Why are Companies Constantly Upgrading their ERP Systems?
February 7, 2025
Bankruptcy is one of the natural states which a company may find itself in. Entrepreneurship is primarily about taking risks. When companies take risks, some of them succeed, whereas others fail. Hence failure is a natural part of the business. However, many critics of bankruptcy laws believe that there isn’t a need for an elaborate […]
What is the Wirecard Scandal all about and Why it is a Wakeup Call for Whistleblowers Anyone who has been following financial and business news over the last couple of years would have heard about Wirecard, the embattled German payments firm that had to file for bankruptcy after serious and humungous frauds were uncovered leading […]
How Modern Decision Makers Have to Confront Present Shock and Information Overload We live in times when Information Overload is getting the better of cognitive abilities to absorb and process the needed data and information to make informed decisions. In addition, the Digital Age has also engendered the Present Shock of Virality and Instant Gratification […]
Geopolitics, Economics, and Geoeconomics In the evolving global trading and economic system, firms and corporates are impacted as much by the economic policies of nations as they are by the geopolitical and foreign policies. In other words, any global firm wishing to do business in the international sphere has to be cognizant of both the […]
In the previous article, we have already come across some of the reasons why the government should not encourage funding of stadiums that are to be used by private franchises. We have already seen that the entire mechanism of government funding ends up being a regressive tax on the citizens of a particular city who […]
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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