Evaluating KPI's: Featured Article
Key performance indicators (KPIs) are financial metrics and non-financial metrics that are used to help a business define and measure its progress toward its goals. KPIs are used in business methodologies to assess the current state of the business and to determine a course of action for any business related problems.
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.
Continue reading "Evaluating KPI's: Featured Article"How to have fewer defective finished products
Introduction
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.
How to cut down on your waste
Introduction
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.
DMAIC Overview: Featured Article
For over 20 years, Six Sigma has been one of the leading process improvement methodologies implemented by manufacturing firms and other businesses. A basic component of Six Sigma is DMAIC. DMAIC is a way to improve work processes by eliminating the defects to reach a 3.4 defect per million opportunities.
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.
Continue reading "DMAIC Overview: Featured Article"Evaluating your options (DMAIC, DMADV): Featured Article
Six Sigma is the process of evaluating and changing business practices and processes to make them more efficient and to reduce the amount of waste in the production process altogether. Six Sigma has two main ways it can be approached to improve business flow and productivity. They are DMAIC and DMADV and both methods are based on the ideas of Deming's Plan, Do, Check, Act cycle. The main difference between the two methods is that DMAIC is used mainly for improving the operations and productivity of an existing business and DMADV is used to make new products or new designs. Both are acronyms and each letter represents an aspect of the implementation that helps improve the flow and quality of business.
Continue reading "Evaluating your options (DMAIC, DMADV): Featured Article"Hiring freight lines to ship finished products
Shipping your finished products to where they can be purchased by the consumer is obviously an important step in the manufacturing process. After all, the reason why you are in business is to make money and if you cannot satisfy your customers by getting them their product in a timely manner, you lose that money. There are a wide range of methods to getting your finished products from one place to another. Some manufacturers have their own fleets, others hire pilots and own planes for international deliveries. But the vast majority of manufacturers, who do not have the resources to create their won fleet, will hire freight lines to ship finished products. Below you will find some examples of the advantages and disadvantage of hiring freight lines to ship your manufacturing plant's finished products:
The Pros and Cons of Six Sigma: Featured Article
Six Sigma is a methodology and approach used to implement lean manufacturing in a production process or service oriented business setting. There are many different reasons why people use Six Sigma and there are also many reasons why people say it may not be the best approach. Of course there are pros and cons to every business idea and there isn't anyone who has found a formula that will work all the time for everyone. So each case has to be considered individually to ensure that it really is the best option. There are many different opinions about lean manufacturing in general and in Six Sigma processes. Here are some pros and cons about them.
Continue reading "The Pros and Cons of Six Sigma: Featured Article"Software options to help you establish your Six Sigma process: Featured Article
Data collection is one of the most important parts of Six Sigma implementation in process improvement for businesses. It is very difficult to improve a process that you don't know much about and it is sometimes very difficult to know much about a process unless you have had the chance to do research on the process itself. The most important parts and results of Six Sigma can't actually manifest themselves until there has been data collected and evaluated. It is also discouraged to move forward with the problem solving phase of the Six Sigma process until you have actually acquired accurate, reliable and useful data. You also need to have it all organized so you can make sense of all the numbers in context. This is why having a software program to collect and organize all the data you plan to use in your Six Sigma implementation is recommended. Here is some helpful info about different programs and features available to help you make the best decision for your business.
Continue reading "Software options to help you establish your Six Sigma process: Featured Article"Implementing Six Sigma: Featured Article
Introduction
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.
Continue reading "Implementing Six Sigma: Featured Article"Implementation roles within six sigma: Featured Article
Introduction
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.
Continue reading "Implementation roles within six sigma: Featured Article"How to measure and chart in six sigma: Featured Article
Measurement is one of the most important parts of Six Sigma implementation. It is essential to have a uniform reporting and collection processes throughout the implementation so that the decisions made are actually based on accurate information.
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)
Measurement is the "M" in the DMAIC methodology for six sigma implementation. Many agree that the measurement aspect of this approach is what makes the six sigma method a success even when other attempts at making a change have failed. In the measurement phase of the implementation process it is the responsibility of the team evaluating the measurement system to observe the process, gather data and then chart that process.
Continue reading "How to measure and chart in six sigma: Featured Article"
Best management systems for manufacturing
Manufacturing management systems are different for many reasons; one such reason is that because not all manufacturing plants are alike, it does not make sense that they all be managed in exactly the same way. With that said, there are a few manufacturing management systems that are more popular than others. In order to personalize these systems, many manufacturers take concepts from various systems and incorporate them in a management style that makes the most sense for their operation. Below are some of the best manufacturing systems for manufacturing that you can refer to as you decide what changes or management techniques you may want for your manufacturing plant:
Just in time manufacturing
Just in time manufacturing is a manufacturing system that focuses to improve the return on investment that a company has on its inventory. This system is triggered to produce more goods at the same rate that these goods are being demanded by customers. So in essence, as something is being sold off of the shelf, there is a system in place that lets the manufacturers know to replace that item. This means that only enough products are made to meet the current demand. Only making enough products to meet the demand means no need for an excess of products in inventory. When there is no need for inventory or storage these costs of extra production and material storage are eliminated.
Continue reading "Best management systems for manufacturing"Evaluating your results: Featured Article
After investing all of the time and effort into implementing a six sigma process or methodology, you will surely want to know how to effectively evaluate your results and use the most of the information that you have acquired. It is only worth the trouble if it yielded results that are encouraging and lead to profits now and in the future through improved quality and customer satisfaction.
An old saying says that the job isn't done until the paperwork is complete and filed with the right people. This is also true of Six Sigma. You are not finished with your implementation until you have evaluated the results of the process and determined what worked best and what could have been done differently or what needs to be done differently from that point forward. After the DMAIC process has been completed and the required change has been decided upon and understood, that doesn't mean that it can or even should be implemented. Making the actual changes is another process that must be undertaken and scrutinized from all angels too. Process control is one of the most important parts of Six Sigma and should be done consistently throughout the whole process whenever possible so that the end result will be as close to the desired outcome as possible. Although there are probably many more, here are 10 criteria for evaluating the success of Six Sigma projects.
Continue reading "Evaluating your results: Featured Article"Establishing lean manufacturing goals for your organization: Featured Article
Lean manufacturing is much more than just a type of business; it is a way of thinking and a lifestyle for many different business owners. Becoming a lean thinker is easier than many people think and that is part of the beauty of the whole process of going lean. Because lean manufacturing involves almost every aspect of the business, the goals that you set for being lean will also involve most or all of the parts of your business. The difficult part about implementing lean manufacturing is not in the concepts because they are generally very simple, but in the continual implementation of the ideas of lean manufacturing. Keeping momentum going is what will make your lean manufacturing operation successful over the long run and goals need to be implemented to accomplish this.
One of the most important concepts in lean manufacturing is to have a system of data collection and reporting set up so that you can measure how much waste is being produced by the company. In a paper called "The Balanced Scorecard - Measures that Drive Performance" the idea that data reporting systems are necessary for the essential measurements for a business to thrive. Evaluating a business from the perspective of lean manufacturing tries to answer the questions like "What do customers think of us? What internal processes must we be the best at? How can we improve? And what do shareholders think of us?"
DMADV overview: Featured Article
Motorola developed the Six Sigma methodology in 1986 as a way to identify and remove errors and defects in the manufacturing and business processes. Since this time, Six Sigma has become of one the most popular business management strategies used in a number of different industries.
Six Sigma uses a series of quality management methods including statistical methods. Six Sigma also create an infrastructure within the organization following a method similar to the karate belt system. Each individual is considered an expert in their particular field. The overall goal of Six Sigma is to produce defects below 3.4 million defects per million opportunities. What this means is you will have a 99.9996% error ratio.
Similar to Lean Manufacturing and other business improvement processes, Six Sigma believes that manufacturing and business processes can be measured, analyzed, improved and controlled. Six Sigma also asserts that in order for a process to be successful, it must have a complete commitment from management on down to the last person in the organization. Unlike other processes, Six Sigma also has an increased emphasis on strong leadership and a commitment to making clear decisions that begin with verifiable data instead of assumptions and guesswork. Six Sigma follows a infrastructure of "Champions", "Master Black Belts", "Black Belts", "Green Belts" and "Yellow Belts".
Continue reading "DMADV overview: Featured Article"
