Nepal | July 12, 2020

Use of statistical tools: How our industry can benefit

Rishi Raj Gautam
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The two main reasons for not using these tools extensively particularly in our country are the lack of adequate appreciation of the advantages of statistical methods and non-pragmatic approach in training programs

statistical tools

Statistics which is the science of drawing inferences and making decisions from varying data is becoming indispensable in modern industry which is becoming more and more competitive.

Many problems in a company are the result of variation.

For instance, components do not match during assembly because they vary in specifications. Production targets are not met as the inputs vary.

Productivity varies because of variations in the utilization of resources. Statistics permits us to predict variation to control it to its natural limits, eliminate the causes of variations and ultimately meet in challenge.

Statistical methods are meant for dealing with information and making its use more effective, and therefore, they are essential for an integrated and efficient management system.

The success of an organization depends upon the effective functioning of all the departments in the company. Statistics helps in assessing the effectiveness of functioning of individual departments and improve their performance on a continuous basis.

Any management task in an organization involves planning, organizing, staffing, directing, controlling, motivating people, communicating etc. For any of these activities, information is a vital resource.

Decisions made on the basis of facts reduce the risk of wrong decisions and even in case of a wrong decision; the risk can be estimated if the decisions are based on statistical analysis.

It is a must for the management to have necessary backing for their decisions and statistics forms this backing.

The decisions taken with the help of statistics are more reliable and acceptable than those taken on the basis of trial and error.

No management system works without people to run the system. A system works only when the people operate the system and people work only when they are motivated to work. The tasks will be performed successfully only when the people work with dedication.

So employees need motivation. Supervisors, executives and managers too need motivation. Motivation based on facts provides necessary driving force to the employees.

The key to motivations is effective communication of objectives and feedback on performance from time to time when needed. Statistical methods provide us effective common medium to communicate at all the levels in the organization.

Machine outputs in terms of variability give us the quality, quantity of the products and machine utilization. The language of statistics facilitates common understanding among different levels in an organization and leads to organizational excellence.

Statistics helps in forecasting the business with reasonable accuracy.

Nepalese organizations can profitably use statistics in the following major functions. Marketing can beneficially use the statistical methods for accurately forecasting the qualitative and quantitative requirements of the consumers.

Engineering can accurately translate the customer’s requirements into suitable error free product design and redesign through application of statistical methods like statistical tolerance, cause and effect diagram, regression and correlation analysis, concurrent design etc.

Purchasing can assist the vendors for supply of defect free components through feedback on performance statistics. Production engineering can evolve optimum process through application of statistical concepts like process capability, analysis of different processes, control chart technique and design of experimentation.

Production can build quality into the products while manufacturing by using process control technique like runs charts, check sheets, and precontrol charts.

Quality control can effectively ensure quality of products during manufacturing through suitable statistical quality control techniques like control charts and the final product quality by use of sampling techniques.

Quality engineering can solve the chronic quality problems efficiently by the application of statistical techniques like design of experimentation, cause and effect diagram, development of quality control procedures.

Human resource department can maintain the human potential requirement by monitoring the inventory of human resources skill and updating the skills required.

The two main reasons for not using these tools extensively particularly in our country are the lack of adequate appreciation of the advantages of statistical methods and non-pragmatic approach in training programs.

Nepalese organizations which are not started using statistics in rather limited areas have to plan for massive training programs in “Statistical Concepts” and they should make such training programs more palatable, pragmatic, simple and interesting.

These programs should be handled by people who have practical experience in the application of these statistical concepts to fields like quality control, financial management, technology, auditing, performance evaluation, cost estimation and cost control.

The workforce and management must be exposed to the logic, philosophy and concepts of statistical methods and their practical applications.

Organizations like NBSM (Nepal Bureau of Standard and Metrology), DFTQC (Department of Food Technology and Quality Control) and Nepal Food Corporation have not yet been doing commendable work in this direction.

Gautam is an associate professor and consultant in food quality control.

A version of this article appears in print on August 01, 2016 of The Himalayan Times.

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