The Resource Curse: The Problem with Commodity Dependence
A large number of developing countries across the world are dependent upon commodities. About 135 of these developing countries were surveyed, and it turned out that more than 94 of these countries are commodity dependent. This means that primary commodities like food grains, oil, etc. account for more than 60% of their total exports. Prima […]
Building Knowledge-Driven Decision Support System and Mining Data
“Knowledge should be shared. It only grows by sharing.” This phrase finds its importance in today’s highly competitive and economically turbulent business world. Unless knowledge is shared among employees, it doesn’t take an organization anywhere. It’s important to share and manage it, in order to foster innovative thinking, develop and train employees and evolve into […]
Working through Business Process Improvement Project
Introduction Organizations are very similar to living Organisms. They too go through a definite life cycle and different stages of development. As in life, change is the only constant factor especially in the operations of each and every organization. Organizations are constantly engaged in the process of changing and fine tuning their internal processes in […]
Elements of Information System Model
Introduction Proliferation of information technology has increased in the last decade. Today’s organizations are acknowledging the importance of information systems. It has been accepted worldwide that information system provides competitive edge and are the bedrock for innovation. The six basic functions of information systems are capture data, transmit data, store data, retrieve data, manipulate data […]
Contract Logistics & Warehousing – Pricing & Costing Mechanisms
3PL Logistics Service Providers are many in the market. There are players from Multi National background, regional players, local companies and individually managed business organizations. Warehousing business, on the other hand, can flow through warehouses, consolidation and merging centers, finished goods stocking points, forward locations, raw material warehouses, JIT/VMI operations, Bonded warehouses, in plant warehouses, […]
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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