Ch04 Metrics

# Agenda

Week 7

Review homework

Week 8 assignment

Chapter 3 - 11, 36(c)

Homework

Case Study: “How We Slashed Response Time” Chapter 4: Statistics
• • •

Problems chapter 4 – 2, 3

Lecture/discussion

Metrics Measurement Statistics

Quality Metrics

Quality Metrics Chapter Four “We best manage what we can measure” Quality Metrics .

• • “95 percent inventory accuracy” “as evaluated by our customers.Metric  A metric is a verifiable measure stated in either quantitative or qualitative terms. we are providing above-average service” Quality Metrics .

allows and encourages comparison. Quality Metrics .Metric   A metric is a verifiable measure that • • • captures performance in terms of how something is being done relative to a standard. supports business strategy.

determined by design Performance measures . “have” or “have not” .Customer quality measures  Customers typically relate quality to: • Feature based measures.“range of values” conformance to design or ideal value • Quality Metrics .

producers cannot measure performance as each individual customer does.True versus substitute performance measures  Customers .use “substitute” performance measures • •  Other example: light bulb • • true performance measure -. these measures are quantifiable (measurable units).brightens the room substitute performance measure – wattage or lumens Quality Metrics . true performance measures typically vary by each individual customer.use “true” performance measures. Unfortunately. • • • example: a true measure of a car door may be “easy to close”. Substitute measure for a car door: door closing effort (footpounds).  Producers .

producers educate consumers on their substitute performance measures.Educating Consumers   Sometimes. What are substitute performance measures for the following customer desires: • • Good Gas Mileage Powerful Computer  What is the effect of educating consumers on performance measures? Quality Metrics .

scrap and rework process capability (Cp or Cpk) first time through quality (FTTQ) Quality Metrics  Internal quality metrics • • • . • • Metric is a standard of measurement. In quality management. we use metrics to translate customer needs into producer performance measures.What is a “metric”?  Another term for a substitute performance measure is a metric.

Example: Is net sales a good metric to measure the performance of a manufacturing department? Quality Metrics .. • • There is little value in a metric which identifies nonperformance if nothing can or will be done to remedy it. a gage). a capable system exists to measure the entity (e.Identifying effective metrics  Effective metrics satisfy the following conditions: • • performance is clearly defined in a measurable entity (quantifiable).  Effective metrics allow for actionable responses if the performance is unacceptable.g.

Quality Metrics . compare alternatives.  However.Use of quality metrics  Quality metric data may be used to: • • • spot trends in performance. organizations should consider the costs and benefits of collecting information for a particular quality metric. higher quality companies often use fewer metrics than their competitors. • • collecting data will not necessarily result in higher performance levels. predict performance.

• • (a) For services. identifying effective metrics is often difficult. (b) In manufacturing. if door closing effort is the metric. these ranges are known as targets.  Producers typically identify ranges of acceptable performance for a metric.Acceptable ranges  In practice. tolerances. ranges often referred to as break points. • Consider the car door example again. will a customer be dissatisfied if the actual effort is 50 foot-pounds versus 55 footpounds. or specifications. Quality Metrics . • Main reason: non-performance of a metric does not always lead to customer dissatisfaction.

customer is extremely satisfied Should a company try to reduce average wait time from 4 to 2 minutes.Break points   Break points are levels where improved performance will likely change customer behavior.customer is satisfied.customer is dissatisfied. 1-5 minutes -.? Quality Metrics . Example: waiting in line • Suppose the average customer will only wait for 5 minutes • • •  Wait longer than 5 minutes -. less than 1 minute -.

Targets. TARGET Upper specification limit (USL) Lower specification limit (LSL) -1 +1 Quality Metrics .desired value of a characteristic. A tolerance specifies an allowable deviation from a target value where a characteristic is still acceptable. tolerances and specifications   Target (nominal) .