Monitoring KPIs is known as "business activity monitoring." Business Activity Monitoring is used to provide real-time information about the current status and results of processes, operations and other transactions. Business Activity Monitoring helps to make a business make better decisions, quickly address problems, and re-position them to take advantage of upcoming opportunities.

KPIs are commonly used to add value to difficult to measure activities such as leadership development, service, and customer satisfaction. KPIs will vary depending upon the organization you are in. The strategy of your organization must be assessed as well to determine the proper KPI. A good business can easily identify, track, define, and act up their KPIs to help them toward their goals.

A KPI must be part of a measurable objective. For example, a KPI could be "Increasing the average revenue per customer from $100 to $200 by 2010." The KPI in this scenario would be `Average Revenue Per Customer'.

KPIs are sometimes confused with critical success factors (CSF). A KPI is something that quantifies management objectives and enables for the measurement of strategic performances. A CSF is something that is critical in order for the business to achieve its specified goal or level of performance. An example of a CSF is installation of a call centre for providing questions whereas a KPI would be the number of new clients you have at the call center.

The KPIs will be different for every organization. For example, a university would use the failure rate of its students as a KPI so it will help them understand their position in the educational community. Businesses tend to sway toward financial KPI such as the percentage of income they receive from returning customers.

• S - Specific


•  M - Measurable


•  A - Achievable


•  R - Result-oriented or Relevant


•  T - Time based

You can distinguish a good KPI because it provides you with direction. A directional KPI can give you insight to a specific area of your business and track the performance of this specific area. The KPI will inform you if the business is growing and improving. A quantifiable KPI is represented as a number and will provide you with a better analysis of your data. Some companies use KPIs with a rating system such as: Poor, Fair, Good, and Excellent. This rating system can easily be translated to a numerical methodology.

Another good KPI should include your customer related numbers such as: new customers, satisfied customers, or customer turnover. KPIs can also be used to track your bad debts. The bad debt KPI will show you exactly where you are losing money.

If you need the results from your KPI quickly, you should identify a daily or weekly KPI. The faster you have the results from your KPIs, the faster you can implement proper changes. Having a large delay with your KPI can slow down your business process and cause a large headache for your overall business process.

KPIs can be broken down into several sub-categories:


• Actionable indicators - These are great for helping a company control the effect of change.


•  Directional indicators - These specific if you business is growing or getting worse.


•  Practical indicators - What is interfering with your existing company process?


•  Quantitative indicators - These can be presented as a number.

The reason for using KPIs it to find what your company truly values. The KPIs target what is of value to your company and helps you determine what you need in order to function. KPIs commonly use strategy maps to measure the results of the KPIs. The strategy maps allow you to understand the KPI process and can help you implement proper procedures from management.

KPIs should be looked at as a long-term change to your company. Often, KPIs do not change and they need to be consistent from project to project. KPIs should be measurable, dependable, observable, reliable, and specific.

Some companies avoid using KPIs because they have heard that it is too expensive to implement or it is difficult to measure. Depending upon the software and the analyst who uses it, you may avoid any type of high cost associated with the software and your analyst should know what is being measured instead of having to guess.

KPIs have also received a bad reputation because it is difficult to change the KPIs as your yearly comparisons with previous years and you may loose the information from the previous years. It may be difficult to get comparisons with other KPIs from different companies if you are implementing your KPI practice in house.

Overall, KPIs will offer your company with an excellent opportunity to target specific areas where growth is desired. Lending institutions and banks use KPI data and make it available to their borrowers to help them maximize their profits.

KPIs are commonly used in the marketing industry to analyze customer related numbers such as: new customers, existing customers, and customer attrition. Marketing teams also assess turnover ratios, outstanding balances, bad debts, potential customer demographics, and profitability of customers based on their KPIs.

Here are some KPI software programs that can help you get started:

Tuppas KPI Software for Manufacturing - Tuppas KPI software includes some of the basic KPIs like: scheduling, equipment effectiveness, forecasting, material usage and costs, cycle time, job cost, product cost, inventory, on-time shipping and ordering. Tuppas takes the basic KPIs and increases them to a higher level KPI such as: analytics, demand forecasting, production efficiency, supplier trends, and comparative analytics.

The Tuppas KPI software provides businesses with clear advantages regarding KPI comparisons on various products, plants, divisions, and other firms within your own corporation. The KPI software will help your company member see where the money is going, where the money is, and what items are not profitable. This will allow you to standardize procedures within the organization to improve sales. Data from multiple sources can easily be integrated into the KPI software, allowing you to view all your information on one spreadsheet.

KPI software can help support decisions on improving production performance and strategy planning. If you select real-time KPIs, you can make a decision on the spot that is based on relative data. The Tuppas KPI software will eliminate the need for an special IT infrastructure and will provide your company with numerous cost-saving benefits.

Another good KPI software program is sold by A 3 Solutions Incorporated. The A3 KPI software will determine your predefined measures to move your business into global or regional sales figures, personnel stats and trends, and real-time supply-chain information. The A 3 KPI software provides you with reports, spreadsheets, charts, and other useful tools to help you indicate your KPIs. A 3 will also help you with financial performance procedures that can optimize and increase the productivity and efficiency of your company. They will also help you find ways to increase your customer pool and evaluate other companies you do business with. The A 3 KPI software has 4 specialized features to help your company grow, they include:


• Management reporting and analysis


•  Executive dashboards


•  Corporate budgeting and forecasting


•  Multi-currency consolidation

After you have purchased the KPI software and you have good KPIs defined, it is time to utilize them. What this means is, you want to use the KPIs as not only a performance management tool but as a carrot. The KPIs allow everyone within your organization to obtain a clear picture of what it important and they can quickly identify what they need to do in order to make the KPIs successful. This will help you manage the overall performance of the KPI and use your employees as the carrot. In order for your employees to become actively involved in the KPIs, you need to post them in areas where they will be seen. Break rooms, lunch rooms, and conference rooms are all great places to post the KPIs to make sure everyone sees them.

No one likes defective products, especially the manufacturers of those defective products. Making a product that no one is willing to buy means wasting precious resources of time, effort, and money with absolutely no prospect of return. Defective products can quite literally take a business with great ideas and turn it into a business that has no hope of making money (or recovering lost costs) and must ultimately close its doors. A defective finished product is a detrimental error that can fortunately be eliminated.

Instructions

It takes time and resources to perfect your production line. So although occasional defects are to be expected, all must be done to prevent the same defect from happening twice. Recognizing and learning from points in the production process that consistently yield unsatisfactory results is a good place to start when working towards having fewer defective finished products.



• Have quality control checks throughout the manufacturing process. Quality control has the sole purpose of ensuring that a product or process is seen from beginning to end without any significant errors. It is the responsibility of your quality control team to identify and eliminate defective products at the earliest stage possible. Individuals with the responsibility of quality control should be well trained and have an eye for the details that are important to their particular step in the quality assurance process.
•  Use computer equipment to automatically eliminate defective products from the production line as soon as possible. As computers and machines become more sophisticated, they are being entrusted with some of the most important quality control responsibilities that a company has. The use of computers minimizes human error and is much more affordable in the long run (not to mention that there are no labor laws dictating how hard a machine can work). Many of the most high-yield manufacturers have already turned to computers to help them in identifying and properly handling defective products long before they reach the finishing stage of production.
•  Have a system of recycling that allows for defective products to be re-integrated back into the manufacturing system or redirected to a different operation for immediate use. It is not enough to simply identify defective products early, something then needs to be done to turn these defective products into products that can ultimately be sold to the consumer. Whether the defective product is melted down and reintegrated into the process, or if it is used for an entirely different product all together, you must devise a way to integrate waste reduction into your system of defective product reduction.
•  Make changes. Change could very well be the most difficult hurdle to overcome in the way of progress. There are many who do not welcome change but see it as intimidating and insulting. Others welcome change but simply cannot see how something that has always been done one way could possibly be done any differently. Research and development teams are given the responsibility of finding answers to the hard questions of what kinds of changes are necessary in order to improve a process. Ultimately, anything that will be done to reduce the number of defective products in a manufacturing process is going to have to go back to somehow making a change. Research new technology and welcome new ideas. Attend seminars and training events. Welcome the sales pitches of equipment designers and engineers. Never dismiss the possibility that there could be a better way of doing things out there.

It is the most prosperous manufacturers in the world that have mastered the ability to have a production line with few, if any, defective products. But this is not to say that every other manufacturer could not do the same.

In the manufacturing business cutting down on waste is really an easy of cutting down on wasted money. When you can cut down on wasted money, you see higher profits and higher profits mean taking your business to the next level. Wasted material resources also become economic issues as more and more pressure is being but on manufacturers especially to clean up their operations.

Instructions

There are a variety of different ways that you can cut down on the waste that you have at your manufacturing plant. The process of cutting down waste is often referred to as Lean Manufacturing. Below you will find some points in the lean manufacturing process as well as some additional ideas that will help you to better control, reduce and eventually eliminate waste.



• Wasted time - Streamlining operations is a huge way of eliminating the problem of wasted time. Time is money and every minute that is wasted by inefficiency is directly reflected in profits. Wasted time can be seen in the work of poorly trained employees, equipment that frequently has down time, the need to make repairs, etc. Sure there will be unexpected delays on occasion, but the trick is to get your manufacturing plant to the point that it is a well oiled machine and that even minor setbacks do not significantly effect that day's work.
•  Wasted inventory - There is another method of manufacturing that cuts down on wasted inventory by making the products as they are ordered. This means that every product has a specific buyer waiting for it. The elimination of inventory cuts down not only on the needless excess of manufacturing, but costs of storage and managing that inventory can also be done away with. Customers enjoy the personal attention that they receive when they know that a certain batch of products is being made specifically to fit their needs.
•  Defective products - Defective products are among the greatest wastes that need to be eliminated. A defective product is a waste of time and in many cases where the product cannot be recycled, it also becomes a waste of material. No time should be spent making a product that will never be sold, yet this is precisely what is happening when a defective product comes off of the assembly line.
•  Wasted labor - Time and labor are connected when it comes to efficient waste free manufacturing techniques. Methods such as assembly line production and the creation and programming of equipment that can perform dual functions are just two ways for how each member of your labor force should play an integral part of the manufacturing process and if their contribution is not vital, that is a waste that should be eliminated.
•  Recycling materials - Although all manufacturing companies strive to operate in a waste free manner and no one likes defective products, those manufacturers that have devised a method for recycling defective products to be used for making new or alternative products do not only have the praise of conservationalists and environmentalists, but they are protecting their bottom line.

Cutting down on waste is something that many manufacturers devote their entire careers to. Those companies who have mastered waste elimination are among the most prosperous companies in the world. We learn from these individual companies and strive to replicate their methods. Yet it is only through tedious personalized attention to the details of each specific manufacturing operation, that a manufacturing plant truly leans how to cut out all of the waste.

Six Sigma asserts that in order to achieve high quality processes, continuous effort must be made to reduce any variations that may exist. In order to reduce the variations in the manufacturing and businesses processes, each process must be measured, analyzed, controlled, and improved. In order for Six Sigma to be successful, the entire organization must adopt the program and have a complete mindset change.

The methodology behind Six Sigma has saved businesses millions of dollars. Motorola developed Six Sigma in 1986 and they have stated that the program has saved them $17 billion dollars. There are 2 major methodologies behind Six Sigma, DMAIC and DMADV. DMAIC is used when you want to fix an existing product or service. DMADV is used when you want to create a new product or service.

The acronym DMAIC can be broken down into the following categories:


• D - Define. Define the project goals and customer deliverables.


•  M - Measure. Measure the process to determine current performance.


•  A - Analyze. Analyze and determine the root cause of the defects.


•  I - Improve. Improve the process by eliminating defects.


•  C - Control. Control future process performance.

During the define phase, your Six Sigma team will define all the goals and outcomes you would like to achieve. The goals must be consistent with the demands of your customers and the business philosophy. The define phase is the "roadmap" for the future.

The measure phase will determine whether or not defects have been reduced. You will use metrics to determine the measurements, the metrics used are: input, process and output indicators. The measurements must be accurate and relevant in order to determine whether or not the defects were reduced and if they will continue to be reduced in the future.

Control is the last step in the DMAIC methodology. All the tools you have worked with in the above steps will finally be put into place during the control phase. The control phase will ensure that any variances that stand out will be corrected before they can have a negative impact on a process and cause defects. Controls can come in the form of pilot runs to decide if the processes are capable. From the pilot run, you will collect data and the process can then be evaluated and pushed forward for transition into standard production. Continued measurements and analysis are essential to ensure the processes keep on track and stay free of defects.

There is an additional tool to DMAIC, which is to synergize. This additional step is to include every member at the company and make sure there is clear communication. Synergy focuses on sharing the gains and working as a team instead of individuals.

Like DMADV, DMAIC follows a method similar to the martial arts belt system. There are different roles within Six Sigma in order for it to be successful.

The roles are as follows:


• Management leadership - This are includes the CEO and all the top management within the organization. They are responsible for the overall Six Sigma process.


•  Champions - This individual is considered the "buffer" between management and the other roles in the Six Sigma process. They are responsible for implementation of the Six Sigma Method.


•  Master Black Belts - These individuals devote 100% of their time to Six Sigma. They are responsible for the overall mindset change of the company and train Black Belts, Green Belts and Yellow Belts.


•  Black Belts - The Black Belt is in charge of the Green and Yellow Belts and they are a support for the Master Black Belt. Like the Master Black Belts, 100% of their time is devoted to Six Sigma.


•  Green Belts - The Green Belts operate under the direction of the Black Belts and play a critical role in achieving results from the Six Sigma methodology.


•  Yellow Belts - The Yellow Belts are trained in the Six Sigma methodology, but they do not have a role in the overall implementation of Six Sigma.

To implement DMAIC, you must first begin with upper management. Management will select a problem through the statistical method provided by DMAIC. Typically the problems include something related to the customer. The problem must be selected with the knowledge that it is able to be repaired. If the problem is too substantial, then you must use the DMADV model and create a new product or service. The project that is outlined must fit within the guidelines of the organization and reach positive results for the customers.

You must form a Six Sigma team to take over the project. The team usually consists of one upper management person, Master Black Belts, Black Belts, and a few Green and Yellow Belts. The team members who will be contributing should be considered "experts" in their particular field and are familiar with the Six Sigma process and contribute ideas that can be improved. You may choose a team that is temporary, with individuals who are "experts" but are not part of the Six Sigma belt system. The members of the Six Sigma team will learn new skills, gain experience, and learn various types of problem solving techniques.

After the Six Sigma team is selected, they must be trained. For the Six Sigma program, there are online training courses and classroom training sessions. For each level in the Six Sigma program, different classes are required, some taking weeks others taking months. Once the teams are trained, they will follow the DMAIC model and transfer ownership of the solution to the process owner, or Champion. The solution that is reached must be effectively communicated to the workers and all the necessary training must be provided. The solution needs to be a permanent fix versus a temporary fix.

DMAIC allows businesses to look at their existing processes from start to finish and evaluate everything in between. Following the model a project team will decide what the most important requirements are and discuss the reason for selecting this particular project. Each project that is chosen needs to have a project goal and the names of every individual who has stake in the success of the project.

As your individual teams begin the data collection phase, they will use a series of flowcharts to identify the problems and its variables. Once the problems are properly identified, they will discuss the solutions for each problem. The DMAIC training will go over how to collect data, analyze it, and discuss solutions for it. The data should be calculated against customer requirements and compared to other processes within the organization.

Using the data, the root problem will be uncovered. Once the root problem is found, it will be easy to test, refine, and implement a solution. From here, the team will decide the implementation plan and do test runs to ensure the improvement that was made is validated.

Careful monitoring of the fixed problem will continue and will be documented. If the problem persists, the team will go back to the beginning and start the DMAIC process over. If the problem is fixed, new policies, procedures, budgets, and instructions must be clearly written and posted for the entire company. The new product or service will be sold to consumers and ownership of the project will be transferred to the employees who work the process on a daily basis.

Companies that have implemented Six Sigma have claimed that it reduces up to 50% of total cost production, cycle-time, and material waste. Properly implementing the DMAIC model of Six Sigma will increase your overall customer satisfaction, build better products that are more reliable and increase your overall-net profit ratio.

Several consulting firms can help you implement Six Sigma into your company and will provide all the necessary training your Six Sigma team will need. Remember that without the support of management evoking a new mindset, Six Sigma will not be successful.

One of the most important aspects of both approaches to Six Sigma is that they begin with a specific problem and an attempt to improve or eliminate that problem. This is why the first step in DMAIC is to define the goals of the process that will yield the desired results in the end. Most people and companies in general are used to defining problems in very broad terms that may not really be useful in the end. This is sometime the hardest part for people, sitting down and determining the exact source of the problem so they can fix it. And example may be that the sales floor is having trouble converting leads into sales. But this is very vague and doesn't give a clear path or suggest a plan of action to be taken. But, stating the problem in quantitative terms helps define where the problem might be coming from. If we know that employee absenteeism has increased by 15% in the last 60 days, then maybe that will explain more about why sales are down and what can be done to correct the problem. So defining the problem area also helps clarify the goal and what can be done to fix it. It is important to make sure that the goals for process improvement are consistent with customer demands and the company's objectives.

Next you need to measure the key aspect of the process that is currently being used and gather data about those processes that will help improve them. For example, if temperature is very important to the product you product, then you need to have regular measures of temperature and make sure that they are within a good range for quality production. The data should be able to tell you why certain problems might be found in the products themselves. Measuring data just for the sake of having it is completely useless and makes the process more inefficient than before. Defining the problem is really just the beginning and then you need to have information that will help you determine which factors influence the quality of your product the most.

Then you need to use the date that you have collected and analyze it and make comparisons with samples taken from the production line. You need to be able to find cause and effect relationships which will eventually lead to pinpointing the problem and then taking swift action to repair the problems that are leading to the quality issues. Understanding the variations in your production process will help you to reduce or eliminate them resulting in higher efficiency which is the ultimate goal of Six Sigma. Analyzing the data also helps you to determine if a problem was simply a random event and that doesn't regularly occur. If this is the case, then you don't need to continue implementing the Six Sigma methods.

Next is improving the design of the production process if you have found that there are problems that need to be corrected. Sometimes these changes can be done quite easily and will little expense other than time, and sometimes they will require redesigning an entire portion of the process. Of course the changes need to be made in accordance with customer expectations and the goals of the company like all the other steps. This step should only be taken if it has been determined that it is a real problem and not just a fluke. Possible solutions should be tested to see if they will really make a significant difference before they are put into full production. All angles of the problem should be considered and there should be an effort to apply multiple different solutions and then select the best one of all.

Then the process must be controlled and data needs to be again collected about any deviations from the target. There should be pilot runs made to ensure that the final product is up to expectations and that it doesn't result in even more problems than the original problem. Sometimes this process will take some time and effort, but ensuring the quality of the product is very important.

DMADV

This Six Sigma process is more involved with developing a new product or process than improving a new one, but in some cases it can be used for improving and existing one. Some people believe that there is really very little difference between the two different forms of methodology.

This process also begins with defining a strategy and goals that will help throughout the whole process. They again must be in line with the company expectations and reputation and the expectations of customers or potential customers. The goals have to be consistent with both areas for them to be successful and achieve the desired result, which is improved efficiency or profits. Then comes the measurement of the CTQ's, or factors that are critical to quality. These factors include product, capabilities, production process capability and risks. Knowing the values for each of these factors will improve the approach taken to start the production process and really help determine if the right approach is being taken. After that, analysis needs to happen to develop a set of design alternatives that could possibly make it to production. There should be many different designs created and then the best one should be selected for the overall qualities, again which should be in line with the goals set forth. The designing the process and optimizing the process must happen. This phase of the design process may need to involve simulations to determine what the actual product will be like. Then you need to verify the design by having several pilot runs and making short production runs. This will again ensure that the quality is the highest possible and will also help the process owners understand better what needs to be done at each phase of the process.

Some people believe that DMADV is used only for developing new products and services and that DMAIC should be used for existing processes. This argument is valid in most circumstances but there are also some situations in which this may not necessarily be the case. But some people say that there isn't much difference between the two versions anyway. The main difference between the two though is the way that the last two steps are implemented. DMAIC is more concerned with improving and controlling the process than developing a new process. DMADV is more concerned with coming up with a completely new way to produce something than just evolving a system already in place. Some people ask if you can use one in place of the other and there is really no straight answer. It is possible to implement DMADV in the place of DMAIC when the process hasn't yielded the results that you wanted in the first place. The summary would be: use DMADV when you are trying to improve the process and it hasn't worked or delivered to your expectations, or when you want to develop something entirely new.



• Hiring freight is among the least expensive of delivery methods - Other options for delivering your finished product might include chartering a plane, sending your product by mail, or having the customer pay for shipping. When these options are compared to the hiring of a freight line, the freight method combines the least expense with the greatest speed and convenience for the customer.
•  Speed is acceptable - Although freight is not the fastest delivery method possible, it is certainly faster that many other methods that may take weeks to complete a delivery. Fleet trucks are also able to get to their destination faster because there is no need to transfer the cargo from one transportation method to another in order to complete the delivery.
•  You can contract with a freight line to have a regular shipment agreement with your manufacturing plant - There are added conveniences to signing a contractual agreement with your freight transportation provider. These benefits include relatively worry free efficiency. There is no need for a middle man because the freight line will pick up from you and handle the entire transaction from that point on. Your customers also benefit from the lack of transitional steps in-between leaving your manufacturing plant and arriving at the location where they can purchase your finished product. Fewer moves also means less of a likelihood that products become damaged, stolen or lost.

Disadvantages



• Variables make it harder to fill immediate/rush orders (weather, road construction, accidents) - There are variables with fleet travel that simply do not exist as strongly with other delivery and transportation methods. Winter months mean harsher weather especially at high elevations. Fleet drivers will also need to rest periodically. This down time means that it takes longer to get your products to their destinations. Human error is much more likely when the trust of your entire shipment is put into the hands of a single driver.
•  Your products may not be the priority contents of the shipment unless you opt for "less than truckload" services. Many freight lines have multiple contracts and therefore different deliveries that are transported in the same truck. When other products are being shipped along side yours there is a greater probability for there to be a mix up or for the delivery to take longer because other stops for other customer's products must be made along the way.
•  International shipment is not available - Obviously there are certain deliveries with freight lines that are simply not available. The most apparent delivery that freight lines would only be partially helpful with, at best, is with international deliveries. Freight lines are very popular within the continental U.S., Canada, and Mexico.

Getting your finished product to your customers is important, you do not want to leave such deliveries to chance but you must also remain financially minded about the transportation methods that you choose. That is why so many manufacturers decide to hire freight lines to ship their finished products.

One drawback that has been seen and noticed is that Six Sigma doesn't do as well when there is not a general buy in by employees at all levels. This can be very important in some types of organizations. This becomes a problem with companies that produce more than one product. There may a plant producing a particular product and when upper management and the board of directors see that that particular division has improved they may be very anxious and eager to put similar procedures and measures into place in all of their facilities when this may not be a good idea especially without securing the commitment of all those who will eventually be involved. There are also others who accuse companies who have adopted Six Sigma of only wanting to look good in court when they are in a lawsuit or some similar problem. Some also state that the value of reducing variation may not actually be worth the time and money it takes to implement Six Sigma, especially when time is an important factor.

Here are some of the most commonly cited pros and cons of Six Sigma. One of the beat things about the methodology of Six Sigma is that it places and emphasis on achieving measurable and attainable goals. A Six Sigma implementation is never put into motion unless there has been sufficient evidence that it will produce results and improve the bottom line. There are also a great deal of tools and techniques that are used for fixing problems in a business setting that take place in a very sequential order. This helps to improve the way that ideas and action flow through the company in many different areas if not all. Discipline regarding the way problems are handled and solutions arrived upon is engrained in the process. Another thing that makes Six Sigma great is the reliance on the passion and commitment of upper management to the company and this passion often trickles down to lower levels and improves company morale in general. This also makes employees on all levels more committed to the business and its vision and goals. Six Sigma also tries to look outside of the company to solve the problems that it faces. It relies on cultural changes and customer opinions which really are very important in the success of all businesses. These concepts are integrated into the company from top to bottom as well. It also creates a foundation on which development of employees and other business ideas can be solidly founded. The decisions that are made through implementation of Six Sigma processes are generally only based on data and actual numbers that have a real world meaning. There are no hunches that make their way to production and no hurt feelings when an idea doesn't do well even though the management really wanted it put into action. Assumptions have no place in Six Sigma and the absence of these types of bad business methods improves the company even more.

With all the positive things that people have to say about Six Sigma, there are also plenty to go around that aren't so positive. With any system that relies heavily on data and measurement like Six Sigma does, it may sometimes be difficult to gather sufficient data and this can be a big problem especially when big tactical decisions are being made based on the date collected. There are even times when a particular type of data or measurement may not even be available at all. Gathering and finding out ways to gather data when it is not available can have a very significant cost to the company in terms of time and effort. Prioritization can also become a problem when Six Sigma is being used because it so critical to the success or failure of the implementation. There are very few tools that have been developed that help make objective decisions regarding prioritization. There is also some dispute as to what really qualifies as statistical error and how much should really be allowed or assumed. If a defect qualifies and anything that doesn't meet a customers demands then where do you draw the line? There are some fantastically picky consumers out there and most businesses will argue that it is near impossible to please everyone that you will ever do business with, especially when customers have expectations of a product or service that were never intended to be there in the first place. Another problem that is stated about Six Sigma is the non standardized process of determining roles in the process and how each relates to the other. For example, when exactly does a green belt really need to become a black belt? What ratio of master black belts should you have to black belts and similar questions? Such procedures are never uniform from one company to another and there is a great deal of flexibility in how this process is implemented. Another problem that can really hurt badly in the long run involves companies that claim to have knowledge of Six Sigma but are only familiar with it from a consulting position and have never actually implemented a system themselves. This lack of experience may lead to problems down the road and lead to losses or decreased quality rather than increasing these figures. Others say that Six Sigma is simply a complicated and overworked quality improvement scheme and can sometimes be done much more easily without following all the tedious steps involved. Six Sigma is also oversold by consulting companies who really only have basic understanding of the tools and resources involved. Some people see the designation of roles in Six Sigma as a cheesy rip off of the different belt levels used in martial arts that really isn't parallel at all. Some also say that Six Sigma is based on arbitrary standards that may or may not translate from industry to industry and from company to company. There are also those who suggest that Six Sigma stifles creativity and replaces it with a controlled process rather than creativeness. This is a very serious problem especially with companies that are in the high tech field that relies on innovation and thinking outside the box to drive business and revenues.

The first role that your software program needs to help you figure out is identifying the problem. If you are purchasing or using a software program, you may already know what the problem is or at least have some idea of where it might be coming from. The software should help you organize the known operational problems and the associated problems that may accompany these primary problems. It should also identify those stakeholders who may be involved in the process like shareholders in the business and customers that are supporting it. It should also be able to clarify primary objectives and goals and have this information available for access any time throughout the process. It can also help you to identify and document known constraints that will be placed on the process because of inherent conditions.

The program also needs to help you collect facts and measure the deficiencies that are found in the business. Project controls can be created or emphasized using the software program that you choose to use and you can continue to identify problems or areas of weakness and audit the compliance issues that may present themselves. This also helps you to organize the research that you do concerning the complaints of the customers and stakeholders. Having this information organized and in front of you at all times is very important in a successful Six Sigma implementation. Then you need to identify the root cause of the problem and analyze it thoroughly. The software should help you to prioritize the list of requirements and to prepare reports about this. It can also be used to score or record the score of particular vendors and the solutions they suggest for fixing the root problem. This also helps to compare the results of the propositions and finally select the best solution for the problem at hand. Improvement and corrective action can also make use of software programs by organizing an implementation team and organizing their schedule and timeline for the implementation of the plan. It should also be able to draft and keep track of an implementation budget that will keep the company on course to making profits rather than spending more on the Six Sigma than the effort is actually worth. Increased profits are really what Six Sigma is all about in the end anyway. Software should also create a plan for testing and then provide organization for the execution of the plan. Another very important aspect of a software program in this phase is the ability to train the implementation team and other people that will be involved in the project as well as help roll out the action itself. The last step in DMAIC is to have ongoing controls and procedures put in place. The steps that are used in Six Sigma need constant reevaluation and updating to make sure that they are achieving the goals that the company has set for the process. A software program can also be very useful for this part of the process. The program should also compare functionality and system outputs to the original requirements list to see what progress has actually been made and what areas still need more improvement. It can also help find discrepancies in compliance of procedures and test to see if differences in the production are a result of implementation errors or other statistical reasons.

There are many different options when if comes to choosing a software program for your Six Sigma process improvement. There are all kinds of platforms that they are based on and can range from very in depth to simple and basic. Depending on what your specific needs are you will need to choose the software that is the best fit for you. Some programs may have concepts and systems that are completely new for most people and will require a significant amount of training and exploration to get the most out of them. Others will require less study and training and may be more intuitive but also lack some of the high powered features that can be used in a very specialized program. One of the most successful types of program used for Six Sigma is an Excel based program that uses the power SPC analysis but is still simple enough to use in Excel. This program is fast, affordable, and easy compared with many other programs. It offers many different functions depending on the phase of DAMIC that you are in. It has prioritization matrices that help define projects and aligns them with the strategy of the company and customer objectives. It also provides the use of Tree diagrams to show the whole project in scope to understand the big picture to clarify and keep the main objective in focus. It also helps to gauge Repeatability and Reproducibility control charts for Measurement Systems Analysis as well as Process Capability Analysis as a baseline for the whole project. This Excel based program also helps to draft Cause and Effect diagrams of Fishbone charts to brainstorm potential solutions to the identified problem. It also helps users to employ Matrix Diagrams that are also used in QFD to determine what will satisfy customers. It also contains a wide assortment of Control Charts which are very important in verifying if the whole system has actually improved the output of the production line. It includes Individual X-Charts, XBar and Range/Sigma charts, Attirbute charts, Moving average charts, and many others.

Whatever decision you make about using software in your process improvement, you need to make sure that it fits your needs at the present time. Needs will change and vary depending on how well the system is implemented and from project to project and you need to assure that the software being used is the most effective for the current project. Something that worked for the last one may not necessarily be what you need this time around. You should also keep in mind that there may be different trainings and updates that need to be done with changes in the program to make sure you are always getting the most out of the features that are offered and that you use.

Welcome to the wonderful world of Six Sigma implementation! It is hard for those who know anything about Lean Manufacturing to be able to think of lean methodologies without thinking of Six Sigma. The Six Sigma method is both complex in construction and simple in concept. Many books have been written and seminars taught on only small aspects of the Six Sigma process. So, implementing a project of any kind may sound simple enough, however, depending on the complexity of the lean issues you are trying to resolve, your implementation of Six Sigma could be quite the challenge. If at any time during the implementation process you realize that the task you have undertaken is too daunting, remember that there are many dozens of highly experienced consulting companies who offer their services on whatever aspect of the implementation that you have become caught up on. Additionally, there are a variety of different pieces of software that can be used to assist in the mathematical and sequential steps of the Six Sigma methodologies.

Steps for implementing Six Sigma

There are several basic steps used for the implementation of Six Sigma in an organization. These steps include beginning with having the company's leadership commit to the implementation process at hand. A strong mentality for change and taking a hard look at how to improve is vital if the company is to progress and ultimately increase profits. The next step in the Six Sigma implementation process is to maintain access to current information on the requirements or demands of your customers. A process management system must then be put into place to measure current performance and identify where you need to make improvements. Establishing these systems of management and measurement take a trained staff if they are to be done properly, that is why many organizations implementing Six Sigma choose to employ individuals who have specific training in the different roles of implementation. Black Belts and Green Belts, as these trained Six Sigma implementers are called, have the responsibility to design and improve processes and to assist process owners. Management must be involved in all these steps of implementation in order to reinforce the need that the implementation team has for process management and improvement design. The last step that an organization seeks to attain is to implement successful Six Sigma methods throughout the organization effectively and clearly, making communication another characteristic that must be fine tuned.

One of the key characteristics of what makes Six Sigma so successful is that it aims to "professionalize" quality management functions. In companies that have not adopted the Six Sigma strategy and have taken a more traditional approach to how their build their leadership structure, quality management in practice is dedicated largely to the supervisors that are working on the production floor and to statisticians who spend their days crunching numbers and evaluating mathematical equations for efficiency in completely separate quality departments. However, when implementing Six Sigma, martial arts terms are used to describe and rank a different kind of operational hierarchy of managers. In this hierarchy, however, there is a straight line from all these implementation roles straight to those who have assumes executive responsibilities. This translates into a strategy where executives and trained implementers are in direct communication throughout the entire process. Here are the key roles that must be assumed for successful Six Sigma implementation:

Helpful Resources: 1. Wikipedia When implementing Six Sigma the roles of implementation are often referred to by names that could easily remind one of martial arts. Read bout the colors and belts of implementing Six Sigma through this link. 2. Commercial Services Available Follow this link to learn more about exactly what Six Sigma is all about. Also learn why the implementation process is so important and what commercial services are available to aid you as you implement this strategy. 3. Six Sigma Implementing Six Sigma is not the same for every company that tries it. This example is for Six Sigma implementation in a small IT firm, there will be differences if implementing this strategy for a large manufacturing organization. 4. Worthwhile of Implementing Six Sigma Implementing Six Sigma will be time consuming and it will cost money, even if those monetary costs are only in hours of labor, so implementation may not be right for you. Read more about whether or not implementation is worthwhile in this article. 5. Versatility of Six Sigma For many companies the Six Sigma process is vital to the efficiency of everyday working life. Follow this link to find articles by a variety of companies on a variety of different topics that illustrate how versatile Six Sigma can be. 6. Implementing Six Sigma Book If you are looking for a more detailed set of instructions for implementing Six Sigma, this book is available for purchase. In it you will be able to read about statistical methods that can be used for a more effective Six Sigma implementation. 7. Six Sigma Solutions The company, Six Sigma Solutions, offers their services in the form of seminars and tutorials that are held by experts in the field. You can visit this site to learn more about their services and to register. 8. Six Sigma Blog If you really have an interest in Six Sigma and have something that you want to say about it, try posting your thoughts and reading the postings of other Six Sigma enthusiasts on this Six Sigma Blog. 9. Implementing Six Sigma Internationally Implementation, in addition to its differences depending on organizational structure, will also differ depending on the type of culture that the Six Sigma process is being implemented in. Read more about implementing Six Sigma internationally, here. 10. GE's Experiences Follow this link to read of a real life example of the company GE's experiences in implementing the Six Sigma process into their operations. Learn more about the roles that they used, the training they had and much more.

There are several key implementation roles in Six Sigma that should be considered. The Executive leadership includes the CEO of the company and other people that make up the top management. They are the group responsible for having the vision and setting up the Six Sigma implementation process. They ensure that the other roles are fulfilled as well. Next are the Champions. They are the group responsible for the implementation across the entire organization and making it possible to integrate the ideas into the company. Executive management takes their future members from the Champions and another very important role they play is as mentors to the Black Belts. Master Black Belts are named by Champions and are basically the coaches of Six Sigma. 100% of their time is devoted to implementing the ideas of Six Sigma and it is very important to them. They help Champions fulfill their roles and also assist the Black Belts and Green Belts. Most of their time is spent on statistical tasks and ensuring consistent application of Six Sigma through various departments. Black Belts are more concerned with specific projects and methods. Their focus is on project execution and ensuring that everything is done properly. This differs from the roles of Master Black Belts and Champions because they are more involved with the projects and functions of Six Sigma. Green Belts are the employees of the company who take up the implementation of Six Sigma and its methodology to specific projects that are being worked on in the company. They are guided by the Black Belts who help them to identify and focus on the areas they need help in. They are also supported by the Black Belts in achieving overall objectives so that the implementation of Six Sigma is uniform and consistent. Yellow Belts are the lowest position in Six Sigma but are still very important. They were hired as employees and trained specifically in the Six Sigma techniques as part of a team in the company to promote Six Sigma. They may have never completed a Six Sigma implementation before and are not expected to be constantly engaging in quality improvement procedures and activities. All the roles in Six Sigma are very important to the proper implementation of the system and to its success.

Getting started with Six Sigma

Just as you would make sure that you have all of the needed ingredients to make a cake before you started cooking, you should get started with your Six Sigma implementation process by first determining how control of the Six Sigma program will be handled and if there is a need for a separate leadership body that will be able to be responsible for the strategic, tactical and management decisions required for the Six Sigma improvement program. You need this leading body to be committed to the ideals of a Six Sigma operation and have a working knowledge of how the Six Sigma plan will operate.

As you get stated with the Six Sigma implementation process you want to ensure that communication is in place. Specifically this includes that employees at every level of the implementation plan should not only remain informed, but trained in the jobs that they will be responsible for carrying out. As very few organizations have employees who are well trained in the Six Sigma implementation process when they have never before implemented Six Sigma, it is typical for the business to outsource the initial Six Sigma training. This outsourcing to Six Sigma professional instructors typically includes the services of providing classes, schedules, participants, costs, and the tools to be taught. Individuals should be chosen to receive training in each of the implementation roles. The IT leader and other managers should be a part of the Champion training that takes place. Training the IT leader or leaders this way ensures that they are on the same page as the rest of the team when it comes time to create programs that will be beneficial to the data collection, measurement and interpretation process. Those who are chosen for Six Sigma Green Belt and Black Belt training must be certified as part of their training so make sure that the organization that you have hired is able to also provide certification. Although the time that it takes to certify these individuals will vary depending on how much time is allowed to be devoted to their training, individuals can typically receive certification in their respective roles in a matter of weeks or months.

Most Six Sigma implementation programs that you come across will cover each of the DMAIC phases (Define, Measure, Analyze, Improve, and Control). However, if you are looking for an implementation option that deviates from this traditional DMAIC methodology, some more progressive training and consulting agencies will also choose to cover the IDOV phases (Identify, Design, Optimize and Validate) and more heavily focus on the use of software implementations.

The next steps in Six Sigma implementation

Once you have trained or hired the individuals who will make up your Six Sigma implementation infrastructure, you must then identify which projects you would like to take on first. Naturally, areas that are underperforming are usually areas that are taken on first. Remember that the goal of Six Sigma is to minimize non-value-added steps in any and all processes. In order to do this, performance data must be available, collected, and interpreted (all processes are additional steps in the implementation). A great deal of work will go into the improvement of areas that affect cost, quality, delivery or customer satisfaction. But ultimately, once a program is refined an organization will then have the ability to increase the value of its products and applications.

In order to best create and follow through with the process of six sigma implementation, various members of the implementation team must take on specific roles. These specific six sigma roles and responsibilities have been given conventional martial arts names. The roles for implementation cause a project team to make changes that create a more professionally trained quality management team. No longer will the production floor workers and the statisticians that work with production numbers be separated. Through instigating these roles and creating a cohesive working group, production problems can be better identified and solutions can be found (as is the purpose of Six Sigma implementation in the first place).

In the implementation roles within six sigma, individuals with the titles of leaders and champions usually receive the highest level of technical training. While those who are trained in a "belt" level will usually continue working their assigned jobs while their training is taking place (a lesser time commitment). Of course the time it takes to compile a well-trained team and the effects of the training process on the production line will vary from company to company and is largely dependent on the consultants that are commonly outsourced for this training. In the paragraphs that follow you will be able to read more detailed descriptions of how these roles are typically defined.

Six sigma implementation roles

The six sigma methodology is filled with many roles. When it comes to the implementation roles of six sigma, most lean experts would agree that the following roles should be included in the implementation team. Of course there are no universal rules governing your six sigma implementation structure, so making changes to these prescribed roles is up the discretion of the individual organizations and their unique needs.

• Executive leadership

• Champions

Those who are assuming the Champion role are typically members of upper management. Champions are responsible for the implementation of six sigma in the organization. The Champion is typically selected by those assuming the role of executive leadership. It is the responsibility of the Champion to understand Six Sigma principles. The Champion must act as a guide for his implementation team by serving as a mentor and facilitator. Champions are typically the first to obtain formal training or are hired before any other member of the implementation team because they have already been certified as a Champion. Champions are responsible for not only bringing the most pressing issues of the organization to light but also to generate ideas for projects that will lead to the improvement of these concerns. Champions also work to resolve cross-functional issues that may slow down the flow of information and the acquisition of the appropriate tools needed to move forward with obtaining and measuring data and then ultimately instigating changes. Champions also act as mentors to Black Belts, the next roles that are assumed in the six sigma implementation process.



• Master Black Belts

Master Black Belts are chosen by the Champions to coach others within the group of those working in the implementation of the six sigma methodologies. This coaching process includes the mentoring of those who have assumes lower roles (black and green belt roles) within the group. Ultimately, the Master Black Belts are responsible for delivering the results of the projects that are being conducted. They must perform many statistical tasks in order to ensure the consistent application of six sigma throughout the entire organization. A Master Black Belt must have strong leadership skills. It is ideal when the individual assuming the Master Black Belt role is well respected in the organization. This respect works to the Master Black Belt's advantage as he must be able to influence decisions. Master Black Belts are entrusted with the responsibility to not only maintain the momentum of a six sigma implementation, but also to keep costs down and maintain the focus of the group's efforts on the customer throughout the entire implementation process. A Master Black Belt position is typically a temporary position that is needed from time to time as new projects present themselves. Therefore a company can either hire a Master Black Belt for a specific project or choose to train one with Master Black Belt certification to also assume other job responsibilities in the organization when his specific six sigma skills are not needed.



• Black Belts

Black Belts are typically members of middle management who are primarily responsible for executing the six sigma plan of action. Black Belts are typically more technically oriented than other roles within the implementation process. Their job is to create, facilitate, train, and lead teams, with an analytical approach. While other previously mentioned roles involve the employee's focus on identifying projects for six sigma, the role of a Black Belt is to use statistical tools to lead other team members and assure successful results. A Black Belt will typically have about 4-5 weeks of professional full-time training in statistical methods and tools. Once trained, a full-time Black Belt will typically spend 2-3 years working as the individual responsible for six sigma execution. It is then typically most advantageous for that individual to return to whatever their original assignment was within the organization. This reasoning is based on the fact that after having worked so intimately with the six sigma mentality for several years, this employee can then re-apply those lessons learned into daily operations. This leads to constant re-adjustment which aligns perfectly with the purpose of implementing six sigma methods in the first place.



• Green Belts

Green Belts are responsible for helping the Black Belts to execute projects while simultaneously attending to their own specific job responsibilities. Green Belts typically have part time responsibilities when it comes to their involvement in the six sigma implementation. Green Belts must also receive formal instruction to become certified, however the time commitment to this instruction is significantly less than the before mentioned implementation roles. It is the responsibility of the Green Belts to incorporate six sigma quality tools and language into their daily operations.



• Yellow Belts

Yellow belts represent everyone else on the six sigma implementation team (and in some cases throughout the whole organization). Yellow Belts are commonly part of a company-wide initiative to implement six sigma but these individuals have not typically received any formal six sigma training nor are they expected to play active roles in quality improvement projects. Although Yellow Belts are not briefed on the details of the project, they do help Green Belt meet project goals and objectives as administrators, operations personnel.

Other implementation roles

In addition to the implementation roles within six sigma that have just been described, there are more roles that can be assumed that aid in the implementation process. Here are just a few examples of the other implementation roles that exist:



• Financial analyst - A financial analyst is a third party consultant whose services are solicited for the objective examination of project results. A financial analyst will typically also have Green Belt training.
•  External consultant - An external consultant is hired in to help the implementation process by providing various levels of needed training. It is the job of the consultant to make certain that the proper training tools are in place so that failures in the first phases of implementation efforts are avoided. Consultants also can help in customizing the organization's approach to Six Sigma following the adoption of some of the more basic principles.
•  Experts - In major engineering or manufacturing sectors an "expert" is hired to improve overall services, products, and processes for their customers.


•  Sponsor - A sponsor is a senior executive who sponsors the six sigma implementation.
•  Leader - The "Leader" is another term used to describe the senior-level executive who is responsible for the business's six sigma implementation.
•  Team member - The term "team member" can be used to describe the role of the professional or organization's employee who has a general awareness of what six sigma is and can bring relevant experience to a particular project, but who is not necessarily formally trained in any of the six sigma implementation roles.
•  Process owner - This individual "owns" or is responsible for the business process that is the target of a Six Sigma project.

In other words, the purpose for measuring and charting in Six Sigma is to create a way to quantify cost, speed and quality and to use charting to create a detailed map of the process, data on key input and output variables, and an analysis of the capability of the process. The six sigma tools for measuring and charting include the following:



• Prioritization Matrix


•  Process Cycle Efficiency


•  Time Value Analysis


•  Pareto charts


•  Control charts


•  Run Charts


•  Failure Modes and Effect Analysis (FMEA)

Here you will be able to read a brief summary of the most important tools that those implementing the six sigma process use to drive quality improvements within the DMAIC model. For larger companies with the resources to buy computer software programs tailored to their needs, these tools for measurement and charting are all done with a click of the mouse. Note that these tools are generally categorized into either a group of process optimization tools or statistical optimization tools. Process optimization tools enable teams to design more efficient workflows while statistical analysis tools enable teams to analyze data more effectively. Here are the descriptions of these tools:

Helpful Resources: 1. Statistical Definitions Before you can start to measure and chart in six sigma, you must first understand what the various tools of measurement and charting are. The dictionary that you will find through this link can help remind you of these statistical definitions. 2. Different Measurement and Charting Processb This site provides the definition of a variety of different measurement and charting methods that can be used in the six sigma implementation process. Read a short description of these methods here. 3. Continuous Process Improvement Read how measuring and charting are part of the whole Continuous Process Improvement strategy of Lean Six Sigma. Read helpful information for why measuring and charting is such an important part of the process as a whole. 4. Measurement Step of Six Sigma This site provides an article that serves as a helpful introduction to the measurement step of six sigma. First you must choose wisely in defining what to measure to make charting information useful. 5. Six Sigma Implementation Read this article posted by the Navy that shows their definitions of how measuring and charting are a part of the DMAIC six sigma methodology. This explanation gives clarity to how measuring is on of the most important of the six sigma implementation steps. 6. Control Charts Control charts are among the more common charting options that are chosen by those looking for a better visual representation of the measurements and ultimately results of the changes that are being made within the organization. 7. Measuring and Charting Processes of Six Sigma If you are looking for more text on any of the measurement and charting processes of Six Sigma, this website provides an excellent collection of materials that you can reference. 8. Six Sigma Process Different perspectives are helpful when addressing a unique problem and obtaining the different opinions of others on this topic of the Six Sigma process is exactly what you can do when you subscribe to this site and gain access to thousands of term papers on your subject of interest. 9. Control Chart Explainations If you wish you had kept your college statistics books to remind you how to use a control chart, wish no more. This link will take you to a textbook explanation of how to make and interpret a control chart. 10. Professional Assistance If you are in need of professional assistance when it comes to measuring and charting in six sigma, this site is just one example of a business that offers their expertise to help you make your implementation successful.

Quality Function Deployment, otherwise known as QFD is used to help understand what customers are really looking for and what they require out of a product or service. The deployment aspect is present because quality engineers used to be sent on location to fully understand a customer's needs and expectations. The physical movement may not actually happen today but the term deployment has stuck anyway. The needs of customers are rated on a numerical scale with higher numbers equated with higher importance and lower number values to lower importance. Different design options are them developed depending on what the customers have said is most important to them. The expectation is that they product or service will be more effective at addressing the concerns of the customers more fully than ever before. Each option is listed and evaluated on how well it addresses the customers concerns. Each option earns a score based on how well they are able to fulfill these demands and then the best choice is determined based on the scores.

Fishbone diagrams are also used in Six Sigma as a charting of outcomes. This is used specifically when the results of one approach is measured independently from others. This is a cause and effect diagram that can be used in a fishbone diagram or cause and effect matrix to show the results of efforts taken. The fishbone helps to clearly identify the variables that should be studied further to reach the greatest benefit. The fishbone diagram looks somewhat like a fish skeleton and this is where it gets its name. To make a chart of this type you begin with the problem you want to know more about and this becomes the head of the fish. Then you draw the spine and six bones branching off the spine where you can list possible variables that could be causing the problem. Each bone on the spine is for a category of input. When all the variables have been listed then a team analyzes the diagram and finds the most likely sources of the problem then committing to further analysis.

A Cause and Effect (C and E) Matrix, which was mentioned above is an extension of the fishbone diagram and the methods used to create it. It is used to help the people using Six Sigma to identify and explore all the possible causes of a specific problem and then to find the true root of the problem.

Failure Modes and Effects Analysis or FMEA is used to identify ways a new product or process might fail before the failure actually happens. It is more about the activities and projects of the company in general than the specific methods of Six Sigma. It is similar to QFD in its basic structure and the first step is also to identify all of the possible scenarios in which failure could perceivably happen. Then an action plan is drawn up to make sure that these potential problems don't actually make it into the production process. They solutions are ranked on how well they address the concern and are rated from best to worst. This them helps the team working on this project to determine what actions should be taken to avoid the problems and make sure they don't actually make it into production lines.

A T-test is a method that is commonly used in many different types of analysis and especially in Six Sigma. This is done to make a pros and cons, or similar comparison chart, about how you can change methods to improve them. A larger sample size is best for this type of charting but this may not always be possible. It helps to determine a confidence level in