The 30,000-foot-level Metric and its Benefits over Traditional Performance and Process Output Response Measurements

Question: What do you mean by 30.000-foot-level metric reporting?

Response: 30,000-foot-level metric reports provide an honest Y variable process output response reporting system that leads organizations toward achieving the three Rs of business; i.e., everybody doing the Right things and doing them Right at the Right time, as opposed to playing games with the numbers.

Not only a Lean Six Sigma improvement project’s primary metric can benefit from a 30,000-foot-level measurement tracking-reporting system but also organizational-value-chain operational metrics can also benefit. 30,000-foot-level measurements are used in Integrated Enterprise Excellence (IEE) organizational-value-chain-operational-metric reporting. The 30,000-foot-level metric tracking is an improved tracking system to the common place tracking system that uses red-yellow-green scorecards, which can result in a lot of firefighting and/or playing games with the numbers.

There are two parts to 30,000-foot-level metric reporting. One part is to determine if a process is predictable, while the second is to make a prediction statement for those processes that are predictable. In this IEE metric system, this prediction statement is in terms that everyone understands. Because everyone from the operator to the CEO level does not really understand the process indices reporting of Cp, Cpk, Pp, and Ppk, which is common in Six Sigma deployments, these metrics is not part of a 30,000-foot-level report-out.

A 30,000-foot-level metric example prediction statement is a log-normal probability plot showing a performance prediction of 2.1% future non-conformance. If 2.1% future non-conformance prediction rate is unacceptable from an enterprise point of view at the operational level relative to an excessive cost of doing nothing differently (CODND) and/or is a constraint of the enterprise, this would be a pull-for-improvement-project creation opportunity. A value chain owner for this 30,000-foot-level measurement surly will want a process improvement project to get completed as soon as possible, because their appraisal performance depends upon it. The owner of this process metric truly understand that process improvement is needed in the relationship Y=f(X) or the process needs to be changed in order for him/her to meet their performance metric goals, and this can be accomplished through an improvement project.

Control charting at the 30,000-foot-level has infrequent subgrouping/sampling. With infrequent subgrouping and sampling, short-term variations that might be caused by day-to-day variability fluctuations of KPIVs (i.e, key-process-input-variables), will result in charts where these perturbations are potential Y variable common-cause variability sources. This approach is much different from traditional control charting, where traditional control charting’s main purpose is the identification of assignable-cause conditions and making timely intervention resolutions to the process. The control chart that mathematically accomplishes the 30,000-foot-level control charting objective for determining predictability is the individuals control chart. With an individuals control chart, between subgroup variability is used to determine the sampling standard deviation when calculating control limits. .

In the construction of control limits for an individuals control charts, it is important that the time between subgrouping is long enough so that typical input process variations occur between subgroups. Another thing that is important when creating 30,000-foot-level individuals control charts is that the plotted data need to be from a normal distribution. If the underlying distribution is not normal (e.g., lognormal distribution), false special cause signals can occur in the chart. For processes where data are not normally distributed, individuals control chart plotted data may need to be transformed before plotting.

It is important to note that an x-bar and R chart’s control limits and the p-chart control limits are not impacted at all by between subgroup variability. Hence, both x-bar and R control charts and p charts are not used in IEE when determining if a process is predictable.

The intent of the 30,000-foot-level control chart is not the providing of timely process intervention inputs for correction, which is the primary intent of traditional control charts. Lead time, inventory, defective rates, and a critical part dimension are example metrics that can benefit from 30,000-foot-level metric tracking. The amount of organizational firefighting can be reduced through a 30,000-foot-level individuals control chart tracking system when reporting operational metrics on a day-to-day basis.

The 30,000-foot-level reporting system in business metrics can lead to a large improvement in resource utilization and reduction/elimination of game playing the numbers. In addition, a 30,000-foot-level metric reporting system can create a pull for project creation when there is overall enterprise improvement needs from an overall enterprise point of view.

More insight to IEE and 30,000-foot-level metric reporting system can be gained through:
* Reading the 4-page article in center of the descriptive brochure that is available through a “Download IEE Brochure” link at www.SmarterSolutions.com
* Reading the “The Three Rs of Business” article; available through the “On-line Resource Center” at www.SmarterSolutions.com
* Reading the book “The Integrated Enterprise Excellence System: An Enhanced, Unified Approach to Balanced Scorecards, Strategic Planning, and Business Improvements.”
* Reading the four book-volume series on IEE. This series provides roadmaps for implementation and execution both at the enterprise and project level as well.
* Attending a one-day Integrated Enterprise Excellence Workshop

Forrest Breyfogle
Forrest@SmarterSolutions.com
www.SmarterSolutions.com
Author and developer of the Integrated Enterprise Excellence System