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 list derived from the detailed process map needs to be shortlisted. This can be done in multiple ways. The different tools that are commonly used in six sigma projects to meet the purpose have been written down. They are as follows:
Cause Effect Matrix: The cause and effect matrix takes the list of inputs from the detailed process map and then gives them an individual score based on the effect that they have on the various critical to quality parameters.
The rows in the cause and effect matrix are used to list down the inputs and the columns are used to list down the critical to quality output. The intersection cell between a row and a column is meant to carry the impact of the input on that specific output. The impact is rated between 1 and 5, 5 being the highest.
Finally, there is a total column, whereby the total impact of the input on various outputs is judged by multiplying the numbers. The inputs are then arranged in descending order and prioritised for action.
Priority Matrix: The priority matrix is a very important tool that can be used to successfully narrow down to a limited number of causes once you have a list of a large number of causes in place. The way to do so is a simple 2 by 2 matrix.
On one of the axis is the dimension of control. It has two classifications high control and low control. High control implies that the performance of the variables is within the scope of the project identified and can be completely controlled by the team involved. Whereas low control means that the performance of the variables may be beyond the scope of the project.
On the second axis is mapped the dimension of impact. Variables are classified as having high or low impact on the business opportunities that are in question.
The end result is that there are four categories of variables with their usual control plans like:
Cause Effect Diagram: Also known as the fishbone diagram or the Ishikawa diagram, the cause and effect diagram is perhaps the most popular way of zeroing down on important inputs. It has been explained in detail in the later pages of this tutorial.
Failure Mode and Effect Analysis: Failure mode and effect analysis judges the possibility that a variable may be able to impact the project in a negative way. A FMEA score is arrived at which signifies the risk associated with the variable.
Six Sigma project leaders will often use multiple analysis. This helps them look at variables in different ways from different perspectives and also gives them assurance that they have zeroed down on the correct variables.
Your email address will not be published. Required fields are marked *