Lean Six Sigma Metrics

While an accurate system of measurement is critical in evaluating an organization's pre and post lean Six Sigma process transformation, selecting the correct one takes some thought. Improper selection yields a data lacking in scope and accuracy. This can jeopardize the likelihood of success for an organization's transformation.

Many different types of metrics may be generated. Selecting the correct one is a decision based upon the industry and the process under study.

Categories of Lean Six Sigma Metrics

Metrics used as part of the lean Six Sigma process can be organized into the following categories:

  • Productivity - Depending upon the industry studied, productivity measures may include labor productivity (units produced/labors hours or cost), equivalent units (a system where items manufactured are expressed as a common unit), total people productivity (units produced/number of or cost of salaried and hourly personnel), sales per employee, and asset productivity.
  • Personnel - These measures yield information about the workforce's habits and skill set. Common metrics include turnover, unplanned absenteeism rate and employee experience (average time on the job).
  • Safety - In a manufacturing environment, safety metrics can be particularly important in identifying process issues. Such measurements may reference OSHA standards such as the number of OSHA 200 log incidents, the number of OSHA lost workday incidents, the number of lost workdays, incident rate (the number of OSHA 200 log incidents x 2000,000 /hours worked), workman's compensation cost per employee
  • Assets - These measurements provide an indication of an organization's resources on hand, and may include total inventory turns, raw inventory turns, number of days inventory supply, cycle time, cash conversion cycle and value-added cycle time.
  • Quality - Quality is a particularly critical concept to lean Six Sigma transformation. It indicates how well customer needs are met by that product or service. Measures commonly used include Cp (potential process capability), Cpk (actual process capability), first pass yield (number of units not requiring rework), defects per unit, defects per million opportunities, defects per million opportunities, fill rate, line item fill rate, percentage of on-time shipment, and errors per shipment.
  • Service - While quality measures in a manufacturing environment focus upon products, customer satisfaction is the quality indicator for service environments. Whatever the industry, typical measures include survey complaints per unit and the percentage of fully satisfied customers.
  • Maintenance - Maintenance factors play a significant role in equipment performance and overall production. Commonly used measures include mean time to repair, mean time between failure, preventative maintenance percentage and operational effectiveness rate.