Working Capital Magic - From Customers to Cash Flow

Measuring the Benefits of Six Sigma

I read a recent article by Cristian Ulloa in iSix Sigma magazine that I thought was pretty interesting on measuring the benefits of Six Sigma.  As you might have figured, I liked the fact that it melded Six Sigma with Theory of Constraints.  A great statement in the article was:

"Sharing credit for the benefits of projects that have directly or indirectly contributed to increasing the total throughput of the system generates a positive impact on the behavior of the teams involved. Teams understand that, even if their project may not have an immediate impact on improving the whole system, when the final bottleneck is addressed, their project will be acknowledged for its role in the higher throughput level. This also is beneficial in motivating project teams to use Six Sigma as an effective tool for improving processes"

Talk about elevating the constraint.  In this case, the project team (and one hopes the entire company as well) is focused on the bottleneck to production and revenue.  It's probably a lot easier to believe in the statement "an hour saved at a constraint is an hour saved for the system, while an hour saved at a non-constraint is simply a mirage" if your bonus paycheck is tied to it....

Six Sigma: Balancing the Voice of the Customer with The Voice of the Process

I’ve been delving quite a bit in Six Sigma again, and I’ve noticed a couple of things that I missed over the last few years. First and foremost, there really is a tight correlation between the (supposed) Voice of the Customer (e.g. the requirements) and the (supposed) Voice of the Process (features).

Assuming the Voice of the Process is a stable and normally distributed process, then Six Sigma states that it should take up no more than half of the tolerance allowed by the specification limits (i.e. the Voice of the Customer). So in essence, based on QFD (Quality Function Deployment), there should ideally be a very close relationship between the two. After all, that’s the whole point of a Designed For Six Sigma process.

So the question is, if I have my requirements from a specific customer, then isn’t my Six Sigma designed process going to be firmly impacted by the variability in customer needs? What happens when customer needs change over time? What happens when they are very complex? This is where the practicality clashes with the textbook examples, in my opinion. Another example of this phenomenon for complex, engineered products can be found in the SixthSigma Blog NASA article – Beyond QFD.

And furthermore, in my opinion, once a process is under control and there is a shift in the process mean (increase in process capability), how does the Process Curve stay within tolerance of the spec limits? I’m sure that the calculation of the sigma varies to allow for this, but its not intuitive.

I know all this is very esoteric. I’ll put together some graphs to illustrate what I mean, along with a real business example. We can look at average defects in the quote to cash process.