About this lesson
Lean Six Sigma Metrics
Lean Six Sigma has introduced some new metrics into the common business vocabulary including process sigma, DPMO, cycle time and value-added effort.
When to use
The metrics are used throughout the project. The high-level targets are set in Define. Data is collected and the metrics are measured in Measure. The values are analyzed in Analyze to determine areas for improvement. Changes are made and the measures are taken again in the Improve phase. The control plan for monitoring them is put in place during the Control phase.
“You get what you measure.” This principle is true in Lean Six Sigma just like in every other part of business. Lean Six Sigma has brought several of the Six Sigma metrics into common use in business:
- Sigma: The standard deviation of a population of data. It is used as a scaling factor to compare the process variation against specification limits.
- DPU – Defects per Unit: The average number of observed defects on a unit in production.
- DPMO – Defects per Million Opportunities: The average number of observed defects in a production run divided by the total number of opportunities to create a defect in that run, normalized to 1,000,000.
Lean Six Sigma has also introduced many businesses to the Lean Manufacturing metrics of:
- Cycle Time: The total amount of time required to move a unit through all the steps in a process including both active working time and delay time.
- Value-added Time: Time spent on a process step in which the process resources are directly creating customer value in a unit.
- FTY – First Time Yield: The probability that given unit can successfully pass through a process step without rework or repair.
- RTY – Rolled Throughput Yield: The probability that a given unit can pass through all the steps in a process without ever experiencing a defect. That is the product of the FTY for each step.
Lean Six Sigma project metrics are set by the stakeholders during the Define phase and then progress towards achieving the goals while being tracked throughout the process. While some of the metrics are the new ones derived from the Six Sigma and Manufacturing; most of the metrics will be typical process improvement metrics. Most projects have several key measures they are used as the primary project objective.
Hints & tips
- The stakeholders should identify which metrics to focus upon and they should line up with the justification for the project in the business case.
- Ideally, focus on only three or four metrics. If you get too many, the team gets confused about what they should consider most important when trade-offs must be made.
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