I am a BB candidate working for a BPO of an automobile operation. We take care of the Accounts payable & receivable operations.
We are in the process of standardising the Sigma calculations across the organisation (BPO), for which we are trying to identify the opportunities.
My doubt is should an opportunity be considered only if it is measurable bcos where one side we inflate the denominator (opportunities), on the other side, if there is a defect in this opportunities it is detected/measured. Will this show the correct sigma level?
There are no right answers here!
Calculating sigma on a standardized platform will entirely depend on your own specific situation that you and your team will be in a best position to identify.
It is important that all key stakeholders are consulted and their inputs taken into consideration before deciding on the standardized way of calculating sigma for your process ctq’s. Once this is done a comprehensive communication strategy and plan needs to be developed and executed to ensure all concerned understand the calculation methodology and there are no surprises for anyone. Functional leaders inputs are most important to ensure that someone is not getting away with mild standards to make his/her work look good without real gains!
MBB is right, there are no black and white answers. There is an answer that is more correct for your given situation, but you need to get the people who are involved in the decision making to come to a consensus.
I would start with your Black Belt or Master Black Belt. Work with them to help set up the stakeholder meeting and decide upon the most correct metric for your situation. It’s important, because it needs to be standardized across your business and it’s going to be a metric that’s in place for a long time…so spend the time and get it right!
It sounds like you have been reading the Mike Harry nonsense about active opportunities. When an opportunity exists – it exists – period. Just because you do not look for it doesn’t mean it goes away. You count what is there. Do a sensitivity analysis and count it both ways. I would be extremely surprised if you can add enough opportunities in a transaction environment to change it 0.1 sigma.
The historical issue that created the active opportunity nonsense was jacking up opportunity counts with a benign test like a bed of nails test set. Not many defects with auto insert and you can send the denominator through the roof.
What ever you choose – don’t change it. Once you standardize it people will leave it alone for a while but they will eventually come back and start creating academic arguments to change it. If you have the analysis done both ways that shows it doesn’t make much difference you can put that to rest.
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