Six Sigma Core Tutorial - Black Belt Reading Material (Revised Edition)

Author: Tang Xiaofen
Publisher:
Publish Date: 2006-09-01
Features:
1.4.2.2 Project Selection Evaluation Principles Six Sigma management is a systematic method for overall improvement of an organization's quality level, with its quality philosophy being that both customers and the enterprise (organization) must benefit, and the manifestation of this benefit is the utility, availability, and innovation of products and services:
(1) Utility, Availability, and Innovation
- Utility includes three aspects: appearance (e.g., the external appearance of an object that is pleasing to the eye); suitability (e.g., correct size or other quality); and functionality (e.g., smoothly completing the specified task).
- Availability includes quantity (e.g., production capacity, inventory levels, distribution channels); time (e.g., production cycles, order cycles).
- Innovation includes knowledge (e.g., innovation); emotional (satisfying personal honor or psychological needs); and economic (customers feeling that they are getting value for money). Based on this consideration, the standards for evaluating Six Sigma projects should fully focus on both customer satisfaction and business operations.
(2) Evaluation Principles The evaluation criteria for selecting Six Sigma projects are based on the following aspects:
- Customer Satisfaction Customer satisfaction is one of the themes of Six Sigma management. The definition of Six Sigma quality has two basic points: one is that product characteristics meet customer satisfaction; and two is to avoid defects (errors) under this premise. Therefore, many evaluation items commonly used by enterprises in the past, such as labor hours, costs, and sales revenue, are often irrelevant to what customers truly care about. To achieve customer satisfaction, the foundation lies in understanding what customers' expectations and needs are. In Six Sigma terms, customer needs and expectations are referred to as Critical to Quality (CTQ). We can use SIGMA-level measurement methods to assess performance in meeting customer needs.
- Process Variables Another theme of Six Sigma management is that measures should target processes. Through process analysis, it is possible to determine process capability, key input or output variables (KPIV or KPOV), and detailed process analysis SIPOC (Supplier, Input, Process, Output, Customer). Due to the diverse nature of enterprises, processes vary accordingly. Using SIGMA-level measurements provides a consistent method for measuring and comparing different processes.
- Poor Quality Cost One of the major characteristics of Six Sigma management is the use of financial language to describe the current level and improvement performance. Financial indicators convert performance into financial benefits, and poor quality cost analysis is an effective method. Poor Quality Cost (COPQ - cost of poor quality) is a key entry point for Six Sigma management. The concept of COPQ helps in selecting Six Sigma improvement projects. Because ideal improvement projects must:
- Have significant potential for cost savings;
- Involve issues related to key process output variables (KPOV);
- Be concerns of both customers and operators.
Similarly, based on the ratio of poor quality cost to sales, we can also estimate the quality level at what SIGMA level.
- Value-Added Capability Whether in manufacturing or services, production and service processes often exhibit a "hidden factory" process. The final yield (referring to the percentage of products that pass inspection and meet quality standards after passing through a series of process steps) of the final process step is often the lowest and most critical.