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Secondary Metric

 

Secondary Metric in a project is one that has to be kept constant or prevented from deterioration as it is an important process metric even though it is not the metric to be improved. Hence, the objective of the project is twofold
1. Improve the project CTQ or the primary metric
2. Keep the secondary metric constant


An application-oriented question on the topic along with responses can be seen below. The best answer was provided on 10th July 2019 by Natwar Lal.

 

Applause for the respondents- Mohamed Asif, Vastupal Vashisth, Manjula Pujar, Natwar Lal & Sharad Talvalkar

 

Question

Q. 175  Define the term secondary metric. Give examples. Are there times when we do not need to have a secondary metric? Is it possible that we may have multiple secondary metrics in a project?

 

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Secondary Metric: in a project is one that has to be kept constant or prevented from deterioration as it is an important process metric even though it is not the metric to be improved.

(taking the definition from Forum's dictionary)

 

Almost 99.9% of the projects will have one or more secondary metrics. One could imagine the secondary metric as a contradiction or a constraint while improving the primary metric. Providing some examples below

 

1. Formula 1 race or any other race: Primary Metric is the speed. You want your vehicle to go as fast as possible. However, there are a few constraints (or secondary metrics) in achieving speed greater than a certain value. Listing some of them below

a. The downforce has to be high at higher speeds. This is because at high speed, the vehicle will have a tendency to leave the ground and this is undesirable. and If downforce is kept high then higher speeds are difficult to achieve. Hence, a goal would be to maximize the speed of the vehicle without increasing the downforce

b. Revolutions (or revs) of the engine. Higher speeds requires an engine to rev at higher speeds i.e. more revolutions per minute. However, higher revs would mean higher fuel consumption. Hence, a goal would be to improve the speed without increasing the revs

Similarly there are a host of other secondary metrics when we look at the design of a formula 1 car and the objective is to make it go as fast as possible.

 

2. Looking at the way India is playing in this semi-final, Primary Metric is to improve the run rate while ensuring that risk of shots played does not increase :) Risk of the shots played is the secondary metric here

 

Other common examples

3. Lower Average Handling Time should not compromise the First Call resolution

4. Higher Return on Investment while keeping the Risk constant

5. Hiring the best available talent while keeping the cost constant

 

How do we identify the secondary metrics?

a. Mostly it is intuitive and if you are well aware of the process, one can easily identify the list of secondary metrics for a particular primary metric. 

b. One could identify the secondary metrics if one thinks about the constraints or contradictions

c. Look at the Roof of the House of Quality (correlation matrix between the technical specs)

 

Situations where there is no Secondary Metric

Ideally there will always be one or more secondary metric (I wrote 99.9% above). The only 0.1% situations where I think secondary metric will not make sense are matters of life and death. In other words, these are situations where focusing on secondary metric is of no relevance. Some examples below

 

1. In medical world, steroids are considered as life saving drugs. However, it is well established that these steroids have side effects as well. Now, if a person is on a death bed (sorry for such an extreme example) and a steroid can save their life, then the side effects really does not matter. Another e.g. from the recent Jet airways. Primary metric was to remain operational. Even though this came at a very high cost (secondary metric) but Jet was not worried about cost because the survival of the organization was at stake (this was obviously before they were completely grounded).

 

2. If the primary metric is about adherence to regulatory or compliance issues. In such situations, the focus on secondary metric is not at all important. E.g. Indian automobile manufacturers have been advised to be BS 6 compliant. Now this is the primary metric. Due to this the cost of cars (secondary metric) is getting higher, but the manufacturers are not worried about the cost as it is a regulatory requirement. Similarly, the reserves that a bank has to keep is a regulatory requirement from RBI. The secondary metric is the cost of parking funds. But banks do not focus on cost of parking funds in order to maintain the reserves.

 

To conclude, Secondary metrics will always be present. Only in special circumstances, one could choose to ignore the secondary metric since primary metric is too critical and the improvement in Primary metric offsets the degradation in the secondary metric.

 

 

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Understanding Metrics:

 

Secondary Metric measures unintended consequence of changes to the process or product.

Below table differentiates Primary and Secondary Metrics.  

 

Primary Metric (Y) Secondary Metric (y's)
Also called as Project CTQ; Y= f(x); X's - Critical Inputs; Y - Output Also called as consequential metric; Cause and Effect relationship with Primary Metric
Used to measure Success; Measures direct output metric Drives the right behavior; Measure result of primary metric
Measures what needs to be fixed Measures what must not be broken ("Protection Measure")
Metric considered for improvement Metric which should not negatively impact while improving primary metric
Examples: Time, Quality, Service, Resources Examples: Flexibility, Engagement, Cost/Revenue, Customer Satisfaction

 

Process driven just alone by primary metric is not mistake proof and prone to output variations/failures.

Thus considering secondary metrics is vital. 

 

Secondary metrics helps organization to gain comprehensive view of operations.

It is NOT accepted to reduce PCT (Process Cycle Time) at the cost of declined Service Quality. Compromising secondary metric at the cost of primary metric.  

 

Example:

Selecting correct metric can help organization to validate the hypothesis and which can ensure that teams are aligned with the business goals. I would like to give an example from Insurance Industry for Primary and Secondary Metric

 

It is imperative to respond to customer needs Quicker, Technological Advancement such as Automation (RPA), Artificial Intelligence (AI), Machine Language (ML) in current space can help organization in achieving this. From an Insurance Claims perspective, quicker claim processing is Vital from customer point of view.

For that, Primary Metric can be: Claim Cycle Time

and Secondary Metric can be: Number of claims processes per person, Delinquency rate

 

Is Secondary Metric necessary?

Secondary metrics are essential, it helps to gather insight of the process and it is necessary to meet long term go

 

Multiple Secondary Metrics:

Other CTQ's apart from primary CTQ becomes secondary metrics

We could have one or more secondary metrics in a project in order to choose best solution

However, it is better to have 3 or 4 controllable secondary metrics that needs to focused to complement the primary metric

 

 

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Secondary Metric :  During six sigma projects, there is need to consider primary as well as secondary metrics. Primary metric is main the indicator to achieve our project goal but there is different role of secondary metric. It works as a " Protection Measure" and it ensures that we achieve our Project goal but not on the sacrifice of something else in the process. It ensures that team work honestly and deliver as per defined target. 

Any management will never agree to bypass some factors or broken them on behalf of improvement which will be delivered by considering primary metric or on behalf of project goal. 

example 1: Goal of a company to meet customer demand in a car manufacturing company by improving their cycle time and takt time. it does not mean that workers on assembly line will reduce cycle time and tack time by passing several defects in the car and if it is done then there is a possibility that customer even will not buy that defected car. so we should meet customer demand by improving cycle time and takt ime but not at the cost of defects passing in the car. here defects in the car plays a role of secondary metric which could have been considered before staring the project. 

example 2:  a students wants to improve his score in competitive exam of multiple choice question by improving his speed of solving the question. so his goal is to improve score by improving his speed but not at the cost of accuracy of solving the question in that time , if he is not able to give right answer in that time then there is no meaning to attempt all question.

Example 3:  Sales team of a manufacturing company has a primary goal to increase sales volume but no company want it at any unnecessary cost. lets say sales team is increasing sales by giving offers, discounts on products and ultimately the selling price is not able to meet even breakeven point then there is no meaning to achieve sales target because its a loss to the company. so sales team should consider all secondary factors while achieving their main target.

 

There will always be secondary metric in any project but most important thing how a project team identifies it and define it. and we need a secondary metric so that we can see what is the thing that we are going to loose if it is affected like in above example we achieved our sales target but we failed to make profit.

 

It is possible that we may have multiple secondary metric in a project and now it depends on project team how they are addressing and which one they are considering as a secondary metric. because there is need to to track all primary as well as secondary metrics while doing a project for any measurable improvement. 

for example assembly line is receiving parts form several other departments to run the line smoothly  to meet cycle time &  takt time target to meet customer demand but it does not mean that to support assembly line delivery on time other departments bypass some process steps like filling of inspection data, repair checking, defect checking, volume to be delivered, variant or type of part to be delivered, so all these 5 factors will act as secondary metric for that project to meet customer demand.

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Secondary matric points to what not desires coming into. If primary metrics mesuares what must be fixed, Then secondary metrics Mesuares what must not be broken.  

Secondary metrics give more holistic view on operation to the management. It makes sure problems are not moving around.Primary metrics conveys informations about output Y

Secondary metrics may provide other output.

 

For example if number of mobiles manufactured in hour is primary matrics , employee work towards to achieve more number which may cause defective pieces. In this case less number of defects is  secondary metrics.

      In few projects multiple secondary metrics may choosen to maintain accuracy and to avoid error or defects. But sometimes it may  difficult to drive more number of secondary metrics.

     Secondary matrics are avoided if in few projects where primary  matrics is helpful as an indicator of key output. But it is always hygiene to have secondary metrics. Because it ensures not to shift  the problem.

 

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Before defining Secondary Metrics, first let us understand what is meant by Primary Metrics so that it will become easier to understand what is Secondary Metrics. In a Six Sigma process Primary Metrics is something that we want to improve, known as Y in the six sigma parlance. 

 

Now Secondary Metrics is something that we do not want to deteriorate at the expense of improving Primary Metrics. Following eamples illustrates the concept of Primary Metrics &  Secondary Metrics                                                                                      

 

 

Sr.No.

Primary Metrics

Secondary Metric

1

Reduction of  inventory in terms of days of consumption in a manufacturing unit

1a) Loss of production because of shortage of a component due to reduction in safety stock.

1b) Increase in the delivery lead time to the customer

 

2

Reduction in time taken for inspection at incoming stores

Increase in defective lots getting accepted

3

To reduce the mismatch between the system stock and physical stock in a stores

3a) Increase in the time required for binning  the items stores.

 

3b) Requirement of additional manpower

  

There could be multiple secondary metrics as shown in the above tables. However one should restrict secondary metrics based on the relative importance so as  to make the six sigma project viable & manageable. The purpose of considering secondary metrics is to give a holistic view to the all stakeholders.

 

Secondary metrics are always there because nothing exists in isolation

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The chosen best answer is that of Natwar Lal. The definitions provided by all respondents are correct. Secondary metric should be selected wherever possible to keep problems from changing shape, however, it is possible that there is no secondary metric.

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