What are some of the metrics used by Q: Should Six Sigma metrics be distinct from companies that are successful with Six the rest of the business metrics? If so, for how Sigma? long? A: The easy Innovative, as well as As organizations strive to A: Ideally, answer classical/typical metrics make up manage with data, Six Sigma Six Sigma would be successful measurement metrics should be fully integrated. metrics to review a frameworks. should not Improvement projects, list of Vanguard translates business operations and be distinct performance "voices" into drivers classical from the rest leadership forums all leverage a and/or and ultimately CTQs, for a unique common measurement of the typical Six focus on clients, business and business framework. Sigma crew. metrics, but metrics. rather one and the same. Practically speaking, Classical measures of quality such as timeliness, however, this is often a work-in-progress, accuracy, ease of doing business and cost are especially in the early stages of a Six Sigma important and often abundant on most companies' implementation. Six Sigma measurement framework. Other typical Six Sigma measures such as rolled-throughput Consolidating Six Sigma metrics with business yield, sigma and DPMO tell a good story, when metrics is an exercise in change management. applied properly. The saying "never solve a problem before its time" applies. Forcing a business (and its culture) to Still, simply collecting and calculating these change to a new set of metrics can lead to measures are not enough to be successful. resistance. Successful businesses apply these metrics in the right context and in innovative ways to solve client So what to do? Effectively managing a continuous opportunities. Companies that are successful with improvement initiative, such as Six Sigma, will Six Sigma tailor metrics to align with core produce a waterfall effect on metrics by not only processes and its critical-to-quality (CTQ) identifying new ways to consider and measure characteristics. Understanding clients' CTQs and what's important to the business, but also creating ensuring they are measured and addressed are better data the current business metrics are based paramount. on. Another element of success is ensuring measures As continuous improvement initiatives are are "leading" rather than "lagging." Leading executed, more actionable and relevant business measures focus on the process, its inputs and data is produced. Business operations are suppliers, whereas lagging metrics focus on motivated by results to incorporate Six Sigma results or outcomes. Ultimately, the truly metrics. With leadership leveraging better successful companies understand the cause-and- business data, a more informed strategy can be effect relationship between the leading and put in place that better addresses client needs and lagging measures. how the company can more effectively address them. At The Vanguard Group, feedback from clients, business leaders and the crew is collected, utilizing both proactive and reactive means. By translating these "voices" into drivers and ultimately CTQs, a measurement framework is constructed that has a unique focus on the client, business and crew. Q: How can companies ensure they are Q: What are some of the ways that these measuring the "right" things? metrics can be effectively displayed to upper management? A: Fundamentally understanding A: How Arguably clients' processes is a cornerstone. the Examples of effectively displayed the most Prioritizing strong CTQs and metric is metrics include dashboards and critical step metrics (though correlation or derived balanced scorecards, digital or low- in ensuring causation) focuses on adding and tech. a company value. used is The metrics displayed should measures importan represent the most critical drivers and the "right" things is to understand its clients' t. First, outcomes identified for a business. needs. Fundamental understanding of a client's regardle processes or value chain allows a company to ss of the tool, the metric must be based on data gain critical knowledge of a client's needs and that is sufficient, relevant, representative, therefore CTQs, enabling definition of business contextual and timely. Without the data processes from the client's point of view. possessing these attributes, the metric based on this data can lead upper management to bad A common challenge in identifying client-focused assumptions and wrong conclusions. CTQs and metrics is the sheer number identified. Complex business processes often deliver a Second, the metric must be actionable. An lengthy list of CTQs, and therefore metrics. While actionable metric is one that is accompanied by all CTQs are important, the right things to measure specification limits of some sort. "Actionability" are those that are most critical. It is usually allows upper management to assess current levels impractical to measure every CTQ or metric and determine whether or not those levels are identified due to limited time and resources. acceptable. At this point, a company must develop and utilize Third, metrics should be presented in a format that an effective means of separating strong from weak establishes a clear "line of sight," cutting through CTQs and metrics. The means of prioritizing CTQs the business' core processes and, therefore, depends on the business, its clients and the process owners. Establishing clear accountability nature of its processes. In most cases, a not only for the quality of the metric, but also the correlation or (hopefully) causation link can be action taken to improve the metric is critical to the established between an input and an outcome success of the dashboard, and the business. through quantitative and/or statistical means. In Upper management should be able to consider a other cases, it may be as easy as asking the client high-level metric and drill down into the business and utilizing a prioritization tool such as pairwise to gain a better understanding of where the comparison or a prioritization matrix. problem originates (drive to root cause). However the CTQs are prioritized, ensuring that Last, metrics should be presented in a simple metrics are focused on successfully adding value manner. Do not crowd as many metrics onto the to the client is the way of ensuring you are dashboard as possible, but rather present the measuring the right things now and in the future. most critical seven-to-twelve metrics required to run the business successfully.
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