Six Sigma Definitions
Acceptable Quality Level (AQL)
AQL is limit of a satisfactory process average at a particular quality level when a continuing series of lots is considered.
Activity-based costing (ABC)
A system for making business decisions based on cost information of fundamental business activities as tasks related to product design, development, quality, manufacturing, distribution, customer acquisition, service and support. ABC is sometimes considered a form of business process re-engineering as it insists on surfacing a manageable number of cost drivers that can be used to trace variable business costs to customer, products and processes.
Analysis of Means (ANOM)
A statistical procedure for troubleshooting industrial processes and analyzing the results of experimental designs with factors at fixed levels. It provides a graphical display of data. Article: Keep on Budget With Earned Value Analysis
Analysis of Variance (ANOVA)
A basic statistical technique for analyzing experimental data. It subdivides the total variation of a data set into meaningful component parts associated with specific sources of variation in order to test a hypothesis on the parameters of the model or to estimate variance components.
A graphic description of the sequential steps that must be completed before a project can be completed.
A framework, which translates a company's vision and strategy into a coherent set of performance measures. A balanced business scorecard helps businesses evaluate how well they meet their strategic objectives. It typically has four to six components, each with a series of sub-measures. Each component highlights one aspect of the business.
A standards for comparisons, a reference for measuring progress in improving a process, usually to differentiate between a current state and a future state. Article: Microsoft Project 2007: Saving and Updating a Project Interim Plan
A method for comparing a process, using standard or best practices as a basis, and then indentifying ways to improve the process.
A full-time change agent trained in the methodology to solve product and process defects project by project with financially beneficial results. A black belt does Six Sigma analyses and works with others to put improvements in place. Article: What is the Purpose of Six Sigma?
A dramatic, near-immediate and significant improvement.
A collection of activities that work together to produce a defined set of products and services. All business processes in an enterprise exist to fulfill the mission of the enterprise. Business processes must be related in some way to mission objectives.
Business Process Improvement (BPI)
The betterment of an organization's business practices through the analysis of activities to reduce or eliminate non-value added activities or costs, while at the same time maintaining or improving quality, productivity, timeliness, or other strategic or business purposes as evidenced by measures of performance. Also called functional process improvement.
Business Process Redesign or Reengineering
A management method which stresses the fundamental rethinking of processes, questioning all assumptions, in an effort to streamline organizations, and to focus on adding value in core processes.
A senior-level manager who promotes the Six Sigma methodology throughout the company and especially in specific functional groups. A champion “owns" the process – monitoring projects and measuring the savings realized. Article: Key Concepts of Six Sigma
Elements of a process that significantly affect the output of that process. Identifying these elements is vital to figuring out how to make the improvements that can dramatically reduce costs and enhance quality.
Critical Control Point (CA)
A function or an area in a manufacturing process or procedure, the failure of which, or loss of control over, may have an adverse affect on the quality of the finished product and may result in a unacceptable health risk.
The time it takes to complete a process from beginning to end, consisting of work time and wait time.
Are control charts which display the number of defects per sample.
Common Cause Variation
A variation that affects all the individual values of a process Common causes Inherent causes of variation in a process. They are typical of the process, not unexpected. That is not to say that they must be tolerated; on the contrary, once special causes of variation are largely removed, a focus on removing common causes of variation can pay big dividends.
A line chart with control limits. It is constructed by mathematically constructing control limits at 3 standard deviations above and below the average, one can determine what variation is due to normal ongoing causes (common causes) and what variation is produced by unique events (special causes).
One of two values (lower and upper) that indicate the inherent limits of a process.
Cost of Poor Quality
Total labor, materials, and overhead costs attributed to imperfections in the processes that deliver products or services that don’t meet specifications or expectation.