The Use of Enterprise Resource Planning Applications in Finance and HRM
The Importance of ERP Software In previous articles on Finance and Human Resource Management, we discussed how the finance and HRM functions have evolved to become important support functions in organizations and not just appendages to the core processes of the organization. For instance, in earlier decades when manufacturing was predominant, finance and HRM were […]
Step 4: Develop a Business Case for your Project
Now that we have the problem as well as the goal statement handy, it is time to ensure that these statements are well articulated in the business case. The management has to choose amongst several possible six sigma projects while granting its resources. The ones that do succeed in getting the resources from the management […]
The Importance of Soft Skills for Project Managers
Project Management is both an Art and a Science Project Management is both an art and a science. It is a science because project managers need to estimate budgets, draw up schedules, and manage costs and earn profits. It is an art because they have to ensure that the team gets along well and the […]
The Pharma Sector and Intellectual Property Rights: Pros and Cons
The Case for Patents The Pharma sector is often caught in the fight over whether the enforcement of IPR or Intellectual Property Rights should be followed or whether the sector exists for alleviating the health concerns of the poor and the needy thereby ensuring affordable drugs to the masses. Before we launch into the discussion […]
What is Kaizen? – The 5 S Approach
“Kaizen” refers to a Japanese word which means “improvement” or “change for the better”. Kaizen is defined as a continuous effort by each and every employee (from the CEO to field staff) to ensure improvement of all processes and systems of a particular organization. Work for a Japanese company and you would soon realize how […]
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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