Understanding "Number of Distinct Categories" in Your Gage R&R Output

This week I was confronted with a question it came from a teammate about what "ndc" actually means in R&R study according to AIAG brochure).
I've found the response in the blog I reproduce hereby.
Hope, you enjoy it.

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By Andy Cheshire

Recently I've been thinking about common questions that customers ask when running a Gage R&R analysis in Minitab.

For example, when you run a Gage R&R, the last result that shows up in the session window is a value for the ‘Number of Distinct Categories’.  This one metric is something that customers seem to overlook when they call to discuss their Gage studies.

  

This value represents the number of groups your measurement tool can distinguish from the data itself. The higher this number, the better chance the tool has in discerning one part from another.

So how do you know if your number is high enough? Fortunately, there are guidelines from the Automotive Industry Action Group (AIAG):

When the number of categories is less than 2, the measurement system is of no value for controlling the process, since one part cannot be distinguished from another.
When the number of categories is 2, the data can be divided into two groups, say high and low.
When the number of categories is 3, the data can be divided into 3 groups, say low, middle and high.
A value of 5 or more denotes an acceptable measurement system.
Let‘s say you do get a value below 5. What next? Well, there are two things you can do.

Analyze more distinct parts that truly represent the entire range of the process.
Increase the precision of your measurement tool.
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