ISACA COBIT 5 – Measure (BOK V)

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• January 26, 2023
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1. Introduction – Section 5

Completing the define phase of the project which was the first phase of DMAC process D four Define. Now we come to M which is the major phase of the project. In defined phase you have set up the business case for the project. You have a charter, you have management approval, you have set up the team, you have set up the time frame for completing this project. That’s all you have done in the defined phase. Now what you are going to do in the measure phase is measure the current performance of the process. The process which you want to improve. Where do you stand now for ASQ certified Six Sigma Black Belt course you will be getting 25 questions from measurement phase. What you are learning in this phase is process characteristics, data collection, measurement systems, basic statistics, probability and process capability. Let’s quickly look at the highlevel overview of this section. So since you have already defined the process, since you have already defined the charter, now you are studying the current performance.

So in this when we look at process flow matrix here you are looking at things such as work in progress, work in queue, touch time, tap time, cycle time throughput all these parameters will give you the current performance of your process. Then in process analysis tools we will be looking at things like value stream mapping, process map, flow charts, spaghetti diagram, gamba walk all these tools will help you in understanding the process. Part B of this section is data collection. Here we will be learning about the data types. Data could be continuous, data could be discrete data. Then we will be looking at measurement scales. Measurement scale could be nominal ordinal interval or ratio. We will talk about that. We will talk about sampling. So if you are taking sample from the population, what types of samplings are? There are four types of probability sampling and three types of non probability sampling which are discussed in this section.

Then once you are collecting data, you could be collecting on a check sheet. Here we will be talking about data coding and data cleaning. Also, so many a times the data which you have collected might not be clean. You might have some missing values. How do you address those? That will be covered in data collection plan and methods? Coming to part C of this section which is measurement systems. Here we will be talking about measurement system analysis. In this we will be talking about accuracy and precision. What is the difference between them. And then in accuracy we will be talking about the bias, the linearity and the stability. In precision we will be talking about the repeatability and reproducibility. So together these two things repeatability and reproducibility are called as gauge R and R study. So we’ll be talking about that study as well. Here in this then we will be talking about measurement system across the organization.

Measurements are not just what you measure. With the help of a gauge measurement could be anywhere in the organization. Whether you are a sales, marketing, design, all aspects of organization will have some sort of measurement. And then we will be talking about metrology. In metrology we will be talking about instrument calibration and instrument traceability traceability to national international standard. Coming to part D of this section here we will have a basic understanding of statistics. We will start with basic terms. We will talk about the central limit theorem and then we will be talking about descriptive statistics. In descriptive statistics we will be looking at the central tendency and the variability. In central tendency we will be talking about things like mean mode, median and in variability we will be talking about the range, standard deviation and interquartile range. We will be covering all these things in this section. What I’m doing here is just give you the overview of the section.

So coming back to the next item here which is graphical methods. In graphical methods we will be talking about box and whisker plots, scatter diagram and histogram. These three things are very commonly used when we talk of data. When you want to put or present data in the form of a graph then we will be talking about valid statistical conclusion. How do you make valid conclusion from the data which you have? After talking about the basic statistics we will be looking at the probability. Here we will look at some basic concepts how to find out the probability using some basic simple examples like rolling a dice. Then we will be talking about number of distributions. Here these distributions will be used further in this course. Distributions are of two types continuous or discrete. In continuous we will be talking about the normal distribution student T distribution, chi square F distribution. In discrete we will be talking about binomial poison and many more.

Hold on to that. Once you reach there you will understand those. Then in F part of this section we will be talking about process capability. Whether your process is capable to produce within the specification or not. For that we will have a process capability indices which are CP and CPK. Then we will be talking about process performance indices which are PP and PPK. And then we will be talking about general process capability studies. How do we find out process capability? If you have attribute data, what you do if you have a non normal data? Because earlier whatever CPK, PP, PPK we calculated that was based on a normal distribution. If we have non normal distribution what do we do? We will be covering that also here in this. And then we’ll be talking about process performance versus specification, short term and long term capabilities. Here we will be also talking about defects per million opportunities. When we say six sigma we say 3. 4 defects per million opportunities.

Since you are doing black belt course I assume that you know this, but still we will be covering these aspects such as defects per unit, defects per million opportunities rolled through yield. Those aspects also will be covered in this section. So that’s the overview of measurement section. So in summary, what we are doing is we are looking at the current performance of your process. For that we could use any of these tools to set the baseline. Because once you are doing the 60 project, you want to have a baseline. You want to know what was the status of your problem before you did anything to that measurement phase will help you in doing that. So welcome to this section and let’s start with the next lecture which is on process flow matrices.

2. Process Flow Metrics (BOK V.A.1)

Hey, welcome back. Congratulations on completing the defined phase of your project. Now you are in major phase of your project. So you started with D, now you are at so in measurement phase, let’s start with process flow matrix. So process flow matrix are related to process. So if you have a process which has step one, step two, step three, let’s look at some matrix related to that process flow. And here in this section we will be discussing these six matrix work in progress. What does that mean? Then there’s a work in queue, touch time, tact time, cycle time and throughput what are these, how these are calculated? We will understand these with the help of very simple examples. So let’s start with work in progress on the next slide. So what’s work in progress? So you have a raw material, then you do some processing on the work and you have the finished product. Anything between the raw material and the finished product is work in progress. So if you have number of operations, let’s say you have three processes which every input has to go through, then any material which is being processed or which is between these processes is work in progress. So work in progress is partially finished good, waiting for completion and eventually sale of these items. So all these things are partially completed good, which are somewhere in the production stage.

These items are either just being fabricated or waiting for further processing. So this might be in some process, let’s say something is getting processed in process number one, two or three in our simple example or something which is waiting in between that. So that’s work in progress. So we talked about work in progress in the previous slide. Now we have another matrix which is work in queue. So work in Q is the material at work station waiting to be processed. And now you might be wondering how is it different from work in progress? So let’s take a simple example here. So example is you have a process number one, then you have a process number two and you have a process number three. Input material comes here, gets through process one, then goes to process two and then goes to process three. And here you have the finished product. And as we said earlier, anything in between this is work in progress. So whether that is being processed at process number one, two, three or anything in between, that is work in progress.

But work in queue is anything in the queue and how is that different from work in progress? Suppose process number two has created so many parts that some of these parts are waiting in the queue for being processed and some of the parts have been put on a shelf and with the intention that later on these would be processed. So work in queue does not include these items. Work in queue includes only the items which are waiting for the process not stored, not the semi finished material which is stored separately, that will be included in work in progress. So work in queue is only thing which is waiting in the queue. So here we have another term related to process matrix and that is touch time. So touch time is the time that material is actually being worked on. Let’s again take that same example of three processes. Process one, process two, process three. Each process takes 3. 5 hours. 3. 5 hours, 3. 5 hours. And if there’s a waiting time between one process to another process or transporting from one place to another place, let’s say it takes 1 hour from process one to process two, that’s a waiting time. Or there is a 2 hours of transport time, transportation time.

This is not included in touch time. The touch time only refers to the time when the material is actually being worked on. No waiting, no motion is included in this time. Next Matrix series. Tactime and what is tactime? Tactime is time in which a product needs to be produced in order to satisfy customer demand. So this is linked to the customer demand, not related to how much time it takes to manufacture a product. So Tactime is equal to the net operating time divided by the customer demand per period. If this doesn’t make sense, let’s move on to the next slide and look at the example of calculating tax time and that will clarify the subject much more better. Let’s move on to the next slide. So here in this example, we have a production unit where the customer demand is ten units per week. So customer needs ten units per week and the plant is operating 40 hours per week. 40 hours per week. And this could be 8 hours per day multiplied by five days working week. So what’s the Tact time here? Tact time will be the plant operating time, which is 40 hours divided by the customer demand which is done.

And that gives us 4 hours of tech time. And as I earlier said, the tech time is not related to how much time it takes to make the unit. This unit might take 2 hours to make, or 8 hours to make, or even eight days to make. That doesn’t matter even if this unit takes eight days to make one unit. But still tax time will be 4 hours only. And in the same example, when we said 8 hours per day for five days, let’s say now there are some breaks in between that. So going back to the same thing, customer wants ten units. This is the same thing what we had in the last example. Plant operates 40 hours per week, but then we did not calculate the breaks in between. Now, if there are two breaks of ten minutes and a 40 minutes of lunch break, that means there is a 1 hour loss or 1 hour of break per day. So that you need to remove from your 8 hours. And hence the net operating time would be 40 hours for the whole week multiplied by five days and 1 hour every day. So that will leave us with 35 hours of productive operation per week. And now if we have to calculate the Tact To time, tact to time will be 35 divided by ten, not 40. Earlier, when we did not calculate the break, we took this as 40.

So now we are taking this as 35 because now we have included breaks or now we have excluded breaks from the total operating time. And with this Tact time comes out to be 3. 5 hours instead of 4 hours. And again, same thing. Tact time is not related to how much time it takes for unit to make. This is related to the operating time and the customer demand. So earlier we calculated the Tact time. In that example we found out that the Tact time is 3. 5 hours. Now let’s understand that tech time is related to customer demand. How much customer wants. Customer wants that every 3. 5 hours we should have one unit produced that is based on customer demand. Now, coming to the production side of this in production side, let’s say we have three processes. Process one, process two and process three. An item has to go through these processes. Process one takes 3. 5 hours, process two takes 3. 5 hours and process three also takes 3. 5 hours coming to cycle time. What is cycle time?

Cycle time is defined as how long it takes to complete one task from start to finish. And that’s what we are talking here. Process one takes 3. 5 hours from starting to finishing. Same thing happens with process two. Also, process two also takes 3. 5 hours from starting to finishing. And same with the process three. Now look at this. We have Tact time of 3. 5 hours. Every 3. 5 hours we want one unit to be produced based on customer demand. And our processes are meeting that. Each of these processes can produce one unit after every 3. 5 hours. So once we start the process, this process will keep on producing a unit after 3. 5 hours. So we meet the Tact time. Suppose any of these processes takes more than 3. 5 hours. Let’s say process one takes 5 hours to complete. One thing is clear in this case that if process one takes 5 hours to complete, then we cannot meet the customer demand. We cannot meet the tech time of 3. 5 hours because process one takes 5 hours to complete. So one thing which we need to see is that the cycle time of any process or every process in the sequence has to be less than the tech time. If any process takes more than the tech time, we have a problem.

What happens if the cycle time of any of these processes is less than 3. 5 hours? Let’s look at that on the next slide. So here. In this example, process one takes 1 hour, process two takes 1. 5 hours, process three takes 3. 5 hours and the tag time remains same 3. 5 hours based on customer demand. Now, if process one can produce item in 1 hour, but I need item after every 3. 5 hours because our process three cannot handle that. So what will happen is there will be inventory between process one and two and same thing happens with the process two also. This is also taking 1. 5 hours. The cycle time for process two is 1. 5 hours. So this also produces faster than the tax time. So this will lead to inventory between process number two and three. So when we look at cycle time, one thing which you can see is if there is any opportunity to rearrange things.

Let’s say in this particular case if somehow we can merge process number one and process number two as a single process which might take 2. 5 hours, we will be fine because we need a unit after every 3. 5 hours. So there is an opportunity here to merge process one and two. Summarizing the Cycle Time if a cycle time of a process is more than tech time, you have a problem you need to resolve that because you will not be able to meet the tech time. If your cycle time is less than the tech time, then you might consider assembling or joining a few processes together so that their cycle time is more or less equal to the tactical time. And that’s how cycle time is being used. Earlier we talked about touch time. So just to differentiate between the touch time and the cycle time, touch time is related to how much time you put on that particular work, how much time you are doing actively working or the value added work on that process. So for example, to make this course Six Sigma Black Belt course, I might have taken six months to complete that. But the actual touch time, the time when I was actually working on producing this course, might have been let’s say 15 days only.

So 15 days is my touch time. That gives an idea that how much is the real work required to do the job. Whereas when we talk of cycle time, cycle time is looking at the processes and the focus here is to see whether the processes are able to meet the tech time or not. Cycle time starts when you start the job, cycle time finishes when you stop the job and then you evaluate whether your processes meet the requirement of the time as against cycle time. There’s another term which is lead time. Lead time is the total time taken by the unit from the time the work is requested to the work is delivered. So from the time an order is placed or a trigger is clicked to manufacture the unit and till it is delivered the whole time is called as lead time. Unlike cycle time. In cycle time we have not included the waiting time, but here in the lead time we include both the processing and the waiting time. So waiting time is included in lead time, but waiting time is not included in the cycle time.

And when you have to calculate lead time, the formula for that is work in progress divided by throughput and work in progress. Let’s say there are 50 units. So you have process one, process two and process three in between that if you see there are 50 units because we said that there will be inventory built up here. So let’s say there’s one piece here, one piece here and one piece here, three pieces in manufacturing. And let’s say there are 47 pieces waiting here as a part of inventory. Then we have 50 units which are work in progress, and we have a throughput, for example, ten units per day which are coming out of this per day. Then the lead time can be calculated as work in progress divided by throughput, which is five days. So five days will be the lead time. And what does that mean? That if you initiate a new unit here at the beginning beginning, and by the time that particular unit comes out of this production line here will be five days. Because you see, the big inventory is lying here, the 47 pieces are lying in the inventory here.

So the piece which you put here start here, will be waiting for another 47 to finish processing and then that particular unit will get processed. So that gives the lead time of a long lead time of five days. So this is the formula for calculating the lead time, which is work in progress divided by throughput. And as we said earlier, throughput is the average time a unit is processed per unit time. And earlier example we said ten units per day, that was the throughput which we took earlier. So that is and throughput can be calculated by one divided by cycle time. So if we have ten units coming out per day, ten units per day per day, which is a throughput and that is equal to one by cycle time. So cycle time will be one divided by ten days. And here we have another example where we said that if cycle time is 20 minutes and then throughput rate will be one by 20 by 20 /minute is if we multiplied by this by 60, then from minutes we can change that to hours. So this will be 60 divided by 20 per hours, which is three units per hour. And again if we multiply this by 8 hours per shift and then we can say that we are producing 24 pieces per day. So 24 pieces per day is throughput if the cycle time is 20 minutes. So if you have to calculate that, make sure that you take right units. So if you you are having cycled time in minutes, then your throughput will be in per minutes. If you have to make it by hours, then multiply that by 60. So that’s how you calculate.

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