Linking BSC (Balanced Score Card) with Six Sigma

[Nadeem A.]

In Reply to Parent Post by Steve Prevette

WHY linking Balanced Scorecard to defects would be a bad idea (in my opinion).

Dr. Russ Ackoff and others have pointed out that the elimination of bad things does not necessarily leave you with a good thing. For example, I can flip channels using my TV remote and eliminate bad shows, but that does not cause me to create a good show.

But atleast you have reduced the 'Effect' of bad things which could be more dangerous, if NOT eliminating them. Also, focus on "Does NOT necessarily", it means its not always the case.

In my scenario, if I reduce the bad things, we will definitely be heading towards the improvement side, which would be a good signal for us since we have only two things BAD/GOOD. So reducing one side will increase the number on other side or vice-versa.

I don't think using six sigma methodology to reduce our defects would be a bad idea, may be I am biased while talking about six sigma, but I see the results in practice.

Anyways, great to see your thoughts and responses.

Thanks.

Nadeem.

[Steve Prevette]

One other thought I had on the drive to work this morning - many measures on a Balanced Scorecard are going to one-sided specifications - for example, I may need to make a minimum profit figure, but the sky is the limit in the other direction. I don't see DPMO representing growth of the profits above the minimum required very well.

[favqty]

I think the way to link both tools should be done with a little change of our pre-concepts. I really would like to recommend to see the BSC as a toll to find out where the problems are and them Six sigma to control de variation of sorted problems.

In other words do not try to use DPMO into the dash board just because you can create different reactions from your co-workers. DPMO should be used as a thermometer of the actions taken to reduce or control the original variation.

The channel to get the link done will be the learning taken during the variation control process must be addressed to the "internal" wheel as you called. All the learnings should be capitalized as a Know How in order to avoid reprocess.

I hope my point of view help you to find your way. (Excuse my bad English)

[Ashraf Ghonaim]

I believe Kaplan described it very well when he said BSC teaches you where to fish (prioritized areas of improvement) while Six Sigma teaches you how to fish (level of improvement to close the gap). How much fish you need is determined by the BSC also.
I believe that most of BSC measures and targets can be decomposed into operational KPIs therefore the operational results can be improved using Six Sigma accordingly

[mariovazquez]

Is Possible access to your written article for ASSE in May 2006 on the system.??

Thanks
mario vazquez

[Steve Prevette]

The ASSE article is a copyrighted article by the American Society of Safety Engineers, so I cannot repost it here. You could review the power point that the article was based upon at http://www.efcog.org/wg/esh_es/Stati...0Day%20Two.pdf

There is a new book by Averill called Lean Sustainability that makes reference ot the article and recommends it.

[supreecha]

Coz u pls. share me for WIGs :World Class for Quality

What are Lag Measure & Lead measure ?
(Leading & Laging Indicator)

[Steve Prevette]

In Reply to Parent Post by supreecha

Coz u pls. share me for WIGs :World Class for Quality

What are Lag Measure & Lead measure ?
(Leading & Laging Indicator)

Generally lagging indicators are those outcome type indicators, typically referred to as "looking in the rear view mirror". Once they have happened, there isn't much you can do about them. Usually this includes severe injuries, severe events.

Leading indicators are intended to either predict, correlate with, or prevent issues with the lagging indicators. For example, those proponents of "behavior based safety" believe that monitoring and correcting individual behaviors (leading) can influence / reduce serious injuries (lagging).

Leading and Lagging came from economics - where lagging indicators shifted AFTER shifts in "the economy" and leading indicators shifted PRIOR to a shift in "the economy".