RED BEAD EXPERIMENT

Learning Objectives

• Have an understanding of the difference between random variation

and a statistically significant event.

• Understand the difference between attempting to manage an outcome

(Y) as opposed to managing upstream effects (x’s).

• Understand how the concept of statistical significance can be used to

improve business processes.
 WELCOME TO THE WHITE BEAD
FACTORY

HIRING NEEDS
BEADS ARE OUR BUSINESS

•PRODUCTION SUPERVISOR
•4 PRODUCTION WORKERS
•2 INSPECTORS
•1 INSPECTION SUPERVISOR
•1 TALLY KEEPER
STANDING ORDERS

• Follow the process exactly.

• Do not improvise or vary from the documented process.

• Your performance will be based solely on your ability to produce white beads.

• No questions will be allowed after the initial training period.

• Your defect quota is no more than 5 off color beads allowed per paddle.
 WHITE BEAD MANUFACTURING PROCESS PROCEDURES

• The operator will take the bead paddle in the right hand.
• Insert the bead paddle at a 45 degree angle into the bead bowl.
• Agitate the bead paddle gently in the bead bowl until all spaces are filled.
• Gently withdraw the bead paddle from the bowl at a 45 degree angle and
allow the free beads to run off.
• Without touching the beads, show the paddle to inspector #1 and wait until
the off color beads are tallied.
• Move to inspector #2 and wait until the off color beads are tallied.
• Inspector #1 and #2 show their tallies to the inspection supervisor. If they
agree, the inspection supervisor announces the count and the tally keeper
will record the result. If they do not agree, the inspection supervisor will
direct the inspectors to recount the paddle.
• When the count is complete, the operator will return all the beads to the
bowl and hand the paddle to the next operator.
INCENTIVE PROGRAM

• Low bead counts will be rewarded with a bonus.

• High bead counts will be punished with a reprimand.

• Your performance will be based solely on your ability to produce

white beads.

• Your defect quota is no more than 7 off color beads allowed per
paddle.
PLANT RESTRUCTURE

• Defect counts remain too high for the plant to be profitable.

• The two best performing production workers will be retained

and the two worst performing production workers will be laid
off.

• Your performance will be based solely on your ability to produce

white beads.

• Your defect quota is no more than 10 off color beads allowed per
paddle.
OBSERVATIONS…….

WHAT OBSERVATIONS DID YOU MAKE

ABOUT THIS PROCESS….?
The Focus of Six Sigma…..

All critical characteristics (Y) are

driven by factors (x) which are
“downstream” from the results….
Attempting to manage results (Y)
Y = f(x) only causes increased costs due to
rework, test and inspection…
Understanding and controlling the
causative factors (x) is the real key
to high quality at low cost...
Learning Objectives

• Have an understanding of the difference between random variation

and a statistically significant event.

• Understand the difference between attempting to manage an outcome

(Y) as opposed to managing upstream effects (x’s).

• Understand how the concept of statistical significance can be used to

improve business processes.