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Chapter 5
Green Six Sigma Tools

‘I have six honest working men

(They taught me all I know)

Their names are What and Why and When

And How and Where and Who.’

– Rudyard Kipling

5.1. Introduction

The selection and application of appropriate tools is a critical success factor of a Green Six Sigma programmer. There are many tools and techniques available in the Six Sigma world (Basu, 2009), some of which are more advanced, such as Design of Experiments (DOE), Quality Function Deployment (QFD), Failure Mode and Effect Analysis (FMEA) and Statistical Process Control (SPC). In this chapter, we do not introduce any ‘new’ Green Six Sigma tools under the five steps of the DMAIC cycle and those discussed do constitute the more frequently and appropriately used Six Sigma and Lean tools. However, the new feature of Green Six Sigma is the introduction of the Sustain cycle to extend DMAIC to DMAICS. Thomas Edison once said, ‘your idea has to be original only in its adaptation to the problem you are currently working on’. The adaptation of the existing DMAIC tools represents ‘appropriate Green Six Sigma tools’.

These tools described here are the tools used more predominantly under the five steps of the DMAIC cycle and the new tools for sustainability.

5.2. Tools for Define

Tools for Define as described in this section are:

Value Stream Mapping
SIPOC Diagram
Flow Diagram
CTQ Tree
Project Charter

D1: Value Stream Mapping

Definition

Value Stream Mapping (VSM) is a visual illustration of all activities required to bring a product through the main flow, from raw material to the stage of reaching the customer.

Mapping out the activities in a production process with cycle times, down times, in-process inventory and information flow paths helps us to visualise the current state of the process and guides us to the future improved state.

Application

VSM is an essential tool of Lean Manufacturing in identifying non-value-added activities at a high level of the total process.

According to Womack and Jones (1998), the initial objective of creating a Value Stream Map is to identify every action required to make a specific product. Thus, the first step is to group these activities into three categories:

Those that actually create value for the customer
Those that do not create value but are currently necessary (type one muda)
Those that create no value as perceived by the customer (type two muda)

Once the third set has been eliminated, attention is focused on the remaining non-value-creating activities. This is achieved through making the value flow at the pull of the customer.

VSM is closely linked with the analytical tool of Process Mapping. Having established improvement opportunities at a high level by VSM, a detailed analysis of the specific areas of the process is effective with Process Mapping.

Basic Steps

The first step of VSM is to select the product or process for improvement.
Each component of production from the source to the point of delivery is then identified.
The entire supply chain of the product or process (e.g. through order entry, purchasing, manufacturing, packaging and shipping) is mapped sequentially.
The quantitative data of each activity (e.g. storage time, delay, distance travelled, process time and process rate) are then recorded.
Each component (i.e. activity) of production or process is evaluated to determine the extent to which it adds value to product quality and production efficiency.
These activities are then categorised as:
- Value added,
- Necessary non-value added,
- Unnecessary non-value added.
Areas of further analysis and improvement are then identified clearly.

Worked-Out Example

The following example is adapted from Womack and Jones (1998), pp. 38–43.

Consider a case containing eight cans of cola at a Tesco store.

Figure 5.1 shows a Value Stream Map of cola, from the mining of bauxite (the source of the aluminium in the cans) to the user's home.

The quantitative data related to the activities in the value stream are summarized in Table 5.1.

Figure 5.1 Value stream for cola cans

Table 5.1 Quantitative data of cola cans

	Incoming Storage	Process Time	Finished Storage	Process Rate	Cumulative Days
Mine	0	20 min	2 weeks	1000 t/hr	319
Reduction Mill	2 weeks	30 min	2 weeks	-	305
Smelter	3 months	2 hr	2 weeks	-	277
Hot Rolling Mill	2 weeks	1 min	4 weeks	10 ft/min	173
Cold Rolling Mill	2 weeks	< 1 min	4 weeks	2,100 ft/min	131
Can Maker	2 weeks	1 min	4 weeks	2,000/min	89
Bottler	4 days	1 min	5 weeks	1500 min	47
Tesco RDC	0	0	3 days	-	8
Tesco Store	0	0	2 days	-	5
Home Storage	3 days	5 min	-	-	3
Totals	5 months	3 hr	6 months	-	319

It is evident from the details in Table 5.1 that value-added activities take only 3 hours compared to the total time (319 days) from the mine to the recycling bin. This proportion is surprisingly small when one considers the overall duration of the process.

Training Requirements

The basic principles of VSM are not new, but making sense of these ideas and applying them to practical problems clearly requires some tuition. There is no shortage of training consultants offering workshops and courses in the tools of Lean Manufacturing including VSM.

We recommend that the team members should undergo an education workshop of at least half a day's duration for VSM. This training programme should be combined with other relevant tools like Process Mapping.

D2: SIPOC Diagram

Definition

SIPOC is a high-level map of a process to view how a company goes about satisfying a particular customer requirement in the overall supply chain. SIPOC stands for:

Supplier: The person or company that provides the input to the process (e.g. raw materials, labour, machinery, information, etc.). The supplier may be both external and internal to the company.

Input: The materials, labour, machinery, information, etc. required for the process.
Process: The internal steps necessary to transform the input to output.
Process: The product (both goods and services) being delivered to the customer.
Customer: The receiver of the product. The customer could be the next step of the process or a person or organisation.

Application

A SIPOC diagram is usually applied during the data collection of a project or at the ‘Define’ stage of DMAIC in a Six Sigma programme. However, its impact is utilised throughout the project life cycle.

SIPOC not only shows the inter-relationships of the elements in a supply chain, but also any critical to quality (CTQ) indicators, such as ‘delivered in 7 days’.

Basic Steps

Select the process for the SIPOC diagram and identify critical to quality (CTQ) parameters.
Determine the input requirements.
Identify the suppliers for each of the input elements.
Define the output and validate CTQ parameters.
Identify the customers.
Draw the SIPOC process diagram.
Retain the diagram for the rest of the improvement project.

Worked-Out Example

Figure 5.2 shows a SIPOC diagram for a company that leases equipment (adapted from George, 2002, p. 185).

Figure 5.2 SIPOC process diagram

Training Requirements

The preparation and teaching of SIPOC should be amalgamated with those for the CTQ tree and the IPO diagram since they complement one another. The combined training is expected to be carried out for both Black Belts and Green Belts in half a day.

D3: Flow Diagram

Definition

A Flow Diagram (also called a flow chart) is a visual representation of all major steps in a process. It helps a team to understand a process better by identifying the actual flow or sequence of events in a process that any product or service follows.

There are variations to a Flow Diagram depending on the details required in an application. We have included two other forms of illustration in this family. These are the Flow Process Chart and Process Mapping.

The type of Flow Diagram described in this section is a top level mapping of the general process flow and uses four standard symbols:

	An oval is used to show the start and the end of a process.
	A box or a rectangle is used to show a task or activity performed in the process.
	A diamond shows those points in the process where a decision is required.
	A circle with either a letter or a number identifies a break and connects to another page or part of the diagram.

Application

A Flow Diagram can be applied to any type of process. It can be used for anything from the development of a product to the steps involved in making a sale or servicing a product.

It allows a team to come to a consensus regarding the steps of the process and to identify critical and problem areas for improvement.

In addition, it serves as an excellent training aid to understand the complete progression of the course of action.

Basic Steps

Select the process and determine the scope or boundaries of that process:
1. Clearly define where the process understudy starts and ends.
2. Agree the level of detail to be shown on the Flow Diagram.
Brainstorm a list of major activities and determine the steps in the process.
Arrange the steps in the order they are carried out. Unless you are developing a new process, sequence what actually is and not what should be.
Draw the Flow Diagram using the appropriate symbols.
There are a number of good practices when charting a process including:
1. Use Post-it™ notes so that you can move them around in a large process.
2. For a large-scale process, start by charting only the major steps or activities.
3. Come back to develop further details for major steps if necessary.
4. Consider Process Mapping to apply to a larger process.

Worked-Out Example

Figure 5.3 shows an example of a Flow Diagram to illustrate a purchase order process.

Figure 5.3 A Flow Diagram

Training Requirements

The basic principles of a Flow Diagram are very simple and can be acquired in a self-teaching process by the user. However, good experience is required to develop a Flow Diagram of a more complex process. This sort of knowledge can only be gained by working as a team involved with improvement projects.

D4: Critical to Quality (CTQ) Tree

Definition

‘Critical to quality’ (CTQ) is a term widely used within the field of Six Sigma activities to describe the key output characteristics of a process. An example may be an element of a design or an attribute of a service that is critical in the eyes of the customer.

A CTQ tree helps the team to derive the more specific behavioural requirements of the customer's general needs.

Application

A CTQ tree is a useful tool during the data collection stage (Define) of an improvement project. Once the project team has established who their customers are, the working party should then move towards determining the customer needs and requirements. The ‘needs’ of a customer form the output of a process. ‘Requirements’ are the characteristics necessary to determine whether the customer is happy with the output delivered. These constitute what is ‘critical to quality’ and thus a CTQ tree helps to identify these CTQs in a systematic way.

Basic Steps

Identify the customer.
Pinpoint the customer's general needs in Level 1.
Distinguish the first set of requirements for that need in Level 2.
Drill down to Level 3 if necessary to ascertain the specific behavioural requirements of the customer.
Validate the requirements with the customer. The process of validation could be one-to-one interviews, surveys or focus groups depending on the CTQ.

Worked-Out Example

(Adapted from Eckes, 2001, p.55)

Figure 5.4 shows a worked-out example of a CTQ tree for room service in a hotel.

Figure 5.4 A CTQ tree

Training Requirements

A CTQ tree is a simple tool in principle and a one-hour training session (including an exercise) should be sufficient for a team member to get involved in developing a practical CTQ tree. This is appropriate for both Black Belts and Green Belts.

Final Thoughts

A CTQ tree is a simple but powerful tool for capturing the details of customer requirements and we recommend its use at the very early stage of a Six Sigma project.

D5: Project Charter

Definition

A Project Charter is a working document for defining the terms of reference of each Six Sigma project. The charter can make a successful project by specifying necessary resources and boundaries that will in turn ensure success.

The necessary elements of a Project Charter include:

Project Title: It is important to use a descriptive title that will allow others to quickly identify the project.
Project Type: Whether it is for quality improvement, increasing revenue or reducing cost.
Project Description: A clear explanation of the problem, the opportunity and the goal.
Project Purpose: Why you are carrying out this project.
Project Scope: Project dimensions, what is included and not included.
Project Objectives: Target performance improvement in measurable terms.
Project Team: Sponsor, Team Leader, and Team Members. It is important to identify Black Belts and Green Belts within the team.
Customers and CTQs: Both internal and external customers and CTQs specific to each customer.
Cost Benefits: A draft business case of savings expected and the cost required to complete the project.
Timing: Anticipated project start date and end date. Target completion dates of each phase (e.g. DMAIC) of the project are also useful.

Application

A Project Charter is the formalised starting point in the Six Sigma methodology. It takes place in the Define stage of DMAIC.

We recommend that larger (e.g. over $1 million savings) projects of a Six Sigma programme, which is usually led by a Black Belt, should have a Project Charter. In fact, a Project Charter can also be useful in a multi-discipline, medium-sized project.

A Project Charter should be used as a working document that is updated as the project evolves. The version control of the charter is therefore very important.

Basic Steps

Select the project by taking into account the following criteria:
1. Not capital intensive
2. Achievable in six months
3. High probability of success
4. Good fit with Six Sigma techniques
5. Clearly linked to real business need
6. Historical and current data accessible
Identify the customers and their specific critical to quality (CTQ) requirements by a SIPOC diagram.
Estimate an order of magnitude figures for the costs and savings for the project. (These estimates would be updated when more accurate data becomes available as the project advances.)
Obtain top management support and sponsorship.
Select the project team with clear leadership and ownership for delivery.
Develop the Project Charter following a defined template (see Figure 5.5).
Obtain the approval of the sponsor.
Review and update the charter with the necessary version control as the task progresses.

Worked-Out Example

Figure 5.5 shows an example of a Project Charter for a ‘Safety Performance’ scheme used by DuPont Teijin Films Ltd, UK.

Project:	Safety Performance Predictor Model
Date:	3/28/00
Project Type:	Quality X Revenue Cost Reduction
Problem Statement:	Plant needs early warning signals so programs can be put in place to prevent injuries/incidents
Goal Statement:	Predict injuries/incidents prior to occurring Performance Level: 1.47 DPMO Time Frame: 6 months
Project Scope and Approach:	Study safety data to determine what factors influence injuries and incidents. Use the most significant factors and develop a predictor model to serve as early warning signals for a potential deterioration in our safety performance.
Team Members:	Terry Leadership John Debbie Leader: Vickie Sponsor: Terry Mentor: Tim
Customers:	Leadership Terry Network Leaders
CTQs:	Early warning signals of downward shifts in safety climate Combined data source for all site safety data To be able to identify problem areas before injuries occur
Defect Definition:	Injuries and Incidents
Opportunities per unit:	Exposure Hours
Approx. DPMO:	1.47Z st: 6.19
Goal DPMO:	1.25Z st goal: 6.19
Stake:	Confidence Interval:	Upper	Lower
Capital:
Timing:	Define	Measure	Analyse	Improve	Control
Target Completion:	04/30/00	06/30/00	07/31/00	08/31/00	09/30/00
Data Issues:	Safety Climate Indicator measurements system needs to be validated

Figure 5.5 Six Sigma Project Charter

Training Requirements

The training of a Project Charter is included in the education programmes for both Black Belt and Green Belt attainment. The basic principles of a Project Charter are relatively simple and can be explained to team members in less than an hour. The development of a chapter with appropriate data may need a couple of days.

5.3. Tools for Measure

The Tools for Measure as described in this section are:

Run Chart
Histogram
Cause and Effect Diagram
Pareto Chart
Control Charts

M1: Run Charts

Definition

A Run Chart is a graphical tool to allow a team to study observed data for trends over a specified period of time. It is basically a simple line graph of x and y axes.

Application

A Run Chart has a wide range of applications to detect trends, variation or cycles. It allows a team to compare performances of a process before and after the implementation of the solution. The application areas include sales analysis, forecasting, performance reporting and seasonality breakdown.

Basic Steps

Select the parameter and time period for measurement.
Collect data (generally 10–20 data points) to identify meaningful trends:
1. x axis for time or sequence cycle (horizontal),
2. y axis for the variable parameter that you are measuring (vertical).
Plot the data in a line graph along the x and y axes.
Interpret the chart. If there are no obvious trends then calculate the average value of the data points and draw a horizontal line at this mean value.

Worked-Out Example

Table 5.2 shows the operational efficiency (%) of a packaging machine.

The Run Chart for this data is shown in Figure 5.6.

Table 5.2 Operational efficiency

x	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sept	Oct	Nov	Dec
y	55	60	45	40	65	60	65	30	60	65	60	55

Figure 5.6 Example of a Run Chart

Training Requirement

The understanding and application of a Run Chart is so simple that it is not essential to conduct a classroom training specifically for it. The team members should be able to use a Run Chart after a preliminary briefing, in a practical application. The training process involving a Run Chart is usually included in an education programme for continuous improvement tools. Due to the fact that it could be seen as encompassing simplicity to a fault, a danger in using a Run Chart is the inclination to interpret every variation as being noteworthy. For any statistically significant result, Control Charts or Regression Analysis should be more appropriate. We recommend the use of a Run Chart for detecting a visual trend only and identifying areas of further analysis.

M2: Histograms

Definition

A histogram is a graphical representation of recorded values in a data set according to the frequency of occurrence. It is a bar chart of numerical variables giving a graphical representation of how the data is distributed.

Applications

The histogram is used extensively in both statistical analysis and data presentation. A histogram displays the distribution of data and thus reveals the amount of variation within a process. There are a number of theoretical models for various shapes of distribution of which the most common one is the normal or Gaussian distribution.

There are several advantages of applying histograms in continuous improvement projects including:

It displays large amounts of data that are difficult to interpret in tabular form.
It illustrates quickly the underlying distribution data revealing the central tendency and variability of a data set.

Basic Steps

Collect at least 50 to 125 data points for establishing a representative pattern.
Subtract the smallest individual value from the largest in the data set.
Divide this range by 5, 7, 9 or 11 depending on the number of data points. As a rough guide, take the square root of the total number of data points and round it to the nearest integer. For example, for 50 data points, divide the range by 7 and for 125 data points you should divide by 11.
The resultant value determines the interval of the sample. It should be rounded up for convenience.
Calculate the number of data points in each group or class.
Plot the histogram with the intervals in the x axis and the frequency of occurrence on the y axis.
Clearly label the histogram.
Interpret the histogram related to centring, variation and shape (distribution).

Worked-Out Example

The following example is taken from Schmidt et al. (1999), pp. 135–137.

Table 5.3 shows the data points of miles per gallon data of a car pool.

Since our smallest data point is 8 and the largest is 45, the interval should be (45 – 8)/7 = 5.3. We round it up to make it 6. In Table 5.4 we place individual data in each class as shown.

Table 5.3 Data points of a car pool

18	16	30	29	28	21	17	41	8	17
32	26	16	24	27	17	17	33	19	18
31	27	23	38	33	14	13	26	11	28
21	19	25	22	17	12	21	21	25	26
23	20	22	19	21	14	45	15	24	34

Table 5.4 Individual data in each class

Class No.	Class Range	Values	Frequency of Occurrence
1	6–12	8,11	2
2	12–18	16,16,17,17,14,12,14,17,17, 13,15,17	12
3	18–24	18,21,23,19,20,23,22,22,19,21, 21,21,21,19,18	15
4	24–30	26,27,25,29,24,28,27,26,25,24, 28,26	12
5	30–36	32,31,30,33,33,34	6
6	36–42	38,41	2
7	42–48	45	1

Figure 5.7 Example of a histogram

Next, we construct the histogram as shown in Figure 5.7. We see that the most values are between 12 and 30 mpg. with 18–24 mpg. representing the median. The data are also skewed to the right by some high mileage figures.

Training Needs

Although a histogram can lead to complex statistical analysis, its basic principles are relatively simple. Most members of the project team are likely to have some familiarity with and knowledge of histograms. However, a one-hour session of classroom training should be valuable to establish the methodology, especially related to the range, class and intervals.

M3: Cause and Effect Diagrams

Definition

The Cause and Effect Diagram is a graphical representation of potential causes for a given effect.

Since it was first used by Ishikawa, this type of illustration is also known as an Ishikawa diagram. In addition, it is often referred to as a ‘fishbone’ diagram due to its skeletal appearance.

The purpose of the illustration is to assist in brainstorming and enabling a team to identify and graphically display, in increasing detail, the root causes of a problem.

Application

The Cause and Effect Diagram is arguably the most commonly used of all quality improvement tools. The ‘effect’ is a specific problem and is considered to constitute the head of the diagram. The potential causes and sub-causes of the problem form the bone structure of the skeletal fish.

They are typically used both during the measurement and analysis phase of the project. Their wide application area covers Six Sigma teams, TQM teams or Continuous Improvement teams as part of brainstorming exercises to identify the root causes of a problem and offer solutions. It focuses the group on causes, rather than symptoms.

There are a number of variants in the application of a Cause and Effect Diagram. The two most common types are the 6M Diagram and CEDAC. Let us examine each of these terms a little more closely.

In a 6M Diagram, the main bone structure or branches typically consist of the self-explanatory ‘6Ms’:

Machine
Manpower
Material
Method
Measurement
Mother Nature (Environment)

A CEDAC Diagram (Cause and Effect Diagram Assisted by Cards) works slightly differently. A blank, highly visible fishbone chart is displayed in a meeting room. Every member of the team must post both potential causes and solutions on a card (or Post-it™ notes) considering each of the categories.

A CEDAC also consists of two major formats:

Dispersion Analysis Type
Process Classification Type

Firstly, the Dispersion Analysis Type is used usually after 6M or CEDAC diagrams have been completed. The major causes identified are then treated as separate branches and their sub-causes are identified.

However, the Process Classification Type uses the major steps of the process in place of the major cause categories. This form is usually used when the problem encountered cannot be isolated to a single department. Each stage of the process is then analysed by using a 6M or CEDAC approach.

A typical sequence of Cause and Effect Diagrams for a complex problem could be:

Process Classification Type

6M or CEDAC

Dispersion Analysis Type

Basic Steps

Select the most appropriate cause and effect format. If the problem can be isolated to a single section or department choose either a 6M (small team) or a CEDAC (large team) approach.
Define with clarity and write the key effect of the problem in a box to the right-hand side of the diagram.
Draw a horizontal line from the left-hand side of the box. Draw main branches (fish bones) of the diagram after agreeing the major categories (e.g. 6M) of causes.
Brainstorm for each category the potential sub-causes affecting the category.
List the sub-causes of each category in a flipchart. In a CEDAC approach these would be a collection of Post-it™ notes for each section.
Rank the sub-causes in order of importance by a group consensus (or multi-voting) and select up to six top sub-causes for each category.
Construct the diagram by posting the top sub-causes in each category. These are the ‘root causes’.
Decide upon further Dispersion Analysis or gather additional data needed to confirm the root causes.
Develop solutions and improvement plans.

Worked-Out Examples

The following example is taken from Basu and Wright (2003), pp. 29–30.

Consider the situation where customers of a large international travel agency sometimes find that when they arrive at their destination, the hotel has no knowledge of their booking.

In this case, to get started you might begin with ‘Hotel Not Booked’ as the effect and the 6Ms (Machine, Manpower, Method, Material, Measurement and Mother Nature) as the causes. When the sub-causes are further investigated the diagram may look like that shown in Figure 5.8.

The diagram points out that many sub-causes including training, e-mail systems and customer feedback appear to be worthwhile areas to follow up.

Figure 5.8 Cause and effect diagram

Training Requirements

As Cause and Effect Diagrams are essential to a quality improvement programme, it is important that members of the team receive at least one hour of hands-on training. An effective method of instruction is by participating in a brainstorming exercise where a Cause and Effect diagram is developed. It is more important to identify the root causes than to assign the cause to a specific category. For instance, in the example given in Figure 5.8, ‘clear instructions’ could also be grouped under Manpower while ‘checklist’ could be assigned to the category of Measurement.

M4: Pareto Charts

Definition

A Pareto Chart is a special form of bar chart that rank orders the bars from highest to lowest in order to prioritise problems of any nature.

It is known as ‘Pareto’ after a nineteenth century Italian economist Wilfredo Pareto, who observed that 80% of the effects are caused by 20% of the causes: ‘the 80/20 rule’.

Applications

Pareto Charts are applied to analyse the priorities of problems of all types, e.g. sales, production, stock, defects, sickness, accident occurrences, etc. Improvement efforts are directed to priority areas that will have the greatest impact.

There are usually two variants in the application of Pareto Charts. The first type is the standard chart where bar charts are presented in descending order. The second category is also known as the ‘ABC Analysis’ where:

Cumulative % values of causes are plotted along the x axis.
Cumulative % values of effects are plotted along the y axis.
80% of the effects with corresponding % of causes are grouped as ‘A’ category.
80–96% of the effects and corresponding causes are ‘B’ items.
The remaining values are ‘C’ category.

Basic Steps

The following steps apply for the preparation of a Pareto Chart:

Identify the general problem (e.g. IC Board Defects) and its causes (e.g. Soldering, Etching, Moulding, Cracking and other).
Select a standard unit of measurement (e.g. Frequency of Defects or Money Loss) for a chosen time period.
Collect data for each of the causes in terms of the chosen unit of measurement.
Plot the Pareto Chart with causes along the x axis and the unit of measurement along the y axis. The causes are charted in descending order of values from left to right.
Analyse the graph and decide on the priority for improvement.

The following steps apply for the preparation of an ABC Analysis:

Decide on the causes (e.g. number of customers) and effect (e.g. sales) of the problem areas that you want to prioritise.
Select a standard unit of measuring the effect (e.g. $ for sales values).
Collect data for each cause (e.g. customer) and the corresponding effect (e.g. sales in $).
Rank the cause according to the value of the effects (e.g. customers in descending order of $ sales).
Calculate the cumulative % values of the causes and effects.
Plot the cumulative % values of the causes (e.g. number of customers) along the x axis and the cumulative % values of effects (e.g. sales in $) along the y axis.
Identify A, B and C categories (e.g. A for 80% of sales, B for 80–96% of sales and C for the remainder).
Analyse the graph and decide on the priority for improvement.

Worked-Out Examples

The following example of a Pareto Chart is taken from Schmidt et al. (1999) p. 144.

Table 5.5 Major defects identified during manufacture of ICBs

Causes	Frequency	% Frequency
Soldering	60	40
Etching	40	27
Moulding	30	20
Cracking	15	10
Other	5	3
Total	150	100

Figure 5.9 Pareto Chart

The major defects identified during the manufacture of Integrated Circuit Boards (ICBs) for a given period are given in Table 5.5.

We plot the causes along the x axis and frequencies along the y axis, as shown in Figure 5.9.

An example of ABC Analysis for a set of inventory items is shown in Figure 5.10.

Figure 5.10 ABC Analysis

Training Needs

The basic principles of a Pareto Chart and ABC Analysis are easy to follow. The training for this tool of prioritising is usually included in the classroom education sessions related to the tools for measurement. A member of a team can be adept in the application of Pareto Charts after, say, one hour's practice on a few practical problems.

M5: Control Charts

Definition

A Control Chart consists of a graph with time on the horizontal axis and an individual measurement (such as mean or range) on the vertical axis.

A Control Chart is a basic graphical tool of Statistical Process Control (see Chapter 9) for determining whether a process is stable and also for distinguishing usual (or common) variability from unusual (special assignable) causes. Three control limits are drawn: the Central Line (CL), the Lower Control Limit (LCL) and the Upper Control Limit (UCL). The points above the UCL or below the LCL indicate a special cause. If no signals occur then the process is assumed to be under control, i.e. only common causes of variation are present.

Application

Control Charts can be used for examining a historical set of data and also for contemporary information. The current control based on current data underpins a feedback control loop in the process.

There are many good reasons why Control Charts have been applied successfully in both quality control and improvement initiatives since Walter Shewhart first introduced the concept at Bell Laboratories in the early 1930s.

Firstly, Control Charts establish what is to be controlled and force their resolution. Secondly, they focus attention on the process rather than on the product. For example, a poor product can result from an operator error, but a poor production process is not capable of meeting standards on a consistent basis. The third factor is that they comprise a set of prescribed techniques that can be applied by people with appropriate training in a specified manner.

For many probability distributions, most of the probability is within three standard deviations of the mean. So μ and σ are respectively the stable process mean and standard deviation; then

When the mean (μ_s) and standard deviation (σ_s) values are calculated from a sample of n, then

There are two types of Control Charts. A variable chart is used to measure individual measurable characteristics, whereas an attributes chart is used for go/no-go types of inspection.

The x-bar chart (also called the mean chart), the s-chart (also called the standard deviation chart) and the R-chart (also called the range chart) are used to monitor continuous measurement or variable data.

The stable Control Charts are used to determine process capability, that is whether a process is capable of meeting established customer requirements or specifications.

Basic Steps

Choose the quality characteristic to be charted. A Pareto analysis is useful to identify a characteristic that is currently experiencing a high number of non-conformities.
Establish the type of Control Chart to ascertain whether it is a variable chart or an attribute chart.
Choose the sub-group or sample size. For variable charts, samples of 4 or 5 are sufficient, whereas for attribute charts samples of 50 to 100 are often used.
Decide on a system of collecting data. The automatic recording of information by a calibrated instrument is preferable to manually recorded data.
Calculate the mean and standard deviation and then determine the control limits.
Plot the data and control limits on a Control Chart and interpret results.

Worked-Out Example

The following example illustrates the construction of variable Control Charts based on the data of packing cartons on a morning shift. The information in Table 5.6 is taken from Ledolter and Burnill (1999).

Table 5.6 Construction of variable Control Charts

Reading No.	Measurements				Average	Std Dev.	Range
1	25.1	25.5	25.0	25.1	25.175	0.222	0.50
2	24.8	25.2	25.1	24.9	25.000	0.183	0.40
3	25.1	25.2	25.2	25.2	25.175	0.050	0.10
4	25.1	25.4	24.8	25.0	25.075	0.250	0.60
5	25.2	24.7	24.9	25.3	25.025	0.275	0.60
6	25.2	25.2	25.0	25.1	25.125	0.096	0.20
7	25.2	25.2	25.2	25.3	25.225	0.050	0.10
8	25.2	25.1	25.3	25.0	25.150	0.129	0.30
9	24.9	25.1	25.2	24.8	25.000	0.183	0.40
10	25.1	25.1	25.3	25.4	25.225	0.150	0.30
Average					25.118	0.159	0.35

Hence

Figure 5.11 Control Chart

The control limits and the data are plotted as shown in Figure 5.11.

Similar charts are drawn for the Standard Deviation and the Range of the data. The control limits are constructed in such a manner that we expect approximately 99.7% of all data to fall between them. In Figure 5.11 all data are within the control limits, indicating that the process is stable.

Training Requirement

The construction and interpretation of Control Charts require a good understanding of Statistical Process Control. The concepts of variable data vs attribute data, common causes vs special causes and control limits are essential to the effective application of Control Charts. Hence a few hours of classroom training is recommended before the members start the application of this tool. Care should be taken not to confuse a Control Chart with a Run Chart.

5.4. Tools for Analysis

Tools for Analysis as described in this section are:

Regression Analysis
Force Field Analysis
SWOT Analysis
PESTLE Analysis
Five Whys
Interrelationship Diagram

A1: Regression Analysis

Definition

Regression Analysis is a tool to establish the ‘best fit’ linear relationship between two variables.

The knowledge provided by the scatter diagram is enhanced with the use of regression.

Application

The topic of Regression Analysis is usually studied at school in algebra lessons where different techniques of ‘curve fitting’ are considered. Two common approaches are:

Method of intercept and slope
Method of least squares

In a practical business environment, the team members normally resort to drawing an approximate straight line by employing their visual judgement. Sometimes they use the ‘method of intercept and slope’. Both of these practices are the estimated ‘best fit’ relationship between two variables. The reliability of such estimates depends on the degree of correlation that exists between the variables.

Regression Analysis is used not only to establish the equation of a line but also to provide the basis for the prediction of a variable for a given value of a process parameter. The scatter diagram, on the other hand, does not predict cause and effect relationships. Given a significant co-relation between the two variables, Regression Analysis is a very useful tool, enabling one to extend and predict the relationship between these variables.

Basic Steps

We have considered the ‘method of intercept and slope’ for developing the basic steps as follows (courtesy: M.J. Moroney, 1973, p. 284):

Consider the equation of y = mx + c, where m is the slope, c is the intercept and x and y are the two variables.
In the equation of y = mx + c, substitute each of the pairs of values for x and y and then add the resulting equations.
Form a second similar set of equations, by multiplying through each of the equations of Step 2 by its coefficient of m. Add this set of equations.
Steps 2 and 3 will each have produced an equation in m and c. Solve these simultaneous equations for m and c.
Plot the straight-line graph for y = mx + c for the calculated values of m and c.

Worked-Out Example

The following example is taken from M.J. Moroney (1973), pp. 278–285.

Consider an investigation is made into the relationship between two quantities y and x and the following values were observed:

y	5	8	9	10
x	1	2	3	4

The values are plotted as shown in Figure 5.12. Now we follow the basic steps to calculate m and c in the equation y = mx + c.

Substituting the observed values of x and y, the resulting equations are:

Figure 5.12 Regression Analysis

Multiplying each of the equations by its co-efficient of m, the resulting equations are:

We then solve simultaneously equations (1) and (2) for m and c.

We find that

Hence y = 1.6x + 4.

We calculate two pairs of values for x and y to draw a straight line, as shown in Figure 4.12:

y	4	8.8
x	0	3

Training Requirements

From the above, it will not surprise you to learn that the training of Regression Analysis is just like brushing up on school algebra! A few classroom exercises for approximately one hour should be adequate for team members to prepare themselves for the practical application of Regression Analysis.

A2: Force Field Analysis Diagram

Definition

The Force Field Analysis Diagram, or simply Force Field Diagram, is a model built on the concept by Kurt Lewin (1951). According to this theory, change is characterised as a state of equilibrium between driving forces (e.g. new technology) and opposing or restraining influences (e.g. fear of failure).

In order for any change to occur, the driving forces must exceed the restraining forces, thus shifting the equilibrium.

Application

The Force Field Diagram is a useful tool at the early stage of change management leading to improvement. It is often used:

to investigate the balance of power involved in an issue or obstacle at any level (personnel, project, organisation, network),
to identify important players or stakeholders – both allies and opponents,
to identify possible causes and solutions to the problem.

Basic Steps

According to Lewin (1951), three key steps are involved in the concept of change management by the Force Field Diagram:

Firstly, an organisation has to unfreeze the driving and restraining forces that hold it in a state of apparent equilibrium.
Secondly, an imbalance is introduced to the forces, either by increasing the drivers or reducing the restrainers, or both, to enable the change to take place.
Thirdly, once the change is complete and stable, the forces are brought back to equilibrium and refrozen.

A Force Field Diagram is constructed by a team and the following basic steps are suggested:

Agree on the current problem or issue under investigation and obtain the desired situation.
List all forces driving changes towards the desired situation.
List all forces resisting changes towards the desired situation.
Review all forces and validate their importance.
Allocate a score to each of the forces using a numeric scale (e.g. 5 = most important and 1 = least important.
Chart the influences by listing the driving forces on the left and restraining forces to the right.
Decide how to minimise or eliminate the restraining forces and increase the driving force.
Agree on an action plan.

Worked-Out Example

The issue identified is how to increase the usage of purchase orders in a pharmaceutical company. The driving and restraining forces were identified by the team and also rated in a scale of 1 to 5 (1 = low, 5 = high). This was then represented in a Force Field Diagram, as shown in Figure 5.13.

The driving forces show a total score of 13 against an overall score of 11 demonstrated by the restraining forces.

Figure 5.13 Force Field Diagram

Training Requirements

The knowledge and application of a Force Field Diagram are best derived by ‘on the job’ training during a brainstorming exercise on an actual problem. The facilitator should have experience in change management in applying a number of Force Field Diagrams to direct the team and gain a consensus of identifying forces and allocating scores.

A3: SWOT Analysis

Definition

A SWOT (Strengths, Weaknesses, Opportunities and Threats) is a tool for analysing an organisation's competitive position in relation to the opposition.

In the context of a quality improvement programme, a SWOT Analysis refers to a summary of the gaps and positive features of a process following the analytical stage.

Application

Based on a SWOT framework, the team members can focus on alternative strategies for improvement. For example, an S/O (Strengths/Opportunities) approach may be considered to consolidate the strengths and open further leverage from the process. Similarly, an S/T (Strengths/Threats) policy could be borne in mind in order to maximise the strength of the process and minimise risks.

Thus, a SWOT Analysis can help the team to identify a wide range of alternative tactics for the next stage.

Basic Steps

Create two categories (internal factors and external factors) and then further sub-divide into positive aspects (Strengths and Opportunities) and negative aspects (Weaknesses and Threats).
Ensure that the internal factors may be viewed as a strength or weakness of a process depending on their impact on the outcome or the process output.
Similarly assess the external factors bearing in mind that threats to one process could be viewed as an opportunity for another procedure.
Summarise the key features and findings derived from previous analyses in each of the SWOT categories.
Develop the improvement strategy for the next stage as pointers from the SWOT Analysis.

Worked-Out Example

The following example is taken from Kotabe and Helsen (2000), p. 277.

Table 5.7 shows the framework of a SWOT Analysis.

Table 5.7 Framework of a SWOT Analysis

External Factors		Strengths	Weaknesses
	Internal Factors	Brand name, human resources, technology, advertising	Price, lack of financial resources, long product development cycle
Opportunities	Growth market, de-regulation, stable exchange rate, investment grant	S/O Strategy Maximise Strengths and maximise Opportunities	W/O Strategy Minimise Weaknesses and maximise Opportunities
Threats	New entrants, change in consumer preference, local requirements	S/T Strengths Maximise Strengths and minimise Threats	W/T Strategy Minimise Weaknesses and Minimise Threats

Training Requirements

The training of the SWOT Analysis should be conducted in stages. The first part is in a classroom where the basic principles can be explained based on a known marketing product. The second aspect of the tuition is delivered to the team member when the results following the analysis of process are summarised.

A4: Pestle Analysis

Definition

The PESTLE (Political, Economic, Social, Technical, Legal and Environmental) Analysis is an analytical tool for assessing the impact of external contexts on a project or a major operation and also the impact of a project on its external circumstances. There are several possible contexts including:

Political
Economic
Social
Technical and
Environmental

This is remembered easily by the acronym ‘PESTLE’ or ‘Le Pest’ in French. It is thus also known as the PEST Analysis.

Application

Very few significant changes, whether they are caused by a major operation or a project, are unaffected by the external surrounds.

Political: A project is affected by the policies of international, national or local government. It is also influenced by company policies and those of stakeholders, managers, employees and trade unions.
Economic: The project is affected by national and international economic issues, inflation, interest rates and exchange rates.
Social: The change is influenced by social issues, the local culture, the lives of employees, communications and language.
Technological: The success of implementation is affected by the technology of the industry and the technical capability of the parent company.
Legal: The project is affected by the legal aspects of planning, registration and working practices.
Environmental: The impact of the change on environmental emission, noise, health and safety is assessed.

Basic Steps

A PESTLE Analysis is carried out in four stages:

Develop a good understanding of the deliverables of the operation and the project. At this stage, the relevant policy and guidelines of both the local company and the parent organisation are reviewed.
List the relevant factors affecting the various aspects of the project related to PESTLE. It is important that the appropriate expertise of the organisation is drawn into the team for this analysis.
Validate the factors in Step 2 with the stakeholders and functional leaders of the company.
Review progress and decide on the next steps by asking two questions:
How did we do?

Where do we go next?
For more information on the PESTLE Analysis, see Turner and Simister (2000), pp. 165–215.

Worked-Out Example

Consider the policy renewal management process of an insurance company based in Finland. The company implemented an online renewal process within Finland and wanted to expand the process in the European Union (EU).

A PESTLE Analysis was carried out as shown in Table 5.8.

Table 5.8 PESTLE Analysis

Contexts	Key Factors	Impact on Company (0–10)
POLITICAL	Within the EU, countries are moving towards a more common political structure	6
ECONOMIC	Slowing economy of Finland; GDP forecast to grow by 3.9% in 2003 Dynamic changes in client business environment in Finland and Europe	8
SOCIAL	Difference in buying habits in Finland vs EU	7
TECHNOLOGICAL	Accelerating pace of change in ICT in Finland Online opportunity in EU with little extra cost New cyber-related risk in client business	9
LEGAL	New constraints or requirements initiated by regulatory bodies, e.g. Insurance Supervisory Authority in the EU	9
ENVIRONMENTAL	No significant impact	1

The PESTLE Analysis shows that the expansion of an online service, in general, has a direct influence upon and opens up opportunities in the EU.

Training Requirements

The principles of PESTLE Analysis are best learned by the process of the group working together during the project life cycle. The programme of Black Belt training normally includes a session on PESTLE Analysis and team leaders should receive a broad understanding of this tool. The analysis is of a strategic nature, and thus it may not involve all members of the project team.

A5: The Five Whys

Definition

The Five Whys is a systematic technique of asking five questions successively. The aim is to probe the causes of a problem and thus hopefully get to the heart of the issue.

Application

The Five Whys is a technique that is widely used to analyse problems in both manufacturing and service operations. It is a variation on the classic Work Study approach of ‘critical examination’ involving six questions: Why, What, Where, When, Who and How?

The objective is to eliminate the root cause rather than merely ‘patch up’ the effects.

Basic Steps

Select the problem for analysis.
Ask five ‘close’ questions, one after another, starting with why.
Do not defend the answer or point the finger of blame at others.
Determine the root cause of the problem.

Worked-Out Example

The following example is taken from Stamatis (1999), p. 183.

Consider a problem: ‘Deliveries are not completed by 4 pm’.

Question 1: Why does it happen?
Answer: The routing of trucks is not optimised.
Question 2: Why is it not optimised?
Answer: Goods are loaded based on their size rather than the location of the delivery.
Question 3: Why are they loaded by size?
Answer: The computer defines the dispatch based upon the principle of ‘large items first’.
Question 4: Why are large items given preference?
Answer: Large items are delivered first.
Question 5: But why?!
Answer: Current prioritisation policy puts large items first on the delivery schedule.

Training Requirements

As can be seen from the above question and answer model, the principle of this analytical tool is very straightforward. Thus the application of the Five Whys does not require any rigorous classroom training. The members of a problem solving team can easily understand and apply this simple tool after just one such group exercise.

Final Thoughts

The Five Whys is an uncomplicated but very effective tool that can be used to identify the root causes of a problem. We recommend that, taking advantage of the fact that it is such a quick an unfussy approach, it can be utilised on a far wider basis than at present.

A6: Interrelationship Diagram

Definition

An Interrelationship Diagram (ID) is an analytical tool to identify, systematically analyse and classify the cause and effect relationships among all critical issues of a process. The key drivers or outcomes are identified, leading to an effective solution.

Application

An Interrelationship Diagram is often applied to enable the further examination of causes and effects after these are recorded in a Fishbone Diagram. ID encourages team members to think in multiple directions rather than merely in a linear sense.

This simple tool enables the team to set priorities to root causes even when credible data does not exist.

Basic Steps

Assemble the team and agree on the issue or problem for investigation.
Lay out all of the ideas or issues that have been brought from other tools (such as a Cause and Effect Diagram) or brainstormed.
Look for the cause and effect relationships between all issues and assign the ‘relationship strength’ as:
- 3 – Significant
- 2 – Medium
- 1 – Weak
Draw the final Interrelationship Diagram in a matrix format and insert the ‘relationship strength’ given by members.
Total the relationship strength in each row to identify the strongest effect of an issue on the greatest number of issues.

Worked-Out Example

The following example is taken from Bassard and Ritter (1994), p. 81.

Consider five key issues to improve customer service:

Logistics Support
Customer Satisfaction
Education and Training
Personal Incentives
Leadership

The Interrelationship Diagram is plotted in a matrix (see Figure 5.14) with appropriate ‘relationship strengths’.

Figure 5.14 Interrelationship Diagram

From the above analysis in the ‘Total’ column, it is evident that Customer Satisfaction and Leadership are the two most critical issues.

Training Requirements

The team can be adept in the application of ID after less than one hour's training in a classroom or a practical environment. The principles are simple, but it is important that a consensus is reached in attributing the relationship strength numbers.

5.5. Tools for Improvement

Tools for Improvement as described in this section are:

Single Minute Exchange of Dies (SMED)
Five S
Mistake Proofing
Brainstorming
Overall Equipment Effectiveness (OEE)

I1: SMED

SMED or Single Minute Exchange of Dies is the name of the approach used for reducing output and quality losses due to changeovers and setups.

‘Single Minute’ means that necessary setup time is counted on a single digit.

Application

This method has been developed in Japan by Shigeo Shingo (1985) and has proven its effectiveness in many manufacturing operations by reducing the changeover times of packaging machines from hours to minutes.

The primary application area of SMED is the reduction of setup times in production lines. This process enables operators to analyse and find out themselves why the changeovers take so long and how this time can be reduced. In many cases, changeover and setup times can be condensed to less than ten minutes, so that the duration of the changeover can be expressed with one single digit. It is therefore called ‘Single Minute Exchange of Dies’.

SMED is considered as an essential tool in Lean Manufacturing and it is instrumental in the reduction of non-value-added activities in process times. Changeover deficit is one of the six big losses that have been defined within the Total Productive Maintenance (TPM). It is important to note that SMED is directly linked with the analytical process of OEE (Overall Equipment Effectiveness).

With due respect to the success of the SMED method, it is fair to point out that the basic principles are fundamentally the application of classical industrial engineering or work study.

Basic Steps

Study and measure the operations of the production line to discriminate:
- Internal Setup (IS), the operation that must be done, which
- machine is stopped.
- External Setup (ES), the operation that possibly can be done while
- the machine is still running.
Suppress non-value-added operations and convert IS operating into ES. The data from OEE and the preparations of prerequisites (e.g. tools, changeover parts, preassemblies, preheating, mobile storage, etc.) are reviewed to achieve results. Some internal setups are converted to external setups.
The next stage is to simplify the design of the machine, especially fillings and tightening mechanisms. Some examples of the design simplification are U-shaped washers, quarter-turn screws and cam and lever tights.
Balance the work content of the line and ensure teamwork. For example, in one automatic insertion machine, one operator sets up on the machine front while the other operator feeds components on the other side.
Minimise trials and controls. Use of Mistake Proofing or Poka-Yoke enables the standard way to be carried out each time.

Worked-Out Example

The following example is taken from Basu and Wright (1997), p. 97.

Consider the setup time reduction of a packing machine.

The internal and external setup times have been measured. As shown in Figure 5.15, the total setup duration is reduced by overlapping external setup times on the internal setup phase.

Training Requirements

The training of SMED is likely to be more effective on team members with a good understanding of work study or industrial engineering. The basic principles should be explained to members with hands-on exercises being carried out in a room. This should be supplemented by a production line study in a factory environment. It is also important that the basics of Overall Equipment Effectiveness (OEE) are covered during a SMED training session.

Figure 5.15 SMED: setup time reduction

SOURCE: Basu and Wright (1997).

I2: Five S

Definition

Five S is a tool for improving the housekeeping of an operation, developed in Japan, where the five Ss represent five Japanese words all beginning with ‘s’:

Seiri (Organisation): Separate what is essential from what is not.
Seiton (Neatness): Sort and arrange the required items in an orderly manner and in a clearly marked space.
Seiso (Cleaning): Keep the work station and the surrounding area clean and tidy.
Seiketson (Standardisation): Clean the equipment according to laid down standards.
Shitsuke (Discipline): Follow the established procedure.

In order to retain the name ‘Five S’, a number of English language versions have evolved. These include:

Seiri: Sort
Seitor: Set in order/Stabilise
Seiso: Shine
Seiketsu: Standardise
Shitsuki: Sustain

Application

The Five S method is a structured sequential programme to improve workplace organisation and standardisation. Five S improves the safety, efficiency and orderliness of the process and establishes a sense of ownership within the team.

Five S is used in organisations engaged in Lean Sigma, Just in Time (JIT), Total Productive Maintenance (TPM) and Total Quality Management (TQM). This principle is widely applicable not just for the shop floor, but for the office too. As an additional bonus there are benefits to be found in environmental and safety factors due to the resulting reduction in disorder and confusion. Quality is improved by better organisation, and productivity is increased due to the decline in the amount of time spent in searching for the right tool or material at the workstation.

Consider the basic principle of a parent tidying a small child's room that is overflowing with clutter and where parts of some playthings are lost. By sorting through the various types of toys, grouping together pieces of missing jigsaw, Lego™ and so forth to reduce muddle, eventually no toy or game will be missing a vital part of the set. The end product should be a neater, warmer, brighter and more civilised play environment. The parent hopes that this will encourage the child to utilise all toys and equipment more productively because all relevant pieces are together, space is enhanced and mess is reduced. Till the next time!

It is useful to note that the quality gurus of Japan like numbered lists, e.g. the Seven Mudas, the Five Whys, and the Five Ss. However, the exact number of Ss is less important than observing the simple doctrine of achieving the elimination of wastes.

As the Five S programme focuses on attaining visual order and visual control, it is thus a key component of Visual Factory Management.

Basic Steps

Sort: The initial step in the Five S programme is to eliminate excess materials and equipment lying around in the workplace. These non-essential items are clearly identified by ‘red-tagging’.
Set in order: The second step is to organise, arrange and identify useful items in a work area to ensure their effective retrieval. The storage area, cabinets and shelves are all labelled properly. The objective of this step is, as the old mantra says, ‘a place for everything and everything in its place’.
Shine: This third action point is sometimes known as ‘sweep’ or ‘scrub’. It includes down-to-basics activities such as painting equipment after cleaning, painting walls and floors in bright colours and carrying out a regular housekeeping programme.
Standardise: The fourth point encourages workers to simplify and standardise the process to ensure that the first three steps continue to be effective. Some of the related activities include establishing cleaning procedures, colour coding containers, assigning responsibilities and using posters.
Sustain: The fifth step is to make Five S a way of life. Spreading the message and enhancing the practice naturally involves people and cultural issues. The key activities leading to the success of Five S include:
- Recognise and reward the effort of members.
  - Top management awareness and support.
  - Publicise the benefits.
The final step is to continue training and maintaining the standards of Five S.

Worked-Out Examples

As Five S is primarily a visual process, a good example of promoting its message would be to display pictures of a workplace with photographs showing both ‘before’ and ‘after’ depictions of the implementation of Five S.

The following example is taken from Skinner (2001) to illustrate the benefits of a Five S programme.

Northtrop Grumman Inc. in the USA first deployed Five S on a part delivery process. The work area assembled a variety of components into a single product.

Before Five S, the area was not well organised and the process was inefficient. With Five S implementations, the area saw a huge 93% reduction in the space employees travel to complete tasks as well as a 42% reduction in the overall floor space.

The system has become a one-piece flow operation between assembly and mechanics, enabling everyone involved to know what the station has and what it needs.

Training Requirements

Five S is a conceptually simple process, but it requires both initial and follow-up training to inculcate the methodology to all employees. The classroom training sessions should be followed by, as far as practicable, a visit to a site where visual changes due to Five S could be observed. A second-best option is to show the members photography or videos illustrating the ‘before and after’ status of the workplace involved in a Five S programme.

I3: Mistake Proofing

Definition

Mistake Proofing is an improvement tool to prevent errors being converted into defects. It comprises two main activities: preventing the occurrence of a defect and detecting the defect itself.

Mistake Proofing is also known as Poka-Yoke. The concept was developed by Shigeo Shingo and the term ‘poka-yoke’ comes from the Japanese words ‘poka’ (inadvertent mistake) and ‘yoke’ (prevent).

Application

Mistake Proofing is applied in fundamental areas. Although Poka-Yoke was devised as a component of Shingo's ‘Zero Quality Control’ for Toyota production lines, it is very easy to understand and grounded in basic common sense.

The process of Mistake Proofing is simply paying careful attention to every activity in the process and then placing appropriate checks at each step of the process. Mistake Proofing emphasises the detection and correction of mistakes at the design stage before they have a chance to become defects. This is then followed by checking. It is achieved by 100% inspection while the work is in progress by the operator and not by the quality inspectors. This inspection is an integral part of the work process.

There is an abundance of examples of simple devices related to Mistake Proofing in our everyday surroundings including limit switches, colour coding of cables, error detection alarms, a level crossing gate and many more.

Basic Steps

Perform Shingo's ‘source inspection’ at the design stage. In other words, identify possible errors that might occur in spite of preventive actions. For example, there may be some limit switches that provide some degree of regulatory control to stop the machine automatically.
Ensure 100% inspection by the operator to detect that an error is either taking place or is imminent.
Provide immediate feedback for corrective action. There are three basic actions in order of preference:
- Control: an action that self-corrects the error, e.g. spell checker,
- Shutdown: a device that shuts down the process when an error occurs, e.g. a limit switch,
- Warning: alerts the operator that some error is imminent, e.g. alarm.

Worked-Out Example

Consider the situation leading to the development of a level crossing. This is a place where cars and trains are crossing paths and the chances of accidents are very high.

The possible errors that might occur would relate to car drivers, who might be preoccupied or distracted while driving (source inspection).

Both the level crossing operator and the car driver should ensure safety features while the work is in progress (judgement inspection).

In order to prevent drivers from making mistakes when a train is approaching, traffic lights were installed to alert the driver to stop (warning).

The lights might not be completely effective, so a gate was installed when a train was coming (shutdown or regulatory function).

The operation of the gate was controlled automatically as the train was approaching (control).

With the above Mistake Proofing devices in place, an accident can only occur if either the control and regulatory measures are malfunctioning or the driver willfully drives around the gate.

Training Requirements

There is no ‘rocket science’ involved in Mistake Proofing and it may be perceived in a dismissive fashion: ‘that's only common sense’. However, it is critical that there should be some basic training in the principles and applications of Mistake Proofing. Furthermore, employees need to be empowered to make improvements in the process by using Mistake Proofing. A half day workshop should be sufficient to meet these training requirements.

I4: Brainstorming

Definition

Brainstorming is an improvement tool for a team to generate, creatively and efficiently, a high volume of ideas on any topic by encouraging free thinking.

There are a few variations on the brainstorming process, of which two methods are more frequently used. First is the structured approach (known as the ‘round robin’) where each member is asked to put forward an idea. The other technique is unstructured and is known as ‘free-wheeling’, in which ideas are produced and expressed by anyone at any time.

Application

Brainstorming is employed when the solution to a problem cannot be found by quantitative or logical tools. It works best by stimulating the synergy of a group. One member's thoughts trigger the idea of another participant, and so on. It is often used as a first step to open up ideas and explore options, which are then followed up by appropriate quality management tools and techniques.

It has the advantage of getting every member involved, avoiding a possible scenario where just a few people dominate the whole group.

There are some simple ground rules or codes of conduct to observe:

Agree to a time limit with the group.
Accept all ideas as given and do not interpret or abbreviate.
Do not evaluate ideas during the brainstorming process.
Encourage quantity rather than quality of ideas.
Discourage the role of an expert.
Keep ideas expressed in just a few words.
Emphasize causes and symptoms as opposed to solutions.
Write clearly and ensure the ideas are visible to everyone.
Have fun!

Basic Steps

Clearly state the focused problem selected for the brainstorming session.
Form a group and choose a facilitator, agree on a time limit and remind members of the ground rules.
Decide whether a structured approach or a free-wheeling basis will be used. For a larger group, a structured process will allow everyone to get a turn and subsequently this could be switched to the free-wheeling method.
Write clearly on a flipchart or a board any ideas as they are suggested. The facilitator will motivate and encourage participants by prompting them, ‘What else?’
Review the clarity of the written list of ideas, allow them to settle and discard any duplication.
Apply filters to reduce the list. Typical filters could include cost, quality, time and risk.
Ensure that everyone concurs with the shortlist of ideas.

Worked-Out Example

Consider the following focused statement for brainstorming.

What are the key selection criteria of a family holiday?

The five members of a family generated 26 ideas or issues. These were then filtered by a budgeted cost of £4,000 for the whole family and the following key criteria were derived.

Two weeks in August
Seaside resort
Indoor and outdoor recreational facilities
Not near a nightclub
Rich local culture
Opportunities for sightseeing

Training Requirements

The application of brainstorming does not require any formal training in a classroom. A facilitator with some previous experience in the process can conduct a successful brainstorming session after briefing the team with the ground rules.

I5: Overall Equipment Effectiveness (OEE)

Definition

The Overall Equipment Effectiveness (OEE) is an index of measuring the delivered performance of a plant or equipment based on good output.

The method of monitoring OEE is devised in such a way that it would highlight the losses and deficiencies incurred during the operation of the plant and identify the opportunities for improvement.

There are many ways to calculate OEE (see Shirose, 1992, and Hartman, 1991). In this section we describe the methodology of OEE that was developed and applied by the author in both Unilever¹ and GlaxoWellcome.²

Overall Equipment Effectiveness (OEE) is defined by the following formula:

where Specified Output = Specified Speed × Operation Time.

Application

The application of OEE has been extensive, especially when driven by the TPM (Total Productive Maintenance) programmes, to critical plant and equipment. It can be applied to a single equipment, a packing line, a production plant or processes. In order to appreciate the usefulness of OEE it is important to understand equipment time analysis as shown in Figure 5.16 and described below.

Figure 5.16 Equipment time analysis

Total Time defines the maximum time within a reporting period, such as 52 weeks a year, 24 hours a day, 8,760 hours in a year.

Available Time is the time during which the machine or equipment could be operated within the limits of national or local statutes, regulation or convention.

Operation Time is the period during which the machine or equipment is planned to run for production purposes. The operational time is normally the shift hours.

Production Time is the maximum phase during which the machine or equipment could be expected to be operated productively after adjusting the operation time for routine stoppages such as changeover and meal breaks.

Effective Time is the duration needed to produce a ‘good output delivered’ if the machine or equipment is working at its Specified Speed for a defined period. It includes no allowances for interruptions or any other time losses.

It is important to note that Effective Time is not recorded; it is calculated from the Specified Speed as

Effective Time = Good Output/Specified Speed

where Specified Speed is the optimum speed of a machine or equipment for a particular product without any allowances for loss of efficiency. It is expressed as quantity per unit such as tons per hour, bottles per minute, cases per hour or litres per minute.

In addition to OEE, two other indices are commonly used, as shown below:

A properly designed and administered OEE scheme offers a broad range of benefits and a comprehensive manufacturing performance system. Some of its key benefits are:

It provides information for shortening lead time and changeover time and a foundation for SMED.
It provides essential and reliable data for capacity planning and scheduling.
It identifies the ‘six big losses’ of TPM (Total Productive Maintenance) leading to a sustainable improvement in plant reliability.
It provides information for improving asset utilisation and thus reduced capital and depreciation costs in the longer term.

Basic Steps

Select the machines, equipment or a production line where the OEE scheme could be applied. The selection criteria will depend on the criticality of the equipment in the context of the business. It is useful to start with a single production line as a trial or pilot.
Establish the specified speed of the production line governed by the control or bottleneck operation. As shown in the following example (Figure 5.17) of a soap packaging line, the specified speed is 150 tablets per minute, i.e. this constitutes the speed of the wrapper (which is the slowest piece of equipment).

Set up a data recording system so that the output data and various stoppages and losses can be recorded.
Compile the data every day and validate the results. At this stage, detailed calculations are not necessary.
Monitor the results, comprising OEE and key indices, major losses as a percentage of the Operation Time and the trends of indices. The reporting is normally on a weekly basis for the department and on a monthly basis for senior management.
Use the results for continuous improvement, planning and strategic changes.

Figure 5.17 Soap production line

Worked-Out Example

Consider the production data of a toilet soap packing line (see Table 5.9) where the control station governing the Specified Speed is an ACMA 711 wrapping machine.

Given that each case contains 144 tablets,

Table 5.9 Data of a toilet soap packing line

Week Number:	31
Operation Time:	128 hours
Specified Speed:	150 tablets per minute
Good Output:	4232 cases
Routine Stoppages:	11 hours 30 minutes
Unexpected Stoppages:	27 hours 15 minutes

It is important to note that the Effective Time was calculated and not derived from the recorded stoppages. There will be an amount of unrecorded time (also known as Time Adjustment) as, in the example, given by:

Training Requirements

The success of an OEE scheme depends heavily on the rigour of continuous training. It is important that each operator, supervisor and manager of a production department receives a half day training programme covering the definitions, purpose and application of the OEE scheme. The training is continuous because of the turnover of staff. Senior management should also benefit from a one-hour awareness session.

5.6. Tools for CONTROL

Tools for Control as described in this section are:

Gantt Chart
Activity Network Diagram
Radar Chart
PDCA Cycle

C1: Gantt Chart

Definition

A Gantt Chart is a simple tool that represents time as a bar or a line on a chart. The start and finish periods for activities are displayed by the length of the bar and often the actual progress of the task is also indicated.

A Gantt Chart is also known as a bar chart.

Application

The most common form of scheduling is the application of Gantt Charts. The merits of Gantt Charts are that they are simple to use and they provide a clear visual representation of both the scheduled and actual progress of activities. The current time is also indicated on the graph.

In addition, Gantt Charts are used to review alternative schedules by using movable pieces of paper or plastic channels. The graphs can be drawn easily by standard software tools such as Powerpoint or Excel. However, a Gantt Chart is not an optimising tool and therefore does not determine the ‘critical path’ of a project.

Basic Steps

Identify the key activities or the tasks related to the project and describe each action using selective key words.
Prepare a scheduling board and, depending on the duration of the project, draw vertical lines to divide the board in monthly, weekly or daily intervals.
Arrange the activities in a sequence of estimated start dates and post them on the extreme left-hand column of the board.
Estimate the start and finish dates of each activity and draw horizontal bars or lines along the time scale to reflect the start and duration of each of the activities.
On completion of each activity, show the actual start and duration of the activity by using a bar of a different colour.
Include a ‘Time Now’ marker on the chart; review and maintain the chart until the end of the project.

Worked-Out Example

Figure 5.18 shows an example of a Gantt Chart showing the planned and completed activities of a Green Six Sigma programme.

Training Requirements

The application of Gantt Charts does not require extensive training. Team members are usually experienced in the use of Gantt Charts. A briefing session in front of the scheduling board should be adequate.

Figure 5.18 A Gantt Chart

SOURCE: Basu and Wright (2003).

C2: Activity Network Diagram

Definition

An Activity Network Diagram is a control tool to determine and monitor the most efficient path, known as the critical path, and a realistic schedule for the completion of a project. The diagram is represented graphically showing a brief description of all tasks, their sequence, their expected completion time and the jobs that can be carried out simultaneously.

An Activity Network Diagram with some variations is also referred to as PERT (Project Evaluation and Review Technique), CPM (Critical Path Method), a Precedence Diagram and, finally, as Network Analysis.

Application

The Activity Network Diagram was extensively used in most projects during the 1960s and 1970s. As larger undertakings became increasingly complex and comprising numerous tasks, its popularity by manual methods started to diminish. However, with the advent of software systems such as Primavera and MS Project, its application at the higher level of the project has increased significantly. It offers a number of benefits:

The team members can visualise the criticality of major tasks in the overall success of the project.
It highlights the problems of ‘bottlenecks’ and unrealistic timetables.
It provides facilities to review and adjust both the resources and schedules for specific tasks.

Basic Steps

There are normally two methods applied for the construction of an Activity Network Diagram: the ‘activity on arrow’ method and the ‘activity on node’ approach. It is the former that has been used most widely and the steps for the application of the arrow technique can be outlined as follows:

Assemble the project team with the ownership and knowledge of key tasks.
List the key tasks with a brief description for each one.
Identify the first task that must be carried out, the tasks that can be done in parallel and the sequential relationship between tasks.
Draw arrows for each task, which are labelled between numbered nodes, and estimate a realistic time for the completion of each of these tasks.
Avoid feedback loops in the diagram. Unlike Gantt Charts, the length of the arrows does not have any significance.
Determine the longest cumulative path as the critical path of the project.
Review the Activity Network Diagram and adjust resources and schedules if appropriate.

For more detailed information on the Activity Network Diagram, see Wild (2002), pp. 403–450.

Worked-Out Examples

Consider a project of writing and submitting the draft manuscript of a technical book such as this one to a publisher. Table 5.10 lists all the activities that constitute such an endeavour, including their dependent relationship and estimated duration.

Table 5.10 List of project activities for production of a technical book

Resource	Activity	Description	Predecessor	Duration (Weeks)
Author	A	Prepare proposal	-	2
Publisher	B	Approve proposal	A	4
Author	C	Preliminary research	A	2
Author	D	Detailed research	C	10
Author	E	Write Chapters 1–3	B	3
Author	F	Write Chapters 4–6	E	3
Author	G	Write remaining chapters	F	4
Admin	H	Type Chapters 1–3	E	2
Admin	I	Type Chapters 4–6	F, H	2
Admin	J	Type remaining	G, I	3
Author	K	Compile full draft	D, J	2
Author	L	Obtain copyright clearance	B	12
Author	M	Submit manuscript	K, L	1

Figure 5.19 Activity Network Diagram

The Activity Network Diagram is shown in Figure 5.19.

The critical path is A, B, E, F, G, J, K and M with a total project duration of 22 weeks.

Training Requirements

The basic principles of an Activity Network Diagram are not difficult to follow and can be covered in a half-day workshop with practical exercises.

A detailed analysis of an Activity Network Diagram can be complex when the variable estimates of duration, ‘float’ or ‘slack’, resource levelling and the probability of occurrence are considered. We suggest that the advanced applications should be treated for academic research.

C3: Radar Chart

Definition

A Radar Chart is a polar graph to show using just one graphic the size of the gaps in the performance levels of key performance indicators.

A Radar Chart is also known as a Polar Graph and, because of its appearance, as a spider diagram.

Application

A Radar Chart is a useful visual tool to display the important metrics of performance at the Control stage of a quality improvement programme. The other benefits of this chart include:

It highlights the strengths and weaknesses of the total process, programme or organisation.
It can define full performance in each category.
It can act as a focal point to capture and review the different perceptions of all stakeholders of the organisation related to relevant performance metrics.
Given a range of rating (say on a scale of 1 to 5), it can drive a total or average score of all entities.

However, a limitation of a Radar Chart is that it tends to provide just a snapshot of the performance levels at any given time.

Basic Steps

Select and define the performance categories. The chart can handle 10–20 categories.
Some performance metrics are likely to be easily quantifiable and expressed as a percentage. Other metrics may be qualitative and not represented by numbers.
Normalise all performance metrics in a scale of 1 to 5 with appropriate guidelines according to the following grades:
- 1 – Poor
- 2 – Fair
- 3 – Good
- 4 – Very Good
- 5 – Excellent
Construct the chart by drawing a wheel with as many spokes as the performance categories and marking each spoke with ‘0’ at the centre and ‘5’ on the rim.
Connect the ratings for each performance category and highlight the gaps.
Use the results for consolidating strengths and improving weaknesses.

Worked-Out Example

The example of a Radar Chart (Figure 5.20) is adapted from Slack et al. (2012), p. 42.

Consider five aspects of operations performance, which as a whole will affect the customer service when a product is delivered to the customer. These aspects are:

Quality: doing things right
Speed: doing this fast

Figure 5.20 Radar Chart
Dependability: doing things on time
Flexibility: ability to change
Cost: doing things cheaply

Table 5.11 shows the actual performance of the supplier and the expectation of the customer for the above five aspects of customer service in a scale 1 to 5, where 5 is high performance and 1 is low performance.

Training Requirements

The application of a Radar Chart does not require any significant classroom-based training. However, it does necessitate a good understanding of how to rate all performance categories. This awareness, and the selection criteria of the metrics, should be explained in a period of about an hour as part of a training programme.

Table 5.11 Actual performance of the supplier and the expectation of the customer

Five Aspects	Supplier	Customer
Quality	2	4
Speed	5	5
Dependability	4	4
Flexibility	2	5
Cost	4	4

C4: The PDCA Cycle

Definition

In a central process, the actual results of an action are compared with a target or a set point. The difference between the two is then monitored and corrective measures are adopted if the disparity becomes large. The repeated and uninterrupted nature of continuous improvement follows this usual definition of Control and is represented by the PDCA (Plan-Do-Check-Act) Cycle.

This is also referred to as the Deming Wheel, named after W.E. Deming (1986). Another variation of PDCA is PDSA (Plan, Do, Study, Act).

Application

The application of the PDCA Cycle has been found to be more effective than adopting the ‘right first time’ approach of concentrating on developing flawless plans (Juran, 1999, p. 41.3). The PDCA Cycle means continuously looking for better methods of improvement.

The PDCA Cycle is effective in both doing a job and managing a programme. The extent to which the PDCA Cycle is applied to the task level depends on the self control of the operators. Education and training enhance the self-control capacity of workers. At the programme level, the PDCA Cycle acts as a process of repeatedly questioning the detailed working of the operations and thereby helps to sustain the improved results.

The PDCA Cycle enables two types of corrective action – temporary and permanent. The temporary action is aimed at results by practically tackling and fixing the problem. The permanent corrective action, on the other hand, consists of investigating and eliminating the root causes and thus targets the sustainability of the improved process.

Basic Steps

P (Plan) Stage: The cycle starts with the Plan stage, comprising the formulation of a plan of action based on the analysis of the collected data.
D (Do) Stage: The next step is the Do or implementation period. This may involve a mini-PDCA cycle until the issues of implementation are resolved.
C (Check) Stage: The next step is the Check phase where the results after implementation are compared with targets to assess if the expected performance improvement has been achieved.
A (Act) Stage: At the final Act juncture, if the change has been successful then the outcome is consolidated or standardised.
If the change has not been successful, however, the lessons are recorded and the cycle starts again. Even if the change is successful, the results are sustained by going through the PDCA Cycle over and over again.

Worked-Out Example

The following example is taken from Juran (1999), pp. 32.8–32.10.

In this illustration, a healthcare organisation in the USA was adhering to the traditional reliance on extensive internal and external inspection to maintain quality standards. This resulted in a medical record system whose size, complexity and format were wasteful and cumbersome.

Figure 5.21 PDCA Cycle

The aspects of the PDCA Cycle (see Figure 5.21) were applied to their internal quality assurance procedures and the medical record procedures were simplified.

Training Requirements

The importance of training for the PDCA Cycle, especially for first time workers, has been well recognised at the early stage of the quality movement and thus the concept of the Quality Circle was born. During the late 1950s, about 100,000 transcripts of radio broadcast text for quality circles were sold in Japan. The teaching of the PDCA Cycle, although simple in principle, should be inculcated in everyone within the organisation on a continuous basis. This tool then becomes most effective when it becomes a way of life in the organisation.

5.7. Tools for Sustain

Tools for Sustain as described in this section are:

Balanced Scorecard
EFQM (European Foundation of Quality Management)
S&OP (Sales and Operations Planning)
Material Flow Account
Carbon Footprint Tool

Three tools for sustainability (viz. Balanced Scorecard, EFQM and S&OP) have already been described in Chapter 4. These three tools are presented again in this Chapter 5 under Sustain in the same format as other tools.

S1: Balanced Scorecard

Definition

The term Balanced Scorecard (BSC) refers to a performance management metric covering all aspects of the business (e.g. R&D, financial, marketing, operations and human resources). As shown in Figure 4.7 (see Chapter 4), it covers both leading indicators (e.g. Financial and Learning and Growth) and lagging indicators (e.g. Customer and Internal Business Processes).

Application

This strategic management tool was introduced (Kaplan and Norton, 1996) to translate strategy into action and has been applied extensively to a variety of improvement initiatives including:

Total Quality Management
Just in Time (JIT) production system
Lean production/lean enterprise
Management of major projects
Activity-based cost management
Supply chain management

Basic Steps

Balanced Scorecard is a company-wide performance management process covering four key perspectives (viz. Financial, Customer, Internal Business Processes and Learning and Growth) where the interests and involvement of all business units are required. The following steps are recommended by Kaplan and Norton to design and implement a Balanced Scorecard.

Select a core organisation unit to develop key performance indicators (KPIs) in all perspectives.
Conduct first round of interviews to agree the KPIs and their definitions.
Conduct the first executive workshop to review KPIs and ensure top management support.
Conduct a pilot exercise to try out the KPIs and seek agreement of a respective business unit.
Conduct the second executive workshop to agree an implementation plan.
Implement the agreed Balanced Scorecard.
Continuously review and improve the performance management system based on the Balanced Scorecard.

Worked-Out Example

As part of their Lean Six Sigma programme GlaxoSmithKline (GSK) introduced a Balanced Scorecard after following the above seven steps. It included 12 KPIs at the top level supported by 23 key performance measures. A standard template was used for each KPI, showing its definition, formula for calculation and a numerical example, as shown below as a sample for the KPI, cost of poor quality.

Title: COST OF POOR QUALITY (COPQ)
FORMULA: COPQ = Sum of cost of recalls + cost of rejects + cost of rework + cost of material failures + cost of adverse regulatory events + cost of waste
GLOBAL TARGET: 75% reduction from 2004 baseline
DEFINITION: The cost of poor quality is calculated by determining what was required to repair the defect and what was impacted by the defective product in the market.
PURPOSE: To identify major areas of poor quality in the business and develop a prioritized list of improvement projects.

EXAMPLE:

Recalls	£4,340
Rejects	£35,500
Rework	£4,400
Material failure	£13,000
Non-compliance	£25,000
Waste	£7,800
TOTAL	£90,040

Training Requirements

The importance of understanding the calculation and significance of each top level KPI and the buying in of the Balance Scorecard has been emphasized by Kaplan and Norton (2004). It is recommended that in addition to the executive workshops for senior managers, each department should also conduct training workshops for employees.

S2: EFQM (European Foundation of Quality Management)

Definition

The EFQM Excellence Model (British Quality Foundations, or BQF, 1999) is a framework for assessing business excellence. It serves to provide a stimulus to companies and individuals to develop quality improvement initiatives and to demonstrate sustainable superior performance in all aspects of the business.

Application

The EFQM excellence model is intended to assist European managers to better understand best practices and how to support them in quality management programmes. The EFQM currently has nineteen national partner organisations in Europe, and the British Quality Foundation is such an organisation in the UK. Over 20,000 companies, including 60% of the top 25 companies in Europe, are members of the EFQM.

The model has been used for several purposes, of which the four main ones are given below:

Self-assessment: The holistic and structural framework of the model helps to identify the strengths and areas for improvement in any organisation and then to develop focused improvements.
Benchmarking: Undertaking the assessment of defined criteria against the model, the performance of an organisation is compared with that of others.
Excellence Awards: A company with a robust quality programme can apply for a European Quality Award to demonstrate excellence in all nine criteria of the model. Although only one EQA is made each year for company, public sector and SME (small and medium enterprise), several EQAs are awarded to companies who demonstrate superiority according to the EFQM excellence model.
Strategy formulation: The criteria and sub-criteria of the model have been used by many companies to formulate their business strategy.

Basic Steps

As shown in Figure 4.11 (see Chapter 4), the model is structured around nine criteria and thirty-two sub-criteria with a fixed allocation of points or percentages. The criteria are grouped into two broad areas:
- Enablers: how we do things – the first five criteria.
- Results: What we measure, target and achieve – the second four criteria.
For each of the nine criteria there are questions for assessment in 32 sub-criteria.
The scoring of each sub-criterion is guided by the RADAR logic which consists of four elements:
- Results
- Approach
- Deployment
- Assessment and Review
The words on the RADAR scoring matrix reflect the grade of excellence for each attribute and what the Assessor will be looking for in an organisation.

Worked-Out Example

The model has been extensively applied in manufacturing, services and project management. It is an important tool of self-assessment to ensure the culture of sustainability in a Green Six Sigma programme.

Following an internal self-assessment, the percentage scores of each criteria were adjusted by the weighting factor for each criteria to calculate the overall score, as shown in Table 5.12.

Table 5.12 An example of EFQM self-assessment scores

Criteria	Score for the criteria (%)	Weighting factor	Net score (%)
Leadership	82	0.1	8.2
People	88	0.09	7.9
Policy and Strategy	80	0.08	6.4
Partnership and Resources	78	0.09	7.0
Processes	96	0.14	13.4
People Results	86	0.09	7.7
Customer Results	84	0.2	16.6
Society Results	70	0.06	4.2
Key Performance Indicators	88	0.15	13.2
		OVERALL	84.6

Training Requirements

EFQM licensed two- or three-day training courses are designed to enable individuals to help their organisations plan, manage and support an internal improvement process. These courses also prepare individuals to complete an internal assessment of their organisation.

S3: S&OP (Sales and Operations Planning)

Definition

Sales and Operations Planning (S&OP) is a senior management review process of establishing the operational plan and other key activities of the business to best satisfy the current levels of sales forecasts according to the delivery capacity of the business. S&OP is also known as the senior management review.

Application

Every organisation usually has some form of regular planning meeting in which the financial and business plans are reviewed and often some marketing and operational targets are discussed by a group of managers. These monthly meetings tend to deal with short-term problems and opportunities and usually decisions are made by the subjective judgments of an influential senior manager. In many companies, what passes for S&OP is often little more than a monthly review of the performance of the master production schedule. This approach of short-term planning fails to achieve the very real business benefits that an effective S&OP process can deliver. S&OP should be treated as a longer-term planning and a short-term execution process through a set of progressive meetings with specific departments.

It is an important tool of regular review to ensure the culture of sustainability in a Green Six Sigma programme. The agenda for the S&OP meeting with the general manager or chief executive officer should include a progress report of Green Six Sigma projects.

Basic Steps

The key steps of S&OP have been illustrated in Figure 4.9 (see Chapter 4). These steps are summarized below:

It starts with the sales and marketing departments comparing actual demand to the sales plan, assessing the marketplace potential and projecting future demand.
The updated demand plan is then communicated to the manufacturing, engineering and finance departments, which offer to support it.
Any difficulties in supporting the sales plan are worked out with a formal meeting chaired by the general manager or chief executive officer.

Worked-Out Example

As part of the MRP II Class A programme, GSK Turkey installed a Sales & Operations Planning (S&OP) process that is underpinned by a set of business planning meetings at various levels. The company went through major changes following the ‘Class A’ award, including the global merger with another multinational pharmaceutical company and the corporate Lean Six Sigma programme. In spite of these seismic changes, the S&OP process has been continued by the company every month.

The rigour of the S&OP process, which is championed by the managing director, has helped the company to sustain and improve the business benefits and communication culture, especially when they were challenged by a number of local initiatives in hand, including:

Transfer of head office
Rationalization of factory and warehouse
New products introduction
Sustaining Lean Six Sigma performance indicators

Training Requirements

The training syllabus of Black Belts and Green Belts should include Sales & Operations Planning meetings. In addition, special training workshops are required for senior managers and key stakeholders of the planning processes. The participants at each stage of S&OP also learn by taking part in meetings.

S4: Material Flow Analysis

Definition

Materials Flow Analysis is a quantitative process for determining the flow of materials through the total enterprise or an ecosystem. When the study of material flows is applied to an economic sector or a nation or a region it is also called material flow accounts.

Application

Material Flow Analysis (MFA) has many application areas of which three areas are most prominent. These are:

On a national or regional scale. In this type of application material exchanges between an economic sector and the nation or region are analysed. This process is also known as material flow accounts or material flow accounting.

On a corporate level. This process involves the supply chains of a number of companies in the corporate group. The goal of MFA within a company is to calculate the balance of the input and output of materials so that materials are more efficiently used.
In the life cycle of a product. In this application MFA is used to compile the life cycle inventory to optimise the balance and waste reduction.

In each application of MFA the central focus is the principles of the circular economy by recycling and waste reduction.

Basic Steps

Select the domain of MFA as to whether the analysis is for a nation, region, corporation or a product life cycle.
Make precise use of the term ‘material’ as to whether it is a transforming material or a finished product.
Establish the unit of analysis, e.g. bottles of whisky or kilograms of transforming materials.
Measure the input and output of materials in each stage of the process or supply chain.
Present the quantitative data in a material flow diagram.
Analyse the material balance and losses in each stage.
Apply the principles of the circular economy to optimise the usage of materials.

Worked-Out Example

The MFA diagram in Figure 5.22 paints a picture of the scale and nature of Scotland's whisky production by calculating all the raw materials used to make whisky, local consumption and exports. The units are proportionate for the material balance but not the total balance.

The example demonstrates how resources from Scotland are combined with a flow of imported materials to make a bottle of whisky. The materials used to produce the whisky have been measured against UK consumption and as exported material. The process also identified 2.8% wastes for further reduction.

Figure 5.22 Material Flow Analysis diagram

This also enables users to explore Scotland's material flow accounts and compare Scotland's material consumption with additional indicators such as population, GDP and carbon footprint data. Moving towards a circular economy is one of the solutions that will maximise value from the goods we already have in circulation while relieving pressure on finite natural materials.

Training Requirements

It is important to understand how to construct a Material Flow Analysis diagram and recognize its subtle differences with material flow accounts. Workshops on MFA also assist in team building, which is critical to collect and verify materials data from multiple sources. The training programmes for Black Belts and Green Belts should also include Material Flow Analysis.

S5: Carbon Footprint Tool

Definition

Carbon footprint is the amount of greenhouse gases released into the atmosphere as a result of the activities of a particular individual, organization, service, product or community expressed as carbon dioxide equivalent.

There are three categories of scopes of carbon footprint as follows:

Scope 1 covers the greenhouse gas emissions that are made directly, e.g. running a car.
Scope 2 covers the emissions it makes indirectly, e.g. energy bought for heating.
Scope 3 covers the emissions by suppliers to make the products along the supply chain.

Application

The application of carbon footprint was first promoted by BP plc in an attempt to move public attention away from the activities of fossil fuel companies and onto individual responsibility. It has become a very useful tool for many applications including:

For an organisation to determine the degree of carbon offsetting by planting trees

To determine the impact on climate change for a new strategy, especially sourcing strategy
To determine the carbon footprint per capita for a country
To develop and validate climate change initiatives by governments, local governments and organisations
To assess the impact of individual travel and lifestyles on climate change
As a regulatory for larger companies to comply with SECR (Streamlined Energy and Carbon Reporting)

For calculating personal carbon footprints, several free online carbon footprint calculators exist. A high-level guide is shown in Appendix 1.

Basic Steps

Select the area for measuring the carbon footprint (e.g. whether a project, department or enterprise).
Define the boundary of calculation (e.g. which locations should be included in the inventory).
Develop likely greenhouse gas inventory (e.g. only CO₂ or also other greenhouse gases)
Determine consumption values for each component of emissions (e.g. quantify the energy consumption).
Calculate your carbon footprint (e.g. by using a software or standard-compliant emission factors).
Develop a climate strategy and reduction targets (e.g. introduce KPIs for climate change).
Report your carbon footprint (e.g. prepare a report with a profile of your carbon footprint, strategy and risk analysis).

Worked-Out Example

A large service company in the UK has been publishing their Carbon Footprint Report since 2008. The report is comprehensive, containing a summary and also detailed emissions of different areas of activities. The following tables (Tables 5.13, 5.14 and 5.15) show the performance summary and details of two areas.

Table 5.13 CO₂ emissions: performance summary

	Year 2019	Change from 2018
Net Emissions	20,252 tonnes CO₂ e	+9.7%
Employees	3,290	+12.9%
Intensity per Employee	6.16 tonnes CO₂ e	- 2.9%

Table 5.14 CO₂ emissions: car travel

	Mileage	Emission (tonnes CO₂ e)	Percentage of Total Emissions
Commuting	12,177	2,735	13.5%
Company Car	474	70	0.3%
Rental Car	408	92	0.5%

Table 5.15 CO₂ emissions: wastes

Type of Wastes	Treatment	Volume (tonnes)	Tonnes CO₂ e
Organic	Compost	247	1.5
Paper	Recycled	246	5.2
Glass	Recycled	19	0.4
Plastic	Recycled	15	0.3
Mixed	Incinerated	165	3.5

Training Requirements

It is important to explain the purpose and method of calculating carbon footprints to all employees in an organisation to enhance the awareness and urgency of climate change initiatives. The team with the responsibility of preparing and calculating greenhouse gases inventory will gain competence with experience.

Carbon footprint is a vital tool of the Sustain stage of Green Six Sigma.

5.8. Summary

The success of a quality programme is underpinned by the selection and application of appropriate tools and Green Six Sigma is no exception to that. The recommendation is to start with simple tools first, as described in this chapter (Basu, 2004). Arguably in this section, only the Control Chart would require a good understanding of Statistical Process Control. Other tools can be applied without the ‘fear’ of advanced statistics associated with Six Sigma. It is recognised that more advanced tools and techniques (e.g. DOE, FMEA, QFD, SPC, DFFS, Monte Carlo Simulation and TRIZ) are required to solve more complex problems to near perfection. A separate book, Implementing Six Sigma and Lean (Basu, 2009), is recommended for helping the reader to tackle this area.

Notes

1 In Unilever Plc, the methodology was known as PAMCO (Plant and Machine Control).
2 In GlaxoWellcome it was called CAPRO (Capacity Analysis of Production).

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Table of Contents for Chapter 5: Green Six Sigma Tools

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5.1. Introduction

5.2. Tools for Define

5.3. Tools for Measure

5.4. Tools for Analysis

5.5. Tools for Improvement

5.6. Tools for CONTROL

Table of Contents for
Chapter 5: Green Six Sigma Tools