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Process Improvement (contd)

Process Improvement (contd). Measurement. Performance Measures. Efficiency Within the process, controllable, predictable Process Effectiveness Output, deliverable to customer Outcome Product/service effectiveness Customer satisfaction. Measurement Guidelines.

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Process Improvement (contd)

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  1. Process Improvement (contd) Measurement

  2. Performance Measures • Efficiency • Within the process, controllable, predictable • Process Effectiveness • Output, deliverable to customer • Outcome • Product/service effectiveness • Customer satisfaction

  3. Measurement Guidelines • Be careful what you measure! • Develop critical success factors • Be specific, simple, result focused • Measure customer satisfaction • Tie rewards to measures • Do not rely on milestones!

  4. Efficiency Measures • Doing things right • Relative (actual to best possible) • Multifaceted • Cost • Variation • Cycle time

  5. Cost • Prevention • Detection • Failure • Internal • External • Exceed requirements • Lost opportunity

  6. Cost reduction and BPR • Increase prevention till MC > MR • Increase prevention and detection until sum(MC) > cost of failure • Improve performance to shift cost curve • Reduce consequences of failures

  7. Variation • Measures of variability • Process Capability Index • Process performance / customer expectation • Six-sigma • Condition for exemplary performance

  8. Process Capability Index

  9. Six-Sigma • Applicable to products and services • 3 s.d. around the mean • Probability under curve is 0.999997 • Measure observed value on the “sigma” curve.

  10. Cycle Time • Total elapsed time • Processing time and non-processing time • Perspective of the output only

  11. Categories of Cycle Time • Real Value Added • Essential process • Business Value Added • Management processes to support, control, monitor internal processes • Non-Value Added

  12. Delighting the Customer(Noriaki Kano Model) Satisfied Customer Delight Stated Requirements Meets Requirements Misses Requirements Expected Quality (Unstated reqmts) Dissatisfied

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