The first step in the Measure stage is to define the key performance measures. These performance measures need to be defined from the customer's perspective.
There are three types of measures:
Input measures: These are measures related to and describing the input into a process. These are the independent variables that constitute some of the Xs that were introduced as part of the equation Y=f(X) in the first chapter. These Xs can be the predictors of process and output measures.
Process measures: These are measures related to individual steps in the process and/or the overall process. These are also independent variables and constitute some of the Xs as part of the equation Y=f(X). Hence, they can be predictors of output measures. Process measures relate to the effectiveness and efficiency of the resources necessary to transform inputs into outputs. Effectiveness refers to how well the output of a process meets the requirements of the customer. In other...