The Cost of Quality: How to Determine Financial Loss Through Sigma Scores
Dr. Michael Abitz received his Doctorate in
Management from Colorado Technical University and Master of Science in
Quality Assurance from California State University.
- Six Sigma Quality Black Belt
- Online Curriculum Developer
- Online Instructor
His professional areas of interest include research, audio/video production, and creating topics for webinar presentations in addition to mentoring organizations in problem-solving. Cost savings include $16.1million in addition to $14 million in new sales.
Dr. Abitz’s experiences include aircraft and computer industries where he developed and presented training in:
- Organizational Process Improvement
- Reliability Test Methods
- Ongoing Reliability Testing (ORT)
- Accelerated Life Testing
- Six Sigma (35 classes each two weeks in length)
- Root Causes Failure Analysis
- Demonstrating MTBF to determine product reliability to US companies and Pacific Rim Suppliers
Cost Justification: What is Your Organization’s Sigma Level
Sigma Level versus dollars lost as a percent of sales is explained. By understanding your processes sigma and addressing risk properly your organization will benefit considerably.
Improvement Team Selection
The success of quality improvement projects will come down to the quality of the team members working on the project. Responsibilities of the Project Sponsor and team members are discussed.
How to Collect Process Information Without Bias (The Post-it Exercise)
Accurate collection of process information is critical for determining process reliability. Inaccurate collection and implications are discussed.
Introduction to Reliability Math
Introduction of reliability arithmetic is presented, how to apply reliability calculations to Sigma Levels and financial loss to the organization.
Determine Revenue Loss Per Process with Process Reliability Modeling (PRM)
PRM has its roots in reliability engineering; with PRM Webinar Participants will learn how to convert qualitative information into quantitative data and calculate process sigma and percent of financial loss to the organization.
Identify Process Root Causes with Reality Charting
Reality Charting is the world’s leading event-based problem-solving process tool; webinar participants will learn the simple basics of using the software.
The Model for Improvement
The plan-Do-study-Act (PDSA) Cycles Should be every organization's preferred method for improvement of transactional or mechanical processes. PDSA is simple, easy to learn yet very powerful.
Description of steps include
PLAN Plan the test or observation, including a plan for collecting data
DO Try out the test on a small scale
STUDY Set aside time to analyze the data and study the results
ACT Refine the change, based on what was learned from the test
When PDSA is combined with The Three Basic Questions developed by Associates. In Process Improvement (API, Austin, TX) users will have a very powerful Scientific method for solving process problems.
The Three Basic Questions include:
- What are we trying to accomplish?
- How will we know change is an improvement?
- What changes can we make that will result in improvement? Question three is a thinking question and may need research (PDSA cycles) before meaningful changes can be made.
The Three Basic Questions encourage agreement among team members on the problem statement, metric, and changes before improvement efforts are started.
The webinar presents a method used to identify, reduce or eliminate transactional or manufacturing process issues. Participants will learn how to effectively collect information in every process and calculate the financial loss to the organization.
When areas causing loss are identified participants will learn how to determine root causes with Reality Charting and repair with The Model for Improvement.
- How to justify improvement projects
- Improvement team selection
- How to collect unbiased qualitative information
- Introduction to Reliability Math
- Determine Revenue Loss Per Process with Process Reliability Modeling
- Identify Process Root Causes with Reality Charting
- The Model for Improvement
- Example of Results
Course Level - Advanced
Who Should Attend
This training is useful for all individuals who want to learn process variation countermeasures.
- Strategic Leaders
- Quality Managers
- Product Managers
- Manufacturing and R&D Managers
- Quality Professionals/Consultants
- ISO Coordinators/Management Representatives
- Engineers and Supervisors
- Laboratory quality professionals
Why Should You Attend
Ineffective process management will result in significant loss to the organization's bottom line. The amount of loss depends upon your organization's Sigma Score, for example, a Sigma Score of 3 suggests a loss of 25% to 40% of sales (Sigma Scores vary from 2 to 6). A score of 6 suggests less than 1% of sales dollars are lost.
Traditional methods of Process Improvement demonstrate high failure rates: Business Process Reengineering (BPR) 50% to 85%, Total Quality Management (TQM) 75%, Six Sigma 50% to 90%, and Lean Six Sigma to 95%.
You can increase your odds of success significantly by combining effective information collection, identification of possible root causes, and effective improvement methods.