Lean Six Sigma metrics focus on the following critical factors: cost, quality, and schedule. A key lean metric often used is the Overall Equipment Effectiveness, which provides a summary impact of the process relative to scheduling and quality concerns. As with all summary metrics, detail is lost. Thus, while OEE can be used for comparing and prioritizing processes for improvement, OEE will not indicate which aspect of the process needs improvement. More specific lean metrics are available, as discussed below, to provide this distinction.
You will at times see reference to other CTx metrics, such as Critical to Safety, or Critical to Process. These Lean Six Sigma performance metrics may be useful, or may be better classified in terms of Cost, Quality and Schedule, which serve as the root drivers for an organization.
Critical to Quality (CTQ) Metrics
There are a number of ways to measure process and operational performance. Yield is a classic measure of process performance, that can be supplemented with broader measures of performance such as Throughput Yield, and Rolled Throughput Yield (for a multiple step process). While these broad measures are useful for comparing processes, such as to prioritize for improvement, they obscure the details needed for process improvement. The classic Process Capability Index can provide the detail needed for process improvement, since it requires (as a prerequisite to its use) the accompanying use of a statistical control chart to verify the process metric is stable (i.e. in statistical control). The control chart provides the analytical tool needed for process improvement by differentiating between inherent variaion built into a process and changes to a process ((See Common and special causes of variation). As Deming often noted, this distinction is critical for process improvement, since the response to special causes of variation is necessarily different than the response to inherent (i.e. common cause) variation. A process capability index can also be expressed as an analogous Sigma Level or DPMO estimate. Operationally, a Sigma Level or DPMO estimate that looks across multiple processes in an attempt to show an overall defect rate for the organization is fraught with error to the point of uselessness. See also: Is Your Process Performing?
Critical to Schedule (CTS) Metrics
Critical to Schedule metrics are related to cycle time and scheduling efficiencies, including:
Overall Equipment Effectiveness: combines the notion of CTS and CTQ metrics.
Critical to Cost (CTC) Metrics
Lean Six Sigma performance metrics that are determined to be Critical to Quality and Critical to Schedule are (by definition) often Critical to Cost as well. Costs associated with the process issues must include the effect of losses due to Hidden Factory and Customer impact, such as delays in shipments or in information exchange.
Metrics used in CTC evaluations, often to quantify and compare opportunities, are aligned with the key concepts of Quality Costs.
Learn more about the Lean Six Sigma principles and tools for process excellence in Six Sigma Demystified (2011, McGraw-Hill) by Paul Keller, in his online Lean Six Sigma DMAIC short course ($249), or his online Green Belt certification course ($499).