Six Sigma Basic Key Terms - Part II (Why Six Sigma)

Six Sigma Basic Key Terms - Part II (Why Six Sigma)
Cycle Time – The time it takes to complete a process from beginning to end, consisting of work time and wait time. It is the cases that, for many processes, wait time is longer than work time.

Cost of poor quality (COPQ) – Total labor, materials and overhead costs attributed to imperfections in the processes that deliver products or services that don’t meet specifications or expectations. These costs would include inspection, rework, duplicate work, scrapping rejects, replacements and refunds, complaints, loss of customers, and damage to reputation.

Value Added – Any part of a process for which the customer is willing to pay. Value – added activities would be those involved in producing goods or delivering services.

Non-value-added – Any part of a process for which the customer is not willing to pay. Non – value – added activities would include…moving or storing raw products, approvals by various managers before something can happen. Such activities do little or nothing to satisfy customers. They only add costs, so they should be targets for eliminations.

Benchmarking – A method for comparing a process, using standard or best practices as a basic, and then identifying ways to improve the process.