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November 18, 2003

Closed Loop

Adding It Up

In addition to the ones Celko points out in "Commodities and Identifiers" (Sept. 17, 2003), here is yet another problem I've come across when developing a Warehouse Inventory System: rounding with aggregated items. For example, suppose the cost of meat is $2.11 per kg, and you sell 0.505 kg, which makes the total $1.06555. Because you can't charge fractions of cents, you round it to $1.07.

Suppose you had 100 kg of meat for sale, and you sold 200 pieces with an average weight of 0.5 kg each. An interesting thing is that depending on how the pieces' weights deviated, the total will differ from $2.11 multiplied by 100 kg, because of the rounding issue, even though the quantities add up precisely to 100 kg (which is unrealistic, as Celko mentions).

Aleksey Burdakov
Moscow

Closer to Focused

I'm glad to see an editor's page ["Both Hands on the Wheel," Sept. 17, 2003] that focuses closer to the real goal — business — instead of the technology. If you don't focus on the right object you may hit the wrong target. However, just simply looking to improve the business model is possibly still slightly off target.

Start with the customer's real needs first. Make sure that the project improves customer satisfaction or simply satisfies their needs. It doesn't hurt if in the process you improve your company's cost of satisfying those needs.

Customer focus is what made Six Sigma more than just a quality improvement process and has turned it into a management model. I have found that most Six Sigma projects have an IT component, or IT is part of the Six Sigma project solution.

Starting with an IT solution might work sometimes. However, the odds aren't in your favor. Starting with a question like "how do we improve our customers' process?" increases the odds that the IT solution will really improve things.

Bill Rushmore
Allison Park, Penn.