Measure Performance,Introduction and Determine What to Measure,Version Nov 2002,1,Page,1.0 Define Opportunities,2.0 Measure Performance,3.0 Analyze Opportunity,4.0 Improve Performance,5.0 Control Performance,1.1Validate Business Opportunity 1.2 Document and Analyze Processes 1.3 Define Customer Requirements 1.4 Build Effective Teams,2.1 Determine what to measure 2.2 Manage measurement 2.3 Understand variation 2.4 Determine Sigma Performance 2.5 Excellent team performance,3.1 process stratification and Analysis 3.2 determine root causes 3.3 validate root causes 3.4 manage creativity,4.1Generate improvement ideas 4.2 evaluate and select solution 4.3 present recommendations 4.4 Implement change,5.1 Develop and Execute pilot plan 5.2 plan and implement solution 5.3 process integration 5.4 closure and recognition,Version Nov 2002,2,Page,Review and Transition,In Section 1.4,we learned how to： Understand the role of effective teams in process improvement. Apply team evaluation tools to identify opportunities to improve team effectiveness. Section 2.0，Measure Performance, covers the following areas:,Prepared Team,2.1 Determine what to measure,2 .2 Manage Measurement,2.4 Determine Sigma performance,2.3 Understand Variation,2.5 Excellent Team Performance,Version Nov 2002,3,Page,Summary of 2.0 “ Measure Performance”,2.1Determine What to Measure Understand the role that data plays in process improvement Understand the cause and effect relationships that occur inside the teams process Determine the indicators needed to evaluate current process performance 2.2Manage Measurement Understand different types of data and how each type can provide the team with different insights and knowledge of a process Develop operational definitions and data collection plans that build validity and consistency in the data which the team gathers 2.3Understand Variation Understand the concept of variation and how a process can be evaluated by assessing its variation over time Plot and calculate the variation of the teams business process Gain hands on experience with the use of the statistical software package MINITABTM 2.4Determine Sigma Performance Understand the various calculations associated with determining process sigma Calculate the sigma performance of the teams process Calculate the rolled-up Sigma for the business 2.5Excel Team Performance Understand the role of high-performance work teams in process improvement Use team diagnostics and assessments to evaluate the team strengths and opportunities for improving its own performance,Version Nov 2002,4,Page,Measure Performance-2.1,Determine What to Measure,Version Nov 2002,5,Page,2.1Determine What to Measure,Objective To identify different types of measures and an understanding of how the measures relate to critical customer requirements. Key Topics Performance Measurement Input, Process,and Output Indicators Indicator Relationships,Version Nov 2002,6,Page,Performance Measures-Customer Value Achieved?,Version Nov 2002,7,Page,Process Elements and Indicator Relationships,Effective improvement requires information from the entire supplier-customer,cause and effect relationship.,Process,Start Boundary_,End Boundary_,Version Nov 2002,8,Page,Input, Process and Output Indicators,Efficiency Measures Cost per transaction Time per activity Amount of rework Turnaround time Variability of an activity,Efficiency Measures Percent defective Number of errors Total response time Invoice/billing accuracy Revenue,Input Indicators,Process Indicators,Output Performance Indicators,CTQS CTPS,Version Nov 2002,9,Page,Process Output Indicators includeCTQs the standard deviation of s is 1.2 minutes; and critical customer requirement or CCR is 10 minutes.,Version Nov 2002,115,Page,Sigma Calculation Table,*note: This table does not include a 1.5 shift. If you enter this table with long-term data then you calculate long-term Sigma and if you enter with short-term data then you calculate short-term Sigma Both Motorola and GE Capital assume that you enter their A bridged Sigma Table with long-term data and exit with a short-term Sigma. In order to do this,they assume a shift of 1.5 Sigma between short-and long-term Sigma. Therefore,if long-term yield equates to a standard normal area of 4.5 Sigma(or 3.4 DPMO)then they assume a 1.5 shift and report short-term Sigma of 6.0.,*,*,Version Nov 2002,116,Page,Upper and Lower CCRs,Version Nov 2002,117,Page,Combine into a single yield,Calculations Defects greater than USL=0.299(29.9%) Area from zero to USL=1-0.299=(0.711(71.1%) Defects less than LSL=0.013(1.3%) Area from zero to LSL=0.013(1.3%) Yield=0.711-.013=0.70(70%) Look up Yield of 0.70 in Sigma Table Z=0.5(approximately),Version Nov 2002,118,Page,4.Calculate Sigma Performance,I Continuous,II DPMO Method,Discrete,V Sigma Roll-up,III High Volume,IV Low Volume,Calculating Process sigma,Select the appropriate method,Version Nov 2002,119,Page,Breakfast Example,Now lets review an