After designing a proper set of performance measures, the organization has to analyze/compare its ‘Key Performance Measures’ levels with competitors, best in industry (Benchmark) etc., identify the ‘gap’ and stretch their targets for those measures.
Different types of Gaps are as below:
- Gap Over standard: The Gap between present performance level and the standard norm/rated capacity.
- Gap Over Internal Best: The gap between present performance level and the internally achieved best performance (the best performed level in past).
- Gap over Customer Requirement: The gap between present performance level and the customers requirement (may be based on M.o.U). It is very important Gap.
- Gap Over Competitor: The gap between present performance level and immediate competitor’s performance level.
- Gap Over Benchmark: The gap between present performance level and best in the industry(Benchmark).
- Gap over Target/Goal: The gap between present performance level and the stretched target/goal of the department/organization. This is the gap which needs to be filled up Immediately.
Stretching Goals :
But, the target/goals should be achievable. If employees perceive the goals as unrealistic and unreachable, they become frustrated and give up trying to achieve it.After stretching the targets ,next step the department/ organization has to do is to identify the gap when compared to present performance level and target/ goal.
- Value Engineering,
- Benchmarking Process,
- Juran’s Project-by-Project Management,
- Use of QI Tools etc.
Six Sigma is a rigorous and disciplined methodology that uses data and statistical analysis to measure and improve a company’s operational performance by identifying and eliminating “defects” in manufacturing and service-related processes. Commonly defined as 3.4 defects per million opportunities.