Page 115 - Six Sigma Demystified

96 Six SigMa DemystifieD

Table 5.1 Example of How Rounding of Data affects Results

Measure A Measure B Measure C
Observation 1 9 9.4 8.6
Observation 2 10 9.8 10.4
Observation 3 9 9.3 9.3
Observation 4 10 10.1 10.1
Observation 5 10 9.7 9.6
Standard 0.548 0.321 0.704
deviation

ctc metrics

CTC metrics are used to track factors contributing to substantial cost when
they vary significantly from their target value. CTC factors also may be critical
to quality or schedule.
When costs are considered, the true costs of errors in the process, including
unreported hidden factory costs, must be included. Examples include

• Capacity loss owing to reworks in system and scrap

• Stockpiling of raw material or in- process material to accommodate poor
yield

• Engineering or management approval times
• Rush deliveries
• Lost orders owing to poor service or poor quality

Those in service or transactional businesses should not be disturbed by the
wording. Scrap, rework, and stockpiling of in- process material occur in these busi-
nesses as well. Think of clients who need to come back, call back, or talk to
multiple people to get the results they seek. Stockpiling occurs any time orders
sit waiting for someone to process them, usually in a batch mode. While board-
ing in groups may work to optimize an airline’s processes, it usually doesn’t
serve the individual customer’s interest too well. Similarly, monthly meetings
by health maintenance organizations to decide if a given patient’s request for
services may be scheduled or will be denied may optimize the scheduling of
the meeting attendees but comes at the cost of delay (as well as pain and even
death) for the patient desperately awaiting the treatment.