1. Problem Statement
2. Problem Objective
3. Primary Metric
4. ‘BACK STOP’ Metric
Six Sigma Foundations
Continuous Improvement Training
www.freesixsigmasite.com
Problem Statement and Objective
The problem statement and objective should be
S.M.A.R.T.





Specific---Focuses on a particular process,
process characteristic or area
Measurable---Can be measured to establish
justification for project and validate improvement
Attainable---Narrow scope to allow successful
completion in a specified period of time
Relevant---Directly tied to business and
corporate imperatives
Time Bound---Specifies a realistic period of time
(usually 3-5 months)
Problem Statement (Description)


There are two purposes of the problem statement:
 To focus the team on a process deficiency
 To communicate the significance to others
The problem statement does NOT include any guess as to
the cause of the deficiency, or what actions will be taken
A poor problem statement
A good problem statement
R&A costs are too high due
to product defects and will
be reduced by analyzing
first and second level pareto
charts.
From Jan – Dec 2009, the
average R&A costs are 7%
of sales with a range of 1%
to 12%, resulting in a loss of
$10M.
Problem Statement
What if no
data exists?
900
Warranty Returns
800
700
600
Preliminary Problem
Statement:
During X length of time,
the “Primary Metric” (the
issue) was X, which
resulted in a loss of $X.
Specific data will be
defined via data collection
and analysis.
500
400
300
200
100
Data
0
1994 1995 1996 1997 1998
Specific data will
have to be
collected to justify
giving the project
priority.
Problem Statement
Problem Statement After Data Collection: From 1994 to
1998, Product A returns are 5% of sales with a range of 2% to 12%,
resulting in a profit impact of $5M.
450
400
350
300
250
200
150
100
50
0
Product
A
Product
C
Product
E
Returns by Product Group
500
450
400
350
300
250
200
150
100
50
0
1994 1995 1996 1997 1998
# of Returns for Product A
Objective


The objective states the goal of the project. It must:
 Address the issue described in the problem statement
 Quantify the expected performance improvement
 Identify the expected timing
Like the problem statement, the objective does not state
the cause of the deficiency or what actions will be taken
A poor objective
A good objective
Reduce R & A costs by
implementing individual
performance measures and
objectives.
Reduce R & A costs
(Product A)from 5% to 2.5%
of sales by year end XXXX,
which will result in a savings
of $2.5M.
Primary Metric

The primary metric is the yardstick that
will be used to measure your success.
It must:

Be consistent with the problem statement and
objective
 Include 3 series of data, plotted as a function
of time:

baseline performance (average over the past 12
months, if possible)
 actual performance
 Objective / goal
Dec-97
Nov-97
Oct-97
Sep-97
Aug-97
Jul-97
Jun-97
May-97
Apr-97
1%
Mar-97
2%
Feb-97
3%
Jan-97
7%
Dec-96
Nov-96
Oct-96
Sep-96
Aug-96
Return $ as a pct of Sales $
Primary Metric
– training sample for Product A
Product Returns
6%
5%
4%
Baseline
Actual
Objective
0%
Secondary Metric
(BACK STOP)

The secondary metric is the conscience
that will “keep you honest”

Tracks potential negative consequences
 More than one may be required
 Examples: cycle time, cost, customer
satisfaction
Dec-97
Nov-97
Oct-97
Sep-97
Aug-97
Jul-97
Jun-97
May-97
Apr-97
Mar-97
Feb-97
Jan-97
Dec-96
Nov-96
100%
99%
98%
97%
96%
95%
94%
93%
92%
91%
90%
Oct-96
Sep-96
Aug-96
Sample Secondary Metric
Pct of Orders Shipped within 24 hours
Sample “BACK STOP” Metrics

Primary Metric: Lead Time


Potential Secondary Metric: Quality, OT
Costs, Costs
Primary Metric: Quality (Defects)

Potential Secondary Metric: Lead Time, OT
Costs, Costs
Standard Work
This format becomes the standard for all
improvement project types …





5S / Safety area activity (1-day)
Workplace Kaizen (2-day)
Cross-functional team Kaizen (5-day)
*BB/LB/Gb type project (3 - 6 months)
*Capital projects / Inventory (6 -12 months)
* requires GM, Finance, Manufacturing, CI approvals