Wednesday, 14 November 2018

Capability analysis: Six Sigma tool

Capability analysis comes up twice in the six sigma process. Capability can be measured a number of different ways. I'll cover that in a minute.

First, what is capability analysis and why do we measure it? Capability analysis is measuring the variation and bias of our process against the requirements of the customer (otherwise known as specifications). The number reported, in whatever form, is a statistic that indicates to us how well the process meets the needs of the customer. The diagram below shows a process that has wide variation and is not centered between the specifications. Both of these issues result in defects, costing the organization money and reducing customer satisfaction.

Capability analysis

So, how can capability be measured?

At least four ways come to mind immediately: Cpk, Z Score, DPMO, and Yield. The key thing to remember about all of these measurements is that they are just different ways of expressing the same idea; how good is my process at meeting the customer needs. So, whats the difference? The short answer is not much.

Cpk and Z scores are directly convertible from one to the other just by multiplying or dividing by 3, depending on which statistic you prefer. DPMO is Defects Per Million Opportunities and expresses the idea that if you were to perform the work process 1 million times, how many results would be defects.

Yield is another way of expressing this as a percentage. Yield is just the percentage of the output of the work process that is "good". I could share with you the formulas for how to calculate these different capability measurements but I don't want you to leave, and those formulas are readily available from any number of sources, including myself.

Context of six sigma

What I'd rather discuss is why we do this in the context of six sigma or really any continuous improvement project. There are two reasons;

1. baseline process performance and,

2. measure the improvement. In step 6 of DMAIC we measure baseline capability.

Capability is a measure of how well the process performs its intended function for the customer. Before we go and start tinkering with things in an effort to improve performance, we need to understand how the process performs today:

That is a baseline.

We come back later in DMAIC at step 14, after we have implemented the improvement plan. It allowed the process to run for some time and we measure performance again. This time, we compare the new process performance to the baseline to determine how much improvement we have made through our efforts.

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