SPC…One Great Point

I recently asked the question, SPC…What’s the point? in a post that was more about leadership than SPC.  That blog stressed that Lean Leaders don’t implement systems like Statistical Process Control unless their team has the knowledge and tools required to use them properly.  So what is the point?

With the right knowledge and tools, SPC has a great point.  All data has background noise.  Only some data contain true signals.  The normal variation that occurs in all processes can make it difficult to recognize the difference between background noise or normal variation and a real signal to act.  The point is that the proper use of Statistical Process Control will help you sort through the noise and to recognize true signals.

SPC helps you sort through the noise by enabling you to understand process variation.  This understanding helps you to avoid two common mistakes:

  1. Failing to recognize that it’s time to act.  This happens when you miss a signal.  You may be tempted to explain away the reasons why the data is trending the wrong way but this could cost you months of reaction time if you missed a statistical signal.
  2. Reacting to normal variation as if it is a signal.  In other words, this is taking action when there is not statistical reason to react (interpreting background noise as a signal).  This is probably the more common issue in today’s world and it can make things worse by causing more variability in the process.

Nothing, not even SPC can completely eliminate making these mistakes.  Using Control Charts however will strike a balance between these errors and will minimize the times you fail to respond or react in error.  Control Charts will also predict future performance.

This leads to a couple corollaries:

  1. You cannot improve a process that is not under control.  In this case, you must take action to get your process under control before taking steps to improve the process.
  2. You cannot expect a process that is in statistical control to get better results unless you change the process.  Trying harder and superficial efforts to improve will not make significant change and your results will only swing within the range of normal variation.

Too many managers treat any data point going in the wrong direction as a trend that must be corrected.  Others treat any data point going in the right direction as confirmation that they are a great manager.   Either way, they don’t recognize normal variation.

Can you share an example of where Statistical Process Control helped you avoid these common mistakes?

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Dr. Donald Wheeler’s book Understanding Variation: The Key to Managing Chaos inspired this post and is a great source on this topic.  The common errors discussed here are from Dr. Wheeler’s book.

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About Christian Paulsen

Christian Paulsen is an Executive Consultant with 20 years of Lean Manufacturing. Chris adds value to organizations by driving process improvement and bottom line savings. Chris intends to help others by sharing the lessons learned after a quarter century of operational leadership, marriage, parenting, and even longer as a Cubs fan. Your comments on this blog are welcome. You can also connect with Chris via LinnkedIn, Twitter, and Facebook in the right sidebar. Chris welcomes your comments. Christian's professional services are available by contacting him through LinkedIn (right side bar)
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2 Responses to SPC…One Great Point

  1. sabline says:

    Christian I stop by and read you post here and there and this one really caught my eye. It is a hard topic to keep you audience really engaged so I was happy you kept it short. It is so important that we use this data in business and would love to hear more how you us stats in your life to keep your business on track.

    • Interesting question. I have been taking a more statistical view of Key Performance Indicators and other data over the last couple years. Weight control in food plants is the most common use of control charts I have seen. I have been using control charts when looking at operating efficiencies of manufacturing lines and downtime data which isn’t particularly hard but I don’t see others doing this yet. As for my business, I’ve taken a statistical look at tracking sales calls and the effectiveness of those calls. The jury is out on the last one but I have been very pleased with how enlightening the control charts and other tools have been.

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