1. Survey of Tactical Methods XONITEK Consulting Group Int’l Friday, August 13, 2010

2. Six Sigma Frameworks / Charting

3. The PDCA Framework Classic concept from W. Edwards Deming in quality management Plan  Determine “what” to improve and “how” to accomplish the change Do  Implement the change Check  Are the results as expected? Act (or Adjust)  Go back and make changes to achieve the desired result Iterate the PDCA process for continuous improvement Presented by XONITEK Corporation 3

4. The DMAIC Framework The Six Sigma evolution of PDCA Define  What is the problem or opportunity?  Based on the Voice of the Customer and internal goals Measure  Collect data relevant to the goals of the project Analyze  Analyze the data, to determine root cause of deficiencies Presented by XONITEK Corporation 4

5. The DMAIC Framework Improve  Implement changes  Might involve pilot testing, Design of Experiments, etc. Control  Implement measures to ensure the new process is consistently applied (Standard Work)  Ensure control measures are in places, such as Statistical Process Control (SPC) There is a similar framework for new product development (DMADV) Presented by XONITEK Corporation 5

6. The SIPOC Framework Very useful in conjunction with high-level Value Stream Maps Excellent way to take a “first pass” at process structure Presented by XONITEK Corporation 6 SuppliersInput Process Step 1 Step 2 Step 3 … OutputCustomers

7. XONITEK Corporation 7 The Normal Curve…  Data points are symmetrical around the “mean”, the center of the curve.  The width of the curve demonstrates the extent of the variation. A B C D E F

8. XONITEK Corporation 8 A Normal Curve over a Histogram…  This is a curve fitted over a Histogram from Minitab.  The Mean or Average is 5.889.  The standard deviation is 1.928.  Number of sample data is 27.

9. Data Types Continuous Data  Can take on any value (12, 12.55, 12.5599218430…)  Examples: Database response time, bus run duration  Charts: XmR, X-bar,R, X-bar, S Discrete / Attribute Data  Can take on a value only from specific choices (True/False, Red/Yellow/Green)  Examples: Query succeeded or failed, driver reported for shift or did not  Charts: np, p, c, u Presented by XONITEK Corporation 9

10. Source: Lean Six Sigma Service Excellence, p. 87 10

11. XONITEK Corporation 11 Sample Xbar-R Chart Upper Spec Limit Lower Spec Limit

12. Control Chart Interpretation If control limits are within specification limits, process is likely to be “within control” Common cause variation is within acceptable limits If not, consider a Six Sigma project to improve the process Presented by XONITEK Corporation 12

13. Control Chart Interpretation Visual inspection of the chart can indicate potential problems within the process:  Points outside the control limits  A gradual shift of the process mean  A trend up or down in values  Non-random cycles  Etc. Control chart violations typically point to potential special cause variation Presented by XONITEK Corporation 13

14. Key Measure: Process Capability 1.33 ≤ Cpk ≤ 2Process is capable of consistently delivering to customer specification Cpk = 2Six Sigma performance 14 Presented by XONITEK Consulting Group Int’l

15. *** Questions and Discussion *** Six Sigma Frameworks / Charting

16. Quality Function Deployment (QFD)

17. Presented by XONITEK Corporation 17 Typical product development process... A company crisis prompts action…  Angry customer  Hot selling product/service from competitor  Obsolescence Negative Reactionary Impacts  Poor selling dud  Hot selling, but defective  Lots of development but no product/service

18. Presented by XONITEK Corporation 18 When should you use QFD? Incremental Innovation  Making improvements to an existing service  (Easy to gather customer needs) Operations Planning  Matching a set of equipment/operators/IT resources to a set of product families/service offerings Human Resource Strategy  Comparing current employee skillsets to the results of a strategic planning process

19. Presented by XONITEK Corporation 19 The QFD Approach, Step 1 Identify the Customer  External Market segment? Use profile? Key success factors?  Internal Why is this product/process needed? Is it really valuable to meeting external customer demands? Establish the project team!

20. Presented by XONITEK Corporation 20 The QFD Approach, Step 2 Gather Needs Data  Surveys  Focus Groups  Studies  Complaints  The Blogosphere  Your competitors’ products Goal: Product features + relative importance

21. Presented by XONITEK Corporation 21 Organize the Input  Affinity Diagrams Find key concepts  Tree Diagrams Identify Cause and effect  Pareto Charts Quantify results for factors Be careful not to “bias” the results; Ensure this is really the customers’ voice. The QFD Approach, Step 3

22. Presented by XONITEK Corporation 22 The QFD Approach, Step 4 Build the QFD, incorporating…  Customer needs  Design requirements  Ability to deliver on requirements  Competitors’ performance Examples to follow…

23. Presented by XONITEK Corporation 23 How the QFD is Built…. Customer and Engineering/Company Relationships Customer “What” Or “Needs” Customer and Competitor Ratings Design How’s Or Company offerings Technical Ranking Technical Values for Objectives Category Header Design Correlation Table The elemental structure of the house…

24. XONITEK Corporation 24 First list the customer needs and the company offerings Building the Relationships… Company Offerings Customer Needs 1 Develop the relationship between a customer’s Needs and a Gym’s Offerings…. The Customer Needs are derived from interviews and surveys…. 2 1 2

25. XONITEK Corporation 25 Correlate the Customer and Company… 3 Establish the strength of the relationships between the Wants and the Needs conveyed using symbols… 3

26. XONITEK Corporation 26 Define Customer Significance & Competitor Benchmarks... Customer Significance to each “Need” should be noted. The Competitors’ positions with regards to those needs. If there are “selling” points based on these comparisons they should be denoted. 1 2 3 3 2 1

27. XONITEK Corporation 27 Establish the “Relationship” of the Offerings… Establish strength of the Design or Offerings relationships to each other…. Program timesMaint.. scheduleFitness staffMaint. staffTrainingFacility sizeInstructionsStaff scheduleFacility hoursAccess control Fee structure LightingInternet access Amt./types equip. Program offerings Strong relationship Weak relationship Very Strong Relationship

28. XONITEK Corporation 28 Establish the Technical Values and Rankings… List the Competitors’ technical ranking. Establish your own targets for offerings. Identify the most critical actions that you need to undertake to satisfy the customer. 3 3 2 2 1 1

29. *** Questions and Discussion *** Quality Function Deployment (QFD)

30. Failure Mode and Effects Analysis (FMEA)

31. XONITEK Corporation 31 FMEA A way to conduct a “reliability analysis” of a product or service A systematic look for:  Function  Failure causes  Failure modes  Failure consequences

32. XONITEK Corporation 32 Types of FMEA activities DFMEA – Design analysis of:  Components  Subsystems  Main systems PFMEA – Process analysis of:  Equipment  Scheduling  Workstations  Gages  Procurement  Employee training  Tests

33. XONITEK Corporation 33 FMEA Reference Form Sample FMEA form…

34. XONITEK Corporation 34 FMEA Header Data FMEA Title – Name of the System, Subsystem, Component or Process… FMEA Type – Circle or otherwise highlight if this is a Design or Process project. Project Leader – Person responsible for the FMEA overall… Prepared By – Individual maintaining updates on the project. Project Description – Concise and easy to understand description of the function…  Include any additional technical parameters to help define the failure modes…

35. XONITEK Corporation 35 FMEA Header Data Dates:  Original Date – the date the FMEA was created.  Revised Date – this is the date the input from various persons was added to the file.  Key Date – the targeted completion date of the project. Core Team – Members of the team responsible for the development of the FMEA and various aspects of its completion.

36. XONITEK Corporation 36 Current State Section Item or Function – Identifies the various parts, processes or subsystems that may fail.  Use Brainstorming to begin to identify these elements of the FMEA. Man, materials, design, process, environment.  Fishbone Diagrams may be useful to “get to” the root causes. Potential Failure Mode – Describes how the process or design may fail to perform with regard to design or process parameters…  Can be a list of separate failure modes for the same functions  May reference the upper or lower assembly impacts… Potential Effects Mode – Describes the impact of the failure with regards to the customer (internal or external)…  “If – Then” consequential statements. Classification – Optional information, used when Govt. Regs., Safety Considerations or Engr. Specs exist for the product or process…  Use a key for this field and add to the FMEA form to clarify symbols.

37. XONITEK Corporation 37 Severity Rating Scale RatingDescriptionDefinition of Failure Result: 10HazardousFailure could cause bodily injury to the customer or an employee. 9High MajorFailure defined as noncompliance with federal, state or local regulations. 8MajorThe unit becomes inoperable when failure occurs. 7Low MajorFailure results in a high degree of customer dissatisfaction. 6High ModerateThe failure exists in a subsystem or partial malfunction of the product. 5ModerateFailure is noticeable by the customer and may result in warranty or customer complaint. 4Low ModerateCustomer can overcome failure loss with no impact to the product or process. 3High MinorFailure results in minor performance loss in the customers process. Customer can over come loss by process change. 2MinorFailure may not be readily apparent to the customer, but would have minor affects on the customer’s process or product. 1Low MinorNo impact to the customer or loss of process/product capability.  Severity Rating – Scale of 1 to 10 created by the team… with 10 as the most severe.

38. XONITEK Corporation 38 Current State Section Potential Causes of Failure – Descriptive and comprehensive list of all “root” causes of failure…  Reference “Fishbone” diagram as one of the tools to find this cause…  Each “potential failure mode” may have more than one cause of failure. Occurrence Rating – An estimate of the frequency of the failure… derived from a team created table…  Occurrence ranking shown on next slide…

39. XONITEK Corporation 39 Occurrence Rating Scale RatingDescriptionFailure Rate Metrics 10Imminent FailurePersistent failures, >= 100,000 ppm. 9High Major>= 50,000 ppm < 100,000 ppm 8Major>= 20,000 ppm < 50,000 ppm 7Low MajorOccurrence about 1/month or >= 10,000 ppm < 20,000 ppm 6High ModerateOccasional Failure of about 1 every 3 months or >= 5,000ppm < 10,000ppm 5ModerateOccurrence about every 6 to 12 months or >= 2,000 ppm < 5,000 ppm 4Low ModerateProcess capable 1.33 Cpk 3High MinorFew failures or approaching1.67 Cpk 2MinorRandom failure or 10 ppm or approaching 2.0 Cpk 1Low MinorFailure very unlikely, Cpk >2.0

40. XONITEK Corporation 40 Current State Section Current Controls Prevention – Identify the methods and testing parameters that exist to find this failure... Current Controls Detection – Defines the manner that the defect is identified…  Preference is detection by use of SPC or other testing methods.  Discovery by failure is NOT preferred… Detection Rating – User defined table with assigned probabilities and associated rankings…  Ranking table guide in next slide…

41. XONITEK Corporation 41 Detection Ranking RatingPotential of DetectionDefinition 10No DetectionDetection not possible with current systems. 9Very RemoteProblem may occur without notice using current sampling plan. 8RemoteDefect can be accepted in the normal inspection criteria sampling plan of “no defects allowed” 7LowProduct is 100% inspected for defect during the process. 6Moderately LowProduct is 100% inspected using “go – no go” gages. Process has been Poka Yoked for error elimination. 5ModerateSPC process in place during the process and product is also inspected off line… 4Low ProbableSPC used and immediate response to out of tolerance conditions. 3ProbableProcess capability has been demonstrated at 1.33 Cpk and SPC program in place. 2High ProbabilityProduct 100% inspected by an automation process. 1Absolute DetectionMethodologies created to make the failure obvious and 100% automated inspection utilized.

42. XONITEK Corporation 42 Current State Section Risk Priority Number (RPN) – A value to rank the concerns calculated from the multiplication of the other rankings …  RPN = Severity x Occurrence x Detection (the product of these three values) Use this value to prioritize the actions and resources of the organization. Do not overstep your resource capabilities… set a threshold of items for action and focus on those items first.  Items with lower numbers but still have high severity must be addressed… Recommended Actions – Actions taken to lower the RPN… includes Cause and Effect diagrams, control charts or other actions necessary to reduce the risk tied to the RPN…

43. XONITEK Corporation 43 Actions to RPN Develop a strategy of what items to address in what order…  Look for “synergy” of activities, where multiple problems may overlap.  If you can’t eliminate the issue find ways to make it easily detectable when it occurs.  Reduction of “severity” or “occurrence” is preferred over making the failure more detectable. Document all process or design changes and their impacts as part of the report out methodology.  Recalculate the RPN as improvements are made to re-establish priorities.

44. XONITEK Corporation 44 Details of filling out the FMEA Person Responsible and Due Date – Enter the name of the person who has the lead action and target date of completion… Actions Taken – Describe the action and implementation date… Severity/Occurrence/Detection – The revised values based on actions taken… RPN – Revised RPN recalculated (multiply the three values: Severity, Detection and Occurrence) from the values above…

45. XONITEK Corporation 45 Sample Completed FMEA

46. *** Questions and Discussion *** Failure Mode and Effects Analysis (FMEA)