Inventory Turnover As Indicator of Health of Inventory and Business
Inventory management as well as Supply chain operations are often overlapping and hold the key to the success of sales operations. In all of the businesses be in automobile, manufacturing, pharma or retail industry, status of inventory reflects the health of the business. Inventory operations have two key elements namely Inventory System and Physical operations. […]
How Not to Put All Eggs in One Basket – De-Risking Strategies for Outsourcers
What is De-Risking ? Outsourcing is a process that involves selection of vendors who would then do the necessary work for their clients regarding handling such work that the clients deem can be done by Third Party Vendors. What this means is that the clients first narrow down the list of outsourcers that can be […]
Globalization and the Trickle Down Theory: Does it Work ?
The underlying premise behind globalization is that the transfer of wealth from the developed countries to the developing countries would eventually result in a scenario where those at the bottom of the ladder in the developing countries would benefit from the wealth flowing into their economies. The theory behind this is that if a Billion […]
Supply Chains as Sources of Competitive Advantage
Optimizing the Supply Chains A supply chain is the network of relationships between the upstream and downstream activities with all stakeholders who are involved in this chain of relationships. To take an example, if a particular good or service has to be delivered to the customer, there are raw materials that are needed for the […]
The Canadian Housing Bubble
Canada is a developed western nation. It does not get nearly as much attention in the world media as it should. This is the reason why Canadian housing market is not being displayed in the news by the mainstream media. Right now the market is going through an incredible bull run. The prices are rising […]
The purpose of measurement system is to validate the measurements before they are considered as factual data and used as a basis for decision making. Any experienced Six Sigma executive knows the reality that the measurement system is nowhere nearly as good as you think it is. People who conduct the measurement system analysis for the first time are surprised to find that it is not rare to find measurements that are 30% or more off the mark in the organizations measurement system. Here is a review of the causes that lead to such widespread variations:
People: Probably the single most important cause of measurement system variation is the people involved. If measurements need to be taken repetitively, it becomes a monotonous task and sometimes errors are made. Also, many times employees wilfully avoid work and fudge the measurement numbers. A system where people were entrusted the job of taking measurements is a thing of the past. Quality guru Juran has made it explicit that measurements related to process efficiency must be collected by non-human means.
Equipment: Faulty equipment is another major factor which result in getting inaccurate measurements. It is not uncommon to find machines that are worn out and/or not properly calibrated. This is true particularly at the extreme ends of the operating range of the machine. Regular maintenance and calibration of the machines is essential. If the measurements are critical to the functioning of the process, the latest and the most high tech measurement systems need to be installed. If we get what we measure, we must measure in the best possible way, isn’t it!
Computational Complexity: This reason is closely linked to the human cause of measurement systems error. However, here the error is not caused by negligence or wilful manipulation. Sometimes, complex metrics are designed. However, the design of this metric is not correctly communicated to the concerned people. Hence we get faulty software tools and/or operators with incorrect knowledge.
Lack of Standard Procedures: It is important that the important metrics of the measurement systems be defined. Such a definition should be communicated to every person that needs to know it. The definition must be reached by consensus and the procedure to arrive at the numerical value of the metric must be explicitly stated inside a manual. Failure to do so can lead to different people having different notions about the same metric. Hence, at a systemic level, you could even end up comparing apples to oranges, if you are not careful enough!
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Characteristics of Data – Central Tendency and Dispersion
February 12, 2025
Steps Involved in Conducting a Measurement System Analysis
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