Keep an Opened Eye on Consumption

I am going to focus on the concept of car consumption and how it relates to the importance and sage of control charts in quality management for my company.

Control charts are used to monitor variations in given a variable for the purpose of making sure that the process is on control. The types of variations are assignable or common.

 The company I work for is in the entertainment business and we have a large set of cars assigned to track and off-track activities. Some of these cars are specific for racing activities are others are just tuned road certified cars. The process of maintaining these cars in a good operating condition involves a series of periodic general inspection, regular change of parts and oil and fuel filling not to mention the inventory of parts which accounts for the largest percentage of money spent on all. Expenses of which the company dedicates a substantial amount of money under the category of cost of doing business.

Our operations department utilizes control charts as an indicator if something is going wrong. One of the variables they focus on is fuel consumption. What was really interesting to me is how specific the process of putting control charts was. The process involved factors like the type of the car, the weather conditions it operates in and the car depreciation value which relates to its usable lifetime. Each one of those affected the level of consumption and it happens that we get a reading for one of the cars beyond the control limits that will indicate that there something wrong with the car and it has to be inspected. Other control charts are prepared in the same manner for the other variables affecting the condition of the car.

As per our operations director, gathering the right set of data is the most difficult part. You will be able to obtain most of the consumption and car wear and tear variables as per industry standards or from the manufacturers themselves. One of the common mistakes is that you will base all of your charts based on them. You will have to collect your own and have a variance analysis just to make sure that you do not get misleading results at the end of the day.

 What I would to add here is regardless of how prepared we seem to be by keeping an opened eye on consumption we had the occasional unexpected breakdowns of some of our vehicles. Despite the fact that the last check was completely perfect. We had other cases in which we were using the wrong limits for our charts and ended up being reactive at the expense of quality.

Would the concepts of quality management and your business relevant statistical process control charts make sure that you have the perfect quality product in the market? In my line of business, it would minimize the risks and based on experience it is not a guarantee. What about yours?

Read The Future

Can anyone really read the future? We all know that this is not true but what I shall talk about relates to the subject hugely.


We learned a bit about forecasting, its importance to organizations and some of the different methodologies used, should those be qualitative or quantitative. I work as a business analyst and my company is in entertainment and events management and I am going to go briefly on how we utilize forecasting in our business.


We learned that applying forecasting techniques is easy once you know which method to choose. In my company we have a mixture of products. Some of which existed for years, some have been renovated and others will be introduced in the near future.


For products that have been in the market for a while we utilize the historical data to recognize patterns on evenly spaced periods. By looking at the growth rates and applying a moving average method we have been able to project demand and sales figures fairly.


With regards to renovated products we look at the elements our clients liked and move the product into that direction. The only way to get our hands on such information is by doing consumer market surveys. Make sure before you go ahead with the process that your sample represents your entire market. We have been in a situation where we projected huge revenues from a recently changed product. What went wrong is that the proposed changed came from a key client, a change the rest of our clients did not like and we ended up changing the product back.


The hardest of all in my opinion is forecasting a new product. I have learned from experience that the best estimates will always have a large percentage of error in this case. If you forecast less and the demand is more, you end up losing clients. If you forecast high and you end up not selling much then you have wasted resources that could have been better utilized elsewhere. What we do is that we relate the new product to another that has similar characteristics. Surprisingly, similar products will have similar market trends and growth rates. If it is a product we have no similar to we seek information from other companies, business professionals and the internet to utilize the best forecasting techniques.


Two things my company does after each forecast. One is we will do manual adjustments to the results. I know from the class that this step is the sales force composite. We will ask the heads of the department about what they think about the numbers. May be they have large number of clients lined up to buy or may be our biggest purchaser is not interested in buying anymore. The second is to look at the state of the economy and how other companies are doing and estimate their spending.


Which is the best forecasting technique? It all depends to me.