First Time Yield (FTY) is a traditional metric that tells you how many defects your process produces for before any improvement is done. Generally this measurement is used in the manufacturing or production field, but it can make the switch to your office easily. The formula for FTY is:
FTY: Total Unit Passed/Total Units Tested
So if you work at a membership organization and you processed 120 retirement requests and found that 50 requests were entered incorrectly, our FTY is .58 %. 70 is the total number of request entered correct or passed and the total number of units tested is 120 retirement requests.
If your process has multiple measurement areas, you will need to perform a FTY for every measureable step in the process. The great about FTY is that it is one of the simplest metrics in 6Sigma and it creates a create illustration of the current state of your process
What does it look like?
A FTY can look like any typical graph you have seen, but most will resemble the chart below. My fancier ones include the curve illustration for clients that highlight the cost of these errors to the client and how the improvements will be quantified.
What doesn’t FTY do?
FTY is a great place to start, but it is important to understand its limitations. FTY will not measure rework or provide any accounting for the cost in time or resources for that rework. There is a more accurate method for measuring that, Rolled Throughput Yield, which we will cover next week.
FTY is a great foundational measurement piece and a great way to introduce your company to 6Sigma, in a way that makes a lot of sense to the people doing the work.
Six Sigma is often thought of as a statistic heavy method and to some degree that is true. But the truth about statistics is if you don’t understand what they are trying to tell you, then they are just numbers on a page. The good news is that the purpose of Six Sigma metrics generally fall into 3 categories: can I make it better, can I make it faster or can I make it cheaper.
Basic Metrics Help Me Make It Better
These metrics are typically Defects per Unit (DPU), Defects per Million Opportunities (DPMO) and Rolled Throughput Yield (RTY). The purpose of these metrics is to decide whether you can eliminate waste and increase the quality of your end product. This is a metric that will not create an almost answer, you will identify and work from a root cause perspective.
Basic Metrics Help Me Make it Faster
This measurement deals almost exclusively with cycle time, this category is almost singularly concerned with reducing production and delivery time. Focus on the cycle time requires you to focus on the process from cradle to grave. You are looking very much to reduce variations and eliminate non value added activities.
Basic Metrics Help Me Lower Cost
This metric requires you to deal with the cost of poor quality (COPD). If this is a measurement that you are using, your purpose is to find out where the quality problem is, how much it is costing the organization and how to eliminate it.
This is a basic summation of how you will decide what type of metrics to use, next week we will go into detail about specific metrics. Knowing why you are measuring something and what you need those measurements to tell you is the most important part of your 6Sigma project. Your belt will be able to walk you through a specific measurement and offer advice as to whether or not it is the best metric to use.
We have covered the basics for creating a Six Sigma infrastructure and if you have already run a project, most of the suggestions go hand and with running a project effectively. Now that we have reached the end, let’s recap the Six Sigma strategies we have learned.
To create a fully functioning Six Sigma infrastructure, I would like to see:
- A consensus for Key Business Objectives
- The creation of core, key and sub processes.
- Organized support for Six Sigma projects.
- A decision on the role of change agents and who they will report to.
- A firm decision on the usage of cross functional teams.
- Transition timeline definitions.
- A decision for a centralized or decentralized approach to Six Sigma.
- Valid measurement dashboards.
- A strategy to incorporate Six Sigma into the performance award system.
- The creation of expected Six Sigma ROI.
- A commitment to assign a firm amount of financial, intellectual and infrastructural resources to Six Sigma projects.
- A commitment to continuously evaluate Six Sigma projects and make adjustments as necessary.
So there you have it, a generic Six Sigma infrastructure. Now it goes without saying, but I’m going to mention it anyways-you need to tailor the infrastructure to your organization. These foundations are a great way to start, but it is worth bringing in a Six Sigma professional who understands your company to help you build your infrastructure. I know that some people will read this and think ‘ that’s so easy, I can put that in place’, but no project is the same and I always look to Murphy’s Law when engaging a Six Sigma project.It’s that old measure twice, cut once adage.
I have covered some specific Six Sigma topics in previous blog posts, but now I want to put up a general guideline for using Six Sigma principles and tools. This post is the first in a series that tells you how to create the framework of a Six Sigma effort.
Create and Agree on Key Business Objectives
Because Six Sigma measures variations, it is imperative that you choose the right projects to measure. If you don’t have a method of selecting projects, before you begin your Six Sigma effort your first step should be to create one. Before your initiative begins, your organization needs to have a standard method for selecting and rejecting projects. Your project selection criteria should reflect your organization’s goals and growth strategies.
Create Core, Key and Sub Processes
This can seem daunting, but it will be the easiest part of your Six Sigma process. This is where value stream mapping and process mapping will become indispensable. Your core processes are the processes that keep your organization running on a daily basis. The key processes are the processes that create the end product/service you clients use. When you start looking for the sub processes you are looking for the processes that support one or both the key and core processes; it is important that you identify the correct processes
because these are the areas that you will be measuring and controlling.
Create Six Sigma Support within the Organization
The key to success with any Six Sigma effort is organizational support, especially from key leadership. Six Sigma efforts are only successful when organizations are invested in the efforts success. To get this kind of support you will need to ensure that the team understands why the effort is important and how it ties to the larger organizational goals. Creating a dialogue about the effort and what it is trying to accomplish creates the foundation for support within the organization.
Identify the Change Agents and What You Want From Them
In previous posts we identified formal and informal change agents and what the respective roles are, both are equally important to a change effort. What needs to be mentioned is that once the change agents have been identified, the belt leading the Six Sigma effort needs to define exactly what they want the change agents to do and how they want the change agent to report to them. If the change agent is informal, this could be tricky and while you may not need to let the change agent know directly you will need to make sure the belt has the expectations laid out in a clear and measurable fashion.
This is a good beginning in establishing a Six Sigma framework, next week we will continue starting with using cross functional teams, until then…enjoy!