Why Radical Disruption is not Always Beneficial: Lessons from Demonetization
Is Demonetization an Example of Radical Disruption? The Indian Economy and Body Polity was treated to a Shock Exercise when the Indian Prime Minister, Narendra Modi, decided to demonetize 80% of the total currency in circulation at a stroke of a sudden announcement and in a most unilateral and arbitrary manner. This policy announcement that […]
How Countries Can Reduce Tax Evasion?
Tax Evasion vs. Tax Avoidance Tax evasion and tax avoidance are often used interchangeably. However, there is a huge difference between the two terms. Tax evasion is a criminal activity. In most countries, tax evasion would attract a jail term. Evasion is usually done by not reporting income or overstating expenses. However, tax avoidance is […]
The Need for Person Independence in Software Project Management
The Perils of Person Dependence Imagine you are a project manager of a software project and are managing multiple resources. If by chance, one of your employees has an emergency (personal or otherwise) and has to take leave suddenly, your first priority should be to ensure that the employee gets time off and next, you […]
The Problem with Antitrust Laws
During the 19th century, the robber barons were dominating the American economy. A handful of people had more wealth and power than the entire nation. It is for this reason that they would collude with each other to keep everyone else at bay. These robber barons were depriving everybody else of fair opportunity as a […]
Strategic Finance – Meaning and Important Concepts
Introduction For an organization to succeed in the global and competitive world, it needs to have a robust strategic plan in place. The strategic plan is made of several definite targets it aspires to achieve. Some of the targets are internal (Productivity improvement, sound finance discipline, etc.) as well as external (EPS, Stockholder value, etc.). […]
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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