BA-09

•Structured Decision Making (SDM) – Detailed Content

•Structured Decision Making (SDM) is a systematic approach to making decisions in complex

environments. It involves breaking down the decision process into clear, logical steps and using
quantitative and qualitative tools to improve outcomes.

•1. Introduction to Structured Decision Making

•1.1 Definition & Importance

∙ SDM is a rational, organized method to solve problems and make better decisions.

∙ It helps in minimizing biases, reducing risks, and optimizing outcomes.

∙ Commonly used in business, management, engineering, and governance.

•1.2 Characteristics of Good Decision 2. The Structured Decision-Making
Making: Process:
∙ Clearly defined problem statement A systematic six-step approach is typically
∙ Data-driven analysis used:

∙ Evaluation of multiple alternatives • Define the Problem

∙ Minimization of risks and uncertainties • Gather & Analyze Information
∙ Alignment with organizational goals • Identify Alternatives

• Evaluate Alternatives & Weigh Risks

• Make & Implement the Decision

• Monitor & Review the Decision

Step 1: Define the Problem
∙ Clearly identify and understand the issue.

∙ Differentiate between symptoms and root causes.

∙ Use techniques like 5 Whys and Fishbone Diagram for problem analysis.

∙ Example: Is the production delay due to machine failure or poor planning?

Step 2: Gather & Analyze Information
∙ Collect relevant data, facts, and insights.

∙ Use qualitative and quantitative analysis.

∙ Identify constraints, limitations, and available resources.

∙ Tools: SWOT Analysis, Pareto Analysis (80/20 Rule), and Cost-Benefit Analysis.
Step 3: Identify Alternatives
∙ Brainstorm and list all possible solutions.

∙ Encourage innovative and creative approaches.

∙ Classify alternatives as short-term vs. long-term solutions.

∙ Tools: Mind Mapping, Decision Trees, Delphi Technique (Expert Consultation).

Step 4: Evaluate Alternatives & Weigh Risks
∙ Compare different options based on:
o Feasibility – Can it be implemented?
o Effectiveness – Will it solve the problem?
o Cost & Resources – Is it affordable?
o Risks & Uncertainty – Are there unintended consequences?
Step 5: Make & Implement the Decision
∙ Select the best alternative based on evaluation.

∙ Develop an action plan for execution.

∙ Define roles, responsibilities, and timelines.

∙ Tools: Project Management Framework, Gantt Charts, PDCA (Plan-Do-Check-Act).

Step 6: Monitor & Review the Decision

∙ Track progress and evaluate success.

∙ Collect feedback and identify areas for improvement.

∙ If the decision fails, adjust the approach and try a different solution.

∙ Tools: Key Performance Indicators (KPIs), Feedback Loops, Continuous Improvement

(Kaizen).
 STEP-1: DEFINE TOOLS
1. SIPOC Diagram (Suppliers, Inputs, Process, Outputs, Customers)
• A high-level process mapping tool that helps identify key elements in a
process.
• Ensures alignment on who provides what and who the end customers are.
Example:
• Suppliers: Fabric vendors
• Inputs: Raw denim fabric, washing chemicals
• Process: Cutting → Sewing → Washing → Finishing
• Outputs: Washed denim garments
• Customers: Apparel brands, retailers
2. VOC (Voice Of the Customer): Collects customer feedback via
surveys, interviews, complaints, and market research.
Example:
• VOC Feedback: "Denim wash shades must be consistent."

3.CTQ (Critical to Quality) Tree: Translates customer needs into

measurable project requirements.
Example:
• CTQ Requirement: Shade variation should be ≤ Delta E 1.5.
4. AFFINITY DIAGRAM IN THE DEFINE PHASE
• 📌 Purpose: To organize ideas and define key problem areas based on customer requirements and team
brainstorming.
• 🔹 How it’s used:
• Collects and categorizes Voice of the Customer (VOC) feedback.
• Helps identify Critical to Quality (CTQ) factors.
• Organizes brainstorming ideas into logical themes.
• 🔹 Example in an RMG Denim Washing Plant:
💡 Problem: High defect rates in washed denim garments.
👉 The Affinity Diagram helps group VOC feedback like:
• Fabric Quality Issues (shrinkage, uneven fading).
• Machine Performance Issues (frequent breakdowns).
• Process Inefficiencies (inconsistent wash recipe, long drying time)

5. Kano Model
• Helps categorize customer needs into three types:
• Basic Needs: Must-have (e.g., no fabric shrinkage).
• Performance Needs: Competitive advantages (e.g., softer fabric).
• Delighters: Unexpected features (e.g., eco-friendly washing).
Kano Model
6. Stakeholder Analysis
• Identifies key stakeholders (internal & external) and their level of influence.
• Helps with effective communication and project buy-in.

7. RACI Matrix (Responsible, Accountable, Consulted, Informed)

• Clarifies roles & responsibilities in a project.
• Ensures accountability and prevents confusion.

8. High-Level Process Mapping

• A flowchart that visually represents the major steps in a process.
• Helps identify bottlenecks and areas for improvement.
 STEP-2:Gather & Analyze Information
1. Cause-and-Effect (Fishbone/Ishikawa) Diagram
• Helps identify potential root causes of a problem.
• Categories often include Man, Machine, Material, Method, Measurement,
Environment.
Example in RMG: Causes of high rejection in washed denim (e.g., poor chemical mixing,
machine calibration issues).
2. 5 Whys Analysis
• A simple root cause analysis (RCA) tool by asking “Why?” five times.
• Helps trace the true cause of a problem.
• Example:
• Problem: High shrinkage in washed denim.
• Why? Incorrect drying temperature → Why? Machine not calibrated → Why? No
maintenance schedule → Why? Lack of training → Why? No standard procedures.
• Root Cause: No standard maintenance procedure.
3. Pareto Analysis (80/20 Rule)
• Helps prioritize problems by identifying the few major causes (80% of problems come
from 20% of causes).
Example in RMG: If 80% of defects come from only 3 main issues (e.g., shade variation,
uneven abrasion, and fabric damage), then fixing these gives the biggest impact.

4. Failure Mode and Effects Analysis (FMEA)

• Identifies potential failure points in a process and ranks them based on Risk Priority
Number (RPN).
• Example: Evaluating failure risks in stone washing and laser finishing processes.

5. Brainstorming & Affinity Diagram

• Used to categorize potential causes before deeper analysis.
• Helps organize ideas from team discussions.
 STEP-3: INDENTIFY ALTERNATIVES
• Brainstorm and list all possible solutions.
• Encourage innovative and creative approaches.
• Classify alternatives as short-term vs. long-term solutions.
• Tools: Mind Mapping, Decision Trees, Delphi Technique (Expert Consultation)
MIND MAPPING
• 📌 What is it?
• A visual tool that helps organize thoughts, brainstorm ideas, and connect related information.
• It starts with a central topic and expands outward with branches.
• 📌 How to Use It?
• Write the main problem or idea in the center.
• Create branches for sub-topics or causes.
• Keep expanding with solutions, risks, or further details.

Example in an RMG Denim Washing Plant:

💡 Problem: High defect rate in washed denim garments.
🖇 Mind Map Branches:
• Causes: Chemical imbalance, wrong wash temperature, poor machine maintenance.
• Solutions: Training, calibration, automated quality checks.
• Risks: High cost, downtime for training, resistance to change.
• ✅ Benefit: Helps in brainstorming and visualizing complex problems easily.
DELPHI TECHNIQUE (EXPERT CONSULTATION):
• 📌 What is it?
• A structured method where experts independently provide their opinions on a problem.
• Their responses are collected, summarized, and re-evaluated in multiple rounds until a consensus is
reached.
• 📌 How to Use It?
• Identify a panel of experts (internal or external).
• Send them a questionnaire about the issue.
• Collect and analyze responses.
• Repeat the process until experts agree on the best solution.
Example in RMG:
💡 Problem: Deciding on a new denim washing technique.
🖇 Steps:
• Round 1: Experts provide opinions on enzyme wash vs. ozone wash.
• Round 2: Responses are summarized, and experts give refined opinions.
• Round 3: A consensus is reached, recommending enzyme wash for better sustainability.
• ✅ Benefit: Helps in getting unbiased, expert-backed decisions.
DECISION TREES:
• 📌 What is it?
• A graphical tool that helps in making decisions by evaluating different choices and their possible outcomes.
• Each branch represents a decision path.
• 📌 How to Use It?
• Start with a decision point.
• List choices as branches.
• Attach possible outcomes and their probabilities.
Example in RMG:
💡 Decision: Should we upgrade the washing machines?
🖇 Decision Tree:
• Option 1: Upgrade to advanced washing machines.
• ✅ Outcome 1: Better efficiency, lower defects.
• ❌ Outcome 2: High investment cost.
• Option 2: Continue with existing machines.
• ✅ Outcome 1: No additional cost.
• ❌ Outcome 2: Higher defect rate, possible shipment delays.
• ✅ Benefit: Helps in structured decision-making by evaluating risks and benefits.
SUMMARY TABLE:
Technique Best For Key Benefit Example in RMG
Brainstorming & Identifying causes of
Mind Mapping Clear visual structure
organizing ideas denim defects
Choosing between
Evaluating choices Logical decision-
Decision Trees new vs. old washing
with outcomes making
machines
Expert consultation Unbiased expert Selecting the best
Delphi Technique
for complex problems insights washing technique
STEP-4: EVALUATE ALTERNATIVES & WEIGH RISKS
Compare different options based on:
• Feasibility – Can it be implemented?
• Effectiveness – Will it solve the problem?
• Cost & Resources – Is it affordable?
• Risks & Uncertainty – Are there unintended consequences?
• Tools: Decision Matrix, Risk Analysis, Sensitivity Analysis.
DECISION MATRIX:
• 📌 What is it?
• A structured tool used to compare multiple options based on key criteria.
• It assigns scores to different factors to help choose the best alternative.
• 📌 How to Use It?
• List down the options (e.g., different suppliers, machines, or processes).
• Define evaluation criteria (e.g., cost, efficiency, quality, reliability).
• Assign a weight to each criterion based on importance.
• Score each option and calculate the total weighted score.
📌 Example in RMG:
💡 Decision: Choosing a new enzyme supplier for denim washing.
✅ Best Option: Supplier C (7.8) has the highest total score, making it the best choice.

Criteria Weight (%) Supplier A Supplier B Supplier C

Cost 30% 7 (2.1) 9 (2.7) 6 (1.8)
Quality 40% 8 (3.2) 7 (2.8) 9 (3.6)
Lead Time 30% 6 (1.8) 7 (2.1) 8 (2.4)
Total Score 100% 7.1 7.6 7.8
RISK ANALYSIS:
• 📌 What is it?
• A process to identify, assess, and mitigate risks before making a decision.
• Helps avoid potential losses, delays, or failures.
• 📌 How to Use It?
• Identify potential risks (e.g., machine failure, supply chain delays, regulatory issues).
• Assess likelihood (Low/Medium/High) and impact (Low/Medium/High).
• Develop mitigation strategies to reduce risks.

📌 Example in RMG:
💡 Risk Analysis for Switching to New Washing Chemicals
✅ Outcome: This analysis helps in planning ahead to minimize disruptions.

Risk Factor Likelihood Impact Mitigation Strategy

New chemical damages Test in small batches before full
Medium High
fabric implementation
High cost High Medium Negotiate bulk discounts
Supplier delay Medium High Keep a backup supplier
SENSITIVITY ANALYSIS:
• 📌 What is it?
• A technique to check how changes in one factor affect the outcome.
• Helps understand best-case, worst-case, and most likely scenarios.
• 📌 How to Use It?
• Choose the key factor to test (e.g., raw material cost, production speed).
• Adjust its values to see how the overall result changes.
Example in RMG:
💡 Effect of Cotton Price Fluctuation on Profit Margins
✅ Outcome: If cotton prices increase too much, profit margins drop significantly. The factory may need
alternative suppliers or cost-cutting strategies.

Cotton Price ($/kg) Production Cost ($) Profit Margin (%)

2.5 (Low) $500,000 15%
3.0 (Normal) $550,000 10%
3.5 (High) $600,000 5%
STEP-5: MAKE & IMPLEMENT THE DECISION
• Select the best alternative based on evaluation.
• Develop an action plan for execution.
• Define roles, responsibilities, and timelines.
• Tools: Project Management Framework, Gantt Charts, PDCA (Plan-Do-
Check-Act).
PROJECT MANAGEMENT FRAMEWORK:
• 📌 What is it?
• A structured approach to managing projects from start to finish.
• Ensures that all steps—planning, execution, monitoring, and completion—are
followed properly.
• 📌 Basic Steps in Project Management:
1. Initiation → Define project scope (e.g., setting up a new denim finishing line).
2. Planning → Identify tasks, budget, resources, and timelines.
3. Execution → Start the work according to the plan.
4. Monitoring & Controlling → Track progress and make adjustments.
5. Closure → Final review and project handover.
Example in RMG:
💡 Project: Setting up a new laser machine for sustainable denim finishing.
✅ Plan: Define budget, machine selection, staff training, and installation timeline.
✅ Monitor: Check machine performance, troubleshoot issues, and optimize efficiency.
✅ Complete: Ensure production runs smoothly before full-scale implementation.
GANTT CHARTS:
📌 What is it?
• A visual timeline of a project, showing tasks and deadlines.
• Helps track who is doing what and when.
📌 How to Use It?
• Break down the project into tasks.
• Assign each task a start & end date.
• Show dependencies (tasks that must be completed before others).
Example in RMG:
💡 Project: Launching a new denim wash style.
Task Start Date End Date Responsible Person
Design approval Feb 1 Feb 5 Designer
Fabric sourcing Feb 6 Feb 12 Procurement
Sample production Feb 13 Feb 20 Sample Team
Customer approval Feb 21 Feb 25 Merchandiser
Bulk production Feb 26 Mar 10 Production Team

✅ Benefit: Everyone knows their deadlines, preventing delays.

PDCA (PLAN-DO-CHECK-ACT):
📌 What is it?
• A continuous improvement cycle to solve problems and improve
processes.
• Helps teams test changes before full implementation.
📌 Steps in PDCA:
1. Plan → Identify the issue and create a strategy.
2. Do → Implement a small-scale solution or test.
3. Check → Analyze results and compare with expectations.
4. Act → Make necessary improvements and scale up if successful.
📌 Example in RMG:
💡 Problem: High defect rate in jeans stitching.
✅ Plan: Investigate causes, check operator skills, review machines.
✅ Do: Conduct training sessions and adjust machine settings.
✅ Check: Monitor defect rates over a week.
✅ Act: If defects decrease, apply changes to the entire production line.
🔹 SUMMARY TABLE:

Tool Purpose Benefit Example in RMG

Project Management Organizes project Ensures smooth Setting up a new denim
Framework workflow execution finishing line
Visualizes project Planning a new denim
Gantt Charts Helps track deadlines
timeline wash launch
Continuous process Reduces errors & Reducing stitching
PDCA Cycle
improvement increases efficiency defects
STEP-6: MONITOR & REVIEW THE DECISION
• Track progress and evaluate success.
• Collect feedback and identify areas for improvement.
• If the decision fails, adjust the approach and try a different solution.
• Tools: Key Performance Indicators (KPIs), Feedback Loops,
Continuous Improvement (Kaizen).
KPI’s (KEY PERFORMANCE INDICATORS?
•Measurable values that show how effectively a company or team is achieving its goals.
•Helps track progress, identify issues, and improve decision-making.
📌 Types of KPIs in RMG (Denim Factory):

KPI Name What It Measures Example Target

Number of garments produced
Production Efficiency 80 jeans/hour
per hour
Percentage of defective
Defect Rate <3% defects per batch
products
On-Time Delivery Orders shipped on time 95% on-time shipments
Machine Downtime Time lost due to machine issues <5% per shift

📌 Example:
💡 If defect rates increase from 3% to 8%, KPI analysis helps identify whether it’s due to
fabric issues, machine problems, or operator errors.
• ✅ Benefit: Helps maintain quality, efficiency, and customer satisfaction.
FEEDBACK LOOP:
• A process of collecting feedback and using it to improve performance.
• Ensures that mistakes are corrected, and processes get better over time.
📌 Types of Feedback Loops:
1. Positive Feedback Loop → Reinforces Good Practices
Example: Operators meet efficiency targets → Reward system introduced → Productivity
increases further.

2. Negative Feedback Loop → Identifies and Corrects Problems

Example: High defect rate detected → Root cause analysis → Training provided → Defect rate
reduces.
📌 Example in RMG:
💡 Problem: Customers complain about inconsistent washing quality in denim.
✅ Solution: Collect feedback → Adjust wash recipe → Implement stricter quality checks →
Monitor improvements.
• ✅ Benefit: Continuous learning and correction lead to better quality and efficiency.
 KAIZEN:
• Japanese concept meaning "change for the better."
• Focuses on small, continuous improvements rather than big, one-time changes.
• Encourages teamwork, efficiency, and problem-solving at all levels.
📌 How to Apply Kaizen in RMG?

Step Action

Identify Problem Find a process with inefficiencies (e.g., long changeover time in sewing).

Analyze Root Cause Use 5 Whys or Fishbone Diagram to find the issue.

Implement Small Change Train workers, optimize workstation layout, reduce waste.

Monitor Results Check if production time improves, defects decrease.

Standardize & Repeat If successful, make it a standard process and move to the next issue.

📌 Example in RMG:
💡 Problem: Time lost during fabric roll changes.
✅ Kaizen Solution: Pre-load fabric rolls near machines → Reduce changeover time → Increase efficiency.
• ✅ Benefit: Sustained improvements in productivity, quality, and cost savings.
Summary Table

Tool Purpose Benefit Example in RMG

Measure performance Ensures efficiency & Monitoring defect rates
KPIs
& track progress quality in jeans production
Adjusting wash recipe
Collect insights & make Improves processes &
Feedback Loops based on customer
corrections customer satisfaction
feedback
Continuous small Increases productivity & Reducing changeover
Kaizen
improvements reduces waste time in sewing
 CHALLENGES IN STRUCTURED DECISION MAKING:
• Time Constraints – Finding a balance between analysis and speed.
• Biases & Subjectivity – Overcoming cognitive biases like confirmation bias.
• Data Overload – Avoiding "paralysis by analysis".
• Resistance to Change – Managing people’s reactions to decisions.

CASE STUDY: APPLICATION IN RMG DENIM FACTORY

Scenario: A washing plant faces high rejection rates due to shade variation in denim fabric. The team must
decide on a corrective action.
• Applying SDM Steps:
1. Define the problem – Identify why the shade variation is happening.
2. Gather & analyze data – Review fabric, dyeing process, and QC reports.
3. Identify alternatives – Adjust chemical composition, improve training, etc.
4. Evaluate alternatives – Cost-benefit and feasibility analysis.
5. Make a decision – Implement the best corrective action.
6. Monitor results – Ensure that quality improves over time.