MBOE recap: What's your sigma level?
For most of us, the sigma level – or defects per million opportunities – for New Year's resolutions would be abysmal. We have 365 opportunities in a year to implement what we resolve to stick to and in reality, how many do we take advantage of? Whether it is skipping that dessert or going out for a run or practicing that hobby, rarely do we stick to our plan - but we keep complaining and hoping that we will achieve that goal. New Year’s resolutions are hard to keep.
Thankfully, our Master of Business Operational Excellence students had an easier task at hand during the Six Sigma Week of the year-long degree program. In the four days they worked on improving the sigma level for a coffee company called Sigma Brew, a simulation created by MoreSteam.com. Sigma Brew is fraught with many issues: Long lead time and wrong orders, to name a couple. Until now the students have been reading and learning the online MoreSteam modules on the Six Sigma body of knowledge. This week they had the opportunity to apply the theory to a simulated real business problem with the usual constraints of cost and resources.
Students first were challenged to define the problem correctly. Tons of data were provided but their job was to pull only those data that made sense to the business and helped them make meaningful decisions. This is not very different from what happens in companies. The true problem is hidden well below myriad symptoms. Data are available but they may not be relevant. It is only after defining a problem one can start to think about what data would make sense.
Data provide the baseline for the current performance of the company. Measuring the correct metrics guides you to not only make right decisions but also show you the impact of the solutions/countermeasures that you implement.
If the problem is not analyzed correctly, the countermeasures will only address the symptoms and the problem will continue. A cause map helps you drill down the root causes of the problem. Statistical tools such as hypothesis testing, regression analysis, ANOVA and others help you understand the degree of impact different root causes can have on the outcome you are measuring.
Improvement occurs when you implement the countermeasures in a systematic manner. It is important to track the metrics to confirm improvement. If there is not impact or the metrics are going in the opposite direction, it becomes important to start from the very beginning to identify the root causes and experiment until you are able to improve.
Improvements last only so long, especially if there are no controls in place to check the progress of the project. Control charts and standard work for leaders can take organizations a long way. There must be a system in place that helps visualize not only the progress but also any roadblocks that come up in way of progress. It is the job of all involved to solve and/or to escalate matter at the right levels to resolve the issues.
Students went through the DMAIC phase to address the issues that Sigma Brew was facing. Each group positively impacted process and the sigma levels went from a one to six up to eight!