REALLY? 90%, 90%, 90% equals 73%? OMG !!! | Green Belt 2.0® Lean Six Sigma | fkiQuality HD

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How can 3 teams working at 90% make together only 73%?
It is the difference between the silo and end-to-end or systemic mentalities.
Watch the impact of one step over the others and how you must know the relationships between steps, not just the steps by themselves as if they were separate, which they are not!
Timestamps:
0:28 - First Time Yield Definition
0:47 - First Time Yield Example Set-Up
1:55 - First Time Yield Equation
3:03 - Starting off with 1000
3:32 - Step 1: 900 out of 1000
4:10 - Step 2: 810 out of 1000? Why?
4:26 - Make Output Equation
4:54 - Step 3: 729 out of 1000
5:36 - Yield Equation
6:29 - Total Yield Equation
6:56 - Why 90% isn't good enough
7:34 - Who experiences the 73%
8:00 - Internal perception Vs. External perception
8:46 - Reasons for this clash in perception
First-time yield is defined as the proportion of good results obtained without rework.
y = good or desirable results divided by expected results
For one-step: Output = Input x yield
Total yield = the product of all single-step yields
Functional and company-wide performance are not the same.
Many managers think that all that matters is to keep/elevate the performance of their assigned function, without an understanding of the company as a system.
Yet, the company is a system, a series of interrelated functions with one common aim (W. Edwards Deming).
Reasons behind the myopic, functional view of performance:
- Company organization
- Incentive schemes
- Functional reporting systems
Presented by Francisco Pulgar-Vidal, Director of Chicago Deming Association and President of fkiQuality.

Опубликовано:

5 июл 2024

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Комментарии : 290

@sherisezynel5048 6 лет назад

I am really glad to see how 90% accuracy, orders, sales, overall becomes 73% in the customer's perspective. Thank you for explaining first time yield.

@shafiazubair5228 6 лет назад

The compounded impact of mistakes truly brings home the need for system thinking across the entire organization.

@cjtrumpeter Год назад

I enjoyed the "we can always do better" mentality of this video. 90% is not enough, especially when everyone thinks it is...

@jamesbohnhoff8135 6 лет назад

Definitely an OMG moment. Perfect quantitative example of why you need to address changes of an "entire system level" as opposed to individual processes in a chain.

@karlajohnson8017 4 года назад

Clear illustration of how important it is to understand how interrelated all departments are in the external related yield and the contrast between internal and external grading and reporting

@Music1234Man 2 года назад

This video does a fantastic job explaining how 90% across the board for a company is not enough. And this perfectly illustrates the problem with departmental 'over the wall' mentality. Isolated by themselves, one department may think that 90% is good enough, but coupled with everyone else only doing 90% can snowball into less than ideal yields.

@loricollings7177 6 лет назад

This is an eye opening concept and video. Most people would believe that 90% yield is a good thing. Then, you realize that you are only looking at 1 function/process that you might own, vs. at a high level across all functions/processes.

@shaunkreighbaum4800 4 года назад

This is a good example of what god use of internal communication and collaboration could do to improve a company as a whole. It must be realized as a collective sum.

@JacobReuter28 Год назад

This video does a great job at showing the potential difference between internal and external yield because all the internal departments think they are doing a fantastic job with yields of 90%, but they fail to look at the external picture that says they only have a yield of 73%.

@maryroy4182 6 лет назад

I liked the example of Yield and how working in silo's impact yield performance. Each area's 90% doesn't end up to the customer with 90%, much lower, which impacts customers perception. Good simple example.

@user-yz5cw5st5b 8 месяцев назад

to me this video highlights the importance of a horizontal view and choosing to not work in a silo mindset. At the end of the day it goes back to the customers and their satisfaction.

@christianhagner6509 2 года назад

This does a fantastic job at showing compartmentalism that happens in companies. Each department only ever sees their own metrics and thinks they are doing well and falling within the 'acceptable bell curve' when in reality the overall process is on the edge of failing. Which also goes back to the notion that there is always room for improvement and when you get comfortable and stop trying is when you get complacent and things begin falling apart. What I find interesting is that this doesn't embark on re-work at all. If your original margin is almost three times less than what you think it is, you'll lose even more money if you have to rework product.

@jaimesnodgrass5049 4 года назад

Really eye opening when you think about the internal yield being different than the external yields. A very good example on why each department must work together and information shared because 90% does look a lot better than 73% and each department thinks they are doing well but in reality could be costing the company customers.

@fkiQuality 4 года назад

This is exactly the point of the video. Good job!

@jamesandre6040 6 лет назад

This is a good illustration of how a company can be judged as being 73% successful by external customers, while internally, each functional department thinks they are performing at a higher 90% success rate. Without rework, the compound effect of errors erodes the overall level of performance yield for the company. This proves that a company is made of a system or a series of interrelated functions with one common goal.

@rickk3487 4 года назад

this is one of the best videos to show overall quality... eye opening

@stevebrazda2536 6 лет назад

Great example of using metrics to demonstrate why a company/organization should be understood (and measured) as a single system!

@Ganjagoddessgrower 4 месяца назад

This is a great explanation of how yield is misinterpreted. That misinterpretation costs $ and customer satisfaction. Lots of bad decisions are made because of that lack of understanding. It’s also a good demonstration of the consequences of poor communication within a company.

@lindakhalil3572 4 года назад

This is a very clear explanation about why you can't average the yields across different processes. The yields are cumulative.

@jamesmccord9304 6 лет назад

Being a Finance professional I was wondering how 90% 90% 90% would equal 79%. Great video. Easy to understand. Great explanations to go along with formulas.

@caryjozefiak3258 6 лет назад

This demonstration is a perfect example that visually depicts how perception is not reality. Each operation in a 3 step process believes it providing an adequate level of quality at 90%. However; the customer of the combined operation is receiving on 73% quality. This demonstrates the importance of understanding and monitoring the big picture - your final product and how it is perceived by the customer.

@noahvandyke3458 4 месяца назад

Goes to show how much more work is created and how resources are wasted when we settle for subpar. Regardless of what percentage you are operating at as a department, what mistakes are made still create a compound of new work. This reiterates the need for continuous improvement. Thank you for clarifying.

@mjalals 7 лет назад

I enjoyed watching all the 3 videos. They were very informative and educative. Please update us with new videos as and when they are ready with you. Thanks for sharing these videos.

@joshturnbull1850 3 года назад

This shows how important it is to make sure department/group metrics are aligned overall company metrics.

@zahraahmad 6 лет назад

this video shows exactly what working in silos do to a company. Each department thinks they are running at 90% accuracy but in reality the product as a whole is usually running at a lot lower percentage. Collaboration is the way to go in order to have a real 90% production run.

@margaritorios 3 года назад

For me, this demostration shows how important is to have a superior training system for the associates, I believe that a well trained, motivated and problem solver associate in every department, will help to have greater yield.

@patriciazuno1694 Год назад

This goes back to parts/departments of an organization having cooperation rather than competition. It’s a snowball effect and the actions of one department accumulate to something beyond one department/person.

@sherisezynel5048 6 лет назад

Thank you for explaining all about first time yield, yield, output, total yield... You made it easy to understand and calculate!!!

@gabriellejacobson2143 4 года назад

Great Summary! This concept really brings to light that 90% yield is NOT really 90%. Very eye opening.

@jandrykokills 6 лет назад

"A company is a system of multiple functions, interconnected." - Excellent concept. Silos in organizations are tough to break down when staff are entrenched, but it's a critical component to eliminating waste. Love the clear explanation of the percentage carried over to the next phase, decreasing the yield for the customer.

@Adam-fd6qp 3 года назад

This is a great example on how small fallout can add up with multiple processes.

@TedMulch 5 лет назад

Outstanding visual representation of corporate inefficiency and single focus mentalities.

@susansatera5087 6 лет назад

This video explains the importance of viewing the business as an entire system vs. individual departments. Each department needs to understand their role in the business and how their performance is impacting the greater business.

@duga6 5 лет назад

Great presentation, Francisco. These calculations really drive the point home that siloed organizations that "think" they are at 90% individually are really failing from a company perspective. And the more steps that are added along the critical path for the product/project/service, the significantly lower the company quality goes: 65.6%, 59%, 53%, 47.8%, and so on....

@debrapetritsch123 5 лет назад

What an eye-opener!

@pamelaharris9300 6 лет назад

It is important for a company to operate as a system. It's imperative for a company to not only have departmental goals, but to also have a strategic plan that accounts for overall company performance, quality goals and a target which includes stretch goals.

@cocor3672 4 года назад

Very true. Sometimes we all are trained to focus on our own deliverables and forget about the overall big picture. We should always remind ourself that little minor defects add up along the way (even before our own deliverables) and it could impact overall customer experiences.

@carolineramirez3061 6 лет назад

Knowing the big picture is important but also important is knowing the details of that picture.

@johngary3716 6 лет назад

This is a great video demonstrating the general concept of yield. That is absolutely true that a company is a system with multiple functions connected.

@ss-fs9gz Год назад

Thanks for the presentation. A fantastic simplified explanation of the concept!

@jammies70 6 лет назад

This makes a lot of sense. Definitely shows that looking at the big picture is important.

@surbhibhatia8262 6 лет назад

It is interesting how systems believe they are doing good enough and it takes a lot of effort for them to think that they can do better. This segment was quite impactful for me to see that 90% - a yield that looks pretty good is not good enough and eventually leads to so many unhappy customers. thanks for sharing! :)

@diamondwatts3100 5 лет назад

I was astonished at the 73% outcome. Very well explained and very informative. This video certainly changed my perception and understanding.

@bahsidygmailcom 6 лет назад

When visually demonstrated, it makes sense and there is a lot of room to make improvements. Great video, and thanks for sharing.

@mitchellalberts9231 3 года назад

In this example, it becomes apparent that internal yields don't tell the full story of the quality of an entire process. It reminds me how we talked about the average being an incomplete picture of a data spread.

@ericryan3989 6 лет назад

This was both an AHA and a headslap video because math. I was guilty of applying math of a system to the individual components, as well as the other way around. This was a good reminder to make sure that when looking at a system, make sure that what you are looking at and how is clearly understood.

@edridder568 6 лет назад

Understanding that the Yield of the entire organization is reduced significantly when looking at the yield of each system within the organization is a real eye opener

@dennislyons2730 4 года назад

this give a better understanding of the percentages of a complete job, and a true customer satisfaction rating.

@charleshippner7980 6 лет назад

Interesting how the departments working in silos had the perception they have good levels of performance. The trickle down effect of each department's performance actually had a huge impact on the business results.

@janetharczak3639 6 лет назад

This was a great visual for providing a much better understanding on yield. Also the video shows clearly how important it is bottom line for all work functions to work together. Very surprising to see that the perceived 90% yield is actually 73%.

@RogelioG52 4 года назад

Very good explanation. Great examples.

@jamesmcelwee5666 5 лет назад

This video was most enlightening and is an excellent proof that a strongly siloed approach to corporate management is risky at best and foolhardy at worst. By focusing only at one segment of the overall system, rather than at the system as a whole it is possible to completely miss the result of less than perfect performance compounded through many processes. Only by eliminating waste at all stages can ultimate targets be achieved and customer demands truly be satisfied. Great video!

@mikebeck9770 6 лет назад

This is a recurring theme how each step in the process affects the overall yield and similarly each component in an assembly affects the overall quality. Each step in the process shares equal importance with the final product.

@marandaburks6255 6 лет назад

This is great info. This shows how the breakdown in communication between cross functional departments could wreak havoc on the company's bottom line. However with having a company-wide view and goals throughout the departments it brings them closer to desired outcomes/targets

@jdpatt904 5 лет назад

Wow. this showcases the importance of every aspect of your operation and customer funnel

@bestlyfe4u 4 года назад

This was great to see how you have to view operations from different stand points and continue to improve all areas of operations so you are not mislead by individual department performance and potentially loose customer satisfaction without knowing

@donggunko9809 4 месяца назад

As part of one department in a big company, each department's expectations were very high in percentage. I was not able to understand. However, through this, I realized that each department yields compounds and it is critical to have the highest performance in each department. It will be inevitable to break down the company into different departments to work efficiently / effectively / sufficiently and at certain points, certain department is the cause of the low yield percent. This should be looked at as the cause of the low performance, instead of whose blame it is, and work to get the highest yield overall.

@jenniferb5322 4 года назад

Excellent explanation which makes it easy to understand yield and the purpose behind performing the calculations for each department that directly or indirectly affects the process, product and customer.

@alirizvi748 6 лет назад

Thank you for posting this video, which highlights that performance at every step of the process should be maintained to high standards, else yield deteriorates exponentially.

@Jaguzma2 8 месяцев назад

I like how it's a very systematic process. If one part is not at one hundred percent, then as the process moves down, the keeps decreasing. What started at a ninety-percent quality turned out to be seventy-three percent. The operations went from functioning at a somewhat high level to an average level.

@janayhayes255 5 лет назад

Looking at the system as a whole is very significant so that you can see yields like this

@oscarchiquito9276 3 года назад

I am not very savvy with these equations, but the way the process is explained in detail helps to understand each step in the process.This is where the company sees any flaws. In this case the yield is what is important.

@monicarodriguez4895 6 лет назад

I appreciate how this video shows that perfection and consistency really depends on all groups turning over a quality product. Even small mistakes from the beginning essentially result in a subpar customer experience. Despite a successful turnout from one team, this brings it home that the overall customer experience is really all that matters. This should make siloed teams realize that they need to support each other in order to deliver a product with zero defects.

@BeatriceDosu 15 дней назад

Knowing that the company is a system with a series of interrelated functions with one common aim, there should be constant and clear communication between them and also continuous process improvement to achieve the best outcome.

@ChristopherStefan Год назад

This video did a great job demonstrating the importance of thinking about the company/project or yield as part of a system. While each part or yield of the system may look 'good' internally, it may not reflect that way externally.

@Student-ws8wg 8 месяцев назад

A clear example that no one function can achieve success without understanding the interrelated functions. The 'company as a system' relationship can be further reinforced through performance-based metrics where individual, department, and company attainment are rewarded as one.

@christinefumi-fiamawle6634 6 лет назад

I’ve worked in an organization in which there were competing metrics across the functional areas. It is the responsibility of senior leadership to align all business units in the goal of increasing yields by putting processes in place that remove the barriers that restrict progress. Without that there can be top line or bottom growth.

@mariaflores-tl1gk 3 года назад

This video could make managers reflect on the real outputs and disconnection between departmental functions.

@vincek6684 4 года назад

Puts a good perspective on performance metrics. Average performance across all silos of operation can actually lead to less than average quality delivered to the customer.

@Toi628 6 лет назад

I found this video to be an interesting concept on the yield, especially after learning about Yields with variations yesterday. The most interesting point is how the internal operations measure at 90% and the external operations at 73%. This video made me wonder which companies stop at the results of internal measure rather than going forward to truly identify how their customer would measure their service. Continuous improvement to increase the spike.

@jasonholesha3148 4 года назад

Interesting way to put together all the components of measurement and analysis as a whole when it appears the individual components are performing well.

@charlesbonham8974 5 лет назад

Powerful insight on looking at a systems as a integrate processes and the danger of silos and the real impact to customers.

@susanr.heaton2956 5 лет назад

Great example of clash in perception and limited mentality with silo departments.

@cesarlopez4907 6 лет назад

Thats amazing i never really thought about it that way. I was assuming that it would yield 90% but when you calculated the make yield i was blown away. we definitely have to look at the whole process and not each functions.

@kslead27 5 лет назад

It's not a difficult concept to understand but walking through this example helps put it together. I've personally seen a shift within my own company focusing on the customer's yield perceptions and being less siloed.

@jackciotuszynski3301 6 лет назад

I really appreciate this video, very few videos touch on as someone mentioned complacency. While most people believe that if their part, component or department produces at 90% that they are a team player and contribute the company. While in reality they are contributing to their slow demise!

@aynkris 6 лет назад

Good explanation on how the customers are impacted by the overall low performance of the company even if each department believes that they are performing well.

@Bittersweetdstny 8 месяцев назад

This is actually an interesting concept and shows that perception is not always reality. As you get further down the process towards the customer, things are likely to go awry and this calculation can show that 90% or just a 10% difference can make a larger impact downstream.

@nsmith9976 5 лет назад

This video makes me think of my brothers employerand how they could benefit by understanding this concept. As a VP of sales in a logistics firm, each division is silo'd (LTL, Last mile, brokerage, intermodal, etc.) Each division has their own sales which undercuts each other as each division focuses on their individual performance not overall company achievements. This video demonstrates the efficiency challenges that I think plague his company. Interesting.

@scotttyler1986 5 лет назад

This insight that the overall yield is an exponential function of the number of individual steps (assuming the same individual yields) really encourages you to look for ways to reduce the number of steps.

@fkiQuality 5 лет назад

Scott Tyler you just described another connection between Six Sigma and Lean! It's unbelievable that some companies only do Lean while others only do Six Sigma. To be fair, this is because of the misunderstanding that Lean is only about reducing waste and Six Sigma only about reducing variation. Although this is what they're best known for, that is not their only focus.

@mitchellhoem2003 2 года назад

This highlights a really important concept when you are working with multiple teams or in a multi-step process. You must have a complete understanding of the yield at each step and holistically. If you do not take a deep dive into the yield at each step (or within each team) and how that relates to the organization's yield, then you will miss improvement opportunities.

@johngoodrich6448 4 года назад

A good way to evaluate the effectiveness the whole company, not just individual departments.

@nathanstratton7918 3 года назад

Many times we only look at our department or area in a company as succeeding but not the overall customers score. Great breakdown

@michellepitts2941 6 лет назад

ALL data must be reviewed and analyzed properly in order to get a true understanding of what is happening. Individually, all 3 departments could be considered as performing well with the 90% averages but as a company, not so much with the external cumulative average of 73%. Great example!

@daylebeyer2440 6 лет назад

It was interesting to diagrammatically break the process down into functions and see how the cumulative effect of reduced quality significantly impacts yield.

@danielarcher9175 4 года назад

Great video. Interesting how individual department performance levels change the overall quality percentage.

@jeffreybonnema4886 3 года назад

Never looked at our process like this - great insight and allows a better view from the customer

@fkiQuality 3 года назад

This is right Jeff, the better view of performance is the one that aligns itself most closely with how we are seen by our customers. Then, we must use this insight to guide all improvements.

@adammademann4414 5 лет назад

Great example of how each function within a company views their performance as acceptable when the combined yield of each departments "acceptable" is not a very desirable outcome in relation to the customers' expectations. With added transparency, cooperation and perhaps a more robust reporting system each department could work as a critical part of the overall system and strive for better results.

@samanthadulceak7200 Год назад

A good example of when an organization compartmentalizes each areas progress and achievements but isn't producing as high of a percentage due to not having that complete view.

@ryanw1633 5 лет назад

Great overview

@hemmamistry7743 5 лет назад

An insightful overview. Having a larger systemic understanding of the yield outcome over a multi-step process is crucial. In order for companies to be successful in producing a high yield overall for their customers, all internal departments must understand that the overall yield is compounded after each step. All internal departments are interdependent upon one another to achieve an overall high yield output that is positive for the customer.

@colleendriscoll6934 4 месяца назад

This made me think about how my organization has recently introduced more inter-department communication and the exchanges of ideas and feedback. They even launched an "ambassador" program in which employees could shadow other employees (i.e., hosts) to learn about their jobs. It was very interesting and educational for me, but there's still much to be done on the improvement front. I don't always have the answers, but I sure know how to point out problems.

@nikiansell9949 4 года назад

Great video! I love the breakout of each function and then putting it altogether to see the big picture. I think this is often a gap in companies.

@ryananderson8130 2 года назад

This describes why it is important to look at each process or piece of the system. If Sales is at 90% and Make and Deliver reach 100% your yield will never be better than 90%. The lowest part of the chain will be the yield even if the other processes are at 100%. This also makes me think of the total percentage of defective orders and which ones are actually large customers or larger orders. Defective orders on major accounts would drive your total yield in dollar's farther down than your actual percentage or orders.

@christopherscott3264 5 лет назад

The crucial aspect of this whole system is that a lot of companies, both large and small, fail to acknowledge that all 'silos' or parts of a company are 'interrelated' with 1 common aim.

@ManishSaini-rk4mt 6 лет назад

Well explained concept of productivity of silos vs whole firm.

@michaelparks8673 5 лет назад

This is a good explanation of first time yield

@katiedunning8276 5 лет назад

This video was very helpful in finding internal vs external conceptions of efficiency/ delivering a business objective. I can already apply the silo effect to the metrics we apply in day to day operations at work. It's a common pitfall in many teams- 90% 3x truly does not = 90%!

@mikhailsirota9556 4 года назад

Thank you for the video. Good explanation of first-time yield as it relates to the company as a whole.

@fkiQuality 4 года назад

Mikhail, in addition to the FTY, the other key concept here is the difference in perceptions between employees and customers.

@444chester 6 лет назад

This is a very strong example of why working in silos is detrimental. I'm clear on the impact of function reporting. I'd like to hear your thoughts on "company organization" and "incentive schemes".