In order to achieve Lean thinking, you must start by defining the value of the product or service in the eyes of the customer. Value is only relevant at a specific price and point in time. Value represents the need of the customer, the voice of the customer.
The problem most organizations have in specifying value is that they tend to concentrate on what they are able to deliver, rather than what it is that the customers really want, the fallacy of 'we know their needs better than they do.' Of course, when they then try to improve the design or delivery process, the result can be more efficient muda (i.e. waste), but muda none the same. The use of hubs by the airline industry is a great example of this, cited frequently by Womack and Jones (Lean Thinking, Jones & Womack, 1996, Simon & Schuster). The hubs serve the airlines need to use their existing resources well, but do not provide what the customer really wants: a hassle free journey directly from point A to point B.
There are three categories of activities:
Value-Added: An activity is value-added if a customer is willing to pay for; it changes form, fit or function of a product or service; it converts input to output; it is notwaste.
Non-value Added (NVA): sometimes called Type II NVA. These activities are unnecessary: they provide no value for internal or external customers, and can be immediately eliminated.
Business Value Added (BVA): sometimes called Type I NVA. These activities provide no value to customers (as defined above), but are necessary given current process limitations. Common examples are inspections, management approvals, most quality assurance activities; technical support activities.
Categorizing each activity in a process to determine if it creates value, or is waste, is a key aspect of Value Stream Analysis
Lean Six Sigma is a process improvement approach that uses a collaborative team effort to improve performance by systematically removing operational waste and reducing process variation.
value, a key part of lean thinking, may be defined a number of equivalent ways, depending on context. In order to achieve Lean thinking, you must start by defining the value of the product or service in the eyes of the customer. Value is only relevant at a specific price and point in time.
The 'Six' in Six Sigma refers to the statistical concept of having less than 3.4 defects per million opportunities (DPMO), which equates to a process being 99.9997% defect-free. This level of performance is considered a "six sigma" level, hence the name.
How Do You Calculate Process Sigma Rating Yourself? To accomplish a Six Sigma level, a production process must generate less than 3.44 defects per 1,000,000 opportunities. To identify if the process's capability is relative to the process's specifications, you must compute the Process Sigma rating.
Value represents the need of the customer, the voice of the customer. The problem most organizations have in specifying value is that they tend to concentrate on what they are able to deliver, rather than what it is that the customers really want, the fallacy of 'we know their needs better than they do.
A sigma value is a description of how far a sample or point of data is away from its mean, expressed in standard deviations usually with the Greek letter σ or lower case s. A data point with a higher sigma value will have a higher standard deviation, meaning it is further away from the mean.
What is Six Sigma? Six Sigma is a method that provides organizations tools to improve the capability of their business processes. This increase in performance and decrease in process variation helps lead to defect reduction and improvement in profits, employee morale, and quality of products or services.
Sigma levels provide a statistical measure of process capability. Ranging from 1 Sigma to 6 Sigma, each level indicates the degree of defects within a process: 1 Sigma: A process with very poor quality, with approximately 690,000 defects per million opportunities (DPMO).
Each Six Sigma process sigma level has a target DPMO value. For example, a Six Sigma process has a DPMO of only 3.4, meaning that statistically only 3.4 defects occur per million opportunities. This translates to near-perfect quality with 99.99966% accuracy.
Value has to do with how much something is worth, either in terms of cash or importance. As a verb, it means "holding something in high regard," (like "I value our friendship") but it can also mean "determine how much something is worth," like a prize valued at $200.
The five principles of Lean encompass identifying value, mapping the value stream, creating flow, establishing a pull system, and striving for continuous improvement.
value implies rating a thing highly for its intrinsic worth. prize implies taking a deep pride in something one possesses. treasure emphasizes jealously safeguarding something considered precious. cherish implies a special love and care for something.
If you have a process with an upper limit of 110, a lower limit of 90, a process mean of 100, and a standard deviation of 3, the Sigma Level would be (110 – 100) / 3 = 3.33.
The term "Six Sigma" refers to a statistical measure of how far a process deviates from perfection. A process that operates at six sigma has a failure rate of only 0.00034%, which means it produces virtually no defects.
A Sigma Level (also known as Six Sigma) is a quality management process that strives to improve the production of products and services by measuring and reducing defects. Motorola first developed it in 1986, and has been widely adopted across numerous industries.
Six Sigma is a set of methodologies and tools used to improve business processes by reducing defects and errors, minimizing variation, and increasing quality and efficiency.
6 sigma is a statistical calculation showing data 6 standard deviations from the mean, and results in a 99.9997% quality standard rate. It was created by Motorola engineer Bill Smith in 1986 as a means of reducing process defects with a much higher quality standard than 3 sigma.
Six Sigma not only helps you reduce waste, but it also helps you further leverage effective processes. With formal training, you will learn how to utilize resources to achieve maximum effectiveness using your current business processes.
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