A Six Sigma metric is a standard measure for assessing the project performance in a particular area. Metrics are applied rigorously in any customer-focused process management system and any program targeted at continuous improvement.
In a Six Sigma project. the focus on customers and its performance standards shows up in the form of metrics that assess project’s ability to meet their customers’ demands and business objectives.
Six Sigma Metrics can be categorized as Classical Metrics and Typical Metrics.
Classical Metrics It contains measures of quality involving timeliness, accuracy, ease of doing business and cost. They are important and emphasis is given on them as vital aspects of most companies’ Six Sigma measurement framework.
Typical Metrics It contains various specialized measures like DPMO, DPU, FPY, RTY and Sigma Level. A Sigma Metric offers an effective alternative to traditional process capability and performance measures as used in Statistical Process Control.
DPMO is a Six Sigma Metric which stands for ‘Defects Per Million Opportunities’ . Six Sigma process improvement projects targets to achieve 3.4 or fewer Defects Per Million Opportunities. DPMO is usd to compare the defect rates of simple and complex items and provides a common standard.
DPU is a Six Sigma Metric which stands for ‘Defects Per Unit’. It refers to the average number of defects per unit based on the processing of a number of units. For example if 100 units are made and five fail, four reworked, and one scrapped then DPU is 0.05.
The First Pass Yield is the proportion of units that, on average, go through a process first time without defects in a Six Sigma project
Rolled Throughput Yield (RTY) is a probability that a unit can pass through a process without defects ina Six Sigma project. It is result of the product of the first pass yields at every step:
RTY = y1 x y2 x y3 x ………..yn
where the yi values are the yields at each step before rework
Implementation of Six Sigma Metrices
The implementation of Six Sigma Metrics requires a systematic approach so that effective utilization of metrics in assessing the performance standards is done.
The first step is about measuring the right things which not only includes the financial performance but also other aspects of the business like customers, performance of internal work process, suppliers, financial and employee satisfaction as well.
Second step is to create the metrics which are SMART an acronym for Specific, Measurable, Actionable, Relevant, and Timely.
Specific means Metrics are specific and directed at a particular area you are measuring.
Measurable means to collect accurate and complete data.
Actionable means that clarity over which direction to take and easy to understand and to take action.
Relevant means measuring only meaningful things, determine effective measures, including both performance and diagnostic metrics.
Timely means getting the data whenever required.
Metrics should be simple and can be categorized into performance Metrics and diagnostic Metrics.
Performance Metrics means high level measures which are external in nature and are related to the customer requirements, business needs and outputs.
Diagnostic Metrics means measures which are internally focused and related to inputs and internal process steps.
Third Step is following a well proven method for developing metrics. It involves the identification of the customers and outputs of the process, determination of customer’s requirements, ensuring the key goals of the business and aligning the metric for the process with those of high level processes.
After the metrics are determined as what needs to be measured, a check needs to be done to ensure if the metrics are making any sense, how they can be compared with the existing metrics, do they form a complete set covering the areas like time, quality, cost, and customer satisfaction and whether they display the desired behavior.