Professional Documents
Culture Documents
1.1 Introduction
The modules on this MSc programme are basically about improving the way that
organizations work. This module gives an initial introduction to the key principles
involved; many of which will be reviewed and developed in more detail in later modules.
The term ‘quality’ is elusive, open to a range of different definitions, but there is no
doubt that the purpose of improving quality is to help organizations to perform better.
The next module, which is on Total Quality Management, deals in more detail with the
definition of quality, how it relates to these various perceptions of success, and the
thinking of the various “quality gurus”. In this module, we introduce some of the basic
concepts of improvement on which this thinking is based.
In order to understand improvement, we have to understand the nature of organizations
themselves.
Task
Much of what follows is based on the work of one of the greatest management thinkers
of the 20th Century: W. Edwards Deming. You will also learn more about Deming and
other management thinkers in the following module on Total Quality Management.
Reading
knowledge of variation – this involves understanding why parts of the system behave
differently and inconsistently, and how to reduce the adverse effects of this.
theory of knowledge – this concerns how individuals and whole organizations learn,
and how this can be applied to help improvement.
psychology – this is about understanding what stimulates and motivates people, and
hence how to lead their involvement in improvement.
Deming also stated that one need not be eminent in any part of profound knowledge in
order to understand and apply it. Effective use of these principles relies on being able to
link the four elements together and apply an integrated approach to managing an
organization.
Theory of psychology
knowledge
Diagram 1.1 – The Deming System of Profound Knowledge
In this module, we concentrate on the first two elements of profound knowledge:
appreciation for a system, and knowledge about variation. Other modules expand on
the second two issues in relation to the behavioral aspects of improving organizations.
Organizations can be viewed in a number of ways. Firstly, one can take a hierarchical
view, sometimes called an ‘organ gram’, which views the organization in terms of how
its employees are organized, and its levels of management control (Diagram 1.2). This
can described as a ‘vertical’ view of an organization.
The second approach is to view the organization in terms of what it does, or how the
work flows through it. This is known as a system view of the organization (Diagram
1.3), and can be thought of as a ‘horizontal’ view.
design and
re-design of product
or service
production or service
suppliers
support services
Reading
Now read:
1.2 Why might you wish to look at an organization in these two different ways? Write
down some advantages and disadvantages for each of these ways of viewing an
organization.
1.5 Customers
Customers are the key to any type of improvement activity. They are those who receive
the outcome that the system produces – the users of product or service for which the
system is intended. This outcome can come in a number of forms, including:
goods
services
information
results, and
other impacts
Sometimes, you will come across a broader definition of the term ‘customer’, one which
includes anyone affected by the system. This might include:
owners or shareholders
employees
the community at large
higher levels of the organization
Customers are those at the receiving end of the system view of an organization. Note
that it is significant that they do not feature in the hierarchical view. Different terminology
sometimes applies to the customers of different organizations, e.g., consumers, clients,
users, beneficiaries.
Task
1.3 Define the customers for each of the different types of organisation you considered
in Task 1.1.
For some organizations this use of the term ‘customer’ does not necessarily imply that
the ‘customers’ have a choice. Some customers may have little or no choice about the
product or service they receive, or whom they receive it from. This particularly applies in
the public sector. Prisoners, for example, are ‘customers’ of the Prison Service, despite
having little choice about their situation and probably not wanting to be there!
However, in most commercial situations, customers do have a choice, and this choice
can be characterized by some form of requirement, specification or expectation.
Meeting or exceeding these customer expectations thus becomes part of the basic
definition of Quality.
A B C D
As an illustration, suppose:
Company A produces wood pulp from raw timber and supplies it to Company B.
Company B manufactures paper of various types and grades from wood pulp, and
supplies this paper to Company C, a stationery retailer.
Company C packages this paper and sells direct to other large companies, including
Company D.
Thus, Companies B and C are both customers and suppliers in this supply chain.
In this module, we will be relating theory to the real world by using examples based on
‘NSS’ (the National Supply Service). NSS is a fictional company based in a national
state that supplies stationery, office equipment and IT consumables to government
organizations, major companies, and other private buyers. Whilst it has no retail outlets,
it displays its product range in catalogues, from which customers place orders by
telephone, fax, post or via the Internet for direct delivery. NSS does not manufacture
any products and uses its own vehicles to deliver to some parts of the country. In other
areas it contracts delivery to distribution companies.
NSS employs 550 staff, about half of whom are based in its headquarters. The
remainder are distributed between fifteen Service Centers across the country, which
provide warehouse facilities and act as distribution bases.
Chief
Executive
Sales & Contract Support
Marketing Management Services
Delivery/Tspt Finance
IT &
Comms
procurement planning
suppliers research
receive order prepare order deliver order
customer
customers
orders
quality support
control services
In this case study, NSS is operating like Company C in the illustration, since it buys
paper and sells it to other organisations.
Consider
Sticking with the illustration and this case study, the supply chain can be extended in
both directions. Think of examples of how Company A might also be a customer, and
Customer D might also be a supplier.
How does the supply chain concept fit with an organisation you are familiar with? Who
are its customers and suppliers, and how far in each direction can the supply chain be
extended?
It may have occurred to you by now that the definition of a ‘customer’ and a ‘supplier’
can be influenced by how the boundaries of the organisation are defined. Diagram 1.4
describes discrete companies, but the principle can equally be applied within an
organisation, where different teams or activities fulfil the supplier and customer roles.
In the system view of an organisation, we can picture this as the various stages within
the overall system. Diagram 1.5 magnifies part of the system view in Diagram 1.3.
supplier supplier
support processes
Here, the supplier/customer relationship operates within the organisation, with each link
in the service chain acting as a ‘customer’ and/or ‘supplier’ in their own right.
‘Customers’ that exist as part of this internal service chain, within an organisation, are
termed internal customers. By comparison, those (‘real’) customers outside the
organisation who receive the final output are termed external customers.
The picture of the simple supply chain in Diagram 1.4 also leads to a definition of
primary and secondary customers:
primary (or direct) customers of an organisation are those who directly receive the
output from it. In the illustration, Company B is a primary customer of Company A,
Company C is a primary customer of Company B, and the customer D is a primary
customer of Company C.
secondary (or indirect) customers are those who do not directly receive the output
of an organisation, but are affected by it further down the supply chain. In the
illustration, Company C is a secondary customer of Company A, and customer D
is a secondary customer of both Company A and Company B. Ultimately, the
quality of Customer D’s experience might be affected by the quality of the job done
by Company A.
We have referred to customers being key to the definition of quality, and hence to its
improvement. In order to improve organisational systems from the perspective of
customers, we need some way of establishing what customers require. This means
establishing feedback mechanisms, preferably including some kind of dialogue with the
customer.
Customer requirements can be classified in various ways:
expected – these are requirements that the customer takes for granted, and
hence is unlikely to specify. For example, a customer booking a hotel room may
assume that it contains a bed, lights, space for clothes, and that it is clean and
tidy.
wanted – these are requirements that the customer may ask for. For example, our
hotel guest might ask for the room to have en suite bathroom facilities, to be a
non-smoking room designated, and perhaps to have a view.
excitement – these are requirements that the customer is unlikely to ask for but
would be delighted to find – an unexpected ‘something extra’. In a hotel room, this
could be some fruit, flowers or perhaps a complementary drink.
Consider
What features might constitute (a) expected, (b) wanted, and (c) excitement aspects of
customer requirements for the following:
a computer (PC)
service in a shop
response to a complaint
(a) expected requirements may include issues relating to technical specification, safety
or statutory regulations
(b) wanted requirements can allow for some element of negotiation (a hotel guest who
wants an en suite bath may be satisfied with an en suite shower instead.)
(c) excitement requirements may involve innovative and imaginative thinking on the part
of the supplier!
It generally follows that when prioritising customer requirements, the same sequence
should be followed, so that:
(a) As a starting point expected requirements are established and met
(b) wanted requirements are identified through consultation with the customer
(c) excitement requirements are explored as ‘the icing on the cake’
questionnaires
telephone surveys
face-to-face interviews or negotiations
focus groups
comment cards
complaints
Information can also be gathered from internal indicators – information that the
organisation has that gives an indication of customer satisfaction. Such data often acts
as a predictor of future customer feedback – so that, for example, the company may
know it has failed to deliver on time before the customer complains!
Reading
Now read:
Task
1.4 For each of these customer groups you identified in Task 1.3, how does the
organisation, identify their requirements:
Reading
Now read:
1.5 What methods of gathering customer feedback are mentioned in Reading 1.5?
What other issues already mentioned in this section are also referred to?
At the outset of this module we stated that improvement can be viewed from a number
of perspectives, but that all of these improvements come down to doing things better,
from the perspective of the particular customer or stakeholder. At the heart of this
improvement principle lies the work or activities that the organisation actually carries
out, known as its “processes”.
Each of these activities constitutes a process in its own right, and each has potential to
be improved.
A
consumers
B
processes
Many modern organisations enhance this systems view of their operation by structuring
the organisation along process lines, and minimising the levels of hierarchy.
Reading
Now read:
Consider
To what extent does the organisation you considered in Task 1.6 operate on the
process, as opposed to hierarchically?
Process improvement is not the same as problem solving. There can be some overlap
in terms of the techniques used, but the purpose is fundamentally different:
problem solving concerns correcting things that have gone wrong, ‘fire fighting’ to
restore a process to its normal standard of operation
process improvement takes a ‘stable’ process as its starting point, and identifies
ways to improve the output from that process
A necessary prerequisite for process improvement is to understand the process we are
seeking to improve – its parameters, objectives and how it operates. This is explored in
more detail in the next section of this module, but the principle of continuous
improvement within an organisation can be illustrated with a simple diagram showing
how it relates to:
process to be
improved
Apply improvement
methods to the
improving the
process
Dr Walter A Shewhart, a statistician working for Bell Laboratories in the United States in
the early 1900s, is credited with having developed the concept of the PDSA cycle. To
improve any process, he proposed that an organisation should:
plan the steps needed to improve the process. This involves confirming the aims of
process improvement and specifying the changes needed to achieve those aims.
In addition, as far as possible, one should predict what effect those changes will
have.
do what has been planned. This means carrying out the changes that have been
planned, and collecting data on the effects of those changes. Where feasible, this
should be done on a pilot basis before being applied to the system as a whole.
study what has been achieved. To do this we need to analyse the results from the
data and compare it with the predictions, decide what has occurred and why, and
hence what lessons should be applied to the next stage.
act on the results of those findings. This means taking appropriate action to
standardise the improvement, modified where necessary.
The PDSA cycle (sometimes referred to as the PDCA cycle, where the C stands for
Check) is normally depicted as a continuous loop as in Diagram 1.8. The PDSA cycle
emphasises the concept of continuous improvement; just because a process has been
improved once, we should not stop there – further opportunities for improvement or
refinement will always be present.
The cycle can be started at any point. If a process is already under way, one may
already be in the ‘do’ phase. One might ideally choose start with study, since it fits with
the idea of learning about the process first. On the other hand, starting with plan
confirms the need to be clear about what we are trying to achieve, and what the aim of
our process improvement strategy is.
• confirm intentions
A
• confirm the new process
P
• develop theories
• adopt on a larger scale
• encourage new ideas
• adapt if necessary
S D
• implement plans
• analyse results
• pilot where possible
• compare with predictions
• identify causes
Consider
How might the PDSA principle be applied at a strategic level, for example by the Board
of Directors of a company? What would Plan, Do, Study, Act mean in this context?
SECTION 2: PROCESSES
2.1 Introduction
This section develops the concept of processes, and their depiction through flowcharts.
It covers the various levels and types of flowcharts, their advantages and drawbacks,
and when they are best used.
input(s)
output(s)
a sequence of steps, or activities
SUPPLIES
In practice, orders will be received by a number of methods. Let us suppose that the
most common of these is by telephone to a central call-handling centre. Within the
overall process of receiving orders by telephone, there will be a number of steps, such
as:
Each of these steps can be viewed as a process in its own right, with a series of sub-
steps that describe the detail of the activity. The overall picture is one of ‘nested’
processes, sub-processes, and detailed actions that make up the overall process.
PROCESS
ACTIONS
SUB-PROCESSES
A flowchart is a diagram that uses graphic symbols to depict the nature and flow of the
steps in a process. Flowcharts are also often called flow diagrams or process maps.
Flowcharting is one of the basic tools of process improvement. The technique sets out
to present the process is an immediate visual form, from which opportunities for
improvement can be identified and implemented, or on which further more detailed
analysis can be based.
The first stage in preparing to flowchart a process is to define its parameters and
identify the basic activities within it:
delivery
Inputs and outputs • the main input is information from the customer
required)
Customer and supplier • the ‘customer’ is in fact a supplier (of information) to the
Call Centre operator
despatch team
As a consequence of this process definition, several issues are excluded from it. It does
not, for example, consider:
This does not mean these steps are unimportant, simply that their impact will be
considered as part of other processes.
Taking what has been agreed as the process and converting this into a basic flowchart
format gives Diagram 2.3. This is the simplest form of flowchart, known as a linear
flowchart. It defines the basic steps in the process being studied. But as we have
seen, each of these steps has a number of sub-steps within it, so the stage of ‘record
details of customer order’ could be broken down as Diagram 2.4.
It is even possible to break down the actions within each of the above, so that a ‘micro’
level flowchart could examine each keystroke made by the operator. The advantage of
each of these levels is that by defining the process in more detail, subsequent levels
can highlight different opportunities for process improvement.
Start
Await
calls
Receive
Record details
of customer
End
Transmit
order details
Await
next call
End
START
Ask
customer
Receive
details from
customer
Record
details Record correct
details on
computer
Repeat
details
Delete items of
order from
computer
Details correct?
No
Yes
Any more
items?
Yes
No
Any special
Yes
requests?
No
END
Diagram 2.4 – One of the Steps in Diagram 2.3 in More Detail
Improvement opportunities that might be identified at each level of the process in the
above example are thus:
the macro level – what is the operator doing whilst waiting between calls? How can
this time be usefully spent?
the intermediate or mini level – a step in this process possibly could be removed if
details of the order item were entered into the computer system only after the
customer had verified them as correct
the micro level – using unique abbreviation codes for each item could reduce the
number of operator keystrokes
Diagram 2.5 summarises the various levels of flowcharting, this time looking at a
different process, that of writing a report.
Is it Is rough in WP
approved
Type approved Get Type
No rough No
report
approval
Yes
Distribute
Yes
report Type
smooth Edit
report
END
END
No
The examples above use recognised symbols for the various activities and decisions.
There is no universal standard for process flowcharting symbols, but Diagram 2.6
shows the most commonly used.
Decision
Activity
Start or End of
Process
Wait
Or
Delay
Input
Or
Output
Meeting
(see integrated or
deployment
flowchart)
Activity shown
in greater detail
in lower level
flowchart
Diagram 2.6 - Process Flowchart Symbols
Task
2.1 Draw up a flowchart for the process of taking your car to a garage for servicing or
repair. Base this on your own actual experience as far as possible – including any
difficulties you may have faced Do this is two stages:
Finally
(c) consider how some of the steps in your activity flowchart might be expanded in
more detail still at the micro level
Note that in Task 2.1 we could have started the process at various points, e.g.,
In this example, the selection of start and end points is not critical. What is important in
practice is to ensure that these boundaries are agreed, and that interfaces (the
boundary or overlap between one major process and the next) are captured and
examined as part of overall improvement activity.
Flowcharts are commonly used as the basis of computer programming activity. The
following reading looks at a simple example in this context.
Reading
Now read:
Task
2.2 Draw a program flowchart to calculate the sum of any number of input values. The
first value provided as input is not to be included in the sum, but will tell you the
number of input values to be added. The program should also count the number of
input values that exceeds 100, and hence the outputs will be:
(a) the sum of the input data values, and
(b) a count of the number of input values that exceed 100
Diagram 2.7 flowcharts a process for claiming expenses. Each step in the process is
listed under the person with responsibility for carrying out that action or making the
decision.
EMPLOYEE ASSISTANT MANAGER
Employee travel
1
information and
receipts
Assistant reviews
form for accuracy,
3
Employee completeness and
prepares adherence to
2 expense claim company policy
form, encloses
receipts, signs
Manager reviews
Report passes for completeness
exception/error review and
4 Yes 5
No Report passes
appropriate-ness review
6
4a
Assistant returns
form to employee
for rework
Yes
No
6a
Manager notes
discrepancy and
returns form to
Assistant makes employee or assistant
file copy
Completed original
submitted to accounts
dept
9
2.3 Develop the intermediate-level flowchart you designed earlier for taking your car to
a garage into a deployment flowchart, showing the roles of:
(a) you
(b) the garage receptionist (assume there is one)
(c) the garage mechanic
Reading
Now read:
Consider
Reading 2.2 presents a modified form of deployment flowchart. How would your
‘garage’ flowchart appear if it were similarly modified? Think of some examples of tasks
you would spell out in more detail.
Establish process
boundaries
NO
Are steps in
Put steps in
sequence?
sequence
YES
Assign flowchart
symbols
Consider
duplication – are identical activities being carried out at different stages of the
process, e.g. repeated checking
unnecessary (non value-adding) steps – are all of the steps necessary for the
process?
delays – is there a bottleneck in the process that delays action or leaves people
waiting?
incorrect sequencing – could time be saved by carrying out the actions in a
different order, or even simultaneously?
complexity – can parts of the process be shortcut or eliminated?
unclear responsibilities – is there a lack of clarity about who is responsible for
different stages of the process?
levels of action or decision-making – could actions or decisions be carried out by
other people, to reduce the number of transactions involved in the process?
Task
2.4 Revisit Diagram 2.7, the flowchart for claiming expenses and make a note of any
possible improvements to the process.
Consider
Now look again at the flowcharts you prepared earlier for taking your car to the garage.
From your perspective as the customer, are any potential improvements possible? (If
the answer is no, this may mean that the garage has already been through the exercise
of flowcharting the process!)
The following extract introduces some other possible flowchart symbols, specifically
designed to help identify potential sources of waste and delay.
Reading
Now read:
Task
2.5 Reconsider your flowchart for servicing the car, and amend the chart to
incorporate as many of these new symbols and concepts as are appropriate. How
might this help you to improve the process, by identifying potential causes of waste
or delay?
Task
2.6 Think about the why you might want to use a flowchart and make a note of what
you believe to be the advantages and disadvantages of using process flowcharts.
Compare your ideas with the lists shown below.
Advantages:
Flowcharts are most useful at the beginning of a process improvement exercise, to help
people involved in the process to understand how it currently works. The group may
find it helpful to compare this as-is flowchart with a diagram of the way the process is
supposed to work. Later, the team will develop a flowchart of the modified process –
again, to record how it actually functions. At some point, the group may want to create
an ideal flowchart to show how you would ultimately like the process to be performed.
Flowcharts are not necessarily as helpful when looking for the most radical changes,
described as process re-engineering. Re-engineering has the effect of doing away
with the process entirely, and replacing it with a new way of achieving the required
function.
comprise:
having the NSS customer place his/her order automatically, by dictating to a voice
recognition system, or pressing the order codes on a telephone keypad,
allowing the employee to authorise the expenses claim himself/herself,
repairing the car yourself!
Reading
Now read:
A note of caution should be sounded with re-engineering some of the more idealised
aspects of process re-engineering have been questioned in recent years, as paying
insufficient attention to technical feasibility, impact on employees, and customer
requirements.
SECTION 3: DATA AND VARIATION
3.1 Introduction
Defining processes and examining them through flowcharts is only the starting point for
improvement. This section covers:
how both the outcomes and the inner workings of processes can be measured
how the necessary data should be collected
how it should be displayed in order to identify variation
They can also act as an incentive – ‘What gets measured get done’ – although there are
potentially negative implications to using measures and targets for reward or
punishment.
In summary, results measures track overall performance and can be used to identify
improvement priorities. Process measures identify where and how that improvement
can be made (Diagram 3.1). Often, results measures have to be reported externally or
to some higher level of the organisation, whereas process measures are used only by
people actually working on or in the process.
PROCESSES
INPUT
OUTPUT
Results
Measures
For example, the overall performance of NSS will be measured by such things as
customer satisfaction, loyalty, profit, share value, market share and return on capital.
These are ‘headline’ results recognisable and often visible to the outside world. Every
process within NSS makes a contribution to these results, but cannot be measured
directly in these terms.
The process of receiving orders, illustrated in Diagram 2.3, may have a number of
process measures associated with it, such as:
speed – how quickly calls are dealt with
Alternatively, the process of receiving orders can be viewed as an entity in itself. The
indicators above become results measures for the process as a whole. Process
measure then address what happens within component parts of this process, and these
might include:
As you can see, results measures and process measures can be considered at a
number of levels, as can processes themselves.
Consider
Think of your own organisation, or one that you are familiar with.
A common failing of organisations that are new to process thinking is that they will have
many results measures, but few if any process measures. The inference is that they
may be setting targets for overall performance improvement without a full understanding
of how that improvement will be achieved.
Task
3.1 Go back to the example from the last section of this module, where you drew a
flowchart for the process of taking your car to a garage.
(a) From your perspective as a customer, determine suitable results measures for the
process as a whole
(b) Taking the mini-level version of the flowchart, identify some process measures
related to individual steps in the process, which will help towards achieving the
desired results.
Note that in order to derive acceptable results measures, and hence process measures,
we need to be clear about what the success criteria are from the perspective of the
customer, and of other stakeholders where appropriate. It is crucial to link the ‘voice of
the customer’ to the selection of appropriate measures. The criteria on which the
selection of measures is based are known as:
Identifying suitable measures, both for results and processes, involves consideration of
a number of component aspects of customer and other stakeholder requirements.
Economy
Economy is the cost of a resource compared to the value of the resource or input. It can
be expressed mathematically as:
amount of input
A measure of economy in the NSS call centre example cited earlier would be the
operator’s salary. Could the same level of performance be achieved by paying the
operator less? This is the reason why call centres are often located in areas where
average salaries are lower.
Efficiency
amount of output
amount of input (3.2)
In the NSS example, the number of calls handled per hour, time taken for standard
greeting, and number of keystrokes per order item are all measures of efficiency. All of
them have a defined output – that’s needed to move on to the next stage of the process
– and all aim to improve efficiency by increasing the output/input ratio.
Effectiveness
value of output
Adaptability
This fourth component looks at the process from another perspective, that of its
flexibility to meet a range of customer requirements. This relates to how easy it is to
change or adapt the existing process to meet special situations or particular customer
requirements.
Note that Diagram 2.4 included an action box for any special requests from the
customer – these might be for example, express delivery, or delivery to another
address. We can envisage a facility on the IT system to record such requests, and the
extent to which they can be met will be a measure of adaptability.
Task
3.2 Look back at the measures you identified in Task 3.1. Do you have examples of:
economy
efficiency
effectiveness
adaptability
for both results and process measures? If not, identify possible measures to complete
the picture.
Reading
Now read:
Reading 3.1 – What to Measure and How
This article characterises results measures for the whole organisation as system
measures, and also defines the difference between measures and metrics.
Consider
Some of the possible measures given earlier for the NSS example are already
expressed as metrics. Which are not, and how could these be converted to metrics?
Converting measures into suitable metrics can be an exacting task, as the following
readings illustrate.
Reading
Now read:
3.3
(a) Take the list of measures you identified in Task 3.2, and if they are not already in
the form of metrics, convert them to metrics. Also make a note of how this data
would be collected, and by whom.
(b) Now, using ideas from Readings 3.2 and 3.3, and other ideas from your own
experience, note any drawbacks or potential problems that you can think of for the
metrics you have identified. Can you generalise these into a list of drawbacks or
potential problems that might exist for any metric in any measurement situation?
In practice, potential flaws can be found with virtually any metric, and poorly selected
metrics are frequently a cause of poor quality in organisations. Metrics that are
inaccurate, open to manipulation, not aligned to process objectives, or simply too
cumbersome, can give an impression of good performance when in fact the opposite
might be the case.
Note that the cost of measurement can itself be a factor in selecting metrics. In the NSS
example, if counting keystrokes required the operator to make a physical record after
entering every item, the time taken to collect this information would itself slow the
process down and might outweigh any potential efficiency gains. Look for another way
of collecting the data in this instance.
The best way to address these problems is to aim for a balance of metrics that between
them have the fewest flaws and reflect the true purpose of the process. When seeking
to identify suitable metrics, apply the following general rules:
always keep the purpose of the process – customer requirements – in mind, and
ensure that the metrics truly reflect these objectives
relate the metrics to the four components of economy, efficiency, effectiveness and
adaptability
look for a balanced set of indicators, rather than a single ‘perfect’ measure
since every metric has potential flaws, consider all possibilities and select the best
(or least bad!)
This type of exercise lends itself strongly to group analysis. Brainstorming can be used
as a technique both to identify all possible metrics, and to identify potential flaws.
READING
Now read:
The first rule of collecting data is ‘never ask a question unless you know what you are
going to do with the answer’. Data collection must have a clear purpose, agreed from
the outset.
data consists of the raw figures, facts and feedback that come from measurement
Reading
Now read:
Data can come in one of two forms, ‘soft’ or ‘hard’ (Diagram 3.2). Generally, if you can
show it on a graph or table, it is hard data. Otherwise it is soft data. Soft data can be
presented in ‘hardened’ form by attaching a number or percentage, for example the
number of people who express a particular opinion.
Task
3.4 Decide whether each of the following statements represents hard data or soft data:
(a) 98% of orders were processed within the target time of two days
(c) The operator achieved an average call-handling rate of 15 calls per hour
(d) 50% of the population claim that they cannot tell margarine from butter
FACTS PERCEPTIONS
FIGURES OPINIONS
STATISTICS FEELINGS
Hard data can sometimes appear more credible than soft data, purely by virtue of it
being presented in visible form. But both hard and soft data have their place in data
collection.
For example, suppose that NSS conducts an employee survey, and finds that only 62%
of its employees say they have had a personal development review with their line
manager within the past twelve months, although the figure should be 100%.
What should the company do? Nothing in that “62%” figure tells us what is going wrong
in the other 38% of cases, or what the company should do to put it right.
More data is needed to answer this question. Some of this could be hard data, gained
for example by analysing the results for different departments or sites to identify
whether the problem is worse in some areas than in others. But other data could be
opinions and feedback from the employees themselves, their views on what is going
wrong and why the personal development reviews are not happening as they should.
This data will help to interpret the hard data results, and will prompt possible solutions to
the problem.
Hard data of this type can be collected in one of two forms:
attributes data – attributes data simply classifies data as falling into a particular
category or not; right or wrong; on time or late, etc. In the above example, the 62%
figure is based on attributes data – the personal development review was either
done within the last twelve months or it was not.
variables data – variables data considers the full spectrum of possible results:
size, volume, length of time and so forth. In the above example, the data could
have been collected as variables data by asking how long ago each employee had
last had a personal development review. This would still have yielded the same
proportion – 62% – within the twelve-month target, but would also have shown for
example how old the longest-outstanding personal development review was.
Generally, variables data has the potential to yield more detailed information than
attributes data, although in some circumstances it can be more difficult to collect and
classify.
Consider
Look again at the list of metrics you came up with in Task 3.3.
(a) Can all of them be classified as relating to either attributes or variables data?
(b) Could any of your proposed metrics be improved by converting them from attributes
to variables data?
analytic studies relate to researching and predicting future performance, for example:
Task
3.5 Suppose NSS has conducted a customer satisfaction survey, and found that 78%
of its customers are ‘Very Satisfied’ with its service. This in itself could form part of
an enumerative study.
What further
(a) hard
(b) soft
analytic data should they collect from their customers to determine how they might
improve their service for the future?
population to describe the total number of units from which we wish to draw a
representative sample
frame to describe the proportion of this total that is available for selection
FRAME
SAMPLE
The sampling technique adopted will be determined primarily by the purpose of the
sampling exercise. If the purpose is to collect hard data – in the above example, to
determine the percentage of orders incorrectly prepared – then it is important that the
sample is truly representative of the whole population. If the purpose is more analytic –
for example to find out why some orders have been prepared incorrectly – then it is less
important for the sample to be representative, and convenience of collection may be a
more important factor.
The main pitfall of sampling lies in believing that a sample is representative when it is
not. An example of this is the opinion polls that accompany the run-up to political
elections in many parts of the world, which rely on asking people their voting intentions.
Why are they sometimes far from accurate? Because the population that they should
be representative of is all those people who will vote on election day. But the frame that
they can access consists only of those people they can get access to, and who are
prepared to answer the questions. Unless this frame is truly representative of the
population, which is highly unlikely, then no matter how methodical the sampling
technique, the data gathered will not be a truly representative sample.
Consider
This is not the only reason that pre-election polls may be inaccurate. What other factors
can you think of that might cause them to produce misleading data or information?
Suppose you are working for a company that has 100,000 employees. You have been
asked to conduct an employee attitude survey, but to select a random 10% sample
rather than send a survey form to every employee. In what ways might the following
samples be unrepresentative:
In fact, a truly representative sample can only be generated by using random numbers.
In the last exercise, you could have chosen to assign every employee a number, and
the use some form of random number generator to select employee numbers from the
list, until the 10% quota has been reached. (Random number tables are available, or
can be generated by a computer program.) In general, it is difficult to be precise about
how large a sample should be used in any given situation. In rare cases, where both the
population and the frame are fixed, it is possible to calculate confidence levels based on
normal distribution. But for practical purposes, it is more useful to base sample sizes on
why the information is needed. In the NSS case cited earlier, for example; the figure of
62% is essentially enumerative data, and it is not vital that this is precise to highlight the
fact that there is a problem. If a sample size of 50–100 (about 10–20% of NSS
employees) yielded this result there would be little value in extending the sample. The
analytic study, to investigate why this problem was occurring and what might be done
about it, need only sample as many people as needed for a cause and solution to
emerge.
3.7 Displaying Data
We use the term data set to describe any set of values that can be analysed by one or
more of these methods. The following paragraphs describe the three most common
methods of displaying data sets:
run charts
histograms
pie/proportion charts
Run charts display points of data over time or in sequence. In its simplest form, a run
chart is simply a line graph with a measurement of time or sequence on the x axis, and
the attribute being measured on the y axis. Diagram 3.4 shows cricket batting
averages.
Average
Runs
22
20
18
16
14
12
10
2
0 2 4 6 8 10 12 14 16 18 20
22 24
4 5
6
Wk 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Av 13 13 19 17 19 21 21 19 19 21 21 22 22 22 21 19 17 15 14 13 14 15 16 15
(1) Identify the sample or time period for which data is to be displayed
(3) Identify the highest and lowest points and calculate the average
(5) Draw in the points on the graph and connect them with straight lines
(6) Draw in a horizontal line to show the average of the data set
mean – calculated by taking the sum of all values and dividing this by the number of
values
or
94072866344929465781
The mean average is 5.2
(9 + 4 + 0 + 7 + 2 + 8 + 6 + 6 + 3 + 4 + 4 + 9 + 2 + 9 + 4 + 6 + 5
+ 7 + 8 + 1)/20 = 5.2
0 1 2 2 3 4 4 4 4 5 (mid-point) 6 6 6 7 7 8 8 9 9 9 = 5.5
The mode average is rarely used in process calculations – either the mean or median
average is normally used and usually the mean.
When interpreting run charts, what advantage might there be in comparing with the
median average, as opposed to the mean average?
Task
3.6 Recall what time you got out of bed in the morning for every day of the last two to
four weeks, and plot this data in the form of a run chart. What conclusions might
you draw from this chart?
A histogram, or bar chart, is used to group data into defined classifications, and to
show general features of that data. They can:
Diagram 3.5 shows a simple histogram, plotting frequency against delivery time in days.
To construct a histogram:
(1) Determine the classifications into which you want to group the data (this may be
immediately obvious, or may require you to make some decisions on how to group
the data, as in the example below)
(2) Group the data into these classifications, by counting how many data points fall
within each band or range
0 1 2 3 4 5 6 7 (delivery time in
days)
3.7 NSS aims to answer telephone calls within 30 seconds. The following table shows
the percentage of calls for which that target was achieved over a 60-day period.
Construct a histogram to show the number of days for which various percentages were
achieved. Group the data in 2% bands from 78.0–79.9% up to 90.0–91.9%.
What conclusions (i.e. information) might you draw from this data?
Pie charts, or proportion charts, operate on the same basis as histograms in that they
group data into a number of classifications. They then show these classifications as a
proportion of the whole picture. To construct a pie/proportion chart:
(1) Determine the classifications into which you want to group the data, as for a
histogram
(2) Group the data into these classifications, by counting how many data points fall
within each classification
(3) Count the total number of data points and convert each classification into a
percentage of the total
(4) Construct the pie chart with a segment for each classification covering the
appropriate percentage of 360 degrees
Consider
Sketch a pie chart based on the data you analysed for Task 3.7, using the same 2%
classifications.
(a) Which method of presenting this data do you believe is preferable and why?
(b) In what circumstances might you want to use pie/proportion charts, rather than
histograms?
3.8 Variation
In all of the examples we have seen so far, there is variation. The run chart, histogram
and pie/proportion charts all show that achievement is not constant, even where a target
has been set. The study of this variation, and of how and why it occurs, is fundamental
to process improvement, and is one of the cornerstones of Deming’s System of
Profound Knowledge.
Reading
Now read:
(This copy of the reading does not include the charts mentioned.)
common causes
special causes
Special causes are created by specific changes that have occurred to the system,
either temporary or permanent. They can be addressed by specific action to rectify the
cause, or to reduce its effects. Special causes might include:
machinery breakdown
a person absent from work
failure of a supplier
misunderstood communication
A process from which all special causes of variation have been removed is known as a
stable process.
Common causes are inherently present in the process or system. They arise from
random variability and are not attributable to a specific incident or action. Variation from
common causes can never be totally eliminated, but it can be reduced, by examining a
stable process and looking for continuous improvement opportunities, as described in
the next section of this module. Examples of common causes might include:
variation in temperature
variations between different operators performing the same task
speed of response of it or communications systems
limitations of the measurement metrics
differing customer requests
Task
3.8 Take a piece of text about 500 words long from any book.
Read it out loud and time exactly how long it takes you to read it (use a stopwatch
that records to 1/10 second if possible). Note the time taken precisely.
Now do the same thing again. Do not look at the stopwatch as you read, but aim to
take exactly the same time as you did before. Again, note the time taken precisely.
Repeat this exercise until you have read the text ten times, recording the precise
time taken each time.
Did you in fact take exactly the same time to read the text? Almost certainly not,
and the reasons for these variations can be classified in just the way we have
discussed, as special and common causes. In this instance, the special causes
might include:
Consider
What other special causes of variation can you think of here? Can you think of any
common causes?
To identify common causes of variation in this instance could be much more difficult.
Even where none of the special causes apply, there will almost certainly be subtle
differences in your speed of reading, which it will be difficult to identify and modify. A
more in-depth analysis is required, perhaps by counting syllables per minute or timing
yourself against a metronome.
Back in NSS, the telephone order line will experience much the same thing. The time
taken to record two or more identical orders will always vary slightly, even if the words
used are exactly the same. Identifying and analysing variation, both special and
common causes, is a key method of improving processes. This is examined in more
detail in the next section of this module.