IT-Governance and Why it is Important
Introduction: What is IT governance and why it is important? It is not enough for corporations to have IT systems and expect them to deliver strategic value to them. Instead, there needs to be a mechanism in place to regulate, monitor, and govern the value creation efforts of the IT systems. This governance mechanism of […]
Develop a Goal Statement corresponding to the Problem Statement
A six sigma team is meant to concentrate on the solutions and not on the problems. It is for this reason that once the problem has been identified, it must be quickly turned in to a goal statement that will guide the execution of the project. What is a Goal Statement ? The Problem statement […]
What is Due Diligence, Why it is Important, and How it Works and, What it Does ?
What is Due Diligence? Many of us would have heard the term Due Diligence in various contexts and situations where one party to a transaction often tells the other to do their due diligence or states that it is considering the same. Indeed, as anyone who has negotiated an employment contract or a legal drafting […]
The Benefits of Buying Local
President Trump has brought the issue of buying local to the forefront once again. He is enacting laws in support of “Buy American, Hire American” principles which he ideologically believes in. This would not be the first case wherein governments are encouraging consumers to buy locally. When government agencies procure materials for government use, a […]
Operations: Policy and Strategy
Introduction It is very important for an organization to have well defined objective. A well-defined objective facilitates development of strategies and policy thereby creating value for customers. Operation Strategy Operational strategy is essential to achieve operational goals set by organization in alignment with overall objective of the company. Operational strategy is design to achieve business […]
A process driven by primary metric alone is not fool proof. Operations managers always know that they face trade-offs. With everything that is desired, there is a chance that something that is not desired will come in too. Hence to prevent these secondary metrics are required. Here is how to use secondary metrics to ensure that the Six Sigma Project is seamlessly executed.
While a primary metric measures what needs to be fixed, the secondary metric measures what must not be broken. This concept can be better explained with the help off an example. For instance the number of cars produced per hour is the primary metric in the factory, workers may start working haphazardly on each car to maximise the primary metric. This will obviously be detrimental to the business. On the other hand, if a secondary metric that measures the number of defects is introduced then the workers cannot get away with haphazard production.
Holistic Picture: The secondary metrics help the management gain a more holistic view into the state of operations. The primary metric just conveys information about one of the Y’s (outputs) of the process. Information about the other outputs is obtained by the management through secondary metrics.
Problem Shifting: Most importantly, secondary metrics ensure that workers are not able to shift problems in the name of six sigma projects. If huge amount of resources are spent on making the assembly line more productive, but at the end we have a faster but more defects producing assembly line, we may be worse off than we started. While trade-offs are a part of the picture, something needs to be lost to make the process more efficient, it must be monitored explicity. This is what the secondary metrics help us to do.
The process could be full of secondary metrics. The goal is to tell the management a complete story with as few numbers as possible. If a large amount of secondary metrics are chosen, it may become difficult for the management to keep track of them. Here is how to choose the best secondary metrics for the smooth functioning of the process.
Other Critical to Quality Measures: The most important critical to quality measure usually becomes the Primary Metric. The other critical to quality measures are good candidates for secondary metrics. This is because since they are critical, their value needs to be controlled. Hence the top few metrics which determine the quality of output should be made secondary metrics.
Assume Future Problems: Another method of finding out secondary metrics is to figure out what can possibly go wrong with the Six Sigma project. Anything which has a plausible chance of negating the positive effects created by the Six Sigma project is a secondary metric and needs the attention of the management.
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