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Can COPQ Be Used for Non-Transactional Teams?

Six Sigma – iSixSigma Forums General Forums Implementation Can COPQ Be Used for Non-Transactional Teams?

This topic contains 3 replies, has 3 voices, and was last updated by  Mike Carnell 2 months, 2 weeks ago.

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  • #210198

    Rtp
    Participant

    Hello,

    We are a team of black belts and data analysts and are rolling out COPQ in my organisation. While I agree that it is easier to calculate COPQ for processes that are repetitive in nature, it’s equally hard for process that are not transactional. Like Projects team or Six sigma teams.

    1. Can COPQ be implemented for teams that are not transactional?

    2. how we can calculate COPQ for a team on black belts and data analysts, where the projects are different, duration of each activity for each project is different. What are the factors we should consider ?

    3. If we want to improve efficiency in our team ? What approach should we use? I have considered using VA/NVA, Wastes. But the challenge is we do not have any data available and will have to be collected from individuals and that will not be accurate (but just a guess).

    Thanks.

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    #210218

    Strayer
    Participant

    At AlliedSignal in the 90’s we used documented cost savings from six sigma projects, which had to be signed off by finance to confirm that the savings were real. Even so there were lots of questions about how real they actually were. We, GE, and others were criticized for not being able to show these claimed savings in our financial statements.

    Yes, you can use COPQ to evaluate non-transactional teams/processes. But it’s difficult. What are your baselines? How do you measure quality of what these teams do and the cost of it not being done well? As noted above, we used financial benefit of the projects compared to their cost. It seemed like a no-brainer but wasn’t very satisfactory.

    You’ll need a defined process for DMAIC and some repeatability for executing it in order to have comparable metrics. You might not want to go there since it places constraints on your teams and might prevent them from doing what’s best to achieve their improvement goals. The simplest thing is to measure how well teams improve the defined problems, according to their metrics. But that might not be enough to convince management that you’re getting results.

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    #210360

    Rtp
    Participant

    Thank you Strayer.

    I did consider the financial benefit of the project and compare it to the cost. But COPQ is not just about reporting. We would have to reduce COPQs. How do we identify what causes the additional costs (in our case it’s usually the delay in delivering the project) ? We do not have any data available for the existing project.

    I was considering using VA & NVA approach as well. Identify NVAs and assign cost based on number of hours * Labour cost. This may help us identify where we have invested additional efforts / done inefficiently that results in higher costs.

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    #210375

    Mike Carnell
    Participant

    As Strayer said we build models at Allied Signal. I had Automotive so I cannot speak for the other 2 legs of the Allied stool but we were building Activity Based Costing (ABC) models. You can read about them and understand them but if you say Activity Based Costing or ABC to a US accountant it has been known to trigger anaphylaxis shock. Rarely fatal in these circumstances.

    Here is the importance of this cost modeling (stop doing COPQ and do cost modeling so if it isn’t in your cost model it is COPQ by definition). Do not allow the typical BS of “well those machines are only 80% efficient that 80% = 100%.” It is always figured to 100% with a reduction target of 68% of the defects removed per year (year 1 would be 100 x .68 year two would be 32% X .68 it was the rate of improvement Motorola set for the SS program). It scales itself as the process improves and puts you on a 100:1 improvement curve over 4 years.

    You are working your rate of improvement not your sigma level.

    Anyone who says they want to see your improvements flow through to the bottom line is about half stupid. Your process has to be rock sold unflinching to get that or else the last operation in the process. As your process comes more under control then you begin to see it but is will never be dollar for dollar. There are a ton of people between you and the end of the process that will spend every dime you save just so the budget doesn’t get cut.

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