Capturing Value
Abstract
Dianna and Fred discuss capturing value, documenting the cost of unreliability, and speaking the language of management.
Key Points
Join Dianna and Fred as they discuss the often-overlooked necessity for reliability and quality engineers to quantify value, document the cost of unreliability, and speak the language of management.
Topics include:
- Why quantifying value is the language of management and a critical skill often missed in engineering degrees.
- Hear a compelling success story.
- We must sometimes be creative and use logical estimations, rather than demanding only hard data, to quantify value and avoid paralysis in decision-making.
- Understand how quantifying the value of information and reducing uncertainty can significantly improve decision-making, potentially avoiding multi-million dollar losses.
Enjoy an episode of Speaking of Reliability. Where you can join friends as they discuss reliability topics. Join us as we discuss topics ranging from design for reliability techniques to field data analysis approaches.
Show Notes
Fred and Dianna dive into the critical topic of capturing value by documenting or making visible the cost of quality or unreliability.
This skill is essential, yet often not taught in engineering schools, which tend to focus on the technical aspects rather than project management, resources, or the value of activities or inactivity. Quantifying value is considered the “language of management” and is crucial for engineers when advocating for a test, arguing against a test, or proposing alternative approaches.
Engineers must remember that their work does not exist in a vacuum; understanding the context of priorities is necessary, and being aware of the costs of “busy work” (like useless reports) can quantify significant lost engineering time. Fred shares a personal story where tracking 14 defects per 10,000 feet of product, which wreaked havoc with production, allowed him to quantify the loss in the hundreds of thousands of dollars. The solution, finding a different extrusion screw style from another division, demonstrated the value of quantifying the impact of technical fixes.
The hosts emphasize that while engineers are often logically stringent and look for hard data, quantifying value—whether for manufacturing scrap or services like field failure—sometimes requires creativity and estimation, especially when dealing with internal customers. It is better to lay out the logic and estimate than to be paralyzed by the need for perfect data, as even improved information can fundamentally alter the value of a decision.
Using value quantification helps managers weigh uncertainty, especially when facing high-stakes choices like whether to start production, where better information might avoid losses of $10 million. To help listeners further, Fred mentions a free ebook on Ascendo Reliability called Finding Value that outlines multiple approaches to quantifying value. Click here to access it.
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