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Defining a Defect Opportunity

Six Sigma – iSixSigma Forums General Forums General Defining a Defect Opportunity

This topic contains 2 replies, has 2 voices, and was last updated by  Strayer 11 months, 3 weeks ago.

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  • #56080

    Jo

    My coworker and I are struggling to identify and define defect opportunities that exist in our processes. We work for a health insurance company so our business is service oriented. We have looked around the internet and found all the definitions of “defect opportunity” but how do you actually apply it to a process?

    Here is what I have come with so far:
    We want to do a check list where all criteria must be met in order for something to count as a defect opportunity.

    *Is it a value-adding process step in the eyes of the customer? (Not QA/Testing…)
    *Is it measurable and observable?
    *Does it directly relate to CTQ?
    *Is it independent of all other opportunities identified?

    Do you have any other criteria to consider? Anyone familiar with defining defect opportunities and calculating sigma levels in a service oriented environment?

    Thank you,
    Joe

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    #202989

    John
    Participant

    Simplest definition is this…It works for service or manufacturing.

    A defect is defined as any element of the product or process that did not meet customer expectations.

    This is our ‘checklist’ on then converting the defect into a problem statement to be solved.

    We are experiencing a problem with….
    The area where the problem is occurring is …
    The problem has existed for at least…
    The size/magnitude of the problem is…(This is critical)
    The expected performance is… (How you know it is a true defect)
    The effect the problem is having on our business is…
    If possible, this is costing us $yr/$month etc…

    In context with areal example. here is one regarding our policy completion.

    The defect is defined as: Any submission error on a new policy request.

    The problem was occurring in underwriting upon application submission.
    It has existed for at least three years
    Our error rate is 33% on new submissions
    Expected performance, or benchmark, is under 10%
    The cost is $Premium if rating incorrectly, processing time, and accuracy of quoted price.
    A soft impact is customer satisfaction and confidence.

    Hope this helps. The biggest challenge is converting defects into something actionable you can resolve and that makes sense for your business.

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    #202993

    Strayer
    Participant

    We often have trouble identifying defect opportunities. As you know, they’re value-added steps in the process where a defect might be introduced. Value-added because by definition a non-value-added step doesn’t change the output. But be careful in service industries. Very often a wasteful step that we’d define as non-value-added actually can introduce a defect. For instance if it delays delivery and the customer has specifications for delivery time.

    Have you done FMEA? It’s one of the best ways to identify where a defect might be introduced.

    As an aside, I have a long-running difference of opinion with many colleagues. I insist that the ratio between potential defects and opportunities must always be 1:1. Otherwise DPMO and sigma level will be skewed. I say that if the ratio isn’t 1:1 you’ve made a mistake in how you identify and count them.

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