wardell books

Measurement and Analysis

Developing Metrics

Developing meaningful metrics is an extremely important function in Quality Control. The most important decision a business makes every day is what to work on. The business and its personnel can work all day and move closer to its ultimate goals, but metrics will drive behavior and focus employees’ efforts. As the saying goes, “what gets measured, gets done”.

Metrics should complement each other and balance each other out. For example, if a business measures labor efficiency and nothing else, employees will focus only on speed and probably create waste in the form of sacrificed quality and excess material use. Instead, the business should also focus on on-time delivery, cost, and quality. These metrics complement each other and allow the business to achieve better balanced results.

Metrics should be clear and understandable to the people managing the process driving them. The business must clearly communicate the meaning of the metrics to managers and staff. By understanding the meaning of the metrics, staff will be able to understand what behaviors and situations drive them; everyone should understand what actions they need to take to move them in the right direction.

Metrics should also be meaningful; if the metric is improving then the underlying process performance should be improving as well. For example, if a business is measuring the amount of product defects and the defect are decreasing, then the payroll for the staff in charge of product re-work and quality repairs should be decreasing as well. Many businesses often review metrics alongside accounting data for better insights into progress.

Pareto Analysis

Pareto Analysis is a statistical technique for decision making that is used to identify a limited number of variables that have an overall effect on an outcome. It uses the 80/20 rule, also known as the Pareto Principle, that states that 80 percent of an outcome can be traced back to 20 percent of the variables causing that outcome.

While the rule above may seem obscure, it has real-world implementation that is straight-forward. For example, if the rule were to be applied to product quality analysis, it would translate to 80 percent of the product’s defects are caused by 20 percent of the many different reasons. For process analysis, it can be translated as 20 percent of the work done leads to 80 percent of the process’s value upon completion.

Pareto analysis is a useful technique when many possible courses of action are competing for attention. In essence, the problem solver estimates the benefit of each action then selects a limited number of the most effective actions that deliver a total benefit that is extremely close to the maximum benefit. It is especially useful when beginning to implement JIT and Lean Operations because it allows management to pinpoint problems and value/non-value added tasks when conducting process analysis, value engineering, quality analysis, and many other activities.

It is also important to note that Pareto Analysis is inherently limited in the fact that it ignores problems that are originally small but may become larger and more important over time. To counter-act this limitation, Pareto Analysis should be conducted periodically to address all problems as well as monitor the increasing effect of problems that were original significant.
Pareto analysis helps to identify the top 20 percent of the causes that need to be addressed to resolve 80 percent of the problems. Once the top 20 percent of the causes are identified, then tools can be used to identify the root causes of the problems. Tools may include brainstorming sessions, cause-and-effect flow charts and Fish Bone Analysis.

Fish Bone Analysis

Fish Bone analysis seeks to identify many possible causes for an effect or problem. Once completed, it is useful for structuring brainstorming sessions because it sorts ideas and information into categories for discussion.

fishbone analysis