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DMAIC: Measure Phase – How to set your project’s KPI (CTQ). 【Benchmark】 (Lean Six Sigma)

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DMAIC: Measure Phase - How to set yo...

CTQ stands for ‘Critical To Quality’. When we collect voice of customers, VOCs, they are of course the words of the recipients of products and services. CTQ is the word of the creator. This article explains how to convert from VOC to CTQ.

(Duration: 4:51)

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Purpose of the Measure Phase and CTQ, Critical To Quality

Hi, this is Mike Negami, Lean Sigma Black Belt.

Today’s theme is the Measure Phase, the 2nd phase of DMAIC. DMAIC is the framework of Lean Sigma projects.  In the Define Phase, we define our project. In the Measure Phase, the main objective is to numerically understand a condition and situation of the target process. The keyword is “numerically”. How can we achieve this?

What we have to do first is to find CTQ. CTQ stands for Critical To Quality. That’s still not very clear, so let me explain more. Even though you collect VOC’s, Voice of Customer, they can’t be used for process improvement as they are. VOC means the words of the people who receive the service or products. The words of the people who supply the service or products, (that’s us), are CTQ.

For example, let’s assume that ‘On-time delivery’ was VOC, then its CTQ equivalent would be ‘minimize the number of late deliveries’. If ‘Menu Variety’ was VOC, ‘how many average numbers of menu items per day’ would be CTQ.

Now I’ll talk about ‘Quality’ in PMP, the Project Management global standard. There is a tendency in Japan that “high quality and high functionality” is better. PMP’s quality is different from that. PMP’s quality is how much your customer’s requirements are being fulfilled.

There are two important points here: One is to identify the right customer group for the target process. The other is to understand the customer group’s needs and requirements.  Upon completion of those, your CTQ’s will be clarified naturally. Among the CTQ’s, identify the ones with the most impact, which are Vital Few.

Find internal factors that directly influence your CTQ’s

When you discuss about CTQ in Lean Sigma, you would hear one formula, y = f(x). I may hear from you that this formula makes it more difficult. ‘y’ is CTQ and what you’ll do next is to find internal factors: the ‘x’ that directly influence your CTQ’s (y).

Using the earlier example, if CTQ was ‘minimize the number of late deliveries’, one of the internal factors, ‘x’, that is directly influenced would be ‘Shipping out on time’. Clarifying your company’s y = f(x) is extremely important. This ‘x’ will become your company’s or department’s KPI (Key Performance Indicator). Furthermore, each employee’s activity that directly relates to the ‘x’ will become their KPI in the future.

Establish a measurement method of your CTQ (y) or internal factors (x)

There is another thing you should do in the Measure Phase: That’s to establish a measurement method for the ‘x’ and ‘y’ if possible. Measure a current level with method and this becomes a benchmark to evaluate on-going progress. This enables you to rotate an effective PDCA Cycle in your project.

Lastly, I would like to tell you one important precaution: please be sure to discuss with your team if your y = f(x) is really the right one and practical. I’ve heard about and seen many cases like the following: the PDCA Cycle is very powerful, so if it’s rotated with the wrong measurement, it surely fails.

This episode may have been complex, so here is a summary of the Measure Phase: 1, Identify the most important CTQ from Voice of Customers. 2, The CTQ becomes ‘y’. Find the internal factor, ‘x’ in the y = f(x). 3, Make a measurement method to evaluate ‘y’ and ‘x’ if possible.

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