What is Pugh Matrix?
When it comes to finding solutions and improvements in business processes, making a final decision can seem impossible. There are always multiple options for dealing with a situation or problems, which can be paralyzing for leadership. Pugh’s Controlled Convergence, also called the Pugh Matrix, is a numerical method for making tough decisions about complex subjects.
The Pugh Matrix is designed to break down the decision-making process into discrete segments with objective transitions. This model revolves around input from those involved, which means informed and genuine participation is necessary for getting useful results. All of the people providing input should have some knowledge and experience with the topics discussed.
The Benefits of Pugh Matrix
Pushing information through a Pugh Matrix helps keep results more objective despite the personal preferences of the participants. Numerical grading and comparison is generally fair, which makes it a diplomatic and useful tool for helping a group of people with different viewpoints come to a single decision.
How to Create Pugh Matrix
The first step in creating a matrix is to define the core criteria for the proposed solutions, which are the things they must accomplish. This is usually done with the “voice of the customer” as a perspective. In fact, it’s usually a good idea to involve client input and interviews when defining core criteria for different potential improvements.
The second step is to weigh each of each criteria or feature on a numerical scale, which is usually done from 1 to 10. This should represent the relative significance of each factor on overall product quality.
Companies then need to define each of the proposed improvements or alternatives as well as choose one to serve as a “baseline” for comparing the others. The baseline is usually the model that’s in use now, but it doesn’t have to be that one. Every single alternative should be compared to the baseline on each of the criteria established in the first step. This comparison can be represented with mathematical symbols like “+, – and =” or numerically as “-1, 0 and 1.”
The final step is to produce the actual matrix in a column format with one axis listing criteria with their weights and the other axis listing alternatives. This format allows the reader to compare the total “criteria weight” for the proposed solutions and pick the one with the biggest number.
What is Analytical Hierarchy Process?
The Analytical Hierarchy Process (AHP) is another model for quantified decision making used in six sigma programs. This process compels participants to make small yet deliberate choices that narrows down a complex, multifaceted decision into binary ones. The semi-objective nature of the test means that participants should be committed and knowledgeable about the subject matter.
The Benefits of Analytical Hierarchy Process
The strength of the AHP model is in its simplicity and inevitability. By constantly forcing people to make decisions between two options, participants are never forced to face an uncomfortable or overwhelming choice. They also can’t delay or avoid committing. They must choose one of the two options presented with each binary grouping. This helps force group decisions and avoid gridlock.
How to Create Analytical Hierarchy Process
The first step when setting up an analytical hierarchy process is to set criteria, much like when constructing a Pugh Matrix. These criteria are typically customer-oriented, which means that any improvement should have some positive impact on final output. Criteria are matched in pairs by listing them on both axes of a column chart.
Participants then rate the relative importance of each pairing by assigning a numerical value. The common practice is to use a scale of odd numbers including 1, 3, 5, 7 and 9 to compare relative importance.
A rating of “1” means equal, which means there will be a “1” rating whenever a criteria is compared against itself on the chart. Higher ratings, like “3” or “5” mean the first item is more important or significantly more important than the second. When the two criteria are compared again on opposite axes, then the inverse of this first value is used.
For example, if Criteria A vs Criteria B is rated as a 5, then participants believe A is significantly more important than B. This means “5” will be entered when A is compared to B on the chart. However, when B is compared to A, then the number entered is “1 / 5” to maintain the relative value of the previous entry.
Pugh Matrix vs. Analytical Hierarchy Process: What’s the Difference?
The Pugh Matrix and AHP have more in common than not. They both are decision making methods that incorporate semi-objective input and attempt to make quantifiable comparisons between alternative solutions. The two methods also rely on establishment of criteria based on attributed customer value and subjective comparison.
Even though these two methods are generally interchangeable, the AHP is a bit simpler and more compulsive. It’s better at forcing a decision when there’s a lot of disagreement or uncertainty, which makes it a strong choice for leaders who are new to six sigma practices. The Pugh Matrix is good at optimizing and eliminating bad alternatives.
Pugh Matrix vs. Analytical Hierarchy Process: Who would use the Pugh Matrix or Analytical Hierarchy Process?
As two of the primary decision making models in the world of progressive business management, it’s a good idea for all company leaders to get familiar with these processes. The best framework for making choices ultimately depends on the demands of the situation and the preferences of the people involved.
There are some major differences in the management of a small, owner-operated company and a multinational corporation with dozens of different leadership positions. The current state of management is also a factor. Companies that have already embraced lean manufacturing and management may benefit more from the Pugh Matrix, while those just getting started on these practices may get better results from AHP.
Choosing Between Pugh Matrix vs. Analytical Hierarchy Process: Real World Scenarios
A general hospital received a grant of several million dollars with a mandate to improve patient care. Those in charge of the initiative now face the challenge of figuring out the best way to make meaningful improvements on a limited budget. There’s tons of things that could be improved, but there’s only enough money to do one or two.
Since the hospital received a grant that can only be used for this purpose, leadership is already committed to taking some kind of action. Since relative worth is more important in this case, they decide to use the AHP model. However, if the hospital was spending money from its own budget, the Pugh Matrix would be more appropriate for gauging potential value of each option on its own.
After making this decision, the hospital’s leadership team then establishes a list of patient criteria. These criteria can include things like shorter wait times, more comfortable furniture and more effective treatment.
Make decisions you can’t regret
There are always some outcomes that business leaders will regret, but that doesn’t mean they have to regret their decisions too. There’s no way a single person will always make the best choice in business, especially when the road is constantly forking as you go. That’s why decision making models like the Pugh Matrix and AHP are a central part of six sigma. These models aren’t perfect either, but they can force through tough choices and help eliminate the bad options.