nities for improvement, monitor progress, and inform the leadership about the state of the business. However, the most important reason for taking measurements is to make problems visible so that they can become opportunities for improve- ment. Good measurements identify or magnify the problem areas so they cannot remain hidden. If problems are visible, they cannot be ignored and thus will have to be fixed.
Otherwise, they continue to bother the company’s leaders as an area to address. Conversely, if problems are not identified, they will be hidden and ignored, and the waste will continue to build.
IDENTIFYING PROCESS MEASUREMENTS
Identifying process measurements begins by looking at all aspects of a process: inputs, process steps, and outputs. The inputs are typically related to the material or information, method or approach, machine or tools, people resources or skills, environmental factors, and measurement capability. The objective is to identify (1) inputs that are performing at a high level (almost at the 100 percent level of acceptability), (2) the variables that show larger variances from the target values, or (3) parameters that directly correlate to the process output.
The significant parameters are chosen to be the measure- ments at the process level for monitoring.
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Sometimes it is difficult to quantify measures for certain parameters, and it requires creativity to establish a realistic, prac- tical, and economic measurement that will quantify variances in the process. The measurement method does not have to be per- fect in terms of absolute measurements. The rate of improve- ment, instead of the absolute value, becomes more critical in making positive contributions to the process output and the ultimate profitability. For example, let’s look at two competing car manufacturers. One has a starting defect rate of 130 defects per unit and the other, 110 defects per unit. At the end of 2 years, if both companies have achieved their planned rate of improvement of 10 times in 2 years, the defects per unit will be 13 and 11, respectively. In both cases, the results are much better than what they started with. Therefore, it makes sense to start the improvement process as fast as possible rather than wasting resources in excessively fine-tuning the measurement method.
When a measurement cannot be easily defined, the follow- ing questions help guide devising a meaningful measurement:
1. What is the intent of the process?
2. How do we know the process is producing good output?
3. Which process input or in-process parameters affect the process output directly?
4. Which process parameters are more critical than others?
5. How do we ensure that the critical parameters are operating at established values?
6. How will we collect and analyze the data to establish relationships between the process output and the input or in-process data?
Responses to these or similar questions will lead to the process measurements. Processes within a department may have mul- tiple measurements. Establishing a defect rate at each process and aggregating that rate for all processes in each department can facilitate a measure of the department’s performance. For each department, quality, Q, timeliness, T, and cost, C, play a
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role in establishing measurements to improve the depart- ment’s performance.
Think about what measurements might be devised for a pur- chasing department, for example. The purpose of a purchasing department is to ensure that all purchased material arrives on time and is 100 percent acceptable. To do so, measurements need to specify exactly what material or service is needed and at what performance level. If the needs are not specified correctly, the performance of the purchased material may not satisfy the requirements to do the job correctly. The measurements for the purchasing process, then, must consider the intent of the purchasing function.
Another aspect of the purchasing process is to monitor suppliers’ performance. In other words, do the suppliers have the capability to meet the company’s requirements? Suppliers must be qualified first based on their proven capability. Such qualification includes the purchasing department’s assessing suppliers’ process management systems and evaluating the sample products and financial viability. After a supplier has been initially qualified, its performance needs to be monitored so the purchasing department can provide feedback to ensure continual improvement of performance. Additional goals must be set to improve the performance of the purchasing process in terms of performance of purchased parts or service, total cost of the purchases, response time, and suppliers’ service.
A purchasing department might respond to the questions asked above as follows:
1. What is the intent of the process? To ensure 100 percent acceptability of the purchased products and services when needed.
2. How do we know the process is producing good output? We monitor levels and trends in the number of defects or errors found in the operations, total cost of the purchased items, availability of the purchased products or services, and suppliers’
service.
3. Which process input or in-process parameters affect the process output directly? Process input parameters will be
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the accuracy of requirements supplied to suppliers, the in- process parameters will be the ongoing monitoring of sup- pliers’ process management systems, and the output parame- ters will be performance of specific parts received.
4. Which process parameters are more critical than others? The parameters can be prioritized based on the variance in perfor- mance and the economic impact of the received material dur- ing evaluation or in production stage. Parameters with larger variance and parts with high prices are critical items to monitor.
5. How do we ensure that the critical parameters are operating at established values? Capability data must be gathered about parts and performance evaluated with respect to estab- lished specifications. If deviation from specification is signifi- cant, suppliers’ processes must be looked into for potential causes for the deviation.
6. How will we collect and analyze the data to establish rela- tionships between the process output and the input or in- process data? A data collection method for selected parts’
parameters must be established and statistical analysis per- formed to understand correlation between process variables and product parameters. In addition, the suppliers’ data must be correlated with the production performance to ensure effectiveness of the purchasing process.