Subject: Re: Q: ISO Cost Effectiveness /Weiler/Ohri/Pfrang
Date: Fri, 1 Oct 1999 14:58:58 -0600
From: ISO Standards Discussion
From: (Doug Pfrang)
Subject: RE: Q: ISO Cost Effectiveness /Weiler/Ohri/Pfrang
Companies already measure cycle time, reworks, total overhead, instances of innovation, etc., but measuring those things does little to improve quality. And no, it does not escape the formal bookkeeping: companies routinely monitor these metrics because they can be leading indicators of potential future financial problems.
Also, installing "hard core indicators close to the operators and keep an eye on them" harkens back to the obsolete "inspect quality into the system" approach that was discredited at least thirty years. Such an approach blames workers for the results of management decisions that are very likely out of the workers' control. Moreover, such statistics rarely improve quality, because workers account for only about 10-15% of the problems in a company -- so even if one tries to motivate them to do their best at the given task (such as by mounting an indicator near them), one could only hope to achieve limited improvements. About 85+% of problems in companies are due to poor management. These problems include poor process design, poor communication, poor goal-setting, poor planning, poor investment decisions, etc. It's just not as simple as hanging an indicator by every worker and thinking that will fix everything.
The best way to improve quality is to determine what matters most to the most customers, and maximize the improvement to that. And, yes, it often can be measured. It is easiest to measure when products are in the mature stage of their lifecycle. Where it is harder to measure is in breakthrough products, where customer expectations are highly speculative.
-- Doug
>From: Edith Ohri
>Subject: Re: Q: ISO Cost Effectiveness /Weiler/Ohri
>
>Quality is an impossible thing to measure, because it's just an attribute and
>does not stand by its own. Even if quality was a real item or a product that
>stands by its own, we would not be able to cost manage it because ot the
>accounting conventions. For example, they don't acknowledge the worth of "time"
>"information" or anything that happens not to have a market value.
>Therefor, it's hopeless even to try walking in this direction.
>A practical solution for those of us that don't want to wait until the bin
>counter ever finish resolving their problems is to install hard core indicators
>close to the operations and keep an eye on them. A good indicator would be
>"cycle time" "reworks" "total overhead" "instances of innovation"... all the
>things that escape the formal bookkeeping. Indicators have one more advantage
>over pure financial reports: they are easier to interpret in case a change is
>detected you can trace it better to its cause and effect.
Date: Fri, 1 Oct 1999 14:58:58 -0600
From: ISO Standards Discussion
From: (Doug Pfrang)
Subject: RE: Q: ISO Cost Effectiveness /Weiler/Ohri/Pfrang
Companies already measure cycle time, reworks, total overhead, instances of innovation, etc., but measuring those things does little to improve quality. And no, it does not escape the formal bookkeeping: companies routinely monitor these metrics because they can be leading indicators of potential future financial problems.
Also, installing "hard core indicators close to the operators and keep an eye on them" harkens back to the obsolete "inspect quality into the system" approach that was discredited at least thirty years. Such an approach blames workers for the results of management decisions that are very likely out of the workers' control. Moreover, such statistics rarely improve quality, because workers account for only about 10-15% of the problems in a company -- so even if one tries to motivate them to do their best at the given task (such as by mounting an indicator near them), one could only hope to achieve limited improvements. About 85+% of problems in companies are due to poor management. These problems include poor process design, poor communication, poor goal-setting, poor planning, poor investment decisions, etc. It's just not as simple as hanging an indicator by every worker and thinking that will fix everything.
The best way to improve quality is to determine what matters most to the most customers, and maximize the improvement to that. And, yes, it often can be measured. It is easiest to measure when products are in the mature stage of their lifecycle. Where it is harder to measure is in breakthrough products, where customer expectations are highly speculative.
-- Doug
>From: Edith Ohri
>Subject: Re: Q: ISO Cost Effectiveness /Weiler/Ohri
>
>Quality is an impossible thing to measure, because it's just an attribute and
>does not stand by its own. Even if quality was a real item or a product that
>stands by its own, we would not be able to cost manage it because ot the
>accounting conventions. For example, they don't acknowledge the worth of "time"
>"information" or anything that happens not to have a market value.
>Therefor, it's hopeless even to try walking in this direction.
>A practical solution for those of us that don't want to wait until the bin
>counter ever finish resolving their problems is to install hard core indicators
>close to the operations and keep an eye on them. A good indicator would be
>"cycle time" "reworks" "total overhead" "instances of innovation"... all the
>things that escape the formal bookkeeping. Indicators have one more advantage
>over pure financial reports: they are easier to interpret in case a change is
>detected you can trace it better to its cause and effect.
