Six Sigma (3 of 4)

RISK measuration

6σ Risk Description, Rating (1-5), Rating (1-10)

Catastrophic (cannot be used) Halts / Taken down / Reboot 5, 9 - 10

Serious (still can be used to some extend) Functional Impairment / Loss 4, 7 - 8

Critical (have work around) Functional Impairment / Loss 3, 5 - 6

Marginal (temporary error) Product Performance Reduction 2, 3 - 4

Negligible (no loss in product functionality) Cosmestic error 1, 1 - 2

Frequent (1/10 to 1/1) 1/10 min to 1+/min, 5, 9 - 10

Probable (1/480 to 1/60) 1/hr to 1/shift 4, 7 - 8

Occasional (1/1440 to 1/10k) 1/day to 1/wk 3, 5 - 6

Remote (1/43k to 1/525k) 1/1 unit-mth to 1/1 unit-yr 2, 3 - 4

Improbable (1/5m to 1/50m) 1/1 unit-yr to 1/100 unit-yrs 1, 1 - 2

Very remote detection Detectable only when "online" 5, 9 - 10

Remote detection Installation and start-up 4, 7 - 8

Moderate detection System integration and test 3, 5 - 6

High detection Code walkthroughs/unit testing 2, 3 - 4

PSP Program Size (Line Of Code)

Indicator Description Plan Actual

Base (B)  Measured / measured 00 120

Deleted (D) Measured / counted 20 30

Modified (M) Estimated / counted 10 20

Added (A) N-M / T-B+D-R 490 480

Reused ® Estimated / counted 20 30

Total New & Changed (N) Estimated / A+M 500 500

Total LOC (T) N+B-M-D+R / measure 590 600

Total New Reused 30 20

6σ PSP Time in Phase (minutes) Plan Actual To Date To Date %

Planning 0%

Design 0%

Design review 0%

Code 0%

Code review 0%

Compile 0%

Test 0%

Postmortem 0%

Total 0%

6σ PSP Defects Injected Plan Actual To Date To Date %

Planning 0%

Design 0%

Design review 0%

Code 0%

Code review 0%

Compile 0%

Test 0%

Total Development 0%

6σ PSP Defects Removed Plan Actual To Date To Date %

Planning 0%

Design 0%

Design review 0%

Code 0%

Code review 0%

Compile 0%

Test 0%

Total Development 0%

After Development 0%

Organic & Mechanistic Model

Organisational structure is a type of framework used in businesses. Its purpose is to find the most effective way to delegate roles, power, and responsibilities to its employees and departments. It also controls and coordinates how information flows between different departments and levels of management in an organization. Having a proper organisational structure will allow a company to implement better operating procedures, and dictate which employees help in making decisions or shaping the organization. Based on an organisations goals and objectives it may be structured in many different ways. Two important structures include Mechanistic and Organic structures.

Mechanistic structures are mainly for companies that operate in a stable environment, use a centralised approach of authority, and maintain strong loyalty for management. Organisations that use a Mechanistic type of structure generally do not need to change or adapt their structure. This is mainly due to lack of innovation, creativity, and quick decision analysis not needed. Examples of organisations using Mechanistic structures include colleges and universities. If you think about it, they have long and strict registration procedures, rarely have to adapt or change in order to keep students enrolling, and most students tend to maintain high loyalty or obedience toward their instructors.

Mechanistic Structures Include:

– Belief upper management is better capable of making decisions

– Management instructions must be followed

– Communication and control must proceed through hierarchical routes

– More emphasis toward completing a task opposed to achieving company goals

– Employees are more jobs specialised and placed into certain departments

– Low differentiation of tasks

Organic structures are used in organisations facing unstable environments and must possess the ability to change accordingly. They have the ability to process, analyse, and distribute information and knowledge very quickly. This ensures that they stay competitive against other businesses. Businesses using Organic structures need to communicate effectively and quickly by spreading information. This is done by departments and different functional areas being closely integrated with one another. Also, by implementing decentralised decision making, employees of lower ranking will have the ability to make important decisions. This will help empower employees leading to greater creativity and better problem solving. Google Corporation is a great example of an Organic structure based business. Their employees are encouraged to use creative problem solving skills and develop new products.

Organic Structures Include:

– Large network of authority, control, and communication

– Problem solving is encouraged by all employees

– Employees are more goals oriented than job orientated

– Employee empowerment is encouraged

The structure of an organization will dictate how people interact with each other and their relationship of roles in the organization. If a structure is out-dated or not implemented correctly in a business, it will lead to many problems. These include conflict among employees or departments, confusion of employee roles, and lack of communication / coordination among departments.

In the past managers have simply tried to reorganise or work with the current structure of a business rather than addressing the necessary issues. This could lead to greater complexity rather than solving structural flaws

A good way to start problem solving regarding organisational structure in a business is to ask 3 important questions:

1 – Is the problem the structure or the way management is managing it?

2 – Does the structure match out strategy?

3 – Has organization design been compromised due to accommodating to personalities?

Empirical Modelling

Empirical Modelling (EM), spelt with capitals to denote a particular approach and to distinguish it from the general term explained above, is a novel approach to computer-based modelling that developed from research initiated in the early 1980s by Meurig Beynon of the Department of Computer Science at the University of Warwick, England. It has many critics who think of it as a broken type of Functional Programming. Early research within the group led to the development of a new language called Eden - an Evaluator for Definitive Notations. The first implementation of Eden was by Edward Yung in 1987 and a number of contributors have been leading the development of this tool ever since.

The approach of modelling offered by Empirical Modelling (or EM as it is often known) centres on the concepts of Observation, Dependency and Agency. The importance of dependency has been particularly well researched with a number of software tools being developed that exploit dependency maintenance as a native concept.

EM software

The EM project has developed various software tools to support the modelling activity. Currently, the main tool is tkeden an implementation of Eden written in C and tcl/tk.

However, the correctness of the syntax is debated, for example Meurig Beynon has described EDEN: "The syntax of EDEN, with its many definitive notations, is quite a mess!". This poses problems for users of the software.

Taylorism

How did current management theories develop?

People have been managing work for hundreds of years, and we can trace formal management ideas to the 1700s. But the most significant developments in management theory emerged in the 20th century. We owe much of our understanding of managerial practices to the many theorists of this period, who tried to understand how best to conduct business.

Historical Perspective

One of the earliest of these theorists was Frederick Winslow Taylor. He started the Scientific Management movement, and he and his associates were the first people to study the work process scientifically. They studied how work was performed, and they looked at how this affected worker productivity. Taylor's philosophy focused on the belief that making people work as hard as they could was not as efficient as optimising the way the work was done.

In 1909, Taylor published "The Principles of Scientific Management." In this, he proposed that by optimising and simplifying jobs, productivity would increase. He also advanced the idea that workers and managers needed to cooperate with one another. This was very different from the way work was typically done in businesses beforehand. A factory manager at that time had very little contact with the workers, and he left them on their own to produce the necessary product. There was no standardisation, and a worker's main motivation was often continued employment, so there was no incentive to work as quickly or as efficiently as possible.

Taylor believed that all workers were motivated by money, so he promoted the idea of "a fair day's pay for a fair day's work." In other words, if a worker didn't achieve enough in a day, he didn't deserve to be paid as much as another worker who was highly productive.

With a background in mechanical engineering, Taylor was very interested in efficiency. While advancing his career at a U.S. steel manufacturer, he designed workplace experiments to determine optimal performance levels. In one, he experimented with shovel design until he had a design that would allow workers to shovel for several hours straight. With bricklayers, he experimented with the various motions required and developed an efficient way to lay bricks. And he applied the scientific method to study the optimal way to do any type of workplace task. As such, he found that by calculating the time needed for the various elements of a task, he could develop the "best" way to complete that task.

These "time and motion" studies also led Taylor to conclude that certain people could work more efficiently than others. These were the people whom managers should seek to hire where possible. Therefore, selecting the right people for the job was another important part of workplace efficiency. Taking what he learned from these workplace experiments, Taylor developed four principles of scientific management. These principles are also known simply as "Taylorism".

Four Principles of Scientific Management

Taylor's four principles are as follows:

1. Replace working by "rule of thumb," or simple habit and common sense, and instead use the scientific method to study work and determine the most efficient way to perform specific tasks.
2. Rather than simply assign workers to just any job, match workers to their jobs based on capability and motivation, and train them to work at maximum efficiency.
3. Monitor worker performance, and provide instructions and supervision to ensure that they're using the most efficient ways of working.
4. Allocate the work between managers and workers so that the managers spend their time planning and training, allowing the workers to perform their tasks efficiently.

Critiques of Taylorism

Taylor's Scientific Management Theory promotes the idea that there is "one right way" to do something. As such, it is at odds with current approaches such as MBO Add to My Personal Learning Plan (Management By Objectives), Continuous Improvement Add to My Personal Learning Plan initiatives, BPR Add to My Personal Learning Plan (Business Process Reengineering), and other tools like them. These promote individual responsibility, and seek to push decision making through all levels of the organisation.

The idea here is that workers are given as much autonomy as practically possible, so that they can use the most appropriate approaches for the situation at hand. (Reflect here on your own experience – are you happier and more motivated when you're following tightly controlled procedures, or when you're working using your own judgment?) What's more, front line workers need to show this sort of flexibility in a rapidly-changing environment. Rigid, rules-driven organisations really struggle to adapt in these situations.

Teamwork is another area where pure Taylorism is in opposition to current practice. Essentially, Taylorism breaks tasks down into tiny steps, and focuses on how each person can do his or her specific series of steps best. Modern methodologies prefer to examine work systems more holistically in order to evaluate efficiency and maximise productivity. The extreme specialisation that Taylorism promotes is contrary to modern ideals of how to provide a motivating and satisfying workplace.

Where Taylorism separates manual from mental work, modern productivity enhancement practices seek to incorporate worker's ideas, experience and knowledge into best practice. Scientific management in its pure form focuses too much on the mechanics, and fails to value the people side of work, whereby motivation and workplace satisfaction are key elements in an efficient and productive organization.

Key Points

The Principles of Taylor's Scientific Management Theory became widely practiced, and the resulting cooperation between workers and managers eventually developed into the teamwork we enjoy today. While Taylorism in a pure sense isn't practiced much today, scientific management did provide many significant contributions to the advancement of management practice. It introduced systematic selection and training procedures, it provided a way to study workplace efficiency, and it encouraged the idea of systematic organisational design.

Preliminary Hazard Analysis (PHA)

The preliminary hazard analysis (PrHA) technique is a broad, initial study used in the early stages of system design. It focuses on (1) identifying apparent hazards, (2) assessing the severity of potential accidents that could occur involving the hazards, and (3) identifying safeguards for reducing the risks associated with the hazards. This technique focuses on identifying weaknesses early in the life of a system, thus saving time and money that might be required for major redesign if the hazards were discovered at a later date.

Brief summary of characteristics

• Relies on brainstorming and expert judgment to assess the significance of hazards and assign a ranking to each situation. This helps in prioritizing recommendations for reducing risks.
• Typically performed by one or two people who are knowledgeable about the type of activity in question. They participate in review meetings of documentation and field inspections, if applicable.
• Applicable to any activity or system
• Used as a high-level analysis early in the life of a process
• Generates qualitative descriptions of the hazards related to a process. Provides a qualitative ranking of the hazardous situations; this ranking can be used to prioritize recommendations for reducing or eliminating hazards in subsequent phases of the life cycle.
• Quality of the evaluation depends on the quality and availability of documentation, the training of the review team leader with respect to the various analysis techniques employed, and the experience of the review teams

Most common uses

• Generally applicable for almost any type of risk assessment application, but focuses predominantly on identifying and classifying hazards rather than evaluating them in detail
• Most often conducted early in the development of an activity or system, when there is little detailed information or there are few operating procedures. Often a precursor to further risk assessment.

Limitations of Preliminary Hazard Analysis

Because the preliminary hazard analysis technique is typically conducted early in the process, before other analysis techniques are practical, this methodology has two primary limitations:

Generally requires additional follow-up analyses. Because the PrHA is conducted early in the process and uses preliminary design information, additional analyses are generally required to more fully understand and evaluate hazards and potential accidents identified by the PrHA team.

Quality of the results is highly dependent on the knowledge of the team. At the time of a PrHA, there are few or no fully developed system specifications and little or no detailed design information. Therefore, the risk assessment relies heavily on the knowledge of subject matter experts. If these experts do not participate in the risk assessment, or if the system is a new technology having little or no early operational history, the results of the PrHA will reflect the uncertainty of the team in many of its assessments and assumptions.

Procedure for Preliminary Hazard Analysis

The procedure for conducting a preliminary hazard analysis consists of the following steps. Each step is further explained on the following pages.

1 Define the activity or system of interest. Specify and clearly define the boundaries of the activity or system for which preliminary hazard information is needed.

2 Define the accident categories of interest and the accident severity categories. Specify the problems of interest that the risk assessment will address (e.g., health and safety concerns, environmental issues). Specify the accident severity categories that will be used to prioritize resources for risk reduction efforts.

3 Conduct review. Identify the major hazards and associated accidents that could result in undesirable consequences. Also, identify design criteria or alternatives that could eliminate or reduce the hazards.

4 Use the results in decision making. Evaluate the risk assessment recommendations and the benefits they are intended to achieve (e.g., improved safety and environmental performance, cost savings).

Determine implementation criteria and plans.

1. Define the activity or system of interest

Intended functions. Because all risk assessments are concerned with ways in which a system can fail to perform an intended function, clearly defining these intended functions is an important first step in any risk assessment. This step does not have to be formally documented for most preliminary risk assessments.

Boundaries. Few activities or systems operate in isolation. Most interact with or are connected to other activities or systems. By clearly defining the boundaries of an activity or system, especially boundaries with support systems such as electric power and compressed air, the analysis can avoid (1) overlooking key elements of an activity or system at interfaces and (2) penalizing an activity or system by associating other equipment with the subject of the study.

Example:

Functions of interest

• Safe handling and use of fuel oil for an LNG cargo ship
• Safe handling and use of LNG cargo for an LNG cargo ship

Boundaries

Include only shipboard systems or operations

2. Define the accident categories of interest and the accident severity categories

Accident categories

The following paragraphs describe three of the most common types of accidents of interest in a PrHA:

Safety problems. The risk assessment team may look for ways in which improper performance of a marine activity or failures in a hardware system can result in personnel injury. These injuries may be caused by many mechanisms, including the following:

• Person overboard
• Exposure to high temperatures (e.g., through steam leaks)
• Fires or explosions

Environmental issues. The risk assessment team may look for ways in which the conduct of a particular activity or the failure of a system can damage the environment. These environmental issues may be caused by many mechanisms, including the following:

• Discharge of material into the water, either intentional or unintentional
• Equipment failures (e.g., seal failures) that result in a material spill
• Disruption of the ecosystem through over utilisation of a marine area

Economic impacts. The risk assessment team may look for ways in which the improper conduct of a particular activity or the failure of a system can have undesirable economic impacts. These economic risks may be categorised in many ways, including the following:

• Business risks such as contractual penalties, lost revenue, etc.
• Environmental restoration costs
• Replacement costs for damaged equipment

Some risk assessments may focus only on events above a certain threshold of concern in one or more of these categories.

Accident severity categories

During a PrHA, a team assesses the severity of the various accidents that can occur with each of the hazards. Establishing severity categories with definitive boundaries allows the team to assess each accident against a consistent measure of severity. It thus provides the framework for prioritising recommendations for risk reduction alternatives.

Example

The following table is an example of three accident severity categories for four different accident categories.

3. Conduct review

Performing a PrHA identifies major hazards and accident situations that could result in losses. However, the PrHA should also identify design criteria or alternatives that could eliminate or reduce those hazards. Obviously, some experience is required in making such judgments. The team performing the PrHA should consider the following factors:

• Hazardous vessel equipment and materials, such as fuels, highly reactive chemicals, toxic substances, explosives, high pressure systems, and other energy storage systems
• Safety-related interfaces between equipment and materials, such as material interactions, fire or explosion initiation and propagation, and control or shutdown systems
• Environmental factors that may influence the vessel or facility equipment and materials, such as vibration, flooding, extreme temperatures, electrostatic discharge, and humidity
• Operating, testing, maintenance, and emergency procedures, such as human error potential, crew functions to be accomplished, equipment layout and accessibility, and personnel safety protection
• Vessel support, such as storage, equipment testing, training, and utilities
• Safety-related equipment, such as mitigating systems, redundancy, fire suppression, and personal protective equipment

The next page is an example of a completed PrHA table documenting the findings of an analysis team.

4. Use the results in decision making

Judge acceptability. Decide whether the estimated performance for the activity or system meets an established goal or requirement.

Identify improvement opportunities. Identify the elements of the activity or system that are most likely to contribute to future problems. These are the items with the largest percentage contributions to the identified risks.

Make recommendations for improvements. Develop specific suggestions for improving future activity or system performance, including any of the following:

• Equipment modifications
• Procedural changes
• Administrative policy changes, such as planned maintenance tasks or personnel training

Justify allocation of resources for improvements. Estimate how implementation of expensive or controversial recommendations for improvement will affect future performance. Compare the economic benefits of these improvements to the total life-cycle costs of implementing each recommendation.

Recommend additional risk assessments. As suggested by the name, preliminary hazard analysis is conducted in an early phase of a project. Additional risk assessments will likely be needed to investigate certain issues in more detail. The insights gained from the PrHA will help determine what, if any, additional risk assessments should be conducted.