Descriptive Analytics II: Business Intelligence and Data Warehousing - Six Sigma as a Performance Measurement System
3 important questions on Descriptive Analytics II: Business Intelligence and Data Warehousing - Six Sigma as a Performance Measurement System
What is six sigma? How is it used as a performance measurement system?
Is a process improvement methodology, and also a performance management methodology aimed at reducing the number of defects in a business process to as close to zero DPMO (defects per million opportunities).
It provides the means to measure and monitor key processes related to a company's profitability and to accelerate improvement in overall business performance.
It provides the means to measure and monitor key processes related to a company's profitability and to accelerate improvement in overall business performance.
- What is DMAIC? List and briefly describe the steps involved in DMAIC.
DMAIC is a simple performance improvement model. Closed-loop. Steps:
- Define: define the goals, objective, boundaries of the improvement activity. Top level: strategic, lower leve: department or project level
- Measure: measure the existing system.
- Analyze: analyze ways to eliminate the gap between current and desired goal
- Improve: initiate actions to eliminate the gap. Do things better, cheaper, faster. Use project management or other tools.
- Control: Institutionalize the improved system by modifying compensations and incentive systems, policies, procedures...
What are the ingredients for an effective performance measurement system?
Measures should
- focus on key factors
- be a mix of past, present, future
- balance the nedds of shareholders, employees, partners, suppliers and other stakeholders
- start at the top and flow down to the bottom
- measures need to have targets that are based on research and reality rather than arbitrary
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