I How to set a reasonable goal based on history (70% to Entitlement rule)

a. Definitions:

i. Baseline – Average performance within the observation history

ii. Entitlement – The best performance achieved within the observation history.

b. Teach the rule of thumb, the mathematics and the history behind the rule

i. Maximize metric : Goal = Baseline+ (Entitlement max- Baseline)*0.70

1. Example: Process % yields, Sales success rate, Net promoter score

ii. Minimize metric: Goal = Baseline - (Baseline – Entitlement min)*0.70

1. Example: DPU, DPMO, % Returns/Complaints, Throughput Time, Call Center Time to Pickup

c. Cautions: Unstable metrics: It is not recommended to determine Baseline and Entitlement on metrics and systems showing Non-normal or “Special Cause” variation

i. Trends – process is trending one way or another.

1. degrading – may not be capable of hitting the goal based on an entitlement at the begining of the trend

2. improving – may not be worth a project, if it’s improving already. Just determine why and standardize.

ii. Steps – may mark a change in the process/people/policies, change in measurement system or metric,

iii. One-offs (outside 3-sigma) – May be a fluke, typo or other undocumented non-repeatable condition.

II DFSS Projects: In cases when you do not have a history, i.e. when you’re developing a new process, the goal that you set must take into account the voice of the client.

a. Setting an aggressive goal is recommended as that will push the team to design the process to its best possible results. By taking a sub-optimal goal, chances are higher that the team might end up developing a sub-optimal process