Six Sigma teaches us that before we attempt to solve a problem, we must first define it and then be able to trust our measurement system. Most of us believe that the price of gasoline has gone up dramatically. Why? Our measurement system tells us so! We go to our local corner gas station and we see a much higher price. We may then become emotional and ask our leaders to "do something."
In this case, our measurement unit is the US dollar. However, what if our measurement unit is skewed? What if it makes the problem seem much worse than it really is? Or what if the main problem turns out not to be the one we set out to solve?
Take a look at the chart below:
| Price in Dollars: | ||||
| Item | Unit | Nov. 2006 | Nov. 2007 | % Increase |
| Gasoline | 1 gallon, regular | $ 2.14 | $ 2.98 | 39% |
| Gold | 100 oz. (GC, Comex) | $ 634.00 | $ 780.00 | |
| Price in Gold Ounces: | ||||
| Item | Unit | Nov. 2006 | Nov. 2007 | % Increase |
| Gasoline | $ 0.34 | $ 0.38 | 13% | |
In terms of US dollars, the price of gasoline has increased 39% from the same time last year. However, if we use gold as our unit of measure, we begin to realize that it has only increased by 13%.
While that may still be a problem, we are now faced with a very different perspective - and possibly a very different problem.
I will not get into the politics of why that is so, but the key point here is that before we become emotional and try to "solve" a problem, we must first define what that problem is - and often, it is our measurement system that is the real problem!
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Thanks and regards,
Jose I. Mora, Principal Consultant
Atzari Consulting, L.L.C.
www.atzari.com
Office: (973) 835-6313 Fax: (866) 223-5813
Mobile: (786) 351-2484
jmora@atzari.com, joseimora@gmail.com
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