Measurement, Analysis and Documentation
Why do (and should) organizations use these concepts to
move up the pyramid and toward quality improvement? Why is it necessary to measure,
analyze and document processes ¨C and, if needed, make those desired changes? Why drive
toward perfection, and what does it mean in real terms?
If your current process capability runs at 1 Sigma, then
that effectively means you have two defects (unusable products) out of every 3 parts. That
means 67% of your costs simply become waste, with no return on your investment. At 2
Sigma, quality improves with 1 out of 3 parts as defects. But that still has an error rate
of 33%. Not until 3 and then 4 Sigma levels will you see dramatic improvements. Put in
these terms, you quickly see how such errors keep you from realizing a greater potential.
Transactions, Multiple Steps and Tolerance
Organizations most effectively utilize Six Sigma
methodology in two situations. One, if a business works with a very high volume of
transactions per year, then they can not tolerate low sigma levels. For example, a 99%
effective rate for 1 billion transactions per year still yields 10 million defects. In any
industry, that is not acceptable.
Another situation that calls for Six Sigma methodology is
when an organization (i.e. manufacturing) has processes with multiple steps. Here total
error rate is critical. For example, the effective rate is 99% for each step; however,
that does NOT give the total error rate as 1%. You must take the 99% for the first step
and multiply it by 99% for the second step, the third step, and so on. With a great number
of steps, your total effective rate could significantly decrease. So, to avoid high
volatility, this organization can not tolerate low sigma levels.
Organizations can also determine error rate by
effectively reversing the typical process of Six Sigma. You can calculate the mean and
variance in your process to define the error rate. This tells you where you are currently
on the Six Sigma curve. For example, if your calculation tells you that you're on a 1 or 2
sigma level, then this is an area in need of improvement. This gives you an opportunity to
look at the data more carefully, take the mean and variance of each step of the process,
and determine in which step the process is having problems. Or it could tell if you there
are many steps causing the problems and, thus, the cumulative increase in error rate.
Processes, Procedures and Control
Organizations use the Six Sigma methodology, because you
can't get any higher than 2 Sigma (tribal or basic knowledge) without putting strong
processes and procedures in place. And without strong processes and procedures, you can
not move toward higher quality and system optimization ¨C toward perfection. Are you
really satisfied with 67% of your product
Problems, Resources and Results
lost as waste? Are you satisfied with such high variability in your system?
If needed, you can change your process to reduce or
eliminate this variability or error. Six Sigma methodology tells you when to take action
to solve a problem. It moves an organization to consistently meet the requirements and
minimize the resources used in its management system. And it creates the desired results
for which the system was designed.
Systems, Control and Perfection
Remember, though, you can only get to 3 or 4 sigma by
developing a system of policies and procedures of measurement, analysis and documentation.
And with this you will easily see that reducing your error rate and moving toward
perfection with Six Sigma tools is well worth the driving time ¨C and, more, crucial to
your system¡¯s control.
You have permission to publish this article free of
charge, as long as the resource box is included with the article. If you do run my
article, a courtesy reply to sean@bizmanualz.com
would be greatly appreciated.
| Chris Anderson is the managing
director of Bizmanualz, Inc. and co-author of policies and procedures manuals, producing
the layout, process design and implementation to increase performance. To learn how to
increase your business performance, visit: http://www.bizmanualz.com?src=ART85
|
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Your Thoughts?
What are your thoughts on this? Drop me a line at ivan at klariti dot com |
