Determine our performance objectivesInstructor :Now that we know where we are starting from, we can begin to determine our performance objectives, or where we want to wind up at the end of the project. So in this step we're going to determine our performance objective.
Instructor : Remember that in Step Four we determined our current process performance, as well as a number of other factors. Here in Step Five we'll use some of the results calculated in Step Four to determine what the end results of this Six Sigma project will be. After you have finished with this section, you will be able to:
>Define benchmark, entitlement, and baseline
>and explain how you determine a performance objective.
Instructor : As we said in the previous section, when you're dealing with improvement you must understand where you are starting.
Instructor : The starting point is called the Baseline. It is the point at which measurement of improvement will begin.
Instructor : The Process Entitlement is the best that can be accomplished with current technology. The usefulness of this concept is that it will indicate whether or not you need to consider new technology in order to complete your project. Technology is a fairly broad term in this context, and can include new tools, parts, and other key resources
Instructor : It can consist of materials, skills available, equipment available, communications infrastructure, or even an accounting system. It's an extremely broad term.
Instructor : While the baseline identifies where you are and the entitlement shows what can be expected with current technology
Instructor : The Benchmark is the current best practice.
Instructor : Benchmarking is defined as a process for identification of best-in-class practices and standards for comparison against internal practices.
Instructor : Benchmarking is a continual search for the best practices, methods, and processes. The aim is to adapt the best features of these "benchmarks" no matter where they originate and use them to make our own processes and products the "best of the best."
There are three primary sources of best practices...
...The top performers within GE...
...Top performers among our competitors within the industry
...And top performers in a similar situation in any industry.
Instructor : All of these sources should be examined whenever possible.
Instructor : There are three keys to success in benchmarking.
Instructor : Consider all organizations, not just corporations;
Instructor : Look at all sectors, including government, non-profit, and hybrid organizations. Corporations don't have all the answers.
Instructor : And look at both domestic and international organizations.
Instructor : The overall DPMO for the nut removal process is one hundred thirty eight thousand, three hundred and eighty defects per million opportunities. So how much should you look to reduce this value for your project? There are new corporate guidelines for Six Sigma certification. Please check with your business Quality Leader or Master Black Belt for help understanding the requirements in your business.
Instructor :
Let's assume for the moment that your guidelines say to reduce the DPMO by ninety percent to start. If the actual D P M O is over one hundred thirty eight thousand, how feasible is it to consider reducing by over ninety percent to near fourteen thousand?
Instructor : One way to get a quick "reality check" is to look at the short-term P P M or D P M O. This is a close approximation of the process entitlement. As you can see, this value is under twenty three hundred; reaching a level of fourteen thousand should be quite do-able. In fact, we could even think about approaching five thousand or less, according to this report.
Instructor : However, we have another value we need to look at before we can truly set our performance objective. This involves comparing our process to that of a competitor through benchmarking.
Instructor : We were able to acquire data from a competitor as part of our benchmarking process.
Instructor : According to our limited data, our competitor has been able to show a long term defect rate of one thousand, four hundred and six defects per million opportunities. The goal should be to at least catch up, and if possible exceed, competitor performance. The long term goal is always to achieve six sigma performance.
Instructor : So we have tentatively set our performance objective for the removal process at a long term D P M O of less than fourteen hundred and six.
Instructor : While our current process is not very competitive,
Instructor : and even our process entitlement falls short of our goal. This implies that we may need a radical change in our process, including the implementation of new technology, to meet our goal,
Instructor : Through a discussion with the team, we have determined to set the goal to reduce the DPMO from 138380 to at least 1400 and with the intention to reduce this DPMO further so that we can reach six sigma and delight our customer.
Instructor : We still have the issue of our benchmarking study defining a performance objective exceeds our process entitlement. What does this mean?
Instructor : If the actual D P M O is over one hundred thirty eight thousand, how feasible is it to consider reducing by over ninety percent to near eleven thousand?
Instructor : One way to get a quick "reality check" is to look at the short-term P P M or D P M O. This is a close approximation of the process entitlement. As you can see, this value is under forty sixty hundred; reaching a level of eleven thousand should be quite do-able. In fact, we could even think about approaching five thousand or less, according to this report.
Instructor : However, we have another value we need to look at before we can truly set our performance objective. This involves comparing our process to that of a competitor through benchmarking.
Instructor : In this step we used Benchmark, Entitlement, and Baseline in the context of business strategy. , to assist in our goal setting.
Instructor : The team set the project objective in consultation with black belts and master black belts.
Instructor : In this case, exceeding the competitor's process is the minimum goal.
Instructor : Improvement is measured by reduction of the actual D P M O number. This is the metric that will determine the success of your project.
Instructor : So where do we stand with our Rockledge case?
Instructor : Due to a discussion referencing the process entitlement and the competitor benchmark, we intend to reduce the long term D P M O of the nut removal process from over one hundred thirty eight thousand to about fourteen hundred defects per million opportunities.
Instructor : Because the performance objective D P M O is less than our estimated process entitlement, we will look for a change in process technology, which could include new tools, parts, or other similar factors.
Instructor : After looking at data for both the installation and removal processes, we have decided to concentrate our efforts on improving the removal process.
Instructor : Well, you've done it again. You've finished step five. We've only got one step left in the Analyze phase, so if you're ready, click Next and we'll go on. If you decide to leave now and come back later, you can go right to Step six.
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