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An Excurse on the Evolution of Quality

Nicola Mezzetti, Ph.D.

Department of Information Engineering and Computer Science


University of Trento
nicola.mezzetti@gmail.com

A.A. 2014/2015

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


”You can’t fake quality any more than you can fake a good meal.”
(W. Burroughs)

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality
Oxford Dictionary
Quality:
1 The standard of something as measured against other things
of a similar kind; the degree of excellence of something.
2 A distinctive attribute or characteristic possessed by someone
or something.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Oxford Dictionary
Quality:
1 The standard of something as measured against other things
of a similar kind; the degree of excellence of something.
2 A distinctive attribute or characteristic possessed by someone
or something.

Unfortunately, this definition does not work


for us!

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Let’s look for some hints in ancient times!

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Historians have traced the
concept of quality as far back as
3000 B.C. in Babylonia.
Among the references to quality
from the code of Hammurabi,
ruler of Babylonia, is the
following excerpt: ”The mason
who builds a house which falls
down and kills the inmate shall
be put to death.”

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


In 1500 B.C. Papyrus, the Egyptian medical, used to describe
precisely how to prepare pharmaceutical drugs.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Archimedes of Syracuse (287 - 212 B.C.) tested the gold
proportion of a votive crown of King Hiero II.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


The Roman architect Vitruvius
wrote ”The ten books on
architecture” to describe his
personal experience about the
quality of construction work and
customers’ needs.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Since 13th century craftsmen
began organizing into unions
called guilds to develop
knowledge about production
stages and materials.
Apprenticeship has been
instituted at those times, within
guilds.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


The evolution of quality in the 20th century

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Identifies reasons for inefficiency:
1 Belief that a material increase in the output of each man or
each machine in the trade would result in throwing a large
number of men out of work
2 Defective systems of management which make it necessary for
each workman to soldier, or work slowly
3 Rule-of-thumb methods
Four principles of scientific management:
1 Develop a science for each element of a man’s work, which
replaces the old rule-of-thumb method.
2 Scientifically select and then train, teach, and develop the
workman, whereas in the past he chose his own work and
trained himself as best he could.
3 Heartily cooperate with the men so as to ensure all of the work
being done in accordance with the principles of the science
which has been developed.
4 Equal division of the work and the responsibility between the
management and the workmen.
Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality
Application of Taylor’s scientific management to the
production of Model T.
Allowed to break down the assembly process in 84 steps
The chassis of the car was pulled down the line by a chain
conveyor and then 140 workers applied their assigned parts to
the chassis.
Interchangeable parts were produced in mass quantities and
... brought directly to the workers who were trained to work at
specific assembly stations.
Impact:
The use of interchangeable parts allowed for continuous work
flow and more time on task by laborers.
The production time for a single car dropped from over twelve
hours to 93 minutes.
These concepts allowed Ford to increase his profit margin and
lower the cost of the vehicle to consumers ($260 in 1924).

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


SQC was pioneered by Walter Shewhart at Bell Laboratories in the
early 1920s.
Shewhart’s principle was that bringing a process into a state
of statistical control would allow the distinction between
assignable and chance cause variations and the prediction of
future output
Assignable cause: the variation is due to
differences in quality of raw material
differences in machines or in operators
difference of time
Chance cause:
the variation is negligible and inevitable
the variation appears randomly and is due to chance and not
to defects in machines or materials or to any other factor
the process is said to be under the state of statistical control

Shewhart developed the control chart in 1924.


Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality
Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality
The Pareto principle states that, for many events, roughly 80% of
the effects come from 20% of the causes.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Four step model for carrying out change

Plan: recognize an opportunity and plan a change.


Do: test the change.
Check: review the test, analyze the results and identify what
you have learned.
Act: take action based on what you learned in the study
if the change did work, incorporate what you learned from the
test into wider changes
otherwise, go through the cycle again with a different plan
Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality
Quality control: an effective system for coordinating the quality
maintenance and quality improvement efforts of the various groups
in an organization so as to enable production at the most
economical levels which allow for full customer satisfaction.
Idea of modern quality control as management-based: Increasing
operator efficiency by educating them on quality in
order to enhance overall quality.
Increasing quality awareness throughout the organization.
Involving the entire organization in each and every quality
initiative undertaken.
Quality control as an administrative effort for continuous
quality improvement:
Providing a channel for knowledge integration and
communication, thus enhancing product quality.
Encouraging employee participation in organizational quality
control initiatives.
Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality
At the end of WWII, Toyota had to compete with American
manufacturers in order to survive.
Due to large lot production, an American worker produced
approximately nine times as much as a Japanese worker.
Given the small demand in Japan, Toyota could not rely on the
same methods. Taiichi Ohno had the idea of making profit by
cost reduction.
Absolute elimination of waste
Just-in-time (JIT): getting the number of parts needed, when
they are needed.
Autonomation: automating a process to include inspection.
Multi-skilled workers: one worker assigned to more
machines.
Minimizing transportation: putting the machines of a
process together.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Quality Loss Function
Quality is the loss imparted by L(y ) = k(y − T )2
the product to society from the where:
time the product is shipped. y is the observed value
T is the target value
Taguchi and Wu proposed the k is the cost coefficient
absolute quality conformance
approach encouraging to pay
more attention to upstream
activities (i.e., product design
and planning of processes):
any variation from the exact
specifications entails a cost
or loss to the organization.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Quality as the conformance to the requirements which the company itself
has established for its products based upon the customers needs.
Do It Right First Time: People are not prevented from making
mistakes, but encouraged to improve continuously.

The ultimate goal is to train all the staff and give them the tools for
quality improvement, to apply the basic precept of Prevention
Management in every area.

Zero Defects: no allowed number of errors built into a product or


process. Four principles:
1 Quality is conformance to requirements.
2 Quality prevention is preferable to quality inspection and correction.
3 Standard of quality is always be zero defect, not close enough.
4 Quality is measure on the basis of Price, Price of Non
Conformance (PONC).

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Juran is widely credited for adding the human dimension to
quality management.

For Juran, human relations problems are the cause of isolation and
resistance to change and thus the root cause of quality issues.

He wrote Managerial Breakthrough, which was published in 1964,


outlining the issue.
The book established the know-how about capitalizing on the
benefits of quality. It was organized in two parts:
Breakthrough: creation of beneficial change.
Control: prevention of adverse change.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Primary Elements of TQM:
Umbrella methodology based on Customer-focused
principles and practices of:
Total employee involvement
behavioural sciences,
Process-centered
analysis of quantitative and
Integrated system
nonquantitative data,
Strategic and systematic
economics theories,
approach
process analysis
Continual improvement
... to continually improve the
Fact-based decision making
quality of all processes.
Communications

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


1 Create constancy of purpose for improving products and services.
2 Adopt the new philosophy.
3 Cease dependence on inspection to achieve quality.
4 End the practice of awarding business on price alone; instead, minimize
total cost by working with a single supplier.
5 Improve constantly and forever every process for planning, production and
service.
6 Institute training on the job.
7 Adopt and institute leadership.
8 Drive out fear.
9 Break down barriers between staff areas.
10 Eliminate slogans, exhortations and targets for the workforce.
11 Eliminate numerical quotas for the workforce and numerical goals for
management.
12 Remove barriers that rob people of pride of workmanship, and eliminate
the annual rating or merit system.
13 Institute a vigorous program of education and self-improvement for
everyone.
14 Put everybody in the company to work accomplishing the transformation.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Six Sigma is...
A strategy to improve process quality by identifying and eliminating
defects and minimizing variation in process outputs.
A data driven approach based on measurement of the process
variation using Statistical Process Control.
A structured implementation approach based on a DMAIC cycle and
certified experts.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality
The ISO 9000 standard family comprises:
ISO 9000:2005 Quality management systems: Fundamentals
and vocabulary
Eight Principles of Quality Management
ISO 9001:2008 Quality management systems
Requirements of a quality management system
ISO 9004:2009 Managing for the sustained success of the
organization - A quality management approach
ISO 19011:2011 Guidelines for quality and/or environmental
management systems auditing

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Eight Principles of Quality Management:
1 Customer focus
2 Leadership
3 Involvement of people
4 Process approach
5 System approach to management
6 Continual improvement
7 Factual approach to decision-making
8 Mutually beneficial supplier relationships

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Lean
A systematic approach to identifying and eliminating waste
through continuous improvement, flowing the product at the pull
of the customer in pursuit of perfection.
Eight Wastes: Some Lean Building Blocks:

Overproduction Pull System


Waiting Work Cells
Transportation Total Productive Maintenance
Non-Value-Added-Processing Total Quality Management
Excess Inventory Point-Of-Use-Storage
Defects Batch Size Reduction
Excess Motion Visual Controls
Underutilized People Concurrent Engineering
Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality
1 Performance improvement
Scientific Management
Statistical Process Control
Total Quality Control
2 Cost reduction (since 1950s)
Toyota Production System
Quality Loss Function
Zero Defects
3 People Management (since 1960s)
Managerial Breakthrough
Total Quality Management
ISO 9000:2005

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


ISO defines Corporate Social
Responsibility (CSR) as follows:

A balanced approach for


organizations to address economic,
social and environmental issues in a
way that aims to benefit people,
communities and society.

In Europe CSR is regulated by law:


The article K3 of the Treaty on
European Union (1998) obliges all
the member states to adopt
anti-corruption measures.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


”The total composite product and service characteristics of
marketing, engineering, manufacture, and maintenance through
which the product and service will meet the expectations of the
customer” (A. Feigenbaum, 1961)
”Quality is the loss imparted by the product to society from the
time the product is shipped.” (G. Taguchi, 1962)
”Conformance to requirements” (P. Crosby, 1979)
”The degree to which a set of inherent characteristics fulfills
requirements” (ISO 9000:2005, 2005)
”Fitness for purpose” (J. Juran, 2010)
”Quality is a dynamic state associated with products, services,
people, processes, and environments that meets or exceeds
expectations and helps produce superior value” (D. Goetsch and
S. Davis, 2010)

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Building and managing organizations capable of
meeting customer requirements
protecting the business reputation by identifying and
eliminating defects
reducing waste in production
understanding what’s important for the customer (current
and future needs)
rapidly adapting in order to provide flexible and fast
responses to market opportunities
... and of continuously improving itself.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


In 1990s Organizational Excellence has been proposed as an
alternative to Quality Management. The main reasons:
Quality Management has no theoretical foundations;
There is quite a confusion over the very definition of
”Quality”;
It remains unclear whether quality management is simply:
a collection of essentially independent techniques;
a management philosophy;
a coherent management methodology;
a strategy;
a theory for managing only the quality of services and process;
a master theory for managing the entire enterprise.
Quality identified as an end in itself rather than a means of
contributing to enterprise success.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Adding value for customers;
Creating a sustainable future;
Developing organizational capability;
Harnessing creativity & innovation;
Leading with vision, inspiration and integrity;
Managing with agility;
Succeeding through the talent of people;
Sustaining outstanding results.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Adding value for customers ⇒ Customer Orientation;
Creating a sustainable future ⇒ Corporate Social Responsibility
Developing organizational capability ⇒ Process approach & System
Approach to Management;
Harnessing creativity & innovation ⇒ Continuous quality
improvement;
Leading with vision, inspiration and integrity ⇒ Leadership;
Managing with agility ⇒ Breakthrough;
Succeeding through the talent of people ⇒ Total employee
involvement;
Sustaining outstanding results ⇒ Continuous quality improvement
& Zero Defects.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Quality Engineering is a technology that deals with the
improvement of the organizations’ performance in understanding
and meeting customers expectations.

Technology (etimological meaning )


gr. TECHNOLOGÍA from TÉCHNÊart and LOGÍA for LÒGOS
discourse, treatise.
Propr. Exposure of rules for dealing with art and scientifically a
subject; Doctrine on immediate application of physics, chemistry
and mathematics to arts and crafts, so that that the architect may
not act against the real scientific principles.

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


”Quality is not an act, it is a habit.” (Aristotle)
”It is most important that top management be quality-minded. In
the absence of sincere manifestation of interest at the top, little
will happen below.” (J. Juran)
”Quality is everyone’s responsibility.” (W. Deming)
”Quality is when your customers come back and your products
don’t.” (E. Naumann, P. Shannon)

Nicola Mezzetti, Ph.D. An Excurse on the Evolution of Quality


Basic Statistical Tests Click here to start
Basic Statistical Tests
Compare groups
Focus of test
with each other

Data type
Compare one
group with
a target
Variables data Attribute data

Click a shape for more information

Data type

Continuous
Attribute data
data

Focus of Type of
comparison attribute data
Center of the Spread of the
distribution distribution (standard
(mean or median) deviation or variance)
Binary data Count data
(yes/no) (occurrences)

Data
distribution
Normal Nonnormal
distribution distribution

Shape of
distribution

Symmetric Not symmetric

1-Sample 1-Sample
1-Sample t 1-Sample Sign 1 Variance 1 Proportion
Wilcoxon Poisson Rate

Click on any page to return here.


Compare groups
with each other

Number of Compare more


groups than two groups
Compare two
groups

Data type

Continuous Attribute data


data

How are data


sampled
Paired
Independent
(dependent)
samples
observations

Type of
Focus of attribute
comparison data

Center of distribution Spread of distribution Binary data Count data


(mean or median) (standard deviation (yes/no) (occurrences)
or variance)

Data
distribution

Normal Nonnormal
distribution distribution

2-Sample
2-Sample t Mann-Whitney 2 Variances Paired t 2 Proportions
Poisson Rate

Click on any page to return here.


Compare more
than two groups

Data type

Continuous data Attribute data

Focus of
comparison

Center of the Spread of the


distribution distribution (standard
(mean or median) deviation or variance)

Data
distribution

Normal Nonnormal
distribution distribution

One-Way Test for Equal Cross Tabulation


Kruskal-Wallis and Chi-Square
ANOVA Variances

Click on any page to return here.


Do you want to compare
one group with a target or Compare one group with a target Compare groups with each other
groups with each other? Compare a characteristic value of a group, Compare two or more groups or the same
such as a mean or standard deviation, with a group under different conditions. Often used
target value. Often used to evaluate whether a to evaluate whether a process is affected by
process meets a performance goal. different factors, changes, or conditions.
Example Example
Focus A quality analyst wants to determine whether A sales analyst tracks customer purchases
of test the mean fill weight of a cereal product differs at various store locations. The analyst wants
from value stated on the package label (500 to determine whether the average cost of a
g). The analyst weighs a sample of cereal customer purchase differs between locations.
Compare one Compare boxes from a single production line.
group with a groups with
target each other

To estimate a characteristic value of a group, you must analyze a representative sample of data from
the group. Then, you can use hypothesis tests to determine whether that value differs from a target or
from another group. A target value may be an industry standard, a past performance level, or a process
specification.

Click this icon


Click a shape to move on any page to Basic Statistical Tests
through the decision tree return to Start.
Do you have continuous
data or attribute data? Continuous data Attribute data
Measures a characteristic of a part or process, Counts the presence of a characteristic or
such as length, weight, or temperature. The condition, such as a physical trait, a type of
data often includes fractional (or decimal) defect, or a rating, such as pass/fail. The data
values. are whole numbers.
Focus of test:
Compare one group Example Example
with a target A quality analyst wants to determine whether Managers at a bank want to know whether the
the mean fill weight differs from the value proportion of customers who are interested
stated on the package label (500 g). The in student loans is high enough (at least 5%)
analyst weighs a sample of cereal boxes from to warrant offering the service to customers.
Data type a single production shift. They survey 3500 customers and count how
many of them are interested in student loans.

Continuous Attribute
data data

If possible, collect continuous data because they provide more detailed information. However,
sometimes attribute data adequately describe the quality of a part or a process. For example, if you
track broken light bulbs, you don’t need to measure a characteristic of the bulb to evaluate whether
it’s broken or not. What matters is only the number of bulbs that are broken (counts).

Basic Statistical Tests


Do you want to evaluate
the center or the spread of Center of the distribution Spread of the distribution
the distribution? Determines whether the central value of the Determines whether the variation of the data
data equals a target value, such as a process equals a target value, such as an industry
specification. Often used to evaluate how standard. Often used to evaluate how
accurate a process is. consistent a process is.
Focus of test:
Compare one group Example Example
with a target An inspector measures a shipment of wheel The manager of a lumberyard wants to
rims and records their diameters. The inspector analyze how consistently a sawmill produces
Data type:
Continuous
evaluates whether the mean diameter of beams that are on average 100 cm long. The
the rims equals the specification diameter of manager measures the beams and analyzes
16 in. whether the standard deviation of the lengths
is less than 1 mm.
Focus of
comparison

Center of the Spread of the


distribution distribution

You can evaluate the central value of the data using the mean (the arithmetic average) or the median
(the middle value when the data are arranged from lowest to highest). The median is less sensitive
than the mean to outliers.
You can evaluate the variation, or spread, of the data using the standard deviation or the variance.
The standard deviation is often easier to interpret because it uses the same units as the data.

Basic Statistical Tests


Does your data follow
a normal or nonnormal Normal distribution Nonnormal distribution
distribution? Data that follow a symmetric, bell-shaped Data that follow a distribution that either is
distribution. not symmetric or is symmetric but not bell-
shaped.
Example
Focus of test: An auto parts company manufactures wheel Example
Compare one group rims to be 16 inches in diameter. Inspectors A shipping company guarantees delivery of
with a target randomly sample wheel rims and measure domestic packages within 72 hours. Inspectors
their diameters. They determine that the randomly sample orders and record the delivery
Data type:
Continuous
measurements follow a normal distribution. times. They determine that the times are not
symmetrically distributed and, therefore, are
Focus of comparison: not normal.
Center of the distribution

Data
distribution

Normal Nonnormal
distribution distribution

The distribution of your data often depends on your process. For example, data that track cycle
time for service processes, such as the time needed to process an application, serve a customer, or
deliver a product, often do not follow a normal distribution.
Although the normal distribution is always bell-shaped, not all bell-shaped distributions are normal. To
determine whether your data follow a normal distribution, use normal probability plots, histograms, or
normality tests such as the Anderson-Darling test. You can perform these evaluations using Minitab’s
Normality Test or Graphical Summary.
If you have 30 or more observations, you can generally treat your data as being normal and perform
a basic statistical test to compare the mean of the group with a target value.

Basic Statistical Tests


Basic Statistical Tests 1-Sample t
1-Sample t
The 1-sample t-test determines whether the mean differs from a target value and provides a range of
values that is likely to include the true mean.
Example
Focus of test: An inspector samples a shipment of wheel rims and measures their diameters. The inspector uses a
Compare one group 1-sample t-test to determine whether the mean diameter of the rims differs from the specification of
with a target 16 in.
Data type: To perform a 1-sample t-test in Minitab, choose Stat > Basic Statistics > 1-Sample t.
Continuous
One-Sample T: Diameter
Focus of comparison:
Center of the distribution Test of mu = 16 vs not = 16

Variable N Mean StDev SE Mean 95% CI T P


Data distribution: Diameter 20 15.9992 0.0034 0.0008 (15.9976, 16.0007) -1.12 0.278
Normal

1-Sample t
Use Minitab’s 1-sample t-test to evaluate whether the mean is greater than, less than, or not equal to
a target value. If you choose a one-sided test (less than or greater than), the test has more power to
detect a difference in the direction of interest. However, it cannot detect a difference in the opposite
direction.
For example, you want to know whether the mean diameter of the wheel rims differs from 16 in. You
could increase the power of the test by testing only whether the mean is greater than 16 in. However,
this test does not detect a difference if the mean is less than 16 in.
Typically, you use a 1-sample t-test to evaluate continuous data that are normally distributed. You
can also use a 1-sample t-test to evaluate data that is nonnormal but meets one of these conditions:
has 30 or more observations, is symmetric with at least 5 observations, or has relatively few extreme
outliers.To quickly evaluate normality and outliers, use Minitab’s Graphical Summary. If your data
contains any extreme outliers, make sure they are valid measurements.
Use Power and Sample Size for 1-sample t to determine how much data you need to detect an
important difference between the mean and the target value.

Basic Statistical Tests


Is the data symmetric or
not symmetric? Symmetric Not symmetric
The data are distributed evenly on both sides The data are not distributed evenly on both
of the central value. sides of the central value and are “skewed” in
one direction.
Example
Focus of test: A pharmaceutical company wants to Example
Compare one group determine whether a newly developed drug A stainless steel manufacturer wants to
with a target relieves symptoms in less than 12 minutes. A determine whether the percentage of
researcher administers the drug to 16 patients chromium in its products equals 18%. An
Data type:
Continuous
and records the time elapsed until symptoms inspector measures the chromium content in
abate. Although the data are not normal, they a sample of products and determines that the
Focus of comparison: are symmetrically distributed. data do not follow a symmetric distribution.
Center of the distribution

Data distribution:
Nonnormal

Shape of
distribution

Symmetric Not symmetric

To evaluate symmetry, display your data in a histogram or boxplot to determine whether it is similarly
distributed on both sides of the central data value. If the data are symmetric, the mean and the
median are approximately equal, so you can use either the mean or the median to describe the
center of the data.
You can also use Minitab’s Symmetry Plot to evaluate the symmetry of your data. Choose Stat >
Quality Tools > Symmetry Plot.

Basic Statistical Tests


Basic Statistical Tests 1-Sample Wilcoxon
1-Sample Wilcoxon
The 1-sample Wilcoxon test determines whether the median differs from a target value and provides a
range of values that is likely to include the true median.
Example
Focus of test: A researcher at a pharmaceutical company administers a newly developed drug to 16 patients and records
Compare one group the time elapsed until symptoms abate. The data do not follow a normal distribution but are symmetric.
with a target The researcher uses a 1-sample Wilcoxon test to determine whether the drug relieves symptoms in less
than 12 minutes.
Data type:
Continuous To perform a 1-sample Wilcoxon test in Minitab, choose Stat > Nonparametrics > 1-Sample
Wilcoxon.
Focus of comparison:
Center of the distribution Wilcoxon Signed Rank Test: Time

Data distribution: Test of median = 12.00 versus median < 12.00


Nonnormal N for Wilcoxon Estimated
N Test Statistic P Median
Shape of distribution: Time 15 15 19.0 0.011 9.350
Symmetric
Wilcoxon Signed Rank CI: Time

Confidence
1-Sample Wilcoxon Estimated Achieved Interval
N Median Confidence Lower Upper
Time 15 9.35 95.0 7.30 11.40

The median is the middle value of the data when they are arranged from lowest to highest. The
median is less sensitive to outliers than the mean.
You can determine whether the median is greater than, less than, or not equal to a target value. If you
choose a one-sided test (less than or greater than), the test has more power to detect a difference in
the direction of interest. However, it cannot detect a difference in the opposite direction.
You can also use a 1-sample t-test to evaluate data that is nonnormal but meets one of these
conditions: has 30 or more observations, is symmetric with at least 5 observations, or has relatively
few extreme outliers. To quickly evaluate normality and outliers, use Minitab’s Graphical Summary. If
your data contains any extreme outliers, make sure they are valid measurements.

Basic Statistical Tests


Basic Statistical Tests 1-Sample Sign
1-Sample Sign
The 1-sample sign test determines whether the median differs from a target value and provides a range
of values that is likely to include the true median.
Example
Focus of test: An inspector for a stainless steel manufacturer measures the chromium content in 12 product samples
Compare one group and determines that the data do not follow a symmetric distribution. The inspector uses a 1-sample sign
with a target test to determine whether the median chromium content differs from the specification of 18%.
Data type: To perform a 1-sample sign test in Minitab, choose Stat > Nonparametrics > 1-Sample Sign.
Continuous
Sign Test for Median: %Chromium
Focus of comparison:
Center of the distribution Sign test of median = 18.00 versus not = 18.00

N Below Equal Above P Median


Data distribution:
%Chromium 12 8 0 4 0.3877 17.70
Nonnormal
Sign CI: %Chromium
Shape of distribution:
Not symmetric Sign confidence interval for median

Confidence
Achieved Interval
1-Sample Sign N Median Confidence Lower Upper Position
%Chromium 12 17.70 0.8540 17.50 18.10 4
0.9500 17.43 18.76 NLI
0.9614 17.40 19.00 3

The median is the middle value of the data when they are arranged from lowest to highest. The
median is less sensitive to outliers than the mean and can be a more informative measure of the
center when the data do not follow a symmetric distribution.
You can evaluate whether the median is greater than, less than, or not equal to a target value. If you
choose a one-sided test (less than or greater than), the test has more power to detect a difference in
the direction of interest. However, it cannot detect a difference in the opposite direction.
You can also use a 1-sample t-test to evaluate data that is nonnormal but meets one of these
conditions: has 30 or more observations, is symmetric with at least 5 observations, or has relatively
few extreme outliers. To quickly evaluate normality and outliers, use Minitab’s Graphical Summary. If
your data contains any extreme outliers, make sure they are valid measurements.

Basic Statistical Tests


Basic Statistical Tests 1 Variance
1 Variance
The 1 variance test determines whether the variation (standard deviation or variance) differs from a
target value and provides a range of values that is likely to include the true variation.
Example
Focus of test: A manager of a lumberyard measures the length of 50 beams cut by a sawmill. The manager uses a 1
Compare one group variance test to evaluate whether the standard deviation of the beam lengths is less than 1 mm.
with a target
To perform a 1 variance test in Minitab, choose Stat > Basic Statistics > 1 Variance.
Data type:
Continuous Test and CI for One Standard Deviation: Length

Method
Focus of comparison:
Spread of the distribution Null hypothesis Sigma = 1
Alternative hypothesis Sigma not = 1

1 Variance The standard method is only for the normal distribution.


The adjusted method is for any continuous distribution.

Statistics

Variable N StDev Variance


Length 50 0.871 0.759

95% Confidence Intervals

CI for
Variable Method CI for StDev Variance
Length Standard (0.728, 1.085) (0.529, 1.178)
Adjusted (0.712, 1.122) (0.507, 1.259)

Tests

Variable Method Chi-Square DF P-Value


Length Standard 37.17 49.00 0.215
Adjusted 28.89 38.09 0.282

You can use Minitab’s 1 Variance test on normal or nonnormal continuous data.
You can evaluate whether the standard deviation (or variance) is greater than, less than, or not equal
to a target value. If you choose a one-sided test (less than or greater than), the test has more power
to detect a difference in the direction of interest. However, it cannot detect a difference in the opposite
direction.

Basic Statistical Tests


Do you have binary data
or count data? Binary data Count data
Classifies items into one of two categories, Counts the presence of a characteristic,
such as pass/fail or yes/no. Often used to result, or activity. Often used to compare an
compare a proportion. occurrence rate.

Focus of test: Example Example


Compare one group A direct-mail firm wants to track the proportion Inspectors at a bus company count the number
with a target of customers who respond to a direct-mail of bus breakdowns each day for 30 days. The
advertisement by purchasing the advertised company wants to determine the daily rate of
Data type:
Attribute
item. Marketing analysts randomly sample bus breakdowns.
1000 customers who received the mailer and
record whether or not the customer bought the
item.
Type of
attribute
data

Binary data Count data

For count data, you count the number of occurrences in a given amount of time, area, volume, or other
observation space. If a process has a constant rate of occurrence, use data from any observation
space to make an inference about the entire process, such as the number of defects per day, per
month, or per year. Otherwise, make sure that the observation space over which you collect the data
is appropriate for the question you want to answer.
Suppose the rate of phone calls at a call center varies greatly each hour. If you track only the calls
received between 8 am and 9 am, the rate will not reflect the average hourly rate over the entire day.
Conversely, if you track the calls over the entire day, the average hourly rate will not reflect the rate
of calls received between 8 am and 9 am.

Basic Statistical Tests


Basic Statistical Tests 1 Proportion
1 Proportion
A 1 proportion test determines whether a proportion differs from a target value and provides a range of
values that is likely to include the true proportion.
Example
Focus of test: A marketing analyst at a direct-mail firm randomly samples 1000 customers who received an advertising
Compare one group mailer and records whether or not the customer bought the item. The analyst uses a 1 proportion test
with a target to determine whether the proportion of customers who respond to the mailer differs from the national
average of 6.5%.
Data type:
Attribute To perform a 1 proportion test in Minitab, choose Stat > Basic Statistics > 1 Proportion.

Type of attribute data: Test and CI for One Proportion


Binary
Test of p = 0.065 vs p not = 0.065

1 Proportion Exact
Sample X N Sample p 95% CI P-Value
1 87 1000 0.087000 (0.070268, 0.106208) 0.008

You can evaluate whether the proportion is greater than, less than, or not equal to the target value. If
you choose a one-sided test (less than or greater than), the test has more power to detect a difference
in the direction of interest. However, it cannot detect a difference in the opposite direction.
Suppose you want to know whether the proportion of customers who respond to the mailer differs
from 6.5%. You could increase the power of the test by testing only whether the proportion is greater
than 6.5%. However, this test does not detect a difference if the proportion is less than 6.5%.
Use Power and Sample Size for 1 proportion to determine how much data you need to detect an
important difference between the proportion and the target value.

Basic Statistical Tests


Basic Statistical Tests 1-Sample Poisson Rate
1-Sample Poisson Rate
A 1-sample Poisson rate determines whether a rate differs from a target value and provides a range of
values that is likely to include the true rate.
Example
Focus of test: Inspectors at a bus company count the number of bus breakdowns each day for 30 days. The inspectors
Compare one group use a 1-sample Poisson rate to determine the daily rate of bus breakdowns and see whether it differs
with a target from the daily breakdown rate from the previous year (2.1 buses/day).
Data type: To perform a 1-sample Poisson rate in Minitab, choose Stat > Basic Statistics > 1-Sample Poisson
Attribute Rate.

Type of attribute data: Test and CI for One-Sample Poisson Rate


Count
Test of rate = 2.1 vs rate not = 2.1

Total Rate of Exact


1-Sample Poisson Rate Sample Occurrences N Occurrence 95% CI P-Value
1 94 30 3.13333 (2.53205, 3.83441) 0.000

“Length” of observation = 1.

You can evaluate whether the rate is greater than, less than, or not equal to the target value. If you
choose a one-sided test (less than or greater than), the test has more power to detect a difference in
the direction of interest. However, it cannot detect a difference in the opposite direction.
Suppose you want to know whether the rate of bus breakdowns differs from 2.1. You could increase
the power of the test by testing only whether the daily rate of bus breakdowns is less than 2.1 per day.
However, this test does not detect a difference if the rate is greater than 2.1 per day.

Basic Statistical Tests


How many groups are you
comparing? Two groups More than two groups
Compare two groups or the same group under Compare more than two groups or the same
two conditions. group under more than two conditions.
Example Example
Focus of test: Hospital researchers want to compare post- A quality engineer wants to compare the mean
Compare groups surgery recovery times in two groups of strength of nylon fiber from 5 different suppliers
with each other patients: patients who receive follow-up care to see whether the strength of the nylon differs
at the hospital and patients who receive follow- between the suppliers.
up care at home.
Number
of groups

More than two


Two groups
groups

Basic Statistical Tests


Do you have continuous
data or attribute data? Continuous data Attribute data
Measures a characteristic of a part or process, Counts the presence of a characteristic or
such as length, weight, or temperature. The condition, such as a physical trait, a type of
data often includes fractional (or decimal) defect, or a rating, such as pass/fail. The data
values. are whole numbers.
Focus of test:
Compare groups Example Example
with each other A quality engineer wants to evaluate whether An analyst wants to compare the quality of
the mean weight of cereal boxes is the same light bulbs from two different suppliers. The
Number of groups: across two production shifts. The analyst analyst inspects a sample of bulbs from each
Two samples boxes from each shift and records supplier and counts the number of broken
their weights. bulbs in each sample.

Data type

Continuous Attribute
data data

If possible, collect continuous data because they provide more detailed information. However,
sometimes attribute data adequately describe the quality of a part or a process. For example, if you
track broken light bulbs, you don’t need to measure a characteristic of the bulb to evaluate whether
it’s broken or not. What matters is only the number of bulbs that are broken (counts).

Basic Statistical Tests


Do you have independent
samples or paired Independent samples Paired observations
(dependent) observations? Each sample is selected randomly, so the The sample is a set of matched pairs, so that
observations in one sample do not affect the one observation is dependent on (related to)
observations in the other sample. the other observation in the pair.

Focus of test: Example Example


Compare groups A health management company wants to To evaluate a computer training course, a
with each other compare satisfaction ratings from former human resource analyst tests the computer
patients at two hospitals. Because the two skills of each trainee before and after the
Number of groups: patient groups are composed of different training. Therefore, each post-training test
Two individuals who are randomly selected, the score is associated (paired) with a pre-training
samples are independent. test score from the same trainee.
Data type:
Continuous

How are data


sampled

Independent Paired
samples observations

Independent samples occur when you:


• Randomly sample items or subjects from two groups (populations). For example, a quality
engineer takes a random sample of bolts that are produced by different machines. The bolts
from each machine are considered independent samples.
• Randomly split a sample into groups and apply distinct conditions to each group. For example,
an analyst randomly assigns a sample of customers to two groups and sends each group a
different promotional email. The analyst records whether each customer responds to the email.
Paired (dependent) observations occur when you:
• Measure a characteristic of the same subject under different conditions. For example, a
researcher measures cholesterol in the same patients before and after they follow a low-fat diet.
• Apply the same conditions to two items or subjects. For example, a quality engineer measures
the tread wear in two brands of tires that were put on the same car. The tread wear for the two
tires is likely to depend on the car.

Basic Statistical Tests


Do you want to compare
the center or the spread Center of distribution Spread of distribution
of each distribution? Compares the central value in the Compares the variation in the measurements
measurements for each group. You want to for each group. You want to determine whether
determine whether the groups differ. the data vary more in one group than in the
Example other.
Focus of test:
Compare groups A quality analyst at a health management Example
with each other company records satisfaction ratings from A manager of a lumberyard measures the
former patients at two hospitals. The analyst length of beams that are cut by two different
Number of groups: wants to compare the average satisfaction sawmills. The manager wants to compare the
Two ratings at each hospital to determine whether spread of the measurements for each sawmill
they differ. to determine whether the consistency of the
Data type: beam lengths is the same.
Continuous

How are data sampled:


Independent samples

Focus of
comparison

Center of Spread of
distribution distribution
You can evaluate the center of the data using the mean (the arithmetic average) or the median (the
middle value when the data are arranged from lowest to highest). The median is less sensitive than
the mean to outliers.
You can evaluate the variation, or spread, of the data using the standard deviation or the variance.
The standard deviation is often easier to interpret because it uses the same units as the data.

Basic Statistical Tests


Does your data follow
a normal or nonnormal Normal distribution Nonnormal distribution
distribution? Data that follow a symmetric, bell-shaped Data that follow a distribution that either is
distribution. not symmetric or is symmetric but not bell-
shaped.
Example
Focus of test: A quality analyst at a health management Example
Compare groups company records the patient satisfaction A public transportation department uses two
with each other ratings at two hospitals. The analyst brands of paint for road stripes. For each
determines that the satisfaction ratings for paint brand, an analyst records the number of
Number of groups: each hospital follow a normal distribution. months that stripes last on the highway. The
Two analyst determines that the durations for each
paint brand are not symmetrically distributed
Data type: and, therefore, are not normal.
Continuous

How are data sampled:


Independent samples

Focus of comparison:
Center of distribution

Data
distribution

The distribution of your data often depends on your process. For example, data that track cycle
time for service processes, such as the time needed to process an application, serve a customer, or
Normal Nonnormal
distribution distribution
deliver a product, often do not follow a normal distribution.
Although the normal distribution is always bell-shaped, not all bell-shaped distributions are normal. To
determine whether your data follow a normal distribution, use normal probability plots, histograms, or
normality tests such as the Anderson-Darling test. You can perform these evaluations using Minitab’s
Normality Test or Graphical Summary.
If you have 30 or more observations in each sample, you can generally treat your data as being
normal and perform a 2-sample t-test to compare the means of two groups.

Basic Statistical Tests


Basic Statistical Tests 2-Sample t
2-Sample t
The 2-sample t-test determines whether the means of two groups differ and provides a range of values
that is likely to include the true difference between the means.
Example
Focus of test: A quality analyst at the health management company wants to compare patient satisfaction ratings at
Compare groups two hospitals. The analyst uses a 2-sample t-test to evaluate whether the average satisfaction ratings
with each other from former patients differ between hospitals.
To perform a 2-sample t-test in Minitab, choose Stat > Basic Statistics > 2-Sample t.
Number of groups:
Two
Two-Sample T-Test and CI: A, B

Two-sample T for A vs B
Data type:
Continuous N Mean StDev SE Mean
A 10 80.7 10.6 3.4
B 15 59.0 14.2 3.7
How are data sampled:
Difference = mu (A) - mu (B)
Independent samples
Estimate for difference: 21.70
95% CI for difference: (10.79, 32.61)
T-Test of difference = 0 (vs not =): T-Value = 4.11 P-Value = 0.000 DF = 23
Focus of comparison: Both use Pooled StDev = 12.9213
Center of distribution

Data distribution:
Use Minitab’s 2-sample t-test to evaluate whether the mean of one group is greater than, less than, or
Normal
not equal to the mean of the other group. If you choose a one-sided test (less than or greater than),
the test has more power to detect a difference in the direction of interest. However, it cannot detect a
2-Sample t difference in the opposite direction.
Typically, you use a 2-sample t-test to evaluate continuous data that are normally distributed. You
can also use a 2-sample t-test to evaluate data that is nonnormal but meets one of these conditions:
has 30 or more observations, is symmetric with at least 5 observations, or has relatively few extreme
outliers.To quickly evaluate normality and outliers, use Minitab’s Graphical Summary. If your data
contains any extreme outliers, make sure they are valid measurements.
Use Power and Sample Size for 2-sample t to determine how much data you need to detect an
important difference between the means of the two groups.

Basic Statistical Tests


Basic Statistical Tests Mann-Whitney
Mann-Whitney
The Mann-Whitney test determines whether the medians of two groups differ and provides a range of
values that is likely to include the true difference between the medians.
Example
Focus of test: A public transportation department uses two brands of paint for road stripes. An analyst records the
Compare groups number of months that each brand of paint lasts on the highway. Because the samples are relatively
with each other small and the data is not normal, the analyst uses a Mann-Whitney to determine whether the duration of
the two paints differs.
Number of groups: To perform a Mann-Whitney test in Minitab, choose Stat > Nonparametrics > Mann-Whitney.
Two

Mann-Whitney Test and CI: Brand A, Brand B


Data type:
N Median
Continuous
Brand A 11 36.00
Brand B 10 37.50

How are data sampled: Point estimate for ETA1-ETA2 is -1.60


Independent samples 95.5 Percent CI for ETA1-ETA2 is (-3.30,0.20)
W = 94.5
Test of ETA1 = ETA2 vs ETA1 not = ETA2 is significant at 0.0671
The test is significant at 0.0668 (adjusted for ties)
Focus of comparison:
Center of distribution

Data distribution: The median is the middle value of the data when they are arranged from lowest to highest. The
Nonnormal median is less sensitive to outliers than the mean and can be be a more informative measure of the
center when the data do not follow a symmetric distribution.

Mann-Whitney You can evaluate whether the median of one group is greater than, less than, or not equal to the
median of the other group. If you choose a one-sided test (less than or greater than), the test has
more power to detect a difference in the direction of interest. However, it cannot detect a difference
in the opposite direction.
For the Mann-Whitney test, both groups should have approximately the same variance. To compare
the variances of the two groups, use Minitab’s 2 Variances.
You can also use the 2-sample t-test to evaluate data that is nonnormal but meets one of these
conditions: has 30 or more observations, is symmetric with at least 5 observations, or has relatively
few extreme outliers.To quickly evaluate normality and outliers, use Minitab’s Graphical Summary. If
your data contains any extreme outliers, make sure they are valid measurements.

Basic Statistical Tests


Basic Statistical Tests 2 Variances
2 Variances
The 2 variances test determines whether the variances (or standard deviations) of two groups differ and
provides a range of values that is likely to include the true variation in each group.
Example
Focus of test: A manager of a lumberyard wants to compare the consistency of the length of beams cut by two different
Compare groups sawmills. The manager uses a 2 variances test to determine whether the variation of the beam lengths
with each other differs between the sawmills.
To perform a 2 variances test in Minitab, choose Stat > Basic Statistics > 2 Variances.
Number of groups:
Two

Data type:
Continuous

How are data sampled:


Independent samples

Focus of comparison:
Spread of distribution

2 Variances

You can perform the 2 variances test on normal or nonnormal data.

Basic Statistical Tests


Basic Statistical Tests Paired t
Paired t
The paired t-test examines the mean difference between paired observations and provides a range of
likely values for the difference.
Example
Focus of test: A human resource analyst evaluates the computer skills of each trainee before and after training. The
Compare groups analyst uses a paired t-test to determine whether the mean test scores before and after the training
with each other differ.
To perform a paired t-test in Minitab, choose Stat > Basic Statistics > Paired t.
Number of groups:
Two Paired T-Test and CI: Before, After

Paired T for Before - After


Data type:
Continuous N Mean StDev SE Mean
Before 15 73.20 15.73 4.06
After 15 83.47 10.23 2.64
Difference 15 -10.27 8.52 2.20
How are data sampled:
Paired observations 95% CI for mean difference: (-14.99, -5.55)
T-Test of mean difference = 0 (vs not = 0): T-Value = -4.67 P-Value = 0.000

Paired t

Typically, you use a paired t-test to evaluate the mean differences between paired observations when
the differences follow a normal distribution.
You can also use a paired t-test to evaluate paired data that is nonnormal but meets one of these
conditions: has 30 or more observations, is symmetric with at least 5 observations, or has relatively
few extreme outliers.To quickly evaluate normality and outliers, use Minitab’s Graphical Summary. If
your data contains any extreme outliers, make sure they are valid measurements.
If the paired differences are nonnormal and contain many extreme outliers, use the 1-sample
Wilcoxon test (for symmetric data) or the 1-sample sign (for nonsymmetric data) to evaluate the
paired differences.

Basic Statistical Tests


Do you have binary data
or count data? Binary data Count data
Classifies items into one of two categories, Counts the presence of a characteristic,
such as pass/fail or yes/no. Often used to response, or activity. Often used to compare
compare proportions. occurrence rates.

Focus of test: Example Example


Compare groups To evaluate a new delivery process, a delivery An automotive manufacturer wants to compare
with each other company counts the number of mishandled the number of scratches on each car door that
packages per day before and after it implements is produced by two production lines. Because
Number of groups: the new process. Because the total number of the car doors have the same surface area,
Two packages handled per day varies, proportions inspectors can easily compare the production
provide a better way to compare the number lines by comparing the rate of scratches per
Data type: of mishandled packages. door.
Attribute

Type of
attribute
data

Binary data Count data

To collect count data, you count the number of occurrences in a given amount of time, area, volume,
or other observation space. If a process has a constant rate of occurrence, use data from any
observation space to make an inference about the entire process, such as the number of defects per
day, per month, or per year. Otherwise, make sure that the observation space over which you collect
the data is appropriate for the question you want to answer.
Suppose the rate of phone calls at a call center varies greatly each hour. If you track only the calls
received between 8 am and 9 am, the rate will not reflect the average hourly rate over the entire day.
Conversely, if you track the calls over the entire day, the average hourly rate will not reflect the rate
of calls received between 8 am and 9 am.

Basic Statistical Tests


Basic Statistical Tests 2 Proportions
2 Proportions
The 2 proportions test determines whether the proportions of two groups differ and provides a range of
values that is likely to include the true difference.
Example
Focus of test: A delivery company tracks how many packages are mishandled each day before and after it implements
Compare groups a new delivery process. A quality analyst uses a 2 proportions test to determine whether the proportion
with each other of mishandled packages under the old process differs from the proportion of mishandled packages under
the new process.
Number of groups: To perform a 2 proportions test in Minitab, choose Stat > Basic Statistics > 2 Proportions.
Two

Test and CI for Two Proportions


Data type:
Attribute Sample X N Sample p
1 18 867 0.020761
2 11 794 0.013854
Type of attribute data: Difference = p (1) - p (2)
Binary Estimate for difference: 0.00690734
95% CI for difference: (-0.00558971, 0.0194044)
Test for difference = 0 (vs not = 0): Z = 1.08 P-Value = 0.279
2 Proportions Fisher’s exact test: P-Value = 0.349

You can evaluate whether one proportion is greater than, less than, or not equal to the other
proportion. If you choose a one-sided test (less than or greater than), the test has more power to
detect a difference in the direction of interest. However, it cannot detect a difference in the opposite
direction.
Suppose you want to know whether a process change affects the proportion of mishandled packages.
You could increase the power of the test by testing only whether the proportion for the new process
is less than the proportion for the old process. However, this test will not detect a difference if the
proportion for the new process is greater than the proportion for the old process.
Use Power and Sample Size for 2 Proportions to determine how much data you need to detect an
important difference between two proportions.

Basic Statistical Tests


Basic Statistical Tests 2-Sample Poisson Rate
2-Sample Poisson Rate
The 2-sample Poisson rate test determines whether the rates of two groups differ and provides a range
of values that is likely to include the true difference.
Example
Focus of test: An inspector for an automotive manufacturer wants to compare the number of scratches per car door
Compare groups for two production lines. The inspector uses a 2-sample Poisson rate to evaluate whether the rate of
with each other scratches per door is the same for both production lines.
To perform a 2-sample Poisson rate test in Minitab, choose Stat > Basic Statistics > 2-Sample Poisson
Number of groups: Rate.
Two

Test and CI for Two-Sample Poisson Rates: Line A, Line B


Data type: Total Rate of
Attribute Variable Occurrences N Occurrence
Line A 6 25 0.24
Line B 16 25 0.64
Type of attribute data:
Count Difference = rate(Line A) - rate(Line B)
Estimate for difference: -0.4
95% CI for difference: (-0.767722, -0.0322782)
Test for difference = 0 (vs not = 0): Z = -2.13 P-Value = 0.033
2-Sample Poisson Rate
Exact Test: P-Value = 0.052

* NOTE * The normal approximation may be inaccurate for small total number of occurrences.

You can evaluate whether one rate is greater than, less than, or not equal to the other rate. If you
choose a one-sided test (less than or greater than), the test has more power to detect a difference in
the direction of interest. However, it cannot detect a difference in the opposite direction.
Suppose you want to detect whether a process change affects the rate of scratches per door. You
could increase the power of the test by testing only whether the rate for the new process is lower
than the rate for the old process. However, this test will not detect a difference if the rate for the new
process is higher than the rate for the old process.

Basic Statistical Tests


Do you have continuous
data or attribute data? Continuous data Attribute data
Measures a characteristic of a part or process, Counts the presence of a characteristic or
such as length, weight, or temperature. The condition, such as a physical trait, a type of
data often includes fractional (or decimal) defect, or a rating, such as pass/fail. The data
values. are whole numbers.
Focus of test:
Compare groups Example Example
with each other A quality engineer wants to evaluate whether An automated inspection process examines
the mean weight of cereal boxes is the same samples of bolts produced by four machines
Number of groups: across three different production shifts. The for severe cracks that make the bolts unusable.
More than two analyst samples boxes from each shift and For each sample, analysts record the number
records their weights. of bolts that are inspected and the number of
bolts that are rejected.

Data type

Continuous Attribute
data data

If possible, collect continuous data because they provide more detailed information. However,
sometimes attribute data adequately describe the quality of a part or a process. For example, if you
are tracking broken light bulbs, you don’t need to measure a characteristic of the bulb to evaluate
whether it’s broken or not. What matters is only the number of bulbs that are broken (counts).

Basic Statistical Tests


Do you want to compare
the center or the spread of Center of distribution Spread of distribution
each distribution? Compares the central value of each group to Compares the variation of each group to
determine whether at least one group differs determine whether the data vary more (or
from the others. less) in at least one group than the others.

Focus of test: Example Example


Compare groups A quality engineer wants to compare the A manager of a lumberyard measures the
with each other hardness of four different paint blends after length of beams that are cut by three different
applying them to a metal surface. She wants sawmills. He wants to compare the spread
Number of groups: to determine whether the hardness of at least of the measurements for each sawmill and
More than two one paint blend is different from the others. determine whether the consistency of the
beam lengths is the same.
Data type:
Continuous

Focus of
comparison

Center of the Spread of the


distribution distribution

You can evaluate the center of the data using the mean (the arithmetic average) or the median (the
middle value when the data are arranged from lowest to highest). The median is less sensitive than
the mean to outliers.
You can evaluate the spread, or variation, of the data using the standard deviation or the variance.
The standard deviation is often easier to interpret because it uses the same units as the data.

Basic Statistical Tests


Does your data follow
a normal or nonnormal Normal distribution Nonnormal distribution
distribution? Data that follow a symmetric, bell-shaped Data that follow a distribution that either is
distribution. not symmetric or is symmetric but not bell-
shaped.
Example
Focus of test: A quality engineer measures the hardness of Example
Compare groups four different paint blends after applying them A health administrator records the unoccupied
with each other to a metal surface. The engineer determines bed space for three hospitals located in the
that the hardness of each blend follows a same city. The administrator determines that
Number of groups: normal distribution. the data are not symmetrically distributed and,
More than two therefore, are not normal.

Data type:
Continuous

Focus of comparison:
Center of the distribution

Data
distribution

Normal Nonnormal
distribution distribution The distribution of your data often depends on your process. For example, data that track cycle
time for service processes, such as the time needed to process an application, serve a customer, or
deliver a product, often do not follow a normal distribution.
Although the normal distribution is always bell-shaped, not all bell-shaped distributions are normal. To
determine whether your data follow a normal distribution, use normal probability plots, histograms, or
normality tests such as the Anderson-Darling test. You can perform these evaluations using Minitab’s
Normality Test or Graphical Summary.
If you have 30 or more observations in each sample, you can generally treat your data as being
normal when you perform a basic statistical test to compare the means of two or more groups.

Basic Statistical Tests


Basic Statistical Tests One-Way ANOVA
One-Way ANOVA
A one-way ANOVA determines whether the means of two or more independent groups differ and provides
a range of values that is likely to include the true mean of each group.
Example
Focus of test: A quality engineer measures the hardness of four different paint blends after applying them to a metal
Compare groups surface. The engineer uses a one-way ANOVA to determine whether the mean hardness differs among
with each other the blends.
To perform a one-way ANOVA in Minitab, choose Stat > ANOVA > One-Way. To determine which groups
Number of groups: differ from one another, check Comparisons and select a method for comparing the groups.
More than two

Data type: One-way ANOVA: Hardness versus Paint


Continuous
Source DF SS MS F P
Paint 3 281.7 93.9 6.02 0.004
Error 20 312.1 15.6
Focus of comparison: Total 23 593.8
Center of the distribution
S = 3.950 R-Sq = 47.44% R-Sq(adj) = 39.56%

Data distribution: Individual 95% CIs For Mean Based on Pooled StDev
Level N Mean StDev +---------+---------+---------+---------
Normal
Blend A 6 14.733 3.363 (-----*------)
Blend B 6 8.567 5.500 (------*------)
Blend C 6 12.983 3.730 (------*------)
One-Way ANOVA Blend D 6 18.067 2.636 (------*------)
+---------+---------+---------+---------
5.0 10.0 15.0 20.0

Pooled StDev = 3.950

Typically, you use one-way ANOVA to evaluate the means of two or more groups if you have
continuous data that are normally distributed. The test assumes that the data from each group have
about the same spread (equal variance). To test the variances of the groups, use Minitab’s Test for
Equal Variances.
You can also use one-way ANOVA to evaluate data that is nonnormal but meets one of these
conditions: has 30 or more observations, is symmetric with at least 5 observations, or has relatively
few extreme outliers.To quickly evaluate normality and outliers, use Minitab’s Graphical Summary. If
your data contains any extreme outliers, make sure they are valid measurements.
Use Power and Sample Size for one-way ANOVA to determine how much data you need to detect an
important difference between the group means.

Basic Statistical Tests


Basic Statistical Tests Kruskal-Wallis
Kruskal-Wallis
The Kruskal-Wallis test determines whether the medians of two or more groups differ.
Example
A health administrator wants to compare the unoccupied bed space in three hospitals located in the
Focus of test: same city. Because the data are not normal and contain extreme outliers, she uses the Kruskal-Wallis
Compare groups test to determine whether the median bed space in each hospital differs.
with each other
To perform a Kruskal-Wallis test in Minitab, choose Stat > Nonparametrics > Kruskal-Wallis.
Number of groups:
Kruskal-Wallis Test: Beds versus Hospital
More than two
Kruskal-Wallis Test on Beds

Data type: Hospital N Median Ave Rank Z


Continuous 1 11 16.00 14.0 -1.28
2 11 31.00 23.3 2.65
3 11 17.00 13.7 -1.37
Overall 33 17.0
Focus of comparison:
Center of the distribution H = 7.05 DF = 2 P = 0.029
H = 7.05 DF = 2 P = 0.029 (adjusted for ties)

Data distribution:
Nonnormal

You can also use one-way ANOVA to evaluate data that is nonnormal but meets one of these
Kruskal-Wallis conditions: has 30 or more observations, is symmetric with at least 5 observations, or has relatively
few extreme outliers.To quickly evaluate normality and outliers, use Minitab’s Graphical Summary. If
your data contains any extreme outliers, make sure they are valid measurements.
If you have many extreme outliers, you may want to use Mood’s median test to compare the central
values of the groups. Although Mood’s median test is less powerful than the Kruskal-Wallis test, its
results are not as strongly affected by outliers.

Basic Statistical Tests


Basic Statistical Tests Test for Equal Variances
Test for Equal Variances
A test for equal variances determines whether the variation (variance or standard deviation) of two
or more independent groups differs, and it provides a range of values that is likely to include the true
variation of each group.

Focus of test: Example


Compare groups The manager of a lumberyard wants to compare the consistency of the length of beams cut by three
with each other different sawmills. He uses a test for equal variances to evaluate whether the variation of the beam
lengths differs for any of the sawmills.
Number of groups: To perform a test for equal variances in Minitab, choose Stat > ANOVA > Test for Equal Variances.
More than two

Data type:
Continuous

Focus of comparison:
Spread of the distribution

Test for Equal Variances

You can use the test for equal variances on normal or nonnormal data.

Basic Statistical Tests


Basic Statistical Tests Cross Tabulation and Chi-Square
Cross Tabulation and
Chi-Square Cross tabulation and chi-square analysis tests whether the distribution of observations for an attribute
variable differs for any of the groups.
Example
Focus of test: An automated inspection process examines samples of bolts from four suppliers and determines whether
Compare groups each bolt contains a severe crack that makes it unusable. Analysts use cross tabulation and chi-square
with each other to determine whether the distribution of cracked bolts differs among the suppliers.
To perform cross tabulation and chi-square in Minitab, choose Stat > Tables > Cross Tabulation and
Number of groups: Chi-Square. Click Chi-Square and check Chi-Square analysis.
More than two
Tabulated statistics: Supplier, Cracked bolt

Data type: Rows: Supplier Columns: Cracked bolt


Attribute
No Yes All

Cross-Tabulation and A 96 4 100


Chi-Square B 92 8 100
C 90 10 100
D 100 0 100
All 378 22 400

Cell Contents: Coun


t
Pearson Chi-Square = 11.352, DF = 3, P-Value = 0.010
Likelihood Ratio Chi-Square = 16.026, DF = 3, P-Value = 0.001

For a more in-depth analysis of the relationship between the groups and their levels, consider using
logistic regression.

Basic Statistical Tests


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182 Six Sigma – Concepts and Cases

Mumbai Dabawala

Around 5000 Tiffinwallasdeliver 175,000 lunches everyday


and take the empty Tiffin boxes back. They make one
mistake in two months. This means there is one error in
every 16 million transactions!

W hat is Six Sigma?

”Six Sigma” means a failure rate of 3.4 parts per million or 99.9997 percent perfect;
however, the term in practice is used to denote more than simply counting defects.
Six Sigma can now imply a whole culture of strategies, tools, and statistical
methodologies to improve the bottomline of companies. In all, six sigma is a rigorous
analytical process for anticipating and solving problems. The objective of six sigma
is to improve profits through defect reduction, yield improvement, improved
consumer satisfaction and best-in-class product/process performance.

Why is it important?

World-class companies typically operate at about four sigma or 99 percent


perfection. To get to the six-sigma level means cutting down on huge costs and
thereby the wasted dollars. For example, if you are four sigma – you would be
producing products at the rate of 6200 defectives for every million you produce vs
3.4 defectives if you are at the six sigma level. Moreover, six sigma improvement
projects typically return in excess of $150k to $250k per project with a Black Belt
returning as much as $1 million to the bottomline each year.

Source: © www.erpweb.com. Reprinted with permission.


Mumbai Dabawala 183

The popularity of Six Sigma is growing. Companies such as Motorola (1987),


Texas Instruments (1988), IBM (1990), Asea Brown Boveri (1993), AlliedSignal/
Kodak (1994), GE (1995), Whirlpool, PACCAR, Invensys, & Polaroid (1996/98),
and many other companies worldwide have successfully implemented Six Sigma.
Recently Ford, DuPont, Dow Chemical, Microsoft and American Express have
started working on instituting Six Sigma processes.

When to use it?

Bottomline drives management action. What is your Cost of (poor) Quality? First
you need to determine that. Properly implemented, six sigma implementation can
become a profit-center for the company. Jack Welch at GE claims that the returns on
six sigma implementation amount to about $500 million as of 1998. Remember that
six sigma is complementary to other initiatives such as ISO or QS 9000 (which is
mainly procedural), Total Quality Management (which is mainly cultural) and
Statistical Process Control (which is primarily statistical process monitoring).

How to use it?

Six Sigma focuses on process quality. As such, it falls into the category of a process
capability (Cp) technique. Traditionally, a process is considered capable if the
natural spread, plus and minus three sigma (a yield of 99.73 percent), was less
than the engineering tolerance. A later refinement considered the process location
as well as its spread (Cpk) and tightened the minimum acceptable so that the
process was at least four sigma from the nearest engineering requirement. Six
Sigma requires that processes operate such that the nearest engineering requirement
is at least plus or minus six sigma from the process mean. This requires considerable
scientific and testing actions – often thousands of tests are run on multiple variables
to get an understanding of what’s going on. Once you determine the process
variables and using the other process analysis techniques, you need to consider
the ones causing the major losses and work on making them more capable.

• Understand who your consumers are and what your product/service is

• Review consumer surveys, concession reports, and other data

• Screen and prioritize issues by severity, frequency/likelihood of occurrence,


etc.
184 Six Sigma – Concepts and Cases

• Determine the internal processes causing the most pain

• Find out why and where the defects are occurring

• Devise ways to address these defects effectively

• Set up a good metrics (six-sigma places a lot of emphasis on measurement)

W ho or what is a Green Belt?

A person trained in the Six Sigma methodology who is a team member of six sigma
process improvement action teams.

W ho or what is a Black Belt?

A person that is part of the leadership structure for process improvement teams are
called “Black Belts” (just as Total Quality utilized “Quality Improvement Team
Leaders” to provide structure). Black Belts are highly-regarded, technically-oriented
product or line personnel who have an ability to lead teams as well as to advise
management.

W ho or what is a M aster Black Belt?

A person trained in the six sigma methodology who acts as the organization-wide
Six Sigma director or a program manager. He oversees Black belts and process
improvement projects and provides guidance to Black belts as required. A Master
Black belt teaches other six sigma students and helps them achieve Green belt and
Black belt status.

Who drives Six Sigma?

Usually a top executive or senior manager who “talks the talk” and “walks the
walk” of six sigma. This person is the sponsor, a catalyst and the driving force
behind the organization’s six sigma implementation.

Six Sigma Basics

For the legendary Jack Welch, a self-proclaimed cynic of quality programmes, Six
Sigma was not another quality tool that was heavy on slogans and light on results.
Under Welch’s regime, GE splurged $450 million (nearly Rs.2,205 crore) in two
years on training its employees for Master Black Belts, Black Belts and Green Belts
(leaders for Six Sigma initiatives within the company).
Mumbai Dabawala 185

So what was special for Six Sigma? Simply speaking, it is a vision, a tool for
quality improvement, a benchmark and a profit improvement methodology all
rolled into one. Started by Motorola in the US in 1985, it was used, among other
things, to manufacture a virtually defect-free pager. The methodology has been
extensively used for achieving defect-free products.

Although Motorola applied Six Sigma extensively for manufacturing areas, GE


chose Six Sigma as a corporate vision and applied it for all their service outputs
(non-manufacturing) to achieve the Six Sigma level of defect-free outputs (99.99967
percent defect-free products). The Six Sigma methodology is based on the paradigm
that a zero defect in any product or process is possible. It believes that the Six
Sigma level of quality – just 3.4 defects per million opportunities – would be
attainable if the products and processes are designed properly.

The Six Sigma approach to quality ensures that the defects are eliminated
progressively by identifying the root causes and eliminating the source of variation.
As the defects are eliminated, the yield improves, work in process comes down,
customer satisfaction improves and the profitability of the company goes up.

While implementing Six Sigma, the first task at hand is identifying the factors
critical to quality and pinning down defects that put a question mark on quality.
As C R Nagaraj, corporate vice president, Mission:Quality, Wipro Limited, explains,
“Six Sigma converts a business problem into a statistical problem and finds a
statistical solution. It then converts the statistical solution into a business solution.”

This is the basic template for all the Six Sigma project methodologies. There are
tools and techniques at different stages that help one understand the problem,
diagnose root causes, validate critical root causes and implement corrective action.
For example, a tool like the Design Customer Satisfaction and Manufacturing
(DCSM) would be used for designing and manufacturing new products, while the
cross-functional process mapping (CFPM) would be used for large processes that
run through the business.

Variation that induces defects is caused by two factors: chance factors and
assignable factors. Chance factors are those that are generated by the system and
over which the operator has little control. For instance, in a manufacturing process,
186 Six Sigma – Concepts and Cases

when a lot of bearings in a machine wear out, they produce variation in the product
under manufacture. Similarly, deviations in the quality of raw material or power
supply produce variations. These are chance factors that the management has to
control.

The variation produced by chance factors is about 85 percent. “These chance


factors are resolved by acting on the system and by management action alone. No
amount of operator skill can control these,” says Nagaraj.

On the other hand, the assignable factors that constitute 15 percent of the
variation is dependent on the person who is operating the system and factors such
as skills, diligence begin their role at this stage. “The management is most
responsible for the variation that is produced, which includes putting up the right
processes, putting up metrics for understanding process behaviour and plan
corrective action,” says Nagaraj.

Six Sigma differs from other quality initiatives in terms of its structured approach
to achieve profitability improvement through the competitive advantage.
Importantly, while other quality initiatives take an operations point of view, Six
Sigma approaches problems from the customer’s side.

Sigma is the statistical measurement for variation in any output, and when
companies talk of + - 6 times the Sigma within a specification, it means that 99.99967
percent of the products manufactured are within specification. The higher the
sigma level, the better the quality. For example, a Three Sigma level of quality
means 93.32 percent of the products or processes are within specification. Among
Indian companies the average Sigma level is estimated by consultants to be in at
2.5 Sigma level.

So how does the Six Sigma work? The methodology focuses mainly on the
strategically important outputs of an organisation that affect customer satisfaction.
The most critical to quality features are attacked first and the rest follow in order of
importance. A Six Sigma scale provides a means of establishing a measure of
performance for any tangible and intangible outputs.

There are eight fundamental steps or stages involved in applying the


breakthrough strategy to achieve Six Sigma quality in a process, division or a
Mumbai Dabawala 187

company. These eight stages are: Recognize, Define, Measure, Analyse, Improve,
Control, Standardise and Integrate. The highly skilled teams known as Black Belts
work full time on Six Sigma projects and lead teams through each of the core four
phases Measure, Analyse, Improve and Control (MAIC) that affect key process.

Case Study: Six Sigma – M umbai Dabawala’s

They make one Error on every 16 million transactions. The world renowned Forbes
magazine has selected them as a colossal example of six sigma’s success..

Logistics at its best.

The Mumbai tiffinwallahs are international figures now thanks to Forbes Global.

The Forbes story details the efficiency with which they deliver the Tiffins of
their customers. Around 5000 tiffinwallahs deliver 175,000 lunches everyday and
take the empty Tiffin back. They make One Mistake in 2 months.

This means there is one Error on every 16 million transactions. This is thus a
6 Sigma performance (a term used in quality assurance if the percentage of
correctness is 99.999999) – the performance which has made companies like
Motorola world famous for their Quality.

Following is the complete story

Mumbai’s tiffinwallahs have achieved a level of service to which Western businesses


can only aspire. “Efficient organisation” is not the first thought that comes to mind
in India, but when the profit motive is given free rein, anything is possible. To
appreciate Indian efficiency at its best, watch the tiffinwallahs at work.

These are the men who deliver 175,000 lunches (or “tiffin”) each day to offices
and schools throughout Mumbai, the business capital of India. Lunch is in a tin
container consisting of a number of bowls, each containing a separate dish, held
together in a frame. The meals are prepared in the homes of the people who commute
into Mumbai each morning and delivered in their own Tiffin carriers. After lunch,
the process is reversed. And what a process – in it’s complexity, the 5,000
tiffinwallahs make a mistake only about once every two months, according to
Ragunath Medge, 42, president of the Mumbai Tiffinmen’s Association. That’s
188 Six Sigma – Concepts and Cases

one error in every 8 million deliveries, or 16 million if you include the return trip.
“If we made 10 mistakes a month, no one would use our service,” says the craggily
handsome Medge.

How do they do it? The meals are picked up from commuters’ homes in suburbs
around central Mumbai long after the commuters have left for work, delivered to
them on time, then picked up and delivered home before the commuters return.

Each tiffin carrier has, painted on its top, a number of symbols which identify
where the carrier was picked up, the originating and destination stations and the
address to which it is to be delivered. After the Tiffin carriers are picked up, they
are taken to the nearest railway station, where they are sorted according to the
destination station. Between 10:15 a.m. and 10:45 a.m. they are loaded in crates
onto the baggage cars of trains. At the destination station they are unloaded by
other tiffinwallahs and re-sorted, this time according to street address and floor.

The 100-kilogram crates of carriers, carried ontiffinwallahs’ heads, hand-wagons


and cycles are delivered at 12:30 p.m., picked up at 1:30 p.m., and returned where
they came from.

The charge for this extraordinary service is just 150 rupees ($3.33) per month,
enough for the tiffinwallahs, who are mostly self-employed, to make a good living.
After paying Rs.60 per crate and Rs.120 per man per month to the Western Railway
for transport, the average tiffinwallahs clears about Rs.3,250. Of that sum, Rs.10
goes to the Tiffinmen’s Association. After minimal expenses, the rest of the
Rs.50,000 a month that the Association collects go to a charitable trust that feeds
the poor.

Superb service and charity too. Can anyone ask for more?

Comments

What is wonderful about this system is that it extends the design and uses the
tiffinwallahs, the end user and their cognitive and memory structure as well. Since
one tiffinwallahs is not going to pick more than 10-20 tiffincarriers, he can easily
sort recognize at the originating station and deliver it to the owner. Also within a
building, the Tiffinwalah knows which floor to deliver. Within a floor a owner can
Mumbai Dabawala 189

recognize his tiffin amongst others. Thus these Tiffins carry only * A symbol (not
name) of the originating station * A symbol for the destination station * A symbol
for the building where the addressee is.

And what is more amazing is that this is run by people, most of whom are
illiterate.

Salaam (Salute) to the Spirit of Mumbai !!

Six Sigma management practice is an ongoing improvement process similar to


CMM, ISO9000, ERP, CRM, SCM etc, and it is not a one time process.

Message: Spend continuously to save continuously. No spending, no


improvement, no saving.