Ericsson meets SMID
Define
April, 2011
Agenda
› 4th April
– Ericsson presentation
– Statistical tools in manufacturing
– DMAIC/IDDOV
› 7th April
– Define
– Measure
› 11th April
– Analyze
› 14th April
– Implement
– Control
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 2
DMAIC Chart
D
Comprehensive
Light
efine
M
easure
A
nalyze
I
mprove
C
ontrol
Understand the task
and its financial
impact.
Develop and execute
an appropriate data
collection method.
Find the root
causes.
Generate and
implement solutions.
Ensure that the
results will last.
• Task selection
matrix
• SMART review
• Stakeholder map
• Risk Management
• Process map
• Data collection
table
•Pareto diagram
• Fishbone diagram
• Correlation
analysis
• FMEA risk analysis
• Process map
• Documentation,
standardization
and training
• SWOT analysis
• Process map
• VOC and break
down to CTQs
• 7MT
• Affinity diagram
• 7QCT
• Measurement
system analysis
• Sampling technique
• SIPOC
• Gauge R&R, Gauge
attribute
• Capability analysis
• Benchmark
• Tagushi loss
functions
• 7QCT
• Hypothesis testing
• Regressionanalysis
• DOE
• Anova
• 7MT
• Data
transformations
• Simulations
• Poka-Yoke
• Hypothesis testing
• Loss functions
• Cost/Benefit
selection
•Pugh Concept
Selection
• 7QCT
• SPC
• Business case
verification
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 3
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 4
Cost of Poor quality
“Improvements in quality always, and automatically, results in
cost and lead time reduction, increase productivity, increase
market shares, and hence increase profits.”
MR.W.Edwards Deming
“ COPQ are costs that would disappear if the products and processes
of a company would be fail or defect free“
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 5
Cost Of Poor Quality
Material
Manufacturing
Process 1
Process 2
defects
Process 3
defects
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 6
COPQ
Material
.
Manufacturing
Process 4
defects
defects
COPQ Stratification
Cost Of Poor Quality can be divided into product specific COPQ, more
process related COPQ and COPQ related to employee effects or “soft”
effects.
Product
Lack of producibility
Cost for test
Process
Soft / Intangible
Non used capacity
Lost goodwill
Delayed plans
Extra freight cost
Inspection cost
Trouble shooting / analysis
High field and service costs
Staff turnover
Increased customer support
Incorrect pricing
Repair & Rework
Overdue debts
Scrap
High maintenance costs
Customer returns (claims)
Overtime
Increased stock
Incorrect orders
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 7
Disappointed customers
Extra paper work
COPQ Product
Example Module Production
INCOMING INSPECTION
Product
Printing
AOI
SMA
AOI
INSPECTION
Lack of producibility
Cost for test
Inspection cost
Trouble shooting / analysis
ASSEMBLY
TEST
ASSEMBLY
TEST INSPECTION
Repair & Rework
Scrap
Customer returns (claims)
CUSTOMER
RETURNS
SCRAP
TROUBLE SHOOTING
REPAIR / REWORK
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 8
COPQ Process & Soft / Employee
Supplier A
Supplier B
Supplier C
Price
2,30 USD
Price
2,45 USD
Price
1,99 USD
Lead Time
6 weeks
Lead Time
6 weeks
Lead Time
4 weeks
Delivery precision
93,2%
Delivery precision
98,0%
Delivery precision
82,0%
Failure rate PPM
984
Failure rate PPM
223
Failure rate PPM
5632
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 9
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 10
What is a CTQ?
› CTQ are the product-, subsystem-, parts- or process features that significantly
impact the final cost, performance or reliability of the product or process
› CTQ’s have to be obtained to meet customer and stakeholder needs and
objectives.
› CTQ’s often have effect on several identified targets (Six Sigma Y’s)
› CTQ’s are found by making a CTQ-tree and should be tangible and
measurable.
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 11
Develop and define attribute
or variables for CTQs
Voice of the
Customer/
Market
Features
Measurement
CTQs
Accessible sales staff
Quotations
(no of missed phone-calls)
No errors (did understand
customer needs)
Responsiveness
Meets customer needs
Delivery
Shorter
lead-times
No updates
(no of loops)
(response-time)
(% of deliveries to
customer request)
(Delivery on first confirm date)
To site delivery
(% of units delivered to site)
Short assembly time
(h/inst)
Test trail done same day
as site installation
(% of inst)
Installation
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 12
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Y = f (X1, X2, X3... Xn)
Ytot = ƒ(x1, x2, x3… xn)

x3 = Ysub1 = ƒ ( x1, x2, x3… xn)

x1 = Y sub2 = ƒ( x1, x2, x3… xn)
and so on…..
In best situations one could find root causes which could
improve several high level Ys in a positive way. In worse situations
two Ys could go in opposite directions for a common x.
The Y = ƒ(x1, x2, x3… xn) approach can be used in a variety of situations.
From simple limited problem solving cases to big business strategy missions.
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 14
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 15
Business Case
› The purpose of the Business Case is to answer the question:
– What is the financial benefit of this improvement?
› A Business Case includes both costs (project, investments and implementation) and
savings (hard and soft).
› The Business Case give you authority to drive the mission.
› Prioritize to other programs/projects that may conflict.
› Give you a mechanism for judging solutions from a cost/saving ratio
› Summarizes and quantifies company profits.
› Money is a common language.
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 16
Business Case Calculations –
Savings
Hard
Intermediate
› Soft
›
›
›
›
›
›
›
›
›
›
›
›
›
›
Defects
Man hours Bottle neck
Cost Avoidance History
TK
etc.
Missed orders
Potential capacit
y
Cost Avoidance Probability
etc.
Un-needed capacity
Customer Happiness
Market share
Employee motivation
etc.
Business Case Calculations –
Cost
›
›
›
›
›
Project man hours
Investments
Equipment
Training hours
etc
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 17
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 18
Goal Statement
- with SMART assessment
Ensure that your goal is set up SMART to be able
to judge when your project and goals are fulfilled.
Specific
Specify what products/processes/services/activities are included in the goal
formulation. Keep it simple but specific. Avoid abbreviations that are not generally
known.
Measurable
What measurements will show that the goal will be fulfilled? How will relevant
progress be tracked? Variable data are always desirable, it facilitate you to track
positive or negative progress trends to the final goal.
Achievable
How tough must we set the goal to be challenged to do our best efforts and more?
A tough and very ambitious goal will drive new perspectives and out of the box
thinking. An over ambitious goal will cause de-motivation and lack if
empowerment.
Relevant
Do we know that this goal area is what we should put our efforts on? Is it high
enough priority so it won't be down prioritized by other activities?
Time bounded
Not only set up a time when the goal shall be fulfilled but also during what period
of time (start and stop time) will measurement will be taken to prove a solid
baseline for goal fulfilment?
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Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 20
Stakeholder analysis
Level of true Individual Interest
1.
Brainstorm stakeholders
Categorize stakeholders
– Set up a communication
plan for group A-D.
– What media? I.e. meetings,
mail, phone, presentations,
oral, etc.
– When? Weekly, monthly,
quarterly, when ever needed
or when we meet in other
occasions etc)
High
Communication plan
D Key players
Individual E
Area manager B
Individual A
Area manager A
Individual D
Individual B
Low
– In interest and authority
3.
C Keep Satisfied
Formal or informal authority
2.
High
Low
– Whom will be effected or
have to know of the project?
Individual F
All line-operators
A Minimal effort
Individual C
B Keep informed
GROUP:
A. What minimal effort is required to keep Group A ticking over?
B. How do we keep Group B informed in a consistent and regular manner?
C. How do we manage Group C engagement in such a way that keeps them satisfied & decreases their ‘wrecking’ potential?
D. How do we engage and delight Group D so that they can help us to engage Group C?
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 21
Communication Plan
›
With the stakeholder analysis as a base, build a plan for when, what
and to whom information must be shared along the improvement
execution?
Media
News letter/
web
E-mail
Steering
group
Team
meeting
Informal
meeting
To whom
Group A
Minimal effort
Group B Keep
informed
Group C Keep
satisfied
Group D
Key
player
Individual F
Individual B
Individual C
Individual E
Area mgr A
Individual D
Area mgr B
Type of
deliverable
Road Map
All
Analysed Facts
x
Alternative Solution x
x
Progress Report
x
x
x
Individual
E
x
x
x
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 22
Individual E
Area Mgr. A
Individual E
Area mgr A
Individual B
Individual E
Area mgr A
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 23
Notice!
Try to find preventive
actions that moves
risks to the right,
downwards or both.
Risk Analyze - Example
High Probability
Low Impact
High Probability
High Impact
G E
C
F
B
Low Probability
High Impact
D
Low Probability
Low Impact
H
A
1) Rate the risks within an improvement by the level of impact and level of probability
2) Identify preventive actions, responsible drivers and ready date
3) Follow up and update probability and impact when preventive actions are taken
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Time schedule
•Project phases (DMAIC)
•Identify milestones
•Identify tollgates
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 26
NOT OK
OK
Problem/ opportunity statement:
Problem/ opportunity statement:
Our delivery precision is poor. Goal level is
98% and last month it was 76%. This is a big
problem for us and needs to be solved
quickly.
Our delivery precision for the STREAMLINE product portfolio
has been poor during 2003 and 2004. We loose revenues
since the market need has been higher than our capacity
during 2004 and a missed delivery is a missed invoicing. The
general customer expectation is a D.P at 98% and baseline
Q1 and Q2 it was 80%. If we don't show a D.P at 98 % at the
end of 2004 we will not only loose invoicing but also customer
contract. The D.P. also cost us extra administration.
Goal statement:
Goal statement:
Aligned with the KPI target the Delivery
Precision = 98% at Q4 2004.
Delivery Precision  98,0% measured on all STREAMLINE
shipments during 041201-041231.
Business case:
Business case:
Every missed delivery cost us ~ 1 Ksek in
extra fright costs and administration. At
present D.P. figures we will lose ~ 500 Ksek
during 2004.
Hard savings: Invoicing losses sales margin 300 Ksek 03Q304Q2, Extra admin 30 Ksek.
Soft Savings: Potentially missed contract during 2005 ~ 10
000 Ksek.
Costs: Manhours 30 Ksek, Traveling costs 30 Ksek.
Hard Savings – Costs during 04Q3-05Q2 = 247,5 – 60 =
187,5 Ksek
Project Scope:
The project will only focus on suppliers who
SD/TFT responsibility.
Project Scope:
No project limitation at this stage.
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 27
Define - Key questions
1.Why do we need the improvement?
2.What process/product/service has to be addressed?
3.What is the goal deliverable?
4.What is the Critical To Quality parameters?
5.Is it a solid Business Case?
6.How do we avoid risks with the project and improvement?
7.Who should attend in the project?
8.Where do we have Stakeholders that has to incorporated in the task?
Ericsson @ SMID - Define phase | Commercial in confidence | 2011-03-24 | Page 28