2017

BACK TO BASICS

Know the Drill

Rooting out critical-to-quality factors

by Mohit Sharma

This article was featured in January 2016’s Best Of Back to Basics edition.

Critical-to-quality (CTQ)trees, also called drill-down trees, help quality professionals translate broad customer needs into specific, actionable and measurable project metrics. They also help establish a relationship between the customer priority and CTQ project parameters. It helps Black Belts (BB)confirm that the problem they are trying to solve is aligned to customer and business priorities. The CTQ tree should be a routine tool used during the define phase of Six Sigma projects. The examples presented in this article help illustrate this concept.

Reduce operating costs

At a meeting, a CEO told his direct reports that his top goal for the year was cost reduction. The head of the infrastructure and logistics department used the CTQ tree to reduce infrastructure and logistics costs.

Step one. Total organizational costs could be affected by salaries and benefits of employees, IT and telecommute expenses, infrastructure and logistics expenses, travel and living expenses and depreciation (Figure 1). The infrastructure and logistics head determined he should focus on reducing infrastructure and logistics costs.

Figure 1

Step two. The next level of the drill-down for infrastructure and logistics was rent and utility costs for the organization, shown in Online Figure 1 on this article’s webpage at www.qualityprogress.com.

Online Figure1

Step three. Then, the logistics head drilled down on seat cost, a measure of productivity for seats in an organization (Online Figure 2).

Online Figure 2

This measure, commonly used in call centers, is reported as a percentage or a ratio to indicate the time the seat is in use or generating revenue. The metric for the BB’s project could be improving seat use (SU = headcount / (effective seats + blocked seats) from X% to Y%.

The drill down can stop here because the project metric has been identified. A relationship has been established between the project Y and business Y.

Improving wire transfers

At a leading American bank, the CEO identified profitability as the business priority. All staff members know that the international wire transfer process is a major concern for the organization. The drill-down tree could help relate the project Y with the business Y.

Step one. The profitability of the north, northeast and east regions was calculated. The northeast region was the least profitable (Online Figure 3).

Online Figure 3

Step two. There are two key processes in the northeast region: wire transfer and check clearance (Online Figure 4). Wire transfer, the low profitability process, is the focus of the BB project.

Online Figure 4

Step three. The wire transfer process is divided into two subprocesses: international and domestic wire transfers (Online Figure 5). The team drills down to international wire transfer as the problem. It launches a project and identifies the metric in the next step.

Online Figure 5

Step four. The BB project metric is identified: Reduce the cycle time of international wire transfer from X minutes to Y minutes by June 2013 (Online Figure 6). The drill-down tree can stop because a project metric was identified and a relationship between the project Y and business Y was established.

Online Figure 6

Takeaways

BBs must remember that there is no set rule governing the level to which they should drill down. However, a good guideline is to pursue a maximum of five levels of drill down from the business priority.


Mohit Sharma is assistant vice president at Genpact in Gurgaon, India. Sharma holds a master’s degree in marketing from Symbiosis International University in Pune, India, and is an ASQ-certified Six Sigma Black Belt.


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