Cp, Cpk, Pp, Ppk, and Business Metrics – Insightful or Folly?Aug 23rd, 2009 by Forrest Breyfogle.
In Lean Six Sigma, much training effort is spent on conveying the importance of having a measurement system so that consistent and correct decisions are made relative to part quality and other assessments. Measurement Systems Analysis (MSA) and Gage R&R study (Repeatability and Reproducibility) are an integral part of the Lean Six Sigma Black Belt and Green Belt training.
It should be the goal of every organization to achieve the three Rs of business; i.e., everyone doing the Right things, and doing them Right, at the Right time. One tool that provides direction for achievement of the three Rs goal is process performance metrics; i.e., a process’ performance report-out should lead to the most appropriate action or non-action. This basic right-behavior objective is not unlike an inspection gage MSA, which is to determine if inspectors can adequately determine whether a manufactured component should be accepted or rejected. Because of this performance-reporting need, it would seem that management and practitioners would be assessing how well current scorecard and metric reporting systems are doing from a MSA conceptual point of view. However, this does not seem to be occurring. The question is why do we not examine business metrics and process capability indices reporting from a MSA point of view with the same level of intensity that we do for product quality metrics?
In an attempt to size the magnitude of this issue, considered the different approaches someone might use to report process performance. One person might choose a bar chart, another a pie chart, a third red-yellow-green scorecards, a four process capability indices (Cp, Cpk, Pp, Ppk, and Cpm) and a fifth a table of numbers. For a given process, each of these reporting methods can provide a very different, and somewhat subjective, picture of how a process is performing and whether any actions should be taken.
In addition, these reports describe historically what happened, which may not be representative of the future; i.e., not unlike driving a car by only looking at the rearview mirror. What is really desired is a futuristic statement about what is expected from the current process’ state so that appropriate adjustments can be made if what is “seen out the windshield” is undesirable. Metric reporting should lead to the most appropriate action or non-action. However, often process-metric decisions are a function of how someone or a group chose their process sampling, data analysis, and reporting procedures. From a philosophical MSA point of view, the reporting of process performance should be independent upon the person who is doing the sampling and reporting. The only difference between process report-outs, in a particular time frame, should be from chance occurrence.
A system for addressing these needs is described in “C-Suite: The Need to Re-think our Business System’s Strategic Planning, Scorecard Creation, and Process Improvement Efforts“. Lean Six Sigma Black Belt training and Master Black Belt training can benefit from including these going beyond the Balanced Scorecard concepts.
Leave a Comment
You must be logged in to post a comment.