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Quality Progress | aPril 2012 the 7 New Quality tools Volume 45/Number 4
Putting Best Practices to Work
www.qualityprogress.com | april 2012
Moneyball: a winning strategy? p. 36
the 7 new quality tools: when the basics just aren’t enough p. 18
Quality Can Drive Economic Recovery p. 12
Meet the 2011 Baldrige Recipients p. 30
Learn to see your data.
e-learning for statistics
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Select the Enterprise Quality &
QMS Software ISO/TS FMEA
Product Data Management
Quality Compliance Software Manufacturing
ISO 9000 PDM Quality Software ISO 13485 NCM
Supplier & Materials
Nonconforming Materials ISO 9000
ISO/TS MRB QMS Software
Supplier & Materials
ISO 9000 Quality Assurance
CAPA QMS Software
Supplier & Materials QMS QMS Software
Product Data Management
Product Data Management
Inspections Corrective Actions Manufacturing
Quality Management Software Supplier Rating
Nonconformance FMEA Quality Systems Software Receiving
Product Data Management ISO/TS 16949
Quality Compliance QMS PDM Manufacturing Receiving Nonconformance Quality Assurance Materials Compliance ERP CAPA
Quality FMEA Manufacturing ISO 13485
ISO 13485 PDM
...with the most VALUE
: Integrated modules for Quality and FDA Compliance Management: CAPA • Change Management • Risk Assessment ...and more! Risk Management in the Quality System Flexible: Leading edge ﬂexible workﬂow adapts to all business processes, without programming : Integrates with 3rd party business systems Scalable: Readily adapts to enterprise environments, and deployments Supplier Management: Collaborates with Suppliers through Supplier Business Intelligence in decision-making with hundreds of conﬁgurable charts and reports
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Putting Best Practices to Work | April 2012 | www.qualityprogress.com
Beyond the Basics
You've heard about the seven basic quality tools, but how much do you know about the seven new quality tools?
20 21 22 25 26 27 28
Affinity Diagrams Arrow Diagrams Matrix Data Analysis Matrix Diagrams Process Decision Program Charts Relations Diagrams Tree Diagrams
by Grace L. Duffy, Scott Laman, Pradip Mehta, Govind Ramu, Natalia Scriabina and Keith Wagoner.
One Size Fits All
Profiles of four organizations that ratcheted up their quality efforts and claimed 2011 Baldrige awards. by QP Staff
Only @ www.qualityprogress.com
• ’Beyond’ Bonuses
A webcast series featuring authors of “Beyond the Basics,” p. 18, shows and tells more about the seven new quality tools, plus a sidebar with figures and tables describing prioritization matrixes, sometimes a stand-in for matrix data analysis. Scatter plots that show the role on-base percentage plays in the Moneyball method described in “Fair or Foul?” p. 36. A flowchart, check sheet and other figures to illustrate an organization’s challenges in lining up the next project, the topic of 3.4 per Million (“Next in Line,” p. 44). Examples of fishbone diagrams that can be used to jump-start a lean Six Sigma project, the subject of Back to Basics (“Creative Combination,”p. 72). Spanish version is also available.
Fair or Foul?
Baseball’s Moneyball method shows that using some analytics are powerful, but they can only take a team so far. by I. Elaine Allen and Julia E. Seaman
• Not Fair Enough
• Next in the Queue
• Fishbone Focus
• Implementing a QMS for the long haul. • Undermining ISO 9000?
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• The best Six Sigma deployment model. • Accepting—and acting on—an audit’s results.
• Error off the field in Major League Baseball? • A look ahead to ASQ’s world conference.
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6 12 44
Tools: the sequel.
48 50 52 61 71 72
Quality in the First Person
Checklists for everyday activities.
To learn more about the manuscript review process, helpful hints before submitting a manuscript and QP’s 2012 editorial planner, click on “Author Guidelines” under “Tools and Resources” at www.qualityprogress.com.
Recovery requires shift in mindset.
The whistle-blower’s dilemma.
3.4 per Million
Always something in the queue.
Statistics Roundtable Standards Outlook One Good Idea Back to Basics
Inside overlapping confidence intervals.
Revisiting the rules of internal control.
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Comparing when data are limited.
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Tools to tackle an LSS project.
- HR AND SR
Developing talent in a setting of sustainability and social responsibility.
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Membership and Subscriptions
Six Sigma to implement lean social responsibility at your organization.
ASQ’s Vision: By making quality a global priority, an organizational imperative and a personal ethic, the American Society for Quality becomes the community for everyone who seeks quality technology, concepts or tools to improve themselves and their world.
Quality Progress (ISSN 0033-524X) is published monthly by the American Society for Quality, 600 N. Plankinton Ave., Milwaukee, WI 53203. Editorial and advertising offices: 414-272-8575. Periodicals postage paid at Milwaukee, WI, and at additional mailing offices. Institutional subscriptions are held in the name of a company, corporation, government agency or library. Requests for back issues must be prepaid and are based on availability: ASQ members $15 per copy; nonmembers $23 per copy. Canadian GST #128717618, Canadian Publications Mail Agreement #40030175. Canada Post: Return undeliverables to 2835 Kew Drive, Windsor, ON N8T 3B7. Prices are subject to change without prior notification. © 2012 by ASQ. No claim for missing issues will be accepted after three months following the month of publication of the issue for domestic addresses and six months for Canadian and international addresses. Postmaster: Please send address changes to the American Society for Quality, PO Box 3005, Milwaukee, WI 53201-3005. Printed in USA.
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Forum or Division Selection As part of your Full membership you receive participation in one topic- or industry-specific Forum or Division. Use the list below to indicate the Forum or Division number and name. _____ ______________________ $_____________ (#) Name included Additional Forums and Divisions may be added to all levels of membership. Please indicate in the list below the additional Forums or Divisions you would like and total the number you have selected. ❑ Human Development and Leadership (13) ❑ Inspection (9) ❑ Lean Enterprise (23) ❑ Measurement Quality (17) ❑ Product Safety and Liability Prevention (25) ❑ Quality Management (1) ❑ Reliability (8) ❑ Service Quality (16) ❑ Six Sigma (26) ❑ Software (14) ❑ Statistics (12) ❑ Team & Workplace Excellence (27) Additional Forum and Division selections: Full or Associate member ________ x $10 = $________________________
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tools: the Sequel
Your guide to 7 more basic quality tools
In january 2009, we published one of our most popular cover stories ever, “Building from the Basics: The seven essential quality tools,” which you can find at http://asq.org/ quality-progress/2009/01/basic-quality/building-from-the-basics.html. Readers wrote to say how much they appreciated the refresher on “the old seven”—the foundation of any quality pro’s tool box. Quality veterans—who know the tools inside and out—said they were happy to have a neatly packaged assemblage of tools to share with colleagues who were newer to quality. A few years have gone by, and we thought it was high time to revisit the basics once again. This time, though, we detail the “new seven,” as identified by the Union of Japanese Scientists and Engineers (JUSE) in 1976. Its purpose for grouping these tools? To promote ways to innovate, communicate and plan major and complex projects. We hope you find this sequel, “Beyond the Basics,” p. 18, just as riveting as you did the original. Don’t miss exclusive webcasts with some of the article’s authors at www. qualityprogress.com that will debut this month. And find these and more tools and templates in the Knowledge Center at www.asq.org. While we’re on the subject of movies, what do you get when you cross a star-studded cast with the power of sabermetrics? The critically acclaimed, Oscar-nominated movie “Moneyball,” which serves as the basis for the article “Fair or Foul?” p. 36. Authors I. Elaine Allen and Julia E. Seaman take a deep look at the Moneyball method the Oakland A’s employed beginning in the 2002 season and explain whether the tactic really made a difference long-term for the team. They also reveal whether the method is played out. To round out our feature roster, we take a look at the common threads present among this year’s Baldrige recipients. While the organizations themselves couldn’t be more different, all used the Baldrige criteria as the basis for vast quality improvements—think 98% customer satisfaction scores or a 40% drop in expensive ER visits. Get a glimpse into how these four organizations achieved Baldrige-level excellence in “One Size Fits All,” p. 30. QP
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to promote discussion of issues in the field of quality and ensure coverage of all responsible points of view, Quality Progress publishes articles representing conflicting and minority views. opinions expressed are those of the authors and not necessarily of ASQ or Quality Progress. use of the ASQ logo in advertisements does not necessarily constitute endorsement of that particular product or service by ASQ.
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Link in a chain
In the article “Get on Board” (February 2012, pp. 37-40), the author did an excellent job arguing that employee involvement is critical to a successful quality management system (QMS). Citing appropriate scholarly sources and providing empirical findings can further enhance the content of this article. The author makes the following statement: “ISO 9001:2008 specifies QMS requirements an organization must achieve to consistently provide products or services that meet customer or regulatory requirements.” Regulatory requirements are not optional. ISO 9001:2008 clearly specifies that an organization must fulfill customer requirements and regulatory requirements. Quality improvement benefits need to be reviewed from the perspective of W. Edwards Deming’s chain reaction: 1. Improving quality leads to decreased costs. 2. Decreased costs lead to productivity improvements. 3. Productivity improvements lead to increased market share, better product quality and lower price. 4. Increased market share leads to staying in business and creating more jobs.1 The real motivation for implementing quality standards should be continuous quality improvement and customer satisfaction. Some organizations implement QMS frameworks and standards for the wrong
1. W. Edwards Deming, Out of the Crisis, Massachusetts Institute of Technology Press, 1986.
PAST CHAIR CHAIR
E. David Spong, The Boeing Co. (retired) James J. Rooney, ABS Consulting
reasons, such as using a QMS just to get certification, or the wrong way, such as using a QMS with no or minimal employee involvement. These organizations are in it for the short-term benefits and can’t take advantage of the long-term benefits a sound implementation can offer. Kishore Erukulapati Renton, WA
John C. Timmerman, Marriott International Inc. William B. (Bo) McBee, Hewlett-Packard Co. (retired)
Karla Riesinger, ASQ
Delivering quality-as-process and qualityas-result is the goal of quality professionals, correct? If we agree nothing is or can be unchanging, and we are planning for alternative futures, we need thinkers, doers, leaders and usable tools. Yes, ISO 9000 is a usable tool. It is in the tool kit along with many other tools. Bob Kennedy has given us important issues to think about in his article (“Taken for Granted,” February 2012, pp. 12-13). As quality professionals, we support results. We support systems that deliver results. If we undermine our systems and if we lose our tools, there are going to be significant problems. If we, the “quality experts” are undermining one of our tools, we are causing a problem. Kennedy’s ideas had better be considered. Jerry Brong Ellensburg, WA
J. Michael (Mike) Adams, Allegheny Energy Inc. (retired) Belinda Chavez, United Space Alliance Darlene Stoddard Deane, Automotive Components Holding LLC Alexis P. Goncalves, Pfizer Inc. Kathleen Jennison Goonan, Goonan Performance Strategies Harold P. Greenberg, American Certification Corp. Eric A. Hayler, BMW Manufacturing Co. LLC Marc P. Kelemen, NanoSynopsis LLC Lou Ann Lathrop, Chrysler LLC Joanne D. Mayo Elias Monreal, Industrial Tool Die & Engineering Richard A. Perlman, Bayer HealthCare Art Trepanier, Lockheed Martin G. Geoffrey (Geoff) Vining, Virginia Tech J. Eric Whichard, JE Whichard & Associates Steven E. Wilson, U.S. Department of Commerce Seafood Inspection Program
QP EDITORIAL REVIEW BOARD
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Brady Boggs, Randy Brull, Jane Campanizzi, Larry Haugh, Jim Jaquess, Gary MacLean, R. Dan Reid, Christine Robinson, Richard Stump
I. Elaine Allen, Andy Barnett, David Bonyuet, John Brown, Bernie Carpenter, Ken Cogan, Linda Cubalchini-Travis, Ahmad Elshennawy, Tim Folkerts, Eric Furness, Mark Gavoor, Kunita Gear, Lynne Hare, Ron Kenett, Ray Klotz, Tom Kubiak, William LaFollette, Shin Ta Liu, Pradip Mehta, Gene Placzkowski, Paul Plsek, Tony Polito, Peter Pylipow, Philip Ramsey, R. Dan Reid, Wayne Reynolds, John Richards, James J. Rooney, Anil Sengupta, Sunil Thawani, Joe Tunner, Jeffrey Vaks, Manu Vora, Jack Westfall, James Zurn
In YouR own woRds
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April 2012 • QP
Six Sigma central
Q: Which is the right way to deploy Six Sigma initiatives: 1. Set up a separate Six Sigma department headed by a newly created Six Sigma manager or site deployment manager, with all Black Belts (BB) being a part of this department. 2. Keep all BBs in their original departments, and have them report to their department managers, as well as Six Sigma leadership, which is not a newly created position, but instead is an existing manager who takes this task as an additional responsibility. This way, management can leverage BB resources organizationwide based on need. David Chen Lisle, IL A: Six Sigma deployment models vary depending on the organization’s goals, available resources, number of employees, geographic distribution, process maturity and culture. Each has its own advantages and risks. Sometimes, it helps to think about where your organization is in its deployment life cycle—launch, growth, expansion or mature—when selecting the appropriate deployment model. For larger, more geographically dispersed organizations that are just embarking on their Six Sigma journey, I would recommend a centralized or “federal” model that has a corporate program management office (PMO) responsible for designing the curriculum and training program, selecting projects, and executing and managing those projects with its own dedicated BBs. In this case, there’s a need to generate widespread transformational change, prove the business case, build credibility and gain momentum by tackling highly visible projects and getting some quick wins. This model requires a strong corporate PMO to enforce relentless consistency, adherence to common process, discipline, execution cadence and a common language. While the centralized model offers more control over deployment decisions, timing and outcomes, it does require significant management oversight. Over time, however, the model runs the risk of never fully integrating the Six Sigma method, skills and mindset into the rest of the organization’s business units, preventing them from becoming more self-sufficient. This, in turn, can create a certain level of alienation between the PMO and the business units, even leading to a perception of elitism—corporate BBs vs. all others. A decentralized or “state” model is characterized by a smaller PMO with more BBs embedded in the business units. The PMO continues to provide the basic infrastructure—tools, training, project tracking and reporting—but leverages the BBs in the business units for identifying and executing the projects. Accountability at the business unit level is paramount. The decentralized model provides a more flexible approach for addressing the needs of the business units, particularly as the deployment progresses, and more creativity and ownership is required. In that evolution, the organization moves from smaller, standalone projects to larger initiatives that cross business units, or shifts from traditional existing process improvement projects to designing new processes or new products. With this model, the PMO offers strategic support in terms of coordinating with other business units, helping build the business
QP • www.qualityprogress.com
Strive to understand your organization’s goals before designing your Six Sigma deployment.
case, and guidance or expertise in using methods such as design for Six Sigma. This model promotes self-sufficiency among the business units and fosters a more seamless cultural integration of the BBs. Decentralized deployment models generally do not work well until the organization has reached a certain level of process maturity, moving from initial launch to scale, replication and sustainment. For organizations without the resources to staff a team of full-time BBs to support all the business units, there is a third alternative: a hybrid approach in which the PMO maintains only a small cadre of BBs or Master BBs. While working on larger, more strategic initiatives, the BBs also train and mentor internal, part-time Green Belts (GB) supplied by the business units. These internal GBs work on projects sponsored by their business units. This model allows the PMO to effectively distribute resources and works well in smaller organizations during the early stages of a Six Sigma deployment. This is the model we currently use at my organization. Some possible limitations of this model are an overwhelmingly unbalanced ratio of GBs to BBs—10-to-1 is a good ratio—and the reliance on smaller, low-hanging projects that can be driven by part-time GBs.
For More InForMatIon
West, A.H. “Jack,” “Critical Stage,” Quality Progress, September 2009, pp. 22-27.
regardless of the model, I would stress one guiding principle: Form should follow function. In other words, strive to understand your organization’s strategic goals and objectives before designing the structure of the deployment. Peter J. Sherman Director, process excellence Cbeyond Inc. Atlanta
A: There is no justification for an auditee unilaterally closing a nonconformance report without taking corrective action just because the auditee does not agree with the nonconformance cited. If and when this happens, it’s up to the lead auditor, team leader or general auditor to raise this matter to the next level of management—preferably, to the client. The client is the person who originally authorized the audit and thus has a vested interest in an audit outcome; otherwise, the client would not have authorized the audit, even in the case of an internal audit. Every audit has a client, whether the audit is internal or external, and it’s up to this client to officially accept or not accept the closure of any nonconforming items. Therefore, the key is to figure out who the client is. In the case you detailed, it may be that the auditee is able to convince the client that the nonconformance cited in the internal audit does not matter much, and therefore no corrective action is required. In this case, I would highly recommend that auditors—either by themselves or through their boss—bring the client up to date about the incidents in which the auditee closed an incident of nonconformance without any corrective actions simply because the auditee did not agree with the nonconformance. Pradip Mehta Principal Mehta Consulting LLC Coppell, TX
Q: In my internal auditing activities, I have occasionally worked with auditees who unilaterally close nonconformity reports in response to audit corrective action requests without any corrective action being taken. Usually, the auditee cites as justification their disagreement with the auditor’s nonconformity finding. This does not seem to be supported by logic, research or any training I’ve had, but I also haven’t seen it expressly prohibited. Assuming there’s proper documentation of the requirement and evidence of the nonconformance, is there any justification for an auditee proceeding in this manner? Peter McGuiness San Ramon, CA
aSked and anSwered
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April 2012 • QP
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• The Spanish version of the CSSGB Primer. • Can be downloaded electronically. • The instructor electronic format is fun.
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Implementing Six Sigma
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by Tracy Omdahl Contains 2800 deﬁnitions. Helpful for Reliability and Quality Engineers.
ISO 9001 Internal Auditing Primer
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Theory of Evolution
Radical change is needed for the global economy to truly recover
In the Past decade, the face of the world has changed in many ways—from how we purchase and consume products to how we’ve become more intertwined, and perhaps even entangled, through global communication and financial systems. Our perception of big business has also changed after seeing how banks and investment firms overindulged in high-risk moneymaking schemes and contributed to the recent economic calamity. But one of the biggest surprises of the recent recession, especially in the United States, has been that hyper consumerism is not a sustainable economic paradigm. In years past, it would have been cited as the reason for tremendous prosperity. Thumbing through a well-worn copy of W. Edward Deming’s timeless classic Out of the Crisis, it’s striking to see how the current economic crisis, as well as quality crises related to a few highly publicized recalls, can be attributed to the factors he pointed out so many years ago as roadblocks to quality and productivity.1 nizations create a precarious situation by jeopardizing long-term objectives, especially global economic and environmental ones. It is impossible to make quality decisions when you’re mesmerized by shortterm activities with no time to reflect. As Deming said, short-term profits aren’t an indication of management ability.
future will be based on the promotion of products and services people truly need, rather than marketing to create artificial demand for things they don’t. The future will focus on product and service differentiation through innovation and the ability to tackle new markets focused on less consumption and better quality of life. Superlative quality will become the superstructure on which the success of innovations will wholeheartedly depend. Single-use disposable products and the philosophy of built-in obsolescence will not be tolerated by an environmentally conscientious society focused on eliminating waste. No one will part ways with their hard-earned income for junk. The future will belong to courageous people willing to take risks. Taking a chance on hiring and investing in bright, creative people instead of figuring out how to cut them from the bottom line would be a good start. There are plenty of eager, talented individuals looking for work who shouldn’t just be given anything to do, but instead given a task they love so they have the opportunity to shine. A strong America will come from partnering with suppliers and customers in new, creative and mutually beneficial ways. Innovation will be the wave of the future, not only for products and services, but also for business processes. For an example, look at the brilliant business model of Blake Mycoskie, who created TOMS Shoes, one of the most successful footwear companies in the world, based on the premise of selling a pair of shoes and giving a pair away to someone in need.3 Thinking of some of the most influential and progressive organizations and products of the past decade—such as Apple with its
A coworker once told me that being focused on short-term goals is like getting laid off from your job and then bragging about how you’ve cut household costs by eating stale bread, not driving anywhere and reading only during the day to save electricity—while at the same time not understanding why no one will hire you. To survive—and even thrive—requires you to invest in your education and skills, develop an energized and fresh outlook, and perhaps buy a new suit, even if it doesn’t seem like the right financial thing to do at the moment. What does this teach us? We need to become comfortable making what appear to be short-term sacrifices for long-term goals. We need to trust ourselves in the face of an uncertain world.
On the heels of the recent economic downturn, managers continue to be galvanized by cost savings, focusing on reducing headcount, cutting employee education programs and eliminating research dollars to satisfy short-term financial incentives. In many cases, exaggerated cost savings have become a cancer with no chance of remission in the form of improved economic health or the manufacture of quality products. Many organizations simply don’t know what else to do, so they resort to what is simple rather than what is right. Focusing only on short-term financial gains shareholders demand, these orga-
The future will be based on a paradigm of environmental and economic sustainability. What will we do for the long haul? How can we band together as human beings for the greater good? Organizations can no longer continue to churn out products as if there will be infinite demand. One of the greatest business booms in the last decade in the United States has been self-storage lockers, which we need to hold all of our things. But how much stuff can we actually accumulate? The idea of an economic perpetualmotion machine simply doesn’t exist. The
12 QP • www.qualityprogress.com
iPhone or Google with its internet services and products—you see that quality and innovation are no longer mutually exclusive functions, but instead have merged. The Achilles heel for many organizations is an emphasis on mediocre products and services buoyed by a snail’s pace philosophy of change and innovation. As Deming pointed out more than a half-century ago, real change comes from the top. the results, such as Apple and its innovative former leader, Steve Jobs. Even the workforce is changing, with a higher level of educated workers in jobs that have traditionally been classified as blue collar or service. Traditional topdown obedience by corporations will no longer work if we expect to develop a synergistic relationship between employees and management to tackle the problems of the future, including answering the question, “What will become of quality?” The leaders who continue to focus on sustaining an environment of quotas, fear and general paranoia will go the way of the dinosaur and acquiesce to leaders who create an atmosphere of cooperation, respect and progressive thinking, and who can give their employees a vision and meaning to the work they do. In this paradigm, quality will no longer be a department or one person, but instead will become a fundamental way of thinking in the organization. This does not mean we’ll impose a uniform Orwellian mentality on people by putting them through Black Belt indoctrination camps. Instead, it signals the emergence of quality practitioners with the right education, a great attitude and a creative, revolutionary spirit. These individuals will provide the right tools for day-to-day tasks and leadership in the form of coaches and mentors who are not afraid to think. As Deming wrote, we need to adopt a new philosophy and to provide leadership, not mere management.5 As Peter Senge pointed out in The Fifth
Discipline, today’s problems come from yesterday’s solutions. Many of the problems
ishing innovation industry—one focused on design, form and sustainability. Art will meet science, and aesthetic quality requirements will be as vital as functional requirements. New quality tools based on holistic, system thinking will need to be developed to meet the challenge. Quality will never be dead, but it may reemerge as a completely new and broader entity. The quality
we encounter in our lives can be traced to a lack of systems thinking and even simple memory failure about how what was done in the past affects us today. Senge wrote that the future will require individuals and organizations to focus on learning, developing shared visions and understanding key interrelationships be-
And when the best rises to the top, we see
The future will belong to courageous people willing to take risks.
tween variables through systems thinking.7 Deming also advocated system thinking and the big-picture approach.8 Individuals and companies will need to challenge and redesign their mental models—otherwise, as Senge pointed out, many of our easy solutions will simply lead back to the same problem, perhaps in a slightly disguised form.9 The relationship between variables that affect the long-term outlook will need to be dealt with to address questions of economic and environmental sustainability, encourage ethical actions that benefit the planet and bring quality not only to products and processes, but also to people’s lives. practitioner of the future will need to be a visionary, creative, empathetic, a learner, an educator and, above all, a steward of responsible action. More than just a mere problem solver or someone tasked with oiling the machine, a quality practitioner will need to be courageous to inquire deeply into the nature of real-life quandaries through dialogue, something that isn’t reinforced in today’s business environment but is sorely needed. The world’s problems come from the human mind, which is where the solutions also reside. There is hope for a better world, but it requires a fundamental change to our mindset. QP
According to Daniel Pink in A Whole New Mind, we are leaving the Information Age, which is characterized by knowledge workers, and entering the Conceptual Age, which is characterized by creators and empathizers.10 Now is the time for radical change and an open mind. The right-brained, logical, linear-thinking quality practitioners of years past will benefit by being more like their left-brained, creative, non-linear marketing and innovative counterparts. In this world, the well-worn, invaluable tools of statistical process control will be reinvigorated by the emerging and flourTONy GOjANOviC is a statistician at MillerCoors in Golden, CO. He has a master’s degree in statistics from the University of Colorado in Denver and is a member of ASQ.
1. W. Edwards Deming, Out of the Crisis, MiT Press, 1986. 2. ibid. 3. Blake Mycoskie, Start Something That Matters, Speigal and Grau, 2011. 4. Deming, Out of the Crisis, reference 1. 5. ibid. 6. Peter Senge, The Fifth Discipline, Doubleday, 1990. 7. ibid. 8. Deming, Out of the Crisis, reference 1. 9. Senge, The Fifth Discipline, reference 6. 10. Daniel H. Pink, A Whole New Mind, Berkeley Publishing Group, 2006.
April 2012 • QP 13
Miscues and Misplays
Could a dose of quality help baseball improve its drug-testing process?
Baseball fans will likely argue more than usual this season: How will Albert Pujols adjust to the American League? Is Bobby Valentine the answer in Boston? Does baseball need the new wild-card round? There’s one discussion no one could have expected, but perhaps now it’s warranted following Ryan Braun’s successful appeal of his suspension for testing positive for performance-enhancing drugs: How could quality be used to avoid an apparent process breakdown and improve Major League Baseball’s (MLB) sample-collection system? “This is a quality issue—bar none,” said Linda Wawrzyniak, owner of Higher Standards Academy, which specializes in language, quality and skills training for athletes, business owners, medical professionals and management. She is also the founder of ASQ’s Quality in Athletics intrerest group (http://asq.org/quality-athletics). “The MLB, the NBA, the NHL, the NFL—anyone that does drug testing—they really need to learn from this and learn about quality procedures. It’s really important in what they do.” Just as teams gathered for spring training, news about Braun and his successful appeal got out. The Milwaukee Brewers outfielder received much attention, in large part, because he was the National League’s Most Valuable Player last season. But other drug cases are now starting to get press: Two NFL players suspended for violating the NFL’s drug policy tried to overturn rulings, contending the leagueappointed drug test collector mishandled their urine samples.1 In Braun’s case, the urine sample taken in October tested positive for elevated testosterone. Braun’s camp said the ratio was the highest ever recorded in baseball’s testing program. Braun faced a 50-game suspension for violating MLB policy, but he appealed, and the ruling was overturned in late February. Reports surfaced that an arbitrator had sided with Braun because of chainof-custody issues surrounding the handling of Braun’s urine sample. “I am the victim of a process that completely broke down and failed,” said Braun, who also called the testing “fatally flawed.”2 The sample, taken from Braun after a game in Milwaukee, was destined via FedEx for a lab in Montreal. Because a FedEx facility near the stadium had already closed for the day, the collector took Braun’s sample to his home, which some reports say is not unprecedented in drug testing. Braun questioned that decision and why the collector did not return to FedEx until 44 hours after the sample was submitted.3 There has been no official statement from the arbitrator explaining the decision. MLB officials defended the collector and the process, however, calling the system “the highest-quality drug testing program of any professional sports organization in the world.”4 However, “the arbitrator found that those instructions were not consistent with certain language in our program, even though the instructions were identical to those used by many other drug programs—including the other professional sports and the World Anti-Doping Agency,” according to an MLB statement.5 Some say Braun has escaped punishment through a loophole or technicality, while others contend these questions about the sample handling raise the possibility of tampering. “This [ruling] is really for the protection of the rest of the players,” said Wawrzyniak, who had just finished working with several teams during spring training. “What happened here was for the good of baseball.” “Everybody was doing what they felt was best,” she added. “Based on the conditions, they’re doing it [collecting and delivering the samples] the best they can. From this [Braun’s case], hopefully it will give baseball some better practices. And that’s always a good thing for every player.” Will the collection and handling process be closely reviewed and analyzed? Will the laboratory that conducted the testing be scrutinized as well? Will sample collectors be audited to ensure they have been complying with requirements and following the process? For now, MLB and the players union have said that the language in the drug policy regarding shipping of samples will be tightened.6 “As has happened several times before with other matters, this case has focused the parties’ attention on an aspect of our program that can be improved,” said players’ union director Michael Weiner. “After discussions with the commissioner’s office, we are confident that all collections going forward will follow the parties’ agreed-upon rules.”7 ––Mark Edmund, associate editor
1. Ken Benson, “Suspended Broncos May File a Lawsuit,” New York Times, March 10, 2012, www.nytimes.com/2012/03/11/sports/football/suspended-broncos-mcbean-and-williamsmight-file-lawsuit.html. 2. Clark Spencer, “Miami Marlins’ Gaby Sanchez Backs Ryan Braun’s Denial,” Miami Herald, Feb. 25, 2012, www.miamiherald.com/2012/02/24/2659560/miami-marlins-gaby-sanchez-backs. html. 3. Adam McCalvy, “Braun Speaks Out, Proud of ‘Integrity,’” mlb.com, Feb. 24, 2012, http://mlb. mlb.com/news/article.jsp?ymd=20120224&content_id=26834634. 4. Ibid. 5. Ibid. 6. Tom Haudricourt, “MLB Drug Process Designed to Prevent Tampering,” Milwaukee Journal Sentinel, Feb. 27, 2012, www.jsonline.com/blogs/sports/140591403.html. html?ua=iphone&dc=smart. 7. Ibid.
14 QP • www.qualityprogress.com
Mr. pareto head
By MIKe CROSSen
MeasureMeNTs CaN help proMoTe qualiTy CulTure
An organization’s leadership simply cannot dictate or mandate the use of quality, and instead must use measurements to promote a true culture of quality within the organization. That’s what a new research report from the American Productivity and Quality center (APQc) reveals based on responses from four high-profile organizations—Altera corp., caterpillar Inc., chemonics International and Textron Systems— that shared how they organize quality functions, measure their impact and ensure a quality culture is used to drive business value. “What this study underscores is that quality is not just a set of tools, concepts or policies; it is the way work is performed every day, by everyone,” said Travis colton, an APQc project manager. The report also identified eight imperatives for the enterprise quality function. To download the 62-page report, which was produced with support from ASQ, visit www. apqc.org.
More CusToMers leaviNg Big BaNks over Fees, serviCe
Fed up with new fees and poor service, more big-bank customers switched to smaller institutions last year than previous years, according to a recent J.D. Power and Associates’ survey. The defection rate for large, regional and mid-size banks averaged between 10% and 11.3% of customers last year, the survey showed. In 2010, the average defection rates ranged from 7.4% to 9.8% “When banks announce the implementation of new fees, public reaction can be quite volatile and result in customers voting with their feet,” said Michael Beird, director of the banking services practice at J.D. Power and Associates. customers do, however, weigh the price they pay against the value of their experience. “It is apparent that new or increased fees are the proverbial straws that break the camel’s back,” Beird said. “Service experiences that fall below customer expectations are a powerful influencer that primes customers for switching once a subsequent event gives them a final reason to defect. Regardless of bank size, more than one-half of all customers who said fees were the main reason to shop for another bank also indicated that their prior bank provided poor service.” Small banks and credit unions lost only 0.9% of their customers on average last year, a significant decline from the 8.8% defection rate in 2010. More details from the survey can be found at www.jdpower.com/content/ press-release/gAdX32O/2012-u-s-bank-customer-switching-and-acquisitionstudysm.htm (case sensitive).
April 2012 • QP 15
ASQ WORLD cONFERENcE
eveNT FeaTures 15 aWard reCipieNTs, TeaM CoMpeTiTioN
cincinnati children’s Hospital Medical center. Earlier this year, it was announced that Jim Bossert and Sister Mary Jean Ryan will be awarded ASQ’s Distinguished Service Medals at the conference. The award ceremony will take place Sunday, May 20, during the annual business meeting. agribusiness and leadership development strategies. • Joseph A. DeFeo, president and cEO of the Juran Institute and authority on transformational change systems and breakthrough management principles.
Thirteen quality thought leaders will be honored at this year’s ASQ World conference on Quality and Improvement next month in Anaheim, cA. The recipients are: • Feigenbaum Medal: Paulo Sampaio, university of Minho, Braga, Portugal. • Freund Marquardt Medal: Joseph J. Tsiakals, Baxa corp., Englewood, cO. • grant Medal: Thong Ngee goh, National university of Singapore. • hutchens Medal: Joel Makower, greenBiz group, Oakland, cA. • ishikawa Medal: H. James Harrington, Harrington Institute Inc., Los gatos, cA. • lancaster Medal: Janak Meht, TQM International Pvt. Ltd., Delhi, India. • shainin Medal: Jack B. ReVelle, ReVelle Solutions LLc, Santa Ana, cA. • shewhart Medal: Jerald F. Lawless, university of Waterloo, Ontario. • Brumbaugh award: Bradley Jones, SAS Institute, cary, N.c., and guest professor at universiteit Antwerpen, Antwerp, Belgium; and christopher J. Nachtsheim, carlson School of Management, university of Minnesota, Minneapolis. • gryna award: Michelle M. Deutsch,
Thirty-two teams have been selected as finalists for the 27th annual International Team Excellence Awards. The teams represent nine countries and will participate in live project presentations at the world conference. The team’s project summaries and profiles, along with the presentation schedule, can be found at http://wcqi.asq.org/teamcompetition/index.html. Watch for further coverage of the 2012 award recipients in future editions of QP. Visit http://wcqi.asq.org/index.html for more about the speakers, the 100-plus conference sessions and a complete schedule of events and details. you can also access a mobile site (http://team.asq.org/wcqi) while attending the conference to more easily browse sessions and other details about the event.
you may now preview what keynote speakers will say at the world conference. Audio interviews with many of the scheduled keynote speakers will be posted this month at http://wcqi.asq.org/speakers.html. Scheduled speakers are: • James Albaugh, executive vice president of the Boeing co., and president and cEO of Boeing commercial Airplanes. • carletta Ooton, vice president and chief quality, safety and sustainable operations officer for the coca-cola co. • Simon Sinek, leadership expert and author of Start With Why: How Great Leaders Inspire Everyone to Take Action. • Majora carter, president of Mcg consulting, a firm that advises organizations about climate adaptation, urban micro-
t-tests used to demonstrate comparability, described in One good Idea (“complicated comparison,” p. 71).
QuICk pOll RESulTS
Each month at www.qualityprogress.com, visitors can take an informal survey. Here are the numbers from a recent Quick Poll: “how would you describe your email use?” • keeping up, but it takes too much time. • Totally in control. • can’t keep up with my overloaded inbox. Visit www.qualityprogress.com for the latest question: “What’s the best way to build a successful baseball team?” • count on development of drafted players. • Throw money at high-priced free agents. • use analytics to find hidden gems. 46.2% 36.2% 17.5%
This month, listen to a webcast series with the authors of this month’s cover story, “Beyond the Basics,” p. 18, telling more about the seven new quality tools and how to use them.
REady TO GO
One quality professional shares her kayaking and hiking gear lists in this supplement to Quality in the First Person (“Quality Assurance at Home,” p. 48).
An additional figure that shows the results of the two one-sided
16 QP • www.qualityprogress.com
NeW gM For asq ChiNa Fred Zhang was recently appointed general manager of ASQ china. Zhang previously worked for Bureau Veritas (BV) ZhaNg china, serving as its director for the greater china region and leading a team providing management certification service in quality, environmental, health and safety, and social accountability fields. Zhang is based in ASQ china’s Shanghai office. JourNal added To iNdeX Quality Engineering, a journal co-published by ASQ and Taylor & Francis group, has been added to Thomson Reuters Science citation Index. The index provides citation data—impact factors—from science and technology journals throughout the world, measuring how often a journal article has been cited. The data help determine how journals are
evaluated and viewed, and it can raise a publication’s prestige and reputation when more readers and authors see how often a publication is cited. Quality Engineering’s inclusion in the index will be effective back to volume 21 (or 2009) content. TWo NeW Board MeMBers Eric A. Hayler of BMW Manufacturing co. in Boling Springs, Sc, and g. geoffrey Vining of Virginia Tech in Blacksburg have been named to the ASQ Board of Directors. They replace two directors who were appointed to serve additional six-month terms while ASQ transitioned its fiscal year from a July 1 to a Jan. 1 start. douBle BuCks iN May ASQ’s member referral program will feature “double bucks” in May for ASQ members who refer new members. Instead of receiving five ASQ bucks for each member referred, you will get 10 to use toward ASQ Quality Press books, standards, certification, training,
conferences and your own membership renewal. Visit http://asq.org/refer for more about the program. TraNsiTioN plaNs The Baldrige Enterprise has unveiled details on its plans to transition its business model after federal funding was eliminated from the program’s budget this year. For more details, visit www.nist.gov/baldrige/transition/index.cfm. NoMiNaTioNs soughT ASQ is now accepting nominations for Six Sigma Forum Magazine’s editor position. Responsibilities include maintaining a qualified editorial review board, recruiting authors, overseeing the submission and peer review of suitable content, and building awareness of SSFM at conferences and through social media. The new editor’s term is 2013-2016. Send questions and nominations to William Tony, ASQ publisher, at email@example.com. For more information about SSFM, visit http://asq.org/ pub/sixsigma.
FirsT eXeCuTive To BaCk deMiNg dies
William E. conway, known by many as the first Fortune 500 executive to work with W. Edwards Deming and truly embrace continuous improvement methods, has died. He was 85. The 1983 recipient of ASQ’s george D. Edwards Medal, he was president and cEO of Nashua corp. when he was interviewed in “If Japan can … Why can’t We?” a 1980 documentary that introduced many of Deming’s methods to American industry. conway later formed conway Management co. to help organizations improve operational effectiveness. He also authored many quality-related articles and two books: The Quality Secret: The Right Way to Manage and Winning the War on Waste: Changing the Way We Work. conway’s full obituary can be found at www. davisfuneralhomenh.com/?menuitem=557& siteid=79&action=1&value=12&obituaries_ action=2&obituaryid=111593.
ASQ SuRVEy OF ENgINEERS
hiTTiNg The Books pays oFF
Long hours studying to succeed and maintain high grades in science and math classes was the primary challenge most engineers said they faced while they pursued their degrees, according to a recent ASQ survey. The biggest factor in their success as engineers was the amount of time they spent studying, according to 43% of the respondents. Twenty-seven percent of engineers surveyed said the instruction they received from high school teachers and college professors had the most influence in their success as engineers. The latest ASQ-Harris Interactive Survey follows a previous study that reported 67% of sixth through 12th-graders said they were interested in pursuing a career in science, technology, engineering and math (STEM), but they were worried about obstacles that might block their pursuit of professions in those areas. The results of both surveys were released during National Engineers Week. One-quarter of those students said they felt pursuing a STEM career involves too much work and studying compared with other career paths. One-quarter also said they were concerned their grades in math and science weren’t good enough. Most engineers polled in the latest survey said they are satisfied with their career: 49% said they are most satisfied with the challenging and interesting nature of engineering, and 35% are most satisfied with their contributions to projects and products. For more about the surveys, visit www.asq.org/media-room/index.html.
April 2012 • QP 17
Seven new quality tools help innovate, communicate and plan
A movie sequel often can be as, if not more, captivating
than the original. Take “The Godfather: Part II.” Remember “The Empire Strikes Back”? More recently, what about “The Lord of the Rings: The Two Towers”? Audiences everywhere couldn’t wait to get inside theaters on opening night to see what happened to the Corleone family, Luke Skywalker, and Frodo and Sam. Essentially, a sequel builds on the original, continuing a journey with familiar characters and settings, developing ideas and unveiling more insight. In that spirit, we asked a supporting cast of QP contributors to help us write the script for the sequel to our January 2009 feature on Kaoru Ishikawa’s original seven quality tools.
Back then, we featured snapshots of each of the “old seven”—cause and effect diagrams, check sheets, control charts, histograms, Pareto analysis, scatter plots and stratification—offering the basics on what you need to understand about them and how they are used. This month, we’re throwing the spotlight on the seven management and planning tools, often referred to as the seven new quality tools: affinity diagrams, arrow diagrams, matrix data analysis, matrix diagrams, process decision program charts, relations diagrams and tree diagrams. A team from the Union of Japanese Scientists and Engineers (JUSE) first collected these tools in 1976 to promote ways to innovate, communicate, and plan major and complex projects. At the time, some of the tools weren’t necessarily new, but their grouping and promotion were. Not to spoil the ending, but 36 years later,
there’s nothing new or groundbreaking in this re-release of the newer seven. But we think this collection of articles about these new tools does what JUSE set out to do when it devised the collection of seven: promote ways to innovate, communicate and plan. As noted in the original installment, our cast of contributors could have provided much, much more on each tool. Many of the tools include additional resources at the end of each article if you want to learn more. You can also visit QP’s archives (www. qualityprogress.com) to access the original article (“Building From the Basics,” January 2009, pp. 18-29), as well as other articles on basic tools. ASQ’s website, too, has plenty of resources and publications (www.asq.org/books-andpublications.html) to help you learn about the basics of quality.
April 2012 • QP 19
United Way Police department YWCA/YMCA School board
The affinity diagram is a visual tool that allows an individual or a team to group a large number of ideas, issues, observations or items into categories for further analysis. The tool groups the ideas in a way that allows those with natural relationships or relevance to be placed together in the same group or category.
As the next step in organizing the output of a brainstorming event into relevant themes or categories for analysis. • To actively involve stakeholders in the specifics of a situation in which their understanding, experience, knowledge and support is required. • As a vehicle for breakthrough thinking and creative association. • To further analyze data, ideas or observations for eventual hypothesis testing, prioritization and decision making.2 To build an affinity diagram, clearly state the issue being explored. Gain consensus among group members on the issue statement, and brainstorm ideas related to the issue under consideration. Write one idea each on a sticky note. Make sure the words are in large-enough print to be seen at least five
The affinity diagram partners well with the brainstorming tool to organize many ideas and issues. The tool also provides an opportunity to creatively identify categories of team observations or input. Often, it helps to overcome team paralysis by offering a step-by-step way to organize multitudes of options. Groups can use affinity diagrams:
Community partners brainstorming list / figure 1
Business owners AA/NA Mayor Armed forces recruiters Technical college Faith-based groups Hospitals
feet away. Randomly place the notes on a board, wall or flip chart so they are visible to the whole group. Figure 1 shows an example of a list created by a group that was brainstorming its organization’s community partners. As a group, cluster the ideas into categories or themes suggested by the content in relation to the issue being explored. Figure 2 shows how the list of community partners can be organized through an affinity diagram. If an idea logically fits within more than one thematic category, reproduce the note so it can be posted in all relevant areas. Sometimes, it may be necessary to isolate ideas that do not naturally fit into the categories identified by the group. These one-offs may provide valuable insight into additional analysis later. Next, create an affinity card (or header card) for each group with a short statement describing the entire group of ideas. Review the resulting cluster themes for consensus. Two additional techniques can be used to encourage creativity among team members: 1. Allow no speaking among team members during the affinity categorization of the sticky notes. All associations of one idea with another should be done in silence. 2. Require team members to use their nondominant hand to move the sticky notes around during catego-
Harley-Davidson riders Habitat for Humanity Parks department
Chamber of commerce
AA = Alcoholics Anonymous NA = Narcotics Anonymous
YMCA = Young Men’s Christian Association YWCA = Young Women’s Christian Association
Affinity diagram of community partners list / figure 2
Government School board Parks department Police department Technical college Mayor Armed forces recruiters
Private/commercial Faith-based groups Business owners Chamber of commerce Over-55 community Harley-Davidson riders
United Way AA/NA YWCA/ YMCA Habitat for Humanity Hospitals
AA = Alcoholics Anonymous NA = Narcotics Anonymous
YMCA = Young Men’s Christian Association YWCA = Young Women’s Christian Association
20 QP • www.qualityprogress.com
rization. In other words, a right-handed person should only use his or her left hand when moving ideas around the board, wall or flip chart. This simple exercise will encourage team members to be more deliberate and pay more attention to the decisions and moves they make. By using affinity diagrams, a group can move away
from idea paralysis and start its journey of exploring an issue or finding solutions to problems. —Grace L. Duffy
1. John E. bauer, Grace l. Duffy and Russell t. Westcott, The Quality Improvement Handbook, second edition, asq quality Press, 2006. 2. Ron bialek, Grace l. Duffy and John W. Moran, The Public Health Quality Improvement Handbook, asq quality Press, 2009.
The arrow diagram—also known as activity diagram, network diagram, activity chart, node diagram or critical path method chart—is used to illustrate the order of activities of a process or project. A basic example is shown in Figure 3. The arrow diagram can be simple and straightforward, but over time its use has evolved to that of organizing and monitoring complex projects and situations. In the 1950s, two project management techniques—the program evaluation review technique (PERT) and the critical path method (CPM)—propelled the development of the arrow diagram to the next level. The U.S Navy developed the techniques between 1956 and 1958 while developing its Polaris nuclear subma-
Simple arrow diagram
1. Select a supplier
/ figure 3
2. Sign an agreement with a selected supplier
rine. E.I. Du Pont de Nemours Co., planning to construct major chemical plants in United States, also used these methods to plan, schedule and control its projects. With PERT and CPM, the arrow diagram can include very specific scheduling and monitoring tasks by infusing additional information and details about each activity within a sometimes complex process or project being defined. Table 1 (p. 22) summarizes PERT and CPM
Arrow diagram using CPM and PERT
Develop supplier evaluation criteria Dr = 2 eS = 1 LS = 1 Project kickoff Dr = 1 SL = 0 eS = 0 LS = 0 ef = 1 Lf = 1 SL = 0 ef = 3 Lf = 3 evaluate supplier A Dr = 1 SL = 2 eS = 3 ef = 4 LS = 5 Lf = 6 evaluate supplier B Dr = 3 SL = 0 eS = 3 ef = 6 LS = 3 Lf = 6 evaluate supplier C Dr = 2 SL = 1 eS = 3 ef = 5 LS = 4 Lf = 6 Create a purchasing agreement template Dr = 3 eS = 1 LS = 9 SL = 8 ef = 4 Lf = 12
/ figure 4
Negotiate with supplier A Dr = 5 SL = 0 eS = 7 LS = 7 ef = 12 Choose a preferred supplier and send an agreement Dr = 2 eS = 12 LS = 12 SL = 0 ef = 14 Lf = 14
Rate suppliers Dr = 1 SL = 0 eS = 6 ef = 7 LS = 6 Lf = 7
Negotiate with supplier B Dr = 3 SL = 2 eS = 7 LS = 9 ef = 10 Lf = 12
Negotiate with supplier C Dr = 2 SL = 3 eS = 7 ef = 9 LS = 10 Lf = 12
CPM = critical path method Dr = activity duration ef = early finish time eS = early start time Lf = late finish time LS = late start time SL = slack PERT = program evaluation review technique DR, EF, ES, LF, LS and SL are measured in days.
April 2012 • QP 21
▲ ▲ ▲
Lf = 12
terminology. Figure 4 (p. 21) is an example of applying PERT and CPM to selecting a supplier and signing a purchasing agreement. The critical path, marked in red on the arrow diagram in Figure 4, includes activities that should be conducted
without delay because they are critical to meeting the scheduled end date. All other activities can be conducted using a more flexible schedule. The creation of a purchasing agreement template, for example, can start anytime between the first and the ninth day of the project, and it can take more than the anticipated three days if an early start day was chosen. The example illustrates how the arrow diagram helps to balance project resources and identify activities that are critical for the completion of the project on time. —Natalia Scriabina
berger, Roger W., The Certified Quality Engineer Handbook, asq quality Press, 2006. Heagney, Joseph, Fundamentals of Project Management, aMacOM Division of american Management association, 2011. levy, Ferdinand K., Gerald l. thompson and Jerome D. Wies, “the abcs of the critical Path Method,” featured in Managing Projects and Programs, Harvard business school Press, 1989. Miller, Robert W., “How to Plan and control With PERt,” which appeared in “Managing Projects and Programs,” Harvard Business Review, reprint series No. 10811, Harvard business school Press, 1989. Wilcox, William H., and James J. O’brien, “How to Win campaigns,” National Civic Review, Vol. 56, No. 5, 1967, pp. 265-269.
Arrow diagram acronyms
Term and acronym early start time (eS) early finish time (ef) Late finish time (Lf) Late start time (LS) Slack (SL) What is it? The earliest time a given task can start. The earliest time a given task can be finished. The latest time a given task can be finished and still keep the projection schedule. The latest time a given task can start and still keep the project on schedule. The time this activity could be postponed without delaying the project schedule.
/ TAbLE 1
How it is calculated? A duration of the activities leading into this one. eS + a duration of this activity. A duration of the activities following this one. Lf − a duration of this activity. LS − ES or LF − EF.
who contributed to this package
Many of the seven new quality tools packaged and promoted by JUSE are referred to by names different from what JUSE originally called them, but only one has actually been modified through the years: matrix data analysis. In its original form, matrix data analysis was heavy on mathematics. Sometimes, it has been replaced on this list by the similar prioritization matrix (see the online sidebar and five additional tables on this article’s webpage at www.qualityprogress.com). There is very little reference material on matrix data analysis itself, but I have compiled the limited information and developed an In more complex industrial problems, data are not necessarily one dimensional. Often, we get into analyzing data that have many possibilities. For example, automobiles are built with several
style, while older consumers place greater emphasis on stability and safety of the design. Similarly, there may be preference discrepencies between men and women in terms of color and comfort. To analyze this data, the traditional seven quality tools may not be adequate. The matrix data analysis method can be used to analyze the data arranged in matrix format. For example, you may want to analyze the customer responses to several attributes of a new product to form a smaller number of uncorrelated variables that are easier to interpret. The matrix diagram arranges items in a column and row format, with the degree of correlation entered into the relevant columns using symbols or numerical values. This idea appears similar to the relationship matrix tool. In the matrix data analysis, however, the correlation coefficient is used to identify the relationship instead of symbols. One type of matrix data analysis is principal component analysis. This technique is used in multivariate analysis. Principal component analysis is a selective measurement technique in which the representative characteristics can be mathematically calculated. Prin-
HEAR ANd SEE MORE from the authors featuring the seven new quality tools. Find links to prerecorded webcasts throughout April at www.qualityprogress.com.
consumer demographics. Difmay react differently because the features and preferences vary. Younger consumers may pay more attention to design
22 QP • www.qualityprogress.com
cipal components analysis can reduce your data and avoid multicollinearity, or a situation in which you have too many predictors relative to the number of observations. Principal components analysis often can uncover unsuspected relationships, allowing you to interpret data in a new way. For the automobile example, 100 potential customers (both genders of various ages in urban and rural areas) were asked to score five automobile features. A score of one was the lowest preference score, and 10 was the highest. The following steps were used to construct and analyze data using matrix data analysis: 1. The scores were averaged and each data item was arranged in row and column format, as shown in Table 2. 2. The correlation coefficient matrix was calculated for each observed group. The example in Table 3 is the sex and age of the observed groups. 3. The characteristic values and vectors using the correlation matrix were calculated, as shown in Table 4 (p. 24). In our example, the first principal component has variance 7.607 (equal to the largest eigenvalue) and accounts for 0.634 (63.4%) of the total variation in the data. The second principal component (variance 3.608) accounts for 0.301 (30.1%) of the total data variation. The third principal component (variance 0.652) accounts for 0.054 (5.4%) of the total data variation. The first two principal components with variances equal to the eigenvalues greater than one represent 0.935 (93.5%) of the total
variability, suggesting the first two principal components adequately explain the variation in the data. 4. The degree of preference for each feature by demographics was reviewed. Such value expresses the degree of preference. The value of characteristics’ vector changes from positive to negative in accordance with age for men and women (Figure 5, p. 24). General preference affected by demography, age and sex are calculated. This is graphically represented by the score plot and biplot in Figures 6 and 7. The score plot graphs the second principal component scores
Matrix data analysis
Group united states: urban Men (age < 35) Men (age 36-60) Men (age > 60) Women (age < 35) Women (age 36-60) Women (age > 60) united states: rural Men (age < 35) Men (age 36-60) Men (age > 60) Women (age < 35) Women (age 36-60) Women (> 60) 6 5.5 5.5 8.5 8.5 9 7.5 8.5 8 6.5 5.5 5 7.5 5.5 5 8 8.5 9 7 8.8 8 5.5 6 6.8 Feature one Feature two
/ TAbLE 2
Feature three 8 8.5 8.5 8 7.5 7 8.5 8 8 8.5 7.5 7 Feature four 9 7.5 7 9 8.5 8 8.5 7.5 7.5 9 8.5 8 Feature five 6.5 6 6.5 6 7.5 8 7 7.5 8 6.6 7.5 6
Correlation coefficient matrix
urban Men (< 35) Men (age 36-60) Men (age > 60) urban Women (age < 35) Women (age 36-60) Women (age > 60) Men (age < 35) Men (age 36-60) Rural Men (age > 60) Women (age < 35) Women (age 36-60) Women (age > 60) 0.26 0.142 0.894 0.558 0.064 0.613 −0.046 −0.108 0.881 0.531 0.223 0.937 −0.125 −0.635 −0.928 0.761 0.847 0.671 −0.082 −0.638 −0.854 −0.185 −0.624 −0.967 0.818 0.921 0.842 −0.163 −0.596 −0.783 0.839 0.41 0.318 −0.421 −0.404 0.99 0.826 0.6 Men (36-60) Men (> 60) Women (< 35)
/ TAbLE 3
Rural Women (36-60) Women (> 60) Men (< 35) Men (36-60) Men (> 60) Women (< 35) Women (36-60)
0.803 −0.115 −0.738 −0.608 0.795 0.996 0.933 −0.664 −0.944 −0.837 0.379 0.782 0.906 0.724 0.707 0.29 −0.096 −0.389 0.951 −0.436 −0.716 −0.839 −0.448 −0.565 −0.654 0.78 0.554 0.942
April 2012 • QP 23
versus the first principal component scores. As in this example, if the first two components account for most of the variance in the data, you can use the score plot to assess the data structure and detect clusters, outliers and trends. For examples with multiple variables, the plot may reveal groupings of points, which may indicate two or more separate distributions in the data. The biplot overlays the score and loading (prefer-
ence, importance) plots of the first two principal components. The second principal component scores are plotted versus the first principal component scores. The loadings for these two principal components are plotted on the same graph. The plot may reveal groupings of points, which may indicate two or more separate distributions in the data. This may be evident with an example that uses hundreds of features. Only five features of the matrix data analysis technique have been mentioned for illustration purposes. If the data follow a normal distribution and no outliers are present, the points are randomly distributed
Characteristic values and vectors / TAbLE 4
Groups Men (age < 35) Men (age 36-60) urban Men (age >60) Women (age <35) Women (age 36-60) Women (age > 60) Men (age < 35) Men (age 36-60) Rural Men (age > 60) Women (age < 35) Women (age 36-60) Women (age > 60) Eigenvalue Proportion Cumulative First principal component 0.102 −0.300 −0.314 0.229 0.333 0.348 −0.179 −0.342 −0.306 0.222 0.327 0.344 7.607 0.634 0.634 second principal component −0.489 −0.257 −0.245 −0.405 −0.187 0.129 −0.444 −0.133 −0.116 −0.399 −0.187 −0.014 3.608 0.301 0.935 Third principal component 0.204 0.343 −0.038 0.099 −0.224 −0.059 −0.260 −0.244 −0.603 0.240 −0.302 −0.369 0.652 0.054
around zero. In the score plot diagram, the generally preferred features appear as you move right along the horizontal axis, and features that are not preferred move to the left. With the exception of the youngest age group, the biplot (Figure 7) seems to indicate that rural and urban men have the same preferences, rural and urban women share the same preferences, and those under
least preferred features
/ figure 5
most preferred features
Score plot of evaluated groups / figure 6
2 5 1
Biplot of evaluated groups / figure 7
1 Second component
Rural men (age > 60) Rural men (age 36-60) Urban men (age > 60) Rural women (age 36-60) Urban women (age 36-60) Rural women (age < 35) Urban men (age < 35) 4 Urban women (age < 35)
Urban men (age 36-60) Rural men (age < 35)
−1 0 1 First component
−1 0 1 First component
24 QP • www.qualityprogress.com
Urban women (age > 60) Rural women (age > 60)
35 years old share the same preferences—regardless of gender. This tool can be used to analyze market data, new product introduction and for narrowing down root cause analysis. Relationships among defects and their causes, location of defect occurrence or process step can be analyzed using the tool. —Govind Ramu
brassard, Michael, The Memory Jogger Plus+, Goal/qPc inc., 1989. Domb, E.R., “7 New tools,” Quality Digest, December 1994. Minitab, “Meet Minitab 16” software documentation, www.minitab.com/en-us/ products/minitab/documentation.aspx?langtype=1033. quality council of indiana, Certified Manager of Quality Primer, 2010, pp. vi-19. shigeru, Mizuno, Management for Quality Improvement: The Seven New QC Tools, Productivity Press, 1988. tetsuichi, asaka, and Ozeki Kazuo, Handbook of Quality Tools: The Japanese Approach, Productivity Press, 1990.
Knowing how to visually present data is absolutely critical in today’s workplace, especially when you consider that visual representation of data is the only way you will reach some individuals. Matrix diagrams can be used to show the relationship between two, three or four groups of information. There is a fundamental need for matrix diagram users to be familiar with data. To get started, you must determine ahead of time where the comparisons are going to be. The tool can be an excellent way to compare customers, associates in a call center, departments and processes, for example. The entities being compared are typically listed across the page (x axis). Features or aspects for comparison are listed going down the page (y Suppose a back-office processing area is scanning forms into a system. When you look at productivity data, you can quickly see there are two groups with distinctly different productivity. List the names of the associates across the page, keeping in mind the total number of associates. If the number is small, you can list all the associates. If the number is large, you may need to create a composite employee, showing how typical high and low performers appear. Brainstorm potential areas that participants say they think might be at the root of driving performance. The output of this activity would be listed down the page. Start filling in the matrix with the data you have. You will then have something to show management about how employees differ in performance and what may be causing the performances to be different. One particular matrix diagram my organization uses on a regular basis is the 2 x 2 matrix (Figure 8). When we conduct workshops with clients, invariably a point is
reached at which we identify potential solutions. The 2 x 2 matrix helps the business partner differentiate the solutions. This differentiation is centered on the effort required to implement a given solution and what the potential impact would be. Solutions are placed on the grid in response to the evaluation of the solution against a predefined set of criteria that defines effort and impact. Potential solutions falling into the green block—high impact and low effort—are the targeted
2 × 2 impact and effort grid / figure 8
Low Low impact High
solutions. These are typically labeled as quick hits. Solutions falling into the red block—high effort and low impact—are prioritized lower on the list because more resources are required to implement a solution that will make less of an impact. Using the two extremes as an example, the matrix diagram of impact and effort shows the relationship between the solutions by their positions on the grid. Using the predefined criteria enables a group to use this differentiation to make business decisions regarding which solutions to pursue. Matrix diagrams are a simple yet powerful means of understanding data. Perhaps more importantly, they are an effective way to convey information to decision makers. —Keith Wagoner
asq, “seven New Management and Planning tools—Matrix Diagram,” http:// asq.org/learn-about-quality/new-management-planning-tools/overview/ matrix-diagram.html.
April 2012 • QP 25
The process decision program chart (PDPC) is an excellent tool for what can be called project risk management. Risk management involves looking ahead proactively during planning to identify potential future problems. PDPC provides a structure to identify what can go wrong and then plan what to do when the wrong things happen. PDPC is a visual tool that combines and builds on elements of several other techniques. It may enhance a tree diagram in which an objective and one or two levels of activities or tasks already have been defined. It has some characteristics of failure mode and effects analysis, such as the identification of risks, consequences and mitigations. The PDPC also can be described as a graphical version of the good project management practice of proactively identifying issues, risks and assumptions. Therefore, a PDPC is a nice tool to place into a project plan or charter. Many levels of planning could benefit from the PDPC. The top level is strategic planning, for which the PDPC
could be used to help select key initiatives or programs from several alternatives. A second level is program planning. “Program” means a portfolio of projects or a group of interrelated activities with specific endpoints. A PDPC can be used to help select the projects or approaches that are most likely to succeed and weed out those that are not feasible because of high risk or unavailability of resources. After a specific project has been chosen, the PDPC can be used in its most basic form for detailed contingency analysis within the scope of project planning. Figure 9 is a simplified example of a PDPC with information from program and project planning. The initiative of training quality engineers was chosen as a way to support the strategy of improving product quality in design. Alternative projects addressing different methods to deliver the training were evaluated. The concept of using internal resources was chosen as the preferred strategy. Then, within the scope of this project, several risks
Process decision program chart example
Strategic planning initiative selection Improve product quality in design
/ figure 9
Quality engineer training (selected initiative) Program planning project selection Self-study and individual certiﬁcation Obtain training from external sources or consultants Project planning contingency selection
Difﬁcult to track progress, ensure consistency and motivate Lack of beneﬁt of interaction Cost too high Lack of understanding of internal company systems Time commitment too high Do not have expertise in training
Use internal resources (selected project)
Provide oversight of individuals
Bring students together periodically for discussion
Allocate funds in the budget
Train the external trainers on internal processes and procedures
Solicit management support, place on employees’ objectives
Provide training on presentation skills and training dynamics
Project beneﬁts do not outweigh risk.
Project beneﬁts do not outweigh risk.
Beneﬁts outweigh mitigated risks. Trainers increase knowledge and presentation skills, cost savings compared with external, team building with interaction and participation.
26 QP • www.qualityprogress.com
were identified and mitigations developed during the planning phase. Throughout the process, decisions were made by considering the potential risks at each step and eliminating the activities for which risk mitigations or countermeasures were not considered practical. Figure 9 also shows the common PDPC practice of denoting impractical countermeasures with an X and practical countermeasures with an O. Identification of countermeasures deemed impractical was based on constraints in the project cost, schedule or logistics. Ultimately, using the PDPC thought process facilitates project planning, identifies risks and mitigations, and helps secure approval to execute a project based on the best benefit and risk ratio, and likelihood of success. The process decision program chart is, therefore, very deserving of its accurate and descriptive long name. —Scott Laman
MANY OF THE AuTHORS drew from Nancy R. Tague’s The Quality Toolbox (ASQ Quality Press, 2005) to develop the summaries of the seven management and planning tools. For more about the book and to read a sample chapter, visit http://asq.org/quality-press/display-item/index. html?item=H1224 (case sensitive).
it or not.
A relations diagram is a graphical representation of the relationship between cause and effect or a given outcome, and all the factors that influence or contribute to that outcome. Figure 10 shows an example of a relations diagram, which is a variation of a typical fishbone or cause and effect diagram. Developing a relations diagram is a structured approach to problem solving. The diagram also can be used to learn more about the problem being addressed, because it can clarify thinking about how various factors are related or contribute to the problem being addressed. After you know these factors, you can address each one, depending on its importance in terms of severity of effect and the cost of addressing
meeting so group members have a chance to think about it and come to the meeting somewhat prepared. 3. Ask everyone to write on a sticky note one factor they think contributes to the problem. Collect the notes and place them on a wall or a board. Do this a second or third time, or until all factors are covered. These notes do not need to be placed in any order—placing them randomly is fine. 4. Write the problem statement on another wall, board or a flip chart. Then, take one of the notes and discuss whether it is a contributing factor and whether the
Lack of training
/ figure 10
Lack of purchasing professionalism No account of incoming materials
Developing a relations diagram involves brainstorming and organizing thoughts as explained in the following five steps: 1. Identify a group of people—usually no more than five or seven— to participate in developing a relations diagram about a problem. Include people from various departments and people with different perspectives. 2. Distribute a clear problem statement to be reviewed at least a day or two in advance of the first
Production too busy Poor machine maintenance Ongoing conﬂict between quality assurance (QA) and production Poor working conditions Lack of advancement High operator turnover
Buying from the cheapest source
Management not understanding link between quality and proﬁtability
Inadequate QA and HR budgets
No accurate cost-of-quality data available
April 2012 • QP 27
group agrees it is. Place it near the problem statement, and draw an arrow from this note to the problem statement. Repeat the same process with another note (factor). Continue this and a relations diagram will emerge, as shown in Figure 10. If one factor contributes to more than one outcome, you can have arrows starting from a factor leading to several outcomes, as shown in the figure. 5. Schedule a relations diagram session for no more than one hour because of the fatigue factor. If necessary,
hold more than one session. Looking at Figure 10, it is clear the lack of management understanding about the link between quality and profitability contributes to many factors leading to poor quality. However, there are no cost-of-quality data available, so the link between quality and profitability cannot be explained. Therefore, to address poor quality, the first step must be to collect cost-of-quality data for a certain period. After sufficient data are collected and analyzed, a presentation on the subject can be made to management. Ideally, after management understands the link between quality and profitability, it will support quality efforts and also look into the professionalism of the procurement and purchasing function. Before the relations diagram was developed, the normal tendency for everyone in an organization was to blame poor quality on high operator turnover, poor-quality materials or poor machine maintenance. The relations diagram clarifies what ultimately drives those factors, which in turn helps address the root cause of poor quality. —Pradip Mehta
CHECk OuT THE ARTICLE that inspired this month’s sequel. “Building From the Basics” appeared in the January 2009 edition of QP and continues to
Putting Best Practices to Work
www.qualityprogress.com | January 2009
receive rave reviews from readers. You can find the open-access article at http://asq.org/qualityprogress/2009/01/basic-quality/building-fromthe-basics.html. Share the link with colleagues through email, Twitter or Facebook. Also find templates for most of the seven basic tools at ASQ’s Quality Tools & Templates corner of its website at http://asq.org/learn-about-quality/ tools-templates.html.
28 QP • www.qualityprogress.com
QUALITY PROGRESS | JANUARY 2009 BUILDING FROM THE BASICS: 7 QUALITY TOOLS VOLUME 42/NUMBER 1
12 Tips To Survive The Recession p. 8
BU L NG
The seven essential quality tools
B SI S
FR M HE
The Big Three: Did Quality Fail Them?
Lean Six Sigma Saves Millions
A tree diagram allows you to detail a conceptual or highlevel goal into more operational tasks to achieve the desired result. The tree diagram starts with one item that branches into two or more branches, each of which branches into two or more, and so on. Tree diagrams can be used to break down broad categories into finer levels of detail and can be adapted for a wide variety of uses.1 Developing the tree diagram helps
called a tree structure because the classic representation resembles a tree, even though the chart is generally upside down compared with the shape of an actual tree. Some quality improvement teams often represent the tree from left to right, with the root at the left and the increasing levels of detail branching out to the right. Every completed tree diagram has a root or root node, which also can be thought of as the starting node. The lines connecting elements are called branches, and the elements themselves are called nodes. Nodes without children are called leaf nodes, end-nodes or leaves.2 To construct a tree diagram, begin with the root node. Develop a short statement of the goal, issue or item being broken down. Locate the root node either at the top or far left of the diagram. Brainstorm what will take the hierarchy to the next level of detail. For an action plan, this may be the next steps to be taken. For an organization chart, it’s the person who reports to the next level of the organization. Brainstorm all possible items for each level until there
move team thinking from generalities to specifics. The tree diagram is a generic tool that can be adapted for a wide variety of purposes: • Developing logical steps to attain a specific result. • Conducting a five whys analysis to explore a root cause. • Communicating to encourage involvement in the development of a jointly supported result. • Drilling down to more detailed levels of a process flow. • Graphically representing a hierarchical progression, such as a genealogy or classification scheme. The structure of the tree diagram represents the hierarchical nature of a structure in a graphical form. It is
is no item or action available at a finer level of description. For a vertical tree, write each idea in a line below the branch. For a horizontal tree, write it to the right of the first statement. Do a “necessary and sufficient” check. Are all the items at this level necessary for the one on the level above? If all the items at this level were present or accomplished, would they be sufficient for the one on the level above?3 Figure 11 shows an example of a tree diagram that illustrates how to prepare for ASQ’s manager of quality/organizational excellence (CMQ/QE) certification. “Prepare for CMQ/QE” represents the goal, or root, of the tree diagram, while “Take ASQ review course,” “Take another course” and “Self-study from ASQ Body of Knowledge” are the next level of details, or nodes, that branch from the root. Further activities and descriptions below each of these three nodes continue
Tree diagram to prepare for CMQ/OE exam / figure 11
Prepare for CMQ/OE certiﬁcation
Take ASQ review course
Take other course Research other options
Self-study from ASQ Body of Knowledge Study alone In study group
Research options Travel required Provide justiﬁcation Gain approval
Provide justiﬁcation Gain approval
Use ASQ CMQ/OE review guide
Use other texts
Consider participants Contact participants Secure study location Decide times and schedule
Order review guide from Quality Press
Borrow from friend
Participate Study Study
Register Study Make travel plans Attend
CMQ/OE = certiﬁed manager of quality/organizational excellence Note: This tree diagram is intended to be used an example and is not a complete guide to prepare for the CMQ/OE exam.
1. Nancy R. tague, The Quality Toolbox, second edition, asq quality Press, 2004, p. 501. 2. Wikipedia, tree structure, http://en.wikipedia.org/wiki/tree_structure. 3. tague, The Quality Toolbox, p. 502, see reference 1.
until options and ideas seem exhausted. —Grace L. Duffy
GRACE L. DUFFY is president of Management and Performance Systems in Tavares, FL. She earned a master’s degree in management and information systems from Georgia State University in Atlanta. Duffy is an ASQ fellow and holds ASQ certifications as a quality auditor, manager of quality/organizational excellence and improvement associate.
GOVIND RAMU is a senior manager for global quality systems at SunPower Corp. in San Jose, CA. Ramu is a licensed professional mechanical engineer from Ontario, Canada. An ASQ member since 1998 and an ASQ fellow, Ramu holds six ASQ certifications: manager of quality/organizational excellence, engineer, Six Sigma Black Belt, auditor, software engineer and reliability engineer. He is co-author of the certified six sigma Green belt Handbook (ASQ Quality Press, 2008). NATALIA SCRIABINA is a vice president and cofounder of Centauri Business Group Inc. in Waterloo, Ontario. She earned a master’s degree in engineering sciences, automated control of electrical systems from the National Technical University of Ukraine in Kiev. Scriabina is a member of ASQ.
SCOTT A. LAMAN is a senior manager of quality engineering and risk management for Teleflex Inc. in Reading, PA. He earned a master’s degree in chemical engineering from Syracuse University in New York. Scott is an ASQ fellow and is certified as a quality engineer, reliability engineer, manager of quality/organizational excellence, auditor and Six Sigma Black Belt.
PRADIP MEHTA is the retired director of quality assurance for the Army & Air Force Exchange Service in Dallas. He earned master’s degrees in textile engineering from Lowell Tech in Lowell, MA, and business administration from the University of Dallas in Irving, TX. A certified quality auditor and systems lead auditor, Mehta is an ASQ fellow and the former chair of its diversity committee.
KEITH WAGONER is a director of continuous improvement at Lincoln Financial Group in Greensboro, NC. He is a senior member of ASQ and a certified quality engineer.
April 2012 • QP 29
One Size Fits All
Baldrige recipients prove organizations of all sizes can benefit from using award criteria
by QP Staff EvEry Handyman rElisHEs the chance to
use his biggest and baddest tool: the circular saw, the power sander, the power drill—pretty much anything with the word “power” in it, actually. But while those are fun to use, it’s rare to find a home-improvement project that doesn’t require having a hammer somewhere in the vicinity. There’s a reason why a tool like that endures in this age of technology: It works, regardless of the situation. That’s a characteristic shared by the Baldrige Criteria for Performance Excellence, which has helped every type of organization you can imagine—from those with 100 employees in one location to those with 100 sites around the world—improve all facets of their operation. The wide-ranging impact of the criteria is evident in the four organizations selected to receive the Malcolm Baldrige National Quality Award in 2011. From a small publishing house in St. Louis to a massive healthcare system headquartered in Detroit, the quartet found common ground in their desire to improve and the tool they used to achieve their goal.
April 2012 • QP 31
schneck medical Center
Ask anyone who has ever been treated at a hospital to list the jobs that are key to a positive patient experience, and you’ll hear the obvious: doctors, nurses and receptionists. But what about staff that deal with money more than medicine? Or those in HR instead of the ER? That all-inclusive approach to putting the patient first helped Schneck Medical Center (SMC) in Jackson County, IN, earn a 2011 Baldrige award and, more importantly, created an organizational culture as healthy as the customers it serves. SMC created a patient-focused system supported by four areas—quality of care, customer service, fiscal and operations, and human resources (see Online Figure 1 at www.qualityprogress.com)—and each area saw the improvement you’d expect from a Baldrige recipient. 1. Quality of care. For any organization, it’s quite a feat to measure your time between negative incidents in years. SMC is in that elite class thanks to a focus on preventing hospital-acquired infections. It recorded zero central line-associated bloodstream infections in 2011, the last case of ventilator-associated pneumonia was in 2009, and the overall rate of hospital-acquired infections has remained at or below 1% since 2008. SMC proved its commitment to putting the patient first when it noticed that a measure related to its treatment of heart attacks was far beyond what it could have been. Its “door-to-balloon time”—how long it takes to assess and diagnose a myocardial infarction, and deliver the necessary intervention—was 120 minutes, so SMC partnered with a competitor 25 miles away to coordinate handoffs. The new system drastically reduced door-to-balloon time to as low as 53 minutes. 2. Customer service. Consulting firm Press Ganey helps those in the healthcare industry improve performance by tracking measures in crucial service areas. In the last round of surveys, SMC landed in the top 25% for nine of 10 measures and earned a spot in the top 10% for overall satisfaction in each customer segment and overall satisfaction for adult inpatients. Those numbers were supported by the Hospital Consumer Assessment of Healthcare Providers and Systems, which verified that SMC bested other Indiana hospitals from 2008 to 2011 in areas such as the ability of nurses and physicians to listen, understand and provide clear discharge instructions.
Schneck Medical Center, “Schneck receives 2011 Presidential Award for Quality and Performance excellence,” http://schneckmed.org/aboutus/ newsdetail.aspx?id=167, Nov. 22, 2011. National institute of Standards and Technology, “Schneck Medical Center,” www.nist.gov/baldrige/award_recipients/schneck_profile.cfm.
3. Fiscal and operations. By rigorously monitoring its daily and monthly activities, in addition to an annual review of key performance measures, SMC has improved its bond rating and its operating margin in the years since the 2009 economic downturn. Because of those efforts, its reported results are in line with Standard & Poor’s “A” and “AA” rated median levels. Also, from 2008 to 2010, SMC achieved revenue growth in its five strategic focus areas: women’s health, joint replacement, noninvasive cardiac care, cancer care and bariatric surgery. That’s no surprise considering that in the county in which it resides, SMC’s market share is better than 60% for inpatient care, 70% for outpatient care and 80% for ambulatory care. 4. Human resources. Since implementing the Baldrige criteria in 2007, SMC’s staff turnover rate has dropped by 25%. Those results stem from an increased focus on staff feedback, as well as a hiring program that features peer interviewing and collects employee input, both of which contribute to the selection of new hires. On the nursing side, from 2009 to 2011, SMC reported a satisfaction level above the benchmark set by the National Database of Nursing Quality Indicators. The results for doctors are equally impressive thanks to a revamped approach by the medical executive committee, which welcomes physician input for staffing decisions. Because of that, 90% of SMC doctors said they felt engaged and aligned with the organization. Perhaps the most intriguing approach to ensuring a satisfied staff comes from SMC’s “Grow Our Own” program. In it, local students at the middle and high-school levels shadow staff members, and then return to work at SMC during college. The program is directly responsible for 17 individuals joining the current medical staff. “Our employees are our most important contributor to Schneck’s performance excellence,” said Gary A. Meyer, SMC president and CEO. “Receiving this award is an extraordinary accomplishment and recognition of their commitment to continuously improve patient outcomes while safely reducing the cost of care.” —Brett Krzykowski, assistant editor
32 QP • www.qualityprogress.com
Henry Ford Health system
As one of the most comprehensive integrated health systems in the nation, Detroit-based Henry Ford Health System (HFHS) employs a workforce of 29,856 at 140 sites spanning a three-county area. The system includes: • Seven hospitals, including a large, level-one trauma flagship hospital.
• 33 multispecialty ambulatory care centers. • Affiliated physician practices. • A research and education component. • A Health Alliance Plan providing health coverage to more than 467,000 members. • 91 community care operations, including outpatient behavioral health, nursing homes, hospices and dialy- dOCTOrs FrOm HEnry Ford Health system meet as they walk the hallways of sis centers, and retail operations offering such servic- one of the organization’s 140 sites. es as optometry and home medical products. So when HFHS decided to use the Baldrige framework, it knew it would take work to successfully implement it on a systemwide level. But, as Susan Hawkins, senior vice president of performance excellence at HFHS, explained, the system’s leaders were undaunted. “We think it may have been easier for one of our hospitals or business units to apply for the award as an individual entity,” she said. “But our CEO never wavered in her belief that we have to do this as a system. Everything that we have to do around the Baldrige criteria supports integration—all units working together for a common purpose. We took the harder road.” Because of its systemwide approach, one of the key contributors to the success of HFHS has been its senior leaders team, which consists of about 25 CEOs from each of its business units and key corporate leaders. The team meets bimonthly for two to three hours at a time, focusing on strategic planning activities and organizational performance review. Each leader is responsible for communicating and implementing ideas from these meetings back at his or her business unit. According to Hawkins, the team represents a dramatic shift in the way the organization is led and has been a key part in its Baldrige success. “Each member of the senior team is accountable to the others for sharing actions and results—both strengths and opportunities— routinely and transparently,” she said. HFHS’s patient-safety and quality-of-care efforts—key drivers in its pursuit of the Baldrige award—hinge on initiatives the system continues each year, including:
National institute of Standards and Technology, “Henry Ford Health System,” www.nist.gov/baldrige/award_recipients/ford_profile.cfm.
• A series of interventions focused on mortality reduction. Since 2004, the system has reduced its mortality rates by 40%. • A “No Harm” campaign modeled after the Institute for Health Improvement’s 100,000 and 5 Million Lives campaigns to reduce patient morbidity and mortality. The HFHS program focuses on reducing harm on a broad scale. In the program’s fifth year, the system has seen a 27% reduction in harm. • A systemwide effort to reduce readmissions by identifying necessary actions needed for patients deemed at high risk for readmission. • A focus on innovation in ambulatory patient care. To drive improvement, the system established and spread a medical home model—called Patient Centered Team Care—and created bundles of clinical interventions and screenings focused on prevention and diabetes management. These bundles are linked to quality bonuses for physicians. HFHS plans to travel this year and host “sharing days” to discuss its quality strategies with other organizations. But this doesn’t mean the system will stop moving forward in its own quality journey. “We can’t stop improving,” Hawkins said. “We have work to do. We know what our opportunities are—they were validated by our feedback in the Baldrige site visit experience—and we’ll continue to look at those things. This is just the beginning.” —Amanda Hankel, contributing editor
April 2012 • QP 33
Concordia Publishing House
Bruce Kintz, president and CEO of Concordia Publishing House (CPH), a nonprofit organization headquartered in St. Louis, MO, says the Baldrige criteria has been in his head pretty much his entire career. But he knew he needed to get quality into the heads of his employees at CPH before formally rolling out the criteria as the company’s performance improvement framework in 2001. “I started off slow and went the route of making sure we had proper buy-in before I actually announced that there was criteria associated with the effort,” Kintz said. “So while we’ve been using it and known the actual words of the criteria for a decade, it’s been about 13 years in total that we’ve been implementing it.” CPH has pursued quality excellence via the Baldrige criteria for more than a decade. The organization first gained recognition in 2009, winning the Missouri Quality “That told us we were on the right track. Then, two years later, to win the national Baldrige award was a major milestone in our quality journey that further proves we run as efficiently as many other benchmark companies,” Kintz said. He attributes CPH’s success to several efforts that have helped leaders run the organization efficiently while keeping customers and employees happy. First, CPH’s annual strategic planning process is continuously improved through multiple review cycles that engage management and employees. The organization employs an inverted strategic planning process that involves three planning horizons—long, medium and short-term. This strategy provides in-process measures that help predict end-of-process measures, Kintz said. “The process improvement process that we use— plan, do, check, act—has been inculcated throughout CPH,” Kintz said. “When you couple those along with voice of the customer (VOC) and voice of the employee, we have all we need to work well with our board of directors and plan for the future.” He added that with help from those tools, CPH’s overall customer satisfaction scores soared above 98% and exceeded levels set by the annual Purdue University Benchmark Study of U.S. Call Centers. “We focus on our customers in everything that we do, and our quality improvement is aimed at improving our relationship with the customer,” Kintz said. “VOC feedback actually drives our product development here.” CPH uses VOC to gather input from customers for compliments, product ideas and complaints. Core product teams analyze customer data, prioritize product and service offerings, and design products to meet and exceed customer requirements and expectations. In addition, CPH’s emerging products team explores the use of state-of-the-art technologies to deliver new and innovative products, such as eBooks, iPhone/iPad apps and customizable online curriculum builders. As a result, the number of digital products CPH offers increased from 457 in 2008 to 1,927 in 2010. “It’s the future—digital publishing rather than traditional,” Kintz said. CPH also gathers employee feedback through a biannual employee survey, the results of which have improved every two years over the previous survey taken. “Our employees are our reason for success,” Kintz said. “They’re our associates, partners and family, and they’re also the future of this business. If we listen as a management team, then our employees are going to be responsive to that and give us good ideas.” It seems there is no shortage of good ideas at CPH. It recently launched an innovation team to ensure employees are actively involved in developing new ideas and seeing them come to fruition. It’s just another way the organization continues its commitment to quality improvement. “It’s never over,” Kintz said. “It’s a quality journey, and this is one step forward in that journey.” —Amanda Hankel
National institute of Standards and Technology, “Concordia Publishing House,” www.nist.gov/baldrige/award_recipients/concordia_profile.cfm.
COnCOrdia PUBlisHinG HOUsE’s increased focus on electronic offerings resulted in a nearly five-fold increase in e-products from 2008 to 2010.
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Anyone who thinks a grassroots, homegrown effort can’t transform a stumbling organization into a bastion of efficiency and excellence, Southcentral Foundation (SCF) has one word for you: nuka. That’s the Alaska Native word used for strong, giant structures and living things. It’s also the name of the healthcare model that helped transform the service provided to Alaska Natives and American Indians from a slogging system to a streamlined one that helped Anchorage-based SCF earn a 2011 Baldrige award. “This award recognizes and honors the strength and traditional values of the Alaska Native people and our customer-owners, which Southcentral Foundation’s Nuka System of Care was built upon,” said Ileen Sylvester, SCF vice president of executive and tribal services. “A large component of our vision is a healthy, thriving community for generations to come. This award reflects that we are well-positioned to see that vision through.” Back in 1998, that wasn’t the case. Patients waited weeks for an appointment, and then waited some more after finally arriving at the doctor’s office. When they actually saw a physician, often it was a different doctor for every visit. The connection between patient and provider was simply nonexistent.1 Everything changed in 1999, when SCF completed SCF can do that because it has constructed a system in which 70% to 80% of appointment slots are unfilled at the beginning of the day.4 That access has contributed to a customer-satisfaction rating that reached 91% in 2010. In addition, Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys put SCF’s overall satisfaction rating at 73.3%, well above the CAHPS benchmark of 46%.5 Those numbers wouldn’t have been possible if SCF hadn’t changed its leadership makeup and involved a group of people that had a vested interest in its success. Now, the majority of managers are Alaska Natives or American Indians. “It is so wonderful for external experts to recognize the amazing journey of Alaska Native people in creating and running SCF’s Nuka System of Care,” said Douglas Eby, M.D., vice president of medical services. With that change in leadership came a philosophy centered on the values of the Alaska Natives, which SCF credits for its ability to provide same-day service, as well as several other improvements: • A 40% decrease in expensive ER and urgent-care visits. • A 50% decrease in specialty care. • A 20% decrease in primary-care visits. • A 30% decrease in admissions and the number of days that patients spend in the hospital.6 If anyone is as pleased with those numbers as SCF, it’s the Alaska Native Tribal Health Consortium (ANTHC), which partners with SCF to operate and manage the Alaska Native Medical Center. “Undoubtedly, the accolades will continue for Southcentral Foundation,” said ANTHC Chairman and President Andy Teuber, “not only through awards such as the Baldrige National Quality Award, but also through the continued recognition of the Nuka System of Care that acknowledges that relationships support wellness.” —Brett Krzykowski
1. Southcentral Foundation, “Southcentral Foundation’s Nuka Model,” www. arcticparl.org/files/080812katherinegottlieb1.pdf. 2. Southcentral Foundation, “About Us,” www.scf.cc/about/index.ak. 3. Baldrige.com, “A Unique Healthcare delivery System,” www.baldrige.com/ sector/healthcare/a-unique-healthcare-delivery-system, dec. 1, 2011. 4. ibid. 5. ibid. 6. Southcentral Foundation, “Southcentral Foundation’s Nuka Model,” see reference 1.
its transition away from a government-run healthcare system to a customer-owned approach. That process began in 1982 and culminated with an organization that bases everything it does on relationships. That’s not as easy as it sounds because of the ground SCF must cover. The organization’s 1,400 employees serve around 55,000 people, including 10,000 in 60 remote Alaskan villages.2 But SCF has established an environment in which it puts what it calls its “customer-owners” first, and it did it via its Nuka System of Care, which is founded on four principles: 1. Customers drive everything. 2. Customers must know and trust the healthcare team. 3. Customers should face no barriers in seeking care. 4. Employees and supporting facilities are vital to success.3 SCF’s results prove those tenets aren’t just words. Gone are the days of waits measured in weeks. Now, if customer-owners call by 4 p.m. and arrive by 4:30 p.m., they can see their primary-care provider the same day.
April 2012 • QP 35
The innovative Moneyball management approach can make a difference—up to a point
Headline Goes In This Area
by I. Elaine Allen and Julia E. Seaman
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by Author Name AFTer MONEYBALL1 wAs published nine years
ago, Oakland A’s General Manager Billy Beane was hailed as a genius for adopting analytics in baseball. His goal was to create a small-budget Major League Baseball (MLB) team that could compete with big-spending teams in the American League (AL), effec-
In 50 Words FIrsT THree words are Vectora Bold 18 pt all In 50 Words tively turning the old system of recruiting players upside down. Or Less nulla Or Less decade later, Beane’scap. Ullamet iustrud dipit and alit nonsecte modolenibh eum • The Oakland A’s were Nearly a methods for discovering • Text for 50 words or at, quat. Ibh eui ea faccumsan henim atue the first baseball team magna faccum quat. less is Vectora Roman drafting undervalued players are baseball’s worst-kept secret. to implement analyti9 on 11 with hanging Odolortio odo dolor alit ipis at, con utatuer ad tat luptatumsan cal-based methods to What’s become known as the Moneyball philosophy has become indents. evaluate players, an enissecte molendrem iriure er acil eu feum eummolobor to as • Text for 50 words or approach referred iurem well entrenched in the sport and the mainstream. Every baseball less is Vectora Roman Moneyball. er sim quatet illa facidunt wisi. 9 on 11 with statisticians who leverage sabermetrics2 to assemclub employs hanging • The A’s had limited indents. Gait nullam quat. Ut inibh ero ex exerostrud tat nos autet ex success with the apble Text for 50 possible baseball team based on analytics. • the best words or proach, in part because ea feugiat iusto consed tatie dolorper iril utat etueraessis ex less is Vectora Roman other areas of the Last11 with Hollywood heavy hitter Brad Pitt played the role year, hanging 9 on game vulputem venit, eugiamc onulpute modoloreet lum augueril dit must be considindents. of Beane in the movie adaptation of Moneyball, which received ered as part of an over• Text for 50 words or sit nulput ut voloborper illa feum vendrer all statistical analysis of cincipi sisit, conse some Oscar buzz. “The Simpsons” even poked fun at Moneyball less is Vectora Roman a team. erciduis dolorperos nulputpatum dolor iusto odolore rciniat, 9 on 11 with hanging andindents. sabermetric principles in a 2010 episode. se venis ad dunt lum ip ea facidunt ea am, veleniam volortinit
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April 2012 • QP 37
Beyond baseball and entertainment, business media also took note of Moneyball and applied it to the world beyond balls and strikes. For example, Forbes distilled the use of Moneyball principles to help businesses hire employees, and Harvard Business School suggested Moneyball analytics should play a role in preparing all business management candidates.3-4 These and other articles on Moneyball offer one main message to the business world: With analytics, you can do more with less.5 The success of Moneyball also suggests there is a way to overcome the odds and field a competitive, championship-level team by understanding the attributes that make the whole team a winner rather than simply a collection of individuals with unique talents.
Basing value on oBP
As a general rule, because better players demand and receive higher salaries, the number of games won tracks with the team’s payroll. Teams with large payrolls tend to have more experienced and higher-rated players, and, therefore, should have greater success in the regular season and postseason. In 1999, the A’s ranked 11th of the 14 AL teams in payroll and fifth in games won. By 2002, its total payroll had fallen to 12th in the league, but the team had moved into first place in games won. The A’s first-place spot was an unprecedented outcome. Going against the assumption that large payrolls translate into postseason wins, the A’s used analytics— relying heavily on team on-base percentage (OBP) rather than individual players’ performances—to acquire and sign players. Rather than looking to his scouts to recruit players, Beane put a quantitative analyst in charge, thinking this shift in strategy would result in: • A more competitive team. • A more efficient way to find and draft players. • A way for small-budget teams to reach the playoffs. Beane’s focus on OBP in his ranking of hitters was key: The statistic reflects discipline in the batters’ box because it includes non-hits that may allow a player to reach base (walks, hit batsmen or, rarely, catcher’s interference). To evaluate the Moneyball effect, we used some of the same data analysis, visualization techniques and statistical models the A’s leveraged. Specifically: Did the effect exist? Was it sustainable? If not, what should or could the A’s have done next to sustain success?
But was this approach actually a winning strategy? Was it a sustainable strategy for the A’s? Using baseball data from 1999-2011, which includes pre-Moneyball baseball, the Moneyball era and post-Moneyball baseball, we assessed Beane’s approach as a technique for winning games, championship playoffs and the World Series. Specifically, was this analytical management a good approach or simply a temporary fix? Could the A’s have stayed within reach of the postseason and World Series for a longer period of time by employing additional analytics? Or was a lack of a larger payroll going to inevitably sink the team no matter what scouting strategy the A’s adopted?
Correlations by years and teams / FIguRE 1
1 Correlation between payroll and games won 0.80 0.60 0.40 0.20 0 −0.20 −0.40 Correlation between payroll and OBP
data and method
We created a database that includes all information on team payroll and performance information for all MLB teams from 1998-2011. Variables were created to identify the A’s, teams that made the playoffs, teams that appeared in the World Series and World Series winners. A categorical variable identified the periods: pre-Moneyball (1998-1999), Moneyball in Oakland (2000-2003) and post-Moneyball (2004-2011). Other variables included dividing the teams into low, medium and high payroll based on median values, quartiles and rank of the team in terms of payroll and market size. Performance statistics included standard batting, pitching and defense for each team. Data were analyzed using standard statistical techniques, including univariate, bivariate and multivariate
OBP = on-base percentage
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methods. These include correlation, regression, time series analysis and analysis of variance using SPSS Statistics software (version 19), and plots and multivariate visualizations using Excel and Tibco Spotfire software.
Online Figure 4 also shows the blue circles (the A’s during their introduction of analytic scouting techniques) in the upper-left corner of plot, indicating a higher number of games won than many other teams during the A’s initial years of analytic scouting with a lower payroll than many teams. Note the separation by pre-Moneyball era, post-Moneyball era and the actual Moneyball era shows teams’ payrolls are widely diverse, with some team payrolls in the pre-Moneyball era higher than team payrolls in the post-Moneyball era. With the addition of the unique identifier for Oakland, you can see the team payroll has been on the low end, but was by no means the lowest.7 With Online Figure 4, you can ultimately understand Oakland’s position compared with all MLB teams and how it was uniquely successful during the Moneyball years. These illustrations tell us that Oakland’s 95 wins for each year in 2000-2003 made them highly competitive. What they don’t reveal, however, is whether the team actually succeeded in gaining a postseason berth and advanced to (or even won) the World Series. One more dimension can be added to the figures to make this clear.
Payroll, games won and oBP
Table 1 and Figure 1 compare the correlations—strength of the relationship between variables—of MLB payrolls, games won, payrolls and team’s OBP from 1998-2011. The A’s implemented its analytic scouting techniques from 2000-2003 before most other teams did. During those years, the analysis shows the decline—to a small extent—in the correlation between payroll and games won, but to a great extent between payroll and OBP. In other words, from 2000-2003, while a team’s larger payroll was still strongly linked to more wins, there was no longer a strong direct connection between payroll and OBP, possibly reflecting Beane’s choice to optimize his team’s OBP with the limited A’s payroll. The analysis in Figure 1 and Table 1 incorporates all MLB teams, so the change in the correlation also may indicate that a number of smaller payroll teams had begun to introduce analytics into their strategies. This was becoming an MLB change, not just something done in Oakland. While informative, it is impossible to know how much to translate this change into a true effect of Oakland’s use of analytics in its scouting. For that, you must examine individual team statistics.
Adding more dimensions
We also can look at the OBP and other team statistics over time to see a difference in terms of performance between teams that reach the postseason and other teams.
To examine the extent of the OBP effect, we constructed additional data visualizations. Each successive figure adds information from other variables and helps further explain Moneyball. The plots in Online Figures 1-4 (which can be found on this article’s webpage at www. qualityprogress.com) show greater degrees of information: • Online Figure 1 is a simple scatter plot of annual payroll by games won for each team over the season. • Online Figure 2 adds different colors to the plot: preMoneyball era teams are in red, and post-Moneyball era teams are in green. Teams at the time of Oakland’s introduction of analytics-driven scouting are in blue. • Online Figure 3 adds shapes to indicate Oakland’s values as circles. • Online Figure 4 shows the changing size of the markers to show the values of OBP for each team for each season.
Payroll, games won and OBP correlation / TABlE 1
Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Correlation between payroll and games won 0.658 0.564 0.331 0.321 0.442 0.419 0.526 0.491 0.536 0.491 0.327 0.476 0.366 0.372 Correlation between payroll and oBP 0.659 0.497 0.045 0.123 −0.048 −0.229 0.463 0.504 0.491 0.548 0.410 0.429 0.374 0.469 Pre-Moneyball Moneyball in Oakland
All teams using Moneyball analytics
OBP = on-base percentage
April 2012 • QP 39
Analytics’ impact on games won / FIguRE 2
3-D scatter plot
Online Figure 5 shows a peak in OBP leading up to the Moneyball years—perhaps giving the A’s the idea to maximize this statistic—but this peak was not seen in the years that followed. However, if the team had examined other key statistics, such as earned run average (ERA), it would have seen a similar increase. Note the ERA for playoff teams post 2000 (shown in Online Figure 6) shows much greater consistency (smaller box plot) than nonplayoff teams. While adding too much information could confuse the figures, the ability to use three axes, color and size
can actually add more clarity. Moving the OBP variable from the size dimension to the third axis of the plot, then using the size dimension to indicate a team’s presence in the postseason or in the World Series, you can
60 OBP 0.36 0.34 0.3 0.32 $50 OBP = on-base percentage
Marking: Marker by (row number) Color by Moneyball group Pre-Moneyball-era teams Moneyball-era teams Post-Moneyball-era teams Shape by Oakland dummy 0 1 Size by playoffs ≥1 ≤0
see how Oakland fared during its initial use of analytic scouting and whether it was a successful management implementation. Figures 2 and 3 give this information in a clear pattern. Figure 2 shows the initial four years of Oakland’s analytic scouting paid off because the A’s were in the playoffs each year (blue circles). Unfortunately, as shown in Figure 3, this did not translate into a World Series berth in any of these years, and the 95 wins per year was not sustainable after many MLB clubs started using analytical scouting techniques.
$100 $150 Team payroll (in millions)
Analytics’ impact on World Series appearances
3-D scatter plot
/ FIguRE 3
More than oBP
Figures and correlation show the A’s succeeded in optimizing OBP with a relatively small payroll, which translated into many more wins initially than would have been expected for its payroll level using traditional scouting techniques. While the A’s did make the postseason during all
four years of the Moneyball era, it never won the
World Series. Moneyball made the A’s successful and a contender, but this top-ranked team could not overcome traditionally stacked teams that could sign highsalary players more proficient in pitching and defense. It appears that optimizing one scouting statistic— the OBP offensive statistic—was not enough to win or even reach the World Series. And Oakland’s apparent edge quickly diminished after Moneyball techniques became widespread post 2004. As all MLB teams added analytics and players responded to the new ranking metrics, the correlation between payroll and OBP
$150 Team payroll (in millions) $100 $200
60 OBP 0.36 0.34 0.3 0.32 $50 OBP = on-base percentage
Marking: Marker by (row number) Color by Moneyball group Pre-Moneyball-era teams Moneyball-era teams Post-Moneyball-era teams Shape by Oakland dummy 0 1 Size by World Series ≥1 ≤0
returned almost to the levels it had been before 2000 (Figure 1).
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Using successive visualizations of the data gave a clearer picture of the initial outcomes and lack of ongoing effect of Oakland’s use of OBP to become a top-tier competing team with a middle to low-tier payroll.8 Would additional analytics have helped Oakland continue to be competitive or reach the World Series? Or is having a higher payroll the only way to succeed long term? An answer can be provided by fitting models to predict the payroll necessary to win in the postseason, looking at the minimum required statistics for pitching and defense, and examining other important offensive statistics.
but this statistic remained no different from other nonplayoff teams before and after the Moneyball era. From this analysis, you can infer that when teams with higher payrolls started looking at players with high OBP, the A’s were likely priced out of the market for these previously underrated players who were once considered hidden gems the A’s could sign. Another analysis for examining how important other statistics are in determining postseason and World Series play is to fit a logistic model predicting these outcomes. Table 2’s statistics were used in a model to predict each of these outcomes. For postseason play, Table 3 (p. 42) shows OBP has the largest odds ratio, although payroll, team walks (bases on balls or BB), starting pitchers’ ERA and closers’ saves, and team fielding percentages are also highly significant predictors of teams that will advance to the playoffs. However, when World Series play (two teams each year) is the model’s dependent variable, the only significant predictor is the starting pitchers’ ERA (Table 4, p. 42). This appears to indicate a good offense can get a team into the playoffs, but it needs excellent pitching to move to the World Series. Maximizing OBP was not enough to get the A’s beyond the playoffs. Finally, a linear regression model can indicate how much each statistic is worth and the incremental payroll
statistical analyses of Moneyball
To examine which statistics were most important to reach postseason play, we calculated and tested the differences between playoff teams and nonplayoff teams from 1998-2011, and looked at Oakland’s statistics during that time. Table 2 summarizes batting, pitching and defensive statistics that are significantly different among playoff teams and nonplayoff teams, and also includes Oakland’s statistics in those categories. Oakland’s statistics resemble the mean and median values of each group. During its playoff years, its OBP was much higher than the other playoff teams (indicating Beane’s preferred choice of statistic to maximize),
Playoff teams, nonplayoff teams and the Oakland A’s
All MLB teams Not in playoffs oakland A’s only Not in playoffs In the playoffs oakland A’s only In the playoffs Mean Median p-value comparing MlB teams in the playoffs and not in the playoffs OBP = on-base percentage ERA = earned run average MlB = Major league Baseball 97 96 0 207 205 0 809 833 0 0.270 0.271 0 0.348 0.354 0 1,046 1,035 0.045 625 640 0 104 99 0.018 3.94 3.68 0 47 48 0 Mean Median Mean Median 80 76 95 95 151 135 184 179 698 711 771 771 0.257 0.259 0.269 0.269 0.332 0.330 0.342 0.341 1,071 1,080 1,055 1,049 580 537 575 574 88 88 103 100 4.13 4.17 4.03 4.01 38 38 46 46 Mean Median Games Home won runs 76 76 167 164 rBI 713 708 Batting average 0.263 0.263 oBP 0.330 0.330 strike- Bases stolen outs on balls bases 1,079 1,076 530 527 95 91 erA 4.51 4.50 39 39
/ TABlE 2
Fielding saves errors percentage 107 106 104 99 97 98 110 107 0 98.22% 98.30% 98.24% 98.40% 98.38% 98.40% 98.22% 98.30% 0
April 2012 • QP 41
Logistic model to predict playoff teams / TABlE 3
dependent variable = playoffs or not Payroll On-base percentage Bases on balls Earned run average Saves Fielding percentage Pseudo r-square = 0.707 B 0 140.01 −0.01 −3.12 0.11 −28.87 standard error 0 40.83 0.01 0.52 0.03 9.14 p-value 0.039 0.001 0.106 0 0 0.002 odds ratio 1.00 6.41867E + 60 0.992 0.044 1.114 0
most significant variable in the model, again emphasizing the importance of good pitching. Although Oakland did make it to the playoffs during its Moneyball years, its maximization of OBP was not a significant predictor—positively or negatively—of postseason success or payroll. Rather, two pitching statistics—ERA and strikeouts by pitching staff—appeared important. Figures 4 and 5 focus on these two statistics, comparing teams that made the playoffs with those that didn’t, along with highlighting the A’s values. Although not always significant, there is a large gap in the average values of the playoff-bound teams and those that don’t make it that far. Although Oakland did not as actively pursue pitchers during the Moneyball era, the team’s ERA was among the lowest in the league, in large part because of starting pitchers it drafted and developed: Barry Zito, Tim Hudson and Mark Mulder. Although not as good as some other teams, Oakland still had contender-level values of
Logistic model to predict World Series teams / TABlE 4
dependent variable = world series or not Earned run average Saves Pseudo r-square = 0.846 B −2.22 0.06 standard error 0.62 0.03 p-value 0 0.077 odds ratio 0.109 1.063
strikeouts by its pitchers, especially during Moneyball years. Nevertheless, these statistics were not enough for Oakland to ever move on to the World Series during these years.
Linear regression to predict payroll / TABlE 5
Unstandardized B Playoffs Strikeouts Strikeouts by pitching Errors Payroll = dependent variable r-square = 0.853 11824359.68 −45966.77 73602.15 −250791.45 standard error 4315127.58 16944.88 17199.31 94879.04 standardized coefficients Beta 0.079 −0.619 0.991 −0.331 p-value 0.006 0.007 0 0.009
Leveling the field
Did the Moneyball approach work? Oakland was never able to bring home the MLB Commissioner’s Trophy— the ultimate measure of success in baseball—during its inaugural Moneyball years. During that time, however, Oakland made it to the playoffs, greatly increased its fan popularity and improved its reputation. The team was able to be as or more successful than most other teams with payrolls up to three times larger. After examining team performances from 1998-2011, it’s clear the team used analytics as an innovative way to level the payroll playing field. As recently as October 2011, Oakland’s strategy has been called “challenging the status quo” and “a lesson that implores us to not settle with tradition.”9
amount needed to boost a team into the playoffs. The baseball statistics that were found to be significant (reported in Table 2), as well as the dummy variables of playoff and World Series berths, were used as predictors of the team payroll. Table 5 shows the results of this analysis. Most interesting is the playoffs coefficient, which indicates reaching the postseason requires an additional $11.8 million above the mean payroll. Strikeouts are the
But Oakland’s success did not last, as Beane’s secret weapon became well known and other teams began to copy its methods. The widespread acceptance and use of sabermetrics in scouting now shows that other teams realize there is value in tracking individual and team statistics. Longer term, the models indicate that focusing exclusively on one statistic or area of the game (offense ver-
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sus defense or pitching) will not lead a team to a World Series win and will not provide a sustainable path to the postseason. All playoff teams have shown the ability to win games and have nearly equal offensive statistics. The models show offense can lead the team to the playoffs, If Oakland did not have the payroll to invest in peak performance players, it might have stayed competitive if it continued to innovate by using its analytic expertise to find more hidden gems in the areas of pitching and defense. While the advantage of Moneyball did eventually fade for the A’s, its success and universal adoption showed that analytical-based methods greatly changed and—some would argue—improved the game.
Average and standard deviation of team ERA / FIguRE 4
6 Non-playoff teams Playoff teams Oakland A’s Team earned run average (ERA) 5
but pitching will provide the edge in the World Series.
Lessons for the business world
Some universal lessons from Moneyball apply not only to business and hiring, but also general project strategies. Beane focused on a simple analytical measure that was a good indicator of overall success, not just from game to game or day to day. The OBP statistic is relatively easy to compute and understand, but it also accounts for different aspects of how players succeed at the plate.
Strikeouts by pitching
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Average and standard deviation of strikeouts by pitchers / FIguRE 5
1300 1250 1200 1150 1100 1050 1000 950 900 850 Non-playoff teams Playoff teams Oakland A’s 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Additionally, Beane was willing to risk going against traditional methods to implement his plan. It is important, however, not to optimize a novel statistic such as OBP at the expense of tried-and-true measures of success. Finally, it is important to know your competitors can and will use your methods against you. QP
REFERENCES AND NOTES
1. Michael Lewis, Moneyball: The Art of Winning an Unfair Game, W.W. Norton & co., 2003. 2. sabermetrics is the specialized analysis of baseball through objective and empirical evidence, specifically baseball statistics that measure in-game activity. the term is derived from the acronym saBR, which stands for the society for american Baseball Research. 3. coeli carr, “7 ‘Moneyball’ Hiring tips,” Forbes, sept. 23, 2011, www.forbes. com/sites/coelicarr/2011/09/23/data-mining-7-tips-on-hiring-the-moneyballway. 4. James Heskett, “How Will the ‘Moneyball Generation’ influence Management?” Working Knowledge, Harvard Business school, Oct. 6, 2011, http:// hbswk.hbs.edu/item/6787.html. 5. tim Harvey, “Five important Neuromarketing Lessons From ‘Moneyball,’” Neuromarketing, Dec. 6, 2011, www.neurosciencemarketing.com/blog/articles/ moneyball.htm. 6. catalpha advertising & Design, “the Moneyball strategy: can it Work For Your company?” Oct. 14, 2011, www.catalpha.com/blog/the-moneyball-strategycan-it-work-for-your-company. 7. complete payroll information can be found at www.stevetheump.com/ payrolls.htm. 8. all original figures were generated using tibco/spotfire software. Find more information at http://spotfire.tibco.com/products/overview/analyticsproducts.aspx. 9. catalpha advertising & Design, “the Moneyball strategy: can it Work For Your company?” see reference 6.
I. ELAINE ALLEN is research director of the Arthur M. Blank Center for Entrepreneurship, director of the Babson Survey Research Group, and professor of statistics and entrepreneurship at Babson College in Wellesley, MA. She earned a doctorate in statistics from Cornell University in Ithaca, NY. Allen is a member of ASQ. She also provides statistical consulting to the Los Angeles Dodgers and has done similar consulting for the Toronto Blue Jays. JULIA E. SEAMAN is a doctoral student in pharmacogenomics at the University of California-San Francisco, and a statistical consultant for the Babson Survey Research Group at Babson College. She earned a bachelor’s degree in chemistry and mathematics from Pomona College in Claremont, CA. Along with Allen, Seaman provides statistical consulting to the Dodgers.
April 2012 • QP
3.4 Per Million
BY Joseph D. Conklin
next in line
Always look ahead to the next project for maximum quality gains
In qualIty, the sequel is what usually makes things better. Who knows how often savings have been left on the table because organizations failed to look ahead to the next project? My friend Sam knows firsthand the value of lining up the next quality project before the first one is over. Just ask him about his job as a quality facilitator at Stream Shelter Research. One of his projects involved improving the visitor-request process. “Why do you need a process for that? I just walk in or out the door, and that’s it,” I said. It turned out not to be that simple. proprietary products and operations. Sam convinced me a process was required. He even showed me the request form (Figure 1) and flowchart (Online Figure 1, which can be found on this column’s webpage at www.qualityprogress.com). A string of lost sales and canceled orders convinced management something needed fixing. In finding out why, one issue repeatedly mentioned was the cumbersome process for arranging visits. If it takes too long, customers lose interest, and audit deadlines for government regulators might be jeopardized. Errors in registration may cause authorized visitors to be turned away at the gate. If visitors are also customers, they rarely return. Media visitors, too, might not feel encouraged to offer Stream Shelter good press. Management asked ables: the length of time to approve a visit and the percentage of visitor registrations performed in error. When management saw the charts in Figures 2 and 3 for the first time, it was shocked and incited to take action. Sam led the first improvement team, which flowcharted the visitor-request process, brainstormed possible causes of error, and developed the cause and effect diagram in Figure 4 (p. 46). The combination of the brainstorming and the cause and effect diagram led to the check sheet in Online Figure 2. The team wanted to know which of the possible causes were the actual ones. Thanks to the data revealed by the check sheets over several weeks, the team prepared the Pareto chart shown in Figure 5 (p. 46). and the array of customers is diverse. Researchers, suppliers, potential customers and government auditors are always showing up to look things over, and that means contact with highly for the quality department’s help in improving the process, and Sam drew the assignment. He dug through the security department’s records for the last 12 months and estimated two important vari-
Savings are often left on the table because you fail to look at lining up the next quality project.
Visiting the issue
Stream Shelter performs contract R&D for companies in its industry, a market subjected to government regulation. It takes ideas that pass proof of concept and helps determine the next step to full-scale production. The pace is fast, the business environment changes rapidly,
Turning things around?
When the team and Stream Shelter management saw the Pareto chart, the top three causes showed low-hanging fruit: 1. “Pass not delivered” was traced to errors by the post office in reading handwritten addresses on the envelopes containing the passes. Security
44 QP • www.qualityprogress.com
Visitor request form
Requestor Supervisor Visitor name Visitor organization/contact
/ figure 1
Type of visitor Sister plant Customer Auditor Media interviewee
less-tangible parts of the process might interact in such a way to limit the overall gains from the new material and equipment. Attacking the less-tangible parts required a more holistic, integrated view of the visitor-request process. At the time, the process lacked an owner. Its parts were scattered across multiple functional groups at Stream Shelter. Under pressure from other urgent business matters, management concluded the tangible improvements were enough and eventually disbanded the team after it completed one year of monthly monitoring. Not surprisingly, the performance plateaued in the next six months, as shown in Online Figures 3 and 4.
Security check Pass issued Pass returned Departure sign off
Y / n Y / n Y / n Pass number reason for visit
switched to computer-generated mailing labels to reduce this problem. 2. Warped badge stock was traced to material deteriorating after being held too long in storage. Management purged the old stock and bought replacement material under a new policy of discarding material if it was not used by a certain date. 3. Outdated badge readers were addressed by purchasing new ones and maintaining them more diligently.
The team continued to meet monthly to monitor progress. During the next 12 months, lead time and error percentages were gradually reduced to about twothirds of their initial levels, as shown in Figures 6 and 7 (p. 47). During these 12 months, Sam advocated to move past the low-hanging fruit and concentrate on material and equipment. The Pareto chart suggested the possibility of additional gains in the people and methods aspects. Sam warned that the
Please try again
The new status quo might have been sustained longer but for a combination of events that stimulated a second improvement effort. Even with the equipment improvements, enough disgruntled visitor stories made it back to the corporate office that management decided to compare Stream Shelter with its sister plants. Stream Shelter’s times remained the longest—twice as long on average
average visitor processing time in days / figure 2
12 11 10 9 Days 8 7 6 5 4 3 1 2 3 4 5 6 7 8 9 10 11 Months before ﬁrst implementation 12
10.71 10.53 11.73 11.24 10.88 11.30 10.92 11.35 10.99 11.80 10.35
average registration error percentage / figure 3
16% 15% Error percentage 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 1 2 3 4 5 6 7 8 9 10 11 Months before ﬁrst implementation 12
14.3% 14.1% 14.4% 14.0% 15.1% 14.1% 14.3% 15.4% 14.9% 14.5% 15.0% 14.5%
April 2012 • QP 45
3.4 Per Million
compared to its sister facilities. Meanwhile, Stream Shelter began preparations to achieve ISO 9001:2008 certification to meet government regulations and customer expectations. Because the goals of certification entailed removing self-contained functional silos as much as possible, the scattered responsibility for the visitor-request process across multiple departments felt at odds with the new effort. When an untrained new hire failed to follow up on one important request, a major potential client was turned away at the gate because security personnel could not find approval for his visit. The resulting loss of a $50,000 contract immediately focused management’s attention. Things grew really exciting when security rejected the request for the ISO 9001:2008 accreditation people the day before they were scheduled to arrive. The supervisor who signed the form no longer A new request was expedited with noticeable encouragement and attention from Stream Shelter’s top management. The shortcomings of the visitor-request process caught the attention of the accreditation people who independently seconded one of Sam’s standing suggestions: Start a second cross-functional team that included more operations employees, in addition to those from the supervisory and technical ranks.
Warped pass material Torn/illegible approval form Torn/illegible/wrong pass Obsolete approval lists Obsolete list of valid ID forms Obsolete approval procedure Visitor process problems
Visitor process problems cause and effect diagram
/ figure 4
Form incomplete/ﬁlled out wrong
Untrained/poorly trained supervisor Untrained/poorly trained security Untrained/poorly trained requestor Unmailed/late/undelivered pass No follow up by requestor People Environment
Worn/uncalibrated pass reader Equipment
Pareto chart of visitor problems
80 70 60 50 40 30 20
12 39 35 32 75 69 64
/ figure 5
worked in Sam’s quality assurance group.
With the benefit of increased management attention, the team received additional training in lean Six Sigma improvement techniques and benchmarking against sister facilities, and was able to assess several enhancements that, when implemented, encouraged a more crossfunctional perspective. Ideally, the visitorrequest process needed a single owner. Senior management identified a few potential candidates within the company.
In all cases, a month or two was needed to transition responsibilities to free up the new process owner for the job. Until an owner could be established, Stream Shelter management approved the second team’s recommendations, changed some of the team members and asked it to take charge of the initial implementation. The most important enhancements were: 1. Assigning specific individuals as hand-off points among the requesting
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Pa ss W no ar td pe el d iv ca pa er n’ ss ed tm m at ak e Re e ria ad pa l– ss r e No ead r un /w /lo ab na ro g le m ng pa to W s e s ro on up s ng ap er fo pr vis rm ov or ve al rs di io sa n gr N us ee am ed s e w o ith n In vi pa co m sito ss pl r et e fo rm Ill eg ib le fo Pa rm ss no tm co Re ai m q le pa ue d ny sto Vi da r n si ta ot to un r p bas in e a r Su cce ese pe p n rv tab ts n on isor le I o/ ap na D p m co Su rov e n m pe al ot pa rv li ny iso st da r n t o vi N aba t in si o se to r r fo ec rm ei fo ve r d
organizations, personnel and security to ensure a request reached the next stage of processing. 2. Making visitor-request process training a mandatory completion item in new hires’ orientation. This ensured new employees did not receive their entrance badges until training was completed. 3. Clarifying the approval procedure so security could accept the name of the supervisor who was in place on the
average visitor processing time in days / figure 6
12 11 10 9 Days 8 7 6 5 4 3 1 2 3 4 5 6 7 8 9 10 Months after ﬁrst implementation 11 12
10.92 11.03 10.07 9.64 10.56 10.09 9.42 8.87 9.30 8.42
average registration error percentage / figure 7
16% 15% 14% Error percentage 13% 12% 11% 10% 9% 8% 7% 6% 5% 1 2 3 4 5 6 7 8 9 10 Months after ﬁrst implementation 11 12
15.4% 14.3% 14.2% 14.6% 13.9% 15.7% 15.1% 13.6% 12.4% 11.8% 11.0% 10.9%
average visitor processing time in days / figure 8
12 11 10 9 Days 8 7 6 5 4 3 19 20 21 22 23 24 25 26 27 28 Months after ﬁrst implementation 29
3.54 6.90 5.76 5.85 7.73 6.99 6.39 7.79 6.82 5.73 5.08 4.74
average registration error percentage / figure 9
16% 15% 14% Error percentage 13% 12% 11% 10% 9% 8% 7% 6% 5% 19 20 21 22 23 24 25 26 27 28 Months after ﬁrst implementation 29 30
6.6% 5.6% 9.5% 13.5% 14.2% 13.4% 13.3% 11.8% 10.4% 10.1% 9.9% 8.5%
date the approval form was signed. 4. Removing the visitor approval list from the set of items requiring senior management sign-off for all changes. This had proved to be a barrier in disseminating the current list to all who needed it. Instead, senior management added administration of the approval list to the annual plant audit so the responsible employees could demonstrate they were handling it right. 5. Rotating personnel between the two key departments—personnel and secu-
rity—so both areas developed a cadre with more comprehensive knowledge of how to check the pertinent details of a pending visitor request. Figures 8 and 9 show the progress in the 12 months after the second team started implementing its recommendations. By the end of one year, Stream Shelter’s visitor-request process performance aligned with its sister plants. At this point, Sam and all of Stream Shelter were proud and relieved at what had been accomplished. They were poised and
prepared to make the visitor requisition process even better. QP
The column is based on a true story involving a real organization. names and data have been changed to maintain the organization’s confidentiality.
JOSEPH D. CONKLIN is a mathematical statistician in Washington, D.C. He earned a master’s degree in statistics from Virginia Tech in Blacksburg and is a senior member of ASQ. Conklin is an ASQ-certified manager, engineer, auditor, reliability engineer and Six Sigma Black Belt.
April 2012 • QP 47
QuAlity in tHe First Person
BY LuLa Moon
Quality Assurance at Home
Do you have the lime to make your guacamole?
HAVING RIPE avocados, garlic, onion, jalapeno and sea salt but no fresh limes when I want to make guacamole is like having various types of conforming widgets in stock but no connecting hardware. So to run my home efficiently—and never again forget the lime—I’ve incorporated quality assurance principles. Quality assurance 5S principles—sort, set in order, shine, standardize and sustain—benefit my home life in the same ways that quality assurance principles benefit the workplace. When I sort and remove clutter, have my favorite delivery menus set in order and readily available, clean and shine household areas and equipment, make standardized lists to ensure I have an inventory of necessities like toilet paper, and sustain my routines, I simultaneously simplify and shape home life into a well-oiled machine. When I make a list of errands to run and constellate them geographically, I save time and gas, like lean manufacturing waste elimination (motion, transportation and waiting). ISO 9001:2008 requires six written procedures. My home life operates more smoothly with written standard operating procedures (SOP) in the form of lists designed to eliminate the human error of forgetfulness. Updated and current revision status required by section 4.2.3(b, c) ensures I benefit from using the newest lists. To illustrate, I’ve included four lists that may be used to brainstorm and create your own customized home-care SOPs.
Recurring grocery list / tAble 1
Earth Fare grocery store and local farmers’ market: Fruit: Apples, oranges, bananas, pineapples, cherries, watermelon, cantaloupe berries: blueberries, raspberries limes, lemons Avocados Mushrooms Ginger Coconut Dark green lacinato (dinosaur) kale, chard, spinach, mustard greens Cilantro, basil, rosemary, parsley, chives, cumin powder sweet red peppers, broccoli, carrots, okra, peas tomatoes, sun-dried tomatoes onions, garlic, jalapenos sweet potatoes, yukon gold potatoes seeds for sprouts Peanut butter, almond butter Hummus, olives Kidney beans, black beans Miso, seaweed raw nuts Quinoa Granola Almond milk eggs rbGH-free cheese, yogurt, cream Honey Herbal teas Chicken salmon Walmart: Coconut oil toilet paper epsom salt (or at Dollar tree) Whole Foods: Citrasolv valencia orange dish soap Fragrance-free laundry soap Celtic sea salt Figs, pears (in season) Pet Supplies Plus: Cat food—grain-free Petco: Cat litter in reusable container
My recurring grocery list (Table 1) reminds me to restock frequently used kitchen, bathroom and pet-care items, plus it helps me keep track of stores that have the best price and product selection. Grouping items on my list in the same order as the stores display them maximizes shopping productivity like lean manufacturing standardized work maximizes manufacturing productivity. For example, I love fresh coconut and peanut butter, but before I added them to my recurring grocery list, I often forgot them and ended up buying and eating less-nutritious snacks food from the convenience store and vending machine. An unexpected additional benefit is that the sound of me cracking a coconut to remove the coconut flesh in my front yard has become a neighborhood socializing magnet. My kayaking gear list (see Online Table 1, found on this article’s webpage at www.qualityprogress.com) guarantees I have electrolytes to replenish my body fluids, salt and energy while I am
48 QP • www.qualityprogress.com
exposed on the river on hot sunny days. It also ensures I have a fleece hat and long-sleeved shirt for warmth after the temperature suddenly plummets due to a summer thundershower (think identifying potential failures). My day hiking gear list (Online Table 2) identifies potential failures and promotes safety. In case I end up on the trail after dark, the list ensures I remember to bring a flashlight, lighter, whistle, jacket and ground cloth. My miscellaneous reminders list (Online Table 3) prompts me to have the gate access code and condo key when I arrive at my vacation destination. It also similarly reminds me to have the access code and key or combination for my storage unit, and to take my reading glasses to help me see menus and programs during a night on the town.
Quality assurance principles benefit my home life the same way they benefit the workplace.
Another universally helpful list includes one for the toiletry bag and traveling items. for home-care continuous improvement. Advantages of this structure are focus (I know what needs doing) and increased productivity (I get it done). As a result, I enjoy more quality in my personal life. QP
LULA MOON earned a bachelor’s degree from Birmingham-Southern College in Alabama. An ASQ member, she is an ASQ-certified manager of quality/organizational excellence, quality engineer, technician and auditor.
My family and I, as customers of and stakeholders in our home, deserve the satisfaction of knowing that our needs are being remembered and met. Quality assurance principles, when implemented in the home, provide a process management tool
RE TO GIS DA TER Y!
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This must-attend conference will demonstrate the impact that quality can have on healthcare organizations and offer relevant and clearly measured results from improvement methodologies and processes that your organization can use.
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April 2012 • QP 49
BY HenrY J. LindBorg
Should You Blow the Whistle?
The career implications of standing up for the truth
Since the advent of stakeholder management approaches in the 1980s, for-profit and not-for-profit organizations have sought to link their brands not only to improved products and service, but also to community concern and social responsibility. After a decade of corporate scandals and economic meltdown, an important risk affecting brand identity and customer retention is misconduct or negligence in areas such as health, safety, environmental protection and financial integrity. Law, enterprise risk management, Baldrige criteria and global social responsibility standards (ISO 26000) have attempted to strengthen corporate ethics. Enterprise risk But life is not improving for those who actively respond to misconduct, whether it’s fraudulent fiscal transactions or activities, or supply chain risks threatening the health and safety of employees and the public. In fact, the “2011 National Business Ethics Survey” conducted by the Ethics Resource Center reported a sharp increase in retaliation against whistle-blowers.2 The retaliation can be devastating for the individual, irrevocably altering relationships with management and co-workers. It may include dismissal accompanied by attacks on the whistle-blower’s character and professional competence that result in diminished prospects for future employment. port what you know to those outside your organization who could help? To better understand the significance of whistle-blowing for individuals and organizations committed to ethical practices, I consulted Tom Devine, co-author of The Corporate Whistle-blower’s Survival Guide: A Handbook for Committing the Truth,3 the most comprehensive compendium of advice and resources on the topic. Over the past 33 years, in his work as legal director of the Government Accountability Project, a Washington D.C.-based nonprofit organization with the mission to provide protection and advocacy for whistle-blowers,4 Devine has assisted more than 5,000 “persons of conscience”—among them quality professionals—in making risky and sometimes life-altering decisions to tell the truth. Though the project began with government, it now extends to businesses of all types. He wrote the guide because he wanted to make a difference, share lessons learned in his practice and overcome the limitations of working case-by-case. What makes a whistle-blower? “Truth itself is a motivation,” Devine said. Whistle-blowers feel compelled to speak in spite of risking alienation by co-workers and entering an unequal contest with an organization. “It’s David and Goliath, with truth in the management advocates that leaders create a strong ethical work environment, and the Baldrige criteria asks for measures of ethical leadership, corporate awareness and monitoring systems. The Sarbanes-Oxley Act1 and ISO 26000 call for whistle-blowers—individuals who discover and expose wrong-doing in their organizations—to be protected from retaliation. Becoming a whistle-blower is therefore no easy choice, even for quality professionals knowledgeable of organizational behavior and accustomed to audit processes with clear guidelines for nonconformance and corrective action. The decision may, in fact, represent a career crisis with profound personal and professional consequences. With other channels exhausted, do you reslingshot,” he said. Of course, motives go beyond pure noble purpose and include strong emotions, including, at times, resentment. Where should potential whistleblowers begin? Think in terms of quality process, Devine advised. First, the potential whistle-blowers need to talk it out and understand the potential consequences of
50 QP • www.qualityprogress.com
their actions. The individual needs their eyes open to the risks they are taking, and needs to discuss their plans with family members who may be affected. Their case and their resolve must be tested before action is taken. This shouldn’t be an instance of knee-jerk actions clouded by emotion. They should seek support, which may include professional organizations. Whistle-blowers are damaged, and sometimes dispirited, by isolation. “Regardless of evidence or legal backing, it’s not enough simply to be right,” Devine said. How can quality professionals support the important role of whistleblowers in corporate ethics? Quality professionals are natural allies with knowledge of social responsibility and quality standards. They should assist in promoting the view that employees are
problem-solvers rather than dissidents and resources rather than threats. According to Devine, the role of whistle-blower should move from “traitor to the eyes and ears of [an organization] that wants to prevent the consequences of a mistake.” How about leadership? How leaders embrace whistle-blowers depends on organizational maturity. Mature organizations value the flow of information and transparency. Though leaders are human and may react defensively, some good advice is that it’s bad business to kill the messenger. Leaders should recognize that it’s a high-risk gamble to suppress the truth. As Devine put it, “Whistle-blowing may be a bitter pill, but it’s good medicine.” Why support whistle-blowers? “Ultimately, it’s about the duty of citizens to support whistle-blowers. “It’s not to slay
dragons or prevail in conflicts,” Devine said. “Rather, it’s no more and no less than making a difference for the better.” QP
ReFeRenceS AnD nOte
1. The Sarbanes-oxley Act is a United States federal law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms. The bill was enacted as a reaction to a series of major corporate and accounting scandals. 2. ethics resource Center, 2011 National Business Ethics Survey, www.ethics.org/nbes/index.php. 3. Tom devine and Tarek Maassarani, The Corporate Whistleblower’s Survival Guide: A Handbook for Committing the Truth, Berrett-Koehler, 2011. 4. For more information on the government Accountability Project, visit www.whistleblower.org. HENRY J. LINDBORG is executive director and CEO of the National Institute for Quality Improvement in Fond du Lac, WI, which provides consulting in strategic planning, organizational development and assessment. He holds a doctorate from the University of Wisconsin-Madison and teaches in a leadership and quality graduate program. Lindborg is past chair of ASQ’s Education Division and of the Education and Training Board. He also chairs the IEEE-USA’s Career Workforce Policy Committee.
R E S U LT S
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Solutions for Today’s Challenging World
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April 2012 • QP 51
BY Connie M. Borror
When are there really differences in overlapping confidence intervals?
while teaching a workshop for a small manufacturing firm, two of the participants approached me to discuss what seemed to be a simple problem they had encountered at work. Recently, management noticed a decrease in the number of products coming off the two assembly lines in their manufacturing plant. Specific steps in the product’s assembly were done by hand. The company was interested in determining whether the perceived decrease in production was real. Several studies had been planned. However, management first wanted to determine whether there was a significant difference between the two assembly lines with respect to average time to complete the task. Management randomly selected 20 people from assembly line one (AL1) and 20 people from assembly line 2 (AL2) to participate in a designed study in which workers completed a particular task. The time to complete the task was recorded in seconds. Together, the employees carried out the experiment using all the usual recommendations, such as randomization and controlling factors that were not of interest in the study. Having some understanding of statistics, the participants realized the groups of interest were independent and wanted to test the hypothesis that mean1 = mean2 or mean1 - mean2 = 0, in which mean1 was the true average time to complete the task for all AL1 workers, and mean2 was the true average time to complete the task for all AL2 workers. They really wanted to know whether there was a significant difference in the average time to complete the task by the two groups (that is, mean1 ≠ mean2 or mean1 – mean2 ≠ 0). The experiment was carried out, and results were collected. Table 1 shows the summary statistics. They decided to analyze the results separately but agreed to use confidence intervals with a 95% level of confidence to reach their conclusions. They came to me with their results and the problem: Using 95% confidence intervals and the same data, they reached two different conclusions. One reported there was no difference between the two groups, while the second reported there was a difference. After looking at both sets of results, it was obvious they carried out their individual analyses carefully and without error. So what went wrong? How could two different conclusions be reached using the same information? lapped, the first employee concluded there was no statistically significant difference in the average time to complete the task for the two groups. In fact, he noted that because the confidence interval for mean2 overlapped roughly 24% of the interval on mean1, there was even stronger evidence supporting his conclusion. The second employee, however, recalled seeing a method for constructing a confidence interval on the difference in two population means and used it to obtain a single 95% two-sided confidence interval 0.37 ≤ mean1 – mean2 ≤ 6.59, and concluded because 0 was not contained in this interval (although it was just barely outside), there was a statistically significant difference between the two groups. At this point, they were not sure who was correct. One of them also had performed a two-sided hypothesis test and found a p-value = 0.030. Still, they were at a loss. Let’s examine the two approaches they used.
Mean (in seconds) Standard deviation (in seconds) Sample size Standard error (SE) of the mean (in seconds)
assembly line designed study results / table 1
Asembly line one ¯1 = 20.93 x s1 = 4.79 n1 = 20 Se1 = s1 4.79 = =1.1 √n1 √20 Se2 = Assembly line two ¯2 = 17.46 x s2 = 4.92 n2 = 20
4.92 s2 = =1.1 √n2 √20
First, let’s examine what they did in more detail. Both employees assumed time to complete a task for the assembly lines to be normally distributed, and they did not assume anything about the population variances (what they were or whether they were equal). In addition, both employees constructed 95% two-sided confidence intervals on the individual population means, mean1 and mean2: 18.69 ≤ mean1 ≤ 23.17 and 15.15 ≤ mean2 ≤ 19.76. Figure 1 shows the individual 95% confidence intervals. That’s where the similarity between the two analyses ended. Examining the confidence intervals and realizing they over-
The first participant used a two-interval method—examining the two confidence intervals on the individual means and seeing whether they overlapped. Because
52 QP • www.qualityprogress.com
he assumed both populations were normally distributed, the sample sizes were fairly small (n1 = n2 = 20), and nothing was known about the population variances. The 100(1 – α)% confidence intervals on the two population means, mean1 and mean2, were (using notation from Table 1): ¯1 − t α,df1 ( n ) ≤ mean1 ≤ ¯1 + t α,df1 ( n x x 2 2 ¯ ¯ √ 1 √ 1 (equation 1) ¯2 − t α,df2 ( n ) ≤ mean2 ≤ ¯2 + t α,df2 ( n x x 2 2 ¯ ¯ √ 2 √ 2 (equation 2) in which the values of t1 and t2 are found using Student’s t-distribution. Often, the interpretation of the intervals is either: • If Equations 1 and 2 do not overlap, there is a statistically significant difference between the two populations. • If Equations 1 and 2 overlap, there is no statistically significant difference between the two population means. The first interpretation is always true.1 However, the second interpretation is not entirely correct. In fact, if the two confidence intervals overlap, a statistically significant difference may or may not exist between the two population means.
s2 s2 s1 s1
ference between two population means, mean1 – mean2, for independent samples: ¯ x (x1 − ¯2) − t*√(SE1) + (SE2) ≤ mean1 −
Power. The two-interval method fails to reject a false null hypothesis more often than the single-interval method.2-4 As a result, the two-interval method is less powerful than the single-interval method. Statistical significance. Whether using hypothesis tests or confidence intervals, statistical significance does not imply practical significance. Paired data. If two groups you’re comparing are dependent, the two-interval method is inappropriate. A single-interval method for paired data should be used. Are those confidence intervals? There are many different types of intervals, such as confidence, tolerance and prediction intervals, for example.5 It may not always be clear from a graph or discussion what the interval represents. Standard error bars, for example, look similar to confidence intervals, but they are typically intervals such as ¯ ± x understood, these intervals can be misinterpreted as confidence intervals. If confidence intervals on individual parameters do not overlap, we know for sure a statistically significant difference exists. It’s when the confidence intervals do overlap that the conclusions are unclear. We must rely on additional exploratory analysis to determine statistical significance and expert knowledge to determine practical significance. QP
1. Donald J. Barr, “Using Confidence intervals to Test Hypotheses,” Journal of Quality Technology, Vol. 1, no. 4, october, 1969, pp. 256-258. 2. ibid. 3. Lloyd S. nelson, “evaluating overlapping Confidence intervals,” Journal of Quality Technology, Vol. 21, no. 2, April 1989, pp. 140-141. 4. nathaniel Schenker and Jane Gentleman, “on Judging the Significance of Differences by examining the overlap Between Confidence intervals,” The American Statistician, Vol. 55, no. 3, April 2001, pp. 182-186. 5. Christine M. Anderson-Cook, “interval Training,” Quality Progress, october 2009, pp. 58-60. CONNIE M. BORROR is a professor in the division of mathematical and natural sciences at Arizona State University West in Glendale. She earned her doctorate in industrial engineering from Arizona State University in Tempe. She is a fellow of ASQ and the American Statistical Association. Borror is also editor of Quality engineering.
mean2 ≤ (x1 − ¯2) + t*√(SE1)2 + (SE2)2 ¯ x (equation 3) Again, t* is found using Student’s t-distribution. Refer to this as the single-interval method. For the second employee’s analysis, Equation 3 was used to construct the 95% confidence interval (0.37 ≤ mean1 – mean2 ≤ 6.59) from earlier. So what about my participants’ problem? I explained the results from the two-interval method were incorrect. The most efficient method to use for their problem was the single-interval method for independent samples, constructing a confidence interval on the difference in the two population means (Equation 3). This was the method used by the second participant in which he found the 95% confidence interval to not contain the value 0, concluding there was a statistically significant difference between the two groups with respect to average time to complete the task.
s . If not clearly stated or √n
Recommendations and cautions
If the two-interval method can sometimes lead to the wrong conclusion, can it be useful at all? The answer is yes, but with caution. When comparing two confidence intervals, be mindful of: Decision making. If the two individual confidence intervals do not overlap—leading to the rejection of the claim mean1 – mean2 = 0—the single-interval method will also lead to rejection of
mean2 = 19.76
The second employee used a 100(1– α)% two-sided confidence interval on the dif-
95% confidence intervals for two population means / figuRe 1
24 23 22 21 x ¯1 = 20.93 24% L1 = 18.69 x ¯ 2 = 17.46 mean1 = 23.17
20 19 18 17 16 15 x1 x2
this claim. If the two individual confidence intervals do overlap, then the singleinterval method may lead to rejection of the claim mean1 – mean2 = 0. More information is needed.
L2 = 15.15
April 2012 • QP 53
Special Advertising Section
on qualit y and improvement
R e S u lT S
may 21–23, 2012
anaheim, California anaheim Convention Center
Proven Solutions in Today’s Challenging World
The 2012 ASQ World Conference on Quality and Improvement will be held at the Anaheim Convention Center in Anaheim, CA, May 21–23. Read more about the sponsors and exhibitors in this special guide. For more information, visit wcqi.asq.org/sponsor-exhibits/index.html.
A special thank you to all of our sponsors and exhibitors!
Professor of Management Applied Research and Statistical Methods
The Lockheed Martin Engineering Management Program (EMP) in the College of Engineering and Applied Sciences (CEAS) at the University of Colorado Boulder is seeking a motivated professional to join our fast-growing program. This professorial position is for a Scholar-inResidence (official rank) in the EMP and, for the right candidate, may be accompanied by an additional appointment as the Deming Professor of Management. The successful candidate will be capable of teaching the course sequences offered by the EMP in the Quality Sciences (EMEN 5042 and 5043) and Applied Statistics and Research Methods (EMEN 5005, 5900, 5610, and 5620). Sample syllabi for these courses can be found on the EMP website at http://emp.colorado.edu, accompanied by a complete description of this program. This position is a non-tenure track, 4-year, renewable appointment. The successful candidate will possess the following minimum qualifications: a terminal degree (Ph.D. or the equivalent) in a field of study related to the mission of the program and subject matter to be taught; substantial and meaningful experience teaching quality methods, applied research methods, and applied statistics to working engineers, researchers, and scientists either in a higher education setting, in a consulting practice, or (preferably) both arenas; a documented record of successful teaching performance; and significant experience working in business and industry as a quality manager or statistician or in a similar role. Desired qualifications also include: a record of creative or scholarly activity in the subject matter associated with this position; management experience in business and industry; experience in or working with high tech and/or service industries; experience in providing instruction in a distance education environment; experience with a graduate-level Engineering Management Program, or an MBA program. In order to apply for this position, candidates must apply at: www.jobsatcu.com, posting #816892. Additional information related to this position can be obtained by contacting Dr. Jeffrey Luftig, Chair, Search Committee at Jeffrey.firstname.lastname@example.org. The University of Colorado Boulder is an Equal Opportunity Employer.
Your QualitY advisor
are you in a bind at work? are you looking to clarify a term or methodology? Have you run into a problem where nobody seems to have the answer? do you wish you had a quality mentor? someone you could turn to when you run into a roadblock? You do. QP’s experts will provide answers and insight to your toughest quality queries. simply email your situation, question or problem to email@example.com, and QP’s subject matter experts will offer their sage advice in our Expert answers department.
54 QP • www.qualityprogress.com
Special Advertising Section
20|20 Integrated Solutions A2LA – American Association for Laboratory Accreditation Accelerated Quality Improvement Actio Software Corporation American Quality Institute AQS Management Systems Inc. ASI Datamyte Inc. ASQ Media Sales ASQ Social Responsibility Baldrige Performance Excellence Program – NIST
417 610 716 611 416 418 714 816 703 515
Memory Jogger Minitab Inc. The National Graduate School of Quality Management National Quality Assurance NSF International Strategic Registration Orkin Commercial Services Perry Johnson Consulting Inc. PQ Systems Inc. Productivity Press – Taylor & Francis QI Macros SPC Software for Excel QiSOFT Quality Council of Indiana Quality Institute of America
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Systems2win Taylor & Francis Thompson Reuters uniPoint Software Inc. University of Scranton Verify Inc. VSC VTR Inc.
315 617 325 514 316 728 724 729
University of Michigan College of Engineering 511
Platinum Sponsor and Lanyard Sponsor Minitab Inc. Career Fair Sponsor MEIRxRS Silver Sponsor EtQ Inc. Executive Roundtable Sponsor The Boeing Company Executive Roundtable Sponsor The Coca-Cola Company
QualiWare Inc. RealityCharting SAS Institute Inc. – JMP Division SGS The Shingo Prize Society of Manufacturing Engineers Sparta Systems StatPoint Technologies Inc.
CArEEr FAIr ExhIBItorS
Goodrich Aerostructures Johnson & Johnson MEIRxRS Zimmer
Booth 129 215 328 228
403 328 517
ASQ SECtIonS, DIvISIonS, AnD ForuMS
Audit Division 334 245 639 733 744 232 645 235 Healthcare Division Human Development and Leadership Division Inspection Division Lean Enterprise Division Measurement Quality Division Orange Empire Section 0701 Quality Management Division Reliability Division 747 Service Quality Division Six Sigma Forum 647 737 734 Software Division Statistics Division Team and Workplace Excellence Forum
237 139 143 736 743 745 242 746 239 137 635 236 135
Boise State University BSI California State University, Dominguez Hills CEBOS Ltd. Creative Healthcare USA EMNS-GSQA Ennov Solutions EtQ Inc. IAQG IBS America Inc. Implementation Partners LLC InfinityQS International Intelex Technologies Inc. The Juran Institute Inc. Master of Business Operational Excellence – The Ohio State University MasterControl Inc. McGraw-Hill Exhibitors as of March 9.
208 415 319 309 509 314 614 517 318 317 618 422 615 329 629 402 311
Automotive Division Aviation, Space & Defense Division Biomedical Division Chemical and Process Industries Division Customer-Supplier Division Design and Construction Division Education Division Electronics and Communications Division Energy and Environmental Division Food, Drug, and Cosmetic Division Government Division
Indianapolis Convention & Visitors Association 700
April 2012 • QP 55
power your workforce through Six Sigma and Lean education
Six Sigma and Lean start with education.
e University of Michigan oﬀers a full suite of Six Sigma and Lean courses. Whether it’s online, in the classroom or a custom oﬀering, we have a delivery option to ﬁt the way your people work and learn.
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56 QP • www.qualityprogress.com
Special Advertising Section
A special thank you to these
Minitab Inc. – platinum Sponsor and Lanyard Sponsor
1829 Pine Hall Road State College, PA 16801 814-238-3280 www.minitab.com Booth 403 Minitab is the leading software provider for Lean Six Sigma and quality improvement. Thousands of organizations trust Minitab for tools that yield bottom-line benefits.
And a special thank you to our
A2LA – American Association for Laboratory Accreditation
5301 Buckeystown Pike, Suite 350 Frederick, MD 21704 Phone: 301-644-3248 www.a2la.org Booth 610 A2LA’s primary mission is to provide comprehensive accreditation for laboratories, inspection bodies, proficiency testing providers, reference materials producers, and product certification bodies. 2167 Northdale Boulevard NW Minneapolis, MN 55433 Phone: 763-746-0505 www.aqsperformance.com Booth 418 AQS Management Systems provides ISO training, coaching, and project assistance in support of organizational improvement and implementation of international management system standards.
IBS America Inc.
125 Hartwell Avenue Lexington, MA 02421 Phone: 781-862-9002 www.ibs-us.com Booth 317 IBS solutions help companies achieve the full benefits of compliance and quality management, including reduced cost and risk and increased customer satisfaction, competitiveness, and profitability.
MEIrxrS – Career Fair Sponsor
100 North Brand Boulevard, Suite 306 Glendale, CA 91203 Phone: 818-247-1368 www.medexecintl.com Booth 328 MEIRxRS offers customized employment service solutions in the clinical research, regulatory affairs, quality assurance/compliance, and medical affairs functions for the pharmaceutical, medical device, biologics, diagnostics, and biotech industries.
AQS Management Systems Inc.
14900 Conference Center Drive, Suite 525 Chantilly, VA 20151 Phone: 800-772-7978 www.infinityqs.com Booth 422 InfinityQS provides quality control solutions to manufacturers worldwide. As the leading SPC software provider, InfinityQS serves companies such as Kraft Foods, the Pepsi Bottling Group, and other large manufacturers.
EtQ Inc. – Silver Sponsor
Baldrige performance Excellence program – nISt
Phone: 212-904-2000 www.mhprofessional.com Booth 311
399 Conklin Street, Suite 208 Farmingdale, NY 11735 Phone: 516-293-0949 www.etq.com Booth 517 EtQ’s quality management software identifies, mitigates, and prevents high-risk events in the quality system. Key modules include CAR/PAR, audits, document control, risk assessment, and more.
100 Bureau Drive, MS 1020 Gaithersburg, MD 20899-1020 Phone: 301-975-8946 www.nist.gov/baldrige Booth 515 The Baldrige Performance Excellence Program promotes organizational improvement and excellence through assessment, feedback, and sharing of best practices. The program manages the Malcolm Baldrige National Quality Award, the highest level of recognition that a U.S. organization can receive for performance excellence.
the national Graduate School of Quality Management
the Boeing Company – Executive roundtable Sponsor
499 Boeing Boulevard Huntsville, AL 35813 Phone: 256-457-2199 www.boeing.com Boeing, one of the world’s largest defense and space businesses, provides customers with best-of-industry, network-enabled systems, services, and solutions.
1233 Diablo Way San José, CA 95120 Phone: 650-619-8151 www.ennov.com Booth 614 As a global software vendor, Ennov Solutions provides an integrated, flexible, Web-based solution to enhance all quality processes (document life cycle, CAPAs, audit follow-up, and training) in a multitude of industries to customers such as Michelin and Novartis, among others.
186 Jones Road Falmouth, MA 02540 Phone: 800-838-2580 www.ngs.edu Booth 429 The National Graduate School of Quality Management offers accelerated, accredited degrees in quality systems management and homeland security. Specializations include homeland security, environmental quality management, and healthcare.
the Coca-Cola Company – Executive roundtable Sponsor
P.O. Drawer 1734 Atlanta, GA 30301 Phone: 404-676-4893 www.coca-cola.com The Coca-Cola Company is the world’s largest nonalcoholic beverage company. It strives to refresh the world, inspire moments of optimism and happiness, create value, and make a difference.
2300 East 14th Street Tulsa, OK 74104 Phone: 918-749-1119 www.statsoft.com StatSoft Inc. provides industry-specific enterprise solutions for integrating analytics with your company’s data repositories for process improvement, root cause analysis, and ongoing process monitoring and control.
399 Conklin Street, Suite 208 Farmingdale, NY 11735 Phone: 516-293-0949 www.etq.com Booth 517 EtQ’s quality management software identifies, mitigates, and prevents high-risk events in the quality system. Key modules include CAR/PAR, audits, document control, risk assessment, and more.
university of Michigan
2401 Plymouth Road, Suite A/B Ann Arbor, MI 48105-2193 Phone: 734-674-7200 www.interpro.engin.umich.edu Booth 511 The University of Michigan offers an array of lean and Six Sigma certifications and online master degree programs. Choose from online or classroom delivery options designed to fit your specific business application.
April 2012 • QP 57
Boeing is proud to sponsor the 2012 World Conference on Quality and Improvement.
World Conf 1_6.875 x 4.875.indd 1
2/9/12 2:23 PM
THE COCA-COLA COMPANY
IS PROUD TO PARTNER WITH ASQ
At The Coca-Cola Company, our mission is to protect and sustain our system and the communities that we serve. The Company’s Global Quality, Safety & Environment organization is committed to creating a high-performance culture in a safe, sustainable workplace. ASQ World Conference featured speaker:
V.P., Chief Quality, Safety & Sustainable Operations Officer The Coca-Cola Company
Monday, May 21st 2012 • 12:15 p.m. – 1:15 p.m.
Anaheim Convention Center • Exhibit Hall 800 West Katella Ave. Anaheim, CA 92802 • www.anaheimconventioncenter.com
The Global Voice of Quality™
Coca-Cola Quality, Safety & Environment
58 QP • www.qualityprogress.com
Special Advertising Section
20|20 Integrated Solutions
Creative Healthcare EMNS-GSQA
The Shingo Prize
A2LA – American Association for Laboratory Accreditation
The National Graduate School of Quality Management
Society of Manufacturing Engineers
Accelerated Quality Improvement
National Quality Assurance
Actio Software Corporation American Quality Institute
Goodrich Aerostructures (Career Fair)
NSF International Strategic Registration
StatPoint Technologies Inc.
Orkin Commercial Services
AQS Management Systems Inc. ASI Datamyte Inc.
www.asidatamyte.com asq.org/ads/index.html thesro.org
IBS America Inc.
Perry Johnson Consulting Inc.
Taylor & Francis
Implementation Partners LLC
PQ Systems Inc.
ASQ Media Sales/Naylor ASQ Social Responsibility Baldrige Performance Excellence Program – NIST
Productivity Press QI Macros SPC Software for Excel
Intelex Technologies Inc. Johnson & Johnson (Career Fair)
University of Michigan College of Engineering
University of Scranton Verify Inc. VSC
The Boeing Company Boise State University BSI
The Juran Institute Inc. Master of Business Operational Excellence – The Ohio State University
Quality Council of Indiana
Quality Institute of America Inc.
California State University, Dominguez Hills
Zimmer (Career Fair)
MEIRxRS (Career Fair) Memory Jogger
SAS Institute Inc. – JMP Division
The Coca-Cola Company
Use your smartphone to visit the World Conference on Quality and Improvement mobile site during the conference at team.asq.org/wcqi/.
April 2012 • QP 59
AQS Management Systems, Inc.
Your Management Systems Solutions Provider
AQS Management Systems, Inc.
provides ISO training, coaching, and project assistance in support of organizational improvement and implementation of international management system standards. Our primary focus is to provide cost-effective advice and support to organizations who intend to use their completed management system to generate profit and reduce risks for their organization.
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For more information or for additional offerings… Call 763-746-0505 or 1-800-633-2588 or email: firstname.lastname@example.org
Visit us at booth 418 at the ASQ World Conference on Quality and Improvement.
w w w. a q s p e r f o r m a n c e . c o m
Join Other ASQ Enrollees Nationwide! Online* Programs Start in the Spring & Fall
Visit us at Booth # 429! At the ASQ World Conference in Anaheim
Degrees in Quality Systems Management
• • • Bachelor of Science Completion* (12 months) Master of Science (12 months) Doctor of Business Administration* (DBA) (24 months)
Food Safety | Homeland Security
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NGS is accredited by the New England Association of Schools and Colleges (NEAS&C). NEAS&C may be contacted at email@example.com or 781-271-0022. Certified to Operate by State Council of Higher Education for Virginia (SCHEV).
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*Not available in Massachusetts. NGS is a not-for-profit institution.
WWW.NGS.EDU/ASQ | 800.838.2580 EXT 107 | INFO@NGS.EDU
60 QP • www.qualityprogress.com
BY Sandford LieBeSman
Updated guide to internal control keeps you in line with ISO 9001
The SarbaneS-Oxley Act (SOX) was passed in 2002 in response to scandals at Enron, Tyco International, Adelphia, WorldCom and other companies. Section 404 requires management and external auditors to report on the adequacy of the company’s internal control on financial reporting.1 Early on, guidance from the Committee of Sponsoring Organizations of the Treadway Commission (COSO) was identified as an effective way of establishing control. The Securities and Exchange Commission (SEC) suggests using COSO when firms review their internal control system. COSO developed the internal control integrated framework (ICIF) in 1992 in response to the savings and loan scandals in the 1980s.2 COSO is now 20 years old and is due for an upgrade to incorporate changes in the financial environment.
In addition, many organizations have expanded their reporting efforts, moving to include other types of external reporting beyond just financial reporting. If management operates in accordance with International Organization for Standardization (ISO) quality management standards, it may report publicly on its operations. For example, the entity may conduct an independent audit and report on the entity’s conformance with ISO 9001. While changes have been made to each of the original five components of COSO, they have not changed in name:
of directors’ and audit committees’ roles, management’s philosophy and operating style, organizational structures, assignment of authority and responsibility, and HR policies and practices. There are five principles applied to the control environment: 1. The organization demonstrates a commitment to integrity and ethical values. 2. The board of directors demonstrates independence of management and exercises oversight for the development and performance of internal control. 3. Management establishes—with board oversight—structures, reporting guidelines and responsibilities in the pursuit of objectives. 4. The organization demonstrates a commitment to attract, develop and retain competent individuals in alignment with objectives. 5. The organization holds individuals accountable for their internal control responsibilities in the pursuit of objectives.
1. Control environment
The control environment is the foundation for all other components of internal control. The board of directors and senior management establish the tone regarding the importance of internal control and expected standards of conduct. The control environment provides discipline, process and structure.
Since 1992, business and operating environments have changed, and stakeholders’ expectations have evolved. In response to these changes, COSO’s revisions are designed to accomplish the following: • Clarify the role of objective-setting. • Include the increased relevance of technology. • Enhance governance concepts relating to boards of directors and subcommittees, such as audit committees. • Expand reporting categories of objectives beyond financial reporting. • Contain more discussion of potential causes of fraud and anti-fraud expectations. • Consider different business models and organizational structures, including outsourcing various functions of the value chain.
The control environment has changed greatly in the past 20 years because of the greater complexity of business models, the expanded use of third parties and business partners, and the globalization of most industries. Because of the new complexity, transparency, operations and internal governance have been extended beyond financial performance. Risk-based programs are expected to be more robust and detailed, corporate social responsibility is more important to stakeholders, and regulatory requirements have expanded the discussion of integrity and ethical values. In addition, the new control environment must include a commitment to competence and a clearer definition of boards
2. Risk assessment
Risk assessment involves a dynamic and iterative process for identifying and analyzing risks to achieving the organization’s objectives, forming a basis for determining how risks should be managed. Management considers possible changes in the external environment and within the organization’s business model that may impede the ability to achieve its objectives.5 In the past few years, organizations have increased risk taking as evidenced by the financial crisis that began in 2008. As the scandals of 2000 triggered the creation of SOX, the financial crisis of 2008 led to the Dodd-Frank Wall Street Reform and Consumer Protection Act.6
April 2012 • QP 61
Dodd-Frank requires an organization to perform an expanded assessment of risks to the financial system and to make general regulatory recommendations on risks to government agencies. The result is that COSO now includes a more riskbased approach to internal control and a clearer description of how it considers risk assessment. A pre-condition to risk assessment is the establishment of measurable objectives, as required by ISO 9001.7 Also, the revision clarifies risk assessment to include processes for risk identification, analysis and response. To protect against fraud risk, an organization must consider inadequate safeguarding of assets and corruption as part of the risk assessment process. In the four principles applied to risk assessment, the organization: 1. Specifies objectives with sufficient clarity to enable the identification and assessment of risks relating to objectives. 2. Identifies risks to the achievement of its objectives across the entity and analyzes risks as a basis for determining how the risks should be managed. 3. Considers the potential for fraud in assessing risks to the achievement of objectives. 4. Identifies and assesses changes that could significantly impact the system of internal control. In the three principles applied to the control activities, the organization: 1. Selects and develops control activities that help mitigate risks to the achievement of objectives. 2. Selects and develops general control activities over technology to support the achievement of objectives. 3. Deploys control activities as manifested in policies that establish what is expected and in relevant procedures to affect the policies. In the three principles applied to information and communication, the organization: 1. Obtains or generates and uses relevant quality information to support the functioning of other components of internal control. 2. Internally communicates information necessary to support the functioning of other components of internal control, including objectives and responsibilities for internal control. 3. Communicates with external parties regarding matters affecting the functioning of other components of internal control. by a third party. Today, controls are found throughout the organization, often in non-financial environments. For example, compliance to ISO 9001 requires gathering numerous sets of data to be used in decision making. Control activities are especially important in monitoring the status of objectives and identifying impending risks. Because objectives must be measurable, controls are used to gather data for each objective that can be used to determine future efforts. The use of the preventive and corrective action tools of ISO 9001 can act as supports for the control activities of COSO. information sources and the impact of technology over the past 20 years, including the introduction of Google, Wikipedia and social networking. Accompanying this expansion is a greater demand for information and greater requirements for quality, protection and communication. Here again, the use of third-party service providers has expanded for internal processes such as payroll, customer relations management, data-center operations, supply chain management and manufacturing. Information and communication with outsourced entities has become critical to organizations.
accompanying the expansion of technology is a greater demand for information.
3. Control activities
Control activities are the actions established through policies and procedures that help ensure the execution of management’s directives to mitigate risks to the achievement of objectives. Control activities are performed at all levels of the organization, at various stages in business processes and throughout the technology environment.8 The growth of technology has been the major change affecting control activities. This includes IT and decentralized methods—such as mobile, intelligence and web-based tools—that may be operated
4. Information, communication
Information is necessary for the organization to carry out internal control responsibilities in support of the achievement of its objectives. Communication occurs internally and externally, and provides the organization with the information needed to carry out day-to-day internal control activities. Communication enables all personnel to understand internal control responsibilities and their importance to the achievement of objectives.9 There has been an expansion of
5. Monitoring activities
Ongoing evaluations, separate evaluations or some combination of the two are used to ascertain whether each of the five components of internal control, including controls to affect the principles within each component, is present and functioning. Ongoing evaluations built into business processes at different levels of the organi-
62 QP • www.qualityprogress.com
zation provide timely information. Separate evaluations, conducted periodically, will vary in scope and frequency depending on the assessment of risks, effectiveness of ongoing evaluations and other management considerations. Findings are evaluated against management’s criteria, and deficiencies are communicated to management and the board of directors as appropriate.10 Monitoring is considered in its broader and intended context—assisting management in understanding how all components of internal control are being applied and whether the overall system of internal control operates effectively. As part of the monitoring activities, organizations may conduct ongoing or separate evaluations. For example, the quality officer of a medium-sized manufacturing company participates in a monthly production meeting in which he obtains information regarding approval of product modifications. The quality officer’s review includes questions to identify unusual trends or anomalies, investigations and information obtained from the investigations to modify control activities that authorize other personnel to alter production terms.11 Separate evaluations are usually conducted by the internal audit function. Other means of accomplishing separate evaluations include: • Other objective evaluations. • Cross-operating unit or functional evaluations. • Benchmarking or peer evaluations. • Self-assessments. Outsourced service providers are another monitoring issue. Periodic information must be obtained to monitor activities and controls used by the service provider. Often, the organization may attain information by reviewing an independent audit or examination report. After the evaluations are complete, the findings should be communicated to the personnel responsible for preventive or corrective action. Deficiencies that
are categorized as material weaknesses, significant deficiencies, major nonconformities and some minor nonconformities should be reported to senior management and the board of directors. In the two principles applied to the monitoring activities, the organization: 1. Selects, develops and performs ongoing or separate evaluations to ascertain whether the components of internal control are present and functioning. 2. Evaluates and communicates internal control deficiencies in a timely manner to the parties responsible for taking corrective action, including senior management and the board of directors.
and employee and customer satisfaction results. • Communication to external suppliers and customers is critical to establishing the appropriate control environment. • Communications from external parties include customer feedback related to product quality, improper charges and missing or erroneous receipts. • Customer information on product quality may include customer feedback related to product quality, improper charges, and missing or erroneous receipts. • Examples of internal reports include results of marketing programs, daily sales flash reports, production quality, and employee and customer satisfaction results. QP
referenceS and nOTe
1. “Sarbanes-oxley act of 2002,” July 30, 2002, www.gpo.gov/ fdsys/pkg/PLaW-107publ204/pdf/PLaW-107publ204.pdf (case sensitive). 2. CoSo was formed in 1985 to sponsor the national Commission on fraudulent financial reporting, also known as the Treadway Commission, which consists of the american institute of Certified Public accountants, american accounting association, financial executives international, institute of internal auditors and the institute of management accountants. for more information, see www.coso.org. 3. The CoSo advisory panel recently asked PricewaterhouseCoopers LLP to develop the revision to CoSo and J. Stephen mcnally, the institute of management accountants (ima) representative for the iCif, to form an ima advisory panel to review the revision. The team included ima CoSo Board member and Chair emeritus Sandra richterme. i am the quality management member on the team that helped craft the changes to CoSo under public review as of march 2012, including several quality-related aspects.. 4. CoSo, “internal Control—integrated framework executive Summary,” december 2011, www.ic.coso.org/download. aspx. 5. ibid. 6. “dodd-frank Wall Street reform and Consumer Protection act,” July 21, 2010, www.gpo.gov/fdsys/pkg/PLaW111publ203/pdf/PLaW-111publ203.pdf (case sensitive). 7. international organization for Standardization, ISO 9001:2008—Quality management systems—Requirements, clause 5.4.1. 8. CoSo, “internal Control—integrated framework executive Summary,” see reference 4. 9. ibid. 10. ibid. 11. ibid.
A few more additions
The following are specific quality management inputs added to the revised COSO framework: • Objectives must be measurable and may relate to improving quality—such as avoiding waste and rework—reducing costs and production time, improving innovation, and improving customer and employee satisfaction. • In areas in which management operates in accordance with ISO standards for quality management, it may report publicly on its operations. • A precondition to risk assessment is establishing measurable objectives linked at various levels of the organization. • Setting the overall level of acceptable risk and associated risk appetite is part of strategic planning and enterprise risk management. • Risk tolerance is the acceptable level of variation in performance relative to the achievement of objectives. • Risk appetite is the broad-based amount of risk an organization is willing to accept in pursuit of its mission and vision. • Examples of internal reports include results of marketing programs, daily sales flash reports, production quality,
SandfORd LIebeSman is president of Sandford Quality Consulting in morristown, nJ, following more than 30 years of experience in quality at bell Laboratories, Lucent Technologies and bellcore (Telcordia). He is an aSQ fellow and past chair of the electronics and Communications division, and is a member of ISO technical committee 176 and the anSI Z-1 committee on quality assurance.
April 2012 • QP 63
Onset’s Hobo UX90 occupancy and light logger is a matchbox-sized, LCD-display data logger that tracks building occupancy and light usage to pinpoint areas in a building that could benefit from occupancy sensors and other energy-saving initiatives. Building owners, facility managers, energy auditors and lighting contractors will use the data loggers to collect time-stamped data documenting each time room occupancy or lighting status changes. The UX90 data loggers streamline energy audits After data has been recorded with the logger, it can be viewed in graph form using accompanying HOBOware software and printed for use in reports. The data also can be exported to Microsoft Excel for more detailed analysis. • Call: 800-564-4377. • Visit: www.onsetcomp.com. amps, and the BU-46C-XL is constructed of solid copper and is rated to 75 amps, with a heavy-duty plated spring and matched clinching ears to grip the wire securely at the end of the leg. The clips are assembled with PVC insulators in red or black with crimp or solder connection. Jaws are also able to secure solidly on terminals, with quick and secure wire attachment. • Call: 800-955-2629. • Visit: www.muellerelectric.com. trol charting and analysis. Data can be retrieved from the following: • Microsoft Access. • SQL Server. • Microsoft Excel. CHARTrunner Lean updates your charts in real time. After you create a chart, you can save and reuse your chart or series of charts. Each time you open a chart, it automatically grabs the latest source data and updates with a new chart. You can also set a specific refresh interval for any chart to update with the latest data so you can make timely decisions. When browsing created charts, you can easily find the chart you need by viewing thumbnail images. Multiple charts can be displayed on one screen and arranged with a click of the mouse. CHARTrunner Lean also can evaluate your data in various chart formats. • Call: 800-777-3020. • Visit: www.pqsystems.com.
Mueller Electric has announced models BU-46A-XL and BU-46C-XL, a series of miniature plier-style clips with long polyvinyl chloride (PVC) insulators, designed for applications in which additional shielding may be required, such as testing, trickle charging and timing. The model BU-46A-XL is constructed of copper-plated steel and is rated to 50
CHARTrunner Lean from PQ Systems retrieves data from various sources and presents it for statistical process con-
64 QP • www.qualityprogress.com
Setra Systems’ AccuSense model ASM is a pressure transducer designed to provide overpressure protection within demanding test environments. The pressure transducers are temperature compensated, with a total error band of less than ±0.25% full scale, minimizing thermal errors and making outputs unaffected by environmental temperature shifts. A hydrophobic porous plug at the top of the unit also protects its recessed air vent from environmental contaminants. The model ASM is ideal for high-tech industrial, laboratory R&D and test cell requirements, including engine diagnostics, refrigeration testing, engine dynamometer testing and analysis. • Call: 800-257-3872. • Visit: www.setra.com.
tions in material science laboratories. The latest version of the software features high dynamic-range imaging, streamlined document storage and retrieval and imaging, data-handling and reporting tools. Version 1.7’s high dynamic-range imaging is useful when displaying images with dark and bright areas that require viewing, measuring or analysis. Users also can load and save acquisition parameters directly in the camera control tool window, batch process images in macros, analyze multiple images and output results to a single spreadsheet. • Call: 484-896-5792. • Visit: www.olympus-ims.com. temperature range of -40°C to +125°C. It has the capability to accept up to four resistance temperature detector (RTD) sensor inputs and four individual RTD current sensor outputs. The MRTD features galvanic isolation on all electrical and data connections, with components housed within a compact and lightweight anodized aluminum
Data acquisition module Software
Olympus Stream image analysis software version 1.7 streamlines the process so users can accomplish complex applicaIpetronik’s M-RTD compact, four-channel analog mobile data acquisition module is designed to support extreme vehicle testing requirements in an operating Venclosure. When used with the supplied software, it offers real-time analytical measurements and simultaneous data storage capabilities of different formats. The M-RTD is ideal for HVAC, climate control and thermal systems testing. • Call: 866-777-6220. • Visit: www.ipetronik.com.
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Send your product description and photo to firstname.lastname@example.org.
April 2012 • QP 65
Medical Device Design and Regulation
Carl T. DeMarco, ASQ Quality Press, 2011, 368 pp., $66 member, $110 list (book and CD-ROM) This book is a comprehensive volume providing everything you need to understand medical devices. It is well organized and starts at the design and regulatory stages, moves through the regulatory system of the U.S. Federal Drug Administration (FDA) and goes further to post-approval marketing and surveillance. The book can be used as a reference and a teaching text. DeMarco has included interesting and useful exercises at the end of each chapter. These are less on testing and are more informative. For example, chapter four discusses clinical trials, their use for devices and the certification steps necessary in an application. The exercises following the chapter include searching the Codex website to find out the international regulations for a device—useful information that is not covered in-depth in the chapter. While there are sections on quality and auditing of devices, and clinical and nonclinical trials for submiting a new device for approval, two chapters focus on this specifically. Chapter seven examines quality systems and current good manufacturing practice (GMP) guidelines. After approval, the FDA can, and often will, inspect manufacturing plants for new medical devices to ensure compliance with GMPs and to enforce this with warning letters or decertifying the facility. Chapter eight, the final chapter, covers all this information in-depth. The author wisely doesn’t try to cover all the statistical methods for designing, testing and evaluating medical devices, which probably would have doubled the book’s size. Also included are extensive appendixes with websites, references and a wonderful lexicon of all the abbreviations used in the book and by regulatory agencies. A CD-ROM is supplied with supplementary reference material. I. Elaine Allen Babson College Wellesley, MA honestly evaluating your systems is not easy. This book clearly translates the criteria language, the requirements and provides help in getting started, best practices, implementation and assessments. Because the criteria are constantly evolving, this edition also addresses criteria changes for 2011-2012. An accompanying CD-ROM references the 2011-2012 changes and provides additional information and tools. The Baldrige criteria apply to every organization regardless of size or interest in receiving the award. Blazey has compiled a well organized and salient compendium of organizational assessment knowledge that will help organizations improve performance. This is the book’s greatest value. If you’re planning to go for the Baldrige gold, this is your book. But even if you’re not, this is a good manual on how to As America’s highest recognition for quality, the Malcolm Baldrige National Quality Award sets high standards. Reaching such lofty levels of performance can be a long and daunting challenge for any organization. Blazey has written a clear and approachable text on the Baldrige award and how to use the criteria to achieve organizational performance excellence. The book represents far more than just a how-to reference manual on the Baldrige award criteria. The Baldrige framework is well developed; however, translating the criteria into actionable items and improve your organization. James Kotterman Michigan Manufacturing Technology Center Plymouth, MI
Insights to Performance Excellence 2011-2012
Mark L. Blazey, ASQ Quality Press, 2011, 384 pp., $56 member, $92 list (book and CD-ROM).
101 Project Management Problems and How to Solve Them
Tom Kendrick, Amacom, 2010, 272 pp., $19.95 (book). A project manager can be faced with an infinite number of issues even while working on a small project. Managing project challenges, as well as surviving in today’s world,
66 QP • www.qualityprogress.com
requires skill, experience and the willingness to listen to other people. This book offers lessons and tips in avoiding issues, problems, overruns, delays and personnel matters. Kendrick offers his own experience and lessons learned in every chapter. The primary and unexpected feature is the author’s focus on people and human resources. He discusses employees throughout the book; he treats them carefully and with respect and offers tips on motivation, communication and listening skills, and ultimately covers monitoring and performance. The book is well written. It’s direct and formatted similarly to areas of the project management body of knowledge. Sections open with a project-related question. This additional framing of a question adds a quick way for the reader to gauge how to use the author’s insights and whether to use his advice. This book is nicely written and unwavering in its focus. Readers will find it to be a useful tool to keep around for a long time. Frank Pokrop Carefusion San Diego
modified the methods so they are aligned with the needs in the public health sector. Using QFD is a way to translate customer requirements into appropriate features at each development stage. The aim is to ensure that the voice of the customer is fully understood and incorporated throughout the design and development of a product or service. LSS is a natural partner to QFD. The concepts are illustrated at different levels: • Macro: Addresses the strategic integration of long-term approaches to meet overall priority outcomes. • Meso: Contains planning and deployment of programs that translate the strategic vision into specific programs and departments. • Micro: encompasses the health department projects and programs instituted at the functional unit level.
• Individual: Uses tools that support the specific task. Overall, I really like this book, even though it does contain a mistake. For example, the description of the Kano model is not good. This is a structured and balanced book written on a suitable level and is motivating and inspiring. There are also many examples and illustrations from the public health sector supporting the discussion. Bengt Klefsjö Luleå University of Technology Sweden
Lean Management Principles for Information Technology, Series on Resource Management
Gerhard J. Plenert, CRC Press, 2011, 368 pp., $79.95 (book).
A career in Statistics
Gerald J. Hahn and Necip Doganaksoy, Wiley, 2011, 360 pp., $69.95 (book).
Quality Function Deployment and Lean Six Sigma Applications in Public Health
Grace L. Duffy, John W. Moran and William J. Riley, ASQ Quality Press, 2010, 195 pp., $38 member, $63 list (book). The purpose of this book is to introduce quality function deployment (QFD) and lean Six Sigma (LSS) methods to public health professionals so that they can implement quality improvements within their own agencies. The authors have
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April 2012 • QP 67
may 8-10 Spacecraft Technology Expo.
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15-18 SCOR Framework and
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16 Lean manufacturing and Process
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21-23 aSQ conference. World
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21-25 New Product Innovation,
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If you’d like your event included in QP Calendar, submit information at least three months in advance to email@example.com. Non-ASQ organizations may list one event per issue.
VISIT WWW.aSQ.ORG/LEaRNINGINSTITUTE FOR dETaILS.
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April 2012 • QP 69
For Accredited Certification Look for the Symbols of Quality
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70 QP • www.qualityprogress.com
One GOOd Idea
BY KEITH M. BOwER ANd ABRAHAM GERMANSdERFER
Assessing comparability based on limited data
LIMITED DATA availability complicates an assessment of whether two populations are comparable. Historically, comparability is determined using a variety of techniques, including equivalency of means and variances, and—often incorrectly—Student’s two-sample t-test.1 But limited data greatly reduces the power of these methods, so an alternative method for demonstrating comparability is required. Statistical equivalency tests,2 such as two one-sided t-tests (TOST), are widely accepted as a way to demonstrate comparability. The amount of data collected should ensure the test is adequately powered. When limited data are available, TOST may be unable to declare equivalency even when the two population means are equal. As an alternative approach, a statistical tolerance interval (TI) can be used to set the comparability criteria.3 TI calculations are typically available in statistical software packages and discussed in most introductory statistics textbooks. A TI covers a proportion (p) of a probability distribution (such as a normal distribution) with a certain confidence level (1 - α). For example, a 95/99% TI covers 99% of a population with 95% confidence. Data from the new process would need to fall inside the TI calculated from the old process to exhibit comparability. Note that the TI approach has several disadvantages compared with TOST, including: • The TI approach is not a hypothesisbased test, meaning a p-value is not generated. • Comparability is more difficult to correctly show with increasing new process data because one or more values could fall outside the interval by chance alone. When insufficient data exist to power a statistical equivalency test such as TOST, the TI method may be an appropriate alternative. A useful technique to consider the adequacy of each approach is to perform a statistical performance assessment (SPA). Consider a scenario in which 10 values are sampled from population A (the old process) and three values from population B (the new process). To calculate the SPA, assume the following: • A and B are normally
1 0.8 0.6 0.4 0.2 0 0 0.5 1 1.5 2 2.5 3 Difference between means in standard deviation units TOST = two one-sided t-tests TI = tolerance interval TOST TI
the comparability criteria—namely, the statistical power for a TOST approach and the probability of all three values from population B falling inside the TI. The results are shown in Figure 1 and Online Table 1, found on this article’s webpage at www.qualityprogress.com. If there is a one standard deviation difference across the means of A and B, there is about a 70% chance of incorrectly concluding the means are equal using TOST. But the chance jumps to more than 99% using the TI approach. Figure 1 shows the TI approach tends to conclude comparability more frequently than the TOST approach, regardless of the actual difference across the two means. Using an SPA, all stakeholders can be made aware of the benefits and drawbacks associated with statistical approaches. A reasonable comparability strategy then may be decided on before collecting and analyzing data. QP
1. Giselle B. Limentani, Moira C. Ringo, Feng Ye, Mandy L. Bergquist and Ellen O. McSorley, “Beyond the T-test: Statistical Equivalence Testing,” Analytical Chemistry, Vol. 77, No. 11, 2005, pp. 221-226. 2. I. Elaine Allen and Christopher A. Seaman, “Superiority, Equivalence and Non-Inferiority,” Quality Progress, February 2007, pp. 52-54. 3. Reed Harris, “Comparability Assessment Strategies and Techniques for Post-Approval CMC Changes,” Fabian Lectures, 2008. KEITH M. BOWER is a principal quality engineer at Amgen Inc. in Seattle. He earned a master’s degree in quality management and productivity from the University of Iowa in Iowa City. Bower is a senior member of ASQ and an ASQ-certified quality engineer, process analyst, technician and improvement associate. ABRAHAM GERMANSDERFER is an associate director at Gilead Sciences in San Dimas, CA. He earned a master’s degree in biotechnology from Worcester Polytechnic Institute in Massachusetts.
statistical performance assessments for comparability studies / fIGure 1
Probability of concluding comparability
distributed with equal variances. • The TOST goalpost is 2.5 times the standard deviation of A. • A 90/99% TI will be calculated using data from A. It is possible to calculate the probability of meeting
April 2012 • QP 71
BaCk to BasiCs
BY Scott Force
3 tools to jump-start a lean Six Sigma project
SINCE 2002, I have been facilitating lean Six Sigma projects and coaching other belts through their projects. Combining tools is a technique I use with teams when potential root cause analysis through a fishbone diagram does not show any obvious direction. cle in Figure 1, or the recurring systemic causes showing up in multiple locations, shown in Online Figure 1. But what do we do in the case of Online Figure 2? By combining the completed fishbone diagram with two other tools from our Six Sigma tool kit, we can take a strategic approach to proceed. Putting the causes from a fishbone on the left side of the matrix and the outputs from the SIPOC diagram along the top allows teams to rate the relationship each cause has with each output, helping to rank and prioritize potential causes the team should investigate first. A completed cause and effect matrix is shown in Online Table 2. The top portion shows the outputs from a SIPOC diagram for making a hamburger. The left side shows the results of a fishbone diagram. In this example, only main causes are shown, but it is recommended that a team use the five whys and display the lowestlevel causes on the diagram. In this generic example, overcooking the hamburger has the greatest relationship with our SIPOC outputs, indicating the team should focus on that cause first.
From using the fishbone diagram, most quality professionals know there are usually three outcomes: 1. One of the bones in the diagram is full of potential causes, leading a team to focus on a particular area (Figure 1). 2. The same potential root causes appear in several bones of the diagram, indicating a systemic cause that, if eliminated, will address several areas of concern (see Online Figure 1, found on this article’s webpage at www. qualityprogress.com). 3. No common cause is seen throughout the diagram, and all bones show several potential causes (Online Figure 2). In the first two cases, the team has some direction by strategically focusing on the particular bone, shown by the cir-
Using a suppliers, inputs, process, outputs and customers (SIPOC) diagram, map the high-level flow for the process to which the fishbone diagram is tied. The key items we will use from this tool are the list of outputs (Online Figure 3).
Cause and effect matrix
The cause and effect matrix shown in Online Table 1 is what ties together the outputs of the fishbone diagram with the outputs from the SIPOC diagram. Part of the quality function deployment house of quality, the cause and effect matrix is the center section of the house and is also known as a relationship matrix. The details of completing a cause and effect matrix are beyond the scope of this column. But the basic process uses a crossmultiplication method in which each row and column intersection is scored by the team for the degree of relationship and is multiplied with a rating
While the SIPOC diagram focuses on desired outcomes and the fishbone diagram focuses on the undesired causes of a problem, creatively combining these tools provides the team with more options on how to proceed with the project. As a lean Six Sigma practitioner, you should begin to see how many of the tools and techniques naturally work together to provide a more focused approach on process improvement. QP
SCOTT FORCE is a Six Sigma Master Black Belt trained by Sigma Breakthrough Technologies Inc. with more than 20 years of quality improvement experience in the healthcare, automotive and power equipment industries. He earned a bachelor’s degree in manufacturing engineering from Miami University in Oxford, OH. A senior member of ASQ, Force is an ASQ-certified quality technician, engineer and Six Sigma Black Belt.
Several potential causes on one bone / figure 1
of importance provided by the customer. Each of these multiplications is added across the horizon-
tal row, providing the final score at the far right.
72 QP • www.qualityprogress.com
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