Business Case for Design for Six Sigma (Digital Short Cut) The

Pearson Education
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Successful development and commercialization of new products are critical to the long term viability of any business. The primary goal of product development is to enable a company to meet its goals for profitability and growth by introducing new, improved and innovative products to the market. The failure of a company to commercialize valuable new product ideas results in the commoditization of that company's product portfolio and potential failure of the business itself.

In this short cut we examine the business reasons that lead a company to adopt and implement the Design for Six Sigma methodology. During our discussion we examine the product life cycle that all products undergo, beginning with product development and ending with product decline. The impact of new, disruptive technologies on current products is also examined and illustrated with a case study example involving the replacement of vacuum tube technology by the transistor.

In addition, an examination of the economics of new product introduction is presented, describing the impact of low priced substitute and "surpriser and delighter" products on existing markets. Using traditional supply/demand economic analysis in combination with the Kano model, the authors explain the dynamic forces which move existing products from premium pricing to a state of commoditization. Finally, the authors take a detailed look at the financial metrics used to measure success in a DFSS project. During this portion of the chapter the authors discuss financial metrics such as Net Present Value; key reasons for failed commercialization programs; and the use of financial sensitivity analysis, including Monte Carlo simulation techniques.

This short cut describes in detail how DFSS brings value to companies. Using the language of business, the authors outline how Design for Six Sigma helps companies identify the needs of customers and emerging product trends through the use of a well defined, structured process. The authors also provides the reader with an understanding of how DFSS can be used to counter the forces of product commoditization and the entry of potentially disruptive technologies in the markets served by the business today.


What This Short Cut Covers 3

Introduction 4

The Product Life Cycle 4

Where Have All the Vacuum Tubes Gone? 5

Understanding Dynamic Markets: The Kano Model 8

The Role of DFSS 12

Six Sigma Financial Metrics 14

Candy Wrapper Film: A DFSS Case Study 15

How to Measure Success in a DFSS Project 16

What's in the Book Commercializing Great Products with Design for Six Sigma? 36

About the Authors 45

Related Publications 46

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About the author

Randy C. Perry is a master consultant and program manager with Sigma Breakthrough Technologies, Inc. Randy has more than thirty years of experience in product development, marketing, and operations productivity improvement. He spent eighteen years with Allied Signal Corporation during the implementation of Six Sigma under the leadership of Larry Bossidy. He has performed consulting and training with many major companies, including Seagate, Eastman Chemical, Tyco, Celanese, and BASF. Randy has bachelor's and master's degrees in chemical engineering from N.C. State University and an M.B.A. from Duke University. He is a certified Six Sigma Blackbelt, and lives in Midlothian, Virginia.

David W. Bacon is a master consultant with Sigma Breakthrough Technologies, Inc., with responsibilities for program development and training in the Master Blackbelt program. During the past forty years, he has provided consulting support in quality and productivity improvement to more than fifty companies, including W.R. Grace, Chemtura, Bayer Material Science, Celanese, Tyco Electronics, and Tyco Healthcare. David is a Fellow of the American Statistical Association and the Canadian Society for Chemical Engineering. He lives on a farm outside of Picton, Ontario, Canada.

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Pearson Education
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Published on
Sep 14, 2006
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Business & Economics / Quality Control
Technology & Engineering / Quality Control
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Content Protection
This content is DRM protected.
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Eligible for Family Library

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This is the eBook version of the printed book.

Development of a new product requires the product development team to address many complex customer requirements during the commercialization process. Consider a situation in which a new product being developed must meet specified upper and lower specification limits based on Voice of the Customer interviews. The design team must model and understand the sources of potential variation in the new product that need to be monitored and controlled if the product is to meet the identified customer needs. The process of analyzing component variation and designing a final product that meets customer tolerance requirements is known as statistical tolerancing.

In this Short Cut, various Design for Six Sigma techniques for determining the impact of multiple sources of variation on a final product are examined in detail. A procedure is described for using representative models for individual product components to estimate the expected overall level of variation in the performance of a final product.

Three methods of tolerance analysis are presented and the merits of each are discussed: Worst Case Analysis, Root Sum of Squares Analysis, and Six Sigma Tolerance Analysis. A detailed case study example, involving multiple sources of variation, is employed to illustrate the application of these methods. Minitab® is used to identify the best-fitting distributions from data sets for individual components. Monte Carlo Simulation with Crystal Ball® is then employed to determine the most important individual sources of variation and the overall variation of the final product. Finally, Crystal Ball's OptQuest® optimization feature is utilized to determine the required design value for each key parameter to meet final customer requirements.


What This Short Cut Covers


Worst Case Analysis

Root Sum of Squares Analysis

Six Sigma Tolerance Analysis

What's in the Book Commercializing Great Products with Design for Six Sigma

About the Authors

Related Publications

Optimize Every Stage of Your Product Development and Commercialization

To remain competitive, companies must become more effective at identifying, developing, and commercializing new products and services. Design for Six Sigma (DFSS) is the most powerful approach available for achieving these goals reliably and efficiently. Now, for the first time, there's a comprehensive, hands-on guide to utilizing DFSS in real-world product development.

Using a start-to-finish case study, a practical roadmap, and easy-to-use templates, Commercializing Great Products with Design for Six Sigma shows how to optimize every stage of product commercialization. Drawing on a combined sixty-five years of product experience, the authors show how to make better product and portfolio decisions; develop better business cases and benefits assessments; create better concepts and designs; scale up manufacturing more effectively; and execute better launches.

Learn how to

Establish infrastructure to support successful commercialization Use Stage-Gate® processes to minimize risk and optimize the use of people and resources Create better plans: Segment markets, define product value, estimate financial value, and position new products for success Capture the "Voice of the Customer," analyze it, and use it to drive development Choose the right tools: Ideation, Pugh Concept Selection, QFD, TRIZ, and many more Develop better products and processes: Process Maps, Cause and Effects Matrices, Failure Modes and Effects Analysis, Statistical Design and Data Analysis Tools, and more Test and improve product performance and reliability Perform Post Mortems and apply what you've learned to your next project

Whether you're an executive, engineer, designer, marketer, or quality-control professional, Commercializing Great Products with Design for Six Sigma will help you identify more valuable product concepts and translate them into high-impact revenue sources.

Innovation, claims quality consultant Subir Chowdhury, is part of America’s DNA. No other country in the world matches America’s creative drive and its ability to turn innovative ideas into revolutionary products–from antilock brakes and steel-belted radial tires to sophisticated software and microprocessors. But as fast as we introduce new products, we lose the markets we establish to countries that know how to manufacture higher quality versions for less money. As Japanese and European firms win market share by concentrating on quality, America is continually forced to rely on innovation to stay ahead.

In The Ice Cream Maker, Chowdhury uses a simple story to illustrate how businesses can instill quality into our culture and into every product we design, build, and market. The protagonist of the story is Peter Delvecchio, the manager of a regional ice cream company, who is determined to sell its ice cream to a flourishing national grocery chain, Natural Foods. In conversations with the Natural Foods manager, Peter learns how the extraordinarily successful retailer achieves its renowned high standard of excellence, both in the services it provides its customers and in the foods it manufactures and sells. Quality, he discovers, must be the mission of every employee; by learning to listen, enrich, and optimize, he can encourage and sustain the highest levels of quality in everything the company does.

Like Fish! and Who Moved My Cheese? The Ice Cream Maker offers an essential and universal lesson about one of industry's foremost challenges in a thoroughly engaging style. For managers and executives, small business owners and entrepreneurs, The Ice Cream Maker is a compelling, eye-opening guide to the most effective ways to achieve excellence and become industry leaders on the global stage.

From the Hardcover edition.
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