The Four Types of Measures and Why Each is Important

Last month, we talked about the Three Most Important Metrics in a Continuous Improvement Culture.  They were Workload Volume, Process Cycle Time, and Process Defects.

Data is key to process management and improvement and The Continuous Improvement Culture Model relies on data measurement as a key component of creating this culture.  Throughout Gemba Academy’s videos and certifications programs, the importance of data and measurement are discussed continuously.

If volume, time, and defects make up the most important process metrics, then what types of measures can we consider in a continuous improvement culture?  These are input, process, output, and outcome measures.  Metrics can also be leading or lagging and each type has a specific function and value if used appropriately.  For more on leading and lagging metrics, check out Gemba Academy’s What are Lagging & Leading Indicators? How are they related? Why are they important? blog article.  Both leading and lagging metrics are important when it comes to continuous improvement.

The Input-Process-Output (I-P-O) model is a structured methodology for visually capturing the inputs to the process, the process steps that are required to transform inputs into outputs, and the outputs that go to the customer.  These are three of the five parts of a SIPOC Diagram. Outcomes drive a much deeper understanding of what the customer does with the output from your process.  Let us examine the four types of measures.

Inputs.  Inputs into your process are the raw materials that you transform through your process into tangible final outputs.  These outputs go to the next step in the process or they go to the end customer.  If an input — your raw material — is bad when it enters the process it will either cause defects in the process or in the output of the process.  The volume of inputs can dictate how much work you will have, so measuring the volume is often important.  Too much volume can result in large batches of work in progress, causing stress on the system and overtime for your workers.  Too little volume results in parts of your process sitting around in a waiting mode.

Process.  Each of your process steps can be measured in many different ways.  The end-to-end measurement of time and measurement of time of individual steps varies in many ways as well.  Each step in the process will have a level of variance and certain defects (or quality).  If there is a decision point, where the process goes one way or another, the volumes of each occurrence can be measured.  Measuring the process identifies where causes of problems occur, assists in diagnosing inefficiencies, and helps in identifying how to make process improvements.

Outputs.  Outputs describe the products and services that are produced by a process.  These can be completely internal, build to a final customer product, or go directly to the customer.  Every process has at least one customer and one output, otherwise, why would it occur?  Typical output measures gauge the quantity and quality of products or services delivered to customers.  In the Lean Six Sigma world, these are often quantified as critical to quality (CTQ) metrics in the voice of the customer (VOC).

Outcomes.  Outcomes are extremely unique and often overlooked by process owners.  The customer of your process will do something with the output they receive.  Often we think we know what that is, but we seldom ask.  This means we are often wrong.  Understanding exactly what your customer is doing with your output can shed a lot of light on the value of your process output.  It can also identify opportunities for you to improve the output.  Outcomes essentially communicate the value that the process delivers to its customers.

The Measure area of the Continuous Improvement Culture model is a key component to success.  By combining these lessons outlined in this series, you can build a solid program over time.

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