a total for each sample.
Branch A
99
92
95
98
97
96
Ranks
Rank A
18.5
1
3.5
13
8.5
5.5
63
Branch B
97
99
99
98
97
99
Rank B
8.5
18.5
18.5
13
8.5
18.5
98.5
3.Enter calculated data back into the equation.
669
Branch C
95
94
99
98
97
96
Rank C
3.5
2
18.5
13
8.5
5.5
69.5
Kruskal-Wallis Test Steps 3 and 4

Concept: Kruskal-Wallis Test Steps 3 and 4

Roll overPage Resources at the bottom of the screen and click the Chi-square
Distribution Table.
Given degrees freedom is k -1 = 2, and = 0.05,2critical = 5.991.
If H
> 2
calc
, k-1 critical
Since2.65 < 5.991, we fail to reject the null hypothesis. The medians of the customer
satisfaction scores for the three branches are equal.
670
Mann-Whitney U Test Statistic

Concept: Mann-Whitney U Test Statistic
The Mann-Whitney U Test is also known as "the Mann-Whitney-Wilcoxon Test"

and "the Wilcoxon Rank Sum Test". The Mann-Whitney U Test performs a
hypothesis test of equality of two population medians and calculates the corresponding
point estimate and confidence interval when independent samples from two
populations have the same shape. Critical values are obtained from the
Mann-Whitney tables:
Ml and Mrrefer to boundaries of the left and right rejection regions.
For a left-tail test, reject if the test statistic is Ml:
For a right-tail test, reject if the test statistic is Mr:
For a two-tail test, reject if either of the observed values is less than or equal to
the tabulated critical value:
M is the test statistic and is the sum of the ranks of the smaller sample. A sample
Mann-Whitney U Test follows, along with the steps to conduct it.
Example
A personal fitness center is running a promotion to attract new members. A daily
sample of new membership enrollments is recorded for each shift and is shown in a
data table. At a significance level of 0.05 and confirming the populations have the
same shape, do the data support the hypothesis that morning shift associates sell more
fitness memberships?
671
Mann-Whitney U Test Step 1

Concept: Mann-Whitney U Test Step 1
Data Table
Morning Staff
Evening Staff
10
13
13
12
11
12

hypotheses.
672
Mann-Whitney U Test Step 2 Calculation

Concept: Mann-Whitney U Test Step 2 Calculation

1.
Build a tally table and assign ranks to each value starting with the lowest.If a
value occurs more than once, use the average of its ranks.
# of Memberships
3
4
5
7
9
10
11
12
Tally
II
II
II
I
II
I
I
II
13
II
673
Rank
1,2 (use 1.5)
3,4(use 3.5)
5,6 (use 5.5)
7
8,9 (use 8.5)
10
11
12,13 (use
12.5)
14,15 (use
14.5)
Mann-Whitney U Test Step 2 Calculation cont.

Concept: Mann-Whitney U Test Step 2 Calculation cont.

2.Transfer the ranks to the original data table and calculate a total for the smaller
sample, which is needed for the test statistic M.
Morning Staff
Memberships
10
13
9
3
7
5
12
n1 = 7
Rank of Morning
Staff Memberships
10
14.5
8.5
1.5
7
5.5
12.5
M = Rank Morning
= 59.5
Evening Staff
Memberships
13
5
4
3
12
11
9
4
n2 = 8
3.The calculated value is M = Rank Morning = 59.5.
674
Mann-Whitney U Test Steps 3 and 4

Concept: Mann-Whitney U Test Steps 3 and 4

Roll overPage Resources at the bottom of the screen and click Mann-Whitney
Table.Find the entry with n1 = 7 and n2 = 8 with a right-tail -value of 0.05 (Mr = 73).
For a right-tail test, reject if the test statistic is Mr:
Since the calculated value of the test statistic is 59.5, we fail to reject the null
hypothesis; 59.5 < 73:
The conclusion is that the data do not support the hypothesis that the morning shift
associates sell more fitness memberships.
675
Non-parametric Tests Assessment Questions

Concept: Non-parametric Tests Assessment Questions
For each of the following statements, click the box for the corresponding
non-parametric test.
676
Lesson Summary

The primary focus of the Analyze phase of the Six Sigma methodology is to closely
examine the output (Y), so that you may understand the variables or inputs (Xs) and
their effects controlling Y. The Black Belt's responsibility includes gathering the Xs
identified in the Measure phase and performing needed analysis to narrow the Xs from
possible to probable prior to the launch of the Improve phase.
The analysis is conducted through the use of tools such as:
Exploratory data analysis
Graphical data analysis through multi-vari studies
Correlation and regression models

Hypothesis testing
Statistical and practical significance
Significance level and power
Sample size calculation
Point and interval estimation
Tests for means, variances, and proportions
Paired-comparison tests
Goodness-of-fit tests
ANOVA
Contingency tables
Non-parametric tests
The use of the activities and tools during the Analyze phase of the Six Sigma
methodology discovers the root causes by identifying significant Xs impacting process
performance.The Black Belt and the team are now ready to move forward in the
project generating, selecting, testing and implementing solutions to address the root
causes.
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Lesson Bibliography

Bibliography
ASQ Statistics Division. Kittlitz, Rudy, editor. Glossary and Tables for Statistical
Breyfogle, Forrest W. III . Implementing Six Sigma: Smarter Solutions Using
Statistical Methods.2nd ed. Hoboken, NJ: John Wiley & Sons, Inc., 2003.
Dovich, Robert A. Quality Engineering Statistics. Milwaukee, WI: ASQ Quality Press,
1992.
Gibbons, Jean Dickinson. Nonparametric Statistics: An Introduction. New York: Sage
Publications, 1993.
Montgomery, Douglas C. Introduction to Statistical Quality Control. 5th ed. Hoboken,
Six Sigma Academy. The Black Belt Memory JoggerTM: A Pocket Guide for Six Sigma
Success. Salem, NH: Goal/QPC, 2002.
Tague, Nancy R.The Quality Toolbox. 2nd ed. Milwaukee, WI: ASQ Quality Press,
2005.
Windsor, Samuel E. Transactional Six Sigma for Green Belts. Milwaukee, WI: ASQ
Quality Press, 2006.
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Improve
Lesson Introduction
Six Sigma Black Belt | Improve

The Improve phase provides the tools and methods for determining and verifying the
sources of variation (input variables - x). Well-designed experiments include those
input variables (x) identified as critical to the process. In these experiments, input
variables demonstrate the Y = f(x) relationship, where Y is a dependent variable that is
a function of x. Using a design of experiments (DOE) approach produces very useful
information on the relationships between factors so that experimenters may quickly
move to improve the process. To better understand this concept, the ASQ Body of
Knowledge provides the following topics:
Design of experiments (DOE)
Define independent and dependent variables, factors and levels, response,

treatment, error and replication.
Describe and apply the basic elements of experiment planning and organizing,
including determining the experiment objective, selecting factors, responses, and
measurement methods and choosing the appropriate design.
Define and apply the principles of power and sample size, balance, replication,
order, efficiency, randomization and blocking, interaction and confounding.
Construct experiments such as completely randomized, randomized block and

Latin square designs, and apply computational and graphical methods to analyze
and evaluate the significance of results.
Construct these experiments and apply computational and graphical methods to

analyze and evaluate the significance of results.
Construct these experiments (including Taguchi designs) and apply

computational and graphical methods to analyze and evaluate the significance of
results; understand the limitations of fractional factorials caused by confounding.
Apply Taguchi robustness concepts and techniques such as signal-to-noise ratio,

controllable and noise factors, and robustness to external sources of variability.

Response surface methodology

analyze the significance of results.
Construct experiments such as central composite design (CCD), Box-Behnken,

etc., and apply computational and graphical methods to analyze the significance
of results.
Evolutionary operations (EVOP)
Understand the application and strategy of EVOP.
680
Lesson Overview

The tools and objectives of the Improve phase are illustrated below.
681

Improve
Design of Experiments
Learning Objectives
Six Sigma Black Belt | Improve | Design of Experiments

At the end of this Improve topic, all learners will be able to:
define independent and dependent variables, factors and levels, response,

treatment, error and replication.
describe and apply the basic elements of experiment planning and organizing
including determining the experiment objective, selecting factors, responses, and
measurement methods and choosing the appropriate design.
define and apply the design principles of power and sample size, balance,
replication, order, efficiency, randomization and blocking, interaction and
confounding.
construct one-factor experiments such as completely randomized, randomized

block and Latin square designs, and apply computational and graphical methods
to analyze and evaluate the significance of results.
construct full-factorial experiments and apply computational and graphical

methods to analyze and evaluate the significance of results.
construct two-level fractional factorial experiments (including Taguchi designs)

and apply computational and graphical methods to analyze and evaluate the
significance of results, and understand the limitations of fractional factorials
caused by confounding.
apply Taguchi robustness concepts and techniques such as signal-to-noise ratio,

controllable and noise factors and robustness to external sources of variability.
construct mixture experiments and apply computational and graphical methods to

683
Introduction to Design of Experiments (DOE)

Concept: Introduction to Design of Experiments (DOE)
Black belts use Design of Experiments (DOE) to craft well-designed efforts to identify
which process changes yield the best possible results for sustained improvement.
Whereas most experiments address only one factor at a time, the Design of
Experiments (DOE) methodology focuses on multiple factors at one time. DOE
provides the data that illustrates the significance to the output of input variables acting
alone or interacting with one another.
ASQ defines DOE as: "A branch of applied statistics dealing with planning,
conducting, analyzing and interpreting controlled tests to evaluate the factors that
control the value of a parameter or group of parameters."
DOE provides these advantages over other, more traditional methods:
Evaluating multiple factors at the same time can reduce the time needed for
experimentation.
Some well-designed experiments do not require the use of sophisticated statistical

methods to understand the results at a basic level. However, computer software
can be used to yield very precise results as needed.
The costs vary depending on the experiment, but the financial benefits realized
from these experiments can be substantial.
The graphic below depicts an example of a relationship between the components that
DOE examines:
process input variables, normally referred to as x variables and as factors in DOE

terminology.
process output variables, normally referred to as y variables and as responses in

DOE terminology.
the relationship between input variables and output variables.
the interaction, or relationship, between input variables as it relates to the output

variables.
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DOE Terminology

Task: DOE Terminology
Certain terms are frequently used with DOE that need to be defined clearly. Click the
name of the term on the left to reveal a definition and information about each.
Independent variable
See predictor variable.
Dependent variable
See response variable.
Factor
A predictor variable that is varied with the intent of assessing its effect on a
response variable.
Most often referred to as an "input variable."
Factor Level
A specific setting for a factor. In DOE, levels are frequently set as high and low for
each factor. A potential setting, value or assignment of a factor of the value of the
predictor variable.
For example, if the factor is time, then the low level may be 50 minutes and the high
level may be 70 minutes.
Response variable
A variable representing the outcome of an experiment.The response is often referred
to as the output or dependent variable.
Treatment
The specific setting of factor levels for an experimental unit.
For example, a level of temperature at 65 C and a level of time at 45 minutes describe
a treatment as it relates to an output of yield.
Experimental error
An error from an experiment reveals variation in the outcome of identical tests. The
variation in the response variable beyond that accounted for by the factors, blocks, or
other assignable sources while conducting an experiment.
685
DOE Terminology Continued

Task: DOE Terminology Continued
Certain terms are frequently used with DOE that need to be defined clearly. Click the
name of the term on the left to reveal a definition and information about each.
Experimental run
A single performance of an experiment for a specific set of treatment conditions.
Experimental unit
The smallest entity receiving a particular treatment, subsequently yielding a value of
the response variable.
Predictor Variable
A variable that can contribute to the explanation of the outcome of an experiment.
Also known as an independent variable.
Repeated Measures
The measurement of a response variable more than once under similar conditions.
Repeated measures allow one to determine the inherent variability in the measurement
system. Repeated measures are known as "duplication" or 'repetition."
Replicate
A single repetition of the experiment. See also replication.
Replication
Performance of an experiment more than once for a given set of predictor variables.
Each of the repetitions of the experiment is called a "replicate." Replication differs
from repeated measures in that it is a repeat of the entire experiment for a given set of
predictor variables, not just repeat of measurements of the same experiment.
Note: Replication increases the precision of the estimates of the effects in an
experiment. Replication is more effective when all elements contributing to the
experimental error are included. In some cases replication may be limited to repeated
measures under essentially the same conditions. In other cases, replication may be
deliberately different, though similar, in order to make the results more general.
Repetition
When an experiment is conducted more than once, repetition describes this event
when the factors are not reset. Subsequent test trials are run again but not necessarily
under the same conditions.
686
DOE Applications

Concept: DOE Applications
Planning the experiment is probably the most important task in the Improve phase
when using DOE. For planning to be done well, some experts estimate that 10-25% of
your time spent should be devoted to planning and organizing the experiments.
The purpose of DOE is to create an observable event from which data may be
extracted and decisions made about the best methods to improve the process. DOE
may be used most effectively in the following situations:
Identifying factors that produce a specific response or outcome
Selecting between alternative approaches to effect the best outcome

In DOE, a full factorial design combines levels for each factor with levels for all other
factors. This basic design ensures that all combinations are used, but if factors are
many, this design may take too much time or be too costly to implement. In either
case, a fractional factorial design is selected as the number of runs is fewer with fewer
treatments.
For example, a four-factor factorial experiment studies the effects on a golf score
using four factors, each with two levels. The factors (and levels) could be: type of
driver (regular or oversized), type of ball construction (balata-covered or three-piece),
type of beverage (water or beer) and mode of travel (walking or riding). To run a full
factorial design experiment, 16 runs would be required (illustrated below).
For a fractional factorial, only 8 runs would be required (see below). Thus if time and
funding only permits 8 rounds of golf, the fractional factorial design will provide good
information about the main effects of the four factors as well as some information
about how these factors interact. More detail on these designs and their differences
may be found in later subtopics in this lesson.
687
DOE Applications

Concept: DOE Applications
688
DOE Planning Process

Task: DOE Planning Process
The project team decides the exact steps to follow in the Improve phase. Steps to
include in the Improve phase may actually be identified in the Measure and Analyze
phases and should be noted to expedite later planning in the Improve phase. What
follows is a suggested guide for planning the experiment(s) to be conducted in the
Improve phase. The suggested process may be modified depending on the exact
situation.
To use DOE, follow these steps:
1. Establish experiment objectives
Objectives differ per project, but the designs typically fall into three categories to
support different objectives:
Screening used to identify which factors are most important.
Characterization used to quantify the relationships and interaction between

several factors.
Optimization used to develop a more precise understanding of just one or two

variables.
2. Identify factors to be considered
Label both input variables (x factors) and output variables (y responses) in the
experiment.
Use information collected in prior phases to assist in the identification process.

3. Finalize an experiment design
Select a design for the experiment.
Choose a design type (full factorial, fractional factorial, or others) that meets the
experiments objectives.
Determine how the factors are measured.
Consider the resources needed and determine whether a practice run or pilot
experiment may be needed.
4. Run the experiment
Run the experiment and collect the data. Place initial data in the results column of
a design array, a graphical representation of the experiment factors and results.
Roll over Page Resources and click on Design Array for an example.
Minimize chance for human error by carefully planning where human error could
occur and allow for the possibility in the planning process.
Randomize the runs to reduce confounding (defined later in this topic).
Document the results as needed depending on the experiment.

5. Analyze the results of the experiment
Review the results of the experiment(s).
Examine the relationships among input variables (factors) acting together and
with regards to the output variable(s) (responses).
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DOE Planning Process

Task: DOE Planning Process
6. Make decisions on next steps
Based on the results, determine next steps.
Are additional runs of the experiment needed?
Do the levels need to be modified prior to conducting the experiment again?
If the results point to an optimal solution, implement the factors and the levels of
choice and look at the Control phase to sustain the desired improvements.
690
Design Array
Six Sigma Black Belt | Improve | Design of Experiments | DOE Planning Process
Concept: Design Array
Design Array
691
Barriers to the Planning Process

Concept: Barriers to the Planning Process
In all projects, barriers present themselves as obstacles to the projects successful

completion. The Improve phase of DMAIC is no exception. The following are
examples of the types of barriers to watch for during planning for an experiment:
Objectives or purpose are unclear the objectives are not developed and fully
understood.
Factor levels are either set too low or too high factor levels set inappropriately
can adversely affect the data and understanding of the relationships between
factors.
Unverified or misunderstood data from previous phases may lead to errors in

planning and assumptions.
Experimentation is a cost, although DOE is more cost effective than some other
options like OFAT (one-factor-at-a-time) experiments, the costs can be too
expensive and need to be considered carefully.
Lack of management support experiments require the full support of

management in order to effectively use the resources required.
692
Selecting Experiment Factors

Concept: Selecting Experiment Factors
Identifying process variables, both inputs/factors and outputs/responses, is an

important part of the planning process. While the selection process varies based on the
information gathered in the Analyze phase and the objectives of the experiment,
variables should be selected that have the following basic characteristics:
Important to the process in question Since many input and output variables may
exist for a process, most experiments focus on only the most critical inputs and
outputs for a process. Such emphasis makes it more likely to successfully
improve the most relevant parts of a process and, on a practical level, limits the
number of variables and the cost of conducting the experiment.
Identifiable relationships to the inputs and the outputs If relationships are

already evident based on prior information gathered, the design of the experiment
can be more focused on those factors with the most positive impact on outputs.
Not extreme level values The information related to the level values for the
factors should not be extreme. Values that reflect a reasonable range around the
actual performance of the factors usually yield the best results.
There is no magic formula or equation for selecting the factors. The guidelines listed
above and a review of the analysis work done in previous phases should provide a
good basis for selection. Remember, the goal of Improve is to model the possible
combination of factors and levels that yield valid and necessary results. We
recommend the use of process experts for selecting experimental factors and levels
based on prior analysis. The prior analysis should suggest what the critical factors are
and where the levels should be set for a first run in the experiment.
693
Other Planning Considerations

Task: Other Planning Considerations
The DOE planning phase may include other considerations for the project team. Click
the considerations on the left to reveal relevant information on the right.
Iterative process
One large experiment does not normally reveal enough information to make final
decisions. Several iterations may be necessary so that the proper decisions may be
made and the proper value settings verified.
Measurement methods
Ensure that measurement methods are checked out prior to the experiment to avoid
errors or variations from the measurement method itself. Review measurement
systems analysis to ensure methods have been reviewed and instruments calibrated as
needed, etc.
Process control and stability
The results from an experiment are more accurate if the process in question is
relatively stable.
Inference space
If the inference space is narrow, then the experiment is focused on a subset of a larger
process such as one specific machine, one operator, one shift, or one production line.
With a narrowed or focused inference space, the chance for noise (variation in
output from factors not directly related to inputs) is much reduced.
If the inference is broad, the focus is on the entire process and the chances for noise
impacting the results are much greater.
694
Types of Experiment Designs

Task: Types of Experiment Designs
Part of planning an experiment is selecting the experiment design. Click the type of
design on the left to reveal a brief introduction of that design on the right.
2-level, 2 factor
The simplest of design options, the 2-level, 2-factor design uses only four
combinations or runs. The number in the first column represents the run number. The
"+" symbol represents the high level; the "" symbol represents the low level.
Full Factorial
This design option includes all levels and all factors for a given process. The
advantage of a full factorial design is that all factors and levels are part of the
experiment, thus ensuring the most complete data.
If there are 2 levels and 6 factors (26), then there are 64 possible runs for the
experiment. A common description of factorial experiments is the designator Lf where
f is the number of factors in the experiment and Lf, the number of levels.
Fractional Factorial
This design is best used when you are unsure about which factor influences the
response outcome or when the number of factors is large (usually considered to be 5 or
more). A fractional factorial uses a subset of the total runs. For example, if there are 2
levels and 6 factors (26), then there are 64 possible runs for the experiment. For a
fractional factorial, the experiment could be reduced to 32 runs or perhaps even 16
runs. An example of this may be viewed later in this topic.
695
Design Principles

Task: Design Principles
Black Belts adhere to a set of design principles to assist in the proper experiment
design. Click the name of the design principle on the left to reveal its description on
the right.
Power
The equivalent to one minus the probability of a Type II error (1-). A higher power is
associated with a higher probability of finding a statistically significant difference.
Lack of power usually occurs with smaller sample sizes.
The Beta Risk (i.e., Type II Error or Consumers Risk) is the probability of failing
to reject the null hypothesis when there is significant difference (i.e., a product is
passed on as meeting the acceptable quality level when in fact the product is bad).
Typically, () = 0.10%. This means there is a 90% (1-) probability you are rejecting
the null when it is false (correct decision). Also, the power of the sampling plan is
defined as 1-, hence the smaller the , the larger the power.
For example, the legal beta risk is the risk a guilty person could have been found not
guilty and is set free.This was also discussed in the Analyze lesson.
Sample Size
The number of sampling units in a sample.
Note: In a multistage sample, the sample size is the total number of sampling units at
the conclusion of the final stage of sampling.
Determining sample size is a critical decision in any experiment design. Generally, if
the experimenter is interested in detecting small effects, more replicates are required
than if the experimenter is interested in detecting large effects. Increasing the sample
size decreases the margin of error and improves the precision of the estimate. There
are several approaches to determining sample size including, but not limited to:
Operating Characteristic Curves, Specifying a Standard Deviation Increase, and
Confidence Interval Estimation Method.
Balanced Design
A design where all treatment combinations have the same number of observations. If
replication in a design exists, it would be balanced only if the replication was
consistent across all the treatment combinations. In other words, the number of
replicates of each treatment combination is the same.
696
Design Principles

Task: Design Principles
Replication
Performance of an experiment more than once for a given set of predictor variables.
Each of the repetitions of the experiment is call a replicate. Replication differs from
repeated measures in that it is a repeat of the entire experiment for a given set of
predictor variables, not just a repeat of measurements for the same experiment.
Replication involves an independent repeat of each factor combination in random
order. For example, suppose a metallurgical engineer is interested in studying the
effect of two different hardening processes: oil quenching and saltwater quenching on
an aluminum alloy. If he has five alloy specimens and treats them in each of the
hardening processes, we will make ten observations. These should be done in random
order to maintain the properties of replication. First, the experimenter can obtain an
estimate of the experimental error which becomes a basic unit of measurement for
determining whether observed differences in the data are really statistically different.
Second, if the sample mean is used to estimate the true mean response for one of the
factor levels in the experiment, replication permits the experimenter to obtain a more
precise estimate of this parameter.
Repetition
When an experiment is conducted more than once, repetition describes this event
when the factors are not changed or reset. Subsequent test trials are run again but not
necessarily under the same conditions.
Efficiency
In experimental designs, efficiency refers to an experiment that is designed in such a
way as to include the minimal number of runs and to minimize the amount of
resources, personnel, and time utilized.
697
Design Principles Continued

Task: Design Principles Continued
Black Belts adhere to a set of design principles to assist in the proper experiment
design. Click the name of the design principle on the left to reveal its description on
the right.
Randomization
The process used to assign treatments to experimental units so each experimental
unit has an equal chance of being assigned a particular treatment. Randomization
validates the assumptions made in statistical analysis and prevents unknown biases
from impacting conclusions.
By randomization we mean that both the allocation of the experimental material and
the order in which the individual runs or trials of the experiment are to be performed
are arbitrarily determined.
For example, suppose the specimens in a metallurgical hardness experiment are of
slightly different thicknesses and the effectiveness of the quenching medium may be
affected by the specimen thickness. If all the specimens subjected to the oil quench are
thicker than those subjected to the saltwater quench, systematic bias may be
introduced into the results. This bias handicaps one of the quenching media and
consequently invalidates our results. Randomly assigning the specimens to the
quenching media alleviates this problem.
Blocking
The method of including blocks in an experiment in order to broaden the applicability
of the conclusions or to minimize the impact of selected assignable causes. The
randomization of the experiment is restricted and occurs within blocks.
Order
The order of an experiment refers to the chronological sequence of steps to an
experiment. The trials from an experiment should be carried out in a random run order.
In experimental design, one of the underlying assumptions is that the observed
responses should be independent of one another (i.e., the observations are
independently distributed). By randomizing the experiment, we reduce bias that could
result by running the experiment in a logical order.
Interaction effect
The interaction effect for which the apparent influence of one factor on the response
variable depends upon one or more other factors. Existence of an interaction effect
means that the factors cannot be changed independently of each other. (See example
on separate page)
Confounding
Indistinguishably combining an effect with other effects or blocks. When done,
higher-order effects are systematically aliased so as to allow estimation of lower-order
effects. Sometimes, confounding results from poor planning or inadvertent changes to
a design during the running of an experiment. Confounding can diminish or even
invalidate the effectiveness of the experiment. (See example on separate page)
698
Design Principles Continued

Task: Design Principles Continued
Alias
An alias is a confounded effect resulting from the nature of the designed experiment.
The confounding may or may not be deliberate.
699
Interaction Example

Concept: Interaction Example
Interaction occurs when one input factor depends on the level of another input factor
as it relates to an output variable. An example of interactions, as found in Design and
Analysis of Experiments by Douglas C. Montgomery, is typically graphed as in the
examples below.
In the first example, no interaction exists as the lines are parallel. This indicates a lack
of interaction between factors A and B. In the second example, interaction exists.
Review the examples below to understand the patterns of interaction when using
graphs such as these.
700
Confounding Example

Concept: Confounding Example
When the effects of two or more factors cannot be separated from each other, those
factors are confounded or aliased to reduce the number of runs required in the
experiment. In the example below, the factors are calculated by multiplying the two
confounded factors together, for example: XY = negative times negative = positive.
In the example above:
X, Y, and Z are factors.
"+" represents a high level.
"-" represents a low level.
X is confounded with YZ; Y with XZ; Z with XY.
In this example, the effects of X and YZ are distinguishable.
701
One-Factor Experiments

Concept: One-Factor Experiments
As the name implies, one-factor experiments involve only one factor or input
variable. In a one-factor experiment the project team selects a starting point, or
baseline set of levels for each factor, then successively varying each factor over its
range with the other factors held constant at the baseline level. After each factor has
been tested, it is then easy to compare the results and conclude which factor most
likely provides the optimal results. For more information, roll over Page Resources,
and then click One-Factor Example.
Often, one-factor experiments are used when the critical factor has been determined
through prior analysis or when testing all factors is too costly or not practical. In these
cases, a one-factor experiment allows the project team to focus on the one critical
factor that can have the greatest impact on the response variable.
702
One-Factor Example
Six Sigma Black Belt | Improve | Design of Experiments | One-Factor Experiments

Example: One-Factor Example
Using our previous golf example, each factor is tested while the other factors remain
the same driver size, ball type, mode of travel and beverage.
The interpretation of the graph is straightforward; for example, because the slope of
the mode of travel curve is negative, we would conclude that riding improves the
score. Using these one-factor-at-a time graphs, we would select the optimal
combination to be the regular-sized driver, riding, and drinking water. The type of golf
ball seems unimportant.
703
Randomized Block Experiments

Concept: Randomized Block Experiments
When focusing on just one factor in multiple treatments, it is important to maintain all
other conditions as constant as possible. Since the number of tests to ensure constant
conditions might be too large to practically implement, an experiment may be divided
into blocks. These blocks represent planned groups that exhibit homogeneous
characteristics. A randomized block experiment limits each group in the experiment to
exactly one and only one measurement per treatment.
For example, if an experiment is going to cover two shifts, then bias may emerge
based on the shift during which the test was conducted. A randomized block plan
might measure each item on each shift to reduce the chance for bias.
A randomized block experiment would arbitrarily select the runs to be performed
during each shift. For example, since the coolant temperature in the example below is
probably the most difficult to adjust, but may in part reflect the impact of the change
in shift, the best approach would be to randomly select runs to be performed during
each shift. The random selection might put runs 1, 4, 5 and 8 in the first shift and runs
2, 3, 6 and 7 in the second shift. Another approach that may be used to nullify the
impact of the shift change would be to do the first three replicates of each run during
the first shift and the remaining two replicates of each run during the second shift.
704
Latin Square Designs

Concept: Latin Square Designs
A Latin square design involves three factors in which the combination of the levels
of any one of them and the levels of the other two appear once and only once. A Latin
square design is often used to reduce the impact of two blocking factors by balancing
out their contributions. A basic assumption is that these block factors do not interact
with the factor of interest or with each other. This design is particularly useful when
the assumptions are valid for minimizing the amount of experimentation.
The Latin square design has two limitations:
1.
2.
The number of rows, columns, and treatments must all be the same (in other
words, designs may be 3X3X3, 4X4X4, 5X5X5, etc.).
Interactions between row and column factors are not measured.
An example of a Latin square design (3X3) is seen below.
Three aircraft with three different engine configurations are used to evaluate the
maximum altitude when flown by three different pilots (A, B, and C). In this case, the
two constant sources are the aircraft (1, 2, and 3) and the engine configuration (I, II,
and III). The third variable the pilots is the experimental treatment and is applied
to the source variables (aircraft and engine). Notice that the condition of interest is the
maximum altitude each of the pilots can attain, not the interaction between aircraft or
engine configuration. For example, if the data shows that pilot A attains consistently
higher altitudes in each of the aircraft/engine configurations, then the skills and
techniques of that pilot are the ones to be modeled.
This is also an example of a fractional factorial as only nine of the 27 possible
combinations are tested in the experiment.
705
Full-Factorial Example - Steps 1 and 2

Concept: Full-Factorial Example - Steps 1 and 2
A full factorial experiment is one that contains all levels for all factors no treatments
are left out of the experiment. A detailed example of a full factorial follows.
Suppose that temperature, time, and catalyst volume are three critical variables
suspected of affecting the yield percentage for an industrial grade lubricant. The
current yield percentage averages 82%.
Step 1: Establish experiment objectives:
The objective of the experiment is to maximize the yield percentage for the lubricant.
The higher the yield percentage, the more product is created and more efficient is the
use of resources.
Step 2: Identify factors to be considered:
The input variables (x) / factors are identified along with a high and low level for
each:
A.
B.
C.
Temperatur 115 C
135 C
e:
50 minutes 70 minutes
Time
94 gallons 102 gallons
Volume of
catalyst
The output variable (y) / response is identified:
Yield percentage of lubricant
706
Full-Factorial Example - Steps 3 and 4

Concept: Full-Factorial Example - Steps 3 and 4
Step 3: Finalize and test the design:

The project team decides to use a full-factorial design, where all factors and levels are
tested. In this situation, two levels and three factors are represented by a 23 full
factorial experiment. This experiment has eight treatments (2x2x2 = 8).
A design array is developed for the experiment:
A decision must be made on whether to run the experiment more than once. If prior
analysis reveals a lot of variation in the process output (e.g., Cp or Cpk is less than
1.00, the generally accepted norm for a process that is not capable of meeting
requirements), then repeating or replicating the experiment may provide enough data
to see the dispersion in the output variable (y).
For this scenario, assume that no output variable variation was detected in prior
analysis work, so the decision is to not run the experiment more than once.
Step 4: Run the experiment:
Data are collected as the experiment runs. The results are recorded in the design array:
707
Full-Factorial Example - Step 5

Concept: Full-Factorial Example - Step 5
Step 5: Analyze the results of the experiment:

Several methods may be used to examine the data. One method is to graph the results
of the factor results with the output variables. The graph is called a "main effects plot."
The mean is calculated for all the results for the low level and the high level of each
factor.
Temperature: low level mean is 77.5% and high level mean is 88.0%
Time: low level mean is 82.0% and high level mean is 83.5%
Catalyst volume: low level mean is 82.5% and high level mean is 83.0%
Using this graphing technique, the data strongly suggests that there is a significant
effect from the temperature factor and only a slight effect for the time and catalyst
volume factors.
The effect of temperature may also be calculated by summing the yield values when
the temperature is high and by subtracting the yield values when the temperature is
low and dividing the results by four.
Temperature effect = (90+89+88+85) (72+79+78+81) / 4 = 352-310/4 = 10.5
When the temperature is set at the high level, the yield gain is 10.5%. This increase is
due to the temperature factor because during the four high temperature treatments, the
other two factors were set at high two times and low two times.
Similarly, calculate the effects for the other two factors:
Time effect = (79+89+81+85) (72+90+78+88) / 4 = 334-328 / 4 = 1.5
Catalyst volume effect = (78+88+81+85) (72+90+79+89) / 4 = 332-330 / 4 = .5
The effects of changing the time to the higher level has a minor increase of 1.5%,
while increasing the volume of the catalyst has a very small increase in yield of .5%
708
Full-Factorial Example - Step 5 Cont. and Step 6

Concept: Full-Factorial Example - Step 5 Cont. and Step 6
Similarly, the interaction effects of the factors may also be determined using a similar
method. The design array is expanded to account for the interactions. The "+" or "-"
indicator is determined by multiplication rules. For example, a "+" multiplied by a "-"
equals a "-". A "-" multiplied by a "-" equals a "+".
Using the same process, calculate the effects of the interaction between variables:
AxB effect = (72+89+78+85) (90+79+88+81) / 4 = 324-338 / 4 = -3.5
BxC effect = (72+90+81+85) (79+89+78+88) / 4 = 328-334 / 4 = -1.5
AxC effect = (72+79+88+85) (90+89+78+81) / 4 = 324-338 / 4 = -3.5
AxBxC effect = (90+79+78+85) (72+89+88+81) / 4 = 332-330 / 4 = .5
The study of interactions produces no information to contradict the original
understanding that temperature (10.5%) by itself has the greatest impact on the yield
percentage. All other factors and combination of factors produce no significant
increase in the yield percentage and may, in some of the combinations, actually
decrease it.
These techniques can be verified using the analysis of variance (ANOVA) process
previously discussed in detail in the Analyze and Measure lessons. Various statistical
packages may be used to calculate the results. Generally, a p-value less than .05 on a
specific factor demonstrates that factor is statistically significant. The percent of
contribution to the results may also be determined using the ANOVA by examining the
sum of squares (SS).
Step 6: Make decisions on next steps:
After the results of the experiment have been analyzed, decide what the next steps. In
this example, the factor of statistical significance is temperature. The following are
examples of possible next steps:
The first experiment could be repeated or replicated to verify results of the first
run. Replication would be costly, but would add weight to the results of the first
experiment.
A second experiment could be designed to build on the first. For example, the
higher level of temperature (135C) could be used for all treatments with
variations allowed in the time or catalyst volume to produce additional
information on optimum levels.
The higher level of temperature (135 C) could be established as the new level
for the production process and the results could be monitored to compare with the
previous average yield of 82%.
709
Yates Order

Concept: Yates Order
When designing an experiment, the levels are assigned to each treatment in such a
way as to ensure all possible combinations for all factors are included. For an
experiment with a small number of factors, this is accomplished easily by observation.
However, for larger experiments, the process of allocating the levels is more difficult.
The Yates order is a means by which levels can be allocated to treatments of each
factor.
Let k equal the number of factors. Yates order is achieved for the kth column by
entering the sign for the low level of the factor (usually represented by a "-" or "-1") in
2k-1 rows, starting at the top of the column. This is followed by entering the sign for
the high level (usually denoted with a "+" or "+1") in 2k-1 rows.
For example, the levels of a four-factor experiment would be allocated like the
following:
k = 4 (with four columns).
Since there are two levels for each factor, there are 24 or 16 rows in total.
The 1st column has the low level sign in the 21-1 rows (21-1 = 1) or first row,
followed by the high level sign in the next row. This alternation continues until
all rows are completed.
The 2nd column has the low level sign in the 22-1 rows (22-1 = 2) or first two
rows, followed by the high level sign in the next two rows.
The 3rd column has the low level sign in the 23-1 rows (23-1 = 4) or first four
rows, followed by the high level sign in the next four rows.
The 4th column has the low level sign in the 24-1 rows (24-1 = 8) or first eight
rows, followed by the high level sign in the next eight rows.
The design array using the Yates order for four factors looks like the diagram below:
710
Yates Order

Concept: Yates Order
711
Fractional Factorial Experiments

Concept: Fractional Factorial Experiments
A fractional factorial experimental design consists of a subset (fraction) of the

factorial design. Typically, the fraction is a simple proportion of the full set of
possible treatment combinations. For example, half-fractions, quarter-fractions, and
so forth are common. While fractional factorial designs require fewer runs, some
degree of confounding occurs. A fractional factorial is often referred to as 2k factorials
with k referring to the number of factors and 2, the number of levels. Using this
nomenclature, a full factorial may be represented as 2k and the fractional factorial 2k-1
as to represent the subset of combinations. There are many possible fractional factorial
designs and the number of possible fractional factorial designs can be represented by 2
k-p where p is the number of independent generators.
For a fractional factorial, a subset of levels and treatments are used for the selected
factors. In the example below, the full factorial is 23 and the fractional factorial is 23-1.
Notice that the fractional only includes a subset of the possible combinations, but still
uses balance in the combinations selected. In the graph below, the grayed rows are not
used in the fractional factorial.
In the example above, the full factorial experiment uses all factors and all levels. The
fractional factorial experiment uses only a subset of the levels (those not selected are
grayed out).
Analysis of the fractional factorial experiment is conducted in the same manner as a
full factorial design.
Roll over Page Resources and click on Example to receive further information
regarding this topic.
712
Example
Six Sigma Black Belt | Improve | Design of Experiments | Fractional Factorial Experiments
Example: Example
Example
An engineer is planning an experiment involving eight factors, each at two levels. She
can afford no more than 35 runs. In this situation, a full factorial would require 28 =
256 runs and is thus not a possible design. She can use a fractional factorial design
that will keep her total number of runs close to but less than 35. The 28-3 fractional
factorial experimental design would require only 28-3 = 32 runs.
713
Introduction to Taguchi Designs

Concept: Introduction to Taguchi Designs
The Taguchi approach to experiments emphasizes two items:

1. Reduce process variation which reduces the loss to society in general.
2. Use a proper development approach to reduce process variation.
Identify a parameter that improves a characteristic of performance.
Identify a less expensive alternative design, material, or method that provides the
same level of quality at a less expensive cost.
To achieve these goals, Taguchi developed orthogonal arrays to facilitate the test
strategy. Examples of orthogonal arrays are on the following pages.
714
Orthogonal Arrays

Concept: Orthogonal Arrays
Orthogonal designs or orthogonal arrays are balanced; they do not allow for
interaction between separate factors composing the design. A 3 x 3 Latin square
design is sometimes called a Taguchi L9 orthogonal array.
The simplest orthogonal array (OA) is the L4, which stands for four trial runs. It falls
within the two-level grouping of OAs. See example below.
715
Introduction to Taguchi Robustness

Concept: Introduction to Taguchi Robustness
Taguchi emphasizes the importance of consistency of product. Robustness refers to

resistance to the effects of variation of some factors. For example, if Brand A
chocolate bar is very soft at 100F and brittle at 40F, and Brand B maintains the same
level of hardness at these temperature extremes, it could be said that Brand B is more
robust to temperature changes in this range.
Product characteristics can be made robust by reducing the variation of a few, key
variables. Taguchi refers to these variables as "signal" or "noise factors." If these
factors can be identified and variation in them can be reduced, the product can
withstand variation in other input factors. Producing products that are robust to noise
of various kinds is clearly desirable. Signal and noise factors will be discussed in more
detail on the upcoming pages.
Robust design aims to produce a reliable design by controlling parameters so random
noise does not cause failure. Since DOE techniques help determine the best design
concepts used for tolerance design, a robust DOE strategy helps create a design that
improves the understanding of the relationship between product parameters, process
parameters, and desired performance characteristics while being desensitized to
adverse noise input variable levels that are inherent to the process.
To achieve robustness, Taguchi suggests three design considerations:
1.
2.
3.
System design Usually performed by engineers, system design involves the

selection of parts, machines, process methods, and some product parameters.
Parameter design The selection of operating levels that contribute to an
optimum output and are insensitive to environmental considerations (noise). This
area is where quality professionals can add significant value.
Tolerance design Identifying process variations that are permissible when
striving for consistent output and adjusting tolerances accordingly.
716
Taguchi Loss Function

Concept: Taguchi Loss Function
According to Taguchi:
Excessive variation is a result of poor manufacturing quality. Reacting to

individual items inside and outside the specifications is counter-productive.
Quality engineering starts with an understanding of the cost of poor quality

(COPQ).
COPQ is more than the number of items outside the specification multiplied by
the cost of rework and scrap.
Cost to society also includes the loss to the customer through poor performance
and reliability, early wear out, and difficulties when interfacing with other parts.
Taguchi defined product quality as the (minimum) loss imparted by the product to
society from the time the product is shipped. The Taguchi loss function translates any
product deviation from its target parameter into a financial measure. Loss function:
maintains that poor quality causes increasing loss to all parties.
provides a financial value for customers' increasing dissatisfaction of product

performance.
gives a financial value for increasing costs as product performance exceeds the
desired target performance.
717
Loss Function

Concept: Loss Function
Taguchi bases loss function on the fact that quality is best at the target. With this in
mind, loss occurs at points away from the target, even if the product is within
specifications; meaning quality loss is zero if the characteristic is 100% at the target.
To use loss function for determining the financial loss that will occur when the quality
characteristic deviates from the target, one needs the following:
Cost of the defective product (A)
Tolerance; the amount of deviation from the target ()
Target (m)
718
Loss Function Example

Concept: Loss Function Example
Identical televisions are assembled in two locations, a Six Sigma facility (Location 1)
and a non-Six Sigma facility (Location 2). The distribution of the televisions color
density is within specification in both locations; however, their distributions greatly
differ. Location 1 has 0.3% outside the limits, but location 2 has 0% outside the limits.
Looking at the illustrations below, you can see the impact of the distribution on the
loss function. Sets built at location 2 will result in a loss approximately 3 times that of
sets built in Location 1.
Location 1
Location 2
719
Loss Function Summary

Concept: Loss Function Summary
Taguchi Loss Function

The processs results serve as the voice of the process. Variations tell how the process
is performing. The target and specifications are the voice of the customer. The Taguchi
Methods use the processs results and the customers specifications to approximate the
financial loss of both the suppliers and the customers. The greater the deviation the
process results are from the target, the greater is the loss.
Before a Taguchi loss function technical solution is introduced, conduct a business
cost-benefit analysis for either reducing process variation or centering the process on
the target. Remember, listening to the voice of the customer is essential for capturing
requirements, feedback, and applying the knowledge to the process. Applying VOC
and Taguchi loss function are ways to control costs and achieve quality.
720
Taguchi Robustness Concepts

Concept: Taguchi Robustness Concepts
As mentioned previously, robustness means resistance to the effect of variation of

some factor.
A product process is controlled by 3 primary factors: noise, signal, and control. These
are explained below.
Cont
rol
Fact
ors
In robust parameter design, a control factor is a predictor variable that is

controlled as part of the standard experimental conditions. In general, noise
factors are allowed to vary with the hope that the output will vary minimally
over a wide range for each control factor. Example: Items in a process that are
controllable, but produce a response when triggered by a signal design of
parts within a furnace.
Sign Strongly affect the mean response of the process, but are controllable and have
al
little affect on variation in the output response. Example: Thermostat on a
Fact furnace or air conditioner.
ors
Nois In robust parameter design, a noise factor is a predictor variable that is hard to
e
control or is not desired to control as part of the standard experimental
Fact conditions. In general, noise factors are allowed to vary with the hope that the
ors output will vary minimally yet, they are included in an experiment to broaden
the conclusions regarding control factors. Examples: Outside temperature,
variations in line voltage.
S/N Quantifies the effect of variation in controllable factors on the variation in the
Rati process output. (This ratio has been criticized in some of the quality literature
o
for its importance and accuracy.)
Signal-to-noise ratios are defined so that a maximum value of the ratio minimizes
variability transmitted from the noise variables. Then an analysis is performed to
determine which settings of the controllable factors result in (1) the mean as close as
possible to the desired target and (2) a maximum value of the signal-to-noise ratio.
S/N ratio calculations are derived from the quality loss function. The objective is to
maximize the performance measure that will minimize the expected loss. To meet the
objective, designers select combinations of design variables that maximize the S/N
ratio because the higher the ratio, the better. There are 3 cases of S/N ratios to
consider: smaller is better, larger is better and nominal is best.
More information will be given on the next two pages regarding formulas and
examples.
721
Signal-to-Noise Ratio

Concept: Signal-to-Noise Ratio
S/N ratio measures the amount of unwanted noise relative to a signal's strength.
Commonly used in the electronics field, airlines require passengers to shut down all
electronic devices before takeoff and landing in order to reduce the background noise
that could disrupt the any of the airplanes electronic systems. Think about how this
electronic example relates to conditions in the workplace for both equipment and
people.
As the magnitude of the process mean compared to its variation, the signal-to-noise
(S/N) ratio is an excellent statistical performance metric for determining the best
values/levels of the control factors. Taguchi developed the S/N ratio as a mathematical
equation indicating the experimental effects influence above the effect of
experimental error due to chance. Simply stated, S/N ratio is the estimated effect of all
the noise factors on the products performance characteristics.
Designers use S/N ratio calculations, derived from the quality loss function, to
maximize the performance measure that will minimize the expected loss. To meet the
objective, designers select combinations of design variables that maximize the S/N
ratio because the higher the ratio the better. There are three cases of S/N ratios to
consider: smaller is better, larger is better, and nominal is best.
Smaller-is-Better
Larger-is-Better
Nominal-is-Best
722
Robustness Example

Task: Robustness Example
The Taguchi robustness concepts, in their simplest terms, involve the selection of
process or operating conditions where uncontrolled external variability does not affect
the product or process. The buttons below present a case where you must design a
product so an unwanted variable does not affect the output of the process. Click each
to learn more.
Amp 1
The classic example is that of an amplifier, which takes a signal and increases it. The
graph shows the plot of the output signal (dependent variable) as it changes with the
input voltage (independent variable).
Amp 2
Line voltage does vary and on occasion, it can be as low as 105 volts or even less, and
it can surge to 125 volts or higher. Adding the mean and the range of variability to the
graph shows the effect varying line voltage has on the output. In essence, both the
signal and variability have amplified.
723
Robustness Example

Task: Robustness Example
Amp 3
Designing the amplifier to operate normally on 140 volts instead of 120 would be on a
different portion of the response curve of the amplifier. This amplifier is now robust to
the fluctuations of the input voltage because the variation of line voltages minimizes
output.
724
Design Process

Task: Design Process
Taguchis approach to design emphasizes continuous improvement and includes three

different aspects of design process: system design, parameter design, and tolerance
design. Click on each to learn more.
System Design
Also called "concept design"
Establishes basic engineering and design concepts; the overall architecture
Produces a prototype model to define initial product or product-design

characteristic settings
Parameter Design
Also known as "DOE"
Identifies settings that minimize variation
Finds the combination of control factor settings allowing the system to achieve its
ideal function
Is insensitive to uncontrollable variables

Tolerance Design
Sets tolerances to minimize the cumulative product manufacturing and lifetime

costs; online quality control.
Focuses resources to reduce and control variation in a few critical dimensions (as
per the Pareto principle).
Identifies tolerances that when tightened, produce substantial performance

improvements.
Determines economic design of safety factors.
Studies the trade-off between extra cost for tighter tolerance and improved
quality; also finds the most economical tolerances.
Conclusion
By identifying controllable parameters, the designer can develop a series of
experiments to determine the factor with the greatest positive influence on the output
of the desired product. Selecting a design or process that is insensitive to uncontrolled
sources of variation improves quality.
725
Mixture Experiments

Concept: Mixture Experiments
Mixture experiments are used when the levels of factors which are the components or
ingredients of a mixture are not independent. A mixture experiment occurs when the
factors selected are proportions of the group of components being blended. Since these
proportions must sum to 100%, some standard mixture designs exist to facilitate this
approach. The response or outcome in a mixture experiment is assumed to depend on
the proportion of components in the mixture and not on the relative amounts in the
mixture. Mixture design accounts for the dependence of response on proportionality of
ingredients.
The purpose of a mixture experiment is to model the blended components so that
predictions of the response for any combination of the components can be made and
so a measure of the influence of each component on the response can be made.
A common example of a mixture experiment is the simplex-lattice design. This design
is the approach used in the example on the following pages.
726
Simplex-Lattice Example

Concept: Simplex-Lattice Example
The simplex-lattice is an example of a boundary point design. This design approach

places all of the design points on the external boundaries of the design. In an example,
consider three chemicals being mixed together to obtain a new product yield. The
examples parameters include the following:
Three chemicals denoted as A, B, and C
Four equally spaced levels (or proportions) for each chemical:
0 or 0%
0.333 or 33.3%
0.667 or 66.7%
1.0 or 100%
q = the number of factors = 3

1/m = the size of the proportion; in this example, levels are set at 1/3
For a {3,3} lattice (where q =3, and m=3), 10 design runs are determined with all
possible proportion combinations.
Using the information above, a design array is determined similar to factorial designs:
The combinations displayed in the design array may be graphed in unique ways that
make the mixture designs stand out against other experiment designs. The graph below
is determined by the intersection of the level indicators on the outer edge of the graph.
727
Simplex-Lattice Example

Concept: Simplex-Lattice Example
The design of the experiment follows the unique limitation that all proportions must
equal 1. The design points in each simplex lattice may be determined by the equation:
(q+m-1)! / (M!(q-1)!)
The analysis of the data follows the same pattern as other experiment designs, using
ANOVA and other methods previously presented in this and other lessons.
728

Improve
Response Surface Methodology
Learning Objectives
Six Sigma Black Belt | Improve | Response Surface Methodology

At the end of this Improve topic, all learners will be able to:
construct steepest ascent/descent experiments and apply computational and

graphical methods to analyze the significance of results.
construct higher-order experiments such as central composite design (CCD) and

Box-Behnken and apply computational and graphical methods to analyze the
significance of results.
730
Introduction to Response Surface Methodology

Concept: Introduction to Response Surface Methodology
Response surface methodology (RSM) is a collection of mathematical and statistical

techniques useful for the modeling and analysis of problems in which a response of
interest is influenced by several variables and the objective is to optimize this
response. RSM is a sequential procedure that couples the concepts of experimental
design and optimization theory.
The purpose of this methodology is to determine the optimum operating conditions for
a given set of process variables. Optimum operating conditions are arrived at by
modeling the functional relationship between a set of independent variables and the
response variable, using experimental design techniques.
For some variables, RSM requires more trials than using the two-level fractional
factorials that have been discussed in this lesson. For such cases, the number of
variables may need to be reduced through prior analysis in previous phases, technical
considerations, or fractional factorial experiments.
Two-level fractional factorials assume that the response is linear between the levels
considered for the factors involved in the experiment. This two-level approach is
adequate for solving many problems and for facilitating useful designs. When a design
needs to accommodate a situation where the response needs to be treated as a function
of the levels of only a few input variables/factors, RSM adequately serves that role.
731
Steepest Ascent or Descent

Concept: Steepest Ascent or Descent
If two factors (X1, X2) are placed on an x-axis and y-axis, their effect on the response
variable may sometimes be viewed in a contour plot. Contour plots show lines of
constant response and are used to help the experimenter understand the response
surface for the purpose of more rapidly converging on the optimum point. When the
response surface is a plane, the contour plot will contain parallel straight lines. When
the response surface is twisted indicating significant interaction, the contour lines
will be curved. Thus, interaction is a form of curvature in the underlying response
surface model for the experiment.
The method of steepest ascent (where "ascent" means improvement in the
measurement of interest) is a well-known optimization technique that can be used to
systematically climb a response surface in specific step sizes to seek out an optimum
point. The goal of a steepest ascent approach to design is to move from an initial point
in the two-factor space (X1, X2) in the direction of steepest ascent to achieve the
greatest rate of increase in the response variable per distance traveled or maximum
point. In general, the path of steepest ascent is perpendicular to the lines on the
contour. By contrast, the method of steepest descent applies when searching for the
minimum point. An example of contour may be viewed below.
The nature of the contour curves in the vicinity of (+,+) suggests a path of steepest
ascent:
in the "northeast" direction.
about 30o above the horizontal.
732
Simplex Approaches to Steepest Ascent

Concept: Simplex Approaches to Steepest Ascent
A simplex approach to steepest ascent requires the following:
One more point than the number of independent variables.
Move away from the lowest response point through the center of the other two
points to an equal distance on the other side.
Repeat this process dropping the lowest point each time.

An example of this approach may be seen below:
In this example, three points are used initially (all points labeled A) since there are
two factors (see the rules listed above). Move from the lowest point (A70%) through
the center of the line between A80% and A83% to a point equal distance away from
the line between those two points. This produces the point labeled B90% as point
A70% is dropped. Next, repeat the process taking the lowest point A80% and moving
through the center point between A83% and B90% to a point equal distance on the
other side, which is C92%.
733
Central Composite Design

Concept: Central Composite Design
A central composite design (CCD) uses an embedded factorial or fractional factorial

that has a group of star points on the external part of the diagram. This combination
provides an opportunity to estimate curvature. A CCD contains twice the number of
star points as there are factors in the experiment.
For a CCD, if the distance from the center to any factorial point is +/- 1 unit, then the
distance from the center point to one of the star points is +/- a where a>1. The value
of a depends on the number of factors involved and the design properties. The
equation for a = [number of factorial runs]1/4.
Examples of the three basic types of CCD designs are graphed and explained below:
CCC Circumscribed
Original form of CCD
Star points establish new end points for factor levels
Requires 5 levels for each factor
Symmetry is spherical, circular, or hyperspherical

CCF Face Centered
Star points are center of each face
a= +/- 1

CCI Inscribed
Used when factor settings are truly the limits
Star points equal the factor settings for levels
A scaled down CCC design
734
Box-Behnken Design

Concept: Box-Behnken Design
The Box-Behnken design is unique in that it does not contain an embedded factorial
or fractional factorial matrix. The treatment combinations are found at the mid-points
of edges of the process spaces in the design. The Box-Behnken requires three levels
for each factor. The primary limitation of this design is that blocking techniques are far
fewer when compared to other central composite designs.
The graph below depicts a Box-Behnken design for three factors (13 runs are
illustrated):
The qualities found in the Box-Behnken design compared to other CCDs are:
Requires fewer treatment combinations than a CCD for cases of three or four
factors.
Requires three levels for each factor rather than the five needed in most CCD
designs.
Its missing corners are helpful when extreme values from the combination of
factors are not needed or should be minimized.
735
Box Behnken Runs

Concept: Box Behnken Runs
The chart below illustrates the number of runs for Box-Behnken designs compared to
central composite designs:
736

Improve
Evolutionary Operations
Learning Objectives
Six Sigma Black Belt | Improve | Evolutionary Operations

At the end of this Improve topic, all learners will be able to understand the application
and strategy of evolutionary operations (EVOP).
738
Introduction to EVOP

Concept: Introduction to EVOP
Introduction
The purpose of the evolutionary operations methodology(EVOP) is to improve a
process through systematic changes in the operating conditions of a given set of
factors. An experimental design is established and conducted through a series of
phases and cycles. The effects are tested for statistical significance against
experimental error when such error can be calculated. When a factor is found to be
significant, the operating conditions for that factor are reset and the experiment
conducted again. This process continues until no further gain is achieved. Hence, the
concept of an evolution is established.
EVOP Analysis Steps

1.
2.
3.
4.
5.
Determine the process factors, operating conditions (i.e., high, low level), and
response variables.
Establish the experimental design to be conducted.
Conduct two cycles before computing experimental error.
Compare the effects of the factors to the experimental error. If the effects fall
within the range of the experimental error, conclude that they are not significant
and conduct another cycle. If one or more effects fall outside the range of
experimental error, reset the operating conditions and begin another phase.
Conclude the EVOP when no further gain is evident.
739
Advantages of EVOP

Concept: Advantages of EVOP
For finding an optimal solution, EVOP has several advantages:
Process does not need to be shut down as is the case with a designed experiment
the process still makes usable product.
Can run conditions that are within the normal operating parameters of the
process.
Data are collected at predetermined conditions in the process.
The operating region slowly and methodically moves in the direction of

improvement in results.
Conservative approach that may find more favor in some organizations that resist
rapid change.
Fosters an environment of continuous improvement because the method is a

simple mechanism and can be a part of normal day-to-day operations thus
allowing adjustments and monitoring as part of daily work.
EVOP also has a few disadvantages:
Since the factor level changes are relatively small, repeat runs are often needed
for each phase.
The experiments are generally longer in duration than traditional designed

experiments because only a few factors are changed in a given phase or cycle.
740
EVOP Process

Concept: EVOP Process
Definitions that should be considered prior to understanding the process steps:
Cycle represents one iteration of data collection at each point in the design.
Phase refers to a new iteration of cycles aimed at a previously defined condition.

The phase is completed when the conditions are changed in response to improved
results.
Example Process:
1.
2.
3.
4.
To run a two-factor or three-factor experiment (EVOPs are not limited to two or

three-factor experiments): Repeat the experiment and, after the second cycle,
begin to measure the error and significance of results. (ANOVA tables are often
used for this purpose as well as statistical software.)
Continue the experiment for a third cycle and, if a factor is demonstrated to be
significant, begin a second phase with a new set of conditions based on the
significant results.
If factors are not statistically significant, consider increasing the range of the
levels for these factors, or
Consider replacing these factors with different factors.

If no factor is significant after eight cycles, change the factor levels or select new
factors.
When no further gain is evident, run new experiments to verify it with new
factors or factor levels; then conclude the EVOP.
741
Example of EVOP

Concept: Example of EVOP
A plant has a chemical process that produces a commercial solvent when several
chemicals are mixed together. An EVOP is structured with two factors: temperature
and reaction time. The current process setting for temperature is 175o C. Levels are
selected at 165o C and 185o C. The current process setting for reaction time is 50
minutes. Levels are selected at 46 minutes and 54 minutes.
The result of the first cycle might look like the diagram below:
Interpreting the graph:
The first data point obtained (175o C and 50 min) produces a yield of 86%
(Shown as 1:86% - cycle:result).

The second data point obtained (185o C and 54 minutes) produces a yield of 83%
(Shown as 2:83% - cycle:result).
The chart above represents just one cycle of data obtained. A second cycle would
be conducted. This cycle consisted of 5 runs.
The data produced is then placed in an ANOVA table using statistical software to
analyze results and determine if there is a statistical significance in the results.
Roll over Page Resources to view the ANOVA table associated with this
example.
If the data analyzed suggests that temperature is statistically significant and
produces a higher yield, then a second phase is begun with the factor of
temperature centered on the higher temperature and the same time factor.
For example, a new phase might begin with a temperature centered on 185o
C (175 185, and 195 C) and maintain the time centered on 50 minutes.
742
ANOVA Table
Six Sigma Black Belt | Improve | Evolutionary Operations | Example of EVOP

Example: ANOVA Table
743
Lesson Summary

The Improve phase is about addressing root causes with solutions. Solutions must be
developed, tried, and implemented with the support of data. To accomplish this,
solutions should be developed using a planned, systematic approach aimed at
eliminating or reducing the impact of the identified root cause.
The purpose of DOE is to provide the most efficient and economical method of
reaching valid and relevant conclusions from the experiment.
Planning the experiment is probably the most important DOE task. SSBBs must
adhere to a set of design principles to assist in the proper experiment design.
One-factor experiments involve only 1 factor or input variable, multi-factor

experiments are designed to evaluated multiple factors set at multiple levels, and
full-factorial experiments use an experiment to test each possible combination of
the factors.
Taguchi Methods are a variation of full-factorial DOE design using a limited

number of experimental runs. Taguchis robust design aims to produce a reliable
design by controlling parameters so random noise does not cause failure.
SSBBs use mixture experiments when the levels of factors that are the
components or ingredients of a mixture are not independent; thus blended into a
group of components. This experiment models the blended components in order
to predict a response for any combination.
Response surface methodology determines how a set of quantitative factors over

a specified region affects response in order to set optimal levels for the variables.
744
Lesson Bibliography

Bibliography
Certified Quality Auditor. Milwaukee, WI: ASQ, 2004.
American Society for Quality. "Glossary and Index." ASQ's Certified Quality Engineer
Self-Directed Lean Program. Milwaukee, WI: ASQ, 2000
Beezer, Rob. "Graeco-Latin Squares." Rob Beezer. 09 Jan 1995. University of Puget
Sound. 18 Jul 2006.
Benbow, Donald, Roger Berger, Ahmad Elshennawy, H. Fred Walker, editors.The
Certified Quality Engineer Handbook. Milwaukee, WI: ASQ Quality Press, 2002.
Bossert, James, editor. The Supplier Management Handbook, 6thEdition. Milwaukee,
Keiningham, Timothy and Terry Vavra. The Customer Delight Principle. New York,
NY: McGraw-Hill, 2001.
Montgomery, Douglas C. Design and Analysis of Experiments, 6th ed. Hoboken, NJ:
John Wiley & Sons, Inc., 2005.
Oakes, Duke and Russell Westcott, editors. The Certified Quality Manager Handbook.
2nd ed. Milwaukee, WI: ASQ Quality Press, 2001.
Westcott, Russell, editor. The Certified Manager of Quality/Organizational Excellence
Handbook. 3rd ed. Milwaukee, WI: ASQ Quality Press, 2006.
745

Control
Lesson Introduction
Six Sigma Black Belt | Control

The Control lessonprovides an overview of how to select, construct, interpret and

apply critical aspects of statistical process control. To better understand this concept,
the ASQ Body of Knowledge provides the following topics:
Statistical process control
Understand objectives and benefits of SPC.
Select critical characteristics for monitoring by control chart.
Define and apply the principle of rational subgrouping.
Identify, select, construct and apply the following types of control charts:
X and R
X and s
ImR / X-MR
X~ and R
p
np
c
u
Interpret control charts and distinguish between common and special causes
using rules for determining statistical control.
Define and explain PRE-control and perform PRE-control calculations and
analysis.
Advanced statistical process control
Understand appropriate uses of short-run SPC, exponentially weighted moving

average (EWMA), CUSUM charts and MAMR.
Lean tools for control
Apply appropriate lean tools as they relate to the Control Phase of DMAIC:
5S
Visual factory
Kaizen
Kanban
Poka-yoke
Total productive maintenance (TPM)
Standard work
Measurement system re-analysis
Understand the need to improve measurement system capability as process

capability improves.
Evaluate the use of control measurement systems and ensure that measurement
capability is sufficient for its intended use.
747
Lesson Overview

The tools and objectives of the Control phase are illustrated below.
748

Control
Statistical Process Control
Learning Objectives
Six Sigma Black Belt | Control | Statistical Process Control

At the end of this Control topic, all learners will be able to:
understand objectives and benefits of SPC (e.g., controlling process performance,

distinguishing special from common causes).
select critical characteristics for monitoring by control chart.
define and apply the principle of rational subgrouping.
identify, select, construct and apply control charts such as:
X and R.
X and s.
ImR / X-MR.
X~ and R.
p.
np.
c.
u.
interpret control charts and distinguish between common and special causes using
rules for determining statistical control.
define and explain PRE-control and perform PRE-control calculations and
analysis.
Portions of this topic were taken from the ASQ Quality Process Analyst web-based
750
SPC Introduction

Concept: SPC Introduction
"A phenomenon will be said to be controlled, when through the use of past experience,
we can predict, at least within limits, how the phenomenon may be expected to behave
in the future." Walter A. Shewhart
Pioneered by Walter Shewhart in the 1920s and later enhanced by W. Edwards
Deming, statistical process control (SPC) is a statistical method for measuring,
monitoring, controlling, and improving a process. The basic rule of SPC is to leave the
variations from common causes to chance, but to identify and eliminate special causes.
Since all processes are subject to variation, SPC relies on the statistical evidence
instead of on intuition.
SPC focuses on optimizing continuous improvement by using statistical tools for
analyzing data, making inferences about process behavior, and then making
appropriate decisions.
Variation is defined as "a change in the process data; a characteristic or a function that
results from some cause." Statistical process control begins with the recognition that
all processes contain variation. No matter how consistent the production appears to be,
measurement of the process data will indicate a level of dispersion or variability in the
data. The management and improvement of variation are at the very heart of the
strategy of statistical process control.
751
SPC Objectives and Benefits

Task: SPC Objectives and Benefits
When Shewhart developed his theory of statistical control, the approach was new and
innovative. Today, SPC is considered by most to be a foundational tool in any quality
management process. Click below to learn more.
Objectives
To use the data generated by the process, called the voice of the process, to
inform the Six Sigma Black Belt and team members when intervention is or is
not required.
To reduce variation, increase knowledge about a process and steer the process in
the desired way.
To detect quickly the occurrence of special causes of process shifts so that

investigation of the process and corrective action may be undertaken before many
nonconforming (defective) units are manufactured.
Benefits
SPC will maximize profits and improve customer service by providing the tools to:
Monitor processes for maintaining control
Detect special causes
Serve as decision-making aids
Reduce the need for inspection
Increase product consistency
Improve product quality
Decrease scrap and rework
Increase production output
Streamline processes
752
SPC Objectives and Benefits

Task: SPC Objectives and Benefits
Tools
Quality management processes may vary in the SPC tools utilized. Typical tools of
SPC include:
Control charts
Pre-control charts
Flow charts
Run charts
Pareto charts and analysis
Fishbone diagrams
Histograms
Process capability analysis
Scatter diagrams
Sampling plans
Regression and correlation
Hypothesis testing
Design of experiments
Analysis of variance
753
Common and Special Causes

Task: Common and Special Causes
The basic rule of SPC is that variation from common causes (controlled) should be
left to chance, but special causes (uncontrolled) should be identified and eliminated.
Shewhart called the causes common and assignable respectively; however, the
terms common and special are more frequently used today. Click below to learn more.
Common causes
Common causes are sources of process variation that are inherent in a process over
time. A process that has only common causes operating is said to be in statistical
control. A common cause is sometimes referred to as a "chance cause" or "random
cause".
Examples of common causes
variation in raw material
variation in ambient temperature and humidity
variation in electrical or pneumatic sources
variation within equipment (worn bearings)
variation in the input data

Special causes
Special causes or assignable causes are sources of process variation (other than
inherent process variation) periodically disrupting the process. A process that has
special causes operating is said to lack statistical control.
Examples of special causes
tool wear
large changes in raw materials
broken equipment
Type I SPC Error
Occurs when we treat a behavior as a special cause when no change has occurred in
the process. Also referred to as "over control".
754
Common and Special Causes

Task: Common and Special Causes
Type II SPC Error

Occurs when we do not treat a behavior as a special cause when in fact it is a special
cause. Also referred to as "under control".
755
Selection of Variable

Concept: Selection of Variable
According to the Glossary and Tables for Statistical Quality Control, Fourth Edition,
ASQ Statistics Division, a control chartplots a statistical measure of a series of
samples in a particular order to steer the process regarding that measure and to control
and reduce variation. Two key notes to consider are:
1.
2.
The order is usually time or sample number ordered-based.

The control chart operates most effectively when the measure is a process
characteristic correlated with an ultimate product or service characteristic.
Because of the Improve Phase of the DMAIC process, the Black Belt and team have
implemented improvements to the variables or inputs (Xs) in the process causing
variation in the output (Y). Once these improvements are in place, it is important to
monitor the process. Select statistically and practically significant variables for
monitoring that are critical to quality (CTQ) when establishing control charts. It is
possible to monitor multiple variables using separate control charts.
756
Rational Subgrouping

Task: Rational Subgrouping
Rational subgrouping is a subset defined by a specific factor. As a sample with

variations caused by conditions producing random effects, the rational subgroup
identifies and separates variations by special causes. Rational subgroups are our
attempt to be sure that we are asking the right questions about the data. Selecting the
appropriate control chart to use depends on the subgroups.
Click below to learn more about rational subgrouping.
Select the Measurement
Identify the best data to track.
Focus on the vital few, not the trivial many.
Select the best data for a few charts.
Produce elements of the subgroup in closely similar identical ways.

Number of Subgroups
Establishing rational subgroups is important for dividing observations.
Compute statistics for each subgroup separately before plotting on the control
chart.
Desire a minimal chance for variations within each subgroup:
For example, 5 subgroups of 5 typically provide more useful information

than 1 subgroup of 25 because the elapsed time between samples is
minimized, providing more opportunities to detect process shift. The
common cause variation can be measured with little or no influence from the
special cause variation.
Defect or Defective
Defect - An undesirable result on a product; also known as "a nonconformity".
Defective - An entire unit failing to meet specifications; also known as "a

nonconformance".
Note: A unit may have multiple defects.
Sample Size
Generally, 2 to 10 items produced under essentially the same conditions.
757
Rational Subgrouping Example

Task: Rational Subgrouping Example
Rational subgroups are subgroups of data collected under relatively homogeneous

conditions and is structured in a way that allows for the monitoring of the sources of
variation that interest us. Rational subgroups are our attempt to be sure that we are
asking the right questions about the data. Click below to see an example of rational
subgrouping.
Example
A SSBB desires to monitor a process that manufactures PET (plastic) bottles for the
beverage industry. The bottles are injection-molded on a multicavity carousel. The
particular carousel contains 4 cavities and the SSBB initially decides to take 3 bottles
from each cavity each hour and measure a critical characteristic. The data might look
like the table below (where M1, M2, and M3 are the 3 measures).
Option 1
Every hour, take 3 samples (subgroups) of 4 bottles (n = 4) at random. Plot the process
(on one chart).
Positives
Each hour has 3 averages and 3 ranges to plot.
The range indicates overall process variation.
Chart provides overall assessment of the quality during the time period.
Option provides data for overall assessment of process capability.
This is the easiest method of sampling.

Negatives
Data is sampled without regard as to which cavity.
Sampling does not provide cavity-specific data to assist in finding causes of

variation.
Option 2
Every hour, take 3 samples (subgroups) of 4 bottles (n = 4) or one bottle from each
cavity. Plot chart for process on 1 chart.
Positives
Data records the cavity the bottle is from.
Each hour has 3 averages and 3 ranges to plot.
Chart shows overall quality during the time period.
Chart provides data for overall assessment of process capability.
Range reflects the difference between the cavities.

Negatives
Chart requires more time collecting and recording data.
Data displays assessment by cavity, but requires additional analysis, not

immediate feedback.
758
Rational Subgrouping Example

Task: Rational Subgrouping Example
Option 3
Every hour, take 4 samples (subgroups) and 3 bottles (n = 3) with each sample from a
different cavity. Plot each cavity on separate charts.
Positives
Maintaining 4 separate charts (one per cavity).
Each chart with one mean and one range to plot each hour.
Easy identification of where (which cavity) changes in the process occur.
Areas in need of improvement readily targeted.
Specific cavity capability data provided.
Most information relative to the process provided.

Negatives
Requires more time for data collection and plotting
Requires collecting more data to establish the control limits

Key Questions
Each option is appropriate depending on the circumstances. Key questions to consider
are:
How capable is the process?
Is monitoring overall quality more important than detecting the shifts?
How easy is it to identify a special cause when it occurs?
How much does it cost to collect the data and perform the tests?
759
Rational Subgrouping Exercise

Concept: Rational Subgrouping Exercise
The following example is taken from The Certified Six Sigma Black Belt Handbook by
Donald W. Benbow and T.M. Kubiak.
"
Suppose a candy-making process uses 40 pistons to deposit 40 chocolate pieces on a
moving sheet of wax paper in a 5 X 8 array on a conveyor belt. Below are 2 options
illustrating how a rational subgrouping of 5 are selected:
Option 1: The first 5 chocolates in each row formed by 5 different pistons.
Option 2: The upper left-hand chocolate formed in 5 consecutive arrays by the

same piston.
"
760
Control Charts

Concept: Control Charts
Description
Originated by Walter Shewhart, control charts are a type of graph for studying how a
process changes over time. By comparing data points to a central line average, with an
upper control limit (UCL) and lower control limit (LCL), users can note variation,
track common causes, and seek special causes. Alternative names are "statistical
process control charts" and "Shewhart charts".
Run charts display data measures over time without the central line average and the
limits.
Control Chart Benefits
The addition of calculated control limits facilitates the ability to detect special or
assignable causes of variation.
The current process is displayed and compared to the improved process by
identifying shifts in either average or variation.
Since every process varies within predictable limits, identifying assignable causes
and addressing them will save money.
761
Basic Control Charts

Concept: Basic Control Charts
Procedure
1.
Choose the appropriate control chart for your data (Information about specific
types to come).
2. Determine the appropriate time period for collecting and plotting data.
3. Collect data and construct the chart with trial control limits using rational
subgrouping.
4. Analyze the chart to determine process stability, looking for out-of-control
signals.
5. Resolve any control issues, looking for assignable causes.
6. Recalculate the limits as necessary.
7. Prepare charts and instructions for production use.
8. Take samples and record data on the control chart.
9. Look for out-of-control conditions.
10. When out-of-control conditions occur, take appropriate action. Otherwise, leave
the process alone.
Use When
Controlling ongoing processes by finding and correcting problems as they occur.

Predicting the expected range of outcomes from a process.
Determining if a process is in statistical control.
Differentiating variation from non-routine events or common causes.
Determining whether the quality improvement should aim to prevent specific
problems or make fundamental process changes.
The process is in control.
User Tips
Time is always the horizontal (X) axis.

Control charts must have:
Centerline (average)
An upper control limit (UCL) and lower control limit (LCL)
Data points
Title
Legend
Labeled axes
When starting a new control chart, the process must be in control.

The control limits calculated from the first 20 points are conditional limits.
Recalculate the control limits after collecting at least 25-30 ordered points from a
period when the process is operating in control.
Developing a control chart with fewer than 25-30 points may not be statistically
valid.
If encountering an outlier when developing the control chart, investigate to see if
there is an assignable cause; if so, eliminate the point from the analysis.
762
Types of Control Charts

Concept: Types of Control Charts
Different types of control charts exist depending on the measurement used. This topic
reviews two basic categories of control: variable charts and attribute charts.
Variable charts
Constructed from variable data (data that consists of measurements like weight,
length, etc.)
Variable data contains more information than data that simply qualifies or counts
something.
Consequently, variable charts are some of the most powerful tools in quality
improvement.
Types: Average and range (X and R), median and range (X~ and R), average and
standard deviation (X and s), and individual and moving range (X-MR, I-MR, or
I-mR).
Samples are taken in 2-10 subgroups at predetermined intervals with the statistic
(mean, range, or standard deviation) calculated and recorded on the chart.
Attribute charts
Use attribute data (data that counts items, such as the number of rejects or the
number of errors).
Control charts based on attribute data are generally less powerful.
Sometimes more difficult to interpret than variable charts.
Types: p-charts, np-charts, c-charts, u-charts.
Samples are taken from lots of material where the number of defective units in
the sample are counted (for p and np-charts) or the number of individual defects
are counted for a defined unit (c and u-charts).
The structure of both types of control charts is similar, but the statistical construction
of the control limits is quite different due to the differences in the distributions in each.
763
Control Charts Roadmap

Concept: Control Charts Roadmap
The roadmap below leads users to the appropriate control chart. To introduce a control
chart type in upcoming sections, this map will reappear highlighting the path
(characteristics) of the particular control chart. Study each to learn the characteristics
of each control chart.
764
Introducing Variable Control Charts

Concept: Introducing Variable Control Charts
Variable control charts monitor key measurable product characteristics or process

variables. The formulas assume the normal distribution and limits are established
based on plus or minus 3 standard deviations; thus, the chance of a part falling outside
of the upper or lower control limit is 0.37%.
For easier calculation of the limits, there is a table of control chart factors. Examples
of factors are the A2 for the X chart and X~, as well as D3 and D4 for the R chart.
Selection of the factor to use depends on the formula and the subgroup size (n).
The subgroup is the sample of size n taken. For each subgroup, the SSBB will
calculate the statistic of interest (X, X~, R, or s), and then plot it on the control charts.
Subgroups for X and R-charts and X~ and R-charts are generally 2 to 10 units.
Typically, an odd number of readings in each sample, 3 being the most common,
is used with X~ and R-charts. The median of the sample is plotted rather than the
average.
Subgroups for X and s-charts are usually greater than 10.

In the formulas, the variable k is the number of subgroups taken. When k appears in
formulas, take an average for all the subgroups (X, R, or s).
Keep in mind when using the formulas for the R and s-charts, the control limits cannot
go below zero. The lower control limit will be zero if the formula for the lower control
limits gives a negative number.
The X-MR charts have some additional considerations when using the term subgroup
and with the formulas. The lesson will cover these at a later time.
765
Variable Equations

Concept: Variable Equations
When working with control charts, one must calculate upper and lower control limits.
Print this page as a reference for upcoming calculations.
766
X-bar and R

Concept: X-bar and R
The average and range chart or X and R chart is the first type of variable control
chart we will explore.
767
Calculating X-bar and R

Task: Calculating X-bar and R
Collect data by subgroup
768

Calculate the mean for each subgroup
Calculate the range within each subgroup
769

Calculate the grand mean
Calculate the mean of the ranges
770

Find the appropriate A2 value from ref table
Calculate the UCL and LCL for the mean
771

From ref table, find the D4 and D3 values
Calculate the UCL and LCL for the ranges
772

Finished
773
Graphing X-bar and R

Task: Graphing X-bar and R
For mean, draw the range, spacing, and labels
Use the grand mean to draw the centerline
774

Draw a line to display the UCL and LCL
Plot the subgroup means
Connect each point to form a line graph
775

Draw the y-axis and show the range of values
Use the range mean to draw the centerline
776

777
Completed X-bar and R Graph

Concept: Completed X-bar and R Graph
The image on the right is an example of a

completed X and R graph.
778
Activity: X-bar and R

Concept: Activity: X-bar and R
With the data below, create an X and R control chart. When finished, roll over Page
Resources, and then click the appropriate X and R Answer tab to check your work.
779
X-bar and R Answer Math
Six Sigma Black Belt | Control | Statistical Process Control | Activity: X-bar and R
Example: X-bar and R Answer Math
780
X-bar and R Answer Table
Example: X-bar and R Answer Table
781
X-bar and R Answer Graph
Example: X-bar and R Answer Graph
782
Summary: X-bar and R

Concept: Summary: X-bar and R
The X and R (average and range chart) has become the workhorse for many
companies as they implement statistical process control. These charts are very useful
because they are sensitive enough to detect early signals of process drift or target shift.
Advantages
Easy to construct.
Easy to interpret.
Information from data is needed to perform process capability studies.
When a process can be sufficiently monitored by collecting variable data in small

subgroups.
Can be sensitive to process changes and provide early warning; providing

opportunity to act before situation worsens.
Disadvantage
Can only be used when data is available to collect in subgroups.
783
Median (X-tilde and R)

Concept: Median (X-tilde and R)
The median control chart or X~ and R chart is calculated using the same formulas
as the X and R chart. The median control chart is different from the average and range
chart in that it is easier to use and requires fewer calculations because the median is
plotted rather than the average of the sample. Typically, the ease of using arithmetic is
the advantage of using a median chart.
784
Calculating X-tilde and R

Task: Calculating X-tilde and R
785

Determine the median for each subgroup
Calculate the range within each subgroup
786

Calculate the average of the subgroup medians
Calculate the mean of the ranges
787

Calculate the UCL and LCL for the median
788

From ref table, find the D3 and D4 values
Calculate the UCL and LCL for the ranges
789

Finished
790
Graphing X-tilde and R

Task: Graphing X-tilde and R
For median, draw the range, spacing and labels
Determine the centerline of the subgroup medians
791

Plot all data points from the samples
Connect the middle point in successive samples
792

Use the range mean to draw the centerline
793

794
Completed X-tilde and R Graph

Concept: Completed X-tilde and R Graph

completed X~ and R (median) graph.
795
Activity: X-tilde and R

Concept: Activity: X-tilde and R
With the data below, create an X~ and R control chart. When you are finished, roll
over Page Resources and click the appropriate X~ and R Answer tab to check your
work.
796
X-tilde and R Answer Math
Six Sigma Black Belt | Control | Statistical Process Control | Activity: X-tilde and R
Example: X-tilde and R Answer Math
797
X-tilde and R Answer Table
Example: X-tilde and R Answer Table
798
X-tilde and R Answer Graph
Example: X-tilde and R Answer Graph
799
Summary: X-tilde and R

Concept: Summary: X-tilde and R
The X~ and R (median) chart is an alternative to the X and R chart and is easier to use
because it requires fewer calculations. The median chart is often used when outliers
are expected.
Advantages
Easy to use
Shows the process variation
Shows both the median and the spread

Disadvantages
Less efficient, exhibiting more variation than the X and R chart
Difficult to detect trends and other anomalies in the range
800
X-bar and s

Concept: X-bar and s
The average and standard deviation chart (X and s) is the next type of variable
chart to explore. This chart is quite similar to the average and range chart except that
the statistic used to measure subgroup dispersion is the subgroup standard deviation
instead of the subgroup range.
801
Calculating X-bar and s

Task: Calculating X-bar and s
802

Calculate the mean for each subgroup
Calculate the std dev within each subgroup
803

Calculate the grand mean
Calculate the mean of the std dev values
804

805

Find the B3 and B4 values from ref table
Calculate the UCL and LCL for std dev
806

Finished
807
Graphing X-bar and s

Task: Graphing X-bar and s
For mean, draw the range, spacing and labels
Use the grand mean to draw the centerline
808

809

Use the std dev mean to draw the centerline
810

811
Completed X-bar and s Graph

Concept: Completed X-bar and s Graph

completed X and s graph.
812
Activity: X-bar and s

Concept: Activity: X-bar and s
With the sample data below, create an X and s control chart. When you are finished,
roll over Page Resources and click the appropriate X and s Answer to check your
work.
813
X-bar and s Answer Math
Six Sigma Black Belt | Control | Statistical Process Control | Activity: X-bar and s
Example: X-bar and s Answer Math
814
X-bar and s Answer Table
Example: X-bar and s Answer Table
815
X-bar and s Answer Graph
Example: X-bar and s Answer Graph
816
Summary: X-bar and s

Concept: Summary: X-bar and s
The X and s (average and standard deviation) chart is not used nearly as much as the
X and R chart. One reason for the limited use of the X and s chart is simply that it is
more complex to construct and use.
Advantages
When the subgroup sizes are fairly large (greater than 10), it is often beneficial to
consider the average and standard deviation chart, since using the range as the
measure of dispersion may not yield a good estimate of process variability.
It may also be used when more sensitivity in detecting a process shift is desired,
as in the case where the product being manufactured is quite expensive and any
change in the process could either cause quality problems or add unnecessary
costs.
Disadvantages
May issue false signals at a much higher rate than other types of control charts.
Is complex to construct and use.
817
Introducing Moving Range

Concept: Introducing Moving Range
Because of the type of data available and the situation, various control charts may be
applicable. Given the unknowns of future projects and situations, the Six Sigma Black
Belt may prefer to use the individual and moving range (X-MR, I-MR) control chart.
Black Belt's often use this chart with limited data, such as when production rates are
slow, testing costs are very high, or there is a high level of uncertainty relative to
future projects. It has also found use where data are plentiful, such as in the case of
automatic testing of every unit where no basis exists for establishing subgroups.
On a typical moving range chart, calculate the range between two successive units (n
= 2), but more successive units may be included in the range calculation. The factors
for calculating upper and lower control limits on the MR-chart are the same as used in
the R-chart.
On the X-chart, plot every observation and calculate the upper and lower limits using
the factor E2.
818
X-MR

Concept: X-MR
The individual and moving range chart (X-MR, I-MR) is applicable when the
sample size used for process monitoring is n = 1. Roll over Page Resources, and then
click Using X-MR to see a list of applicable uses of X-MR control charts.
819
Using X-MR
Six Sigma Black Belt | Control | Statistical Process Control | X-MR

Example: Using X-MR
Examples Using X-MR Charts

X-MR charts are applicable to situations when the sample size is n = 1. Examples
include:
The early stages of a process when one is not quite sure of the structure of the
process data.
Monthly data.
When analyzing every unit (thus no basis for rational subgrouping).
Slow production rates with long intervals between observations.
When differences in measurements are too small to create an objective difference.
When measurements differ only because of laboratory or analysis error.
Taking multiple measurements on the same unit (as thickness measurements on

different places of a sheet of aluminum).
820
Calculating X-MR

Task: Calculating X-MR
Collect data
Calculate the range between consecutive data
Calculate the mean for the data
821
Calculating X-MR

Find E2 constant in ref table
Calculate the mean for the MR
822
Calculating X-MR

Find D3 and D4 constant in ref table
Calculate the UCL and LCL for MR
Finished
823
Graphing X-MR

Task: Graphing X-MR
For mean, draw the range, spacing and labels
Use the mean to draw the centerline
824
Graphing X-MR

Task: Graphing X-MR
Plot the individual measurements
825
Graphing X-MR

Task: Graphing X-MR
Use the MR mean to draw the centerline
826
Graphing X-MR

Task: Graphing X-MR
Plot the moving range
827
Completed X-MR Graph

Concept: Completed X-MR Graph

completed X-MR graph.
828
Activity: X-MR

Concept: Activity: X-MR
With the data below, create an X-MR control chart. When you are finished, roll over
Page Resources and click the appropriate X-MR Answer to check your work.
829
X-MR Answer Math
Six Sigma Black Belt | Control | Statistical Process Control | Activity: X-MR
Example: X-MR Answer Math
830
X-MR Answer Table
Example: X-MR Answer Table
831
X-MR Answer Graph
Example: X-MR Answer Graph
832
Summary: X-MR

Concept: Summary: X-MR
An X-MR (individuals and moving range) chart is quite useful, since it is constructed
with individual measures (that is, the subgroup size is one). The X-MR chart is
applicable to many different situations, since there are many scenarios when the most
obvious subgroup size is one (monthly data, etc.).
A SSBB can use the individuals and moving range chart early in the production of a
new product or the implementation of a new process. Then later, after more process
knowledge is gained, it would be better to switch to a more sensitive chart.
Advantages
Useful even in a situation with small amounts of data.
Easy to construct and apply.
Useful in the early stages of a new process when not much is known about the
structure of the data.
Disadvantage
Cannot discern between common cause and special cause variation.
833
Summary: Variable Charts

Task: Summary: Variable Charts
Variable control charts have many advantages, especially the sensitivity they exhibit
when designed appropriately. To learn more about some guidelines regarding the
choice of variable charts, click each chart type below.
X and R
Average and range (X and R) charts are some of the most often used charts in SPC.
The subgroup size for these charts is less than 10 and usually between 3 and 5. When
designed effectively, these charts can be very sensitive and provide for excellent
process monitoring. Since the average range of the subgroup drives the width of the
control limits for the average chart, the subgroup size and selection process are crucial
for these charts.
X~ and R
The median control chart or X~ and R chart is similar to the X and R chart and is
calculated using the same formulas. The subgroup size for these charts is less than 10.
The median control chart is different from the average and range chart in that it is
easier to use and requires fewer calculations, as the median is plotted rather than the
average of the sample. Typically, the ease of using arithmetic is the main advantage in
using a median chart,which may also be used when anticipating outliers.
X and s
Average and standard deviation (X and s) charts are like the average and range charts
in many ways, but the subgroup size is greater than 10. The large subgroup size means
that X and s charts can be very sensitive to changes in the process. Thus, they are often
used when you desire greater sensitivity and are willing to increase the cost of
sampling.
X-MR
Six Sigma Black Belts often use individual and moving ranges (X-MR) charts at the
beginning of a process launch when data is in short supply and each item processed is
important. Since the subgroup size is one for this chart, it is widely applicable,
especially in situations where small amounts of data are available.
834
Attribute Equations

Concept: Attribute Equations
When working with attribute data charts, it is important to differentiate these related
terms.
Defect - An undesirable result on a product; also known as a nonconformity.
Defective - An entire unit failing to meet specifications; also known as a

nonconformance.
Note: A unit may have multiple defects.
On a form, an incorrectly completed block is a defect, thus one form may have
multiple defects. However, any form with at least one defect would be defective. In
monitoring form accuracy, one might count the number of defective forms or the total
number of individual defects in a given number of forms.
Of the attribute control charts, p and np-charts monitor percent defective (also known
as fraction defective and fraction nonconforming) while c and u-charts are counts of
defects.
In the respective formulas, the variable k is the number of subgroups taken. When k
appears in formulas, take an average for all the subgroups.
Print this page as a reference for upcoming calculations with attribute charts.
835
Attribute Equations

Concept: Attribute Equations
836
p-Charts

Concept: p-Charts
The p-chart is one of the most-used types of attribute charts. It shows the proportion
of defective items in successive samples of equal or varying size. Consider the
proportion as the number of defectives divided by the number in the sample. To
develop the control limits for a p-chart, consider the case where we are inspecting a
variable sample size and recording the number of nonconforming items in each
sample.
837
Introducing the p-Chart

Task: Introducing the p-Chart
The p-chart monitors the proportion defective in successive samples of equal or

varying size.
Click each item below to learn more.
Identify p
Take a sample of size n from a large lot and then count the total number of
defective units.
For each sample, calculate a value of p as the number defective divided by the
sample size, and then plot this proportion value on the chart.
Centerline
To calculate the centerline of the p-chart,
p, the summation of np, is the same as saying the sum of the total number of
defective units.
The summation of n is just the total number of items in all the samples.
Variable Sample Sizes
Sample size n does not affect the centerline on a p-chart, however, the calculation
of the upper and lower control limits is dependent on the sample size.
Where a sample size is variable, a common technique is to calculate the upper

and lower control limits using the average sample size.
When using a chart with control limits, evaluate any points occurring near the
upper or lower control limits to determine if, when the actual limits for the
sample size are used, an out-of-control condition exists.
Alternative Methods
Once establishing the process average p, alternative methods are available to handle
variable sample sizes.
If using a computer to monitor the process, it is common to calculate the limits

based on every sample size. Some refer to this process as having moving limits.
OR
Put two sets of limits on the chart, calculated using the maximum and minimum
anticipated sample sizes.
Then evaluate the points falling in between these two limits to determine if, when
actual limits for the sample size are used, they signal out-of-control conditions.
838
Calculating p-Charts

Task: Calculating p-Charts
Collect data by sample
839

Calculate the totals
Calculate the p value for each shipment (defectives per lot)
840

Calculate p-bar for data set (centerline)
If no moving limits, calc avg sample size
841

Calculate the UCL and LCL
Finished
842
Graphing p-Charts

Task: Graphing p-Charts
Draw the range, spacing and labels
843
Graphing p-Charts

Use p-bar to draw the centerline
844
Graphing p-Charts

Plot the sample p values
845
Activity: p-Charts

Concept: Activity: p-Charts
With the data below, create a p-Chart. When finished, roll over Page Resources and
click the appropriate p-Chart Answer to check your work.
846
p-Chart Answer Math
Six Sigma Black Belt | Control | Statistical Process Control | Activity: p-Charts
Example: p-Chart Answer Math
847
p-Chart Answer Table
Example: p-Chart Answer Table
848
p-Chart Answer Graph
Example: p-Chart Answer Graph
849
np-Charts

Concept: np-Charts
The np-chart, number of defective units, is related to the p-chart. The np-chart is a
control chart of the counts of nonconforming items (defectives) in successive samples
of constant size.
The np-chart can be used in place of the p-chart to plot the counts of nonconforming
items (defectives) when there is a constant sample size. In effect, using np-charts
involves converting from proportions to a plot of the actual counts.
850
Calculating np-Charts

Task: Calculating np-Charts
Calculate the total defective items
851

Calculate np-bar (centerline) for data
Calculate p-bar (needed to calculate UCL and LCL)
852

Finished
853
Graphing np-Charts

Task: Graphing np-Charts
Use np-bar to draw the centerline
854
Graphing np-Charts

Task: Graphing np-Charts
Plot the number of defectives by sample
855
Activity: np-Charts

Concept: Activity: np-Charts
With the data below, create an np-Chart. When finished, roll over Page Resources
and click the appropriate np-Chart Answer to check your work.
856
np-Chart Answer Math
Six Sigma Black Belt | Control | Statistical Process Control | Activity: np-Charts
Example: np-Chart Answer Math
857
np-Chart Answer Table
Example: np-Chart Answer Table
858
np-Chart Answer Graph
Example: np-Chart Answer Graph
859
Summary: p and np Charts

Concept: Summary: p and np Charts
The centerlines in p and np-charts may not be midway between the control limits
because sometimes the lower control limit is zero.
Binomial distribution serves as the statistical model for both p and np-charts,
thus, Six Sigma Black Belts often misuse p and np-charts because they fail to
realize that the data does not meet the conditions of a binomial model. As Donald
J. Wheeler writes in Advanced Topics in Statistical Process Control, "there are
several conditions to meet before the binomial model is applicable and p and
np-charts are appropriate:
Each item must either possess or not possess the characteristic in question to
the quality standard (items judged as acceptable or not acceptable, good or
bad, etc.).
The probability that a given item possesses the characteristic of interest is

independent of whether there are or not preceding items."
Six Sigma Black Belts often use X-MR charts instead of p and np-charts,
especially when there is doubt about meeting the binomial model conditions.
860
Introducing c and u

Task: Introducing c and u
C-charts and u-charts are based on Poisson distribution and work with the count of
individual defects rather than numbers of defective units (used in the p and np-charts).
Six Sigma Black Belts use c and u-charts where there are opportunities for many
defects per defined inspection unit.
For additional overview information on c and u-charts, click each item below.
Defects and Units
With c and u-charts, it is very important to define the defects and the unit. The unit is
the area of opportunity to count the defects.
Inspection Unit
50 miles of pipeline
10 yards of cloth
50 circuit boards
100 forms
Type of Defects Counted

Weld defects
Blemishes, snags
Solder joint defects, damaged
components
Incorrect data entry, missing data
C-Chart Formula
The c-chart formulas assume counting the number of defects in the same area of
opportunity. The c in the formulas is the number of defects found in the defined
inspection unit, and that is plotted on the chart.
For example, if the inspection unit is 100 forms, count the defects on a sample of 100
forms and plot that number on the c-chart.
U-Chart Formula
With a u-chart, the number of inspection units may vary. The u-chart requires an
additional calculation with each sample to determine the average number of defects
per inspection unit. The n in the formulas is the number of inspection units in the
sample.
A firm generates 250 forms in a given day and inspection found 27 errors.
Since a sample contains 100 forms, 2.5 inspected units were examined (250
forms/ 100 forms/sample).
To calculate u (defects per unit), divide the number of errors by the inspection
unit (27 errors / 2.5 inspection units).
Plot the u = 10.8 defects per unit on the control chart.
861
Introducing c and u

Task: Introducing c and u
U and Variable Sample Size

Because the u-chart equations for the upper and lower control limits are dependent on
the number of inspection units (n), use the same alternatives relative to handling the
variable sample size as with the p-charts:
Use the average sample size to develop the limits and evaluate points close to the
limits.
Calculate the limits for each sample based on n.
862
c-Charts

Concept: c-Charts
Use the c-chart, c standing for counts, when you are interested in the number of
defects per inspection unit. The formulas for the control limits for the c chart (and the
u chart, which is discussed later) are based upon the Poisson model.
863
Calculating c-Charts

Task: Calculating c-Charts
Calculate the total defects
864
Calculating c-Charts

Task: Calculating c-Charts
Calculate c-bar (centerline) for the entire data set
Finished
865
Graphing c-Charts

Task: Graphing c-Charts
Use c-bar to draw the centerline
866
Graphing c-Charts

Plot the number of defects
867
Graphing c-Charts

868
Activity: c-Charts

Concept: Activity: c-Charts
With the data below, create a c-Chart. When finished, roll over Page Resources and
click the appropriate c-Chart Answer to check your work.
869
c-Chart Answer Math
Six Sigma Black Belt | Control | Statistical Process Control | Activity: c-Charts
Example: c-Chart Answer Math
870
c-Chart Answer Table
Example: c-Chart Answer Table
871
c-Chart Answer Graph
Example: c-Chart Answer Graph
872
u-Charts

Concept: u-Charts
The u-chart monitors the defects (nonconformities) per unit when the number of
inspection units is allowed to vary.
873
Calculating u-Charts

Task: Calculating u-Charts
874

Calculate the total rolls shipped
Calculate the total defects
875

Calculate u-bar (centerline) for all the data
Calculate the UCL and LCL for n = 1
876

Calculate the UCL and LCL for n = 2
Finished
877
Graphing u-Charts

Task: Graphing u-Charts
Use u-bar to draw the centerline
878
Graphing u-Charts

Task: Graphing u-Charts
Plot the total number of defects per unit
879
Activity: u-Charts

Concept: Activity: u-Charts
With the data below, create a u-Chart. When finished, roll over Page Resources and
click the appropriate u-Chart Answer to check your work.
880
u-Chart Answer Math
Six Sigma Black Belt | Control | Statistical Process Control | Activity: u-Charts
Example: u-Chart Answer Math
881
u-Chart Answer Table
Example: u-Chart Answer Table
882
u-Chart Answer Graph
Example: u-Chart Answer Graph
883
Summary: C and U-Charts

Concept: Summary: C and U-Charts
Use the c-chart to monitor the number of defects (nonconformities). The application of
the c-chart requires the inspection unit to be defined clearly and the areas of
opportunity to be consistent.
The u-chart monitors the defects (nonconformities) per unit. It essentially changes the
counts into rates in cases where the area of opportunity varies from sample to sample.
The Poisson model is the statistical model that is the foundation of c and u-charts.
Like the binomial model for p and np-charts, the Poisson model has several conditions
that must be met:
The counts must be discrete events.
The counts must be clearly defined with an unambiguous area of opportunity

described.
The events must be independent.
The defects (nonconformities) must be few compared to the areas of opportunity.

Advantage
Can be used where the nonconformities from many potential sources may be
found in a single inspection.
Disadvantage
Requires a constant sample size.
884
Summary: Attribute Charts

Task: Summary: Attribute Charts
Six Sigma Black Belts often use attribute charts to monitor the quality of a complex
unit when the data are easy to obtain. Many companies are including attribute gauging
in their measurement systems. Attribute charts are some of the first charts a SSBB
may attempt to use. The SSBB will likely discover that a critical process characteristic
needs to be monitored with a variable chart.
Click each type of attribute chart below to learn more about them and about how to
select the appropriate chart.
p-Chart
The most often used, the p-chart, uses fraction nonconforming data. It provides an
estimate of the ongoing quality level, and it is easy to use. A customer might request
using a p-chart to ensure a certain quality level is being obtained. Remember that
p-charts have the advantage of being applicable when the subgroup size varies.
np-Chart
The np-chart, a cousin of the p-chart, records the number of defective units
(nonconformances) and is more difficult to use when the subgroup size varies.
c-Chart
The c-chart monitors the number of nonconformities (defects) and requires the
inspection unit to be defined clearly and the area of opportunity to be consistent.
u-Chart
The u-chart monitors the nonconformities (defects) per unit. It essentially changes the
counts into rates in cases where the area of opportunity varies from sample to sample.
885
Causes for Variations

Concept: Causes for Variations
"Variation there will always be, between people, in output, in service, in product.
What is the variation trying to tell us?" W. Edwards Deming
Variations in output are due to one of the two types of causes: common and special
(assignable). It is estimated that 85% of all process problems are due to common
causes. Study the chart below to compare common and special causes.
886
Interpreting Control Charts

Concept: Interpreting Control Charts
Interpreting control charts is a learned behavior based upon increased process

knowledge. No shortcuts exist to becoming competent at the skill of interpreting
control charts and it is most certainly not a skill learned without practice.
The distinction between common and special causes is critical in statistical process
control. For Shewhart and Deming, this distinction is the distinction between a process
surrounded by "noise" and one sending a "signal."
Improving the process is the central goal of using control charts.
Control charts provide a "voice of the process" that enables a Black Belt to identify
special causes of variation and remove them, thus allowing for a stable and more
consistent process.
A control chart becomes a useful tool after initial development. After establishing and
basing the control limits on a stable, in-control process, charts put in the work area
allow operational personnel to monitor the process by collecting data and plotting
points on a regular basis. Personnel can act upon the signals from the chart when
conditions indicate the process is moving or has gone out of control.
887
Process Stability

Concept: Process Stability
Before taking appropriate action, a SSBB must identify the state the process. In
Advanced Topics in Statistical Process Control, Donald Wheeler argues that a process
can occupy one of 4 states:
Ideal state: A predictable process fully meeting the requirements.
Threshold state: A predictable process that is not always meeting the

requirements.
Brink of chaos: An unpredictable process currently meeting the requirements.
State of chaos: An unpredictable process that is currently not meeting the

requirements.
Scroll this page to the bottom, then click each of the labels to learn more about process
states.
888
Common Signs

Concept: Common Signs
To see some of the common signs of an out-of-control condition on a control chart,

roll over each term below to see a chart example. When finished, roll over Page
Resources and then click Rules for a set of written guidelines to follow when
interpreting control charts.
889
Rules
Six Sigma Black Belt | Control | Statistical Process Control | Common Signs
Example: Rules
Standard Out of Control Conditions

The following conditions are based on Western Electric Rules. The lists of conditions
may vary depending on the resource used.
1.
2.
3.
4.
5.
6.
7.
8.
1 point more than 3 from the center line (either side)

9 points in a row on the same side of the center line
6 points in a row, all increasing or decreasing
14 points in a row, alternating up and down
2 out of 3 points more than 2 from the center line (same side)
4 out of 5 points more than 1 from the center line (same side)
15 points in a row within 1 from the center line (either side)
8 points in a row more than 1 from the center line (either side)
890
Pre-control Introduction

Task: Pre-control Introduction
According to originator Dorian Shainin, pre-control is a simple algorithm based on

tolerances which is used for controlling a process. Pre-control is a method of detecting
and preventing failures and assumes the process is producing a measurable product,
with varying characteristics according to some distribution.
Click below to learn more about using pre-control charts.
Pre-control zones
Pre-control zones include halfway between the target and each specification limit.
Each zone between the lines has colors resembling a traffic signal with green
(acceptable), yellow (alert), and red (unacceptable).
Traditional pre-control charts

Specification limits were originally used with the first pre-control charts to establish
regions/zones, which have been deemed somewhat controversial.
891
If the process stayed within 1/2 of the

specification or tolerance width, then
it was allowed to run.
If two consecutive samples were in
either yellow range, then the process
was adjusted or fixed.
Any sample in the red zone was
cause for stopping and repairing the
process.
Pre-control Introduction

Task: Pre-control Introduction
Six Sigma Method of Pre-control

The Six Sigma Method of Pre-control utilizes process capability limits instead of
specification limits to set the green, yellow, and red zones and is therefore considered
more robust than the traditional use of pre-control charts.
The limits of each zone are calculated based on the distribution of the
characteristic measured, not on the tolerances.
Units that fall in the yellow or red zones trigger an alarm before defects are
produced.
Pre-control rules
Rule 1:
If two parts are in the green zone, take no action continue to run.
Rule 2:
If the first part is in the green or yellow zones, then check the second part.
If second part is in the green zone, then continue to run.
If first part is in the yellow zone and the second part is also in the yellow zone on
the same side, adjust the process.
If first part is in the yellow zone and the second part is also in the yellow zone on
the opposite side, stop and investigate the process.
Rule 3:
If any part is in the red zone, then stop.
Investigate, adjust, or reset the process.
Re-qualify the process and begin again with Rule 1.
892
Foundation of Pre-control

Concept: Foundation of Pre-control
Two samples are taken at specified intervals that depend upon the individual process
being controlled.
If the first sample A is in the green zone, then the second sample can occur
within any region except red. The process is allowed to continue with no
adjustment.
If, however, A occurs in either yellow zone, then if the B sample also occurs
in either yellow zone, the process is stopped and fixed or adjusted before more
parts are made.
If the process is stopped, 5 consecutive parts must be made in the green zone
before the process is allowed to continue.
Roll over Page Resources at the bottom of the screen and click Pre-control
Probability Table to see the probabilities:
The sum of the probabilities of the 3 zones (red, yellow, and green) must equal 1.
Therefore, the probability that a unit falls in either of the red zones is 0.0013.
893
Pre-control Steps

Task: Pre-control Steps
Six Sigma Method of Pre-control Preliminary Activities

The following are the steps in setting up the Six Sigma Method of pre-control for a
process. Click below to learn more.
1. Calculate st
Determine the short-term sigma, which estimates the inherent machine capability.
st + lt = total
Where:
lt is the long-term sigma which includes factors other than the internal properties
of the machine such as:
Environment
People
Tool wear
total is the total sigma estimating the variability in the final product.
2. Process Improvement (DOE)

Improve the process to the extent practical by conducting a Design of Experiment
(DOE).
3. Calculate Pre-control limits
Recalculate short-term sigma (st should be > 4 before using pre-control) then
calculate the pre-control limits:
The green zone is 1.5.
The yellow zone is -3 and -1.5 and 1.5 and 3.
The red zone is beyond 3.0.
894
Pre-control Steps

Task: Pre-control Steps
4. Qualify the process

To qualify the process, five consecutive samples must be in the green zone:
5. Operate the process and sample

Once the process is qualified, continue to operate the process taking 2 samples at
appropriate intervals.
895
Pre-control Advantages and Disadvantages

Concept: Pre-control Advantages and Disadvantages
In response to the debate about the use of pre-control charts, here are some of their
advantages and disadvantages listed below.
Advantages
Easy to implement and interpret.
Use in initial setup operations to determine if the product is centered between the
tolerances.
Easy to detect shifts in process centering or increases in process spread.
Serves as a set up plan for short production runs.

Disadvantages
Lacks information about how to reduce variability or how to return the process
into control.
Too limited to use for process with a capability ratio greater than 1.0.
Small sample size limits the ability of the chart to detect moderate to large shifts.
896
SPC Exercise

Concept: SPC Exercise
897

Control
Advanced Statistical Process Control
Learning Objectives
Six Sigma Black Belt | Control | Advanced Statistical Process Control

At the end of this Control topic, all learners will be able to understand appropriate uses
of short-run SPC, exponentially weighted moving average (EWMA), CUSUM charts
and MAMR.
Portions of this topic were taken from the ASQ Foundations in Quality Learning
899
Short-Run SPC Introduction

Concept: Short-Run SPC Introduction
Short-run or low-volume production is common in manufacturing systems and

includes manufacturing processes that produce built-to-order products or quick
turnaround production. The short-run control chart can also be used in other industries
such as general services and healthcare when data are collected infrequently. These
processes often are so short that not enough data can be collected to construct standard
control charts.
Statistical process control techniques have been developed to accommodate short-run
production for both variables data and attributes data. Examples of control charts
for both situations are presented.
If possible, collect approximately 20 samples before you construct the control charts
for short production runs are constructed. In the examples presented in this subtopic,
ten samples will be used for illustration purposes.
Roll over Page Resources at the bottom of the screen and click Short-run SPC
Decision Flowchart to use as a job-aid in determining what type of chart is
appropriate for your process.
900
Short-Run SPC Decision Flowchart
Six Sigma Black Belt | Control | Advanced Statistical Process Control | Short-Run SPC Introduction
Example: Short-Run SPC Decision Flowchart
901
Var. Data Short-Run SPC Step 1 Measurements

Concept: Var. Data Short-Run SPC Step 1 Measurements
For short production runs with variables data, the most commonly used control
charting procedures are the X and R charts (also referred to as "nominal Xand R
charts"). The following are the steps for setting up the nominal X and R charts for
short production runs:
Step 1: Measurements
For a given process, say there are k samples measured, each with n observations,
denoted by xij, as shown in the table below:
Samples
1
2
Measurem
ents
x11, x12, x13
, ..., x1n
x21, x22, x
, x2n
23,
:
k
:
xk1, xk2, xk3
, , xkn
902
Var. Data SPC Step 1 Nominal Defined

Concept: Var. Data SPC Step 1 Nominal Defined
Step 1: Measurements/Deviations from Nominal

Let Ti represent the nominal value for the ith sample, that is, there are k nominal
values (not necessarily distinct), T1, T2, , Tk. The data that will be plotted on a
control chart are the deviations from the nominal, not the actual measured variables,
and are denoted by dij, as shown in the table below, where dij = xij Ti:
Sample
Number
Measurement Nominal, Ti
s
Deviations
from
Nominal, dij
x11, x12, x13,

, x1n
d11 = x11 T1
T1
d12 = x12 T1,
d1n = x1n T1
x21, x22, x23,

, x2n
d21 = x21 T2
T2
d22 = x22 T2,
d2n = x2n T2
:
k
dk1 = xk1 Tk
:
:
xk1, xk2, xk3, , Tk
xkn
dk2 = xk2 Tk,
dkn = xkn Tk
903
Var. Data SPC Step 2 Deviations Defined

Concept: Var. Data SPC Step 2 Deviations Defined
Step 2: Measurements/Deviations from Nominal/di and Ri.

The deviations, dij, are the new set of data that will be used to find the center line and
control limits. Once the deviations from the nominal are found, the summary statistics,
diand Ri, are calculated for all k samples, as shown in the table below:
:::
904
Var. Data Short-Run SPC Steps 3 - 5

Task: Var. Data Short-Run SPC Steps 3 - 5
Variables Data Steps Continued

Click the steps below to learn more.
Step 3: Calculate the control limits for the average deviations
Control limits for the average deviations can now be calculated using the same
formula as given for control limits for the average but now with d-double overbar in
place of X.
The control limits for the average deviation from the nominal are:
where A2 is the control chart factor as shown before with subgroup size of n.
Step 4: Calculate the control limits for the range
Control limits for the range can now be calculated using the ranges from the
deviations from the nominal. The control limits for the range are:
where D4 and D3 are the control chart factors for a subgroup of size n.
Step 5: Create the control charts
Control charts for both measures can now be created. The control charts will include:
upper and lower control limits
center line
statistics for each sample number

Assumption necessary to apply this formula for the control limits:
The process standard deviation is approximately the same for all parts.
Assumptions
There are two basic assumptions that should be considered in order to apply the
nominal Xand R charts:
The process standard deviation is approximately the same for all parts. If this is
not a valid assumption, an alternative control charting procedure should be used.
The procedure works best when the sample sizes are the same for each part
number.
905
Var. Data Short-Run SPC Example Intro

Concept: Var. Data Short-Run SPC Example Intro
Example
The following data was collected over a two-day period on three parts. A total of ten
subgroups were measured. This process represents a short production run because it
will be running for only a five-day period. The three parts are given by A, B, and C,
each with the following nominal values:
T A = 200
T B = 70
T C = 35
The data found over a two-day period is

shown the table on the right.
In this problem, k = 10 (number of

samples) and n = 3 (number of
measurements in each sample).
Sample
Number
Part Type
Measureme
nts
xi1, xi2, xi3
4
5
6
7
8
9
10
B
B
B
B
C
C
C
906
202, 205,
201
199, 201,
203
198, 204,
207
73, 77, 75
78, 77, 74
72, 71, 76
68, 66, 71
37, 35, 35
32, 35, 34
31, 33, 38
Var. Data Short-Run SPC Example Step 1

Concept: Var. Data Short-Run SPC Example Step 1
Step 1: Add the nominal values for each part to the table along with the
deviations from the nominal.
Sample
Number
Part Type
Measurements Nominal Value, Deviations

from Nominal,
xi1, xi2, xi3
Ti
dij = xij Ti
1
2
3
4
5
6
7
8
9
10
A
A
A
B
B
B
B
C
C
C
202, 205, 201

199, 201, 203
198, 204, 207
73, 77, 75
78, 77, 74
72, 71, 76
68, 66, 71
37, 35, 35
32, 35, 34
31, 33, 38
907
200
200
200
70
70
70
70
35
35
35
2, 5, 1
1, 1, 3
2, 4, 7
3, 7, 5
8, 7, 4
2, 1, 6
2, 4, 1
2, 0, 0
3, 0, 1
4, 2, 3

Step 2: Using the deviations as the new data set, the average deviation and
range of the deviation can be found:
Sample
Number
Part Type Measurem Nominal

ents
Value,
xi1, xi2, xi3 Ti
4
5
6
7
8
9
10
B
B
B
B
C
C
C
202, 205,
201
199, 201,
203
198, 204,
207
73, 77, 75
78, 77, 74
72, 71, 76
68, 66, 71
37, 35, 35
32, 35, 34
31, 33, 38
Deviations Average Range,

from
deviations, Ri
Nominal,
di
dij = xij
Ti
200
2, 5, 1
2.67
200
1, 1, 3
200
2, 4, 7
70
70
70
70
35
35
35
3, 7, 5
8, 7, 4
2, 1, 6
2, 4, 1
2, 0, 0
3, 0, 1
4, 2, 3
5
6.33
3
-1.67
0.67
-1.33
-1
4
4
5
5
2
3
7
908

Step 3: Calculate the control limits for the average deviation, d-double
overbar:
Roll over Page Resources at the bottom of the screen and click Factors for Control
Charts to find A2 for n = 3.
909

Step 4: Calculate the control limits for the range:

Roll over Page Resources at the bottom of the screen and click Factors for Control
Charts to find D3 and D4 with n = 3.
910

Step 5: Establish the control charts for the deviations:
911
Attribute Data Short-Run SPC Introduction

Concept: Attribute Data Short-Run SPC Introduction
The attribute control charts for long, continuous production runs are the:
p-chart
np-chart
c-chart
u-chart
The properties behind these charts will be used to set up short-run control charts for
attribute data. The short-run control charts for attribute data are actually standardized
control charts. The attribute for the control chart of interest is standardized, and this
standardized value is plotted on a control chart. To illustrate, consider the standardized
value using the process nonconforming (i.e., p-chart):
The standardized attribute is found by subtracting the mean value and then dividing
this difference by the attributes standard deviation. The new value is denoted by Zi.
912
Attribute Data Short-Run SPC Properties

Task: Attribute Data Short-Run SPC Properties
Click below to learn about the properties of standardized control charts:

1. Each data point is standardized.
pi becomes a Zi
npi becomes a Zi
ci becomes a Zi
ui becomes a Zi
For example, the standardized value using the p-chart is:
2. The standardized random variable Zi is normally distributed.
3. The center line for the standardized charts is 0.
913
Attribute Data Short-Run SPC Properties

Task: Attribute Data Short-Run SPC Properties
4. The control limits for the standardized charts are 3 and 3.
914
Attribute Data Short-Run SPC Control Charts

Concept: Attribute Data Short-Run SPC Control Charts
The standardized attribute control charts for short production runs are summarized
in the following table:
Attribute Control
Chart
At
tri
bu
te
Sta
nda
rd
Dev
iati
on
Statistic
Plotted on
the Control
Chart
of
Attr
ibut
e
p-chart
np-chart
c-chart
ci
u-chart
ui
915
Attribute Data Short-Run SPC Example Intro

Concept: Attribute Data Short-Run SPC Example Intro
Example
Surface defects are counted on ten metal plates, all of the same surface size. The
process the data comes from is considered a short production run. The surface defects
on the ten metal plates are shown in the following table:
Plate
Number
1
2
3
4
5
6
7
8
9
10
Total
Number of
Surface
Defects
3
2
0
1
4
7
2
0
1
3
23
916
Attribute Data Short-Run SPC Example Step 1

Concept: Attribute Data Short-Run SPC Example Step 1
Step 1: Calculate the average number of nonconformities, c:

It is important to determine whether the process is in control in terms of the surface
defects (number of nonconformities).
where there are a total of 23 surface defects and 10 samples.
917

Step 2: Calculate the standardized values using:
The standardized values are given in the table below.

Plate
Number
1
Number of
Surface
Defects
3
Plate
Number
918
Number of
Surface
Defects
6
7
10

Step 3: Plot the standardized values on a control chart with limits of -3

and 3 and a center line of 0:
Note: There appears to be one observation beyond the upper control limit, and the
process appears to be out of control.
919
EWMA Introduction

Task: EWMA Introduction
According to the Glossary and Tables for Statistical Quality Control, the
exponentially weighted moving average (EWMA) chart is a variable control chart
where each new result is averaged with the previous average value using an
experimentally determined weighting factor, (lambda). Click on the information
below to learn more about EWMA charts.
Equation
Begins with a group of successive averages (or individual values if the subgroup size
is 1). Each future value is a weighted average of the values that precede it. The
recursive formula is given below:
where is the weighting constant (usually between 0.2 and 0.4).
Key Points
Usually only averages plotted and range omitted.
The action signal, a single point out of limits.
Also known as the Geometric Moving Average (GMA) chart.
Used extensively in time-series modeling and in forecasting.
Allows the user to detect smaller shifts in the process than with traditional control
charts.
Ideal to use with individual observations.
920
EWMA Example

Concept: EWMA Example
Example
A manufacturer of small electric motors has just finished a pilot run of eight motors.
One of the critical dimensions is the diameter of the shaft on the journal end. With this
limited production run, the company would like to know how consistently they are
producing the diameters. The data is given below (in millimeters).
Data Table
12
14
15
16
11
14
15
13
The data represents diameters for the first through the eighth motors, so the time
sequence of manufacture is preserved.
921
EWMA Example Steps 1 and 2

Concept: EWMA Example Steps 1 and 2
Step 1: Choose a starting value and establish .

Our initial value is the average of the first three points (12, 14, 15), with = 0.20:
xi-1 = 13.67 (shown in the table below step 2)
xi = 12
Step 2: Calculate the moving range and apply the recursive formula for
the moving average.
Moving range is the absolute difference between consecutive points. Note that the
range is always positive.
The first moving range is 2 (the absolute difference between 12 and 14), and the
second moving range is 1 (the absolute difference between 14 and 15). Thus, the
moving ranges for the entire set of data shown in the MR column below.
Applying the recursive formula yields the following:
Order
xi
(x) EWMA
MR
1
2
3
4
5
6
7
8
x
x
12
14
15
16
11
14
15
13
110
13.
67
13.67
13.74
13.99
14.39
13.71
13.77
14.02
13.82
2
1
1
5
3
1
2
922
EWMA Example Step 3

Concept: EWMA Example Step 3
Step 3: Calculate the control limits

The upper and lower control limits for the EWMA chart are fairly complex to
calculate, and software is usually used. However, if it is necessary to calculate the
limits by hand, the following equation is used:
where d2 is a control chart constant found by rolling over Page Resources at the
bottom of the screen and clicking Factors for Control Charts for n = 2.
Now the control limits can be calculated as follows:
923
Factors for Control Charts
Six Sigma Black Belt | Control | Advanced Statistical Process Control | EWMA Example Step 3
Example: Factors for Control Charts
924
EWMA Example Step 4

Concept: EWMA Example Step 4
Step 4: Establish the control chart

This example uses individual values, but the EWMA chart can be used with any
collection of subgroup data.
925
CUSUM Charts Introduction

Task: CUSUM Charts Introduction
According to the Glossary and Tables for Statistical Quality Control, the cumulative
sum control chart (CUSUM) is used with variable data and calculates the
cumulative sum of the deviations from target to detect shifts in the level of the
measurement. Click the information below to learn more about CUSUM control
charts.
Key points
May be suitable when necessary to detect small process shifts faster than with a
comparable Shewhart control chart.
The chart is effective with samples of size n = 1 where rational subgroups are
frequently of size one. Examples of utilization are in the chemical and process
industries and in discrete parts manufacturing.
The CUSUM chart can be graphical (V-mask) or tabular (algorithmic).
Unlike standard charts, all previous measurements for CUSUM charts are
included in the calculation for the latest plot.
Establishing and maintaining the CUSUM chart are complicated.

Definitions and formulas
The formulas and examples provided for CUSUM charts are taken from The Certified
Six Sigma Black Belt Handbook by Donald W. Benbow and T.M. Kubiak.
Roll over Page Resources at the bottom of the screen and click CUSUM Definitions
and Formulas and CUSUM Formulas for Individuals and Subgroup Averages to
view and print a listing of definitions and formulas for individuals and subgroup
averages.
926
CUSUM Charts Introduction

Task: CUSUM Charts Introduction
V-mask
A V-mask resembles a sideways V. The chart is used to determine whether each
plotted point falls within the boundaries of the V-mark. According to The Certified Six
Sigma Black Belt Handbook by Donald W. Benbow and T.M. Kubiak, "Points falling
outside are considered to signal a shift in the process mean. Each time a point is
plotted, the V-mask is shifted to the right. The geometry associated with the
construction of the V-mask is based on a combination of specified and computed
values." The graph below shows how the formulas relate.
927
CUSUM Example

Task: CUSUM Example
CUSUM charts are fairly complex to calculate, and software is usually used. The
following steps demonstrate the construction of the CUSUM chart. Roll over Page
Resources at the bottom of the screen and click CUSUM Chart Example Data Table
to view and/ or print while going through the steps. Click each step below to learn
about the construction of the CUSUM chart.
1. Collect a set of data.
The data are given in Column B of the CUSUM chart example data table.
2. Specify a target value, u0.
Select u0 = 50.
3. Compute deviations from target and range.
Compute Columns D and E from the CUSUM chart example data table.
4. Compute Sigma (X).
Compute the average of Column E from the CUSUM chart example data table:
R = 2.08
d2 is a control chart constant found by rolling over Page Resources at the bottom of
the screen and clicking Factors for Control Charts for n = 2.
2.08/1.128 = 1.85
5. Determine a value for K.
For convenience, set K (the slope of the V-mask) = Sigma (X) = 1.85.
6. Compute values for k, d, H, and h.
Although they are computed as single values, they are shown in the CUSUM Chart
Example Data Table as columnar data for the reader's convenience and to facilitate
the ease of calculating subsequent columns.
Using the formulas previously stated:
k = 1.00
d = 2.50
H = 4.63
h = 2.50
928
CUSUM Example

Task: CUSUM Example
7. Compute values for Zi, Si, and Ti.

Using the CUSUM Chart Example Data Table, compute the values for:
Normalized deviation from the target value (Column L)
Equivalent to the upper boundary of the V-mask (Column M)
Equivalent to the lower boundary of the V-mask (Column N)
Enter the respective data in Columns O and P for each data point.
8. Interpret results and take action accordingly.

Determine Column Q from the CUSUM chart example data table and take action
accordingly:
If Si > h or Ti > -h, a shift in the process mean is considered to have occurred.
Note: The example shows the steps in constructing an individual average. Please refer
to Advanced Topics in Statistical Process Control by D.J. Wheeler for the subgroup
average approach.
929
MAMR Introduction

Task: MAMR Introduction
The Moving Average and Moving Range (MAMR) charts provide a graph of the
moving average of a process characteristic and the moving range. This type of chart is
used with variables data. Click the information below to more about the MAMR
chart.
Key points
May be suitable when necessary to detect smaller process shifts than with a
comparable Shewhart control chart.
Appropriate to use when data are collected periodically or it may take

considerable time to produce a single item.
Relevant when it may be desirable to dampen the effects of over control.

Selection of a moving average length
The overall sensitivity of the chart to detect process shifts is affected by the
selection of the moving average length. Generally, the longer the length, the less
sensitive the chart is to detecting shifts.
Specific selection of the length should be made with consideration to the

out-of-control detection rules being used. When the moving average length
becomes a practical consideration, you should consult a more rigorous source on
this topic, such as Advanced Topics in Statistical Process Control, by D.J.
Wheeler, or a statistical software program.
Selection of a method for estimating sigma
Method 1
Average moving range

Method 2
Median moving range: when using this method for a, the following formulas
apply:
Moving average chart:
Median moving range:
Constant found by rolling over Page Resources at the bottom of the screen and clicking
Factors for Control Charts.
A4
Moving range chart

Constants found by rolling over Page Resources at the bottom of the screen and clicking
Factors for Control Charts.
D5 and
D6
Although the use of the average moving range is more popular, variability present in
the data may suggest the use of the dispersion statistics. However, according to
Wheeler in Advanced Topics in Statistical Process Control, control limits are
computed by using a variety of dispersion statistics (e.g., range, median moving range,
standard deviation) and Wheeler concludes "there is no practical difference between
any of the sets of limits."
930
MAMR Introduction

Task: MAMR Introduction
Rational subgrouping
As with any control chart, consideration to rational subgrouping remains vital. The
upcoming example assumes a rational subgroup of 1 with a moving average length of
3. If statistical and technical considerations were appropriate for a rational subgroup of
5, the average of each subgroup would constitute a point in the moving average of
length 3.
Note: Statistical software packages allow the user to set the subgroup size.
Interpretation of the charts
By nature of their construction, points on moving average charts and moving ranges
charts do not represent independent subgroups. Therefore, these points are correlated.
While single points exceeding the control limits may still be used as out-of-control,
other tests such as zone run tests may lead to false conclusions. Some software
packages recognize this and limit the out-of-control tests on the moving range charts
to the following:
One point more than three sigma from the centerline.
Nine points in a row on the same side of the centerline.
Six points in a row, all increasing or all decreasing.
Fourteen points in a row, alternating up and down.

Roll over Page Resources and click Out-of-Control Tests Moving Range Chart to
see the corresponding graphs for the above mentioned rules.
The information and example provided for MAMR charts are taken from The Certified
Six Sigma Black Belt Handbook by Donald W. Benbow and T.M. Kubiak.
931
Out-of-Control Tests Moving Range Chart
Six Sigma Black Belt | Control | Advanced Statistical Process Control | MAMR Introduction
Tip: Out-of-Control Tests Moving Range Chart
932
MAMR Example

Task: MAMR Example
The following steps depict the construction of the MAMR chart. Roll over Page
Resources at the bottom of the screen and click MAMR Chart Example Data Table
to view and/or print while going through the steps. Click each step below to learn
about the construction of the MAMR chart.
1. Collect a set of data.
The data are given in Column B of the MAMR Chart Example Data Table.
2. Specify the length of the moving average.
For this example, the moving average length will be set at 3.
3. Calculate the moving averages.
The moving averages are given in Column C of the MAMR Chart Example Data
Table.
4. Calculate the moving ranges.
The moving ranges are given in Column D of the MAMR Chart Example Data
Table.
5. Calculate the centerline of the moving average chart.
The centerline of the moving average chart is:
6. Calculate the centerline of the moving range chart.

The centerline of the moving range chart is:
7. Compute the moving range chart LCL and UCL.

MR LCL and UCL
933
MAMR Example

Task: MAMR Example
8. Compute the moving average chart LCL and UCL.

MA LCL and UCL
9. Plot the chart and interpret the results.
934

Control
Lean Tools for Control
Learning Objectives
Six Sigma Black Belt | Control | Lean Tools for Control

At the end of this Control topic, all learners will be able to apply appropriate lean tools
as they relate to the Control phase of DMAIC such as:
5S.
visual factory.
kaizen.
kanban.
poka-yoke.
total productive maintenance (TPM).
standard work.
936
Use of Lean Tools in the Control Phase

Task: Use of Lean Tools in the Control Phase
In the Control Phase of the DMAIC process, lean tools are used to monitor the
improvements implemented. Click on each lean term below to learn how the tool is
utilized in this phase.
Note: The use of lean tools in other areas of DMAIC is covered in the next lesson of
this course, Lean Enterprises.
5S
Japanese originally, 5S stands for five "s" words. The 5S method assists in the
organization of the work place the and standardization of work procedures.
Sorting (Seiri) - Keep only what is necessary in the work area. Example: A
commercial cleaning company implemented a mobile cleaning station containing
products and equipment used daily, while other products and equipment were
stored in a supply closet at each customer location.
Storage/Set in Order (Seiton) - Organize the way necessary items are kept,
making it easier to find and utilize. Example: A fast-food restaurant's walk-in
refrigeration unit contains labeled shelves and bins storing food by packaging
size and frequency of use.
Shining (Seiso) - Cleanliness of the work environment and the equipment to

facilitate a quality process and product. Example: A spa cleans and sanitizes all
equipment and tools after each customer to avoid the spread of bacteria.
Standardizing (Seiketsu) - Tasks, procedures, schedules and the persons

responsible for helping keep the workplace in a clean and organized manner are
parts of the control plan for the business unit or department. Example:
Formalized process and procedures are incorporated into the training material and
new hire training class.
Sustaining (Shitsuke) - Indoctrinate the practice of 5S into your organization's

culture until it becomes part of your standard operating procedures. Example:
New hire orientation provides each associate an employee handbook containing
principles and philosophies embracing the practice of 5S.
937

Visual Factory
Setting up the workplace with signs, labels, color-coded markings, etc. to increase the
awareness of personnel working in different work areas and multiple shifts to ensure
consistency in a process.
Visual aids help reduce variation in the process which can ultimately lead to defects.
Example: The branch network and mail operations of a bank implemented a
color-coded payment system where each type of payment would be assigned a colored
bag to ensure proper processing.
Kaizen
Kaizen is a Japanese term that is translated to mean continuous improvement focusing
on low-cost, gradual improvement. The term is commonly used when referring to a
small incremental change. To truly sustain Kaizen for the long term, 5S and
standardized work must be in place in an organization, and the attitudes of employees
from top management down to the associate level will have to change in order for
Kaizen to be implemented successfully.
Example: A "job-swap" program is implemented in an organization where associates
"swap" positions for a half-day to learn about the up-stream or down-stream tasks in a
shared process. A debriefing session is held monthly for the participants to discuss
their experiences and to solicit ideas for improvement in the process.
938

Kanban
Kanban is a system of continuous supply of components, supplies, and information so
that workers have what they need, where they need it, when they need it.
Kanban is a Japanese term, kan meaning "card," ban meaning "signal." The kanban
system works by signaling the need to replenish stock or materials or to produce more
of an item (also called "pull" approach).
Example: A supermarket's checkout scanners are Kanban signals sending electronic
messages to the warehouse to restock low inventory items.
Poka-yoke
Poka-yoke is a Japanese term that means "to avoid inadvertent errors." Poka-yoke is
often referred to as 'mistake-proofing'. A poka-yoke device is one that prevents
incorrect parts from being made or assembled, or easily identifies a flaw or error and
helps to eliminate variations in process.
Example: A financial institution's loan booking system requires all data entry fields
on a screen to be populated before allowing the associate to move to the next screen,
preventing an incomplete account set-up.
939

Total Productive Maintenance

TPM is a systematic approach for continuous improvement of maintenance activities
having an impact on the control of a process. This strategy's main goal is to maximize
equipment usefulness across its lifespan.
TPM increases the Overall Equipment Effectiveness (O.E.E.), a combination of the
uptime, cycle time efficiency, and quality output of the equipment:
Uptime% x Speed% x Quality% = O.E.E. %
Example: On a scheduled basis, a financial institution's statement processing machine
is taken out of service for cleaning, adjustment, and replacement of worn parts, belts,
inks, etc. The operator performs a daily checklist of maintenance duties. Monthly, a
representative from the vendor assists in phases of the process.
Standard Work
Identification and agreement on the optimal way to perform each task/step in a process
becomes the standard operating procedure or standard work procedure. Standard
work contributes to process control by minimizing the variation in the product flowing
through the process. There are three basic elements involved:
Takt time matches the time to deliver a service, produce a part or finished
product to the pace of sales and is the basis for allocating work among workers.
Standard in-process inventory the minimum number of items or parts, including

units in machines, required to keep a cell or process moving.
Sequence the order in which associates perform tasks at various processes.

Example: Workstations for associates in a call center were standardized with forms
and files allowing employees to use any available area.
940

Control
Measurement System Re-analysis
Learning Objectives
Six Sigma Black Belt | Control | Measurement System Re-analysis

At the end of this Control topic, all learners will be able to:
understand the need to improve measurement system capability as process

capability improves.
evaluate the use of control measurement systems and ensure that measurement
capability is sufficient for its intended use.
942
Measuring System Improvement

Task: Measuring System Improvement
After implementing solutions, we must re-assess the process and determine if the
process has been statistically improved. Various tools such as measurement system
capability re-analysis, post improvement capability analysis, graphical data
analysis and statistical testing are used to answer the question, "Did the
improvements have a significant impact?" Statistically validated outcomes will help
demonstrate our process improvements. Click each term below to learn more.
Measurement system capability re-analysis
The measurement system capability analysis (Gauge R & R) used during the Measure
phase can be used to see if there is an improvement with repeatability, reproducibility,
and accuracy. Conduct a Gauge R & R study and compare the results from the study
administered during the Measure phase.
Guidance for
Acceptable ranges of
Gauge R & R
% of Measurement
Error to Total
Tolerance
Acceptability
Total measurement
error of less than 10%
of total tolerance
Acceptable measuring equipment.
Total measurement
Possibly acceptable based on the importance of the application,
error of 10% to 30% of cost of the measuring equipment, cost of repairs, etc.
total tolerance
Total measurement
Generally unacceptable; every effort should be made to
error of more than 30% identify and correct the problem. Customers should be
of total tolerance
involved in determining how the problem will be resolved.
943

Post improvement capability analysis

Estimating process improvements necessitates a comparison between the past process
performance with the improved process performance. A process capability study
should be completed during the Measure Phase to see how capable the process is
performing. Then latera post improvement capability analysis should be conducted to
see how capable the improved process is performing. The image below shows the
change in distribution type of a cycle time reduction project starting as a normal
distribution and changing to a Weibull distribution after improvements were
implemented. The Weibull distribution suggests the process is approaching entitlement
or inherent capability.
944

Graphical data analysis

The impact of implemented solutions can be observed using primary metric charts,
control charts, histograms, Pareto charts, etc. The continual tracking of metrics should
be part of the implementation plan and may also be a source of potential new projects.
Below is an example of a primary metric tracking errors per shift. The implemented
improvements have reduced errors.
Statistical testing
Improvement validation using statistical testing comparing the before process to
the improved process is necessary to see if a statistically significant gain has been
realized from implementing the proposed solutions.
The two-proportion test example in the Analyze lesson of this course provides an
example.
Continuous improvement efforts

As an organization evolves in embracing the Six Sigma methodology, process
capability evaluation becomes part of the ongoing continuous improvement.
Measurement capabilities may need to be improved to achieve the desired level of
control.
945

946
Control Measurement Systems

Task: Control Measurement Systems
The assurance of highest quality requires accurate equipment to measure and test the
quality of products or services. Measurement systems (sometimes referred to as
"measurement capability systems") test the quality of products and services. During
the Control Phase, "sustaining the gain" is a goal, and the measurement system helps
achieve this goal. Listed below are terms and types of measurement systems used in
the Control Phase of DMAIC. Click below to learn more.
Measurement accuracy
A true value is established and the distribution of measurement deviations from the
known value is tracked. A measurement system is deemed "inaccurate" when the value
is consistently incorrect or over- or under-estimated.
Gauge Repeatability
Gauge repeatability (a.k.a., "equipment variation") is the variation in measurements
obtained when one operator uses the same gauge for measuring the identical
characteristics of the same parts.
Can the same operator get the same measurement using the same gauge on the same
part in two or more trials?
Gauge Reproducibility
Gauge reproducibility (a.k.a., "appraiser variation") is the variation in the average of
the measurements made by different operators using the same gage while measuring
the identical characteristic on the same parts.
Can two different people get the same measurement using the same gauge?
947

Gauge R & R with variables

Variable Gauge R & R studies provide a quantitative value for the part characteristic
being tested, determining the accuracy of the measurement system and the calibration
process. For example, a variable gauge study will provide a measurement (known or
true value) to compare measured pieces or parts showing how close the test value is to
the known value. The test value is compared to the specification limits to discern
qualitative decision-making about part or piece characteristics.
Examples of variable gauges include:
Micrometers
Line rulers
Vernier calipers
Bench fixture gages

Gauge R & R with attributes
AnAttribute Gauge R & R is used when looking at measurements or counts such as:
Pass or fail
Accept or reject
This tool is utilized to detect variation in inspection methods between
operators/associates who are the most intimate with the process or product.
Attribute Gauge R & R Steps
1.
2.
3.
4.
5.
Collect a group of 30-40 inputs/transactions to be evaluated. Having 30+ as a

sample size is ideal to produce reliable results.
Determine the known or true value. A rule of thumb is to have at least two
experts review each input/transaction and come to agreement.
Identify the participants in the study. The individuals chosen should be the people
making the decisions on a regular basis.
Administer the assessment to the participants. The structure of the study requires
that each participant evaluate the particular input/transaction twice. For example:
During Trial 1, Operator 1 evaluates all the samples then Operator 2 will
evaluate the samples.
The administrator will then collect the samples, record Trial 1, and change
the order of the samples to avoid bias.
Trial 2 will be administered to Operator 1 then Operator 2.
The administrator will collect the samples and record Trial 2.

Analyze the recorded data. Spreadsheets or statistical software worksheets can be
used to enter and analyze the results. Enter the assessment results into separate
columns labeled for the:
Known
O1T1 (Operator 1, Trial 1)
948

Destructive Testing
Destructive testing uses techniques such as tensile testing (determining the strength
of a material by subjecting a test specimen to an increasing pull until rupture occurs)
which can inflict damage or impair the usefulness of the product tested. Examples of
destructive testing include:
testing a flashbulb
testing a bullet
cross-sectioning a weld
An obvious shortcoming of destructive testing is if all units are tested (damaged),
there will be no product left. Destructive testing, therefore, relies on acceptance
sampling, the process of
Taking a sample out of a group or lot of items.
Evaluating the items taken.
Making a decision to accept or reject the lot based on pre-determined criteria.
Note: Measurement Systems are described in the Measure lesson of this course.
949
Control Exercise

Concept: Control Exercise
950
Lesson Summary

Once the improvements have been selected and implemented, the Control phase
provides tools to continue measuring the process and evaluating the results using:
statistical process control (SPC).
advanced statistical process control (SPC).
lean tools
measurement system re-analysis

A successful project is one in which the solutions are implemented and monitored to
prevent the process from reverting to the previous pre-improvement state. The goal of
the control phase is to "sustain the gain."
951
Lesson Bibliography

Bibliography
American Society for Quality. Quality Process Analyst Certification Preparation
Course, Version 1 (web-based course). Milwaukee, WI, 2006.
Benbow, Donald, Roger Berger, Ahmad Elshennawy, and H. Fred Walker, editors.The
Certified Quality Engineer Handbook. Milwaukee, WI: ASQ Quality Press, 2002.
Statistical Methods. 2nd ed. Hoboken, NJ: John Wiley & Sons, Inc., 2003.
Montgomery, Douglas C. Introduction to Statistical Quality Control. 5th ed. Hoboken,
Pries, Kim H. Six Sigma for the Next Millennium: A CSSBB Guidebook. Milwaukee,
Pyzdek, Thomas. The Quality Engineering Handbook. 2nded. Boca Raton, FL: Taylor
& Francis Group, 2003.
Wheeler, Donald J. Advanced Topics in Statistical Process Control. Knoxville,TN:
SPC Press, 1995.
952

Lean Enterprise
Lesson Introduction
Six Sigma Black Belt | Lean Enterprise

As you have learned, DMAIC is the primary methodology for Six Sigma. However,
other process improvement methodologies have been adapted into the Six Sigma
process. Lean enterprise, also called "lean manufacturing," is one of these additional
methodologies.
While Six Sigma focuses on reduction of variation, lean enterprise focuses on
elimination of waste. Waste is defined as any activity that consumes resources, but
creates no value. In addition to waste elimination, lean enterprise examines the entire
process to ensure more efficient flow. The concept of lean enterprise is based on two
assumptions: Elimination of waste improves performance and many minor
improvements can lead to perfection. To better understand this concept, the ASQ Body
of Knowledge provides the following topics:
Lean concepts
Describe the theory of constraints.
Describe concepts such as value, value chain, flow, pull and perfection.
Describe the CFM concept.
Identify these activities in terms inventory, space, test inspection, rework,

transportation and storage.
Describe how cycle -time reduction can be used to identify defects and
non-value-added activities using kaizen type methods to reduce waste of space,
inventory, labor and distance.
Lean tools
Define, select, and apply tools such as visual factory, kanban, poka-yoke,
standard work and SMED in areas outside of DMAIC-Control.
Total productive maintenance (TPM)
Understand the concept of TPM.
954
Lesson Overview

The tools and objectives of the Lean Enterprise lesson are illustrated below.
955

Lean Enterprise
Lean Concepts
Learning Objectives
Six Sigma Black Belt | Lean Enterprise | Lean Concepts

At the end of this Lean Enterprise topic, all learners will be able to:
describe the theory of constraints.
describe lean-thinking concepts such as value, value chain, flow, pull and
perfection.
describe the continuous flow manufacturing (CFM) concept.
identify non-value-added activities in terms inventory, space, test inspection,

rework, transportation and storage.
describe how cycle-time reduction can be used to identify defects and

non-value-added activities using kaizen type methods to reduce waste of space,
inventory, labor and distance.
957
Theory of Constraints

Task: Theory of Constraints
In contrast to variation reduction (Six Sigma) or waste removal (Lean), the theory of
constraints (TOC) focuses on increasing overall system throughput by first paying
attention to the "weakest link" of the system.
A constraint is any limitation that prevents an organization from moving toward its
goal. A constraint may be physical and internal (a machine, facility or policy) or
non-physical and external (market conditions or demand for a product).
According to H. William Dettmer in Goldratt's Theory of Constraints, "This is the
beginning of the prescriptive part of the Theory of Constraints. Goldratt has developed
five sequential steps to concentrate improvement efforts on the component that is
capable of producing the most positive impact on the system."
Click each step below to learn more.
1. Identify the system constraint
Dettmer asks:
"
What part of the system constitutes the weakest link? Is it physical or is it a policy?
"
2. Decide how to exploit the constraint.
Dettmer states:
"
By "exploit," Goldratt means we should wring every bit of capability out of the
constraining component as it currently exists. In other words, "What can we do to get
the most out of this constraint without committing to potentially expensive changes or
upgrades?"
"
3. Subordinate everything else
Dettmer continues:
"
Once the constraint is identified (Step 1) and we've decided what to do about it (Step
2), we adjust the rest of the system to a "setting" that will enable the constraint to
operate at maximum effectiveness. We may have to "de-tune" some parts of the
system, while "revving up" others. Once we've done this, we must evaluate the results
of our actions: Is the constraint still constraining the system's performance? If not,
we've eliminated the constraint, and we skip ahead to Step 5. If it is, we still have the
constraint--and we continue with Step 4.
"
958
Theory of Constraints

Task: Theory of Constraints
4. Elevate the constraint

Dettmer further notes:
"
If we're doing this, it means that Steps 2 and 3 weren't sufficient to eliminate the
constraint and we have to do something more. It's not until this step that we entertain
the idea of major changes to the existing system--reorganization, divestiture, capital
improvements, or other substantial system modifications. This step can involve
considerable investments in time, energy, money, or other resources, so we must be
sure we aren't able to break the constraint in the first three steps. "Elevating" the
constraint means that we take whatever action is required to eliminate the constraint.
When this step is completed the constraint is broken.
"
5. Go back to Step 1, but beware of "inertia"
In this final step, Dettmer states:
"
If, at Steps 3 or 4, a constraint is broken, we must go back to Step 1 and begin the
cycle again, looking for the next thing constraining our performance. The caution
about inertia reminds us that we must not become complacent; the cycle never ends.
We keep on looking for constraints, and we keep breaking them. And we never forget
that because of interdependency and variation, each subsequent change we make to
our system will have new effects on those constraints we've already broken. We may
have to revisit and update them, too.
"
H. William Dettmer summarizes by noting:
"
The Five Focusing Steps have a direct relationship with the three management
questions pertaining to change: what to change, what to change to, and how to cause
change. They tell us how to answer those questions.
To determine what to change, we look for the constraint. To determine what to change
to, we decide how to exploit the constraint and subordinate the rest of the system to
that decision. It that doesn't do the complete job, we elevate the constraint. The
subordinate and elevate steps also answer the question "how to cause the change."
"
959
TOC Metrics

Concept: TOC Metrics
TOC defines three operational measures

to determine whether an organization is
moving toward its goal:
Increased throughput (selling price cost of raw materials)
Decreased inventory
Decreased operating expenses
The following four measurements are

used to identify results for the overall
organization:
Net profit (NP) = throughput operating expense (T-OE)
Return on investment = net profit /

inventory (NP/I)
Productivity = throughput / operating

expense (T/OE)
Turnover = throughput / inventory

(T/I)
960
Lean Thinking

Task: Lean Thinking
As mentioned earlier, Six Sigma uses the DMAIC methodology to reduce variation
and defects; lean enterprise thinking uses the methodology below.
Click each step below to learn more.
Define value
Defining value is the first step to creating a lean enterprise. Ultimately, value must be
determined by the customer. The customer wants the right product, with the right
capabilities, for the right price. Therefore, it is important to talk to the customers to
find out what they really want.
Identify the value stream (value chain)
The second step to creating a lean enterprise is identifying the value stream for the
product. Use value-stream mapping to concentrate on the set of activities (both
value-added and non-value-added) that link a process together.
Enhance value flow
Flow focuses on the object of value. In other words, the design of the product or the
efficiencies and conveniences of the services are created for the customer. The goal is
to eliminate any breaks in the flow so the product or service moves smoothly and
continuously to the customer.
Maximize customer pull
Rather than creating products in response to sales forecasts, create the product when
the customer requests it. Maximizing customer pull can result in a reduction in
cycle-time, finished inventories and work-in-process (WIP). Customer pull can also
result in stabilized customer ordering and pricing.
Optimize the process
The continuous pursuit of perfection in lean enterprise means that there are endless
opportunities for improvement. The systematic elimination of waste will reduce the
operating costs and fulfill the customer's desire for maximum value at the lowest price.
While perfection may never be achieved, its pursuit is a goal worth striving for
because it helps maintain constant vigilance against wasteful practices.
961
Value Stream Mapping

Concept: Value Stream Mapping
Value Stream Mapping compared to Process Mapping

Value Stream Map
"As-is" condition
Time-based
Cycle-time
Wait time
Change over time
Value-add time
Process Map
"As-is" condition
Input - output based
Process parameters
Product parameters
Control methods
Inventory
Operators
Scheduling information
Roll over Page Resources to see an example of a value stream map and frequently
used mapping symbols.
Value Stream Mapping Steps

1.
2.
3.
4.
5.
6.
7.
8.
Identify the deliverable product or service. (What is it?)

Who is the ultimate customer?
How does the ultimate customer define value for this product?
Chart the flow of production for this product/service. Begin and end with the
customer. (How did the product get to the customer? What are the steps? Why
this product?)
Add metrics and observations.
Validate the map of the current state.
Develop a future state.
Prioritize a work plan.
962
Continuous Flow Manufacturing

Concept: Continuous Flow Manufacturing
Continuous flow manufacturing, also referred to as "1-piece flow" or "CFM", is a

technique used to manufacture components in a cellular environment. A cell is a group
of workstations, machines or equipment. The cell is arranged so a product can be
processed progressively from one workstation to another without having to wait for a
batch to be completed and without additional handling between operations.
CFM Goals
To make one part at a time, correctly, all the time

To do so without unplanned interruptions
To do so without lengthy queue times
CFM Concepts
Tasks are reduced to their simplest components.

Opportunities for machine- or operator-error are reduced.
Done correctly, there is a continuous flow of activity between shop operators and
the manufactured product.
CFM is a generative manufacturing method created to continuously increase
output, improve quality and grow sales and profits, without the need for
constantly enlarging production or support staff.
1-piece flow is an extremely efficient way to manufacture goods, provided the
correct physical structures have been set up to support its particular needs.
963
CFM Compared to Batch Production

Concept: CFM Compared to Batch Production
The opposite of continuous flow manufacturing is mass production or batch

production. Although many companies produce goods in large lots or batches, this
approach to production builds delays into the process. Items cannot move on to the
next process until all the items in the lot have been processed. The larger the lot, the
longer the items sit and wait between processes.
Batch production can lower a company's profitability in several ways:
The lead time between customer orders and product delivery is lengthened.
Labor, energy and space are required to store and transport products.
The chances for product damage and/or deterioration are increased.
Benefits of 1-piece flow production
Customers can receive a flow of products with fewer delays.

Risks for damage, deterioration or obsolescence are lowered.
1-piece flow allows for the discovery of other problems that need to be
addressed.
964
Non-Value-Added Activities

Task: Non-Value-Added Activities
Non-value-added describes an action or activity in a process, procedure or service

that does not add value to the customer.
Keep in mind that some non-value-added activities cannot be avoided. Examples may
include federal regulations, safety standards and quality control processes. Although
these activities do not increase customer-defined value, they may be required business
necessities.
The goal behind creating a lean enterprise is the elimination of non-value-added
activities (wastes) in every area of production including customer relations, product
design, supplier networks and factory management.
Waste is defined as any activity that consumes resources (time, space, materials) but
does not add value to a product or service. Essentially, waste is anything that the
customer is not willing to pay for. Nearly every bit of waste in the production process
can fit into at least one of the following categories. Likewise, the presence of some
waste can lead to other wastes.
Click each of the waste producers below to learn more.
Overproduction
Overproduction is visible as storage of material: producing more than demanded or
producing it before it is needed. Overproduction is the result of producing to
anticipated demand: making more, making earlier or making faster than is required by
the next process.
What are some causes of overproduction waste?
Just-in-case logic
Misuse of automation
Long process setup-up times
Unleveled scheduling
Unbalanced work load
Redundant inspections
Waiting (Queuing)
Periods of inactivity in a downstream process occur because an upstream activity does
not take place or deliver on time. For example, waiting occurs when a worker is ready
for the next operation, but remains idle due to machine downtime, lack of parts or line
stoppages.
What are some causes of waiting waste?
Delayed shipments
Unbalanced work load
Unplanned maintenance
Long process set-up times
Misuse of automation
Upstream quality problems
965

Inventory
Inventory consists of excess materials not directly required for current customer
orders. Examples are parts, raw materials, work-in-process (WIP), supplies and
finished goods. Inventory is considered waste since it does not add value to the
product. Costs are incurred for environmental control, record keeping, storage and
retrieval. Although some inventory may be necessary, excess inventory will run the
risk of gathering dust, deteriorating, becoming obsolete, getting wet or being damaged
in handling.
What are some causes of inventory waste?
Protecting the company from inefficiencies and unexpected problems
Product complexity
Poor market forecast
Unbalanced workload
Unreliable shipments by suppliers
Misunderstood communications
Processing
Processing waste is due to additional steps or unnecessary activities in a process, such
as rework, reprocessing or rehandling. Processing wastes should be minimized by
asking why a specific step is needed and why a specific product is produced. All
unnecessary processing steps should be eliminated.
What are some causes of processing waste?
Product changes without process changes
Just-in-case logic
Undefined customer requirements
Over-processing to accommodate downtime
Lack of communication
Redundant approvals
Extra copies/excessive information

Transportation
Transportation waste involves unnecessary movement of materials, such as the
movement of "Work in Process" from one operation to another. Such examples
involve the use of forklifts, conveyors and trucks in inefficient ways, making
production more costly and complex.
What are some causes of transportation waste?
Poor plant layout
Poor understanding of the process flow for production
Large batch sizes
Long lead times
Large storage areas
966

Motion
Motion waste is the inefficient and unnecessary movement of workers and machines.
Workers should not have to walk excessively, lift heavy loads, bend abnormally, reach
awkwardly or repeat motions when using machinery.
What are some causes of motion waste?
Poor people/machine effectiveness
Inconsistent work methods
Unfavorable facility or cell layout
Poor workplace organization and housekeeping
Extra "busy" movements while waiting
Defective products
This waste involves products or aspects of your service that do not meet customer
expectations or requirements, resulting in refund, rework or repair.
What are some causes of defective products?
Weak process control
Poor quality
Poor equipment maintenance
Inadequate training/work instructions
Poor product design
Misunderstood customer needs

Underutilized workers
This waste occurs when workers' abilities are not used effectively.
What are some causes of underutilized workers?
The business culture
Poor hiring practices
Low or no investment in training
Low pay, high turnover strategy
967
Cycle-Time Reduction

Concept: Cycle-Time Reduction
Cycle-time is the amount of time needed to complete a single task or activity for the
product or service. Cycle-times may vary by task; therefore, it is beneficial to show a
range and average on the value stream map. If cycle-time variation can be reduced, the
process becomes more predictable.
Often, cycle-time can be reduced by breaking down a single task and analyzing the
amount of time that it takes to complete each sub-activity of that task. After this
breakdown, it is easier to tell which sub-activities may be contributing to a slower
cycle-time. Ultimately, non-value-added activities can be eliminated and value-added
activities can be performed more quickly and efficiently.
Kaizen is a Japanese term that is translated to mean "continuous improvement." Many
companies have successfully used workshops called kaizen "events" or "blitzes" to
drive dramatic improvements in cycle-times, inventory levels, changeover times and
overall quality.
Successful kaizen workshops require three key components:
Selecting the right project and boundaries
Empowering the proper team
Planning for follow-up
968
Kaizen Blitz

Concept: Kaizen Blitz
A kaizen blitz starts with a specific problem to solve. The focus area is best defined
through a value stream mapping process. Any process might be a target for a kaizen
blitz, but it is best to start with one having great customer impact or one with
frustrated workers.
Once an area for improvement is targeted, upper management - often with the help of
a trained kaizen facilitator - initiates the blitz. Management gives the kaizen team a
mandate to change a process or to create and test a new one, along with the power to
make any necessary decisions along the way.
Depending on the kaizen's scope, a cross-functional team with 5-10 representatives is
ideal. Team members should include the key people who are closest to the work and
live with the process. It is also just as important to include people who do not work or
live with the process every day: like representatives from finance, design engineering,
marketing and other areas in the company. Outside eyes can often more easily
question existing methods and provide a fresh and objective view of too familiar
problems.
Together, the team observes the activity and raises questions or challenges the overall
process. Typically, the team's goals will include:
Reducing cycle-time
Meet Takt Time
Reducing space
Reducing inventory
Maintaining a safe work environment

The kaizen activity usually results in incremental improvements that are easily
sustainable. In many cases, the team implements a change and studies the results
before making a recommendation.
969
Takt Time versus Cycle Time

Concept: Takt Time versus Cycle Time
Takt is the German word for metronome. Takt Time enables your organization to
balance the pace of its production outputs with the rate of customer demand. The term
Takt Time, is used to indicate the desired rhythm of the process.
The formula for Takt Time is:
Takt Time = available resources (hours) / demand (units)
For example, if a product has a demand of 64 units per day, and the work day consists
of two shifts (16 hours), then the Takt Time to produce each unit is 15 minutes.
To meet this demand, the combined cycle-time for each activity within a process must
be equal to, or less than, the Takt Time.
970

Lean Enterprise
Lean Tools
Learning Objectives
Six Sigma Black Belt | Lean Enterprise | Lean Tools

At the end of this Lean Enterprise topic, all learners will be able to define, select and
apply lean tools such as visual factory, kanban, poka-yoke, standard work and SMED
in areas outside of DMAIC-Control.
972
Visual Factory

Concept: Visual Factory
Several tools can be used during the DMAIC process to help build a lean enterprise.
One such tool is a visual factory. The intention is to set up the workplace with signs,
labels, color-coded markings, etc., to increase the awareness of the workers in terms
of:
Daily production
Maintenance items
Goals
Quality metrics
Processes and procedures

Visual applications help keep things running as efficiently as they were designed to
run.
973
Visual Factory Benefits

Concept: Visual Factory Benefits
Benefits of a Visual Factory
Visual techniques express information in a way that can be understood quickly by

everyone.
Sharing information through visual tools helps keep production running smoothly
and safely.
Visual information can also help prevent mistakes (poka-yoke). Color coding is a
form of visual display often used to prevent errors. Shaded "pie slices" on a dial
gauge instantly tell the viewer when the needle is out of the safe range. Matching
color marks is another approach to help people use the right tool or assemble the
right part.
Examples of a Visual Factory
Work group display boards with charts, metrics, procedures, etc.

Color-coded pipes and wires
Painted floor areas for good stock, scrap, trash, etc.
Shadow boards for parts and tools
Production status boards
Directional flow indicators
974
Visual Factory Exercise

Concept: Visual Factory Exercise
Based on the information you learned about visual factories, place each tool in its
correct location on the tool board.
In this example, what are the benefits to having a specified spot for each tool? Roll
over Page Resources, and click Possible Visual Factory Answers.
975
Possible Visual Factory Answers
Six Sigma Black Belt | Lean Enterprise | Lean Tools | Visual Factory Exercise
Example: Possible Visual Factory Answers
Possible Answers
Since the arrangement is defined, all tools will fit easily on the board at the end
of the day.
Each worker will know exactly where to find a particular tool when it is needed.
Workers will be able to tell easily if a tool is missing or broken as they are always
on display.
976
Kanban

Concept: Kanban
Another tool used to create a lean enterprise is a kanban system. Kanban is a system
of a continuous supply of components, parts and supplies so that workers have what
they need, where they need it and when they need it.
Kanban is a Japanese term: kan meaning "card", ban meaning "signal." The kanban
system works by signaling the need to replenish stock or materials or to produce more
of an item. Kanban can be done using cards as the signaling component. In a simple
kanban system, an empty box, container or pallet can signal the need for more
supplies. The supplier or warehouse should only deliver components to the production
line when signaled.
977
Kanban Benefits

Concept: Kanban Benefits
Benefits of a Kanban System
Reduced inventories
Predictable flow of materials
Simplified scheduling
Visual "pull" system at the point of production
Improved productivity
Since kanban is a chain process in which orders flow from one process to another, the
production or delivery of components is pulled to the production line. This method is
in contrast to the traditional forecast-oriented method where parts are pushed to the
line. An example and illustration are provided on the next page.
978
Kanban Example

Concept: Kanban Example
In a plant that manufactures widgets, a 42" stem-bolt is needed. The stem-bolts arrive
on pallets (each pallet holding 100 stem-bolts). When the pallet is empty, the person
assembling the widgets takes the card attached to the pallet and sends it to the
stem-bolt manufacturing area as an order to manufacture and send another pallet of
stem-bolts. A new pallet of stem-bolts is not made until the card is received. This is
kanban in its simplest form. A more realistic example would involve two pallets. The
widget assembler would start working from the second pallet while new stem-bolts
were being made to refill the first pallet.
979
Poka-Yoke

Concept: Poka-Yoke
Because people can make mistakes even in inspection, mistake-proofing often relies
on a sensing mechanism called poka-yoke.
Poka-yoke is a Japanese term that means "to avoid inadvertent errors." A poka-yoke
device is one that prevents incorrect parts from being made, assembled or identifies a
flaw or error.
Often referred to as "error-proofing", poka-yoke is actually the first step in
error-proofing a system. Error-proofing is a manufacturing technique of preventing
errors by designing the manufacturing process, equipment and tools so that an
operation literally cannot be performed incorrectly.
980
Poka-Yoke Examples

Concept: Poka-Yoke Examples
Examples of Poka-Yoke
Error-proofing is the practice of striving for zero defects using techniques, standards
and devices that prevent errors from being made. Examples of preventative measures
include:
Childproof caps on prescription medicine bottles
Different size fuel dispensing nozzles to prevent cross-fueling
Design of parts so that they cannot be exchanged by mistake
Color-coded parts
Error-proofing also uses shutdowns, controls or warnings to detect errors and stop
them before they become defects. Examples of detection measures include:
Automatic shutoff on coffee pots and other small appliances
Smoke and carbon monoxide detectors
Warning buzzer when blood pressure drops below acceptable levels during
surgery
The key to effective error-proofing is determining when and where defect-causing
conditions arise and then figuring out how to detect or prevent these conditions every
time.
981
5S

Task: 5S
Another tool that can be applied in a lean enterprise is the 5S structure. Originated in
Japan, 5S stands for five "s" words, that assist in work place organization and the
standardization of work procedures.
Click each step below to learn about the five methods and see examples of each. The
words in parentheses are the original Japanese terms.
Sort (Seiri)
Eliminate unnecessary items from the workplace.
Method: Tag items believed to be unnecessary are moved to a central location and
reused or eliminated.
Example: In a bank, each teller station is stocked with a working supply of commonly
used forms, such as deposit tickets and savings account withdrawal forms. Extra forms
are stored in the supply closet.
Set in Order (Seiton)
Store items efficiently and effectively.
Method: "A place for everything, and everything in its place."
Example: In a copying/printing center, all paper is properly stored and labeled
according to size, color and weight.
Shine (Seiso)
Clean and maintain
Method: "Clean thoroughly, clean often." Establish a daily cleaning routine. Identify
maintenance issues along the way.
Example: In any corporation, conference rooms are cleaned and straightened after
each meeting so the rooms are immediately ready for the next scheduled meeting. All
AV equipment is checked for maintenance needs.
Standardize (Seiketsu)
Establish best practices.
Method: Establish a routine, identify ownership and solicit the input of employees
who are doing the work.
Example: In a hospital, the responsibility of nurse scheduling is given to the senior
nurse who best understands the needs of each department balanced with the need to
retain quality nurses.
Sustain (Shitsuke)
Continue the improvement over the life of the company.
Method: Change the culture of clutter. Establish a new status quo of workplace
organization and reward accordingly.
Example: A company implements a program to instill a continuous improvement
mindset and rewards employee suggestions that reduce waste or enhance profitability.
982
Standard Operations (Work)

Concept: Standard Operations (Work)
The lean concept standard work maintains that each activity should be performed the
same way every time. Standard work is the term used to systematize how a part is
processed, and includes man-machine interactions and studies of human motion.
Standard work operations are most efficiently and safely completed with all tasks
organized in the best known sequence, using the most effective combination of these
resources:
Man
Materials
Methods
Machines
Mother Nature
Measurements
Within standard work, each operation is broken down into small pieces and analyzed.
Each worker is then given all the tools to make the part quickly, with the highest
quality. The process is documented in writing and with photographs. Charts and
posters at the work area are often used to reinforce the methods.
To have the greatest impact, standardization must occur not only within the area but
also across the entire company. Standardization includes paint and color standards for
safety elements, equipment operation instructions, floor markings, interior and exterior
building markings, material labeling, etc. By creating standards and defining
procedures, we achieve commonality across the entire organization.
983
Standard Operations (Work) Benefits

Concept: Standard Operations (Work) Benefits
Benefits of Standard Work
Can eliminate errors that waste time and money

Helps ensure reproducibility from operator-to-operator
Helps reduce variation in cycle-time
Helps produce a more consistent product or service
Can simplify down-stream activities
Helps assure a high quality product, proud workers, satisfied customers and
workplace safety
Leads to remarkable productivity improvements, with reduced variation in the
shop floor environment
984
SMED

Concept: SMED
Single minute exchange of dies (SMED) is a system used to reduce changeover time
and improve timely response to demand. Developed by Toyota, SMED, is also
referred to as the "Toyota Production System." SMED involves a set of procedures to
be followed for a successful exchange of dies.
The goal of SMED should be to develop a production system that gets as close as
possible to making only what the customer wants, when the customer wants it,
throughout the production chain. The resulting production system becomes a strong,
flexible operation adaptable to changes.
According to Donald W. Benbow and T.M. Kubiak in The Certified Six Sigma Black
Belt Handbook, "it was common practice in metal-forming industries to produce
thousands of one part before changing the machine's dies and then producing
thousands of another part. This practice often produced vast inventories of work in
process and associated waste. These procedures were justified because changing
machine dies took several hours."
Many companies produce goods in large lots simply because long changeover times
make it costly for products to change frequently. However, when methods are in place
to accommodate quick changeover, setups can be done as often as needed. Quick
changeovers mean that products can be made cost effectively in smaller lots.
Before a setup operation can be improved, it is best to analyze how it is currently
performed. Three preliminary steps involved in a setup analysis include:
Videotaping the entire setup operation
Asking setup personnel to talk about what they do
Studying the time and motions involved in each step of the setup
985
Using SMED

Concept: Using SMED
Setup improvement activities can be implemented in three stages:
Distinguish between internal and external setups.
External setups are those items that can be performed before a machine or
process is stopped.
Internal setups are those tasks that must be done after the machine or
process has stopped.
Convert internal setups to external setups. Look at each task within the
changeover process to determine how current internal setups can be converted to
external setups.
Streamline all aspects of the setup operation. Once new processes are in place,
practice the process continually and analyze it for improvements.
Benefits of a SMED System
Flexibility: Changing customer needs can be met without the expense of excess
inventory.
Quicker delivery: Small-lot production means reduced lead time and reduced
customer waiting time.
Better quality: Less inventory storage means fewer storage-related defects.
Quick changeover methods lower defects by reducing setup errors and
eliminating trial runs of the new product.
Higher productivity: Shorter changeovers reduce downtime, resulting in a
higher equipment productivity rate.
986

Lean Enterprise
Learning Objectives
Six Sigma Black Belt | Lean Enterprise | Total Productive Maintenance

At the end of this Lean Enterprise topic, all learners will be able to understand the
concept of total productive maintenance (TPM).
988

Concept: Total Productive Maintenance
Total productive maintenance (TPM) is an initiative for optimizing the effectiveness

of manufacturing equipment. TPM addresses the production operation with a
comprehensive, team-based management program that is proactive instead of reactive.
The goal of TPM is to eliminate losses, whether from breakdowns, defects or
accidents.
TPM helps identify and eliminate the "six big losses" that contribute negatively to
equipment effectiveness:
Breakdowns
Setup and adjustment loss
Idling and minor stoppages
Reduced speed
Defects and rework
Startup yield loss

TPM implementation starts with measuring and analyzing overall equipment
effectiveness (OEE). This analysis will help diagnose problems and will become the
measurement to determine how successful TPM efforts are. As stated in the Control
lesson, OEE is a combination of the uptime, cycle-time efficiency and quality output
of the equipment:
Uptime% x Speed% x Quality% = O.E.E. %
989
TPM Pillars

Task: TPM Pillars
The following seven strategies are the most common for implementing TPM
effectively. They form the pillars to foundation of any TPM effort. It is not necessary
to implement all these strategies at once. The company must decide which of these
strategies will have the most positive and immediate results.
Click each strategy below to learn more.
Focused Improvement (Kaizen)
To make equipment more efficient, examine its effectiveness by identifying and
analyzing all losses caused by downtime, speed and defects. Make continual
improvements.
Autonomous Maintenance
Allow machine operators to take responsibility for routine maintenance tasks, freeing
up skilled maintenance workers to work on other TPM initiatives. The result is more
knowledgeable machine operators who can effectively communicate equipment
problems to maintenance staff.
Planned Maintenance
Have a systematic approach to all maintenance activities. This involves identifying the
preventive maintenance required for each piece of equipment, creating standards for
condition-based maintenance, and setting responsibilities for operating and
maintenance staff.
Technical Training
Train staff to improve their skills. This includes training on maintenance, operations
and troubleshooting. In addition, make certain the staff understand why these skills are
important.
Quality Maintenance
Focus on eliminating non-conformances in a systematic manner, much like focused
improvement. Understand what parts of the equipment affect product quality in order
to eliminate current and potential quality concerns.
Office TPM
The goal is to improve productivity and efficiency in the administrative functions and
identify and eliminate losses. Analyze processes and procedures to determine
opportunities for increasing office automation.
Safety/Environmental Management
Focus on creating a safe workplace that is not endangered by the processes or
procedures. The goal is zero accidents, zero health damage and zero fires.
990
TPM Benefits

Concept: TPM Benefits
Benefits of Total Productive Maintenance (TPM)
Improved machine reliability

Extended machine life
Increased capacity without the purchase of additional machines or sacrifice of
additional floor space
Improved teamwork between machine operators and maintenance workers
Improved safety
Increased ability to reallocate skilled workforce to more technical duties by
having machine operators perform daily and routine maintenance
991
Lean Enterprise Pyramid Game

Concept: Lean Enterprise Pyramid Game
992
Lesson Summary

The primary focus of a lean enterprise is to eliminate waste. As you have learned,
waste is defined as any activity that consumes resources, but creates no value. The
emphasis is on making the entire process flow more efficiently rather than improving
specific sub-processes. This lesson emphasized the following concepts and tools as a
knowledge base to use for creating a lean enterprise:
Lean concepts
Theory of constraints (TOC) focuses on increasing overall system throughput by first
paying attention to the "weakest link" of the system.
Lean thinking describes the methodology for creating a lean enterprise and includes
the following steps:
Define value
Identify the value stream
Enhance value flow
Maximize customer pull
Optimize the process

Continuous flow manufacturing (CFM) is a technique used to manufacture
components in a cellular environment. The cell is a group of workstations, machines
or equipment arranged such that a product can be processed progressively from one
workstation to another without having to wait for a batch to be completed and without
additional handling between operations.
Non-value-added activities describe an action in a process, procedure or service that
does not add value to the customer. Non-value-added activities are typically described
in terms of waste producers that fall into the following eight categories:
Overproduction
Waiting
Inventory
Processing
Transportation
Motion
Defective products
Underutilized workers
Cycle-time is the amount of time needed to complete a single task or activity for the
product or service. If cycle-time variation can be reduced, the process becomes more
predictable.
Lean tools
Several lean tools can be used during the DMAIC process that can help build a lean
enterprise.
Visual factory
Kanban
Poka-yoke
Standard work
SMED
993
Lesson Summary

Total productive maintenance

(TPM) is an initiative for optimizing the effectiveness of manufacturing equipment.
The goal of TPM is to eliminate losses, whether from breakdowns, defects or
accidents.
994
Lesson Bibliography

Bibliography
Dettmer, H. William. Goldratt's Theory of Constraints: A System's Approach to
Continuous Improvement. Milwaukee, WI: ASQ Quality Press, 1997.
MacInnes, Richard L. The Lean Enterprise Memory JoggerTM. Salem, NH: Goal/QPC,
2002.
995

Lesson Introduction
Six Sigma Black Belt | Design for Six Sigma

Design for Six Sigma (DFSS) strives to prevent defects by transforming customer
wants and perceptions into reliable, defect-free product or process. DFSS provides a
process and structure for delivering Six Sigma quality products to the customer. To
better understand this concept, the ASQ Body of Knowledge provides the following
topics:
DFSS Introduction
Introduce the purpose of DFSS.

Quality function deployment (QFD)
Demonstrate a quality function deployment tool for analyzing the customers

needs and linking to the technical requirements needed to satisfy the customer.
Robust design and process
Understand the role functional requirements have within design.
Examine strategies for incorporating robust design concepts into the design
process; especially strategies for reducing noise.
Understand the concepts of tolerance design and statistical tolerancing.
Calculate tolerances using process capability data.

Failure mode and effects analysis (FMEA)
Understand the terminology, purpose and use of scale criteria (including risk
priority number (RPN)) for FMEA and apply to processes, products or services.
Understand the distinction between and interpret data associated with design
FMEA (DFMEA) and process FMEA (PFMEA).
Design for X (DFX)
Understand design constraints such as design for cost, design for

manufacturability and producibility, design for test and design for maintainability.
Special design tools
Understand the concept of special design tools such as the theory of inventive
problem-solving (TRIZ) and axiomatic design (conceptual structure robustness).
997
Lesson Overview

The tools and objectives of the DFSS lesson are illustrated below.
998

Overview
Introducing DFSS
Six Sigma Black Belt | Design for Six Sigma | Overview

Concept: Introducing DFSS
Some organizations have a history of long-term success with development, launch,

and integration of new products. With roots in the Department of Defense and NASA,
Design for Six Sigma (DFSS) seeks to understand the customers perceptions, needs,
and expectations that are critical to ensure a successful product.
DFSS is a proactive, rigorous, systematic method using tools, training, and
measurements for integrating customer requirements into the product development
process. DFSS strives to prevent defects by transforming customer wants and
expectations to what can be produced, whereas the Six Sigma DMAIC model focuses
on eliminating defects by reducing operational variability.
The DFSS customer focus increases the probability of success much earlier by
applying systematic and scientific methods such as quality functional deployment
(QFD), failure modes and effects analysis (FMEA), and robust design optimization
(RDO).
QFD approaches develop an understanding of the customers needs and translate

these into engineering and manufacturing requirements.
Through FMEA, analyzing failures and their effects influence design perimeters.
RDO deals with integrating design of experiments (DOE) to find optimal and
robust solutions early in the development.
1000
Committing to DFSS

Concept: Committing to DFSS
By designing for producibility, reliability, performance, and maintainability, DFSS

projects offer solutions that meet or exceed customer needs. However, achieving
quality performance through any set of tools also requires preparation and
commitment to change.
For a list of tools involved in DFSS, roll over each gear below.
1001
DFSS and Six Sigma

Concept: DFSS and Six Sigma
Six Sigma aims to improve an existing process by reducing variation or centering the
mean. After organizations introduce new designs, Six Sigma professionals return to
solve problems similar to the previous process. To generate the right product at the
right time at the right cost, DFSS incorporates the Six Sigma problem-solving
technique into the design process. DFSS is the practice of designing any product,
service or process to satisfy customer and internal business requirements at a Six
Sigma level of performance.
1002
DFSS and ROI

Concept: DFSS and ROI
Because quality experts regard 70-80% of quality problems as design-related,

engineers and other process designers have the best opportunity to improve product
quality and save costs. As a process moves through the phases of concept to design,
prototyping and production, the cost of eliminating quality problems increases.
DFSS effects on cost-savings are proportional to the initial investment. The greater the
initial investment to eliminate design issues, the lower the life cycle costs associated
with the process. Since process improvement after start-up is more costly, a
well-developed DFSS project development plan will help to ensure success and
maximize the return on investment.
DFSS Addresses Business Challenges
Customers demanding product/process excellence
Managing variability
Improving predictability and capability
Reducing costs and increasing profitability
Increasing development effectiveness
Managing development costs
Meeting customer requirements
1003
Using DFSS

Concept: Using DFSS
Black Belts use DMAIC to address problems to reduce costs and improve quality by
reducing variability or shifting the mean. Even then, a process (given its design) has a
maximum level of performance. Entitlement refers to the best performance level for a
process, product, service, or transaction.
What happens if future customer requirements exceed the current process capability?
Since customers desire more performance and the process is operating at entitlement,
process redesign is necessary; thus the need for DFSS arises. In the interaction below,
click Next Step to learn about a process link between DMAIC and DFSS.
1004
DMADV

Concept: DMADV
As DMAIC guides the Six Sigma Black Belt through an existing process, the stages
for DFSS are: Define-Measure-Analyze-Design-Verify (DMADV). Used when
designing a new process, product, service or transaction, DMADV works closely with
obtaining information and analyzing the voice of the customer in order to meet
customer requirements. DFSS contains such a large body of knowledge for each stage
that DFSS is a course in itself. The purpose of this lesson is to provide an overview of
DFSS.
1005
DFSS Teaming

Concept: DFSS Teaming
When your team develops a new design from start to finish, engineering should not be
the only department involved. From inputs such as learning training needs from
human resources, patent infringement advice from the legal department or money
matters from the finance department, your team can benefit and derive important
information. Using cross-functional team members from other departments is critical
to the smooth operation and the success of DFSS.
On the product design side, DFSS projects include:
Subject matter experts (SMEs).
Six Sigma Black Belts and Green Belts as team leaders.
Master Black Belts as mentors and trainers.
Project champions as process owners and roadblock breakers.
1006
DFSS or Six Sigma

Concept: DFSS or Six Sigma
For each situation listed below, select the best approach for dealing with that situation.
After clicking a box, either a check mark will display (correct answer) or an X
(incorrect answer).
1007

Quality Function Deployment
Learning Objectives
Six Sigma Black Belt | Design for Six Sigma | Quality Function Deployment
At the end of this DFSS topic, all learners will be able to analyze a completed quality
function deployment (QFD) matrix.
1009
Customer Input
Concept: Customer Input
Organizations today realize the importance of giving allegiance to their customers.

Paradigms have shifted from "product-centered" to "customer-centered." Meeting
customer requirements is a core principle of quality because delivering what the
customer needs and values gives purpose and direction to all work processes.
Quality, delivery, and cost are important considerations that influence customer
satisfaction. DFSS influences customer satisfaction by developing and planning the
product to meet the customers needs and ensuring those requirements carry through
to manufacturing and field operations. Therefore, all processes and organizations must
be thoroughly grounded in customer-defined requirements.
Customer satisfaction is a value judgment made by the customer regarding their total
experience with the product or service. Quality is an important factor (but not the only
factor) influencing customer satisfaction. Listening to and integrating your process
with the voice of the customer is critical to remaining competitive.
1010
QFD Principles
Concept: QFD Principles
Securing customer input helps prepare a

list of customer concerns/wants. Quality
function deployment (QFD) is a
methodology that organizations often use
to incorporate the voice of the customer
throughout a product or service
development life cycle. For this reason,
some quality experts call QFD
customer-driven engineering or
listening to the voice of the customer.
QFD Principles
Start with the voice of the

customer at the concept stage (e.g.,
surveys isolate which benefits
customers feel are important).
Carry through to manufacturing with

highly detailed instructions (e.g.,
instructions for production process
control or for how front-line
employees will provide a service).
Employ a series of matrices and

charts (e.g., tools that rank features
by significance, identify possible
problems, and provide well-defined
engineering specifications).
1011
QFD Overview
Task: QFD Overview
As a tool for use by the whole organization, QFD is a course in itself. QFD links VOC
to existing quality. QFD is a methodology translating customer needs and
requirements (voice of the customer) into the production of yourproducts and services.
Introduced by Yoji Akao (1966), QFD is a structured, disciplined methodology and
qualitative tool used to identify the customers' quality requirements and translate them
into important design targets.
Benefits
Creates a customer-driven environment
Establishes priorities and improves quality and customer value
Prioritizes process improvements
Forces early communication, planning, and decision-making
Involves the entire company and bridges departments
Provides documentation for the decision-making process

Use When
Analyzing customer requirements
Developing a new product, process, service or transaction
Improving a product, process, service or transaction
Interpreting customer requirements into organizational methodology
1012
House of Quality
Concept: House of Quality
The House of Quality (named for its house-shaped matrix appearance) is one of the
most important matrices in QFD. Early in the planning phase, the House of Quality
clarifies the relationship between customer needs and product features. It helps
correlate market or customer requirements and analyses of competitive products with
higher-level technical and product characteristics to identify the strong and weak
relationships. The House of Quality diagram makes it possible to bring together
several factors into a single figure.
1013
Left Wing and Attic Matrix
Concept: Left Wing and Attic Matrix
The left wing, the starting point for constructing the House of Quality, serves as the
voice of the customer by listing previously identified customers' needs and
requirements. Included is a scale to rate the importance of each need and serve as a
multiplying factor when determining rankings. Use a 1-10 scale, where:
10 = extremely important or critical to the customer.
1 = not very important to the customer.

Note: Not all customer needs merit a 10.
The attic, serving as the voice of the company, lists the engineering characteristics
(technical requirements) designers believe are required to meet the customers specific
needs. The center is a matrix identifying the interrelationships between the customer
needs and the technical requirements. For example, how significant is size if the
product is small and light weight? Designers evaluate the interrelationships by a
variety of methods, including point values as 10-to-0 and 9-3-1, or symbols. The
example below uses symbols to designate the significances.
1014
The Roof
Concept: The Roof
After identifying the technical requirements and completing the matrix between the
requirements and the needs, the roof provides an area for designers to rate the
requirements to each other. This analysis identifies the key points where improvement
in the technical requirement could benefit the product.
The analysis revolves around a key question: Does improving one requirement
automatically improve or deteriorate another requirement? For instance, note the
following relationships from the matrix below:
Improving yield has a strongly positive relationship with improving process

capability.
Improving yield has a strongly negative relationship with improving rate.
Improving yield has no effect on the cost to maintain.
1015
The Basement
Concept: The Basement
The basement provides several opportunities:
Records weighted scores for each engineering characteristic as it supports

customer needs
Records engineering targets for each technical requirement

The weight score provides a numerical value on how each technical requirement rates
against the customer requirement. This technique forms a weighted rating: a rating
linked to the most important customer requirement that is determined by multiplying
the individual rating and the customer importance value. The sum of the products then
provides the rating for the characteristic. For example, calculate the weighted scale for
the Weight design requirement:
The weight design requirement has a weak or possible relationship to the

customer need of low cost: (1 * 10).
The weight design requirement has a strong relationship to the customer need of
small, lightweight: (9 * 8).
(1 * 10) + (9 * 8) = 82.
The designer then uses the Key Design Requirements row to identify the engineering
requirements that most strongly meet the customers requirements. Notice the large
difference between those marked with an X and those unmarked. Some matrices may
also include a competitive analysis of each engineering requirement with the
competition (benchmarking results).
The target values row records the specific engineering targets for each technical
requirement. Since targets need to be precise, do not use a range. Based on
information analyzed in the House of Quality, target values may change.
1016
The Basement
Concept: The Basement
1017
Right Wing: Customer and the Competition
Concept: Right Wing: Customer and the Competition
The right wing allows designers to compare their product to the competition in terms
of the customers requirements. For instance, note the following comparison between
UsDot relative to the positioning of the competition (G-Wiz and J-co Com).
UsDot rates below both competitors in terms of reproducibility and the ability to
verify; both of which are of maximum importance to the customer.
UsDots ability to verify rating is significantly lower than both competitors are,
and the customer highly values this characteristic.
UsDot product has the highest reliability.
1018
Analyzing
Concept: Analyzing
The matrix is actually examining two relationships. In the graphic below, the lower
grid shows the relationship between the individual customer requirements and each
engineering characteristic. Some professionals and organizations create a matrix using
a series of symbols.Whether circles, diamonds, triangles, circles of different colors,
pluses and minuses, the house of quality shows the relationship between the customer
needs and the technical requirements.
Within the roof, however, the grid is showing the relationships between the
engineering characteristics. Regardless of the recording technique:
A positive relationship shows both technical requirements can be improved at the

same time.
A negative relationship means that as one requirement improves, the other

worsens.
A blank means that a change has no effect.

To practice analyzing a house of quality matrix, roll over Page Resources, and then
click House of Quality Exercise. To check your answers, close the House of Quality
Exercise window, roll over Page Resources, and click House of Quality Answers.
1019
House of Quality Exercise
Six Sigma Black Belt | Design for Six Sigma | Quality Function Deployment | Analyzing
Example: House of Quality Exercise
Study the matrix below to answer the following questions. To check your answers,
close this window, roll over Page Resources, and click Answers.
1.
2.
3.
4.
5.
6.
What is the relationship between Easy to Click and Button Resistance?

What is the relationship between Easy to Clean and Product Dimensions?
What is the relationship between Energy Needed to Move and Sealed Ball?
Which customer requirement does the company believe they are the best at in
their field?
Compared to their main competitor, which customer requirement is the company
worst at?
How does this company compare with its competition in terms of its products
being Easy to Clean?
1020
House of Quality Answers
Six Sigma Black Belt | Design for Six Sigma | Quality Function Deployment | Analyzing
Example: House of Quality Answers
1.
2.
3.
4.
5.
6.
What is the relationship between Easy to Click and Button Resistance? Strong
positive relationship.
What is the relationship between Easy to Clean and Product Dimensions? No
relationship.
What is the relationship between Button Resistance and Sealed Ball? Negative
relationship.
Which customer requirement does the company believe they are the best at in
their field? Contouring the mouse to the hand.
Compared to their main competitor, which customer requirement is the company
worst at? Mouse does not jam (thus implying their mouse has problems
jamming).
How does this company compare with its competition in terms of their products
being Easy to Clean? In the middle: better than B, but not as good as A (who is
the best).
1021
Numerical Scoring
Concept: Numerical Scoring
In order to quantify ratings, some quality professionals use values instead of symbols.
The preferred scale depends on the individual and the organization. Common scales
include 5-to-0, 10-to-0, 5-3-1, and 9-3-1.
In the below QFD matrix, the Few Errors characteristic has been calculated for you
as an example (rating of 46). Given the information on this QFD matrix, calculate the
weighted rating for each characteristic, and then prioritize the customers needs. To
check your work, roll over Page Resources and click QFD Answer.
1022
QFD Answer
Six Sigma Black Belt | Design for Six Sigma | Quality Function Deployment | Numerical Scoring
Example: QFD Answer
To determine the weighted rating of a column, multiply the value by the customer
importance value, and then add the column. The weighted ratings are 65, 21, 36, 46,
35, 53, and 70.
Sample calculation: Adaptable Content: 65 = (5 * 4) + (0 * 2) + (4 * 5) + (0 * 4) + ( 5
* 5)
Prioritize Characteristics: Current BoK (70), Adaptable Content (65), Moveable
Sections (53), Few Errors (46), Compact Size (36), Low Price (35), and Durability
(21)
1023
Houses of Quality in DFSS
Concept: Houses of Quality in DFSS
Since using the QFD process is important to completing the design from customer
requirements to manufacturing characteristics, designers generally use a series of
matrices. When progressing from one matrix to another, you will notice the features
along the roof of the previous matrix become a side feature of the next matrix. For
example, see the location of Technical Characteristics in the first and second images.
By continually narrowing the process and fine-tuning the choices, you will
integratecustomer expectations into product design, process planning and eventually to
process control.
1024
Tips
Task: Tips
Whereas brainstorming helps develop a list of characteristics, a House of Quality with

too many characteristics can be overwhelming. Use affinity diagrams and tree
diagrams to develop details about the characteristics before making the House of
Quality. Each grouping in the affinity diagram may warrant its own House of Quality.
Detailed examples of affinity and tree diagrams were presented in the Project
Management lesson of this course.
Click each item below for a list of directions for completing a House of Quality, user
tips, and analysis tips.
Steps
1.
2.
3.
4.
5.
6.
7.
Capture the voice of the customer (customer requirements).

Determine the relative importance of each customer requirement.
Establish the relationship between the design requirements and the customer
requirements.
Determine the relative importance of each design requirement.
Compare self to the competition regarding each customer requirement.
Compare the design requirements to each other.
Add target values and specifications for each requirement.
User Tips
Refer to the following information in this course: matrix diagrams, House of

Quality matrix, customer data collection tools
QFD requires an opening share of information
Using a cross-functional team brings together different people with knowledge

about the customer, product, process, service, and/or transaction
Customer data may exist within the organization, but not communicated to those
needing the information
Avoid the we know better than the customer attitude
For each characteristic, set a specific target, not a range
Trade offs between characteristics may lead to unmet customer requirements,

delayed development, increased cost, and/or poor quality
Use specialized software to develop a complex matrix
1025
Tips
Task: Tips
Analysis Tips
Odd patterns in the center of the matrix may indicate problems.
If there is an empty row, no characteristic meets the customer requirement.

Therefore, identify a new characteristic.
If there is an empty column, a customer requirement was missed or the

characteristic is not needed.
Rows with no strong relationships Having at least one strong relationship helps
meet customer requirements. If there is not a strong relationship, look for one.
Column with no strong relationships Each characteristic should have at least

one strong relationship. If there is not a strong relationship, rethink the
characteristic.
Row or column with many relationships This may be a cost, reliability or safety
issue. Remove the relationship from the house and analyze it separately.
1026

Robust Design and Process
Learning Objectives
Six Sigma Black Belt | Design for Six Sigma | Robust Design and Process
At the end of this DFSS topic, all learners will be able to:
understand functional requirements of a design.
develop a robust design using noise strategies.
understand the concepts of tolerance design and statistical tolerancing.
calculate tolerances using process capability data.
1028
Introduction
Known for developing quality-engineering methodology to improve quality and

reduce waste, Dr. Genichi Taguchis work improves engineering productivity to
achieve high-quality and low-cost solutions. Many companies in diverse industries
around the world use the Taguchi Methods to save millions of dollars. Vested
companies aim at reducing waste during design, manufacturing, and operations, thus
affecting costs and the bottom line.
This topic includes the following Taguchi Methods:
Robust design
Functional requirements
Noise factors
This topic also includes the following important concepts:
Tolerance design
Tolerance and process capability

Note: The Improve lesson of this course also touched upon the concept of "Taguchi
robustness."
1029
Taguchi Methods
Concept: Taguchi Methods
Competition pressures organizations to examine their products, processes, and services

in order to improve efficiency, decrease costs, improve quality, increase production
volume, reduce cycle times, and improve customer satisfaction. Consider what
Madhav S. Phadke writes in Introduction to Robust Design (Taguchi Methods). ITT
reported the following about development:
Design influences more than 70% of the product life cycle cost.
Companies with high product development effectiveness have earned 3 times the
average earnings of their competition.
Companies with high product development effectiveness have revenue growth 2

times the industry's average revenue growth.
While Genichi Taguchi refers to quality engineering techniques, other terms include
Taguchi Methods, robust design, robust engineering, or robust DOE. Robust design is
an efficient and systematic methodology that applies statistical experimental design
for improving product and manufacturing process design, thus aiming to design a
more reliable product or process.
For example, many statistical control charts are quite robust in regards to the
assumption of normality (i.e., somewhat skewed or bimodal populations can still
provide us with control charts that detect changes in mean or variability). Furthermore,
many statistical methods can give us valid results with some marked departure from
normality.
1030
Robust Design
Concept: Robust Design
Defining the ideal state of the basic function that is performing perfectly is the key to
robust design. To achieve this, Taguchi suggests the following guidelines for robust
design:
Identify the ideal function for the product or process.
Select quality characteristics that are continuous variables.
Select characteristics that add quality.
Quality characteristics should cover all aspects of the ideal function.
Quality characteristics should be easy to measure.

Robust design aims to produce a reliable design by controlling parameters so random
noise does not cause failure. Since DOE techniques help determine the best design
concepts used for tolerance design, a robust DOE strategy helps create a design that
improves the product parameters, process parameters, and desired performance
characteristics.
A product or process is controlled by three primary factors: noise, signal, and control.
To learn more about each, roll over each label in the diagram below.
1031
Moving Needs Through Design
Concept: Moving Needs Through Design
The voice of the customer (VOC) describes the customers needs. VOC helps to align
design and improvement efforts, identify areas to enhance, identify critical features
and identify key drivers of customer satisfaction. VOC occurs throughout DFSS by
using the needs established during Define to focus the development process through
delivery.
Customers typically state their needs in common language, but designers must
transform the requirements into precise, technical terms and requirements in order to
meet the customers needs.
After defining the VOC, designers need to create critical-to-quality (CTQ)
requirements. To develop the CTQs, designers do the following:
1.
2.
3.
Select several quality characteristics for each customer need

Develop measures to quantify each need
Set targets and specifications to exceed the competition
Designers convert the CTQs into the functional requirements (FRs) that serve as a
transition between the CTQs and the critical-to-process (CTP) features documented at
the process level. The process of transforming the VOC into CTPs is required to
ensure robustness. Functional robustness is the ability to withstand variation in input
conditions and still achieve desired performance capabilities and produce the desired
result at the lowest possible cost.
1032
Functional Requirements
Concept: Functional Requirements
Customers only like surprises when requirements are exceeded. Otherwise, customers
are disappointed or disgruntled.
Functional requirements (FRs) are the requirement the product or process must
possess to satisfy the customers requirements. The FRs need to be understood early in
the design process in order to establish criteria for selecting a design based on the
quality level and development costs that enable the product to survive in a competitive
marketplace. Along with establishing the functional requirement early in the process,
the FRs must yield accurate information. Misinformation about the FRs can delay the
development cycle.
Therefore, to meet the objective of their business strategy, the customers business
requirements serve as the foundation of the VOC. The customer's requirements must
transition into quality characteristics, target values and measurement techniques. Thus
detailed requirements and specifications are developed, and constraints involved in the
product or process are identified.
Examples of Functional Requirement
Car must average 35 miles/gallon

(highway driving).
Manual must be written in active

voice.
A warning signal must activate when

the temperature exceeds 30oC.
Inside diameter must be 0.2500

inches.
Benefits of Functional Requirements

Promotes partnership with the
customer
Establishes a baseline for
requirements
Emphasizes quality to reduce rework
Increases time efficiency by reducing
implementation of unnecessary items
Reduces maintenance
Increases reliability
1033
Robustness and Cost
Concept: Robustness and Cost
Customers always have expectations of the product or process. Since satisfactory

performance depends on the interdependencies of different components, the product
with components within tolerance intervals may not satisfactorily perform.
For example, if the car doors size is near its upper tolerance limit and the size of the
doorframe is near its lower tolerance limit, the door may not close properly. A product
performs best when all product parameters are at their ideal values.
A large number of product failures and the resulting cost of poor quality (COPQ) are a
result of neglecting uncontrollable factors causing variation during the early design
stages. Robust design involves deciding the best values for the controllable factors in
the presence of the uncontrollable factors. Therefore, a robust design is less sensitive
to variation due to the uncontrollable factors.
Process and product design largely determine both the products cost and variations.
Increasing process controls can reduce variations, but these controls may be costly.
Therefore, designers focusing on reducing both variations and the need for process
controls will reduce costs.
1034
Noise Factors
Concept: Noise Factors
Noise factors are all the uncontrolled sources producing variation throughout the
products life and across production units, except variables in design parameters.
There are two types of noise factors: external and internal. External noise sources are
variables that are external to the product affecting its performance. Internal noise
sources are the products deviations from its nominal settings, including
worker/machine and environmental conditions.
In baking, the use of sugar, butter, eggs, milk, and flour are controllable factors,
whereas the conditions inside the oven such as humidity and temperature are not
controllable. Motor vehicle tires encounter external noise through exposure to a
variety of conditions such as surface conditions due to weather (damp, wet, snow, ice),
different temperature, and different road types (concrete, asphalt, gravel, dirt, and off
road). The ability of tires to provide a smooth ride and responsive stopping regardless
of the conditions is an example of robustness. For more examples of noise factors, roll
over Page Resources, and click Noise Examples.
1035
Noise Examples
Six Sigma Black Belt | Design for Six Sigma | Robust Design and Process | Noise Factors
Example: Noise Examples
Examples of Noise Factors
General
Weather
Temperature
Humidity
Raw Materials
Material constraints
Moisture content
Mechanical
Machine type
Machine age
Electronics
Motor interfaces
Electrical isolation
Circuit board
fabrication
Vibration
Shift
Operator
Operating
Environment
Use
Supplier
Date produced
Material properties
Lot number
Cleanliness
Machine number
Tool wear
Tool design
Circuit board thickness

Wait time
Material thickness
Oxidation
Component density
Water temperature
Component type
1036
Controlling Noise Factors
Concept: Controlling Noise Factors
Noise factors are difficult, expensive, or impossible to control. In the past, many
engineers approached noise problems by attempting to control the noise factors
themselves. Because of the expense, Dr. Taguchi suggests designers should only use
this type of control action as a last resort, and he recommends an experimental
approach to seek the design parameters to minimize the impact of the noise factors on
variation.
This approach drives the designer to select the appropriate control settings that will
make the product unaffected by noise factors, thus robust. Remember, the goal of
robustness strategies is to achieve a given target with minimal variation.
Lack of robustness is synonymous with excessive variation, resulting in quality loss.
Ignoring noise factors during the early design stages can result in product failures and
unanticipated costs; therefore addressing noise factors early in the process through
robust design minimizes these problems.
1037
Control Methodology
Concept: Control Methodology
To layout a robust design strategy, the product development team must first identify
the inputs, outputs, cost-effective controllable factors and uncontrollable factors. Then
designers use well-planned experimental design to gather data for analysis to provide
valid and objective information about the design.
Well-planned experimental design maximizes the amount of information obtained for
a given amount of effort. DOE, previously covered in the Improve lesson, is an
efficient procedure for planning experiments to obtain data for analysis for yielding
valid and objective information.
1038
DFSS and Orthogonality
Concept: DFSS and Orthogonality
The goal of setting noise factors is to simulate worst-case conditions that could occur.
Once the design team identifies the ideal function and corresponding noise and control
factors, the team begins to develop the experimental plan. Traditionally, if an
experiments involves 5 control factors and 3 noise factors using an 8-run design and a
4-run experiment, 32 trials are required.
As you have learned in the lmprove lesson of this course, Taguchis approach uses
orthogonality, an approach studying each factor independently. To accomplish this,
the plan consists of two orthogonal arrays the inner array and the outer array. The
inner array consists of control factors and the outer array consists of noise and signal
factors. To summarize the orthogonal array information from the Improve lesson, the
matrix for each the three noise factors allows the designer to use a 2-factor noise
interaction.
Thus, the designer runs all noise factors against each control factor, and then analyzes
the data by computing the signal-to-noise ratio to summarize the results at each
control factor setting.
Another way for determining the effects of noise factors involves performing the
experiment with the best combination and the worst combination of noise level
settings. By making the product or process perform robustly at these two extremes,
then the process will be robust at any combination of noise factor settings in between.
1039
Tolerance
Concept: Tolerance
Tolerance is a permissible limit of variation in a parameter's dimension or value.

Dimensions and parameters may vary within certain limits without significantly
affecting the equipments function. Designers specify tolerances with a target and
specification limits (upper and lower) to meet customer requirements. The tolerance
range, the difference between those limits, is the permissible limit of variation.
Systems are made of components, and components are made of materials.
Realistically, not all components are made of the same materials. Designers must
determine the tolerances for all system components.
Different methods exist for determining tolerance specifications; a conventional
method depends on the designers experience and perception, and a loss function
method is based on the COPQ.
1040
Statistical Tolerance
Concept: Statistical Tolerance
Parts work together, fit into one another, interact together and bond together. Since
each part has its own tolerance, statistical tolerance is a way to determine the tolerance
of an assembly of parts.
By using sample data from the process, statistical tolerance defines the amount of
variance in the process. Statistical tolerance is based on the relationship between the
variances of independent causes and the variance of the overall results. Tolerence
intervals were also covered in the Point and Interval Estimation section of the Analyze
Lesson.
Example: Given a 12-piece sample from a process with a mean of 14.591 and a
standard deviation of 0.025, find the tolerance interval so that there is a 0.95
confidence that it will contain 99% of the population. From the table, K = 4.150.
1041
Stack Tolerance
Concept: Stack Tolerance
Sometimes parts are stacked together. Depending on the application, the parts may be
the same or quite different. In these cases, tolerance levels must be determined for the
entire stack.
Sum the minimal heights for the lower tolerance limit.
Sum the maximum heights for the upper tolerance limit.

Assuming the processes producing each part are capable and within normal
distribution, the tolerances of the parts are not additive, but are instead related to the
variance.
1042
Statistical Tolerancing
Concept: Statistical Tolerancing
According to Thomas Pyzdek in The Six Sigma Handbook,

"
Engineering tolerances are usually set without knowing which manufacturing process
will be used to manufacture the part, so the actual variances are not known. However,
a worst case scenario would be where the process was just barely able to meet the
engineering requirement. This situation occurs when the engineering tolerance is 6
standard deviations wide ( 3 standard deviations). Thus, we can write the equation as:
"
"In other words," Pyzdek asserts, "instead of simple addition of tolerances, the squares
of the tolerances are added to determine the square of the tolerance for the overall
result." Pyzdek goes on to say, "The result of the statistical approach is a dramatic
increase in the allowable tolerances for the individual piece parts." This is an
important concept in terms of tolerance because now the parts can have a greater
tolerance for each part. An example is provided on the next page.
1043
Statistical Tolerancing Example
Concept: Statistical Tolerancing Example
The following example is taken from The Six Sigma Handbook by Thomas Pyzdek.
Consider a shaft and bearing assembly where the shaft is specified to be 0.997 0.001
and the bearing is specified to be 1.000 0.0001. In this example, the minimum
clearance between the two is 0.001 inches and the maximum clearance is 0.005 inches.
Pyzdek notes:
"
Thus, the assembly tolerance can be computed as:
Tassembly = 0.005" - 0.001" = 0.004"
The statistical tolerancing approach is used here in the same way as it was used above.
Namely,
If we assume equal tolerances for the bearing and the shaft to tolerance for each
becomes:
Which nearly triples the tolerances for each part.

"
1044
Statistical Tolerancing Assumptions
Concept: Statistical Tolerancing Assumptions
In concluding the discussion of statistical tolerancing, Pyzdek uses the following

assumptions from the formula used on the previous page:
"
The component dimensions are independent and the components are assembled
randomly. This assumption is usually met in practice.
Each component dimension should be approximately normally distributed.
The actual average for each component is equal to the nominal value stated in the
specification.
"
1045
Tolerance Design
Concept: Tolerance Design
Tolerance design establishes metrics allowing designers to identify the tolerances that
can be loosened or tightened to meet customer needs while producing a cost-effective
product. Tolerance design goes a step beyond parameter design by considering
tolerance decisions as economic decisions just as spending additional money buys
better materials or equipment. Besides economics, tolerance design also considers
other factors such as constraints due to materials properties, engineering design
choice and safety factors.
By enhancing the understanding of the relationship between product parameters,
process parameters, and desired performance characteristics, designers use DOE to
identify what is significant and move the process or product to the ideal function.
The following formulas are important in tolerance design:
Tolerance Specifications
Functional Limit
Need functional limit and the

safety limit to calculate
DOE establishes upper and lower
functional limits
Economic Safety Factor
Taguchi uses the point where th

product fails 50% of the time (L
50)
1046
Tolerance Design Example
Concept: Tolerance Design Example
The following tolerance design problem involves the power supply to televisions.
Functional limits at +/- 25% of output voltage
The average quality loss (A0) after shipping a bad TV = $300
In-house power supply adjustment before shipping = $1.00
1047
Tolerance Design and Process Capability
Concept: Tolerance Design and Process Capability
Customers always have requirements. To meet those requirements, we assign products

and processes certain specifications and a target. As the products deviate from the
target, quality losses grow. Functional requirements (FRs) are the requirement the
product or process must have to satisfy the customer. Tolerance is a permissible limit
of variation in a dimension or value of the parameter.
Linking tolerance and process capability is about linking functional requirements and
tolerances to the economic safety factor. Three situations are forthcoming:
nominal-is-best, smaller-is-better, and larger-is-better.
Nominal-is-Best and
Smaller-is-Better
A manufacturer of doors received 2 formulas

a special order from a major
builder for 40 inches doors. The
functional limits for the door
order are +/- 0.5 inches. The
economic loss due to a poor door
is $45, and the average
manufacturing cost is $8.
Determine the tolerance for the
order to satisfy the economic
safety factor.
Larger-is-Better
The wire used to hold ceiling
planters has a cross-sectional area
of 0.5 in2. The wire is supposed
to hold at least 30 pounds of
plants. The cost of producing the
wire is $3 while the failure cost
of the wire is $100.
Determine the tolerance needed
for the wire required to satisfy the
economic safety factor.
To satisfy the economical safety

factor, the customer should
receive doors with a tolerance of
40 inches +/- 0.211.
To satisfy the economic safety

factor, the wire should be 5.77
times the functional limit (30 lbs.)
or 173.1 lbs.
1048

Failure Mode Effects Analysis
Learning Objectives
Six Sigma Black Belt | Design for Six Sigma | Failure Mode Effects Analysis
At the end of this DFSS topic, all learners will be able to:
understand the terminology, purpose, and use of scale criteria (including risk
priority number (RPN)) for failure mode and effects analysis (FMEA) and apply
to processes, products or services.
understand the distinction between and interpret data associated with design
FMEA (DFMEA) and process FMEA (PFMEA).
1050
Purpose
Concept: Purpose
Both customer satisfaction and dissatisfaction are keys to identifying

critical-to-quality (CTQ) characteristics. CTQ are the select few, measurable key
characteristics of a specific product, process, service, or transaction that must be in
statistical control to guarantee customer satisfaction. As QFD is a vehicle for
identifying key elements driving customer satisfaction, failure modes and effects
analysis (FMEA) is an up-front process for reducing the impact on customer
dissatisfiers.
As a cost-efficient safety and reliability improvement tool used during product
development, FMEA is a systematic group of activities intended to:
document the process.
recognize and evaluate a failure and the effects that failure has on the system.
identify actions that could eliminate the failure, reduce the probability the failure
occurs, or reduce the criticality of the failure on the system or its users.
First used by the U.S. military in the 1940s and then by industry in the 1960s, FMEA
is a systematic problem-prevention tool. FMEA helps quality professionals find the
potential critical failures of a system and then eliminate or control them. A critical
failure is any failure affecting user safety or causing a total system shutdown. While it
is impossible to eliminate all possible failures, the FMEA process provides an
opportunity to consider and document all the failures that are most damaging to a
system or to its users safety.
1051
Overview
Task: Overview
FMEA consists of three processes: identify, prioritize, and focus. By identifying

critical product characteristics and process variables, the team is able to prioritize
product and process deficiencies to focus on prevention of the most significant product
and process problems.
Click each item below to learn more.
Benefits
Ranks possible failures by their effect on the customer
Prioritizes deficiencies to focus improvement efforts
Documents information about risks of failure and risk reduction
Emphasizes prevention
Reduces product development time and cost
Improves reliability and quality
Reduces the amount of rework, repair and scrap
Stimulates team discussion

Use When
Identifying possible failures
Designing/redesigning a process, product or service
Evaluating a product for robustness (functionality, producibility, reliability)
Identifying causes during early stages of defect reduction efforts
Identifying key process/product parameters and evaluating methods for

controlling them
Considering a change to the products/processs design, application,

environment, material, manufacturing or assembly process
Following a team brainstorm about the problem

Input Sources
Customer requirements
Design specifications
DOE
Failure and rework data
Prior FMEAs
Warranty, rework and service data
For DFMEA, the product or service; for PFMEA, the process
1052
Overview
Task: Overview
Quality Tools with FMEA

Other tools to gather information or ideas for the FMEA process:
Fishbone diagrams
Histograms
Pareto charts
Process decision program charts
Process maps
Run charts
Tree diagrams
Checklists
Brainstorming
Affinity diagrams
Scatter diagrams
Statistical analysis
Expected Results
Learn to identify critical product/process parameters
Achieve consensus on solutions and methods of implementation
Understand detailed product/process

Types of FMEA
Covered in Body of Knowledge:
Design FMEA - To improve system design
Process FMEA - To improve the manufacturing process

Others not in Body of Knowledge:
System FMEA - To improve linking multiple processes
Functional FMEA - To improve performance
Defect FMEA - To identify root causes of defects
1053
Risk Priority Number
Concept: Risk Priority Number
Before returning to the individual types of FMEA, one must also understand a tool
within FMEA. Risk priority number (RPN) is the dimensionless index used to rank
and evaluate the combined degree of severity, frequency of occurrence, and the ability
to detect specific defects.
Generated by multiplying the severity, occurrence, and detection for each defect, the
RPN statistic reduces the number of possible failures to investigate. To help the team
narrow its focus on possible root causes, address the failures with the highest RPN and
any failure with a severity ranking of 10.
User Tips
Think of RPN as a risk factor

The higher the RPN value, the higher the risk
In the sample below, consider the scoring criteria as a suggestion rather than absolute.
Also, note that the detection scale is the reverse of the severity and occurrence scales.
1054
Design FMEA
Task: Design FMEA
A vital part of the up-front engineering disciplines, design failure mode and effects
analysis (DFMEA) is a proactive approach documenting weaknesses in product
design that may cause system failures while a product is in service, thus eliminating
unsafe conditions that might result from a failure. Click each topic to learn more.
Benefits
Completed when designing new products or changing existing products, DFMEA:
helps identify potential product failure modes early in the product development
cycle.
identifies characteristics requiring special controls as well as highlighting areas of

improvement.
increases the likelihood that all potential failure modes and their effects on
assemblies will be considered.
assists in evaluating product design requirements and test methods.
establishes a priority for design improvement.
documents the rationale behind design changes and helps guide future
development projects.
improves system safety by eliminating unsafe conditions that might result from a
failure.
Teams
Beginning its investigation by identifying the lowest system level for analysis,
cross-functional teams, including representation from all engineering functions, should
complete the following tasks:
Analyze product design
Recommend design changes
Follow through on recommended actions

The engineering functions may include, but are not limited to:
Reliability
Product design
Quality
Manufacturing
Test
Field service
Logistics
Improvement
DFMEA often leads to design changes that improve a products reliability in one of
two ways:
A reduction in the failure rate during useful life
An increase in the duration of useful life through elimination of an early wear-out

failure mode
1055
Design FMEA
Task: Design FMEA
Worksheet
To see a sample DFMEA worksheet, roll over Page Resources, and then click
DFMEA Worksheet.
1056
DFMEA Worksheet
Six Sigma Black Belt | Design for Six Sigma | Failure Mode Effects Analysis | Design FMEA
Resources: DFMEA Worksheet
1057
Process FMEA
Task: Process FMEA
Process failure mode and effects analysis (PFMEA) is a proactive approach to

identify potential process deficiencies early in the process planning cycle. This enables
engineers to focus on controls that reduce nonconforming product and increase
detection capability well before production begins. It also provides an organized,
systematic approach to process change and helps prioritize process improvement
actions. Click each topic to learn more.
Benefits
Helps analyze products and processes to reduce the occurrence and improve the
detection of defects
Assists in the development of process control plans
Establishes a priority for improvement activities
Documents the rationale behind process changes
Guides future process improvement plans
Helps identify potential Six Sigma projects

Compared to DFMEA
Similarities to DFMEA:
Uses cross-functional teams
Follows same general steps
Uses similar worksheet

Differences from DFMEA:
PFMEA does not rely on product design changes to overcome process

weaknesses
Team must consider design characteristics relative to the manufacturing process

to ensure that the product meets expectations
Worksheet
To see a PFMEA worksheet, roll over Page Resources, and then click PFMEA
Worksheet.
1058
PFMEA Worksheet
Six Sigma Black Belt | Design for Six Sigma | Failure Mode Effects Analysis | Process FMEA
Concept: PFMEA Worksheet
1059
Procedure and Tips
Concept: Procedure and Tips
Procedure
The FMEA team begins by identifying the lowest system level for analysis (e.g. parts
or components). After selecting the appropriate system level, the team completes the
following steps:
1.
2.
3.
Identify the design/process/service and construct a process map.

Identify the potential failures.
For each failure, identify the possible consequences/effects.
a.
4.
For each consequence, assign a level of severity (S).

a.
b.
5.
6.
8.
Use a 1-to-10 scoring scale.

Insignificant = 1, Catastrophic = 10
For each failure, determine the potential root causes by listing all the possible
causes.
For each cause, determine the occurrence rating (O).
a.
b.
7.
Failure Effects The outcome of the failure modes occurrence on the

process (identifying the impact on the customers experience).
Use 1-to-10 scoring scale.

Extremely unlikely = 1, Inevitable = 10
For each cause, identify the current process control: the tests and/or procedures
reducing the possibility of the failure reaching the customer.
For each process control, assign a detection rating (D).
a.
b.
Use a 1-to-10 scoring scale.

Most certain to detect = 1, Most certain not to detect = 10
9.
10.
11.
12.
Calculate the risk priority number (RPN) by multiplying S x O x D.

Calculate criticality by multiplying S x O.
Prioritize by RPN and criticality by sorting the RPN column.
Develop a corrective action plan based on the causes found and determine actions
to minimize the effect of each cause.
13. Implement corrective actions and reevaluate risk.
14. Repeat the analysis until all potential failures pose an acceptable risk level.
15. Document all changes and results.
User Tips
Helpful until during the Define Phase in DMADV and both the Define and
Improve Phases in DMAIC.
Creating FMEA results requires disciplined cause-and-effect thinking.
Use the broad knowledge within a cross-functional team to correctly assess the
risk.
Use flowchart and process maps to identify the system to be analyzed.
SIPOC (Suppliers-Inputs-Process-Outputs-Customers) analysis can be helpful.
Document the known cause-and-effect relationships in a fishbone diagram before
starting FMEA analysis.
Use the scoring guidelines table as a ratings guide.
1060
Procedure and Tips
Concept: Procedure and Tips
Criticality and RPN calculations provide guidance for rank ordering potential
failures.
The higher the RPN, the more urgent the necessary improvement.
The detection level in a PFMEA must be determined for the process step at hand;
thus not based on the end of the process or any other step.
The same failure mode, the same effect and the same cause can occur more than
once over different process steps. More specifically, the same cause can occur
more than once with different effects within the same failure mode. Therefore, do
not duplicate their severity, occurrence and detection ratings because each rating
is independent of every other rating.
1061
FMEA Exercise
Concept: FMEA Exercise
Given the information on the chart, rank the failures associated with obtaining the
wrong part in order (from highest to lowest) by RPN. To check your answer, roll over
Page Resources, and then click FMEA Answer.
1062
FMEA Answer
Six Sigma Black Belt | Design for Six Sigma | Failure Mode Effects Analysis | FMEA Exercise
Example: FMEA Answer
Answer
1.
2.
3.
4.
5.
6.
Fails test (400)

Cant build parts: Supplier error (192)
Defective parts shipped: Inadequate test procedure (160)
Cant build parts: Supplier error (128)
Defective parts shipped: Wrong parameter (80)
Defective parts shipped: Test malfunction (40)
1063

Design for X
Learning Objectives
Six Sigma Black Belt | Design for Six Sigma | Design for X
At the end of this DFSS topic, all learners will be able to understand design constraints
such as design for cost, design for manufacturability and producibility, design for test
and design for maintainability.
1065
DFX Introduction
Concept: DFX Introduction
Design for X (DFX) is an approach for designing products and services that meet
customer requirements. As a cross-functional team design activity involving
manufacturing, distribution and service organizations, DFX strategy reviews design
continually to find ways to improve product. For instance, when considering
serviceability, maintenance and service personnel are involved to note their
requirements and concerns. Due to its use of cross-functional teams and the nature of
continual review, DFX is needed within concurrent engineering (simultaneous
engineering) as an approach to improve new product development where the product
and associated processes develop in parallel.
1066
Concepts for DFX
Task: Concepts for DFX
The DFX toolbox contains numerous techniques for addressing product and process
design. Although importance varies from industry to industry and from product to
product, each technique has many applications. Click each to learn more.
Design for Cost
Also called value engineering
Designers must consider price limitations

Design for Manufacturability
Goal: To design products and processes in such a way that they result in fewer
problems during manufacturing.
Emphasize robustness rather than ideal performance
Reduce the probability of mistakes by reducing complexity
Design preventative mechanisms for likely errors
Reduce the number of parts
Reduce the number of manufacturing operations
1067
Concepts for DFX
Design for Assembly
Simplify the product into fewer parts
Make the product easy to assemble
Reduce service, decrease time to market, and reduce repair time

Sometimes Design for Manufacturability and Design for Assembly are combined
(DFM/A).
Benefits of Integrating DFM and DFA
Simpler designs
Fewer parts
Reduced assembly time
Reduced production cost
Fewer errors
Fewer suppliers
Easier to test and maintain

Design for Producibility
Goal: By influencing design and concurrent engineering, DFP is a key metric of the
success of product design.
Identifies the needs of innovative manufacturing
Ensures proposed process will satisfy design requirement
Decreases cost
Reduces concept-to-build cycle times
Reduces risk
Design for Test
Important during development, production, and use
Makes access points easily assessable
Creates built-in test points
Uses standard connections and interfaces
Tests with standard equipment
Develops a build-in self test
1068
Concepts for DFX
Design for Maintainability (Serviceability)
Important to the customer
Designs easy service
Makes access points simple, yet secure
Assures reliability of individual components
Balances reliability and cost with the products intended use and life
Reduces downtime for maintenance
Reduces the number of maintenance tasks
When applicable, uses disposable parts instead of parts requiring repair
Eliminates or reduces the need for adjustment
Uses mistake-proof fasteners and connectors

Design for Safety
Eliminates potential failure elements that may occur during operation
Emphasizes safety throughout the product life: safe to manufacture, safe to sell,
safe to use, and safe to dispose
Others
Design for user friendliness
Design for ergonomics
Design for appearance
Design for packaging
Design for features
Design for time to market
Design for environment
1069
Reliability
Task: Reliability
Failure is a real and important concept whether it is software, sensitive medical

equipment, a complex machine for an industrial process, or a household toaster. How
long will the product work? How many failures will occur within so-many years?
How do different environmental conditions affect performance?
Since successful performance is important to customers, producers must have a useful
method for determining the probability of the product's ability to perform successfully
for a specified time under specified conditions. Within the engineering field, reliability
is the probability that a product will perform as stated, under specified operating
conditions, for a given time period. This definition contains four concepts: probability,
successful performance, operating conditions, and time. Click each below to learn
more.
Probability
The chances that something will happen
A calculated, numerical value
Previously covered probability theory provides the mathematical foundation

Successful Performance
A specifically defined set of criteria for goodness or failure
A unit's conditions for each must be clearly defined; failure could mean total
inoperativeness or diminished performance
To calculate reliability, a product (or unit) exists in 1 of 2 states: successful

performance or failure
Operating Conditions
Operating conditions specify the environmental and use limits for operating the
unit (Ex.) This medicine must be stored in a dry room between 56 oF and 87 oF.
Customers have a responsibility to use a unit within these limits, but this is by no
means a guarantee
Product designers must anticipate and design for stress conditions above those
proper use conditions
Time
Within the context of reliability, the time period involved must be specified
Times could be hours, years, miles, cycles, or some other measure tied to
duration or amount of use
1070
Bathtub Curve Introduction
Concept: Bathtub Curve Introduction
Before examining each distribution, it is important to understand how the pattern of

product failure can change with time. The bathtub curve, so named for its distinctive
shape, is the model used to describe failure patterns of a population over the entire life
of the product. The bathtub curve is a plot of failure rate vs. time and shows how fast
product failures are taking place and if the failure rate is increasing, decreasing or
staying the same. The curve is divided into three regions, as seen in the illustration
below.
The bathtub curve is not a perfect model. The graph is not in proportion and was never
intended to show the exact shape of the ends of the curve. The left and right ends of
the bathtub curve show only the general trends of the population failure rate as the
product ages. However, it is useful for describing failure patterns for a population of
well-designed, mature products. In addition, because each proportion of the bathtub
curve has a corresponding distribution that provides the appropriate failure rate
change, the bathtub curve often determines the distribution selected for a reliability
analysis.
Given the connection between distributions and the bathtub curve, the discussion to
follow is framed in terms of the three bathtub curve regions. For ease of explanation, it
begins with the wearout period and proceeds to the left.
Test your understanding of the bathtub curve, roll over Page Resources, and click
Test.
1071
Test
Six Sigma Black Belt | Design for Six Sigma | Design for X | Bathtub Curve Introduction
Fact: Test
Test your understanding of the bathtub curve, by dragging each label on the left to the
appropriate box representing each region on the right.
1072
Wearout Period Normal Distribution
Concept: Wearout Period Normal Distribution
The right side of the bathtub curve has an increasing failure rate, signifying that:
probability of failure is increasing.
age is a factor in the probability of failure.

This makes sense, as most items become more likely to fail with age due to
accumulated wear.
The normal distribution can be used to model a products times to failure in the
wearout period. This is because the normal distribution has an increasing failure rate
corresponding with that of the wearout period. Both are shown below.
Rollover Page Resources, and then click Reliability Calculations to see how to
calculate reliability using the normal distribution.
1073
Reliability Calculations
Six Sigma Black Belt | Design for Six Sigma | Design for X | Wearout Period Normal Distribution
Fact: Reliability Calculations
To calculate reliability using the normal distribution, you must know or be able to
estimate the mean and the standard deviation.
Use the normal distribution to calculate a products reliability. The reliability itself is
found in normal probability tables. In order to use the tables, it is necessary to use the
translation equation (z):
The beginning of the wearout region is often assumed to be 3.5 to 4.5 standard
deviations to the left of the mean. The exact figure is determined by the amount of
wearout failure risk that product designers are willing to assume.
1074
Useful Life Period - Exponential Distribution
Concept: Useful Life Period - Exponential Distribution
The useful life period (center of the bathtub curve) has several distinct characteristics:
Period of intended product use
Customer use is the highest
Most reliability calculations and predictions done
Constant failure rate
Age of the product does not affect the probability of failure
Low failure rate if reliability is high
Exponential distribution can be used to model a products times to failure

The exponential distribution has a constant failure rate, corresponding with that of
the useful life period as seen in the illustration below. To view the mathematical
formulas in detail roll over Page Resources, and click Formulas.
1075
Formulas
Six Sigma Black Belt | Design for Six Sigma | Design for X | Useful Life Period - Exponential Distribution
Fact: Formulas
The mean of the exponential distribution is symbolized by Theta (). If a product can
be repaired, is referred to as the mean time between failures (MTBF). If a product
cannot be repaired, is referred to as the mean time to failure (MTTF). The mean of
the exponential distribution is an indicator of reliability during the useful life region of
the bathtub curve and should not be confused with the end of useful life or the
beginning of wearout. For reliability to be high, the MTBF (MTTF) must be high
compared to the mission time.
The formula for the exponential distribution is:
1076
Early Life Period
Concept: Early Life Period
The final portion of the bathtub curve, that which is furthest to the left shows a
decreasing failure rate. Failures during this period are referred to as early life failures.
Systems in this phase of lifecycle are deemed unsuitable for routine operation or
delivery to customers. The failures are caused by nonconformities introduced into a
product by the production process.
Common sources of early life failures include:
Inadequate materials
Improper use
Handling damage
Over-stressed components
Improper setup or installation
Power surges
The early life period is sometimes called the burn-in period. Roll over Page
Resources, and click Burn-In to reveal more details.Even though virtually all new
products experience early life failures, the failures are generally not used to make
reliability predictions.
1077
Burn-In
Six Sigma Black Belt | Design for Six Sigma | Design for X | Early Life Period
Fact: Burn-In
Burn-in refers to the practice of running the system under conditions that simulate an
operating environment for a period of time sufficient to allow the failure rate to
stabilize. For many types of product, burn-in is performed at normal operating
conditions. For others, burn-in is performed at higher-than-normal stress levels such as
increased temperatures, vibration levels, etc.
During burn-in, many of the units containing nonconformities fail and are removed
from the population. This improves the reliability of units delivered to the customer
and reduces the likelihood that a unit will fail in customer hands because of an early
life cause. Unfortunately, the burn-in approach to ensuring high reliability is also very
costly and can be less than 100% effective.
1078
Reliability Indicators
Concept: Reliability Indicators
Mean time to failure (MTTF), mean time to repair (MTTR), and mean time between
failures (MTBF) are indicators of a unit's reliability. While none of these measure
useful life length (they measure reliability during life), MTTF and MTBF differ by
being a measure of reliability for nonrepairable and repairable units respectively. The
greater the MTTF and MTBF, the less likely a unit is to fail and the higher the
reliability. MTTR is the total corrective maintenance time divided by the total number
of corrective maintenance actions during a given period. MTTR is the average time it
takes to do a repair (corrective maintenance) once a unit has failed.
1079

Special Design Tools
Learning Objectives
Six Sigma Black Belt | Design for Six Sigma | Special Design Tools
At the end of this DFSS topic, all learners will be able to understand the concept of
special design tools such as the theory of inventive problem-solving (TRIZ) and
axiomatic design (conceptual structure robustness).
1081
TRIZ
Concept: TRIZ
This course previously covered the importance and benefits of using Taguchi Methods
for performing robust design. TRIZ and axiomatic design (AD) are tworelatively new
approaches to enhancing robust design. Both approaches aid the design
decision-making and problem-solving processes during the Design phase of DMADV.
TRIZ is an acronym for the Russian phrase Teorija Rezbenija Izobretaltelshih Zadach,
meaning theory of inventive problem solving. Genrich Altshuller (1926-1998), a
Russian mechanical engineer, created TRIZ as a set of problem-solving design tools
and techniques. After studying over 400,000 patents looking for inventive
problem-solving methods, Altshuller noticed patterns across different industries.
Traditionally, inventive problem-solving is linked to psychology; however, TRIZ is
based on a systematic view of the technological world.Altshuller realized that people,
including specialists, have difficulty thinking outside of their field of reference. Given
a problem (P) within their specialty, many people will only limit their search for a
solution (S) to their area of specialty.
What happens if the known solution to the problem could be found in another
knowledge area? For an example of a solution found in a seemingly unrelated area,
roll over Page Resources, and click Diamonds.
1082
Diamonds
Six Sigma Black Belt | Design for Six Sigma | Special Design Tools | TRIZ
Example: Diamonds
Traditional diamond-cutting methods cut diamonds along natural fractures, but often
result in new fractures that go undetected until using the diamond. Rather than
improving the existing process, cutters needed a new process. The key in establishing
the new method was a pressurized process in the food canning industry used to split
green peppers and remove the seeds. A similar technique applied to diamond cutting
resulted in cuts without additional damage.
1083
Solutions and Knowledge
Concept: Solutions and Knowledge
Altshuller classifies problems into two types: those with known solutions and those
with unknown solutions. Books, journals, subject matter experts and personal
knowledge provide answers to known solutions for 99% of problems.
Altshuller also classified solutions by levels of inventiveness. The concept of
employee creativity is often tied to breakthroughs: an improvement to unprecedented
levels of performance. Since breakthroughs comprise only 1% of solutions, TRIZ
helps designers avoid the trial-and-error approach and guides them to a better design
because 99% of the problems have been solved somewhere before.
1084
Parameters and Principles
Concept: Parameters and Principles
The ideal solution is one with only benefits and no harmful or negative effects.
Unfortunately, problem-solvers often resort to trade-offs and compromise, thus not
achieving the ideal solution. An inventive problem is a problem in which the solutions
cause other problems to appear. For example, an increase in metals strength also
increases the weight. This solution creates a dilemna because the increased weight is a
negative outcome and not cost-effective.
Through his study of many patents, Altshuller identified 39 fundamental engineering
parameters and 40 inventive principles. His solution involved using contradictory
engineering parameters that created undesirable results to identify the inventive
principles to use for a solution.
1085
Table of Contradictions
Concept: Table of Contradictions
In order to help designers identify solutions, Altshuller also created a table of

contradictions. The table is a very large grid listing the 39 fundamental engineering
parameters along both axes. However, the y-axis is the feature to improve and the
x-axis is the undesirable result. The intersecting cells contain numbers corresponding
to the inventive principle to use for a solution.
For example, the conflicting engineering parameters for a beverage can are the length
of a moving object and stress. To improve the can wall thickness, the length of a
non-moving object is the feature to improve, and stress is the undesired effect. Finding
the intersection of these two parameters on the table identifies the appropriate
inventive principles; in this case 1, 14, and 35.
Closer examination within each of these principles could
change the shape of the wall (#1).
change the material used (#14).
change the method of welding the lid to the can (#35).
1086
TRIZ and DFSS
Concept: TRIZ and DFSS
By providing a methodology to think and look outside the box and avoiding
contradictions, TRIZ can help engineers, designers, developers, researchers and
quality professional solve problems and find new ideas leading to new product
development. Some links to DFSS and Six Sigma include:
Solving bottlenecks
Eliminating contradictions discovered in the House of Quality roof
Determining target values
Identifying potential failure modes
Lowering costs
Improving serviceability
1087
Axiomatic Design
Concept: Axiomatic Design
In order to transform inputs into outputs, axiomatic design (AD) is a series of activity
steps to analyze systematically the transformation of customer needs into functional
requirements, design parameters and process variables. Originally developed by Nam
Suh at MIT, AD helps designers understand and structure design problems by
facilitating the analysis and synthesis of design requirements, solutions and processes
in both manufacturing and nonmanufacturing environments.
AD identifies four domains within design: customer, functional, physical and process.
Designers create solution alternatives by mapping the requirements specified in a
domain to a set of characteristic parameters in an adjacent domain. The mapping
between the customer and functional domains is defined as concept design; the
mapping between functional and physical domains is product design; the mapping
between the physical and process domains corresponds to process design.
Identifying the customers needs and requirements also known as customer domain
serves as the ADs foundation. The functional domain consists of the requirements of
what the product must do to meet the customer requirements, while the physical
domain consists of the design parameters necessary to meet the functional
requirements. Thus, the process domain consists of the requirements to produce the
product to meet the physical domain.
1088
Axioms and Domain
Concept: Axioms and Domain
An axiom is a self-evident truth upon which other knowledge must rest, thus serveing
as a starting point for deducing other truths. In this sense, an axiom can be known
before knowing any of the other propositions.
Fundamental Axioms of Axiomatic Design
The functional requirements are independent of each other.
Good designs are less complex.

General Steps for Axiomatic Design
1.
2.
3.
4.
Establish design objectives.

Generate ideas for solutions.
Analyze the solutions alternatives.
Implement the selected design.
After converting the customer needs into functional requirements, the designer breaks
down the high-level functional requirements (FR) into lower-level FRs until
implementing the design. At the same time, the designer moves between adjacent
domains. This zigzag movement ultimately links the entire design.
1089
Lesson Summary

DFSS is a proactive methodology for integrating information from the voice of the
customer into a design process to produce a defect-free process/product for the
customer. The purpose of this lesson is to emphasize some of the primary DFSS tools.
QFD is a methodology for determining the VOC and using the information to
drive development.
The House of Quality is a QFD tool linking the customer to the technical
requirements. Moving the information through a series of matrices integrates the
customer needs into required processes and their controls.
Robust design is a series of tools and concepts aiming to reduce the effect of
noise so the design does not fail. Tolerance design links components, their
specifications, and their interdependence with other components.
FMEA is a proactive tool aimed at dissatisfiers by examining potential causes of

failure to prevent failure for the customer.
DFX addresses design by focusing on specific aspects of cost, manufacturing,

assembly, test, safety and maintainability.
Axiomatic design is another tool for transforming the customers needs

throughout the design process.
TRIZ provides a methodology for thinking outside the box to problem solve
during design.
1090
Lesson Bibliography

Bibliography
Certified Manager of Quality/Organizational Excellence. Milwaukee, WI: ASQ. 2005.
Certified Quality Engineer. Milwaukee, WI: ASQ. 2000.
Version 1 (an online course). Milwaukee, WI, 2006.
ASQ Statistics Division. Rudy Kittlitz, editor. Glossary and Tables for Statistical
Quality Control, 4th ed. Milwaukee, WI: ASQ Quality Press. 2005.
Benbow, Donald and T.M. Kubiak. The Certified Six Sigma Black Belt Handbook.
Statistical Methods. 2nd ed. Hoboken, NJ: John Wiley & Sons, Inc., 2003.
Taguchi, Genichi. Taguchi on Robust Technology Development. New York, NY:
ASME Press, 1993.
Tague, Nancy.The Quality Toolbox, 2nd ed. Milwaukee, WI: ASQ Quality Press, 2005.
1091

Next Steps
Post-Assessment
Six Sigma Black Belt | Next Steps

Introduction: Post-Assessment
Now that you have completed the web-based Six Sigma Black Belt certification
preparation course, the following learning option is available to you:
1.
2.
3.
Take the course post-assessment. Here are 150 questions from each section of the
ASQ Body of Knowledge. You may repeat this assessment as many times as
needed until you reach a passing score of 80%. The questions are in a randomized
bank of approximately 500; the assessment will pose different queries each time
you take it.
If you select an incorrect answer, you will receive feedback as to which course
topic/lesson covers that question.
Once you reach or exceed the passing score
1093
Practice Test

Introduction: Practice Test
Now that you have completed the web-based Six Sigma Black Belt certification
preparation course, the following learning option is available to you:
1.
2.
3.
Use the Practice Test to check your knowledge and continue your certification
exam preparation.
This test may be taken as many times as you choose. There are 150 randomized
questions from all of the topics/sections of the Body of Knowledge.
If you select an incorrect answer, you will receive feedback as to which course
topic/lesson addresses that question.
1094
Printer-friendly Version of Course

Summary: Printer-friendly Version of Course
Use the link below to generate an Adobe Acrobat file (PDF) of this entire course
(minus any interactivity) for you to print or save. There are approximately 1,000 pages
in this course so be sure you have an adequate paper supply.
Click here for a printer-friendly file.
1095
Course Evaluation

Introduction: Course Evaluation
As part of our internal process of continual improvement, we solicit feedback from all
students who take our web-based training. We invite you to complete the attached
course evaluation and share your appraisal with us.
Click the link below to open the Adobe Acrobat PDF file.
Use the Zoom feature to view this file at 100%.
Once you are done, select the email button to forward your critique to ASQ.
Click here to start the course evaluation.
We appreciate your feedback.

Thank you.
1096

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Six Sigma Black Belt

Six Sigma Black Belt

Six Sigma Black Belt | Introduction

Six Sigma Black Belt | Introduction

Welcome to the American Society for

Business process management

Design for Six Sigma

Six Sigma Black Belt | Introduction

Six Sigma Black Belt | Introduction

Six Sigma Black Belt

Six Sigma Black Belt | Enterprise-Wide Deployment

The nature of a Six Sigma project is enterprise-wide. Particularly for companies

Understand and distinguish interrelationships between business systems and

Understand leadership roles in the deployment of Six Sigma.

Understand key drivers for business.

Understand key metrics and scorecards.

Understand the origin of continuous improvement tools used in Six Sigma.

Six Sigma Black Belt | Enterprise-Wide Deployment

Six Sigma Black Belt

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

understand and distinguish interrelationships between business systems and

Why Use Six Sigma

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

Depending on whom you ask, Six Sigma may be referred to as a philosophy, a

Philosophy and Goals

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

The philosophy of Six Sigma goes beyond

Culture of the organization

Support systems for the tools

Business Systems and Processes

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

To understand a system, go no further than your computer. The personal computer

What is another example of a system in nature?

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

The Personal Computer

is made up of a monitor, keyboard, mouse, software and other hardware

which function together to allow the user to open email software

by executing the process of navigating and opening the program.

The process will be discussed next.

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

Process is defined by The American Heritage Dictionary as a series of actions,

Applying a Systems View to Business

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

Information Technology (IT)

Business Process View

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

A business process is a collection of related activities that produce something of value

New product/service development

Becoming familiar with cross-functional business processes greatly increases

Managing the Purpose

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

No business process can be effective unless its purpose is properly communicated to

Process Impact on the Organization

Six Sigma Black Belt | Enterprise-Wide Deployment | Enterprise View

Six Sigma Black Belt

Six Sigma Black Belt | Enterprise-Wide Deployment | Leadership

understand leadership roles in the deployment of Six Sigma (e.g., resources,

Six Sigma Black Belt | Enterprise-Wide Deployment | Leadership

Successfully implementing Six Sigma methodologies within an organization requires

Financial requirements (budgeting)

Specific people tied to the skills