A process-focused business constantly realigns processes to remain capable of meeting changing market demands. Only by gaining predictability can an enterprise truly maintain capable processes to changing customer demands. Three key terms that help us define process capability are:
Process Baseline: Process baseline is the average, long-term performance level of a process when all the input variables in the process are running in an unconstrained fashion.
Process Entitlement: Process entitlement is the best case, short-term performance level of a process when all the input variables in the process are centered and in control.
Process Benchmark: Process benchmark is the performance level of the process deemed by comparison to the best process possible. It takes us to the best that anyone has ever done. In practical terms this means researching and finding the best that has ever been done in the industry. Six Sigma facilitates in understanding variation in our business processes!!!
Cost of Poor Quality (COPQ).
Traditional Cost Concept:
Most companies utilize financial reports which compare actual costs with budgeted costs. The difference is called a variance and, if significant, may prompt management action. Departmental budgets may also be established with the results reported on a monthly or quarterly basis. These costs are necessary to carry out the functions of each department, including the control of product and process quality. The responsibility for financial control usually rests at the departmental or plant level. Until the 1950s, few, if any, companies focused any attention of the costs of poor quality. These results were hidden among various labor, material and miscellaneous expense categories. Only the most obvious quality department charges were identified.
Six sigma projects can be directed at any number of CTX (critical to X) requirements as given below:
Critical to Quality (CTQ)
2.Critical to Delivery (CTD)Critical to Price (CTP)Critical to Safety (CTS)
Let us look at a few examples for each of the CTX requirements.
Critical to quality improvement projects may include:
Simplifying product designs Aligning product designs with customer requirements.
Meeting current marketplace quality levels.
Exceeding current marketplace quality levels.
Exceeding reliability and maintainability requirements.
Exceeding product appearance expectations.
Meeting technical requirements Providing products that are more durable.
Cost of Quality (COQ)Cost of quality improvement projects may include
Reducing internal rejections.
Reducing external rejectionsMinimizing salvage and sorting operations
Reducing warranty claimsReducing product variationReducing process variation
Reducing various forms of waste
Eliminating unnecessary inspections Critical to Delivery (CTD).
Critical to delivery improvement projects may include:
Providing exact amounts of product.
Providing service within a specific time interval.
Ensuring immediate responses to customer questions
Providing a product or service on the proper day and time
Providing more rapid field service
Providing cost-effective delivery methods
Meeting customer packaging requirements.
Minimizing shipping damage.
Critical to Price (CTP)Critical to process improvement projects may include:
Designing products that are easier to assemble.
Minimizing changeover times
Reducing in-process inventories
Minimizing product touch times
Optimizing work cell design
Streamlining internal work flows
Reducing process flow variation
Enhancing process velocity
Eliminating redundant operations
Maximizing product yields
Speeding up operations
Reducing cycle times
Minimizing equipment downtime
Maximizing preventative maintenance
Performing value stream mapping
Critical to Safety (CTS)Critical to safety improvements may include: