This KPI reporting video of a free app resolves commonplace control chart, process capability, and KPI reporting issues.
Performance metric reports should lead to the best actions or non-actions throughout an organization; however, this typically does not occur.
This video shows the benefits and how to use a free app to resolve these organizational reporting issues and associated process improvement efforts.
Described in this video is the shortcomings of the traditional reporting practices of
- Control charts for a Y response in the relationship Y=f(x)
- Process capability indices (Cp, Cpk, Pp, and Ppk)
- Process-performance metrics
- Key Performance Indices (KPIs) reporting
This session shows the benefits and how to use a free app to resolve these organizational reporting issues and associated process improvement efforts.
Metrics are reported and can take several report-out formats at various levels in an organization.
This session describes an alternative form of metric reporting that offers consistency of report-outs throughout an organization.
The described Integrated Enterprise Excellence or IEE form of metric reporting is referenced as satellite-level for financial metrics and 30,000-foot-level for operational metrics.
A free app (www.smartersolutions.com/eprs-metrics-software) is demonstrated in this video for the creation of 30,000-foot-level and satellite-level metrics.
Control Charts
Often there are issues with how organizations use control charts, which can lead to much wasted efforts and untended consequences.
- Control charts are to timely identify out-of-control signals or special cause events so timely resolution actions can be undertaken.
- Control charts provide no insight as to how well a process is performing relative to specifications or customer requirements.
- Control charts can create false out-of-control signals, especially when processes are tracked at a high Y-level in the relationship Y=f(x).
This KPI reporting video describes use of a free 30,000-foot-level reporting app that enhances application of individuals control chart mathematics.
Control Chart UCL and LCL Calculation
It is important to under the basics when calculating UCL and LCL values for a control chart.
- Data-calculated control chart’s Upper Control Limit (UCL) and Lower Control Limit (LCL) values are used to determine if a special-cause situation has occurred in a tracked response.
- When data are within UCL and LCL limits, one infers that the process is in-control and only exhibits common-cause variation or noise for a process-output response. Values that are outside UCL and LCL limits can originate from special cause events, where corrective action may be appropriate.
- A question for consideration: When calculating UCL and LCL values for a control chart that tracks a process from a high-level perspective, should the variability between adjacent time-series values or subgroups be considered a source of common-cause or special-cause variation?
- Before responding to this question, one should consider the situation where an organization receives a new supplier shipment every day. The question is: should the variation between days be considered a source of common-cause variation or not?
- Most say this day-to-day source of variation should be considered common-cause.
Only an individuals control chart mathematically considers “between subgroup variation” as a source of common causes variation. X-bar & R, P-charts, and C-charts do not.
This video describes use of a free 30,000-foot-level reporting app that addresses these issues.
KPI reporting video Process Capability and Performance Indices
Organizations need to understand how a process output response is currently performing from a high-level point of view, whether a specification exists or not, in terms that are easily understood.
Traditional process capability and performance indices do not address this need for many reasons.
Reported Cp, Cpk, Pp, and Ppk values:
- Are only appropriate if a process is stable or “in-control”; however, a process capability report-out statement does not provide this assessment in the same chart.
- Are valid if the data are normally distributed or an appropriate data transformation is made.
- Are difficult to understand.
- Are dependent upon how data are collected, e.g., data from an x-bar and R chart can provide a much different set of values than an individuals chart from the same process.
- Calculation requires a specification; however, often process outputs do not have a specification; e.g., work in process or WIP.
- Calculated at one point in time and is not automatically updated.
- Does not provide a prediction statement.
- Does not encourage process improvement.
This video describes a free 30,000-foot-level reporting app that addresses these issues.
KPI reporting video and Performance Metric Reporting
Traditional Key Performance Indicator (KPI) and Performance metric reporting can take many formats.
Often one may look at a report-out and think what should I do with this reporting?
- These forms of reporting are attempting to manage Y in the relationship Y = f(X) for organizational metrics, which can lead to inappropriate actions. For example, consider that a monthly Y goal in an organization is the number of units shipped. Consider next that a current month goal is not being met. For this situation, in order to meet this current-month goal future orders are pulled into the current month at great expense to the organization as a whole so that the monthly goal is met. The general organizational consensus is that we will worry about next month next month. This common-place practice can create much organizational chaos and negatively impact the organization’s overall financials.
- These traditional reporting formats do not encourage improving the X’s in a process so that the Y response will be better in the future. For the previous illustration, perhaps the organization should undertake improving its marketing and sales processes so it can, in the future, ship more products monthly, without robbing from future-placed orders.
- Traditional metric reporting formats can lead to much firefighting and playing games with the numbers.
This KPI reporting video describes use of a free 30,000-foot-level reporting app that addresses these issues.