Definition of Opportunity:
Any area within a product, process, service, or other system where a defect could be produced or where you fail to achieve the ideal product in the eyes of the customer. In a product, the areas where defects could be produced are the parts or connection of parts within the product. In a process, the areas are the value added process steps. If the process step is not value added, such as an inspection step, then it is not considered an opportunity.
Opportunities are the things which must go right to satisfy the customer. It is not the number of things we can imagine that can go wrong .
[From the discussion forum:]
“Some folks think we measure opportunities by counting how many ways something can go wrong. That is a bad approach, because it inflates the denominator. Motorola had a fairly simple approach: count number of parts plus number of connections. Period. In another discussion thread I read that Allied-Signal used a formula of multiplying bill of material part counts by three. Both approaches are straightforward and repeatable.
“If your process is administrative, it probably will be very difficult to be as simple or as repeatable. Don’t sweat it. You can use defects per unit as easily as defects per opportunity. The idea is to measure the right things, and to understand how the process varies over time, so that it can be improved.”
Opportunities from a customer’s standpoint really do not make any sense. When you hand something off to a customer the opportunity is once – just like you recieving supplied material. They either sent you the correct thing or not, and if it isn’t perfect then it is defective. At the customer level you need to treat it as one.
You use opportunity counts to account for complexity differences internally (or benchmarking something externally). If you make jet engines, light bulbs and loans the opportunity count will level the playing feild. If they are all 1 defect per unit they are not equivalent operations. If I calculate rolled throughput yield from defects per unit it still says they are equivalent. If I put in the opportunity count I can differentiate betweent them.« Back to Dictionary Index