Q.1 List the 10 important considerations for data collection by Juran institute.

Solution: The Juran institute suggests 10 important considerations for data collections: 1. Formulate good questions that relate to the specific information needs of the project 2. Use appropriate data analysis tools and be certain the necessary data are being collected 3. Define comprehensive data collection points so that job flows suffer minimum interruption 4. Select an unbiased collector who has the easiest who ahs the easiest and most immediate access to the relevant facts. 5. Understand the environment and make sure that data collections have the proper experience 6. Design simple data collection forms 7. Prepare instructions for collecting the data 8. Test the data collection forms and the instructions and make sure they are filled out properly 9. Train the data collectors as to the purpose of the study, what the data will be used for, how to fill the forms, and the importance of remaining unbiased. 10. Audit the data collection process and validate the results. Q2. Write a short note on: a. Stakeholder value b. Project value c. Customer value Solution: (a) Stakeholder Value: Major investors have become more activist about company performance. Once it was rare for top executives to be punished for failing to deliver returns; now it is common. A measure often used to measure performance is shareholder value. Shareholder value had no clear definition but was generally taken as a measure of whether a company had created (or destroyed) wealth for its shareholders. In recent years a more reliable measure has been sought and two methods have been developed; market value added (MVA) and economic value added (EVA). As a system of analysis MVA aims to strip out most of the anomalies created by accounting standards to paint a truer picture of shareholder value. The basic calculation is to take the amount of money entrusted to management, measured by adding up money raised through shares issued, borrowing and retained earnings. That gives a measure of how much outsiders have given to the company in the years since it was founded. It then takes the current value of the companys shares and debt, as a measure of how much money the investors could take out of the business. The difference is the MVA, which measures how the executives running a company have fared with the capital

under their control since the company was established. If the MVA is positive that means value is being created for investors, if negative that means investors money has been destroyed. EVA takes the after tax operating profit for a company and compares it with its cost of capital. Cost of capital is an economic concept that includes far more than just the interest paid to the bank and the dividend to shareholders. For each company the cost of capital varies, sometimes quite widely. Some industries are naturally more risky than others; investors will accept lower returns from a big established food group than from a young software company because it is more likely the big food group will generate stable returns while it is quite likely the software company will stumble. The EVA figure represents the difference between the profit a company makes and the cost of its capital. The idea is that it is not good enough for a company just to make a profit from its business. It also has to make enough to cover the cost of its capital. If it is not covering the cost of its capital, plus a reasonable margin, then the logical conclusion is that it would have been better if the investors money had been placed elsewhere, or if a new management team were brought in to make better use of the capital. (b) Project Value: Organizations add value to their business through a series of processes. Increasingly such processes are undertaken within the context of a project. It is the cumulative effect of projects that decides on the success or failure of a company in delivering value to both its customers and shareholders. An aspect of project value is how this is used at a portfolio level to ensure the right projects are brought forward through the portfolio. When looking across the portfolio to determine the prioritization of projects a key consideration is the value they add to the organization. This reinforces the importance of ensuring that the value a project contributes to an organization is clearly defined and articulated. In order to create and sustain competitive advantage in the form of effective differentiation and/or cost savings, organizations need the help of their suppliers. The supply chain has recently received considerable attention in the business press. It is raised here because projects bring together a range of suppliers. Increasingly, these suppliers can only add value to a project if there is co-operation between them. This has driven the trend towards projects being undertaken in a spirit of partnership rather than in an adversarial manner. (c) Customer Value: There is considerable debate within the business world on whether companies should deliver value for their shareholders or customers. There is no simple answer, but new techniques such as lean production are designed to produce unique value for the customer. Project duration and cost are considered in, project-as-production system terms, making concern for total cost and duration more important than the cost or duration of any activity.

Co-ordination is accomplished in general by the central schedule while the details of work-flow are managed throughout the organization by people who are aware of and support project goals performance. Value to the customer and throughput, the movement of information or materials to completion, are the primary objectives. Improvements result from reducing waste, the difference between the current situation and perfection (defined as meeting the customers unique requirements in zero time with nothing in stores). Q3. Discuss Five Elements of the Six Sigma Framework. Explain DMAIC Process. Solution: Management strategies, such as TQC, TQM, and Six Sigma, are distinguished from each other by their underlying rationale and framework. As far as the corporate framework of Six Sigma is concerned, it embodies the five elements of top-level management commitment, training schemes, project team activities, and measurement system and stakeholder involvement as shown in Figure.

Stakeholders include employees, owners, suppliers and customers. At the core of the framework is a formalized improvement strategy with the following five steps: define measure, analyze, improve and control (DMAIC). The improvement strategy is based on training schemes, project team activities and measurement system. Top-level management commitment and stakeholder involvement are all inclusive in the framework. Without these two, the improvement strategy functions poorly. All five elements support the improvement strategy and improvement project teams. Most big companies operate in three parts: R&D, manufacturing, and nonmanufacturing service. Six-Sigma can be introduced into each of these three parts separately. In fact, the color of Six Sigma could be different for each part. Six Sigma in the R&D part is often called Design for Six Sigma (DFSS), Manufacturing Six

Sigma in manufacturing, and Transactional Six Sigma (TSS) in the nonmanufacturing service sector. All five elements are necessary for each of the three different Six Sigma functions. However, the improvement methodology, DMAIC, could be modified in DFSS and TSS. DMAIC Process The most important methodology in Six Sigma management is perhaps the formalized improvement methodology characterized by DMAIC (definemeasure-analyze-improve-control) process. This Six Sigma companies everywhere apply works well as a breakthrough strategy. Six Sigma companies everywhere apply this methodology as it enables real improvements and real results. The methodology works equally well on variation, cycle time, yield, design, and others. It is divided into five phases as shown in Figure. In each phase the major activities are as follows.

Phase 0: (Definition) this phase is concerned with identification of the process or product that needs improvement. It is also concerned with benchmarking of key product or process characteristics of other world-class companies. Phase 1: (Measurement) This phase entails selecting product characteristics; i.e., dependent variables, mapping the respective processes, making the necessary measurement, recording the results and estimating the short- and long-term process capabilities. Quality function deployment (QFD) plays a major role in selecting critical product characteristics. Phase 2: (Analysis) this phase is concerned with analyzing and benchmarking the key product/process performance metrics. Following this, a gap analysis is often undertaken to identify the common factors of successful performance; i.e., what factors explain best-in-class performance. In some cases, it is necessary to redefine the performance goal. In analyzing the product/process performance, various statistical and basic QC tools are used.

Phase 3: (Improvement) this phase is related to selecting those product performance characteristics which must be improved to achieve the goal. Once this is done, the characteristics are diagnosed to reveal the major sources of variation. Next, the key process variables are identified usually by way of statistically designed experiments including Taguchi methods and other robust design of experiments (DOE). The improved conditions of key process variables are verified. Phase 4: (Control) this last phase is initiated by ensuring that the new process conditions are documented and monitored via statistical process control (SPC) methods. After the settling in period, the process capability is reassessed. Depending upon the outcome of such a follow-on analysis, it may become necessary to revisit one or more of the preceding phases.