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Calculatin?g COPQ Using Weighted Risk of Potential Failures Article

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    McNicholl
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    Dear Forum Members,

    Has anyone read the above article by Pankaj Sharma? I have read with interest the article published on http://www.isixsigma.com. I am starting out in discussions with a project sponsor and I believe the approach described is what is required to answer the questions of the sponsor and key stakeholders before taking the project forward to the next stage. The project relates to failures associated with a Telemetry system designed to transmit customer tank level and pressure information via landline phone or GSM to a delivery planning hub who are to use the information about the customer demand and tank level to efficiently schedule deliveries of bulk nitrogen, oxygen or carbon dioxide. The Voice of the Customer statement from a key stakeholder within the business being “If the telemetry system were to be 100% reliable what would it cost?” The Voice of the Customer statement from the sponsor is “We need to present the information the business needs to determine whether or not the telemetry system is a nice to have feature or essential”.

    There is a part of the process descrition that I do not fully understand. This is “Include only controlled factors (inputs) in the analysis. This is important, as existing costs for uncontrolled factors cannot be calculated with confidence.” It is not clear to me what are “controlled factors (inputs)” ? Perhaps what leads to my confusion is that in step 2 it goes on to say “After importing the inputs, review the list with the team to ensure all potential failures are identified. Include every possible failure even if the process has not experienced it. If there is a risk for failure, the team must identify it and include the potential cost of failure in the COPQ calculation.” And then in step 4 “Using team inputs and any available estimation tools, calculate the average cost to resolve (ACR) for each potential cause of failure.” Could you elaborate or give some examples of what a controlled factor may be alongside an uncontrolled factor?

    I also notice that any capital cost that may be required to resolve is not included. Surely this should be included?

    Yours in anticipation,

    Colin McNicholl

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