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Paper Organizers International: A Fictitious Six Sigma Green Belt Case Study

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This chapter is from the book
This chapter presents a case study to demonstrate a Six Sigma DMAIC project in action. From start to finish, the case study presents examples of each phase of the Six Sigma program.

CHAPTER OUTLINE

16.1 Background of the Case Study

16.2 Define Phase

16.3 Measure Phase

16.4 Analyze Phase

16.5 Improve Phase

16.6 Control Phase

LEARNING OBJECTIVES

After reading this chapter, you will be able to:

  • Conduct a Six Sigma DMAIC project

  • Use the tools and methods of the Define, Measure, Analyze, Improve, and Control Phases

16.1 Background of the Case Study

The Company

Paper Organizers International (POI) offers a full range of filing, organizing, and paper shuffling services. To accomplish these tasks, POI purchases metallic securing devices [*] (MSDs), staplers, hole punchers, folders, three-ring binders, and a full range of related products to serve its customers' paper-handling needs. The employees, or internal customers, of Paper Organizers International use Metallic Securing Devices (MSDs) to organize piles of paper pending placement into folders or binders.

The Purchasing Department of POI has noticed an increase in complaints from employees in the Paper-Shuffling Department (PSD) about MSDs breaking and failing to keep papers together. This creates opportunities for client papers to be mixed together. The Purchasing Department would like to improve the process for purchasing MSDs to eliminate complaints from employees in the Paper Shuffling Department.

Origin of the MSD Six Sigma Project

POI's mission statement is "Put the Right Information in the Right Place," RIP it! To accomplish this mission, POI has established a cascading set of business objectives and business indicators, which ultimately result in potential Six Sigma projects, see Table 16.1 on page 491.

Table 16.1. POI's Business Objectives and Indicators with Potential Six Sigma Projects

President

 

Director of Paper Shuffling Department (PSD)

Business objectives

Business indicators

Area objectives

Area indicators

Potential Six Sigma projects

Increase the number of orders

Number of orders/month (c-chart)

Increase the number of orders in PSD

Number of orders in PSD/month (c-chart)

New customer promotions project

Increase the number of POI services (filing, organizing, etc.) utilized by each customer

Average/and standard deviation of number of services utilized per customer/quarter (linex.gif and S-charts)

Increase the number of services utilized by each customer in PSD

Average and standard deviation of number of services utilized per PSD customer/quarter (linex.gif and S-charts)

Existing customer promotions project

Minimize production costs

Production costs/month (I and MR charts)

Minimize production costs in PSD

Production costs in PSD/month (Figure 16.1; I and MR charts)

MSD quality project

Eliminate employee complaints

Number of employee complaints/month (c-chart)

Eliminate employee complaints from PSD

Number of employee complaints from PSD/month (c-chart)

Employee morale project

The monthly production costs in the PSD are shown on the Individual and Moving Range chart in Figure 16.1 (see the next to last row in the fourth column in Table 16.1).

16fig01.jpgFigure 16.1 Minitab Individual and Moving Range Chart of Monthly Production Costs in the PSD

Figure 16.1 on page 492 indicates that production costs are stable (no special causes such as points beyond a control limit or too many sequences up and down, etc.) in the PSD with an average monthly cost of $1,096,880.00 and a standard deviation of $99,000 (liner.gif/d2 = $111,672/1.128).Additionally, production costs are approximately normally distributed (see Figure 16.2 on page 492). Team members discovered that PSD management considers monthly production costs to be very high, given the volume of work being processed by the department.

16fig02.jpgFigure 16.2 Minitab Histogram of Monthly Production Costs in the PSD

The four potential Six Sigma projects shown in the rightmost column of Table 16.1 are prioritized for attention in Table 16.2. Table 16.2 on page 493 is a Cause-and-Effect-type matrix (see Section 4.1) that weights the importance of each potential Six Sigma project to each of POI's business objectives.

Table 16.2. Prioritization of Potential Six Sigma Projects

Business objectives

Potential Six Sigma projects

New customer promotions project

Existing customer promotions project

MSD quality project

Employee morale project

Increase the number of orders

Weights

.35

3

3

0

0

Increase the number of POI services utilized by each customer

.10

1

3

0

0

Minimize production costs

.40

0

0

9

3

Eliminate employee complaints

.15

0

0

9

9

Weighted average of potential Six Sigma projects

1.15

1.35

4.95 [*]

2.55

The cell values are assigned by top management and are defined as follows: 0 = no relationship, 1 = weak relationship, 3 = moderate relationship, and 9 = strong relationship. The Finance Department developed the importance weights for each business objective to maximize the impact of Six Sigma projects on the bottom line of the organization. Consequently, the most critical project with respect to the business objectives is the MSD quality project; see 4.95 in the last row of Table 16.2. The champion and process owner of the MSD process prepared an initial project charter and presented it to the members of the MSD quality project team.

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