Six Sigma Tools & Terms
Below are some common Six Sigma terms:
Affinity Diagram / Chart
An affinity diagram is a tool for organizing large quantities of information from many people. It is often used with brainstorming and other creative thinking activities. The ideas are usually written on sticky notes, then categorized into groupings of similar ideas. It sorts a large quantity of unorganized information into related categories. It encourages creative thinking, helps identify patterns in mountains of data and encourages people to work collaboratively. It will be used to analyze customer data that is based on comments rather than numerical ratings, sort out complex problems or issues, and organize opinions on any topic.
Cause and Effect Diagram (Fishbone/Ishikawa)
Brainstorming tool used for proposing root-causes (the “bones of the fish”) for a specific effect (the head of the fish). This can be used in combination with the Affinity Diagram to determine the major categories. Also commonly used in combination with the “5 Whys” technique in order to help people understand the root cause.
COPQ (Cost of Poor Quality)
Financial measures depicting the impact of problems (internal and external failures) in the process as it exists; includes labor and material costs for handoffs, rework, waste or scrap, inspection, and other non-value-adding activities.
Cpk or Cp (Process Capability)
Process capability or the degree to which a process can meet customer requirements. It is measured against an upper and/or lower specification limit representing the “extremes” of customer requirements/demands on the process. Values > 1 indicate a capable process, values < 1 indicate a process that is not meeting customer requirements
Decision-making tool used when potential choices must be weighted against whatever key factors (e.g., cost, ease to implement, impact on customer are most relevant).Encourages use of facts, data, and clear business objectives in the decision-making.
CTQ (Critical to Quality)
Refers to what customers consider important in any given process. Collecting Voice of the Customer data leads to the discovery of CTQs, which are translated into distinct requirements that can be measured.
Charter (Project Charter)
Team document defining the context, specifics, and plans of an improvement project; includes business case, problem and goal statements, constraints and assumptions, roles, preliminary plan, and scope. The charter is to be reviewed with the sponsor to ensure alignment and revised or refined periodically throughout the DMAIC process based on data.
Forms, tables, or worksheets that are set up ahead of time for people to use in data collection; it allows for collection of stratified data (e.g. number of complaints, billing adjustments, etc.) in a consistent way. Checksheets help standardize data collection by providing space where people should record data. They are mainly used to collect new data when no historic data is available.
Monitors variance in a process over time and alerts the business to unexpected variance which may cause defects.
DFSS (Design for Six Sigma)
DFSS is a systematic methodology utilizing tools, training and measurements to enable us to design products and processes that meet customer expectations and can be produced at Six Sigma quality levels.
DMAIC (Define, Measure, Analyze, Improve and Control)
DMAIC is a process for continued improvement. It is systematic, scientific and fact based. This closed-loop process eliminates unproductive steps, often focuses on new measurements, and applies technology for improvement.
DMADV (Define, Measure, Analyze, Design, and Verify)
Describes the application of SIX SIGMA tools for designing new products and processes. When to use DMADV:
– A product or process is not in existence and needs to be developed.
– The existing product of process exists and has been optimized, and still does not meet the level of customer specifications or Six Sigma level.
Dashboard (or Process Scorecards)
A graphical tool that provides a summary update on key indicators of process performance. It can include “alarms” to show if and when a key indicator is nearing a problem level. A dashboard is an evolutionary picture of a process; it changes over time based on what measures are appropriate for the current process.
Data Collection Plan
A structured approach to identifying the required data to be collected and the approach to collecting it; typically performed during the Measure phase of a DMAIC project. The Data Collection Plan includes: the measure, the measure type, data type, operational definition, and the sampling plan if new data is necessary.
DPMO (Defects per Million Opportunities)
Calculation used in Six Sigma initiatives to show how much “better” or “worse” a process is by indicating the amount of defects in a process per one million opportunities. The challenge of DPMO calculation often comes in agreeing on how many opportunities exist. It is often not a black and white decision. The best guideline is to count opportunities that directly affect the use of the final output. If the end customer does not care about it, it is not an opportunity.
Accounting for the number or frequency of defects that cause lapses in product or service quality.
Five Whys are often used to generate a cause and effect. It is the technique of asking “Why” five times in order to dig into each potential cause. “Why” is asked until the root cause is revealed. Additional questioning then becomes meaningless. 5 questions is just a reference point, at times it may take you 3, 10 or more to get to the root cause.
Force Field Analysis
A list of the factors that support and factors that “hurt” an idea; “restraining” factors are listed on one side of the page and “driving forces” listed on the other. Used to reinforce the strengths (positive ideas) and overcome the weaknesses or obstacles.
Frequency Plot or Histogram
Shows the shape or distribution of the data by showing how often different values occur. It summarizes data from a process and graphically represents the frequency distribution in bar form. It helps to answer the question: “Is the process capable of meeting customer requirements?”. It will be used to display large amounts of data that are often difficult to interpret.
A graphical representation of different projects plotted along two axes (Y = Impact, X = Effort). A project selection tool that allows comparison of dissimilar projects during the project selection process.
A graph of how customer satisfaction is effected by a particular problem, change, or other variable. The graph is divided into three regions of customer reactions to the variable: “Dissatisfiers”, “Satisfiers” and “Delighters”. This tool is intended to help DMAIC teams prioritize resources to focus on the most important customer requirements.
Moment of Truth
Any event or point in a process when the internal/external customer comes in contact with a process. At each of these points the customer has an opportunity to form an opinion (positive, neutral, or negative) about the process or organization.
It is a quantitative method relating multiple factors to the output of a process. The statistical study of the relationship of a combination of multiple variables (X1 X2 X3…Xn) to a single output Y. For example, timeliness of room service can be studied by quantifying staffing level, staff training, and room occupancy.
A narrowing or prioritization tool. Faced with a list of ideas, problems, causes, etc., each member of a group is given a set number of “votes”. Those items or issues receiving the most votes get further attention/consideration.
Pareto Diagram (or Chart)
Focuses on efforts or the problems that have the greatest potential for improvement by showing relative frequency and/or size in a descending bar graph. Based on the proven Pareto principle: 20% of the sources cause 80% of any problems. It is used to help a team focus on the specific causes or issues that will have the greatest impact if solved. It displays the relative importance of problems/issues in a simple, easy to interpret visual format.
Illustrated description of how things get done, which enables visualization of an entire process and identification of areas of strength and weaknesses. It helps reduce cycle time and defects while recognizing the value of individual contributions.
This member of the executive committee is a strong advocate of the project and can assist with barriers that may come up. He or she is accountable for the project’s success and can therefore explain to everyone in the organization the business rationale for the transfer project and assist with cross-functional collaboration efforts. He or she will remain up to date on key aspects of the project by regularly meeting with the team leader and members.
The project sponsor:
Is a member of the executive committee
Is accountable for project success
Addresses cross-functional or other barriers
Reviews and tracks progress with team leader
Advocates for necessary resources
A project management tool that identifies all required tasks or activities and what parties are involved in those tasks as well as their level or type of involvement. A RACI is used to ensure clarity on roles and responsibilities in a team environment. It alleviates problems and fosters a culture of accountability.
Letters In RACI stands for:
R Responsible : The person who performs the activity; the “doer”
A Accountable : The person with ultimate approval power; the “buck stops here”
C Consulted : A stakeholder who is involved prior to task completion; “in the loop”
I Informed : A stakeholder who is told of the outcome of the task or decision; the “keep in the picture”
ROI (Return on Investment)
A measure of the financial returns from an investment opportunity, expressed as a percentage. All else being equal, projects with a larger ROI are more attractive investment opportunities.
A method that allows each item or person chosen to be measured, to be selected completely by chance.
The statistical study of relationships. An analytical tool that allows an assessment of a key outcome and extent to which one or more factors being studied can explain the variation in results.
These are important considerations when setting up measurements. Repeatability means that: The same person taking a measurement on the same unit gets the same result. Reproducibility means that: Other people (or other instruments or labs) get the same result you get when measuring the same item or characteristic.
These plans are developed during the “Control” phase for DMAIC projects to ensure that the gains achieved can be maintained. As conditions change, a Response Plan helps monitor results and respond to problems, manage processes day-to-day, and help practice continuous improvement.
Root Cause Analysis
Study of the original reason for nonconformance with a process. When the root cause is removed or corrected, the nonconformance will be eliminated.
Collecting and using a portion of all of the data to draw conclusions. Sound conclusions can often be drawn from a relatively small amount of data. Sampling is done because collecting and looking at all the data may be too expensive or too time consuming.
Collecting an unrepresentative “slice” of data that will lead to inaccurate conclusions.
A SIPOC is a high-level process map that includes Suppliers, Inputs, Process, Outputs, and Customers. It defines the Start and end Points of a process. Quality is judged based on the output of a process. The quality of the output is improved by analyzing input and process variables. SIPOC is a very effective communications tool. It ensures that the team members are all viewing the process in the same way. It also informs leadership on exactly what the team is working on. Therefore, it should be done in the early stages of a project.
SPC (Statistical Process Control)
The application of statistical methods to analyze data, study and monitor process capability and performance.
Scatter Plot or Diagram
Graph used to show the relationship or correlation between two factors or variables.
Identifies all stakeholders impacted by a project and their anticipated and required levels of support for the project. Typical stakeholders include managers, people who work in the process under study, other departments, customers and suppliers. A DMAIC project will require a fundamental change in the process. In an effort to reduce the resistance to change, it is crucial to identify the stakeholders early on, and to develop a communication plan for each of them. Regular communication can create more buy-in, identify better solutions, and avoid pitfalls.
The lower case letter “sigma” in the Greek alphabet is a symbol used to represent the “Standard Deviation” of a population. Standard Deviation is an indicator of the amount of “variation” or inconsistency in any group of items or process. Looking at variation helps management to much more fully understand the real performance of a business and its processes.
A visual display outlining the highlights of a project and its components leading the team to a solution. It is used in presentations to Sponsor, Senior Management, and others.
Stratification means dividing data into groups based on key characteristics. The purpose of dividing data into groups is to detect a pattern that localizes a problem and explains why the frequency of impact varies between times, locations or conditions. For instance, when studying check-in problems in a hotel, it may be necessary to look at afternoon, evening, and late night time periods separately.
Graphically shows any broad goal broken into different levels of detailed actions. It encourages team members to expand their thinking when creating solutions.
A review session that determines whether activities up to that point in a project have been satisfactorily completed. Tollgates are commonly conducted to review critical decisions during a project.
Changes or fluctuations that determines how stable or predictable a process may be; affected by environment, people, equipment, methods, measurements, and materials; any improvement should reduce or eliminate variation.
VOC (Voice of the Customer)
A systematic approach to gather and analyze customer requirements, expectations, level of satisfaction and dissatisfaction. Methods of gathering Voice of the Customer include complaints, surveys, comments, market research, focus groups and interviews. Voice of the Customer should drive the process improvement or re-design efforts, and is a key data source in the project selection process.
Total number of units handled correctly through the process step(s), typically expressed as a percentage. Yield simply indicates how many items were delivered at the end of the process with no defect.
Check out our Lean Training, Six Sigma Training, Lean Six Sigma Training, Continuous Improvement Training or the full range of Training Courses for relevant courses on how to streamline & improve your business processes.