The Importance of Six Sigma Performance Measurement

The Importance of Six Sigma Performance Measurement
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A Brief Introduction

Six Sigma is a quality control mechanism that is applied to various business verticals. Although it was originally conceived of in the manufacturing industry, it has slowly evolved to include use in all other industries as well.

Six Sigma focuses primarily on streamlining processes, to ensure that the desired output of those processes is achieved every time. This is done by making the process as constant as possible, and thereby reducing the number of defects. Reducing defects is immediately obvious with physical products; however, with service industries, it is not quite so simple. Therefore Six Sigma defects were redefined to encompass any output that did not tie into what the client wanted.

There are two methodologies used with Six Sigma: DMAIC, for existing processes, and DMADV, for creating new processes.

Measurement – A Key Aspect

Regardless of which Six Sigma is used, either DMAIC or DMADV, measurement is an important part of the system adopted, as it is the second component of both.

Measurement during the application of Six Sigma involves recording the quantifiable aspects of the process for further analysis. The activity of taking measurements must include all factors that could bias the outcome. These factors are also assessed at this stage and are treated as variables of an equation.

In fact, measurement at the primary stages of Six Sigma application forms a starting point that makes performance measurement at a later stage far more meaningful.

Performance Measurement Metrics

Surprisingly, the performance measurement stage is where most enterprises face a lot of difficulty. The difficulty somewhat mirrors the one of applying Six Sigma in a service industry. Many companies find it challenging to identify what qualifies as a variable for performance measurement. Knowing this is a vital part of the application of Six Sigma, however, because without performance measurement, the question of how much a process has improved has a vague answer.

There are various metrics for measurement, which fall under certain broad categories:

  1. Improvement in quality – In a Six Sigma environment, this particular category fits in perfectly, as it simply is to calculate the number of defects. The defects are defined during the initial application stages; therefore, the numbers can be compared without a problem.
  2. Process variability – One of the key components of the Six Sigma methodology is to ensure that the process is as constant as possible, for the minimum number of defects.
  3. Finances – Possibly the easiest quantifier, finances always are the most popular performance measurement metric. After the application of Six Sigma, a company could assess the cost factor of a process as compared to the unwieldy process previously in place.
  4. Acceleration of process time – Time is also a valuable resource, and streamlining processes could potentially lead to a significant reduction in time. This is also an easily quantifiable metric.
  5. Assessment of productivity – This performance metric essentially determines whether an improved process utilizes available resources more efficiently, thereby generating more product for less raw material.

In the End…

Sometimes the very act of measurement becomes an impetus for the workforce to perform better. By evaluating the results of this activity, a company may also stand to gain in terms of efficiency.