Quality Digest

Hi there,

COPQ is suppose to be confusing thats what distinguishes black from green or green from yellow.
See COPQ is not a concept its just a guiding philosophy, each company would further define COPQ to there own need which are oftern referred as BIG Y in six sigma.

lets take an example of Inventroy management, BIG Y could be cost of inventory to the organisation, now further big Y can be changed to smaller y's like inventory carrying cost, Time to order (trying to be a JIT company or production based "produce to sell then produce to stock"). Both the above small y's can be reduced thru six sigma project.

Further there can be few more instances where it make sense to increase small y like "per unit production" which will come under umbrella of BIG Y of productivity and cost of inventory.

Hope this should help you to clarify your doubts.

thanks
Pradeep

www-sixsigma <www-sixsigma@lists.insidequality.com> wrote:
www-sixsigma Digest In This Issue:
Re: Assessment of quality
PPM Defective

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From:
Subject: Re: Assessment of quality

ORIGINAL POSTING: I've read this month in News Digest about "Chinese Value
Quality". For me is very interesting hou do you calculate "Value Quality"
Petar

RESPONSE: The word "quality" can have very different meanings to people.
Some executives can have some form of negative response/feeling from the
word; e.g., the last quality program was expensive and did not have any
value to the organization.

Often the word quality often leads to thinking that something either has
good quality or poor quality; i.e., an attribute pass/fail conclusion. In
Six Sigma, often the cost of poor quality (COPQ) is referenced. This
typically is related to the cost of not meeting a specification or goal.

However, life is often not so simple. How can we really determine COPQ for
inventory, where lower is better and any goal is somewhat arbitrary? Or,
the COPQ relative to on-time delivery?

I want statements that lead to a clear picture of what is meant. Because of
confusion and even potentially negative images from some executives, I
prefer to down play using the word Quality.

I prefer to have metrics that yeild a clear understanding and picture of
what is occurring at all levels within an enterprise. I want these metrics
to lead to the right activities for virtually all situations.

I prefer determining the cost of doing nothing differently (CODND) to COPQ.
The CODND can be applied directly to many more situation that COPQ. You
don't even have to have a specification to determine it. For example, a
CODND calculation for inventory could be simply the direct and indirect
carrying cost for all inventory. A Six Sigma project might be needed to
reduce this CODND; if successful, the difference between the CODND before
and after the project could be a project's value.

Hope this helps. Let me know off-line if you would like to discuss further.

Forrest Breyfogle
Six Sigma Moderator
forrest@smartersolutions.com
512-918-0280 X401
www.smartersolutions.com

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From:
Subject: PPM Defective

Can someone explain what a 6 sigma process is said to produce a 3.4 ppm,
when the same process could produce 2 ppm if it was centered. I understand
the 1.5 sigma shift theory, but I do not understand why we would need to
state PPM as 3.4, and assume the shift. I a not "Black Belt" educated, so
keep the answer "Green" please.

Thanks for your time...

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End of www-sixsigma Digest V2 #18
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