The metrics of a Six Sigma project reflect customer needs and ensure that the internal metrics of the organization are achieved. The selection of project metrics is one of the crucial elements in the Define phase of the Six Sigma methodology.
Six Sigma project metrics can be categorized into primary metrics and secondary metrics.
Primary Metrics
A primary metric, also called a project CTQ, is a CTQ measure that is used to monitor project progression and success. It is the reference point throughout the Six Sigma project. Ideally, project CTQs should have direct impact on customers. For any Six Sigma project, the primary metrics should be:
- Tied to the problem statement and objective of the project.
- In possession of an operational definition.
- Measurable, simple, and expressed in the form of an equation.
- Aligned to business objectives.
- Tracked on hourly, daily, weekly, and monthly basis.
- Expressed graphically over time with a run chart, time series, or control chart.
- And, validated with a Measurement Systems Analysis (MSA).
Some of the primary metrics of a Six Sigma project include customer satisfaction, on-time delivery of products, final product quality, and less costly products.
Secondary Metrics
A secondary metric, also known as a consequential metric, is a project metric that you do not want to sacrifice at the expense of primary improvements in a process. These metrics ensure that the process is improving and not shifting one metric at the expense of another. It means that the secondary metrics have a relationship with the primary metrics of a Six Sigma project. Therefore, the primary goal of a Six Sigma project will be to move the primary metrics, but ensure that secondary metrics do not deteriorate or stay constant. Some of the secondary metrics include cycle time, volume shipped, inspection data, and rework hours. These metrics should not be sacrificed to achieve the primary metrics such as customer satisfaction, on-time delivery of products, and final product quality.
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QFD offers several benefits to organizations.
- It reduces design cycle time due to the decrease in design changes.
- It reduces the overall product development time because the focus is solely on satisfying key customer needs.
- It reduces overall cost by reducing design changes.
- It improves customer satisfaction because the development process is driven by the voice of the customer (VOC).
- It rates a product against other products in the market through competitor analysis.
- And, it documents identified competitive marketing strategies.
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A value-added activity is any activity that increases the worth of a product or service. It directly contributes to meeting customer requirements, and customers are willing to pay for it. Value-added activities also generate a positive ROI for an organization. Without these activities, the process will be affected. A lean team should analyze if activities in a process actually add value to a product or service. They should also determine if activities in a process can be performed in parallel or be merged. This will help organizations deliver outputs more efficiently.
Example: In a manufacturing process, value-added activities can include: receiving a part request, preparing an internal request for a part from production, finding a relevant plant for issuing a request, finding production availability, updating part request information, and the manager processing the part request information and updating the request.
Non-value-added activities are activities that consume resources and time without adding any value to a service or product. Non-value-added activities do not contribute to customer satisfaction and, therefore, customers are not willing to pay for these activities. They are not important to the production and delivery of a product or service, and eliminating them will not affect a process. Because non-value-added activities do not generate any positive ROI but incur only expenditures, organizations should focus on eliminating them.
Example: In the manufacturing process, non-value-added activities can include: sorting and organizing requests, searching for relevant part production locations, checking locations for availability and delivery, generating production requests, and reviewing the status of requests.
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Six Sigma is a customer-focused approach to business process improvement and performance management which encompasses a statistical and method-driven process. In order to effectively deploy the process in your organization, it is necessary to identify the basic elements that drive the Six Sigma methodology. Knowledge of the Six Sigma fundamentals is the first step toward a successful Six Sigma implementation. Before applying any business strategy in an organization, you must identify the goals and benefits of the strategy. You must also recognize the need for such a business strategy in the organization.
Surviving in a business world that is full of competition is crucial to any organization. Six Sigma provides the means to handle declining product prices in the market, which helps any organization compete with the best companies in business. It targets zero defects by setting a common performance goal for the entire organization. Six Sigma helps an organization achieve increased profitability and quality improvement rates, ahead of any of its competitors. Reduced scrap-related costs, rework, improved yield, and increased customer satisfaction are identified in companies striving to achieve Six Sigma.
A Six Sigma initiative differs from other quality improvement methodologies because it ensures that the costs involved in implementation are offset by the gains received from improvements.
The primary goal of Six Sigma is to implement a measurement-based strategy in an organization that concentrates on process improvement and reducing variation. In addition to this, the other important goals of Six Sigma include:
- Reducing the number of defects, leading to the improved quality of a product or service.
- Achieving customer satisfaction by ensuring that customer expectations are met.
- Reducing cycle time, which enables the faster delivery of products.
- And, higher profitability by improving efficiency and effectiveness of the organization.
